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

Good morning, everybody, and thank you for joining today. I'm Wimal Kapadia, the EU biopharma analyst here at Bernstein. It's my great pleasure to introduce Giovanni Caforio, CEO of Bristol-Myers Squibb; and Samit Hirawat, Chief Medical Officer at BMS. Thank you for your time. We really appreciate it.

Thanks, Wimal.

[Operator Instructions] And it's nice to see we've already got a few questions submitted, so thank you very much. I think with that, we can kick off. And I think, Giovanni, we'll sort of jump straight into Q&A if that works.

That's perfect, thank you.

Okay. Excellent. So just considering the audience that we have here a generalist conference, I really want to start a little bit more high level. And when I think about Bristol over the last few years, I think it's been really interesting. There's been concerns around IP expiries, and this has been offset by pipeline success, I think a bolstering of this mid- and early-stage pipeline. So I guess my first question really is, how do you think the company is positioned today? What are you excited about? What concerns you? Maybe that's a good place to start.

Well, thank you. And good morning, everyone. Thanks, Wimal. Let me start by saying I feel really good about where we are at Bristol-Myers Squibb. We've made great progress, and I'm confident in the opportunity and the ability to grow the company through the decade. And there are several elements to our portfolio that are particularly exciting. So first of all, the performance of our in-line business is strong. Opdivo has returned to growth. There is really good momentum with Opdivo. Second and most important, we have a really exciting launch portfolio. We've already launched 8 medicines in the last 3 years. This year was a particularly important year. We've received approval for Opdualag in oncology; and Camzyos, first-in-class medicine for HCM, hypertrophic cardiomyopathy. We're looking forward to the PDUFA date for deucravacitinib in September. So there will be 9 new product launches. And when I look at the potential of those products, we see $10 billion to $13 billion in sales by 2025 and over $25 billion in nonrisk-adjusted revenue by the end of the decade. Now on top of that, our mid-stage pipeline continues to progress. And so we're really excited about a number of programs: milvexian in cardiovascular, our CELMoD programs in multiple myeloma and cendakimab in eosinophilic esophagitis. So when you put it all together, we see the company growing low to mid-single-digit between now and 2025. This is an important period because it's when Revlimid loses exclusivity, and we see the company maintaining a very healthy level of profitability with operating margins in the low to mid-40s. We have tremendous financial flexibility with $45 billion to $50 billion in free cash flow in the next 3 years. And all of that brings me to the confidence in the fact there are multiple paths for our company to grow in the second half of the decade. So the momentum is really good at the company.

Well, very interesting. And then you touched on several things I want to dig a bit deeper into. You've -- again, just sticking with the same topic. There's a lot you've just mentioned. But what do you think -- and we'll come into more detail, but what do you think at a high level is the most underappreciated aspects of some of the things that you just talked about?

Well, I think that what's important is that the pipeline is really developing as we speak. And this year, as I mentioned, is a really important year for us. Three first-in-class medicine approved this year. Two have already happened. Deucrava in September. So we are just at the beginning of a phase in which we accelerate the renewal of our portfolio. And obviously, those approvals will be launches. And over the next periods, we'll really see the potential of those medicines. What's exciting is that when I look at the profile of our new products, the labels, and when I look at the reaction from physicians, there is a really strong interest for a very diversified but also a very differentiated portfolio of new medicines. But obviously, the development of our pipeline continues to accelerate. It's -- this year is a really important here, and we'll provide much more clarity.

Perfect. Great. And again, just before we dig into some of the details, a couple more questions, one from the audience, I just want to incorporate. You touched on margins just now. How should we think about the margin profile? You -- Bristol has given us guidance on the top line, and I've been -- thanks for the detail. It's been fantastic. But in terms of the margin profile longer term, so the question from the audience is how -- that balance between the IP expiries and new product launches. How should we think about the margins over the long term?

Yes. And So the question obviously comes from the loss of exclusivity on Revlimid, which is a highly profitable brand. And so obviously, from a gross margin perspective, during the period in which Revlimid loses exclusivity, we will see some decline in gross margins. Now looking then at the second half of the decade, actually our most important growth drivers are also medicines that are highly profitable. And so we see that stabilizing and growing again. I think from an operating margin perspective, though, we definitely see top line growing faster than expenses. And that's what makes us confident with guiding to operating margins in the low to mid-40s, which is what we've discussed before.

Okay, perfect. Perfect. And then just sticking with the margin debate, to some extent, of course, inflation. There's a big debate. And think about the generalist PM and the attraction of large-cap pharma over the last several months as a defensive sector. Now from your perspective, how should we think about your ability to neutralize the inflationary impact that's affecting, like every other company, the entire value chain?

Yes. It's a really important question. For us, for our industry, much less of an impact than other sectors just given our expense base and the nature of our business. Not a significant factor this year. Obviously, if inflation continues to be sustained, we will see somewhat more of an impact next year. But as I said, clearly lower than other sectors. And through discipline in managing investments and expenses, we -- we're comfortable to be able to manage through that.

Okay, perfect. Okay. Now let's get to the fun stuff, the drugs themselves. And I really want to start with cardiovascular, I think probably the most important debate, I think, right now given you've got a few things going on there. But before we get into the new products, just very briefly, we had an update last week in Europe, Teva launching at risk for Eliquis. I mean, I guess how should we think about that? What is the status there and the impact we could see?

Yes -- no, thank you. A really important question. So let me just remind you where we are with Eliquis. We feel very strongly about the intellectual property defending Eliquis. The patents, both composition of matter and formulation patents for Eliquis, were actually upheld by courts last year in the U.S. and Canada. And so as a result of that, we see exclusivity for Eliquis in the U.S., where the majority of our sales happen through 2028, and really nothing has changed there. We have challenges in multiple European countries. We've discussed that before. And what happened in the last couple of weeks is that a judge in the U.K. invalidated the Eliquis patent. At the same time, in the Netherlands, a court rejected our request for a preliminary injunction against an at-risk launch of generics. So we have seen generic companies launching, one in the U.K. and one in the Netherlands. And let me just say we fundamentally disagree with the court decisions that have been made there. They're not based on law. We are going to be appealing in the U.K. We are going to go through trial in the Netherlands. We'll defend our rights. And obviously, if we succeed, those generic companies will have to pay damages. I think what's maybe interesting and important for the audience is when we look at the sales of Eliquis in the U.K. and the Netherlands, they're about 6% of total global Eliquis sales, and as you know, we split those 50-50 with Pfizer. So when we look at multiple scenarios -- we were discussing earlier long-term guidance for the company. We look at multiple scenarios regarding Eliquis in Europe. They don't impact our ability to deliver on the commitments that I just described with respect to growth through 2025 and clearly not in terms of the outlook for the second half of the decade or the profitability discussion we just had.

Fine. So it sounds like the good color you've been giving us on the impact for the rest of the year, that's really not going to be substantially impacted by what is going on in the U.K. and Netherlands?

Yes. When you look at potential impact this year in the range of $200 million to $300 million, again split 50-50 with Pfizer, and we'll continue to follow this closely, obviously.

Okay, perfect. Excellent. Okay. So now let's move on to, I think, the first really interesting debate that investors are having, which is around the Factor XI. And this is where Samit can step in, I think. In terms of -- let's start with like your level of confidence when we're thinking about the secondary stroke prevention trial, the data that's coming soon. Maybe we start there.

Sure. Thank you. And let me break the news here that we actually have the data in-house now for that trial.

Okay.

And of course, I'm not going to discuss the data. I won't get into the specifics. I know that will be the following question. But certainly looking forward to working with Janssen, of course looking forward to initiation of the Phase III program. We have the information that we need to be able to look at the data from TKR as well as SSP study to define the treatment regimen for the patients going forward and certainly not going to get into the indications either.

Okay, okay. Completely fair. I would like to push but yes, that's not the case. So I guess there's a couple of things I really want to touch on. But for me, unmet need is one that we often debate with investors around that Factor XI, Eliquis and Xarelto are great products. Clearly, they've done extremely well. So how does Bristol actually think about that? Of course, it's driven by the data, which I'm not going to talk about. But just that debate there of unmet need and particularly efficacy but then also safety because bleeding is, of course, a key part of the debate. So...

Yes. There are 2 or 3 elements that are going to be really, really important and very -- we need to look at it from that perspective: single-agent use versus use on top of dual antiplatelet agents. And that's the data that has been produced through the SSP study to be able to then demonstrate the safety, efficacy and other elements that we look at. So if you think about the future development of Factor XIa inhibitor, that is milvexian now, we have to look at it from a perspective singular intrinsic pathway versus dual intrinsic and extrinsic pathway inhibition of Factor XI versus Factor X, respectively. Secondly, targeting the arterial side versus arterial and venous side of antithrombotic effects. And thirdly, we don't have to think only about where Factor Xa inhibitors are used today but rather a general principle of where anticoagulation is needed, and there are multiple opportunities. And we've talked about them in the past, if you remember those diagrams that we've shown in the past conferences. So there are multiple opportunities. But again, the specifics of that, we will be able to discuss when we present the data at a conference.

Okay, okay. And any color you can provide on drug interactions with antiplatelets? Or no comment for now? Just forget the data?

Of course, again, no comments from that, but we've not seen any major drug-drug interactions from the drug-drug interaction studies that we've done thus far. And so certainly looking forward to discussing more deeply once we present the data.

Fine. Okay. Very clear. And in terms of peak sales potential, the range can be quite large when we think about what Eliquis and Xarelto are actually delivering today. So you put out this guide of greater than 5. I'm curious how we should think about that in terms of some of the indications that you talked to us, Samit. What drives that greater than 5? And what are the big swing factors we should be thinking about?

So again, we've not given guidance on the indications. The guidance is more on the general principles of cardiovascular drug development and especially in the antithrombotic and anticoagulation piece. So again, to get into the specifics of that, you'll need to see what the indications are, and that's what we're working with Janssen to ensure that we give you a more in-depth look on those.

Fine, fine, fine. Okay. And in terms of the TKR data, do we need more there to inform next steps? Or we can -- you can start to think about that from today.

No. So the TKR data was one piece of the puzzle where we saw the data for the single-agent use, 10 to 14 days. We saw the dose-response relationship when it came to safety perspective -- sorry, there was no dose/response in terms of safety. It was flat, meaning no bleeding was demonstrated. Whereas for efficacy, we actually saw increasing efficacy with increasing dose. And now combine that data with what we've now seen in the SSP study, that will give us a full perspective of what dose to take for the next step.

Okay.

Yes. I think we've always said that the combination of those two Phase II studies was going to give us what we needed in terms of dosing and the strategy to select and prioritize indications to start for the Phase III program. And that's where we are.

Okay, okay. And in terms of the data being presented and when we'll hear more, any context on time lines?

Well, we're hopeful that we will be able to find a conference to be able to present the data this year.

Okay. Excellent. So now let's move on to Camzyos, if I'm saying that correctly.

Yes.

And HCM. Can you -- I think let's start -- there's a few questions I have here, but maybe we start with how you're approaching the commercialization, how you're targeting the centers where you believe uptake will be relatively quick and how we should then think about time lines and approach to get to that broader cardiologist community.

Yes. No, absolutely. We're really excited about the approval of Camzyos because it's the first medicine approved for the treatment of a really serious disease. And so once we received approval from the FDA, the level of excitement in the cardiology community but equally as clear from the patient community has been quite extraordinary in fact. And we're really pleased with what we hear from physicians and what we are seeing at the very beginning of commercialization. So when you look at the opportunity with Camzyos, there's about 75,000 patients diagnosed in the U.S. today. There's about 100,000 in Europe. And in the U.S. specifically, those patients that have already been diagnosed and are treated are highly concentrated in expert centers. So there's about 20% to 30% of patients who are treated in just 100 centers, and the majority of patients are treated in 500 centers in the U.S. So it's clear that our #1 focus is obtaining high penetration in those sites because they are expert treaters, they have a large number of patients. These patients have been waiting for a therapy, and that's #1 sort of chapter of our commercialization strategy. I think as we go forward, we will actually begin to focus more broadly on cardiology and drive referrals of patients into the specialist center. And then I think the third chapter has to do much more with the education required in order to significantly grow diagnosis rates. So if you think about it, it's not that different from the strategy that we successfully implemented when we launched Eliquis because we started exactly that focus and we moved Eliquis from focusing on the new oral anticoagulants to the broader market, untreated patients. So we have an organization in place which has been working on Eliquis for many years and has the experience, the ability, the relationship to launch Camzyos.

Okay, okay. And you mentioned diagnosis, and you've talked about diagnosis being around 25% today and the aim is to double that over time. And I guess I'm curious, what are the -- what could drive that higher? Yes. So yes.

Well, I think that the biggest factor is the availability of the treatment. Because we've seen that in many markets, the availability of a transformational therapy provides great incentives to physicians to diagnose the disease. And so I think that's the #1 focus area. Of course, it's the education and a number of other guidelines and a number of other strategies that, that gets executed. But I think that just the availability of a new therapy provides great incentives. Samit?

Maybe I can add just a couple more things. So if you think about it today, if you showed up to a doctor's office with leg in the -- leg pain or calf pain with a little bit of edema, the first diagnosis they will think of is DVT, right? But if you showed up in a doctor's office with shortness of breath, HCM will not be their first thought. This is a diagnosis of exclusion today. So education becomes really important because it's the most commonly inherited genetic cardiac disorder, which is actually present in 1 in 200, 1 in 500 people who are living with it not knowing that they actually have underlying hypertrophic cardiomyopathy. So how do we get there? Well, you do get an annual physical, right? And at some point, that annual physical actually includes an EKG. But EKGs are read by machines most of the times. And what do you do with that information? So there are methodologies that we and many others are working on to start to think about applying machine learning and artificial intelligence to be able to predict. Now it's not available today, but we are very fast approaching those times when we can assist that application so that actually the attention can be really brought to the forefront so that people start thinking a priori about underlying HCM. And then certainly, if you're symptomatic, then it shouldn't be as in shortness of breath or early heart failure. It shouldn't be treated by just willy-nilly early medicines because if you have the diagnosis, then why not approach it with the best medicine possible? So we are continuing on that path. There is a thing that we launched November of last year. Could It Be HCM? That is just the first effort of starting to educate the public as well.

Okay. So it sounds like you think the risk/reward in that doubling is just to the upside longer term?

Yes.

Perfect. Excellent. So maybe you touch on -- a little bit on formulary coverage. How long before you think we reach critical mass in Medicare in particular? Just curious to hear your thoughts.

Yes, absolutely. And there are several dynamics at play here. With respect to formulary coverage, broadly speaking, I think what we see happening at the beginning -- at the very beginning is that as patients start therapy before the drug is on formulary, there are medical exception processes that physicians can put in place. They take usually 4 to 6 weeks. During this period, patients typically, through our patient assistance program, would receive free drug. But we do believe there is clearly an opportunity to have approval, and then we see commercial supply because there's nothing available with this disease. We feel that formulary listing may take, on average, 6 months. And so that's the period that we're thinking in terms of ramping up access. Now when you think about different Medicare versus Medicaid and commercial, the largest opportunity at the beginning is clearly in the commercial space and the Medicaid space because obviously, specialty medicines in Medicare are somewhat penalized in terms of access by sort of the inability to provide patient support programs in Medicare. Over time, obviously, that can be addressed, but I think if you think about it, the first, fastest uptake tends to be on the commercial and Medicaid side.

And in terms of the bridging program for the commercial, could you just touch on that?

Yes. Absolutely. So as I mentioned, as patients are prescribed Camzyos, they can be enrolled in a bridging program. They receive -- through our patient assistance program, they receive a free drug. And during that period of 4 to 6 weeks, until an approval for their patient is obtained, that's what they receive and then they obviously can switch to commercial supply after that.

Okay. Okay. No, that makes sense. So maybe just on NOW. It's a debate, the REMS program. So how should we really think about that? What kind of impact do you think that will have on the trajectory of the launch? And maybe if you could talk a little bit about the titration, checking the eligibility depending on background, those type of aspects, and the echo monitoring as well.

Yes. So I think -- if you think about a symptomatic patient with obstructive hypertrophic cardiomyopathy, they actually see the doctor more often than one would think, because what is the -- what was the currently -- or what was the standard of care is beta blockers and calcium channel blockers, not necessarily the best medicine to completely control the symptomatology and the progression of that disease. So from what we've heard from the physicians as well as from the patients, this is not a burdensome activity. This is a noninvasive procedure that can actually be done in echocardiography centers, and the readings can be sent easily. And as far as we've heard thus far, when we present the data and the REMS has been launched along with the drug, we're getting good feedback that this is not an impediment to enrolling patients and treating patients or enrolling physicians and doctors. So we -- it is not considered to be a true barrier to providing the medicines to patients.

Bull's-eye.

And do you think the REMS suggests any concern from FDA? And are you having to share continued safety data around maybe muscle weakness?

No. So I think we have to put it into perspective of what was the reason behind the REMS, and that actually lies in the mechanism of the drug. It is a myosin inhibitor, which means it relaxes the heart and you don't want to overshoot it. And so the idea is that manage it through echocardiography, look at the echocardiogram. And if the ejection fraction is not falling below 50%, discontinue the drug. And if the ejection fraction is nearing there or getting lower than that, then how do you manage that? So that guidance needs to be provided. And I think it's appropriate to ensure that we have that mechanism in place to protect the safety of the patients and it's not burdensome or overly -- being overzealous in terms of managing the patient. And I think it is actually seen in a good way that if the patient is safe and the drug is effective, then it is not an impediment.

Okay. That makes sense. Okay, final question on this one is just the price. So 90,000 is the list, I believe, and that compares quite cheaply with myectomy but quite expensive versus; the largely ineffective calcium blockers, et cetera. So, I mean, I guess in terms of uptake, is that the right price point? Is there any pushback you've had so far on that price point? Just any feedback there.

Yes. So first of all, it's really based on the value of the medicine. You're absolutely right that the cost of surgical intervention is significantly higher. But broadly speaking, just the management of those patients in the absence of effective therapy is burdensome and expensive. We have not received pushback with respect to price. And again, we do expect access rapidly for the medicine.

Fine. Fine, fine. Okay, excellent. Let's move on. And I just want to -- a few questions on immuno-oncology, maybe just starting with Opdivo. Just a quick one on the neoadjuvant lung setting. You've had some good data. I'm curious how we should think about the commercial potential. I always have this debate with oncologists around the level of usage in the adjuvant/neoadjuvant setting and the risk/reward. So what feedback have you had so far? What kind of uptake do you think we could see in this setting?

Yes. No, absolutely, the feedback is very, very strong because the data is compelling. And obviously, we're all heading into ASCO. There would be plenty of opportunity to discuss the data. The feedback we hear from the scientific community is extremely strong. So we do expect that to be a standard of care in patients in the early stage. It is clear that the commercial potential is significant, but it is driven by what's a relatively short duration of therapy in the study. So the potential is smaller than what it would be in an indication where you have longer therapy -- therapeutic use.

Okay. Okay. And just to dig a bit deeper in terms of the high-risk population within that neoadjuvant setting, is that maybe where you think the usage will take place? Or do you think it could be much broader than that?

Well, look, I think we have to live by the label.

Yes.

So what the label covers is what it is. But again, we have to look at the bigger picture of it. You've got the first-line metastatic setting covered through 227 and 9LA, where we've got the doublet of IOs. And then we have the studies ongoing in the peri-adjuvant setting, we have the study in the adjuvant setting and we have a study ongoing in the unresectable non-small cell lung cancer. And over time, those data will mature and come out. So you've got coverage from neoadjuvant all the way to metastatic and everything in between. So that's how one has to think about treatment of a patient on a patient journey. Wherever they might be, they will have an option to get treated with Opdivo.

Okay. No, very fair. So maybe just on Opdualag. Today, you're the first to get the LAG-3. So I'm just curious, feedback so far on initial uptake. And how should we think about the commercial potential for these products?

Yes, the feedback. So this is the third checkpoint inhibitor for -- from Bristol-Myers Squibb. And it's a fixed-dose regimen combination of relatlimab, our LAG-3 inhibitor, and Opdivo in the same vial. The feedback has been extremely positive so far because physicians actually appreciate the efficacy of the combination and the tolerability of the regimen. And so feedback has been very, very positive. As we said, we see the first opportunity in physicians and patients that are currently on PD-1 monotherapy. If you remember the melanoma -- metastatic melanoma market, it's about 1/3 Opdivo plus Yervoy, it's about 1/3 PD-1 monotherapy and then 1/3 BRAF inhibitors. The physicians that have continued to use PD-1 monotherapy are physicians that have not, for some patients, been comfortable using Opdivo plus Yervoy because of perceptions around their safety. And obviously, Opdualag presents a perfect opportunity for them. So we see the uptake initially there. Over time, as the long-term survival data matures, there's clearly opportunity to broader than that. But again, the response has been very positive.

And in terms of competition, I want to be -- maybe be specific. Bispecifics. One of your large oncology competitors, Roche, have a bispecific approach targeting LAG-3 with PD-L1. So I'm curious how -- and it may not be specific to that molecule, but the bispecific approach versus your approach.

Look, we do like various modalities. Whether it be bispecifics, ADCs, naked antibodies, they're all appropriate approaches, but they need to be tested out. You'll remember, industry as a whole had given up on LAG-3.

Yes.

But BMS did think about it differently, initiated a program in Phase III in a measured approach and generated the data. Here we are with first-line melanoma indication in hand. So there's that first-comer advantage that we already have. We've got the adjuvant trial in melanoma ongoing. We've initiated a Phase III program in colorectal cancer, we are continuing to generate data in non-small cell lung cancer as well as hepatocellular carcinoma, and we'll see where other signals might be coming up. And so data-dependent decisions. We'll continue to move forward. I can't comment on their approach to a bispecific, but data will tell. And of course, science continues to evolve. Innovation is there. We were the pioneers in using doublet IO therapies. We've got Opdivo, Yervoy and now we've got Opdivo and LAG-3 now.

Very fair. So sticking with the topic of innovation in oncology, TIGIT. One of your competitors recently had a failure or at least an interim readout. So I'm curious if there's any implications for your program and how you think about this target within solid cancers?

So I don't think the story of the target is yet complete. It's very early days. We haven't seen the depth of the data. And again, I'll leave it at that from a competitive perspective. We do have 2 differentiated molecules, very different molecules. One is Fc-inert TIGIT, which nobody else was developing, so we'll have to see what that shows. And the other one is a bispecific. It's got dual targeting. We haven't disclosed the second target yet. So we have to see what the data tells us. And then there are other datasets that will be coming out, and we will see at ASCO. I think the small cell data will be presented. So in-depth. And what the reasons might be -- and maybe there's a learning to be had over there in terms of either the disease characteristics, patient populations, biomarkers that we will then be able to incorporate going forward. So I think TIGIT story is a very interesting one because we did have good Phase II data. So we need to understand what happened, what took place in the Phase III trial. But it's still a very important target.

Okay. No, very fair. And you mentioned ASCO. So just in terms of what we should be looking out for this weekend from Bristol, anything in particular you'd like to highlight?

There are several things that are coming out there. We'll be, first of all, disclosing for the first time the data from the Breyanzi pilot study, which is in patients who were not intended for transplant, which continues on from the past story of transplant-eligible patients. And of course, the PDUFA date is this month, so we are really looking forward to that. We also will be presenting the long-term data on 9LA as well as 227 for the longer-term follow-up of 5 years and 3 years. For 227, 5 years; and 9LA, 3 years. Then of course, Opdualag, continued presentation of that data as well. And then there are other datasets that will be there. And then there's EHA in a week or so, where we will then showcase over there a new CELMoD, 282 in lymphoma. That data will be presented. And then longer-term follow-ups for many of the other trials as well.

Yes. So you mentioned the pilot study. Maybe you can just start on that. Latter of lines of DLBCL is getting a bit more competitive. And in particular, I think of the non-approved, the CD3, CD20s longer term. So I guess if you just think about the competitive profile that you have there and what kind of revenues we could be thinking or penetration we can be thinking about in that setting.

So let me start, from a patient perspective, that these are truly transformational agents. If you think about the moderate mortality associated early on with multitude of -- or multi-modality therapies that are used or multi-drug combinations that are used and then continuous treatment with those versus a single one-and-done cell therapy and then the outcomes that we've been able to see in the trial where we did the comparison versus high-dose chemotherapy and stem cell transplant and the data that you will see from the pilot trial, so these are truly transformative. And so there's a large number of patients who are not cured with the first-line therapy. And so what options do they have if they have a primary refractory disease or relapses? And these are the therapies that are available now or will be available now once approval comes through. So these are the ones that should be used very early on once the approval is there and based on the label because these are the ones that can either negate the need for later-line therapies depending on the how the drug -- or how the disease behaves, or delay the use of subsequent therapies at a later date.

FIne. So you truly believe this will be a direct competitor rather than being used post a CD3/CD20, for example?

I do believe this. The best therapies should be used very early on, and there is nothing, nothing more transformational than cell therapies I have seen as an oncologist in 22 years.

Okay. Very good. Okay. So let's move on to deucra. A big debate for the stock. And correct me if I'm wrong. Maybe it's an unfair statement, but I feel like excitement for the TYK2 is relatively moderate. So what do you think it is that the market is really missing about the mechanism and about the products? And you can tell me I'm wrong.

Yes. No, I...

I don't think he loves it.

So I'll start and I'll ask Samit to give you his perspective, but we actually see great, great excitement in the scientific community. There are -- there is great interest in deucravacitinib. It's the first-in-class TYK2. There is compelling data in psoriasis that showed very clearly a differentiated efficacy profile and also compelling safety compared to the available -- to oral treatments in particular. In psoriasis, as you know, we have a number of other programs ongoing or recently disclosed of a positive Phase II trial in lupus. So there has been a lot of debate about the label for deucravacitinib, and we can talk about that. At the same time, I can tell you there is tremendous excitement for it, so.

Yes. And I think -- look, I don't know whose excitement you were talking about, but we have a -- and the data that continues to evolve increases our excitement. So Giovanni only talked about psoriasis, but we've got data on psoriatic arthritis as well, and we've got the Phase III program ongoing there. And recently, we talked about the SLE data being positive and to be presented on Saturday. And so all of that continues to increase our enthusiasm. And if you think about why the excitement may not be there in some parts of the world is because people want to equate it to a JAK inhibitor, which we've repeatedly said and shown data why it is not from a mechanistic point of view. As -- when we look at the clinical point of view, the effects that we see are not at all like the JAK1, 2 or 3 effects but more of a TYK2 effect, more like an IL-12/IL-23 interferon-alpha inhibitor effect. So our belief is exactly that, and that's where we see the activity as well. If you think about psoriasis -- psoriatic arthritis, IL-12/IL-23-driven diseases or SLE where there's an interferon-gamma-driven disease, so that's how we look at it. And of course, now we're looking forward to September PDUFA date.

Okay. And so you mentioned the JAKs. And is it fair to say Bristol's base assumption is no language at all that's JAK-like on the label from a safety perspective? Is that your base assumption?

So I think that what we always say is we don't really make comments about discussions that may be ongoing with the regulators with respect to the label. We've been pretty clear that our base assumption is a label that reflects the data that we are generating from both an efficacy and safety perspective.

But -- okay. So let's talk about the competitive environment. So psoriasis is clearly getting more competitive as a disease. So when you are thinking about access and ramp for deucra later this year, how are you really going to ensure that you can compete? Because it's getting tougher.

Yes. No, absolutely, it is a competitive space. I think what we hear, though, is that the profile of deucravacitinib is clearly differentiated compared to other orally available treatments. And there is and continues to be a need for more effective oral options in -- for patients with psoriasis. So as we think about, obviously, approval, the PDUFA date is in September. The launch strategy, our teams are ready. And not unlike other launches at the beginning, it is all about physicians' intent to prescribe and new patients on drug. At the beginning, there obviously are patient assistance programs and the ability to provide patients with free drug and support while coverage is obtained. And this is also a space that is heavily managed, so we will be working to -- with payers to get deucravacitinib on formulary over time. But we're confident we'll be able to do that just because the profile is very differentiated.

Okay. And Samit, you mentioned lupus. Really always an interesting target. Never easy. I guess seeing the Phase II data, what's your level of conviction now for the Phase III? Because we've seen in the past, lupus is -- I wouldn't call it the worst therapeutic adjuvant drugs, but it's tough.

Yes.

So your level of conviction now that you've seen the Phase II.

Yes. So the data in the Phase II that we've seen is quite compelling because the efficacy that we see is across the endpoints. Whether it be SRI(4), whether it be BICLA or LLDAS, everything is covered. And from a safety perspective, of course we don't see any signals that are different than what we've already seen. So it is going to be important to translate that now, of course, into the Phase III. So we are in discussions on where the trial design should be, how we will conduct the studies and the dose that we will be taking forward, et cetera. But overall, the conviction is pretty high, I would say, because the data are very supportive. And you will see the data on Saturday, and you will see what the dose has been. And the abstracts are out and what we do see is the lowest dose that we tested over here, 3 milligrams QD, already almost maximizes the impact from an efficacy perspective. And so we are truly looking forward to that initiation and generating that Phase III data to take forward.

Oh, perfect. Perfect. And just very quickly on the IBD indications. Just your level of conviction there for the class. And when will we start to see more of the UC data in particular?

So again, we don't have the efficacy yet proven with the UC and CD indications. We are looking forward to seeing the CD data first sometime early next year, and then UC data towards the back end of next year as the trial is still enrolling and then we'll see the higher-dose data coming out from there.

And you're confident that you can push the dose higher from a safety perspective? Because obviously, IBD is a little bit tougher, so you need to push. But you're confident that safety is -- you can push without compromising?

Look, we've already seen the data at higher doses in the psoriatic arthritis studies, if you'll remember. Now of course, we are pushing it further, but the data will ultimately write the story. So we have to wait for that data to be able to take that further.

Okay. Okay. Perfect. And just we've got a very specific question, so I'm just going to ask it from the audience, which is, can you talk about your partnership with Editas on the alpha-beta T cell therapy and how it fits into your broader cell therapy strategy?

Editas? The one that we announced today that is...

Yes, is it -- Editas, yes.

So I'm probably not the best person to give you a full gamut of that information. Certainly, we can get back to you on that. But certainly, our overall portfolio in the cell therapy space is continuing to evolve, and we are truly looking forward to continuing to generate that innovation both from the autologous side as well as from the allogeneic side. And certainly, we've taken multiple approaches. Alpha-beta is just one of them. Gamma delta, we announced today. And then iPSC is the third one. So we've taken all approaches and more of a holistic approach to that rather than limiting it to one.

Okay. Perfect. Okay. So just in the last few minutes, I want to touch on the mid- and early-stage pipeline. So I think that's really an interesting part of the Bristol debate, and we've seen nice evolution there. So maybe we start at a higher level. And in terms of the depth and breadth, are you satisfied with what you have? Where would you like to continue to invest? And this ties in with one of the audience questions which is, "BD remains a priority for you. So which TAs are the focus? Or should we not think of it that way?" So maybe just at a high level.

Yes. So I think at a high level, if you just think about the discussion we've had this morning, we've covered solid tumors, hematology, immunology, cardiovascular medicine. The portfolio and the pipeline of Bristol-Myers Squibb has become extraordinarily rich and diversified. And that's one of the core strengths of the company. And I think it's true for the medicines we have in the market, the late-stage pipeline which is in launch phase today, and it's true for the mid-stage pipeline. And when you look at the most interesting programs across the mid-stage pipeline, obviously we covered milvexian in cardiovascular, we've spoken about what is happening from an oncology perspective, the CELMoD programs in hematology. And I mentioned cendakimab in immunology earlier. So when you look at the mid-stage pipeline, it's extremely rich and it's diversified across our four areas of focus as well. Over the next 2 to 3 years, we expect to have at least 15 proof-of-concept decisions for our early pipeline. And obviously, as a result of the data evolving, we will bring more assets into the forefront of late-stage development. At the same time, we've always been very clear that we see external innovation, so business development, complementing our internal efforts. And we have tremendous financial flexibility to do that and know-how in the company to be able to execute that. So I would expect us to continue to be active in business development, and I see that primarily in those four areas that -- where we have deep expertise at the moment. So solid tumors, hematology, immunology and cardiovascular disease. Of course, these are broad areas. And particularly as you look at immunology, there are multiple diseases in there. So it's a broad focus more than a narrow focus. But it really is external innovation complementing what is, I would say, an unprecedented level of depth and breadth in our internal pipeline.

Okay, very clear. And I want to touch on CELMoDs and the IL-33s. But just a question from the audience and something you didn't mention now, Giovanni, which is the Phase I assets in neuro sense and how excited we should be about what Bristol are doing there.

Yes, sure. Our focus is primarily in the new information, neurodegenerative diseases. And we have several programs, but primarily we're working through external collaborations. We've always believed in that and certainly very proud to be able to take the broad landscape of neurology and doing that. So we have IL-4, for example, in MS, a BTK inhibitor we are also testing in MS. Then we have the anti-Tau program with Prothena that we're testing out in Alzheimer's, looking to the future. And there are several others as well. So over time, you'll see the data evolving. And as data evolves, we'll continue to see if we need to do more internally or we'll continue the progress on the external front. But truly, this is a therapeutic area that we are going to continuously stay close to and see how we continue to evolve on that.

And so potentially the fifth in terms...

It is. And it's -- as Samit mentioned, I think it's a really good example of leveraging a network of external collaborations to very rapidly build an attractive portfolio of early assets internally. And now we are at the stage in which we're going to begin to significantly accelerate internal resourcing and investment because those assets have reached the point that we'll have multiple proof-of-concept results in the next couple of years.

Okay. Perfect. I know we're down to our last minute. I just want to get two more questions in. So the IL-33. DUPIXENT being a close maybe cousin of that mechanism at least. And you're testing in a few indications, but can you really raise the bar here versus ones on the market today? And then does EoE actually move the needle for a company like Bristol, I guess is my -- so you clearly might -- you must be thinking bigger. So just how we'll think about that.

So two quick things. One, it's IL-13, I think, you're talking about. So IL-13. So the way we differentiate it is -- if you look at it, the type 2 information that occurs and which has 2 components to it, alpha-1 r and alpha-2 r. Alpha-1 r, many drugs do indirectly inhibit that, but the alpha-2 is left open, which means that the fibrosis and remodeling that's occurring, that's left open. So when we think about eosinophilic esophagitis, that component becomes important. That's exactly what's happening there that leads to the stricture formation. And so the Phase III study that we are conducting right now is going to look not only at the infiltration of eosinophils but also that avoidance of the stricture formation and the inflammation that's occurring. So we do intend to differentiate ourselves. The Phase II data did tell us that we see endoscopic as well as the microscopic changes that we intend to see with the program. And then, of course, late this year, we'll see the data from the Phase II study in the atopic dermatitis indication, and that will then pave the way for future exploration as well.

Okay. Perfect. I think we're out of time, so I think we will stop there. Giovanni and Samit, thank you very much.

Thank you, Wimal.

We really appreciate it. Thanks, everybody.

Thanks, everyone..

Thank you.

Samit.

Thank you.