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Bristol Myers Squibb Co. (NYSE:BMY)

Cowen and Company 33rd Annual Health Care Conference Call

March 6, 2013 9:20 am ET


Francis Cuss – Senior Vice President-Research, R&D


Steve M. Scala – Cowen & Co. LLC

Steve M. Scala – Cowen & Co. LLC

Good morning and welcome to the Bristol Myers Squibb section of the Cowen Conference. We are very pleased to have the Company with us; once again this year representing the Company is Dr. Francis Cuss, who is Senior Vice President of Research and Charlie Bancroft, who is Chief Financial Officer as well as John Elicker and members of the Investor relations all in. We’ve long felt that Bristol Myers Squibb is a much known name in pharma for basically the reason that rolling out promising new products that we think will have a dramatic impact on the P&L over time. So we feel that this Company offers leverage potential that is not seen in another pharma stocks, and for that reason, we think it’s a name that you should own in our portfolio.

So with that I’ll turn it over to Dr. Cuss.

Francis Cuss

Good morning everyone, thank you very much, Steve that was kind remarks, I hope I can show you where your confidence is invested for the next few minutes. Just the forward-looking statement. This is a slide of the Company strategy, which I think will be familiar to many of you should be. We’d be showing this for the last five years, and I think it’s very important part, corporate strategy is a very important part of our success and the fact that it embedded in R&D, I think reflects what we have been trying to do, we can now show we can deliver. The elements of our strategy are obviously innovation, but essentially looking for innovation both internally and externally, and as well as, having our head in the clouds in terms of the science, we have our fleet firmly planted on the ground in terms of driving our business forward, whether it’s R&D or the rest of the business.

As my mother used to say, when I made a promise to her, the proof of the pudding is in the eating, and I think the proof of any strategies what have you delivered. And this slide here shows the 14 important drugs meeting unmet needs for patients that are being approved in the last 10 years. I think it’s important part of our strategy is the Best of Biotech, Best of Pharma and I think some of the approvals over the last year or two reflect what we’re trying to do.

So Forxiga, Eliquis, small molecules discovered in-house potential for best in first in class biologics like YERVOY high innovative Best of Biotech, Best of Pharma. We’re delivering. This is the broader portfolio from early true to late, don’t have time today to go into all of it, we’ll have to do that. But I’m going to concentrate on a couple of areas, but it covers all our core areas, and it has the balance of small molecules, large molecules.

Let me start our strategy in 2007, we had 6% of the portfolio, that 6% is biologics now it’s 40%. So we’ve made a major shift in terms of that. And we’ve had a slower, but substantial shift in terms of those disease areas, where we believe there is still unmet need. Our North Star is reaching unmet need, so we’re highly aspirational, but it’s also about delivery.

So let me take a couple areas, which we’ve had strategies for sometime, but we have high aspirations, and I’d like to tell you, what we are doing, and what we look to deliver in the near to medium term; one is immuno-oncology, the other is hepatitis C.

So here is our immuno-oncology pipeline; on the right hand side you can see we have our late stage assets YERVOY is approved for metastatic melanoma, but it’s also life cycle management for other indications I’ll talk about that in a moment. Nivolumab, next generation anti-PD-1 antibody, I’ll talk some more about that too, and also in Phase III doesn’t get as much year time, but important for us is elotuzumab in multiple myeloma, can consider as an immuno-oncology mechanism of action, but we also have earlier stage assets the Anti-KIR, Anti-CD137 and Interleukin-21 in Phase I, Phase II; and the LAG3 antibody in preclinical, and as well as being late and early assets we can divide these also into that those the targets the innate system, the innate immune système as well as the adaptive system.

As you recall the innate system is a the more primitive immune system or legacy from the insects and the worms is a non-specific approach and the adaptive sytem which has evolved in vertebrates, and also with backbones that targets very specifically both infections and tumors.

I’ll talk a little bit more about the adaptive system, but I want to give you a sense of the comprehensive and intensive nature of our IO portfolio that we are looking at both of these. Some of these are removing to break that the tumors have put on the immune system others are pressing the acceleration, they are stimulating the immunes directly. So there’s lots of different approaches here, lots of different possible combinations, and I’ll talk about some of those.

So let me talk in a little more detail about the adaptive system and the T-cell checkpoints that we are targeting for these therapies. If you look at the map, Yervoy is approved its part of this co-stimulation system, where the checks and bounces around the immune system that ensures that you don’t get too much of an immune process or not enough.

In the case of cancer, the tumors suborn the system, they stop the immune system actually recognizing and rejecting the tumor. Ipilimumab, is the first generation looking at removing the check on the T-cell, so it’s a negative signal that the CTLA4 provides and the antibody blocks that. Nivolumab, a different pathway in this case, PD-L1 on the left there you can see on the antigen-presenting cell that could also be the tumor cell. So PD-L1 and PD-L2 expressed on tumor cells, they link with the PD-1 on the T-cell and send a negative signal. Our monoclonal antibody blocks that signal therefore releasing the T-cell from its block. You can imagine of course that ipilimumab releases one signal one negative signal, nivolumab does a separate one, could envisage putting these two together could be better than either alone. It turns out as a lot more checks and balances within this system, it’s very complex system, very finely tuned.

Tumors have been there around a long time, they found ways to block all of these, so anti-LAG-3; is another approach where a negative signal suppresses the T-cell we have monoclonal antibody in preclinical, which we’d have to show in early animal models that put that together with nivolumab it improves the response to nivolumab. So that’s another potential combination that we will be going forward and looking at in the future in the clinic.

As well as taking the foot off the break there is an opportunity to put your foot on the accelerator, and urelumab is a monoclonal antibody that actually stimulates directly the 4-1BB the 137A on the T-cell. Again a whole different set of biology with a whole additional set of interesting opportunities to combine.

So these are also different approaches we have a network of physicians and scientists around the world, who are helping us to look at how we might sequence these, how we might put them together in different ways to meet the overall needs of improving success rates, and the ultimate challenge here is, if you can give a response rate that last for five years, something we’d call that a cure. So the ultimate aim here is to raise the chance of curing patients, who presently have metastatic disease, and might be death in a few months or a few years.

So let me talk a little bit about the individual assets. First of all, Yervoy, as you are aware, the first therapy for metastatic melanoma that was approved in over a decade. We’ve followed up the patients from the initial studies reported the data at ESMO, the European Society of Medical Oncology last year, showing that the full year or the five-year time point, the kind of durable responses that we’ve seen at earlier time well it continues on average about twice the response rate and no treatment.

So we’re beginning to confirm this idea that once you get a response, you do have a long-term survival, and this is a very novel different parts of immune-oncology treatments as opposed to perhaps targeted therapies. The development in melanoma continues, we have adjuvant studies ongoing, one in a cooperative study, and one an internal study within BMS and we will be getting results of the BMS study later this year internally, and then the year one later. There’s also studies in squamous non-small cell lung cancer, and small cell lung cancer, with Yervoy, and also in early lines of prostate, castrate-resistant prostate cancer and heavily treated patients. The heavily treated patients study will be reported later this year, but probably as we see in the context of both those studies to understand, how we’ve always might be useful in prostate cancer.

Last year at ASCO and together with The COMPANION New England Journal, ASCO written about PD-1 and PDL-1 by BMS and members of the medical and academic community. I think it was very dramatic results in three years non-small cell lung cancer, and renal cell carcinoma and melanoma. This data I’m showing here was updated data at ASMO, it shows about 27%, 28% response rates in renal cell and melanoma and this 18% shows was all doses, but in fact at those that we’ve select was taken to Phase III in non-small cell lung cancer in nivolumab actually had about 27% response rate.

Why is this important? This is important for two reasons. One is historical response rates in non-small cell lung cancer is less than 10%, a lot of people respond to chemotherapy but they die quite quickly. So that is much better at least in these initial data than historical controls.

From a mechanistic perspective; it’s important because up until now, immunotherapy is really showing benefits in what have been traditionally regarded as immunological tumors such as renal cell carcinoma and melanoma. This has not been the case. So it gives the opportunity. The chance that we maybe have to expand immuno-oncology beyond traditionally immunological tumors, perhaps suggest the many tumors that suborn the immune system that if you release the breaks or you accelerate stimulating immune system, they are going to be have to have effects and start see these durable long responses, don’t know that yet, but we’re revolving the data see if that’s true.

Uniquely for us and BMS, we’re excited – not uniquely excited but because we’re excited, we’ve uniquely started in Phase III with three different indications, three different tumors, and certainly have the different lines of therapy. So it’s the broadest most comprehensive Phase III program, we have had in BMS ever, in non-small cell lung squamous in second-line, squamous cancers first is docetaxel standard-of-care and in non-squamous also second-line versus docetaxel.

These studies are underway and this data should be available to us next year 2014. Renal cell carcinoma in advanced tumors versus (inaudible) versus the standard-of-care, and in melanoma, we have a broad program both naïve early lines of melanoma, and also patients pre-treated with Yervoy, melanoma program should be breeding out in 2015.

Let me just turn briefly to elotuzumab, as I said it’s some ways are we shadowed by the PD-1, excitement around PD-1, but it’s an interesting targeted therapy, which does have its actions thorough immunotherapy, it targets and express glycoprotein on the multiple myeloma self, which then when it by and facilitates the immune system taking out those cells. We presented data at ASH last year in late lines of multiple myeloma patients in combination with Ribavirin showing a very high response rate about 90%, and this should reach prolonged progression free survival at the time, we haven’t actually reach the meeting survivors certainly it was going to be longer than what’s historically been the case for Ribavirin’s alone, and it was pretty well tolerated and it’s quite safe. We’ve gone forward into Phase III with elotuzumab both in early lines of multiple myeloma, and in late lines in both in combination with Revlimid.

So let me move now to hepatitis C in some way that’s linked to my mind with immuno-oncology, and that we had for both a long health strategy and a high aspiration to cure patients, and in this case we’ve had a broad strategy here, not just based on direct-acting antiviral although we’ve certainly has the strategic drug discovery at BMS to discover and develop three direct-acting antiviral that could work together without needing interferon, without needing ribavirin to get a high cure rate, and to be very tolerable, and that I’ll talk about in a minute. We’ve shown in early mid-stage testing.

Separately, we acquired lambda interferon, with the acquisition of ZymoGenetics together with ribavirin, and/or direct-acting antiviral, and also we are looking at adding into these standard-of-care interferon ribavirin our own DAAs. The reason this is board is no matter how we took the view, no matter what happened in the market, and I will in the exploratory development of other compounds, and I must say that it’s probably even being more dramatic than I would have envisaged, whatever happened there, we had optionality here, and I think it’s becoming clear that as the competition grows so the market is more likely to be segmented both in terms of geography and genotype.

So in terms of our focus here; first area of where we are seeking to make a submission and it could be the first submission of approval for to direct-acting combination of all oral interferon, or ribavirin free is in Japan. In Japan it’s about 1.5 million people infected with HCV as a result of the tainted blood back in the 80s and 90s, and about 70% of those are genotype 1b. This combination of Daclatasvir 5A inhibitor, and Asunaprevir; a NS3 inhibitor we’ve shown it gives close to 90%, SCR24 response, which is a cure, it’s well tolerated and we started the Phase III, which will deliver data later this year, we’ll be presenting that to the AASLD, but perhaps more importantly will give us the opportunity to make a submission in Japan before the end of 2013.

Part of our broader strategy was to have a three-drug regimen, we believe it would need three drugs in order to cure the whole genotype 1, so 1a as well as 1b; results for our mid-stage test that we presented recently at the AASLD. Bottom line here is within four weeks, 100% of the patients had trial suppression, and essentially 100% were cured. One patient was lost a follow-up during the 12 we got SVR4, in fact when we found him again, at SVR24, he was still suppressed, so essentially this regimen is able to suppress 100% of the 1a and 1b genotype in this particular study, small study, but I think very interesting whether it was 12 weeks or 24 weeks, it worked in both.

We are expanding this is ongoing expansion of this trial, we are formulating a fixed dose combination and the idea will be to start Phase III, early in 2014 of the fixed dose combination. In addition to these two areas, we’re also continuing with the dual, so that’s daclatasvir, asunaprevir in 1b patients in trials in United States and Europe, with an idea of making a submission there and we also have what we call our court, which is the Peg/Riba plus dose 2, where we are looking at sort of partial respond is now respond, and there is a trial ongoing in that in both Europe and United States. So and in addition with lambda interferon, we are looking at HCV in certain geographies and perhaps even more importantly looking to expand rHBV franchise in terms of doing trails in hepatitis B more broadly.

So let me finish by saying, we have strategy with high aspirations. We believe we are making progress in terms of delivery, but the question, I always get asked is okay, what have you done for me recently? How you’re going to sustain us? And I think the elements of how we will sustain this are embedded first of all, in having a strategy you heard me say, not just the corporate strategy, not just an R&D strategy, but a series of platform and asset strategies that we don’t change every day, but we stay focused on and we deliver on. It is important also that we build a team at BMS, at incorporeally but perhaps to remain to my presentation a team, as the head of R&D both in research and development that could continue both the culture and this focus on the strategy.

Very specifically we focus on quality and research, what I mean by that I mean quality compound target validation, and having development plans that actually deliver the kind of information unique to determine the maximum developmental, and regulatory and commercial strategy payoffs.

In development, it’s following the science, I think that’s epitomized by work with Eliquis. Did we go after once a day, because that were commercially attractive, we’ll do go and work with the science pushes you to give a twice a day, and try and nail and try factor better efficacy, better safety, better overall mortality. That’s what following the science actually delivers. And then of course you have to get your drugs approved and we have, perhaps not a I’ll tell you that confrontational but more interactive and transparent relationship with regulatory authorities.

And of course, this is all underpinned by looking outside for innovation, selective integrations looking outside as well as looking inside for that. So put that all together, we believe that’s a recipe for continuing success, and sustainability in the medium and long-term.

Let me just finish by saying, what should you look out for over the next few months. And we pick out four important areas; I think Onglyza, Sustiva study, CV outcomes reported out in the third quarter hopefully. Technical flows in have to make a resubmission there in mid-2013 obviously Yervoy, Nivolumab will be presenting data at ASCO extensions of the data you’ve already seen, and also the combination of Yervoy with nivolumab and metastatic melanoma and of course, I’d just say, representing the data from the Phase III studies in Japan with the dual therapy in 1b patients at AASLD later in the year, so an important year for us, important data, and I look forward perhaps coming back next year, and telling you about some of that.

Let me stop there, thank you very much.

Question-and-Answer Session

Unidentified Analyst

So two questions and I’ll quit, maybe either Charlie or John tell us what they proceed in the initial (inaudible).

Francis Cuss

Yeah, so it’s an interesting debate about the Antelope of without getting into where the one really needs, there is certainly there is a feeling that we could have one. We have an agreement with Portola, who has a modified factor XIa, which very elegantly socks out factor Xa inhibitors that reverses quite quickly. We have an agreement with them to use a fixed band in there early study and those are underway.

So in vitro looks promising and I think we are moving forward with them to get the data and have it submitted as soon as it’s practical. Okay.

Unidentified Analyst


Francis Cuss

I think you know what, I think we are going to breakout, so maybe should do that out, if that’s okay. Thanks every one.

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