Amgen Inc. (AMGN) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Oppenheimer's 34th Annual Healthcare Conference. I'm Jay Olson, one of the biotech analysts at Oppenheimer. Thank you all for joining us here today. It's my pleasure to welcome Amgen to our conference, and it's an honor to introduce Justin Claeys, Head of IR; Susan Sweeney, Head of Global Marketing Access and Capabilities; Murdo Gordon, Head of Global Commercial Operations; and Jay Bradner, Head of R&D. So we have an amazing lineup here today. And it's great to see all of you and really appreciate you making time for us today. Thank you so much.

Great. Thank you, Jay. We're really glad to be here today. It's an exciting time at Amgen, and we appreciate the chance to share why we're so optimistic about our growth potential. We see many opportunities across our 4 therapeutic area pillars: General Medicine, Oncology, Inflammation and Rare Disease. We have a long track record of successfully executing, and that gives us confidence that we will continue to deliver. Our mission is to serve patients, and we've never been better positioned to do so. Let me pause for a moment on obesity. For the past number of months, this has obviously been a tremendous focus for investors, including our lead program, MariTide, and its differentiated profile. Over the past week, we've heard a lot of discussion around MariTide and its Phase I data set. We're glad to take your questions here. I want to make sure our investors understand our view of this program and why we're confident in its potential. Beyond obesity, let me emphasize that we're looking to help patients facing a wide range of serious illnesses. We have the most balanced portfolio in Amgen's history, and we are not fully dependent on any single area to drive further growth. With that said, let me now ask Murdo to make some opening comments on the many opportunities we see across our 4 therapeutic area pillars, and then, Jay, we'll turn over to you for the Q&A.

Thanks, Justin. Yes, Jay, let me just unpack a few things that are going well in our business right now. Our 2023 results and 2024 guidance highlight that our volume-driven growth strategy is working. Demand for our products continues to grow. In 2023, we had 15% year-over-year volume growth and 9% product sales growth that was driven by 18 products that had record sales. Our General Medicine products continued to deliver strong volume growth in 2023. Repatha was at 37%, EVENITY at 44% year-over-year. Both products, again, setting record sales on the year. We see significant growth for EVENITY and Repatha, given the relatively low penetration they have in really large addressable patient populations. Moving to Oncology. We've got strength across the portfolio, in particular with BLINCYTO, following positive Phase III data in earlier treatment lines. The updated NCCN guidelines are helping provide physicians a reimbursement pathway in that setting as well. We look forward to the BLINCYTO June PDUFA date. We see significant growth potential from earlier lines of therapy and in the future from the subcutaneous administration formulation of BLINCYTO that we're working on, which will significantly broaden the prescriber base. We also have a June PDUFA date for tarlatamab, and we are ready and prepared to launch and bring this very exciting first-in-class medicine to patients in small cell lung cancer. And then within our Inflammation portfolio, we continue to see long-term potential for Otezla, driven by the unique profile and broad label, really strong payer coverage, and we're investing more. We've increased our investment in that asset. Exiting the year, last year, we saw a reduced impact from competitor-free drug programs. We had really strong new patient starts where they grew 6% year-over-year in Q4. Moving to TEZSPIRE, also in our Inflammation category. It continues to be on a really strong trajectory. And it's very early days, launch phase still, with record sales of $177 million in Q4 '23 and record sales for the year of $567 million. We've expanded coverage for, in particular, the new autoinjector delivery of that product. And we've got PBM coverage roughly in the neighborhood of 80% covered lives. We're excited about the addition of the Rare Disease growth pillar and pipeline, which you'll hear more about next week at our investor event on February 22. Beyond Rare Disease, we're rapidly advancing an exciting pipeline, multiple potentially first-in-class or best-in-class medicines across all 4 of our pillars, with numerous key data readouts in 2024, which Jay can further elaborate on. In addition to MariTide and obesity, we're excited about rapidly advancing innovative Oncology programs, like I mentioned, tarlatamab, but also looking at AMG 193 and xaluritamig; olpasiran, our potentially best-in-class Lp(a) drug-targeting molecule, which has really enrolled rapidly with 7,000 patients within a year into our pivotal Phase III cardiovascular outcomes trial; rocatinlimab, our first-in-class OX40, targeting monoclonal antibody, being studied in atopic dermatitis, and data from that first Phase III study anticipated in the second half of 2024; TEZSPIRE in multiple additional indications, a broad life cycle program there, with COPD data readout anticipated in the first half of 2024 and Phase III data in chronic rhinosinusitis with nasal polyps in the second half of 2024. So with these and other earlier molecules, we're excited about the pipeline. We're excited about our portfolio and the potential to really serve many, many more patients around the world. So we're confident in the long-term growth outlook, and we're very pleased to be here with you today, Jay, and I'll turn it back to you for Q&A.

All right. Super. Thank you so much for that comprehensive overview, a perfect setup for our discussion here today. I know that some in our audience may have questions, and I encourage you to use the Q&A function to submit them. And with that, maybe we'll get started with obesity. Congrats on the publication in Nature Metabolism last week, Phase I study of AMG 133. We know that you've gotten some pushback on the results, and maybe if you could share your key takeaways with us. And how should we think about the Phase II study results expected later this year?

Yes, I'll start. Thanks for the invitation to join today, Jay. Maybe before just diving in, I want to share a couple of reflections. I'm just over a month here at Amgen, and it is a real privilege to represent this portfolio. We have first-in-class and best-in-class therapeutics across our therapeutic areas, and to join this leadership team that visits with you here today. The creativity, complexity, the potential impact of these medicines is impressive by any measure, but also, the sense of urgency, the deep insight that accompanies them is even more impressive. And MariTide, or AMG 133, as you asked, is just a brilliant example of this. As you surely know, MariTide's a pioneering bispecific molecule that both inhibits GIP receptor signaling while activating the GLP-1 receptor as an antibody peptide conjugate. It's now in Phase II clinical investigation. We recently reported the results of our Phase I in Nature Metabolism, as you cited. And that paper really establishes the potential for differentiation on degree and durability of weight loss, on tolerability and, in particular, on monthly or even less frequent dosing. Now the MariTide Phase I study, as you asked highlighted the promise of this exceptional efficacy, tolerability and durability. It was a 49-patient study, first-in-human study and naturally looked at safety, pharmacokinetics, pharmacodynamics. We looked at single as well as multiple ascending dose cohorts. And remarkably, patients in, as an example, the high-dose cohort of 420 milligrams had a 14.5% weight loss after just 3 monthly doses. And we've been very encouraged by the degree of efficacy especially observed in only a Phase I study. What sets MariTide apart further, though, is the durability of weight loss. Even 150 days after the last dose, patients in this high-dose group, they maintained approximately 11% weight loss compared to their baseline weight. And this outcome, 150 days later, is not commonly seen with other molecules in the class. So looking ahead about the Phase II, as you asked, we're very eager to get deeper into MariTide's potential. We have a 592-patient, 52-week Phase II study in obese patients. This includes participants both with and without type-2 diabetes. We're looking at different dosing levels and dosing regimens, including dose escalation along extended dosing intervals, including monthly, including even less frequent dosing intervals. And we have an interim analysis scheduled for the middle of this year and final top line data anticipated by late 2024. Finally, our Phase III planning is progressing very smoothly. We're aiming to explore MariTide's fully differentiated properties, again, efficacy and durability of weight loss, tolerability and feasibility of monthly or less frequent dosing intervals in a number of obesity-related clinical settings.

Perfect. That's super helpful. And then, I guess, maybe one follow-on question. I know there's been a lot of controversy around the mechanism of action. Can you just talk about the strategy of pursuing GIPR antagonism versus agonism?

Sure. In brief, GIPR antagonism is supported by human genetics. We have a strong heritage here at Amgen. We've been leveraging human genetic insights to inform our drug design and our drug development across all 4 of our therapeutic areas. Some of these insights have led to several successfully marketed drugs. You could think of our cardiometabolic therapeutic area, where this approach of population genetics to targets and the further and subsequent guidance to more precisely target patient populations has been just instrumental for medicines like Repatha, EVENITY, olpasiran, rising in our late-stage development campaign right now. And we're confident that this is the right approach to look at obesity, which is often a genetic disease itself. We've been doing this work at our deCODE genetics team in Iceland. And this group has been at the forefront and remains at the forefront of leveraging population genetic insights for therapeutic insights for decades. At deCODE, we uncovered that variance of the human GIP receptor gene and downstream signaling proteins that reduce GIPR activity are linked to lower body mass index and reduce cardiovascular risk, and this is replicated across distinct ethnic populations. This pivotal finding was the design principle for MariTide, engineered specifically to inhibit GIPR while simultaneously activating the GLP-1 pathway with appended peptides. This design was intended to mirror the beneficial effects we saw in human genetics. And the consistency between these genetic insights and then the preclinical findings and now the Phase I data is just totally reassuring. It further credentials this scientific approach that is an industry-standard, especially in nonmalignant diseases where medicines for obesity, diabetes and cardiovascular need to have an outstanding therapeutic index. So the outcomes of the Phase I study were very compelling, demonstrating not only efficacy, but also tolerability and durability of weight loss over time.

Okay. That's super helpful. And then there's also been a lot of discussion around the GI profile of MariTide and the 4 out of 8 patient dropouts in the high-dose cohort. Can you just share your perspective on that?

Sure. MariTide has well demonstrated a favorable safety and tolerability profile. During the Phase I study, we observed GI-related adverse events. These were predominantly mild, they were transient, and they were primarily associated with the first dose. In fact, these AEs resolved very swiftly, typically within the first 48 hours of onset, and thereafter, the incidence significantly drops to just 9% of patients experiencing GI AEs in subsequent doses. And this underscores a notable improvement in tolerability with continued treatment. Regarding participant retention, as you asked, I think it's important to clarify that in the high-dose cohort, and actually across all the Phase I cohorts, no withdrawals were attributed by the trial investigators to adverse events. No withdrawals were attributed to adverse events. Participants that chose to drop out had AE profiles just like those that remained in the study, further supporting MariTide's well-tolerated nature. The ongoing Phase II study has, in fact, witnessed very rapid enrollment, great engagement from the medical community and has surpassed all of our initial time line estimates. And this enthusiasm from clinicians and researchers is further proof of the growing interest and the growing confidence in MariTide's potential. So we're encouraged by the favorable safety and tolerability profile that was observed in the fixed-dose regimen of Phase I, and we look forward to seeing additional data from the larger and quite a bit longer Phase II study later this year.

Okay. Likewise. We're super excited to see that data as well. There's also been some discussion about the comparison of metabolic parameters, including the lipid profile for MariTide versus other therapies. Can you just comment on that?

Yes. The metabolic parameters in the Phase I study were in line with our expectations. They were in line with what we anticipated. We draw on a comprehensive preclinical data set and honestly, the extensive clinical experience with GLP-1 analogs and have strong reasons to believe that MariTide's impact on metabolic health will become even more pronounced with extended treatment in a larger patient cohort. We're particularly excited about this upcoming 52-week results from the expansive Phase II because a larger and longer trial can only provide us with a more detailed and definitive analysis of MariTide's metabolic effects. With the data set of this magnitude, again, 592 patients, we will be able to offer a clear demonstration of MariTide's efficacy, tolerability and sustained weight loss and show how this contributes directly to a positive metabolic profile over time.

Okay. Perfect. That's super helpful. And then another question that we get from investors is about the discussion part of the publication where the authors indicate that the intra-patient dose-escalation regimen may offer an advantage in decreasing first-dose effects seen with MariTide. Can you just elaborate on how you're thinking about dose escalation, and to the extent that you can disclose the Phase II dosing schedules that you're exploring?

Sure. We are confident in MariTide's potential to provide a favorable and a differentiated patient experience. To really maximize the public health benefit of MariTide, we're focusing on a dosing frequency that could be monthly, possibly even less frequent. And this will, hopefully, significantly enhance the patient experience through its simplicity and through its convenience. The current ongoing Phase II, as you asked, has 11 dosing cohorts. This is just a methodical characterization of dosing regimens. This will help us realize the full impact of MariTide. And here, we're looking at various dosing strategies that range from fixed dosing and dose escalation, but importantly, also extended-dosing intervals, some of which extend beyond monthly administration. As I've said, this design is totally instrumental to establish the most efficacious and tolerable dosing regimen. It will guide dose selection and schedule selection to advance into Phase III, with a firm goal of providing the best possible patient experience. The approach that we're adopting with the dosing strategy is really hoping to significantly enhance treatment adherence as well, part of patient satisfaction, and moving well beyond the current standard of weekly injections. We're going to get great insights from the ongoing Phase II. This will inform the Phase III strategy and allow us to further capitalize on the unique attributes of this antibody-peptide conjugate. Again, this is not only efficacy and durability, but tolerability, practicality of even less dose-frequent schedules. So the goal of all of this is to ensure it really stands out, not just for MariTide's therapeutic benefits, but also the potential to provide a really favorable and differentiated patient experience.

Okay. Great. It sounds like you got a lot of optionality built into the dosing in that study. So we look forward to more details. One of the questions we get is about how the -- eventually, how you're thinking about the commercial formulation. Can you comment on that as well?

Maybe I can jump in here, Jay. So as Jay Bradner has mentioned, we expect that monthly or potentially even less-frequent dosing will add to a positive and really simple patient experience. And any one of the doses that Jay was referencing that we're studying in the Phase II can be supplied with a simple autoinjector. As many know, Amgen is really a world-class biomanufacturing capability. I continue to be impressed by the things that our process development team and engineers do. So we're going to bring those capabilities to bear in both formulation and supply as we advance MariTide through the clinical development. And as Jay highlighted, our ambition for MariTide extends beyond the impressive efficacy, the tolerability we're seeing and the durability. We're really committed to ensuring a seamless treatment experience for patients. So in line with this commitment, we're planning for the commercial version of MariTide to be available in patient-friendly autoinjector format. And this is really something that we can innovate on and design to simplify administration, and that aligns with our vision to enhance patient experience, and importantly, in this disease category, patient adherence over time to sustain that weight loss. During the initial Phase I trials, we used a formulation that facilitated in the swift initiation and completion of the study, rather than the final commercial version. And that's important, I think, for everybody to know. It's an approach that's relatively standard practice in early-phase research, and it allows us to focus on efficacy and safety assessments without kind of taking too long to develop a commercial version. So looking ahead, very optimistic, Jay, that MariTide's potential for monthly or even less frequent dosing will significantly enhance the patient experience, and we're exploring that with a range of dosing options in the Phase II.

Great. That makes perfect sense. And maybe just a follow-up on that. How are you thinking about the eventual launch and market positioning? And how are you going to position MariTide relative to other therapies? And how large can the commercial opportunity be?

Yes, I mean, it's obviously a very exciting time for everyone here at Amgen that's working on this program. And what we're excited about is the potential for differentiation on the degree, the durability of weight loss, potentially tolerability and definitely the monthly or even less-frequent dosing. So it's always exciting when you think that you can come to market with something that's highly, highly differentiated. I think the promising data from the Phase I studies of MariTide showcase not just rapid weight loss, where participants experienced a 14.5% reduction after only 3 monthly doses, but the durability of that weight loss with a sustained 11% weight loss after 150 days from the final dose. So really, really important differentiation attributes. And not forgetting tolerability here, as Jay said, the tolerability of MariTide looks very interesting given that most of the side effects were associated with first dose and very transient and then a very low percentage of patients experiencing any GI AEs after that. So what further sets MariTide apart is going to be the dosing schedule. Monthly dosing, in and of itself, marks a huge advancement in the treatment convenience compared to what's on the market. And we're exploring the potential for even less-frequent administration in the Phase II trial. So that adaptability in dosing could really help and provide an unprecedented flexibility and favorable patient experience, as I said, with an autoinjector. Regarding tolerability, I think Jay has indicated the profile there. I think that looks very, very strong. So when you look at the market opportunity, we're talking about hundreds of millions of people living with obesity and overweight. And it's a very heterogeneous disease. We think that there will be, obviously, different people responding in different ways to the treatments. We see that in the market already. And so we think we can enter the market and satisfy a fairly significant chunk of that with the differentiated profile of MariTide. So the work is ongoing. Our extensive Phase II study provides us the potential to fit that differentiated opportunity and distinguish MariTide in multiple segments. And our goal is to deliver a treatment that not only sets a new standard for efficacy and durability of that efficacy, but also tolerability and definitely the convenience of a more favorable patient experience.

Great. That's super helpful. Thanks for sharing that vision with us. And we do want to talk about other things outside of obesity. So maybe just focusing on some of your large growing products for a moment. Can you just talk about Prolia, EVENITY, Repatha? How are you viewing the growth trajectories for those drugs?

Yes. We do have some other great things happening at Amgen beyond obesity, Jay. We're really excited about the way we finished last year with Otezla. The growth opportunity here is substantial given the broad indication that we have for all severities of psoriasis, combined with the established clinical profile, the well-understood safety of this product, the payer coverage we have, a lack of testing required upon initiation and convenient oral administration. What we saw in the fourth quarter was an increase in new patient starts rising by 6% year-over-year, driven by strong execution. Continued investment, I've mentioned several times in public calls where we've expanded our dermatology sales force and increased direct-to-consumer investment, which will continue throughout the course of this year. So very, very excited about Otezla growth generation there. Repatha, look, it's been a lot of work, but there's a huge number of untreated patients here. And this is the #1 killer of patients in America. And we think that now we have established excellent access for Repatha with the best coverage we've ever had. Cardiologists tell us that, that coverage now makes it easy to use Repatha. So on top of that, recent formulary changes in Medicare Part D will continue to fuel that strong volume growth that we've seen. And some payers are even removing prior authorization, so making it even easier. So easing that access to Repatha, I think, now we can focus uniquely on the urgent need to educate physicians and patients on the importance of lowering LDL-C to reduce the risk of cardiovascular events. So in the U.S., we've activated more than 20,000 new prescribers in 2023. That was both in primary care and cardiology, and we're really pleased with the progress. And we're very, very excited about the long-term potential growth now for Repatha, and that's not just in the U.S., but in many major markets around the world. You asked about Prolia. We see lots of opportunity to continue to grow Prolia in bone, along with EVENITY. These 2 products fit very nicely with one another in that category. There's a large unmet need with osteoporosis, disproportionately impacting postmenopausal women. The diagnosis and treatment rates for these patients are relatively low. Only 6% of very high-risk patients with osteoporosis are treated with a bone builder, and that creates a really, really urgent need for treatment with an effective therapy. So EVENITY is an important therapy to address this unmet need. It's the only bone builder that works with the body's natural ability to increase bone formation. And also the other mechanism is it actually does have some effect on decreasing bone resorption. So we see strong growth potential for EVENITY and we continue to see growth in Prolia.

Another key product that continues to deliver is BLINCYTO, and always surprises us with its continued performance. And now you're moving to earlier lines of therapy, and you have a subcu formulation in the works as well. Can you help put that into context for us?

Yes. Look, we're excited about the June PDUFA date for the data that were presented from the E1910 study in earlier lines where, as you mentioned, Jay, also very excited about the potential of a subcu administration, which provides further upside in that indication, but it might even unlock the opportunity to go into other settings with BLINCYTO. So a great growth driver, lots of room to grow for this product going forward.

Okay. Super helpful. And we're also really excited about tarlatamab with your June PDUFA coming up there. Congrats, again, on getting the priority review. Can you just talk about how that's going to fit into your portfolio? And especially now that Merck has acquired Harpoon, it seems like DLL3 is a popular target.

Jay, do you want to start on tarla?

Yes, I'm happy to. We're wildly excited about the potential of this medicine. We're rapidly advancing the earlier lines of treatment. And the unmet need, you must know there is extraordinary to recap for everyone. As just said, tarlatamab is a first-in-class, DLL3-targeting BiTE molecule that recruits and activates immune cells. We got an FDA priority review following really promising results from our Phase II DeLLphi study, that was in advanced small cell lung cancer, in this PDUFA date of June 12, 2024. June is a big month for us here at Amgen, development with 2 PDUFA dates. It's so unique. There's 70,000 of these patients across the United States and in the major markets outside of the United States. And the potential to reach these patients with a targeted therapy that they so deserve, where the standard of care remains combination chemotherapy, as it has for decades, is a huge opportunity that we don't take lightly. And so we're moving as fast as we can, as expertly as we can, to move tarlatamab earlier into treatment, where, hopefully, the responses can only be better. And they're indeed extraordinary already. We've initiated 2 Phase III studies, and we plan to initiate a third in the first half of this year. And I'd really rather not comment on other people's data. This is a space that's rightly and nicely competitive for patients. But the activity of this medicine is exceptional, and we're very confident expanding the investment and moving it to earlier lines of therapy.

Excellent. That's super exciting and great news for patients. I think we're just about out of time here, but I want to make sure we didn't miss anything. Justin, anything that we didn't ask and should have?

Yes, Jay, thanks so much. And I think, I agree, there's a lot more going on besides the things we talked about. But obviously, given the time, glad to focus on the questions that we had today. But maybe just to sum it up. I mean, as you heard, there's a lot going on that's really exciting at the company. It really is the most balanced portfolio in our history, marketed products, pipeline products. And there's really an important number of catalysts through the rest of the year. One just final item I wanted to flag for our investors is that we're hosting a rare disease event next week. It's going to be on Thursday, 4:00 Eastern Time, you can find the details on our Investor Relations page. And really, the goal here is to just to provide an opportunity for folks to learn more about our fourth and newest therapeutic area, pillar of growth. So thanks again, Jay, for hosting us.

It's our pleasure, and thank you so much for bringing us up to speed on all the impressive progress you're making. On behalf of patients at Amgen, really appreciate it, and we look forward to seeing you next week.

Great. Thanks again, Jay.

Great. Thanks, everybody.

Thank you.