Bristol-Myers Squibb Company (BMY) Earnings Call Transcript & Summary

Delighted to introduce our first keynote of this year's session, Bristol-Myers Squibb. We have 2 representatives. We have Rupert Vessey, the President and Chief Medical Officer; we have Samit Hirawat, the Chief Medical Officer and Head of Development; and we have Tim Power, the Head of Investor Relations. So thank you for being with us and delighted that we eventually made it to make the technology work. So look, I'm going to try and do in 40 minutes or so what you took 3 hours to do or 3 days to do in your recent R&D update, but I'm going to just hit the hotspots. If investors do have questions, then please feel free to e-mail me, andrew.baum@citi.com, and I'll squeeze in as many as we can. So I'm going to alternate my questions or try to between Rupert and Samit on the early and late stage of the portfolio and organization.

Perhaps to kick off something for both of you. You obviously come from different companies, different cultures. Samit, you and I know each other from your time at Novartis. Rupert, your previous career was obviously most recently at Celgene. Could you talk to the differences, both positive and, let's say, different at Bristol today, and what you're looking to form compared to the cultures and competencies that you had previously in your legacy companies?

Sure. I can start from an external perspective, because I come from either the heritage of the organization or the BMS organization. So although now more than a year I've been at BMS so I can't call myself external anymore. Very different compared to my past 12 years at Novartis. Within Novartis, of course, we went through various changes over time where I can say the overall purpose in terms of keeping patients at the center in terms of thinking through is the same. And I realize that the passion for doing the right thing by the patient, accelerating the drug development, having the collaborative environment, it's similar to any other company but at a much higher level in terms of the collaboration, and actually it's very loudly if you think about what heritage Celgene organization did in terms of their BDA activities and lift in the pipeline. It speaks very loudly on the BMS side as well if you look at the external collaborations and the way they've worked through in accelerating the pipeline and also from a conduct of clinical trials perspective with the external collaborations perspective. So those are the commonalities. What we are trying to do as we build a culture of one company now over the last 7, 8 months, certainly, COVID has given us a different perspective, and we have certainly been very agile and adapting to it. What we are trying to build is an organization that is -- has a bigger, greater relief -- or rather belief in the system of empowerment and working from bottom-up rather than working top-down only. And certainly, even more collaboration is coming in, and you've heard a lot from Giovanni as well as ourselves during the 3 days of the investor call, where we are working outside the organization to build the pipeline as well as outside the organization to conduct and continue to manage our pipeline and the overall clinical trials. Rupert, you may want to add as well to -- on top of that.

Sure. Thanks, Andrew. I mean, obviously, I've worked at a number of different places, including GlaxoSmithKline and Merck for 10 -- 8 and 10 years, respectively, and then 5 years at Celgene. I mean Celgene and BMS are quite different companies. Although they are unified by certain things, they both have really strong commitments to identifying novel groundbreaking treatments for really serious diseases, and I think that's been a unifying point for employees from both heritage organizations coming together. As far as my part of the organization is concerned, the heritage BMS organization had almost all of its research and early development activities in Central New Jersey. There's a site in Redwood City, very good site, that had been there for a while, I mean, and a brand-new site that was present in Cambridge. I think what Celgene has brought into the mix is a much more diversified footprint, and we've tried to capitalize on that. So now we have fully functioning but highly innovative research and early development facilities in San Diego, the Bay Area, Seattle and what -- obviously bringing our 2 organizations together in Cambridge into a wonderful new facility. And then we have a lot of resources still in New Jersey that can be used to support and work with teams at those outlying sites. I personally think it's a footprint that most people running early stage R&D -- and large companies would be extremely envious of it, allows us access to incredible talent. Discovery in early development does well in smaller, tighter units, in my opinion, and it also puts us close to major university and biotechnology centers of innovation, who are our key partners and also a source of highly talented employees for us going forward. So I think that's really the change that we're trying to forge in research and early development.

So segue from the big picture question, so probably the question that we've received most frequently in advance of this webcast, on liso-cel. So your recent financial disclosure highlighted that the FDA had yet to inspect your manufacturing facilities. Could you update us whether this is not an issue because it falls into the mission-critical and adverse comments that the agency has defined as potentially allowing approval without prior inspection? Or is there any cause for concern? Or has indeed inspection taken place during the time between publication and today? So I guess that's one for Samit.

Yes, sure, and thank you. Thank you for bringing that forward because, certainly, we do believe the differentiation and the profile of liso-cel compared to many of the competitor products is very, very clear. I think it is well understood also by the health authorities. And thus far, our discussions with the FDA, we are very encouraged by the way they have looked at it. So that is all going in a good direction. As you very well mentioned in the 10-Q, we have certainly disclosed that the site inspection for the cell therapy facilities has not been completed. And certainly, with the evolution of the COVID-19 as well as the challenges it has posed both for us and for the FDA, it does pose a risk because the FDA staff, like many of us, are operating under those significant constraints on travel because of COVID. Now with that said, while we typically don't provide any details on regulatory discussions, what I can say today is the FDA has informed us that they will require inspection of both our facilities in Washington state as well as the manufacturing organization for the vector, which is located in Texas. These inspections have not yet taken place. We are working very closely with the FDA to keep this application on track. And as you know, the PDUFA date is in November. We still have some time to go. But at the same time, we are aware that some of the people -- same people who are at the FDA who will be working or working right now on liso-cel will also be pulled into the inspection-related activities that might be coming along for the COVID-related vaccines. Now FDA is very well aware of that. They are juggling multiple things as this is a public health crisis and they need to manage as well as the diseases that are life threatening, they also need to manage that. So those are all running in parallel. I don't think we can say anything more except that the importance of this application is very, very high for us. I think it is also as important from the FDA perspective. And we'll continue to work closely with them so that we can bring this product to the patients as soon as possible. We will not be providing continuous update on this as the process will move along at the pace that the FDA will decide and define. We'll certainly update quarterly on the filings as appropriate. But otherwise, the next time we'll probably have been updated the market when the status is very, very clear. Today, what we know is what I just conveyed to you. They will require the inspection of facilities.

Thank you. I appreciate that. So maybe staying with liso-cel. The differentiation you noted in terms of CRS was reflected within the TRANSCEND data set. There is still a reasonably high rate of neurologic adverse events. And although the rate of grade 3 CRS is low, I think, 2% from memory. There are obviously grade 1 and 2, which suppresses the high levels. So where I'm going is, do you think that profile is sufficient to allow itself to be administered used outside the hospital setting, obviously reducing the financial barriers in order to increase market share versus some of the competitors?

I think from a clinical profile perspective, as you very well pointed out, one of the key factors is what's the grade of CRS and how can it be identified and managed? And what we have learned, not only from the TRANSCEND data, from the main clinical trial that was presented, but also ongoing work that has been presented as well, on a large number of patients now, the product has been delivered as an outpatient. People are -- physicians are managing those patients quite well. And we do believe that is a differentiating profile that we would be able to bring to bear when we go to the commercial settings where the tertiary centers, who will be delivering these therapies, will be able to manage these patients by infusing the product in an outpatient setting. But certainly, we'll have to have a good communication and the risk management profile that will be put into place so that if the patients do spike a fee where they have the ability to connect with the hospital, come back to the hospital and be managed. So those things will be in place. We do believe that the profile of liso-cel will allow us to be able to deliver that in the outpatient setting. Of course, we'll see what the label ultimately will say.

And in terms of the next iteration of liso-cel, some of your competitors are looking at closed manufacturing systems within the bone marrow transplant lab to both reduce costs rather than sort of hub-and-spoke cell transduction model, which is currently used in the industry. There's also some potential advantages in efficacy. Where is Bristol and the platform that you required for that? How advanced is Juno? Do you have agreements with companies like Molteni, who have the equipment? Are you turning to other providers? Is this just getting going? Could you give us some indication of your interest and progress?

Maybe Rupert, do you want to take one?

Sure. Can you hear me okay?

Yes.

Yes.

I can. I can.

Yes. So Andrew, we've put in a lot of work on next-generation cell therapies from a multitude of angles. We've just initiated a couple of trials with what we call the next-T product. You can see those on ClinTrials.gov. Those changes to manufacturing have been driven by the very large translational insights that we've developed from treating literally thousands of patients with CAR T therapy at this point with multiple different manufacturing processes. And we think those products are going to have some significant advantages in terms of dose turnaround time, cost of goods and potentially in terms of efficacy and safety as well. And we've just started dosing in both of those trials. We've also got work ongoing on our own allogeneic cell therapy products, and we're looking at the potential for iPSC derived approaches. As you know, there's a couple of companies out there that are making headway in that regard. So we're pretty active on all fronts. Yes, Juno, when the company was acquired, had a group that was looking at different types of manufacturing and closed manufacturing systems. And so that work is still ongoing as part of our manufacturing efforts.

And then a couple of other questions, same topic. Parent-child INDs as a way to accelerate the iteration for cell therapies, is that something that you have started to adopt? The FDA seems to have tentatively pushed open the door. And then secondly, in relation to your BCMA bispecific, the combination with the gamma secretase inhibitor, there was some data shared. I think the earlier stage was, again, out of Juno. Where are you on that program? Do you think it's required?

So the parent IND child question is an interesting one and we haven't actually done that yet. And I think it comes down to an issue of whether -- if you're making something that you really think is different and then you have it sort of under the same IND, is it really a different product? Or are you arguing that it's more or less the same? So I think we'll explore that and test those waters. And I think it depends on what we're bringing forward and how much of a modest versus significant change, we think, it is to the first product that moves into the clinic. But definitely an evolving area of interest. We do have access to, again, a secretase inhibitor. And we have been using that in combination with a number of our BCMA portfolio programs, so there are trials that are getting underway to look at that. I think it's too early to say whether that's really a necessary thing for us to combine, but we can do it if we need to.

And would that be -- just looking at, and I guess my last question on BCMA is, looking at your T cell engager, which similarly to some of its peers, although not all, has a relatively high rate of adverse events in the initial data. How are you thinking about remediating that? Is GSI a potential way of lowering dose or alternatively pretreatment with debulking? Fractionation? How do you improve the profile to reduce the increase of therapeutic window? Just a broad question.

Yes. I think that's -- I mean, T cell engagers in general are obviously incredibly active drugs with very narrow therapeutic index. It isn't clear to me that combining it with a GSI would necessarily help because I think you're preserving antigen on the target cell surface. So you still got to activate all the T cells and you're going to have the same sort of issue. I think the concept of debulking ahead of time is one that is definitely worth considering, and that seems to have worked with CD20/CD3 bispecifics where pretreatment seems to lower the risk when you then come in with the bispecific. And I think we have a number of agents in our portfolio that would allow us to do that. I also think we're in the process of learning which patients may be more at risk of those types of adverse unwanted responses and which ones have a better therapeutic index through the translational work that we're doing. So the program's still in relatively early stages, although we're delighted with the signals that we've gotten to date. And as we move that through some E10s in late development, I think we'll be able to address a number of those questions. Samit, I don't know if you want to add anything to that.

No, I think you've covered it all. Thanks.

So I'm going to stay with Rupert because I know he's got hot stuff, but Samit, I'm coming back to you. Don't worry. So we're very excited about the commercial and medical potential of your Factor XIa Inhibitor and the plethora of opportunities that will exist despite the world having generic anti-headache small molecules. Could you update us on -- it would seem to me, given that the GWAS, the Mendelian randomization data, the committal risk in the absence of off-target effects for efficacy are very, very low, certainly much lower than another Phase II. And the obvious low-hanging fruit to us would seem to be embolic stroke of unknown origin, acute coronary syndrome, where there's a broader therapeutic window with the Xa's and those are very substantial commercial opportunities the problem is the time lines, of course, are very long in terms of the trials. So perhaps you could, perhaps both of you, update us on, number one, your level of confidence in clinical risk-reward, given what I've outlined? And then b, the structure of the future commercial program with your partner, whether I'm talking about the right therapeutic areas or I'm sure there's other ones as well. I can think of some others or whether you think they should be focusing on looking at subgroups of the atrial fibrillation population with seamless likelihood.

So whether you like it or not, it actually did come to me. Factor XIa is in the late-stage development program. And we are equally excited about Factor XIa and certainly making progress. There was a slight delay, rather slowdown in terms of patient enrollment during the early part of the COVID impact that we did have in the health care system as a whole. But we are in a good phase of recovery, especially outside the United States right now. As you know, 2 trials are ongoing and you even mentioned that we have our partner. Janssen and us are partnering on there. Janssen is conducting a study in the total knee replacement indication, whereas we're looking at the indication of secondary stroke prevention. We haven't yet disclosed publicly what the overall development program is going to look like. But certainly, we are looking at opportunities, not just in AF. We are continuing to consider opportunities beyond that. And you very well said, I think the ability to be able to combine that with anti-platelet agents, which will be the background therapies for many of these patients and then still being able to deliver treatment to patients who may be at a high risk of bleeding and having a full-dose treatment route and partial-dose treatments that are today applicable for the Factor Xa inhibitors, those are all opportunities that we have to have on the table and look for improvements as we look forward. So truly excited. More to follow once we have fully vetted through the program in terms of additional indications. But everything that you said is on the table for discussion.

And we'd expect the first data from the venous trial middle of next year and then arterial trial...

Somewhere in the second half of next year because we -- as we said, the total knee replacement trial, as well as secondary stroke prevention, the first data should be in the second half of next year.

On your 1 of the 3 R&D days that you hosted, you presented data on cendakimab, excuse me for mispronouncing. And there was 5 or 6 pages on it, which is somewhat surprising, given the perceived need. You also highlighted a prevalence number, which was perhaps were in excess of what some of us in the market would have quoted. Could you talk to why you singled out this agent? Not just explain the prevalence numbers, but more importantly, when I look at other cytokine-targeting agents historically, which have been used, the IL-5 and there's been 2 of them, they obviously both failed. So despite they showed endoscopic improvement, there was no clinical benefit. So what's driving the enthusiasm behind this molecule? What are we missing both in patient numbers but also in differentiated clinical benefits? And obviously, [indiscernible] also being developed as well in that space.

Sure, absolutely. And the reason behind talking a little bit more about cendakimab was that we had never talked about that molecule in the past, whereas the Phase II data are truly very exciting. And as we are -- we looked at the data, we decided to go into Phase III in the eosinophilic esophagitis. Certainly, Dupixent is there, as you said, but it's primarily an IL-4 inhibitor. It works through the heterodimerization with the IL-13 subunit or one of the subunits of IL-13, so it inhibits IL-13 but not fully. The Phase II data for us looked quite interesting, primarily endoscopic improvement perspective. But when you look at the patient-reported outcomes perspective, in terms of the dysphagia score and the days without dysphagia and what improvements patients felt. Those are very promising and that therefore, it deserves looking at a little bit deeper in the Phase III study. This potentially would be the second to market agent for that indication after Dupixent if Dupixent is positive. So we have to continue to build on that, and we have to continue to learn on that as we go to the Phase III and then beyond in terms of understanding these data and the evolution. I think the overall readout from the eosinophilic infiltrates and what happens also with the rings in the furrows and overall exudates in these patients, how they perform in terms of their ability to eat and get rid of dysphagia, all are going to be important as we look at it on longer term. I think in addition to that, the ability to specifically inhibit IL-13, both on the Alpha 1 and Alpha 2 subunits, we do believe it plays a role in the inflammation, and then on the other side on fibrosis, it's going to be much more important because potentially, Dupixent leaves out 1 portion on the fibrosis side, which is the Alpha 2 subunit function, at least biologically speaking. Those are going to be important. I won't comment too much on the incidence prevalence, but I do want to say that this is a very much underdiagnosed condition today. And as more education occurs, as more understanding of novel therapeutic developments come into play, there will be more diagnosis and more that patients will be provided these opportunities. I think beyond that, we are now looking at cendakimab and IL-13 as a pathway. In what other diseases it would be applicable? Certainly, there are lots of cytokine inhibitors, and we have to be mindful and choiceful in terms of where we want to develop. More to follow on that, but there are other indications that might come along for cendakimab that might be very, very important.

So a question for Rupert. One of your competitors asked me to talk to them about the impact of COVID on R&D going forward. And one of my conclusions or potential learnings was the role of master protocols, umbrella trials, basket trials, which have historically been limited to oncology with some success. The success of trials like recovery in COVID suggests that they can be deployed effectively in other areas. And it would strike me that autoimmune and immunomodulatory cytokine would be an obvious place to do that in order to define patients subgroups or whether clinical or biological subgroups, which may benefit for 1 versus the other. And given your portfolio of TYK2, S1P1s, as well as your cytokine targeted therapies, is this a viable strategy for the industry? Do you think that this has got legs? Or do you think there's a fine line between a basket trial and a garbage trial because you didn't set up the parameters right and you end up with a bunch of needless data? So is it workable outside oncology? And does COVID open the doors to using them more broadly to simultaneously advance drugs and optimize or select responsive patients?