Amgen Inc

NASDAQ:AMGN

Earnings Call Analysis

Strong Q4 Drives 20% Revenue Growth with Positive 2024 Outlook

In Q4, total revenue reached $8.2 billion, a 20% rise year-over-year, while non-GAAP EPS grew 15% to $4.71. The full-year reflected revenue growth of 7% reaching $28.2 billion and a 5% EPS increase to $18.65. The quarter saw a 23% volume growth offset by a 3% net selling price decline, excluding Horizon's impact which was only included from its October 6 acquisition date. The full year's product sales grew 9% due to a 15% volume boost, despite other revenues declining 16% primarily from lower COVID-19 collaboration profits. The non-GAAP operating margin stood strong at 50% for the year, with a disciplined expense approach, leading to a 9% operating expense increase and a $7.4 billion free cash flow despite a dip from 2022's $8.8 billion. Looking ahead, 2024 forecasts a revenue between $32.4 billion to $33.8 billion and an EPS between $18.90 to $20.30, expecting a mid-single-digit price decline. They plan a full-year non-GAAP operating margin around 48%, anticipating costs of sales between 17%-18% and a 20% increase in R&D expenses to support late-stage plans, with capital expenditures of roughly $1.1 billion.

Solid Performance and Strategic Acquisitions Set the Stage for Growth

Amgen has recorded another strong year in 2023, laying a foundation for sustained growth well into the end of the decade. The acquisition of Horizon stands out as a major strategic move, establishing a new pillar of growth in rare diseases that complements Amgen's existing businesses in general medicine, oncology, and inflammation.

Pipeline Development Shows Promise

The company is nurturing the deepest and most diverse pipeline in its history. This robust pipeline is anticipated to contribute to multiple significant milestones in the current year, signaling potential new offerings and market expansions.

Product Sales Indicate Strong Volume Growth

Across various regions, Amgen experienced impressive volume growth, particularly in the Asia Pacific region with a 41% increase. Notable product performance includes a 25% year-over-year increase for Repatha and a 12% increase for Prolia, delivering robust quarterly sales. However, Nplate sales saw an 18% decrease, and full-year sales for Otezla dropped by 4% due to pricing pressures and inventory levels.

Biosimilar Segment and Rare Disease Brands Exhibit Growth

Amgen's biosimilar portfolio continued its upward trend with a 10% year-over-year growth for the fourth quarter, and products from the Horizon rare disease acquisition reported a 6% year-over-year sales growth. Standout mentions include KRYSTEXXA and UPLIZNA, both of which delivered record sales.

Financial Metrics and Future Expectations

Amgen achieved a 20% year-over-year growth in fourth-quarter revenue and 15% growth in non-GAAP EPS. While free cash flow dipped to $7.4 billion from $8.8 billion due to the Horizon transaction and associated costs, the company remains on track with deleveraging plans and anticipates strong cash flows moving forward.

Revenue and Earnings Per Share Projections for 2024

Looking ahead, Amgen forecasts total revenue between $32.4 billion and $33.8 billion and non-GAAP EPS between $18.90 and $20.30 for 2024. The anticipated decline in product prices is expected to be partially mitigated by robust sales growth, particularly in the first quarter of 2024, where a revenue increase of roughly 20% year-over-year is forecasted.

Increased Investment in Research and Development

Amgen is making significant incremental investments in R&D to propel its late-stage pipeline, especially its oncology programs. An increase in non-GAAP R&D expenses is projected at approximately 20% year-over-year for 2024. The focus on advancing key pipeline assets reflects the company's commitment to innovation and long-term value creation.

Guidance on Margins, Costs, and Tax Rate

For 2024, Amgen expects a non-GAAP operating margin of around 43% in the first quarter, with projections to improve in subsequent quarters. Non-GAAP cost of sales is anticipated to range between 17% to 18%, and SG&A expenses are estimated to constitute 21% to 22% of product sales. A non-GAAP tax rate of 16% to 17% is foreseen for the year.

Earnings Call Transcript 2023-Q4

[Operator]

My name is Julianne, and I will be your conference facilitator today for Amgen's Fourth Quarter 2023 Financial Results Conference Call. [Operator Instructions] I would now like to introduce Justin Claeys, Vice President of Investor Relations. Please, you may now begin.

[Justin Claeys, executive]

Thank you Julianne. Good afternoon, and welcome to our fourth quarter 2023 earnings call. Bob Bradway will lead the call and be followed by a broader review of our performance by Murdo Gordon, Vikram Karnani, Jay Bradner, who I'm pleased to welcome and is joining us for the first time on our quarterly earnings call and Peter Griffin. Dave Reese will also be available during the Q&A session. Given the timing of the Horizon Therapeutics acquisition close, the results as shown in our press release and slides include contribution from the Horizon business from October 6 onwards. For the avoidance of doubt, this will also be the basis for our filed financial results. To supplement this information, Vikram will also provide sales information for these products for the full fourth quarter, including the first week of October, as further context in his remarks. Through the course of our discussion today, we will use non-GAAP financial measures to describe our performance and have provided appropriate reconciliations within the materials that accompany this call. We will also make some forward-looking statements, which are qualified by our safe harbor statement. And please note that actual results can vary materially.

With that, over to you, Bob.

[Robert Bradway, executive]

Okay. Thank you, Justin, and let me thank all of you for joining our call. 2023 was another year of performance and progress for Amgen, further positioning us to deliver attractive growth through the end of the decade and beyond. Last year, we delivered double-digit volume growth in all 4 quarters with balanced growth across products and geographies. 18 of our medicines generated record annual sales including Repatha, Prolia, EVENITY, TEZSPIRE, BLINCYTO, KRYSTEXXA and UPLIZNA. The acquisition of Horizon, which -- it's completed on October 6, gives us a significant new rare disease business that now stands as a fourth pillar of growth alongside our leading general medicine, oncology and inflammation businesses. The medicines we acquired are all very early in their life cycles and by leveraging Amgen's world-class biologics manufacturing, decades of experience inflammation and our extensive global presence. We believe these products have the potential to reach many more patients around the world. Last year, we also advanced the deepest and most diverse pipeline in our history with promising molecules at all stages of development across our 4 pillars of growth. We anticipate well over a dozen significant pipeline milestones this year. I'll touch on a few.

In general medicine, we'll generate Phase II data this year for our obesity molecule, Maritide, and we're excited, of course, to learn more about this asset. We're also advancing a number of early-stage assets in this space. In oncology, we have a [indiscernible] PDUFA date for the FDA to complete its priority review of tarlatimab as a third-line treatment for small cell lung cancer. Tarlatimab is the first bispecific T cell engager shown to be effective in addressing a major solid tumor -- in this case, one for which there has been no new treatment in decades we present. We're studying tarlatimab in earlier lines of treatment and hope over the fullness of time to be able to serve the tens of thousands of patients diagnosed with small cell lung cancer each year in the U.S. and major markets around the world. We've done this very successfully now with our first BiTE BLINCYTO, which has steadily moved into earlier lines of treatment for acute lymphoblastic leukemia, and we'll take the same approach with yet another promising bite that being zaleritamig in prostate cancer.

In inflammation, we'll have Phase III data from rocatimlumab in atopic dermatitis from the first of what are now 8 trials in the ROCKET program. And in rare disease, we'll have Phase III data for luplisma in myasthenia gravis and IgG4-related disease. At a time when a rapidly aging global population needs more innovation, Amgen is delivering, both with the medicines we have in the market today and with the promising new medicines that are advancing in our pipeline.

We're also excited by the rapid convergence of biotech and tech, which is enabling us to innovate more quickly and confidently. We've been preparing for this hinge moment for more than a decade and recently named Dave Reese as our first ever Chief Technology Officer to ensure that we're capitalizing on technologies like generative artificial intelligence, not just in R&D, but across the entire company. Succeeding Dave is Amgen's Head of R&D is Jay Bradner. Jay is a physician scientist and a seasoned R&D leader having served for many years as President of the Novartis Institute for Biomedical Research. Jay previously also served as a faculty member at Harvard Medical School and prior to joining Amgen was a practicing oncologist at the Dana Farber Cancer Institute. We're delighted to have Jay on board and excited by the work that he Dave and the rest of our team will do together to accelerate innovation at Amgen for the good of patients and for the long-term growth of our business.

And with that, I want to thank our 27,000 employees around the world for their many contributions to our success. And let me now ask Murdo to talk about our commercial performance in 2023.

[Murdo Gordon, executive]

Thanks, Bob, and I'm very pleased with our performance in 2023. Execution was strong across the business, resulting in record sales in the year for 18 brands and robust volume growth across the pillars of our business. Full year product sales increased 9% year-over-year. Volume growth was 15% with strength across our regions. U.S. volume growth was 14%, and volume growth in our Europe, Latin America, Middle East and Canada region was 10%. Asia Pacific continues to be our fastest-growing region with 41% volume growth. These results include $954 million of sales from the legacy Horizon portfolio from the period of October 6 through December 31.

I'll start with our General Medicine business, which includes Repatha, Prolia, EVENITY and Aimovig. Overall revenue for these 4 products, 15% year-over-year in the fourth quarter, and 17% for the full year, driven by 18% and 20% volume growth, respectively. Repatha sales increased 25% year-over-year in the fourth quarter with volume growth of 35%, partially offset by lower net selling price. Outside of the U.S., we saw 25% volume growth with strength across our regions. In the U.S., volume growth of 48% was driven by a 66% increase in the number of new patients starting treatment. We saw a decline in net selling price in the U.S., primarily driven by new formulary coverage. We expect this additional coverage to lead to strong volume growth, which will more than offset declining net selling price. In addition, some payers have recently removed prior authorization for some patients, which will further ease their access to Repatha. We remain committed to the urgent need to educate physicians and patients on the importance of LDL-C lowering to reduce the risk of cardiovascular events. In the U.S., we activated more than 20,000 new prescribing physicians in 2023 in both the primary care and cardiology settings. And while we're pleased with this progress will continue to work tirelessly for the many, many more patients around the world who can [Audio Gap] had record sales of $318 million for the quarter, driven by 39% volume growth [Audio Gap] women in the U.S. patients with [Audio Gap] an effect of therapy. EVENITY is an important [Audio Gap] it is the only bond builder that works with the body's natural ability to increase bone formation and also decrease bone resorption. We see strong growth potential for EVENITY, and we'll continue to apply our proven experience in bone health to ensure it reaches all the patients who need it.

Prolia sales grew 12% year-over-year to a record $1.1 billion for the fourth quarter. Volume growth of 10% was supported by real-world evidence reaffirming Prolia's superiority in reducing fracture risk when compared to alendronate in treatment-naive patients with postmenopausal osteoprosis at a high risk of fracture.

Moving to our oncology business, which includes BLINCYTO, LUMAKRAS, Vectibix, KYPROLIS, Nplate and XGEVA. Sales of these 6 innovative products grew 5% year-over-year for the fourth quarter with 3% volume growth. Full year sales grew 12% year-over-year, driven by 12% volume growth. BLINCYTO sales grew 47% year-over-year to a record $241 million for the fourth quarter. Volume growth of 55% was supported by broad prescribing to patients with acute lymphoblastic leukemia in frontline consolidation treatment. Long term, we see significant growth potential for BLINCYTO from utilization earlier in the front line as part of induction treatment. LUMAKRAS sales increased 8% year-over-year for the fourth quarter. We see future growth opportunities for Legras coming from launches in new markets and additional indications. Vectibix sales increased 5%, and KYPROLIS sales grew 8% year-over-year for the fourth quarter, both driven by volume growth. Nplate play sales decreased 18% year-over-year for the fourth quarter, driven by volume decline related to timing of orders placed by the U.S. government, partially offset by volume growth across our regions. Full year sales increased 13%, primarily driven by volume growth, including U.S. government orders. Excluding U.S. government orders, Nplate sales grew 23% year-over-year for the fourth quarter and 8% for the full year.

Transitioning to our inflammation business. Otezla sales increased 2% year-over-year for the fourth quarter, driven by favorable changes to estimated sales deductions and 3% volume growth, partially offset by lower inventory levels and lower net selling price. Full year sales decreased 4% driven by lower net selling price and lower inventory levels, partially offset by 2% volume growth. New patient starts for Otezla grew 6% in the fourth quarter, driven by strong execution and increased investment. Competitor free drug programs had a reduced impact in the quarter. Otezla is uniquely positioned to grow in 2024 and beyond, given its indication for all severities of psoriasis, combined with an established clinical profile, broad payer coverage, a lack of testing required for initiation and Canyon oral administration. Enbrel sales decreased 8% year-over-year for the fourth quarter, driven by a 4% impact from unfavorable changes to estimated sales deductions and lower net selling price. U.S. volume grew 1% in the fourth quarter, supported by an increase in new patients starting treatment as a result of improved payer coverage. Going forward, we expect net selling price to continue to decline year-over-year driven by higher rebates to maintain broad first-line payer coverage and changes in patient mix.

TEZSPIRE continues a strong launch trajectory with $177 million in sales in the fourth quarter and $567 million for the full year. Sales increased 10% sequentially. Our successful launch of a self-administered prefilled single-use pen allowed us to expand coverage with major pharmacy benefit managers to over 80%, contributing to higher new patient growth as the year progressed.

Moving forward, we expect this expanded coverage will allow TEZSPIRE to help even more patients with severe uncontrolled asthma. Sales of TAVNEOS were $44 million in the quarter and $134 million for the full year. In the fourth quarter, we saw a 17% quarter-over-quarter volume growth in the U.S. Approximately 2,700 patients have now been treated with TAVNEOS by over 1,700 health care professionals. Looking forward, we will continue to leverage our expertise in nephrology and inflammation to bring TAVNEOS even more patients with ANCA-associated vasculitis. Sales for our biosimilars portfolio grew 10% year-over-year for the fourth quarter and 5% for the full year, driven by 27% and 29% volume growth. This volume growth was partially offset by net selling price decline. Over time, we expect long-term growth in our biosimilars business to be driven by the addition of new molecules and additional launches. Overall, our execution is strong across the business, underscored by our foundational commitment to serve patients. The 4 pillars of our portfolio position us well to serve many more patients around the world who can benefit from our innovative therapies.

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

[Vikram Karnani, executive]

Thanks, Murdo. I am glad to share an update on our rare disease business now that we are 4 months past due close. We are now fully operating as part of Amgen with integration activities ongoing. As Bob has mentioned before, we are excited to be Amgen's fourth pillar of long-term growth. I wanted to make sure you're aware that we are not reporting the full quarter in press release and slides which reflects sales from October 6 onwards and to $954 million. This excludes $41 million of sales that occurred in the first week of October prior to deal close. For the full quarter, our rare disease brands from Horizon delivered product sales of $995 million, representing 6% year-over-year sales growth. Throughout the remainder of my remarks, I will reference full quarter product sales. TEPEZZA and IGF-1R monoclonal antibody for patients with thyroid disease generated $467 million of sales during the entire fourth quarter, representing 3% quarter-over-quarter growth. This is the third row of quarter-over-quarter growth for TEPEZZA with the growth largely driven by the U.S. We saw a number of positive leading indicators, including a record number of unique TEPEZZA prescribers, total patient enrollment forms and patient starts in 2023. Additionally, thanks to our efforts, we've been able to generate favorable medical policy changes for greater than 50% of U.S. covered lives, and we expect to continue this momentum throughout 2024. We continue to see approximately 100,000 patients with moderate to severe disease in the U.S. who could benefit from TEPEZZA, with the majority of these patients in low clinical activity score settings. Given positive leading indicators and high unmet need, we see a long-term growth opportunity for TEPEZZA in the U.S., while also recognizing there is some time lag between our execution efforts and the realization of increased patient numbers. International expansion also remains a meaningful long-term growth opportunity for TEPEZZA. TEPEZZA is approved in Brazil, and we are progressing towards approval in additional countries. Our expansion into both Japan and Europe is a high priority with regulatory review underway in Japan and filings in the EU throughout the year.

KRYSTEXXA, a pegylated uricase enzyme for patients with chronic refractory gout delivered a record $280 million in sales for the entire fourth quarter, representing 30% year-over-year growth, driven by continued strong commercial execution. Sales are now annualizing $1 billion run rate. Performance was driven by execution across all phases of the patient journey, to manage generation, stakeholder engagement and adherence to treatment. UPLIZNA, an anti-CD19 monoclonal antibody, which is now the fastest-growing biologic in NMOSD, delivered a record $70 million in sales for the entire fourth quarter, representing 68% year-over-year growth. International expansion is also underway with UPLIZNA now launched in multiple ex U.S. markets. Our remaining Ultra rare portfolio generated $178 million of sales for the entire fourth quarter, primarily driven by our Ultra rare medicines, RAVICTI, PROCYSBI and ACTIMMUNE. Looking ahead at 2024 by leveraging Amgen's world-class biologics capabilities, decades of experience in inflammation and extensive global presence. We are ready to reach more patients than ever before.

I will now turn it over to Jay.

[James Bradner, executive]

Thank you, Vikram, and good afternoon, everyone. I'd like to take a minute to convey how thrilled I am to join the Amgen R&D organization and his leadership team. the creativity of our discovery research, expert and expedited clinical development, the most authoritative biomanufacturing organization in the industry, all were well known to me before joining. But now on staff at Amgen, I appreciate the strong sense of service, the patients facing serious illness, the like money commitment, growing the impact of our medicines and our business and the shared conviction in this remarkable portfolio of potential first-in-class and best-in-class medicines.

In 2023, we executed with speed across our clinical pipeline, achieving excellent enrollment in key programs. [indiscernible] of 2024 as the year with significant data readouts across the portfolio for medicines with the potential to transform patient care. Key highlights in 2023 included the delivery of promising data from 4 key oncology assets and the attainment of 3 breakthrough therapy designations in oncology. We initiated pivotal Phase III studies for tarlatumab in small cell lung cancer, LUMAKRAS in non-small cell lung cancer and colorectal cancer, along with [indiscernible] in Sjogren's syndrome. In general medicine, as previously disclosed, top line 52-week data from the 592 patient Maritide Phase II study is expected by late 2024. Leveraging the durability of weight loss observed in Phase I and rapid enrollment enjoyed in Phase II, we recently added a part 2 to this study, which explores durable weight loss beyond 52 weeks. Our planning for a comprehensive Phase III program across multiple indications remains on track.

Lastly, you may have seen that yesterday, nature of Metabolism published a manuscript from Amgen R&D that provides the integration of Maritide preclinical and Phase I data. Beyond Maritide, our obesity strategy encompasses several assets with AMG 786 in Phase I and additional preclinical assets advancing. Our approach is tailored to meet the dynamic needs of obesity treatment, demonstrating a longitudinal commitment to innovation and patient care in this field. The Phase III outcome study of Olpasiran, are potentially best-in-class Lp(a) targeting small interfering RNA molecule in atherosclerotic cardiovascular disease has enrolled more than 7,000 patients globally. This rapid enrollment accomplished in just 1 year across 34 countries and over 700 sites underscores the medical community's strong interest in and the potential impact of Olpas. We've deliberately expanded our initial enrollment target from 6,000 to over 7,000 patients to ensure comprehensive demographic representation and access regional regulatory requirements. We are on track to complete enrollment in the first half of '24.

In oncology, we're focused on approaching high conviction targets with differentiated therapies for large effect sizes. We're pleased to announce that the FDA granted priority review for BLINCYTO in early-stage CD19-positive B-ALL with a PDUFA date of June 21, 2024. The ongoing Phase III Golden Gate study is enrolling patients to evaluate the effectiveness of alternating BLINCYTO with low intensity chemotherapy here in older adults diagnosed with Philadelphia chromosome-negative B-ALL. We're also planning to amend this study to evaluate subcutaneous administration of blinatumomab with initiation anticipated in the second half of 2024 potentially allowing us to serve more patients in treating physicians.

Lastly, we're pleased to announce that just today, the American Journal of Hematology published a manuscript highlighting data from the dose expansion phase of our ongoing Phase Ib study of subcutaneous blinatumomab as a seal agent in adult patients with heavily pretreated relapsed factory B-cell ALL. Of 27 evaluable patients treated, we observed an 85% fleet response rate, of which 75% were MRD negative. Subcutaneous blinatumumab was well tolerated with no observed grade 4 cytokine release syndrome.

Turning to tarlatamab, a first-in-class DLL3-targeted BITE molecule -- the FDA granted priority review following promising results from the Phase II DeLLphi-301 clinical trial and a PDUFA date of June 12, 2024. We're rapidly advancing tarlatamab into earlier lines of treatment, where we have initiated 2 Phase III studies and plan to initiate a third in the first half of 2024. Xaluritamig, a first-in-class STEAP1 bispecific molecule being studied in metastatic castrate-resistant prostate cancer continues to progress following the presentation of encouraging Phase I data last fall. We are ahead of schedule with the monotherapy dose expansion and expect to complete enrollment in the coming weeks. We've opened a reduced monitoring cohort and are making significant progress in dose range finding studies in combination with novel hormonal therapy combinations. For AMG 193 in oral MTA cooperative PRMT5 inhibitor -- we're encouraged by 9 responses we've seen across 7 MTAP null solid tumors. AMG 193 is a terrific example of a medicine targeting a genetically defined synthetic lesality and a first clinical translation of our induced proximity platform. We're now swiftly moving forward with dose expansion studies and plan to enter master protocols and thoracic and gastrointestinal malignancies, exploring combinations with standard of care in the first half of 2024.

In our inflammation portfolio, we continue to explore TEZSPIRE indications beyond severe asthma, including separate Phase III studies in chronic rhinosinusitis with nasal polyps, where top line data are expected in the second half of 2024 as well as in eosinophilic esophagitis. We also remain on track to present Phase II COPD data in the first half of 2024.

Our ROCKET Phase III program for rocatinlumab, the first-in-class anti-OX40 monoclonal antibody has successfully enrolled over 2,400 patients with moderate to severe atopic dermatitis. We're introducing an eighth study to the ROCKET program to flooring auto injector, and we are planning to initiate both the Phase III study in prurigo nodularis and a Phase II study in asthma this year as we seek to broadly explore the potential of rocutinlumab.

Lastly, we are encouraged by the advancements of our rare disease pipeline several mid- to late-stage opportunities. In December, TEPEZZA received orphan drug designation in Japan where we've also recently submitted a new drug application for TEPEZZA in thyroid eye disease. To serve additional patients in Japan, we have a Phase III study underway in the setting of chronic disease with a low clinical activity score. Beyond Japan, we are progressing TEPEZZA subcutaneous administration to drive increased adoption and improve patient experience and plan to initiate a Phase III study in thyroid eye disease this year.

With UPLIZNA, we anticipate important Phase III data readouts this year in myasthenia gravis and IgG4-related disease. Both diseases with significant unmet need and where we have the potential to make a real difference for patients. Dazodalibep, an innovative CD40-ligand inhibitor fusion protein has entered Phase III for Sjogren's syndrome. This follows encouraging Phase II data with efficacy across patients with moderate to severe systemic disease and patients with high symptom burden. Dazodalibep is the first tariff to demonstrate efficacy in this latter patient population. Closing out our rare disease efforts, we're excited about Fixalparant, an LPAR1 antagonist being studied in idiopathic pulmonary fibrosis, on track for a Phase II proof-of-concept data readout in the second half of 2024.

In closing, I'm delighted to report on the important progress we made advancing our innovative pipeline, and I'm looking forward to sharing more pipeline milestones through 2024. I'll now turn it over to you, Peter.

[Peter Griffith, executive]

Thank you, Jay. We're pleased with our strong execution and performance in the fourth quarter and for the full year 2023. In the fourth quarter, total revenue of $8.2 billion grew 20% year-over-year and non-GAAP EPS of $4.71 grew 15% year-over-year. For the full year, we delivered total revenue of $28.2 billion, 7% growth year-over-year and non-GAAP EPS of $18.65, 5% growth year-over-year. As a reminder, both Q4 and the full year results include Horizon's results beginning October 6, when the acquisition closed, so our financial results will exclude approximately 1 week of Horizon's results from our fourth quarter results. I'll review the details of our fourth quarter and full year financial results before discussing our outlook for 2024. The financial results are shown on Slides 54 to 56 of the slide deck.

Turning to our fourth quarter total revenue of $8.2 billion. We saw product sales increased 20% year-over-year, driven by volume growth of 23%, offset by net selling price decline of 3%. Excluding the impact of Horizon, product sales increased 5% year-over-year driven by volume growth of 9%. Full year total revenues of $28.2 billion grew 7% year-over-year. Product sales increased 9% year-over-year, driven by 15% volume growth. Other revenues decreased 16% year-over-year, primarily due to lower profit and cost sharing from our COVID-19 collaboration with Lilly in 2022. Strong expense discipline resulted in a 50% non-GAAP operating margin as a percentage of product sales for the full year 2023. While we continue to focus on both internal and extension, investing $4.7 billion in our pipeline and $27.8 billion in our acquisition of Horizon. With product sales volume growth at 23% in Q4 and 15% for the full year, we still efficiently manage the operating expenses of the business. Q4 non-GAAP operating expenses increasing 18% year-over-year, while full year non-GAAP operating expenses increased 9%. Excluding the impact of Horizon, Q4 non-GAAP operating expenses increased 3% and full year non-GAAP operating expenses increased 5%. On a non-GAAP basis, Q4 cost of sales as a percentage of product sales was flat on a year-over-year basis at 16.3%. For the full year, cost of sales as a percentage of product sales increased by 1.1 percentage points to 17.0%. The full year increase was primarily driven by higher profit share and changes in our product mix. partially offset by the replacement of the Puerto Rico excise tax with an income tax beginning in 2023. Non-GAAP R&D spend in the fourth quarter increased 16% year-over-year and 8% year-over-year for the full year primarily due to higher spend on later-stage clinical programs and marketed product support, including spend on programs acquired from the Horizon acquisition and continuing investment in our pipeline, including Maritide.

Q4 non-GAAP SG&A expenses increased 20% year-over-year, primarily driven by commercial and G&A expenses related to the Horizon acquisition. Full year non-GAAP SG&A expenses increased 5% year-over-year, primarily driven by commercial and G&A expenses related to the Horizon acquisition, partially offset by a decline in other marketed product spend. Non-GAAP OI&E were about $635 million in expense in the fourth quarter, a $168 million increase year-over-year, primarily driven by increased interest expense related to the debt issued for the Horizon acquisition. Full year non-GAAP OI&E was favorable $279 million year-over-year, primarily driven by the change in accounting for the BeiGene investment to the fair value mark-to-market method and by gains related to early debt retirement, partially offset by higher net interest expense.

Our non-GAAP tax rate increased 2.5 percentage points year-over-year to 15.9% in the fourth quarter and 2.7 percentage points year-over-year to 16.5% for the full year, primarily due to the 2022 Puerto Rico tax law change mentioned previously. The company generated $7.4 billion of free cash flow in 2023 compared with $8.8 billion in 2022. The decrease is driven by the Horizon transaction and integration costs higher repatriation tax payments and higher capital expenditures. We expect to continue to generate strong cash flows with the addition of Horizon and are on track with our deleveraging plans to return to our efficient capital structure by the end of 2025.

In summary, we continue to execute on our multiple capital allocation priorities. First, we continue to prioritize investments in both internal and external innovation. Our increased spending and non-GAAP R&D of 8% in '23 over '22, coupled with the acquisition of Horizon Therapeutics continues to broaden and strengthen our balanced portfolio across therapeutic areas. With our strong late-stage innovative pipeline moving forward through development, we expect our non-GAAP R&D to continue to increase in 2024. Second, we continue investing in our business for long-term growth, including our state-of-the-art manufacturing facilities in Ohio and North Carolina. Amgen, Ohio, our new advanced assembly and final product packaging plant has just received license from the FDA for commercial production in January, roughly 2 years after we broke ground, and our innovative drug acceptance plan under construction in North Carolina is expected in the operational by 2026. In addition, we've positioned the organization to accelerate investments in innovation, including leveraging the power of generative artificial intelligence. And third, we return capital to shareholders through growing dividends including $2.13 per share in the quarter. This represented a 10% increase over that paid in each 2022 4 quarters.

Turning to the outlook for the business for 2024. First, because this is the first full year incorporating the impact of Horizon, we're providing some additional granularity in our guidance, which we don't expect to be the same extent in the future. For 2024, we're expecting revenue of $32.4 billion to $33.8 billion and non-GAAP earnings per share of $18.90 to $20.30. As we continue to integrate Horizon, we expect the acquisition to be accretive to non-GAAP EPS in 2024. We and we're on track to meet the synergy target previously communicated of at least $500 million in pretax cost by year 3 after closing or in 2026. Our revenue range reflects our strong growth outlook driven by numerous opportunities across our 4 therapeutic area pillars. We will record a full year of legacy Horizon product sales, and we expect continued volume-driven growth in our priority products, Repatha, TEZSPIRE, EVENITY, Otezla, Prolia and BLINCYTO, Consistent with industry trends in our recent history, we expect mid-single-digit price decline for our portfolio in 2024.

As a reminder, as you model the first quarter of 2024 and consistent with our historical trends, we expect first quarter product sales to be the lowest quarter as a percentage of the full year due to benefit plan changes, insurance reverifications and increased co-pay charges. So we expect the first quarter of 2024 total revenue to grow roughly 20% year-over-year. For the full year, we expect other revenue to be in the range of approximately $1.3 billion to $1.4 billion. And we continue to efficiently run the business through our disciplined approach to managing operating expenses.

In 2024, we're making incremental R&D investments to support our promising late-stage plan, including our rapidly advancing oncology programs as discussed following ESMO in October and other programs, including Maritide. Furthermore, the addition of Verizon has an impact on the 2024 operating margin given the timing of when synergies are realized. As a result, we project the full year non-GAAP operating margin as a percentage of product sales to be roughly 48%. Note that we expect non-GAAP operating margin growth to accelerate in each of the quarters following the first quarter, there are primarily 3 reasons for this. First, typical lower product sales in Q1, as I mentioned above, and in each of the following quarters. Second, increased spend on our commercial brands will continue building on the investments we made in the second half of 2023, including Repatha, OTEZLA and our bone portfolio of EVENITY and Prolia. And third, Q1 2024 reflects the addition of Horizon, for which we are just at the beginning stages of realizing synergies given the acquisition close date of October 6. So we expect non-GAAP operating margin to be roughly 43% in the first quarter. I would reiterate that we expect operating margin growth to accelerate in each of the quarters following the first quarter. We project non-GAAP cost of sales to be in the range of 17% to 18% as a percentage of product sales for the 2024 year. Taking into account the full year of Horizon related expenses, we expect non-GAAP R&D expenses in 2024 to increase approximately 20% year-over-year. with investments also increasing to advance key pipeline assets, including AMG 193, Maritide, rocatimlumab and tarlatamab. We see significant potential in our innovative pipeline, and it is important that we strategically invest now to fully unlock the opportunities ahead create long-term value for patients, staff and shareholders.

And for non-GAAP SG&A spend, we expect 2024 full year amounts as a percentage of product sales to be between 21% and 22%. We anticipate non-GAAP OI&E to be in the range of $2.6 billion to $2.7 billion. As mentioned on our Q3 '23 call, the '24 guidance includes the interest expense related to the $28 billion of debt rates for the Horizon acquisition. We expect a non-GAAP tax rate of 16% to 17%. Our guidance is primarily being driven by 2 factors. The first is the jurisdictional mix of income, including the full year benefits associated with the Horizon transaction. and the legal entity rationalization undertaken in the fourth quarter of 2023 in part to integrate the Horizon entities into our existing U.S. headquartered legal entity structure. The second is the benefit from a planned payment to the IRS as an advanced deposit as we've done in the past to stop the accrual of interest on uncertain tax positions. There is no change in our belief in the merits of our legal arguments with the IRS as we prepare for trial. Given the interest rate environment, although the deposit negatively affects our cash flow in '24. If any of the deposit is returned to us upon the resolution of our litigation, those funds would accrue interest income. Therefore, the radar bitrage makes this payment a prudent use of our capital. Once again, out of an abundance of clarity, this represents no change in our belief in the merits of the tax court case. The guidance also includes the impact of the adoption of the OECD, 15% minimum tax by certain jurisdictions. Based on our individual footprint, we don't anticipate any significant effects of the new rules in 2024, but we're closely watching the global tax landscape for future impacts as the framework continues to be considered by additional jurisdictions and new rules take effect. We expect governments around the world, including the United States to continue to look for more sources of tax revenue from large multinational corporations that could result in higher taxes in the coming years.

Similar to 2023, we expect share repurchases now to exceed $500 million in 2024. We expect that we will continue to increase our dividend. We expect capital expenditures of approximately $1.1 billion in 2024, consistent with our capital allocation priority to invest in our business, including the Ohio and North Carolina facilities I mentioned ahead and into the rare disease pillar.

In summary, we delivered another strong year of financial results in 2023. Our confidence in the long-term growth of Amgen is strong, and we believe that our new rare disease pillar One of our 4 pillars will be an important additive source of growth for the company. This concludes the financial update. My thanks to my approximately 27,000 plus colleagues at Amgen around the world for their commitment to our mission of serving patients and their tireless efforts in 2023.

I'll turn it back to Bob for Q&A.

[Robert Bradway, executive]

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

[Operator]

[Operator Instructions] Our first question comes from Michael Yee from Jefferies.

[Michael Yee, analyst]

Thanks for good results and good guidance. We had a question on obesity. On 133, of course, you had the publication yesterday. I feel like it was the most scrutinized Phase I publication. But maybe you could just talk to -- maybe Jay could talk to your interpretation of some of the markers, for example, lipids, A1c, blood pressure and all that kind of thing. And maybe talk about your confidence level about the profile versus competitors.

[James Bradner, executive]

Yes. Thanks a lot, Michael. We really appreciate the consideration the Phase I paper is receiving from the community. It's exciting to report these data. For those who haven't seen it, this was a randomized, double-blind, placebo-controlled study, 49 patients looking at safety, PK, PD, single ascending dose, 7 cohorts, multiple ascending dose 3 cohorts, 3 monthly doses, patients with obesity migrated to 30. And and we were quite pleased with the outcome. Looking at the 420-milligram dose as an example, which was the highest dose study, 14.5% weight loss at only day 85. And moreover, quite durable coming off of that medicine out to 150 days, all with relatively mild gastrointestinal side effects. And so to answer your last question first, we find the Phase I data, which we're pleased to share with the community to be quite supportive of our ongoing work to develop this medicine to the greatest possible benefit of patients suffering from obesity. Now you've asked questions around some of the measurements on the study, lipid, blood pressure and A1c. And I would just caution that this is a Phase I trial. The numbers are very small that the duration of treatment is rather short. But even with all of those caveats, while hard to draw conclusions from much small numbers, especially labile measurements like blood pressure and lipids, all are directionally favorable. And so we have -- we take no concern whatsoever from those measurements on the study.

[Operator]

Our next question comes from Salveen Richter from Goldman Sachs.

[Salveen Richter, analyst]

Another one here on the obesity program. So post the published Phase I data. How are you thinking about differentiation on GI tolerability? Is dose range being evaluated in the Phase II study similar to that in the Phase I?

[James Bradner, executive]

Yes. Thanks for the question. I'll take this one as well. As you may or may not know the Phase II study, which is ongoing at present and going very well, explores 11 dosing cohorts with relevant placebo controls. And through that study, we'll have a chance to gain an experience with a longer exposure to Maritide dosed in different ways. We've recently added a part 2 to this study that will allow us to explore even more durable weight loss beyond 52 weeks enabled by just very rapid enrollment. And these dosing cohorts will go on to test dose level and even less frequent dosing schedules than monthly. And so these Phase II data even by end of year, will be strongly instructive as to finding a safe and tolerated and efficacy dose to carry into Phase III clinical investigation.

[Murdo Gordon, executive]

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

[Operator]

Our next question comes from Jay Olson from Oppenheimer.

[Jay Olson, analyst]

Congrats on the progress, another on 133. Talk about whether or not that we see later this year will include patients from 2 of the study? And do you think it's possible that 133 could be dosed twice every 2 or 3 months? And also, if you could just comment on the rollover rate of patients from Part 1 to Part 2?

[Robert Bradway, executive]

Jay, could you catch on that some of what Jay asked was broken up here at the beginning.

[James Bradner, executive]

Part was a little bit broken off of your question. I heard a better explanation of Part 2 frequency of dosing. And then I did not hear your third part.

[Jay Olson, analyst]

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

[James Bradner, executive]

Okay. Yes. Thank you for the question, Jay. Let me give a little bit of context on this Part 2 study that I think will help answer them. In Part 2, the intent is to really look at durable weight loss beyond 52 weeks. And so by durable weight loss, patients eligible for Part 2, which begins at the end of 52 weeks. We will be responding to this medicine. And then they'll be rerandomized to 4 cohorts. That will test dose level. And again, this even less frequent dosing schedule. We have not disclose the granularity on the dosing schedule. This is a competitive environment. But we're afforded this chance because the ADC, the antibody core of meritide, like so many immunoglobulin therapeutics allows for the opportunity to use it much less frequently. The rate of patients rolling over to Part 2 will be established as the Phase II study continues to progress this year.

[Operator]

Our next question comes from Chris Schott from JPMorgan.

[Christopher Schott, analyst]

Just maybe to pivot over to TEPEZZA for a question. Can you just talk a little bit about the dynamics for 2024? It seems like the products come back to growth. But I'm just trying to get a sense of now that Amgen owns the asset and has more kind of time with it. What are your top priorities? And how do you think about continuing to kind of grow the patient base here?

[Robert Bradway, executive]

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

[Vikram Karnani, executive]

Yes. Thank you for the question. I think if you focus a little bit on what are the underlying factors that are driving capacity growth, we saw a record number of unique TEPEZZA [indiscernible]. We saw an increase in patient enrollment forms and patient starts. In addition, we've made pretty significant progress on payer coverage, as we've seen our covered lives have now increased to greater than 50% of U.S. covered lives. And that's important educating some of those stakeholders on the new clinical data updated indication, it continues to drive uptake across the full spectrum of TED patients. And finally, what holds all of this together, it's a really robust patient service model. that supports patient access. I think we continue to make progress and execute towards each one of these important leading indicators -- and we shouldn't forget that there is still low penetration of the approximately 100,000 patients that can be eligible for this medicine in the U.S. alone. Now, just one last point here is that as we've noted before, there continues to be a time lag between the execution of all of these efforts and the realization of increased patient numbers. As we said before, it can take up to 90 days once a patient is identified for therapy for that patient to actually get on therapy. But we're pretty happy with all of our leading indicators and the execution that we have seen coming out of last year.

[Robert Bradway, executive]

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

[Operator]

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

[Evan Seigerman, analyst]

I wanted to touch on TEZSPIRE specifically in COPD. How are you planning to differentiate given the pretty competitive data so from Dupixent? And how should investors be looking at this data from an efficacy bar? Are there nuances in this trial that need to be clarified that might make it harder to do an apples-to-apples comparison?

[James Bradner, executive]

Yes. And thanks for the question. Murdo, why don't I start and then you add on. So and timely question, Phase II COPD study of TEZSPIRE, we expect data in the first half of this year. This was a big study, 337 patients, moderate to severe COPD. They're having exacerbations despite being on triple therapy. And so reflective of the current unmet need inadequacy of therapy for patients with COPD. This is a slightly broader population than Dupi that we're studying here. we're totally on track for the readout. We quite like the mechanism here. You must know that TSLP works as a signaling factor upstream and by blocking it with our unique biotherapeutic. We block TSLP IL-25, IL-33 signaling. TSLP hit so many cell types modulating this airway Type 2 response. By hitting TSLP upstream, we think we can really have an impact on the disease biology. We see slip elevated in the serum of patients in bronchiecoza and bronchioalveolar lavage fluid. It's released by airway epithelium. There's just a lot of signals from the basic biology of this disease, pointing to a medicine of this nature. And by looking at the broader population than they did with Dupi, we have a chance to really figure out who the responder is. Murdo?

[Murdo Gordon, executive]

I think you've covered all the bases. I would just add this, Evan, that with the unique and differentiated mechanism, as Jay described, we hope we can treat a broader population of patients than perhaps the currently available therapies. And we also recognize that there are patients who are refractory to those currently available therapies, and we would obviously want to understand if they would be responders to test buy. I think we've got strong commercial capabilities, including with our partners at AstraZeneca and are well positioned to take a product like this into the market. We're successful in Phase III.

[Operator]

Our next question comes from Umer Raffat from Evercore ISI.

[Umer Raffat, analyst]

I wanted to touch up on AMG 133 as well, 2 parts question. First, on the discontinuations at the high dose, we know 5 out of 8 not finished the full duration of the study, but there was a second arm also of this high-dose 420-milligram with 10 patients, which was not reported. This was the one with digital tools. Could you speak to the discontinuation rate in that arm? Is this a 420 done separately, which is not part of the paper. And secondly, I know there's a case of liver enzyme elevation of the 280 mg dose, but this patient also had COVID. Could you perhaps speak to the timing of liver enzyme elevation relative to the bid episode?

[Murdo Gordon, executive]

Yes. Thanks, Umer. I won't be able to provide patient level insights to the Phase I study at this time, but I do appreciate your question and your interest in the report. I'll speak to the dropouts of the Phase I at the 420-milligram dose, which was 4 out of the 8 patients. First, it's notable to say that the high dose cohort in the multiple ascending dose receiving the 3 doses of 420 experience real weight loss, real benefit of 14.5% after these 3 monthly doses. This was the group that proved actually quite durable out to day 150. Four subjects decline to participate in this clinical study setting largely for logistical reasons. The AEs and other characteristics were comparable to all the other patients in the study. Now the second question around the digital group. I don't have it in to that. Dave, do you?

[David Reese, executive]

No. I mean we can get back to you on that. I don't know that we reported that -- those data in the discontinuation rate.

[Operator]

Our next question comes from Colin Bristow from UBS.

[Colin Bristow, analyst]

Maybe a couple more on Maritide. First, could you provide some insight into the dosing? I mean, obviously, these are pretty large doses. And if we look at like Repatha 420 milligrams takes over 5 minutes by infusion or 3 consecutive injections. So I was wondering if you could give any insight there. And then in terms of the relative affinity for GI versus Glip, Maritide teams have preferentially favor blip much more than competitor molecules. And so do you think the ultimate clinical profile is more closely going to resemble that the long-acting GLP-1 versus competitor GLPs.

[James Bradner, executive]

Yes. Thanks, Colin. I appreciate the deconsideration of the molecule, especially I'd start by saying I don't regard these doses as high. I'm new here. But 420 milligrams for a biotherapeutic that's an antibody drug conjugate with a peptide antibody ratio 2:1, seems well in scope for a modern biotherapeutic product. I don't need to tell this community paying so close such close attention to Amgen that this is a very sophisticated biotherapeutics organization. And on the manufacturing side, just every patient every time, and we have all the capabilities necessary to deliver this medicine at whichever of these 3 or other dose and schedule we arrived at. So no concerns there for me whatsoever.

Regarding the balance of the pharmacology, you do invoke a difference between our medicine and medicines developed by pure pharmaceutical companies. namely mechanistically the core antibody of meratide inhibits the GIP receptor, whereas these other peptide medicines agonize it. we feel very secure in our choice to inhibit that receptor supported by just the finest level of experimental data available experiments of nature that genome-wide association studies in very large populations have pointed to a need, an opportunity to inhibit the gift receptor to deliver lower BMI as observed with variance in that receptor and downstream signaling pathways that correlate with reduced body mass index in large populations. As to the balance which you asked between inhibition of GIP receptor and agonism of GLP-1, these are very difficult measurements to make in humans, but our modeling suggests that was the therapeutic doses and exposures that we observe that we are achieving both.

[Murdo Gordon, executive]

And Colin, it's Murdo. I would just add that from a patient experience perspective, we've learned a lot from other biologics. And Amgen has a world-class process development, manufacturing and device team, and we've done a lot of work on this one and we anticipate a very positive and simple patient experience on at least a monthly dosing schedule, and we've learned a lot from Repatha specifically, and there's more to follow on Repatha from that, but we continue to work to improve patient experience with our biologic injectables.

[Robert Bradway, executive]

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

[Operator]

Our next question comes from Yaron Werber from TD Cowen.

[Brendan Smith, analyst]

All right. Great. This is Brendan on for Yaron. Just a quick one from us, actually, based on the data you've seen so far and maybe some feedback from physicians that you've heard, this is on UPLIZNA. Where do you kind of see UPLIZNA fitting into maybe the MG treatment paradigm given all the competition there, but maybe more to the point, how you're thinking about expansion opportunities, given all the different autoimmune indications you could potentially pursue? Just trying to kind of understand how you see longer-term growth there.

[Robert Bradway, executive]

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

[Vikram Karnani, executive]

Yes, thanks for the question. Yes, UPLIZNA actually growing quite nicely and quite fun in NMOSD. As you know, it is now the fastest-growing biologic in NMOSD. We continue to execute across a variety of fronts. I mean, we're -- we see this product nicely positioned versus as it's appropriate for NMOSD patients and within the competitive environment that we operate in. And we've continued to make significant progress over the last 18 months or so, maybe even longer of continuing to drive more growth with newer prescribers and even depth with existing prescribers. So the product continues to do well. And I think -- we hope to continue to deliver good execution on this medicine in NMOSD. Maybe, Jay, you want to talk about the second question?

[James Bradner, executive]

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

[Operator]

Our next question comes from Mohit Bansal from Wells Fargo.

[Mohit Bansal, analyst]

I have a question regarding the subcutaneous delivery of TEPEZZA. You do have a plan to initiate a Phase III study, can you talk a little bit about which technology you are using? Is this with the preexisting Halozyme technology? Or are you using something as for this development?

[Robert Bradway, executive]

Sorry, I had trouble understand the question.

[Murdo Gordon, executive]

Question is what technology we're using for the subcutaneous injectable form of TEPEZZA.

[James Bradner, executive]

Maybe I'll just jump in. Mohit, we're not commenting at this point on the provider. We just said that we're going forward with the subcu.

[Operator]

Our next question comes from Geoff Meacham from Bank of America.

[Geoffrey Meacham, analyst]

Another one on 133. When you think about the Phase III program, I just wanted to know what sort of informs the next indications you're going to go after? Is it unmet need? Is it the potential for differentiation on 133? And the timing of that, do you think that you'd want to have the Phase II data in hand? Or is this something that you could roll out sort of that risk?

[James Bradner, executive]

Yes. Thanks for the question, Geoff, really appreciate it. As you know, obesity is a major public health crisis, maybe 40% of Americans with a BMI over 30 massively costly, so huge burden to the global third-party payers and societies. The obesity-related disease list is quite long and expanding from cardiovascular disease and heart failure type 2 diabetes, obstructive sleep apnea, NASH and NFALD kidney disease. These are chronic conditions that really demand medicines that can deliver durable and chronic weight loss. And so we think we have a really strong offering for these obesity-related diseases rising in our Phase II program, as you know. And obesity has a strong genetic component. And we locked on to GIP inhibition based on genetic insights. So the opportunity space is quite large. You asked the question what indications and perhaps even in what sequence. And when we have all the requisite data, we'll remark in due course. But we intend all indications where this dual mechanism can improve public health. And we are actively planning and on track for an expansive Phase III program.

[Robert Bradway, executive]

And in terms of -- Dave, you want to add the regulatory piece of it.

[David Reese, executive]

Yes, I think -- Geoff, this is Dave Reese. I would just add that we're planning a very expansive Phase III program. So you can expect to see multiple indications move forward. parallel. And as Jay indicated, as we start to see data, we will begin launching those trials, and we'll discuss them. And then in addition, as you're aware, regulatory authorities around the world require a certain body of safety data before Phase III launches. And so of course, we will be compliant with that. But our goal is to launch Phase III as quickly as possible. once we have the requisite data set and regulatory approval.

[Operator]

Our next question comes from David Risinger from Leerink Partners.

[David Risinger, analyst]

Yes. So I have the question on AMG 133, please. Could you add some more color on your expectations for the impacts on blood pressure and lipids in Phase II, specifically whether you anticipate tirzepatide-like efficacy on those metrics?

[James Bradner, executive]

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

[David Reese, executive]

And the best extrapolation that you can have is from the preclinical data that were just published, I urge you to take a look at that.

[Operator]

Our next question comes from Michael Schmidt from Guggenheim Securities.

[Unknown Analyst]

[indiscernible] on for Michael. A quick one on Xaluritamig. Can you talk about your plan of data disclosure this year and your current thinking on the potential registration path? How do you think about the positioning of this agent relative to some of the other emerging agents based on different mechanisms such as ADC or AR degraders in prostate cancer?

[James Bradner, executive]

Yes. Thanks for this outstanding question, Michael. And Xaluritamig is a very interesting and exciting molecule for those on the call. This is a STEAP1 CD3 bispecific. We have been studying this in advance castrate-resistant prostate cancer. We have expanded a cohort in the Phase I monotherapy. We're opening to reduce monitoring as well as you invoke the existing and novel androgen receptor modulators integrators, we're exploring combinations with novel agents in that domain as well. The priorities for the program right now are to establish reduced monitoring. This will be important to reach just all the patients who can benefit. We're looking at the feasibility of reduced monitoring. We have great experience with these T cell engaging bispecifics as well as the plausibility of outpatient therapy. The approach to the regulatory path will present in due course. There will be no surprises there. The path to bring medicines to patients with case-resistant prostate cancer alone and ultimately, in combination is well worn, thankfully, and we know how to deliver there. You asked about differentiation on medicines. These are often apples to oranges comparisons, we have looked at that, of course, and we really like the offering of xaluritamig. The patients treated on our study had quite advanced disease, even more advanced disease than the graphics of the patients as reported on other mechanism medicines such as radioligand therapies. And the response rates we're seeing are really clinically meaningful to patients. and that gives us great encouragement to develop the medicine more ambitiously in the next few years.

[Robert Bradway, executive]

Dave, in terms of the data sharing, do you want to share...

[David Reese, executive]

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

[Operator]

Our next question comes from Tim Anderson from Wolfe Research.

[Timothy Anderson, analyst]

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

[James Bradner, executive]

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

[Operator]

Our next question comes from Robin Karnauskas from Truist Securities.

[Nicole Germino, analyst]

This is Nicole on for Robin. So on daxtilimab, targeting ILT7 for business, can you talk about your level of confidence in this target in light of the competitive landscape and we do expect to see near term from safety and [indiscernible]?

[Robert Bradway, executive]

Sure. Jay and Dave?

[James Bradner, executive]

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

[David Reese, executive]

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

[Operator]

Our next question comes from James Shin from Deutsche Bank.

[James Shin, analyst]

I have one for Jay. I just kind of want to piggyback on what Tim was alluding to. The GIP antagonism versus agonism, looking at the [indiscernible] paper it looks like 133 420-milligram dose has a slight blip in triglycerides that eventually fades, but it does seem like antagonism is behaving a little differently from the literature for agonism. Is it too early to chalk it up to antagonism versus agonism in your view? Just wanted to get your thoughts there.

[James Bradner, executive]

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

[Robert Bradway, executive]

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

[Operator]

Our last question will come from Carter Gould from Barclays.

[Carter L. Gould, analyst]

Maybe just one on 786. Can you walk through exactly what's sort of driving -- maybe let me take it back. Maybe first, kind of if you could outline sort of how you're setting expectations there? And any color on what's driving the delay there? It seems like it's taking a long time to enroll 72 patients.

[James Bradner, executive]

Sure. No, thank you for your question. For the broader group, AMG 786 is an oral medicine being developed for obesity. It is not increasing that we've not as yet disclosed this target or pathway. This study is progressing fine. The readout of the Phase I is on track for the first half of 2024. We've completed initial dose escalation cohorts, and we're just collecting and analyzing data, expecting to read out in the first half of this year. .

[Justin Claeys, executive]

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

[Robert Bradway, executive]

Okay. Thank you all for joining the call. As you heard, we're excited about the opportunities that we see for growing our business across all 4 of our pillars, general medicine, oncology, inflammation in rare disease. Last October, we shared an in-depth look at oncology in connection with the medical meeting. And we plan to do an introductory review of rare diseases and our rare disease pillar in late February to give you more information about the medicines that we already have on the market as well as some of those that are advancing through our pipeline. So we're encouraged by the questions that we heard on this call about those molecules, and we're excited about them and their prospects. So we'll host a call, which I will share with you here over the next few days and look forward to having that opportunity. In the meantime, again, thank you for your support, and we look forward to talking to you at the Rare Disease Day or at our first quarter results call. Thank you.

[Operator]

This concludes our 2023 Q4 earnings call. You may now disconnect.