Amgen Inc. (AMGN) Earnings Call Transcript & Summary

Okay. Well, we're close to on time. So okay, we've got upcoming next and hopefully, I'll be able to get the marbles out of my mouth here momentarily. Okay. And I need to be practicing names ahead of time and making better notes. Okay. Dr. Sumita Bhatta. I hope I didn't butcher it too badly, did I? How did I do?

Okay.

Okay. All right. It sounds like -- totally like I think I've got it, and then I get up here and stuff comes out. Okay. So Dr. Sumita Bhatta is a board-certified oncologist and the Vice President of Global Medical Affairs and the Head of Oncology at Amgen. She's had over 9 years of experience in the biopharma industry and held a number of research and developmental roles. And so today, we're just pleased as punch to have you join us. And I see -- what did we call your topic? Understanding how new drug treatments are brought to market, which we are really interested in knowing about and having better understanding. So I hope that we have a few minutes at the end to answer questions. So welcome.

Thank you, Terri. I'll go ahead and share my screen. And you'll tell me if I did it right in just a second.

I think, well, we need the presenter mode.

Yes. Okay. Thank you so much, Terri. Thanks to everybody in the room and online. This is a great pleasure of mine to be able to speak to you all. I wish it could have been in person. I just want to echo what Dr. [indiscernible] had just finished with, which is the patients and the patient caregivers are really my why. It's the why I go to work and why I work in drug development. And so this is really a huge highlight for me to have this opportunity. So thank you very, very much. So today, we will be talking about understanding how new drug treatments are brought to market. And we'll go through this overview. So first, we'll speak about overview of the drug development process, and this will really be the bulk of the presentation. We'll talk about how then regulatory authorities look to analysis of data from clinical trials and making their decisions at a very high level. We'll look at what we should be thinking about when we compare clinical trials. What are some considerations that should come to mind. And then finally, we'll end with enrolling in a clinical trial. What are some of the benefits? What are some of the risks? And how can you go about doing that if you should so be interested. Cancer drug development is a multi-step process. You can see that there are multiple parts of drug development that lead ultimately to a patient being able to receive a drug. The first step is discovery and development. First, we have to find compounds that could be potentially beneficial. The next step is preclinical research. So before these patients even -- before these drugs even enter a patient, there is a ton of research that is done to make sure that it's appropriate to move on to the next step. The third step is clinical research. It's what a lot of you may have already been involved in or may consider being involved in, in the future. And that's really investigating whether a new drug can benefit you in a safe manner. Step 4 is the regulatory review process. Here, we've highlighted the FDA, but as you know, there are multiple health authorities across the world that use similar type of processes in determining whether or not drugs really should be available for us. And step 5 is really the FDA approval and post-marketing process. So sometimes not all questions are answered in the clinical trial that leads to approval and this opportunity, step 5, is a process by which question can be answered in greater detail. So this is an interesting figure because it really highlights the multiple steps that are required in each of these different segments to get a drug to market. It also highlights the number of potential drugs that get whittled down before they actually make it to a Phase III trial and subsequently to an approval. You can see from the funnel that there's multiple drugs that enter the drug discovery process, multiple potential candidates. And through these steps of drug optimization, which is really ensuring that the structure of the molecule is appropriate, preclinical testing in both cell lines and animals and then clinical trials, fewer and fewer and fewer drugs actually make it to the finish line. That's important to highlight because you can see that the median time to develop a cancer drug is about 7 years and the median cost to develop a cancer drug is around $650 million. And that is very much due to the fact that all of these processes with so many candidates have to take place before you get to the winning asset. So we'll talk a little bit about step 1 and 2 of the drug development process that is drug discovery and preclinical research. Drug discovery can happen in multiple ways. Sometimes it's accidental. Sometimes drug discovery comes from things that we already have in nature, like plants, funguses, things that are generally already available. For example, a cancer drug that we all know very well, paclitaxel came from a tree. And there are other drugs that have come from things like sea sponges. And so this accident discovery happens. Amgen takes what we call a biology-first approach whereby we try to understand the biology of a drug. [indiscernible] that is by and large how targeted therapies are developed. That is also an approach that's taken for immunotherapies, which are drugs that harvest the body's own immune system to fight off different types of cancers. [indiscernible] and discovery has occurred and the actual compound has been optimized, these agents can go into preclinical research. And [indiscernible]. And the IND has within it, the data that was just generated from the preclinical studies and more information about the drug compound as well as the clinical plan that we think we're going to need to demonstrate the activity of this drug to benefit patients. That -- and regulatory authorities will look at this data and determine whether that's an appropriate plan. And if it is, they'll allow us sponsors -- sponsors, by the way, can be pharmaceutical companies or it can be academic centers to initiate clinical trials. So the first phase of clinical trials is Phase I. We generally consider this early phase clinical trial testing. And here, the primary goals are to establish safety and the dose of the drug. Oftentimes, we're also looking to understand how the drug works in the human body. We use some terms such as pharmacokinetics and pharmacodynamics to describe this. Pharmacokinetics can be things like, how well is the drug absorbed? How is it metabolized? How is it eliminated? Which organ in the body is responsible for elimination? Meanwhile pharmacodynamics can be such elements of, is the drug acting upon a certain marker in the body that we would expect it to? Maybe decrease of a protein level or something similar that could just let us know whether the drug is achieving its target. The length of time for this phase of clinical development is variable. It can either range from several months to several years. It can be less than 100 patients to more than several hundred patients depending on how the study is designed. Generally, the next step in clinical trials is Phase II, drug development. And again, the goal here is to continue to now test that safety that we think we are confident about in Phase I, but also now look for signals of efficacy. Phase II drug development can be done as single-arm trials where patients are only getting the drug of interest or this can be randomized where the patients are getting the drug of interest against what they might already be receiving that's already been approved. Again, there's a lot of variability in how this gets done. And this can take months to years. We say 3 years here, but again, this is a very variable process depending on the type of drug that's developed and the multiple different pathways of this Phase II drug development process can take. Now as sort of moving into the later phases of development. Phase III, for example, is when we're really seeking to confirm now the effectiveness of a drug against what is generally considered standard of care in a larger group of people. And this can take up to 4 years, sometimes even more, depending on the complexity of the trial. The goal here is now to really confirm whether this candidate drug is going to improve outcomes over what's already available to patients. And finally -- and this can lead to approval of the drug. Generally speaking, that Phase IV part of drug development is there for monitoring after approval and to answer some of those unanswered questions that we didn't necessarily get through Phase I to Phase III of development. Now I just highlighted what's considered a traditional path to market, but if a drug is spectacular and has a tolerable side effect profile that makes it promising, there are some approaches that the FDA can give us to make drugs available more quickly. So on the top left, we'll start with Fast Track designation. So this is an opportunity to speed up drug development and review of data to allow faster approval of drugs to treat serious conditions or an unmet medical need. So an unmet medical need, what does that exactly mean? An unmet medical need is where potentially there's no treatment available for a particular disease or where there's a potential to improve upon what's already available, whether it be with greater efficacy or better safety profile. What is the benefit of fast track designation? Well, it offers the opportunity to interact with our regulatory authorities with more agility. We have more opportunity for written communication, more meetings. Potentially, we have a rolling approval process, which would mean that as data is generated, it gets submitted for ongoing review rather than everything being compiled and submitted all together later on. And again, the goal here is to speed up the drug development process. Typically, the sponsor asks the FDA for this designation and the FDA can then decide whether or not it's appropriate to grant this or not. The next type of approach is called Breakthrough Therapy designation and this is generally given when drugs have demonstrated already that there's substantial improvement or the potential for substantial improvement over existing therapies. This affords many of the same opportunities that Fast Track designation gives such as more agility and communication. This is generally either requested by the sponsor or even at some times requested by the regulatory authorities given what they've seen with the data to date. On the upper right-hand side of the slide, you can see that there's something called an Accelerated Approval. This is a program that allows for quicker approval of drugs for areas of high unmet need or serious conditions based on generally what's called the surrogate endpoint. So what's a surrogate endpoint? A surrogate endpoint is a measure that often predicts overall benefit or ultimate benefit to a patient. Generally, it's not the true marker of, for example, survival, but it can be, for example, response rate that correlates with survival in the end. If a drug is approved via the Accelerated Approval pathway, generally another trial will be needed to confirm the results with the endpoint of interest. And if, for example, that confirmatory study doesn't confirm what the accelerated approval pathway has shown, a drug can actually be pulled from the market. The final approach that I want to discuss today is Priority Review. This is an opportunity that the FDA can provide whereby they commit to taking action on a drug application within 6 months instead of the standard 10-month review time line. This is, again, done when there is promising activity, when there's really a high unmet need, where there's a desire to make drugs available to patients quicker than normal. And generally, this is something that the sponsor can request and then the FDA can look at and decide whether it's appropriate and give that designation. So we talked about generally what the links are for development. Here is an example of an accelerated drug development time line, permission of clinical trials to FDA approval and after. And why -- the reason we want to show you this is, again, to highlight that when a drug has compelling properties, there can be an opportunity to accelerate its development. And I think this is the goal for all of us as long as it's done in a responsible way, to allow patients to receive therapies that they may benefit from as soon as possible. Again, it has to be done in a responsible way. So here, you'll see Phase I development for this hypothetical drug began in August of 2018. The drug received many of the opportunities afforded by the FDA, Breakthrough Therapy designation, Priority Review and ultimately Accelerated Approval within a 3-year time period. You can see then the line below that demonstrates the Phase III time line. This is the confirmatory study that's required to then make sure that the data that we've seen in that accelerated approval study is true and is confirmed by the endpoint of interest here. And there are also other questions that haven't been answered, and so the drug has an ongoing Phase IV study as well. Again, the important thing to highlight here is that there are opportunities for drug development acceleration. It has to be done in a very thoughtful way in partnership with regulatory authorities and the key goal is to ensure that it's responsibly developed to ensure that patients are not being exposed to an unsafe therapy just for the sake of speed. Now how is data analyzed. The FDA has a team of physicians statisticians, chemists, pharmacologists, a variety of other scientists that review the data that's been submitted. And generally, this can be data from several clinical trials that get submitted through marketing application. The FDA with all of its team can opine on the value of that product for patients. They may need additional data. They may ask for an advisory committee where they call upon experts for their recommendation. They may also request additional studies or more data to make sure that they feel comfortable with the decision that they're making. Primarily, the decision is based on the benefit versus the risks, and this is probably true for many of the things that we do in life, but this is utmost importance here for the FDA. And then they render a marketing approval decision based on all the available data that they have in partnership with the company or the institution submitting the data. Now you'll come across tons of data from -- you'll go to [ ASP ] or you'll go to ASH, you'll go to many of these congresses where data presentations are being made one after the other after the other, and how do you interpret all of this? It becomes very complicated. And so generally speaking, cancer drugs are evaluated for approval in this Phase III setting, when they're typically compared with what's already available to patients, and this is called standard of care in a clinical trial. The reason that this has done is comparison with standard of care allows assessing the new drug to see if it's superior, equal or inferior to the existing drug that's being used to treat the disease. And this is true not only for efficacy, but also for safety. When you see trials from different drugs, there is a tendency to want to compare those results to one another. But it's actually quite important that we take caution when doing things -- when trying to compare results from separately conducted trials because these trials can be very different in the types of patients that were enrolled, the interventions that were made, the severity of the disease, what patients may have gotten prior to enrollment on the studies, et cetera. So there's a multitude of factors that make it very challenging to compare one study to the other. And why is this important? It's just very easy to misinterpret data without fully understanding the differences in those trials. So what are some possible benefits and risks of joining a clinical trial? You'll see them here on the screen, some possible benefits of joining a cancer clinical trial is that you may ultimately advance cancer research and help someone else with the same disease that you have that might be afflicted with this disease later down the line. You might also get benefit from the drug. You could get a treatment that's not available outside the trial that you ultimately do benefit from. You'll likely be able to see your cancer team more often because these trials often require more visits for some of the monitoring that we discussed. And so that you can be checked more frequently for some of the side effects you might be feeling. And some of the expenses that you may face may be paid for as part of your enrollment in a clinical trial. However, there are also risks of joining a cancer clinical trial. Especially in early stages, we really don't have all the answers for side effects. And oftentimes, this evaluation is being done in patients for the very first time. Also, the treatment may simply not work. It may not be efficacious, especially in the earlier lines of clinical trials. While I just said one of the benefits could be more frequent visits to the hospital, that could also not be a benefit for folks who live further away from the treatment facility or have more barriers to getting care. So more doctor visits may not necessarily be a good thing as it includes more time and travel. If you're part of a randomized study and you get randomized to the standard of care arm, you may not have a choice then to get the active therapy. And while I said some cost maybe covered, this is not always the case. Insurers may not cover all costs of the clinical trials. And so this can be a financial element that needs consideration. Now if you are interested in a clinical trial or your loved one is interested in a clinical trial or a friend or someone else that you work with is, it's important to know that generally these clinical trials are carefully supervised, monitored and documented, because this is research that is conducted in humans. They help determine if the study drugs and treatments are safe. And if they produce desired results, and there are several ways in which patients can enroll. That information is listed below. Your physician can also tell you about what may be available at their center. And with that, that concludes the main portion of the presentation. I'd be happy to take questions. But before I do, I just once again want to reiterate how important it is for us to have these types of engagements, how valuable your feedback and questions are and that you truly are the reason why many of us go to work every day, especially me.

That was wonderful. It really kind of helped like simplify what the process is in order to get to a clinical trial, what a drug has to do in order to get to as like becoming the standard of care, the latest and greatest. I do have a question, and I'm not sure if there's going to be anything from the audience. But if the drug has already been approved for another use, does it have to start back at Phase I? How does it get approved for a different type of a use?

Yes. The question -- the answer to that question Terri, it does. It does have to go back into Phase I testing. Because the dose may not be the same in a different type of patient or a different type of cancer. So all of the safety data has to be regenerated from the beginning. We can probably -- even the preclinical data, frankly, is generated for new tumor types.

Okay. And then as far as like that data that's analyzed, like -- but it's our information about what's going on in our cancer, it's not like our personal information?

So when patient level data is submitted, and I think that's the crux of the question, forgive me if I've misinterpreted it. Patient-level data is submitted as well as aggregate data to regulatory authorities and multiple, I mean, numerous analyses are done to look at the data and cut it in different ways to ensure that we're properly understanding the side effects and the efficacy parameters. So it is your patient-level data or your loved one patient-level data that is being examined as well as group aggregation of data.

Okay. All right. So a part of it becomes a mass solution then. Okay. And then what about -- I'm just going to read the question from the chat. I've noticed no one has discussed using AI, which is artificial intelligence in drug development to reduce developmental time line or identify new drugs or repurpose to approve drugs. Is this being done or -- in order to [indiscernible] that you know of?

I would say that there are efforts being made to address these issues. I think AI, we still have some time for that to be done, but it is being looked at. Real-world data is another place that there is tremendous promise for. For example, patients are being treated with drugs in the real world setting. And sometimes this data can be used to give us some information about the historical control arm. And that can limit the amount of data that has to be generated, exposing patients to drugs that are already available because we have numerous -- plethoras of data that already exist. So you're right, we haven't mentioned it, but it is going on in the background and real-world data, especially is a major contributor. It's something that regulatory authorities look at something we're expected to generate, frankly. The other thing we haven't mentioned that is really important I thing to mention is diversity in clinical trials. And so we are -- the FDA has now mandated that we provide a diversity plan. So how are we going to have representation from different ethnicities, races, genders, et cetera, as part of these clinical trials, what's our plan? And we're obligated to think about this. I think it's extremely important that we think about this because we know that the patients who actually receive the drugs, once they're approved they are not necessarily the same that were enrolled in that clinical trial. So we do need to start generating data on diversity as well. Okay. Great. And I think we had a question from the audience.

Okay. Great. And I think we had a question from the audience.

We saw a big change in drug development time lines with the COVID vaccine and a push there. With the Cancer Moonshot initiative, do you see the drug development time line being compressed? And then kind of a secondary question to that, how much of the time line is medically driven? And how much of it is just governmental or bureaucracy driven?

Yes. I think the Moonshot, I think it had a second set of wings after COVID. Moonshot has been around for a little bit of time, but COVID has really highlighted the ability to bring drugs to market faster. Now whether or not this will improve the opportunity for oncology drugs, I think it's still a bit unknown. I will tell you that there is a sense of urgency in development of these drugs. I think we all feel it, including the government. So I think to answer your question about whether this is bureaucracy and process versus the medical need, frankly, I do you think there -- it is important to do -- to take our time in the appropriate ways to develop these drugs. We're all working, I think, as fast as we can, but we do really need to ensure that we're not subjecting patients to side effects or untoward impacts just because we were on a pick for speed. And this is going to obviously be different depending on the level of unmet need. So where there is opportunities where nothing is available, the time line is accelerated. Where there are multiple things that are available, I think you'll see it being a little bit longer. And I think this speaks to the variability in time lines in general.

Okay. As far as communication between like a pharmaceutical company and the hospital locations, do you have any suggestions how to expedite or improve that communication?