Emily Field: Hi. Thank you for taking my question. I had another question on Kisqali. I believe you discussed earlier today about developing potential partner assets for Kisqali. And I was just wondering if you could give any insights just into how you’re thinking about that. Obviously, the oral third class in combination with CDK4/6 has been a focus of some competitors. So would that be an idea, or just any insights you can provide there would be helpful. Thank you.
Vas Narasimhan: Yes. Thanks, Emily. I think my comments earlier today were mostly referring to our internal programs to develop additional mechanisms that we think would be relevant for the breast cancer setting. So that would include, of course, the CDK2 class, perhaps a stronger CDK4, CDK 2/4. So we have a number of projects ongoing within the research unit within NIBR to look at additional oral agents that can target the various elements of the cyclin-dependent kinase cascades. So that’s, I think, a big area of focus. We also continue to evaluate in-house if there is a role for any of our radioligand therapies, as well as our own in-house ADC programs as well. It is a priority for us to build a deeper breast cancer portfolio behind Kisqali, but it’s all very early.
And I think it’s something we want to address now given the probably a very strong decade we expect to see with Kisqali in the position we’ll build in breast cancer to make sure we have a steady portfolio. So I think more to come on how we progress those internal assets as we get more preclinical than hopefully clinical data. Next question, operator?
Operator: Thank you. Your next question comes from the line of Tim Anderson, Wolfe Research. Please, go ahead. Your line is open.
Tim Anderson: Thank you. On NATALEE, we obviously don’t have the data, but in high-risk patients on side-by-side analysis, what can you say for how it compares to Lilly’s Verzenio even just a qualitative description efficacy and tolerability? And then you mentioned in intermediate patients and especially no negative it might be more challenging to drive uptake. And I’m wondering why is that focused primarily on tolerability and NATALEE use a lower dose, of course, to mitigate tolerability what can you say about the tolerability in NATALEE at that lower dose in general? Thank you.
Vas Narasimhan: Yes. Thanks Tim. So, I won’t repeat what I said to Steve. Obviously, we don’t want to, in any way, impact our ability to present and publish the data set in the upcoming periods. So, not much more I can say the data is consistent. We believe clinically compelling and we said that it’s clinically meaningful and I think it’s been well described in all of your reports as to what it requires to be clinically meaningful. In fact, I probably can’t characterize it any further than what I’ve already said. Now, with respect to node-negative patients that’s not related to our tolerability profile. That’s more just clinical practice where we need to now educate physicians that there — it remains risk for recurrence in no negative patients and that those patients also would benefit from CDK4/6 on top of endocrine therapy.
So, it’s much more of a, I think, a patient — physician education and changing clinical practice nothing to do with the safety profile that we’ve seen. As you noted, we took it down to 400 — we took sale down to 400 milligrams based on our belief that this would give us a better safety profile and there has been a Phase 2 study, the AMELI study, which looked at that clinical profile to show you, at least give you an indication of how the drug performs at the 400-milligram dose level. Next question, operator?
Operator: Thank you. Your next question comes from the line of Kerry Holford, Berenberg. Please go ahead, your line is open.
Kerry Holford: Thank you. A question please on business development. But I would hear your latest thoughts here? What is your appetite for external R&D opportunities either in the form of partnerships, acquisitions. And I guess Novartis has been reasonably quiet on PT over the past year or so. And clearly, many of your peers picking up the pace here now. Has Novartis tried and failed because some deals in this recent planning spree? Yes, I’d just love to hear your latest thoughts with regard to appetite or the size of deal tertiary focus. Thank you.
Vas Narasimhan: Yes. Thanks Kerry. There’s no change in our strategic thinking on how we approach BD and M&A. I would agree we’ve been relatively quiet over the last year, but we’ve also had a major transformation program ongoing and also focused on accelerating our internal assets. And I think that’s borne fruit with the positive readouts of Pluvicto, iptacopan, Kisqali, as well as the additional assets I outlined on the call. But we are very actively looking across a range of both partnering, licensing and of course, bolt-on M&A. And we continue to focus primarily in the sub-$5 billion range, as we’ve outlined. We, of course, look at all deals and deal sizes given our strength of our balance sheet, but we want to stay extremely financially disciplined.
I mean I think 1 thing that’s a priority for us as a management team, if you look at the signs, is it compelling strategically, but importantly, is there a clear and compelling case for value creation given the premiums that are paid. And we don’t want to get into the situation where we pay out so much value that in the end, we’re not able to generate value for the company or our shareholders. So, that’s I think, a high priority on our mind as we look at the external environment. So we hope to, of course, execute some additional deals in our core therapeutic areas over the coming year. But I think given our positive readouts, we also don’t feel pressured to do that. We’ll do it if it makes sense scientifically and strategically. Next question, operator?
Operator: Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please, go ahead. Your line is open.
Peter Welford: Hi. Thanks. Just a sort of broad question in terms of — we’ve obviously been very strong commercial performance during the first quarter that I think surpass, certainly, most people’s expectations, but at the same time, we’re obviously undergoing a pretty big strategic review and also obviously a lot of changes in the commercial organization. So just curious, is it that there hasn’t really been an impact to or any disruption from this? And I wonder if you could sort of update us how far you are through now sort of exiting in terms of the headcount reductions and some of the changes that have done with that review. And therefore, should we, in fact, anticipate that actually some of the commercial focus and performance could improve during the rest of the year, or are we just, I guess, just wrong in assuming that there was any disruption in the first place, and this has all been managed.
And in fact, you’ve seen with the greater focus actually already the benefits of the change in the structure that we see with the company.
Vas Narasimhan: Yes. Thanks, Peter, and I appreciate the question. So to be clear, we believe the performance we’re seeing in Q1 is a result of the focused strategy we implemented over the course of last year, which is largely executed other than a few countries in Europe. It’s largely in place. And there were a few key drivers. One, the simplification of the organizational structure as well as the focus on the United States as a key market. Second, identifying the nine key brands and putting all — most of our M&S focus on those nine key brands to drive outstanding growth, which also created a higher degree of organizational focus on those brands. I think also ensuring that all of the incentives and all of the various elements are focused on driving the performance of those brands as a pure-play innovative medicine company. I believe all of that has led to, I think, a very strong performance in Q1, which we expect to continue. But Harry, anything you’d want to add?
Harry Kirsch: I think you said it all. And I think what people always were a bit concerned when we did the transformation for growth program, which probably many people understood there’s only a restructuring, it’s actually not the case, was about focus. Yes, there was also, given the internal merger mainly between pharma and onco, restructuring elements. But in the end, that led to more focus. And, of course, still, we are working on some things fine tuning, but I think that focus on the commercial side as well as on the key assets has led to a lot of clarity, and therefore, good uptake that we see. And as Vas mentioned, we do not expect that to slow down much.
Vas Narasimhan: And one of the last element, the efficiency and productivity you’re seeing, the leverage, it’s in part because of the streamlining of the organization from a headcount, but also that focus leads to much more efficient resource allocation and the elimination of unnecessary spend in many areas. And I think that additional productivity is what you’re seeing flow through the pipeline when you look at the core operating income performance and the margin expansion within the Innovative Medicines business. Thank you, Peter. Next question, operator?
Operator: Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please, go ahead. Your line is open.
Seamus Fernandez: Hello. Great. Thanks for the question. So just hoping that we could get a little bit of color on one of your key assets, your BTK for CSU and which is studying in MS as well. Vas, maybe if you could just tell us how confident you are that your asset can avoid the liver safety pitfalls that have plagued this class of agents in MS at a minimum, have we seen enough patients exposures to kind of move past that seemingly 70-day time point that FDA has been raising concerns about against two other assets? Thanks so much.
Vas Narasimhan: Yes. Thanks Seamus. So, we have the detailed monitoring in place, which FDA has asked for. We have 1,600 patients exposed across dose levels. We have not seen to deliver toxicity or liver signals that others have seen, I think coming back to the science, again, BTK is not expressed in the liver. Importantly, patients who genetically don’t express BTK also don’t have liver abnormalities. And from what everything we could see in our preclinical work; the structure of our molecule didn’t generate any metabolites or other off-target liver effects within preclinical models. So, we believe this is related to the structures of the medicines, not actually the BTK as a target. And our hope is we can demonstrate that through the CSU two ongoing studies and the two MS studies.
But ultimately, this will, of course, be data-driven. But I believe that if we can demonstrate that there’s strong mechanistic reasons why there should not be class labeling and really specific to the individual molecules. And I believe in prior slides, we’ve — my right collection is we showed the structures of the four BTK inhibitors and prior R&D days. And you would notice that our BTK inhibitor has a very unique structure relative to the other. Our hope is that it can drive a better safety profile, but we’ll ultimately see based on the clinical data that we generate. Thanks Seamus. Next question, operator?
Operator: Thank you. Your next question comes from the line of Eric Le Berrigaud from Stifel. Please go ahead, your line is open.
