Good day, and welcome to the Bristol-Myers Squibb Third Quarter Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Tim Power, Vice President of Investor Relations. Please go ahead, sir..

Thanks, Dennis, and good morning, everyone. Thanks for joining us this morning for our third quarter 2022 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 today's call are Chris Boerner, our Chief Commercialization Officer; and Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development. As you'll note, we've posted slides to bms.com that you can follow along with for Giovanni and David's remarks. But before we get going, I'll read our forward-looking statements.

During this call, we 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 our estimates as of today, and should not be relied upon as representing our 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 certain non-GAAP financial measures to the most comparable GAAP measures are available on bms.com. With that, I'll hand it over to Giovanni..

delivering the full commercial value of the 9 launch products, expanding the opportunity for these assets through new indications, and advancing our mid-stage pipeline. Additionally, we will continue to leverage our financial strength and flexibility to prioritize business development opportunities.

As we deliver on renewing our portfolio and transforming our company with a younger and more diversified business, I am confident in the future of Bristol-Myers Squibb. We now have critical mass across all 4 of our therapeutic areas. Each has foundational in-line brands, exciting new products and a broadening mid- to late-stage pipeline.

This is important because we believe that this more diversified business of younger products, supported by constant innovation and focus in therapeutic areas where we have real expertise, best position us to navigate the changing U.S. environment.

Before I turn it over to David, I want to thank our employees for their relentless focus on delivering for the patients we serve. I am confident we will continue to deliver for patients and our shareholders. I will now turn it over to David to walk you through the financials.

David?.

Thank you, Giovanni, and thanks again for joining our third quarter earnings call. Let's turn to Slide 10 to discuss our top line performance. Unless otherwise stated, I will discuss sales performance growth rates on an underlying basis, which excludes the impacts of foreign exchange.

Revenues in the third quarter were approximately $11.2 billion, consistent with prior year. Our diversified in-line and new product portfolio grew strongly, up 13%, offsetting the impact of our recent LOEs. Now let me touch on our performance of our new product portfolio on Slide 11.

Global revenues were over $550 million, up 66% versus prior year, driven by continued demand. Growth over prior quarter was also strong, up 16%. We continue to be very pleased with the performance of our new product portfolio and its future potential.

With 3 new launch brands this year and over $2 billion of annualized revenue so far, our portfolio has been largely derisked, increasing our confidence in the potential to generate greater than $25 billion of nonrisk-adjusted revenues in 2029.

Turning to Slide 12 to discuss our performance of our solid tumor portfolio, Opdivo sales continue to grow globally, up 13%, driven by demand for our newly launched in core indications. In the U.S., sales were strong.

We continue to grow double digits, up 17% versus prior year, driven by demand of our newer metastatic and adjuvant indications, partially offset by declining second-line eligibility as well as some use from Opdualag in first-line melanoma.

Internationally, revenues grew 8%, primarily due to growth from new indications, particularly first-line lung and GI cancers. Looking forward, we continue to expect growth of Opdivo from our new and expanding indications in both early and late-stage cancers. Now let's move to Opdualag. We cannot be more pleased with the launch of Opdualag.

The launch is off to a great start, being the first LAG-3 inhibitor to launch in fixed-dose combination with our PD-1 inhibitor, Opdivo. Sales in the quarter were $84 million, growing 45% sequentially, and sales of Opdualag are already annualizing to approximately $350 million.

At this point in the launch, our share in first-line melanoma is in the mid- to high teens. And as expected, we are seeing use of Opdualag coming from PD-1 monotherapy and Opdivo + Yervoy combinations. Moving on to our expanded cardiovascular portfolio on Slide 13. Our leading OAC, Eliquis, had another strong quarter, up 16% year-over-year.

In the U.S., sales increased 31% versus prior year, driven primarily by demand and favorable gross-to-net adjustments. As expected, sequential performance was driven by the typical dynamics we experienced each year from higher gross-to-net payments, as patients enter the donut hole.

Internationally, Eliquis has become a leading OAC across numerous countries. Given the success of the product, pricing pressures, as expected, impede growth. Pricing measures in addition to at-risk generic entry in the U.K., Netherlands, affected growth in the quarter.

Now turning to Camzyos, a first-in-class medicine to treat underlying disease of obstructive hypertrophic cardiomyopathy. We are continue to be pleased with the progress we are making to bring this life-changing medicine to patients. To date, we have over 2,000 REMS-certified health care professionals, which is a good indicator for intent to treat.

And we've received extremely positive feedback from physicians and patients. We are also making progress at large HCM centers to ensure they are operationalized to make Camzyos available to patients. As of the end of Q3, there are over 1,100 patients enrolled in our hub and growing each week.

As expected, new patients are generally initiating treatment as part of their regularly scheduled echocardiograms. Based on the time to transition patients to commercially dispense medicine, we expect acceleration of revenue beginning in Q4 and as we move into 2023.

Chris can provide more details on the launch during Q&A, but we are pleased with the progress we have made. Turning to Slide 14 to discuss hematology's performance, starting with Revlimid. Sales in the quarter were approximately $2.4 billion. Sales were primarily impacted by generic entry, particularly in international markets.

In the U.S., we saw slower than anticipated entry by second wave generics in September. We expect to see generic erosion progressively increasing in the coming weeks. And at this point, we expect Revlimid sales to be at the upper end of our $9 billion to $9.5 billion range for the year.

Pomalyst global revenues grew 8% versus prior year, primarily driven by demand for triple-based regimens in earlier lines, extending the duration of treatment for patients. Moving to Reblozyl, which had another strong quarter. Sales were $190 million in the quarter, up 22% versus prior year.

In the U.S., revenue growth was impacted by a onetime change in distribution model in the prior year. Excluding the impact from last year, sales would have been approximately 25% versus prior year. This is being driven by continued progress in increasing patient adherence, and extending treatment duration.

Outside of the U.S., Reblozyl continues to grow driven by demand in both MDS and beta thalassemia associated anemia. To date, we are now reimbursed in 9 countries, and we'll continue to secure reimbursement in additional countries in the future. Now turning to our cell therapy assets, Abecma and Breyanzi.

Abecma generated strong revenues in the quarter of $107 million. This represents growth of 59% versus prior year or 22% sequentially. In the U.S., sales growth was driven by strong demand, offset primarily by timing of patient infusions, which we expect to materialize in Q4.

Outside of the U.S., sales increased due to a onetime step-up of slots in select markets, which is expected to be sustained at this level for the foreseeable future. We are very pleased with the manufacturing progress we've made to ensure Abecma gets to more patients, while we continue to work on further expanding our capacity.

As we prepare to move Abecma into earlier lines based upon the positive readout of KarMMa-3. Finally, on Breyanzi, sales in the quarter were $44 million, up 50% versus prior year. Demand remains strong, and we continue to work hard expanding capacity in the next year to benefit more patients with large B-cell lymphoma.

As we communicated in the past, we expect Q4 sales to be largely similar to Q3 sales. Now turning to our expanded immunology portfolio on Slide 15. Starting with Zeposia. Global sales in the quarter was $69 million, up 83% versus prior year, largely due to the expansion of Zeposia in ulcerative colitis.

Sequentially, in the U.S., the sales were impacted by last quarter's favorable gross-to-net and wholesaler buying patterns of approximately $20 million. We continue to see demand growth of 12% over last quarter.

Our strategy remains focused on further expanding volume so we can continue to improve access in 2023, and we made progress on improving the quality of access as well. Internationally, we are continuing to make strides in securing reimbursement in additional markets to get Zeposia to more patients living with MS and ulcerative colitis.

Now turning to our most recent launch, Sotyktu, our first-in-class selective TYK2 inhibitor for patients with moderate-to-severe plaque psoriasis. We're extremely pleased with the U.S. label based upon the strong data. While early in the launch, we are very encouraged by the feedback we are getting from physicians.

Our focus is to ensure many patients as possible get Sotyktu, establishing this medicine as the oral of choice allowing us to secure broader formulary position in 2024. Internationally, we are also pleased to have received Japanese approval in September, and we look forward to European approval next year.

Let's now discuss our third quarter P&L on Slide 16. The I've already discussed revenues, so I'll now focus on other key non-GAAP items in the quarter. Gross margins decreased primarily due to product mix, partially offset by foreign exchange and related hedging settlements.

Excluding acquired in-process R&D, operating expenses were broadly in line with prior year, and affected by the timing of spend. Acquired in-process R&D charges in the quarter were $30 million related to an upfront payment to GentiBio. This was offset by $73 million of licensing income benefiting OI&E in the quarter.

The third quarter effective tax rate was 16.9%, driven by earnings mix. And overall, we delivered another quarter of earnings growth with non-GAAP earnings per share growing 3% versus prior year. Moving to the balance sheet and capital allocation on Slide 17. Cash flow from operations in the quarter were $3.7 billion.

The company's balance sheet remains strong with approximately $9 billion in cash and marketable securities on hand as of September 30, which also accounts for the $3.3 billion we paid for Turning Point Therapeutics. Our capital allocation priorities remain unchanged.

Business development continues to be a top priority, and we continue to execute on this strategy with the closing of Turning Point Therapeutics acquisition as a recent example. We remain committed to continued debt reduction. In the quarter, we repaid $2.8 billion of debt, and we remain committed to returning capital to shareholders.

We executed a $5 billion ASR earlier this year, and have $9.5 billion remaining in our share via authorization, and we will continue to be opportunistic on share repurchases. Now turning to our 2022 non-GAAP guidance on Slide 18. We are maintaining our full year outlook.

We continue to expect revenues to be approximately $46 billion with our in-line and new product portfolio growing in the low double-digit range. Our recent LOE guidance and Revlimid guidance remain unchanged. However, as mentioned earlier, we expect Revlimid sales to be in the upper end of the $9 billion to $9.5 billion range.

We continue to expect gross margin to be approximately 79%, and our operating expenses, excluding acquired in-process R&D remain unchanged, primarily driven by favorability in FX as well as cost discipline, partially offset by the inclusion of expenses from the Turning Point acquisition.

Putting everything I just mentioned together, we are reaffirming our full year non-GAAP EPS guidance, reflecting the strength of our underlying business and absorbing the approximate $0.06 impact from Turning Point acquisition.

Before we move over to Q&A session, I want to express my gratitude to our employees for the performance in the quarter and their continued commitment to our patients. I'll now turn the call back over to Giovanni and Tim for a Q&A session..

Great. Thanks very much, David.

Dennis, can we go to the first question, please?.

[Operator Instructions]. The first question comes from the line of Chris Schott with JPMorgan..

Just two for me. I guess, first on Sotyktu.

Given the favorable label, can you just talk about the target patient population you're going to be going after here? So specifically, are you going to be looking mostly at Otezla failures initially? Are you going to focus more, I guess, on first-line patients starting on systemic therapy? I know you've talked a little bit also here about reimbursement dynamics.

But is there anything you do to accelerate this process prior to this kind of 2024 time line that you've been kind of alluding to? And then the second quick one was just on Eliquis. I think we've had a few quarters now where we're seeing kind of a positive price adjustment.

I just was wondering, if you can elaborate a little bit on the dynamics there? And is this something that's more onetime in nature and will reverse? Or is this kind of just a new base we should think about for the business, so we think what kind of volume growth going forward?.

Thank you, Chris. Chris Boerner will start and then David will give you some comments on Eliquis..

first, removing the market -- new-to-market blocks that face all new products in this space; second, taking advantage of where we have open access today, and remember, we estimate that about 10% of patients have open access at the initial stages of this launch; and then obviously, it's all about building volume during the early phases of the launch and then leveraging that volume.

We're going to do everything we can to accelerate getting into a better access position in 2023. But we certainly feel like we're in a very good position and on track to be in a good position in 2024.

David?.

Yes. On the Eliquis rebates, remember, this is a very large product over $10 billion in revenue. And based upon the product mix, we forecast what the anticipated discounts will be based upon the product mix across all the payers. And each quarter, we adjust that, some quarters are up and some quarters are down.

But the last 2 quarters we had some releases, and that's what really explains it. But nothing changes for the full year, really..

Your next question is from the line of Seamus Fernandez with Guggenheim Securities..

So a couple of quick questions. So the first one is just on the competitive landscape that's evolving in ulcerative colitis.

Can you guys just give us a sense of how the launch of Zeposia is tracking in MS versus UC? And what percentage of patients are you seeing specifically at this point as we look at the sort of separation of scripts? And how you're thinking about the competitive landscape evolving with the increasing interest from physicians and IL-23, perhaps even the combination of IL-23s with biosimilars Humira as a potential new breakthrough in the category? Just wondering, what you guys were thinking coming out of the most recent meeting as well.

And then just the last second question is on the Camzyos launch. Just trying to get a sense of when you guys anticipate seeing a meaningful inflection in prescriptions or revenue.

Is this something where we should anticipate seeing a meaningful uptick in the fourth quarter? Or is it potentially with the new indication in the middle of next year?.

Thanks, James. So Chris and Samit will address your question on UC, and then Chris will comment on Camzyos..

Sure. Thanks for the question, Seamus. With respect to Zeposia, I would say Zeposia continues to perform well. We saw a nice double-digit demand growth in the quarter. The majority of that growth is continuing to come from ulcerative colitis.

So I would say that the majority of patients, if you look at where the growth of this asset is going to occur through the end of this year, and certainly as we get into next year, the majority of that's going to be coming from UC. The market share that we have for Zeposia in MS continues to remain stable.

Above 50% of the share in S1Ps is coming to Zeposia. We feel very good about the position that we're in there. Obviously, as we've talked about previously, the oral market in MS is under some pressure from IV. But in spite of that, we're maintaining a consistent share in the MS population. The big focus that we have continues to be on UC.

We believe that's where we have the strongest position as well as the biggest opportunities for growth. And I would say that there, I think that from a competitive standpoint, so far, the position for Zeposia continues to be strong. Obviously, it is a very competitive marketplace.

But for example, with the introduction of RINVOQ, the growth of RINVOQ has not largely come at the expense of Zeposia. In fact, we've maintained our position in that market in spite of the introduction of that new asset.

Clearly, there are a number of dynamics that are going to continue to play out, but we feel pretty good about our competitive position as the first S1P in this market for UC.

The only other thing that I would note is that obviously, as we've said, the big focus we have with Zeposia is to build volume and then convert that volume into a stronger access position. We did get a very important early win on the access side in October with CBS, Inc. now covering Zeposia with 0 step edits.

That's important because if you add that with the other plans that -- smaller plans that have covered Zeposia, we now have about 30 million covered lives and we're well on track to be in a good position with the other PBMs as we go into 2023. And maybe I'll let Samit address the other part of that question, and then I'll pick up on Camzyos..

Very briefly, Seamus, the way we think about it is that unmet medical need still remains very high in patients with ulcerative colitis. And certainly, new medicines are needed. As you know, we have our own clinical development plan ongoing with Sotyktu in ulcerative colitis.

Two of the trials will read out from a proof-of-concept perspective in 2023 for CD and UC, UC would be in the second half of the year. And we will continue to explore if those trials then lead to future development as well as if combinations are going to be the possibilities of the future with standard of care or novel therapies.

So more to come, but we need to first see the data..

And then picking back up on your question on Camzyos, I would just say at the outset, we are very pleased with the launch of Camzyos. We're seeing a really nice acceleration for this product in the second half. A few elements or color around that. First, we've talked about the importance of certified physicians.

We now have over 2,000 REMS-certified physicians as of the end of the second quarter. We're seeing a nice healthy increase in that week-over-week. David referenced that as of the end of the third quarter, we had 1,100 patients who had been prescribed Camzyos. That's also seeing nice week-over-week increases.

I think we had referenced on the previous quarterly call that a big focus area has been helping some of the larger institutions build the infrastructure to support the use of this product. We've seen very significant improvement on that in recent weeks.

And the pace of new starts that we're seeing is consistent with those accounts, in particular getting organized. Nearly all of the patients that we are seeing are going through our Camzyos patient hub, and that's really important because that will facilitate getting patients onto therapy and staying on therapy.

And I think it's notable that of the patients who have had multiple dispenses thus far, none of them have dropped out therapy, which is a nice indicator of how well that hub is working. I think the question with respect to how fast we're going to see an acceleration of revenue kind of speaks to this question of access.

Access, as anticipated, has not been a barrier with this launch. We now have about 50% of plans covering Camzyos. All of the patients who are covering Camzyos are being to the label, which is a good indicator of a strong position.

And you will have seen on the slides that as of the end of the third quarter, about 1/3 of those 1,100 patients had converted to commercial drug. In October alone, we've seen an almost doubling of the number of commercial dispense that we saw in Q3.

So we feel very good about the pace of this launch and what we're seeing in the second half, and happy obviously to provide additional color as this launch continues and we get into the fourth quarter call..

Your next question is from the line of Andrew Baum with Citi..

You addressed Reblozyl in your prepared comments. I'm just curious, same topic on Onureg.

Given the attractiveness of the drug as an oral alternative, I'm surprised it's not doing better, perhaps you could outline what are the barriers here and some of the key catalysts ahead? And then second, in relation to milvexian, the 200-milligram dose, the efficacy was inferior to placebo.

There was some discussion about whether COVID could have impacted the rate of thromboembolic events during the initiation of that particular dosage.

I wonder whether you had trial to characterize that particular dosing arm of the trial?.

Thanks, Andrew. Chris, why don't you start on Onureg and then Samit will answer the question on Reblozyl..

Sure. The question on Onureg around some of the barriers that we're seeing. I would say that the biggest challenge with Onureg continues to be the proportion of patients who are getting intensive chemotherapy. As you know, those dynamics in the first-line setting here are continuing to evolve. We've seen a decrease in the U.S.

mainly of the percentage of patients who go on to get intensive chemotherapy. And remember, the label is for patients who receive intensive chemotherapy and get a complete response. Having said that, focus with Onureg continues to be on ensuring that we maximize the opportunity for maintenance. The maintenance share right now is about 50% to 60%.

We think there's opportunity to continue over time to expand that maintenance market. And for those patients who get intensive chemotherapy, get a complete response, go on to maintenance, the choice needs to be Onureg. So that's been the significant focus we have for the U.S. team.

And then we continue to see very early stages of launch outside of the U.S. in markets like Germany and France, and the early uptake there has been good..

And Andrew, thank you for the question on milvexian. Yes, certainly, we looked at the hypothesis around COVID, and the 200-milligram dose doesn't seem to be driven through there. But we are continuing to explore why the group stood out.

But the point to be taken home, I think, remains that we have an eightfold dose range that is available to us for picking the right dose bond to Phase III trials, and we are in that place where we are now looking forward to initiation of the program in the next few months on the Phase III side with the 3 indications that we've spoken about before in AF, ACS and SSP..

The next question is from the line of Chris Shibutani with Goldman Sachs..

If I could ask a question about how you see dynamics in the multiple myeloma setting, particularly the interplay between CAR T therapies and with the anticipated arrival of bispecifics as an option. Could you perhaps talk about where you see the dynamics playing out in 2023? Secondly, on Opdualag, there has been a good revenue performance there.

Can you remind us, what your strategy is for broadening those label opportunities, and when we might be able to see data to help build confidence in continued growth for that asset?.

Thank you, Chris.

Samit?.

Sure. Thank you, Chris, for the question. On multiple myeloma, I think the starting point is that no matter how many therapies have been developed and become available, the disease remains uncured at this time. So there is an opportunity to continue to bring more transformative, more effective and safe therapies to these patients.

And in that regard, certainly, cell therapies have really brought in some transformation in terms of getting patients into a complete remission. And hopefully, those are very long lasting. Bispecific, as one has been approved today in the U.S. -- or yesterday in the U.S. and certainly in the EU as well, is a new armamentarium.

Certainly brings a good efficacy. However, as you saw from the data that have been presented, there are opportunities to continue to improve on the safety profile, high rates of CRS are going to be problematic, as you also saw some of the statements made by thought leaders, and that's where differentiation will need to continue to occur.

We will be presenting our own data at ASH this year for a T cell engager, and you'll see that. I think the other way to look at it is the holistic development in multiple myeloma where we are also developing now initiated 3 Phase III trials with CELMoDs.

And the future probably will look like a combination approaches of T cell engagers or cell therapies and how CELMoDs can be added to those. So we have a holistic approach of treating multiple myeloma and trying to get more and more patients into very long, durable complete responses and at some point, someday getting to a cure.

Do you want to add something, Chris?.

Sure. Maybe I'll just add that while bispecifics and CAR T both share, in this case, the target of BCMA, I think it's important to keep in mind they offer very different characteristics for patients, including the availability of the products, the duration of treatment, adverse event profile.

And I think ultimately, as we've said repeatedly, the utility of BCMA CAR T and bispecifics is going to be unique to each patient and the setting that we're in. And we anticipate that these various patient factors are going to become increasingly important in determining how patients are treated.

And then maybe before I turn it over to Samit about the expansion of Opdualag, let me just say, at the outset, we continue to be very impressed with the strong performance of Opdualag out of the gate. Our focus has been and will continue to be to target that PD-1 monotherapy population.

I think as David alluded to; we're seeing use of conversion of both Opdivo + Yervoy patients as well as PD-1 monotherapy to drive that use as of today. But as we think about the growth of this asset going forward, remember, where we sit today, PD-1 monotherapy is still about 20% of first-line metastatic melanoma.

And that's the target for our commercial launch, and so we see continued opportunity to grow this asset through the end of this year and well into next year..

And I think in addition to what Chris has just spoken about, there are obviously many other trials that are ongoing. In the Phase III setting, we've got the melanoma study, in the adjuvant setting as well as the CRC trial in the second line plus setting in MSS colorectal cancer.

And then looking into the continued enrollment in the Phase III portion -- or Phase II portion of non-small cell lung cancer randomized portion as well as the 2 studies ongoing in HCC and multiple other signal-seeking studies ongoing with our collaboration with investigators.

So obviously, as the data emerges, we can take that program forward to multiple other indications..

The next question is from the line of Tim Anderson with Wolfe Research..

Going back to mildexian. I'm just trying to understand why we haven't seen Phase III trial start yet. You've had the data for a number of months in something like atrial fibrillation. You didn't run Phase II, so there's no data specifically in that setting to analyze. You're in a race with other companies.

So why haven't we seen anything posted yet? It's almost makes you wonder if FDA preventing you from advancing yet. And are there concerns or something like that. And then second question is just a general pipeline one for Samit. It's been a pretty big positive news flow in 2022.

I think there's the view that you go into more of a catalyst like period in 2023.

So Samit, what are the next 2 or 3 most important clinical catalysts coming up, let's say, over the next 12 months in your view?.

Thank you, Tim. Let me ask Samit to answer your question both on milvexian and the pipeline. I just want to say, with respect to the pipeline, Tim, as I mentioned in my remarks, I think what's really exciting is that actually the mid-stage pipeline is beginning to accelerate and the number of catalysts there are really important.

And that's why we highlighted that in my remarks, and we look forward to continuing to update you there..

And Tim, thank you for the question. I'm glad that you are as excited as us in terms of initiation of the Phase III program.

Once the trial reads out, we have to get in touch with the health authorities, agree on the dose, agree on the overall trial design and then we can initiate the plans by submitting the protocols to IRBs, to ethics committees, to the institutions they have to go through before we can actually enroll patients. So all of that is being worked through.

We have our partner, Janssen and us. We're working very diligently, very closely to get the program started. In the next few months, you'll get to hear the initiation of the Phase III program for milvexian.

In terms of the pipeline and what's the new catalyst in the next year or 2? I've talked about it before, and I think our pipeline is fortunately very full and each of the therapeutic areas has multiple opportunities beyond milvexian.

For example, in cardiovascular space that we've spoken about, I think we are looking forward to some of the readouts in the immunology space. as we think about cendakimab over the next couple of years for the ongoing eosinophilic esophagitis study as well as, I think Giovanni spoke about in his opening remarks, LPA1 proof-of-concept study.

If that reads out and if the data's are similar to, from an efficacy perspective, what we saw a couple of years ago in 2018, the publication, that could open up the doors if the safety profile is well managed.

In a similar way, we have repotrectinib that will be registered and hopefully available in the second half of next year for patients with non-small cell lung cancer with RAS mutations.

And as the data emerges, there are a few transitions that could occur in 2023 as well from early to late development such as androgen receptor lag independent degrader or alnuctamab. And then, of course, there is the readout for the COMMANDS trial that we are anticipating for Reblozyl as well.

So there are multiple other catalysts that are coming through in the pipeline in 2023..

The next question is from the line of Stephen M Scala with Cowen..

Revlimid continues to exceed expectations, presumably creating a tough compare for 2023. So I'm just wondering, at this point, are you comfortable with consensus looking for growth for Bristol overall next year? I know 2023 guidance will be issued next February.

But if you could tell us whether you're comfortable or not willing to comment at this point, that would be helpful. And then secondly, on branebrutinib, 3 programs were discontinued only RA remains.

Why were the other programs discontinued and RA continues? If it was due to tox, can you specifically tell us whether it was liver tox?.

Thank you, Steve. I wanted to ask David to start on Revlimid and outlook, and then Samit will answer your question..

Thanks, Stephen. On Revlimid, as we said in my remarks, we still anticipate for the full year Revlimid to be in that $9 billion to $9.5 billion, more in the upper half of that range. But as we said all along, we're going to have quarter-to-quarter variability based upon how our generic volumes enter the market and timing from quarter-to-quarter.

So broadly, we're still in line with the forecast that we had provided before. As far as 2023 guidance, underlying business, we continue excluding foreign currency. As we see this year, we continue to be able to grow the business, and we'll provide an update on '23 guidance as we normally do on the Q4 call..

Thanks, David. And just, Steve, on the branebrutinib side, it is certainly not the toxicity. We've set ourselves high bars for taking molecules into late-stage development, and we did not meet the high bar for those indications. The indication for RA is continuing, and we'll see what the data reads out.

And based on that data, then we'll make a decision whether that should continue or not..

Your next question is from the line of Luisa Hector with Berenberg..

Maybe just to try again on the outlook for 2023. Is there anything more to say on Revlimid? You've had the guidance of $2 billion to $2.5 billion of erosion each year.

Is that what you're expecting for next year? And then I wanted to try and clarify on some of the license income partly connected to your statements on IPR&D, but also when we look at that line within other operating income, royalties, license income does seem to be a step-up in Q3.

So I'm just wondering, is that driven perhaps by the diabetes with Astra that's going particularly well on to future? Is there a one-off item within the line in Q3 or something a bit more sustainable that we should think about going forward?.

Thank you, Luisa. So let me just reiterate. Nothing really changes with respect to 2023 in terms of our outlook, and that includes the fact that we continue to see approximately $2.5 billion of decline for Revlimid. But David can give you more insights into the second question you had..

Yes. On OI&E, it's a good question. A couple of good things that are going on there. One is that our royalties on PD-1 and diabetes continue to -- as those businesses grow, the royalties that we receive on those businesses continue to grow.

A couple of other things, if you just think about interest rates with our cash balance, interest income is increasing. But as you know, we've been stepping down and paying down our debt, so our interest expense has been declining. And some of our licensing income that we've seen come through has also improved.

So you put all 4 of those factors together, and that's how we see the OI&E progressing better over time. Just to recall, there longer term as it relates to that royalty income, those royalty rates will step down on our diabetes franchise in '23 and going and '24 for PD-1.

So we'll update you on that guidance when we do guidance on the fourth quarter call..

The next question is from the line of Terence Flynn with Morgan Stanley..

Maybe two for me. I was just wondering, first on Camzyos, just a clarification maybe for Chris. You mentioned that commercial access is improving this quarter relative to last quarter. I think you said something about doubling.

So does that mean we should think about sales for 4Q in the $10 million range? And then your T cell engager, the data we're going to see at ASH, maybe you could just remind us.

I know you changed the formulation to a subcu there if you're confident you now have a go-forward dose and you're seeing less CRS than maybe you saw with the IV formulation, and if you expect to be competitive with teclistamab, which was just approved from J&J?.

Thank you. Chris, why don't you start on Camzyos and then Samit..

Sounds good. So Terence, thanks for the question. Let me clarify a few things. First, while we're not going to give specific product level guidance for the fourth quarter. What I would say is that we are very happy with the conversion and increasing conversion of patients on Camzyos to commercial drug.

Remember, as you think about this launch, you need to think about it in the context of how many physicians are REMS-certified. Our ability to then translate those physicians into getting patients into clinics and getting on therapy, we're seeing a nice increase week-over-week in terms of patients coming in at the top of the funnel, if you will.

Because they're going into our hub, they're staying on therapy. And the fact that now we're converting those patients to commercial drug at a faster clip, I think it's a very good sign that this launch continues to accelerate in the fourth quarter.

The only other thing to keep in mind is that because most patients will take some time to initiate therapy as well as work through the benefits verification and any appeals process, those patients are going to be on free drug for roughly 7 to 8 weeks.

That time will decrease over time as we get PBM coverage decisions formally through the end of this year and into early next year. But that's how you should think about the flow of patients and the sequence of patients. The really good news, though, is that we continue to see physician interest in this product. The feedback has been good.

We're seeing week-over-week increases in patients at the top, and we're seeing a nice increase in conversion of patients going on to commercial drug. And we anticipate that continuing..

And Terence, for the T cell engager, certainly we'll not get into the specifics of the data. But as you recall, with the IV formulation, we had very good efficacy that we had seen, but the toxicity profile was not acceptable and that's why we switched the subcutaneous. And the data will be presented.

So certainly, after the presentation of the data, we are happy to get into dialogue as to what the data are and how we perceive them as we go forward..

The next question is from the line of Carter Gould with Barclays..

Great. And thanks for all the color on Camzyos. I have 2 more on that front, though, for Samit. I guess, first off, we saw the nonobstructive trial design, the Phase III got posted.

Just wonder -- but it's pretty sparse on details on how you're thinking about titration in the setting, given the Phase II work that was done here was more drug concentration dependent. Obviously, the REMS is more echo dependent.

So just how you're thinking about titration in the nonobstructive setting? And then also on , how do you think about this? Should we be thinking about this as a backup to Camzyos? Or do you see this coexisting maybe in a different set of indications like HFpEF, et cetera?.

Sure. Let me start with Camzyos first in the nonoperative hypertrophic cardiomyopathy. We are looking forward to initiation in terms of enrollment of patients in that Phase III study. The data that we had seen already in the Phase II are quite promising, looking at the impact on biomarkers and even in the longer-term follow-up of that trial.

I can't give you the specifics on the titration at this time and certainly for future discussions. Once we have initiated the trial, we'll be able to talk more about it. For MYK-224, as you know, that we always want to have multiple shots. And this is a new molecule that we are developing.

Certainly, the first trial that you'd probably see is going to be looking also at obstructive hypertrophic cardiomyopathy. And the reason for that is because we've got Camzyos data. We have in-house data the way we would want to compare the trial -- compare the drug and see what differentiation features that drug carries.

And then as we look to the future from a development perspective, we'll define which indications we want to pursue with MYK-224, which indication we want to replicate with Camzyos. We have not defined and decided yet on how we will develop 224. And certainly, when we have that, we'll get into that dialogue as well..

The next question is from the line of Matthew Phipps with William Blair..

Just a quick one for me. Samit, there's been a couple of failures this year in EoE, where maybe the Phase II is a histological endpoint, but not the dyspepsia endpoint.

Just maybe you can give us any comments on why you think IL-13 would be better suited to IL-13 both of those endpoints in your EoE Phase III?.

Sure. We can certainly -- the one that you're probably talking about is the one that we saw yesterday or day before for the EoE. Remember, the mechanism of action over there is the IL-5 inhibition as opposed to cendakimab, where it is the IL-13 inhibition.

The differentiating feature also compared to some of the other drugs that are approved or have shown data. This is a direct inhibitor of IL-13 with a downstream effect of inhibition of both R1 and R2 receptors.

And we believe that the inhibition of both is important not only for decreasing the inflammation, but also for remodeling and reversing the fibrosis. We have seen this in the Phase II trial that was presented a while back for cendakimab, and that was the basis of taking this into a Phase III trial.

And certainly, we'll be looking at this ratio in this trial as well. So in a couple of years when the trial reads out, we are hoping to be able to replicate and improve on the results of the Phase II study..

Next question is from the line of Colin Bristow with UBS..

Maybe just a quick follow-up on Sotyktu. You previously talked about the strategy to build volume against established competitors with sort of free drug or bridging programs.

Could you just give us some more specific details on what you are doing there just to help us think about the progression of the sales trajectory? And then just secondly, on the next-generation IMiD portfolio, what should we specifically expect to see at ASH with regards to iberdomide and mezigdomide?.

Thanks, Colin. Chris, why don't you start on Sotyktu, and then Samit will take the IMiD..

Sure. So as we think about the progression of Sotyktu, I think you start with a couple of things upfront. One is the profile of the drug.

We've talked about that at some length that the fact that we have a very clean label here, it gives us the ability to tell a very strong story about 2 Phase III studies that directly show an efficacy improvement against the existing standard of care.

So we've got a great efficacy message to tell, good safety profile, the value of this asset is very clear. We saw that coming into this launch, and all of the feedback that we've received from physicians thus far is consistent with that. The next important point is that we've got a very experienced team. They know this space well.

So we've been able to penetrate where the vast majority of these patient sits, which is in the community setting. So we feel very good about that. The trick with this space because it is a heavily managed space is going to be that we do a few things really well. Initially, we've got to remove new-to-market blocks.

Those blocks are put in place for every new product in this space, and that's a big focus for us right now. We then have to take advantage of where access is open. And as I said earlier in response to the previous question, that's about 10% of patients. And so we're doing everything we can there.

But for the majority of patients, the focus is on building volume and then leveraging that volume to negotiate with PBMs to get you into a more favorable formulary position as soon as feasible. Because of the timing of this launch, we certainly missed the window by and large for negotiations this year. The focus will be on negotiating for 24 access.

Though in response to Chris' earlier question, we're going to do everything we can to accelerate that. So that's really the focus that we have. We have a robust set of patient services that we can offer to patients to get them onto therapy.

We give them both of initial free trial offer as well as a bridge program, and we would anticipate significant use of that bridge program to guide us into when we have a more favorable formulary position..

Yes. And just talking about ASH. In general, one of the things that you will be seeing over there is the presentation of the data for the expansion arm of mezigdomide in combination with dexamethasone in fifth line plus patient population.

But in general, from multiple myeloma, we will also be presenting the data for our next CAR T, which is GPRC5D-targeted as well as for KarMMa-2, one of the arms which is looking at proof of concept in the post-transplant treatment setting. That data will also be presented at ASH in addition to alnuctamab, which is the T cell engager..

Next question is from the line of Evan Seigerman with BMO Cap..

One on Abecma.

Can you provide just some color as to when we may see the KarMMa-2 data? I know that the 270 press release late -- a medical meeting, and I see that there's now a green checkmark on your near-term catalysts? And then also more broadly speaking, when you think about the evolution in the BCMA CAR T space, what do you -- how do you position Abecma versus, say, the competitors, especially with say, the Carvykti data on the horizon as well?.

Thank you.

Samit?.

Sure. I will start with that, Evan. And from a KarMMa-2 data presentation perspective, certainly, as I said earlier, those data will be there as a proof of concept with a longer follow-up at ASH meeting.

And certainly, we've talked about what the initiation of the next trial based on those data would be with -- and that's what I think 270 Bio I talked about, how we intend to initiate a trial in the earlier setting. It is a differentiated way of looking at it.

And more details will be available when we actually do launch the trial in terms of trial design and how we have thought about it. In terms of the comparison of Abecma versus the data from Carvykti.

Once again, as Chris has spoken about earlier, we do believe that Abecma remains a very differentiated asset from a safety profile perspective as well as the first CAR-T that has data as a randomized Phase III trial showing superiority to current standard of care.

So that profile will continue to grow, and that profile will continue to improve hopefully. And that's why we are thinking of initiation of that early line trial in the post-transplant setting..

Your next question is from the line of Dane Leone with RJF..

Congratulations on the results and progress this quarter. Two easy ones for me. Firstly, the launch of Opdualag has been going quite well.

And looking into 2023, I think there's still some questions about the cannibalization potentially within the melanoma setting relative to Opdivo as the Street still expecting quite robust growth of Opdivo into next year.

Could you just comment around what you're seeing as the launch starts to mature a little bit with Opdualag and whether your expectations are that's going to have limited impact in the utilization of Opdivo in the melanoma setting? And then secondly, an easy one, are you expecting EMBARK results for Camzyos next year? Or is that being pushed to 2024?.

Thank you, Dane.

Chris, why don't you start?.

Maybe I'll start with Opdualag and turn it over to Samit. So what we're seeing right now, just to set sort of where we are with the Opdualag launches. We are sourcing roughly 50% to 60% of this business from PD-1 monotherapy and about 40% to 50% from Opdivo and Yervoy combination.

That's slightly higher Opdivo + Yervoy cannibalization in the third quarter we had anticipated prelaunch. But we expect that to stabilize, and we would continue to expect that going forward, the majority of Opdualag business is going to come from PD-1 monotherapy.

Remember, in the market right now, as I said earlier, we've got about 20% market share for PD-1 monotherapy. That's roughly evenly split between Opdivo and KEYTRUDA. So the way I would think about the progression of Opdualag is, first and foremost, you will see some cannibalization of Opdivo and some of Yervoy as well.

However, the vast majority of the use of this asset in the long run should continue to come from PD-1 monotherapy. Some of that will be Opdivo, some of that will be from a competitor. And as I think about the growth trajectory, that 20% share is the target for us of PD-1 monotherapy. That's where we think we should be getting the business.

And the fact that we still have 20% of this market to go gives us confidence we can continue to grow this overall business going into 2023..

And just on EMBARK results, those are projected to be in 2024..

Your next question is from the line of Mohit Bansal with Wells Fargo..

So one clarification and one question, if I may. On Camzyos, Chris, I think you mentioned that 1/3 of the patients who are prescribed Camzyos are on commercial. But then you mentioned that in October, we have seen doubling of that.

Can you please clarify what is doubling here, number of commercial patients or the funnel or prescribed prescription for Camzyos? And then the second part of the question is regarding milvexian. The indications you have mentioned, SSP and ACS, this seems to be a little bit of acute type of indications.

So yes, the patient number are high, but duration of treatment may be smaller. I think that is only for a month or so after a stroke.

So just trying to understand, how should we think about the opportunity in the acute type of settings?.

Sure. Maybe I'll start on the Camzyos question. So let me just clarify the 1/3. Of the 1,100 patients, roughly 1,100 patients that we had as of the end, a 1/3 of those patients had dropped down to commercial drug, beyond commercial drug.

And what I was referencing was in the first 3 weeks of October, we've seen an almost doubling of the number of commercial dispenses that took place through all of the third quarter.

So that illustrates an important consideration for the trajectory of commercial sales here for this product, which is that we're starting to see an acceleration both in terms of the number of patients coming on to therapy and the pace at which those patients are converting down to commercial drug..

And on the milvexian side, although the words say acute coronary syndrome, but it doesn't mean that the treatment is only done in the acute setting or even for the secondary stroke prevention. Patients actually stay on antiplatelet regimens, for example, for a very long time on a chronic treatment period.

And so in a similar way, milvexian is anticipated to be used in a chronic setting rather -- meaning the long duration of treatment rather than only in the acute phase..

The next question is from the line of Robyn Karnauskas with Truist Securities..

I guess two for me. Number one. On Reblozyl, we're hearing -- I was just wondering about duration of therapy. We've got some anecdotal comments in your [indiscernible] some patients still fill a lot of fatigue, and so they'll stop before the drug is actually working.

So could you comment on like what you're seeing for duration of therapy and if you think that will change? And then second, on deucra, I noticed that you have a topical formulation that's being developed.

Can you talk a little bit about what your strategy might be there? Obviously, the topicals are becoming a growing market segment, and maybe what different indications you might be pursuing?.

Thank you. Chris, and then Samit..

Sure. So I think you're right that a big focus area for us on Reblozyl continues to be on duration of therapy. The way we anticipate being able to drive that duration of therapy, though, is to continue to focus on dose titration. What we're seeing right now is about 50% of patients are dose titrating.

And remember, you need to have 2 dose titrations to get the benefit that you saw in the clinical program in the real-world setting. And so about 50% of patients are dose titrating with the first step. And that compares to about 80%, which is what we saw in the clinical study.

And if we can get that dose titration, patients will get the full benefit of Reblozyl, and we anticipate that, that full benefit will translate into a longer duration of therapy.

So I think that what you're hearing is consistent with the focus that we have the continued growth of this product, continue to make sure that Reblozyl is the standard of care in the second-line on-label population, expand that population as much as we can by decreasing the time that patients are in ESAs and then ensuring they get the full benefit of Reblozyl by focusing on appropriate dose titration, which we anticipate will increase the duration of therapy..

Yes. And just very briefly on Sotyktu. Look, I think the overall potential for topical therapy is being evaluated and we'll have to inform you in due course because landscape is continuing to evolve with multiple therapies coming for the milder population or mild population.

We already have the approval for moderate-to-severe plaque psoriasis, and the mild population indication, we'll need to continue to explore..

So thanks, everyone. In closing, with 9 new product launches in the last three years, I want to take a moment to reflect on all of the progress we have made.

We have significantly derisked our portfolio with strong clinical, commercial and financial execution, and we are well underway to transform our business into a more diversified and resilient company. I look forward to the coming catalysts ahead from our new product portfolio and our mid-stage pipeline.

With that, thanks again for taking the time to join our call today. And as always, our IR team will be available for any follow-up questions you may have. Thank you, and have a good day..

Thank you. That does conclude today's teleconference. We do appreciate your participation. At this time, you may now disconnect..