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Executives

Joseph P. Miletich - Senior Vice President of Research and Development

Analysts

Matthew Roden - UBS

Amgen Inc. (AMGN) UBS Global Healthcare Conference Call May 21, 2013 10:00 AM ET

Marc Goodman - UBS

Good morning, everyone. My name is Matt Roden. I am a biotech analyst here at UBS. And I'd like to thank everyone for coming to the new UBS Global Life Science Conference -- Global Healthcare conference.

I am pleased and privileged to introduce Amgen, the largest biotechnology company by revenues. Amgen has several important products approved for oncology, renal, and inflammation disorders and has several pipeline readouts over the two years that we are all looking forward to. In addition, Amgen is leveraging its expertise in biologics manufacturing by running one of the largest biosimilars programs, development programs.

Speaking on behalf of Amgen, we are pleased to introduce Dr. Joe Miletich, Senior Vice President of R&D and Head of Translational Sciences Program at Amgen. He's also heavily involved in the biosimilars program -- development program as well.

Prior to Amgen, Joe was at Merck where he was the Senior Vice President leading preclinical development and was also Professor of Medicine and Pathology at the Washington University in St. Louis -- Washington University School of Medicine in St. Louis. Following the presentation, I'd like to remind everyone there is a breakout across the way in the Carnegie West Room, and with that I am pleased to hand it over to Joe.

Joseph P. Miletich

Good morning and thank you. It's a pleasure to be here this morning. This is our Safe Harbor statement.

I'd like to begin by just reviewing the refocus we have made recently in R&D strategy. One, I'd like to just remind those of you who might not know that we really do take an integrated modality approach. In other words, we don't think of ourselves as only a biologics company or a peptide company or a small molecule company. We look at all of these as tools that you need to address human disease, and we are fluent in all of those modalities and we actually approach things from biology first, and we decide what the best tool will be after we understand the biology of a target, just an important thing for us to remember. We've actually learned a great deal about synergy between different approaches that you can take with small molecules, biologics, and combination molecules.

We have also decided recently to really intensify our focus on approaching targets that have human genetics as validation. And I think the two most prominent programs in our portfolio that have taught us the value of this are the PCSK9 program and the sclerostin program, both of which have substantive human genetics that teach us that these mechanisms are important in people and that if we can replicate what happens in those individuals who have variations in these genes, we can -- if we can mimic that by a therapeutic that can sort of mimic a knock out in people if you will that we have much more confidence that we will see the same kind of impact in people, and that this is a very much more satisfying way to pursue targets than traditional ways of following literature reports of things which tend not to be consistent across time.

We have also decided that for the near future in order to really give a really good return on capital that we really need to invest heavily to accelerate the programs we believe in the most. That sounds very simple but sometimes it's hard to do, but we have taken this to heart and we really do energize and advance those programs that we believe are the most strong. We invest aggressively in those, and we highlight those for you.

Those that we can't accelerate that same way, we partner or out-license or in some instances even discontinue, because we want to make sure that we have the resources necessary to actually accelerate the ones that we believe in most to full advantage. Where we can, we try to find another place for the other ones. We still think they are quite promising, but they might take either a little longer or they look less differentiated to us at that moment in time.

And we always continue to scan for external opportunities, wherever we can see an advantage where we can complement what we know how to do with what someone has already done or can do,we like to find a synergy there and to advance those things. And we have some examples from the recent past, BioVex, Micromet, KAI, and our recent acquisition of deCODE. So, we are very active in acquiring innovation that takes place outside of our company as well.

So, how will deCODE bring value? I won't dwell on this for a long period of time, but I would like to say that deCODE as a company probably has the best genetics platform in the world. They have incredible software tools, they have an incredible database, clinical phenotype database, and there's an enormous understanding of the genetics, of the genomics, and the phenotypic clinical data across the population in Iceland. And that population is representative of a great deal of Europe, parts of Asia, and certainly United States. So, it's not an isolated unrepresentative community.

And the real power here is that when you have that kind of detailed genetic information, you can actually get to the rare variants, and the rare variants are the ones that usually teach you the most about a particular gene function. The genome-wide scans that you've probably become familiar with over the years, they tend to identify things that are -- have small additive effects, where the hazard ratio might be 1.2 or 1.3, and there are multiple effects like that, and it rarely in a human genome-wide study, do you rarely point to sort of one thing that's essentially itself a modifier of a phenotype. It's usually in the genome-wide studies, they are usually multiple multipliers and you are trying to guess which of them might be more important than others, and it probably changes across individuals.

When you can get to these rare genotypes, the things that are far less than 1% or even less than 0.1% of population, you can actually identify phenotypes that are more directly linked to that particular gene and you understand what the importance of it will be. Again, as you can see in cases with PCSK9 and sclerostin that I hope some of you are familiar with. I can give you a conceptual example. For example Alzheimer's is still an unmet medical need of vast important for example.

And recently, deCODE’s scientists as well as scientists from another consortium published data on TREM2, which is the triggering receptor expressed on myeloid cells. The reason this is important is because this is a novel target, and the genetics point there. It turns out that this is a receptor that's important to activate microglial cells, and those microglial cells are the ones that will be responsible in cleaning up if you will any debris or any of the amyloid precursor protein, the amyloid substances can be deposited in Alzheimer's disease. And a dysfunction in this mutation now is clearly linked to Alzheimer's and to the prevalence and the significance of Alzheimer's. So, it just shows again the power of human genetics.

Again, we have also been able to identify another putative target, the amyloid precursor protein itself, or APP has long been implicated but it's sort of come in and out of fashion as people have done more and more studies and tried different therapeutic approaches. But recently, a mutation that's been identified there from an analysis that deCODE has done convinces us that if you have a variation that makes it impossible to actually form the amyloid that gets deposited in the brain because there is a different amino acid at the cleavage site, that that actually can result in as much as an eight-fold protection against Alzheimer's disease when you look across the population of Iceland.

So, it's data like this that you can actually use to increase your weight of confidence and your level of understanding. So, we are in the process with deCODE of going through a long list of potential targets and evaluate what we might want to do, and I think this is going to be very promising for the future of bringing more targets that will have much greater chance of success once we reach the registrational phase in people.

I am going to review what we have in our current pipeline now. Many of these programs I am going to talk about and we will have little slide on, I’ll mention a couple that are on this slide, just to orient you. Our heart failure program, omecamtiv mecarbil, the one that we are doing in conjunction with Cytokinetics, we are still in a period of collecting data in the Phase II study where we are using NIV to understand what the therapeutic window is, where we have to actually be to get the right response without going too far on the curve of systolic contraction, and we are deep into the studies with oral formulations to understand if we can limit that with oral formulations.

I'd categorize this as a fairly high-risk program because that therapeutic window could be very narrow, and we are elucidating that right now. But by the end of the year, we will have a better handle on that. And if we do decide that there's a good therapeutic window, which I think is the way the data are heading now, and if we can mimic that with an oral formulation, which I also think there is a good or a reasonable chance of doing, then this will become a very important program to us in the future.

AMG 181 is the α4 β7 antibody, against α4 β7, that blocks lymphocyte trafficking and is -- we expect to be useful in inflammatory bowel disease. This is in partnership with AstraZeneca and MedImmune. And that too is I think a very promising program that's moving forward that I won't spend much time highlighting today.

The last one I might mention is AMG 334. This was mentioned at the business review. This is a very early phase program, but I highlight this as an example of a program that we have decided to accelerate very quickly. It's a monoclonal antibody that blocks the receptor for calcitonin gene-related protein and we know pharmacologically and we know from human experience that this is very important in migraines. CGRP is elevated in migraines. We know that you can induce migraine attack with migraines, and we know that there have been some therapies tried that weren't commercializable because they didn't have characteristics for chronic therapy but that could actually interrupt acute migraines.

So we are very excited about this program. We developed an antibody using proprietary technology that allows us to block the receptor and we know from a biomarker study in people using capsaicin and dermal blood flow that this molecule has very good PK/PD properties in blocking the CGRP response, so that's a program we are accelerating, and I hope you will hear more about in next year and in the years that follow.

So there are some of the programs that were on that list that I think are worth highlighting. The Talimogene laherparepvec or T-VEC, this is a molecule – it is a virus that we acquired from BioVex. This is a herpes Type I virus, and it's been modified, it's been modified to express GM-CSF. It's also been modified so that it can't really replicate in non-dividing tissues. That's to focus it on tumors. This is introduced intra-dermally. And it's also been modified so that one of the mechanisms that the herpes virus has for escaping immune detection has also been disabled.

And the idea here is that you can inject this in a lesion, it will replicate inside the tumor locally, and when it replicates sufficiently, it will actually burst open. The GM-CSF that's produced will actually enable dendritic cells and other cells sort of priming the immune response, and then the antigens that are presented because you have destroyed the tumor cell are in a prime location then to actually immunize the patient using the patient's own tumor and the patient's own tumor antigens to prime the immune system to actually fight that tumor (inaudible) metastases.

And this is a program that we have announced in our interim analysis or actually our final analysis for durable response that this program is -- has actually succeeded in that form. There were about 430 patients enrolled in this two-to-one study against GM-CSF alone. We saw an interim trend in favor of overall survival as well, and we will talk more about this at ASCO and there will be a session on this, but we are very much encouraged by this and in these patients with late-stage melanoma we believe there is a great opportunity here.

There is a very large addressable population here, there's about a 130 plus thousand cases of new melanoma diagnosed a year, about a fifth reach this kind of severity of disease, and while there are some therapies that have been introduced recently, Ipilimumab and Vemurafenib that can help subsets of those patients, we believe that this program actually has a promise to help a very large fraction of patients in there, and we are seeing very long-lasting durable responses in some of those patients. So, more will be presented at ASCO.

For Trebananib, our peptibody, proprietary peptibody platform that blocks Ang1 and Ang2; the promise here is that VEGF, that vascular endothelial growth factor is not the only thing that stimulates blood vessel growth. The angiopoietins are also critically important here. The overall promise of this program is that we are seeing that it's another way to disrupt the vasculature in tumors specifically, and we believe that this mechanism actually allows us to do this in a way that is friendlier to the patient and we think will allow combination with other therapies eventually in a better fashion.

We are seeing very promising data in ovarian cancer in a Phase II study where we saw in a dose exposure response linked, and in the Phase III studies that we have undertaken both in recurrent now and in first line disease, we have actually increased the dosage so that we are at the high end of the exposure level that we saw most promising results from in the Phase II study, and we will see these results for recurrent disease. We will see the progression-free survival portion of that analysis later this summer.

So, we are very excited to see how this plays out for an opportunity in ovarian cancer. This is the design of the study. This first one that will read out, that's expected mid-year this year, was basically 900 plus patients, and this was on a backbone of paclitaxel in ovarian cancer, very large unmet medical need, and we expect this to be very promising result, and we hope to be able to share that with you mid-year.

The PCSK9 program, AMG 145, for lowering LDL cholesterol, I hope and I am sure that you know quite a bit about this program already. But we have -- we published the results of our large Phase II studies and we not have many Phase III studies going on, mono-therapy in combination with statins, and heterozygous familial hypercholesterolemia and in those patients that are statin intolerant we have also begun the Phase III outcome study and we have long term extension studies and safety and efficacy studies going on. Much of this data we will report out in 2014. We are very excited about this program. There is a, we believe, there is a very large addressable population if you look across the U.S., Europe and Japan, we believe that there is as many as 17 million or so possible addressable patients here.

And again this is not to replace statin therapy. This is actually to get patients to go, who can't get there, either because of intolerance of statins or they can't take a sufficient amount of statins to actually get them to their goal. And I believe there is great interest all around the world in this program and we are very excited to be in the place we are here and we will get a large amount of data from the Phase III studies reading out in 2014.

Blinatumomab is our, is the program that we acquired from Micromet along with the PIPE platform. We have a pivotal Phase II study for adult patients that have relapsed and refractory B-cell precursor ALL. This is a dismal disease, a disease with very dismal outcome. There is also a Phase I/II study for pediatric patients, another Phase II study with adult patients with minimal residual disease and finally a Phase I/II study for adult patients who have refractory/relapsed diffuse large B-cell lymphoma, a subset of our non-Hodgins lymphoma.

The idea behind BiTE is really very appealing. The BiTE molecule is a molecule that's designed to have two antigen combining sites if you will, one to recognize a target that's on a particular cell type it should likely destroy and the other recognizes a T-cell, generally most of the T-cells in the body. And when this molecule bridges these two it helps to create a molecular synapse. The T-cell becomes activated and becomes a cytotoxic T-cell. It forms a synapse with the target cell, basically injects into it a whole host of things that actually destroy the target cell.

It also gets activated itself and regenerates itself, goes on co-serially if you will. And it also proliferates so it also expands itself in a population. And we are learning how to use this technology in this particular case. We believe that it's applicable to a large number of other tumors as well but this is the first instance. And we expect pivotal data from this study again in 2014. So we are very excited not only in this particular population but also as a platform approach to approaching cancers along this line.

Brodalumab, this is our antibody that binds to the IL-17 receptor and blocks the signaling of ligands through that receptor, which puts it in distinction from some other programs that are targeted at individual ligands. We have three Phase III studies. This is a program that we are conducting again in conjunction with AstraZeneca/MedImmune. The three Phase III studies, the first one actually is studying the efficacy, safety and effective withdrawal in the re-treatment compared to placebo. And then two studies, studying the efficacy and induction and maintenance regimens of AMG 827 or Brodalumab, compared with ustekinumab.

And I will just remind you that in our Phase II study we saw really the most amazing results I have ever seen in psoriasis here as well, that up to 60% of patients in that Phase II study were able to get a complete remission of their disease, a 100% clearing. So we are very excited about this. We are also in -- we are also making a decision on psoriatic arthritis and we have also decided to take forward a Phase II study in asthma for this program as well. So that's an exciting program to us.

Velcalcetide is the peptide that we have acquired with KAI and the idea here is to be able to provide an IV therapy that can actually agonize the calcium sensing receptor. We have come to understand with speaking to clinicians and then also understanding how (Sensipar) is actually used in the field, that an IV therapy that would guarantee compliance can be very compelling to patients on dialysis for a lower iPTH and actually then we think that will result in improved outcomes. And the compliance is a very important aspect of this. So this program we also expect to see pivotal data in 2014 as well.

And basically the two pivotal clinical trials the scheme is here, about 250 patients in each arm and with the primary endpoint of looking at lowering the iPTH and the secondary endpoints that are monitored there. So, very interesting program.

Romosozumab, this is was formerly known as AMG 785. This is the program we have in concert with UCB. This is the antibody that actually neutralizes Sclerostin and Sclerostin is an activator of osteoblasts -- I am sorry it's a negative regulator of osteoblasts. So by neutralizing Sclerostin with this antibody you basically take the brake off of osteoblasts and allow those osteoblasts to form new bone. We are seeing in our studies with Romosozumab up to this point. We have seen the ability to build the highest quality and the most bone in more sites around the body than we have seen with any other agent. So we are very excited about this.

And this study is probably the pivotal study where we are looking at vertebral fractures at 12 and 24 months. It's a very large study. It involves treatment for one year with Romosozumab and then a follow-on with Denosumab to consolidate the gain in bone. There is also a second large study going on versus alendronate to actually get us some experience what it looks like against that molecule and we think that the combination of these two large studies will make a very attractive registrational package.

We have a large Phase III study going on with -- as you can see in this schematic with Rilotumumab, used to be known as AMG 102. We are targeting specifically MET-positive cancers here and gastric cancer and in gastroesophageal junction adenocarcinoma. We have seen, again in a Phase II study very promising results by targeting this population. We have the diagnostic kit in place so that we can address this patient population and when this study reads out we hope to be able to bring this forward.

This is actually very important in our emerging market strategy because gastric cancer while a serious and important in the rest of the world, in Asia is of really huge importance. There are more deaths from gastric center in China than there are from all solid tumors in United States in any given year. So we believe this will be very useful in addressing those populations.

So we believe at Amgen we are uniquely positioned to unlock the potential of biology. I mentioned our new approach. We have the late stage pipeline that's advancing. And we have world class modality platform. This is what the data readout looks like over the next few years and you can see in particular these programs that I have mentioned. 2014 is a very, very compelling year.

Having said I'd like to take a minute just to mention our biosimilars programs and I have just a minute. Our principle concern with the biosimilars is that we want to ensure patient safety. Let me just remind everyone, I am not going to go through this slide, but biologics are not like small molecule generics. Small molecule can typically have 50 or 100 atoms, configured in a given (space or) array. You can replicate that with many chemical processes and you can actually study it and know exactly what you have done. When you make a complex molecule like a monoclonal antibody there are over 20,000 atoms that have to be in this particular arrangement. We do this in cells because we don't have synthetic technology that allows us to view that. So we program living cells. Living cells don't make every copy exactly the same. So you get a spectrum of molecules. And the trick in making a biosimilar is coming up with a cell line and a process and a purification method that allows you to have the same distribution of those molecules which you would see in the innovator. That's not always easy to do. In some instances that's harder than coming up with an innovator molecule.

FDA recommends a stepwise approach to demonstrating biosimilarity. We believe we are on track with the molecules that we have in six programs. And we believe this gives us distinct competitive advantages.

I will just show the last slide and remind everybody that we believe this is a very large opportunity and we believe that by understanding what it takes to do this ourselves as well as understanding our own innovative molecules, it puts us in the best position to understand patient safety and also understand the dynamics of what's involved in actually making all of this happen. So thank you for your kind attention and I will stop there.

Question-and-Answer Session

[No recorded Q&A Session for this event]

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