BMYMP - Bristol-Myers Squibb Company (BMY) J.P. Morgan 42nd Annual Healthcare Conference (Transcript)

2024-01-08 13:08:08 ET

Bristol-Myers Squibb Company (BMY)

J.P. Morgan 42nd Annual Healthcare Conference Call

January 08, 2024, 10:30 AM ET

Company Participants

Chris Boerner - Chief Executive Officer

Conference Call Participants

Chris Schott - JPMorgan

Presentation

Chris Schott

Good morning, everybody. I'm Chris Schott at JPMorgan. It's great to see everybody back in person again this year for second year in a row. It's my pleasure this morning, though, to be introducing Bristol-Myers to again kick off the JPMorgan Healthcare Conference. From the company, we have Chris Boerner, who recently stepped into the CEO seat at Bristol. And looking forward to the conversation here given all the updates and deal activity we've seen from the company recently.

So with that, Chris, Happy New Year. Thanks for joining us, and looking forward to the presentation.

Chris Boerner

Thank you, Chris. So, good morning, everyone. It is great to be kicking off the 2024 JPMorgan conference.

As Chris referenced, I have been in the CEO role now just over two months, and I am incredibly proud and excited to be taking over the leadership of this company with its over 150-year history of bringing really important medicines to patients and a very bright future.

So, let me tell you how I see the company today and my confidence that we will be one of the fastest growing companies in the sector by the end of the decade. So, this is our disclosure slide. So, a few things that you're going to hear from me today.

First, we are in the process of writing the next chapter of this company. Over its history, BMS has had a number of periods of renewal, driven by changes in our portfolio, the evolution of science, changes in the environment, and we are in another one of those periods now. When you look at the business today, you see two portfolios: a legacy cash generating portfolio, and a growth portfolio that is more diversified and will be an important catalyst for us going forward.

As we think about the decade, our growth dynamics are going to evolve and we're going to talk more about that really through the course of this presentation. But the overarching objective is to deliver sustainable top-tier growth by the end of the decade, and I firmly believe that we have the portfolio, the internal capabilities, and the financial horsepower to deliver that.

So, if you step back though, let's start with where we are today. Unquestionably framing how we see the company and I think many investors are three key factors: First, we exist in an evolving, increasingly complicated regulatory and market access environment that includes but is not limited to the impact of IRA in the US and clearly, Eliquis will be among the first products impacted by IRA. Second, virtually all aspects of our business are becoming intensely competitive.

And while both of these factors impact all companies to a certain extent in our sector, our situation is magnified by a third factor, namely, we face losses of exclusivity for a number of key products. We have discussed in recent quarters the impact of Revlimid. We have Eliquis in the middle of the decade, and then bookending the back end of the decade is Opdivo. These are meaningful revenue losses. And these factors require that we have a plan and that we execute that plan exquisitely well.

And specifically, successfully navigating these dynamics requires that we think about the decade in three distinct periods. Between now and the middle of the decade, the focus will be on growth and maximizing the opportunity that we have with our launched and soon-to-launch growth portfolio. That's mainly a commercial execution story. We then have to navigate a couple of years starting in 2026 where we are at the height of our LoE exposure. And the focus here will be on shortening this period as much as possible by accelerating our R&D programs. And then importantly, emerging in the last part of the decade, 2028 and beyond, as a company with sustainable top-tier growth.

So, what gives me confidence that we can achieve that growth? Well, we enter this journey with considerable strengths as a company. In fact, when we compare where we are to other companies that have faced similar periods of LoE exposure, while our overall percentage of exposed revenue is slightly larger, on almost every other key metric we compare favorably. And specifically, I would highlight a few things.

We have established our emerging presence in commercially attractive and growing therapeutic areas. This includes a leading position in cardiovascular disease, oncology, and hematology; we have a growing presence in attractive segments of immunology and in neuroscience; and a number of launched or launching products that will drive growth across these therapeutic areas.

We have a growing portfolio of pipeline assets with significant commercial potential. Since the last JPMorgan, we have doubled the number of registrational or near registrational assets. We have over 30 early stage assets and a very productive IND engine. Included in this portfolio are leading platforms in cell therapy and protein degradation. We'll talk a little bit about that during the course of the presentation. And we have a very strong financial position as a company. And that gives us the ability to invest in growing our businesses, it gives us the ability to source innovation externally, as we have done recently, and to return cash to shareholders through dividends and opportunistic share repurchases.

So, we have a wealth of strengths coming into this period of LoE exposure. And leveraging these strengths will be the key to how we grow the business. And when you think about that business, I want you to think about two portfolios. A legacy portfolio, which, while declining, is still generating significant cash, and that cash gives us the ability to invest in a growth portfolio. This portfolio consists today of 11 large brands across therapeutic areas, four therapeutic areas. And it is a portfolio that we will expand as we execute our internal pipeline and as we bring assets in through partnerships and acquisitions just as we did with Mirati and Karuna and RayzeBio.

How we go about growing this portfolio entails we do a number of things really well which are articulated on this slide. First, we have to build on our leading position in two of our largest therapeutic areas: oncology, including hematology; and cardiovascular disease. Second, we've got to continue to grow our presence in selected areas of immunology and in neuroscience. Third, we have to maximize our differentiated pipeline and platforms through enhanced R&D productivity. Fourth, we have to continue our strategic approach to capital allocation. And across all of these efforts, we have to execute exquisitely well.

So, let's double-click into each of these, starting with oncology. Oncology is a therapeutic area that we have a long history in as a company and a leading position today. And I think as most of you know, that position is heavily indexed today in immuno-oncology. And as we think about growing our solid tumor business, our focus is threefold: extending the durability of our I-O business, expanding beyond I-O into targeted therapies, and deepening our investment in important modalities. And here, you've seen our recent investments in next generation ADC platforms that includes the SystImmune collaboration we announced recently, and more recently, our move into radiopharmaceuticals with the proposed acquisition of RayzeBio.

Now, let me say a bit more about our ability to extend our I-O business. Today, we have a large business with Opdivo across 11 tumors. Looking towards the end of the decade, we see multiple paths to extend and grow the franchise with Opdualag and Opdivo SubQ. With SubQ specifically, we have the potential to address up to 75% of Opdivo's current U.S. indications, and we have a pipeline in place to grow the franchise with other novel agents.

In hematology, we're focused on three things. We are well-positioned to extend our presence in multiple myeloma, particularly in the second half of the decade through next-generation cell mods and cellular therapy. Both modalities are showing very promising data with the potential to address the continued unmet need in this disease across multiple patient types and lines of therapy. We have considerable runway to grow in lymphoma, notably with our best-in-class CAR T, Breyanzi. And we have a continued focus in non-malignant hematology with Reblozyl, where we're expanding the number of patients who can benefit from this very important medicine.

So, let me provide a bit more color on our efforts in hematology, starting with the role of Breyanzi in lymphoma. We have seen very compelling data in chronic lymphocytic leukemia and follicular lymphoma. For example, in CLL, where no other CAR T has succeeded, Breyanzi has delivered extraordinarily durable responses in patients who have failed earlier lines of therapy. As a result of these data, in both follicular lymphoma and CLL, we will double the number of patients who can benefit from this critically important therapy. And this expansion will align nicely with the significantly increased manufacturing capacity that will be coming online this year.

With respect to our efforts in non-malignant hematology, Reblozyl's expansion is already underway in MDS, where we've launched the COMMANDS indication, which significantly expands by four-fold our treatable patient population. Commercial performance with this launch has been very good. We've seen a nice uptake, which we'll update you more on in our Q4 call in a few weeks. And we have considerable room to grow in this indication, both in the U.S. and globally, as well as with other expansion opportunities that are noted on this slide.

Adding it up, in both oncology and non-malignant hematology, we have a clear strategy to significantly grow our business and that's on top of already well-established positions that we have across these diseases.

So, turning to cardiovascular disease, another leadership area for the company. Here, we see growth potential in two areas: growing our leading position in the treatment of cardiomyopathies and heart failure, and extending our very successful history as a company in thrombosis.

The foundation for growing our position in cardiomyopathies and heart failure is Camzyos. Camzyos has clearly established us as a company that is leading the science in this area. This launch is off to a very good start when you compare it to relevant analogs, as you see on the left-hand side of this slide. And remember, a large percentage of the potential patient pool today has not yet been treated, and there remains a significant pool of patients who remain undiagnosed. And as a result, we're investing heavily in this brand and in this disease as we see this product having very significant commercial potential.

Beyond cardiomyopathies, we intend to extend our leadership in thrombosis, where Eliquis is the leading product today. And here, Milvexian is a very important product in enabling us to do that. We have three Phase 3 studies running in parallel in secondary stroke prevention, acute coronary syndrome and atrial fibrillation, all very attractive commercial opportunities.

Regarding AF, as I know there's been some discussion of this program post a competitor study being halted for efficacy, I want to emphasize a few things. First, our confidence remains absolutely unchanged in the scientific rationale for pursuing a Factor XIa compound in AF. Second, we designed a Phase 2 study based on our Eliquis experience that did appropriate dose ranging. As a result, we believe we have identified an efficacious dose, and our Phase 3 trial is well-designed to evaluate the scientific hypothesis in this disease. And finally, if we're right and the science holds, we will have the only oral Factor XIa in Afib, which means that this is an even more attractive commercial opportunity than before. So, this is a very exciting program for us, and we'll see the first data readouts in 2026.

Now, beyond advancing in areas where we're strong today, we're also building our presence in both immunology and in neuroscience. In immunology, we're focused today on maximizing our existing assets with considerable commercial emphasis right now on Sotyktu. We also continue to expand the potential of these assets with important data readouts. For example, with Sotyktu and psoriatic arthritis and SLE starting in 2024, and we have an exciting next set of assets coming, and I'm going to highlight today LPA1 and CD NEX T CAR therapy.

First, let me comment on where we are with Sotyktu. Remember, our goal is to be the leading oral agent in psoriasis. We're focused on driving patient volume and improving market access for Sotyktu, and we have put significant resources into doing both. You can see on the right-hand side of this slide we have significant expansion opportunities for this product and I would draw your attention particularly to psoriatic arthritis and SLE as being particularly important. And these expansion opportunities will enable us to expand the treatable patient population and will further improve market access.

LPA1 is a next-wave asset that we are particularly excited about because of its potential to provide an effective and tolerable options for patients with idiopathic pulmonary fibrosis and progressive pulmonary fibrosis. These are large commercial opportunities with limited effective treatment options today. The early data that we've seen with this program is very exciting, with the potential to be a new standard of care and an important catalyst for growth for the company in the back half of the decade.

A second asset that we are very excited about is our CD19 NEX T program. Based on a growing body of evidence, including our own experience with Breyanzi, we believe that CAR T has the potential to meaningfully improve outcomes for patients across a host of autoimmune diseases. We will be reading out our clinical data in lupus this year, and we have expanded our ongoing Phase 1 program beyond SLE to include myositis, MS, and other diseases. We have every reason to believe that our CD19 NEX T asset has the potential to be the best-in-class construct for treating these patients with autoimmune diseases. And as you can see on this slide, if successful, this area is a very attractive commercial space with significant patient potential.

Neuroscience is a space in which the company has a long history going back to Abilify. In recent years, we have been methodically building a larger presence in this area with a number of potentially very exciting early clinical programs in neuroinflammation and neurodegeneration. With the proposed acquisition of Karuna, we're accelerating our entry into neuropsych with KarXT, and we have exciting expansion opportunities in neurodegeneration with this asset, all of which you can see illustrated on this slide. Notably, we believe KarXT has the potential to transform the treatment of schizophrenia, and as you see here, has a number of subsequent indications with significant, we believe, multi-billion dollar potential across both neuropsych and neurodegeneration. And we are very excited to bring the Karuna team into BMS and already are focused on integration and building the launch team for KarXT in the U.S., which has a PDUFA date in late Q3.

Now, obviously, I'm only able to highlight a handful of assets this morning, but as we look across therapeutic areas, I see a very exciting and rich pipeline that provides considerable opportunities for meaningful growth in the back half of the decade. And our focus is to continue to enrich this portfolio, first and foremost, by advancing our internal pipeline, and where it makes sense strategically and financially through business development. And in fact, we've made good progress over the last 12 months.

This is a picture of our potential NMEs through the remainder of this decade, and I've highlighted in purple the addition of assets we have brought forward since last year. In total, as of today, we have the potential to deliver over 16 new products starting today through 2030. Importantly, as you look at this list, these products are overwhelmingly first or best-in-class. And it is the pipeline momentum that you see on this slide that supports the growth opportunities that we see in the back half of the decade.

And of course, keep in mind a few things. First, this doesn't include meaningful lifecycle management opportunities for approved and pipeline agents across therapeutic areas of which there are over 40 today. Second, this picture is going to continue to evolve as we execute in R&D and as the science evolves. And finally, we'll continue to drive increased productivity in our pipeline through the use of digital tools such as AI and machine learning.

And this year I would highlight a number of data readouts which are going to continue to flesh out opportunities in the back half of the decade. I would draw your attention in particular to registrational data for Cendakimab and early-stage data that are signposts for the future, such as AR LDD data in prostate cancer to demonstrate the potential of targeted protein degradation and CD19 NEX T data in lupus to of course underpin the potential of resetting the immune system with CAR T. But clearly, we're going to be watching all of these over the course of the year.

So, let me turn briefly to capital allocation. We will continue to be strategic in our approach to capital allocation. This means continuing to source innovation externally, maintaining a strong investment-grade rating with balance sheet strength, and returning cash to shareholders. We have returned over $30 billion in cash to shareholders over the last three years. We've increased our dividend 15 now consecutive years in a row, and we have the capacity to be opportunistic in returning capital to shareholders through buybacks, as we have done periodically.

Just a bit of a double-click on business development. Business development remains a priority to strengthen the growth profile of the company. We've clearly executed a number of transactions recently. Our primary focus today is executing against these opportunities. But going forward, our overarching approach to business development is focused on licensing, partnerships, and bolt-on acquisitions. That, as you can see on this slide, build depth in existing therapeutic areas, enhance our presence in emerging areas, and we are going to, of course, be -- continue to be focused on significant areas of unmet need where BMS can establish a leadership position, all with the goal to enhance the growth profile of the company, particularly in the back half of the decade. And on this slide, you can see that we're already executing our strategy to enhance our growth profile through smart business development.

Now, I know I've covered a lot of ground this morning already, but clearly, all of what I've highlighted is only possible if we have very disciplined execution. A top priority for me this year is ensuring that we're focused on delivering very strong execution across the company. And here's what that means tangibly. In commercial, the focus is on accelerating performance for key near-term launch growth -- near-term growth drivers. We have also increased our resourcing for key products to drive that near-term growth. In R&D, getting to top-tier productivity is absolutely critical. The team is focused on culling programs that no longer deliver the right level of value, thereby freeing up resources to invest in new programs and importantly, accelerating ongoing programs.

In short, driving high-value opportunities and efficient spend are top priorities for me and the management team of our R&D organization. And of course, getting to top-tier execution across our manufacturing network, inclusive of cell therapy is table stakes. But beyond the functional focus here, I'd say that my management team and I are dedicated to driving a culture that emphasizes a strong sense of urgency and accountability.

On the topic of accountability, let me say a few things with respect to financial targets. First, in recent years, we've issued a number of longer-term targets, notably those on the left-hand side of this slide. Over the last few months, we've reviewed scenarios for both near-term and longer-term performance, and as a result, I'm confident in reaffirming these financial targets as of today. At the same time, our approach going forward will be to provide shorter-term, primarily annual guidance. Notably, annual objectives will be focused on total company revenue and line items. And of course, given the importance of R&D, we'll continue to update you on the evolution of our pipeline and key milestones. And we'll be providing our 2024 guidance in our Q4 call in a few weeks.

So, let me say in closing, while we have entered another significant period of transition for the company, I am very confident in our ability to navigate this journey with the goal of achieving top-tier growth by the end of the decade. Underlying my confidence is the fact that we have a number of key strengths as a company. We have a strong portfolio of launching or recently launched products. We have an organic pipeline with a large number of catalysts. Over the course of the decade, we remained financially strong. And I am fortunate to count among my BMS colleagues some of the brightest, most dedicated and hardworking employees in our industry, with a singular focus on delivering transformational medicines to patients, while doing so in an environment that is committed to diversity, inclusion and health equity. And combined, these give me great confidence in the future of BMS, and I look forward to continuing to update you on our progress. So, thank you.

Question-and-Answer Session

Q - Chris Schott

Well, I appreciate the comments, Chris. Maybe just to kick off, Bristol has been very active on the M&A front over the past few months. And I'm trying to get a sense of, as you step into this seat, is there a greater sense of urgency to address top-line growth to the latter part of the decade? And should we think about kind of this cadence of M&A as reflecting maybe a bit more of a focus of bringing in external assets to augment the internal pipeline?

Chris Boerner

Well, Chris, what I would say is our first and top priority is to deliver on our organic pipeline. We have got a very rich set of recently launched products or soon-to-launch products. I don't think our pipeline has ever been richer. We've got a number of catalysts in the back half of the decade. As I just noted, we could potentially launch up to 16 new assets between now and the end of the decade. So, executing that pipeline is priority number one.

Chris Schott

Okay.

Chris Boerner

That said, as you know, business development has always been a way of how we've thought about our business. We brought in important products like Opdivo and Camzyos through BD. And as we think about capital allocation going forward, while we have executed a number of really exciting deals over the last few months, business development is still going to be an area that we'll be looking at. We'll be focused on the things that I mentioned, driving additional depth in therapeutic areas we're in today, expanding, but always focused on making sure that our business development makes strategic sense, financial sense, and is an area of science where we can be a leader.

Chris Schott

Okay. And I think about additional transactions and you've laid out the priorities, I think the size of deals, are you constrained at all in terms of size of transactions given the $20 billion or so of capital you just deployed?

Chris Boerner

Well, we remain in a very financially strong position, so we have the ability to not only continue to do business development, but also importantly return capital to shareholders as we've been committed to do, for example, through the increasing of the dividend over the last 15 years or so. What I would say is that the focus in business development is very much going to be, as I highlighted today, on licensing opportunities, partnerships and bolt-on opportunities. But we certainly have the capacity to continue to engage in business development.

Chris Schott

One of the questions I got on the capital deployment front is where share repo fits in. I know the company has been active over the past few years, but I guess one of the questions I get is why don't you just allocate all that cash flow towards BD? I think one of the big questions investors have with the story is how do we think about what '28, '29, 2030 looks like, and I think there's a desire maybe there'd be even more assets in the portfolio. So, how do you think about that use of cash relative to alternatives?

Chris Boerner

Well, I think the way we want to do it is we want to continue to be strategic in how we think about capital allocation. Clearly, a focus that the company has had historically, and that, as I mentioned, we're going to continue to have, is on leveraging business development. Look, we've got a great set of assets internally. We've got a great R&D organization with a strong pipeline, but we don't have a monopoly on great ideas. And so, we need to continue to engage the external environment and source innovation externally.

Having said that, we're also going to continue to allocate capital back to shareholders. We have done that consistently through business development. We obviously have a $5 billion authorization for buybacks. We're going to be opportunistic in engaging on those buybacks. But we're in a very strong position financially. The business continues to generate strong cash. And so, we have the ability to be very strategic in how we think about capital allocation across those dimensions.

Chris Schott

Okay. And maybe just last one on the BD side of things. How are you thinking about balancing near-term earnings and that some of these deals do have a little bit of dilution tied to them relative to the longer-term top-line growth and growth of the overall business? How do you balance those two?

Chris Boerner

Yeah, I think it is an element of balance. It's not an either-or, for sure, because I think, as I've emphasized, as we look at navigating this decade, we need to do a few things very well. First and foremost, we got to execute on what we have today. We've got to deliver the growth that is embedded in our recently launched and launching portfolio. These are exciting and important assets for patients, and we've got to deliver on those. There's going to be a significant focus there.

Beyond that, though, as you look at the back half of the decade, we've got to continue to bolster that and improve the growth profile that we have as a company. Now, obviously, executing against our internal pipeline is a priority, but where we find exciting opportunities that strategically make sense and financially make sense that are external, we'll engage in the external environment through business development.

And as I look at the deals that we've done recently, Karuna accelerates our opportunity to get back into neuroscience to do so with an asset that KarXT has the potential to be the first meaningful improvement in schizophrenia in over 30 years. So, there's a big opportunity in schizophrenia, both as a monotherapy and combination. And the nice thing is that bridges back to our early and very exciting pipeline that we have in neurodegeneration. And so, we see considerable opportunity with that. That's going to be something that's going to generate potentially revenue starting this year and accelerating over the course of the decade. And then, RayzeBio, of course, gives us access to one of the fastest-growing platforms in oncology. Now, that's going to be an opportunity that's a bit later in the decade.

Chris Schott

Okay. Great. One more bigger picture one. I know in the new launch targets, with the third quarter earnings, you pushed out the $10 billion sales by a year. I just -- can you just come back to the drivers of why you decided to make that pivot? And maybe the confidence -- I know you're going to be moving away from those longer-term targets, but reiterating those longer-term targets say, what gives you confidence in terms of the longer-term outlook despite maybe a slightly slower ramp of a few of the assets?

Chris Boerner

Yeah. So, look, that target is based on nine assets, a collection of nine assets. And it's like any portfolio, there's going to be things that are going really well and some things that we're going to have to continue to push on. And I think as we looked at that portfolio of assets, we saw a number of things that were super exciting and things that were going either as planned or better than planned. Opdualag, Reblozyl, Breyanzi is going very well. So, we feel really good about the trajectory of those.

But at the same time, we know that Abecma has had some challenges. We're going to have to work our way through. Obviously, the AdCom that's coming up. But we think that product post that AdCom has considerable legs. It's just taking a bit longer for us to get back into a competitive position with that product.

And then Sotyktu, obviously, that's a really important product for us. It's one where the keys to success are going to be driving top of the funnel patient enrollment, getting patients onto the product, mainly onto free product. And then as market access improves over time, that product will continue to perform very well. That process of getting that market access improvement has taken a little bit longer.

So, when we added the puts and takes, we decided it made sense to push that target from '25 to '26. But as I said today, looking at where this business is, we feel very good about that objective. And that's why we reiterated it among the other financial targets that we talked about today.

Chris Schott

Great. Just digging into some individual products, maybe first on Karuna with KarXT. The product clearly has a first-mover advantage. It seems like there's a lot of excitement in the field about the product coming to market. So, can you just elaborate a little bit more on how much infrastructure we need to think for Bristol to add here and how you're thinking about uptake of the product?

Chris Boerner

Sure. Well, we're very excited about the opportunity. As I mentioned, the initial opportunity is going to be in schizophrenia. This is going to be a very targeted launch. This will be for those physicians who are treating those patients. This is not a massive opportunity in terms of the number of folks that we have to target. So, we feel confident that we can build that team with the time that we have.

Remember, Karuna is already building infrastructure today. They made good progress in hiring a number of folks, for example, on the market access side. And so, while we're operating as two separate companies today, pending the regulatory approval of this deal, we feel comfortable that we'll be able to build that team. We'll make decisions at risk in order to be ready for that launch. The PDUFA is coming up in September, so it's going to be important that we execute that. But we feel very good about our ability to, along with the efforts Karuna is doing today, be able to build that team and be ready for launch.

Chris Schott

As I think about the future indications, so things like adjuvant schizophrenia, Alzheimer's psychosis, just how derisked are those in your view? So, as you were kind of looking at the deal model, is that something that you feel you've got high conviction in those opportunities, and that was kind of a key piece of the transaction for you?

Chris Boerner

Well, obviously, the schizophrenia programs are heavily derisked because we have multiple studies showing the efficacy as well as the safety advantage of the product. And then, as we get into Alzheimer's disease psychosis, for example, we have reason to believe based on earlier data from another company that showed that this mechanism has the potential to work. And so, we think that this has got a high probability of success.

We think that when you look at the totality of this, the initial opportunity in neuropsych, and then importantly, the opportunity in Alzheimer's disease psychosis, we think there's an opportunity in Alzheimer's disease agitation, potentially in bipolar. You add it all up, we think the product has multi-billion dollar opportunity. Obviously, those later programs, the studies have to read out, but we have a high degree of confidence that given the unique MOA of the asset, it should work.

Chris Schott

Okay. Just staying on the new product side, Sotyktu. Just quick update in terms of how you're feeling with regards to formulary position? And as we kind of look into 2024, is, from your perspective, the drug in a different place than it was last year?

Chris Boerner

Look, I think we're going to be in a much better place in 2024 than in 2023. For example, in 2023, not everybody had this even on formulary. We'll have full formulary access or almost full formulary access in 2024. The focus is on improving the quality of that formulary access. And so, our initial objective had been, by this year, to have most patients in the zero to one step edits. It will likely be a combination of zero, one, and two step edits, just given how slow some of those contracts have evolved. But we're going to feel much better about the position we're in today.

Adam will be able to talk more about sort of the evolution of that on our Q4 call in a few weeks, but we feel good that we're trending in the right direction. There will be almost universal formulary access, and then our focus right now is continuing to drive volume of patients at the top of the funnel, be able to generate that volume so that we can improve that quality of formulary placement. And like I said, we're going to have a larger percentage of patients with zero and one this year. But obviously, we've got more work to do.

Chris Schott

And just last one, on Sotyktu, it does feel like there's more and more oral competitors kind of working their way through the pipeline. How do you think about sustaining -- putting a lot of investment now, but kind of sustaining that leadership position as you build it?

Chris Boerner

Well, look, our focus is on being the leading oral agent in psoriasis. We have the clinical profile to do that. We have multiple Phase 3s that show clear superiority to Otezla. And so, our focus right now is on establishing that position. And we've talked about what we need to do that, that's going to be the clear focus for 2024. And if we do that effectively, then I think we put ourselves in a really good position from a competitive standpoint. But it is all focused on what do we got to deliver in 2024 and driving really strong execution on that brand.

Chris Schott

Okay. Great. Switching over to CAR T, latest on capacity, I know that's been kind of a journey. Could you just -- maybe, it seems like you've made some good progress on that front, but should we think about capacity still as a rate limiter for uptake in '24, or is it moving beyond that?

Chris Boerner

Well, CAR T is a complicated technology, and so I think it's always something that you're going to have to stay focused on. We've got a very good team on the manufacturing side focused on this. Where we set today is on Abecma, we've made great progress in overcoming both vector and product capacity. So, we feel good about the supply situation on Abecma.

Breyanzi, what we've said is this year is an important year for bringing capacity online, and it's important for two reasons. One, we've got to make sure we have that capacity. But more importantly, we have got two new indications with follicular lymphoma and CLL. And where we sit today, we feel very good about the merging of both that expanded patient population with the expanded capacity that we have.

But obviously, in cell therapy, you got to stay focused on this. We feel pretty good about where we are across both of those products from a capacity standpoint.

Chris Schott

Okay. Great. So, the last couple ones here. Moving on to Opdivo. At the R&D Day, I think you talked about potentially about a third of patients you thought would be good candidates to transition to a SubQ formulation. I guess I'm just trying to get some sense of how that launch could play out. How quickly can you move those patients over? And how much protection will that provide the franchise as we think about potential biosimilar competition coming over time and IRA, I guess, as well?

Chris Boerner

Yeah. Well, we think about SubQ as potentially extending the franchise through the end of this decade into the early 2030s. So, our conviction that it has the potential to do that is unchanged. In terms of how we think about this launch, as I said, we think we can cover with SubQ up to 75% of the indications. We think we can convert about half of that business over. The focus will be on once we get approval converting, where it makes sense to use a SubQ.

So, you could think, for example, about clinics where chair time is at a premium, because this is something that is obviously you're able to do much quicker. It involves less staff time. The other area is for patients who don't necessarily need to see the physician is sort of in and out. So think about the adjuvant indications where patients are coming in and need to get an infusion. Today, you can utilize SubQ in that setting.

So, we'll be targeted in how we go about this. But the focus post approval will be to converge as quickly as possible in those area where SubQ gives real patient [an in-office] (ph) benefit.

Chris Schott

Great. Maybe the last question here. I know you're going to be giving guidance in a few weeks, but just high-level pushes and pulls we should keep in mind for 2024 for the company?

Chris Boerner

Well, look, we've got good momentum coming out of 2023 for the business. I would say our focus areas are first and foremost continuing to drive products in that growth portfolio that are important. Opdivo is clearly an important large product. We've still got growth opportunity for Eliquis. Then, it's going to be about continuing to drive additional performance on Reblozyl. The COMMANDS launch is going very well. Opdualag has continued growth opportunities.

Cell therapy, the big thing we're going to be watching is Abecma and what happens with that AdCom. But listen, I think if that AdCom goes well for us, which we feel very good going into it, I think that opportunity there is going to be significant still. The profile of that drug is a strong profile and we feel good about our ability to compete. So, we're going to be watching that one carefully.

And then, we've got a number of data readouts that are going to be important above and beyond the commercial opportunities. Be looking for CD19, lupus data, obviously Cendakimab. And then, the rest of the business, I think we're going to be focused on continuing to drive good uptake and we'll talk more about that in our Q4 call.

Chris Schott

Great. Well, I think we're about out of time. Really appreciate the comments today. Thanks for joining us.

Chris Boerner

It's great. Thanks, Chris.

Chris Schott

Thank you.

Chris Boerner

Bye-bye.

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Bristol-Myers Squibb Company (BMY) J.P. Morgan 42nd Annual Healthcare Conference (Transcript)