Bristol-Myers Squibb Company
Q1 2010 Earnings Call Transcript

Published: 30 Apr 2010

[Operator:]

Good day, and welcome to today's First Quarter 2010 Earnings Release Conference Call. At this time, I'll turn the conference over to Mr. John Elicker, Vice President, Investor Relations. Please go ahead, sir.

[John Elicker:]

Thank you, Audrey, and good morning, everybody. Thanks for joining us on the call to review our Q1 results. You've seen the press release out already at about 7

[Lamberto Andreotti:]

Well, thank you John, and good morning, everyone. Let me start by acknowledging once again the great contributions that Jim Cornelius has made in leading Bristol-Myers Squibb for the past several years. I now look forward to the opportunity to take the baton from Jean and lead the company with the ambition of having Bristol-Myers Squibb become a new benchmark for the industry. During the past six weeks since we met at our March 4 investment community event, I focused on making certain that we have the right team and the right governance structure in place to take Bristol-Myers Squibb to the next level. I have confirmed a number of key executives and their roles, but I've also made some senior management changes among my direct subords and their direct subords. And with our pure biopharma focus now in place, I've also simplified our governance structure with the goal to improve the speed and quality of our decision-making. We are now fully ready to accelerate the delivery of our strategy. And let me remind you that the key elements of our strategy include

[Charles Bancroft:]

Thank you very much, Lamberto. We did have a very strong quarter. We delivered a non-GAAP EPS of $0.56, that's up 33%, despite a negative impact of $0.03 from U.S. health care reform. The year-over-year increase was primarily driven by good sales growth, continued expense management and fewer shares outstanding due to the Mead Johnson split off in December last year. Now, I want to give you some highlights from our first quarter financial results, discuss the impact of U.S. health care reform and talk about guidance before we go to your questions. The company reported first quarter net sales from continuing operations of $4.8 billion, an increase of 11% or 8%, excluding foreign exchange. Health care reform had a 1% negative impact on net sales in the quarter and volume was up 4%. The first quarter sales performance was powered, in large part, by double-digit increases in our cardiovascular and virology franchises. PLAVIX grew 18% in the U.S., confirming its established strength and continuing potential. U.S. sales were driven by a 2% increase in prescription demand, a higher average selling price, and we did see some inventory build in the retail channel year-over-year. In Europe, generic clopidogrel was available in most of the countries. We already see the majority of our business in important countries like France, Germany and the U.K. impacted by generics. We expected erosion of PLAVIX sales in Europe to begin to slow, but it will continue. The impact is primarily recorded in equity income from affiliate in our P&L. Second, our virology franchise demonstrated strong global sales growth, up 19% from the year ago. This sales strength demonstrates the continued strong demand for REYATAZ, the SUSTIVA franchise and BARACLUDE across both our U.S. and international markets. Finally, we had another solid quarter for ABILIFY, with global net sales up 5%. In the U.S., sales of ABILIFY were down 2% despite a 9% increase in prescription demand. That was fueled by our indications for bipolar and major depressive disorder. When comparing ABILIFY'S U.S. sales for the first quarter of 2010 with last year, there are three things to keep in mind

[John Elicker:]

Thanks, Charlie and Lamberto. And Audrey, I think we're ready to go to questions and just a reminder, that in addition to Lamberto and Charlie, we also have Elliot here to handle any of your R&D questions as well as Tony and Beatrice on the commercial side. Audrey?

[Operator:]

[Operator Instructions] We'll go first to Tony Butler with Barclays Capital.

[Charles Butler:]

Lamberto, we've been doing some diligence on a number of international companies be it -- countries be it Germany or the U.K. or France or Spain and the impacts of international health care reform. I'm curious if you could comment internationally because we tend to focus too much, I think on the U.S. and how you could see some increasing pricing pressure internationally?

[Lamberto Andreotti:]

Tony, it's interesting that I was expecting the first question to be on the of U.S. health care reform, and now you take me back to my international years. And it is true, there are a number of countries that are under pressure. Greece, obviously is under everybody's attention. Greece is a country of, I would say, approximately $200 million sales for us, and we are carefully monitoring what's going on there. There are signals in Germany that I do want to go for price. And obviously, similar measures are being studied in other countries. Now, we have been dealing with that for years. And what is important in those countries, and really important in the U.S., is to have enough innovative products to offer to the marketplace. And there you can secure the proper access and the proper pricing and also to be good at improving productivity. And again, I think we have a track record at Bristol-Myers Squibb for dealing with those situations. So I don't see anything particularly different from what we have been dealing with in the past in the various accounts. Let me add one point, that all of us here have an international background and I tell you, the international background is becoming very useful in the U.S., dealing with these different access situations we have here, and we are using some of the experience we accumulated outside of the U.S. in the U.S. itself.

[Operator:]

We'll go next to David Reisinger at Morgan Stanley.

[David Risinger:]

In terms of the American Diabetes Association, I believe that you're presenting just one Phase III dapagliflozin study if you could just provide some details on that. And then what else we should watch for later in the year to get more clarity on the infection risk for dapa. And then second, regarding ipilimumab, could you please comment on your discussions with regulatory authorities and the EU and U.S. regarding the filings that you're planning? And then finally, SPRYCEL was very, very strong in the quarter. It was up $47 million sequentially to a $166 million, can you provide a little bit more color on that please?

[Lamberto Andreotti:]

Yes, I thought, David and I will ask Elliot to take this Dapa, any questions and Tony and Beatrice, you comment on SPRYCEL. And I would just like to add a comment that all three products are three very important products to us. And the degree of confidence in their future and the contribution that they can give to our sales is increasing and all of us are spending a lot of time and attention at getting ready for the potential launch of Dapa NAP [ph] and for the potential launch of a new indication of SPRYCEL. Elliot, why don't you just continue with that?

[Elliott Sigal:]

Yes, David. On your question about the ADA, you're correct that we'll be presenting in June data on dapagliflozin for our Phase III study that studies dapagliflozin in the context of add-on to insulin. So patients, since this is an insulin-independent mechanism and unique in that regard, we're very excited to present data on patients that seem to have a lot of insulin resistance and large doses of insulin. And the question of the study is, "Can the addition of dapagliflozin decrease the amount insulin and insulin dependence, and what would be the improvement and what we're after of the triad of clinical benefits with regard to glycemic control, blood pressure control and weight control with dapagliflozin?" We've now completed eight Phase III studies in dapagliflozin and the emerging profile is as we have been reporting it. We will roll out three more Phase III studies in September of 2010 in Europe, data from the add-on to the sulfonylurea study, data from an add-on to metformin versus sulfonylurea and data from an add-on to the insulin Phase III study actually, similarly as we will do in ADA, we'll do this in Europe. So we remain excited about that. You asked about infection risk. To date in the program, the rate of signs, symptoms and other reports suggested of urinary tract infections is about similar to placebo, while the rates of signs, symptoms and other reports suggested of genital infections, these are usually Canada infections, are higher than placebo and educating the patient and being proactive to deal with this, what we think of this and tolerability issue is our focus. And more of this data will be presented in the forthcoming year. With regard to ipilimumab, yes, March 4, you detected my enthusiasm about immunotherapy in oncology in general, Ipilimumab's potential in melanoma and we remain enthused and looking forward to ASCO. I did refer to the fact that there were ongoing health authority discussions then, which we always do to make sure that we are in line with what the agency expects in the content and the form of the submission. We've had these discussions now in the U.S. and Europe and expect to submit applications for regulatory approval of ipilimumab in both the U.S. and Europe over the next couple of months. These are discussions with the regulatory authorities who focused on the data we have on hand, from the 020 study and the indication would be appropriate to the data in that regard. And we look forward to ASCO, the first week in June, we will be presenting more ipilimumab studies, our first Phase III study in melanoma with survival end point and a Phase II study in lung cancer.

[Lamberto Andreotti:]

Beatrice, do you want to speak about SPRYCEL?

[Beatrice Cazala:]

Yes. Clearly we are very excited about speaking of adding a first line indication for SPRYCEL on top of contraindications. So as you know, worldwide there are 15,000 patients diagnosed each year, about 100,000 in various stage of the disease. So as we are today, the most prescribed agent indicative for GLEEVEC resistance on intolerant CML patient, the possibility now were for getting up to the ninth segment of SPRYCEL first line will be very exciting. It will also allow us to increase the size of our cyglinin [ph] market as patient maybe switched earlier and we're hoping for earlier switch from GLEEVEC versus today which will continue to titrated up on -- instead of being titrated up on Glivec. That's very important because as you know, GLEEVEC today, continues to be demonstrating long-term people benefit and simplicity of once-daily dosing with no food restriction. So we also have once per day dosing with no food restriction and no black-box warning for PT prolongation. So very exciting times based on very strong track records of success to date and Tony, if you want to comment about the U.S.?

[Anthony Hooper:]

Our first quarter was about 27% up on the same time last year or 19% growth versus fourth quarter last year, which as you know was in contrast to with the market itself. The TK [ph] market went down 1%. Our favorability was driven by strong volume growth as well as the price increase. 2/3 of all GLEEVEC patients that have switched have switched to SPRYCEL. And to further support our SPRYCEL growth, we have increased our sales efforts in the community by leveraging our [indiscernible] sales force. And lastly, we've recently launched a new patient education program designed to reinforce compliant behavior throughout treatment and also includes a co-pay assistance program for eligible patients.

[Elliott Sigal:]

This is Elliot, I'd like to just add to Tony's comments and Beatriz's comments about first line SPRYCEL. We are excited to be presenting, as Beatrice referred to, at ASCO, our first line data, and we can announce today that, that first line data has been filed in Europe and we are finalizing our application in the U.S. and other countries.

[Operator:]

We'll go next to Catherine Arnold at Credit Suisse.

[Catherine Arnold:]

I wanted to ask you a quick follow-up on SPRYCEL and then a question to the health care reform. On SPRYCEL, do you have, could you remind us in terms of the first-line study, if those patients remain on therapy, and what other kind of studies you might have to show the durability of response, obviously survival being most important, but the durability of the respondents of SPRYCEL versus GLEEVEC to try to attract those that might be a little bit less amenable to change? And then on healthcare reform, I wanted to ask you about, when you made a comment about the doubling effect from 2011, I assume that you will be looking for ways to mitigate that effect. And I also wanted to see if you could characterize the assumptions that you made, is that doubling just because the donut hole is added or is there a step up in Medicaid rebate effect? And have you been pretty conservative in regards to some things that aren't really ironed out, about things like the rebates that you provide today to managed care and what happen to those when you get the donut hole and those kinds of issues?

[Elliott Sigal:]

Catherine, this is Elliot, and with regard to the first-line CML [Corrective Measure Study] trial for SPRYCEL, the study is a five-year study, so we're clearly after a duration and survival. And as GLEEVEC did, as our competitor is doing, the approach to getting approval in first-line is to do a five-year study. But we have worked out with the agencies around the world that the first-tier read-out of important markers that are correlated with survival in this disease will be acceptable for potential approval on a conditional basis, on an accelerated basis, and then full approval will be available to either agent that shows the proper results at five years. So we will have data on an ongoing basis out to five years with these patients with regard to durability. We also will be investigating switch information for this. The two trials are different. Our primary endpoint is a major cytogenetic response, which was what GLEEVEC showed for its approval and is the accepted primary end-point recommended by health care authorities. Major molecular responses and other important emerging biomarker, the secondary endpoint for us. Our trial also differs in the fact that we did include cardiac patients and this is very important for the community. We did not exclude them as the case in the CIGNA trial and of course, the CIGNA already has black box warning. So we feel we have a very good study and I am corrected that the primary endpoint is complete cytogenetic response, I may have said major cytogenetic response, complete cytogenetic response. We feel this is an important study in the field.

[Lamberto Andreotti:]

Catherine, let me start addressing your question on healthcare reform, and Charlie will give you some details. It is clear but we are going after mitigating actions in 2011 and the years after 2011. In fact, as I said before, we started looking at the potential impact of healthcare reform at the very beginning of this year, and we have already implemented a number of cost-containment actions and also before the approval of the healthcare reform itself. We have a track record, I would say, of both reacting to unexpected events in a very aggressive and effective way, and we also have a track record of going after productivity. So the entire Bristol-Myers Squibb, not only the US-based units, are after cost containment elements to offset the impact of healthcare reform, and the underlying strength of the business will help us too. So we are going to announce the results of our analysis as soon as we are ready with our more definite conclusions. And Charlie?

[Charles Bancroft:]

2011, as we said, double that before any mitigating actions. So the doubling relates specifically to the healthcare reform impact as we see it. As far as the ramp up, in the first quarter, on an operating basis excluding the retiree drug subsidy one-time item, it was roughly $0.02 and we see the balance of the year, $0.09. So there is a little bit of a ramp up through the year because 340B pricing or expansion is really not much in the first quarter as well as some of the Medicaid managed care because that didn't take effect until towards the end of March. As we think about next year, the implementation guidelines around particularly the pharmacy and our share of the overall percentage of government sales still to be determined and the regulations aren't fully written there. As well as senior behavior entering the donut holes, there's still more work to fully understand the impact there. But we've included that in our range, and we feel comfortable that we're about in the midpoint of our range for next year.

[Operator:]

We'll go next to John Boris of Citi [Citigroup].

[John Boris:]

First one for Lamberto, as you settle into the CEO's seat, and if had an opportunity to reflect on the business, can you maybe just outline what your top three priorities are going forward? And then on R&D, for Elliot, on belatacept, can you give a PDUFA [Prescription Drug User Fee Act] date coming up in the near-term? Or do have launch quantities of the product? And will you be launching this sequentially right with the PDUFA date? And then on apixaban, just an update on the QD [quaque die] dosing formulation, is this something that you're going to be able to formulate appropriately? And then any timing around the development of that QD formulation?

[Lamberto Andreotti:]

Let me tell you that despite all the emotions of the last few days, after everybody woke up to the reality of healthcare reform, I'm focusing again on continuing to build this company the way it can be built to the way it can be successful. My focus, John, is on top line, top line and top line, and on all elements that could contribute to the top line. So the products that we will continue to market are already key products in our portfolio, the products that we can expand, like SPRYCEL and ORENCIA, thanks to the good life cycle management programs we had and the newer products that we have just launched we are going to launch. So top line is my first priority. Productivity, we are not losing focus on productivity at the same time, and I believe that there is still more that we can do especially in using other company or finding new partners for the many different things we do in manufacturing and in selling and in developing products et cetera. Another priority, I wouldn't call it my third priority, is to continue to have good management. And I'm very blessed with a very strong management team here at Bristol-Myers Squibb, and my priority is to continue to have passion for the selection and growth of strong managers for the years to come.

[Charles Bancroft:]

So John, this is Elliot. Quickly, on apixaban QD, although we're working on a formulation, we will not have that at launch. And we're really targeting the type of benefit/risk balance that we believe we will see with our appropriate dosing in BID [bis in die] dosing, and we think that that will be a very competitive situation. With regard to belatacept, you're correct that we had a positive advisory committee on March 1, we have a PDUFA date, May 1. We have been working with the FDA [Food and Drug Administration] and the review is actively progressing. Both groups are actively engaged, but as you can appreciate, given that the advisory committee was held less than two months ago, and the fact that bela [belatacept] will have a REMS [Risk Evaluation and Mitigation Strategy] that we proposed, there's a significant amount of work that we need to finish prior to approval. We remain confident in the benefit/risk profile of the drug and the belief that this can be a new treatment for patients undergoing renal transplantation. We are all ready with the supply and the preparations for launch. And perhaps, Tony would like to comment further on that.

[Anthony Hooper:]

So the U.S. team, from both medical and the commercial organization, sales and marketing are fully trained and ready to launch the moment we have a final label and approval. We have nude vials ready for labeling and packaging, and we should be in the market within ten days of final approval.

[Operator:]

We'll go next to Chris Schott at JPMorgan.

[Christopher Schott:]

Can you elaborate a little bit on ONGLYZA? In your view, what is it going to take to achieve broader adoption in the DPP-4 (dipeptidyl peptidase 4), of just DPP-4 as a class? And in your view, how much of an issue is the expense of the DPP-4 as relative to maybe other genericized class going to be hurdle for uptick for the DPP-4s? And then the second question on the S5A small molecule combo data, data coming at AASLD [American Association for the Study of Liver Diseases], is that going to be EVR [early virologic response]? Or when can we expect to see sBR [sustained biochemical response] for that combo? And could you just talk about your strategy for the combo from there, would you move right into Phase III with that? And is there any potential to file for accelerate approval at least to Interferon intolerant patients?

[Lamberto Andreotti:]

Let me start on ONGLYZA and it starts with a joke. It takes a lot of patience and a lot -- but not joking, it takes a lot of focus on profiling the customers and continuing to focus our people on the things that can actually make a difference in the minds of the prescribers and the payers. Tony, why don't you elaborate on this?

[Anthony Hooper:]

So it's clear from the marketplace at the moment that fair amount of a diabetic treatment is happening in the generic market itself. I think the $4 script has clearly driven patients and physicians to that at the moment. And when we see our abandonment rate, i.e. patients going into the pharmacy with a prescription and then walking away not filling that prescription, it's clear that cost in today's environment is an issue. It's an issue we're addressing as far as we can, and they can link back towards to what Lamberto was saying around selling the value proposition of this product in combination with metformin. Once the entire environment starts to understand that to treat diabetes, which is a chronic disease that patients will either die from or die with, importance of early intervention with a number of compounds with different modes of action is going to be the most essential and specific way of treating patients. So we have looked very clear at the market in terms of what's required to drive an uptick. We obviously would like a steeper curve at the moment. But we do, as Lamberto said, continue to see good progress with our leading indicators, which make us feel fairly confident about our ability to grow ONGLYZA in this marketplace. Physicians have tried the product, generally continue to use it and to accelerate this option, we are refocusing our efforts in specialists, with a more targeted clinical campaign to endocrinologists. In addition, we make pretty good progress with access and reimbursement, and almost 85% of total lies on our [indiscernible](48

[Elliott Sigal:]

Let me just remind everybody, Chris, that we have a multi-pronged attack on Hepatitis C. We're developing a superior interferon, the Lambda, that we feel can be added to any small molecule antiviral, and data for that will be available at the meetings towards the end of the year. Also in standard of care, with the standard interferon and ribavirin, we're adding superior small molecules, one of which was 5A that we just reported out for, in 12-week data this past meeting at EASL [European Association for the Study of the Liver] in Europe. We will have further information on that also at the end of the year at a conference. It would unlikely be sBR at this point, 24 weeks past, but we are doing a study that will define all of these parameters. We do have enough information to go rapidly into a dose-ranging trial and plan for a Phase III start next year for the combination of an interferon, ribavirin and NS5A, which we're continually enthusiastic about. It's early in development and you might have seen the nature paper that just came out, we are pleased to be leading this field. We're also doing proof of concept of two small molecules, whether that can be a sustained therapy for some people perhaps around the world. There are advantages to having an interferon sparing agent. It's not clear yet that two drugs are sufficient or whether we need three. We are doing a two-drug combination and we should have some data for that towards the end of the year as well. And that's a very exciting program. We have started in no responders, but we are now starting in naive patients in Japan and elsewhere in the world and planning other studies.

[Operator:]

We'll go next to Tim Anderson at Sanford Bernstein.

[Tim Anderson:]

To me, the slow ONGLYZA launch, as well as some of the other drug launches that have been slow by other companies, begs the broader question of whether drug companies have cut things like the sales forces too much? And am wondering if there's broader lessons to be learned here with ONGLYZA? And what went wrong specifically? And would you have done anything differently if you could roll the clock back? On SPRYCEL, I can understand why that drug gets used to fair bid and second-line CML [chronic myelogenous leukemia], but first-line you use a something quite different because there, I think, the major driver will be tolerability and safety, and I'm wondering how you see those two variables shaking out between SPRYCEL and to CIGNA? And the cardiovascular safety, what you're hoping to differentiate on mostly?

[Lamberto Andreotti:]

Let me start with the question on what it means to launch a new product in this present environment. Yes, you're correct. It is more complicated to launch a new product nowadays. I don't think that the slow uptakes of the new products are related to less sales forces. I think they are related to a number of factors that had changed the marketplace and that we had started addressing. It is more complicated to launch products that perceived as less differentiated and they are the new things we need to do. They need to be increased and accelerated, but there is a number of elements that apply also to very differentiated products that we are offering talking about. Beatrice, why don't you expand on that?

[Beatrice Cazala:]

It's clear that not only in the U.S. but globally, it's more and more complex to launch products, and it takes time, it takes time before and it takes time after launch. We have other regulatory and access hurdles and it gets critical [indiscernible](53

[Elliott Sigal:]

Tim, this is Elliot. On your question on SPRYCEL, I'll give you the medical view and maybe Beatrice wants to add. But qualitative commercial opinion, CML is a very, very interesting disease and that there's a relatively low incidence of new cases. There are 15,000 patients diagnosed each year. So you would call that as first line. And I agree with you, the medical approach is going to focus on the experience with GLEEVEC to some extent and the safety. But there's a large pool of patients, a 100,000 patients in various stages of the disease, thanks to initial success of GLEEVEC. And therefore, second-line therapy is also an opportunity, and we see that market growing as people understand that we can improve upon the very important advance that was GLEEVEC with agents such as SPRYCEL, both in first-line and in second-line and the earlier recognition of when a patient is failing GLEEVEC. This campaign with two companies pointing out the scientific data will increase the awareness of the limitations of GLEEVEC that we have been targeting to improve. So this is a very interesting change in medical practice that I think there are two important entries for us to consider for the patients.

[Beatrice Cazala:]

I was there when we launched SPRYCEL instead online and talked a lot of patients. And when you were asking the balance of tolerability versus efficacy in our develop prescription in both segment, I think it is clear that those two are important in both stages of the disease, the early stage as well as the late stage. And all the patients will tell you that even in first-line, they want to look at superior efficacy first and increase efficacy. They won't have ability but clearly if you get there. So that's why we believe that data will have, will be able to assess the top line patients. On the tolerability side, it's also very important that we provide a drug that the patient can think that's convenient especially in the first stage once they are in the drug. So the ability to deliver sufficient safety in the trust line as well as summarizing importance, we believe that we have comparative data that allows to get or come off with different combinations.

[Elliott Sigal:]

And we have market experience that when physicians have a choice between SPRYCEL and to CIGNA, they bring SPRYCEL. And we believe that's due to the demonstrated clinical benefits, the simplicity of once daily dosing with no food restrictions and no black boxing concern for QD and other cardiac effects.

[Operator:]

We'll take our next question from Jami Rubin at Goldman Sachs.

[Jami Rubin:]

Elliott, maybe if you could just please clarify your filing strategy on FDA once more? This 020 study is a second-line study, where you're using 3 milligrams versus the 10 milligrams study and the pivotal trial as well as a non-approved vaccine. And if you could just sort of flush out for us the strategy with respect commercialization just given that this 020 study is not the pivotal study? And then just a follow on with SPRYCEL, without survival datum, do you still expect that SPRYCEL and to CIGNA combined could become standard of care in front-line CML? Or what is the data that you think is necessary in order to drive a significant shift in use to standard of care?

[Elliott Sigal:]

Yes, Jami. Let me address the comment. I would not call 020 not pivotal. It wasn't pivotal in our thinking years ago. And as a result of conversations with health authorities, and this is why we do this, we decide what is an appropriate indication on file for and do we have data to enable a review. Of Phase III study, that's survival with ipilimumab that does compare against an experimental vaccine in previously treated patients. We consider pivotal to the indication of metastatic melanoma in previously treated patients, where there is no standard of care and therefore we feel it's appropriate standard of care is often experimental regimen to compare with the well-characterized experimental treatment and we chose the vaccine. We have an adequate study to check the contribution of ipi alone as well as ipi in combination with the vaccine. We do not to commercialize the vaccine. We do plan to commercialize the 3-milligram dose and the indication that I mentioned. The old 24 first-line study is a different patient population and a different regiments. And when that data becomes available, we hope to provide enough information from that study to talk about an expanded indication for the drug.

[Beatrice Cazala:]

Now from the commercial perspective, when we have very good finals. , we need to all reunite it (01

[Operator:]

And we'll take that question from Steve Scala of Cowen.

[Steve Scala:]

First, is it reasonable to assume the impact of healthcare reform in 2013 will not be greater than 2011, it might be even less given that PLAVIX will be gone and there will be potential volume offsets across the business? That's the first question. And second, Elliot, everything you said on ipilimumab suggests that you believe the first-line study will not be necessary for approval that the second-line study will be sufficient for approval, can you just confirm that, that is your belief? And on the first-line study, would you be able to tell us how many events are necessary to stop the study? And what the power and alpha is of the study?

[Elliott Sigal:]

I think, Steve, I am not going to discuss the power now other than we have appropriately power this study and we want to be very careful here to get the result that we're after and that's the way the study is being conducted. So Perhaps a very conservative approach to making sure we get the answer. The events that we're looking for, we think we might reach by the end of the year, but the death rate is slowing as I've said previously. Therefore, the study is taking longer than we thought, one can never predict the Phase III result with a 100% certainty but I believe this is information that is good for patients obviously and good for the drug. So we await that. Our discussions with the regulatory authorities have focused on the data we have in hand that is the second-line 020 study and we will submit based on these data. Study 024, people agree is a different study in a different population. When we have that data, we would plan to submit it as well.

[Charles Bancroft:]

In regard to healthcare reform regarding 2013, as I mentioned earlier, the implementation guidelines still need to be resolved and then utilization across the different programs still more experience there. Having said that, we would view 2013 because of the donut-hole impact related to PLAVIX most likely being somewhat what we've seen in 2011 and also that impact is before any mitigating action and how we look at the strength of our business as well as the maturity of our pipeline.

[John Elicker:]

Audrey, thank you for putting in the question. And thanks, everybody for asking the questions. Before we close it down, I think Lamberto has a few closing comments.

[Lamberto Andreotti:]

First of all, thank you again for your questions, and let me give you a couple of final thoughts at the end of this conference call. First, these very, very good first quarter results have continued to build on the momentum that we have created over the last few years since we announced and began implementing our BioPharma strategy. And I must say we are very proud that we have executed against this plan and continued to deliver on our commitment. Second, we have driven EPS growth significantly. We've booked strong sales and operational leverage, continuing to prudently managing cost. Third, we have a number of potential exciting filings in the next 12 to 18 months, EP first-line, or is just a cure et cetera. And these filings will further strengthen our highly differentiated pipeline and at the same time, we are accelerating the pace of business development through our String of Pearls strategy. And finally, yes, we all take challenges. Biggest one is the impact of this U.S. Healthcare Reform in the next few years. But we, at Bristol-Myers Squibb have taken the right actions to mitigate those effects and we expect to do even more. At the same time, we continue to give priority to revenue growth and pipeline sustainability. Well, thank you for your attention and thank you to my colleagues here for having shared information with you today.

[John Elicker:]

Thank you.

[Operator:]

And that does conclude today's conference. Again, thank you for your participation.