施貴寶 (BMY) 2012 Q3 法說會逐字稿

Good day, and welcome to today's third quarter 2012 earnings release conference call.

As a reminder, this call is being recorded.

At this time, I would like to turn the call over to Mr. John Elicker, Senior Vice President, Public Affairs and Investor Relations.

Please go ahead, Mr. Elicker.

Thank you, Leah.

And thanks, everybody, this morning for joining us on the call.

I know it's a busy morning for all of you.

With me today, we have Lamberto Andreotti, our CEO; Charlie Bancroft, our Chief Financial Officer -- as you may know, also additional commercial responsibilities.

Both Lamberto and Charlie will have prepared remarks.

And then joining us for Q&A are Elliott Sigal, our Chief Scientific Officer; Beatrice Cazala, Executive Vice President of Commercial Operations; and Giovanni Caforio, our President of the US Pharmaceuticals business.

Let me take care of the legal requirement.

During this call, we will make statements about the Company's future plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act.

Actual results may differ materially from those indicated by these 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 subsequent date.

We specifically disclaim any obligation to update forward-looking statements, even if our estimates change.

We will also discuss non-GAAP financial measures, adjusted to exclude certain specified items.

Reconciliation to these non-GAAP financial measures to the most comparable GAAP measures are available at our website, bms.com.

Lamberto?

Thank you, John, and good morning, everyone.

This was a challenging quarter for a number of reasons, and especially due to the discontinuation of the 094 development program.

While I'm disappointed -- very disappointed with that situation, I'm certainly proud of the way we handled it, quickly and decisively, to preserve patient safety.

Importantly, we remain committed to and focused on delivering against our strategy.

Nothing has changed in that regard.

We remain fully committed to business development in our therapeutic areas of focus, and we remain fully committed to the field of hepatitis C.

Further, a lot happened during the quarter that continues to give me confidence that we are on the right track.

The strong performance of our key and new products, the clinical and regulatory advances, particularly those related to Yervoy, anti-PD1 and Eliquis, the simplification of our long-term alliance with Sanofi, and of course, the completion of the Amylin acquisition, and the expansion of our alliance with AstraZeneca.

Let me just spend a few minutes on some of these highlights.

Commercially, I was encouraged by the performance of a number of key products, namely Orencia, Sprycel, Baraclude, Onglyza and Yervoy, which has experienced solid growth, partly due to progress with access to reimbursement abroad.

All of these products had a strong quarter.

All experienced double-digit growth.

Clinically, immuno-oncology remains a key part of our future, and we made progress last quarter on two fronts.

At the European Society for Medical Oncology, we presented long-term survival data on Yervoy, data that is very important, value valuable for patients with metastatic melanoma.

And we also began phase 3 trials of anti-PD1, two for lung cancer and one for renal cancer; and we are expecting to begin soon, possibly later this year, a phase 3 trial for melanoma.

On the regulatory front, there were significant developments with respect to two key products, Eliquis and Forxiga.

Regarding Eliquis, we received a positive opinion from the CHMP in Europe, and we are expecting a decision by the end of the year.

In Japan, our application is progressing, and could lead to a decision by the end of the year.

And in the US, we now have a new PDUFA date of March 17 from the FDA.

Regarding Forxiga, we are hoping for a decision in Europe by year's end; and in the US, we now have clarified [pass forward] with the FDA in our planning to resubmit our application by the middle of 2013.

Regarding hepatitis C, we believe we still have some interesting opportunities.

Data on some of them will be presented at the AASLD conference next month.

And in Japan, we pursue our Genotype 1b strategy and expect to file an all oral regimen by the end of next year.

And finally, regarding diabetes, we now have a very broad, robust portfolio of treatment options for patients, physicians and payers.

With strong performance by Onglyza and encouraging regulatory progress on Forxiga and the recent acquisition of Amylin, I'm excited about the evolution of our joint Bristol-Myers Squibb AstraZeneca portfolio into a comprehensive diabetes franchise.

With respect to Amylin, I am pleased that we finalized the acquisition in August and have started to cross train our US sales force.

In fact, our integrated sales force has just begun promoting our entire franchise.

Taken as whole, the quarter reflected a significant transition underway at Bristol-Myers Squibb toward the portfolio of the future.

And going forward, we plan to maintain our balanced approach, driving results today, while setting the stage for tomorrow.

Though we, together with the entire industry, continue to face macroeconomic head winds, especially in Europe, I believe our strategy and our product and geographic diversification will support us going forward.

As such, I remain optimistic about our future.

And now, Charlie will provide you with some of our key numbers.

Thank you.

Thank you, Lamberto.

This was an important quarter for the Company, as we take another step towards our transition to the portfolio of our future.

In the third quarter, we delivered non-GAAP EPS of $0.41.

We reported net sales of $3.7 billion in the quarter, down 30% compared to last year due to the exclusivity loss of Plavix and Avapro, causing volume to be down 28%.

Price was favorable by 1%, and foreign exchange had a negative 3% impact on sales.

Excluding Plavix and Avapro, global sales grew 7%, driven by trends of our key brands that are important to our future.

Let me provide a few highlights.

During the quarter, we reported worldwide Yervoy sales of $179 million, with US sales contributing $123 million.

We are making good progress gaining access with Yervoy internationally, and are focused on delivering longer term growth.

In the US, we believe that the demand we saw in the third quarter provides a strong base from which to build Yervoy in the future.

It is important that we continue to reinforce the value of the potential for long-term survival.

The four- and five-year survival data recently presented at the European Society of Medical Oncology will be important as we work with all stakeholders in the patient's journey to shift the treatment goal to long-term survival.

As Lamberto mentioned, with the acquisition of Amylin and regulatory progress with Forxiga, we now have what we believe is a very strong diabetes portfolio with a broad range of options for patients, physicians and payers.

Onglyza franchise sales were $178 million, up 40% compared to last year.

In the US, prescriptions grew twice as fast as the DPP-4 market.

In Europe, planning is well underway to launch Komboglyze XR during the fourth quarter.

Longer term, in addition to glycemic control, we are focused on the potential for cardio protection and have studies ongoing across the portfolio.

We are looking forward to the Onglyza Savor study results which should report out next year.

The Exenatide franchise had sales of $75 million in the quarter.

Following the closing of Amylin in August, the teams have been focused on ensuring the right level of access in the US, and the aligned sales forces have recently begun full promotion.

Outside the US, the process of transition with Lilly is underway, and we should be substantially complete by mid 2013.

Sprycel was up 25% in the quarter.

We continue to make share gains in both first line and the continued expansion of the second line opportunity.

Outside the US, we are seeing strong adoption in Japan; and the EU business is doing well, particularly in markets where we have first line reimbursement, including Germany, Italy, and Spain.

The Orencia franchise was up 32%.

Orencia SubQ, which was launched in the US at the end of last year, had sales of $61 million in Q3 and now accounts for 28% of our franchise sales in the US.

Orencia SubQ was recently approved in the EU, and we are in the launch process.

Reyataz sales were down 7%.

While US sales were up 5%, international sales were down 18% due to three factors.

Firstly, the overall market is becoming increasingly competitive; and secondly, we have seen lower inventory levels in Europe.

Finally, there is variability of timing of orders in Russia and Brazil, where we had government purchases in Q3 last year, but took place in Q2 this year.

Before I move to expenses, let me touch on the restructuring of our agreement with Sanofi.

The revised agreement simplifies operations and supports our strategy and focus on delivering our portfolio.

We expect that the EPS impact of the restructuring will be minimal from 2013 through 2018.

Now, let me give you just a few comments from the rest of our P&L.

I will focus my remarks on our non-GAAP results.

Reconciliation to our GAAP results are available on our press release and on our website.

Gross margin was 75%, up 100 basis points compared to third quarter last year.

This favorability was primarily driven by foreign exchange.

Advertising and promotion expenses were down 19%, reflecting decreased spend behind Plavix, Avapro, and life cycle flexing of certain in-line brands.

The effective overall tax rate was 20.5% in the quarter.

The decrease compared to third quarter 2011 is primarily due to earnings mix.

Now, turning to guidance, you have seen that we have confirmed our 2012 non-GAAP EPS guidance of $1.90 to $2 and expect to be at the upper end of the range.

This includes the estimated $0.03 dilution relied to the acquisition of Amylin.

You'll also note in our press release that we have updated our line item guidance.

Let me comment on two of the changes.

We now expect full year gross margin as a percentage of sales to improve approximately 100 basis points versus last year.

This is in part driven by sales mix and favorability in foreign exchange.

And we expect our tax rate to be approximately 23%, which assumes the extension of the R&D tax credit.

Earnings mix and effective tax planning are having a positive impact on our full year rate.

I would now like to turn it over to your questions.

Thanks, Charlie.

And Leah, I think we're ready to go to questions.

And I would just remind everybody that in addition to Lamberto and Charlie, we have Elliot, Beatrice and Giovanni here for any questions you may have.

Leah?

Leah?

Thank you.

(Operator Instructions)

I'm sure there must be some technical difficulty, Leah.

I'd be shocked if there were no questions.

One moment, please.

Our first question comes from Marc Goodman with UBS.

Good morning.

A couple things.

First, on Abilify, can you talk about whether this initiative by CMS in May has had any impact on that market?

Second of all, can you talk about Baraclude a little bit, OUS.

It seems a little weaker than we would have thought, if there's anything going on there.

And then third, just on the GLP market -- Bydureon -- is this slowdown in the ramp just because of the turnover in companies and change in sales force, or is there something else going on?

Thanks.

Thank you, Marc.

Why don't we do the following -- why don't we ask Giovanni to comment on Abilify and the GLP market in the US.

And Beatrice will follow with a comment on Baraclude.

Yes.

Good morning.

This is Giovanni.

On Abilify, the first thing I would say is the key trend in the marketplace in the US right now is really the genericization of the market and the entry of generic competitors for many of our products.

With respect to the Abilify performance, the performance continues to be stable quarter-over-quarter and versus prior year, and very much in line with our expectations, and our focus has not changed.

We continue to be very focused on promoting the differentiated profile of Abilify with the efficacy as early as week one.

So we have not seen any significant change in access trends, and the performance of the brand continues to be strong.

With respect to the GLP-1 market -- as you know, the market is growing rapidly.

GLP-1s were initially adopted primarily by endocrinologists in the US, and they have started to use it in relatively late-stage patients.

With the entry of new products, such as Bydureon, because of the weekly dosing and the convenience, we expect that the growth of the market in the GLP-1 segment will continue, because those products will be adopted more broadly by primary care physicians and they will be used earlier in the treatment paradigm.

With respect to Bydureon and our trends, as Lamberto mentioned at the beginning, we have very rapidly accelerated the integration of the Amylin business.

We have cross-trained our sales forces.

We recently began promotion of the full portfolio, including Bydureon, through the AstraZeneca, the BMS, and the Amylin teams.

Those teams are in the field.

And we do see significant potential for growth, not only because of increasing penetration with endocrinologists, but also we do see that we will be able to grow the prescriber space, including primary care physicians.

We are optimistic with the growth prospects of Bydureon and our Exenatide franchise within the GLP-1 market.

Wait -- before Beatrice speaks about Baraclude, I would like to say a couple of things about our presence in diabetes.

I think that -- probably I said it before in my prepared remarks, but I want to repeat that with the strong performance for Onglyza, the encouraging regulatory progress for Forxiga, and the acquisition of Amylin, I'm really excited about the evolution of our giant Bristol-Myers Squibb AstraZeneca portfolio into this comprehensive diabetes franchise.

And what I wanted also to say is that we are focused not just on glycemic control within diabetes, but also on CV protection.

With that in mind, we have CV outcome programs in place for all the three classes of agents in our portfolio, DPP-4, SGLT2, and GLT-1.

And we'll see the first results beginning with SAVOR next year.

This is what I wanted to say about the diabetes franchise.

And then Beatrice, why don't you speak about the good results of Baraclude.

Baraclude's strong sales performance versus last year -- we recorded a plus 11%.

So we see contrasted views.

Very strong market in China, we are growing more than 34%, so very successful there.

We also are continuing growing in the rest of Asia, with very strong growth there, 15%.

What you are talking about, possibly a slow-down, it's mainly in Europe, where we have seen the impact of some government action against usage of Baraclude, and we do think demand, especially in countries like Italy.

So overall, it's a picture where we still see very strong growth, globally versus last year, very strong market share, recognition of the ability of the product to really deliver on its long term efficacy and safety, and position very well as a market leader versus Tenofovir.

Thank you, Beatrice.

Thanks, Marc, for the questions.

Next question, please, Leah?

Next question from Jami Rubin with Goldman Sachs.

Thank you.

First question is to Charlie.

The margin progression this quarter was a bit confusing.

Gross margins were much higher than expected, but the tax rate was a lot lower, and at the same time, marketing, admin and promotion expenses -- or rather, marketing, selling, admin and R & D were about $200 million higher relative to our expectation.

So can you try to clarify what is going on?

What should we assume going forward?

Are the heavier promotional and R&D expenses front-line loaded, or is this now the new normal at Bristol-Myers?

How should we think about gross margins going forward, and to what extent the mix should be sustained?

And then also on the new tax rate guidance of 23%, how we should think about that going forward?

And then I have a follow up question.

I don't know if Elliott's on the call, but interested in your comments on Dapa and the path forward.

What additional work have you been asked to do, and what were the key areas of focus by the FDA?

And if you can just provide a little bit more granularity on what that submission package will look like relative to what you submitted before?

Thanks.

Jami, this is Elliott.

I'll take the dapagliflozin Forxiga question first.

We, as Lamberto indicated, have had extensive discussions with the FDA in the last several months.

Based on evolving data, clinical data of patients that have been treated following extensions, the FDA's benefit/risk profile assessment of dapagliflozin may have shifted in favor of the drug.

Our discussions have therefore resulted in a well-defined path forward.

We don't require starting any new clinical data, but we are planning to resubmit in the middle of 2013 with more clinical data from our extension of some studies, plus the results of some dedicated blood pressure studies with dapagliflozin.

This medicine as you know, offers the triad of potential benefits of glucose control, weight reduction, and blood pressure reduction.

And we do expect to have an advisory committee and a six-month review.

So resubmission of ongoing clinical studies, another look at the benefit/risk, including probably an advisory committee, and a six-month review.

Meanwhile, in Europe, we are encouraged by the progress and do feel that we will have this drug approved in Europe by the end of the year.

Jami, this is Charlie.

Thanks for your question.

In regard to gross margin, expenses and taxes -- in one respect, we are absorbing now, for the first time, Amylin in both the third quarter and as we've guided for the full year 2012.

And also, you may recall that in Q4 last year, we had unusually high MS&A expenses, which we commented in previous earnings calls that we don't expect to repeat this year.

Gross margin, as I mentioned in my comments, is benefited by exchange for the contracts that we record there.

So I can't comment going forward how that would potentially look, not knowing where exchange rates will go.

And on the tax side, as I mentioned, it's a component of earnings mix and tax planning.

Without giving guidance for 2013 on the tax line, I would say earnings mix is always going to be variable; but on the tax planning side, some of that we see should be a positive going forward.

In regard to 2013 overall, we have talked about this previously, regarding the dynamics not only impacting the industry, but impacting us specifically, and as we stated, we intend to provide 2013 guidance in January of next year.

Thank you, Jami.

Leah, can we go to the next question, please?

Absolutely.

Tim Anderson from Sanford Bernstein.

Thank you.

Can you narrow down your expectations on the timing of US approval of Eliquis?

Specifically, do you think the agency will take the full six months, or could it be something less than this?

And is there any chance the product might need to go before a FDA advisory committee, or do you think you've answered all of the agency's questions at this point?

And then, on emerging markets -- on a constant exchange rate basis, growth was, I think around 2%, which is fairly low.

Any color on your expectations for future growth and emerging markets would be appreciated.

Tim, this is Elliot.

On Eliquis, we do not expect nor have any indication there will be an advisory committee.

As I mentioned on our last investor call at the end of July, we had a set of questions we felt we could submit answers to by mid-September.

We did that.

The official receipt by the FDA of those answers was September 26.

I am confident our answers address all the questions in front of the FDA.

That submission date triggers a potential six-month review; therefore, we had announced a PDUFA date of March 17 of '13.

I am personally hopeful that the decision can come earlier.

In Emerging Market, your question, we are strongly encouraged to see continued growth for our new brand and key growth drivers, Baraclude, Sprycel, and Orencia, mainly.

They have been partially offset by decline and softness in some of our mature brands and REYATAZ.

So we saw very strong growth in China, and we saw weaknesses more in Russia and Brazil linked to the tendering of REYATAZ, which I counted differently between Q3 and Q2.

So overall, we have strong growth in those markets; Brazil for Orencia, Sprycel.

We have strong also growth for Baraclude in Russia, and China continued to be very strong for us.

Thanks, Tim, for the questions.

Leah, can we go to the next one, please?

Absolutely.

Gregg Gilbert with Bank of America.

Thanks.

A couple on Eliquis.

First, what is the earliest that the commercial organizations of Bristol and Pfizer could be ready to launch Eliquis in the US?

And, Elliot, do you have any views on Edoxaban, and how that will compare with current players and Eliquis, based on what has been presented thus far?

And then on HCV, with the market moving to one pill once daily, seemingly -- do you have efforts underway to compete on that front?

Thanks.

Giovanni, I think you want to take the Eliquis question, but I can summarize the answer.

We are ready, right?

But why don't you go with more detail?

Yes, yes.

So as you know, we are working very actively with Pfizer to prepare for launch.

The answer is, we are ready to launch.

As we've said before, a couple of other comments.

The first one is, we are really excited with the profile of the product.

It is differentiated not only versus Warfarin, but also versus the other agents, and that's going to be very important for us.

The second point is, we will launch with the combined strength of Bristol-Myers Squibb and Pfizer.

We have significant experience in cardiovasculars.

We have a strong presence in cardiology.

We will have a broad reach in primary care, and a very clear focus on access.

When we launch, we will focus on establishing access for the first four to six weeks post-approval; and at the same time, we will train our sales and medical teams to begin promotion of Eliquis.

And we are ready to launch.

Our first objective when we launch, even the differentiated profile and the strength of the data will clearly be to establish Eliquis as the leading new agent.

We also believe we have the potential to increase the percentage of naive patients, new to brand RXs that go to new agents.

As you know, the new agents right now are capturing about a third of NBRXs.

And we believe that the launch of Eliquis, given the differentiated profile, will be able to significantly grow that percentage.

Elliott?

Yes -- Gregg, I'll answer your question on Edoxaban and then HCV.

Edoxaban, of course, is the potential competitor in the 10-A space, an ongoing Phase III trial that may be read out next year.

Clearly, our data as it stands now is differentiated, with superior efficacy and less bleeding, and a mortality benefit.

We believe the differentiated data from two trials, Aristotle and Avarois, will be reflected in the label, and they will be a best-in-class product answering a significant unmet need.

It is impossible for us to know for sure what the profile of Edoxaban will be.

It clearly will depend on their data that we will review, and we take serious for next year.

I will note that the half life of this drug, Edoxaban, is similar to both Rivaroxaban and Eliquis.

And our experience, and the experience in the field so far, would predict a BID dose would be necessary to achieve a profile, like Eliquis, of both superior efficacy and superior bleeding.

So we're pleased with our regulatory process going forward over the summer.

We are working expeditiously with the FDA, and I mentioned our preparations in Europe.

With regard to HCV -- this is a very competitive area, of course.

We do see some important milestones this particular quarter.

Particularly at the Liver meeting, we will present several things that represent the value we see in this space.

We believe there is room for several regimens.

We look forward to present exciting data on a sustained viral response on our triple combination of our 5A and protease inhibitor, plus our non-nuke NS5B.

You'll note that the 5A and NS3 protease inhibitor is what we have been calling the dual.

The dual is in Phase III in Japan.

The protease inhibitor has been dosed in over 1,000 patients, our 5A in several thousand patients.

So now we begin to add NS5B to this dual regimen.

And we have seen in a 12-week regimen a very impressive sustained viral response.

In fact, it corresponds to 100% in the small number of patients tested, if loss to follow-up are excluded.

We're looking forward to being able to advance this regimen, potentially in Phase III registrational studies starting in the first half of 2014.

In the meantime, we will be obtaining more safety data on the third component, the non-nucleotide NS5B, and completing formulation work to combine the three drugs into one pill that will be administered twice a day for a up to 12-week regimen.

In addition, our dual, as mentioned, is progressing in Japan.

And there's a significant number of patients, over 2 million patients, infected there.

70% of them have genotype 1-b.

The dual has had a very high SVR, after the regimen there of the dual.

And we will see the Phase III data in the middle of next year, and hope to file by the end of the year.

We've also initiated a Phase III quad program, with the dual on top of peg/riba for GT1a and GT1b null patients.

We continue to develop Lambda in parts of the world where we think an interferon will remain an important option.

We also will present at the Liver meetings proof of concept for Lambda in hepatitis B, which I think is an important medical opportunity.

Okay.

Great.

Thank you, Gregg, for those questions.

Leah, can we go to the next one, please?

Absolutely.

Mark Schoenebaum with ISI Group.

Hello, guys.

Thanks a lot for taking my question.

Some of my questions have been asked.

I had one financial question and a couple pipeline.

The first was -- I still don't entirely understand the tax rate in the quarter, a little lower than we were expecting.

Maybe provide a little bit more color on that, if you don't mind?

Second question I had was on PD-1.

Could you just give us an update on the time line for the Phase IIIs and any enrollment that has already occurred.

And then also, the Yervoy combo trial with Zelboraf -- what the status is for combing Yervoy with Zelboraf?

And then my final question was on Dapa, just to build on a prior question -- did I hear you right, Elliott, that you said that you think you may have -- that the FDA's mind may have changed about the risk/reward on this?

Thanks.

Well, thank you, Mark.

I'm not sure what would have happened if we didn't answer most of your questions in advance.

I'm sorry?

So who starts?

You start with tax rate?

Let me just review what I said before regarding the tax rate.

Our tax rate is variable to where we have our earnings, and we have earnings differentials between countries.

So it's just purely a function of earnings mix, where we earned our income for the quarter.

Yes, Mark, so on PD-1, Zelboraf and dapagliflozin.

Starting in the reverse order -- yes, I said that after extensive discussions with the FDA, we believe that the FDA clearly is willing to reconsider the benefit/risk of this drug.

This will require a review and probably an advisory committee.

And their sense that they conveyed to us is that the benefit/risk has shifted in the favor of the drug.

And that says we have evolving data, plus we think we can shore up that argument by supplying more data over the next six months.

So since I don't have all that data in hand, I have to add that important caveat, but I feel we will be submitting an even stronger application for this important medicine by the middle of '13, have a six-month review, including probably an advisory committee.

With regard to PD-1, we have a very significant, dedicated intense team on this in development.

And with our commercial colleagues for advice and involvement in this, it's a very exciting area in specific and in general.

We have just recently launched three Phase III studies.

Two are in lung studies, so patients have started to be dosed in second-line squamous cell and second-line non-squamous cell.

A renal cell carcinoma study has also been started, and soon there will be a comprehensive Phase III program covering all lines of therapy in melanoma, probably to start before the end of the year.

With regard to ipilimumab data with Zelboraf, we did feel that we would have this data in-house by the end of this year.

It might take into next year.

It's a 50-patient study with Zelboraf and ipilimumab used together, primarily for safety and advice.

We will present at ASCO combination data, including PD-1 and ipilimumab.

Thanks, Mark.

Leah, can we go to the next question, please?

Absolutely.

Catherine Arnold with Credit Suisse.

Thanks very much.

I was wondering if you could step back and talk about your priorities for business development?

Obviously, you're still planning to be very aggressive about deals.

But given Amylin and given Inhibitex, what are the therapeutic areas where you might say, we really want to pursue those based on where the body of science is going, based on your strategic objective?

And then, when it comes to Eliquis, could you talk about getting the patients that are in the less -- the more stable patients on Warfarin switched over to Eliquis; and what you've learned about where the market is with Xarelto and Pradaxa that you will incorporate into your plans -- whether it's the bleeding concerns with it, a lack of an antidote, or pricing, or patient stratification.

Give us a little bit more granularity there.

Thanks.

Hello.

Good morning, Catherine.

Giovanni, you will take the Eliquis question.

Let me make a couple of comments about business development.

As I said before, we are disappointed by the discontinuation of the 094 program, which is a stark reminder of the high-risk nature of our business.

Having said that, nothing has changed with regard to our business development strategy.

And you might be aware of it.

We recently announced that Fran Heller has joined the Company as the new head of Business Development.

Business development has been one of our top priorities, and we're pleased that we closed our acquisition of Amylin and our expansion of our AstraZeneca during the quarter.

We continue to be interested in small molecules, as well as expanding our biologics capability.

And the areas are aligned with our key strategic disease areas.

So they remain [sirimec], virology, neuroscience, immuno-oncology, and immunology.

We will continue to look for business development opportunities that can help deliver long-term growth, and we are also interested in near-term opportunities, opportunities that could improve -- or would improve the growth profile of the Company.

What I want to say also is that we will remain disciplined with regard to focusing on transactions -- business development transactions that are strategically, scientifically, and economically sound.

So in summary, nothing has changed as far as business development is concerned at Bristol-Myers Squibb.

Yes, Catherine, this is Giovanni.

From an Eliquis perspective, as I said before, the very important point is that the profile of Eliquis is very differentiated, not only versus Warfarin, but also versus the other agents.

And also that we will have Pfizer and us at Bristol-Myers Squibb very focused on ensuring a successful launch.

With respect to the patient pools, as I mentioned before, we are very focused on looking at new-to-brand prescriptions, or NBRXs.

And the new agents to date in the US have captured approximately one-third of NBRXs.

It's important that we believe that's primarily because of a convenience perception from physicians on Xarelto and Pradaxa.

And when we launch with Eliquis, we will have really strong data.

The efficacy data is important.

The bleeding data is extremely important.

So as I said before, our first focus really is to establish Eliquis as the leading new agent, accelerate the erosion of NBRXs from Warfarin.

And clearly over time, there will be patients that are well controlled on Warfarin or currently on aspirin, at a later point, that will beginning to be accessible to us.

But I think it's really important to focus on the profile and how we will be able to drive establishing the brand as the leading agent from the beginning.

Thanks, Catherine.

Leah, can we go to the next question, please?

Yes.

Our next question comes from Steve Scala with Cowen.

Thank you so much.

Two questions for Elliott.

First, will Bristol take an interim look at the PD-1 lung study in 2013?

And if so, if you could tell us when in 2013, that would be helpful.

And secondly, what is the nature of the dialogue with the FDA on Eliquis's resubmission?

Is there daily discussions?

Are any new questions arising?

Are any of the questions that are arising requiring clarification?

Or are there no questions, and if so, what does that mean?

Okay, Steve.

Thank you.

Taking Eliquis first, we typically don't comment on the daily interactions with the FDA.

For you, I'll make an exception today.

This is a very good interaction.

There are frequent interactions, just for clarification.

I do not expect any new questions, as I said before.

I feel the answers should be sufficient for a decision, and we're moving forward.

I think I'm encouraged that, as I said in the beginning, the FDA has a willingness to work expeditiously with us.

With regard to the question on PD-1 -- as in most Phase III trials, there are interim analyses built into our squamous small-cell lung cancer, as well as non-squamous non-cell lung cancer and the renal trial.

I don't have a prediction on when.

We usually don't announce the interim studies.

But the regulatory pathway for each indication will be determined by the results.

I can assure you that we do have an aggressive program to properly qualify this, with the feeling that if the data continues to evolve the way it is, it will meet a very important unmet medical need, and there's great enthusiasm in the field, as well as in the regulatory agencies.

Thank you, Steve.

Leah, can we get the next one, please?

Our next question comes from Seamus Fernandez with Leerink Swann.

Thanks for the question.

Just to follow up on Steve's question on PD-1 -- Elliot, maybe you can just give us your thoughts on the PDUFA 5 and a little bit of the FDA's new breakthrough treatment paradigm.

And again, what that might mean as it relates to the need for survival data versus response rate data, specifically in squamous non-small cell lung cancer, given the unmet medical need there, as it relates to PD-1.

And then, you guys are making what seem to be unusually strong statements behind the SAVOR study.

This is the CV outcome study, obviously.

Can you give us a sense of, in the meta analysis that you've conducted on CV outcomes, have you actually looked at that on top of statins?

And are you seeing a comparable-sized effect in the meta-analysis in patients that were also on statins?

Thanks a lot.

Okay, Seamus.

I think it's too early for me to be able to comment on how PDUFA 5 will impact practice.

I think it is important the way the agency has tried to balance the amount of time allocated so that we may have more predictability, perhaps more first cycle approvals, at the cost of some, perhaps less time up front.

I do sense that there's great interest in breakthrough therapies.

Certainly the Oncology Division's approvals before the PDUFA dates, even now, would indicate that.

And the enthusiasm we see on some of our drugs that offer breakthrough possibilities would confirm that, although one has to wait to see the final profile and the benefit/risk in all these cases.

We are making people aware of SAVOR, but there is no new information until we see the results of the Phase III trial.

We were encouraged to do long-term cardiovascular assessments, initially, of new diabetes agents, as you remember, primarily to rule out cardiovascular harm.

We took the position that these should be done in a way to detect a benefit, if there was one.

We were struck with the prescribed meta-analysis in our own program to rule out harm that the hazard ratio was very favorable for Saxagliptin.

We noticed that others had made a similar calculation.

And the meta-analysis across all -- and I would emphasize, short-term trials -- is encouraging.

So what we have now is a hypothesis.

There is biological plausibility that there are other substrates involved that are affected favorably with DPP-4 inhibition, but the mechanism, should it exist, is relatively unclear.

The reason we point this out is because we've had a great deal of enthusiasm in enrolling this study.

We've expanded the study, and the time lines have been brought forward by maybe a year.

And hopefully, we'll see the data in-house in the middle of '13.

Thanks, Seamus.

Can we go to the next question, please, Leah?

Our next question comes from Chris Schott with JPMorgan.

Great.

Thanks very much.

Just a couple questions here.

The first was on Eliquis.

The roughly third of new-to-brand patients who are going to novel agents -- is this in line with where you would have expected share to stand at this point with Xarelto and Pradaxa?

And I guess the question is -- are you thus far finding that Warfarin's stickiness is as expected?

Is it stickier, is it less sticky, maybe, than you would have expected, as you think about this market evolving?

Second question on Eliquis -- there's obviously been a lot of noise around Pradaxa out there.

It's obviously a different mechanism.

But do you see any risks that, that noise impacts the uptake of all novel agents, such as physicians are less willing to adopt a new agent because of the noise that's out there?

And then the final question is on -- shifting gears -- to hep C. The triple combination moving into Phase III in 2014 -- will that be with the single pill you commented on earlier, or is the single pill a future program?

Thank you.

I'll start with hepatitis C. The triple regimen is starting sometime in early '14, as of now.

It must await expansion of our ongoing Phase II that will give us more safety information on the third component, the NS5B, and is also affording us the opportunity to do a fixed-dose combination, which will be one pill twice a day.

And that's we intend to use in the Phase III studies.

On Eliquis -- Giovanni?

Yes, on Eliquis.

This is Giovanni.

I would say the following -- first of all, clearly we followed from the beginning the launch uptake of Pradaxa and Xarelto very carefully.

As we've commented several times, there is a need to educate physicians over a period of time when you are changing a practice of medicine that has been established for a very long time.

And that clearly has been the case with Warfarin.

And this is really the reason why you've seen initial uptake, and the reason why the uptake has been primarily in the specialist segment versus primary care physicians, at the beginning.

When I made the comment about one-third of NBRXs now having shifted to the new agent, it's also important to remember two things.

First of all, that percentage continues to grow.

And second, that has been really the result primarily of a convenience perception with the new agents.

We do have a very differentiated profile, as I mentioned before -- efficacy, bleeding -- those will be extremely important to the specialist, and it will also be important to the primary care physicians.

And that's why we see our ability to grow NBRXs and establish Eliquis as the leading new agent.

Great.

Thank you, Chris.

Can we go to the next question?

I think we have time for two more, Leah.

Thank you.

Our next question is from Chris Butler with Barclays.

Yes.

Thanks.

It's Tony Butler.

Two very brief questions -- Elliott, one, really, on elotuzumab.

We've heard some very good information coming out with respect to elotuzumab and multiple myeloma.

And I'm curious -- I believe the refractory trial is due to complete enrollment quite soon.

Will there be an interim analysis next year?

And when would you expect a readout of that total data?

And then finally, for Lamberto -- given the delays in Eliquis, I'm just curious how you keep the troops of the sales force motivated.

I might expect that if they felt they would have launched earlier and given the FDA concerns, that's not going to necessarily -- that has not been the case.

How do you continue to motivate them through this bit of lull period?

Thanks.

Yes, Tony, this is Elliot.

I'll take the question on elotuzumab, which is our -- essentially another immuno-oncology approach, this time focused on a specific antigen that is relevant to multiple myeloma.

We are anxiously awaiting these trials.

We're going to have to wait a little longer for the final Phase III, which should come in early 2014 in one study, maybe the second quarter of 2014 in the third study.

And these studies involve both relapsed multiple myeloma patients, as well as the relapsed or refractory multiple myeloma patients.

So let me take your question on the motivation of the sales force.

Everybody at Bristol-Myers Squibb is disappointed because of the delay of Eliquis, not only the sales force.

The good thing is that the entire company believes in what we're doing.

So there's a strong motivation, and strong belief in our strategy.

And you'll find this throughout the entire corporation, which I find very encouraging, and I'm very proud of.

The sales force is not idle.

And Giovanni, you can explain what the Eliquis sales force is doing today -- waiting, and be ready for the launch of Eliquis.

Yes.

We've clearly been training our sales teams.

They've been doing business planning in preparation for launch.

But we have also been able to leverage the Eliquis sales force, particularly in the hospital, in support of our diabetes franchise.

So they have been working on our diabetes franchise, and they will be moving to Eliquis as soon as we receive approval.

Elliott, did you want to follow up?

Yes.

There was a question I didn't fully answer earlier about whether the Pradaxa issues should or will cloud the perception around the 10-As.

I don't think we should consider these all the same class.

They're not.

They're not -- they may be oral approaches to anticoagulation, but clearly there's a Xa class and a factor IIa class, the thrombin inhibitors.

They behave differently pre-clinically.

They behave differently clinically.

We chose specifically Xa for the ability to get a wider therapeutic window to get more efficacy and less bleeding.

The issues around Pradaxa in terms of GI disturbance that led to about 15% of discontinuations doesn't exist in the profile that we have.

And I think because we went after this mechanism and the BID dose, we have less bleeding than the other agents, with more efficacy.

And so those are clear differentiating points that I hope we can make clear to the practicing public.

Thanks.

Leah, can we go to our last question, please?

Last question comes from David Risinger with Morgan Stanley.

Thanks very much.

I guess, I'll just keep it relatively brief.

My questions are for Elliot.

Elliott, I was just hoping that you could walk us through what we should expect with respect to PD-1 data disclosures over the next nine months or so.

Will we see any press releases before ASCO, or is it really going to be the May/June time frame for the next efficacy updates on PD-1?

And then, second -- with respect to the saxagliptin SAVOR study, typically we think about cardiovascular trials ending a year early as entailing risk; that the active drug, or the drug being studied, is not successfully keeping people healthier over a longer period of time.

But you did increase the size of that study by, I think, about a third.

And so could you just juxtapose those two and tell us how we should think about the SAVOR trial?

Thank you.

The SAVOR trial was enrolling well.

We had no difficulties.

We wanted to increase the targeted enrollments, so that we could increase the number of events that we would have over a given period of time, and that has resulted in an earlier potential read-out.

And I won't have any more information, other than to repeat that, in the middle of the year, internally, we hope to see the result of that trial.

With regard to data flow on PD-1 -- we've just started our Phase III.

I do know at this point targeted for ASCO, we will have updated studies that will help characterize even further response and durability from our early studies in multiple tumor types.

And we will have combination data of PD-1 with ipilimumab in melanoma.

And at this point that's, I think, the next data point to think about.

Thanks for your questions.

Lamberto?

Let me close this call saying that, again, this was a challenging quarter for us at Bristol-Myers Squibb.

But it's also a quarter that demonstrated our ability and our determination to straight through to our strategy; a quarter that underscored our commitment to building a solid foundation for the future, and as such, one that reaffirmed my optimism about our future.

Thank you, everybody.

Thank you.

Great.

Thank you, Lamberto.

And thanks, everybody, for joining the call.

Have a great day.

Ladies and gentlemen, that will conclude today's presentation.