My name is Skinner and I will be your conference facilitator today for Amgen’s Fourth Quarter 2017 Financial Results Conference Call. [Operator Instructions] I would now like to introduce Arvind Sood, Vice President of Investor Relations. Mr. Sood, you may now begin.

Okay. Thank you, Skinner. Good afternoon everybody. I would like to welcome you to our conference call to discuss our business performance for 2017 and our outlook for 2018. Although our results exemplify our focus on volume driven growth, tax reform has created profound changes and opportunities for our industry and our company. So to begin this dialogue, our Chairman and CEO, Bob Bradway will provide some perspective, followed by our CFO, David Meline who will review our Q4 and full year 2017 results and provide guidance for 2018. Our Head of Global Commercial Operations, Tony Hooper, will review our product and geographic performance in 2017, followed by our Head of R&D, Sean Harper, who will provide a pipeline update. As in the past, we will use slides corresponding to our presentation today and a link to these slides was sent earlier. We plan on using non-GAAP financial measures in today’s presentation to provide information, which maybe useful in understanding our ongoing business performance. However, these non-GAAP financial measures should be considered together with GAAP results and reconciliations of these measures are available in the schedules accompanying today’s press release, a Form 8-K and also on the Investor Relations section of our website. Just a reminder that some of the statements made during the course of our presentation today are forward-looking statements and our 2017 10-K and subsequent filings identify factors that could cause our actual results to differ materially. So with that, I would like to turn the call over to Bob.

Okay. Thank you for joining our call. We have more ground than usual to cover with you in our prepared remarks this afternoon. We will be addressing not only our results for 2017 and our outlook for this year, but also the impact of tax reform, which we see is a very favorable development for our business. To kick off, I would offer that with another year of strong performance behind us, we are even more excited about the long-term prospects for our business than we were a year ago. In 2017, we continued to deliver solid operating performance as earnings per share growing 8% and operating margins improving to an industry leading 53.5%. In capital terms, payout to our shareholders grew by 14% as we improved our return on capital to 33%. We delivered these results in a period of increased competition for many of our largest products, several of which have lost patent protection and while continuing to invest heavily in the future of our business. Our steady progress through 2017 places us squarely on track to deliver against the long-term commitments we set several years ago for 2018. We entered 2018 in a strong position and confident about our long-term outlook. Those franchises which have come off patent in nephrology and oncology had held up well and we expect them to remain competitive. The brands that we expect to drive our future growth led of course by Repatha, Prolia, and KYPROLIS, with Aimovig and the biosimilars coming close behind are emerging now and the strong data we have to support them are encouraging. And finally, we have stable cash flows and the strong balance sheet both of which are improved by tax reform. We intend to use our resources to continue to invest in our people and…

Okay. Thanks Bob. Before I review our results and guidance, I would like to take a moment to reflect on our performance over the last several years. As Bob mentioned, we entered 2017 as another year, which presented significant challenges related to the transition of our portfolio as well as the evolving competitive dynamics of the industry as a whole. In the face of these expected and other not so expected challenges including Hurricane Maria, I am pleased to report that we delivered positive performance again in 2017. Additionally, with regard to our 5-year goals, we have already delivered or have clear line of sight to delivering on the commitments we established in 2014. The first goal was to achieve a substantial improvement in our operating efficiency agility and speed with the resulting outcome of the non-GAAP operating margin between 52% and 54%, representing a 15 point increase at the midpoint. We achieved this objective starting in 2016, 2 years ahead of our commitment. Second, in 2017 we delivered the $1.5 billion transformation savings commitment and will exceed that goal in 2018. Third through our next-generation bio-manufacturing capability as well as other efforts to optimize our fixed capital infrastructure, we are on track to meet our 2018 goal of reducing our facility footprint by 23%. Finally, based on today’s 2018 guidance I am pleased to confirm our expected delivery on the other key objectives of both double digit non-GAAP EPS growth and providing returns to shareholders of at least 60% of non-GAAP net income on average during the period 2014 to 2018. These commitments are being achieved before benefiting from tax reform which further enhances Amgen’s performance in 2018 and beyond. Now let’s turn to the fourth quarter financial results on Page 6 of the slide deck. Revenue at $5.8…

Thank you, David. I would like to begin with a few comments on our overall performance in 2017 followed by a review of our product performance. On the full year basis 2017 sales were in line with 2016 as the growth of our newer products offset the decline in our mature brands. We saw this play out again in quarter four as robust volume growth led by Prolia and our recently launched brands offset volume declines in Enbrel, ESAs and NEUPOGEN. Our international performance in quarter four led by Europe as David said was strong with 70% growth excluding the impact of foreign exchange, driven by volume growth of 10%. The European portfolio has already transitioned to the majority of sales from newer brands leading to strong volume growth for the overall portfolio. I am pleased with our execution in 2017 and our team has made excellent progress across a number of strategic fronts in building the foundation for long-term volume driven growth. We drove volume growth across several important brands led by Prolia. We defended Enbrel and several of our material brands against increasing competition. And we executed some patient focused lifecycle management strategies. We continue to advance our recently launched products with impressive new clinical data. The most significant of course being Repatha OUTCOMES data as well as three new sets of overall survival data, two for KYPROLIS and one for BLINCYTO. We also began laying the foundation for our next wave of launches as we prepare for Aimovig, a migraine product in the U.S. and AMGEVITA, our Humira biosimilar in Europe later this year. This will be an exciting milestone as we begin to commercialize our biosimilars in 2018. I am confident that we are well-positioned to capitalize on the opportunities within our portfolio of innovative and…

Thanks Tony. Good afternoon. I will begin with cardiovascular, with the recent inclusion of our cardiovascular outcomes data in U.S. label Repatha is the first and only PCSK9 inhibitor approved to prevent heart attacks, stroke and coronary revascularization in adults with established cardiovascular disease. We now have numerous professional guidelines and treatment pathways along with the FDA all recognizing the ability of Repatha to reduce life changing events from stroke and heart attack. And we expect payers to take an increasingly more thoughtful approach to patient access. In inflammation, we began dosing Tezepelumab in our 52-week Phase 3 study in over 1,000 patients with severe uncontrolled asthma in our collaboration with AstraZeneca. I would note that the primary endpoint in our Phase 3 program is the same as the one we reported for the Phase 2b study where we demonstrated efficacy across a broad spectrum of patient types. We have also reacquired our IL15 antagonist antibody AMG 714 after our cell immune collaboration generated intriguing Phase 2a data in severe celiac disease. We will be discussing the data and potential path forward with regulators are they are not clearly established endpoints for registration in this area. In neuroscience we and Novartis are looking forward to the FDA PDUFA date for Aimovig in May. I am often asked about our approach with the CGR receptor antibody versus the ligand and how it differentiates. We targeted the receptor because we wanted the most potent antibody we could develop to reduce the amount of antibody required for maximal clinical effect. And our expertise in antibody discovery and development allowed us to succeed at this. With Aimovig we can elicit maximal CGRP inhibition with a relatively low doubts we have submitted 70 milligram and 140 milligram per month to regulators compared with higher doses…

Okay, thanks. Skinner, let’s go straight to the questions and could you please remind our callers of the procedure for asking questions and let me just give them a heads up that will go longer than usual because advertising at the beginning of my remarks we were going to be little bit longer in our prepared portion. So, we will stay and take the questions from the analysts. Skinner, let’s jump to it.

Absolutely. [Operator Instructions] And our first question comes from Robyn Karnauskas from Citigroup.

Hi, guys. Thanks for taking my questions. So, can you really be clear about what percentage of your write-ins was influenced by biosimilars to what looks a real impact? And for Sean, when you think about your pipeline which is really broad and [indiscernible] all the options that are available? And now, when you think about the probably adjusted value in the pipeline, can you help us understand how to value that pipeline to offset the biosimilar impact? Thanks.

Okay, Robyn, we are having a little bit difficulty hearing you, but I think your first question was unlike was one that we should ask David to address, I think you were asking how much of the wide range in revenue guidance was attributable to biosimilar. So, I think David try to make it clear that a lot of it was related to Sensipar, but we are going to have David to address that.

Yes, right. So, if you look at the guidance that we offered it’s obviously much larger than we would typically have about double what we would have at the beginning of the year. And certainly, a large portion of that is attributable to the uncertainty around the launch, the competitive launches that may occur this year from Sensipar. So, that’s the primary driver of the broader guidance than we typically would offer.

And again, Robyn, it wasn’t clear what you are trying to get at with your question was the pipeline, but Sean go ahead.

Yes. I mean, I think it had to do with the value of the pipeline versus obviously the pressures we are facing on some of our legacy products as they go through the portfolio transition. I would just say that you are right, Robyn, we do have a very broad and deep capability these days. It’s the best it’s ever been at Amgen in my opinion. And I think that what you can observe is that across the key therapeutic areas that we are focusing in, we have a lot of really exciting opportunities. And I think that we can expect to see the same sort of productivity with respect to advancing the pipeline over the next 5 years that we have observed over the last 5 years.

Okay, let’s go to the next question.

Our next question comes from Chris Raymond from Piper Jaffray.

Thanks for taking the question. So, I have a question that I think it mostly related to Enbrel, there has been some dust kicked up recently with regard to payers in PBMs instituting some so-called co-pay accumulators, which don’t allow co-pay assistance and other patient assistance to count against deductibles and out-of-pocket maximums. From what I have read you guys have seemed to taking a really strong stance against this with some specific countermeasures and you are working to ensure that patient support actually benefits the patient. But I am just hoping if you could maybe put some brackets around the ranges of uptake that this phenomenon could have this year. And what other specific countermeasures you could take if your current measures don’t work? Thanks.

It’s Tony. So, let me respond to that one. You are correct that Amgen has made it pretty clear that we disagree with the concept of the accumulator. That fundamentally, our systems is, a, to assist patients who can’t afford their co-pays that the agreements and contracts we have with these organizations is around making sure if patients get access. So, we put that in writing and made it clear to people. As I look at quarter one, I see a minimal impact to our Enbrel business because of these programs.

And our next question comes from Geoffrey Porges from Leerink Partners.

Thank you very much for your question and for all the color in the presentation. Perhaps, David, could you comment a little bit on your balance sheet, you sort of alluded to the fact that there maybe some moving thoughts in your balance sheet and obviously you are bringing a lot of cash back. You are effectively un-levered despite the fact that you have significant debt given your cash position. As you look at opportunities across the industry, Bob, has been sort of quiet outspoken about the need for consolidation. And just wondering what kind of leverage would you be comfortable with given the visibility you have for the future cash flow. Would you be willing to sort of go up on a net basis to several times your EBITDA?

Yes, Geoff. So, I guess the way I would think about the balance sheet going forward is I would look at how we have managed the balance sheet over these last several years. And we did that to optimize and get the lowest weighted average cost of capital and we did that without consideration of the offshore cash balances. So, we set our leverage and it’s varied over the last several years out of peak after Onyx and then it’s come down since that time. And I think it would be fair to assume that on a steady state basis, we would think about those kinds of balance sheet leverage ratios to be similar to what we have had in the past. Now, what I would say is that in the very near-term given the fact that we have such a large amount of capital that we will be deploying, it’s quite possible as I mentioned in my comments, but we would pay some debt in the interim, but that wouldn’t be mistaken to be where we think the ideal capital structure would be. So, I would refer again without reference to the cash we have been carrying, but just look at our leverage over these last several years, I think it’s a good sort of guidepost for how we will manage the business going forward.

Our next question comes from Ying Huang from Bank of America/Merrill Lynch.

Hi, thanks for taking my questions. Just a question for David, can you comment whether the guided 14% to 15% tax rate for 2018 is actually also the way we should think about a long-term tax rate? And then in 4Q ‘17 your OpEx went a bit higher than usual, do you expect the margin, the pre-tax operating margin to go back to the level you saw in the first three quarters in 2017 for the 2018 period? Thank you.

Yes, sure. So, in terms of the tax rate post-2018, what I would say is that if you look at our guide for this year on a non-GAAP basis at 14% to 15%, our preliminary analysis would suggest to us that, that would be a reasonable outlook for the period post 2018 and I use some words preliminary and that sort of thing, because it’s still evolving, but I think as a starting point, I think it’s reasonable to think about that as a steady state type level of tax rate going forward. And then in terms of you are correct as I tried to articulate if you look at our operating expense performance in Q4, basically we typically have as you know, we typically have the highest level of expense is in Q4 on an annual basis. And to the extent, we had expenses beyond that this past year in Q4 of ‘17 those were basically an entirely one-time type expenses that we wouldn’t expect to be recurring and that was related as I said to the hurricane costs, which are extraordinary and one-time as well as based on the fact that we had last year 35% tax rate versus taxes this year at 21% in the U.S. We looked at choices we might make around the timing of such discretionary expenses and time them into the period where we got to benefit from a tax perspective. So, with all of that, you go to 2018 as I said, our guidance would suggest to you until us that we expect to operate in the 52% to 54% range again this year. And I think you can expect the quarter-by-quarter patterns of margins and expenses to be quite consistent with what you have seen if you look at an average over the last several years.

Our next question comes from Matthew Harrison from Morgan Stanley.

Great. Thanks for taking the question. David, I was hoping you could just help us breakout some items for 2018 guidance, particularly since you have got a couple of moving pieces in terms of the bottom line here if you could help us think about the impact that the tax rate had the impact of the buyback versus the underlying performance of the business? Thanks.

Yes. So, I guess what I would say is that if you – well, first of all, I think the tax calculation is pretty straightforward in terms of take the 14% to 15% range and apply it to what would be pre-tax profit. I think I gave you a range in terms of both operating margin and what we expected below the line interest expense and income to be. So, I think that hopefully will get you to a pre-tax income that you can apply the tax rate against. And then in terms of the repurchase activity, we now have authorization in total of little more than $14 billion for repurchases. And as I said, we could see that deployed as soon as you know completion in the first half. Our guidance of course takes into consideration that if there is some range of timing possibilities that our guidance covers in terms of the repurchase effects. So, again I think you can apply some math to get to the share count and how that would impact your EPS. Then it’s included in the guidance.

Our next question comes from Terence Flynn from Goldman Sachs.

Hi. Thanks for taking the question. Maybe just a follow-up to Jeff’s earlier question, Bob during your prepared remarks you mentioned you are well-positioned to capitalize on consolidation opportunities for your shareholders, just wondering if you would consider larger scale mergers or is that primarily built on similar to your prior history is Onyx is a recent example? Thanks.

Well, I said two things Terence. I said we are well-positioned to address ongoing changes in healthcare environment. And we expect there will continue the ongoing pressure from the healthcare environment and that we were also well-positioned to capitalize on consolidation for the benefit of our shareholders. So we have been consistent for some time in saying that that we have the financial capacity and we are interested in looking for deals that we think we can add value to in our areas of focus, so we are going to continue to do that. And as the other question implied we have felt for some time that there are pockets of excess capacity in the industry and we will look to see whether we can help create some value by being part of the consolidation around those.

Our next question comes from Michael Yee from Jefferies.

Thanks. Good afternoon. Thanks for the question. When I think about your 2018 guidance, I am sure that people are trying to get the details of that, but I am certainly trying to think that there is more uncertainties about beyond 2018, back in 2014 you gave a long-term strategic outlook and we delivered on that. But I think people are kind of worried about beyond 2018, what are the factors that you need to get through Bob or Dave to think about longer term guidance or maybe there is no need for longer term guidance, what are you thinking about? Thanks.

We will both take a shot at your question Mike. I think you are right, we felt there was a big disconnect in 2014. And we were confident about the long-term outlook. And we seem to be at a different place from our shareholders. So we found it’s helpful to try and address that disconnect with longer term guidance. And we are – as we said, I think each of us said we are confident about the long-term outlook for our business now and excited about what we see as long-term growth potential of the company. But we continue to talk to our shareholders and get, take their counsel about the benefit of thinking about the guidance question.

Our next question comes from Ronny Gal from Bernstein.

Good evening and thank you to my questions. Just a quick clarification for Tony and then a question for Sean, Tony you mentioned that you are not seeing impact from the copay accelerator. My understanding of that, you will not expect to see one until late in the second quarter when patient begin to hit the maximum out-of-pocket costs. Do I have this wrong or is there something that we should see earlier in the year? And then for Sean on the BCMA program, obviously you guys are putting some resources against it, how good does those by specifics have to be for you just taking forward in comparison to what we are always seeing from a CAR T program since 50% or 70% or maybe just give us the parameters you are looking forward to see if the products are good enough?

So Ronny, to answer your first part of your question, this is Tony, the accumulator programs would of course depend on what the individual patient’s deductible is. And as I said we are seeing and predicting minimal impact in the first quarter. And by definition I would therefore see minimal impact in the second as well by Amgen.

Yes. With respect to our BCMA BiTE programs, I think our view is that it’s going to be important for us to be able to demonstrate data. And these comparisons can be very complex, you know that the patient populations and the pretreatment of patients and things of this sort in the CAR T studies is often very different than this populations that we generate in our data set. So comparisons can be hard. But the bottom line is everyone that that we talk to in this field believes that if you can take a product like a BiTE off the shelf administers and get a similar degree of efficacy with potentially less of the safety risk and the enormous cost that can be associated with those safety risks in the hospital that BiTE would be a preferred modality. As I have said many times, I think there is a role for both of these modalities in the spectrum of care for even an individual patient in an oncology center.

And our next question comes from Umer Raffat from Evercore ISI.

Hi. Thanks so much for taking my questions. I wanted to ask three if I may, one on court decisions on from PCSK9 antibody patents that we thought last year, do you think they have any read across to the upcoming Enbrel district court litigation. Second on Sensipar and it seems like it’s a big swing factor in your 2018 guidance, my question is this, there was an IPR on one of your 2026 patents which was never instituted, so in that context, the question I have is how the generic entry possible or is that another way, are you aware of a non-infringing formulation. And then finally just a quick one, how much CGRP in your 2018 guidance? Thank you.

So where is the third question, we are trying to track you there.

CGRP in the 2018 guidance.

Okay. Umer, obviously we have ongoing litigation, I don’t think it’s appropriate to comment on your sensible question. I wouldn’t try to read across – I wouldn’t try to do the meta-analysis in intellectual property land across the two trials that you referenced. David do you want…?

We are obviously not going to give individual product guidance Umer at this point. We are excited about the product. We are excited about being first, so some dramatic population and the interest in having a new therapy that makes a big difference is high, but we are not going to give you individual product launch guidance at this point.

Okay.

Yes. Now let’s take the next question and maybe you can just remind our audience as to limit themselves to one question, since we are running over way over today.

Yes. Please limit yourselves to one question, ladies and gentlemen. And our next question does come from Geoffrey Meacham from Barclays.

Good afternoon guys. Thanks for the question. Bob, when you think about deals, how much of a priority is a return to top line growth versus just managing cash flow? And then very related, have you guys have explored – ever explored a split or some sort of segmentation of the business, just to separate the mature franchises from the early cycle products and pipeline? Thanks.

Okay. Geoff, our focus when we look at deals is on we are looking to deploy capital that we think we can only return for our shareholders from, so it’s very easy to find accretive deals, it’s very hard to find deals that are both accretive and add to the long-term return on capital for our shareholders. So we are going to continue to be disciplined. We know the six areas that we are interested in. And with respect your second question, again I think you know our track record in this regard. We have been very active and very focused on looking at all ways to create value for our shareholders and we will continue to do that.

And our next question comes from Eric Schmidt from Cowen and Company.

Okay. Just a question for Tony on Repatha, is I am doing the math right on Slide 23 would be the volume and sales gains that you had, it looks like there was a net 15% quarter-on-quarter decline in Repatha’s price, is that true and maybe you can provide some color what’s going on there? Thank you.

Yes. I actually couldn’t give you the details with that one right now. There was going to be a change in net price, but I don’t think that it was that high. We can come back to you guys and give you the details on that. I don’t have them with me.

Our next question comes from Alethea Young from Credit Suisse.

Great. Thanks for taking my question. One for Sean, are there additional Phase 2 programs would you consider for Tezepelumab, maybe anything in allergies or anything like that things?

Yes. Right now, I think the things we are kind of excited about in Phase 2 are AMG301 in migraine, which is we are in a strong leading position with that mechanism and hope to see that it will be either synergistic with CGRP or address patients that don’t respond to CGRP innovation. And we have also the aisle to new team program AMG592, I would highlight as a program that is moving into multiple Phase 2 autoimmune disorders. And that’s a mechanism as you may know where we are able to affect the population of Treg cells in a profound way with this engineered form of IL-2. The number of our BiTE programs are while they are in Phase 1 that the next study for them could in fact like it was for BLINCYTO, be registration enabling. So this Phase 1, 2, 3 line gets pretty blurred in the oncology area particularly. So I consider a lot of the molecules that are in the clinic including our MCL1 inhibitor to be potentially in a pre-registration study as the next study type of status.

And our next question comes from Cory Kasimov from JPMorgan.

Hey, good afternoon guys. Thanks for taking the question. Mine is on Repatha and I recognized it’s really recent, but I missed it a little more color. On the early feedbacks you are getting from the field on the drug post the inclusion of CBOT in the label and really more importantly how much of a difference you expect the label to make given that you guys make it sound like it’s still the payer access issue and payers have been aware of this data for a longer period of time? Thanks.

So, Tony here. Let me respond to that one, right. So, as I have said a couple of times, since launch, we have been able to talk to physicians about the product being able to lower LDL from a promotional perspective, which is probably 98% of our physicians who don’t attend large congresses, we have not been able to be in a position to talk about the real benefit of Repatha dramatically lowering LDL and thereby reducing the risk out of heart attack and stroke. Just to give you an idea of how fast this has moved, we got the approval on the Friday at about 11:35 a.m. By Tuesday, we had trained our entire team of managers on actual promotional material. By the Thursday, we trained the entire sales force. By Saturday, we trained 250 cardiologists, speakers and by the next week, they had completed just over 200 speaker programs with an average of about 15 people attending each speaker program. I have never seen such rapid uptake of a speaker program from an exit – and these are promotional speaker programs, where the cardiologists are talking specifically from the new label. The feedback from sales force to-date has been very positive, people not truly understanding the value of what the drug does. And when I look at the last two weeks average NBRxs, they are about 18%, 20% higher than the average of the 4 weeks for December. So, yes, it’s tough to read this early on, but we are seeing an uptick in new patients getting to getting approved. When I look at our payer or access environment, I see the commercial plans sort of January of 2017, are improving – have improved by about 8% in terms of the approvals. Our Part D coverage has improved by about 30%. So, we continue to work hard to make sure people understand the value of this drug. I think more and more cardiologists and physicians are putting forward appropriate patients and fighting for them to get on the drug.

And our next question comes from Salim Syed from Mizuho Securities.

Yes, hi. Thanks guys for taking my question. I just had one on Repatha. So, Eugene Braunwald spoke recently at The Medicines Company Investor Day and spoke specifically regarding primary prevention with inclisiran. I was curious what your thoughts were on that and if there is any impact to Repatha as it relates to that. And specifically also do you think inclisiran can be inserted between a statin and Repatha? Thank you.

Yes, hi, this is Sean. I will try to respond. I think obviously the kinds of populations that can be addressed with these agents are identical to the kind of populations that have been treated with statins over the years, we focused on a very high risk secondary prevention type population, although our label in both the U.S. and Europe is broader than that. And I think that it’s perfectly reasonable to study high-risk primary prevention patients. However, when you look at the situation we faced right now where it’s so difficult to get these drugs to patients who have experienced multiple events and have very high levels of LDL. I am not sure that’s the direction strategically that I would go if I were going to do another OUTCOMES trial, but it’s a reasonable thing to do. In terms of sequencing these therapies, if that all depends on the effect size that can be achieved, the safety profile of the novel mechanism of platform technology like siRNA in a very broad population. The bar is extremely high obviously from an efficacy safety perspective with Repatha.

And our next question comes from Ian Somaiya from BMO Capital Markets.

Thank you for taking my question. I had another one on Repatha. You have previously commented on maybe willingness to speak with payers or negotiated with payers on rebates and pricing once CVOT was in the label, I guess we have gotten to that point. And then separately once the guidelines reflected the recommendations, I am just curious where are we from a price rebate negotiation standpoint, how much room is there for us to see changes in sort of the pricing structure of the PCSK9 going forward?

So, it’s Tony. So as we have talked last year, we are in constant debate and discussion with payers and providers around the value of this drug, about the value-based pricing we have and the rebates that are being offered in the marketplace to ensure improved levels of access. So, we continue to work with the payers on an ongoing basis to ensure we get a good position on formulary that we have improved on the utilization management criteria with fundamentally just about every plan has improved on that one. Quite dramatically, we have with worked hard to ensure that we can assist patients where appropriate with co-pays that they are not able to afford or deductibles and unable to afford. And I don’t think that work is going to stop for a while as we go forward.

Next question comes from Andrew Peters from Deutsche Bank Equity Research.

Hi, thanks for taking my questions. So, I guess maybe to just switch gears a bit on a slightly different topic on the next-gen manufacturing side, just wanted to see how and if this new technology could potentially impact margins? And then more broadly as you talk about kind of the made by Amgen stamp for the biosimilar franchise, as you think about biosimilar production in general, how do you think Amgen is differentiated and from a margin perspective as you think about biosimilars, is that something that can fit into your pricing strategy on a competitive basis as well? Thank you.

We take this in two parts. David and I can respond to your question, Andrew. First, with respect to next-generation manufacturing, we have been talking about this as you know for some time. We are delighted – and we are excited that global regulators have approved our first of these facilities in Singapore. And when we committed to that first again talking about some years ago we were clear that both as a consequence of lower capital cost and the meaningfully lower operating costs we would expect over time a benefit to be reflected across the sales line and that will happen. And generally we have said and we still believe that manufacturing is a source of competitive advantage at Amgen. We have a track record of supplying every patient every time and we think when it comes in particular to biosimilars, the reliability of the safe supply and reliable supply of biosimilar medicines from Amgen will be a differentiator.

Yes, I guess I would add when we set out on the journey to get to our current margin structure we talked about a number of things that were contributing to us achieving that and certainly as Bob just talked about the first module of this next-gen manufacturing is now going to be helping us and this next module will continue to enable us to drive our competitiveness. I would caution against thinking that you should think there is a big step up from where we are operating right now, because I think we are operating in a very nice place in terms of our own competitiveness. And so think about driving continued cost down to enable us to then continue and increase our investments in particular in support of these new products that are going after very large patient population. So, we are thinking about continuously driving our cost base to allow us to invest heavily in support of growth for the business.

Skinner, as it’s nearing 6:30 on the East Coast, let’s take two more questions, please.

Absolutely. Our next question comes from Carter Gould from UBS Equities.

Good evening, guys. Thanks for the questions and squeezing me in. For Sean, follow-up in the earlier question given all the excitement, recently we have seen agents focused on inflammation go relatively broad in terms of indications that you are proceeding relatively narrowly despite central role in inflammation. Is that more because of the rest of your portfolio of assets, risk mitigation approach or should we expect the list of indications to expand?

Yes, it’s a good question. I mean, what I would say is that we believe that there is a particularly profound level of unmet need in asthma and for a agent that could be given to sort of all comers without having to parse patients by fairly complex criteria that are difficult to assess in the average clinicians office. So, I personally believe that that is an area of particular opportunity for biologic therapy like tezepelumab. I think that COPD, it represents another very substantial opportunity and because of the nature of this mechanism one could believe that it might be more likely to have efficacy in a setting like that. Then some of the other therapies that are directed more at the inflammatory cascades that downstream in asthma and there are other disease areas like atopic dermatitis that we continue to explore. And I am sure as with all of these products in the inflammation space once a product has a kind of an anchor core profitable indication, virtually every good idea and a variety if not so good ideas get explored by either companies or investigator-sponsored studies trying to find every possible nook and cranny where the product might work.

And our last question for the call comes from Kennen Mackay from RBC Capital Markets.

Hi, thanks for taking the question. One for Bob and David here. David, you mentioned there was now the balance sheet strength to really sort of grow the business and really supports some of that capital and Bob sort of building up what you mentioned surrounding a focus on transformative therapies like a moving micrometer like Aimovig, like Prolia, like Repatha, just wanted to get a perspective on what was out there that you really sort of view it as interesting? We have seen a lot of consolidation in the CAR T space, do you have some exposure there owning a couple of the Kite, now Gilead programs. Is there anything like in-gene therapy or gene editing or does that really not align with the positioning of sales and volume converging in the years ahead?

Yes, I guess, this is Meline. What I would comment on in terms of the opportunities out there we have been I think pretty clear that we are focused in particular on the six areas, where we have decided to establish a commercial presence. And so we tend to orient ourselves towards those opportunities and we are quite clear in the market that we want to see everything of any size that might be of interest to us across those areas and that Kennen maybe Sean would want to comment on technologies, but certainly….

Yes. No, I would just since you mentioned some of these emerging technology platforms like gene-editing for therapeutic purposes or gene therapy that the earlier these kind of things are, the more likely it is that we will look at them even if they aren’t in one of these six areas, because we felt there is a breakthrough opportunity emerging and we could bring to bear our scientific and manufacturing commercial capabilities and so on. We have shown that will move on those kind of things.

Alright. Well, I think Kennen, Sean and David did a good job answering the question, so rather than add to it, let me just again thank you all forbearance and call that went a little longer than usual from us. But just to wrap up, we are heading into 2018 as I think you can tell from our remarks. We are excited we think we are operating the business well. We have strong products. We have an attractive pipeline that’s advancing rapidly. Strategically, we think we are well-positioned and focused on delivering growth and value for our shareholders. So, we look forward to reconvening with all of you in April and see how we do through the first quarter. Thank you.

And I would just like to add my gratitude for your patience. We had a lot of topics to cover today of course between myself and my team we’ll be standing by for several hours. So, if you have any other questions, feel free to call us. Thanks again.

This does conclude today’s call. You may now disconnect. Thank you for your participation.