Bristol-Myers Squibb Company (BMY) Presents at Bank of America Securities 2023 Health Care Conference (Transcript)

Bristol-Myers Squibb Company (NYSE:BMY) Bank of America Securities 2023 Health Care Conference May 9, 2023 11:40 AM ET

Company Participants

Adam Lenkowsky - EVP, Head of Commercial

Conference Call Participants

Geoff Meacham - Bank of America

Geoff Meacham

Welcome to the first morning of the BofA Healthcare Conference. My name is Geoff Meacham. I'm a senior biopharma analyst, and we are excited to have Bristol-Myers here. And Adam Lenkowsky is here, who recently was promoted to EVP, Head of Commercial. So congratulations.

Adam Lenkowsky

Thank you, Geoff. Great to be here.

Question-and-Answer Session

Q - Geoff Meacham

Let's just kick off with that. Like so give us -- as you evolve into the new role, you already know a lot of the commercial business around the world and different therapeutic areas. Give us kind of your -- what would be your top 3 kind of list of priorities as you look to the back half of this year and into next?

Adam Lenkowsky

Sure. Well, for me, I've been with the company for 26 years now. So it's really the most exciting time I think in our company's history. When I think about my priorities coming into the role, number one, our strategy is unfolding nicely, which is really to replenish the portfolio. As you know, we've launched 9 new products in just over 3 years. And those products this year will roughly contribute about $4 billion of sales.

And what's important about that is in 2025, we're projecting those 9 new products to yield between $10 billion and $13 billion of sales. And then beyond 2030, approximately $25 billion. So really replenishing the portfolio and executing on these products is my top priority.

Secondly, when I look more at the near term, we just launched some of these new products last year. So best-in-class, first-in-class products, products like Opdualag, product like SOTYKTU and Camzyos. And so those launches are going very well, but we're just starting to get those up and running outside of the U.S. as well.

And finally, when I think about kind of the next wave, we've talked about now introducing 6 new assets, moving them into Phase III. So a good example of what we've talked about in the past would be Milvexian. We just started all our Phase III study. So my job is working closely with the commercialization organization and our R&D organization to ensure that we're ready to launch those products really in the back end of this decade. So those are my top 3 priorities.

Geoff Meacham

Got you. Well, let's look at the new product portfolio. So Reblozyl is probably the -- today, it's the biggest one. And maybe longer term, it could be one of the biggest ones. So talk a little bit about the opportunity in first-line anemia and like sort of what you have in hand today and then the new indications that could get you to the next robust growth.

Adam Lenkowsky

So we're pleased with what we've seen with Reblozyl. Really since we launched in the second line post ESA setting, the performance of Reblozyl has gone very well. Our shares are north of 70% in the market. So in the second-line setting, we're focused on continuing to increase the dose as well as improve the time to switch from ESA to Reblozyl second line.

But the first-line opportunity for Reblozyl really poses a very significant opportunity, essentially doubles the addressable patient population, and we're pleased that the FDA provided us with a priority review. So our new PDUFA data, our action date is headed towards the end of August, August 28. So that's what our teams are focused on doing.

And I talked about outside of the U.S. as well. So we'll also get ready to launch the first line sometime in the next year. And we look forward to sharing the data of the COMMANDS data at ASCO just in a few weeks from now.

Geoff Meacham

And we look at Reblozyl today from a commercial perspective. Give us some perspective on duration of therapy. I think that's an underlying driver of a lot of these products that investors sometimes it's harder to model if you have more of a chronic type of treatment versus an episodic.

Adam Lenkowsky

Yes. I mean that's the key advantage, I think, that Reblozyl offers compared to ESAs. It's really the durability of response, and you'll see that data at ASCO through the COMMANDS study. What we've been able to do is we've increased the dose since we launched about 20%. And so that's really helped keep patients on therapy longer, get a better response rate. So that's really one of the significant advantages of Reblozyl over ESAs. And I think when you look at a product like Reblozyl and many of our new products, it's largely derisked. So as we've guided that to $3 billion, essentially, it's going to be predicated on second-line data, coupled with now COMMANDS, which would be the biggest opportunity for the brand around the world.

Geoff Meacham

And are there nuances OUS versus U.S. in terms of practice and how the -- you could see the cadence of growth kind of accelerate?

Adam Lenkowsky

It's just timing of reimbursement is really the difference. The behavior and the treatment is largely the same. And the focus of -- in the second-line setting pushing the dose up and rapid switch is -- that's one area. I guess I would say the only nuance in the label outside of the U.S. when you think about our European label, it is also indicated for patients who are in-able -- or unable to take ESAs. It's about 10% of the population who just are unable to handle ESA. So we are -- in that case, in essence in a first-line setting in some of those markets.

Geoff Meacham

So you mentioned Opdualag, and that's had a fantastic launch, very good initial feedback from oncologists, some -- talk about the kind of the switch factor. Do you see that as much from Nivo-ipi to Opdualag? And then when you look at over the course of this year in the U.S., is it just more executing on the core melanoma market? Or are there new kind of drivers here?

Adam Lenkowsky

Yes. Yes. I mean, we're really pleased with what we're seeing with the Opdualag launch. What we have shared at our last earnings, our market share for Opdualag is now hovering between 22% and 23% of the total melanoma marketplace, and we expect to continue to grow that.

Now we do have an opportunity now for growth that has just emerged where the NCCN has removed BRAF/MEK inhibitors, which has been really the foundation of first-line treatment as a Category 1 and replaced that with Opdualag and Opdivo-Yervoy because of Mike Atkins' Dream Seek data, which clearly showed that using Opdivo, Yervoy or Opdualag, first is better and then sequencing to BRAF/MEK in the mutant population.

When I think about how our share breaks down, we have about a 10% share for Opdualag in the BRAF mutant setting. So there's significant opportunity to continue to penetrate in BRAF mutant now through the end of the year. And also, when I think about the switches where we are, we're seeing about 2/3 of the switch is coming from monotherapy. And when you just look at Opdualag compared to Opdivo mono and KEYTRUDA mono, our share is higher than those 2 monotherapies combined now.

Geoff Meacham

And can you talk about the -- I know it's early, but the European kind of the expectations for -- how should we think about the cadence of that rollout?

Adam Lenkowsky

Yes. Obviously, we're disappointed that we were unable to launch in Germany. We announced that unfortunately, the new AMNOG rules just didn't recognize the innovative value that Opdualag brings to patients, and that's really a shame for melanoma patients in the market.

Now we still have an opportunity to continue to launch outside of the U.S., and that's what we're focused on doing. Our goal is to make sure that Opdualag is available to as many patients as possible. However, we need to make sure that also that the innovation is recognized. And so we're going to continue to work with G-BA AMNOG to try to get back in and renegotiate that. And as we look to future indications for Opdualag, so essentially, the next few data readouts would be in adjuvant melanoma, where we have a Phase III study or in second-line CRC, we think we'll have an opportunity to really get broad adoption around the world.

Geoff Meacham

And from a mechanism, so LAG-3, the -- you mentioned a couple of indications, but broadly lung is obviously the bigger market. What's your confidence in broadening out down the road, the profile here? I wasn't sure where the science takes you on LAG-3 over [indiscernible].

Adam Lenkowsky

Well, that's why you do the experiment, I think, right? So I think we have -- we do know that relatlimab or LAG-3, combined with OPDIVO is active across a myriad of tumors. And so we are testing beyond the indications that I named in Phase III. We're testing it in liver cancer, in HCC. We're testing it in lung cancer as well. And we'll get that data really in the beginning of next year, and then we'll be able to make informed decisions on how we want to proceed with registrational studies and where we want to place that in terms of lines of therapy.

Geoff Meacham

And Adam, if you step up the conversation to look at fixed dose combinations with Opdivo, Opdualag obviously is such that. But if you look at other IO/IO combinations, so is this something that you would say Bristol is part of a key strategy is to develop more IO/IO combinations that are same idea, like fixed dose, subcu, like easy to take? Is that part of life cycle extension of the Opdivo business?

Adam Lenkowsky

Well, for me, I spent about half of my career in oncology at BMS, launching Yervoy, launching Opdivo. And so a core pillar of our strategy has been IO/IO combinations. We're the only company out there now with 3 IO mechanisms particularly for PD-1 and, of course, LAG-3. And so we've been testing a number of different combinations. We've got other IO agents under development like TIGIT. As I mentioned, Opdualag is going to be -- continue to look at across a host of other indications.

However, I wouldn't say that we are solely focused or dramatically focused on IO/IO. We're looking at combinations with chemotherapy, combinations with TKIs, combinations with targeted therapies. And we'll continue to follow the science and identify the best places where patients have the opportunity for the greater response. And another area of focus for us is really to identify biomarker specific strategies to see where we you can receive the highest response rate and the longest durable survival benefit.

Geoff Meacham

Got you. And looking outside of the IO/IO combinations from a technology perspective, so gene and cell therapy. So let's talk a little bit about Abecma and Breyanzi. Bristol is one of the largest companies in the cell therapy space. Give us a status update of where we are with respect to manufacturing capacity issues and other in the past, there's been some vector considerations when we model.

Adam Lenkowsky

I get more and more excited about our opportunity in cell therapy, both in the near term and the long term. I think this is a market that's going to grow significantly. We're projecting the market can grow to over $25 billion at peak. And similar to what we see in the IO dynamic, I think there are going to be just a few companies really poised for success. And I think that BMS is really in that pole position with starting with our products, which we think are best in class like Breyanzi, which we know has a differentiated safety profile. Abecma, we're excited to share our KarMMa-3 data, performing very well in the marketplace today. And our next wave of CAR-T agents and cell therapies.

So GPRC5D, which we have in the clinic today. Our next key agent, which we're looking at even beyond hematologic malignancy into lupus. And that's really where you can look at really expanding this market as well as we also have a biospecific as well. And so when you think about what we've been able to do over the last several years, it really is ramping up our capacity.

You saw that in Q1 where we sold about $200 million -- over $200 million of combined CAR-T sales. And so we're focused on 3 areas as it relates to increasing capacity. Number 1 is reliability. And so we think we've done a really nice job there, and that includes out-of-spec turnaround time. The second is increasing vector, as you said. And so we are doing that, looking internally and externally for vector. We just put a press release out about acquiring a site in Libertyville, Illinois to produce Vector. So that should increase our Vector capacity through the next several years starting in 2025.

And then finally, it really is around drug product, and we'll have Devons and Massachusetts online by the end of this year. And for a European business, we'll have Leiden online by the beginning of 2025. So again, those 3 areas, you're going to continue to see us improving capacity across both of our assets over the coming years.

Geoff Meacham

And when you look at the U.S. sort of infrastructure for cell therapy for CAR-T, where do you think we are today with regard to making it more seamless and centers being able to have -- be able to handle the higher volume of patients? I'm just trying to get a sense for -- in the adoption curve, are we second inning? Third inning? Are we still back in the first?

Adam Lenkowsky

No. I think we're probably in the second inning, honestly. We're really early in the journey. And what I could tell you not just for BMS, but what we're seeing in general, clearly, the demand for these products is significantly outstripping the supply.

And as our products continue to move earlier and earlier in treatment, they're going to need to find new ways to manage these products. So it really isn't about the capacity of the institutions at this point. They want to have more slots. I mean that's what they tell us. And we're working every single day with our manufacturing team to increase the supply, so we can get these to as many patients as possible. There is, I think, a future where these products -- not everyone, but think about a product like Breyanzi with the safety profile that it offers, is a desire to use this in the outpatient setting.

So today, we're looking at about 15% to 20% of outpatient use relatively low. Most of it is still in the academic medical centers. But I could see a world when you look at particularly CD19 agents with clean profile, then I do feel like you'll see more and more outpatient use, and that also will help with any capacity constraints in the institutions.

Geoff Meacham

Yes. And outside the U.S., are we with respect to sort of the infrastructure and be able to infuse patients, right? I mean -- is that -- we even started the game before in the first inning in the U.S.?

Adam Lenkowsky

No, no. We're probably in the first inning there. But I would say -- and before I was appointed at CCL, I was running our international business. And when I look at what we've been able to do in Japan, in Germany, in France, 3 of the largest markets outside of the U.S., we're seeing very similar dynamics with Breyanzi and Abecma. In fact, I think that a market like Japan could possibly be the second largest market in the world for CAR-T. They really want to adopt this. We've talked a lot in the past about some of the challenges of access and reimbursement outside of the U.S. We've been very, very pleased with what we've been able to see in those markets and around. They are recognizing the innovative nature that these products are bringing and the adoption outside of the U.S. has been very strong.

Geoff Meacham

You mentioned lupus and a number of other indications. So you guys are one of the companies that are not going down the pure hematology-only path here. The gene therapy, cell therapy as a platform has broad applicability. But help us with how much of a priority going into things like solid tumors or autoimmune or things like that? Like are there indications beyond just lupus that you're thinking about longer term?

Adam Lenkowsky

Yes. So the first priority right now is continuing to drive earlier lines in he-malignancies. You see that in second-line DLBCL. We're going to look at earlier line multiple myeloma with Abecma and starting that study in the back end of the year. That's really the first pillar of the strategy.

We are certainly exploring outside of he-malignancies, as I mentioned, not just in lupus, but in broader immunologic diseases, because we do think that there could be a really nice efficacy benefit there. And the ability to just give one CAR-T [indiscernible] to be and done and potentially have a cure in some of these very challenging to treat diseases. We think that is not just the possibility, we think that will be a reality in the longer term.

Now of course, we know that the Holy Grail is, can you crack into the solid tumors? And there's been some evidence that you can. There have been a few tumors that seem to be more sensitive than others. But I think that may be a longer way to weigh at this point.

Geoff Meacham

And the risk from alo, is that something that you guys are working on? How do you view that perspective?

Adam Lenkowsky

I think we have -- we're tackling from multiple mechanisms. I talked about earlier. I did -- I think number one, I think about BCMA as a target. Clearly, there's importance around BCMA utilization. I think CD19 is already recognized as best-in-class safety. Yes, I do think off the shelf, they do bring some benefits, but what we see today even with "off-the-shelf" there are some limitations. You have to be in the hospital for 10 days. So I think that right now, we're looking at these kind of, let's call them, first-generation cell therapies are going to be here for the long term. And then maybe in the back end of the decade, you'll start to pivot to newer technologies that may be easier to manufacture and quicker to get into patients.

Geoff Meacham

Got you. Well, let's go down the line of the new launch portfolio. So SOTYKTU, great indication or great label. Help us with kind of the access today and how you're thinking about going into next year with -- now that you have good share, but there's a good familiarity. But what are the next steps to kind of in the U.S. launch?

Adam Lenkowsky

So very, very happy with the way that the SOTYKTU launch is unfolding. We talked about SOTYKTU being the oral standard of care as you just alluded to, our share of orals right now is approaching 40%. So OTEZLA being 60%, and so we think we were poised to pass them by the end of the year based on what we're seeing today, the enthusiasm in the marketplace.

When you actually look at the broader market, with new to brand share, which is what we look at are -- we're actually ranked #3 in terms of total market share behind only that of SKYRIZI and OTEZLA, which is incredibly impressive since we're not even a year in the marketplace. But as I said, as it relates to active, it takes time for products in this class to gain access.

On average, when you look at analogs in the class, takes about 18-or-so months to get open access. Our goal is to try to pull forward some of that access based on the demand that we're generating, and that's that the PBMs want to see that you're generating demand, which we are doing. We also want to make sure that we're not taking out unnecessary discount early on in the life cycle. So we want to be prudent with how we approach payers, but we understand that we want to make sure that this product is available, easy to access.

So today, most of our patients are coming into our hub. We get to push some patients out to commercial, but generally, we'll carry these patients until we either have access or until they're switched from another agent. But we expect to have broader access position in the beginning of next year in January. The decisions that PBM takes, they're pretty formulaic. I mean it's not never say never in terms of can you get a product launch and they'll immediately put it into a preferred position, can happen, but it really is the exception, not the rule. Usually, they review the class once or twice a year. This is a very competitive class.

So typically, these decisions are made in the fall for the following January. So our -- we're pleased with how the launch is progressing, and our focus now is really continue to drive demand, continue to drive breadth and depth of prescribing.

Geoff Meacham

I know you guys have invested in DTC campaigns and give us a sense of -- for the level of awareness among physicians and then the level of awareness with the head-to-head data versus OTEZLA.

Adam Lenkowsky

The teams have done a phenomenal job. I'll give credit to our medical teams, even prior to the launch, making sure that they're aware of this new mechanism. Remember, this is the first TYK2 agent that's approved in any disease state. [Technical Difficulty] So our awareness with physicians is probably close to 90%, very, very high, and that's on unaided basis. So that's not our challenge, and physicians understand the profile. They really like the label. They're pleased with the label that we received, and they're confident in the efficacy profile versus OTEZLA as well as the safety profile.

Now as it relates to patients, the reason why you do DTC campaigns is to really educate patients and get them to go into their doctors to ask for the prescription because when a patient goes in and asks for a prescription, the large majority of the time, they're going to get that prescription that they asked for. And so that's why we do it, and we've seen some really early promising metrics from the SOTYKTU DTC campaign.

Geoff Meacham

Indications outside of psoriasis, looking to IBD, give us a perspective on your -- kind of your confidence level at expanding the indication base, so over the next say couple of years.

Adam Lenkowsky

Yes. So we have started our Phase III study in SLE as well as in PSA. And so as we've guided the $4 billion-plus number for SOTYKTU, those are the indications that comprise the $4 billion-plus peak revenue. And so it'll be exciting to have an opportunity to potentially get approval into SLE or lupus, which we know have been very difficult area to crack. And we have, as I said, we'll be looking at our next CAR-T as well. So we have multiple opportunities to get into lupus. PSA is also an exciting adjacency, I would say, to our PSO indication.

As it relates to IBD, as we've shared on our earnings call, we didn't see enough in terms of proof of concept in Crohn's disease to decide to move that forward. And then when you look at where we are in ulcerative colitis, we'll get that data probably towards the back end of this year when we can just make a more informed decision on do we want to move forward in that. I think just a couple of things are noteworthy. Number one, those indications in IBD are not in the $4 billion-plus guidance. And when you look at where we are today, PSL will represent the large majority, I think, of the $4 billion plus in sales.

And secondly, I think when you look at the IBD market on its own, I mean in order to get into that market today, where there are biosimilars where it is heavily managed class, you do need to bring products in there that are highly differentiated or have biomarker specific opportunities to look at what patients are the right ones for these drugs. So we're going to continue to interrogate that, and there may be actually opportunities as we move forward. We just need to see how the data turns out.

Geoff Meacham

Right. Let's switch gears to Camzyos. You guys have a lot of products, so we've got to do some quick hits. So when you look at the launch experience so far, what would you characterize is the tipping point? Is it awareness? Is it consistency in converting patients from trial to commercial? Is it payer negotiations?

Adam Lenkowsky

Yes. So great question. I mean, remember, we just celebrated the 1-year anniversary of the Camzyos approval. And I think the first thing is just setting expectations on what a CV launch looks like compared to what we talked about with what like an Opdualag launch could look like. And you generally see a nice, gradual, steady increase over time with very long time to peak, which is incredibly healthy place to be.

Last year, upon launch, this is an area, unlike what we talked about with SOTYKTU where poor awareness of the disease, tremendous amount of misdiagnosis, diagnosis rates around 25% in HCM. And so we spent a lot of time last year just building the infrastructure, making sure that physicians were REM certified. We now have over 3,300 physicians who are REM certified.

Those 500 accounts, getting them ready to operationalize and have patients come. And what I'm really pleased to see is consistent week after week, quarter after quarter, we are starting to see increase in the number of patients, increases in physician prescribers. In these 500 accounts, they're highly penetrated in the 100 of those 500 accounts, which really comprise the -- those are the highest and most significant HCM centers of excellence. We've got almost 100% penetration.

So now it's around driving depth of penetration. And to your question around any -- what are barriers, what are challenges, there does not seem to be any access challenges as it relates to Camzyos. We're pleased with what we've seen there. Of course, you see prior authorizations to label. But beyond that, there's no other issues. I think the biggest challenge we face is the fact that when you look at the diagnosed patients, they may show up at a physician's door in these centers of excellence 1, 2, 3 times a year. So they don't come, as we've said, all at once. And so it's really making sure that we're getting those patients once they're in the doctor's office, putting them on Camzyos. And we'll continue to see that build over time.

Geoff Meacham

Got you. And on your legacy products, so if we switch gears to OPDIVO, you've had some success commercially, and you've seen an inflection from earlier use and GI gastric indication. So looking out in the next, say, 12, 18 months, what are the drivers in the U.S. and Europe that in terms of label expansion or new tumor types?

Adam Lenkowsky

Yes. Very pleased with OPDIVO. As you saw, we showed 18% growth in the quarter. We expect that to continue to grow in double digits over time. We have a host of new indications. As you said, the near-term growth is continuing to come from first-line lung, where our share now has reached 15% in the U.S., continues to come from gastric cancer. Our share is over 50% adjuvant bladder. So these are the real drivers of the opportunity as well as renal cell carcinoma.

The next set of opportunities really now are in the earlier stages of the disease. We're currently, I think, leaders in that space today with some indications added to melanoma, adjuvant esophageal cancer, adjuvant bladder. And our next indications will be in Stage 2 melanoma. We have data readouts coming out in lung cancer in the periadjuvant/adjuvant stage. We have data coming out in prostate cancer. So you'll start to see those read in the next, really, 12 to 18 months.

Geoff Meacham

Got you. Okay. When we go to some of the legacy products, LOE products, so on the Revlimid cliff, when you think about the cadence of the generic erosion, what are the puts and takes for this year? And is the decline in line with what you guys were thinking about with regard to having the certain volumes coming from the authorized?

Adam Lenkowsky

So we have guided that we will sell approximately $6.5 billion this year. And over the next 2 years, we'll see approximately a $2.5 billion step down each year until you get to 2026, then you have full generics in the market. So Rev continues to be a significant cash and profit contributor to our bottom line.

When we think about what we've been seeing and what we control and what we don't control. So we know how much the generic companies are able to sell into the channel. And so what we've said was each year, we're looking at about a $2.5 billion step-down. What we saw -- if you remember at the end of last year, we saw favorability of about $500 million, because there were fewer sales coming into the channel.

First quarter, we saw actually some unfavorability, because although we know how much is coming in on an annual basis, we don't know the quarterly cadence of that because they sit within the specialty pharmacies. And that's something that's not in our control. Whether they sit on the product, whether they dispense the product. And that's why you'll see continued variability from quarter-to-quarter. One quarter will decline. One quarter, we may show significant increases, but we do have a good sense as to what the annual impact is going to be.

Geoff Meacham

Fantastic. So it's a sprint to get through all the products. We did it. Yes, we did it. So thank you for the time. Really appreciate it.

Adam Lenkowsky

Thank you so much. Thanks for having me.