BMYMP - Bristol-Myers Squibb Company (BMY) Management Presents at Jefferies London Healthcare Conference (Transcript)

2023-11-16 09:36:05 ET

Bristol-Myers Squibb Company (BMY)

2023 Jefferies London Healthcare Conference

November 16, 2023 4:30 AM ET

Company Participants

Timothy Power - VP & Head, IR

Conference Call Participants

Akash Tewari - Jefferies

Presentation

Akash Tewari

Good morning, everyone. Last day. Signs up. Let me help your conference. My name is Akash Tewari. Anyway pronounce my name. I am a Pharma and Biotech Analyst here at Jefferies.

I have the pleasure of hosting Tim Power, Head of Bristol, IR for a nice, one-on-one fireside chat discussion today.

Tim, let me hand it to you for some opening remarks and then we'll get started.

Timothy Power

Thanks, very much Akash and thanks for the opportunity to be here this morning. I mean, I suppose, if I just take a step back where we are right now, clearly the company is going through an important patent cycle at the moment and the market is obviously focused on that understandably.

I think though, if we sort of put that in context, thinking about the fact that this isn't the first time Bristol has gone through a patent cycle, and frankly, we've seen some other companies more recently go through something similar and come out very strong on the other side. I think it's important to remember that we're going into this actually with some real advantages in some ways.

If you think about relative to some of our competitors going into similar situations, we have a very strong balance sheet that enables us to sustain shareholder distributions to invest for growth through business developments. We have a new product cycle and growth portfolio that's coming along nicely.

And we have a really, really good pipeline and we had an event in September to talk about R&D at Bristol and what was very clear is that the potential that pipeline is there and that we can make it even more productive going from 6 to 12 registrational assets over the next year-and-a-half and increase in the productivity of that of that portfolio.

So you put that together with the fact we've a new CEO has come in and I think you'll see real urgency from Chris with respect to financial execution, execution across the commercial portfolio and with respect to the pipeline. I think there's real optimism for the future for the company at this point.

Akash Tewari

Understood. So to that point, Tim, I mean, it's - I feel like with some of these large cap pharma CEO transitions, this one is actually it's unusually normal where, Chris has been in the company for several years and he's kind of taken the reigns from Giovanni. But the typical pattern we see is, large cap pharma CEO comes in, in one or two years a “big deal happens”, right? There's this idea that there is a mandate that is given with a new CEO to do something that really changes the trajectory of the company.

I think, Bristol, the sense I get is, investors want clarity, right? They don't want like it's just same thing with Pfizer. Like, they have 17 products that are launching but everyone doesn't know how to model them. One major product, right, at an ELIQUIS replacement, an OPDIVO replacement is really what I think gives people clarity post ‘25.

You guys have talked about there's no appetite to do another Celgene deal. But there have been these mega tuck-ins, right? You could argue Horizon or Alexion where these kind of mega tuck-in type of acquisitions. When you think about the mandate to do something, maybe not Celgene size, but in that $25 billion to $50 billion range. What is the appetite for that internally at Bristol right now?

Timothy Power

Sure. So and the first thing I would say is I point or two Akash is, actually think we have a really important opportunity with the low vaccine compound. Think about sort of a next-generation of anti-thrombotics, it’s about ELIQUIS. But if we move past back to year question, the good news the company has, as I said, a very strong balance. Very, very good cash flow. So the firepower to do strategic acquisition is there.

Ultimately there's really three things that we think about when it comes to doing business developments and M&A. It comes back to - is there a good strategic fit for what we're looking to bring in? Are we convicted on the science and do we feel that there is a good financial rationale, as well? And obviously, accretion and dilution as a component of that, but economic return is a particularly important focus for us.

With those lenses, sort of thinking across areas where we think we can add value and really we're thinking about all of the options that makes sense in that regard. And if you speak to our management team, you'll clearly hear them say that we're somewhat size agnostic. And you're right with the caveat being that’s clearly a mega deal on the size of Celgene, it’s not something that's on the cards right now.

Akash Tewari

Understood. Now, you guys have done deals in kind of this precision oncology space turning point, obviously the drug had approved I think today. Mirati just recently was announced as well when I look at Merck for example, some of your peers that have the same amount of expertise in oncology. It's all about IO and ADCs right? Next-gen chemotherapy and that's really where the field is kind of starting to head is in particular for the treatment of solid tumors.

When I look at kind of Bristol’s oncology portfolio, that seems like it's glaringly not there, right, the ADC components. So, do you feel like we've had a breakthrough with that technology with the linkers and the stability that you feel like this is a modality that could be worth integrating into Bristol’s portfolio? And would that be something that's more early-stage? Or something that could be more of a commercial later,-stage type of compound?

Timothy Power

Yeah. So, what the company has said in sort of provide a bit more context here is that, it's, we believe very important to continue to drive leadership in immuno oncology but also to diversify beyond immuno oncology. And if you think about what we talked about again at our R&D Day in September, it's very clear that even with the portfolio that we have today, there's real opportunities to diversify beyond IO.

You think about the targeted protein degradation platform we have where we may be able to bring some of these really innovative assets into solid tumors, like an antigen receptor degrader for prostate cancer for example, when it comes to other modalities like ADCs the fact is that we as Bristol don't have a lot of ADC exposure today. I think that's a fair observation. We have a few assets here and there.

We also have a potential option to bring forward an ADC component to protein degradation in the future as well. But clearly, as we think about our portfolio, there may be opportunities for us to complement that with them with other modalities and ADC is a modality, we want to pay attention to.

Akash Tewari

Understood. Now, I remember when we hosted the team in New York and as much as people complain about Waldorf, The Sheraton in Times Square were so, keep that in mind. You specifically talked about building out capacity in CNS and Neurodegeneration, and shortly thereafter the Tau with Prothena that was discussed.

Can you talk about additional appetite on the CNS side? And why the interest specifically in Neurodegeneration, do you feel like there's maybe been some breakthroughs in the biology there? It's obviously been very tough to treat some of those indications, why the interest there specifically?

Timothy Power

Yeah. Good question. So, I’d say, Bristol as a company clearly a legacy in neuroscience, particularly in the past in psychiatry. But to your point, the current portfolio that we have, the pipeline we have is really more oriented in neurodegenerative disease/ And the way that came to be was the team sort of viewed the biology is starting to advance.

And that the understanding – the biological understanding of some neurodegenerative diseases was getting to a point or maybe there would be better ways to drug some of these conditions. And the model that was established was to create a small team of experts that could get very plugged into the science, whether it's through academic elaborations or within the sort of biotech ecosystem and source assets early enough that would be able to be sort of at the leading edge if that started to come to fruition.

And what we're starting to see is that that's beginning to happen now. If you look at the pipeline that we have today, assets like the Tau that you mentioned that we got from Prothena, really interesting asset. We have some early assets in ALS and some others that we're looking at as well. We can, we talked about some of these at our events in September.

So I think the point here is that we are starting to see a point where the biologic understanding is starting to enable us to develop more and more assets against diseases like ALS, as I said. And when it comes to business development, I think, again, coming back to what I said a few minutes ago, if there's a strategic fit there, we're interested. So neuroscience clearly is a vertical that we're building. And so that's one that we'll continue to evaluate.

Akash Tewari

Understood now. Now, maybe going into your product-specific portfolio and let's start with - I think, Sotyktu. I feel like that's where if I meet a Bristol bowl, it's always I think Sotyktu is an $8 billion to $10 billion type of opportunity. They always have a lot of confidence there. And I think to your credit what you've said about how Sotyktu biology is going to play out in terms of selectivity, I think has started to play out on the commercial launch, right?

There was, I think some commentary about continued levels of step edits. I mean you are taking 40% of the new patient starts on the oral side. So there is good execution. But it just seemed like there's a bit of a tone shift in terms of the time to get full commercial coverage and the step editing that's kind of occurring here. Outside of what we know what's going on with STELARA, had there been any other changes kind of recently in the market that may have shifted your timelines here?

Timothy Power

Sure. So I think, I mean, the fundamental point here I think is that this is a drug that has significant potential. We've been able to develop a medicine that's very innovative. It's shown superiority to the current oral standard of care in psoriasis, which is Otezla. That's in the label. And what's really important here in the sort of near to medium term centers on access.

And what we've been very clear about is that the strategy was to establish this product by effectively building as much volume as possible knowing that we wouldn't have access and effectively sort of facilitating that through a free drug program. The expectation was that we would get to a much better reimbursement position next year.

Now, what's happened this year is actually we've had some good news. We were able to secure access with a CVS plan. It's a relatively small population, about 15% of the market. But we're able to get it at zero to one step edit. And what that's enabling us to do now is to pull patients out of the free drug program, convert them to commercial.

And you can see that if you look in IQVIA scripts, you can actually see that - some of that coming out already. And when it comes to next year, our hope was to be able to get to a point where we would have very broad access next year and high quality access at that. So, and we were hoping to be able to get to zero to one step edits in 2024.

So if you look at where we are today, the bad news I suppose is that we have about 80% plus the patients who don't have access to Sotyktu right now. We're going to be able to get, we believe close to 100% of patients having Sotyktu on their plan next year. The point though was getting to zero to one step edits will probably take a little bit longer.

And so, there's going to be a tailwind behind this product going from 2023 to 2024. It may be quite as strong as we were hoping a few months ago. But the good news is we expect continued momentum then going into 2025, both with respect to continued volume growth and then continued access expansion, as well.

Akash Tewari

Understood. And it's interesting because I feel like, five years ago it was kind of clear like you had Stelara. You didn't get the efficacy of the biologics. But it’s a nice rage from steroid type regimen. Sotyktu kind of gets into that realm where you are having biological like activity. So can you talk about really, how do peers view it? Do they still view it as kind of like here's the oral. Here's the biologics. Or is that line starting to get blurred and you also have Humira buyers somewhere starting to encounter as well. How is that kind of also affecting the step editing?

Timothy Power

It's really not so much of a distinction between orals and biologics from the payer perspective. It's more about how they manage the disease or the category. And so, if you have a plan today where there's step edits effectively, it's not mandating a particular product test to be failed before you get access to your drug. It's that A another systemic has to be used and then you can get access to Sotyktu. But you're right. What we're starting to see is a dynamic now is that the availability of biosimilar Humira is becoming a factor in the negotiation with payers. And so that's creating a little bit of the sort of delayed expansion to sort of preferred status that we were hoping to get next year and pushing it a little further out.

Akash Tewari

Understood. Now, speaking of milvexian. I mean, to me, you're absolutely right. I mean this could be a huge opportunity. Never comes up in Investor discussions. And I think right now, everyone's dealing with what's happening in the next quarter. Even something that's coming out in the next two to three years seems like forever.

But, we were at AHA and one of the hit the same target milvexian it's in the form of a mab. Look, I'll tell you, when I look to that data set, I said, why didn't Bristol use bleeding events as their end point instead of the composite stroke non-CNS embolism endpoint that you guys are proceeding with. Certainly, I think you would have been able to show a benefit over - maybe not ELIQUIS but some of the prior drugs in that in that area.

But two-folds, one, from that data set that came out from that private company, is there any read across you have on milvexian and the importance of actually having less bleeding events, forget just your, your other endpoint. And the number two, actually, from kind of a powering perspective, right, how is the lack of maybe less dropouts affects, how efficacy is going to perform here? And I, to me that might be the more critical shush.

Timothy Power

So, maybe just for a bit of background here, we believe milvexian has really significant potential. If you think about Bristol as a company, fairly a very, very strong legacy of developing anti-thrombotics from PLAVIX on the antiplatelet side to ELIQUIS on the Anticoagulant side and they are now potentially sort of bringing those two together in some ways with milvexian with our partners now at Jansen.

What we're trying to accomplish with this drug is to develop a medicine that has efficacy that's the same if not better than existing Anticoagulant like 10As , but to your point with a better bleeding profile. And if we're able to accomplish that, if you think about it, what it enables is an expansion of where Anticoagulants get used. Because if you look at the way anticoagulation therapy works today in atrial fibrillation we know that there's somewhere between 20% and 40% of patients who either get undertreated or not treated at all.

And the reason for that is even though they're diagnosed and they're at risk of stroke, their physicians are concerned about bleeding. So that the point that, if we can have a better bleeding profile, there's a real opportunity in AFIB. Beyond atrial fibrillation, you think about diseases like, acute coronary syndrome, secondary stroke prevention, standard of care today is anti-platelet treatments and we know that when you add Anticoagulants on top of that, you can you can reduce events.

But unfortunately, you're adding a bleeding profile on top of a background bleeding profile and it becomes difficult to make that work.

So again, a profile that has efficacy without significant increase in bleeding can enable an expansion of anticoagulation in that setting as well. What we've seen from our Phase 2 trial is actually, from our perspective it gives our - gives us conviction that we're starting to see a profile that looks like that.

And to build on your point, we're seeing a growing body of evidence the factor 11 has that type of a profile. So the antibody data we saw over the weekends suggests a very different breeding profile to factor 10A. We even saw head to head data last year from a factor 11A, in AFIB, versus Apixaban, which is the standard of care where the bleeding profile looks better.

And from our own Phase 2 data, as I said, we're seeing even in secondary stroke trial that you referenced, good efficacy with respect to ischemic strokes, but no increase in major bleeding, no increase in intracranial bleeding or fatal bleeds. And that's not what you would see. If you were looking at a factor 10A in combination with anti-platelet treatment.

So again, as the data continues to build, our confidence in this profile continues to increase.

Akash Tewari

I think that the question I was thinking - I was debating with my team is, let's say you show non-inferiority to your primary endpoint. But you have a 50%, 70% reduction in major bleeds. I mean that is a big improvement versus the standard of care. I feel like that's a drug that should be on the market.

Have you had any communication with the FDA about potentially filing? Because that is one of your major secondary endpoints. I think, it’s your first major secondary endpoint, is that potentially a filable endpoint? Because it seems like I think that mab competitor is looking at that as their primary for Phase 3 studies.

Timothy Power

Yeah. So, absolutely, our plan is to be able to again, if you think about the profile, I said if it's about efficacy that's as good if not better than existing. Both with a better bleeding profile to the extent, that that's what we show in a registrational program. That's absolutely what we want to talk to the health authorities about.

Akash Tewari

Okay. Interesting. All right. Got it. Got it. Got it. Now, maybe stepping back and looking at CAMZYOS, we were at the AHA and it's obviously, all about select and everyone knows about this. But there were data sets with CAMZYOS and we hosted a KOL calling, this doctor mentioned something that I don't think I really appreciate it, which is the cost of these echoes is a problem, right? Like A, you have an expensive drug that you're giving out of pocket. You'll have out of pocket cost associated with it. But then also these echoes cost like a $1,000 a pop.

They're seeing their doctors every six months or probably more likely every year. And so they had to kind of change their regular pattern of treatment once they get on CAMZYOS and that seems like A, a pretty significant financial burden, but also relatively inconvenient. You've alluded to the possibility of maybe working with the FDA to change the REMS.

I mean, to me, the quarterly it seems overly burdensome. Any sense on is there a possibility we can even we could at least go from quarterly to six months. And is there any timeline we can think about with your discussions on the FDA on this topic?

Timothy Power

Sure. So, I mean, just again for a bit of context, I mean, CAMZYOS is a product that's really a big transformation for these patients. What we've seen is that people who've been incredibly symptomatic unable to sort of perform daily activities of daily living seeing that they're able to actually be active. And so the point is that once patients get on the strokes see very signal significant symptom relief they want to stay on treatment.

And the point around the REMS program, Akash, clearly it's been something that we've had to navigate. I think physicians have gotten better at managing it. There is always the potential to have a REMS change over time. It's a very long process. It's not easy to do. We've seen it in the past. It's something we'll continue to look at, but it's probably not something that would change in the near term.

Akash Tewari

Understood. Got it. Now, speaking of your R&D Day, I mean, one of the programs that I feel like your commentary was quite bullish on was NYK224. This is your backup myosin inhibitor Mavacamten came with the MyoKardia acquisition. I know, you're going to have data for that compound on obstructive HCM Q1 ’24.

But with the IRA, it seems like you're not going to pursue it in that indication. But ATPase in that opportunity, I mean, that's a huge potential opportunity for this class. Can you expand a bit about your excitement in that indication where it could kind of fit in the treatment paradigm? And the early signals you might be seeing there?

Timothy Power

Sure. Yeah. So, well, I would say is, what we've done so far is a Phase 1/2 study for Mavacamten our marketed myosin inhibitor in ATPase. It's a small trial. But we've started to see some evidence that the drug is active in ATPase, again small patient numbers. But the fact that we're seeing activity is telling us that it's worth exploring, blood and myosin inhibitor can do in ATPase.

So, without being the case to your point, what we've decided to do is take a second myosin inhibitor 224 and at this point, what we’ve planned to do is put that into a full Phase 2 proof-of-concept in half and on the basis of what that tells us then we would be able to see how we move forward. And to the extent that we can really bring something to the table here I think to your point, to ATPase an area is continuing on that need and could be really important for patients as well.

Akash Tewari

Understood. Now, maybe kind of stepping back and thinking about you have co-formulations and then obviously sub-cue. It kind of struck me, on the Q3 call, you're mentioning in terms of the current Opdivo patients who would be receptive to going to a sub-cue formulation 65% to 75% of the total. I mean, that's I think bigger than - Merck said it's about half, that would be receptive.

And then of that group, half of those patients would be able to maybe switch to a sub-cue - I mean, that's talking about like a third of your Opdivo revenues. So A, disrupt might get on the market let's say, 2025, can we talk about how that the cadence of that switch would play out?

And then number two obviously, the IRA, the way that IRA is going to be written it sounds like, you're going to avoid getting negotiated under a sub-cue, as those are two different active ingredients. But you mentioned exclusivity or protection to the early 2030s, but not the full 13 years. Can you expand a bit about why you guys have given that color versus the pull-through?

Timothy Power

Yeah, so there is a lot in your question there. Maybe just sort of taking a sort of a step back on this one. We think this is a really important option for patients. If you think about what happens in a physician's office today with an IV of Opdivo patients, obviously it's a half an hour of an infusion. They have to be prepped for that. It takes up resources within the physician center.

Sometimes their infusion capacity is limited. So having the ability to have the physicians’ office administer a five minute injection instead we think it’s really important for patients and for their providers. And with that being the case, we expect based on the data, we've just gotten to be able to file this and potentially get an approval to launch as you say maybe in 2025, in indications that constitute roughly 65% to 75% of today's Opdivo business in the United States.

We don't expect to convert to all of that. To your point, we think we can convert about half of it. But I would say, if we think about it between 2025 and when Opdivo is exclusivity in 2028, we have three or four years to be able to make that conversion happen. Our view is that we'll be able to maintain and this part of the franchise through the early 2030s, there's obviously an IP component to that.

And when it comes to IRA, clearly there's a lot that we don't know. But our current thinking is based on through the guidance we've seen so far, with respect to how IRA will be implemented that because this contains two active moieties. It should be independent of Opdivo free form when it comes to price.

Akash Tewari

Understood. Understood. Maybe just a hit, I mean, I feel like one of the products that you guys, I think are outperforming on is Reblozyl, you have to COMMANDS first-line setting. I mean, this seems like there's any product that wow, this could definitely exceed expectations. It does seem like it would be that compound it seems to be getting broad use in MDS in general, as well.

Can you talk about how getting COMMANDS on the label has started to help with uptick? You get RS positive and RS negative. And then number two, as we think about the cadence of growth in the back half of the decade, right, I mean is this something that could really start to accelerate as we get into 2027, 2028, et cetera?

Timothy Power

Sure. Yeah again, another really important product if you think about chronic anemia's the setting of a disease like MDS to this point it's really been ESAs is the only option, which have been used frankly off-label. And so having a branded product that’s showing superiority to ESAs it’s something that's really important for patients and their doctors.

And so, at this point, what I can tell you is, the lunch has been going well and we did get a broad label both RS positive and RS negative patients in the label. That what we found is that in particular community physicians really value the fact that there's no need for them to test RS status anymore. They can use this in any of their patients’ academics. Obviously will continue to test. They may use it a little bit differently in our RS positives versus RS negatives.

But yes, it's going very well and about 60% of patients are treated in the community setting. So, again, that population getting well-served now. There are more indications potentially even to combing on COMMANDS it’s actually we think about sort of the Independence trial, which is testing this product in Myelofibrosis. So, we're going to continue to look at ways to expand this product and bring sort of new anemia treatment to as many patients as we can.

Akash Tewari

Understood. And then, maybe finally to wrap up on a backbone. Obviously, I think a disappointing kind of mid-year performance for that product, A, with the manufacturing issues, but B, I think the comments on the Q3 call were kind of fascinating, because to me, it doesn't seem like it's just the legend product, right?

It's not just simply a CAR VIC –D versus ABECMA dynamic. There certainly seems to be a component of that. But you also mentioned broader competition going on in kind of the multiple myeloma space. Can you talk about how maybe some of these BCMA-CD3s and LEGEND have impacted the demand on ABECMA? And when do you think that product can maybe start returning to growth here?

Timothy Power

Yeah, good question. I mean, again, this is the sort of the first BCMA product for patients multiple myeloma. And when that launched, if you're a member, we saw incredibly strong demand for this product to the point, we couldn't supply enough products. The same happened even when the second BCMA CAR-T became available. And so really what started to change was when the bispecifics became available, we saw that market shift from being kind of a warehouse bolus type market to more of an incidence-based market.

And so you're starting to see very intense competition for new patients coming into treatment. What's also happened more recently is, as we've seen more capacity for CAR - T in the BCMA space has become even more competitive. And so, we're working through how we compete in that context. I think what's really important for us now is to expand our site footprint, make sure physicians understand the best way to sequence bispecific versus CAR – T.

And also making sure that the fundamental profile of ABECMA vis-à-vis the other CAR-T is is really well understood, especially when you think about differences in trial design and how sort of correcting for those might impact how people think about what this drug could be. So those are the things we'll be focused on moving forward.

Akash Tewari

Understood. I know we're out of time. But, Tim, as always, I really do enjoy talking to you. I really appreciate it. Thank you all for joining us, as well.

Timothy Power

Thanks, Akash.

Question-And-Answer Session

Operator

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