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

Well, good morning, once again, and welcome to TD Cowen's 46th Annual Healthcare Conference. We are absolutely delighted to have Bristol-Myers Squibb here again with us this year, representing the company, Adam Lenkowsky, who is Executive Vice President and Chief Commercial Officer. So Adam, thank you so much for being here.

Thanks for having me, Steve.

So let's start out with a bit of a big picture. Can you remind us of any notable pushes and pulls throughout the year in terms of both revenue and OpEx we should be considering?

Yes, happy to do that. When I take a step back, when you think about 2025 performance, we delivered strong performance and execution. And so we had good momentum coming into 2026, particularly with our growth portfolio. So products like Reblozyl, Breyanzi, Camzyos all performed well. We expect that to continue this year. We are now in year 2 for launches like Cobenfy and Opdivo Qvantig. So -- will also contribute to the growth of the company. That said, there are also some headwinds. As you know, we have now full generics in the market for both Revlimid and Pomalyst as part of our legacy portfolio. And I should say, and I talked about on the call, although not part of our growth portfolio, that will be offset by significant growth of Eliquis this year, we expect to see double-digit growth. There are some notable quarterly dynamics that David touched on, on the call. I think we saw a significant inventory build in Q4, particularly in our U.S. oncology business. So our [ IO ] franchise, Opdivo, Yervoy, Opdualag and to a lesser extent, Reblozyl. And so we're seeing that happen now in the first quarter. We're seeing that inventory burn that should normalize by the end of the quarter, and we don't expect any significant deviations for the year. As far as operating expense, we've been very disciplined in our overall operating expense. Recall last year, we did have higher OpEx in the second half versus the first half. That was largely due to some of the deals that we made, our partnership with BioNTech as well as the acquisition of Orbital had increased the percent of R&D spend in the second half of the year. We expect that to normalize this year. So taken together, and I think about the performance of the growth portfolio, the financial discipline, I know we'll talk about the unprecedented number of Phase III readouts that we'll have this year. We feel like we're in a really good position to execute on our strategy of driving long-term sustainable growth.

Great. So let's dig into some of those commercialized products first, and then we'll go more to the products that are on the way. Let's start with Camzyos. So how is Camzyos performing versus what the plan was? And you have new competition. So how can you beat the competition?

Steve, Camzyos continues to perform very well. As you know, it annualized last year at north of $1 billion. We saw consistent and sustained increases in new patients. These are patients who will be on treatment for many, many years, and we continue to see that happening this quarter as well. Secondly, what we're seeing is we're -- even though we're 4 years out almost from the launch, every single week, we're continuing to add new prescribers into Camzyos treatment. And that's happening at the community practices as well as some of the smaller institutions. It's a very positive sign as we're looking to broaden the business outside of the COEs and the roughly 500 centers of excellence. Now as it relates to the competition, we've been expecting competition in this space for quite some time. What we had heard from physicians for over a year that they did not believe there is any meaningful differences between Camzyos and Aficamten. I think when you see the label and the approval that they've had now coming to market in January, that continues to be reaffirmed by our customer base. They don't see any meaningful differences. And we remain steadfast that we're going to be the leader in this space for the foreseeable future.

By the way, if you have a question and you're in the audience, just raise your hand, and we'll do our best to get the question answered. Let's go to another approved product that being Opdivo subcu. So are you on track to achieve the 30% to 40% conversion of Opdivo with the subcu by 2028? And what obstacles, if any, are the payers putting in the way of adoption of that...

Yes. So we feel good about the performance of Opdivo Qvantig in its first full year on the market. Remember, what we talked about last year was receiving our permanent J-code on July 1, and we saw a nice inflection of sales performance in the back end of the year, largely due to continue to build confidence in reimbursement with the community. What we're seeing with Opdivo Qvantig is use across a broad number of tumor types in the community. So we're seeing use in monotherapy. We're seeing use in combinations, whether it's in GI, RCC, metastatic melanoma. And we hear consistently from our community oncology base that Opdivo Qvantig improves practice efficiency, improves the economics of the practice -- and then finally, from a patient standpoint, it's really patient-friendly. When they're offered an opportunity to go on the IV or on the subcu, a 3-minute in-office subcutaneous injection is clearly preferable. So we are on track to deliver against our roughly 30% to 40% conversion commitment, and we're really pleased with what we're seeing from this launch.

Okay. Similar question this time about Cobenfy. So how is it tracking against plan? And what is the outlook?

Yes. Cobenfy in its first full year on the market, we made good progress. What we're seeing in a highly entrenched market is increasing the number of prescribers each week. We are focused on driving both depth and breadth of adoption. And what's a positive sign of those physicians who have a positive experience with Cobenfy, they have an increased proclivity to increase their depth of prescribing. This year is an important year as we look to bring new data sets into the market. In fact, by the end of this month at a conference called SIRS, which is the Schizophrenia International Research Society, we will have our Switch study, which is a Phase IV study that was conducted. And that is the #1 question that we get from psychiatrists. How do I switch my patients that will not help decompensate those patients for positive symptoms and also minimize adverse events. So we'll be sharing those data at the end of this month. and we'll be able to disseminate that data broadly across the psychiatry community. We've also increased our focus in peer-to-peer. We'll have real-world data. And so we feel good about the progress that we're making. And again, it's an important year 2, but we still expect to see steady and consistent growth from this important asset.

Great. So let's stick to the switching study for a second. How long do you think it will take physicians to embrace that data in the clinic?

Look, this is one where it's going to take time. We'll have the data presented at the end of the month. We'll publish the data midyear. We will work with our teams to disseminate the data very broadly. Unlike what you see though in areas like cardiovascular or in oncology where you have NCCN guidelines, [ APA ] guidelines have not been updated since 2020. So we wouldn't expect the guidelines to be updated. So it's going to take some time, but we're going to work tirelessly to get this in front of as many physicians as we can so they can treat patients and have the best possible experience and be able to start with and stay on Cobenfy long term.

So you've done a great job securing coverage, commercial coverage, government payer coverage for this asset and Q1 '26 should be the time where that's in full play. Is this the quarter where we can get the best picture of the potential of this drug?

We were really pleased with our ability to achieve access, particularly Medicare and Medicaid access very early on in the launch within the first 3 to 4 months. And so as we said, when you look at this drug, I mean, you could see a nice steady increase in TRxs. We'd expect that to continue. The way that we've described it is steady and consistent growth in schizophrenia. So we would not expect an inflection. We have not seen that inflection in other products. The inflection though comes where you add new indications to Cobenfy. We'll have data readouts in the back end of this year in Alzheimer's disease psychosis. That will be a great opportunity to inflect the drug. It's a meaningful commercial opportunity. We'll have bipolar studies reading out early next year. So really, it's going to be these next indications that will inflect the product. But all of the leading indicators that we're seeing really point to a direction of this is going to be a big drug in schizophrenia and a multibillion-dollar drug longer term with a suite of new indications.

Are there any updates on the Alzheimer's psychosis trial, ADEPT -2? So are we still -- is it on track to read out at the end of this year? And how has it gone with the addition of the new patients and so?

Yes. So we are tracking towards the end of the year. Reminder, we have not just 1 study, but we have 3 studies in Alzheimer's disease psychosis that will read out at the end of the year. So ADEPT -2, ADEPT-1 and ADEPT-4 should all read out by the end of the year. We also have ADEPT-5, which is a study that is looking at a BID formulation for Cobenfy in Alzheimer's disease psychosis. So we look forward to those data readouts. We've got multiple shots on goal. And we know this product works just based on what we've seen from the open-label Phase I study. That said, we know in neuroscience studies, it does tend to be high placebo rates as well. And that's why we have multiple studies that are ongoing. But we have confidence in the study and these programs that they should hit this year.

And I understand why you're saying end of year, but that leaves open a lot of days and months. So can you be more specific as to when we might get this data?

Probably by the end of the year, you should see the studies readout.

Yes, we're talking December.

I don't know if it's December or November, but roughly towards the end of the year.

Okay. Okay. Good enough.

We'll let you know. I'm pretty sure you'll know as soon as we do.

Okay. Let's move to milvexian, another very exciting drug. What is the base case assumption within Bristol as to whether this becomes the new standard of care for Eliquis and replaces it entirely? Or do you more just go into treatment settings where Eliquis does not play?

Yes. Similarly, the good news is that we don't have to wait very long. We'll have both the data readouts in SSP and in AFib by the end of this year, reading out with our partner, J&J. As far as AFib, now this is obviously a very significant opportunity. It's an area where Eliquis dominates in the space. And so our thesis is that Eliquis is going to play across a broad patient -- milvaxian is going to play across a broad patient population, not just those 40% of patients who are untreated or undertreated based on bleeding. But if we achieve what we hope to achieve, which is comparable efficacy with a better bleeding profile, we think this could become a potentially new standard of care in treating atrial fibrillation. We know that bleeding is the #1 reason why physicians tend to either underdose or they don't dose. It's also the #1 reason why Eliquis dominates in the space over Xarelto is why it's because of the literally millions of real-world data patients that we have in looking at improvement in bleeding profile. So we're excited to see these data read out, and we believe that this could be a new standard of care in atrial fibrillation and really become the stroke drug if we have approvals for both SSP and for AFib.

Great. I should tell the audience, we do have a cardiovascular panel this afternoon, half of which will be devoted to clotting. So hopefully, you can participate in that as well. So when -- I assume you're having some early conversations or maybe not, but early conversations with payers on milvexian. What are they setting the bar to be relative to whether they would embrace it as a new therapy?

No, it's a great question. We have had a number of discussions with payers sharing our target product profile compared to what we see with Eliquis. Although they haven't given us a specific threshold of what they want to see, they also recognize the value of a product that has comparable efficacy to Eliquis with a lower bleeding profile. They recognize the economic benefits, the significant cost savings that come with a lower bleeding profile. So don't lead to hospitalizations, increasing morbidity. And it's really the payers and employers that have to bear the brunt of those significant bleeding events. So they are looking forward to seeing a product that potentially can have a better bleeding profile than Eliquis, and we'll continue to have these discussions along the way to ensure that patients can gain access to this important product.

Well, so what is that, is that target product for bleeding profile [indiscernible] in shares.

Superior, obviously, to get on the market, we have to have a superior bleeding profile compared to standard of care Eliquis. And so we have put together our design paper. You've seen that. And so we do expect to see improvement in major bleeds versus standard of care Eliquis. That's the way we get on the market. And then we would expect to see an event rate -- an efficacy rate that is comparable to that of Eliquis.

So let's go on to another topic digging a little bit deeper into drug products that are on the come, but also on some of the products we just talked about. So how would you rank the following Bristol readouts in '26 and '27 by peak revenue potential? So [indiscernible], Cobenfy ,[indiscernible], iberdomide, [indiscernible] and Milvexian. So how would you rank them into their peak potential revenue-wise?

Well, I'm glad you mentioned 5 of the products and because all 5 will read out by the end of this year. All 5 have very strong commercial potential. And when you look at the 5 assets, you can just see the diversification of those assets from immunology to CV to hematology and to cardiovascular disease. So I'll touch briefly on each of the assets, and we can go as deep as you want, Steve, on them. So when I think about Cobenfy and [ ADP ], this is obviously a significant opportunity for the brand. I mentioned we've got 4 studies here. There's nothing approved in ADP. And we think that the profile of Cobenfy can really transform an area that has seen nothing approved just using -- use of off-label antipsychotics. We just talked about the opportunity with milvexian, particularly in atrial fibrillation, the ability to beat Eliquis, which is a product that continues to grow steadily after over a decade on the market. That is another significant commercial opportunity for the company as well as for our partners in J&J. So we're looking forward to that data readout. Iber and Mezi, which is our 2 CELMoDs, we've got a lot of momentum coming out of ASH, and that's Iber, Mezi and Golcadomide. You also know that we received recently our PDUFA date in a priority review from the FDA for iberdomide. So our PDUFA is now mid-August based on an MRD endpoint. So we also expect to see Iber and Mezi partnering with CD38 as well as with Kyprolis in earlier lines of multiple myeloma, also providing very good commercial opportunities over time. And finally, I think one of the sleeper assets that we don't talk enough about is admilparant. Admilparant is -- will be indicated for both IPF and PPF. These are fatal lung diseases. And when you look at the market today, it's about a $4 billion market. We think the market can grow significantly over time. And a product like admilparant would not come with some of the baggage that we see with the products today, high rates of diarrhea, some other products that are coming to market that have high rates of cough or dyspnea, difficulty with inhalation type of mechanism. LPA1 or admilparant is an oral agent that has a potential opportunity to halt the progression of the disease while having minimal adverse events. So all of these are exciting opportunities, and we look forward to sharing the readouts at the end of this year, and they will all contribute to the growth at the end of the decade of this company, and our focus is really driving long-term sustainable growth.

We couldn't agree more. The IPF and PPF market does look very large. Could it be over $10 billion?

The way that we see it is it could at least double. Today, it's a $4 billion market. We think it could be between $8 billion and $10 billion. And how that would happen, it would happen with -- when you look at the diagnosis rates and treatment rates in IPF and PPF, particularly in PPF, they're incredibly low. In PPF, the treatment rate is only 30% today. So we would expect to see with newer agents coming to the market increases in both diagnosis and treatment rates. With a product like admilparant with an improved safety profile, you could see longer duration of treatment as it halts the progression of disease. We also see coming likely with the approval of admilparant, but also when I think about the next several years into 2035, the potential of combinations in this space, all of which will serve to grow the category. So what could be -- what is a relatively modest category today, we think could be a big category by the middle of the 2030s.

A competitor in the LPA1 space had a failed trial. So how is admilparant different? And how will it not suffer that same fat?

Yes. So we know that Amgen had a failure in the LPA1 program. Now a reminder, admilparant has a different mechanism of action. LPA1 is an asset that targets 3 specific pathways in the treatment of IPF and PPF. Amgen had what was called an LPAR1, which is different mechanistically. I think the second area that gives us confidence in our program is we had a very large Phase II program, about 400 patients in this program for IPF and PPF. And we saw significant improvement in [ FVC ] which is the primary endpoint of both our IPF and PPF studies, both strong efficacy as well as very good tolerability and safety profile. So taken together, we feel like those are really good reasons to believe in the enthusiasm that we have in this asset.

Maybe we can move to Opdivo and in its LOE. And the reason why I'm mentioning this is other companies with very large LOEs as well, including in the PD-1 space, have been more vocal with investors about their ability to push out the LOE and gain additional time on the market, and we're talking at least a year or much more. So why is Bristol not engaging in this conversation as well? I know you're a conservative company and so forth. But is there anything different about the IP estate at Bristol, say, versus your competitors who are being more vocal?

Here's what I'd say, Steve. Number one, as you just rightly pointed out, it's not our style to go out and talk about things that -- and potentially get over our skis in some areas that we are closely monitoring the case laws as it relates to patent exclusivity. What I will say is this, we will continuously to vigorously defend our IP, whether it's for Opdivo or any other product. We've been successful already in staving off biosimilars that are trying to come to market with Opdivo. And we do give 2028, December 2028 as our LOE as a conservative planning date. That's what's in our long-range financial plan. I believe that's what's modeled in your long-range financial plan and should be the case, and we'll continue to update you as we look to the future. We do have subsequent patents for Opdivo that bring us out into the 2030s, but we are modeling December 2028 as the loss of exclusivity for Opdivo. But we also have, of course, we talked about Opdivo Qvantig, which could extend the franchise into the 2030s. And what's really exciting is that by the time that we start to see the biosimilars coming into the market in the, let's say, the early 2029 period, we could also start to see some of our Pumitamig data come. And with Pumitamig, this gives us a potential opportunity to not just grow but expand the opportunity we have with IO, with our BioNTech partners. So we have multiple options around maintaining and growing our IO franchise into the future.

So let's drill on to Pumitamig. So why is the Bristol strategy in developing this asset better than that of competitors?

Look, I'm not sure if it's better than competitors. I mean, number one, we're very pleased with our partnership with BioNTech. They were very careful in selecting a PD-L1 VEGF. So note the mechanism difference. Now that has not played out, as you know, in the first-gen PD-1, PD-L1s. But when you look at adding a VEGF, we do think there's some mechanistic plausibility to an advantage that a PD-L1 VEGF could give. Number two is we've got a lot of experience in this space now, almost 2 decades, starting with the launch of Yervoy then to Opdivo to LAG-3. So we've got experience from a scientific standpoint as well as strength commercially here. We have 8 Phase III studies that we have already announced that either started enrolling or will be initiating. And then with our BioNTech partner, we are excited because we've structured the deal and both companies have exciting assets in our early pipeline. So looking at novel, novel combinations, combinations with ADCs, combinations with targeted therapies. So you'll start to see more of that in the Phase I stage as we look to accelerate. Our goal is to be first or second in every tumor that we're going to compete in, save for lung where we know Summit has a clear lead there. But we feel very good about the partnership we have and the speed at which we're moving forward.

Sticking with the pipeline, but overall, not just in combination with Pumitamig, but what Phase I or Phase II assets across the Bristol-Myers Squibb R&D portfolio are you most keen to get your hands on to commercialize?

Yes. Well, as a commercial leader, there's nothing better than launching. And I said we've got the opportunity to launch at least up to 10 new medicines and 30 new life cycle management indications by 2030. And that's really this -- the wave of assets that are in Phase III or moving into -- rapidly into Phase III today. But the next wave, we just talked about Pumitamig in Phase III, but also we've got -- we'll start to move faster with Phase I novel, novel combinations. I think anti-Tau is another area. When you look into the 2030s, perhaps the neuroscience field could be the next oncology [indiscernible] where there's a huge unmet need there in Alzheimer's disease, in particular. And our anti-Tau, which is in Phase II today, we've got a number of really promising assets in neuroscience, but also specifically in Alzheimer's disease, products with Brainshuttle technologies, new mechanisms, combinations that we're really excited to bring forward. In the oncology space, -- very excited to launch a product like PRMT5. Now we have 2 studies in Phase III. As you know, MTAP deletions are prevalent in about 10% to 15% of most cancer types. So many of those studies are already in Phase I, and they'll be moving into Phase III after proof of concept in monotherapy and in combination. And then I'd also say, iza-bren, we just announced study that was done in China in triple-negative breast cancer. And in triple-negative breast cancer, iza-bren, which is our HER3 EGFR ADC that we partnered with Systimmune and showed both an overall survival and a PFS benefit in monotherapy. So just think about what that could mean in combination in areas like lung cancer, EGFR mutant lung cancer or triple-negative breast cancer and a host of other different cancer types. So these are just a few examples of assets that we're really excited. We've got a significant number of assets that are in Phase I today or moving into Phase I, Orbital being another example where we could possibly -- we're possibly looking at curing patients or at least having durable remissions in some of the toughest to treat autoimmune diseases. So we've got a real significant number of assets that are coming behind these Phase III data readouts.

We -- try to end all our panels by asking, what do you think the biggest surprise or change will be at Bristol-Myers Squibb in the next decade?

Yes, I love that question, Steve. Thanks for asking. Well, I think the #1 surprise for Bristol is not a surprise to the Bristol management team, but I think it's going to be a surprise to many of the analysts out there around how you're modeling growth for the company at the end of the decade. When Chris became CEO in 2023, he set out a clear vision for this company. And that is to be the fastest-growing company at the end of the decade. We want to see top-tier long-term sustainable growth. And when you look at the number of assets that we have, we talked about so many of them this morning, whether it's from Cobenfy to milvexian to [indiscernible] to Arlo-cel, which is our GPRC5D to our CELMoD platforms to products that are moving very rapidly into Phase III to our radiopharmaceutical platform, all of these substrates are going to provide significant growth. So I'm looking forward to sitting here, Steve, a year from now, and you'll just see a good piece of the readouts that we have as a company. But we feel really good at Bristol-Myers Squibb about where we will be as a company and the growth trajectory we'll have from '29 to the end of the decade and driving long-term sustainable growth and what that means to the company, to our shareholders and importantly, to patients.

I have to say it's an impressive amount of momentum in the product story. So sadly, with that, we do need to conclude. We are out of time. So Adam, thank you so much for making the time to be with us.

Thanks for having me. Thanks for the great questions.