Bristol-Myers Squibb Company (NYSE:BMY)
UBS Global Health Care Conference Call
May 19, 2014 03:00 PM ET
Giovanni Caforio - Chief Commercial Officer
Marc Goodman - UBS
Marc Goodman - UBS
Thank you very much Bristol-Myers for joining us. For next presentation we have Giovanni Caforio who is the Chief Commercial Officer for Bristol. And he has been with the company since 2000 and he has had numerous roles from Europe to other parts of the organization to run, he was also running oncology and immunology and obviously this is a very big important time for Bristol. They are changing dramatically and obviously oncology is the massive focus right now. So I am sure that’s going to be a source of the topic for conversation here and into the Q&A afterwards in the other room. So Giovanni thank you very much for joining and I will turn it over to you.
Thank you, Marc. Thanks for the opportunity, good afternoon everybody, delighted to be here to present the story of Bristol-Myers Squibb. As Mark mentioned I have been with the company since 2000 in a number of roles. I am actually be physician by training and started in R&D over 25 years ago, but moved to the commercial side about 20 years ago.
Before I start let me just say this is our forward-looking statement and I won’t read all of it. But what I would like to do is start by making a few comments on our strategy as a company and some of you that follow Bristol-Myers Squibb may have seen this slide before. In fact our strategy was crafted in 2007 and we’ve been executing very consistently our strategy to transform into a biopharma company since 2007. We believe we have done that quite well ahead of many of the other companies that have reshaped their strategy and were very successfully moving from a diversified company to a much more focused company.
The concept of biopharma was really meant to describe our desire to acquire some of the strengths of the biotech industry while retaining the capabilities and strengths of the pharmaceutical industry and for a long period of time we have actually said we were aspiring to becoming biopharma and I must say at this point, we are pretty comfortable to say that we become a biopharma company and we have been very successful at that transformation.
But at the end of last year we decided to continue to make bold moves and announced a number of other changes. One that I am sure many of you are familiar with, was the divestiture of our stake in our diabetes alliance with AstraZeneca that has sharpened our focus on specialty care even further.
And in fact the slide that I want to make a few comments on today is an evaluation of that slide and so the first message is our strategy continues to be really consistent with what you heard from us since 2007. The second point which is very important is that obviously our focus and portfolio are clearly all in specialty care at this point with four areas of focus today, in oncology, cardiovascular medicines, immunoscience and virology, and a number of other platforms in our R&D organization and I think that’s really the sweet spot for us as a company.
But a few comments as well the concept of diversified is very important to us as well and there are many different ways to look at the concepts of diversified. For us it is three things; first of all contrary to some of the other biotech companies. We have an established presence in more than one therapeutic area, I mentioned four, those are critical for us, but we also are increasing our R&D investments in genetically defined diseases and we have active problems in fibrosis. So, we have diversified from the perspective of the therapeutic areas of interest.
We are well diversified from the perspective of our global geographic footprint, specifically with respect to our commercial operations and obviously we are diversified because we have a long tradition with small molecules, but we are strengthening our presence in biologics to the point that they represent over 50% of our programs in R&D today and growing very rapidly.
Those three concepts on the slide that also have been there since 2007, the first one is innovation. It's clearly because of the therapeutic areas and the R&D programs we are in, but for me as the head of the commercial organization, innovation is also continuing to evolve our commercial model and strategy all the time, obviously at a timing which the external environment is changing more rapidly probably than it ever has.
Integrate speaks to our strategy and traditional partnering outside of BMS and we do have a number of strong partnerships, many of them science based, some of them on the commercial side. And that will continue to be an area of focus for us.
And then improvement in terms of our desire to do better every day at everything we do. And obviously all of the therapeutic areas in which we compete are extremely competitive. They are crowded and we need to be the best at what we do all the time.
The last statement on this slide really describes our desire to continue to keep the patient at the center of everything we do. That's extremely important for us and part of culture at BMS. And our objective is to bring our people and customers closer to our patients all the time.
So with that in mind, let me just spend a couple of minutes covering what I will -- giving you a preview of what I will cover during my presentation. Obviously, I will talk about the performance of our key brands and the opportunity we have with our franchises. I would like to spend a few minutes to discuss with you what we are doing in terms of the prioritization of our markets around the world. And I won’t make any specific comments with respect to accelerating innovation but obviously as I said on the commercial side, the way we do business today in any therapeutic area is very different from just a few years ago because of the focus of the payers, because of the increasing role of patients around the world and the fact that every country is seeing a dramatic change in the way healthcare is delivered.
So let me start with brand performance. And this is a slide which depicts some of the most exciting medicines that we have either in the market or in late-stage development. I will cover some of those in detail over the next few slides, but let me just make a couple of comments about Sprycel, as you know very important product for us in CML. Sprycel continues to do extremely well around the world and in the U.S. obviously as the largest market in many of the European markets and in Japan, we continue to see very robust growth quarter-over-quarter for Sprycel and specifically in the U.S. Sprycel continues to be the leading second generation TKI in both the first and second line setting.
One comment with respect to Orencia. As you know, over the last two years, we launched our subcutaneous formulation of Orencia around the world and the growth of Orencia has been quite strong because of our ability to compete in both IV and subcu markets and also because of our focus on promoting the data in support of the use of Orencia in the first line setting as an alternative to TNS. That strong growth continues. It’s safe to say that in the first quarter we saw somewhat of a softening of our trends in the U.S. The market is incredibly competitive and we’ve done and continue to do a lot work in order to strengthen our execution there and reaccelerate our growth in the U.S. market. And finally with elotuzumab we just made an announcement this morning that we’ve been granted breakthrough designation for this agent which is an immuno-oncology agent in Phase III development in multiple myeloma.
Now let me spend a few minutes on each of the key assets. You’re all familiar with Eliquis. Our objective is to become the leading agent in stroke prevention for patients with nonvalvular atrial fibrillation and we are making a lot of progress towards that objective in the U.S. and key markets around the world.
The first comment I would like to make is obviously the U.S. market is extremely important. And last year around the summer we made some comments that we were strengthening our strategy execution with Pfizer in multiple areas and we’ve seen a significant improvement in performance over the last few months. In the first quarter in the U.S. Eliquis grew TRxs by 35%, NBRx as new patient shares in the range of 20% versus the prior quarter which is a really good performance because it compares to a decline of 6% for Pradaxa and a growth of 11% for Xarelto. Very important for us is our performance in cardiology because that’s really the key driver of the business and in cardiology our trends are very strong, our shares are the only shares that are growing in terms of new patient shares. And today our new patient share with Eliquis in cardiology in the U.S. is in the range of 37% which is really good number and we are continuing to be as I said the only agent that is growing share in cardiology.
So a lot of work we are doing obviously a lot of work ahead of us, one of the critical areas of focus for us has been access and in the U.S. in terms of access we now have very competitive coverage in both commercial and Medicare Part D. On the Medicare Part D side we also have very competitive preferred access versus the other agents and we are in a really good position on the commercial side as well where our copay programs are also working extremely effectively.
A couple of comments about markets outside of the U.S., Germany is a very big opportunity for us, obviously a market where the new agents have penetrated very rapidly our share is growing very rapidly in Germany as well, we are above Pradaxa and growing quite nicely. Japan is the third market of priority for us. We had as every agent during the first 12 months in Japan a limitation to 2 week prescriptions which happens again to every new product in Japan that was lifted at the end of February after 12 months in the market since then we’ve seen a very significant growth of our share in Japan, we are already ahead of Pradaxa and we have the leading share in the switch market in Japan with approximately 80% of our patients coming from Xarelto. So we are quite excited about our performance in Japan. And as you probably know, we are working to broaden the label and we have submitted an application for the treatment of VTE in the U.S.
Moving to hep C which is clearly a big opportunity for us globally. We have three files with regulatory authorities in Japan in the U.S. and in Europe and potentially have the opportunity to launch in all three parts of the world by the end of the year. Obviously our number one priority is in Japan where the unmet medical need is very significant. We have an opportunity with our dual regimen to come to market significantly ahead of the competition and be the first overall regimen in Japan. And as a reminder in Japan there is over a million patients about 70% of them are genotype 1b and our dual regimen has been studied in that population, so we are very excited with that opportunity.
But we also are very excited with the opportunities in the U.S. and in Europe. There the center of our strategy is really our belief that daclatasvir our NS5A agent is a first in class and best in class agent and has the potential to be combined as part of multiple regimens particularly for the treatment of difficult to treat patients, such as genotype 3, HIV, HCV coinfected, cerotic patients for transplant and other subsets of difficult patients. And we are working very actively to prepare for those launches.
And then moving to immuno-oncology, I know that's clearly an area of priority for us and for many of you, as we prepare for ASCO. We're very excited about immuno-oncology because we've seen the potential to provide long-term survival to many patients, potentially one day cure in cancer and we are working very actively as the company that has the leading position in immuno-oncology through Yervoy and our pipeline to advance all of our programs to make sure that promise can be realized.
Just a couple of comments on Yervoy, the first immuno-oncology agent to really have demonstrated the ability to generate long-term survival in patients, in this case with metastatic melanoma, our Yervoy penetration continues to evolve quite nicely. We had a very good quarter globally in the first quarter with growth sequentially over the last quarter of last year and significant double-digit growth versus the same period of the previous year.
In the U.S. that growth is driven by primarily by the community where the priorities being increasingly adopted and the community in the U.S. now represents over 60% of our sales. Very strong performance in Germany again, where we received reimbursement approval for the first line use of Yervoy and in late launch markets such as France, we've seen very rapid uptake as well. So, good performance with Yervoy really as the cornerstone today of immuno-oncology. But as you probably know, we have a very broad program with nivolumab, our anti PD-1 agent and we are supporting that program which is also progressing very rapidly. A lot of data will be presented at ASCO; a lot of that data has been released the last week and I'm sure we will talk about that during the Q&A.
On the commercial side importantly, we are investing to make sure we are fully resourced and ready to be potentially introducing nivolumab in cancers such as lung. So beyond myeloma, we have commercial presence in melanoma obviously through Yervoy. But we are growing as we speak our teams in the U.S. in order to be ready for a potential launch in lung.
And then, a couple of comments on priority market. Obviously a lot of the work we are doing is to make sure that our commercial organization is ready to deliver on multiple new launches. We have an opportunity to execute an extraordinary number of launches around the world and our focus is on our priority markets with our portfolio that is really focused on specialty care. We are doing work as a company to ensure we have the right capabilities; we have the right organization in place to be working from the global perspective very closely with every one of our key markets around the world and make sure that we are successful there.
I mentioned at the beginning how our global footprint is really critical to us and very diversified. Obviously we are present in more than just the 14 markets depicted on this slide, but that's our priorities. This is where more than 18% of our sales are generated and obviously these are the market that in most cases will be the earliest to launch our new portfolio.
And finally, let me just make a few comments on our strategic priorities going forward. And again, as I do that, one of the comments I want to make is that they’re very consistent in fact with what you heard from us in the past. Obviously, our priority as a company is to continue to balance our need to continue to deliver strong performance in the short-term. But we are absolutely aware that given the strength of our pipeline and the demonstrated success of our R&D efforts, we must invest in our pipeline and we are committed to doing so. So we will continue to balance short and long-term and obviously we have very significant opportunities in the medium and in the long-term because of our pipeline.
My focus as the head of the commercial organization and the focus of the entire company is to continue to flawlessly execute new launches and to drive good growth in market and market share growth for our key brands.
The third priority is obviously as I said specifically with respect to immuno-oncology, but beyond immuno-oncology to accelerate the development of a very, very exciting late-stage pipeline and obviously Nivo is at the center of that effort but is not the only product; elotuzumab which I mentioned earlier in my presentation is a very important priority for us as well.
We believe there is a lot of value for us to leverage our focus on specialty care. And obviously our constantly evolving our commercial model to make sure we are well resourced and we have the right capabilities to take advantage of our portfolio. Over the last few years, we’ve invested heavily like many other companies but effectively been able to strengthen our access, infrastructure around the world. We’ve grown our Outcomes Research and helped Outcomes competencies and capabilities on the medical side. And obviously we do a lot of work with patients around the word.
And I would say from that perspective that given the number of launches we have executed around the world, we are actually uniquely positioned to had a lot of experience over the last five years in launching products around the world and gaining access for them in very complex HTA environment such as the UK and Germany and in many of these countries, we’ve actually often been the company with the most files and applications that have gone through those regulatory authorities. So that’s a really good experience for us to leverage as we think about the next wave of new products.
And finally, we will continue to be very disciplined in terms of our capital allocation. As you know, we are very committed to our dividend but also as we have said many times, business development remains a very important priority for BMS as we work to further strengthen our pipeline and ensure the sustainability of our specialty care strategy.
So in summary, a story which is all about consistency in our strategy since 2007 and going forward, further sharpening the focus on specialty care, a really important focus on four therapeutic areas and some other pillars within R&D, and the commercial organization extremely focused on strengthening its capabilities focusing on the key global markets to make sure that a number of potential launches can be executed effectively going forward; from a daily perspective, strong fundamentals with our business coming out of a good quarter with good trends for many, many of our brands.
And with that, I would like to thank you for the opportunity. And I know we have some time for Q&A. Thank you very much.
[No Q&A session for this event]
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