Q2 2025 Earnings Call Transcript

My name is Julianne, and I will be your conference facilitator today for the Amgen Q2 FY 2025 Earnings Conference Call. [Operator Instructions] I would now like to introduce Justin Claeys, Vice President of Investor Relations. Mr. Claeys, you may now begin.

Good afternoon, everyone, and welcome to our second quarter 2025 earnings call. 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. 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. Over to you, Bob.

Good afternoon, everyone, and thank you for joining us today. As you'll hear, Amgen delivered another strong quarter, driven by growing demand for our medicines across the board. With net selling prices for medicines declining across the industry, volume growth is a key differentiator. And once again, this quarter, that's what we delivered.

We did this, of course, while also advancing a world-class pipeline. In the quarter, revenues grew by 9% year-over-year and volume increased at an impressive 13%, 15 of our products delivered at least double-digit sales growth, demonstrating the breadth and depth of our portfolio. As you're all aware, there's a focus on pricing and tariffs in our industry. And I would just say that we are actively engaged in discussions with our government officials and share the objectives of improving patient access, affordability and expanding biopharma manufacturing in the U.S.

We believe the world needs more innovation, not less, and we're continuing to invest heavily in innovation to support long-term growth. We're, of course, doing that while building on a track record of success, including multiple Phase III readouts in the first half of 2025. We also believe that AI will be additive to the innovative capacity of our industry, and we feel we remain well positioned to accelerate progress through the convergence of biotech and technology, including the application of AI across the company. Let me turn to a few key drivers behind this quarter's momentum. I'll remind you that we're focused in four areas, and each are performing well.

In general medicine, we're reaching large, underserved patient populations with multiple products that have significant room for growth, for example, in cardiovascular disease and bone health. In addition, our obesity pipeline programs are advancing broadly. In rare disease, we have four key growth drivers, which are all early in their life cycles and well positioned for robust long-term growth with attractive pipeline molecules following closely behind. In inflammation, where we've enjoyed decades of leadership, we're excited about the progress we're seeing in difficult-to-treat diseases where innovation is most needed.

In oncology, we're delivering therapies that are redefining standards of care and changing what patients can expect from treatment. Our industry-leading biosimilars portfolio continues to contribute meaningful growth as well. And we've proven to be a leading competitor in this field, and it remains an attractive area for us. To close, this was an exciting quarter, not just because of the financial results, but because of what it signals about Amgen's future.

In-line brands are delivering. We're launching new products, and we're advancing the next wave of late-stage programs. Amgen is well positioned to deliver innovation and growth, not just this year, but for the long term. And I want to thank our colleagues around the world for their dedication to our mission to serve patients.

With that, let me turn it over to Murdo for an update on the commercial progress in the quarter.

Thanks, Bob. In the second quarter, sales increased 9% year-over-year, driven by 13% volume growth. As you heard from Bob, 15 products delivered double-digit or better growth, a clear demonstration of the strength of our portfolio and quality of our execution. Turning to General Medicine.

Repatha delivered $696 million in the second quarter, up 31% year-over-year. Improved access is enabling more patients to benefit from Repatha with an estimated 100 million people in need of effective LDL-C lowering, the opportunity to expand our impact remains substantial. In the U.S., we saw continued demand growth across both cardiology and primary care, supported by an expanding prescriber base and deepening engagement across key customer segments. Our direct-to-consumer campaign continues to make a positive impact with more patients actively asking their doctors about Repatha.

On pricing, we expect less net price erosion than we've experienced historically. EVENITY sales increased 32% year-over-year to $518 million in the second quarter. In the U.S., EVENITY grew 41% with increased prescription volume from both established and newly activated prescriber accounts. In Japan, EVENITY is positively impacting many people with over 700,000 patients treated since launch.

As the only therapy that both builds bone and slows bone loss, EVENITY is uniquely positioned to reduce fracture risk in women who are postmenopausal. Approximately 250,000 patients in the U.S. have been treated with EVENITY to date. However, many remain at high risk of fracture, with about 90% of the roughly 2 million very high-risk patients still not receiving appropriate therapy. This represents a meaningful opportunity to drive growth by ensuring more patients receive the protection they need from EVENITY.

Prolia sales declined 4% year-over-year in the second quarter to $1.1 billion, driven by lower net selling price. In the U.S., 3 biosimilars have now launched. And while it remains early, initial market dynamics are unfolding in line with our expectations. I'll move to our rare disease portfolio, which grew 19% year-over-year, delivering nearly $1.4 billion in sales in the quarter and now annualizing at over $5 billion.

TEPEZZA grew 5% in the quarter to $505 million in sales. Since launch, TEPEZZA has had a positive impact for thousands of patients living with thyroid eye disease. We're continuing our efforts to engage a broad prescriber base of oculoplastic surgeons, ophthalmologists and endocrinologists, and we're encouraged by the feedback we're receiving from the medical community, including an increase in intent to prescribe reported by endocrinologists during the second quarter. We launched TEPEZZA in Japan in December, and we're happy with the progress to date.

UPLIZNA sales increased 91% year-over-year to $176 million in the second quarter. UPLIZNA continues to be the #1 prescribed FDA-approved treatment for NMOSD. UPLIZNA growth is also bolstered by the FDA approval in April for use in IgG4-related disease. Our launch in IgG4-related disease is going well with strong uptake amongst rheumatologists and key academic medical centers.

Additionally, launch preparations are underway for the anticipated approval of UPLIZNA for use in generalized myasthenia gravis, a chronic autoimmune neuromuscular disorder. We look forward to the potential to bring UPLIZNA to patients living with gMG who can benefit from UPLIZNA's differentiated profile, including its durable efficacy over time and convenient dosing and administration. Moving to inflammation, TEZSPIRE delivered another strong quarter with sales up 46% year-over-year to $342 million. Adoption of biologic agents in severe asthma has accelerated meaningfully over the past 5 years, almost doubling as physicians increasingly recognize the value of these treatments.

Yet with U.S. biologic penetration still under 25%, there remains substantial opportunity for continued growth. TEZSPIRE has not only helped expand the category, but continues to grow faster than the market, gaining share from legacy products based on its differentiated and broadly applicable profile to treat patients with multiple triggers and drivers of severe uncontrolled asthma. Our innovative oncology portfolio, which includes BLINCYTO, IMDELLTRA, LUMAKRAS, Vectibix, KYPROLIS, Nplate and XGEVA grew 14% year-over-year, generating $2.2 billion of sales in the quarter. At the core of this growth is our industry-leading bispecific T cell engager or BiTE platform, which led to the discovery of both IMDELLTRA and BLINCYTO.

With these products, we're helping to redefine the standard of care and improve overall survival rates in difficult-to-treat cancers, creating meaningful opportunities to reach more patients and drive long-term growth. Our U.S. launch of IMDELLTRA for the treatment of patients with extensive stage small cell lung cancer who are progressing on or after chemotherapy continues to build momentum, generating $134 million in sales in the second quarter. We see strong conviction in IMDELLTRA as the standard of care in second-line small cell lung cancer. IMDELLTRA is being administered broadly across sites of care, including academic cancer centers, regional cancer hospitals and community oncology clinics.

Over half of all IMDELLTRA doses are now administered in the community setting, indicating growing comfort with this important new cancer therapy. BLINCYTO grew 45% year-over-year to $384 million in sales, driven by broad prescribing across both academic and community segments. In the U.S., recent updates to the NCCN guidelines position BLINCYTO as a preferred consolidation therapy in combination with continued multi-agent chemotherapy for both adults and pediatric patients with Philadelphia chromosome-negative B-cell ALL. In the second quarter, biosimilar portfolio sales grew 40% year-over-year to $661 million.

Since the first launches in 2018, our biosimilars have delivered almost $12 billion in sales, representing a significant contributor to top line growth and generating meaningful cash flows. Within this portfolio, our launch of PAVBLU, a biosimilar to EYLEA continues to gain momentum, reaching $130 million in the second quarter. Retina specialists are responding very positively to PAVBLU, expressing appreciation for this high-quality Amgen biosimilar delivered in an easy-to-use prefilled syringe. I'm very pleased with our performance in the second quarter, powered by life-changing medicines, disciplined execution and a clear and enduring commitment to the patients we serve.

And now I'd like to hand it over to Jay.

Executive Vice President of Research & Development Thank you, Murdo, and good afternoon, everyone. The second quarter marked a period of strong momentum and execution across the R&D pipeline. We delivered high-quality rapid progress advancing multiple late-stage programs. Starting with MariTide, our investigational therapy for obesity and obesity-related conditions.

In June, data were presented at the ADA and simultaneously published in the New England Journal of Medicine. Let me highlight some of the key points that define the differentiated profile for MariTide for the treatment of obesity and obesity-related conditions. MariTide is convenient, the most advanced obesity treatment in development with monthly or less frequent dosing. Efficacy is strong with up to approximately 20% weight loss at 52 weeks without a plateau and with a clinically meaningful improvement in cardiometabolic parameters, including hemoglobin A1c.

MariTide is safe, very well tolerated at target doses. We've significantly improved GI tolerability with dose escalation without compromising weight loss efficacy. The Phase III program is underway, well informed by prior data and utilizing a refined 3-step dose escalation approach to optimize tolerability. Enrollment momentum for chronic weight management is strong across multiple geographies, reflecting broad investigator enthusiasm, participant interest in these trials and significant remaining unmet need.

Since June, we initiated two additional Phase III studies. The first, MARITIME-CV evaluates cardiovascular outcomes in adults living with atherosclerotic cardiovascular disease and obesity or overweight. The second, MARITIME-HF, evaluates reduction of heart failure events and cardiovascular risk in adults living with heart failure with a preserved or mildly reduced ejection fraction and obesity. In summary, MariTide represents a promising treatment advance for people living with obesity, obesity-related conditions and type 2 diabetes.

With four Phase III studies underway and obstructive sleep apnea set to initiate this year, we are well positioned to deliver a robust and comprehensive clinical knowledge base. Beyond MariTide, in general medicine, we remain excited about data from the Repatha VESALIUS Phase III primary prevention study expected later this year. Turning to olpasiran, our promising best-in-class small interfering RNA medicine targeting Lp(a), the fully enrolled event-driven OCEAN(a) Phase III cardiovascular outcome study continues to mature. This medicine and study reflect our precision medicine approach to cardiovascular risk reduction in patients with elevated Lp(a) levels.

Moving on to our rare disease portfolio on UPLIZNA, we look forward to the upcoming December 14 PDUFA date for generalized myasthenia gravis, recognizing ever more the significant unmet need for durable, convenient therapies consistently highlighted to us by treating physicians. We are pleased by the European Commission's approval of TEPEZZA for the treatment of adults with thyroid eye disease. Additionally, enrollment is complete in our Phase III study examining subcutaneous administration of teprotumumab, representing another step forward towards improved patient convenience and treatment accessibility.

In inflammation, our two Phase III studies of TEZSPIRE in chronic obstructive pulmonary disease continue to enroll patients with moderate to very severe COPD with blood eosinophil counts greater or equal to 150 cells per microliter. Beyond COPD, enrollment was recently completed in our Phase III eosinophilic esophagitis study, and we look forward to the October 19 PDUFA date for TEZSPIRE in chronic rhinosinusitis with nasal polyps. Moving to oncology, in June, interim results from the global Phase III DeLLphi-304 trial of IMDELLTRA, the first and only FDA-approved delta-like ligand 3 or DLL3 targeting BiTE molecule were presented and simultaneously published in the New England Journal of Medicine.

These compelling data showed IMDELLTRA significantly reduced the risk of death by 40% and significantly extended median overall survival by more than 5 months compared to standard of care chemotherapy in patients with small cell lung cancer who progressed on or after one line of platinum-based therapy. Additionally, IMDELLTRA significantly improved patient-reported outcomes of dyspnea and cough and was numerically better tolerated on numerous parameters when compared to standard of care chemotherapy. Regulatory filings are underway. Together with the remarkable DeLLphi-301 data already reported, as Murdo highlighted, IMDELLTRA has the potential to become the new standard of care for second-line small cell lung cancer.

We continue to investigate IMDELLTRA in earlier lines of small cell lung cancer. Currently, three additional Phase III studies are underway across limited stage and extensive stage disease, along with Phase I studies evaluating IMDELLTRA in combination with novel agents to potentially further improve patient outcomes. We are also focused on enhancing patient convenience by evaluating less frequent dosing and subcutaneous delivery. We continue to investigate our CD19- directed BiTE medicine, BLINCYTO in earlier treatment settings while also advancing a subcutaneous formulation.

In June, Phase Ib and II subcutaneous blinatumomab data were presented and simultaneously published in the Lancet Hematology, demonstrating 89% to 92% remission rates and manageable safety in adults with relapsed/refractory CD19-positive Philadelphia chromosome-negative B- cell precursor acute lymphoblastic leukemia. Subcutaneous blinatumomab has the potential to improve both the patient experience and efficacy, and we remain on track to initiate a potentially registration-enabling study in both adults and adolescents later this year. Our first-in-class STEAP1 CD3 bispecific T cell engager xaluritamig is advancing in Phase III clinical development.

We are also exploring xaluritamig in combination therapy and in earlier stages of prostate cancer with multiple Phase Ib studies ongoing. Collectively, IMDELLTRA, BLINCYTO and xaluritamig exemplify the significant growth potential of our robust bispecific T cell engager platform and reinforce our commitment to bringing groundbreaking treatments to cancer patients worldwide. Beyond our T cell engagers, in June, we announced data from the Phase III FORTITUDE-101 study of first-line bemarituzumab, our first-in-class fibroblast growth factor receptor 2b directed monoclonal antibody. Bemarituzumab plus mFOLFOX6 chemotherapy met its primary endpoint of overall survival at a prespecified interim analysis in patients with unresectable locally advanced or metastatic FGFR2b positive HER2-negative gastric or gastroesophageal junction cancer.

In closing, I want to extend my gratitude to our colleagues for their dedication to achieving these critical milestones and their unwavering focus on improving outcomes for patients facing serious diseases. I'll now turn it over to Peter.

Thank you, Jay. We're pleased with our strong second quarter performance and remain on track with our 2025 full year goals and long-term objectives. The financial results are shown on Slides 31 and 32 of the slide deck. In the second quarter, we delivered revenues of $9.2 billion, reflecting our key growth drivers highlighted on our Q4 earnings call, Repatha, EVENITY, TEZSPIRE in our innovative oncology, rare disease and biosimilar portfolios.

Our non-GAAP operating expenses rose 8%, led by non-GAAP R&D growth of 18% year-over-year, reflecting continued investment in our late-stage pipeline, including MariTide, olpasiran, IMDELLTRA, xaluritamig and rare disease. Our non-GAAP OI&E was favorable $213 million year-over-year, driven by gains from early retirement of debt and lower interest expense. Recall, we retired $4.5 billion of debt in 2024 and have retired $4.3 billion in the first half of 2025. Our non-GAAP tax rate decreased 0.7 percentage points year-over-year to 14.2%, primarily due to the change in earnings mix. The company generated $1.9 billion in free cash flow in the second quarter, reflecting operational momentum across the business while continuing to invest in innovation.

We invested $1.7 billion in non-GAAP R&D spend, an increase of 18% year-over-year and expect to build on this momentum in the second half of the year with increased investment in our innovative late-stage pipeline. We are accelerating innovation and productivity through AI investments across the value chain from discovery to development to commercial execution and in G&A. This is enabled by digitized workflows, modernized data infrastructure and global access to advanced generative AI tools. For 2025, we continue to expect capital expenditures of $2.3 billion to expand network capacity for our products across the portfolio and our innovative pipeline, including MariTide.

In addition, we returned capital to shareholders through competitive dividend payments of $2.38 per share, representing a 6% increase compared to the second quarter of 2024. Turning to the outlook for the business for 2025 on Slide 33. We expect our 2025 total revenues in the range of $35.0 billion to $36.0 billion and non-GAAP earnings per share between $20.20 and $21.30. This guidance includes the estimated impact of implemented tariffs. It does not account for tariffs or pricing actions announced or described but not implemented. In addition, let me highlight a few updates to our outlook for the remainder of the year.

We now expect full year non-GAAP operating margin as a percentage of product sales to be roughly 45%. Our outlook now includes several business development transactions, resulting in roughly $200 million of incremental R&D expense expected in Q3. The outlook continues to reflect our investments in advancing key late-stage programs, including MariTide, olpasiran and IMDELLTRA and leveraging technological advancements, including artificial intelligence. Our operating margin outlook also includes incremental launch and commercial investments starting in the third quarter. In line with these priorities and reflecting the business development transactions of roughly $200 million, we now expect non-GAAP R&D expense to grow over 20% in 2025. We now anticipate non-GAAP OI&E to be approximately $2.2 billion in 2025. For WEZLANA and AMJEVITA sales in the United States, we continue to expect quarterly sales to fluctuate and do not expect any sales in the third quarter.

And let me remind you of prior items that have not changed. For the full year, we continue to expect other revenue to be approximately $1.4 billion. We expect a non-GAAP tax rate of 14.5% to 16.0%. We expect share repurchases not to exceed $500 million in 2025. We are focused on delivering sustained long-term value for patients and shareholders by doing what we said we would do, growing leadership in the United States and internationally, driving innovation in areas of high unmet medical need and maintaining rigorous financial discipline.

We continue to focus on execution excellence across the enterprise and remain well positioned for sustained growth through the long term. I'm grateful to work with all of our colleagues worldwide in serving patients. This concludes our financial update. I'll now hand it back to Bob for our Q&A session.

Julianne, could you now open the call for questions and just remind our callers of the procedure for submitting their question to us.

[Operator Instructions] Our first question comes from Yaron Werber from TD Cowen.

Maybe just the first question on, Jay, for you on MariTide. In Q4, when we have the second year data, how much granularity are we going to be able to glean from the patients who are going on maintenance? And are you going to give us data on Q8 weeks and Q12 weeks at that point?

Executive Vice President of Research & Development Thank you, Yaron. As you identify and gathered from our words moments ago, the data readout from the Phase II type 2 diabetes study and Part 2, the chronic weight management studies are expected in Q4 of 2025, and we'll have more to share about these data in due course.

Our next question comes from Salveen Richter from Goldman Sachs.

So the industry has been adopting a number of strategies here, which you spoke to with regard to helping the administration achieve their goals to reduce drug pricing, but that goalpost is still shifting around you with the latest angle being Medicaid MFN. So curious here as to your thoughts on that clause specifically, but additionally, how you are thinking about DTC efforts, which seem to be a growing theme across the industry and was called out by one of your peers this morning.

Well, Salveen, I think it may be a little premature to speak in detail about any one of the particular proposals. But what I would say at a higher altitude is that we agree that reform is needed in the U.S. health care system. And we would like for our medicines and all the medicines in this country to be more affordable and for those medicines to be more widely available. So at Amgen, obviously, we also believe that this country and the world needs more innovation, not less.

And so the onus is on us to help find ways to reform to bring the price of medicines to make them more widely accessible while preserving the innovative ecosystem that has enabled this country to be the world leader in biopharmaceutical medicines. So we welcome the government's focus on the role that foreign countries can play in trying to preserve that innovative ecosystem by rewarding innovation fairly. And we expect to work with this administration to try and find a path forward that helps to achieve their objectives, and I think the objectives of many leaders in this industry. So still little bit early days, Salveen, to talk in any detail about specific initiatives or specific proposals.

But we've enjoyed a good working relationship with the administration, and we expect that we'll continue to have the opportunity to work with them to advance on this front.

Our next question comes from David Amsellem from Piper Sandler.

So you cited strong performance, in particular, from the rare disease business and you're getting back to a capital structure that looks more like it was prior to the Horizon transaction. So I guess my question here is, what is your appetite for significant consequential M&A regarding rare diseases? And what is your appetite in general for continuing to build out that broad therapeutic vertical?

David, your question seems to focus on the word significant. And I don't know what your definition of significant is. But what I would say, I would reiterate that we remain very interested in rare disease. We think the portfolio of rare disease assets that we have both in the market now and the pipeline of rare assets is very attractive.

We will continue to look for ways to grow our rare disease business both organically and to the extent that they are licensing or acquisition opportunities, we'll look for those as well. I would point out on the question of transactions, whether it's in rare disease or elsewhere, that we've a lot of activity right now, in particular, in our portfolio, a lot of late-stage activity. And so we'll be very mindful about wanting to continue to execute flawlessly across those programs. So -- but again, thanks for observing that the capital structure has followed the course that we told you to expect, and we feel very good about the progress we've made in integrating Horizon and shoring up the balance sheet.

Our next question comes from Courtney Breen from Bernstein.

The first one is just on MariTide. As we look at the three-step dose escalation that you've incorporated into the Phase III that have been announced, this incorporates kind of a physician if we think about the future clinical use, having to select the maintenance dose kind of straight after the last titration dose rather than stepping through each of the potential maintenance doses, which is what we see in practice in the market today. Can you explain kind of why you think this is a better paradigm to be using? Or how you expect kind of physicians to select that right dose for the patient that they have in front of them given they will have only had the titration information or feedback for that particular patient up until that point?

Executive Vice President of Research & Development Thank you very much, Courtney. Why don't I try and answer here. As a monoclonal antibody, dose escalation with MariTide is naturally very smooth, very steady, as we've shared. And as we firmly believe, progressive benefit can be derived from a tolerability standpoint with both lower doses and also with multiple steps to target.

This is very consistent with the experience of the field and the 21-milligram starting dose selected for Phase III clinical investigation indeed has a very low risk of serious GI events and progressing to a highly efficacious target dose. And indeed, we're studying several in the Phase III study. We'll deliver both the well-tolerated patient experience and give us a graded understanding of dose and response. And so the Phase III design was very carefully conceived in order to read out dose proportionate benefit to MariTide.

You also asked about maintenance, and I appreciate you bringing this up. It's just true that these are chronic diseases that run with obesity as is obesity and overweight themselves. And long-term treatment of these diseases has proven just very challenging with these weekly injectable peptides with very low persistence on medicine. And our studies together will guide the optimal use of MariTide for long-term maintenance therapy, where patients and doctors will no doubt work together to sustain the benefits of MariTide on doses and perhaps even different schedules guided by these data.

Our next question comes from Umer Raffat from Evercore ISI.

On VESALIUS-CVOT or PCSK9 outcomes trial, I'm curious how you're thinking about the event rate accumulation over time? It looks like by the time it reads out by year-end this year; it's basically right around that 4.5 year follow-up, which you were anticipating. I guess my confusion is, is that time line driven by the 4.5-year follow-up? Or is it rather because you're hitting those predefined events of 750 plus on the triple and 1250 on the quadruple?

Executive Vice President of Research & Development Thanks, Umer, for your question. As you surely know, and based on your sophisticated question, VESALIUS CV, for everyone, is our primary prevention study of PCSK9 inhibition in cardiovascular risk reduction. We anticipate a readout in the second half of this year. The readout is purely based on accumulated events or event rate.

Next question comes from Terence Flynn from Morgan Stanley.

Great. Maybe another one for Jay. I was just wondering if you could provide any more thoughts on how you're thinking about the design of MariTide CVOT study in type 2 diabetes in light of Eli Lilly's recent SURPASS-CVOT data where they compared tirzepatide to Trulicity and just how you -- how that might influence how you're thinking about control arm for your study?

Executive Vice President of Research & Development Yes. Thanks very much for the question. We read the paper with real interest and as you can imagine, follow the field quite closely. We indeed have four MariTide Phase III studies underway.

They're all enrolling well. The CVOT presently opened is with atherosclerotic coronary vascular disease with obesity and overweight, and we'll have more to share around our plan for pivotal studies in diabetes and in their cardiovascular outcomes in the fullness of time.

Our next question comes from Jay Olson from Oppenheimer.

Congrats on the quarter. And it was nice to see the positive FORTITUDE-101 top line results for bema. Can you provide some color on the time line to file for approval, especially with regards to the results for -- from FORTITUDE-102, do you need those for filing? And also, any color you can give us on when we should expect to see the detailed results from FORTITUDE-101?

Executive Vice President of Research & Development Thanks, Jay. We're very excited about the emerging picture around bemarituzumab. The doublet with chemotherapy was indeed positive for overall survival, which quite matters for all cancers, especially this one, the fifth most common with very little impact to date with targeted therapy. And targeting FGFR2b expression in this cancer, combined with mFOLFOX6 chemotherapy, is a meaningful advance for these patients.

We've not yet disclosed our regulatory strategy. And as you point out, triplet study that importantly adds checkpoint therapy to this pairing of bemarituzumab and chemotherapy will read out in the second half of this year or the first half of next year. We've adjusted the date range based on our current best estimate, and our regulatory strategy integrates these data sets.

Our next question comes from Chris Schott from JPMorgan.

Just wanted to come back to Repatha. Just as we're thinking about that primary prevention study, can you just talk a little bit about the bar that you see here in terms of what we see from that data to be clinically meaningful? And once you have that data on level -- on label, like how big of a driver do you see this for that franchise as a whole?

Let me take this in two parts, Chris. Maybe Jay, you can kick off and then Murdo, why don't you add your thoughts.

Executive Vice President of Research & Development Thanks for the question. There's no level of LDL-C that confers a better outcome for patients with coronary vascular disease. And so really suppressing LDL-C with Repatha in these high-risk patients who've not yet had an MI or revascularization is in a -- we think a great opportunity for benefit. I'd be loath to peg a specific overall risk reduction here today.

But the field is quite calibrated to what a meaningful outcome would look like for these patients as we've studied this medicine exhaustively in the secondary prevention realm. Murdo?

Yes. Thanks for the question, Chris. And I would just say that we're already doing very well in the "primary prevention population of patients." Roughly 40% of our Repatha new-to-brand prescriptions are from patients who have yet to suffer a first vascular event. And so we're getting a lot of these high-risk patients right now.

What I think a VESALIUS positive result could do is help reinforce the need for more aggressive LDL cholesterol lowering guidelines, help reinforce the need to remove payer barriers, which we have done successfully over time. But still some prior authorization criteria exist for some populations of patients. And of course, we are very interested in continuing to expand the penetration of PCSK9, both in secondary prevention and in primary prevention. So I think this is -- it's an important trial, but it continues to drive the tailwind that we're already experiencing that we've been able to create for Repatha growth in the market.

Our next question comes from Matthew Phipps from William Blair.

Noticed AMG 732 listed on the press release today. Just curious how that program differentiates from TEPEZZA and maybe what unmet need you're looking to address in thyroid eye disease?

Thanks, Matt.

Executive Vice President of Research & Development Yes. No, thanks for noticing. We're delighted to share in these earnings materials for the first time, the development of AMG 732, which is a next-generation IGF-1R targeting monoclonal antibody. This medicine's benefits from the target validation strongly provided by TEPEZZA and will be presented to patients in a subcutaneous administration.

The Phase II study is enrolling patients with moderate to severe active TED and progressing very well.

I think the big picture here, Matt, is that the time we acquired Horizon, we said we felt there would be lots of opportunities given the large molecule nature of the portfolio, lots of opportunities for us to introduce innovation over time. And this would be an example of that.

Our next question comes from Dave Risinger from Leerink Partners.

Yes. And congrats, Bob and team, on some great financial momentum. So I'm curious about the end of the press release highlighting the development of biosimilar versions of OPDIVO, KEYTRUDA and OCREVUS. I know that that's not new news, but can you please discuss how you see the potential for IV biosimilars to compete with hyaluronidase subcutaneous versions which are set to experience significant uptake ahead of the opportunity to launch IV biosimilars?

Yes. Murdo, do you want to take the first stab there and then invoke Jay however you like.

Sure. Dave, thanks for the question. Obviously, we're excited about the growth that we're seeing in our biosimilar portfolio overall. And Amgen's success here has been remarkable, quite frankly since 2018, now cumulative $12 billion of revenue generated by this portfolio of products.

We've had a 100% success rate in regulatory -- both development and regulatory milestones. And of course, we continue to grow the business year-over-year this year with 40% growth with the most recent launches of PAVBLU, BEKEMV this year. So we're very pleased with the use of capital invested in this. We know the oncology space very well.

We were one of the first companies to launch oncology biosimilars. So we feel that we understand the dynamics for KEYTRUDA and OPDIVO. We're watching the hyaluronidase uptake very closely and to see if subcu has a role to play in the treatment of cancers. I think what we're particularly interested in seeing is whether or not the cadence of the PD-1 dosing lines up with the chemotherapy dosing or other adjuvant therapy and combination therapy.

But we're watching it closely. And if Amgen decided to further develop other biosimilars, we would and could. Jay?

Executive Vice President of Research & Development Yes, I would just only add really medically, as an oncologist, use of these breakthrough immuno-oncology checkpoint medicines is pretty firmly mapped into treatment plans, treatment practices, patterns of practice really all across the world and bringing forward these two medicines, ABP 206 and ADP 234 is just really a seamless move to bring biosimilar medicines into an area of oncology that has benefited from innovation, and now will benefit even better from access.

Our next question comes from Evan Seigerman from BMO Capital Markets.

I actually wanted to touch on IMDELLTRA. You noted impressive growth this quarter, and I'm really trying to understand kind of what's driving the volume. Is it increased penetration into that refractory population? And how do you see this panning out over the course of the year? I'm just trying to get a sense as to where this could go.

Yes. Thanks, Evan. The growth in IMDELLTRA is definitely an uptake on those patients, those small cell lung cancer patients who are progressing on or after chemotherapy. So we're seeing utilization consistent with the data that we've generated so far.

I think the data that we presented in June at ASCO were obviously compelling first time real overall survival benefit has been shown in that particular setting of small cell lung cancer. We're also seeing an improvement in both academic and community setting ability to operationalize the monitoring required for IMDELLTRA. And I think that probably had a slightly dampening effect at the beginning of the launch and is now more or less being managed as appropriate. So we're seeing good volume growth, very strong clinical conviction.

As I said, it's the first time we've seen such compelling data in this setting in small cell lung cancer. And I'm looking forward to more data as it progresses, and we'll have more to say about how we see the growth of this really important asset as we see more data.

The only thing I might add there, Evan, is that the strength of the launch and the breadth of uptake that we've seen, in particular from the clinics, encourages us for the future of the BiTE portfolio. And as you know, we're excited about xaluritamig. So the lessons we're learning here, no doubt will be useful in that context. But all signs so far are really positive.

Our next question comes from Alex Hammond from Wolfe Research.

So another one on the biosimilar front. So we've seen this regulatory landscape evolving. So I guess looking forward, what changes could we see from regulatory standards to establish comparability? Could we see PK comparability versus randomized Phase III trials to be feasible? And how could these dynamics possibly modulate your long-term guidance of greater than $4 billion in sales by 2030?

We'll take this in two parts. Jay, there's some clinical regulatory questions, and Murdo, your perspective on the market.

Executive Vice President of Research & Development Yes. Thanks, Alex. We too have been very interested to see some possible, I mean, not as yet firm pathways, but possible softening of some of the regulatory requirements for biosimilar medicines. And this really plays very favorably to our differentiated capacity to develop very high-quality compositions that map to the established innovator medicine.

Now this may or may not be true in all geographies around the world, and so we have to consider this a global regulatory go-to-market plan. But from a drug development standpoint and an innovation of biosimilar standpoint, these changes, we believe, accentuate our comparative and differentiated capacity of biosimilars. Murdo?

Yes. Thanks, Jay. The only thing I would add is this is still a technically difficult area and requires significant expertise in designing molecules that will meet the parameters, even in the new parameters that the FDA are requiring for comparability of a biosimilar to an originator. There might be less clinical trial effort required for data generation, but it's still technically difficult to do what we do.

And we're fortunate we have a very strong process development organization here at Amgen, who are often very adept at finding unique ways to develop biosimilars that do not infringe on the intellectual property of others.

Alex, just topic of biosimilars and the adoption of them in the U.S. is often a subject in policy and other circles in Washington, D.C. And I think from our perspective, the market is developing well. There's an appropriate regulatory framework and the assurance of safe, reliable supply is important here. But again, I think this is a market that's developing well and pretty much playing out as we expected it would when we committed capital to development products in the area.

Our next question comes from Mohit Bansal from Wells Fargo.

This is Sadia Rahman on for Mohit. Can you talk about the -- your confidence in the TEZSPIRE COPD program in light of a competitor's Phase III trial missing despite good Phase II data from their molecule in COPD? And how are you thinking about the patient profile that's most likely to benefit from TEZSPIRE, particularly around eosinophil levels?

Executive Vice President of Research & Development Yes. Thank you for the question. I mean the short answer is we feel great about the mechanism and confidence in it for COPD. And the profile, especially with an understanding of the responder population as likely relating to the degree of Th2 immunity's contribution as measured by the biomarker of blood eosinophil count as a possible biomarker of response, we feel very strong.

I assume here that you're speaking to the recent Roche data. And this is a molecule we know well, actually comes from Amgen, astegolimab. And though that Phase II data did not repeat in Phase III, I would just remark that the ST2 pathway is distinct from the TSLP pathway. And so I wouldn't be quick, not that you're doing this to lump the two.

The ST2 pathway, this suppressor of tumorigenicity 2 protein, is quite distinct from the more allergic or eosinophil-driven TSLP pathway. ST2 is a nonallergic signaling pathway that relates more to epithelial damage. And so while disappointed for patients that the Phase III in all-comers didn't read through with that molecule, we feel very confident in the TEZSPIRE mechanism of action, the Phase II data and are conducting these experiments now together with our partners at AZ to get an answer.

Our next question comes from Luca Issi from RBC Capital.

Maybe if I can circle back on obesity. You obviously have two molecules in development here with MariTide and 513. However, I believe both molecules are injectables versus Eli Lilly clearly shows some very encouraging data for orforglipron at ADA, which is obviously an oral small molecule. What's Amgen's appetite to augment your current offering vis-a-vis by adding an oral small molecule via either BD or organic discovery? I guess the other way to ask that question is, what percentage of the obesity market do you think could ultimately be oral versus injectable?

Any color there, much appreciated.

Yes. Maybe we can add some color from a few different perspectives here, Luca. So first, I would say on BD, obviously, we're open. We're paying very close attention to all interesting innovation in the field of obesity and related conditions.

So we have and we'll continue to look carefully at things that might be helpful to patients that are managing these diseases. Jay, maybe you want to offer some thoughts on the clinical aspects, and then Murdo, why don't you talk about the market dynamic?

Executive Vice President of Research & Development Well, you're right. There remains a massive unmet need, maybe 2% of patients with obesity are currently addressed by current medicines, which are quite hard to take for even longer than a calendar year and, of course, aren't cured by these medicines. And so there's a big opportunity for distinctive medicines, new mechanisms, differentiated properties and potentially different routes of administration as well. Just exactly as Bob said, we didn't just wander in obesity because it became hot.

We've been studying these pathways for more than a decade. Our research and development pipeline earlier than the two medicines you cited targets incretin pathway, also non-incretin pathway medicines rising up in our pipeline. Some of these medicines may indeed be given orally. And so please more to follow from Amgen Research.

Murdo, would you want to comment about the market? And how it's shaping up for world and for MariTide.

Yes. Luca, thanks for the interest, and that's obviously an important question as we try to project the market going forward. As Bob said, we are interested in looking at orals, and that comes from us seeing orals constituting a decent portion of the market. But I think our flagship product, MariTide, is clear in its differentiation, and that is to treat people for their chronic weight management so that they can benefit in a cardiometabolic way for their health, so they have less ultimately, cardiovascular comorbidity or mortality.

And so that's what we're doing. We're taking MariTide into the clinic for full breadth of indications. And as Jay also mentioned, we believe we have a differentiated product that makes it much easier for patients to persist with their chronic weight management treatment over the course of their lifespan so that they can benefit from that in important ways with outcomes. So looking at the orals very closely, but excited about our flagship product that we're developing.

Our next question comes from Geoffrey Meacham from Citibank.

Another one on MariTide for Jay. You just post ADA, were there any changes that you guys made to Phase III, just thinking increased entry criteria or maybe pace of titration just to optimize discontinuations? And then related, from a strategy perspective, let's say, to the current study, do they constitute the majority of Amgen's Phase III investment in MariTide? Or would you guys looking to expand more broadly into peripheral indications where weight maybe plays a role?

Executive Vice President of Research & Development Yes. Thanks, Geoff. The feedback after the ADA was quite strongly positive, especially from key opinion leaders, investigators in the field. And that for us was terrific to hear thought leaders present these data that we spent so much time with and get their unvarnished opinions was very positive.

And no, there were no changes or edits to the Phase III program as a result of those engagements at ADA. There was actually really strong confidence that I think is well reflected by the very strong enrollment that we're seeing on this trial right -- on these trials right now. We remain very interested in bringing MariTide to other obesity-related conditions. And the field is even suggesting some not overtly obesity-related conditions to think about.

And we'll have more to say on the broader MariTide Phase III program in due course.

And Geoff, it's Murdo. I would just add that we're also looking to inform clinical practice as much as possible in chronic weight management. So anything we can do to help those clinicians upon approval, understand how to use MariTide in the real-world setting, we will continue to generate those data.

Julianne, I think we've got time for one more question, and then Bob will wrap up the call.

Our last question today will come from Carter Gould from Cantor Fitzgerald.

Thanks for taking the question for Bob or Murdo, wanted to ask on the policy front. We've seen IP under attack across the industry on multiple fronts, the most notably in the obesity space. Are you taking actions or advocating either on your own or in conjunction with peers to address persistent unlawful compounding? Or does Amgen now view compounding of the current wave of GLP-1s or as a general concept as a creeping direct or indirect threat to [indiscernible]?

Or is Amgen expecting it to fade as a concern by the time MariTide launches? Any thoughts would be appreciated.

Obviously, Carter, IP is a critical consideration in our industry, and we're very respectful of the importance of IP as the basis on which investments are made in this industry. Again, you know the drill, right? We invest a couple of billion dollars of research and development over 10 or 15 years and we need to have confidence in the IP that protects those investments. But compounding is less a direct issue for Amgen because our molecule is an antibody, and it won't be compounded in the way that peptides and small molecules have been and can be in light of the statutes that are available to permit it.

But in general, I think we're pretty clear that compounding is not good for the industry, probably not good for patients. And we would be mindful of the importance of kind of quality framework that we have in place that the regulators routinely assess us on, and that's what gives us comfort that we're providing safe, reliable supply of medicines to our patients. And Murdo, feel free to jump in if you want to add anything.

No, I would concur. I think it's important to underscore that there isn't a compounding pathway for a biologic such as MariTide. And it's concerning that compounders continue to make product available despite the supply situation having been resolved by other manufacturers.

All right. Let me just address two things quickly before we thank you for joining us on the call. So first, just to highlight, again, I hope you got a clear sense from us that the business is performing well. And that's true across therapeutic categories and geographies.

And our execution is also strong in operations and research and development. And of course, that's setting the stage for what we expect to be attractive long-term growth for the company. So again, excited about the performance. Looking forward to the second half of the year.

But before we conclude today, I just want to share one organizational announcement, which is that Justin Claeys will be transitioning his IR responsibilities to our Treasurer, Adam Elinoff. Justin will be moving into a new role as the Head of Financial Planning and Analysis at Amgen. And that's an area where he has spent much of his 20-year career with us. So we're looking forward to having him back in that leadership role.

And thrilled that Adam, who's been with the company for nearly 19 years will take on the responsibility of Investor Relations in addition to his treasury role. So I'm confident that all of you will enjoy working with him and that it will be a seamless transition. And on behalf of Pete and the rest of the team, I want to thank Justin for the superb job that he's done in leading the Investor Relations effort. So thank you all for joining us, and we look forward to connecting with you at the next quarterly call.

This concludes our Amgen Q2 2025 Earnings Conference Call. You may now disconnect.