Good day and welcome to the Bristol Myers Squibb Second Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Tim Power, Vice President, Head of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Thanks for joining us this morning for our second quarter 2024 earnings call. Joining me this morning with prepared remarks are Chris Boerner, our Board Chair and Chief Executive Officer; and David Elkins, our Chief Financial Officer. Also participating in today's call are Adam Lenkowsky, our Chief Commercialization Officer and Samit Hirawat, our Chief Medical Officer and Head of Global Drug Development. As you'll note, we've posted slides to bms.com that you can use to follow along with Chris and David's remarks. Before we get started, I'll read our forward-looking statement. During this call, we make statements about the company's future plans and prospects to constitute forward-looking statements. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in the company's SEC filings. These forward-looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any future date. We specifically disclaim any obligation to update forward-looking statements even if our estimates change. We'll also focus our comments on our non-GAAP financial measures, which are adjusted to exclude certain specified items. Reconciliations of certain non-GAAP financial measures to the most comparable GAAP measures are available at bms.com. And with that, I'll hand it over to Chris.

Thanks, Tim, and thanks everyone for joining us this morning. Starting on Slide 4, our second quarter results reflect continued progress against our strategy to position BMS for long-term sustainable growth. In Q2, we continued to strengthen commercial performance with uptake accelerating across a number of our marketed products. Growth portfolio revenues increased 18% year-over-year or 21% excluding the impact of foreign exchange. This portfolio is on track to be a larger component of our overall mix moving forward. We also advanced our pipeline, demonstrating the strength of our portfolio and the development of our first or best-in-class assets. This includes US regulatory approvals for Breyanzi, Krazati and Augtyro. We also achieved a number of milestones this quarter for our I-O franchise, including European approval in first-line bladder cancer, presented data at ASCO in first-line liver cancer and are progressing to a more convenient subcutaneous formulation of nivolumab where we now have a PDUFA date from the US FDA of December 29th. The EMA is also reviewing our subcu application. Before we get into more details around quarterly performance, on Slide 5, I'd like to step-back and take stock of where we are as a company and where we are headed. As discussed previously, we are focusing on reshaping BMS to achieve sustained top-tier growth and maximize long-term value. We're doing this by focusing on three key objectives. First, we are focusing our portfolio on transformational medicines where we have a competitive advantage. This means advancing and, where possible, accelerating first or best-in-class treatments across our therapeutic areas, prioritizing pipeline assets with meaningful growth potential and discontinuing programs that no longer meet our threshold for return on investment. Through these actions, we are ensuring our R&D efforts are focused on programs where BMS has a right to win and where…

Thank you, Chris, and good morning, everyone. I will begin with the highlights of our quarterly sales results on Slide 12. Let me start with a brief reminder that unless otherwise stated, all comparisons are made from the same period in 2023 and sales growth rates will be discussed on an underlying basis, which excludes the impact of foreign exchange. All references to our P&L are on a non-GAAP basis. Our performance during the second quarter reflects focused execution across the business, including a 21% increase in our growth portfolio and a 3% growth in our legacy portfolio. The growth portfolio continued to increase as a proportion of our total sales and now represents about 46% of the business. Expenses during the quarter came in more favorable than expected, reflecting our focus on driving operational excellence and timing of spend, resulting in a slightly higher operating margin of roughly 40%. These results support our positive outlook for 2024 and our updated financial guidance. Second quarter sales performance across our key therapeutic areas reflect continued momentum for several important growth brands, including Reblozyl, Camzyos, Breyanzi and Opdualag. While we saw growth across our immunology business, we recognize there's still more work to do, particularly with Sotyktu in this highly competitive category. There were also some inventory and gross-to-net favorability across several growth brands this quarter, which will be important to take into consideration when phasing sales in the second half of the year. Let's take a closer look at our key brand performance, starting with our oncology franchise on Slide 13. Opdivo remains an important product within our immuno-oncology business. Sequentially, global sales were up driven by demand and an estimated benefit of $65 million related to customer buying patterns in the US. We expect growth this year to be in…

Thanks, David. Rocco, could we go to the first question, please?

Absolutely. [Operator Instructions] Today's first question comes from Chris Schott at JPMorgan. Please go ahead.

Great. Thanks so much. Just two quick questions here. Maybe the first one is, can you just talk about the immunology portfolio and how to think about pricing going forward? I know you mentioned that there's some modest incremental price pressure on Sotyktu, given the broader access. But once that rolls out, I guess, as we think about the second half of this year, is that a good run rate to think about price for immunology or when we consider further access competitive environment, is this a business that likely continues to see price erosion over time? The second question I had was just on IRA. I know we're all kind of waiting on the price disclosure on Eliquis, but is there any just directional color you can share of just in terms of how negotiations went, any surprises, just how you think about IRA price negotiations more broadly as you're thinking about the portfolio and kind of markets you're competing, et cetera, just anything you could share on that front or do we just have to wait till that disclosure, I guess, in a month or so, but I appreciate it. Thank you.

Thanks, Chris. Maybe I'll start with your second question, then I'll flip it to Adam. So as expected, we've received the government's final MFP price for Eliquis. And as is consistent with what we've discussed previously, we anticipate CMS is going to publish the MFP price either on or before September 1st. And once that happens, we look forward to providing you more color on the impact of MFP on the shape of the Eliquis business. What I'll say today, now that we have seen the final price, we're increasingly confident in our ability to navigate the impact of IRA on Eliquis. Eliquis is an important drug for patients. It's going to continue to be an important drug for the company in the short-to-medium term. If we step back from Eliquis though, I want to continue to emphasize that we firmly oppose government price setting under IRA. We continue to believe that arbitrary price setting by the government on life-saving medicines is not good public policy. So irrespective of short-term dynamics, we remain very concerned about the long-term implications of IRA on innovation, but we'll be able to give you more color on Eliquis once we get that price published, which we anticipate in the coming weeks and certainly before September 1st. Adam?

Yeah, Chris, thanks for the question. Just more broadly in immunology, we know this is a highly competitive and highly rebated category and we're making good progress across a number of our key products as you heard from David and Chris in our growth portfolio as well as in immunology. Now, I have to acknowledge that Sotyktu performance has been slower than we'd like, but we're focused on improving that. We're executing our plan where a key focus has been on improving our access position. As David mentioned, we're continuing to make significant progress in that area. We came into the year with 25% unrestricted access and we had that through roughly the first half of the year. As we move into the back half of the year, essentially effective July 1st, we more than doubled that. We now have approximately 65% access, the majority of which is zero step edits. And so that's about over 100 million lives now and we expect further access improvements in January. So obviously, that's important because we'll see new patients move faster onto commercial product, we'll work to move patients quickly out of our bridge program and onto commercial product and we'll see much fewer patients attrit at the specialty pharmacy. We'll also see, as David mentioned, a modest increase in gross-to-net due to the rebates required for improved access, offset by increased volume. As a reminder, in Q2, we had a one-time negative impact of about $6 million due to a gross-to-net true-up. So as we exit the year with our expanded access, we're going to be in a much better position versus where we started this year, which will give us a lot of momentum as we move into 2025, and we're committed to making this a big product for the company.

Thanks, Adam. Rocco, can we go to the next question, please?

Yes, sir. Our next question is from Luisa Hector with Berenberg. Please go ahead.

Hello, thank you for taking my questions. I just wondered whether you could describe where the $150 million stocking benefit occurred across which products in Q2? And then perhaps a question on cendakimab. So good to see the positive readout there. Could you tell us how soon you might be able to file and perhaps how you can position this and some sort of color around the access and the launch ramp sort of piggybacking on your comments on Sotyktu. So how should we think about the potential launch there? Thank you.

Thanks, Luisa. I'll ask David to start and then Samit and Adam can address the question on cendakimab.

Yeah, Luisa, thanks for the question. On the inventory, that's really in the I-O franchise across Opdivo and Yervoy, but as well there are some in our immunology franchise of Orencia and Zeposia.

Thanks, David, and thank you for the question. For cendakimab, we have a positive Phase 3 study that read out just recently. The trial met both its primary endpoints on dysphagia days as well as the eosinophilic count decrease, and it also met the secondary endpoints, but we've just received the data in our hands. So we are doing a deep-dive on that. And as we look at the data, we will, of course, take into account when the data will be presented at the medical conference as well as take into account what the landscape is in terms of how patients are treated today and as we plan for the next steps for cendakimab. From a commercial perspective, let me pass it on to Adam, who can then comment on that as well.

Yeah. Luisa, thank you for the question. So we're obviously pleased with the positive Phase 3 study for cendakimab. It's early days and so we look forward to presenting the data. But just roughly when you look in the US, there are about 300,000 treated patients. Treatment rates in EOE are pretty low in the United States. In fact, first-line treatment rate is around 4% and that increases as you go down lines of therapy to third line, which about a third of patients are treated. And the majority of patients are on conventional therapies like PPIs, steroids and then they are treated with Dupixent. And so as Samit mentioned, dysphagia days are important for patients as also the potential for remodeling here. And this is a market where payers are managing about half of the lives in the US, so we expect in -- majority of lives to be positioned behind Dupixent. And again, we look forward to sharing the data with regulatory authorities and presenting at an upcoming meeting.

Thanks, Adam. Let's go to the next question, please, Rocco.

Yes, sir. Our next question comes from Chris Shibutani with Goldman Sachs. Please go ahead.

Good morning. Thank you very much. Chris, you and the team have been much more aggressive on the business development front over the last six to nine months and you've had to make some really thoughtful decisions about prioritizing programs so that the costs don't overrun. What's your capacity now? And in particular, what's your appetite, noting that historically Bristol has been in cardiovascular disease, metabolic and just a requisite question about any interest in the obesity and obesity adjacent realms? Thank you so much.

Sure. Thanks for the questions, Chris. Maybe I will start and then I'll turn it over to David who can speak to the capacity a bit. Well, as expected, we continue to prioritize business development. It's, as you point out, something that we've certainly had as a priority going back to when we did the deals at the end of last year. I would say our priority right now is to execute the deals that we completed seven months ago. Notable among that is we're actively preparing for the KarXT launch, hopefully in September, and certainly, Adam can speak to that. As David also mentioned, I would highlight that we're also focused on paying down the debt as a top priority. Beyond that though, business development and partnerships are going to be continue -- continue to be important to us in terms of the types of deals that we're interested in. Obviously, they have to make strategic and financial sense as a first order. We're going to continue to be disciplined there. As I mentioned in my prepared remarks, you saw the therapeutic areas and modalities that we're focused on and where we feel we have a right to win. So those would be primarily the areas of focus for business development. And then the requisite question on obesity, I'll get to in a second, but there's also a requisite question on size of deal. I would think about bolt-on deals and partnerships as being the priority for us in the immediate term. And look, we're going to continue to monitor the obesity market, but I would say with respect to business development for us right now, I would focus on those areas that I highlighted in my prepared remarks. David?

Chris, I think you covered it well. The only thing I'd emphasize as we think about capital allocation overall besides the debt paydown is we remain firmly committed to the dividend as evidenced by us paying a dividend for the past 92 years and increasing it the last 15 years. And as you know, we have one of the lowest payout ratios of our peer group. So overall, we remain very financially disciplined from a capital allocation perspective.

Great. Thanks, David. Can we go to the next question, please, Rocco?

Absolutely. Our next question today comes from Tim Anderson of Wolfe Research. Please go ahead.

Thank you. Can I go back to the IRA stuff for a moment? There's no formal gag order preventing drug companies from talking about ongoing price negotiations. I'm told CMS has asked drug companies to keep quiet nonetheless and all the drug companies have been complying with that, including Bristol, and I'm trying to figure out why would drug companies comply with that request and really kind of keep it quiet ahead of the coming announcement. And then second, we might actually be getting that announcement much earlier than people are thinking possibly in the next week or so ahead of the congressional recess. If that update does come earlier, can we assume that you'll provide your update shortly thereafter, so meaning possibly in the next couple of weeks if the news were to come earlier?

Sure. Thanks for the questions, Tim. So first, we've been consistent that we're going to only speak to the specifics of MFD once we have the -- once we have CMS having published, which we anticipate being on or before September 1st. What I'll say is once that price is disclosed, we're going to be able to provide a very good picture of the shape of the business for Eliquis going forward, inclusive of the impact of IRA. And we very much look forward to being able to provide that clarity. And again, what I would emphasize is based on having seen the price, we're very confident in our ability to navigate the impact of IRA on Eliquis. And so again, we'll provide more details when that price becomes public. And one other point is, we will provide once that becomes public is we will announce earlier if CMS comes before September 1st and we'll put what we anticipate around IRA and its impact on our IR website, and so that's how we'll be communicating that.

Great. Let's go to the next question, please.

Yes, sir. Our next question comes from Evan Seigerman with BMO Capital Markets. Please go ahead.

Hi, guys. Thank you so much for taking my question. Two for me. So Adam, can you walk me through some of the key launch preparations you're taking for the launch of KarXT that will help you capitalize on your competitive headstart? And then on the IRA/trough earnings, I'm not going to push on the price, but what else do you need to know or need to have in hand to really be able to help us understand kind of when these trough earnings that we've been talking about and when you'll be able to provide kind of when that happens? Thank you guys so much.

Sure. So why don't I let Adam start on KarXT and then I'll take your second question.

Yeah, Evan, thank you for the question. So we're excited about the launch of KarXT as this is a very important drug with significant commercial potential as we shared. Reminder, given a late September and Q4 launch, we effectively see this as a 2025 launch and KarXT is going to be the first innovative therapy in schizophrenia approved for decades. So let me talk a little bit about how we are preparing for the launch. And I'll focus on a few key areas. Number one, we're sourcing a very experienced field sales and strong medical organizations to prepare the market for this new mechanism. Secondly, the access team that we have, have been out there for months, reinforcing the profile with state Medicaid directors and Medicare payers. Just as a reminder, the schizophrenia market is very different in terms of access in markets that are highly PBM-driven. Government payers will be critical to building access for this product since the patient population is greater than 80% Medicaid and Medicare. We've received very positive feedback from thought leaders and payers in the space that KarXT fills a significant unmet need. And the third area that I'll highlight is we need to ensure that physicians and patients have a positive first experience. This is a new mechanism with a different profile and ensuring that patients stay on treatment. So overall, we're pleased to launch Readiness Efforts and we look forward to launching this important medicine later this year.

Yeah, thank you, Adam. I just want to add a couple of things, Evan. Samit here. In addition to looking forward to the approval in September, we are also executing on the overall development plan for KarXT, as you know, adjunctive schizophrenia study as well as the Alzheimer's disease associated psycho studies are ongoing and they're enrolling well. We look forward to data readouts in 2025 and 2026. We anticipate initiation of the Phase 3 trials in bipolar disorder as well as Alzheimer's agitation also in 2025 with a BID dosing and then also preparing to start the Phase 3 study, Alzheimer's disease cognition impairment also in 2025. In addition to that, we are now making the preparations for the autism studies, which will include children, so we need to do some work on that, but really a large program that is being initiated and executed right now.

Thanks, Samit. Now Evan, going back to your question on trough. I'll redirect you back to the comments that I made at the beginning of the year. We've talked about navigating a period that starts in 2026. Now having said that, our focus continues to be on improving the shape of the business over time. And the good news is we have a lot of strategic levers to pull. We have a growing portfolio of young assets. We saw good growth in the first half and we expect good growth in the back half. We have new products launching, notably KarXT and nivo subcu this year. Those are going to be important in terms of describing the shape of our business longer-term. We have late-stage pipeline assets that are reading out starting this year and accelerating through next year and into 2026. And as we've discussed over time, these have considerable commercial potential. We have some very interesting early programs. We're going to start seeing proof-of-concept starting this year, notably CD19 NEX-T. And of course, as David has mentioned already today, we have a very good balance sheet and the capacity to do smart partnerships and business development. So those are a number of the things that are obviously going to shape how this business looks in the back half of the decade. And we're fixated on delivering across the business in the short-term as well as pulling the strategic levers I just mentioned that are going to be needed to accelerate the timing and pace of growth for the company in the back half of the decade.

Let's go to the next question, please, Rocco.

Absolutely. Our next question today comes from Carter Gould with Barclays. Please go ahead.

Hi. Good morning. Thanks for taking the questions. Maybe one for Adam. You had a really nice quarter in Breyanzi, you highlighted some of the drivers there. Can you maybe, you know, compartmentalize that a bit and help us think about then the second half of the year as we think about both those new indications, but also the step-up in supply? Just again given sort of the reset in 2Q, additional color here would be pretty helpful.

Adam?

Yeah, Carter, thank you for the question. We're pleased with Breyanzi performance in the quarter. Remember, in Q1, we said we expected significant improved manufacturing capacity and also a tailwind from our new indications. So in the second quarter, as David shared, sales increased over 50% versus prior year and we anticipate that to continue through the remainder of the year. We expect continued strong growth to be driven first by our lead indication in LBCL as Breyanzi is increasingly recognized as the best-in-class CD19 as well as by our expanded indications, which are off to a very good start. We're also pleased and I want to acknowledge and thank our GPS organization with our expanded manufacturing capacity. We're now in a much stronger position to meet demand in the market. And so taken together our recent approvals, our expanded manufacturing capacity and best-in-class will enable us to compete much more effectively to win in this market.

Thanks, Adam.

Okay, let's go to the next question, please, Rocco.

Yes, sir. Our next question comes from Seamus Fernandez with Guggenheim Securities. Please go ahead .

Great. Thanks for the question. So a couple of quick ones. Samit, you have a number of clinical readouts coming in multiple myeloma with your CELMoD portfolio in 2026. Just hoping you could help us understand how you see those products potentially commercially or maybe not commercially, but clinically positioned relative to the very increasingly crowded landscape that we see today. And then the second question actually hearkens back a little bit to IRA, but more so to Part-D redesign. Can you guys help us understand how the Part-D redesign dynamics that are likely to materially impact the substantial payout that you make on Eliquis is likely to be offset negatively by the impact of the catastrophic cap that comes in, in 2025? And at what point will you seek to educate the market on those pushes and pulls in 2025? Will that fall with the IRA negotiation effects or will it fall, you know, simply with 2025 guidance? Thanks.

Samit, then Adam.

Yeah. Thank you, Seamus, for the question. As we think about multiple myeloma, it is a disease which has really been benefiting from multiple therapies that have been approved over the years and certainly has had transformational outcomes for these patients, including small molecules as well as large molecules and now with cell therapies and bispecifics coming into the play. As we think about CELMoDs, as we think about Iberdomide and mezigdomide both in development across the four Phase 3 clinical trials with readouts coming in 2026. The way we think about it is multi-drug regimens will be required for these patients because ultimately right now we don't have a cure for the disease. And that's the way we have designed the studies with mezigdomide going head-to-head versus pomalidomide, whereas if we think about iberdomide, we're looking at combinations to really change the outcomes when you combine them with velcade and dexamethasone or moving into a maintenance setting after transplant going head-to-head versus Revlimid. So we believe that there are patients who are not going to be eligible to receive cell therapies where these therapies will play a role. Also, we need manageable toxicities, which don't have the same outcomes of CRS, et cetera, that are associated by specific therapies right now. So placement of these therapies will become important and we'll continue to generate more data through many other trials so that we ultimately give more our momentarium to physicians to prescribe to the right patients for better outcomes in multiple myeloma.

Thanks, Samit. Seamus, before I turn it over to Adam to walk through the redesign of that specifically, I'll just say that when we give the color on MFP, that will be inclusive of all aspects of IRA, including the Part-D redesigns, get that whenever we talk about the final MFP price. But Adam?

Yeah, Seamus. As you alluded to, since products are impacted differently by the Medicare redesign, we carefully evaluate each of the individual dynamics both now as well as into the future to determine the potential impacts. We will see a favorability with Eliquis next year due to the Part-D redesign, notably with the elimination of the coverage gap. That'll partially be offset by Rev and Pomalyst having responsibility now in the catastrophic phase. So we're monitoring this very closely to understand what the impact is on out-of-pocket cap as well and other shifts that are happening in the landscape.

Yeah. And just to close off on that, what I would say when we look at Part-D redesign across the entire portfolio, we actually think that it offsets and would be largely meaningful.

Great. Thanks, Chris. Can we go to the next question, please?

Absolutely. Our next question today comes from Terence Flynn at Morgan Stanley. Please go ahead.

Great. Thanks so much for taking the question. David, I was just wondering if you can provide any early commentary on how we should think about 2025 operating margins, maybe just walking us through some of the puts and takes. And then separately, I was wondering if you guys can disclose the WINREVAIR royalty from Merck? Thank you.

David?

Yeah, thanks, Terence. And look, we remain committed to our greater than 37% operating margin. And as you saw, we saw strength in our gross margins with our mix of our business. And we feel really good about the operational efficiency programs that we're executing against now, which gives us a lot of flexibility in maintaining those operating margins above 37%. Thanks, Terence.

And about WINREVAIR, David?

And WINREVAIR that, so we recognized 22% of global sales of WINREVAIR that comes through our other growth revenue that comes through there and you'll hear about those sales from Merck when they come through.

Great.

But obviously an important growth driver for us is that 22% royalty rate.

Great. Thanks very much, David. Can we go to the next one, please, Rocco?

Yes, sir. Our next question today comes from Mohit Bansal with Wells Fargo. Please go ahead.

Great. Thank you very much for taking my question. And maybe one question I want to ask is like as with new launches, there are spaces you have done really well like oncology and cardiology now with Camzyos picking up, but immunology seems to be a challenge and even before Sotyktu there was Zeposia, so just want to understand, what are the excess dynamics that you are finding challenging versus your expectations going in? I'm asking because with some of those IL-23s and all, they have found better access than what we are seeing with Sotyktu. So could you please help us understand that? Thank you.

Thanks, Mohit. Good question. And Adam, you'll take it.

Sure, Mohit. Thanks for the question. So as we talked about, we are focused on continuing to accelerate our growth portfolio. As you saw in the quarter, we're making good progress there. We're delivering strong performance for products like Reblozyl, Camzyos, Breyanzi and Opdualag. As I talked about, Sotyktu performance is slower than we would like and we are focused on improving both performance and execution. But ultimately, it's the access there that has taken longer than we expected. Remember, in many of the immunology categories that we compete in, these are highly controlled, highly managed products by the large PBMs. And so it took longer for us to get into a preferred position based on entrenched contracts. And so as we're seeing uptake now, we're in a much better position with approximately 65% access with most of that is at zero step edit. And that's going to be really important. So we recognize this is a highly competitive market and we're continuing to make improvements and we expect further improvements in access in January. As it relates to Zeposia, Zeposia has really been a tale of two launches. We entered the market in multiple sclerosis and we've seen good uptake there over time and we're doing that in a market that continues to contract based on the kind of the increases in the products like Ocrevus and Kesimpta and we continue to grow our share in a competitive market. Now UC has been more challenging. It is more managed, it's more managed class. TNFs have preferred status across virtually all of the PBMs, but we're also focused on making progress there as well. So I think it's hard to paint immunology in general with a broad brush. Orencia continues to perform well, no biosimilar insight. And finally, as we talked about, we're ready for the launch of KarXT, which has very different access dynamics than what's in the immunology space today. So we are continuing to make progress in delivering strong performance and execution and we're confident in our ability to continue to grow our business in the near term and into the longer term.

Thanks, Adam. Let's go to the next question, please.

Yes, sir. Our next question comes from David Risinger with Leerink Partners. Please go ahead.

Yes, thanks very much, and congrats on the performance. So two questions, please. First is, with respect to IRA, many companies, including Bristol have suggested it's not too much of a problem. And so I'm just helping, I'm hoping that you could help us understand a little bit how you're thinking about drugs that aren't rebated today like Part B drugs such as Opdivo and their risk of price pressure when they're negotiated relative to drugs that are heavily rebated today like Eliquis. So if you could just comment on that, that would be helpful. And then second, with respect to some of your growth drivers, obviously, you've kind of commented a lot on Sotyktu and Opdualag, but there are competitors that have shown some pretty encouraging data and competitors claim and in some cases, i.e., with respect to Sotyktu, they're running head-to-head trials that their drugs are going to show much better efficacy cross-trial than Sotyktu and Opdualag and launch late decade. So if you could just comment on that and how you're thinking about the future competition? Thanks so much.

Thanks, David. I'll let Adam address certainly the first question and actually probably the second question as well. But let me just first say, we're not going to speculate on the impact of products that have not been or aren't planned to be negotiated. Adam can speak generally about how we manage the different books of business between Medicare and commercial. But Adam?

Yeah. I mean, I think we're a long way off to 2028. So I agree, I think it's premature to discuss if Opdivo would be eligible even for IRA negotiation. Remember, if Opdivo makes the list, there could be generics in the market or biosimilars in the market as well. But I think most importantly is what you heard from both David and Chris is that we announced a PDUFA date for our nivo subcu in late December. So our goal is to convert as much business as we can well prior to the LOE. And we expect to convert at least 30% to 40% of the total US business for Opdivo ahead of the LOE and we think this is a great opportunity for both physicians and patients and we look forward to launching this important formulation. Also, with a biosimilar in the market and we don't expect to see Opdivo completely fall off either. So we also expect to see the subcu and the IV continue into the next decade as well. As it relates to the competition in immunology or in PSO, I think, more specifically as you're asking, again, we are preparing for competition there. I think Sotyktu has set a high bar for new orals in the PSO space. This is a very competitive category today. It's only going to become more crowded and more competitive over time. We also plan to have several indications, including PSA by -- we'll see some data by the end of this year, which will help both PSO and help accelerate Sotyktu as well as SLE, both of which SLE and PSA will be approved and will read out at that time. So we're going to have to see the results of the study. The oral IL-23 Phase 3 data would need to be meaningfully different in order to move the needle, but we're continuing to make progress with Sotyktu and executing our plan and we focus on growing this important brand.

And I think I'll just add because I think you also mentioned, David, Opdualag. And as far as Opdualag is concerned, once again, we are way ahead with melanoma indication already approved in the first line, anticipating the data for the adjuvant melanoma, anticipating also the presentation of the Phase 2 data soon and then initiation of the Phase 3 program in the subset of non-small cell lung cancer to continue the progress. Rest of the data that we've seen from the competition is just too small to really interpret anything out of that.

Thanks.

Thanks so much. Can we go to the next question, please, Rocco?

Absolutely. Our next question comes from Steve Scala with TD Cowen. Please go ahead.

Thank you very much. Chris, I apologize for being picky, but you said two times on the call that Bristol would give visibility on the contour of Eliquis business around September 1st, but you didn't say floor guidance. And when you were specifically asked about floor guidance, you repeated something from earlier in the call. So is floor guidance no longer in the plans? And secondly, Samit on cendakimab in EoE. So Dupixent showed 60% of patients achieved histologic remission at 24 weeks. Is cendakimab fully competitive with that? You sound very confident. So it sounds like yes. And historically, your tone in saying things like this has been very predictive. So I'm just curious what to make of it. Thank you.

Thanks, Steve. I'll start and then I'll turn it over to Samit. So look, we know there's a lot of interest in this topic around floor guidance. As I've said before, in general, we've moved away from providing long-term targets. This actually reflects us going back to what the company has done historically. That said, we continue to increase our confidence in the long-term growth profile of this business. We're going to continue to provide updates to you on that business as appropriate and we'll be transparent about how we see the business evolving. And as for how we do that and when we do that, as I think most of you are aware, our normal practice is to provide forward-looking guidance at the beginning of the year, normally when we report our Q4 results, and we're going to continue with that process. Samit?

Thank you. And thanks for the question, Steve. As always, very pointed one. Look, we did do the study as it relates to comparison versus Dupixent. So it's very hard to start comparing the data. Also remember the way the dysphagia days, which is a more important and most important thing from a symptom relief for the patient. The way we measured it versus what Dupixent did in their study are very different ways. So we have to keep that in mind. Certainly will not comment on the specificity of the data because we would rather present it at a medical conference or to come on that. Certainly, as mentioned earlier by Adam as well, we look to the data deeply and put it into perspective as we go forward also in communications with the regulators.

Let's go to the next question, please, Rocco.

Absolutely. Our next question today comes from Trung Huynh with UBS. Please go ahead.

Good morning, guys. Trung Huynh from UBS. I have a few follow-ups on the subcu Opdivo. So today you highlighted again the 30% to 40% conversion. How quickly are you arriving at this 30% to 40% of patients? What's stopping it from being more as we've seen things like Darzalex have quite significant conversion? And then, when is the exclusivity expected to last for this subcu versus IV given the somewhat recent CMS drafts on IRA on subcu formulations? I think you mentioned in one of the questions the next decade, but do you have a year? Thank you.

Adam?

Yeah, Trung, thanks for the question. So again, as I said, we are looking forward to the PDUFA date in late December and our launch planning is continuing to progress. So we said we have converted at least 30% to 40% of the total US Opdivo IV business. And we have -- the good news is we have time because the LOE is not until 2028. So we expect that conversion to come largely from patients who are in the adjuvant setting, use in combination with Yervoy where there is continuing Opdivo treatment, for example, indications in metastatic melanoma in first-line RCC as well as in Opdivo monotherapy. These indications represent approximately 70% of our overall business. And so we talked about the benefits of nivo subcu has the potential to benefit both patients with a less than five-minute infusion time and physicians who are able to free-up chairs, particularly in the community setting. And we do have the potential to benefit patients through the next decade with nivo subcu based on the fact that we've got a broad patent estate. So we expect to see both nivo subcu and Opdualag continue to persist our leading IO franchise into the early 2030s.

Thanks, Adam. Let's go to the next question, please.

Absolutely. Our next question comes from Matthew Phipps with William Blair. Please go ahead.

Thanks for taking my questions. Two quick ones on Phase 3 trials. Wondered if recruitment has recommenced in the ACTION-1 trial with RZ101 and Actinium supply is secured there. And then on the successor trials with mezigdomide, it looks like the trials have advanced to Part 2 of the Phase 3. Wondering if you can give us any sense of the dose that was taken from Part 1 into Part 2? Thank you.

Thanks, Matt. Samit?

Yeah. Thank you for both the questions. For the Actinium-225 study, as you know, we are the furthest along in terms of the Actinium-225 Phase 3 trial. GEP-NET is the first indication with very strong data supporting it. We have reinitiated the recruitment in the trial and we are still looking forward to the data readout in 2026, along with certainly looking forward to new indications starting with a small-cell lung cancer Phase 1 trial that is already ongoing. For mezigdomide trial, again, enrollment is continuing. We will not yet declare what the dose we've taken forward. But certainly, yes, both trials have moved to the Part 2 of the study and you will continue to hear about how the trial progresses and we're looking forward to the readout starting in 2026.

Thanks, Samit. Let's go to the next question, please.

Absolutely. Our next question comes from Olivia Brayer with Cantor Fitzgerald. Please go ahead.

Hi, good morning, and thank you for the question. I wanted to ask a follow-up on Sotatercept. It looks like you guys changed your other income guidance by about $200 million for the year. So is that essentially entirely from the Sotatercept launch? Obviously, a big number there if you back it out based on a 22 -- or a 22% royalty rate. And then how are you thinking about Sotatercept's contribution to your P&L going forward just given the strong economics there? And one more, just can you also comment on level of enthusiasm around your PRMT5 program and what we'll see from the Phase-1 readout in the back half of the year? Thank you.

David and Samit.

Yeah, Olivia, thanks for the question. The O&E increase was mainly driven by two things, as I said earlier in my prepared remarks, which is the diabetes royalties coming in better than we had anticipated as well as interest expense coming in better than anticipated. And what I was saying earlier related to WINREVAIR, since we still own the intellectual property of that, that 22% of global sales related to the product goes through our other growth revenue line. So it comes through sales.

And thank you, Olivia, for the question on PRMT5. Certainly, again, very much further along on that one. Phase 1 trial continues on. What we will be presenting data is the responses that have been seen across multiple different tumor types. So really looking forward to presenting that data as we plan to initiate the Phase 2 studies in a couple of indications, which we will talk about more as we get closer to the initiation of those trials in selected patients, of course, with MTAP deletions.

Thanks. And let's go to the next one, please, Rocco.

Yes, sir. Our next question comes from Steve Chesney with Redburn Atlantic. Please go ahead.

Yeah, great. Thank you. Maybe just a follow-up on radiopharma, please. With regard to the commercial opportunity for RYZ101 and GEP-NET, I wonder how competitor filings of an ANDA and a 505(b)(2) for Lutathera impacts your thinking on pricing for innovators in the space? And then also on KarXT, we've seen a couple of competitor data sets over the past month or two that showed relapses at a fairly early time point and somewhat lower-than-expected response rates. Just wondering how you guys have been thinking about that as it relates to KarXT, whether you have more confidence in your construct or are you doing something differently on dosing? Thank you.

Adam, then Samit.

Yeah, first, let me just talk about our enthusiasm about RayzeBio and the platform that we have here. We believe this is a really exciting platform, one that's going to grow significantly through the back end of the decade. And what particularly excites us about Rayze is the kind of robust IND engine that we'll see over the course of the next decade or plus as well as what we know is a state-of-the-art manufacturing facility that has been forward. Now the lead program in RYZ101 in GEP-NET is, I think, a fairly modest commercial opportunity. However, when you look at this technology, particularly the Actinium-based radiopharmaceutical platform, this has the potential to have efficacy and safety across a host of solid tumor treatments. So as we've talked about, we are looking at this in small-cell lung cancer and potentially many other tumor types. So we look forward to launching the GEP-NET indication that will be the lead asset and well -- as well as a number of new INDs coming in the back half of the decade and beyond.

Yeah. And thank you, Adam. And just to talk about CD19 NEX-T there are a couple of things to understand. Number one, we have two studies ongoing. The first study enrolls patients not only with far advanced systemic lupus erythematosus, but also systemic sclerosis as well as myositis. The second study is enrolling patients with multiple sclerosis. Now it's very important to understand the profile of the patients that are being enrolled. These are patients who have far advanced disease. They are on glucocorticoids, immunosuppressants, immunomodulators. And these patients may also have underlying organ dysfunction such as renal failure and kidney damage. So as we think about the impact of these single-infusion CAR-cell therapies, what are we trying to achieve? We're trying to achieve a remission in the sense that patients can go off of their treatments such as glucocorticoids and immunosuppressants. What one does not expect at this time at least that we can revert the damaged kidney to a normal state because kidney doesn't grow by itself. So I think we have to keep that in mind as we look at the data and we're looking forward to bring that data as we look to the presentation of these patients that we are treating today.

Great. Thanks, Samit. Let's go to the next one, please.

Absolutely. Our next question today comes from James Shin with DB. Please go ahead.

Good morning, guys. Thanks for taking the questions. A couple more on the pipeline. Just to piggyback on PRMT5 readout later this year, can you shed some light on the data size, which data points to expect? And are you thinking this will be disclosed via conference setting? And then similar to that about CD19 NEX-T, how will that be read out? And then I think another question, our previous question talked about some of the negotiation dynamics in immunology. A lot of these CDMs are getting into biosimilars. Has that changed negotiation dynamics at all in your early interactions? Thank you.

Samit and Adam.

Yeah. And I think your question, you're breaking up a bit, James. I think you were asking about disclosure for?

PRMT5 and CD19.

Exactly.

Yeah. So both of these molecules, we are looking forward to presenting the data this year, certainly through a medical conference for both of them. For PRMT5, all the patients that have been enrolled, we are looking forward to bring the dose overall safety and where we've seen responses. And certainly, that will be the data that we will be presenting. For KarXT, we're looking forward to presentation of the data for certainly SLE at an upcoming conference as well and then grow from there. We are obviously preparing and planning to have conversations with regulatory authorities as well to plan for later stages of development of this molecule.

Yeah. Just quickly on the biosimilar question, as I mentioned, in UC, yes, biosimilars do have a preferred position in first-line. However, in respect to the PSO market, we are continuing to work with payers to understand the dynamics there. But we have not heard or seen PBMs move to a biosimilar first approach. The reason for that largely is the fact in PSO, products like Humira and Stelara do not have a dominant position in that space. So we would not expect biosimilars, at least in the near term to take on a preferred position.

Thanks, Adam. Let's go to the next one, please.

Absolutely. Our next question today comes from Kripa Devarakonda with Truist Securities. Please go ahead.

Hey, guys, thank you so much for taking my question and congrats on the quarter performance. I have one question on Camzyos and maybe a question on IRA. Camzyos, in terms of patients added per quarter, it seems like we're starting to see a little bit of acceleration. I know last couple of quarters, you said you thought of reaching steady state. Do you think this is just noise or could this be a trend going forward? Are you seeing awareness and understanding of the drug increase uptake? And the other thing on IRA is actually a little bit more futuristic maybe. Do you see any potential impact on IRA implementation depending on result of the November election? Could there be any change? Thank you.

So Adam, and then I'll take your IRA question.

Kripa, yeah, thanks for the question. And we've seen steady and consistent growth from Camzyos. And as David mentioned, we saw approximately 1,300 patient increase on commercial drug quarter-over-quarter. We expect that to be steady and consistent growth over time. Physician and patient feedback continues to remain very positive. Our focus is increasing our user base, both in the large COEs, while also increasing breadth of prescribing in some of the smaller institutions and some of the larger community practices. In fact, we'll be deploying additional community representatives. These are Eliquis representatives into the community of cardiology account to drive treatment. So we're seeing good momentum with Camzyos and we're pleased with the performance of this very important product.

And I know we're running over time maybe for two more here. So maybe go to the next one, please.

And yes, sir. And our next question today comes from Sean McCutcheon with Raymond James. Please go ahead.

Hey, guys. Thanks for taking over it -- thank you for taking my question. Maybe one for Samit. So we're going to get the Oceanic AF data at ESC in about a month. Obviously, Librexia AF is ongoing and time will tell if there are any distinctions from the rapid failure we saw for Asundexian. But and likely insufficient dose-finding in Pacific as noted, but what are the specifics you're looking for read through on the mechanism for those data? And do you see any risk to getting data that come in that clearly shows sufficient inhibition of Factor XIa activity, do you have a detriment on stroke prevention? Thanks.

And before Samit answers, I just want to address the second part of Kripa's question just very quickly around patient. Obviously, we're going to continue to follow the election in the United States, it's difficult to speculate on how things will change from a policy standpoint with any given administration just simply because it's not just a Presidential Election, but it's also you have to look at the composition of Congress. So I think we're just going to have to continue to pay attention to this over time. But Samit, do you want to address?

Yeah. Thank you. Thank you for the question as well. Look, I think let's start off with the first fact that when we started the Milvexian program, it was based on the prior learnings from the Phase 2 studies. That's why we chose the doses that we chose that for a single agent at a higher dose of 100 milligrams BID, whereas the 25 milligram BID where there was a background of antiplatelet agents. Second, independent investigators have now conducted preclinical work to show the differentiation between Asundexian versus Milvexian, showing the inhibition and the time it takes and the doses that are required for real inhibition of Factor XIa. And so that gives us a little bit more confidence in terms of how things are going -- are shaping up. Third, for AF, secondary stroke prevention as well as ACS, the enrollment continues very well in these three trials and we're looking forward to those readouts. Last thing I would say is when the data are presented, we certainly would like to see the number of events that happened, what time they happened and the impact of the dose that was used that will all be very helpful as we think about Milvexian.

Great. Thanks. And let's go to the last one, please, Rocco.

Absolutely. Our final question today comes from Alex Hammond of BofA. Please go ahead.

Hey, guys. Thanks for squeezing me in. So following Camzyos' strong performance this quarter and the REMS registry data at ACC. Can you set expectations for potential REMS modification moving forward? And do you think having the results from the ODYSSEY study reading out early next year will provide a favorable time to reengage with the FDA? Thank you.

Samit.

So I think as -- thank you for the question, as both David and Adam said earlier, thousands of patients have now been treated with Camzyos and certainly, we've learned a lot and we see the manageable profile here as well as the transformational outcomes that these patients have and stay on treatment for a very long time with 80% of the patients being treated with 2.5 and 5 milligram doses. We continue our conversations with the FDA. I will not get into the specifics. And certainly now that we have pulled in the readout of the non-obstructive hypertrophic cardiomyopathy study about six months in with a readout now expected in 2Q next year, we will certainly have multiple engagements with the FDA on that front as well.

Thanks, Samit. So before we close the call, maybe I'll just leave you all with a few things. We are pleased with the performance of the business and in particular, the growth portfolio performance where revenues grew nicely in the first half and now represent, as David said earlier, 46% of the total business. At the same time, our pipeline continues to advance with new medicines and we look forward to important catalysts coming up like the KarXT launch and a number of data readouts in the coming months. So overall, I'd say we've executed well in the quarter. We feel good about the full year and are raising our outlook accordingly. It's certainly going to be a busy back half of the year and we're focused as a team and as a company on driving strong execution. So thank you all for your time today and the Investor Relations team is certainly available to answer any follow-up questions that you may have. Have a nice weekend.

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.