Q3 2025 Earnings Call Transcript

My name is Julianne, and I will be your conference facilitator today for the Amgen Q3 2025 Earnings Conference Call. [Operator Instructions] I would now like to introduce Casey Capparelli, Vice President of Investor Relations. Mr. Capparelli, you may now begin.

Thank you, Julianne, and good afternoon, everyone. Welcome to our third quarter 2025 earnings call. Bob Bradway will lead the call and be followed by a broad review of our performance by Peter Griffith, Murdo Gordon and Jay Bradner. 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 could vary materially. Over to you, Bob.

Okay. Good afternoon, everyone, and thank you for joining us today. Amgen delivered another strong quarter, driven by rising demand for our medicines and meaningful progress across the pipeline. Volume growth once again paced our progress in an environment where selling prices are declining across the industry.

This volume growth reflects the strength of our portfolio and the value our medicines provide to patients and prescribers. We saw growth across all four therapeutic areas this quarter. Revenues were up 12% year-over-year and volume up 14%. 16 of our products grew at double-digit rates and 14 are now annualizing at over $1 billion in sales. Our broad base of innovative medicines is generating powerful momentum and gives us confidence in our ability to sustain long-term growth.

We've also been working to expand access to our medicines. And we recently launched AmgenNow, a new direct-to-patient platform that allows qualified patients in the U.S. to access Repatha at one of the lowest prices in the world. This is an important step forward in helping more people benefit from the kind of innovation as represented by Repatha. Let me take a moment to recognize the scale and complexity of what we do in biologics manufacturing which is both an art and a science.

And at Amgen, we've built one of the most advanced capabilities in the world in making large molecules. We benefit from 45 years of experience in this space and from having a manufacturing network that's predominantly based here in the U.S., serving American patients and patients all around the world since our inception. We continue to invest in manufacturing with more than $3 billion in planned investments in the U.S. this year alone. This builds on over $40 billion invested in manufacturing and research and development since the passage of the Tax Cuts and Jobs Act in 2017. This foundation positions us well to support growing global demand for our products.

And let me just turn briefly to each of our four therapeutic areas. In General Medicine, we're expanding our impact across underserved disease areas with substantial runway. Cardiovascular disease remains the world's leading public health challenge with tens of millions of patients at risk for heart attack and stroke. At the upcoming American Heart Association meeting, we will share data on Repatha showing important benefits in preventing a first heart attack or stroke.

Again, a powerful signal for the impact or potential impact of Repatha in primary prevention. In bone health, EVENITY is a transforming care for postmenopausal women at high risk of fracture. It is the first and only bone-building therapy that increases bone formation and decreases bone resorption. EVENITY continues to deliver strong performance and with treatment rates still low among women with high fracture risk, we believe there's significant room for growth.

We expect this product to remain a growth driver throughout its life cycle. Looking ahead, both MariTide and Olpasiran offer additional pathways for growth in obesity and cardiovascular disease, two of the world's most pressing health issues. In rare disease, our portfolio of growth drivers are all early in their life cycle. These products are performing well now, and we expect them to continue to grow well into the future.

For example, with new indications such as IgG4-related disease and generalized myasthenia gravis on the horizon for UPLIZNA, we're excited by what this product can offer an increasingly broad range of patients. I would also say that the progress that we are seeing with UPLIZNA across a range of different diseases reaffirms our belief for the potential of CD19-directed therapies to address a wide range of rare autoimmune diseases. In inflammation, we've been a leader for decades, and we are very encouraged by what we're seeing with TEZSPIRE as physicians are increasingly comfortable with its profile increasingly comfortable with the fact that it is a well-tolerated and broadly effective agent able to intervene upstream in the inflammatory cascade.

We remain highly encouraged by the long-term prospects for TEZSPIRE. In oncology, we're continuing to establish new standards of care. IMDELLTRA has generated strong clinical enthusiasm in small cell lung cancer. BLINCYTO is, of course, now firmly established as the standard of care in frontline consolidation for B-cell acute lymphoblastic leukemia, and we are seeing encouraging project -- progress rather with Xaluritamig in prostate cancer as it advances through Phase III.

Meanwhile, our biosimilar strategy continues to deliver results as well. You can see that in the quarter, revenues were up more than 50% year-over-year and are now annualizing at roughly $3 billion in sales. To close, let me just say that we continue to engage with policymakers in Washington and elsewhere around the world to support policies that improve access, protect innovation and strengthen the biomanufacturing ecosystem, especially here in the U.S. We've built a strong springboard for 2026. The products that will drive our next wave of growth are in hand, supported by compelling data, reinforced by readouts this year and still early in their life cycle.

We're encouraged by the momentum we're seeing in the business and confident in our ability to deliver innovation and growth well into the next decade. I want to extend my thanks to our colleagues around the world for their commitment to patients. With that, let me turn over to Peter for a financial update. Thank you.

Thank you, Bob. We are pleased with our strong third quarter performance and remain on track with our 2025 full year goals and long-term objectives. The financial results are shown on Slide 6 and 7 of the slide deck. In the third quarter, revenues increased 12% year-over-year to $9.6 billion, reflecting the continued strong performance of our six key growth drivers, Repatha, EVENITY, TEZSPIRE, and our innovative oncology, rare disease and biosimilar portfolios.

The quarter also benefited from discrete items, including roughly $250 million from favorable changes to U.S. estimated sales deductions and a government order for Nplate of $90 million. I would also note that the third quarter included $105 million in sales for RAVICTI, a small molecule within the rare disease portfolio for which we now have a generic competitor as of October. Our non-GAAP operating margin was 47% and reflects significant investments across the business, led by non-GAAP R&D growth of 31% year-over-year, this includes several business development transactions, resulting in roughly $200 million of incremental R&D spending.

Excluding these business development transactions, Q3 non-GAAP operating expenses rose 14% and non-GAAP R&D grew 19% year-over-year, reflecting increased investment in our late-stage pipeline. Our continued investments in programs, including MariTide, Olpasiran, Xaluritamig and rare disease will drive sustainable long-term growth and strengthen our leadership in innovation. Our non-GAAP OI&E resulted in a $568 million expense. We continue to strengthen our balance sheet with $4.5 billion of debt retired in 2024 and $6.0 billion of debt retired in 2025. We are pleased to report that we have returned to our pre-Horizon capital structure ahead of plan, and we will achieve greater than $500 million in pretax cost synergies in 2025 in connection with the acquisition.

Our non-GAAP tax rate increased 4.8 percentage points year-over-year to 18.2%, primarily due to the change in earnings mix. We generated $4.2 billion in free cash flow in the third quarter, reflecting operational momentum across the business, rigorous management of working capital, all while continuing to invest in innovation. In addition to the increase of 31% in non-GAAP R&D described above, we continue to advance and accelerate technology and AI across the value chain from discovery to development to manufacturing and through to commercial execution. AI and trial enrollment, manufacturing optimization and customer engagement are all among areas leveraging innovation to drive productivity at speed and scale.

We're also accelerating molecule design and other aspects of early-stage research powered by modernized AI and data platforms. For 2025, we now expect capital expenditures of roughly $2.2 billion to $2.3 billion to expand network capacity for our products across the portfolio and our innovative pipeline, including MariTide. Our capital expenditures reflect significant investments across the United States, including Ohio, North Carolina, Puerto Rico, Rhode Island, California and Massachusetts. We expect our projects to continue to be on budget and on time.

In addition, we returned capital to shareholders through competitive dividend payments of $2.38 per share, representing a 6% increase compared to the third quarter of 2024. Turning to the outlook for the business for 2025 on Slide 8. The benefit of our portfolio was clearly seen this quarter and coupled with momentum across the business, we are raising our 2025 guidance ranges for both revenue and non-GAAP earnings per share. We expect 2025 total revenues in the range of $35.8 billion to $36.6 billion and non-GAAP earnings per share between $20.60 and $21.40. This guidance includes the estimated impact of implemented tariffs.

It does not account for tariffs or pricing actions announced or described, but not yet implemented. In addition, let me highlight a few updates to our outlook for the remainder of the year. For the full year, we now expect other revenue to be approximately $1.5 billion. Non-GAAP R&D expenses are now expected to grow at a mid-20s percentage rate year-over-year in 2025. This is driven by increased investment in our late-stage programs and the previously mentioned Q3 business development transactions.

We now anticipate non-GAAP OI&E to be in the range of $2.1 billion to $2.2 billion in 2025. We now expect a non-GAAP tax rate in the range of 15.0% to 16.5%. And for WEZLANA in the United States, we continue to expect quarterly sales to fluctuate and do not expect any sales in the fourth quarter. And let me remind you of prior items that have not changed. We continue to expect the full year non-GAAP operating margin as a percentage of product sales to be roughly 45%.

The outlook continues to reflect our investments in advancing key late-stage programs, including MariTide, Olpasiran, rare disease and Xaluritamig and leveraging technological advancements, including artificial intelligence. Our operating margin outlook also includes incremental launch and commercial investments. We're focused on delivering sustained long-term growth and value for patients and shareholders by doing what we said we would do, 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 throughout 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 over to Murdo for an update on our strong commercial progress in the quarter. Murdo?

Thanks, Peter. In the third quarter, sales increased 12% year-over-year, driven by 14% volume growth. 16 products delivered double-digit or better growth, clear evidence of the strength of our portfolio and the disciplined execution of our teams around the world. Starting with general medicine. Repatha delivered $794 million in the third quarter sales, up 40% year-over-year and now annualizing at approximately $3 billion.

Since Repatha's launch a decade ago, the PCSK9 inhibitor class remains underutilized with these therapies currently reaching fewer than 5% of patients eligible for lipid-lowering therapy. With roughly 100 million people still in need of effective LDL-C lowering, Repatha has a substantial opportunity to expand its use to address cardiovascular disease, the world's #1 public health crisis. As you'll hear from Jay, we have recently announced important data from the VESALIUS-CV outcome study, which met its dual major adverse cardiovascular events or MACE endpoints in patients at elevated cardiovascular risk without prior heart attack or stroke.

Now I've worked in lipid management for more than 30 years, and I've witnessed numerous landmark statin studies, demonstrating how intensive LDL cholesterol lowering reduces cardiovascular risk. The VESALIUS-CV results demonstrate that Repatha provides additive benefit above and beyond statins, delivering even more reduction in cardiovascular events in primary prevention patients at higher risk. Currently, greater than 95% of patients insured in the U.S. have coverage for Repatha, and most insured patients pay less than $50 out of pocket per month. The prior authorization requirements for many of these patients have also been removed or substantially reduced.

In the U.S., we're taking bold steps to improve access with the launch of AmgenNow, our new direct-to-patient program. Repatha is the first therapy available through AmgenNow at a monthly price of $239 or roughly $8 a day. This is nearly 60% below the current U.S. list price, which is already one of the lowest in the world. The launch of this program is a meaningful step toward providing additional affordability and access to Repatha for American patients.

EVENITY delivered $541 million in third quarter sales, up 36% year-over-year. In the U.S., sales grew 44%, driven by higher prescription volumes from both established and newly activated prescribers. EVENITY is the only therapy that builds bone and slows bone loss, which is a unique advantage in helping postmenopausal women reduce fracture risk. In the U.S., EVENITY continues to lead the bone builder segment with over 60% market share and approximately 270,000 patients treated to date.

However, many remain at high risk of fracture, with close to 90% of the roughly two million very high-risk patients still not receiving appropriate therapy. In Japan, EVENITY has been prescribed to approximately 800,000 patients since launch, making it the leader in the bone builder category with greater than 50% market share. The success of EVENITY in Japan underscores the significant untapped potential in the U.S., where improvements in screening and diagnosis and increased treatment could meaningfully expand patient reach and drive continued growth. Prolia delivered $1.1 billion in sales, an increase of 9% year-over-year.

Three biosimilars have launched to date in the U.S., and we see competitive dynamics evolving in line with expectations. In future quarters, we expect increased competition to negatively impact Prolia sales. Our rare disease portfolio grew 13% year-over-year to $1.4 billion, now annualizing at over $5 billion with strong performance across the board. UPLIZNA sales increased 46% year-over-year to $155 million.

The launch of UPLIZNA in IgG4-related disease is progressing well with significant uptake among rheumatologists and key academic medical centers. While IgG4-related disease is a recently defined condition, our educational efforts are rapidly building awareness and diagnosis. We've seen over 300 unique prescribers since launch across multiple specialties, demonstrating breadth of adoption of UPLIZNA in this indication. UPLIZNA is a leading FDA-approved treatment for NMOSD with growth driven by increased new patient demand and strong rates of treatment initiations and adherence.

Additionally, launch preparations are underway for the anticipated approval of UPLIZNA in generalized myasthenia gravis or gMG, a chronic autoimmune neuromuscular disorder driven by pathogenic B cells. We look forward to the potential of serving more patients who can benefit from UPLIZNA's differentiated profile, including its durable efficacy and convenient dosing and administration. TEPEZZA grew 15% to $560 million in the quarter, driven by increases in inventory and price. We're encouraged by our launch in Japan, where more than 800 patients have been treated with TEPEZZA since December.

In the U.S., approximately 25,000 patients have received treatment since launch. To reach even more patients who can benefit from TEPEZZA, we continue to engage a broad prescriber base who have indicated an increasing intent to prescribe. TAVNEOS sales were $107 million in the third quarter, an increase of 34% year-over-year, driven by strong volume growth. More than 6,700 patients with ANCA-associated vasculitis have been treated with TAVNEOS in the U.S.

Over 3,800 health care professionals have now prescribed TAVNEOS, representing a 31% increase in the prescriber base so far this year. In inflammation, TEZSPIRE delivered another strong quarter with sales up 40% year-over-year to $377 million and has now achieved over $1 billion in sales year-to-date. TEZSPIRE is well positioned to help many more patients in the U.S. given its differentiated and broadly applicable profile to treat multiple triggers and drivers of severe uncontrolled asthma. In addition, TEZSPIRE has recently been approved in the U.S. for add-on maintenance treatment in adults and adolescents aged 12 years and older with inadequately controlled chronic rhinosinusitis with nasal polyps.

This disease is associated with elevated eosinophils and is observed in roughly 20% of patients with severe uncontrolled asthma. This reinforces TEZSPIRE's proven efficacy in eosinophilic disease. Importantly, in this registrational trial, TEZSPIRE demonstrated a reduction in the need for surgery, further expanding its value and potential to help an even broader patient population. Our innovative oncology portfolio, which includes BLINCYTO, IMDELLTRA, LUMAKRAS, Vectibix, KYPROLIS, Nplate and XGEVA grew 9% year-over-year, generating $2.3 billion in third quarter sales.

Growth in oncology is fueled by our industry-leading bispecific T cell engager platform, the foundation for IMDELLTRA and BLINCYTO. These medicines are redefining standards of care in difficult-to-treat cancers and extending survival for more patients worldwide. IMDELLTRA generated $178 million in third quarter sales, fueled by strong clinical conviction and rapid adoption across care settings. IMDELLTRA is widely recognized as the standard of care for patients with extensive stage small cell lung cancer who are progressing on or after chemotherapy.

Over 1,400 sites of care in the U.S. are now administering IMDELLTRA with more than half of the doses occurring in the community setting. Following superior clinical evidence in the Phase III DeLLphi-304 study, the NCCN guidelines have been updated to reflect IMDELLTRA as the highest recommended therapy in the second-line setting. We look forward to the anticipated full confirmatory approval later this year. BLINCYTO grew 20% year-over-year to $392 million in sales, driven by broad prescribing across both academic and community segments.

We see strong conviction in BLINCYTO as standard of care in combination with continued multi-agent chemotherapy for both adults and pediatric patients with Philadelphia chromosome-negative B-cell ALL. Our biosimilar portfolio delivered another strong quarter with sales increasing 52% year-over-year to $775 million and now annualizing at $3 billion. Since our first product approvals in 2018, our biosimilars have generated nearly $13 billion in sales. Additional launches are providing meaningful top line growth and durable cash flow.

PAVBLU, a biosimilar to EYLEA continues to gain momentum, reaching $213 million in sales in the third quarter. Retina specialists have responded very positively to the launch of PAVBLU, citing its convenient prefilled syringe format and Amgen's high-quality biosimilar manufacturing as important advantages. I'm very pleased with our performance in the quarter, fueled by the unwavering commitment of Amgen employees around the world to deliver on the company's mission to serve patients. And now I'll hand it over to Jay.

Thank you, Murdo, and good afternoon, everyone. The third quarter was a period of strong and disciplined execution across R&D. We advanced multiple late-stage programs and deepened the evidence base for our marketed medicines. Starting with MariTide, both of our Phase III chronic weight management studies are fully enrolled.

Interest was significant, enrolling approximately 5,000 adults in roughly 6 months. We have rapidly advanced into additional Phase III studies with strong enrollment momentum in MARITIME-CV and MARITIME-HF for the study of atherosclerotic cardiovascular disease and heart failure, respectively. Recall, in our Phase II chronic weight management study, we observed statistically significant reductions in systolic blood pressure, triglycerides and hs-CRP, a key marker of vascular inflammation. These statistically significant improvements in validated cardiovascular risk factors highlight the potential impact of MariTide beyond weight loss.

We have also recently initiated two Phase III studies in obstructive sleep apnea. With six global Phase III studies now underway, we're building a robust evidence base for MariTide. In addition to MariTide, we are advancing our early-stage portfolio for obesity and obesity-related conditions. This includes AMG 513 presently in Phase I and a number of rising preclinical candidates for both incretin and non-incretin targets, featuring both oral and injectable routes of administration.

Beyond obesity, in general medicine, as Murdo noted, the Repatha Phase III VESALIUS-CV clinical trial met its dual primary endpoints, demonstrating significant reductions in major adverse cardiovascular events, or MACE, in higher-risk individuals without a prior heart attack or stroke. VESALIUS-CV asked a clinically vital question. Can people at higher risk for a first heart attack or stroke benefit from Repatha when it is added to optimized lipid-lowering therapy. This landmark study enrolled over 12,000 patients, approximately 85% of whom were maintained on moderate to intensive statin-based LDL-C-lowering therapy.

At a median follow-up of approximately 4.5 years, both primary MACE endpoints were met and no new safety signals were observed. We are very excited to share the full results from this trial at the American Heart Association Scientific Sessions on November 8 and would encourage all to review the detailed data when presented. In addition to the VESALIUS-CV data, we will also present several real-world studies that report on the state of current lipid management and the effectiveness of Repatha treatment in clinical practice as well as new data from the FOURIER open-label extension study. Together, these data reinforce Repatha's long-term benefit and established safety profile while providing new insights into atherosclerotic cardiovascular disease risk management.

The size, scope and ambition of our cardiovascular program, including efficacy from clinical trials and effectiveness from real-world data demonstrate Amgen's unwavering commitment to people living with heart disease and the impact that affordable transformative medicines like Repatha can have on their care. Turning to Olpasiran, our promising best-in-class small interfering RNA medicine targeting Lp(a), we are pleased by the conduct and progression of the fully enrolled event-driven OCEAN(a) Phase III cardiovascular outcome study. We continue to follow the aggregate endpoint accrual rate, which is lower than initial predictions.

As the study matures, we will update on the date for primary analysis as appropriate. We retain strong conviction in the potential of lowering Lp(a) to reduce cardiovascular events, owing to very compelling genetic and epidemiological data that link elevated Lp(a) to cardiovascular disease. Moving to our rare disease portfolio at UPLIZNA. We recently presented additional data from the Phase III MITIGATE trial in IgG4-related disease, featuring subgroup analyses stratified by baseline characteristics and organ involvement, such as the pancreas, kidney and bile ducts.

These data demonstrate benefits comparable to those seen in the overall trial population, supporting UPLIZNA's potential across the spectrum of IgG4-related disease patients. For UPLIZNA in generalized myasthenia gravis, we look ahead to the December 14 PDUFA date and continue to receive encouraging physician feedback that highlights the need and opportunity for highly active, durable and convenient treatment options for patients with gMG. In inflammation, we are excited by the FDA and European Commission approvals of TEZSPIRE for the add-on maintenance treatment of inadequately controlled chronic rhinosinusitis with nasal polyps for the benefit of adult and pediatric patients aged 12 and older.

The Phase III data supporting this approval revealed rapid and sustained symptom improvement and a meaningful reduction of systemic steroid use. Notably, among patients treated with TEZSPIRE, we observed a near uniform avoidance of surgical intervention. Additionally, our two Phase III studies of TEZSPIRE in chronic obstructive pulmonary disease are enrolling patients with moderate to very severe COPD with blood eosinophil counts greater than or equal to 150 cells per microliter. Our Phase III study in eosinophilic esophagitis continues to mature.

By targeting thymic stromal lymphopoietin or TSLP at the top of the alarm in inflammatory cascade, TEZSPIRE targets the root cause of serious inflammatory diseases driven by Th2 inflammation. Moving to oncology. Our bispecific T cell engager or BiTE platform is delivering outstanding clinical results for patients facing advanced cancers. IMDELLTRA, our DLL3 targeting BiTE molecule now established as standard of care in second-line small cell lung cancer is generating compelling data in combination and in earlier lines of therapy.

In September and October, we presented results for multiple arms of the DeLLphi-303 Phase Ib study of IMDELLTRA in patients with small cell lung cancer, tested in combination with a PD-L1 inhibitor as first-line maintenance therapy. IMDELLTRA demonstrated a promising overall survival of 25.3 months, approximately doubling survival observed in other studies featuring the existing standard of care. In separate arms of DeLLphi-303, IMDELLTRA tested as first-line treatment in combination with platinum-based chemotherapy and a PD-L1 inhibitor demonstrated 12-month overall survival of 81% with median overall survival not yet reached.

In both settings, the safety profile was manageable and consistent with the known safety of each component. We are now evaluating these combinations in the pivotal DeLLphi-305 frontline maintenance and DeLLphi-312 frontline induction and maintenance Phase III studies. Previously, we shared the remarkable results of the DeLLphi-304 study, evaluating IMDELLTRA versus standard of care in subjects with relapsed extensive-stage small cell lung cancer after platinum-based first-line chemotherapy. The U.S. regulatory submission has been accepted by the FDA with a PDUFA date of December 18, 2025. Regulatory reviews are also underway in a number of additional geographies.

We are developing IMDELLTRA for expansive impact in small cell lung cancer and other DLL3-positive malignancies, including Phase Ib studies evaluating novel agent combinations, less frequent dosing regimens and subcutaneous delivery. As an oncologist, let me share that the impact of IMDELLTRA for patients facing such a challenging disease as small cell lung cancer is honestly very moving. This disease has seen little innovation in decades, and IMDELLTRA is now benefiting so many in this fight. With BLINCYTO, our CD19 targeting BiTE medicines, we continue to work to improve and evolve the standard of care for patients here with B-cell acute lymphoblastic leukemia.

Recently, we initiated a potentially registration-enabling study of subcutaneously administered blinatumomab in both adults and adolescents with relapsed or refractory B-ALL. Our first-in-class STEAP1 CD3 bispecific T-cell engager, Xaluritamig is advancing in Phase III clinical development with two studies now underway. The first study, XALute, is enrolling patients with metastatic castrate-resistant prostate cancer who have previously been treated with taxane-based chemotherapy, comparing Xaluritamig monotherapy versus investigators' choice of standard therapy. The second study, XALience, is evaluating the combination of xaluritamig and abiraterone versus investigators' choice of standard therapy in patients with chemotherapy-naive metastatic castrate-resistant prostate cancer.

We are also exploring Xaluritamig in other combinations and in earlier stages of prostate cancer with multiple Phase Ib studies ongoing. Across IMDELLTRA, BLINCYTO and xaluritamig, we see meaningful long-term potential from our bispecific T cell engager platform and remain committed to bringing transformative and innovative therapies like these to patients with cancer. Lastly, we are disappointed to announce that FORTITUDE-102, a Phase Ib/III study of bemarituzumab plus chemotherapy and nivolumab in patients with first-line gastric cancer was stopped for an adequate efficacy at an ad hoc analysis requested by the Data Monitoring Committee.

We are deeply grateful to the patients, investigators and research partners who made the study possible. We remain committed to creating and developing medicines for challenging cancers where unmet need is significant as for patients with gastric cancer. Here, however, the magnitude of observed efficacy did not meet our standard for an Amgen medicine. Beyond these innovative medicines, our next wave of biosimilar candidates is advancing in Phase III clinical development, featuring biosimilars to OPDIVO, KEYTRUDA and OCREVUS.

With breadth and depth across our four therapeutic areas, we are excited about the potential to deliver for patients, and we are well positioned to deliver sustained long-term growth. In closing, thank you to the Amgen teams whose disciplined execution and patient-first mindset make this progress possible. I'll now turn it over to Bob for Q&A.

Okay. Thank you. Why don't you remind our callers of the procedure for asking questions, and we'll try to get to as many of you as possible. I know it's a couple of minutes past the top of the hour now. So we'll try to get through these. And if we don't get to everybody on the call, we'll be available afterwards to answer any outstanding questions. So, let's get started.

[Operator Instructions] Our first question comes from Salveen Richter from Goldman Sachs.

With Olpasiran, you mentioned best-in-class in the context of a competitive landscape out there. And you also noted that the event rate for the OCEAN(a) outcome study is lower than you expected. Could you just speak to your confidence in this program and what the event rate means for a base case readout, whether it's now in 2027 versus year-end '26 prior? And then separately, from a BD perspective, you spoke to how you're back at pre-Horizon debt levels.

How does this impact your approach to business development heading into 2026?

Thank you very much, Salveen. I'll take the first question around Olpasiran. And as I mentioned, our conviction remains very strong. The genetic association for Lp(a) in cardiovascular disease is crystal clear from human genetics, from epidemiological data.

Lp(a) is fundamentally an inflammatory lipoprotein particle, and we know a lot about that biology in the vascular beds from analogy to LDL-C. Olpasiran has true best-in-class properties. It's frequency of administration is better. The depth of Lp(a) suppression is better, has a very clean safety profile.

OCEAN(a) is an event-driven study. We're accustomed to conducting these global studies, look at VESALIUS-CV. We're very pleased with study conduct and look forward when we do read this out to seeing the impact of Olpasiran. We won't guide today on that particular date, but we'll keep all posted as we put into focus.

And Salveen, I wouldn't say that the return to the leverage that we had pre-Horizon affects our thinking in business development to any great extent. We're actively looking for opportunities in business development, as you know. We're particularly focused in the therapeutic areas that you're familiar with as areas of interest for us. And just given the number of things we have in the late-stage clinic right now, we're focused primarily on earlier-stage things.

And the good news is there are more of those than late stage anyway. So we're focused, open for business, but we have been. So thank you for the question.

Our next question comes from Terence Flynn from Morgan Stanley.

Peter, I was just wondering, high level, I know you're going to give 2026 guidance at this point, but maybe you could walk us through some of the puts and takes that we should think about heading into 2026. And then, Jay, just one clarification on ROCKET ASTRO. I noticed you completed that trial and it said the safety was consistent. Just wondering if there was any gastrointestinal ulcerations in that study. I know you saw those before in some of the prior studies.

Yes, Terence, thank you very much for the question. And I would point towards our key growth drivers when you think about the top line and where the company is going. We've just had an excellent quarter, 14% volume growth, Repatha, EVENITY, TEZSPIRE, innovative onc, rare disease now annualizing at over $5 billion off the quarter, biosimilars annualizing at close to $3 billion. So that's how we're thinking about that.

As we go down the P&L, maybe the easiest thing for me to do, Terence, would be just to spend a minute because I think people probably are thinking about operating margin. And we've been clear in the past number of years about that. And when we have an opportunity to achieve cash-on-cash returns greater than our hurdle rate, we're going to drive those opportunities for shareholders. So nothing has changed in that.

We're at about the 47% operating margin level in 2024 as we continue to accelerate the investing in research and particularly development, Terence of our later-stage pipeline. We're going to continue and have continued to invest in 2025, again, focused on research and development. We're going to stick with this disciplined capital allocation approach. We haven't changed from that, investing in the best innovation, as Bob just said, looking externally inside the company internally remains at the top of our capital allocation hierarchy.

Nothing's changed there. So we'll keep that up. We haven't provided longer-term margin targets, so nothing into 2026. But I'd just say we remain focused on achieving industry-leading margins while continuing to invest in the very best innovation. So as you think about the business going forward, here's a couple of thoughts for you to think about.

First, we're focused on our earlier pipeline. Bob just mentioned that again, investing in the best innovation to further build out that part of the pipeline. In terms of R&D expenses, I just want to note, we experienced what I might characterize as a step change increase in R&D expenses over the last year. We don't anticipate an incremental step change going forward.

In terms of R&D expense, think of a lot of puts and takes there. We'd remind you that we've completed a number of Phase III studies in 2025, including Repatha VESALIUS, the a confirmatory study for IMDELLTRA along with several rocatinlimab, bemarituzumab studies. And we've added studies, of course, for MariTide, Olpasiran and Xaluritamig and those will carry forward into 2026. I'd also remind you, Terence, that our non-GAAP operating margin guidance of for the full year 2025 includes $200 million of business development activities in the third quarter, along with some incremental launch and commercial investments in the fourth quarter.

So just kind of summarizing, hoping that answers your question and gives you some thoughts about where we're at this year and continuing into '26. We're going to continue to drive executional excellence, productivity and ruthless prioritization around the organization. We've worked very hard as an enterprise for many years to be amongst the leaders in margins in our industry, and we certainly expect to continue to remain there. So, Terence, thank you very much for the question.

Jay, do you want to speak to ASTRO?

I gladly would. Terence, thanks for asking. For all on the call, ASTRO is a 52-week study of rocatinlimab, the OX40 directed T cell rebalancing agent. In this case in adolescents with moderate to severe atopic dermatitis, tested two doses, 150 and 300 milligrams.

We studied the medicine as monotherapy as well as combination therapy with low-dose steroids or calcineurin modulation. Study met its co-primary endpoints at 24 weeks. Safety, quite consistent with the other studies. We did observe GI side effects, mostly mild in nature and not at an excessive rate.

As we bring to close the eight studies of the ROCKET program, we start to reflect on the target product profile, we'll have more to say about that in the near future.

All right. Let's move on to the next question and see if we can keep it to one question so we can get as many of you as possible. Who's next?

Our next question comes from Jay Olson from Oppenheimer.

Congrats on the quarter. We're curious about the VESALIUS-CV results and how you expect them to impact the overall market opportunity for Repatha? And also what should we look for in the details when you present them at AHA? And related to that, just any lessons learned that you can apply to Olpasiran?

Jay, we're glad you're interested and excited about the VESALIUS study. So are we -- we look forward to having a chance to share with you in detail. Maybe two parts. Jay, do you want to kick off and then Murdo, you can follow up.

Yes. Thanks, Jay. Cardiovascular disease is still the #1 killer, heart attack every 40 seconds in the United States. And just about everybody in the world knows about bad cholesterol or LDL-C that Repatha so dramatically lowers.

And we know that lower is better, yet lipid management globally is still very poorly managed, about 100 million people in the world who are in need of better control. Repatha, so firmly established as accessible, affordable, efficacious in the prevention of recurrent CV events in VESALIUS-CV, we asked the really vitally important question, can we prevent first events? And indeed, this is the first -- the only PCSK9 to demonstrate such an effect. 75% of MIs are first events. And so it's a really important question.

We can't wait to share these data at the upcoming AHA. Importantly, on this study, as Murdo mentioned in the top of the program, this is in addition to optimize lipid management. And so for patients and doctors on a statin, but with inadequate LDL-C control, this is a major, major advance. We're looking very much forward to sharing the complete results.

You asked about lessons learned. I think work with great people. The TIMI Study Group was outstanding. We carry all of the learnings of how to conduct a global study of this incredible span in nature, more than 12,000 patients worldwide.

And I think it also serves to emphasize by hitting both dual primary endpoints, just how much room there still is to improve cardiovascular care targeting inflammatory lipoparticles. Murdo?

Well, I think you've covered most of it, Jay. I would say that if you're not doing anything this weekend and you're really curious, be in New Orleans or tuned in. I really -- I think that the word landmark gets thrown around a lot in describing clinical trials, but I don't think it's an inappropriate moniker to put on this one. I think this is a substantial advance in understanding how you can prevent first heart attacks and strokes.

This is a call to action for primary care physicians everywhere. And we will make sure that immediately after the presentation of these data that our medical teams, our field sales teams, our patient support organizations are out there in full force, making sure that primary care physicians are aware of these data. and that patients have the benefit, as Jay said, of an affordable solution that gives them incremental risk reduction beyond any established lipid-lowering therapy on the market today with Repatha. So it's an exciting time. We've systematically told you all that we were opening up access for Repatha and that we were asking primary care physicians to do more beyond the cardiologist role here.

And these data give us yet another opportunity to continue that important work. Thank you.

And Jay, as we mentioned a couple of times on the call in our prepared remarks, Amgen now obviously is an important part of the thinking here. We don't want there to be any excuse for anyone not to be able to get access to this at an attractive price relative to the benefit that the medicine provides. So, anyway, thanks for asking the question. Let's move on to next caller.

Our next question comes from Matt Phipps from William Blair.

FDA recently released new biosimilar guidance and maybe removing the need for comparative efficacy studies. I wonder if that changes your view at all on the business, maybe some of the barriers to entry, but also the calculus on what biologics might be worth pursuing a biosimilar for?

Thanks, Matt, for the question. I don't think it changes our strategic focus on biosimilars. This has been a very good growth business for Amgen, and we continue to see it as such. Obviously, we pay attention to the new guidance and our development teams and regulatory teams are very focused on making sure we're ready to adapt to them.

I would say that all of the technical functions here at Amgen are in a position to compete effectively regardless of the guidance, whether it's heavy clinical trial requirements or whether it's technical comparability requirements. We've got a great process development team here in our manufacturing operations organization who continue to do very innovative things in the development of biosimilars, such as helping us be the only biosimilar to EYLEA commercially available on the market. So we think we'll be in good shape. We'll be competitive.

And no matter what the guidelines come, obviously, we'll look closely at them, as I said, and we'll understand how that might impact development of products going forward.

And just quickly, Matt, at a strategic level, I would observe that there's an undercurrent of question in some quarters, particularly in Washington about how successful the biosimilar market is in the United States right now. As a leading competitor, our perspective is the market is performing very well. We think the ground is well set for this to continue to be a flourishing market in the U.S. with patients having access to alternative supplies of important medicines after their patents have expired. And we would watch carefully to make sure that policies don't emerge that might move this marketplace in the direction of the generic drug industry, where there have been obviously a number of abuses that have given rise to quite a bit of anxiety about that market and its impact on patients.

In contrast, we think the biosimilar market is working well. We think regulatory and other policies that are in place today enable that to continue. And we would advocate for, again, a recognition that the things that are in place now are working well.

Our next question comes from Yaron Werber from TD Cowen.

Great. Maybe just a question for Jay. The second year of the MariTide data is expected by year-end. We know you're looking at three different things.

You're looking at the same dose, lower dosing, going to placebo and you're testing Q12 weeks in that study. There's no Q8 weeks. Any sense sort of -- is this going to be in a medical meeting? And can you give us any sense kind of what to really expect and put it in context?

Yes. Thanks, Yaron. The Part 2 of the Phase II chronic weight management study is indeed a very interesting study, having achieved strong efficacy in Part 1, 52 weeks, Part 2 will contribute a first maintenance experience. And just a reminder the design, as you covered already, we are testing quarterly dosing, full dose.

We're testing low dose at monthly, and we're comparing these measures to placebo and continued treatment. And these data will be very useful to us. This will inform our maintenance strategy. It will provide guidance to additional Phase III designs, and we'll have more to say about our disclosure approach in due course.

Our next question comes from Chris Schott from JPMorgan.

Maybe a bigger picture question on obesity. We've had a number of updates in the space lately. We've got the Metsera headlines going around. We've got some discussions on lower Medicare pricing for obesity drugs.

I'd just be interested in just Amgen's latest view on kind of the obesity market and the company's role within the market with MariTide and the broader pipeline. I want to get just the latest kind of lay the land from your perspective.

Yes. Thanks for the question, Chris. I would say that we are -- we remain very enthusiastic about the opportunity for us in obesity. We believe strongly, as you know, that we have a differentiated approach to this market than the competitors that are in the space. presently and different from what we see others advancing in their portfolios.

So again, our interest in this based on everything we know about our molecule and everything we see in the marketplace remains very, very constructive. So, I'll invite Jay and Murdo, I'm sure they'll have thoughts they want to add. Jay, why don't you kick in?

Sure. Thanks for the invitation. It's a major public health crisis. Living in the United States, so many people face this every day.

Maybe 40% of adults in the United States will have a BMI over 30 and 1/5 of children. It's also massively costly to health care in the United States. The CDC will estimate over $170 billion a year. And market -- Murdo can speak to it, but the market is totally underpenetrated, implying that health care can significantly improve.

But for it to improve, we think it will take really differentiated assets, not just another weekly injectable peptide, which have proven very hard to keep patients on those types of medicines with 55% failure to continue medicines beyond the calendar year. And of course, obesity itself as well as the related conditions require much more enduring and chronic therapy. And so we think that MariTide has a fantastic and differentiated profile to contribute there. But as you asked about the broader pipeline, we've been in obesity and metabolic medicine discovery research for more than 20 years.

And this pipeline, we have another Phase I asset, AMG 513. And we have preclinical programs advancing for novel targets within the incretin and non-incretin pathways. Some will be oral, some will be injectable. And so we're really in it to have a huge impact on this major public health crisis. Murdo?

Yes. Thanks, Jay. I mean the only thing I would continue to reinforce for everybody listening in is we continue to feel that MariTide is a true differentiation compared to what is available in the market. I mean it is interesting that there's a bidding war between two companies for a GLP-1 that is through some lipid technology enabled potentially to maybe be monthly.

So to have a product that's well defined clearly monthly, perhaps even less frequently in a market, as Jay described, that is massive and undersatisfied, where we hope to go into this market, not just to reduce the weight of patients who struggled with obesity but also to help deliver on the medical benefit of managing that weight. And I can't wait to see the results of our Phase III program, and I'm really pleased with how the team is executing. We look forward to that day. Thank you.

Our next question comes from Evan Seigerman with BMO capital.

Bob, your comment kind of on the biosimilar sector struck with me. I'm wondering if you could highlight what you think needs to change from a policy perspective to encourage even more uptake of biosimilars. For example, the #1 selling adalimumab product is still HUMIRA and not AMJEVITA. How can you as a biosimilar leader really encourage more use of these products?

Yes. Again, I think there's a difference in the U.S. between the Part B medicines and the Part D medicines or the retail and the physician-administered medicines. So I think the market dynamics are evolving differently in those two areas. Obviously, the payers are very involved in the Part D where the rebate dynamics are important, but that erodes over time, and I think we see happening that now.

Very confident when you look back over the fullness of time, you will see that AMGEVITA, our adalimumab biosimilar will have been a very successful product for us. We see that internationally. It continues to be a strong product for us. We think it will continue to be that.

And I think, again, in the U.S., a safe, reliable supply of a true biosimilar like ours will do well in the long term.

Our next question comes from Umer Raffat from Evercore.

This is Mike DiFiore in for Umer. I just want to go back to the MariTide Phase II trial for a bit. There is some confusion on whether we'll get two-year weight loss data in the upcoming Part 2 readout of the MariTide obesity Phase II trial. So can you clarify the design, especially as it relates to the washout post week 52?

And since most of these patients will have lost weight in year one, isn't it reasonable to assume that weight loss in year two, Part 2 will be a lot less in year one Part 1?

Yes, Jay, go ahead.

Yes, I'm happy to answer the question. As I shared, it's principally a maintenance study that tests low dose monthly and full dose quarterly against placebo and continued MariTide at target dose. As the study was powered really to inform Phase III and we derived a significant amount of guidance from Part 1, there are some aspects of Part 2 that are more descriptive. I mean you may know that to participate in Part 2, patients had to achieve greater than 15% weight loss in Part 1, and then they were randomized to a number of arms.

And so the power to make significant insights into weight loss between the arms is not strong, but there will be patients that continue on at their target dose. And as patients in Part 1 did not achieve a weight loss plateau, we'll be interested to follow those patients forward for the second calendar year.

And just to be clear there, Jay, when you say the power is not strong, you mean it's not designed -- numerically, it's not designed for that purpose.

That's right. This, as I shared, is a study that's designed to inform our strategy on maintenance MariTide as well as further Phase III programming. And we fully expect to derive all the information needed from Part 2 of the study for those purposes.

Great. Okay. Let's go to the next question. Again, I'm mindful we're getting up to the half past the hour. So we'll take two more questions, and then I apologize to the rest of you. We're available for calls later in the day. So let's go to the next question.

Our next question is from David Amsellem from Piper Sandler.

So on UPLIZNA specific question. So you're seeing pretty strong performance in the wake of the label expansion in IgG4-related disease. Can you talk to the extent to which there's been pent-up demand here? Give us your refreshed views on the sales opportunity here?

And then I guess, beyond that with the gMG label expansion, how are you thinking about rapidity of uptake there given that, that's a more competitive landscape and there are some competitive dynamics to consider in gMG.

We'll try to get it efficiently for you here. But I think, Murdo, I'm sure you're going to want to have -- say a few things about the exciting dynamic we see for UPLIZNA.

Yes. Thanks for the question, David. Obviously, we're very early in the IgG4 launch. As I mentioned, we've got roughly 300 unique prescribers that have prescribed UPLIZNA for IgG4. I'm not sure I would characterize it as pent-up demand.

IgG4 is a disease that really only got its own ICD-10 code in 2023. So this is a patient that often presents without an obvious diagnosis on the part of the physician. So we're actually seeing our awareness, our education and the fact that we've got the only FDA-approved treatment for IgG4 as a catalyst for even more growth. The estimate is about 20,000 patients in the U.S. But as I mentioned, given that the diagnostic codes are relatively new here, the actual market could be much bigger.

We have obviously demonstrated overwhelming efficacy. When you can reduce flares by as much as 87%, substantial reduction in steroids and really have patients who are in significant trouble here, have their disease resolved and have their flares reduced as a very important therapy. So it's helped us a lot. Jay will want to expand further on that.

But before I turn it to him, I'd just say that in NMOSD, we expect to have a strong -- sorry, in gMG, we expect to have a strong presence in that market given the profile that we were able to show in the MINT trial. We've got a very convenient dosing here after the first loading dose, you get to twice a year therapy. very durable effect, perhaps more durable than some of the agents that are in the market today. And given that the data are already out there, we -- there, we have some real interest on the part of the people who are treating the gMG patient population. The other thing to think about in gMG is there's a lot of switching between treatments and between classes of therapy.

Usually, a patient is on a primary therapy for no longer than a year to 1.5 years, and they see at least two medications, sometimes as many as three medications until they feel stabilized. So it is a market that's still dissatisfied despite the number of entrants. Jay?

Yes. Thanks, Murdo. I think the differentiation is really strong, as Murdo shared. And I think it's attributable to targeting the core disease biology.

I mean targeting the CD19 positive cell is really the entirety of the B-cell compartment, not just the mature cells, but also the immature cells that start to elaborate the autoantibodies. And because of this, although it's always hard to make trial-to-trial comparisons, we see numerically higher efficacy by MG-ADL, which is a standard measure. We see more steroid sparing than FcRn. We see incredible durability, as Murdo said, during the randomized control period and a serious dosing advantage with Q6 months dosing after the loading dose.

And so durable, sustained efficacy are not just promising for gMG, but more broadly to the other diseases that are driven by pathologic autoantibodies. And as you might know, we have open studies of inebilizumab as well as blinatumomab in autoimmunity that are open and enrolling in a very dynamic and exciting space where CD19 medicines of many classes are showing profound activity in severe and advanced autoimmune diseases. And we, of course, have two in-market brands. So we're in a good spot to take advantage of this opportunity to help these patients.

Our last question today will come from Dave Risinger from Leerink Partners.

So thank you for all the updates. I was just hoping that you could maybe just call out the top two or three pipeline cards that are turning over that could be most impactful for Amgen in the next 6 to 12 months that we should be focused on?

Jay, do you want to go ahead and talk about a couple of things that you're watching carefully?

Yes. Well, I'm obviously very excited in this moment about the VESALIUS-CV, which we're going to be sharing in just a week. And so I really quite encourage you to pay close attention to this. The further development of IMDELLTRA and tarlatamab is also very exciting.

We see very dramatic activity in the cases that are now being communicated back to us of patients saved from impossible situations, as I shared, is very powerful. And as we've learned from blinatumomab, moving tarlatamab, IMDELLTRA into combination therapy into frontline use into a setting where there could be less active disease owing to the debulking of chemo, all promises, as we've seen in this dramatic 303 study presented at World Lung as well as at ESMO for really meaningful activity in frontline in Phase III. And this is one of those moments, David, where time just can't move fast enough to read out those Phase III studies.

We had an opportunity here before the call, Dave, to see some PET scan data on a patient who is in tough shape, who is experiencing quite a profound response to the medicine. So it's a medicine that we're excited about. I think somebody at ESMO described it as wow squared. So stay tuned.

A lot of -- we're hopeful about the data that's forthcoming on the IMDELLTRA platform here over time. All right. Well, thank you all for your attention and for joining the call. Casey and his team will be available through the afternoon and evening if anybody didn't get a chance to raise a question that they have an interest in.

We look forward to being with you after the next quarter. Thanks.

This concludes our Amgen Q3 2025 Earnings Conference Call. You may now disconnect.