Amgen Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 6, 2024

Key Takeaways

  • Horizon acquisition accretive: Amgen closed the Horizon Therapeutics deal on October 6, adding a new rare disease pillar that generated $995 million in Q4 sales and is expected to deliver at least $500 million in pre‐tax synergies by 2026.
  • Strong 2023 financials & guidance: Q4 total revenue rose 20% year-over-year to $8.2 billion and non-GAAP EPS grew 15% to $4.71, while full-year revenue climbed 7% to $28.2 billion; 2024 guidance calls for $32.4–33.8 billion in revenue and non-GAAP EPS of $18.90–20.30.
  • Pipeline milestones ahead: Over a dozen significant readouts are expected in 2024, including Phase 2 data for obesity candidate maritide, a June 12 PDUFA for tarlatamab in small cell lung cancer, Phase 3 data for roketimlimab in atopic dermatitis, and Phase 3 results for uplizna in myasthenia gravis and IgG4-related disease.
  • Broad commercial growth: Every therapeutic pillar delivered volume growth—18 brands achieved record annual sales in 2023, led by Repatha (+25% Q4 sales), BLINCYTO (+47%), EVENITY (+39%) and PROLIA (+12%), with Asia Pacific up 41% in volume.
  • Technology & capacity investments: Amgen increased R&D spend by 8% in 2023, appointed its first CTO to harness AI, and is building new manufacturing plants in Ohio (FDA-licensed) and North Carolina to support future biologics production.
AI Generated. May Contain Errors.
Earnings Conference Call
Amgen Q4 2023
00:00 / 00:00

There are 18 speakers on the call.

Operator

My name is Julianne, and I will be your conference facilitator today for Amgen's Quarter 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. There will be a question and answer session at the conclusion of the last speaker's prepared remarks. In order to ensure that everyone has a chance to participate, I would now like to introduce Justin Clays, Vice President of Investor Relations. Mr.

Operator

Clays, you may now begin.

Speaker 1

Thank you, Julianne. Good afternoon, and welcome to our Q4 2023 earnings call. Bob Gradway will lead the call and be followed by a broader review of our performance by Murdo Gordon, Vikram Karnani, Jay Bradner, who I'm pleased to welcome and is joining us for the first time on our quarterly earnings call and Peter Griffith. Dave Reese

Speaker 2

will also be available during

Speaker 1

the Q and A session. Given the timing of the Horizon Therapeutics acquisition close, The results as shown in our press release and slides include contribution from the Horizon business from October 6 onwards. For the avoidance of doubt, this will also be the basis for our filed financial results. To supplement this information, Vikram will also provide sales information for these products for the full Q4, including the 1st week of October, as further context in his remarks. Through the course of our discussion today, we will use non GAAP financial measures to describe our performance and have provided appropriate reconciliations within the materials that accompany this call.

Speaker 1

We will also make some forward looking statements, which are qualified by our Safe Harbor statement. And please note that actual results can vary materially. With that, over to you, Bob.

Speaker 3

Okay. Thank you, Justin, and let me thank all of you for joining our call. 2023 was another year of performance and progress for Amgen, further positioning us to deliver attractive growth through the end of the decade and beyond. Last year, we delivered double digit volume growth in all four quarters with balanced growth across products and geographies. 18 of our medicines generated record annual sales, including Repatha, Provia, Evenity, TESPYRE, BLINCYTO, KRYSTEXXA and UPLISNOW.

Speaker 3

The acquisition of Horizon, which completed on October 6, gives us a significant new rare disease business that now stands as a 4th pillar of growth alongside our leading general medicine, oncology and inflammation businesses. The medicines we acquired are all very early in their life cycles And by leveraging Amgen's world class biologics manufacturing, decades of experience in inflammation and our extensive global presence, We believe these products have the potential to reach many more patients around the world. Last year, we also advanced the deepest and most diverse pipeline in our history promising molecules at all stages of development and across our four pillars of growth. We anticipate well over a dozen significant pipeline milestones this year. I'll touch on a few.

Speaker 3

In general medicine, we'll generate Phase to data this year for our lead obesity molecule, Maritide, and we're excited, of course, to learn more about this asset. We're also advancing a number of early stage assets in this space. In oncology, we have a June 12 PDUFA date the FDA to complete its priority review of tarlatumab as a third line treatment for small cell lung cancer. Tarlatumab is the 1st bispecific T cell engager shown to be effective in addressing a major solid tumor, in this case, one for which there's been no new treatment in decades and which today has a 5 year survival rate of just 3%. We're studying tarlatanamab in earlier lines of treatment and hope over the fullness of time to be able to serve the tens of thousands of patients diagnosed with small cell lung cancer each year in the U.

Speaker 3

S. And major markets around the world. We've done this very successfully now with our first BiTE, BLINCYTO, which has steadily moved into earlier lines of treatment for acute lymphoblastic leukemia, And we'll take the same approach with yet another promising bite that being zauiridomig in prostate cancer. In inflammation, we'll have Phase 3 data from roketimlimab in atopic dermatitis from the first of what are now 8 trials in the ROCKET program. And in rare disease, we'll have Phase 3 data from uplizna and myasthenia gravis and IgG4 related disease.

Speaker 3

At a time when a rapidly aging global population needs more innovation, Amgen is delivering, both with the medicines we have on the market today and with the promising new medicines that are advancing in our pipeline. We're also excited by the rapid convergence of biotech and tech, which is enabling us to innovate more quickly and confidently. We've been preparing for this hinge moment for more than a decade and recently named Dave Reese as our first ever Chief Technology Officer to ensure that we're capitalizing on technologies like generative artificial intelligence, not just in R and D, but across the entire company. Succeeding Dave as Amgen's Head of R and D is Jay Bradner. Jay is a physician scientist and a seasoned R and D leader, having served for many years as President of the Novartis Institutes For Biomedical Research.

Speaker 3

Jay previously also served as a faculty member at Harvard Medical School and prior to joining Amgen was a practicing oncologist at the Dana Farber Cancer Institute. We're delighted to have Jay on board and excited by the work that he, Dave and the rest of our team will do together to accelerate innovation at Amgen for the good of patients and for the long term growth of our business. And with that, I want to thank our 27,000 employees around the world for their many contributions to our success. And let me now ask Murdo to talk about our commercial performance in 2023.

Speaker 2

Thanks, Bob. I'm very pleased with our performance in 2023. Execution was strong across the business, resulting in record sales in the year for 18 brands and robust volume growth across the four pillars of our business. Full year product sales increased 9% year over year. Volume growth was 15% with strength across our regions.

Speaker 2

U. S. Volume growth was 14%, and volume growth in our Europe, Latin America, Middle East and Canada region was 10%. Asia Pacific continues to be our fastest growing region with 41% volume growth. These results include 9 $4,000,000 of sales from the legacy Horizon portfolio from the period of October 6 through December 31.

Speaker 2

I'll start with our general medicine business, which includes Repatha, Prolia, Evenity and Aimovig. Overall revenue for these four products grew 15% year over year in the 4th quarter and 17% for the full year, driven by 18% and 20% volume growth, respectively. Repatha sales increased 25% year over year in the 4th quarter, with volume growth of 35%, partially offset by lower net selling price. Outside of the U. S, we saw 25% volume growth with strength across our regions.

Speaker 2

In the U. S, volume growth of 48% was driven by a 66% increase in the number of new patients starting treatment. We saw a decline in net selling price in the U. S. Primarily driven by new formulary coverage.

Speaker 2

We expect this additional coverage to lead to strong volume growth, which will more than offset declining next selling price. In addition, some payers have recently removed prior authorization for some patients, which will further ease their access to Repatha. We remain committed to the urgent need to educate physicians patients on the importance of LDL C lowering to reduce the risk of cardiovascular events. In the U. S, we activated than 20,000 new prescribing physicians in 2023 in both the primary care and cardiology settings.

Speaker 2

And while we're pleased with this progress, we'll continue to work tirelessly for the many, many more patients around the world who can benefit from Repatha. Transitioning to bone health, EVENITY had record sales of $318,000,000 for the quarter, driven by 39% volume growth. Osteoporosis disproportionately impacts postmenopausal women and the diagnosis and treatment rates for these patients are low. In the U. S, only 6% of very high risk patients with osteoporosis are treated with a bone builder, creating an urgent need for treatment with an effective therapy.

Speaker 2

EVENITY is an important therapy to address this unmet need as it is the only bone builder that works with the body's natural ability to increase bone formation and also decrease bone resorption. We see strong growth potential for EVENITY and we'll continue to apply our proven experience in bone health to ensure it reaches all the patients who need it. Prolia sales grew 12% year over year to a record $1,100,000,000 for the 4th quarter. Volume growth of 10% was supported By real world evidence reaffirming Prolia superiority in reducing fracture risk when compared to alendronate in treatment naive patients with postmenopausal osteoporosis at a high risk of fracture. Moving to our oncology business, which includes BLINCYTO, LUMICRAZ, Spectabix, Kyprolis, Nplate and XGEVA.

Speaker 2

Sales of these 6 innovative products grew 5% year over year for the 4th quarter With 3% volume growth, full year sales grew 12% year over year, driven by 12% volume growth. BLINCYTO sales grew 47% year over year to a record $241,000,000 for the 4th quarter. Volume growth of 55% was supported by broad prescribing to patients with acute lymphoblastic leukemia in frontline consolidation treatment. Long term, we see significant growth potential for BLINCYTO from utilization earlier in the frontline as part of induction treatment. LumaCrest sales increased 8% year over year for the Q4.

Speaker 2

We see future growth opportunities for LumaCrest coming from launches in new markets and additional indications. Pectavix sales increased 5% and Kyprolis sales grew 8% year over year for the Q4, both driven by volume growth. Enplace sales decreased 18% year over year for the Q4, driven by volume decline related to timing of orders placed by the U. S. Government, partially offset by volume growth across our regions.

Speaker 2

Full year Sales increased 13%, primarily driven by volume growth, including US government orders. Excluding US orders, Enplace sales grew 23% year over year for the Q4 and 8% for the full year. Transitioning to our inflammation business. So Tesla sales increased 2% year over year for the Q4, driven by favorable changes to estimated sales deductions and 3 percent volume growth, partially offset by lower inventory levels and lower net selling price. Full year sales decreased 4% driven by lower net selling price and lower inventory levels, partially offset by 2% volume growth.

Speaker 2

New patient starts for Otezla grew 6% in the 4th quarter, driven by strong execution and increased investment. Competitor free drug programs had a reduced impact in the quarter. Otezla is uniquely positioned to grow in 2024 and beyond given its indication for all severities of psoriasis combined with an established clinical profile, broad payer coverage, a lack of testing required for initiation and convenient oral administration. Enbrel sales decreased 8% year over year for the 4th driven by a 4% impact from unfavorable changes to estimated sales deductions and lower net selling price. US volume grew 1% in the 4th quarter, supported by an increase in new patients starting treatment as a result of improved payer coverage.

Speaker 2

Going forward, we expect net selling price to continue to decline year over year driven by higher rebates to maintain broad first line payer coverage and changes in patient mix. TESTBIR continues a strong launch trajectory with 170 $7,000,000 in sales in the Q4 and $567,000,000 for the full year. Sales increased 10% sequentially driven by volume growth. Our successful launch of a self administered pre filled single use pen allowed us to expand coverage with major pharmacy benefit managers to over 80%, contributing to higher new patient growth as the year progressed. Moving forward, we expect this expanded coverage will allow TESPIR to help even more patients with severe uncontrolled asthma.

Speaker 2

Sales of TABNEOS were $44,000,000 in the quarter and $134,000,000 for the full year. In the Q4, we saw 17% quarter over quarter volume growth in the U. S. Approximately 2,700 patients have now been treated with TAPNOS by over 1700 healthcare professionals. Looking forward, we will continue to leverage our expertise in nephrology and inflammation to bring TAVNEOS to even more patients with ANCA associated vasculitis.

Speaker 2

Sales for our biosimilars portfolio grew 10% year over year for the 4th quarter and 5% for the full year, driven by 27% and 29 volume growth. This volume growth was partially offset by net selling price decline. Over time, we expect long term growth in our business to be driven by the addition of new molecules and additional launches. Overall, our execution is strong across the business underscored by our foundational commitment to serve patients. The 4 pillars of our portfolio position us well to serve many more patients around the world who can benefit from our innovative therapies.

Speaker 2

And with that, I'll turn it over to Vikram who will cover our rare disease portfolio.

Speaker 4

Thanks, Murdo. I am glad to share an update on our rare disease business now that we are 4 months past due close. We are now fully operating as part of Amgen with integration activities ongoing. As Bob has mentioned before, We are excited to be Amgen's 4th pillar of long term growth. I wanted to make sure you're aware that we are not reporting The full quarter in press release and slides, which reflects sales from October 6 onwards and totaled $954,000,000 This excludes $41,000,000 of sales that occurred in the 1st week of October prior to deal close.

Speaker 4

For the full quarter, our rare disease brands from Horizon delivered product sales of $995,000,000 representing 6% year over year sales growth. Throughout the remainder of my remarks, I will reference full quarter product sales. TIPEZA, an IGF-1R monoclonal antibody for patients with thyroid eye disease generated 4 $7,000,000 of sales during the entire 4th quarter, representing 3% quarter over quarter growth. This is the 3rd quarter in a row of quarter over quarter growth for Tepesa with the growth largely driven by the U. S.

Speaker 4

We saw a number of positive leading indicators, including a record number of unique DAPEZA prescribers, total patient enrollment forms and patient starts in 2023. Additionally, thanks to our efforts, We've been able to generate favorable medical policy changes for greater than 50% of U. S. Covered lives, and we expect to continue this momentum throughout 2024. We continue to see approximately 100,000 patients with moderate to severe disease in the U.

Speaker 4

S. Who could benefit from FEZLA, with the majority of these patients in low clinical activity score settings. Given positive leading indicators and high unmet need, we see a long term growth opportunity for TAPESSA in the U. S, while also recognizing there is some time lag between our execution efforts and the realization of increased patient numbers. International expansion also remains a meaningful long term growth opportunity for TEPEZZA.

Speaker 4

TEPEZZA is approved in Brazil and we are progressing towards approval in additional countries. Our expansion into both Japan and Europe is a high priority with regulatory review underway in Japan and filings in the EU throughout the year. KRYSTEXXA, A pegylated uricase enzyme for patients with chronic refractory gout delivered a record $280,000,000 in sales for the entire Q4, representing 30% year over year growth, driven by continued strong commercial execution. Sales are now annualizing at $1,000,000,000 run rate. Performance was driven by execution across all phases of the patient journey, demand generation, stakeholder engagement and adherence to treatment.

Speaker 4

Aplisna, An anti CD19 monoclonal antibody, which is now the fastest growing biologic in NMOSD, delivered a record $70,000,000 in sales for the entire 4th quarter, representing 68% year over year growth. International expansion is also underway with Aplisna now launched in multiple ex U. S. Markets. Our remaining ultra rare portfolio generated $178,000,000 of sales for the entire 4th quarter, primarily driven by our ultra rare medicines, RAVICTI, PROCYSBI and ACTIMUNE.

Speaker 4

Looking ahead at 2024, By leveraging Amgen's world class biologics capabilities, decades of experience in inflammation and extensive global presence, We are ready to reach more patients than ever before. I will now turn it over to Jay.

Speaker 2

Thank you, Vikram, and good afternoon, everyone. I'd like to take a minute to convey how thrilled I am to join the Amgen R and D organization and this leadership team. The creativity of our discovery research, expert and expedited clinical development, most authoritative biomanufacturing organization in the industry, All were well known to me before joining. But now on staff at Amgen, I appreciate the strong sense of service, the patients facing serious illness, the like minded commitment, growing the impact of our medicines and our business and the shared conviction in this remarkable portfolio of potential first in class and best in class medicines. In 2023, we executed with speed across our clinical pipeline, achieving excellent enrollment in key programs setting up 2024 as a year with significant data readouts across the portfolio for medicines with the potential to transform patient care.

Speaker 2

Key highlights in 2023 included the delivery of promising data from 4 key oncology assets and the attainment of 3 breakthrough therapy designations in oncology. We initiated pivotal Phase 3 studies for tarlatanab in small cell lung cancer, lumacrafts in non small cell lung cancer and colorectal cancer along with desodalibab in Sjogren's syndrome. In general medicine as previously disclosed top line 52 week data from 292 patient Meritide Phase 2 study is expected by late 2024. Leveraging the durability of weight loss observed in Phase 1 and rapid enrollment enjoyed in Phase 2, we recently added a Part 2 to this study, which explores durable weight loss beyond 52 weeks. Our planning for a comprehensive Phase 3 program across multiple indications remains on track.

Speaker 2

Lastly, may have seen that yesterday Nature Metabolism published a manuscript from Amgen R and D that provides the integration of Meritide preclinical and Phase 1 data. Beyond Miratide, our obesity strategy encompasses several assets with AMG 786 in Phase 1 and additional preclinical assets advancing. Our approach is tailored to meet the dynamic needs of obesity treatment demonstrating a longitudinal commitment innovation and patient care in this field. The Phase 3 outcome study of opaciran are potentially best in class Lp targeting Small interfering RNA molecule in atherosclerotic cardiovascular disease has enrolled more than 7,000 patients globally. This rapid enrollment accomplished in just 1 year across 34 countries and over 700 sites underscores the medical community's strong interest in and the potential impact of opaciran.

Speaker 2

We've deliberately expanded our initial enrollment target from 6,000 to over 7,000 patients to ensure comprehensive demographic representation and to satisfy regional regulatory requirements. We are on track to complete enrollment in the first half 2024. In oncology, we're focused on approaching high conviction targets with differentiated therapies for large effect size. We're pleased to announce that the FDA granted priority review for BLINCYTO in early stage CD19 positive BALL For the PDUFA date of June 21, 2024, the ongoing Phase 3 Golden Gate study is enrolling patients to evaluate the effectiveness of alternating BLINCYTO with low intensity chemotherapy here in older adults diagnosed with Philadelphia chromosome negative B ALL. We're also planning to amend this study to evaluate subcutaneous administration of blinatumomab with initiation anticipated in the second half of twenty twenty four potentially allowing us to serve more patients and treating physicians.

Speaker 2

Lastly, we're pleased to announce that just today the American Journal of Hematology published a manuscript Highlighting data from the dose expansion phase of our ongoing Phase 1b study of subcutaneous blinatumomab as a single agent in adult patients with heavily pretreated Relapsed refractory B cell ALL. Of 27 evaluable patients treated, we observed an 85% complete response rate, of which 75% were MRD negative. Subcutaneous blinatumumab was well tolerated with no observed grade 4 cytokine release syndrome. Turning to tarlatanab, a 1st in class DLL3 targeting BiTE molecule, the FDA granted priority review following promising results from the Phase 2 DELFI-three zero one clinical trial and a PDUFA date of June 12, 2024. We are rapidly advancing tarlatanab into earlier lines of treatment where we have initiated 2 Phase 3 studies and plan to initiate a third in the first half of twenty twenty four.

Speaker 2

Zalaritimig, a 1st in class STEP1 bispecific molecule being studied in metastatic castrate resistant prostate cancer continues to progress following the presentation of encouraging Phase 1 data last fall. We are ahead of schedule with the monotherapy dose expansion and expect to complete enrollment in the coming weeks. We've opened a reduced monitoring cohort and are making significant progress in dose range finding studies in combination with novel hormonal therapy combination. For AMG 193, an oral MPA cooperative PRMC5 inhibitor, We're encouraged by 9 responses we've seen across 7 MTEP null solid tumors. AMG 193 is a terrific example of a medicine targeting a genetically defined synthetic lethality and a first clinical translation of our induced proximity platform.

Speaker 2

We're now swiftly moving forward with dose expansion studies and plan to enter master protocols in thoracic and gastrointestinal malignancies exploring combinations with standard of care in the first half of twenty twenty four. In our inflammation portfolio, we continue to explore TESFIRE in indications beyond asthma, including separate Phase 3 studies in chronic rhinosinusitis with nasal polyps, where top line data are expected in the second half of twenty twenty four, as well as in eosinophilic esophagitis. We also remain on track to present Phase 2 COPD data in the first half of twenty twenty four. Our ROCKET Phase 3 program for roketimlimab, a 1st in class anti OX40 monoclonal antibody has successfully enrolled over 2,400 patients with moderate to severe atopic dermatitis. We're introducing an 8th study to the ROCKET program to explore an auto injector and we are planning to initiate both a Phase 3 study in Perrigo Nodularis and a Phase 2 study in asthma this year as we seek to broadly explore the potential of roketinlimab.

Speaker 2

Lastly, we are encouraged by the advancements of our rare disease pipeline with several mid to late stage opportunities. In December, TEPEZZA received orphan drug designation in Japan, but we've also recently submitted a new drug application for TEPEZZA in thyroid eye disease. To serve additional patients in Japan, we have a Phase 3 study underway in the setting of chronic disease with a low clinical activity score. Beyond Japan, we are progressing to PEZA subcutaneous administration to drive increased adoption and improve patient experience and plan to initiate a Phase 3 study in thyroid eye disease this year. With Aplisna, we anticipate important Phase 3 data readouts this year in myasthenia gravis and IgG4 related disease, both diseases with significant unmet need and where we have the potential to make a real difference for patients.

Speaker 2

Azodalibat, an innovative CD40 ligand inhibitor fusion protein has entered Phase 3 for Sjogren's syndrome. This follows encouraging Phase 2 data with efficacy across patients with moderate to severe systemic disease and patients with high symptom burden. Gazodalibat is the 1st therapy to demonstrate efficacy in this latter patient population. Closing on our rare disease efforts, we're excited about fitpaaxalparan, an LPAR-one antagonist being studied in idiopathic pulmonary fibrosis on track for a Phase 2 proof of concept data readout in the second half of twenty twenty four. In closing, I'm delighted to report on the important progress we make advancing our innovative pipeline and I'm looking forward to sharing more pipeline milestones through 2024.

Speaker 2

I'll now turn it over to you, Peter.

Speaker 5

Thank you, Jay. We're pleased with our strong execution and performance in the Q4 and for the full year 2023. In the Q4, total revenue of $8,200,000,000 grew 20% year over year and non GAAP EPS of $4.71 grew 15% year over year. For the full year, we delivered total revenue of $28,200,000,000 7% growth year over year and non GAAP EPS of $18.65 5% growth year over year. As a reminder, both Q4 and the full year results include Horizon's results beginning October 6th When the acquisition closed, our financial results will exclude approximately 1 week of Horizon's results from our 4th quarter results.

Speaker 5

I'll review the details of our Q4 and full year financial results before discussing our outlook for 2024. The financial results are shown on Slides 54 to 56 of the slide deck. Turning to our 4th quarter's total revenue of $8,200,000,000 We saw product sales increase 20% year over year driven by volume growth of 23%, offset by net selling price decline of 3%. Excluding the impact of Horizon, product sales increased 5% year over year driven by volume growth of 9%. Full year total revenues of $28,200,000,000 grew 7% year over year.

Speaker 5

Product sales increased 9% year over year, driven by 15% volume growth. Other revenues decreased 16% year over year primarily due to lower profit and cost sharing from our COVID-nineteen collaboration with Lilly in 2022. Strong expense discipline resulted in a 50% non GAAP operating margin as a percentage of product sales for the full year 2023, while we continue to focus on both internal and external innovation, investing $4,700,000,000 in our pipeline and $27,800,000,000 in our acquisition of Verizon. With product sales volume growth at 23% in Q4 and 15% for the full year, we still efficiently manage the operating expenses of the business. Q4 non GAAP operating expenses increasing 18% year over year, while full year non GAAP operating expenses increased 9%.

Speaker 5

Excluding the impact of Horizon, Q4 non GAAP operating expenses increased 3% and full year non GAAP operating expenses increased 5%. On a non GAAP basis, Q4 cost of sales as a percentage of product sales was flat on a year over year basis at 16.3%. For the full year, cost of sales as a percentage of product sales increased by 1.1 percentage points to 17.0%. The full year increase was primarily driven by higher profit share and changes in our product mix, partially offset by the replacement of the Puerto Rico excise tax With an income tax beginning in 2023, non GAAP R and D spend in the 4th quarter increased 16% year over year and 8% year over year for the full year primarily due to higher spend on later stage clinical programs and marketed product support, including spend on programs acquired from the Horizon acquisition and continuing investment in our pipeline, including Maritime. Q4 non GAAP SG and A expenses increased 20% year over year, primarily driven by commercial and G and A expenses related to the Horizon acquisition.

Speaker 5

Full year non GAAP SG and A expenses increased 5% year over year, primarily driven by commercial and G and A expenses related to the Horizon acquisition, partially offset by a decline in other marketed product spend. Non GAAP OI and E were about $635,000,000 in expense in the 4th quarter, dollars 168,000,000 increase year over year, primarily driven by increased interest expense related to the debt issued for the Horizon acquisition. Full year non GAAP OI and E was favorable $279,000,000 year over year, primarily driven by the change in accounting for the BeiGene investment to the fair value mark to market method and by gains related to early debt retirement, partially offset by higher net interest expense. Our non GAAP tax rate increased 2.5 percentage points year over year to 15.9% 4th quarter and 2.7 percentage points year over year to 16.5% for the full year, primarily due to the 2022 Puerto Rico change mentioned previously. The company generated $7,400,000,000 of free cash flow in 2023 compared with $8,800,000,000 in 2022.

Speaker 5

The decrease is driven by the Horizon transaction and integration costs, higher repatriation tax payments and higher capital expenditures. We expect to continue to generate strong cash flows with the addition of Horizon and are on track with our deleveraging plans to return to our efficient capital structure by the end of 2025. In summary, we continue to execute on our multiple capital allocation priorities. 1st, we continue to prioritize investments in both internal and external innovation. Our increased spending and non GAAP R and D of 8% in 2023 over 20 22 coupled with the acquisition of Horizon Therapeutics continues to broaden and strengthen our balanced portfolio across therapeutic areas.

Speaker 5

With our strong late stage innovative pipeline moving forward through development, we expect our non GAAP R and D to continue to increase in 2024. 2nd, we continue investing in our business for long term growth, including our state of the art manufacturing facilities in Ohio and North Carolina. Amgen, Ohio, our new advanced assembly and final product packaging plant has just received licensure from the FDA for commercial production in January, Roughly 2 years after we broke ground and our innovative drug substance plan under construction in North Carolina is expected to be operational by 2026. In addition, we've positioned the organization to accelerate investments in innovation, including leveraging the power of generative artificial intelligence. And third, we returned capital to shareholders through growing dividends, including $2.13 per share in the quarter.

Speaker 5

This represented a 10% increase over that paid in each of 2022 is 4 quarters. Turning to the outlook for the business for 2024. First, because this is the first full year incorporating the impact of Horizon, we're providing some additional granularity in our guidance, which we don't expect to repeat to the same extent in the future. For 2024, we're expecting revenue of $32,400,000,000 to $33,800,000,000 and non GAAP earnings per share of $18.90 to $20.30 As we continue to integrate Horizon, We expect the acquisition to be accretive to non GAAP EPS in 2024 and we're on track to meet the synergies Target previously communicated of at least $500,000,000 in pre tax costs by year 3 after closing or in 2026. Our revenue range reflects our strong growth outlook driven by numerous opportunities across our 4 therapeutic area pillars.

Speaker 5

We will record a full year of legacy Horizon product sales and we expect continued volume driven growth in our priority products Repatha, Despyr, Avenity, Otezla, Prolia and BLINCYTA, consistent with industry trends in our recent history, we expect mid single digit price declines for our portfolio in 2024. As a reminder, as you model the Q1 of 2024 and consistent with our historical trends, We expect Q1 product sales to be the lowest quarter as a percentage of the full year due to benefit plan changes, insurance reverifications and increased co pay charges. So we expect the Q1 of 2024 total revenue to grow roughly 20% year over year. For the full year, we expect other revenue to be in the range of approximately $1,300,000,000 to $1,400,000,000 And we continue to efficiently run the business through our disciplined approach to managing operating expenses. In 2024, we're making incremental R and D investments to support our promising Late stage pipeline, including our rapidly advancing oncology programs as discussed following ESMO in October and other programs including maritime.

Speaker 5

Furthermore, the addition of Horizon has an impact on the 2024 operating margin given the timing of when synergies are realized. As a result, we project the full year non GAAP operating margin as a percentage of product sales to be roughly 48%. Note that we expect non GAAP operating margin growth to accelerate in each of the quarters following the Q1. There are primarily three reasons for this. 1st, typical lower product sales in Q1 as I mentioned above and in each of the following quarters.

Speaker 5

2nd, Increased spend on our commercial brands will continue, building on the investments we made in the second half of twenty twenty three, including Repatha, Otezla and our Bone portfolio of entity and Prolia. And 3rd, Q1 2024 reflects the addition of Horizon for which we are just at the beginning stages of realizing synergies given the acquisition close date of October 6. So we expect non GAAP operating margin to be roughly 43% in the first quarter. I would reiterate that we expect operating margin growth to accelerate in each of the quarters following the Q1. We project non GAAP cost of sales to be in the range of 17% to 18% as a percentage of product sales for the 2024 year.

Speaker 5

Taking into account the full year Horizon related expenses, we expect non GAAP R and D expenses in 2024 to increase approximately 20% year over year with investments also increasing to advance key pipeline assets including AMG 193, Meritide, roketimlimab and tarlatumab. We see significant potential in our innovative pipeline And it is important that we strategically invest now to fully unlock the opportunities ahead to create long term value for patients, staff and shareholders.

Speaker 1

And

Speaker 5

for non GAAP SG and A spend, we expect 2024 full year amounts as a percentage of product sales to be between 21% 22%. We anticipate non GAAP OI and E to be in the range

Speaker 6

of $2,600,000,000 to $2,700,000,000

Speaker 5

As mentioned on our Q3 'twenty three call, The 2024 guidance includes the interest expense related to the $28,000,000,000 of debt rates for the Horizon acquisition. We expect a non GAAP tax rate of 16% to 17%. Our guidance is primarily being driven by 2 factors. The first is the jurisdictional mix of income, including the full year benefits associated with the Horizon transaction And the legal entity rationalization undertaken in the Q4 of 2023, in part, to integrate the Horizon entities into our existing US headquartered legal entity structure. The second is the benefit from a planned payment to the IRS As an advanced deposit, as we've done in the past to stop the accrual of interest on uncertain tax positions, there is no change in our belief in the merits of our legal arguments with the IRS as we prepare for trial.

Speaker 5

Given the interest rate environment, although the deposit negatively affects our cash flow in 2024, if any of the deposit is returned to us upon the resolution of our litigation, those funds would accrue interest income. Therefore, the rate arbitrage makes this payment a prudent use of our capital. Once again, out of an abundance of clarity, this represents no change in our belief in the merits of the Tax Court case. The guidance also includes the impact of the adoption of the OECD 15% minimum tax by certain jurisdictions. Based on our individual footprint, we don't anticipate any significant effects of the new rules in 2024, but we're closely watching the global tax landscape for future impacts as the framework continues to be considered by additional jurisdictions and new rules take effect.

Speaker 5

We expect governments around the world, including the United States to continue to look for more sources of tax revenue from large multinational corporations that could result in higher tax in the coming years. Similar to 2023, we expect share repurchases not to exceed $500,000,000 in 2024. We expect that we will continue to increase our dividend. We expect capital expenditures of approximately $1,100,000,000 in 2024 consistent with our capital allocation priority to invest in our business, including the Ohio and North Carolina facilities I mentioned ahead and into the rare disease teller. In summary, we delivered another strong year of financial results in 2023.

Speaker 5

Our confidence In the long term, growth of Amgen is strong and we believe that our new rare disease pillar, one of our 4 pillars, will be an important additive source of growth for the company. This concludes the financial update. My thanks to my approximately 27,000 plus colleagues at Amgen around the world for their commitment to our mission of serving patients and their tireless efforts in 2023. I'll turn it back to Bob for Q and A.

Speaker 3

Okay, thank you. Let's open the line and we'll take questions from our callers. And Julianne, why don't you remind them of the procedures so we can get through these questions here efficiently for everyone.

Operator

Thank Our first question comes from Michael Yee from Jefferies. Please go ahead. Your line is open.

Speaker 7

Hey, guys. Good afternoon and thanks for good results and good guidance. We had a question on obesity. On 133, of course, you had the publication yesterday. I feel like it was the most scrutinized Phase 1 publication.

Speaker 7

But maybe you could just talk to maybe Jay could talk to your interpretation of some of the markers, for example, lipids, A1C, blood pressure and all that kind of thing and Maybe talk about your confidence level about the profile versus competitors? Thank you so much.

Speaker 2

Yes. Thanks a lot, Michael. We really appreciate consideration the Phase 1 paper is receiving from the community, it's exciting to report these data. For those who haven't seen it, this was a randomized double blind placebo controlled study, 49 patients looking at PK, PD, single ascending dose 7 cohorts, multiple ascending dose 3 cohorts, 3 monthly doses, Patients with obesity be a migrator than 30. And we were quite pleased with the outcome.

Speaker 2

Looking at the 4 20 milligram dose as an example, which was the highest dose study 14.5% weight loss at only day 85. And moreover quite durable coming off of that medicine out to 150 days all with relatively mild gastrointestinal side effects. And so to answer your last question first, we find the Phase 1 data which we're pleased to share with the community to be quite supportive of our ongoing work to develop this medicine to the greatest possible benefit of patients suffering from obesity. Now you've asked questions around some of the measurements on this study, lipids, blood pressure and A1C. And I would just caution that this is a Phase 1 trial, the numbers are very small, that the duration of treatment is rather short.

Speaker 2

But even with all of those caveats, while hard to draw conclusions from such small numbers, especially labile measurements like blood pressure and lipids, all are directionally favorable. And so we have we take no concern whatsoever from those measurements on the study.

Operator

Great. Thank you, Michael. Thank you,

Speaker 3

Michael. Next question. Yes.

Operator

Thank you, Michael. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead. Your line is open.

Speaker 8

Good afternoon. Thanks for taking my question. Another one here on the obesity program. So post the published Phase 1 data, How are you thinking about differentiation on GI tolerability? Is the dose range being evaluated in the Phase 2 study Similar to that in the Phase 1?

Speaker 8

Thank you.

Speaker 2

Yes. Thanks for the question. I'll take this one as well. As you may or may not know the Phase 2 study, which is ongoing at present and going very well, explores 11 dosing cohorts with relevant placebo controls. And through that study, we'll have a chance to gain an experience with a longer exposure to Miratide, dosed in different ways.

Speaker 2

We've recently added a Part 2 to this study that will allow us to explore even more durable weight loss beyond 52 weeks enabled by just very rapid enrollment. And these 4 dosing cohorts will go on to test dose level and even less frequent dosing schedules than monthly. And so these Phase 2 data Even by end of year, we'll be strongly instructive as to finding a safe and tolerated and efficacious dose to carry into Phase 3 clinical investigation. Yes. The only thing I would add is we're starting from a basis of a monthly dosing cadence and schedule.

Speaker 2

And so the additional dosing cohorts would look at potential dosing schedule beyond monthly. And the data are pretty clear in the market right now that the GI toxicity or GI side effects generally related to the day of dosing of the GLP-1s which are dosed weekly, we see some of that same GI side effect profile in kind of the first dose part of the dose titration, but there's an opportunity here to potentially spread the dosing intervals out further and further improve tolerability in our program. And as Jay clearly described, we've got all of the different aspects of that being studied in the Phase 2 program.

Speaker 1

Thanks, Julien. We'll go to next question.

Operator

Thank you, Salveen. Our next question comes from Jay Olson from Oppenheimer. Please go ahead. Your line is open.

Speaker 9

Hey, thank you so much for taking the question and congrats on the progress. Another question on 133. Talk about whether or not the data that we see later this year will include patients from of the study and do you think it's possible that 133 could be dosed once every 2 for 3 months? And also if you could just comment on the rollover rate of patients from Part 1 to Part 2? Thank you.

Speaker 3

Jay, could you catch all that some of what Jay asked was broken up at the beginning?

Speaker 5

The 3rd part was a little bit broken

Speaker 2

up of your question. I heard A better explanation of PAR2, frequency of dosing. And then I did not hear your 3rd part.

Speaker 1

I think it was 5 months later.

Speaker 9

If you just comment on the rate of patients rolling over from Part 1 to Part 2. Thanks.

Speaker 2

Okay. Yes. Thank you for the question, Jay. Let

Speaker 5

me give a little bit

Speaker 2

of context on this Part 2 study that I think will help answer them. In Part 2, the intent is to really look at durable weight loss beyond 52 weeks. And so by durable weight loss, Patients eligible for Part 2, which begins at the end of 52 weeks, will be responding to this medicine. And then they'll be re randomized to 4 cohorts that will test dose level and again this even less frequent dosing schedule. We have not disclose the granularity on the dosing schedule.

Speaker 2

This is a competitive environment, but We're afforded this chance because the ADC, the antibody core of Meritide like so many immunoglobulin therapeutics allows for the opportunity to use it much less frequently. The rate of patients rolling over to Part 2 will be established as the Phase 2 study continues to progress this year.

Speaker 1

Thank you, Julien. Go to next question.

Operator

Thank you, Jay. Our next question comes from Chris Schott from JPMorgan. Please go ahead. Your line is open.

Speaker 10

Great. Thanks very much. Just maybe to pivot over to Tepesa for a question. Can you just talk a little bit about the dynamics for 2024? It seems like the products come back to growth, but I'm just trying to get a sense of now that Amgen owns the asset and has more kind of time with it, what are your top priorities?

Speaker 10

And how do you think about continuing to kind of grow the new patient base here? Thank you.

Speaker 3

Sure. Chris, maybe we'll take it in a couple of parts. But Vikram, share your thoughts first.

Speaker 4

Yes. Thank you for the question. I think if you focus a little bit on what are the underlying factors that are driving We saw a record number of unique TEPASA prescribers. We saw an increase in patient enrollment forms and patient starts. In addition, we've made pretty significant progress on payer coverage.

Speaker 4

As we've seen, Our covered lives have now increased to greater than 50% of U. S. Covered lives. And that's important, educating some of those stakeholders on the new clinical data updated indication, it continues to drive uptake across the full spectrum of TED patients. And finally, what holds all of this together is a really robust patient service model that supports patient access.

Speaker 4

I think we continue to make progress and execute towards each one of these important leading indicators. And we shouldn't forget that There is still low penetration of the approximately 100,000 patients that can be eligible for this medicine in the U. S. Alone. Now just one last point here is that as we've noted before, there continues to be a time lag between the execution of all of these efforts and the realization of increased patient numbers.

Speaker 4

As we've said before, it can take up to 90 days Once a patient is identified for therapy for that patient to actually get on therapy. But we're pretty happy with all of our leading indicators and the execution that we have seen coming out of last year.

Speaker 3

And Chris, the only thing I would add is building on Vikram said in his prepared remarks, we're excited about the international opportunity as well. And I think he characterized that well previously. And we're also excited about what we see as ongoing opportunities to invest in innovation for the benefit of TED patients. So all in all, feel excited about the rare disease pillar that we've established and the role that Tepesza will play in that.

Speaker 1

All right. Next question, Julien.

Operator

Thank you, Chris. Our next question comes from Evan Seigerman from BMO Capital Markets. Please go ahead. Your line is open.

Speaker 1

Hi, guys. Thank you so much for taking my question. I wanted to touch on TESSPIRE specifically in COPD. How are you planning to differentiate Given the pretty competitive data we saw from Dupixent, and how should investors be looking at this data from an efficacy bar? Are there nuances in this trial that need to be clarified that might make it harder to do an apples to apples comparison?

Speaker 2

Yes. And thanks for the question. Myrtle, why don't I start and then you add on. So it's a great and timely question. The Phase 2 COPD study of TESBIR, we expect data in the first half of this year.

Speaker 2

This was a big study, 337 patients, moderate to severe COPD. They're having exacerbations on triple therapy and so reflective of the current unmet need and inadequacy of therapy for patients with COPD. This is a slightly broader population than DUPI that we're studying here. We're totally on track for the readout. We quite like the mechanism here.

Speaker 2

You must know that, t slip works as a signaling factor upstream and by blocking it with our unique biotherapeutic, we block TSLIP, IL-twenty five, IL-thirty three signaling. TSLIP hits so many cell types modulating this Airway Type 2 response by hitting TSLIP upstream, we think we can really have an impact on the disease biology. We see t slip elevated in the serum of patients in bronchiol mucosa and bronchialvial lavage fluid. It's released by airway epithelium. So there's just a lot of signals from the basic biology of this disease pointing to a medicine of this nature.

Speaker 2

And by looking at the broader population than they did with doopy, we have a chance to really figure out who the responder is. Murdo? I think you've covered all the bases. I would just add this, Evan, that with the unique and differentiated mechanism, As Jay described, we hope we can treat a broader population of patients and perhaps the currently available therapies. And we also recognize that there are patients who are refractory to those currently available therapies and we would obviously want to understand if they would be responders to Tespyre, I think we've got strong commercial capabilities, including with our partners at AstraZeneca and are well positioned to take a product like this into the market if we're successful in Phase 3.

Speaker 1

Great. All right. Thank you, Julian. Next question?

Operator

Thank you, Evan. Our next question comes from Umer Raffat from Evercore ISI. Please go ahead. Your line is open.

Speaker 6

Hi guys. Thanks for taking my question. I wanted to touch up on AMG133 as well. 2 parts question. First, on the discontinuations at the high dose, we know 5 out of 8 did not the full duration of the study, but there was a second arm also of this high dose 4 20 milligram with 10 patients, which was not reported.

Speaker 6

This was the one with digital tools. Could you speak to the discontinuation rate in that arm? So there's a 4 20 done separately, which is not part of the paper. And secondly, I know there's a case of liver enzyme elevation at the 280 mg dose, but this patient also had COVID. Could you perhaps speak to the timing of liver enzyme elevation relative the COVID episode.

Speaker 6

Thank you very much.

Speaker 2

Yes. Thanks, Umer. I won't be able to provide patient level insights to the Phase 1 study at this time, But I do appreciate your question and your interest in the report. I'll speak to the dropouts of the Phase 1 at the 4 20 milligram dose, which was 4 out of the 8 patients. First, it's notable to say that the high dose cohort in the multiple ascending dose Receiving the 3 doses of 420 experienced real weight loss, real benefit of 14.5% after these 3 monthly doses.

Speaker 2

This was the group that proved actually quite durable out to day 150. 4 subjects decline to participate in this clinical study setting largely for logistical reasons. The AEs and other characteristics were comparable to all the other patients in the study. Now the second question around the digital group, I don't have insight into that. Dave, do you?

Speaker 3

No, I mean we can

Speaker 7

get back On that, I don't know that we reported that those data in the discontinuation rate.

Speaker 1

All right. Good. Julien, let's go to the next question.

Operator

Thank you, Umer. Our next question comes from Colin Bristol from UBS. Please go ahead. Your line is open.

Speaker 11

Good afternoon and thanks for taking the questions. Maybe a couple more on Maritide. First, could you provide some insight Into the dosing, I mean, obviously, these are pretty large doses. And if we look at like Repatha 4 20 milligrams takes Over 5 minutes by infusion or 3 consecutive injections. So I was wondering if you could give any insight there.

Speaker 11

And then in terms of The relative affinity for GIP versus GLP, maritide seems to have or preferentially favor GLP much more than competitor molecules. And so do you think the ultimate clinical profile is more closely going to resemble that of a long acting GLP-one versus compared to the GIP GLP? Thanks.

Speaker 2

Yes. Thanks, Colin. I appreciate the deep consideration of the molecule especially. I'd start by saying I don't regard these doses as high. I'm new here, but 4 20 milligrams for a biotherapeutic that's an antibody drug conjugate With peptide antibody ratio 2:one seems well in scope for a modern biotherapeutic product.

Speaker 2

I don't need to tell this community paying so close attention to Amgen that this is a very sophisticated biotherapeutics organization. And on the manufacturing side, just every patient, every time and that we have all the capabilities necessary to deliver this medicine at whichever of these 3 or other dose and schedule we arrive at. So no concerns there for me whatsoever. Regarding the balance of the pharmacology, you do invoke a difference between our medicine and medicines developed by peer pharmaceutical companies, Namely mechanistically the core antibody of Meritide inhibits, the GIP receptor whereas these other peptide medicines agonize it. We feel very secure in our choice to inhibit that receptor, supported by just the finest level of experimental data available, experiments of nature, that genome wide association studies in very large populations have pointed to a need, an opportunity to inhibit the GIP receptor to deliver lower BMI as observed with variance in that receptor and downstream signaling pathways that correlate with reduced body mass index in large populations.

Speaker 2

As to the balance which you ask between Inhibition of GIP receptor and agonism of GLP-one, these are very difficult measurements to make in humans, but our modeling suggests that with the therapeutic doses and exposures that we observe that we're achieving both. And Colin, this is Murdo. I would From a patient experience perspective, we've learned a lot from other biologics and Amgen has a world class process development, manufacturing and device team and we've done a lot of work on this one and we anticipate a very positive and simple patient experience on at least a monthly dosing schedule. And we've learned a lot from Repatha specifically and there's more to follow on Repatha from that, but we continue to work to improve patient experience with our biologic injectables.

Speaker 3

Just as we go to the next Let me observe that we're almost up to the hour that we asked you all to set aside, but I know we still have quite a few questions in the queue. So Try to get one question per caller here and get through. We'll stay through the queue of calls or questions rather that's Still waiting for us, but I know some of you may have to drop. So let's move forward, Justin.

Speaker 1

Yes. All right, Julian, next question please.

Operator

Thank you, Colin. Our next question comes from Yaron Werber from TD Cowen. Please go ahead. Your line is open.

Speaker 12

All right, great. Thanks. This is Brendan on for your own. Thanks for taking the question. Just a quick one from us actually.

Speaker 12

Based on the data you've seen so And maybe some feedback from physicians that you've heard. This is on Oplizna. Where do you kind of see Oplizna fitting into maybe MG treatment paradigm given all Competition there, but maybe more to the point how you're thinking about expansion opportunities given all the different auto immune indications you could potentially pursue? Trying to kind of understand maybe longer term growth there?

Speaker 3

First, why don't we ask Vikram just to address the performance of the product right now in NMOSD and then A combination of Jay and Dave can talk about the other activities or other potential applications.

Speaker 4

Yes. Thanks for the question. Yes, Aplisna is actually growing quite nicely and quite well in NMOSD. As you know, it is now the fastest We continue to execute across a variety of fronts. I mean, we're we see this product nicely positioned versus as it's appropriate for NMOSD patients and within the competitive environment that we operate in.

Speaker 4

And we've continued to make significant progress over the last 18 months or so, maybe even longer of continuing to drive more growth with newer prescribers and even a depth with existing prescribers. So the product continues to do well. And I think we hope to continue to deliver good execution on this medicine in NMOSD. Maybe, Jay, you want to talk about the second question?

Speaker 2

Yes. No, I'm happy to. As you may know, I'm a hematologist. I think CD19 is a terrific target. It's expressed Really on all B cells and SPEAR's plasma cells and therefore, considering indication expansion as you've asked, There's a large number of diseases that could potentially be approached with aplizna to the real benefit of patients with unmet need, Far beyond the application of the prevailing CD20s that target just a subset of B cells, This is not lost on our team and we're working through indication expansion priorities presently.

Speaker 1

All right. Julien, let's go to the next question.

Operator

Thank you. Our next question comes from Mohit Bansal from Wells Fargo. Please go ahead. Your line is open.

Speaker 13

Great. Thank you very much for taking my question. I have a question regarding the subcutaneous delivery of Tepasa. You do have plan to initiate a Phase 3 study. Can you talk a little bit about which technology you are using?

Speaker 13

Is this the existing Halozyme technology or are you using something else for this development? Thank you.

Speaker 3

I'm sorry, I had trouble understanding the question.

Speaker 2

The question is what technology we're using for the subcutaneous injectable form of TAVAZA.

Speaker 1

Yeah, maybe Maybe I'll just jump in. Mohit, we're not commenting at this point on the provider. We're just said that

Speaker 3

we're going forward with the subcu.

Operator

Great.

Speaker 1

Okay, Julien, we'll go to next question.

Operator

Thank you, Mohit. Our next question comes from Geoff Meacham from Bank of America. Please go ahead. Your line is open.

Speaker 10

Hey, guys. Thanks for the question. Another one on 133. When you think about the Phase 3 program, Just wanted to know what sort of informs the next indications you're going to go after? Is it unmet need?

Speaker 10

Is it the potential for differentiation on 133? And the timing of that, do you think that you'd want to have the Phase 2 data in hand? Or is this something that you could roll out sort of at risk? Thank you.

Speaker 2

Yes. Thanks for the question. Jeff, really appreciate it. As you know, obesity is a major Public health crisis, maybe 40% of Americans with a BMI over 30, massively costly, so huge burden to the global third party payers and societies. The obesity related disease list is quite long and expanding cardiovascular disease and heart failure, type 2 diabetes, obstructive sleep apnea, NASH and AFLD, kidney disease.

Speaker 2

These are chronic conditions that really demand medicines that can deliver durable and chronic weight loss. And so we think we have a really strong offering for these obesity related diseases rising in our Phase 2 program as you know. And obesity has a strong genetic component and we locked on to Kipper inhibition based on genetic insights. So the opportunity space is quite large. You asked the question, what indications and perhaps even in what sequence.

Speaker 2

And When we have all the requisite data, we'll remark in due course, but we intend all indications where this dual mechanism can improve public health, and we are actively planning and on track for an expansive Phase 3 program.

Speaker 3

And in terms of Dave, you want to add to the regulatory piece?

Speaker 7

Yes. I think Jeff, this is Dave Reese. I would just add that we're planning a very expansive Phase 3 program, so you can expect to see multiple indications move forward in parallel. And as Jay indicated, as we start to see data, we will begin launching those trials and we'll discuss them. And then in addition, as you're aware, regulatory around the world require a certain body of safety data before Phase 3 launches.

Speaker 7

And so of course, we will be compliant with that. But our goal is to launch Phase 3 as quickly as possible once we have the requisite data set and regulatory approval.

Speaker 1

Great. Julien, go to next question please.

Operator

Thank you, Jeff. Our next question comes from David Risinger from Leerink Partners. Please go ahead. Your line is open.

Speaker 10

Yes, thanks very much. So I have another question on AMG-one hundred and thirty three, please. Could you add some more color on Your expectation for the impacts on blood pressure and lipids in Phase 2, specifically whether you anticipate tirzepatide like efficacy on those metrics? Thanks very much.

Speaker 2

Yes. Thanks, David. I mean, we're making all these measurements and I'm not going to try to forecast the outcome of that pharmacology at this time. As you've seen in our Phase 1 program, the medicines very well tolerated delivering durable weight loss and benefit without significant excursion of some of those measurements. I just think it's Too early to try to answer your question and we'll have all that data at the end of the first part of Phase 2 towards the end of this calendar year.

Speaker 7

The best extrapolation that you can have is from the preclinical data that we're just published. I'd urge you to take a look at that.

Speaker 1

Okay, Julien, we'll go to the next question please.

Operator

Our next question comes from Michael Schmidt from Guggenheim Securities. Please go ahead. Your line is open.

Speaker 14

Hey, it's Yigay on for Michael. Thanks for taking our questions. A quick one on XALOIDIMAG. Can you talk about your And of data disclosure this year and your current thinking on the potential registration path, how do you think about the positioning of this agent relative to some of the other emerging agents based on different mechanisms such as ADC or AR2 rates in prostate cancer?

Speaker 8

Thank you.

Speaker 2

Thanks for this outstanding question, Michael. And zelarinomig is A very interesting and exciting molecule for those on the call. This is a steep one CD3 bispecific. We have been studying this in advanced castrate resistant prostate cancer, we have expanded a cohort, the Phase 1 monotherapy. We're opening to reduce monitoring as well as you invoke the existing and novel androgen receptor modulators integrators, we're combinations with novel agents in that domain as well.

Speaker 2

The priorities for the program right now are to establish reduced monitoring. This be important to reach just all the patients who can benefit. We're looking at the feasibility of reduced monitoring. We have great experience with these T cell engaging bispecifics as well as the plausibility of outpatient therapy. The approach to the regulatory path will present in due course.

Speaker 2

There'll be no surprises there. The path to bring medicines to patients with catheter resistant prostate cancer alone and ultimately in combination is well worn thankfully and we know how to deliver there. You asked about differentiation to other medicines. These are often apples to oranges Comparisons, we have looked at that of course and we really like the offering of dalaritamig. The patients treated on our study had quite advanced disease, even more advanced disease, than the demographics of the patients as reported on, other mechanism medicines such as radioligand therapies and the response rates we're seeing are really clinically meaningful to patients.

Speaker 2

And that gives us great encouragement to develop the medicine more ambitiously in the next few years.

Speaker 3

Jay, in terms of the data sharing, do you want to share the light data? Yes. In terms

Speaker 7

of data availability, as Jay mentioned, we're nearly complete in terms of dose expansion enrollment. So as those data roll forward over the course of the year, we'll provide guidance as to when we might have the next look at that data, but that's probably the next meaningful set of data we'll get a look at either later this year or early into next year.

Speaker 1

Okay, Julien, go to next question please.

Operator

Thank you, Michael. Our next question comes from Tim Anderson from Wolfe Research. Please go ahead. Your line is open.

Speaker 3

Thank you very much. So Eli Lilly today made a couple of sets of comments about This topic of GIP agonism versus antagonism and they also weighed in on the data you published yesterday. And I'm wondering in as much as you Heard that or read those comments. Is there any context to add or anything that's factually incorrect or anything to refute Because they covered quite a few points and they can do to express their view, which is agonism is the best way, not antagonism.

Speaker 2

Hey, Tim, this is Jay. I'd open it up to anyone else who wants to contribute to this. I don't believe that, yes, that engaging in a dialogue around this is As much to the narrative, rather I'd say that, the argument for, GIP receptor antagonism comes from just the highest level of scientific data, the human experience across populations with a 1,000,000 patients studied, way where that variation is directionally inhibitory, the BMI is lower. And so we're hoping to replicate that pharmacology with this medicine. We feel great about the offering in this domain.

Speaker 1

Okay. Julien, we'll go to next question please.

Operator

Thank you, Tim. Our next question comes from Robyn Karnauskas from Truist Securities. Please go ahead. Your line is open.

Speaker 15

Hi, good evening. Thanks so much for taking my question. This is Nicole on for Robin. So on daxdilumab Targeting ILT7 for, Lupus. Can you talk about your level of confidence in this target in light of the competitive landscape?

Speaker 15

And would you expect To senior term safety and efficacy.

Speaker 3

Sure. Go ahead, Jay and Dave. Kevin?

Speaker 2

Yes. Well, it's very early days with this medicine. There is a strong preclinical support from the published literature and our own preclinical work. It's nicely for patients a very competitive landscape, but this is the earliest phases of clinical investigation. And so, We're going to approach this with total equipoise and bring the medicine to the patients that stand to benefit the best based on the biology underlying.

Speaker 7

Yes. Would say the target as you mentioned is one that helps control some of the central signaling that drives some of the autoimmune diseases that are being investigated here. And at this point, I think it's all efforts towards generating the clinical data.

Speaker 1

Okay. Julia, next question please.

Operator

Thank you, Nicole. Our next question comes from James Shinn from Deutsche Bank. Please go ahead. Your line is open.

Speaker 16

Hey, thanks for taking the question. I have one for Jay. I just kind of want to piggyback on what Tim was alluding to. The GIP antagonism versus agonism, I'm looking at the nature paper. It looks like 133, 420 milligram dose has a slight blip in triglyceride that eventually fades, But it does seem like antagonism is behaving a little differently from the literature for agonism.

Speaker 16

Is it too early to chalk it up antagonism versus agonism in your view, just wanted to get your thoughts there?

Speaker 2

The short answer is, it's too early to chalk it up to antagonism versus agonism. As I said before and I meant it, that these lipids are labile and indirect biomarker of this pharmacology. This is an early stage study that had 1 or 3 monthly doses of the medicine. And so we are not reading anything into the lipids. Conclusively from this trial, we are making all these measurements in the active Phase 2.

Speaker 1

Great. And I think we have time for one more, Julien.

Operator

Thank you, James. Our last question will come from Carter Gould from Barclays. Please go ahead. Your line is open.

Speaker 17

Good evening. Thanks for taking the questions. Maybe just one on 786. Can you walk through exactly what's sort of driving or maybe Maybe first kind of if you could outline sort of how you're setting expectations there and any color on what's driving the delay there? It seems like it's taking a long time to enroll 70 patients?

Speaker 17

Thank you.

Speaker 2

Sure. No, thank you for your question. For the broader group, AMG 786 is an oral Medicine being developed for obesity, it is not an ingredient that we've not as yet disclosed its target or pathway. This study is progressing fine. The readout of the Phase 1 is on track for the first half of twenty twenty four.

Speaker 2

We've completed initial dose escalation cohorts and we're just collecting and analyzing data, expecting the readout in the first half of this year.

Speaker 1

Great. And Julian, we're going to turn it back to Bob for some closing remarks. Okay.

Speaker 3

Thank you all for joining the call. As you heard, we're excited about opportunities that we see for growing our business across all four of our pillars, general medicine, oncology, inflammation and rare disease. Last October, we shared an in-depth look at oncology in connection with the ESMO Medical Meeting and we plan to do an introductory review of rare diseases and our rare disease pillar in late February to give you more information about the medicines that we already have on the market as well as some of those that are advancing through our pipeline. So we're encouraged by the questions that we heard on this call about those molecules and we're excited about them and their prospects. So we'll host a call which IR will share with you here over the next few days and look forward to having that opportunity.

Speaker 3

In the meantime, again, thank you for your support and we'll look forward to talking to you at the Rare Disease Day or at our Q1 results call. Thank you.

Operator

This concludes our 2023 Q4 earnings call.

Powered by Quartr