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

Okay. Good afternoon, everyone. I'm Geoff Meacham, I'm the senior biopharma analyst here at BofA. And I have Olivia Brayer from my team with me as well. And welcome to the afternoon session for the Bofa Virtual Vegas Healthcare Conference. We are thrilled to end today with Bristol Myers. And speaking on behalf of Bristol, we have Chris Boerner, who is Executive VP and Chief Commercial Officer. Chris, thanks for joining us.

It's my pleasure to be here. Thanks for the invitation.

And so maybe to kick it off at a higher level, Chris, how should we think about the cadence of growth over the course of this year? Is it a function of trying to see the Opdivo business reaccelerate? Is there an element of all the new launches collectively starting to drive growth? I just want to get a sense for the moving pieces here looking over the course of '21.

Sure. Happy to. Well, let me say at the outset that we feel very good about the strength of the business and the prospects for growth in 2021 and beyond. Obviously, COVID has created some noise and uncertainty in the short term, but it hasn't impacted the fundamentals of the business, and we anticipate the COVID dynamics are going to improve, certainly as we get into the second half of the year. As for the cadence, maybe I'd highlight a few things. First, we have a number of in-flight launches that are critically important and largely, frankly, going as expected. In IO, for example, we see continued opportunities to grow that business. The first-line launch in the U.S. is going well. We knew that given the competitive environment there, that growing share was going to take time. But we certainly see additional opportunities to grow in the U.S., and we're still very much in the early days outside of the U.S. The 9ER launch in first-line renal is still early days, but we've seen good uptake there. Then of course, we just launched in gastric cancer. So a number of opportunities to grow that business. In hematology, in a similar way, the launch of Reblozyl is going well. This is a business, as we said on the call, is really transitioning from these early launch bolus patients to kind of true underlying demand. But we fully expect to grow this business in 2021, and the product is an important catalyst for us as we think about the longer term. And then the last kind of ongoing launch, I'd highlight is Zeposia, where we're starting to see real momentum build in MS, we're the #1 S1P in terms of written prescriptions. And we're on track to become the #1 S1P in terms of commercial dispense. So that's a launch that continues to pick up steam. So these ongoing launches are going well, and we've seen good execution. Then as you know, we have a number of newer launches that are really going to be important, particularly as we get into the second half of the year and into 2022. I'd note there, the cell therapy launches, which are just underway and going quite well. I'm sure we'll have a chance to talk about those. We've got additional derisked opportunities with Opdivo in metastatic gastric cancer as well as adjuvant gastric and bladder. And then we're rapidly approaching the PDUFA date for Zeposia in UC. So we step back, we see sort of a mix of growth coming from both the strong base business and the in-flight launches as well as momentum that we'll continue to build with those and then new launches in the second half of the year.

And Chris, just on that point, are there franchises that stand out as "easier to launch" in a pandemic versus more difficult? Obviously, Opdivo, we're just talking line extensions. And so most docs are familiar with the product. But some of these newer launches may require a little bit longer of a sales cycle, which I'm not sure if that's easier done in a normal situation versus COVID. Is there 1 that stands out on the positive and the negative?

Well, certainly, as you think about moving into any new launch, areas where you have familiarity are going to be easier than areas that are fundamentally new to you. What I would say, given the breadth of our portfolio and what we've seen thus far, I would think about the impact of the pandemic really in 3 buckets. You've got products like Revlimid and Eliquis, which have really strong fundamentals and the impact of the pandemic has been very muted. And in fact, on both of those products, to the extent that we've seen an impact, for example, on new patient starts, those have been compensated by other things. So in the case of Revlimid by longer duration of therapy, and Eliquis just outperformed the market. Then you have a bucket of launches around cell therapy, for example, which are off to a very good start, and we really haven't seen any impact of the pandemic there. I would say that the 2 franchises where we, much like our peers, have seen some impact are oncology and hematology. And there, again, it's both of those markets have seen new patient volume down in IO. It's been down on the order of 5% to 10% versus pre-COVID level, similar story in MDS. Oncology is also an area where we have disproportionately been unable to engage with customers' lives. In fact, the impact there has been about twice that you see really across the rest of biopharma. That said, in both of those markets, we continue, as I said earlier, to see strong fundamentals and there's a clear opportunity to grow those businesses in 2021 and beyond. So I think that as we think about the impact of the pandemic, I'd leave you with a few things. First, it's product and market specific. Our assumption is that these dynamics are going to improve as we get into the latter half of the year, and COVID really hasn't fundamentally affected the growth thesis for us as a company.

And when you think about the use of telemedicine, some of the main markets, hem/onc, in particular, do you think that's here to stay? Is that going to be easier to launch a drug using technologies like that? Or do you think once COVID sort of comes and goes, and hopefully it will, that, that's going to sort of erode?

Well, we see telemedicine in digital more generally as having a permanent impact really across all of our therapeutic areas. We do believe that kind of the post-COVID world is going to be a hybrid. I don't see the world sort of dispensing with in-person interactions. I think there will still be a role for both commercial and medical in-field engagement. But digital is here to stay. And I think the dynamic you're going to see play out is going to be a little bit different by therapeutic area and maybe by market. But certainly, telemedicine and digital engagement with customers is something that's a new reality. And by the way, we've just taught the entire marketplace to do it pretty efficiently over the last 12 to 18 months.

All right. So let's talk a little bit more detail about Opdivo. And just with respect to the first-line lung positioning, you guys have had some pretty nice share gains since the label was formally expanded. For some of the docs that are still sort of taking a wait-and-see approach, is that chemo light or chemo free? Is that -- how is that resonating with physicians and down the road with patients? And do you think that will get some momentum once we get out of the COVID and can have a little bit more sort of face-to-face marketing-type of meetings with oncologist?

Yes. I think that certainly, the chemo-free element is 1 piece of what is resonating with both customers and patients in particular. What I would say, if you just step back from that -- those, the launch in first-line lung is going very well. And I think the keys to success there have been multifold. First, when you talk to customers in lung cancer really in spite of the innovation that we've seen, there's still an underlying belief that there's more opportunity here in terms of improving the standard of care. And continuing to help patients who still are not getting really long and durable responses to existing therapy. And that includes existing IO therapy in combination with chemotherapy. And so I think the -- what's resonating the most is, as you say, the chemo-free option that we have. But really importantly, it's that long durable benefit that we're beginning to see hopefully emerge from the data here. Many of the customers who are utilizing Opdivo and Yervoy in lung cancer are physicians who are experienced with it in other tumor types. They've seen the tail of the curve in melanoma and the tail of the curve that's emerging in renal cell. And I think there's a genuine belief that we could see the same thing here. And so we come to the market with multiple options, both IO/IO and obviously the 9LA regimen for those feel that some amount of chemo is important. We've seen good uptake in the 1 to 49 population, PD-L1 expression population. We still see opportunities to grow there. And certainly in that PD-L1 negative population where 9LA comes into play, we see opportunities to grow the business there. So we're happy with the share uptake that we've seen. As I said, this is a market where the competitive dynamics are such, it's going to be account by account. And certainly, we continue to see opportunities to engage -- as we see opportunities to engage with customers more, we fully expect to continue to grow share here. And like I said earlier, this is still very early days outside of the U.S. So we just launched in some of the early launch markets in Europe and the Japan launch is going very well as well.

And then, Chris, obviously, RCC is a big indication for Opdivo. Maybe just help us with where we're at with that 9ER launch. I know it's obviously early days, but just give us a sense of how you're seeing competitive dynamics shake out, especially now that there are multiple IO/TKI options on the market and more to come later this year?

Yes. Well, it's early days, but we're happy with the progress that we're seeing with the 9ER launch in first-line renal. We've seen very good uptake in the first 1.5 months or so. Opdivo + cabo is now at roughly 10% market share overall. We tend to triangulate how we look at the share across multiple sources, including we have detailed chart audits that we do every month. And what we're seeing is that, that business is mainly being sourced from IO/TKI therapy. We have seen some cannibalization of Opdivo + Yervoy. But what I would say is that Opdivo + Yervoy continues to be in a very strong position in first-line renal. The share there is between 25% and 30% now. We -- the cannibalization we've seen is, frankly, not that surprising. And remember, this is a relatively small dynamic pool of patients. We saw a transitory impact on Opdivo + Yervoy when other IO regimens launched, and we fully expect that we'll rebound that business. What's important at this stage, though, is that, a, the feedback from physicians on the 9ER regimen continues to be very favorable. They see compelling efficacy, including the OS and doubling of PFS and a safety profile that looks very attractive. And so we see opportunities to grow this regimen, as we've talked about before, particularly in the favorable risk population. That was a population that was off-label for 214 and is on label with 9ER. And we anticipate that we'll, over time, continue to source either from the existing IO/TKI options, but also increasingly sourced from single-agent TKIs, which still represent somewhere in the order of 20% to 30% of the use across risk statuses in first -- risk status in first-line. Now obviously, the competitive dynamics are going to continue to become more involved in that we've got additional IO/TKI options that will be forthcoming. What I'd say about that is we see Opdivo + cabo taking share nicely from existing regimens. The feedback there suggests a real advantage over the IO/TKI regimens that are in the market today, and that's being reflected, frankly, in physician choice. And then obviously, as additional regimens, notably, KEYTRUDA and LENVIMA enter the market, I would just go back to what we said before, which is that we like the profile for Opdivo + cabo. All of the feedback that we've gotten since ASCO GU really does confirm that 9ER is very competitive on both efficacy and safety. And this is a space that we know well. We know it from second-line, and we certainly know how to compete in first-line. So we feel good about where we are from a competitive standpoint.

Okay. Great. And Chris, you obviously mentioned gastric and especially some of the adjuvant indication, gastric, esophageal, things like that and bladder. Maybe just help us with where you see Opdivo fitting in? Especially in the gastric adjuvant setting, but maybe more broadly as well to follow-up in the adjuvant setting and moving into earlier lines of therapies going forward. Obviously, that's sort of still a question mark, right, for a lot of different indications. Can we fully penetrate the adjuvant market and especially moving into neoadjuvant settings and some of those solid tumor area? So maybe just help us broadly, one, how are you thinking about Opdivo penetration and things like near-term adjuvant settings like gastric, but also longer term, how you see Opdivo fitting into that paradigm?

Well, we're very excited about the opportunity to bring Opdivo into the gastric setting as the first IO in that setting. And I think that the excitement really is somewhat speaking to the second part of your question, which is the way we look at adjuvant generally is that this is a space where IO therapy should exquisitely work. You have, in general, beaten update immune system with layers after layers of chemotherapy. And certainly, we have seen very compelling activity in certain tumor types. We saw it in melanoma. And we're very happy with the data that we've seen both in bladder and in gastric cancer. And we've seen early data, as you note, in neoadjuvant in the lung cancer space. So I think that in general, the data are still somewhat nascent when you look across the entire market. But certainly, where IO has been approved, we've seen really nice uptake. And the dynamics of that are that you're going to see 2 things happen. First, you see IO taken -- be utilized by patients who are being treated today. That certainly was the case in melanoma. But importantly, we also learned in melanoma that you see an expansion of the percentage of patients who do get treated. Because now you have really compelling options that, in general, because of the way IO works, have a relatively advantageous safety profile. And that's important for these patients who are in early stages of their disease. The other thing I would say that we found interesting is really the dynamics between adjuvant and the metastatic disease, where if you look at our experience in melanoma, those have largely -- we've been able to largely grow that adjuvant business without having a particularly strong impact in the metastatic business. Obviously, the hope is that you truer more patients in the adjuvant setting. But at least today, patients who have been treated in the adjuvant setting who unfortunately move on to the metastatic setting are still, in general, being considered eligible for IO therapy. So if you step back and look at it, these are potentially very attractive commercial opportunities. There's clear patient need across multiple markets in the adjuvant setting. We like the prospects for this approach to therapy working in this setting. We've seen compelling data certainly in melanoma, now in gastric and in bladder cancer. And we're excited about seeing additional studies readout where we could hopefully help more patients in this particular part of the disease.

Chris, just a follow-up on that. When you think about sequencing, just philosophically adjuvant versus first-line metastatic, does the -- if you have an IO monotherapy in the adjuvant setting, do you have to have an IO-IO or some sort of combination in metastatic? In other words, do you have to have something to resensitize a tumor or reprogram the immune system in the metastatic setting if the patient is IO experienced?

Yes. Well, I can speak to the limited data that we have in the melanoma setting to see what patients have been doing there. We have seen some utilization of single-agent adjuvant, followed by single-agent use in the metastatic setting. Now the majority of our use, as you well know, in first-line metastatic is combination use with Yervoy. So I think it will be a little bit disease-by-disease dependent in terms of how physicians ultimately choose to treat. I think the nice thing that we're seeing, certainly from a commercial standpoint is that you're not seeing physicians in general, say that, well, if I treated a patient in the adjuvant setting, I'm just not going to use an IO therapy in the metastatic setting. And I think that they're open to, again, tumor-specific details notwithstanding, they're open to rechallenging with IO therapy in the metastatic setting.

Got you. Okay. That's helpful. Let's switch gears to your cell therapy program. And we find it exciting because we followed Juno, we followed Celgene previously. And Bristol is, by far, now the largest company that has a cell therapy pipeline in a business, but you're just starting commercially. So what are the early signals of kind of the adoption or awareness for both liso-cel and ide-cel that you're seeing, and do you think there's going to be a learning curve despite the fact that other therapies have been out there still for a couple of years?

Yes. Well, as I said earlier, we're very happy with the launches of both of these products, Breyanzi and Abecma. While it's early days for both, I would say they're both off to a very good start. We have a bit more data on Breyanzi because it was approved earlier, so let me maybe just start there. The launch with that product has gone very well. We have seen the messaging around having a best-in-class asset here really resonate with customers. They see efficacy that's at least as good, if not better than competitors, with a safety profile that truly is differentiated. And so a lot of excitement within the prescribing community for the launch of Breyanzi. What I would say the launch -- with respect to the launch dynamics is, we were able to get out of the gate very quickly. We certified over 50 accounts to be activated to treat with Breyanzi in the first quarter. We were able to get our highest priority accounts, those that have potentially the highest patient volume up and running within 8 weeks of approval. And as I said, the messaging is resonating. One of the big things that had really tripped up some of the early launches in cell therapy was market access and some of the payer reaction. The payer reaction to Breyanzi has been very, very positive with over 80% of the payers we engage within DLBCL expected to cover consistent with the label. So I would say, as we look at that launch, we are exceeding on virtually all of the commercial metrics that we have at this point. And so our focus right now is continuing to activate new sites, ensuring that those patients who are going on therapy have a very positive first experience that's critically important with these accounts, just given the fact that there are competitor agents in DLBCL. And then, of course, over time, we'll begin driving referrals to hopefully expand the overall market here. So Breyanzi is going very well. Again, still early days, but off to a strong start. I'd say there's a similar story for Abecma, though even earlier in the launch. Good receptivity to the first BCMA-targeted cell therapy here. What I would say is we've nicely been able to leverage the infrastructure that we put in place around Breyanzi. So we've seen an even more rapid uptake of academic sites being activated. We activated the top $0.25ers within 10 days of approval. Again, that's one of the advantages, Geoff, to the point you made of being the leader in this space. Is you're not doing this for 1 product, you're doing it for multiple products. Similarly, we've had very good access, again, leveraging the infrastructure we've built to support Breyanzi. So overall, very good feedback and couldn't be happier with both the commercial and the medical execution that we've seen thus far.

And just to your point about having infusion centers that can target both products. What percent is that of myeloma patients treated in the outpatient setting or in the transplant setting? And do a lot of myeloma docs have a separate facility that they would infuse Abecma? Or are they generally shared among some of the academic centers?

I think it varies center by center, you have certainly large centers, Moffitt is 1 of them that treats a lot of multiple myeloma patients. And so there, there's a very focused area with within the -- how they're going to treat these patients. In other cases, there's going to be shared facilities. And certainly, when you begin looking at the outpatient setting, that's largely going to be done in a shared setting. So I think it's a little bit of account by account. What's nice about this particular market as we look at both DLBCL and multiple myeloma, there's considerable overlap. And so we're getting to know these customers. We're able to help them work through the logistics of how they get these patients on therapy for those who aren't experienced with other, for example, CD19-targeted agents. And so I think this really is set up for us to be successful here, both with respect to the footprint that we have across multiple cell therapy products. And then remember, one of the big advantages that we have is the larger footprint that we have with our broader commercial presence in multiple myeloma. And so we knew the physicians who have these patients in the case of Abecma refer those patients in. And that's a real opportunity for us to hopefully leverage that expanded footprint to broaden the opportunity for patients to benefit from cell therapy, not only in multiple myeloma, but also in DLBCL.

And Chris, now let's shift gears to TYK2. Obviously, that's been a big topic lately for investors around your Phase III registrational data. But also some regulatory updates that have come across the JAK space this year. So maybe just give us a sense of how you guys are thinking about commercial positioning for that asset? There's -- I think the big question, right, is what does the label ultimately look like and whether FDA decides to put a warning on it. So maybe, one, just give us a sense of your expectations heading into those labeling discussions with the FDA. But also how you guys are thinking about how to position that asset in that first-line psoriasis market?

Yes, it's a great question. Obviously, a hot topic. Let me say at the outset that we continue to received very positive feedback from customers about the POETYK data that we just presented at AAD. We obviously had been talking to KOLs about these data going into that conference. And certainly, a lot of discussions have taken place since. And everything that we are hearing for those KOLs really does confirm that deucrava has the opportunity to establish a fundamentally new standard of care for the treatment of these moderate to severe psoriasis patients. We obviously don't comment on ongoing regulatory negotiations or interactions. But what I would say is that, a, this is a critically important launch for us as a company. And so it's all hands on deck. We're in the process of planning for a launch next year. And we think the data are very clear on the fact that the deucravacitinib is a differentiated profile versus not only Otezla but with respect to safety in the JAK class. And everything that we're seeing from a clinical standpoint confirms that. Everything that we're seeing with respect to lab values, and importantly, the KOLs that we've been engaging with have broad understanding of this marketplace, including the JAK class. And all of those discussions confirm that, at least in their mind, this is a distinct class from the JAKs. Now in terms of how we're thinking about positioning it, as we look at the data that we've seen from both PSO 1 and 2, a few things are clear. The efficacy is clearly superior to the only brand in the marketplace right -- oral brand in the marketplace right now. And frankly, it's similar to first generation biologics. The second thing that's clear is we've got a very favorable safety profile. As I said, that's not only relative to Otezla, but it's relative to the JAK class. And if you combine a really good efficacy and safety profile with the fact that you've got a convenient oral formulation here, we think that the prospects for deucravacitinib in really repositioning the standard of care in psoriasis is going to be quite exciting. And so we continue to build for the launch of this product. It's, as I said, a high priority for us. And the initial focus will be in obviously displacing Otezla. And then over time, we'll have the opportunity to hopefully expand the oral market by potentially delaying patients moving on to injectable therapies.

And Chris, do you guys view this product, deucrava, as potentially a pipeline in a product with multiple indications? Was the class warning have any effect on the level of investment, probably not, right?

No. We very much view this as a product that has a pipeline. And obviously, there's a lot of data to play out there yet. But certainly, mechanistically, as we talked about at AAD, we believe there's ample opportunity to expand this beyond psoriasis to other immunology diseases. And certainly, we're building a broader franchise and presence across immunology. And so we would view this as an important component of that, and we'll resource it appropriately.

Yes. I mean we kind of view the -- we get a lot of questions on the potential for a black box. And I mean, to us, it's kind of irrelevant. It's still -- the profile looks great, regardless, right? And you can get to good upside to numbers either way. So it's kind of -- it's sort of a moot point.

Yes. And keep in mind that the pivotal studies were done against the only competitor that will be in the initial launch space. And there, the efficacy and safety data are very clear. It's a superior product relative to a test.

Right. So let's shift gears to Reblozyl. And that's had a very good launch last year and you've gotten some good adoption. And maybe just help us with kind of the view forward from here. Are there pockets that -- of patients or customers that haven't yet -- you haven't yet reached? What's the next sort of inflection up after a couple of quarters have had some sort of puts and takes with respect to inventories, et cetera?

Yes. So we are -- continue to be very excited about the prospects for Reblozyl. We think it's an important step forward and really a transformational therapy within MDS. Obviously, this was a product that came out of the gate very strong. We had a very large early bolus pool of patients who came on to therapy. As we mentioned on the call, that pool of patients continues to bleed off over time. It was about 40% of our business in the fourth quarter. It's about 20% of the business today, and we anticipate those bolus patients continuing to fall off of therapy in the coming quarters. And they'll be replaced by consider true underlying demand for this product. And as we look at it, I think our focus continues to be the same just given where this is in the launch, and that is continuing to drive the profile to get new patients on therapy. Continue to expand the breadth of users. We continue to bring on new users weekly. And thus we're building new patient starts around this brand. And that's very important in -- at this point in the launch. The second area of focus will be to continue to ensure these patients are treated consistent with the clinical study. Obviously, when you look at patients who come on early in any launch, those patients may have shorter duration of therapy. But over time, as patients become much more similar to what you saw in the clinical trial, we would obviously want to make sure that they're being treated appropriately, and that's consistent with the dosing duration that we saw in the pivotal study. So those are really the 2 big focus areas for us. And as I said, I think we see considerable opportunity to grow this business in 2021 and certainly beyond. And then we'll wait for additional studies to readout in order to move this into potentially earlier lines of therapy.

Perfect. Well, with that, we're out of time. So really appreciate it, Chris. Thanks a lot for the time. Great conversation. And next year, we'll do actual Vegas. How about that?

Look forward to it. Good seeing both of you and had a good time.

All right. Take care. Thank you, Chris.

Bye.

Take care.