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

I'm Geoff Meacham. I'm the senior biopharma analyst, and I have Charlie from my team on stage with me as well. Welcome to the Bristol-Myers session. So on behalf of Bristol, we have CFO, David Elkins. David, welcome.

It's good to be here. Thank you for having me.

Yes. So let's -- we got a lot of questions, but maybe just kick it off kind of post 1Q, like the messages coming out of that, and then we'll get right into some pipeline and portfolio questions.

Yes. No, thank you for that. And if you think about Bristol, we're really writing the next chapter in the company's history here. 150 years, this company has been around, some amazing products that we brought to the marketplace, whether you think about ABILIFY or Plavix in both neuroscience as well in cardiovascular. But really, what we're focused on is delivering here and now and executing against what we have from a growth portfolio. Really excited about some of the products we have there. We recently brought in KarXT from Karuna, which we can talk about in Q&A. But we've got great growth products, which I'm sure we'll cover off, whether we're talking about Opdualag, our cell therapy franchise, but also Camzyos in cardiovascular and Reblozyl within MDS. We're really excited about that and continuing to grow those products. And we can talk about the growth of those in the first quarter, but also how we're seeing it as the year progresses. Pipeline. We got a lot of really exciting things coming through the pipeline, a few catalysts over the next couple of years, which we can cover off as well. And then you may have -- we talked on the first quarter call, we're really focused on driving efficiency and effectiveness, simplifying our business model, removing layers in the organization to speed decision-making, but also being able to free up resources to invest in our portfolio. We brought in with the 4 acquisitions that we closed in the first quarter, we have significant clinical development programs that we need to execute against both from KarXT, but as well our radioligand Rayze acquisition. We're really excited about that -- potentially be significant IND engine in one of the fastest-growing areas in oncology. Mirati. We launched Krazati, but also we have a robust clinical program there with doublet and triplet therapies in first-line lung, which we can talk about. And we also have PRMT5, which we will get some data on as well. So really a lot to be excited about as far as the portfolio, both the growth portfolio but as well as the pipeline. And our priority is just executing every quarter against that.

Makes sense. Yes, let's -- before we get into the new launches, I wanted to kind of ask you your -- the -- I know you guys haven't given formal guidance for kind of the Eliquis, the IRA impact and trough. But maybe give us a framework for how potentially to think about the next, say, 2 years or so. The launch portfolio, I think, at the end of the decade is going to really drive differentiated growth, but like investors are focused on the next, say, 12, 18 months. So whatever you can do to kind of help give us some context for that.

Yes. Look, we reaffirmed our guidance in the first quarter call that we're going to continue to grow this year, and we anticipate growing in '25. We really didn't say anything about the IRA negotiations because we're precluded from saying anything around that. But that price will become public in September. And what we said is we'd provide what the impact of that was to our business in '26 and '27 from a revenue and an EPS perspective. And that should give investors a really good understanding of how IRA is going to impact the shape of our business.

Makes sense. Okay. when you look at the core Opdivo business, so there have been some drivers, esophageal, new indications as well as kind of earlier lines of therapy. Thinking about the next, say, 12 to 24 months, investors focus a little bit less on this, but it is a big driver of bottom line in particular. So what would you say are the biggest kind of growth engines for that franchise?

Yes. Look, we feel really good about Opdivo and it continuing to grow. It grew close to 10% last year, and we said it'd be more modest growth this year because we just don't have as many new indications coming out this year. We have the neoadjuvant and obviously periadjuvant. And -- but what we said is we had some destocking that occurred in the first quarter of the year. But as we look at that -- the growth potential of the product, it's going to continue to grow this year and into next year. So we feel really confident about that.

Yes. Perfect. Well, let's talk through the new launches. So that's the most exciting part of the Bristol story. You have Reblozyl, which in the earlier-stage anemia is just now gaining traction. Walk us through the next, say, 12, 24 months in terms of what the drivers are going to be. I'm sure it's all the above, but is it mostly line extensions in U.S.? Do you -- is there a geographic kind of rollout as well that could contribute?

Yes. So let me just walk through all of them first. I'll start with -- we talked about Opdivo. But also I'd be remiss if I didn't mention that we have the PDUFA date for a subcutaneous formulation with Opdivo. And we believe 30% to 40% of the business will go into subcutaneous formulation with physicians. And there's a high unmet need. The great thing about that is we have the PDUFA date in February of '25. Opdivo doesn't go generic in the U.S. until December of '28. So we have 4 years to bring that over. And that could be very complementary to the growth profile of the company. The other thing is Opdualag, which is -- Opdivo is a component of Opdualag. And we had some really positive data come out in first-line lung on Opdualag. And we're -- also later this year, we should see some data on liver as well. So the ability to move Opdualag, we've been really pleased that it's now the standard of care in first-line melanoma. But with additional indications, we'll get more data later this year on lung at a conference, and we're looking -- moving that into Phase III. So feel really good about the near-term potential of Opdualag continuing to grow. But as well, longer term, it's going to be a really important product to our portfolio. The next one I'd really focus on is Reblozyl. I mean it's just doing phenomenally well. It grew 70%. We got a broad first-line indication, RS-positive, RS-negative. We're only about 25% penetrated in that market. And also, I think it's really important, geographically, see plenty of expansion coming there because we've got a broad label in Europe as well as in Japan. So continuing to look at that product do very, very well. I guess the next area that I'd go to is talking about our cell therapy franchise. We made -- our focus on execution, we've made great strides in our manufacturing capacity. We're unconstrained from a manufacturing capacity. We're really excited about Breyanzi. We already got 2 indications, SLL and CLL, earlier this year. And we have 2 more indications: mantle cell lymphoma coming as well as follicular lymphoma coming later this year. So we see Breyanzi being a critical growth driver for the company. We did get an earlier indication of Abecma, but that market remains very challenged and competitive. But we said overall, as you think about that -- our cell therapy franchise, Breyanzi is going to be a significant growth driver of the business. The area that -- and Camzyos would be the next one I would talk about. We've been really pleased with this. We think this is going to be on track to be one of the most successful cardiovascular launches. And this is a new class. So it takes time to build up this. You're also limited by patients have to go through echocardiograms. A lot of those labs are full to begin with. But we've been really successful in getting excitement around this product, high unmet need the. The patients actually feel the benefits of the drug when they get on it. And what we're seeing for the long-term safety profile is people are staying on this medicine for a very long time. And so we're really excited about that. I mean we have a world-class commercial organization in our cardiovascular business with the success of Eliquis but now continuing to drive Camzyos. And then we got another catalyst come in with milvexian Phase III data coming in '26. So we feel really good about the cardiovascular franchise and the growth products, and I'm sure we'll talk about the pipeline a little bit more. The area that has been -- hasn't been meeting expectations is immunology. That remains a challenged business for us. I think it's taken us longer to get access than we were anticipating. The quality of that access hasn't been what we wanted. And as a result of that, you've been seeing that come through, not just on SOTYKTU but also on Zeposia. We think there's going to continue to be pricing pressure, particularly from our rebating, because we're seeing competition there, not just from Otezla in the oral market, but you're also seeing competition from the biologics as well. So as we're looking at that business, we're looking at it as a double digit, about 10% growth Q1 to Q2 sequentially for SOTYKTU and Zeposia. And ORENCIA, it's probably going to be a single-digit sequential growth for Q2. So -- and as we also said on the call, remember, as we're thinking about SOTYKTU, we said we're roughly doubling that business from Q1 to Q2 in the commercial business. So we need to continue to improve upon our market access for SOTYKTU to be competitive. We will be moving from one-step edit to zero-step edits on ESI. So that will help position. And as we said on the call, we're going to get another large PBM with about 30 million lives later this year. So that will also help, which I think gives us -- once we get on more of that equal footing, that gives us the ability to continue to grow that into next year and beyond. We also have Phase III data coming out in cirrhotic arthritis for SOTYKTU, which -- there's about 25% of psoriasis patients have cirrhotic arthritis. So I think that's going to be another driver. And then we're going to get Phase III next -- second Phase III on cirrhotic arthritis that will help SOTYKTU the following year.

So I guess several products that we talked about here, I think we can probably go through each one of them. But maybe just start with cell therapies. So Breyanzi, you mentioned that that's going to be kind of the growth driver. But I guess just kind of looking across kind of multiple cell therapy players, they've seen some pressure last quarter, maybe even this quarter. I think some of them say that the inflection will take probably a little longer, maybe second half of the year. But maybe you can talk about how -- what you're seeing from your side in terms of the competition, where that's coming from, the bispecifics or from the clinical trials and whatnot.

Yes. It's a really good question. And you really have to bifurcate Abecma and BCMA versus CD19 and Breyanzi because the dynamics are very different in those 2 markets. I would agree with you as far as the competitive environment in BCMA with Carvykti and as well as the bispecifics that are in there. We see that's going to remain very competitive, and that's why we think the growth will be more muted with Abecma. But Breyanzi, we believe we have a best-in-class molecule here, very safe. We're moving into the community settings. But more importantly, there's still a high unmet need in lymphoma, in getting those indications, as I was saying earlier, in CLL and SLL, but then mantle cell lymphoma and then follicular lymphoma. That's a huge patient population that we're now going to be able to address. And from a supply perspective, we're unconstrained. We've continued to improve our -- focusing on the execution and from a supply chain perspective. We've had a manufacturing facility in Massachusetts. We're building a manufacturing facility in Leiden. And one of the other constraints is vector supply. And last year, we announced the purchase of a Libertyville site, where we're going to be doing suspension vector, which will further strengthen the supply of the cell therapy business. The other thing we just announced as well is we -- our partnership with Solaris, where that's going to be an automated manufacturing process, which will increase the success rate coming through, so the throughput, but it also will shrink the turnaround time. And we're really excited about that partnership with them. And that's going to be another thing that will help increase the long-term supply of Breyanzi. So we remain really, really excited about the long-term potential of that product.

Maybe how are like the company -- within the company's kind of settings, kind of what's the plan that you guys are doing in terms of driving that area of growth?

Which one, sorry?

The company settings for Breyanzi.

Yes. I mean -- the additional indications?

Additional indications, but just kind of in terms of just given kind of what we're seeing in terms of the constraint within the academic centers?

Oh, I think -- look, this is a huge unmet need, and we believe that those constraints for Breyanzi aren't going to be there because these patients don't have many other treatment options, and they'll get prioritized in that regard. So we feel pretty good about the prospects of Breyanzi even with those constraints given the types of diseases and the high unmet need for these patients.

David, just to follow on that, when you look at cell therapy as a platform for Bristol in general, I mean the -- you guys are investing in new indications and line extensions, et cetera. But maybe talk through the commercial piece of it. Are you starting to see more leverage, easier access from a pricing reimbursement kind of perspective? And I think going forward, is that going to get meaningfully better? Or sort of is it incremental where we are now?

Yes. We believe it will continue to improve. I mean this is -- as I -- we were saying this is a high unmet need, if you think about the therapeutic areas that Breyanzi is going in there. And we don't see that as a constraint for this product going forward. So I think the -- yes, that's what I would say. It's -- we feel really good about the access.

I wanted to ask you -- so you mentioned with respect to the Opdivo LOE and the way to manage it, and I think most investors don't look at that as a more shallow kind of erosion curve and particularly since Opdualag could be a big offset there. Walk us through kind of how you're thinking about that in the outer-years. What is the menu of where Opdualag could go beyond lung and beyond melanoma? And is that the bigger driver? Or are there other combinations, formulations that you guys were thinking about at the end of the decade and beyond?

Yes. Sitting here today, it really is focused on Opdualag and moving that into other tumor types. So we see continued growth there. Obviously, the subcutaneous is going to be important. There's -- if you think about through the physicians, those infusion chairs are jampacked right now. So to create capacity for the health care system overall is going to help that. But sitting here today as far as combinations, Opdualag is the main one that we're focused on. Now we have other -- as you think through, as I was talking about earlier with Mirati and looking at the combinations there with KRAS, we think there's multibillion-dollar opportunities there in doublet as well as in triplet therapies in first-line lung. So you look at the oncology portfolio overall. And then as we were talking about earlier, just coming back to RayzeBio and radioligand, we think there's an untapped potential there. It's a huge market. And this -- and just given the mechanism of action, given your ability to see the drugs being delivered to the tumor type, getting those products approved is something we're also really excited about that -- it's going to be multiple IND engines and multiple tumor types.

Makes sense.

So maybe on Camzyos, I think we heard some kind of incremental updates from competitors this past weekend. Maybe any kind of latest thoughts that you guys have in terms of the kind of the overall kind of market or the potential kind of competitive landscape over like...

Yes, it's a great question. We actually held an ad board after the data became public on Monday. And the takeaway from the key thought leaders was that no real clinical differentiation with the product or from a safety profile. And remember, we just shared at ACC real-world data on safety profile of Camzyos. And I think as well the proof is in the practice that once patients go on Camzyos, they're staying on Camzyos, and the days -- duration of therapy is continuing to extend with that. And we're continuing to build a lot of data, real-world data on that, which we will continue to engage with the FDA on as far as the safety of it. But similar to what we saw with Eliquis, the more real-world data you have from a safety perspective, it just strengthens the profile. So we believe between the efficacy and the safety profile of Camzyos, it sets a really high bar for any competitors that are coming in. Now we launched this product a couple of years ago. We're going to continue to build as we move into new centers of excellence but as well as move into the community setting. And remember that we have the same sales and marketing organization that made Eliquis #1. We had a real opportunity here to make Camzyos the product of choice in this new really important market. And I think having a competitor product as well coming in helps from the standpoint of increasing patient awareness and having somebody else out there. Longer term, it's going to be good for patients.