Amgen Inc. (AMGN) Goldman Sachs 44th Annual Global Healthcare Conference (Transcript)

Amgen Inc. (NASDAQ:AMGN) Goldman Sachs 44th Annual Global Healthcare Conference June 14, 2023 2:20 PM ET

Company Participants

Robert Bradway - Chairman and Chief Executive Officer

Conference Call Participants

Salveen Richter - Goldman Sachs

Salveen Richter

Good morning. Thanks everyone for joining us. I’m Salveen Richter, I cover Biotechnology at Goldman Sachs, and we're really pleased to have Bob Bradway, Chairman and CEO of Amgen with us. Bob maybe to start here, a lot of big themes and events that are playing out in healthcare, specifically with relation to biopharma. Perhaps you could start by just talking about the recent FTC move to block your proposed acquisition of Horizon. What are your thoughts on the cross-bundling agreement? How do you expect this to play out? And what gives you confidence that this deal will still close?

Question-and-Answer Session

A - Robert Bradway

Well, first I'd say, we remain very excited about the opportunity of combining with Horizon. So the more we've gotten to know the company and the opportunity, the more enthusiastic we've become about our ability to add value by combining forces with them. So, I think in terms of our confidence in the law, we've been very clear and I would reiterate this morning that there are -- we don't believe there are any anti-competitive issues that just stand in the way of the two companies coming together. But obviously the FTC has a different point of view and fortunately we live in a land where there is a rule of law and the rule of law will have its day. And so, we're headed towards a hearing in the autumn and we'll look forward to having an opportunity to express our point of view and we will listen with interest to the FTC's point of view to try and better understand how it is they think that this is a combination that might be harmful in the marketplace.

So, again, we remain very excited and think that there just are no competitive overlaps that ought to stand in the way of this deal moving forward. And by the way, I would reiterate as I think your colleagues and our investors I think are generally aware that no international regulators have -- no international regulators have expressed concern about this combination. So we're enthusiastic.

Salveen Richter

And are you still expecting this deal to close by mid-December?

Robert Bradway

Yes, I think that's an appropriate time. We have a hearing in the autumn and let's imagine that it will take the judge a little bit of time to write his thoughts after the hearing. And I think we -- our objective is to still have the deal closed by the end of the year.

Salveen Richter

And with this hearing, what do you think will be the focus? And what should investors know heading into this, not just about the hearing itself, but the process post?

Robert Bradway

Well, again, I think the good news is that this is going to be a trial and therefore the information of both sides will be public. I would encourage those who are interested to pay attention to what we have filed. We recently filed our perspective on the FTC's claims. And so, I would just encourage your investors to look directly at that material and reach their own conclusions.

Salveen Richter

There's been some questions about just the TEPEZZA sales that have played out being a little bit weaker than expected in the context of this whole acquisition. And did you anticipate this? Are you still excited in the prospects for TEPEZZA and Horizon in general?

Robert Bradway

Yes. As I've said at the outset, we remain very enthusiastic about our ability to add value in a combination with Horizon. And so, there are several elements of that which we've discussed previously. So remind you that the deal is subject to regulatory review. And so, I'm not going to say things that we haven't already articulated. But we were very clear at the outset that we believe that we could add value in this combination and that the two companies together would reach more patients than either company working alone. And we still believe that to be true.

So the kinds of attributes that we will bring to the table for Horizon include our international presence, our international capabilities in areas where we think they will be relevant for the portfolio of Horizon. We believe our manufacturing, for example, in particular, our biologics manufacturing will be a real source of potential value here over the long term. And then our ability to design molecules for rare diseases together with Horizon, I think will be a very powerful combination. So we remain enthusiastic and if anything the more we've learned the more, I think both sides feel confident that there's a real synergistic element of this combination that can be win-win for patients.

With respect to TEPEZZA specifically, I don't think there's anything playing out different there from what we expected at the time of the announcement. I would add that the data that we have seen since the announcement of the transaction is obviously very encouraging. So if you look at the data for TEPEZZA in chronic disease or the low clinical activity score of patients, you see a very significant benefit relative to placebo. So, I think it was 62% versus 7% per protocol for those patients. So that's obviously a very impressive benefit for the chronic disease patients and that implies a need to do a few things which I know the team at Horizon is very focused on. We're growing, expanding, building out the sales force, making sure that the sales force is beginning to educate general ophthalmologists, for example, and endocrinologists about this opportunity. So that works underway and working with the payers to reflect now the new language in the label for the product. So all those things are underway, it takes time, but we fully expect that this will continue to be a very important therapy and one that we can add value to around the world for patients who are suffering from thyroid eye disease.

Salveen Richter

Great. Let's move over to the biosimilar business here. So what are the learnings so far with regard to the AMJEVITA launch in these buy and bill models? And how to think about that future tail that could play out post the initial six months when you have other entrants?

Robert Bradway

Well, I'd go up in altitude and say that the lessons in biosimilars are playing out pretty much as we expected they would when we committed internally in 2011 and I think publicly we first started talking about in 2012 to enter biosimilars. So again, we believe Amgen is a world leader in manufacturing proteins. We believe we're a world leader in doing clinical development and process development around protein therapeutics. And we believed that those capabilities would enable us to reliably, safely develop and supply these molecules to the marketplace. So we said in the first time we ever discussed our desire to enter this business that it would be important for us to be in the first -- amongst the first of the biosimilars to launch. And that meant we needed to be on time and on budget in the development of our molecules and so far, touch wood. That's what we've done. So you see with AMJEVITA, for example, the most recent launch that we're the first entity to be able to launch into the U.S. market and we're very pleased about the position that we established for AMJEVITA, which is one that we think will accrue benefit to us over the long term. So we're now on the major formularies. We have our position already staked out. We've had an opportunity to demonstrate to the payers and to the patients and the providers that we are a stable, reliable source of biosimilars. And we're off to a good start.

So in general now that we've -- again, we've launched six biosimilars. We have another five to launch in the U.S. And we think biosimilars will continue to be an important source of growth for Amgen through the end of this decade and into the next. And that's based on the flow of molecules that we expect to launch between now and then. So we launched AMJEVITA. We did what we said we would do. Again, that will be a source of growth for us this year. And as I've already stated this morning, we think we have established a good strong base for our company with AMJEVITA in the marketplace. There'll be other competitors trying to get into the market that won't come as a surprise to you or to us. But again, we think that a few of us will remain and do well through time and we're counting on that for AMJEVITA and our other brands.

So the other molecules that we're planning to launch, again, we talked about those -- the next three that we will be launching for which we now have completed registration enabling trials and we would expect to be amongst the first to launch those next three medicines as well. Then there are three others -- at least two others coming behind it later in the decade. And altogether, we think that that will enable us to more than double the business compared to what we generated in, I think, it was 2021 when we look back to 12 months ending in 2021, we said we thought we would expect to be able to double the business from there and we continue to still think that that will be true.

Salveen Richter

Just going back specifically to AMJEVITA with the recent commentary by another biosimilar company focused on Humira and their kind of steep price discounts. How does that play out now? And with the PBM dynamic with your drugs, this drug and…

Robert Bradway

There are many things that go into position and share position in the market for Humira biosimilars. Again, it starts with having to have formulary positions. We have that. We think it's important to have a reputation for reliable safe supply and we think we've established that over the long term with the physicians and patients and payers when it comes to these specialty products. We think we're demonstrating it now with AMJEVITA. We have the kind of patient support, the kind of post market surveillance, the kind of other activity that we think will be important for long term success and that's what's reflected in our approach to the market. And that approach includes the pricing of our medicine compared to others. So, we recognize that there are going to be other entrants that aren't as capable as us and we'll let the market speak. But so far, no particular surprises for us in that regard.

Now you mentioned earlier, you mentioned buy and bill and, obviously, the interesting aspect of the AMJEVITA launch is, we're seeing the biosimilar market in the U.S. in a setting other than buy and bill. So this is what we would call the retail or the Part D segment of the market and the dynamics there are going to be a little different from buy and bill. At this point in buy and bill, we have a pretty clear sense and I think you all probably have a pretty clear sense of what the trends are and what the uptakes are for new launches there. Still early days for a product like Humira. And therefore, again, we'll all learn more, but I wouldn't say there's anything that's particularly surprising to us at this point.

Salveen Richter

Got it. When you look at your inflammatory portfolio here and you think about the tail that's going to play out a growth profile for Enbrel and Otezla, help us understand the competitive dynamics with Enbrel and just the read across from a biosimilar Humira, for instance, or Otezla in the context of Bristol kind of putting free drug into the system and then novel drug coming into play. So you have your formularies, but how do you kind of offset these dynamics?

Robert Bradway

Well, again, I would go up in altitude for a moment Salveen and say that we've been a leader in inflammation now for nearly two decades. So we have a very established presence with the prescribers, with the payers, with the patients. And we now also have a very broad product portfolio. So if you look at our most recent launches, TAVNEOS, for example, and ANCA associated vasculitis or TEZSPIRE in severe asthma, or you look at rocatinlimab, which we're in Phase 3 clinical development for or you look at some of the more established products like Enbrel and Otezla and now AMJEVITA and one day our biosimilar to STELARA. What you'll see is, we have a very broad base in the [in-plant] (ph) market and we think that broad base is useful to us when it comes to how to position our medicines, when it comes to trying to understand what the unmet needs are in the patient population. And looking at that business, we continue to be very enthusiastic about what we expect we will deliver.

So again, TEZSPIRE is a game changing, very innovative medicine for patients who are suffering from severe uncontrolled asthma. That medicine again is performing very, very well. And TAVNEOS is performing well as we expected and hope that it would. We're able to talk to a combination of rheumatologists and nephrologists about that disease. And we're -- again we're enthusiastic about the outlook for Enbrel. I know there's been some question about what are the trends on Enbrel, but, again, from our perspective, we said in the first quarter volumes grew. We expected that to carry on through the balance of the year and we still believe that will be true. So pricing was a little bit -- pricing and inventory were a little bit different from the normal first quarter for us, but we talked about that in our in our earnings report, so I'm not going to dwell on it now.

Salveen Richter

Perfect. And then we did see growth and pretty strong growth here from hem/onc business in Q1. What's driving that growth in [indiscernible]

Robert Bradway

Yes. The hem/onc business is doing terrifically well. And I think first thing I would say is data. The data continues to accrue for our medicines and continue to give physicians comfort and encouragement about using these therapies in a broader range of patients. So for example, the BLINC date, I would say don't go to sleep on BLINC. I've been saying it for a while, I'm going to keep repeating it. BLINC is a practice of BLINCYTO, which is our medicine initially approved for acute lymphoblastic leukemia is a game changing medicine in a very, very tough serious disease. But if you look at the data that we've shown in infants and in adults, it's very clear that adding BLINCYTO early in the lines of therapy and in fact, the most recent data we showed were right after induction therapy gives the prospect of very significantly improved benefit over standard of care.

So BLINCYTO demonstrates a really important proof point for us, which is, the value of engaging the T-cells in the process of eliminating cancer. Letting T-cells find those remaining cancerous cells throughout the body and eliminating them to help give the prospect of deep durable remissions and maybe even that four letter word, CURE. So we're very excited about BLINCYTO. And again, just because of what it's doing in leukemia, but for what it has a potential to do in other liquid tumors where the B-cell disease is relevant and also what it establishes for us as we move forward with our solid tumor bites.

So just allow me another minute or so. I want to just also point out on BLINC that we're very enthusiastic about the subcutaneous formulation that we're advancing which we think will give us an opportunity to look at a broader range of diseases beyond the acute lymphoblastic leukemia. So a lot going on there, happening very quickly impressive data and that's why you see BLINC growing the way your question implies. But if you move beyond to other molecules in the portfolio. Vectibix continues to perform very well. Again, there, I think we're benefiting from the new data that shows it to be -- shows data that look better than chemo plus bevacizumab. So physicians are increasingly recognizing the value of combining Vectibix with chemo earlier in the disease state there. KYPROLIS performed very well. I think non-U.S. sales out of the U.S. were up 36% in the first quarter. So really across the board, Nplate is performing well. Across the board, the hem/onc portfolio is showing well.

We're also benefiting and we'll probably see this more broadly in the industry when we get into the second, third and fourth quarters. We're also benefiting from the fact that I think the physicians in their offices and the hospitals are now better resourced than they were in the COVID period. So patients are getting into the hospitals, they're getting into the clinics and their caregivers are able to resume the kind of treatments for them that were not necessarily happening during the pandemic.

Salveen Richter

You've provided long-term guidance on the -- for the company. When do you think you'll update that guidance?

Robert Bradway

Well, yes, we provided long-term guidance, and we've reiterated that we feel better about that guidance now even than when we gave it, we were confident when we gave it. We were very clear when we gave it, what things had to happen in order for us to meet or beat that guidance. And the good news is the things that we knew needs to fall in place have been falling in place.

So what are those things? We talked about the growth that we needed to establish with our in-line products. In the first quarter, we had 10 products achieved record sales. So if you look at the volume growth, which is our growth is going to have to come from volume, not from price increases, an industry -- an artifact of competitive conditions in the industry right now. And fortunately, we're well positioned with medicines like Repatha, EVENITY and Prolia, and we believe Otezla as well over long-term medicines for which we think there will be considerable volume growth. So the first thing that we said had happened, those products had to grow. You had to see it in the volume growth. The numbers, I think, are bearing that out.

Second thing that we said had to happen is that our international -- demand for our products internationally had to be growing rapidly. Again, you saw that in the last earnings release, where I think we had volume growth of 20% in Europe and 35%, 36% in our Japan-Asia region. So, international volume growth, volume demand, very strong for the business. We said biosimilars had to perform for us, and we've already talked about that. The things that we said we had to do, we've done. So with respect to the in-line and the biosimilars, very much on track with what we said we wanted to achieve. The pipeline, again, tremendous progress in the pipeline since we gave that long-term guidance.

So what is the tremendous progress? Well, we have registration-enabling trials, again, a number of different cancer drugs now. Tarlatamab, for example, was still a very early drug when we gave that original guidance. But we're expecting to have potential registration-enabling data available by the end of this year. So that would be -- represent a major breakthrough in small cell lung cancer. So lung cancer, gastric cancer, pancreatic -- or excuse me, prostate cancer. We have projects there that are much further along than when we gave the original long-term guidance, and we're very excited about what those data show. We talked about [inflam] (ph) at the time of long-term guidance and what we expected there. Rocutinlimab is now rapidly enrolling in Phase III clinical development. The biosimilars, we've talked about that are important to the inflam portfolio in this period.

And then finally, we talked about what needed to happen in the general medicine area, which for us includes our Lp(a) program and obesity. And again, we've made tremendous progress in the interim. Lp(a) trial is now rapidly enrolling in Phase III clinical development. You saw what we demonstrated in Phase II, which was a very, very significant and consistent inhibition of Lp(a) and people who were at high risk of heart disease because they were born with high levels of Lp(a). So we're able to suppress that by 95%, and we're running a big Phase III trial that will show whether that means we can prevent major cardiovascular events. So that's come a long way since then. And of course, you've all had the opportunity to see what's happening obesity, and you had a chance to see a glimmer of why we are so excited about a role that we can play in that area, which is our AMG 133 data.

So whether it's the in-line products, whether it's the biosimilars, whether it's the pipeline, the things that had to fall in place have largely been falling in place. So with respect to that long-term commitment, we remain very enthusiastic about our ability to generate growth for our investors, growth for our staff. And of course, that means serving more and more patients around the world.

And then the Horizon deal at the time we announced it, we explained we thought would be additive. We said we expect that, that deal would be accretive to growth. We gave you the year when we thought that would be the case. We told you what we thought the synergies would be at the end of the third full year after closing. And so, again, I think from our perspective, you can see that -- we see that as additional opportunity in terms of our financial performance through the end of the decade.

So as to next steps, let's wait and get the Horizon deal closed, and then we can figure out what makes sense to help investors see why we are enthusiastic about what we think we can deliver.

Salveen Richter

So apart from tarlatamab, which we're going to see data by year-end, we're going to get some LUMAKRAS data, and we're also going to get Xaluritamig data. Maybe help us understand what we should be looking for with those.

Robert Bradway

Yes. So let me start with Xaluritamig, which is our most recent product to get a name. You may be more familiar with it as AMG 509. AMG 509 rather is a bispecific for a target known as STEAP1, S-T-E-A-P-1, which is a cell surface antigen that's expressed on large fraction of prostate cancer patients. And we are very enthusiastic about the data we're seeing there, which suggests that the biology that we expect to work here seems to be working. So again, we'll share data with you as those data become available. But there's clearly a huge unmet need still in prostate cancer. And there are a few reasons around the biology that really attracts us to this approach. So stay tuned for that.

Tarlatamab, as you said, is very rapidly enrolling, and there's a great deal of enthusiasm for it as there should be, given the need for progress in small cell lung cancer. And the LUMAKRAS data, we have so much LUMAKRAS work underway. The good news is, there'll be lots of data becoming available. We just shared at ASCO for example -- excuse me, at ESMO, we shared the Phase Ib data combining LUMAKRAS with chemo in colorectal cancer. And those data, I think it was a 90-plus percent disease control rate. That gave us reason to believe that the Phase III trial that we're running in that setting makes sense. We showed some brain data demonstrating that the molecules brain penetrant, we showed that at ASCO. And so again, there's a steady flow of data coming on LUMAKRAS.

And then our gastric cancer trials, again, continue to enroll, and we'll have an opportunity with those Phase III programs to demonstrate whether inhibiting the FGFR2b access has the potential that we hope it does for gastric cancer patients.

Salveen Richter

Great. You talked about obesity and are those that believe that it's a duopoly market and those two players are Lilly and [indiscernible] are very far ahead of anyone else. Help us understand why that's not the case and where we should really be focused on with your data?

Robert Bradway

Well, first, I would say, I think we're looking at a molecule that has potential in obesity and beyond. And I think as we've spend time in this area. We've become convinced about the role of fat or outpost tissue in causing other important diseases. And so, I think a molecule that has the characteristics that we hope that one will have has the potential to treat not just people who are obese and therefore, at risk of all kinds of health issues, but patients suffering from other disorders as well.

So, so far, what we've shown you is that, in a 12-week period, so over three months over the course of four injections, it's a once-monthly injection, that our approach was able to achieve 15% reduction in weight for the subjects that were exposed to the drug in that trial. So what you can see from that is that, there's a potential dosing advantage. You can see there's a very profound potential benefits in terms of bringing weight down.

And the other -- there are a couple of other intriguing things that we want to explore in the Phase II program. So we'll be looking at a wide range of different dosing alternatives in Phase II, again, to establish how this medicine might meet the needs of patients in ways that aren't being met by the products that are available or likely to be in the market ahead of ours.

So, our approach is different from our competitors. Ours is informed by human genetics. And so in particular, we're antagonizing the GIPR receptor, and we're the only molecules doing that. And we're doing that based on genetic data that to us suggest that that's the right way to go about this. So we have not just the GLP-1, but we have a bispecific that also antagonizes GIPR. And the backbone of this therapy is a protein. And so, that may provide some of the benefit that we're seeing in terms of the dosing schedule versus others who are approaching it a little differently.

And then I would also just say that we have a second molecule that's in clinical development in a completely different orthogonal axis. So in other words, it's not an incretin-based therapy to address obesity. And we have several other preclinical studies following rapidly behind. So this is an immense global issue. And again, one where we think the world needs more innovation, not less. And we think we have an answer to part of what the world is going to want. So we'll generate data, and then we'll let you see that data, and we'll all make a decision.

Salveen Richter

Great. The Inflation Reduction Act continues to be a debate in the industry, and we saw Merck filing a lawsuit here. What's Amgen's point of view on this and the potential impact here to the business?

Robert Bradway

Well, we have been very clear that we think the Inflation Reduction Act was bad for patients. It's bad for innovation. And we think that the consequences of this bad legislation will be borne by patients long into the future. And in particular, the pill penalty or the poison pill penalty is part of the problem and especially for cancer patients. I think it's sad, maybe even tragic that, that legislation creates disincentives for innovators to advance medicines, in particular, in cancer.

And so, I don't think there was any appreciation of the disruption that, that language would have to the innovative cancer research field. And it's something that is already playing out as innovators around the world are shutting down programs, reallocating capital away from the pill problem to other opportunities. So it's unfortunate, but it's a law. And we will adapt. I'm sure others will as well, and we already have. And fortunately, we're pretty well positioned in some areas that will be less significantly affected by the legislation.

So for example, as you all know, we're a world leader in biologics. So biologics are understandably being treated a little differently from the pill therapies. We happen to have some medicines now and potentially more of them in the future that address the needs of patients that are considered part of an orphan group and drugs that enjoy that orphan designation aren't subject to the same constraints as some of the larger volume diseases. So in general, we've adapted, the legislation has been enacted and we'll move forward.

Salveen Richter

Broadly speaking across the business when you look out to the end of the decade, where do you see the biggest opportunities for Amgen? And where are the greatest challenges?

Robert Bradway

Well, we've touched on them. The biggest opportunities for us continue to revolve around innovation, and we have in-line portfolio of innovative medicines that we think will continue to grow through that period of time. We've talked about biosimilars. We think it to us is inconceivable that there won't be growing demand for biosimilars globally. We think we're well positioned to meet that demand. And then we look at our pipeline. We think to be successful, you're going to have to be innovative, and that means first-in-class or best-in-class medicines that have a big effect size in those diseases where there aren't good therapies available today. So that's an example of that.

Small cell lung cancer. There's just been nothing in decades for small cell lung cancer. The average life expectancy for patients whose disease relapses and almost all of those patients have diseases that relapses is five to eight months. And so, if we can show in our registration-enabling trial, what we've shown in the earlier data, which is, overall survival levels that are meaningfully greater than that. I think we have a potential to make a big difference. And if we can then imagine moving that therapy into earlier lines of small cell lung cancer, the way we have now done with acute lymphoblastic leukemia, even potentially a more profound benefit.

So the good news when I look at our portfolio is we have a number of innovative medicines, whether it's lung cancer, gastric cancer, prostate cancer, innovative first-in-class well ahead of the competition and at least based on the data we have so far, they look like they're having a big effect size. So those are things that are necessary in order for you to be successful.

Again, cardiovascular disease and included in that obesity. So far, our data look as good or better than any that we've seen at the similar stage of development in obesity, and we would say the same thing about Lp(a). Lp(a) is, we believe, the cause of a huge amount of suffering in society today because none of the other therapies that are approved and on the market affect Lp(a). You can't affect it with diet, you can't affect it with exercise. There are no other medicines available for you. So if we're able to show in our Phase III trial that we can reduce heart attacks and strokes for those people who were born with high levels of Lp(a), that's a big day.

So again, those are some things later in the decade that we're excited about. And then, I've talked about TAVNEOS and TEZSPIRE. TEZSPIRE is underway now in a range of late-stage studies, fundamental novel biology, first-in-class by a long way. And again, the data in asthma were great. We'll see how it looks in other diseases. But we're excited about that. Rocautinlimab, again, completely novel approach. We're clearly in the lead there. We think that we can address some of the remaining unmet need in atopic dermatitis with that product. So really across the portfolio, we're excited.

And then the final thing I would just observe is, when it comes to understanding human data, and there's a lot of buzz in the world right now about using data to build business insight. When it comes to human data, nobody has brought a portfolio of human data as we do based on the significant investment we've made in human genetics.

So a decade from now, however, much of that insight is worth to us today, we think it will be worth even more a decade from now. So we feel very excited about how we've positioned the research at Amgen and the development portfolio and the commercial execution.

Salveen Richter

And the challenges, Bob?

Robert Bradway

I mean, obviously, the Inflation Reduction Act is something that we all have to deal with. That comes home to roost more to the back end of this decade than it does right now, and it will come home to roost, and we have already begun adapting. We will continue to adapt. And I would say that price pressure is not going away. We live in a world that's getting older and older and older. And as people get older, they consume more medicines. And as the people who have to pay for those more medicines wake up to that fact, they're putting more and more pressure on price. So that's not going to go away. And that just means we're going to have to do our jobs more productively from one year to the next. But we're up for that. This doesn't come as a surprise to us. We've been saying that we thought that this would happen, and it is. And by the way, clearly accelerated by the pandemic and the huge budget deficits that nations around the world had to run through the pandemic.

So again, that's going to continue to be a challenge. But the good news for the industry is, the demographics are overwhelmingly clear, right? As the world ages, as the world gets wealthier, the demand for what we do will continue to grow, and it will grow substantially. And fortunately, the ability to innovate is probably as good or better than it's ever been, and hardly a day passes that we don't discover something inside our own four walls that has us excited about what we can do for patients, let alone what's happening in the industry. So we're living through an incredible golden age of biology right now. And the challenge is going to be for us to make smart bets about which parts of that golden biology to invest in and to try to get it in the hands of patients who can benefit from it.

So yes, there are challenges but what industry doesn't have challenges. But again, I like the demographics that we see in our industry, and I like the way we're positioning for it at Amgen.

Salveen Richter

Could you touch a little bit on AI machine learning and the integration with your portfolio in [deCODE] (ph) and when we might start to see some products kind of evolve or emerge from this growth?

Robert Bradway

It happens every day. So we are -- we have so much machine learning going on around our human data, starting with genetics, and we have done now for a very long period of time. So that's underway. Every day we generate insights there, and we're able to do it at a speed that I think still staggers people who are new to the company and collaborators who are new to engaging in this area with us.

But the other big thing is, we said in 2012, we said that it was 2012 after the Watson jeopardy incident captivated people's attention about the potential for AI. We said that we thought AI would be one of the things, together with next-generation sequencing that has the potential to change the way we think about research in the area of biology and biotechnology. So we anticipated this now more than a decade ago, and we've been getting ready -- had been making the steps necessary to be able to capitalize on the tools of artificial intelligence that are increasingly available to us in our business. So, whether that's things like deep mines alpha fold and being able to use alpha fold to gain insights into protein structure. We downloaded that software, and we were using it within 24 hours of the publication. And in the days, weeks and months since then, we've solved problems that we were struggling with because of the insights that became available to us from that [in silico] (ph) rendering of the 3D structure of protein.

So that's happening all the time. But -- so as to the day when we'll be able to say that product is a function of AI. I don't think it's going to play out that way. I think everything through our pipeline, the way we select molecules now we will be benefiting from machine learning and AI, meaning, the molecular attributes that we're looking for will be informed by the analytic tools that AI enables us to deploy. And so hopefully, we'll be choosing better molecules earlier, less expensively than what was the case a decade ago.

Salveen Richter

Great. And one last question here. Anything you want to highlight on capital allocation today and where you stand and then where you see it kind of evolve towards the end?

Robert Bradway

Capital allocation, again, I think we've been very, very clear now for more than a decade about our approach to capital allocation. So we've been clear about our desire to invest in internal and external innovation, our desire to return capital to our shareholders in the form of dividend buybacks and now, of course, in addition, we stated our desire to pay down debt, which we incurred as part of the Horizon transaction. And our CFO, Peter Griffith has been very clear about what he sees as a reasonable target for that.

So our capital allocation principles remain intact. We're going to invest heavily in innovation. We think that's how we can earn a return for our investors through a combination of internal and external investments, and then we will look to continue to maintain our discipline, which enables us to -- operating discipline, which enables us to return capital to shareholders and bondholders.

Salveen Richter

Great. Well, with that, thank you so much, Bob.

Robert Bradway

Okay. Thank you. Thanks very much.