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

Greetings, everyone. Welcome to the 42nd Annual Raymond James Institutional Investor Conference, the second day that's starting right now. Thank you all for joining. My name is Dane Leone. I'm one of the senior biotech analysts with Raymond James. This session, I will be discussing the outlook for Bristol-Myers Squibb and joined by David Elkins, who is the Executive Vice President, Chief Financial Officer. Very excited to have David and his team joining us today for this discussion. David, good morning to you. Thank you very much for joining us for this session today.

Dane, thank you for having me. It's a pleasure to be here.

Great. So the format for this discussion for everyone joining us, we're going to go through a fireside chat together. As the moderator probably instructed you, if you have questions as we're going through, they will -- you can submit those questions, they'll be relayed to me, and I can get them into the queue for you. So with that, I'd like to kick it off. Since we have David, we're going to focus a lot on the outlook for 2021, the corporate strategy. I think a good place to start off of the fourth quarter earnings call, we go into the 2021 guidance for Bristol.

So David, you guys provide pretty clear guidance for 2021 sales and earnings growth, with a slight increase from the prior guidance around non-GAAP EPS, which at the midpoint here up on the screen, implies about a 13% growth rate for the year. The question we always get coming out of the fourth quarter earnings and looking at a new year are some of the key variables that your team is considering for constructing this guidance range. How do we think about the lower and upper bounds driven more by top line growth variables or margin expectations? So anything you can kind of provide on the color of your thought process and putting this together, I think, would be a great starting point.

Great, thanks, Dane. First, I'll just start by how we finished 2020. We had a very strong finish to the year. In the quarter, we grew 10% and for the full year growing 7%. So good momentum in the business. I think the in-line brands -- we're really excited about the return to growth for Opdivo this year, and that's really driven by first-line lung. And we exit the year with double digit share. So we continue to see Opdivo as a growth driver, mainly driven by first-line lung. But also it will benefit from other tumor types as well as we get indications. We got a few PDUFA dates in other tumor types in May coming. So exciting times for Opdivo there. Eliquis continues to do really well, and strong growth as we exited the year. And we still see that as a growth driver for the business as we move forward as we continue to convert those Warfarin patients over into the class. And then we continue to win market share against the other NOAC players. So really good field force execution on Eliquis and really excited about the launches in Opdivo. And then we have our other product launches, as you may have recently seen, Dane. We got the approval for Breyanzi, which is our first cell therapy and ide-cel PDUFA date in March. And our centers are very competitive. We've got numerous centers that are open, and we've already infused our first patient. So that's doing well. ZEPOSIA in multiple sclerosis, doing very well with its launch. And Onureg as well. So the breadth and depth of the portfolio is really coming to light. And then as we just look at the bottom line, we also announced on our year-end earnings call that our synergies are tracking better than we anticipated originally. We raised -- so we raised our guidance to $3 billion in synergies, and that will help us out this year from a bottom line perspective. And also, we recently announced some of the excess cash that we have, paying down additional debt of about $4 billion. So that will help from an interest expense perspective. And then we raised our share repurchases to $3 billion to $4 billion this year, returning that cash to our shareholders. And we also announced the increase in our dividend, almost double digit, 9.8% increase this year, and that's our 12th year of raising our dividend. So a very balanced capital allocation approach between doing acquisitions, returning cash to shareholders.

Great. And the question that we always get and especially right now where we seem to be hopefully coming out on the other end of the tunnel, but as it pertains to COVID, are there confidence intervals that you built-in, in terms of what you need to see in terms of either doctor visits, medical utilization generally around anything that was impacted around COVID, maybe high-touch drugs that are getting prescribed? Where is your team's thought process right now in terms of areas where there is a lingering impact from COVID in terms of prescriber utilization? And where could that go over the course of the year? Or any kind of risk variables that may be things take a step back?

Yes, so COVID did impact our business, but overall, as you can see in the results we had last year, it's a very resilient business because of the types of therapeutic areas that we're in. These are life-threatening illnesses that many people are fighting, so they really need to get to their medicines. But what we did see is like our products that are infused in hospital setting, we did see an impact for new prescriptions, between 10% and 20% as fewer people were going into institutions. And that was really earlier in the year in the second quarter of last year. And what we did see is that subsiding as we went throughout the year. This is clearly something we're going to keep an eye on. And also, I think new prescriptions, we saw that across our business being more impacted than refill prescriptions as fewer people were going in to try new medicines. They're more apt to continue to refill the one that they have. But as we said, the business overall did really well despite that, and it's something that we're keeping an eye on as we head in here into 2021. But we're feeling good with the vaccines coming and the hope with -- we've got another new, the third vaccine being approved here recently. Hopefully, that will get us all back to more of a normal environment in the second half of the year.

Great, and hopefully, that means my kids go back to school.

We can hope.

I think. So you mentioned this in terms of how you're thinking about the guidance around synergy and how you brought up some of your synergy targets, presumably as it pertains to the Celgene acquisition, how are you thinking about, I guess that maybe from a continued longer-term perspective from Celgene synergy? And then your team's willingness to maybe offset some of that synergy with new larger business development deals, and I can point to the MyoKardia acquisition last year, late last year. So how are you kind of thinking about that of pulling synergy out of large past acquisitions versus layering on new ones to the cost structure?

Yes so Dane, starting with the Celgene transaction, we were very fortunate that we moved quickly on the integration with Celgene and we had over 90% of the organization enrolled prior to COVID hitting. So very fortunate in that regard. But also what that wound up doing, and it's one of the main drivers of us exceeding our synergy targets of that $3 billion savings from a run rate perspective by the time we get to 2022 is that we were able to get the savings from salaries and having that organization settled much sooner than we had originally anticipated. So that helped us in exceeding our synergies. And then the other thing that we were able to do is within a couple of days of closing, we had all of our major suppliers come in and from a third-party perspective, able to negotiate those contracts a lot faster than what we were originally anticipating. So between getting the organization in place and as well as being able to work with our vendors, we were able to realize savings sooner. So we achieved $1.4 billion last year in savings of the $3 billion, so well on our way and off to a great start. And that really gives us confidence. And it was a muscle that we built up throughout the year. To your question around MyoKardia, we're really excited about that transaction. This is a huge unmet need in obstructive HCM. And we had a ready sales force. It's there with Eliquis sales force ready to carry this product and launch it. And as we shared before, we see that as about a $4 billion product in peak year nonrisk-adjusted sales. So -- and that was dilution as this year as we get ready to launch the product, about $0.15 to $0.20 worth of dilution in '21. But we were able to offset that in our guidance with the synergies that we're getting from Celgene but as well the efficiency programs that we have in place.

Yes. And touching and maybe expanding actually on just some of these efficiency programs that your team has internally with such a large organization, it can be kind of a grind to get margin impactful internal efficiency programs running. What type of things that as the organization sits today, will you be focused on that could actually continue to drive more efficiency internally and contribute to that profit margin over time?

Yes, if you look at BMS and where our margins are, our margins are in that low 40% to mid-40% range. And we've been on a journey of continuing to be more efficient, particularly from the SG&A perspective. And as you see, we have one of the -- we're top-tier as far as our SG&A expenses versus our peers. And that's a lot of those efficiency programs that we put in place. And that also enabled us to really invest in the opportunities that we see ahead of us with all the new indications on Opdivo, but as well as the new products that we're bringing through regulatory trials to really invest over $9 billion in research and development. But clearly, the synergies from Celgene is a big driver of those continued. And lastly, what I'd say, Dane, is with these new launches, and we have the new launches coming in our hematology franchise as well as our cardiovascular franchise, are 2 great examples where we can allocate resources from the more mature brands to the launch products. And that enables you to really move quickly, invest behind the launches without adding incremental expenses as you're doing it. So that resource allocation is equally important to the underlying efficiency programs that we have in place.

Great. And that's actually a good bridge to longer-term expectations. Your team has been great about providing a 5-year perspective and having updates and hitting -- trying to hit milestones in terms of those longer-term guidance metrics. So I put that up on the screen for 2020 through 2025. Obviously, we're already along that journey to a degree. In your view, and you touched on this with some of these new products, what are some of the puts and takes for this low to mid-single-digit CAGR you guide through 2025? And we get peppered with this all the time as do you, what are some of the big offsets to the expected Revlimid generic cliff that could start next year? Obviously, that's something you guys planned for as you went through the process of the Celgene acquisition. But it remains a big focus for investors. So yes, maybe you could just drill in a little bit more of the offsets to that, that you guys have already planned to have from a product portfolio perspective.

Yes, thanks, and look, this is something we're very much focused on with the loss of exclusivity of Revlimid and Pomalyst approaching us in that '22 to '25 time period. But there's really 2 major things, and I don't drill down into each one of those. First is the in-line business continues to do very well. As I was indicating with Opdivo, we still see Opdivo as a strong growth driver for the business. I was talking about first-line lung earlier, which we've made great progress from a share perspective and continue to penetrate that market, and that's a really important market for us. But also, we got some exciting news, like first line renal. We also are moving into gastric, which is a big opportunity for us, as well as other areas like adjuvant treatment in many tumor types as well, as metastatic. So we have multiple approvals coming, PDUFA dates in May that we'll be launching. So besides non-small cell lung cancer, there's other tumor types, and that adjuvant treatment, which is also an important market for us. We see all of that helping drive Opdivo as we move forward through 2025. And then Eliquis, as I was saying before, one of the things we always look at is where are we from growing that market, that market's an attractive market and continues to grow. But also, our new prescription share is higher than our total share. So we continue to see that opportunity to grow our market share as well as growing that market. And there's still a significant number of warfarin users out there that will continue to be a driver, growth driver through 2025 for Eliquis. And then the other is equally important is our new product launches that are doing really well. ZEPOSIA is a great example of that in multiple sclerosis that we launched last year. It has high reimbursement rates. Physician preference is very high. So that's off to a good start. Onureg in AML, it's the first treatment for maintenance treatment for AML patients. And that's really having a huge impact for patients in their fight against AML. And then Reblozyl we also launched last year in MDS and beta-thalassemia. But we also are looking to launch that in first-line MDS, in all comers. Currently, we just have it in RS positive patients. So Reblozyl is doing very, very well. And then this year, we have -- we also have PDUFA date for ZEPOSIA. ZEPOSIA we see is almost a franchise. It's currently in MS. But we also see that moving into other autoimmune diseases, particularly irritable bowel disease, like Crohn's and colitis. And we had positive Phase III data there on MC, and we're looking to launch that product. And then the last product I would say, is -- not last, but mavacamten, which was through the MyoKardia transaction. We see that with over $4 billion potential, nonrisk-adjusted by 2029. We'll be launching that product here shortly. And we're really excited. As I said, this is obstructive hypertrophic cardiomyopathy. And there's really no treatment for these patients. This is where the heart muscle continues to close, makes it more and more difficult to pump blood. And there's really no treatment option out there for these patients. It's a life-threatening disease. So we're really excited to launch that. And then lastly, we have our TIG2 and that's another autoimmune, and we got positive data, 2 Phase III data on psoriasis. But again, that's another autoimmune, and we're looking forward to moving that product into other indications as well in the future with cirrhotic arthritis. But also that can be used in IBD diseases like Crohn's and colitis as well. So these numerous products that we have, launching those this year. And I'd be remiss if I even mentioned cell therapy with, as I talked about earlier, Breyanzi off to early, early start. But we're really excited about the opportunity that this presents to patients that are fourth line plus in diffuse large B cell, multiple myeloma. So we're really excited between our in-line businesses like the Opdivo and Eliquis, but as well as all those launches that I mentioned.

Great. And I'm just going to incorporate a question that we got into the, I guess, an addendum to that. For -- through 2025, are there other brand expirations that we need to be aware of for the current portfolio beyond Revlimid or anything that you would highlight that your team is, I guess, going to manage through a life cycle transition?

Yes. It's Revlimid and Pomalyst, as we talked about, those are the 2 main products that are facing LOE in that period through '25. And we see Revlimid, in particular, is the largest product, much more of a slope than a cliff, and that really enables us to replace that lost revenue with both Opdivo and Eliquis growth. But as long as -- as well as those launch brands. And as we shared at an earlier conference and in our guidance for the full year, as you look at 2025, we thought it was really important to articulate what the business would look like in 2025. And Revlimid and Pomalyst will be less than 10% of our business by the time we get to 2025. And -- but the remaining business, over 90%, about 30% of that is going to be those launch brands that I just mentioned. So that's -- and we have some smaller products that will face LOEs as we do in this business like SPRYCEL and ABRAXANE. But with all the launches that we have coming, that's where we -- we're comfortable in giving the guidance that we had that low to mid-single-digit CAGR through 2025 with the growth of our in-line bands as well as the growth coming from the launches.

Great. And that actually is a good bridge to talking about the longer-term operating margin guidance. As we were talking about, we're in around the 40% range today, and your team is hoping to get that to closer to mid-40s over the course of the next several years. And what you just laid out was a shift within the portfolio to growth products from old brands to a certain degree. Given a little bit of that mix shift in Revlimid, which presumably would be a high-margin business, how are you thinking about driving up that operating margin? And maybe if you put in 3 buckets from the actual drug portfolio to synergies to internal efficiency, kind of like what we are laying out for the 2021 guidance?

Yes, thanks, Dane, and it's a really important point. We are a high-margin business in that 40%, which enables us to generate a significant amount of cash flow. That's really driven by a couple of things, and I'll explain how that helps us as we go through that period to 2025 to maintain that low to mid-single-digit 40%. First, as I was just talking about with the launch brands, we're really fortunate in that several of those launch brands are high-margin products because they're -- the nature of the product from a manufacturing perspective, they're a small molecule. And our TYK2 is a great example of that. That's the MyoKardia asset, mavacamten -- sorry, that's another one as well, but our TYK2. And -- but also the MyoKardia asset with mavacamten as well is a high-margin product. And Onureg and ZEPOSIA, Onureg was the one that I was mentioning in AML and ZEPOSIA is also really important. And it will be something that will add to our gross margin profile of that, which will help to offset what we're seeing with Rev and Pom, which are high-margin products. Also, Eliquis, we recognize all the revenue, but half the profits of that. So as I was talking about earlier, as those launch products become a greater proportion of our portfolio, that will also help the margins from a gross margin perspective, which is really important, which we guided that to be about 80.5% this year. So we continue to expect to have healthy gross margins. And then to your second part of your question around expense base, 2 things I'd say there. One is the continued -- we only achieved $1.4 billion of those $3 billion worth of run rate synergies in the end of last year. So that will continue to contribute. We said about half of that remaining $1.6 billion will be achieved this year and in 2022. So that's going to help bottom line margins as we continue to grow. And the other thing that I'd mentioned. With these new brands that are coming like the MyoKardia, the MyoKardia asset mavacamten, we're able to leverage our existing sales force, both in cardiovascular, but as well as the hematology sales force and launching our new cell therapy. So it doesn't necessarily have to be additive for us to launch these products. We have strong sales and marketing capabilities in place. We're able to allocate those resources to those new launches. So once you take all that together, the gross margins, the synergies and the resource allocation, that gives us confidence in being able to maintaining that margin in that low to mid-40%.

Great. And take this a little bit of a curveball as you will, just incorporating a question into what I was thinking about asking next on free cash flow. So I was going to ask of that $45 billion to $50 billion of free cash flow expected from 2021 to 2023, how do you think about the breakdown between dividends, stock repurchases, debt and pay down -- debt paydown in biz dev? But the curveball to that is, what's your expectations for interest rates? And how might the changing interest rate environment influence how you make those capital allocations?

Yes, it's an important question. I'd start by saying we have a very balanced capital allocation approach. We're fortunate that we have a strong cash generation business. That's why it was important for us to share that $45 billion to $50 billion over the next 3 years. And there's a couple of things there. One, is we exited the year with $16 billion worth of cash on the balance sheet. And then you add to that, that $45 billion to $50 billion of free cash flow that will continue to generate. And there's a couple of uses of that cash. One, as I talked about, the dividend perspective, our dividend is about $4.4 billion at current levels. And that -- historically, we've increased that over time. So you can think of that into that $12 billion to $14 billion range of cash. We also are continuing to de-lever, and it's really important. We said that we want to maintain that strong investment grade. And we have almost $11 billion of just natural maturities over the next 3 years. And then also with the additional debt pay-down of $4 billion. That brings you to about $15 billion that will be de-leveraging and strengthening our balance sheet, which gives us more strategic flexibility as we look at business development. And then from a share repurchase perspective, we have a history of doing share repurchases. And if you may recall, back in 2019, we did a $7 billion ASR. Last year, we did almost $2 billion in share repurchases. And this year, we indicated we were going to do between $3 billion and $4 billion of share repurchases. So as you're thinking about that going forward, we really look at share repurchases, 3 to 4 that we did this year. And then as we said, we look to offset dilution from employee-based compensation, and we'll be opportunistic about future share repurchases. But that still leaves -- if you do the math and all that, that still leaves a significant amount of cash for us to continue to replenish our portfolio. In order to give us a different business by the time we get to 2025, a new growing business that will enable us to grow into the second half of the decade.

And a good question came in, on that. Do you have a specific contribution to capital deployment in any given year to EPS growth? Or have historical metrics that it's contributed historically on a collective basis?

Yes, if I understand the question correctly, Dane. We have a very consistent capital allocation approach and specifically to share repurchases. The first protocol is to offset any kind of dilution. And then after that, exit. We're not looking to build up a large cash balance either given where interest rates are. So our top priority remains the long-term health of the company, replenishing that portfolio to continue to drive long-term health. But that being said, we're very disciplined in our approach to acquisitions. And therefore, we're doing this to complement our internal product line, which is very strong. And excess cash will return to our shareholders.

Okay, great. So it's not -- you don't use a specific target of capital deployment to boost EPS growth in any given year by some target percentage?

No, it's -- our capital allocation is in service of our strategy as a corporate maybe. And as I said, those strategic pillars are the dividend, reducing our debt levels and continue to support business development to replenish the portfolio.

Great. So let's talk about the portfolio strategy a little bit on this slide. Some of the highlights that your teams made recently. BMS has, obviously, a large company, has a mid- late-stage pipeline. I would say that's pretty diverse across different verticals, oncology, hematology, cardiology and immunology. A question that we get a lot is when you're thinking on the next, call it, through 2025 and your mix across different indications and verticals, what are -- what verticals does your team anticipate being "growth areas" over the next several years from a perspective in internal infrastructure as in building out the commercial team or the support teams to anticipate a bigger revenue base. And so where are you guys looking across some of these different disease verticals where you want to either get larger and smaller for whatever reasons and why?

Yes, thanks. Obviously, that's something we spend a lot of time thinking about and what drives a lot of our strategic choices that we make. There's really 4 main areas that we're focused in. One is clearly on oncology and solid tumor, and Opdivo and Yervoy are the current drivers there. And then as you also think about from a hematology perspective with the images that we have being Revlimid and Pomalyst, but also now that we're going to be launching products like Onureg as well as the 2 cell therapy assets, which are really important for our growth. And then on cardiovascular, a couple of things. We have Eliquis, which is one of the leading cardiovascular drugs in the world. With the MyoKardia acquisition, we have mavacamten that's going to be launching here shortly. And then the third, I would say, is Factor XIa, which is another really important cardiovascular drug. So that franchise, we see multiple products coming through. And then our immunology business, we have multiple products coming there. We have ORENCIA that's in the marketplace now. We have ZEPOSIA that we talked about earlier. That though it's currently in multiple sclerosis, we see that moving into IBD with Crohn's and colitis. And then also with our TYK2 coming and psoriasis, we see that as continuing opportunity in psoriatic arthritis, but as well as the IBD diseases with Crohn's and colitis and possibly even lupus. So those are the 4 main pillars, and that's where we have sales and marketing expertise as well as research and development expertise. So that's where we're focused on. And I don't know if there's anything more you wanted to dive into there.

No, that's great. We get a lot of questions on 2 specific areas that could be kind of obvious areas of investment to build-out, but also areas that your teams kind of hinted at in the past. And those would be specifically targeted oncology in neuroscience. So target oncology obviously hasn't been an area of your big oncology portfolio historically, but has become a pretty high-profile area over the last couple of years. And then interestingly, your team does include neuroscience as a vertical with you in your slides. But as it currently stands, you just have a very early stage program there. So everyone is very curious about your aspirations potentially in neuroscience.

Yes, so target oncology is an important emerging area. And it is an area that we're investing in and we see it as an important opportunity for us. But that science is still early days and emerging, but you should expect to see us being a player in that area. On the neurology side, we're really focused on neurodegeneration. And it's a high unmet need with the aging population that we have. And we have several emerging partnerships, and that's the way we've approached this. Really looking for what are those emerging technologies. And we have several -- about half a dozen different partnerships in that area that we're waiting for the data to prove out those proof of concepts. And we'll take it from there once we see how the technology unfolds. But you should see us more of the early stage types of partnerships that we're doing in neurology, whereas the other 4 therapeutic areas that I mentioned earlier, you would see us with the ability to bring in later stage assets, similar like MyoKardia, it's a great example of that.

Great, and that's an excellent bridge to how your team thinks about the size of business development deals. Clearly, you haven't been shy around larger, more transformative transactions, such as Celgene and MyoKardia. But like you just said, you've been pretty active at earlier stages as well. Always kind of an unfair question to ask, but as your balance sheet currently sits, you've been digesting the Celgene acquisition for over a year now. How do you think about guiding investors for what they should be expecting between larger deals versus more bolt-on deals over the next 12 months or through 2025, if you want to take a longer-term approach?

Yes, so a couple of things I'd say there. Look, replenishing our portfolio remains critically important to us. So that's why we have a strong internal pipeline, but we want to supplement that through external innovation. And just the nature of our business has a tendency to be more earlier stage assets, which are important to replenish your portfolio. So we have a tendency to do more of those just due to the availability of those assets. And Dragonfly is like a great example of that, that we did last year. As far as larger deals, they have to be, from our perspective, are very disciplined and I think MyoKardia is a great example of that. It's in a strategic area of interest, cardiovascular. And the reason why I want that is because we have the capabilities there, both on the research and development side, as well as the sales and marketing side to create value above and beyond the biotech that had the asset prior to us. And the reason why I say that is we're very financially disciplined on how we look and execute against deals. And it's important for us to -- with their economic value-added by contributing more than the target's cost of capital. And but also knowing that we have the capabilities from a development perspective as well as a sales force perspective, gives us greater confidence in our ability to execute against the acquisition plan. So I would expect you to see us doing more of those smaller deals. But clearly, when we find a larger deal that makes financial sense, it's emerging science, scientifically sound, and it's complementary to our existing portfolio from a resource allocation perspective. We're ready to execute against those deals.

And one question from the audience. For your financial expectations for your revenue CAGR through 2025, does that include any implicit deals that have not been done yet contributing to the top line growth?

So very little to none. Ours -- it's really all about the in-line brands that I had mentioned earlier, Opdivo and Eliquis, but as well as the launch brands that's driving all the growth. So any meaningful business development that we do would be additive to our 2025 numbers. And the reason why I say little to none, we have a lot of partnerships that are out there. Where you could have milestone payments, proof of concepts. But right now, we risk-adjusted those out of our forecast.

Great, thank you. And with the time remaining, we would like to touch on a few of the key milestones that your teams laid out for 2021. Upcoming imminently is, as you've touched on it, potentially a really big product for the company, very important product. It's called deucravacitinib, also your TYK2 program, and what will potentially have is the presentation of the pivotal studies, POETYK 1 and possibly POETYK 2 which could be, I guess, guided to by your team for American Academy of Dermatology during late April. Maybe you could just -- this is -- obviously, we get this question also on a daily basis, how is your team continuing to think about the potential drug label, positioning of this drug as a first-in-class drug within what some people consider to be a fairly crowded psoriasis market once the drug is actually approved?

We see this as a really important medicine for patients in the psoriasis market, but still, there's a lot of unmet need. We're really excited by the 2 clinical Phase III studies that we had POETYK 1 and POETYK2, which -- the first one will be shared shortly at a medical conference where everybody can see that data. But this is a really important new oral medicine for patients with a great efficacy and safety profile, we think, is similar to the IL-12 and 23. And this is once-daily oral choice medicine. We think it will be the oral choice medicine in the marketplace. So we're really excited about bringing it to the marketplace. And as I said earlier, with these autoimmune drugs like this, we also believe very much so that it's a franchise where we can move it into other lines of therapy like psoriatic arthritis as well as Crohn's and colitis, but we see this as being the top oral choice medicine in that psoriasis market.

Great. And then the time remaining, I think I'll pick probably one of the more immediate questions that we've been getting on a regular basis. So as you said earlier, 2 of the launches, the drug launches that you have this year, coming on in the cell therapy space, both in hematology, one drug for lymphoma, one drug for multiple myeloma. There's been a lot of debate about the commercial outlook for this drug class. You have 2 CAR-T therapies on the market, nearing about collectively $1 billion in sales. We always get asked, are these drug-like products in terms of how we think about margin, potential contribution margin. Where is your team at in terms of thinking about what the actual operating margin is and the sales potential of these therapies? Is this going to just be completely next-generation commercial outlook versus what we had with the first 2? Or how are you looking to develop the market since you're now going to be the only company with 2 of these products on the market?

Yes, it's a real -- it's an important question as well, Dane. Look, the market continues to mature. And we're really excited with Breyanzi. We see it as being a best-in-class drug. and better than the current standard of care. And as we're getting ready to launch this profile as I mentioned a little bit earlier, we're in a very good competitive position as far as the number of sites that this product can be offered. But also, as you said, we have 2 cell therapies that we're going to be launching shortly. One we have launched, but as well as ide-cel with a PDUFA date in March. And that will help our competitiveness by having both of those products going through our centers. Going back to Breyanzi, the excitement there is besides being best-in-class, really durable responses, but the safety profile of this product is really important as well. And we can see that product being used in the outpatient setting. So that will help increase the number of patients that can receive this versus the current therapies that are out there. And then -- so I think those are the main drivers of that self-therapy franchise. And we'll continue to build out those centers and get this in the hands of more patients because the patients that this is going to is fourth line plus therapy that has failed on all other therapies. And the durability response we're seeing is really impressive. And we also look -- see an opportunity with both Breyanzi as well as ide-cel is bringing those into earlier lines of treatment. So treating those patients earlier. And with the durability of response that we're seeing there, it could be a really meaningful treatment choice for patients fighting these hematological diseases. And the other thing compared to the other launches, there is a DRG reimbursement on the inpatient setting, which is a really important factor as we launch these new products.

It's a much different payer landscape. Well, with that, we are out of time, but I want to thank you very much for this chat. This is really informative in terms of how you're thinking about the operating outlook and portfolio strategy for Bristol. Thank you to all of my colleagues that joined us on this webcast. But David, thank you so much for entertaining on our questions here, and hopefully, we can see each other in person at some point in the near future.

Well, thank you for having me, and I appreciate everybody's interest in BMS. Stay well.

Thank you, everyone. This concludes the session. Look forward to seeing you in the next session.