Amgen Inc. (AMGN) Q4 2013 Earnings Report, Transcript and Summary

My name is Marvin, and I’ll be your conference facilitator today for Amgen's Fourth Quarter and Full Year 2013 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session at the conclusion of the last speaker’s prepared remarks. In order to ensure that everyone has a chance to participate, we’d like to request that you limit yourself to asking one question during the Q&A session (Operator Instructions). I’d now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Thanks, Marvin. Good afternoon, everybody. I’d like to welcome you to our conference call to review our operating performance for the fourth quarter and full year 2013. We have accomplished a lot during 2013 on many fronts, including operational and strategic and we’re looking forward to delivering in 2014 a year that’s fully characterized by significant cynical data flow. Leading the call today will be our Chairman and CEO, Bob Bradway, who will provide a strategic report on our performance in 2013 and outlook for 2014. We also have our interim CFO, Michael Kelly who will review our Q4 and full year results and provide financial guidance for 2014. Tony Hooper, Our Head of Global Commercial Operations will then discuss our product performance during the quarter and trends that we see going forward. And finally Sean Harper, our Head of R&D, who will then outline the expected flow of data from many of our pipeline products. After Sean’s comments, we should have ample time for Q&A. We will use slides for our presentation today. These slides have been posted on our website and a link was sent to you separately by email. Our comments today will be governed by our Safe Harbor statement, which in summary says that through the course of our presentation and discussion today, we may make certain forward-looking statements and actual results may vary materially. So with that, I’d like to turn the call over to Bob. Bob?

Okay. Thank you, Arvind. I think confidence is the best way to describe how we feel about our long-term growth prospects as we head into 2014. And our confidence is bolstered by our performance in 2013 on all fronts, financial, operational and strategic. Financially in the fourth quarter as you can see from our results, revenues were up 13% and our earnings per share were up 30%. For the full year revenues were up 8% and earnings per share of 17% reflecting strong execution and continued momentum in our business. Geographically, we grew across all our markets. We were strong in the U.S. And once again this year I believe we are one of the few companies growing revenues in Europe and that reflects the strength of our current products and recent launches as well. In terms of individual products, the highlights for 2013 include totally on XGEVA contributing $1.8 billion of sales. Sensipar exceeding $1 billion for the first time and after 15 years on the market Enbrel remaining the leading Anti-TNF therapy and of course Neulasta and Neupogen continuing to grow with the benefit of their established safety and efficacy track record. While delivering strong operating performance in 2013, we invested in the growth of our business and that's reflected in our advanced pipeline. We have 10 molecules that are in late stages of development and set to deliver pivotal data by 2016. We also have a portfolio of 6 biosimilar molecules that we expect to begin launching in 2017. 2014, in particular, will be a data-rich year for us and Sean will provide details on when we expect information to become available during the year. Just this past week and earlier this afternoon, we reported topline results from the third and fourth of our five pivotal studies…

Thanks, Bob. Turning to the fourth quarter on Page 4 of the slide deck, you can see revenues grew by 13%, driven by strength across our product portfolio both in the U.S and internationally. This also reflects incremental revenues following our acquisition of Onyx Pharmaceuticals, both from Kyprolis as well as from Nexavar and Stivarga. Operating income grew by 24%, as operating costs grew well below revenues. Within operating expenses, our cost of sales margin improved by 0.8 points to 60% driven by lower royalties. Research and development costs increased year-over-year with roughly half of the increase due to the acquisition of Onyx and its proposed clinical program. The remainder was driven by our late stage clinical trials particularly for evolocumab. SG&A expenses decreased by 3% due to the end of the Enbrel profit share in the quarter. Specifically on October 31, our profit sharing arrangement with Pfizer ended and was replaced with a royalty on Enbrel sales, which we will continue to report in the SG&A line going forward. The two-month benefit of this change reduced expenses by about $130 million versus the year-ago quarter and will contribute about $800,000 million next year. That benefit was partially offset by the addition of the Onyx SG&A expenses. Net income increased 28%. Similar to the last quarter, the tax rate was lower compared to 2012 due to the federal R&D tax credit and the change in the geographic mix of expenses and revenues. Finally, adjusted earnings per share were 30% higher helped by a lower average share count compared to 2012. In summary, for the full year on Page 5, revenues grew 8% to $18.7 billion and adjusted EPS grew 17% to $7.60 per share. We exited 2013 with good momentum as we moved into 2014. Turning next to cash flow…

Thanks, Michael. Good afternoon, everyone. You'll find the summary of our global sales performance in Slide #8. We delivered a strong portfolio performance and product sales including Kyprolis growing at about 11%. In the U.S., our business grew 11% year-over-year in the fourth quarter. U.S. wholesale inventory levels ended at the high end of our normal range. Outside the U.S., our business grew 9% in the fourth quarter or 10% excluding the impact of foreign exchange. I'd like to review our fourth quarter product performance beginning with Neulasta and NEUPOGEN. Year-over-year, global sales of Neulasta increased by 10% in the fourth quarter. This was mainly driven by price with unit demand remaining stable. NEUPOGEN sales were flat year-over-year while quarter-over-quarter sales declined 34% due to the $155 million order from the U.S. government in the third quarter. We've seen minimal impact from recently launched competition as Neulasta and NEUPOGEN shares remained stable in both the U.S. and Europe during the fourth quarter. We continue, however, to take all competition seriously. Now to Enbrel. Fourth quarter sales grew 3% year-over-year largely due to price. Our investment in direct-to-consumer advertising with Phil Mickelson continues to drive brand awareness, which is important as physicians continue to honor over 90% of Enbrel patient requests. We remain the value share leader in both rheumatology and the dermatology segments and we're confident in Enbrel's potential growth. Moving on to Aranesp, Aranesp sales were down 4% year-on-year. We continue to see price pressure in Europe and segment slowdown in the U.S. EPOGEN sales increased 10% year-over-year. This was mainly driven by an increase in unit demand due to the withdrawal of Omontys in early 2013. Hemoglobin levels have remained relatively stable throughout 2013 based on our most recent data. We'll continue to monitor and use dose utilization…

Good afternoon. We have an exciting year ahead with data flow from our pipeline that's already begun with our new press release we released just recently on top line results from our third and fourth Phase III studies of evolocumab, which were very encouraging for patients with dyslipidemia and high risk for cardiovascular events. We anticipate the results of our last pivotal Phase III efficacy study in patients with heterozygous familial hypercholesterolemia in the near future. We believe these studies will support a global filing plan in 2014 based on the reduction in LDL cholesterol. Of course, the precise timing will depend on our ongoing discussions with various regulatory agencies. In the U.S., for example, timing for evolocumab is dependent on having achieved the appropriate progress in our ongoing outcome study. Turning to our oncology programs, we were encouraged by the feedback on Kyprolis from clinicians at the ASH meeting last month and are looking forward to new Kyprolis data in the first half of this year including a review by an independent data monitoring committee of an interim analysis of the ASPIRE study in relapsed multiple myeloma patients. I would note that ASPIRE compares a regimen containing Kyprolis on top of Rev-Dex to Rev-Dex alone and maybe an instrumental study in expanding Kyprolis' label to earlier lines of therapy. We are also expecting the final analysis of the FOCUS study in relapsed refractory multiple myeloma during the first half of the year. Our two immuno-oncology programs continue to advance as well. In 2013 we reported that our Phase III T-VEC study in metastatic melanoma met its durable response rate primary endpoint with favorable interim trends in overall survival. We continue to expect the final overall survival data in the first half of this year. We believe there is also…

All right. Thank you Sean. Let’s open it up now for questions and Marvin, why don’t you remind our callers of the procedures and we’ll start with the first question.

(Operator Instructions) Our first question comes from the line of Robyn Karnauskas with Deutsche Bank.

Thanks for taking the question. So, just starting up with the pipeline AMG 416, maybe you could talk a little bit about how you see its placed in the market versus where Sensipar is now, and what kind of data would make doctors think it's superior, and then I guess another part of that question is it is IV, so it might be in the bundle, how do you think about the market opportunity given that? Thanks.

Great, thank you Rob.

So from a market perspective, let me just talk quickly, obviously Sensipar has been very successful in terms of both growing the segment and increasing penetration in that one at the moment. One of the issues we have of course is constant patient compliance and we find a large number of patients aren’t staying on their drug for the entire 12-month period. The IV form, of course, which will be co-administered during dialysis would make life much easier, and therefore we think both in terms of outcomes and in terms of maintaining patient and drug, it will be a unique opportunity to add to the bundle.

Our next question comes from the line of Mark Schoenebaum with ISI Group.

Thanks for taking my question. Hey, I was just wondering the -- Sean I think you said you’re going to file on 145 in 2014. I was just confirming if that’s the this first time you’ve said that or maybe I just haven't done my homework in. Second of all, there has been – we’ve heard from other folks that the FDA has asked PCSK9 sponsors to have roughly 25% of their events accrued in the outcomes trials at the time of filing. Can you give us any color if you received that kind of feedback or if you would encourage me not to believe those people that are saying those things? Thank you very much.

Okay. Well, first of all, yes, I think this is the first time that we’ve been clear that we would be receiving all the pivotal data sets in a timeframe where we would be pursuing global filing plans in 2014 and that is our intent. As I mentioned, with each jurisdiction, we will have discussions with regulators about the precise timing and requirements for filing. It's clear that the FDA are interested in understanding that these outcome studies are progressing and that there is an ability to have some sense of when the final results would become available from an outcomes study. But really these are ongoing discussions. We have initial consultations with regulators when we are just in a concept phase and later when we actually have data we have much more in-depth interactions and discussions. So, I don’t generally discuss the details of these fluid interactions that go on over the course of time with regulators. But it is clear that the agency is wanting to have an understanding of the trajectory of the outcomes trials before they would proceed with approving this class of product based on just LDL alone, they could make that choice.

All right.

Our next question comes from the line of Eric Schmidt with Cowen and Company.

Thank you for taking my question, it's on the revenue guidance for 2014. It looks like you’re not only forecasting a deceleration in growth, but also a slower rate for sales when you’re exiting Q4, and I assume some of the inventory effects that Tony mentioned might have to do with that, but if you could just broadly outline how you’re thinking about the current portfolio and its growth prospects in 2014, which if any franchises might be declining?

Sure, Tony why don’t you address Eric’s specific comments and then I'll add a thought.

Okay, so on the (indiscernible) happen in the U.S., when I say ending at the slight up end of the range, is about a day, so it's about $50 million in terms of wholesale inventory. We think there might have been another $50 million at the end user, but not a large amount of money. The product mix as we go forward in 2014 starts to change slightly, of course, as we get for the first time the full competition on the filgrastim portfolio. We have potential competition from Mircera against Epogen, and growth brands are now coming off a much higher base. So that’s why you’ve possibly seen some slow down, but slow strong positive growth.

And Eric the other thing I’d add is, while we provided revenue in earnings per share growth, we obviously also addressed the strong operating income growth that we were expecting driven by the improved contribution from Enbrel. So you’re expecting we’re focused on driving strong operating income growth this year and with that strong cash flow growth.

Well Marvin, let’s go to the next question.

Our next question comes from the line of Terence Flynn with Goldman Sachs.

Hi, thanks for taking the question. I was just wondering with respect to the PCSK9, if you can give us any latest thoughts on your delivery device and if a bridging trial is going to be required for the new device. And then I realize you’re not going to comment directly on pricing for this class, but maybe can you walk us through any of the potential factors that are going to guide your decision on pricing? Thanks a lot.

Okay, it's Sean. I think we remain clear on our position that we don’t want to get into the details around these devices and the regulatory strategy behind them. We are confident of having every two week and monthly presentations for the product, and I’d prefer not to get into more details of that. Tony, you may want to comment on the second half of the question?

So, I mean just in terms of price, I mean everything is really around the fact that there continues to be a huge unmet medical need with patients with cardiovascular risk even when they’re on statins. We expect or we see more than 30% of patients don’t reach goal and therefore remain at high risk of either heart attack or death in fact. So we will price this drug clearly around that unmet need in the marketplace understanding that this is a biologic case.

Our next question comes from the line of Yaron Werber with Citi.

Yes, how are you doing? Thanks for taking my question too. This is also a little bit of a financial question, but I mean if you looked historically, I guess it is just a follow-on to Eric’s question, I am just trying to get a sense here sort of how conservative is your guidance or rather sort of how much competitive headwinds are you sort of expecting on the revenue line and what do you sort of -- help us understand maybe if you can a little bit of the OpEx too, because I think the guidance is below consensus and it is still surprising?

Yaron, as I said we expect to drive strong operating income growth this year and that includes our expectations. We've talked now for some time that we'll drive operating income contribution by an incremental $800 million for Enbrel and we ended the quarter with momentum, as you saw in our results. Tony outlined a couple of the areas where there is some uncertainty heading into the year. But fundamentally across the products and geographies, we feel very good about the performance that we ended the year with and therefore the momentum that we're carrying over in the first quarter. So we expect strong results as I said during the course of 2014 as we continue to invest in the long-term drivers of growth here, which are the pipeline and international expansion and biosimilars and the things that I talked about in my remarks. But I think we touched on the elements of Eric’s comments. Tony, you want to add anything to the comment?

No. I mean we continue to drive the growth brand. We're building market share. It's a bit early in the year to be saying we know exactly where we will land and we are competing at every stage. And we look forward to actually building this business and growing it.

Yaron, I think the tax rate and shares in terms of the bottom line, I think the tax rate and shares were probably above where we were as well if you look at those consensus numbers. So, tax rate clearly in '13 was low for reasons that won't be repeated in 2014 and I think we were pretty clear during the course of the year with each of our quarters as to what was going on there. And on the share count, again I think Michael tried to provide some clear guidance for you on that front as well as we head into 2014.

Yaron, I would just note that our guidance that we had given is actually bracketed by the consensus expectations because the consensus is $19.5 billion for revenues and for earnings per share is $8.16.

Our next question comes from the line of Michael Yee with RBC Capital Markets.

Hi. A question actually on AMG 334, I think that's the first time you sort of mentioned that at least speaking about it on the call. I'm sure you're aware that Lilly made an announcement I think just a couple of weeks ago on theirs. Maybe you could speak to whether or not we'd actually get data on that drug this year and how that would be different than Lilly's drug?

So, it's hard to be sure when we'll see the data but it is possible that data from the first study which is an episodic migraine might be available by the end of the calendar year. The difference in the drugs is fundamental. The other agents are agents that are monoclonal antibodies that are directed at epitopes on CGRP itself. Our strategy is to block the receptor which is then independent of CGRP concentration and timing of release. And in the synapse that can be very important. So our first principles thinking about this biology as well as the preclinical data that we've generated have suggested that it's a much more effective approach potentially to have a receptor antagonist than a ligand sequestering antibody so that there is the differentiated feature there.

Next question comes from the line of Ian Somaiya with Nomura.

A quick question, just was hoping to get your thoughts on the competitive landscape. We are expecting to get Phase III data from at least one competitor Bristol and AbbVie, their drug elotuzumab. So just wanted to get your thoughts on how we should think about your data set and also the emerging data set for that molecule? And then just into the future a little bit, HDAC 6 inhibitors and how – if there are any plans to run combination studies with Kyprolis?

This is Tony. Let me start some of that discussion and perhaps Sean can add. When we look at the multiple myeloma market, it's clear that in spite of the tremendous advances over the last decade or so, there continues to be a huge unmet medical need. Average life expectancy has moved now to only 60 years and we truly believe the physicians will be looking more and more for drugs that deliver efficacy or combinations of drugs that deliver efficacy and extend life. As a company, we continue to believe that the protozoan inhibitors will continue to be a backbone of multiple myeloma therapy. And based on our own scientific evaluation, our clinical evaluation and talking to experienced KOLs around the world, we continue to believe that Kyprolis has the potential to be the best-in-class in this particular category. So as we look forward to advancing our Phase III data, expanding our label and giving physicians an opportunity to use this drug in earlier lines of patients as we go forward. Sean?

I've little to add. I agree and I think the issue of the combinations with things like the antibody therapy for HDAC inhibitors will play out over time, but it's hard to imagine a situation in which the proteasome inhibition backbone is displaced in any near term.

Marvin, let's take the next question.

Our next question comes from the line of Geoffrey Porges with Bernstein. Geoffrey Porges - Sanford C. Bernstein & Co.: Thank you very much for taking the question. Sean, you've now seen four of the five pivotal trials or at least the near-term pivotal trials to 145 and you've disclosed more or less that the LDL reduction is consistent with Phase II. Could you give us a sense of what you're seeing qualitatively and quantitatively in terms of CV events? I realize there's not probably statistical significance to the studies individually or even in aggregate, but is the trend in the right direction? Thank you.

Yes. It's an interesting question. As you know, many of these studies are 12-week efficacy studies. And we do have longer safety experiences over time. But it would require many more patient with exposure than we have currently to expect to have the numbers of events that would allow even if we were, for example, cutting risk in half. You still couldn't expect to have any measure of real power for that. So, we don't have a formal analysis looking at that yet. When all the data are put together in total for filing, we will analyze them at that level. But I don't expect to see a lot of benefit when we're talking about such small numbers of events. This is of course why the very large long-term outcome trials were required as you know.

And fundamentally, Geoff, as you can glean from our remarks on the call, we're excited about the data we've seen. We're excited about the role that this medicine could play for patients that are at a risk of cardiovascular disease. So, we continue to deliver on this program and that's what we intend to do.

Our next question comes from the line of Chris Raymond with Robert Baird. Christopher Raymond - Robert W. Baird & Co.: Thank you. Just another question on 145 if you'll bear with me. I'm kind of curious; one of the earlier questions in the queue I think Sean's answered to it, I think I heard you say Sean that with respect to the need for the outcomes data in the percent of events et cetera. I understand not wanting to give a lot of answers here but I think I heard you say Sean that essentially FDA is looking for something relative with info on the trajectory of events. Can you expand on that? What do they mean by that? Is that something new? Thanks.

So that's the term I'm using to try to just convey the fact that I think what occurs in many cases and we all know this from the data that's been published on this issue is that it can be very difficult to anticipate with accuracy when a sponsor is going to actually complete a post marketing commitment such as an outcomes trial. And I think the agency is keen to understand the time that would elapse between an initial approval based on a surrogate, even a robust surrogate like LDL and when the outcomes data will become available. So that's why I was using this term trajectory meaning can you predict with some reasonable idea when you're going to actually see the data. Is it going to take three years, five years, 10 years? That's meaningful from a regulatory perspective.

Our next question comes from the line of Tony Butler with Barclays Capital.

Thanks very much. And sticking to 145 just briefly, Sean would that – with again the comment around the FDA, would that necessitate looking not only at Fourier but also one of the other long-term outcome trials as well? In other words, do both of them collectively, do they get pooled and would that then therefore need to be disclosed. And I’m sorry just one very small housekeeping and it's really related to Tony. In Q3 you commented about some of the geographies like Brazil and Turkey being negative, claiming that there would be tenders in Q4; was that the case for Q4? Thanks very much.

Yeah, we’ll start there with your geographic question Tony.

If you look at Q4 Tony, there was actually about 135% increase between quarter three and quarter four as the tenders vote back in and these come mainly out of the Middle East and Russia. So yes, a dramatic growth from that last quarter for the year.

Sean.

Yeah, I’m not sure I completely understood the first part of the question; I think that from an outcomes data perspective reduction of the cardiovascular events like heart attacks, strokes, sudden death, cardiovascular death, the only meaningful study that we will have to address that question is the FOURIER outcomes trial. It's properly designed and powered to read that sort of thing out. Certainly there are combined analysis that are done across all of the studies that are performed in any of these development programs to look for generally adverse effects and including if you saw events traveling in the wrong direction that would obviously be a concern. So those analysis are always done more from the perspective of assuring safety and trying to look for an efficacy signal.

Our next question comes from the line of Geoff Meacham with JPMorgan.

Good afternoon guys. Thanks for taking the question. I’ve got a couple of P&L questions. You guys have made progress on the pipeline with a lot of readouts this year. I just want to get your perspective on what this means to free commercial spend on the SG&A line in R&D as well. And then the other revenue line has grown incrementally higher in the past couple of quarters. I just want to get a sense for the constituents and the sustainability of that looking forward. Thanks.

Yeah, Geoff we presented the guidance for 2014 at the top line and EPS we weren’t planning to get into detail of expense line item by line item. But based on my comments that operating income growth you can expect that -- we expect to see operating income leverage this year again driven by the $800 million contribution from Enbrel. And with respect to other income Michael, do you want to add any insights for Geoff?

I’d just say on a historical run rate basis where the revenue have been $300 million or $400 million a year and with the addition of Onyx it will just about double, not quite but just about double.

Okay.

Our next question comes from the line of Ravi Mehrotra with Credit Suisse.

Hey, thanks for taking my question. Bob you talked about the notable international expansion you had over the last couple of years. Can you take us through further expansion times from a geographical perspective, your preference of organic versus M&A to do that and linked that whole commercial organization platform for biosimilars would you commercially those globally through the Amgen commercial branded platform or reset the entity? Thank you.

Sure. Okay, thanks Ravi. You’re right at pointing out that international expansion has been an important objective for us. We see that as a source of long-term growth for Amgen, and we’re talking particularly about our desire stand in Japan and China and select the emerging markets and so far we have been successful we feel in doing that through a combination of partnerships and acquisitions. Obviously in Japan, China and Russia where we use partnerships to help advance our interest and we’ve used acquisitions in Brazil, Turkey and now with the reacquisition of NEUPOGEN and Neulasta rights in a number of other key emerging markets as well. So I think we feel we have a strong platform now from which to profitably expand in these international markets, so we have a presence from which we can organically launch our molecules in nearly all of the international markets that are of interest and we think important for the kind of medicines we’re advancing. We’ll look to supplement our position with ongoing acquisitions Ravi, but I think there aren’t many and so we’re right now executing against our organic plans. And with respect to biosimilars, again our first launch is for biosimilars to get in 2017 so there’s still quite some time before we got to commit to specific answers to your question. But we think that our biosimilar portfolio will be an attractive source of growth for Amgen particularly internationally, so where we look at international markets is likely that it will be through the Amgen organization and in the more developed markets we still have time before we disclose exactly how we want to that.

Our next question comes from the line of Matt Roden with UBS.

Thanks for taking my question. A lot of the big picture questions have been taken. So, I'm going to hit you with a nerdy one for Sean maybe. It's on Kyprolis, the ASPIRE trial. Can you remind us when the last interim Data Monitoring Committee analysis was done on safety for ASPIRE? And at what threshold difference in cardiovascular events would cause the stoppage on safety? So just trying to get a sense for how to interpret what you've said earlier about the DMC timings. Then, just related if there are any updates on the ENDEAVOR and CLARION trials ongoing?

Yeah, so I don’t have on the top of my head the last ASPIRE DSMB review. These typically will occur in this kind of trials on kind of a quarterly basis often. But I don’t know off the top of my head when the most recent one was. And there are no specific stopping rules in these regarding cardiovascular events, there are overall assessment that the risk benefit of the product continues to look appropriate to a very seasoned DSMB will understand the reason and then so on. There really aren't any updates to give on ENDEAVOR and CLARION. They're enrolled in enrollment phases and there is not too much to say about those right now.

Okay. All right, let’s go to the next question.

Our next question comes from the line of Eun Yang with Jefferies. Eun Yang - Jefferies & Co.: Thank you. Question on AMG 145. So, (indiscernible) trials were conducted in various patient populations, and according to clinicaltrials.gov, outcomes data is not coming out until 2018. So, without outcomes data, our ability to -- or patient population approval indications, and if not, what would there be the reason of indication that you could go after with that prior to outcomes data?

So the first thing I’d point out is that the kind of data that gets put on .gov is a very crude sort of an estimate of when one would expect in an event driven trial to complete and it's often done by kind of just a straight line kind of modeling which is rarely actually accurate in terms of what happens the best you can do when you start out from the very beginning estimating that. So I wouldn't pin too much on that exact date when it's that far out in the future; it may take longer, it may take less, considerably less time. The issue of the approvability of the various subgroups, we do study populations in our clinical trials sometimes for purposes of being able for example, to understand in a very clean background way, on a really clean background safety, for example. And not all of the populations that we study, and we studied at a very broad range of population may end up with as specific language in indications for a product like this. In fact, if you look at the statin class, you won't find that. You won't find that. I think the way I always think about this is that this product is going to be appropriate for individuals who have high cardiovascular risk despite having avail themselves of all available existing therapies, particularly statins, and still have a substantial modifiable risk factor in the form of LDL that's not -- let's say below 70, where we generally feel -- you feel that you had it under pretty good control. I think that's the population that we are seeking to serve, but it is -- you won't usually find very specific indication statements for each individual population in the labels of these sort of products.

The next question comes from the line of Howard Liang with Leerink Partners.

The AMG 785 or Romosozumab, I think the Phase 3 that was published in the Internal Medicine has a re-treatment component. Why don’t we see data from a re-treatment – when would it be re-treatment data? I think you are testing a couple of different formulations. Can you give us some color on that?

So, we often do in Phase II a wide range of things with the therapeutics where we can begin to get some understanding of issues like withdrawal, re-treatments and so on. And so we do have some features like that in the long-term expansions with these Phase II studies. They don't necessarily predict claims that we would be seeking by doing Phase III types. As you can imagine in this field with fracture endpoints being required, it is very difficult to do or make studies that require fracture end points beyond just what we're already doing with two large fracture studies that was performed with the product. The product has got no particularly unusual formulation issues associated with it. It's an injectable monoclonal antibody and we're doing the usual things with that with respectable formulation and device formats.

Our next question comes from the line of Joel Sendek with Stifel. Joel Sendek - Stifel Nicolaus & Company, Inc.: Thanks a lot. I have a follow-on question to the biosimilar topic regarding the 2017 launch. I'm wondering if you could share with us some of your assumptions behind that timeframe to get there. For example, which of the three biosimilars are you contemplating or all three of them? And is there the potential to accelerate that timeframe? And is it continued at all upon the FDA guidance to industry? Thank you.

Sure. Joel, maybe we'll take a couple different cuts at this. Just again to remind you, we have six programs underway; three of which are in pivotal trials. Our plan is to try to be first to our – certainly among the first few for these as their – as patents expire around the globe. We seek to be ready to launch a biosimilar product. So that's due in 2017 and I don't think we're going to get into specific details at this stage about what – which products we're launching in which jurisdictions when, but generally our strategy is to seek to be first and among the first few for these molecules. And so far the progress in advancing them through pivotal trials is proceeding in line with our expectation and the remaining three we expect to move forward during the course of the year as well. Sean, do you want to talk about guidelines from FDA on advancement…?

So, I think that it's fair to point out that this is unchartered territory and new area and there maybe issues that we don't anticipate. However, at this point we wouldn't engage in enrolling pivotal trials for registration of these products that we didn't have a pretty good sense that there's a roadmap. And so obviously there's the usual dynamics which always takes longer than we all can imagine to do these things like enroll trials and get the data and file and get it reviewed and get the product to market. But in some ways, a lot of that is based on fairly standard approaches to looking at those kinds of guidelines.

Marvin, let's go ahead and take one last question if there is one.

Our last question comes from the line of Gene Mack with Brean Capital. Gene Mack - Brean Murray, Carret & Co.: Thanks for taking my question. I appreciate getting me in there. I wonder if there's any update you can give for us on oprozomib where the compound stands at this point and what next steps might be in 2014 in terms of development? Thanks.

So oprozomib is as you know the oral proteasome inhibitor which is in development at Onyx and it is sort of in a Phase 2a kind of stage of development or it's still in relatively small numbers of patients. And we are understanding the various things you do at that stage in terms of how well tolerated as a monotherapy formulations that we play around with combinations with some of the things that we know that it would have to be combined with. So a lot of work that is aside from the fact that it's an oral versus an intravenous agent and it's relatively straightforward from the perspective of comparing it to the work that was done by Onyx with Kyprolis.

Great. Thanks, Sean. I would also like to thank you all for your participation in our call this afternoon. If you have any additional questions, of course we can continue the dialogue separately. Thanks again.

Ladies and gentlemen, thank you for joining us for today's Amgen fourth quarter and full year 2013 financial results conference call. We thank you for your participation. You may all disconnect.