My name is Ian and I will be your conference facilitator today for Amgen's Third Quarter 2018 Financial Results Conference Call. [Operator Instructions] I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Excellent. Thanks Ian. Good afternoon, everybody. Thanks for joining us today. We have a lot of ground to cover, so I'll keep my comments brief. Continued execution, launch progress, and pipeline advancement are some key themes that come to mind as I think about our third quarter results. To elaborate on these themes and more, I'm joined today by Bob Bradway, our Chairman and CEO. After Bob's strategic review, our CFO David Meline will review our financial results for the third quarter and provide updated guidance for 2018. Also joining us today is Tony Hooper, and then you'll get to hear from Murdo Gordon, our newly appointed Head of Global Commercial Operations. Following Murdo's review of product performance, our Head of R&D, David Reese will provide a pipeline update. We will use slides to guide our discussion today and a link to those slides was sent separately. My customary reminder that we will use non-GAAP financial measures in today's presentation and some of the statements will be forward-looking statements. Our 10-K and subsequent filings identify factors that could cause our actual results to differ materially. So, with that, I would like to turn the call over to Bob.

Okay Arvind, thank you. On today's call I'll provide an overview of our performance in Q3, speak to the progress we're making in delivering our strategy for long-term growth, and share some thoughts on the current healthcare environment. Let me start by acknowledging that while we're in the midst of a period of high volatility driven by a variety of macro and political factors, our fundamental objectives of innovating for the benefit of patients and delivering for shareholders remain intact and unchanged. Looking to the future, there are bound to be headwinds but we're confident in our ability to navigate them from a position of strength. You see evidence of that strength reflected once again this quarter in our healthy balance sheet, strong cash flows, and efficient cost structure. We've said for some time that we expected growing pressures on drug prices in our industry. We can all see that plainly today. With price under pressure, having innovative products which can deliver volume growth by meeting the needs of large numbers of patients is ever more important. We have several such products and you can see the benefit of this in the third quarter where our new and recently launched products had double-digit unit volume growth. We believe differentiated products like Prolia, Repatha and Aimovig offer attractive long-term growth prospects. Prolia continues to build strength globally and there continues to be large untapped potential in the area of osteoporosis. With Repatha, we're taking steps to open up access and improve patient affordability to this important therapy. Our announcements this past week are significant and reflect our commitment to lower out-of-pocket costs for patients especially in Medicare in order to help ensure that patients who need Repatha get Repatha. Our new product story continues to unfold with Aimovig and migraine prevention.…

Okay, thanks Bob. Overall we are encouraged by our strong results and earnings in the third quarter. I'm pleased that our transformation efforts continue to enable both investment in our business and delivery of double-digit earnings per share growth as we navigate our portfolio transition. Turning to the financial results on Page 6 of the slide deck. Worldwide revenue at $5.9 billion in the third quarter grew 2% year-over-year. Worldwide product sales at $5.5 billion in the third quarter grew 1% year-over-year, as strong unit volume growth in our new and recently launched products outpaced declines in our mature brands. We continue to experience good volume growth in Europe at 13% in the quarter reflecting the value of our innovative products in a market where we've experienced biosimilar competition and portfolio transition for several years. Other revenues at $394 million increased $74 million year-over-year primarily due to a milestone payment received related to our Aimovig partnership with Novartis. As communicated earlier this year, we continue to expect full-year other revenues to grow 15% year-over-year. Non-GAAP operating income at 3 billion declined 2% from prior year non-GAAP operating margin was 53.9% for the third quarter as we continue incremental investments in our products and pipeline to drive growth and maximize shareholder value. On a non-GAAP basis cost of sales as a percent of product sales increased by 0.3 points to 13.8% driven by higher manufacturing costs partially offset by lower royalty cost and the impact of Hurricane Maria related charges in Q3 of 2017. Research and development expenses at $906 million or 16% of product sales increased 6% versus last year. SG&A expenses increased 11% on a year-over-year basis primarily driven by investments in product launches and marketed products support. In aggregate third quarter non-GAAP operating expenses increased 7% year-over-year. Other…

Thanks David. I’m excited to join such a special company and my early experience here has been extremely positive. I have been impressed by the highly talented people at Amgen along with a culture that is patient focused. Amgen has tremendous opportunity with highly innovative and unique products a tradition of strong science, a rich pipeline and now commercially available biosimilars that will benefit large numbers of patients. Now on to the Q3 performance and you'll find information on our product sales starting on slide 10. I'm pleased to report that despite increasing competition, we continue to deliver volume driven sales growth in 2018 similar to the prior quarters our international operations delivered 11% sales growth excluding the effect of foreign exchange which was driven by 15% volume growth. If I turn to brand performance beginning with Prolia, we delivered another outstanding quarter with sales increasing 15% year-over-year with 16% volume growth from share gains in both the U.S. and internationally. Repeat injection rates in the U.S. remain especially strong at over 70% if you recall we do see some seasonality with Prolia demand which held true in the third quarter this year. Osteoporotic fractures represent a large burden for patients and can be very expensive to treat and results in more hospitalizations than heart attack, strokes and breast cancer. By 2025 fragility fractures are expected to cost $25 billion in the U.S. Prolia is a novel biologics developed to address this large unmet need and it's priced very competitively. Moving to our oncology product starting with KYPROLIS which grew 12% year on year driven primarily by growth in our ex U.S. business. As you recall from the previous quarter there was a benefit to sales due to a clinical trial purchase in Q2 which did not repeat in Q3.…

Thanks Murdo. As Bob mentioned, we are entering an extremely exciting phase in R&D including seven new early stage clinical programs. Six of these are within our oncology therapeutic area and I will begin my remarks there. Starting with our bispecific T-cell engager platform. AMG 427 is a half-life extended BiTE the targets FLT3, a receptor that is expressed in almost all AML cells. Activating FLT3 mutations and over expression of wild type FLT3 are both associated with poor prognosis in AML patients. In contrast to small molecule inhibitors of mutant FLT3, AMG 427 targets both mutant and wild type forms of the receptor. Also in AML, we began enrolling a Phase 1 study earlier this year with AMG 673, our extended half life CD33 BiTE, and we look forward to the opportunity to present the first in human data from our first generation CD33 by AMG 330 later this year. Having BiTEs directed against different targets on AML cells is core to our strategy of using combination or sequential therapy to eradicate the disease which occurs in about 20,000 patients in the U.S. each year. Likewise in multiple myeloma, our goal is to transform the disease through the generation of deep durable responses and ultimately achieve a functional cure by using highly effective combinations of drugs. One foundational element is cut Kyprolis, which is a potent proteasome inhibitor as demonstrated by the superior efficacy of Kyprolis containing regimens against standards of care including overall survival, the gold standard in oncology. As Murdo mentioned, the approval of the weekly Kyprolis regimen provides a more convenient dosing regimen of this highly potent therapy which we hope will help serve more patients. In addition to Kyprolis, we have a portfolio of high potential myeloma therapeutics including two that just entered the clinic.…

Okay. Thank you, David. As Arvind noted earlier, Tony Hooper is on the call with us and now he will be at Amgen beyond year-end. This will be his last quarterly earnings call with us. This is a ritual, who has been part of his life for the past 13 years, so Tony before we start Q&A, is there anything you want to say to the listeners?

Well, Bob, thank you very much indeed. Good afternoon, folks. For those of you who have now listened to Murdo twice in the last week or so, I'm sure you understand why we're so excited about him joining the executive team with Amgen. He does bring with him decades of successful commercial experience in many of the therapeutic areas that Amgen participates in. He also bring a set of fresh set of eyes to our efforts, our mission and will help lead Amgen on to the next stage of its journey. As Bob mentioned in our second quarter call, one of the hallmarks of a well run company is the carefully considered succession planning process. Murdo and I are executing an orderly and planned transition, unrelentingly involved to ensure that nothing falls for the tracks, so that Murdo can rapidly focus on growing revenue and defending the legacy brands. I'd like to also take this opportunity to thank all the Amgen staff that I had the pleasure to work with over my seven years at Amgen. We got a group that sets tough goals and then delivers them. They have a passion for serving patients that is beyond words. They are also one of the most competitive groups I've ever had the pleasure to work with. I'd also like to thank those analysts and investors on the call today for interactions over the years. Your challenges and your guidances have always been appreciated. Thank you very much.

Okay, thank you. With that, why don't we turn it over to the Q&A. And Ian, if you just remind our callers of the process that we use for that purpose. Thanks.

[Operator Instructions] Our first question is from the line of Matthew Harrison from Morgan Stanley.

Thanks very much for taking the question. I appreciate it. I wanted to ask a question about biosimilars, if I could. So could you maybe just comment a little bit on how you view the outlook for biosimilars in Europe? Obviously, we've seen some recent TNF launches. But the Humira launches, it's fairly competitive. And I'm just wondering if you could comment a little bit more in detail about how you view the outlook and how you view the competitive dynamics in that market? Thanks.

Early days still. But we like, what we see so far. As you know, we've launched our two products KANJINTI and AMGEVITA, as we said we're in early days, but so far so good. So we have portfolio of eight other molecules advancing through the clinic, and we look forward to launching those internationally as well. Murdo, any incremental thoughts from you, well?

Yes, we've got more experience, obviously with KANJINTI, having being in the market for a longer period in time, we've done quite well through a series of tender processes with particular strength in Germany. I think it's a little too early to tell with AMGEVITA, but we have obviously seen competitive activity and it will be a competitive process, but the team on the ground is very strong. The other thing to think about with the biosimilars portfolio for Amgen is, particularly as it relates to some of the oncology biosimilars in our portfolio is, we will be embedding them alongside our innovative portfolio and we'll be able to explain the benefits of the Amgen quality and dependable supply to providers and reimbursement authorities around the world.

And our next question is from the line of Geoffrey Meacham from Barclays.

A question for Murdo and perhaps Bob. I know it's early days in the seat. But I wanted to get Murdo, your preliminary thoughts on strategies to grow Amgen OUS business, how much of a broader priority is this? I'm just asking because it's a much smaller component of the revenue base versus peers, but you do have asset now that can be foundational to growing OUS more broadly. Thank you.

We will take the answer in two parts Geoff, I'll kick off. As you know, we've been able to demonstrate double-digit volume growth now quarter-after-quarter in international markets and I think that reflects the recognition of the value of our of our new products, and we do expect international growth to be an important part of our long-term strategy for delivering that to our shareholders. And again, I think it's still early days for us in particular in Asia and some of the other emerging markets, but so far, we're encouraged by the results. Murdo?

Yes, I would echo the same remarks, Bob, and I would just add a few good events that have happened for us with approval of Repatha in China. We have a great partnership in Japan with our partners Astellas, and we look forward to expanding beyond that in 2020. We have great businesses across Europe, Canada, Australia and emerging businesses in the rest of the world and it is as it was Tony's focus, it will be my focus to continue to grow our business ex-U.S. and make the innovations from Amgen's R&D pipeline available in those markets. So we've gone from 42 countries to 102. That's a good sized footprint for a company our size and affords us an opportunity to expand outside of the U.S.

And our next question is from the line of Ying Huang from Bank of America Merrill Lynch.

So maybe Bob you can give us a little more color, given the recent proposal from Trump administration on the reform on Medicare Part B. What can Amgen do to mitigate potentially the negative impact? And then secondly I have a question on Aimovig. Given the apparent lack of differentiation clinical data so far, how do you position Aimovig against the other two competing therapies to market for 2019 contract negotiation? Thank you.

Okay. Again, we'll take this in two parts. One on I'll start with the, your question about the political environment and then kick it to Murdo to respond to your question about Aimovig. With respect to the proposal, I could think I'd start with your question, which is that at this point, it is just a proposal. We expect it will be quite a bit of interest in trying to help shape the eventual outcome of that, but our objective and our commitment is to continue to work with the administration and congress to try to improve the competitiveness and access for innovative drugs in our system, and that includes in Part B. We think there are some things that can be done to eliminate unnecessary cost and friction in the system and make sure the patients who need innovative therapies can get them, and we will continue to advance those ideas in our discussions in Washington. But again, it just would underscores a proposal at this point and there will be plenty of time to see the proposal take shape. Murdo you want to address the question, starting with the comment that there is no differentiation between the products?

Well, yes. As I said in my prepared remarks, the launch of Aimovig has been a fantastic success. We have seen very good provider payer and patient response to our launch. And as I also mentioned in my prepared remarks, Aimovig is indeed the only receptor antagonist for - to CGRP. We're also hearing really good feedback on the fact that there is no loading dose and that payer approvals have been quite good so far. So about 70% payer approval rate for a new product in a symptomatic category and that's a really, really strong signal to us that payers do indeed want to approve them, want to pay for these agents. You've seen that we've been able to secure coverage at least with one large PBM with ESI and we're working through the rest, but I continue to believe that being a first mover in this category and having over 100,000 patients initiated so far, having a really strong program to bridge patients from initiation to secured reimbursement through their insurer. And having 12,000 physicians having tried the product to-date puts us in a really strong position to work with payers to make sure that reimbursement for this product is both differentiated and open.

And our next question is from line of Terence Flynn from Goldman Sachs.

I recognize you don't want to give 2019 guidance until January, but just wondering, Dave, if you can walk us through maybe the puts and takes for both the top line and margins that we should think about as we look at our models here. And then just a high level expectations for pricing dynamics in 2019, should we expect something similar to what we saw this year? Thank you.

So as I said, we'll offer formal guidance in January, but in terms of the contributors to performance next year, I guess I would start by pointing out that the company, we've got running in a very efficient manner right now given the work that we've done to improve our competitiveness over the last several years. And we are continuing to challenge ourselves and we've put in place a continuous improvement program where we're going to get incremental productivity, which will help us to fund what is a very exciting pipeline of opportunities that are developing. The second thing I'd mention is that we do continue to increase our investment in support of the new products. Most recently Aimovig, most recently also continuing to build out, as was the question around international, which is an investment that we are committed to an ongoing basis. And then finally, if I look at the revenue side of the business, we're encouraged by the ongoing double-digit growth that we're seeing in our new product portfolio. And of course, we have a fair amount of uncertainty now about on the legacy side, what is going to be the path of competition and the timing, in particular as it relates to Neulasta and eventually Sensipar. So that's an open question that we'll see by January we'll have incremental information on those and we'll be able to share with you our guidance at the time. But overall, we think the business we've established a nice run rate in terms of profitability and margins and we'll continue to seek to optimize that while making sure we're not missing any opportunities to invest.

I think on pricing Terence, it's premature for us to be offering any comments about 2019 pricing. So I think we're all aware of what the environment is for pricing now globally and we'll just leave it at that for now.

And our next question is from line of Chris Raymond from Piper Jaffray.

Maybe another biosimilar question if I might. Just on the biosimilar eculizumab program, I think you guys still highlight this program pretty prominently on your biosimilar website. But I don't think you really talk much about this effort in a while. And then I think that's despite having had the go ahead for just over a year now, I think from the EU regulators to start that trial. So I guess the question is when will we hear more about this program and maybe when we do, can you maybe tell us in what way? Thanks.

Why don't we ask Dave to respond your question, Chris?

Yes. Then also as I mentioned, we finished Phase 1 Pharmacokinetic and Pharmacodynamic study in this program, we have achieved global alignment in terms of the design of the Phase 3 trial and we're in start-up activities for that study. This of course targets a disease where there are a limited number of patients, they tend to be focused that centers of expertise. There's competitive patient enrollment and so we feel that based on where we are, we're well positioned to execute that program.

And our next question is from line of Phil Nadeau from Cowen & Company.

I wanted to ask on Sensipar in the litigation there you mentioned couple of months ago, you have more incremental information early next year. Can you remind us of the timelines of that litigation and when in particular it could finish? Thanks.

The litigation is under way now and we don't have a timeline for when the appeals process will be run there, but obviously this will be visible part of the normal legal process. And David, you can just reiterate what you said about guidance for the balance of the year, if you'd like with respect to Sensipar.

Yes. So what we've indicated is that in the updated 2018 guidance, we have a range which includes, at the top end where we would continue with Sensipar without generic competition through year-end and obviously within the range we would include other scenarios. But, yes, so we're continuing to monitor those and if there were a launch it would be at risk at the present time, at least.

And our next question is from line of Robyn Karnauskas from Citi.

I guess another question around since you've already touched here just specifically around Medicare advantage, given the step edits that are - are initially are out in August and then may go in full effect January 1. Can you help us understand what percentage of Neulasta revenue would be if there was unlimited capacity for a biosimilar for new asset taking a step at it. And can you help us understand in the field right now, what you're seeing regarding these plans forcing people to use the cheaper drug over a grand drug in the situation of Neulasta and others? Thanks.

Robyn, we're having a little bit difficulty hearing you at times during your question. So I don't know that we want to give specific percentages in response to your question, but Murdo I'll advise you to offer any thoughts.

Yes, I think the specific question was related to step edits in Medicare Part B. And what we think the impact of that would be on Neulasta particularly in light of biosimilars, if I heard properly. But I would say that we've been pleased so far with how Medicare Part B plans are - or how Medicare Part B has been managed however, we are clearly aware that on the 340B side of Medicare, there are certain advantages to biosimilars. But on the Part D side of Medicare, the Medicare Advantage step edits have been moderate so far, and we would expect that to be the case in 2019. Beyond that, I think we'll see more propagation but it's hard to pin down specifically where we'll see it.

And our next question is from line of Michael Yee from Jefferies.

Wanted to ask an R&D question and that was obviously you highlighting a lot more about the BiTE platform, you obviously have some early AMG 420 data you've reported out. I guess, maybe if you could speak to how competitive, you expect to bispecific BCMAs or bispecifics overall are expected to be versus CAR Ts and how you expect yourself to be positioned with bispecifics overall? And maybe with a focus on BCMA just to start off with. Thanks.

Yes, thanks for the question. I would first start at a high level by saying, don't necessarily expect CAR Ts and BiTEs to be mutually exclusive. We think all of these therapies will find a home. We've been quite pleased with the data we've seen so far in our BCMA directed BiTE programs. We think that they do have some potential advantages. Number one, these are off the shelf therapies, our goal in all of these programs is to deliver an off the shelf medicine that an average oncologist can deliver whether at an academic center or in the community as opposed to a specialized center for CAR Ts. We also expect to of course to be able to deliver these at a competitive cost of goods, which are in the longer term, I think will be important. And then finally we believe that with the BiTE platform, as I mentioned in going after multiple targets, it affords us the ability to take multiple shots, add a tumor cell by either using them in combination or sequentially, and our goal here really is to produce very deep and durable responses.

And our next question is from the line of Geoffrey Porges from Leerink.

Question for you Bob. Looking at your commentary in all of the results, there are obviously a lot of pressures in different parts of the portfolio, but also some opportunities. First question is are you running the company with the expectation of growth or with the expectation of stability from the current portfolio? And then secondly, you've commented in the past, that the business development opportunities have been constrained by the price of the available assets and obviously that's changing. Could you give us a sense of - from both the Amgen perspective and your sort of industry perspective on whether assets are becoming more available and attractive and what sort of cadence you would expect things to start to move?

Geoff, our orientation is to try to position the Company to deliver long-term growth for our shareholders. So our focus is on delivering a portfolio that can generate long-term growth that starts with innovation, the ability to demonstrate the value of that innovation and then the ability to capture the benefit of it globally. So that's what we're focused on. And you're right, we've positioned the Company to be, we think in a strong position to deal with the kind of headwinds that the industry is dealing with at the moment. And in addition, we have some of our own individual patent expirations, but we think we're in good position to manage through those as well. At the same time, as you point out, valuations have been volatile and have started to come down for some of the earlier stage companies in our sector and we will continue to look for opportunities. And I suspect our well capitalized peers will as well, opportunities to advance innovation where we think we can do that through business development that adds value to our shareholders. So we're paying close attention to it as you would expect. And we will continue to do that. As with respect to the cadence so, Geoff, I wouldn't like to comment on whether we'll see an increase in activity or not, but I think it's fair to observe that prices are adjusting in the sector.

And our next question is from the line of Ronny Gal from Bernstein.

Bob, two questions for you, first as a CEO of Amgen and then as the Head of Pharma. First conceptually, if you think about the biosimilar business, your biosimilar business, what kind of - what percentage of Amgen revenue should biosimilar achieve and say 5, 8, 10 years, just pick a horizon of your choosing. Just to get a feel of how you're thinking about this. And second you talked about helping the administration shape their proposal. I guess the basic question is can pharma accept or support any proposal where the US will use international benchmark data for prices in other countries to set or determine US prices as a principal?

So, Ronny, two very different questions there. First, with respect to biosimilars, as you know, we are advancing 10 products, in aggregate, they address market of $65 billion plus of revenue opportunity. We've said that we think this can be an important growth driver for us. We have talked in the past about this being a potentially a multi-billion dollar business unit for us. We're pleased with it so far, we've been operating on time and on budget in this area. We've noted that it's proving difficult for some of our competitors, but we expected that that would be the case. So, so far we like our hand in biosimilars. And we think that this can be a growth driver for us. But to state the obvious, we have been and we will continue to be driven by our innovative portfolio of products and that's not going to change as we advance our 10 on a similar molecules. So well, they can contribute to growth, the balance of our business is still going to remain overwhelmingly and innovative led business. And with respect to your question about the pricing environment in this country, obviously we think that innovation and having access to it are critical. We think the United States has benefited from innovation, making it to the citizens in this country more rapidly than in other countries, and we think that if you look across diseases, our citizens are benefiting from the availability of new medicines more quickly and more comprehensively than in other countries. And what we're focused on is seeing both that the innovative ecosystem is maintained and that patients can have access to it. And as I've said, or as I said earlier on this call, particularly in an aging society we think what's required is more innovation, not less. And the system that enables people to get access to that innovation swiftly. So that's what we're focused on, and I think you can see that's what our trade association has been focused on as well.

And our next question is from line of Umer Raffat from Evercore ISI.

First on your BCMA, my question is not on the data, but more on, just so we understand the design heading into ASH. And specifically what's the total n in the trial versus the total n at that specific center where the investigator showed those 5 CRs. Just so we have a sense for that. And then secondly, Murdo, I don't want to ask you on 2 to 7 TMB update, but what I do want to ask you is on CGRP. My question is, the slide mentioned you expect the TRx activity to moderate and normalize. Do you think the class is close to peaking or will it continue to grow and competitors are getting more share? Just wanted to understand that better.

Okay, we'll just answer in two parts, Dave.

Yes, so let me start with the BCMA. The design of the trial is the standard first in-human dose escalation. So we would expect later in the year to present data across all of the cohorts, which of course are across quite a range of doses. I'll leave it to the investigators who run the trial to present the details of that including the sample size, sample sizes by cohort.

And Umer thanks for not asking me technical questions of a different kind on this call. But CGRP market is we think significant and we don't think we're moderating to the point of saturating that market. The point I was making was in our current trend you see the result of some pent-up demand where patients were anticipating the availability of Aimovig. So we saw quite a large bolus of patients coming in to our patient services hub and those patients are a part of our current curve. At some point, you will see that the pent-up demand will work through, and there will be a slight change in the slope of the uptake curve, but it will still be a very strong launch curve, especially when you compare it to other recent launches in other categories. And then the other comment that I made that I would draw your attention to is just that the spontaneous physician, - sorry patient awareness here unaided is between 10% and 15%. And what we've seen since the launch of our DTC campaign is that our website and other digital media traffic has doubled. And so we really think we're scratching the surface of helping migraine - chronic migraine sufferers with our preventative therapy such as Aimovig. So it was really just a comment on having a bolus of patients working through the early part of our uptake curve, that we think that we'll see continued demand growth.

And our next question is from line of Kennen MacKay from RBC Capital Markets.

I have another commercial Aimovig question for Murdo. The 100,000 patient numbers really spectacular I was hoping you could maybe help us understand how many of those are still on free drug versus how many have been transitioned to commercial reimbursement? And then sort of following up on the prior question relating to trajectory and moderation, on Slide 24 your chart on uptake there appears to suggest sort of exponential uptake with almost 150,000 prescriptions out in October 18. Is that launch trajectory chart for sort of display purposes only or could I be reading into that 150k number? Thank you.

You sound like I do when I'm talking to my team here Kenny. Thanks for the question. We're obviously very excited about this launch trajectory. It is indeed significantly better than recent launches. And there are a few things to consider about that. One, the unmet need for chronic migraine sufferers is really high. Two, this is a very interesting and helpful medicine for those chronic sufferers. And three, payers have allowed the reimbursement of Aimovig. So to your question of how much is paid and how much is free is we would anticipate that overtime a significant portion of our early launch cart will indeed be paid. I think we have really strong patient feedback both anecdotally and through our services hub. We have really strong physician or headache specialist feedback and we would expect that the launch trajectory will continue to be one that exceeds other benchmarks from other categories. As for a specific percentage of free versus paid, it's really hard to do, but I will say we're closing the gap on the ratio quite quickly. So our retail uptake that those are patients going straight to paid product not through our patient services hub is rising rapidly and is on the same, if not more steep trajectory than the total.

And our next question is from line of Cory Kasimov from JPMorgan.

Wanted to follow up on CGRP and ask about access. So we've seen the one publicly announced incremental formulary win for Aimovig already with Express Scripts. But anecdotally, could you speak to how dynamic these payer discussions in formulary positioning are now the competition has entered the market? Or maybe more specifically, do you see this has been a market that necessitates competitive rebates or discounts to drive access or should we be thinking about the space differently?

Yes, so far we're feeling quite good about what we've been able to do with payers. As you mentioned, the ESI win we also have a good indications from Anthem and Kaiser. We are working through the process across other plans and access team here is out there, negotiating. And yes, you will see some gross to net in the form of rebates. Where we end up with that? It's just very early to tell, but we want to make sure that patients have access to Aimovig. You can tell that that was our strategy from the beginning with the price points that we established in the market and we will indeed be continuing to ensure that patients have good comprehensive access both commercially and in Part B.

And our next question is from the line of Carter Gould from UBS.

I guess for David, on the myeloma landscape, myeloma assets between Kyprolis, BCMA, your CD38 and MCL1, I guess is there an underlying perspective on how you either think the myeloma landscape is going to evolve or how you think you can shape it as opposed to pursuing these as sort of disparate assets? Thank you.

Yes. Thank you for the question. It's a great question, our feeling is that we're actually very well positioned to have a potentially transformative impact on this disease. Our view is that combinations of these agents will be used going forward. And the goal I think really now is cure or functional cure for this disease, someone trained as an oncologist, that's not you or do you use lightly, but I think it's warranted here and we would view this as a collection of agents that we think we can use in the right combinations to really drive toward that kind of outcome as opposed to a series of one-offs.

And our next question is from line of Alethia Young from Cantor Fitzgerald.

And Tony, congrats on a wonderful run and congrats for everybody else is that been added to the team. I guess I have a question about the PAC-1 data coming, and just how do you envision this mechanism fitting with CGRP and generally, what your expectations kind of heading into that's read out at the end of the year? Thanks.

Thanks, it's Dave Reese, I'll handle that question. PAC-1, the PAC-1 receptor sits in a pathway that is very distinct from the CGRP pathway, the sort of neurovascular pathways that we believe are involved in the genesis of migraine are quite different here. Now, what we don't have with the PAC-1 receptor that we had during CGRP development was the sort of clinical validation because it is a first-in-class, first out of the gate agent. The design of the Phase 2 trial is really quite similar to the design that we had with Aimovig and it's designed to give us an efficacy readout, as well as of course additional safety data. Should we see efficacy, the question will then be, is there a distinct population of patients that may respond to PAC-1 receptor inhibition as compared to CGRP inhibition and that would be something that the development program would be intended to determine going forward.

Ian, as it's just a few minutes past 6:00 PM on the East Coast, let's take two more questions, please.

Certainly. Our next question is from the line of Salim Syed from Mizuho Securities.

Tony, I'm still happy to send you my Repatha scripts, if you want. And welcome to Murdo. I have one on PCSK9, either for you Murdo or for Tony. On inclisiran, so obviously another quarter has passed and then another - we've got another DSMB update. At what point or maybe how do you guys framework that in terms of threat versus to being complementary to your PCSK9, maybe for primary prevention or threat regarding pricing or volume? How do you guys framework those two things? And maybe just give us your thoughts around that. Thank you.

We might just start to answer your question Salim with Dave Reese, since you're asking questions about our clinical programs.

Yes. I mean, I would offer a few observations here. First, long-term safety is an absolutely critical outcome in this class. And with Repatha, we have an enormous amount of data. I think that is the - that is probably the critical piece. We'll have to look at the efficacy. I think the accumulated data with Repatha strongly support the lower is better hypothesis. I think there is just an overwhelming weight of evidence, now in support of that. And therefore, we feel very comfortable with what we can deliver with Repatha.

Yes, the only thing I would add Salim is as Tony mentioned, I've got decades of experience, and I've been in cardiovascular now for decades. I've seen the evolution of statins, I have seen the evolution of antiplatelet drugs, I have seen the evolution of novel oral anticoagulants. And I think what I hope to be able to do is pick up where Tony left off, and really expand the usage of PCSK9s and specific Repatha for these high-risk cardiovascular patients where we've proven an event reduction benefit. We can do that with substantial time horizon prior to when we would expect other competition like Inclisiran entering the market. And I think with recent moves, we've made to improve access specifically for Part D patients, which is, as you know that 65% of the potential patient pool, we should be able to help improve the volume growth of Repatha between now and when we might face new competition. Part of me wants to say that new competition can expand the class and improve interest in it. But I would like to make sure that we are competitive and we drive share there as well.

And our last question comes from the line of Brian Skorney from Robert W. Baird.

I just wanted to get your thoughts. I know you just completed a trial with Sandoz regarding the Enbrel infringement. Just wondering when you expect the judge to return decision in this case. And can you just kind of walk us through what the best case and worst-case scenarios are for you guys in terms of potential biosimilar impact and timeline of exclusivity?

Well, Brian, the closing arguments are expected in that trial, later this year. I think, late in November we're expecting closing arguments and then some time thereafter likely months thereafter, we'll have the judge's decision. And then I'm sure whichever way the outcome as you can expect will be challenges in the appeals process. So at this point why don't we just simply reiterate that we stand by the intellectual property of Enbrel. And we look forward to having an opportunity to validate that intellectual property through this court process. Okay. I think, let me thank you all for joining us on the call and I hope you can see from our report of the third quarter that we continue to deliver solid financial performance. We're ready for the change in competitive environment that all of us I think and this industry face, focused on developing innovative first-in-class therapies. And we're excited about the 7 that we talked about just having introduced into clinic, doing our parts and working with our colleagues in the industry to improve accessibility and affordability for our products. And finally, excited about the level of engagement that we continue to enjoy from our staff around the world. So thank you all for your participation in the call. And as usual, our IR team will be standing by if you have any further questions.

Ladies and gentlemen, this does conclude the Amgen's third quarter 2018 earnings call. We thank you greatly for joining us. You may now disconnect.