Good day and welcome to the Bristol Myers Squibb 2021 Second Quarter Results conference call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Mr. Tim Power, Vice President Investor Relations, please go ahead, sir..

Thanks, Catherine. And good morning everybody. Thanks for joining us this morning for our Second Quarter 2021 Earnings call. Joining me this morning with prepared remarks are Giovanni Caforio, our Board Chair and Chief Executive Officer; and David Elkins, our Chief Financial Officer.

Also participating in the call today are Chris Boerner, our Chief Commercialization Officer; and Samit Hirawat our Chief Medical Officer and Head of Global Drug Development.

As you'll be aware, we've posted slides to bms.com that you can use to follow along with -- for David and Giovanni's remarks, but before we get started, I'll read our forward-looking statements. During today's call we'll make statements about the Company's future plans and prospects that constitute forward-looking statements.

Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in the Company's SEC filings. These forward-looking statements represent are estimates as of today, and should not be relied upon as representing estimates as of any future date.

We specifically disclaim any obligation to update forward-looking statements even if our estimates change. We'll also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items. Reconciliations of those non-GAAP financial measures to the most comparable GAAP measures are available at bms.com.

and with that, I'll hand it over to Giovanni..

Thank you Tim, and good morning everyone. I hope you're all staying safe and healthy. Now, turning to Slide 4. Let me start by saying I am very proud of our Second Quarter results, and express my gratitude to our teams across the globe for their dedication and steadfast commitment to our patients.

Through their work, we are continuing to make great progress to diversify and renew our portfolio, and position Bristol Myers Squibb for an even stronger future.

During the second quarter, we delivered excellent results across the board, including strong sales growth due to solid commercial performance, positive clinical results in our mid and late stage pipeline, continued BD execution, and strengthened our financial position.

The strength of our commercial execution this quarter was underscored by the performance of our key medicines, including the return of Opdivo to growth and the uptake of our new launch portfolio. Over the last 18 months, we launched five new medicines with significant potential, and we are very encouraged by their performance to date.

Clinically, we continue to deliver on the potential of our pipeline with significant mid- and late-stage clinical readouts and important regulatory actions across our therapeutic areas. The recent additions to our portfolio added diversification to our business and an opportunity to generate sustained growth over time.

From a financial perspective, we saw double-digit growth for both the top and bottom line, and we are reaffirming our full-year revenue and non-GAAP EPS guidance. We continue to maintain a strong balance sheet and generate significant cash flow, allowing us to advance our disciplined capital allocation strategy.

We remain focused on external business development opportunities to further strengthen our pipeline over the long term. This quarter, we executed two licensing deals, an anti-TIGIT bi-specific antibody program with Agenus, and MORAb-202, a folate receptor alpha ADC with Eisai, both strategically aligned with our Oncology franchise.

Overall, I am extremely pleased with our progress in the quarter. Turning now to our execution scorecard on Slide 5. We have made tremendous progress year to date across our therapeutic areas. In Oncology, we are strengthening our I-O franchise and have returned Opdivo to growth through multiple clinical successes and excellent commercial execution.

Earlier this year, we launched Opdivo in three additional indications, including first-line gastric cancer, where we are the first and only I-O agent. We anticipate additional launch opportunities and growth drivers for Opdivo to further accelerate the growth of the brand.

We also see opportunities to expand our I-O portfolio through the fixed-dose combination of our LAG-3 inhibitor, Relatlimab with Opdivo. At ASCO last month, we announced impressive results for Relatlimab, potentially the third I-O therapy for BMS, building on our leadership in the field and expanding the durability of our franchise.

We have a broad development program underway in I-O to benefit more patients over time. Moving to hematology, we received approval in the U.S. for two cell therapies, Breyanzi and Abecma, and demand for these products has been strong. Physicians recognize the value of these treatments and there is significant patient need.

Building on existing indications for Breyanzi, we announced the first-ever positive Phase 3 topline data in second-line transplant eligible large B-cell lymphoma last month. This is an important result. For the first time, we have shown that our cell therapy treatment is superior to a well-established standard of care.

The positive results demonstrate that we can benefit patients early in their treatment journey. We look forward to sharing more details on these results later this year. We also have Iberdomide Phase 2 data in-house, which we are very pleased with and look forward to discussing with health authorities.

The data are potentially the first step towards the establishment of a new backbone of treatment in multiple myeloma, offering a better option to benefit patients. We have made tremendous progress expanding our immunology franchise. Deucravacitinib, a first-in-class selective TYK2 inhibitor, has the potential to be the oral agent of choice.

We expect to launch this potential new medicine in psoriasis in the second half of 2022. We have initiated our Phase 3 program in psoriatic arthritis, and we also look forward to Phase 2 data in ulcerative colitis later this year and in Crohn's disease and lupus in 2022 to further expand the potential of this molecule.

We initiated our Phase 3 program for Cendakimab in eosinophilic esophagitis. And last month in the U.S., we launched Zeposia in ulcerative colitis. Finally, turning to CV, we are encouraged by the topline results we received this quarter for Milvexian, our Factor XIa inhibitor.

We look forward to presenting the data at a medical meeting later in the year. Additionally, we are preparing to launch Mavacamten for symptomatic obstructive HCM in the U.S. early next year. We are encouraged by the potential of these assets to strengthen the durability of our CV franchise.

In closing, on slide 6, our steadfast progress gives me great confidence that we are well-positioned for growth. We are rapidly advancing a new launch portfolio of first-in-class or best-in-class medicines across therapeutic areas.

We remain focused on driving in-light product performance, executing on our launches, advancing early-, mid-, and late-stage pipeline opportunities, and continuing to take a disciplined approach to capital allocation.

Our strong clinical performance further de-risks our launch portfolio, and as a result our confidence in our ability to deliver the 20 billion to 25 billion in non-risk-adjusted revenue in 2029 continues to increase. Our continued strong financial performance and balance sheet enables us to diversify and strengthen our long-term prospects.

As our sales force returns to the field and we welcome our remote teams back to the office, I'm excited by the opportunity to reconnect with our colleagues, stakeholders, and patients. I believe we have the strongest pipeline and launch portfolio in BMS' history, and I'm very excited about our future.

With that, I'll turn it over to David to walk you through the financials.

David?.

Thank you Giovanni, and thank you all for joining our call today. Let me start with our top-line performance on Slide 8. I'm very pleased to discuss our strong double-digit growth this quarter, driven by increased demand for our key medicines across the globe.

Looking at the first half of the year, which normalizes for most of the COVID-related buying patterns we experienced last year, commercial performance was strong, up 9% year-over-year or 7% excluding currency. This robust performance demonstrates both our strong execution of our commercial teams as well as increased demand for our products.

I'll now provide additional color on the performance of our key brands and new launches, starting with Eliquis on Slide 9. This was another strong quarter for Eliquis, with global sales up 29% versus last year.

Second quarter growth benefited from a favorable year-over-year comparison as prior year included the unwinding with COVID-related buying patterns. When looking at the first half to normalize for this dynamic, sales remained strong, up 18%.

In the U.S., we saw strong demand with total prescription growth of 14% versus prior year driven by market share gains, which continue to expect strong new-to-brand share growth [for further] (ph) translates to overall total prescription growth.

As a reminder, when we look toward the third and fourth quarters, we expect similar dynamics from the Medicare coverage gap as seen in previous years. Internationally, we had very strong demand across all key geographies, as we further gained share as the number one OAC in multiple markets, and we continue to see additional room to grow.

Overall, we remain very pleased with the execution of Eliquis around the world, and expect to continue to grow Eliquis share within a growing class. Now, turning to Opdivo on Slide 10, let me start by saying we're very pleased to deliver return to growth this quarter, up 16% versus last year.

While COVID recovery dynamics as well as approximately 40 million in U.S. inventory build contributed to this quarter 's growth, the brand's performance was largely driven by strong demand for both our core and our newly launched indications.

In the U.S., sales were up 13% year-over-year, as well as 14% sequentially, driven by launches in lung, RCC, and our upper GI cancers, which are all going well, and in lungshares in the low-double digits with positive momentum, and we're seeing use across all histologies.

In RCC, our Opdivo plus Cabo launch continues to do well, with Opdivo now the leading PD-1 first-line renal across both available regimens. In upper GI, we saw a very strong start with Opdivo plus chemo in first-line gastric cancer with CheckMate -649 which reached 25% to 30% share in just a few months based upon the strength of our data.

The adjuvant esophageal launch, while still in early days, is off to a great start. Overall, we see upper GI as an important opportunity for Opdivo based on the breadth of offered indications and the fact that Opdivo is the only PD therapy approved for HER2 negative gastric cancer.

Outside the U.S., we had another strong quarter with sales up 13%, excluding the impact of foreign currency versus last year. Growth was primarily driven by demand of our new launches in lung and renal cancer. Results also benefited from a favorable comparison due to COVID-related impact last year.

All in all, we're very pleased with Opdivo 's performance and future growth outlook based on the positive momentum for our current launches, our future potential launches, including muscle-invasive bladder cancer and first-line esophageal, as well as potential expansion opportunities from clinical trials that we will lead out over time.

Now, turning to Slide 11, regarding our in-line multiple myeloma portfolio. Revlimid was up globally, primarily driven by demand for triplet-based therapies and increasing treatment duration. In the U.S., we are encouraged to see prescriptions nearing pre-COVID levels.

Pomalyst global sales were up 15%, driven by continued strong demand for triplet-based therapies and use in earlier lines. Now moving to our recent launches on slide 12, we continue to be very pleased with our new launches. Beginning with Reblozyl, which generated $128 million in Q2 and increased 14% sequentially.

As the bolus from the MDS launches continue to wind down, it's being replaced by underlying demand growth as expected. We continue to expect sustained growth in the second half of the year as we remain focused on treating new patients earlier in their treatment journey and ensuring they receive the most appropriate dose for sustained benefit.

Moving to Zeposia, which generated $28 million in the quarter, the MS launch continues to progress well, where Zeposia is the S1P of choice in terms of written prescriptions, and where we continue to see high intent to prescribe metrics.

We have also seen an acceleration in the conversion time from written prescriptions to commercially-supplied products. Looking forward, we see -- we continue to focus on establishing Zeposia not only as the S1P of choice, but also the oral treatment of choice for MS. Beyond MS, we launched Zeposia and ulcerative colitis in the U.S. in early June.

While early in the launch, we are very encouraged by physician receptivity to the product so far. Our plan is to focus on stepwise process of building volume by establishing demand for this differentiator oral-like biologic-like medicine, while maximizing access overtime.

Turning to Onureg, the launch is also going well with double-digit demand growth over prior quarter, we continue to expand the user base with physicians recognizing Onureg as the first and only FDA approved treatment for AML patients, in first remission with a demonstrated OS benefit.

Second quarter sales were impacted by reduced inventory, driven by our transition from bottles to blister cards. However, based upon the strength of the underlying demand trends, we expect to see sales rebound in the second half of the year.

Remember that this is a new treatment segment, where it will take time to shape and establish Onureg as a maintenance treatment. Looking at each of these products internationally, we're encouraged to see how these launches are going, and we look forward to driving growth through gaining access and reimbursement in additional markets over time.

Now, I would like to turn to Slide 13 and discuss cell therapy.Demand for our two new differetiated cell therapy products has been strong. Starting with Breyanzi, we were pleased with our launch progress, with Q2 sales of 17 million driven by strong execution and rapid site activation, with more than 65 sites activated to date.

messages around our differentiated profile and outpatient utilization are resonating well, with high awareness among CAR-T treaters. Next, as it relates to Abecma, our first-in-class BCMA CAR-T at sales of 24 million in the quarter, led by very strong demand. We were able to leverage the site footprint of Breyanzi to accelerate site onboarding.

An advantage of launching two CAR-T medicines simultaneously. Based on the significant unmet demand and differentiated profile, we have seen robust demand for this product, beyond our current capacity and we are looking hard to increase capacity over time.

Looking forward, we continue to see meaningful long-term potential with our cell therapy franchise, across both Breyanzi and and Abecma as evidenced by the recent demand we've seen. Now, turning to the next slide, a few points as we think about our launch portfolio overall.

First, we're very encouraged with how each of these products are progressing at this point in the launch cycle. Together, they have already contributed $225 million this quarter, and are approaching $1 billion run rate. Importantly, we review these products as having significant future potential.

This gives us great confidence in our ability to diversify and renew our portfolio as we look forward. Now, let me take you through a few line items on our P&L on slide 15. Since we've already covered sham sales for the quarter, I'll focus on a couple all other key line items.

First, gross margin decreased versus prior year, which is primarily due to foreign exchange and product mix. Operating expenses were higher than last year, particularly in MS&A, due to higher launch and pre-launch investments across therapeutic areas, as well as foreign exchange, which were partially offset by our realized synergies.

Remember that at the same time period last year, our spend levels were lower than normal due to the initial wave of COVID. Our effective tax rate was 16.9%, primarily driven by our earnings mix, and overall non-GAAP EPS increased significantly year-over-year, primarily driven by our strong topline performance.

Now switching gears to the balance sheet and our capital allocation on Slide 16, our liquidity position remains strong with over $13 billion in cash and marketable securities, and strong capture from operations of 3.1 billion in the quarter. Our capital allocations priorities remain unchanged.

During the quarter, we continued to strengthen the balance sheet while renewing and diversifying our portfolio through business development. As Giovanni mentioned, we executed two deals during the quarter that both complement and diversify our Oncology portfolio with Agenus and Eisai.

As it relates to continued debt reduction, our $4 billion tender offer, an additional $1.5 billion in maturities in the first half of the year, demonstrate our commitment to strong investment grade rating.

As it relates to our share repurchases of the planned buyback to $3 billion to $4 billion this year, we have already bought back 3 billion to date, and will remain opportunistic as the year progresses.

Now, turning to our 2021 guidance on slide 17, following this quarter's performance, we are reaffirming our top and bottom line non-GAAP guidance for the year, which reflects significant growth over last year. From a full-year revenue perspective, we continue to expect growth in the high-single-digits.

In terms of phasing for the remainder of the year due to Eliquis ' coverage GAAP and an unwinding of Opdivo inventory that I noted earlier, we expect Q3 global revenues to be similar to Q2. However, we are encouraged by the strength in the business and expect full-year sales at the higher end of our guidance.

We have updated our gross margin assumption to 80% for the full year, primarily due to product mix and the impact of foreign exchange. Moving to operating expenses, we are maintaining our full-year guidance on MS&A of low-single-digit increase and on R&D of mid-single digit increase..

In terms of phasing for OpEx, we expect it to increase quarter-over-quarter at a similar pace to the first half of the year. Based on that and the strength of the business, we are reaffirming non-GAAP diluted EPS of $7.35 and $7.55 for 2021.

This quarter, we remain pleased not just with our performance, but also with the considerable progress we've made in executing our launches, and advancing our pipeline. I'll now turn the call back over to Tim and Giovanni for Q&A..

Thanks David.

Catherine, could we go to our first question please?.

Thank you. We'll take the first question from Chris Schott of JP Morgan, please go ahead..

Great. Cath, thank you so much for the questions. I guess the first one for me was on Opdivo, and maybe just a two-parter here. First of all, good to see that return to growth.

But what are you seeing for Opdivo in terms of the COVID impact? I know you've talked in the past about some lingering kind of headwinds, but I just want to get the latest as we move through June and July.

Is that business still depressed or are we starting to see a more normalized environment? And then, the second one on Opdivo was just a little bit more color on the roll out in gastric in terms of where we stand today in terms of penetration rates.

Then my final question was just on the competitive environment for mavacamten in light of some of the recent competitor data. I just want to see, more broadly speaking, has there been any change in view or confidence in that asset at all? Thank you so much..

Thank you Chris. Let me ask Chris Boerner to answer your question about Opdivo, and then Samit will make some comments on the profile of Mavacamten..

Sure, thanks for the question, Chris. So let me start with the COVID impact. We have seen a recovery in the I-O market really coming out of Q1 and into Q2, and I would say that is recovery on multiple parameters. First, we've seen new patient claims. While they still lag pre-COVID levels, they've certainly improved quarter-over-quarter.

I-O demand continues to recover versus the pre-COVID levels, and in fact grew about 5% quarter-over-quarter. And importantly, we've seen an increase in in-person engagement. Oncology still lacks other therapeutic areas, but increasingly, our field teams are able to engage live with our customers.

And that's going to be really important, given the competitive nature of a number of these markets like first-line lung cancer. So I would say in general, COVID continues to be dynamic really across markets, and certainly that's true in oncology, but I would say there's been a general improvement as we exited Q1 and into Q2.

As for how things are going in gastric cancer, I would say the gastric launch continues to go really very well.

As you know, we have multiple indications now in gastric cancer, and I would say that in general the first-line metastatic launch is going quite well, our share is roughly 35%, and that's being led really by the gastric segment that we see really good utilization of Opdivo plus chemo in both GEJ and EAC as well, we're seeing use across all CPS levels.

As you would expect, the majority is in the greater than 10%, but we are seeing strong uptake in less than 10% as well, and I would say execution has been very good. And in fact, we have the number 1 share of voice and we continue to build new trials, which is important at this stage in the launch.

So overall, we're very happy with the performance in gastric..

Thanks Chris, I would just -- thanks Chris, and Chris, I will just take on the Mavacamten question that you asked, and I guess the question is emerging from the Redwood data that we recently shared through a press release.

And while it's truly an apples-to-oranges comparison, if we were to indulge in that, I would say that we don't see a differentiation as might have been perceived, and the reason for that is, if you'd look at it from an efficacy perspective, the measures were at a different time-point first of all, 10 weeks versus a 30-week trial for EXPLORER.

Secondly, the differences or the primary endpoints that were measured were at rest and with valsalva maneuver who were in the Redwood trial versus during exercise. So if you were to compare those apples-to-apples, there is no differentiation that we see.

From a safety perspective as well, when we talk about decreasing the ejection fraction, if you start with a higher ejection fraction, of course you will not see as big of a decrease below 50%, which was the case in the Redwood trial. We have patients enrolled in our EXPLORER study with a lower rejection fraction of 55% or lower.

And therefore, when we compare apples-to-apples again, in fact, if anything, we could turn out to be better. At the end of it all, I would say we need to wait to see the data in the Phase 3 trial for the competitor molecule. We already have our Phase 3 data.

We've already submitted and look forward to bringing it to patients with a PDUFA date in January..

Thanks Samit.

Can we go to our next question, please?.

Thank you. We'll now take the next question of Geoff Meacham of Bank of America, please go ahead..

Hey guys. Thanks for the question. Congrats on the quarter. I just had a few. On the cell therapy launches, you guys had a good quarter out of the gates.

I wanted to ask you what the drivers of the next few quarters are, is it signing up more accounts, is it establishing better reimbursement? And maybe just help us with kind of if you had any manufacturing bottlenecks. I know you guys have talked about that previously.

And then on Deucravacitinib, maybe just help us with how you're thinking about what success looks like in ulcerative colitis, and also any additional thoughts that you've had? I know there's been a lot of discussion about potential labeling and differentiation versus JAKs, and maybe as you've had time to digest the recent data, could you just give some updated thoughts on that? Thank you..

Thank you, Geoff. So let's start with cell therapy. Let me just say first, really exciting, and the launch is off to a great start. It really demonstrates that our decision to invest in this technology and the differentiated nature of our two products is paying off. There is a lot of excitement.

Let me ask Chris to give you more details and then Samit will give you his perspective on deucravacitinib.

Chris?.

Yeah. I would just reiterate what Giovanni just said. The commercial and medical launches for both products continues to be very strong. We've seen good execution across the teams.

Importantly for both Abecma and Breyanzi, the profiles for these products are resonating well with customers, in the case of Abecma as a first-in-class BCMA -targeted cell therapy and for Breyanzi as a best-in-class. One of the things we've seen across both products is there’s significant unmet need.

That's particularly true in the case of Abecma just given the fact that there are no other opportunities in many cases for these patients. And as a result, we've seen very strong demand for both products.

What I would say is for Breyanzi, the focus continues to be on ensuring the sites know how to manage these patients well, continuing to sell the best-in-class profile that we have with Breyanzi, and we're increasingly seeing interest in patients being referred to clinical trial sites who are managing that well with Breyanzi.

For Abecma, I would say the focus there continues to be engaging with customers around manufacturing capacity. As we had said previously, this is a space where because of the significant unmet need, and because we are the first BCMA targeted cell therapy in this space, the demand for this product has outstripped our current capacity to manufacture.

What I would say is the sole focus that we have there is on steadily increasing manufacturing capacity. We have a very strong team that's in place focused on this.

We’re engaging obviously internally and externally with third parties including regulators to increase the number of slots that we have available for patients, and that's going to be the main focus on that product for the coming months..

Thanks. And maybe I can take on the deucrava question in terms of ulcerative colitis for deucrava. As you know, with the TYK2 inhibitor, we know the downstream effect is the inhibition of IL-12 and IL-23 pathway. These mechanisms are already proven to be effective in ulcerative colitis.

So, we're truly looking forward to seeing the data at the end of the year from our Phase 2 study where we will get to see the induction data comparing deucrava versus placebo. So we know what success would look like because there is proven mechanisms out there.

We know what the efficacy that we would be looking for in a Phase 2 study to initiate our Phase 3 program. And the good news is, we also have the Crohn's disease study ongoing which we will lead out next year.

So, a broad program that we will be able to take forward to really get the Phase 3 data to impact the second half of the decade following the Zeposia launch right now in that disease..

Thanks Samit, Catherine can we go to the next question please?.

Thank you. We'll now take the next question from Terence Flynn at Goldman Sachs. Please go ahead..

All right. Great. Thanks for taking the questions. Congrats on the progress with the new products. Maybe two for me, just one follow-up on Abecma.

I was wondering if you could give us any guidance in terms of number of patients you can currently serve from your manufacturing facility that you have right now, and then remind us the timing to bring on additional capacity as again, I think you guys are building out some further capacity there, so any update on timing? And then a question for Samit on the Factor XIa program, I know we talked about this last month, you have the data in-house, but any more perspective on how to think about starting up a trial on the AFib setting, or is that really contingent on seeing data from the second Phase 2 trial? Thank you..

Thanks, Terence.

Chris, do you want to start on Abecma?.

Sure. So as I said in the previous question, our focus continues to increase the available capacity that we have for this product, as I think we've discussed previously.

We had increased the number of slots that were available for patients to August, and so we were able to increase to meet the demand in August, at the same time, we continue to see a shortage of vector that that is something that's been affecting multiple cell therapy products, and so we're keeping an eye on that, and what I would say, Terence, is that the situation on vector supply continues to be fairly dynamic.

And so with respect to when supply we'll ramp significantly. I would say that rather than put out a date that would likely shift, I'll just say that this continues to be a top priority for us. Our sole focus continues to be on increasing the supply to meet the near-term anticipated commercial demand.

And then, obviously, we have a longer-term focus on ensuring more stable, long-term supply for vector that would be available to support both of these products. But that's where the situation sits for Abecma..

In terms for Milvexian or Factor XIa inhibitor, what I would say is that what we've seen, that's far from the total knee replacement study. We are very pleased with that. The trial showed exactly what we anticipated it to show.

And we do believe along with our collaborator, Janssen, that we do need the second trial data as collectively the two trials will form the basis for the clinical development plan.

Remember, in the first study in the TKR study, we you only have about two weeks of dosing with a single-agent Factor XIa inhibitor, whereas in the second trial, in secondary stroke prevention, we have the background therapy of doublet antiplatelet therapy as well, went up to three months of dosing.

And so that longevity will be important to understand the overall safety profile, and that will obviously then be able to go into Phase 3 program. Not only just [Indiscernible], but we're thinking of other indications as well..

Thank you Samit. Catherine could you go to next question, please..

Thank you. We'll now take the next question off Andrew Baum at Citi, please go ahead..

Thank you. Couple of questions. First, we didn't hear so much about your earlier generation of immuno-oncology programs before the transaction.

There has been a number of papers out on the importance of T-rate depletion and ADCC, with parts of the [Indiscernible] mechanism, and I know you have your [Indiscernible] postulated molecule in a fairly large trial.

Could you update us on when me might expect to see some results, and just your general level of enthusiasm on that approach for a validated target? And then second, in light of the Aduhelm approval, and particularly the biomarker, how is this thinking influencing you of your assets in neurodegenerative disease? Obviously, you've been invested historically in that space.

Is this a catalyst for Bristol to reenter that segment?.

Thanks, Andrew. Let me make just a couple of very high-level comments and then Samit will take both of your questions. So first of all, with respect to IO, I think we're really excited about the opportunity to launch our third I-O agent potentially soon, which is Relatlimab in metastatic melanoma.

And that really shows how we are progressing and extending, in fact, the strength of our I-O franchise. With respect to the CNS, again Samit will address your question in more detail. From my perspective, I'd like to say is this is.

a research area that we committed to, in fact, as part of the cell gene research strategy a few years ago, we are really excited to have a number of early programs that are continuing to advance, is primarily driven by a really interesting set of external partnerships. Let me ask Samit to give you more detail on both of those topics..

Andrew, I think from a CTLA-4 perspective, as you know, we have three molecules and developing the backup CTLA-4, probody non-fucosylated and fucosylated molecules. The trials are ongoing, as you said, very well, and we are actually looking forward to see the data towards the end of the year, as well as in early part of next year.

That will certainly pave the way for new trials, looking at combinations with our pipeline, with Opdivo as well as other molecules that you just heard from Giovanni, we have [Indiscernible], and then new additions to our pipeline with Tigits as well as the ADC that we recently acquired.

Those clinical development plans are being formulated and appropriate indications are yet to be chosen based on the activity that we would see from these trials.

To your second question on the recent approval on Alzheimer's disease and then how to see that data and what to do with that, we do believe, as Giovanni said, that our focus on neurology and neurodegenerative disease has continued to be there and will continue actually to increase from there onwards.

The way we look at that data is now that the threshold has been set from a regulatory perspective -- it was hard to gauge before what endpoints to really shoot for and what was the threshold. Now that we know what the threshold is, it is now probably going to be better or easier to develop studies because there is the regulatory path forward.

As you recall, we recently had announced our collaboration with [Indiscernible], and looking forward to make our way into the clinical studies with that Tau inhibitor with a differentiated mechanism that we will be able to take forward, more to follow in the future..

Thanks so much.

Catherine, can we go to the next question, please?.

Thank you. We'll now take the next question from Seamus Fernandez at Guggenheim. Please go ahead..

Great. Thanks for the question.

So first on Abecma, just wanted to get a better sense of where capacity could potentially go to, and if there is any visibility on the vector dynamics and perhaps when that might really -- is that entirely reflective of -- is that more reflective of the situation in terms of vector manufacturing and capability to do both or is it a global market dynamic associated with the use of nucleic acid -targeted therapies? Just wanted to get a sense of what the impacts are there.

And then what would the hopes for expansion of capacity capability to be in 2022 relative to 2021? Do you have any sense of timing improvement for the vectors as it relates to Abecma? Second question.

Just wanted to get a little bit of a better sense of the ongoing strategy, the number of targets that you guys are pursuing specifically in multiple myeloma. You have a huge number of programs ongoing there.

Just wanted to have you guys talk a little bit about prioritization in that regard and where you see the most opportunity for new products in that space, whether it be the CELMoDs or bispecific, the T-cell engager. Just wondering where we're going to see some acceleration in those programs there. Thank you so much..

Thanks very much. So on Abecma, let me just say to your question. The supply chain of -- globally, the supply chain for vector is very dynamic. [Indiscernible] issue, but rather a really complex issue across the industry.

I will ask Chris to -- whether there is anything he wants to add, and then we'll talk with Samit about our strategy multiple myeloma, as I mentioned, excited to have the Iberdomide Phase 2 data in house, which is a really important step forward for us.

Chris, anything to add on Abecma?.

Yeah, the only thing I would add is Seamus just there are sort of 2 dynamics at play with Abecma.

One is the significant demand that we're seeing in the marketplace, which is, I would say, a function of the fact that there's significant unmet need, the profile of Abecma is very strong, and the fact that you've seen a bolus of patients who have been really reserved for these therapies, and this therapy in particular, when it launched.

So there's very strong demand, and so obviously there's an internal focus on increasing our ability to supply that demand, which has exceeded the supply that we anticipated having to deliver into the marketplace. The second thing I would say, is this broader global issue around vector supply.

That's something we've been hearing from customers that's impacting multiple cell therapy products, and obviously as we think about our strategy, not only for the end of this year, but really as we get into next year, our focus is going to be ensuring a more stable long-term supply of vector.

And that's something we will be happy to update on as we have more details to provide.

Samit?.

Actually it's from multiple myeloma perspective, we certainly remain the leaders in multiple myeloma, and want to continue to progress on that path, and we have a very strong pipeline as you very well mentioned. There are 3 pillars to the multiple myeloma strategy.

Number one, the cell mods, and we intend to use the cell mods as the future backbones replacing the IMiDs that are currently out there. In that regard, the strategy is two pronged. One is a single-agent entering in the late line of therapy.

The first data we've seen with Iberdomide already, and then next year we will see the data for [Indiscernible], the second cell-mod, which is more potent.

And then progressing them further up the line in terms of combinations, you might see on clinicaltrials.gov, we've already announced and are initiating a trial in patients who have received two to three prior lines of therapy, as a combination of Iberdomide, the [Indiscernible] compared to Velcade to dexamethasone.

And that strategy will continue as we go further up the line with the cell-mods. The second pillar is the BCMA targeted therapies. First of which is already approved, that is Abecma. And the idea for Abecma will too again move further up the line for eligible patients who can receive cell therapies.

CARMA3 is currently enrolling, looking at patients who have received 3 prior lines of therapy, and then intention would be to go further up the line again for the right patient population.

Now, not all patients can get cell therapy because of comorbidities or other reasons, and therefore other BCMA directed therapies are going to be important, and that's where the T-cell engagers and the ADC come in to play, but they are very early in development right now, in Phase one studies, and so more to follow on that.

Our prioritization, our belief remains very strong that patients with multiple myeloma still are not cured and we will require combination therapies in the future with multiple targets and multiple modalities and we'll progress accordingly..

Thanks, Samit.

Catherine, could we go to our next question, please?.

Thank you. We'll now take the next question from Tim Anderson at Wolfe Research. Please go ahead..

Thank you. Eliquis continued to do well. Of course, one thing that could derail would be an appeal for a ruling overturning the Lower Court. Can you just give us your expectation for a timeline on an appeal to court ruling? And then, second question.

Just mavacamten -- it feels like there's kind of a back story on the regulatory front why you guys got the standard review. Because at the time of that deal, you did expect and you had it in your slides, it's like you'd get a second half 2021 launch.

So a fair amount of time has elapsed since you got the standard review and I'm wondering if you can share what concern s the agency may have. It seems like there may be some concerns about not having long enough -- pretty good regulatory duration in terms of efficacy..

Yes. Thanks Tim.

Samit, do you want to start with the second question?.

Sure. Absolutely. For Mavacamten, Tim, we've already filed for Mavacamten, the FDA has already accepted the file. We have a PDUFA date. So those concerns I think are relieved and our -- we are really looking forward to bringing these exciting data, as well as the medicine to patients with obstructive hypertrophic cardiomyopathy.

As you know with Mavacamten, we have other plans that are already ongoing and in execution in other disease types as well. So we don't see it as a showstopper in any which way, and looking forward to really the readout on the regulatory side, also bringing it globally to other parts of the world..

Thank you, Samit. And with respect your first question, Tim on the IP litigation for Eliquis, first of all, as you know, we're very pleased with the decision that was made by the court in that summer, which really confirms the strength of not only the composition of matter patent, but also our formulation patent.

And as you mentioned, there is an appeal that has been filed and the hearing is scheduled in September. So we look forward to hearing the result of that process..

Thanks, Giovanni.

Catherine, could we go to the next question, please?.

Thank you. Well, now to the next question from Carter Gould with Barclays, please go ahead..

Good morning guys. Thanks and congrats on the results so far. Maybe just first on Reblozyl.

Can you talk about the headwinds you're still seeing from COVID, and also, as you think about XUS kind of ramping over the second half of the year, any color on expectations or additional countries you expect to launch in? And then maybe coming back to Iberdomide, some of you talked about the combination study that got posted on clintrials.gov.

Can you just talk a little bit more around demonstrating clinical meaningfulness in the setting, where obviously you're going to have generic IMiDs in the not-too-distant future, and you're still in the study, you're comparing against -- there's no IBID in the comparison.

So just really kind of driving home the importance of cell mods in this setting, would be helpful. Thank you..

Thanks for the questions. There's really good dynamics on Reblozyl. Let me ask Chris to give you a better perspective before we call our Iberdomide with Samit..

Thanks for the question, Carter. So with respect to COVID I would say it's very similar to the answer I gave previously on COVID, I think the dynamics in that market are still evolving, we've not yet seen a full return to normal.

But what I would say is in the quarter, we also there saw an improvement both with respect to new patients entering the clinic and being given access to therapy, as well as importantly, again, our field team's ability to interact with customers, and that's going to be really important here because you've got to continue to push on an urgency to treat these patients, many of whom have been treated for considerable time on ESAs.

So those dynamics we think are very favorable and bode well for continued growth opportunities for us as we go into the second half of the year. And with respect to the XUS launches, say it's still very early days, but what we've seen is very good customer reception in early-launch markets like Germany. The execution in those markets have been good.

As COVID continues to improve there and we're able to engage with customers more, we see those dynamics continuing to improve over the course of the year. And then we have, of course, additional launches as access at this period, most notably with Belgium, the Netherlands, France, and Italy in the coming months..

Thanks Chris. And for Iberdomide, the way I look at it is. there is a progression of how we move forward, and how we move up the line. If you recall, over the last couple of meetings at ASCO as as well as ASH, we've been able to show the overall profile for Iberdomide, because of it's tolerability, the combinability is good.

So we've been able to combine with Dara, we've been able to combine with KYPROLIS, as well as with Velcade. So this is just one of the first studies that we have launched in the Phase III setting in the randomized trials. As you know, there is a Phase II study that is also ongoing doing a head-to-head comparison of Revlimid vs.

Iberdomide in Europe through E&M, and we will get to see the data that will form the basis of the future Phase III trial there. And there will be other studies that will be coming through, where you'll start to see the comparisons versus the [Indiscernible] as well..

Thanks Samit. Catherine can we go to the next question, please..

Thank you. We'll now take the next question from Luisa Hector of Berenberg. Please go ahead..

Thank you for taking my question. I wanted to come back to Deucravacitinib. You talked about a potential launch in the second half of next year.

Is that a delay? And I know previously you've commented on your plans to build out your dermatology sales force towards the end of this year, is that still the plan or does that shift slightly into next year? Thank you..

Thanks, Luisa. Let me say, we're really excited getting ready for deucrava. There is no delay, but I'll ask Samit to give you more perspective and then Chris will talk about commercial preparation..

Sure. Thanks, Giovanni. And Luisa, thanks for your question as well. There is one thing that we need to remember; that this is an NDA, not an SNDA, and certainly two very large studies. This is a priority for the Company.

We are certainly looking forward to launching in the second half of next year and certainly we will share the acceptance of the file as the file is validated by the regulatory agencies. There is no other way to say it, but we are excited about the data with the efficacy and the safety that you've shared before..

And what I would say in terms of the commercial and medical build-out is that's well underway. We feel very good about where we are and the quality of the teams that we've been able to put in place. Medical has been in place for a number of months, and I would say those teams have very deep dermatology experience.

We obviously have our key internal roles that have been filled, and are in the process of building our launch planning. Our plan is and has been to build out the sales teams in the second half of this year.

We feel very good about where we are in that timing, and our anticipation is that we're going to be ready for launch whenever the approval comes, and so really no change in how we're thinking about building out the commercial teams..

Right. Thanks.

Catherine, could we go to the next question, please?.

Thank you. We'll now take the next question from Steve Scala of Cowen. Please go ahead..

Thank you. I have a few questions. Regarding the Factor XIa DTE total knee replacement Phase 2 data, Samit, you said that the trial showed exactly what was expected.

Can you remind us of what you expected? For instance, did you expect 0 bleeds? Second, has the FDA asked any questions on Deucravacitinib CV risk? And if so, what was the nature of those questions? And then lastly, do you expect an FDA panel for Mavacamten? Thank you..

Thank you, Steve. Let me ask Samit to address all 3 of your questions..

So for Factor XIa, Steve, what -- when I say we got what we wanted is it was a multi-arm study where we looked at single daily dose as well as BID and it was a dose range. What we wanted from the study was to give us an inkling on, number 1, the safety profile that we were observing, as well as to see what is the goals that we should take to Phase 3.

And that's what we intended from the study and that's what we got. And plus, we wanted to see the therapeutic index overall, what dose range one can use in the future programs and that's what we got. Of course, you'll hear more as the data are presented later this year, but this is where we started off in the TTR study and that's what we got.

On the Deucrava study that you asked about what the cardiovascular risk questions, etc., from the regulatory agencies, of course, we will not comment on our conversations with the regulatory agencies.

Having said that, you've seen the data, we've shown what the non-existence of the cardiovascular risk, in the follow-up that we have for Deucravacitinib, and we're very pleased with the profile that we currently have, which is very differentiated.

On the Mavacamten side, once again, not commenting on the regulatory strategies and regulatory conversations, but we continue to look forward to the PDUFA date in January, and we are certainly very excited with the data on that side as well..

Thanks Samit.

And Catherine, can we go to the next question, please?.

Thank you. We'll now take the next question from Matthew Harrison of Morgan Stanley. Please go ahead..

Great. Good morning. Thanks for taking the question. I guess 2 from me following up on a couple of questions from before on.

On Factor XI, can you just maybe put the secondary stroke trial into context? What is a good outcome from that study when we see the results later this year? And then second, on the cell mods, especially now that you have some data in-house, what do you see as the quickest regulatory plan to get that to market? Thanks..

Thanks, Matthew. Let me ask Samit to address both of your questions..

Thank you, Matt. For Factor XIa from the secondary stroke prevention, the aim of the trial is to be able to see if Factor XIa can be combined with the background therapy of anti-platelet agents.

And that's what we're looking forward to, because as you recall, Factor Xa inhibitors that are out there have a higher risk of bleeding when they are combined with anti-platelet therapies.

So that's what the good outcome would look like if we can actually manage that risk profile that is there, and that will then pave the way for taking it forward into indications that are to be discussed with our partners and of course, with the agencies in the future.

For cell mods, as Giovanni already shared with -- in his prepared remarks, you've seen the data from the Phase 2 trial of Iberdomide.

we're looking forward to having those conversations will be with the health agencies, based on the overall response rate data, and the overall profile that we have for Iberdomide, and then that will pave the way for seeing if we can bring the drug to market with these data or not. And we'll share those as we know more..

Let me just say that with cell mods, we have been discussing the progress with this platform for some time, and I think it's really good to be seen now than we have 5 of those agents in the clinic, and the Iberdomide data is really the beginning of looking at really important proof-of-concept data on a number of assets, and I'm really pleased that this platform is progressing so well.

I think it's going to be really important for us going forward..

Thanks, Giovanni.

Catherine can we go to our next question, please?.

Thank you. We'll take the next question from Matt Phipps of William Blair. Please go ahead..

Good morning. Thanks for taking my question. Another Factor Xa -- XIa question. Do you have any thoughts on the recent antibody results in some of vaccine that were published in New England Journal of Medicine last week.

Obviously, a nice VT prevention, but no real difference in bleeding rates, which might be expected, given that was a smaller size study. And then I guess just any general thoughts on an antibody versus smaller molecule approach.

And then lastly, can you just confirm if any additional clinical studies for Deucra, whether it be a longer follow-up or any healthy participant data with PDI or anything is needed prior to submission?.

Thank you.

Samit?.

Let me start on the Factor XIa, I will hold myself from commenting on anybody else's studies, but certainly there's a specificity of the antibodies that we have to keep in mind.

On the other hand, then you have to keep in mind the oral versus IV aspect of things, and oral versus subcutaneous, which will be very important in the future development and the patient burden, as well as the healthcare system.

So we'll need to continue to monitor that, and then we'll compare the results when full results are available for our program, and then other programs as well, as we take into account Phase 3 development.

For Deucravacitinib, as we have previously talked about, we are looking forward to the approval in the second half of next year, so we're not waiting for additional studies from that perspective, unless of course, they become a part of the conversations with the health agencies..

I think we maybe have time for one last question..

Thank you. We'll now take the next question from Dane Leone at Raymond James. Please go ahead..

Thank you very much for taking the questions and getting one last in here for me, and I appreciate the updates across the portfolio. Just one quick one to wrap things up on Factor XIa. How do you see the program evolving? Obviously, you've seen it's not encouraged by the results you have in-house that will be represented later on TKR.

But are you going to take additional compounds into the clinic? You recently published a paper on 724, 296 that look promising. Just thinking about your competitors and the multipronged approach they are taking versus how you see the program expanding over time. Thank you..

Thank you for the question. For Factor XIa we are pleased with the profile that we have thus far for Factor XIa that is in the clinic already, the milvexian molecule. We do have a backup, but that is progressing, as one would always have a backup plan, at its own pace, we're not accelerating that.

We are looking forward to seeing the data for the secondary stroke prevention study early next year, and that will then pave the way for Phase 3 program. Nothing more to add from that perspective at this time..

Thank you Samit, and thank you all for joining us today. As we've discussed throughout the call, we had a very successful quarter. We delivered strong results, consistent with our strategy by continuing to grow revenue, execute on new launches, and advance our pipeline.

I'm proud of what our team have accomplished so far this year, including the attainment of several important milestones, and I'm really encouraged by what we are doing for patients, I believe we're very well positioned for the future.

I'd like to thank everybody for participating in the call, and of course, our team is available to answer any additional questions you may have. Thank you and have a good day..

That concludes today's call. Thank you for your participation. You may now disconnect..