Bristol-Myers Squibb Company (NYSE:BMY)
JPMorgan Healthcare Conference Call
January 12, 2016, 12:30 PM ET
Giovanni Caforio - CEO
Chris Schott - JPMorgan
Chris Schott - JPMorgan
From Bristol, we have Giovanni Caforio, the company’s CEO. Bristol, obviously, has been a real pioneer in the immuno-oncology space and we’re in the midst of an extremely exciting Opdivo launch.
With that, I’m going to turn it over to Giovanni to run through the opportunities for the company.
Good morning, everyone. Thank you, Chris. It’s a pleasure to be here representing Bristol-Myers Squibb at a really important time for the company. We had an exciting 2015. I’m actually very proud of what we’ve accomplished as a company, and importantly many good and important things that we have done for patients.
Before I start, let me just remind you of our legal statement. If you’re interested in more detail, that can be found on our Web site or SEC filings. I’d also like to remind you that we will communicate our full year 2015 results in a couple of weeks. And so when I make comments about 2015 performance, that will relate to the first three quarters of the year.
Now let me start by showing a slide that many of you may have seen before. It actually is an important slide, which describes our biopharma strategy. We developed our strategy in 2007 and have been executing successfully the transformation of our company into a biopharmaceutical leader.
As we’ve executed consistently our strategy, we’ve also continued to evolve our focus particularly in terms of therapeutic areas in order to respond to internal and external opportunities and obviously challenges. And so for example, immuno-oncology has emerged as a leading platform for us and the key priority for the company.
At the same time, we decided to stop our discovery activities in virology and very recently, as you know, we divested our research and clinical programs in HIV to ViiV Healthcare because we are convinced that those programs are in better hands with a leader in the field while we focus our efforts on the therapeutic areas that are a priority for us. And so we’re making great progress in building a diversified portfolio of truly innovative specialty care medicines.
Now moving to 2015, it was a very pivotal, very important year for us because it actually has been the beginning of a new chapter, a period of sustained growth for the company. And I’m happy to report that 2015 has been a year of unprecedented success for us as a company. We’ve made significant progress in advancing and strengthening our leadership position in immuno-oncology.
From a clinical perspective, we’ve had great progress. Three of our pivotal trials with Opdivo were stopped early because of a survival advantage versus the previous standard of care. We had unprecedented speed with regulators in the FDA in the U.S. alone. We received seven approvals from the FDA across four tumor types. And Opdivo, our leading immuno-oncology agent is approved today in 43 countries. We had strong commercial execution and I am very encouraged with rapid adoption in the market.
Beyond immuno-oncology, we continue to be committed to the rest of our portfolio. I will just give you a couple of examples. Eliquis is well on its way to becoming the leading [indiscernible] globally and we made great progress last year. We had strong performance with our hepatitis C portfolio, particularly in Japan, in certain European countries and very recently with the launch of Daklinza in the U.S.
When it comes to hepatitis C, our focus is on areas of high unmet medical need, difficult to treat patient populations and those may vary depending on the country and depending on the region. Obviously, we all know that is a very competitive market, highly dynamic with new entrance. We do expect new competition to have an impact on our business going forward.
I should say other important medicines such as ORENCIA and SPRYCEL also did very well. Overall, going back to my previous comment, 2015 was a year of unprecedented success for the company. We build a strong foundation for growth and I am very optimistic about our growth in 2016 and beyond.
In '16, we are driven by four priorities. The first one, to drive business performance is intuitive. We are at the beginning of a period of growth. We are very committed to delivering the full value of a young, diversified and exciting portfolio. We remain very committed to leadership in immuno-oncology, which is a transformational area that can really change the way cancer is treated.
I’m confident we’re making all of the right investments from a commercial perspective, from an R&D perspective to continue to execute our strategy in immuno-oncology. And obviously during this presentation, I will spend a lot of time discussing our performance in immuno-oncology.
We are also continuing to be committed to diversification and we look at diversification as the long-term element of our immuno-oncology strategy, so diversification within immuno-oncology but also outside of immuno-oncology. We have interesting, exciting, early pipelines that are emerging in areas that I will cover later. And finally, we remain committed to a balanced capital allocation strategy with business development as the key priority.
Moving to what happened in immuno-oncology in 2015. I am very proud of our ability to establish Opdivo as the leading agent. Through what has happened in 2015, Opdivo has emerged as a foundational agent in cancer care and establishing itself as the standard of care within its approved indications.
We set a strategy where our immediate focus was going to be on lung cancer, melanoma and renal cancer. In lung cancer today, Opdivo is the only PD-1 indicated for all second-line patients, across all histologies and importantly regardless of PD-1 status. The feedback I hear and we hear from physicians, it is important to be able to prescribe and use Opdivo without a need for testing because it is important to act quickly for patients in the refractory setting. We’ve seen strong commercial execution and rapid adoption.
In melanoma, we have a broad approach to this market with indications from the adjuvant setting with Yervoy to the metastatic setting with Opdivo. Importantly, we received approval for the first combination of two immuno-oncology agents, Opdivo and Yervoy, in metastatic melanoma. And I am pleased that when you look at the totality of our immuno-oncology portfolio, we have the leading share of new patient starts in the first line.
Lastly, with renal cancer, that approval came in the second half of the year. This is a very important area for us because the unmet need for patients is very high. And in fact the approval came one week after our submission was validated by the FDA to demonstrate the importance of the data. And I’m pleased to report that prescribers are receiving this information with enthusiasm and again the uptake has been quite solid.
Let me show you an example of strong commercial execution in the U.S. This data refers to weekly sales in the U.S. market through the year. And as you see, we are seeing a significant acceleration in the second part of the year driven by the approval of the non-squamous lung cancer indication, renal cancer and the combination regimen in melanoma.
Earlier in the year, we saw rapid adoption of the squamous non-small cell lung cancer indication when we rapidly captured approximately 70% market share. Later, we launched the non-squamous indication and there as well today we have approximately 60% market share in the second line setting. We are seeing similar uptake in renal and although the launch is more recent, we are already above 50%.
And I’m particularly pleased that the adoption of the combination of Opdivo and Yervoy metastatic melanoma has been fast, particularly in the community where we have already over 20% market share. I’m also pleased to see that Yervoy through the approval of the adjuvant indication in combo in metastatic has actually stabilized in the U.S.
Obviously, remember that the U.S. accounts only for approximately 50% of Yervoy sales and clearly in the rest of the world where the combo is not yet approved, we are continuing to see an impact on the launch of PD-1 agents on the Yervoy business. Overall, I feel we’ve built a very strong leadership position in terms of volume and market share capture in the U.S. with our immuno-oncology franchise in 2015.
Moving to 2016, as we are convinced in the transformational nature of immuno-oncology and the value of Opdivo, we are continuing to invest in a broad program with over 50 clinical trials in approximately 25 tumors. In 2016, we look forward to seeing results from clinical trials in five additional tumors and first-line non-small cell lung cancer.
As you know, our development strategy includes optionality for early interim analysis of our pivotal trials as well as the ability to move rapidly from early single arm trials into registration when the data warrants it. So I am looking forward to further data evals in 2016.
Moving to the longer term, we remain committed to bringing the promise of immuno-oncology to more and more patients across more tumor types and are convinced that the combination of immuno-oncology agents is the way to go. In fact, we are the only company to have one combination approved in metastatic melanoma and in late-stage trials for both lung cancer and renal cancer.
Beyond the combination of Yervoy and Opdivo, we are investigating novel mechanisms of action to be used in combination with Opdivo as a backbone agent. Our objective is to address the need of patients that do not respond to Opdivo, to patients that relapse after a response to Opdivo and obviously to seek signals in those tumors where the current signals are not strong, such as for example pancreatic and broadly colorectal cancer.
So as you’ve seen, we have a short-term strategy in immuno-oncology, which we are executing commercially in three tumor types, we are broadening our focus in an increasing number of tumors and continuing to innovate through novel mechanisms of action and combinations.
Beyond the focus on Opdivo and Yervoy, we are developing a really attractive pipeline of new agents, which are in early stage of development. I won’t go into a lot of detail on this slide but I’m actually very excited to have five agents in the clinic; anti-LAG3, Urelumab, anti-GITR, Lirilumab and the anti-CSF1R and to be adding three more agents in the clinic in 2016, the IDO, anti-CD73 and anti-OX40. So in 2016 we will have eight novel agents in the clinic and look forward to advancing every one of those programs.
Moving out of oncology and describing the performance of Eliquis, I’m also very optimistic that Eliquis is continuing to make inroads towards leadership in the market. We developed a launch strategy where we decided to focus first on leadership in cardiology and then expand our efforts to primary care and the broader market, driven by the differentiated profile of Eliquis, its clinical data which is very compelling and strong commercial execution.
Today, we have 12 markets around the world where Eliquis is the leading agent in new patient share in cardiology. And this is just an example of the U.S., obviously the largest market where we have been the leader for approximately one year. That leadership in cardiology is translating into growth in the broader market and primary care, and I’m optimistic that again Eliquis will become the leading agent in the market.
Beyond Eliquis, we are also focusing on advancing an early but promising pipeline of innovative and potentially transformative agents in a number of therapeutic areas. I’ll just mention cardiovascular, an area where we have a strong legacy. We have ongoing programs in fibrosis and heart failure. Interestingly, through business development we added two programs in 2015; an agreement with uniQure on gene therapy approaches to chronic heart failure and the acquisition of a Phase 2 program through Cardioxyl for acute decompensated heart failure.
We have a really attractive early pipeline with novel mechanisms of action in immunoscience to address the remaining unmet medical need in rheumatoid arthritis and IBD and are conducting studies in lupus where the unmet need remains very high.
In genetically defined diseases, two interesting compounds and programs in the clinic for Duchenne muscular dystrophy and progressive supranuclear palsy and an emerging platform, which is really exciting in fibrosis looking at stopping of reversing the fibrotic process in important diseases in the lung, the kidney and the liver. This is another area in which we’ve complemented our internal program with business development and have reached an agreement with an option to acquire a Phase 2 asset by Promedior, which is currently in development for IPF and myelofibrosis. So our pipeline outside of oncology is early but truly innovative compounds and programs and building platforms in a number of areas of expertise for us.
Now let me move to capital allocation. We maintain a balanced approach. We have a strong balance sheet, which enables us to make the right investments in support of our business. Business development remains our top priority and I’ll make some comments about that later. And we also remain committed to the dividend where we have recently increased that for the seventh consecutive year.
Moving to business development. 2015 was a year of significant progress and a lot of activity for us. This is an area where we have a long track record of success, because as a company we are convinced that we must complement internal R&D with external efforts. And this slide shows the types of deals that we did in 2015. Not only in oncology but as I mentioned across therapeutic areas and different types of deals from acquisition to licensing, options, cooperation, clinical collaborations with industry and academia. This remains clearly an area of focus for us going forward.
So in closing, let me say that I am very confident and optimistic with what is ahead of us at Bristol-Myers Squibb as we begin an exciting period of sustained growth. Driven by the unprecedented success of 2015, we are in a position of strength with significant growth opportunities in I-O where we have advanced our leadership position with Opdivo and Eliquis driven by strong performance.
We are continuing to make strategic investments behind our growth brands, advancing a diverse and very innovative and promising pipeline, seeking to develop transformative medicines for patients in need. We maintain a balanced approach to capital allocation with a commitment to the dividend but at the same time a top priority for business development.
I’m very optimistic about what’s ahead of us and I look forward to 2016. Thank you. I look forward to the Q&A. Thank you, Chris.
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