Welcome back to the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I'm one of the Biotech Analysts here at the bank. Our next presenting company is argenx. Sitting up here on stage with me is the new CEO, Karen Massey. Congratulations, Karen, on the recent promotion. We're gonna be spending time, I think, focused a little bit on the pipeline because there's a lot going on. Maybe we can start off by talking about what your vision is for the company now that you're helming all the major decisions, and how you think about strategy going forward. Yeah. Thank you so much. It's great to be here and at a great conference. Appreciate the opportunity. I mean, I would say we have laid out our growth strategy for argenx, and that's Vision 2030. That gets us to, you know, 50,000 patients by the end of the decade, 10 labeled indications, and five molecules in late-stage development. I would say we've had that plan in place, and we continue to execute on that plan. As I think about my strategy and where we wanna take argenx over the decade even beyond that, you know, the vision for argenx has always been to be an immunology innovation company. The first leg of that was building VYVGART and establishing VYVGART, and we've and I think we've demonstrated the ability to do that. We wanna continue that leadership in FcRn, the first leg of the next part of the strategy is extending our FcRn leadership for decades to come. We have two next generation FcRns, and we're investing in an oral. That's a big part of the vision for the company. The second part is how do we also build a non-FcRn portfolio that is as meaningfully contributing to argenx as the FcRn portfolio? That's really all about hopefully what we can talk about today. Yeah. The pipeline beyond VYVGART. Okay. Since you mentioned them, let's maybe spend a couple minutes on those next generation assets that you're looking at for the gMG and CIDP indications, as well as the oral FcRn. Until recently you were heading up the commercial organization, so you can talk to this in real time. What do you think theoretically would be the benefit of, let's say, having an oral FcRn versus the various different methods that you have of delivery now, everything from IV to Hytrulo to pre-filled syringe? Yeah. Our strategy from the beginning with VYVGART and we'll continue with FcRn is that we want to transform these diseases that have significant unmet need. With VYVGART, we believe we can deliver in gMG, what we're seeing we deliver also in CIDP, is really strong efficacy, but importantly safety across broad indications, and then as you said, the convenience for patients. We launched with infusion, we brought subcutaneous, and then pre-filled syringe. That, taking that playbook across all of the indications allows us to start to think about patients being treated earlier in their disease. We're really expanding these indications, expanding these markets. It's a big part of our strategy and will be a big part of our strategy for future indications. The oral helps us to do that, so, as well as our next gen. 213, one of the next gen FcRns, moves to every four-week dosing, so it's a step forward in convenience. Potentially with the oral, you can imagine that's another step forward in convenience, but still maintaining that efficacy and safety profile of FcRn. You think about FcRn, from an MOA, we know that there are many, many indications beyond what we already have approved in MG, CIDP, and ITP. We think by having multiple next generation options, we have the opportunity, yes, to provide more convenience in the indications that we'll already be approved in, but we can also start to continue to push the boundaries of the biology of FcRn and even further expand those indications beyond. Yeah, it seems though that you've done a good job of moving patients into frontline. I remember, I think, our first version of the model when the drug first launched had a much lower peak sales penetration. I think part of the reason for the constant revision upward is that the company has been able to move higher in the lines of therapy. As you think about, you know, in a world where, let's say, auto-injectors are much more commonly used because of, let's say, the GLP-1s, the company is developing an auto-injector pen. As you think about the incremental benefit from moving to a pre-filled syringe to an auto-injector to an oral, how much of a meaningful impact do you think you're gonna be seeing with each of those iterations? I mean, I think for each of these innovations, we do see it as a step forward and driving the majority of our growth. I mean, if you think about the step that we took, going from subcutaneous to pre-filled syringe, and as you said, the continually increasing the revenue and the projections, that's being driven by pre-filled syringe. Because what you see is that we've been able to expand the prescriber base significantly beyond where we thought it would be when we launched VYVGART, significantly expand the addressable market because of how the simplicity of being able to use a pre-filled syringe at home rather than having to go into for an infusion. It is a step forward. I think the auto-injector is less of a step change because, you know, the big shift was going from HCP-administered to patient-administered with the pre-filled syringe. The auto-injector will still, assuming approval and we get through the regulatory framework, will still be patient-administered. It helps because it's easier to handle. It helps because if patients are needle-phobic, but it won't be as much of a step forward. It is, it will continue to be a differentiator for us. You can imagine the oral, as you say, I mean, we'll see how it plays out with the GLP-1s. I think you can imagine that going from frontier, our next growth opportunity, and we see the addressable market as around 70,000 patients. To put that in context, that's similar to where we see the gMG market, addressable market right now. You can think of it as a gMG-like opportunity from that perspective. We designed a clinical trial that allows us to explore three of the different subtypes. We have IMNM, we have DM, dermatomyositis, and then PM. From my perspective, you know, each of the subtypes has a clear biology rationale, and we can go through what that is. I would say we're very disciplined at argenx at always starting with the biology and the science. We have a clear biology rationale for each. We designed a clinical trial that is very thoughtful in that it allows us to look at the overall population, but also the subsets, so that we can really explore, and we have multiple paths to success depending on the data that we see. In terms of the value driver, from my perspective, and certainly as a commercial person, I'm really excited about IMNM, and that's what we've been talking about. As we've been doing our homework to really understand the commercial opportunity, what you see in IMNM, there's nothing else approved. This is a completely white space indication. We think there's around 20,000 patients, so that's bigger than the TAM for CIDP. It's bigger than the addressable market when we launched MG. You'll remember that with myositis, it's weekly dosing, so CIDP-like dosing. Being able to go to a space where there is a huge unmet need, there is no competition, including no competition on the horizon, and there's also quite a bit of overlap in IMNM. If you think about the treating physicians, it's more neurology and rheumatology. Obviously we have strength in rheumatology. The overall opportunity is a big value driver for us. We have a lot of belief in the biology for all of the different subtypes. If you had to ask me to prioritize and where I'm most excited about, because of the patient unmet need, I think IMNM's gonna be really exciting. Okay. To say that you're most excited about is not the same thing as less bullish about DM, correct? That's exactly right. I would not say that. I mean, I think in DM, it's just a different dynamic. I'm also excited about the overall myositis opportunity. In DM, we have a strong biology rationale. The difference from a commercial perspective is just the dynamics. It's more heterogeneous. We know that there's more at play in driving the disease, and there is more competition. It's a larger patient population. We think that that's a 40,000 TAM. Look, I think that's also an exciting opportunity. It's another one where it's bigger than the CIDP TAM at launch. Yeah, it's certainly a big value driver. There's a good biology rationale. I look forward to seeing actually the data play out for each of the different subtypes because I think they all each have their own unique opportunity. When it comes time to showing the data and the press release, like, give us a sense of what level of granularity we're expected to see? Yeah. I mean, at argenx and the style that we have is that we like to be transparent, and we want to share as much data as possible. This is our first entry into rheumatology, and some of the medical congresses and conferences with rheumatology are a little more strict, and we want to make sure that we have the opportunity to make a big splash with this data because when it reads out. We'll definitely share, the, you know, top line, and as much detail on the subtypes as we can, we'll just have to, once we see the data, we'll have to determine what the right path forward is there. We like to be able to give transparency, and we'll be able to give a good sense of where we think we're going with this indication. Okay. Now, because of the different prevalences of the three different subtypes, how should we be thinking about the balance of each of the subtypes that finally enrolled into the study? Yeah. The way that we designed the study, if we maybe just take a step back, it's a seamless phase II, phase III. When we did not cap any of the subtypes, we let the enrollment run both for phase II and also for phase III. You can imagine that it's not an equal distribution across all of the different subtypes. It enrolled based on, I would say, unmet need, as well as the disease characteristics. We haven't shared the underlying sort of the number of patients across subtypes, but we'll be able to do that at, I would say, at top line. Okay. There isn't a concern internally that you enrolled too few people in one of the subtypes and therefore it wouldn't be, like, strong enough to support an application? No, I mean, the trial, it's a basket design. We're able to look at, from a statistical analysis plan perspective, the total population as well as the subtypes. Okay. One other common question we're getting lately is, what are your discussions with FDA on the subtypes? Like, is there flexibility to look at the data and then decide if you know, want to apply for a full label for all three or a subset of them? Yeah, I mean, as always, we're engaged very closely with the FDA, especially on such an important study. As always, it will come down to let the data speak. It'll be a review decision. I think we have multiple paths forward. Okay. Then in terms of a commercial organization, assuming that you move forward, in some capacity with this indication, what changes would you need to make, if any, to the field force? Yeah, this is our, potentially, our first step into rheumatology. We with this step, and then of course we have on the horizon Sjögren's, another exciting potential rheumatology indication. We do start to think about expansion so that we can cover more of the rheumatology. It's a different footprint. Also potentially different, support services for patients so that you can compete in rheumatology versus neurology. We can leverage a lot of the commercial infrastructure that we have, with, let's say, some expansion so that we can make sure to have the reach that is needed to succeed. Okay. If this becomes, let's say, another potential vertical for the company, you just mentioned Sjögren's, so maybe let's talk about that. You've got a study underway which I believe reads out in sometime in 2027. You wouldn't be alone in looking at Sjögren's. Maybe mechanistically can you just talk us through why it made sense to invest the, you know, the money and the time into looking into this? Yeah. certainly. I mean, I think one sort of takeaway that I think about with Sjögren's is, and some of these rheumatology indications is there was always the autoantibodies were generally known, but it was always thought that they were more of a bystander or an outcome of the disease. I think what the real shift has been is like, is that no, in these in these rheumatology indications, actually these IgGs could be driving the disease, and I think that's what we've seen in Sjögren's. The way we went about Sjögren's is the same sort of disciplined approach that we go about to choose any indication, look at the biology, and that's what we can look at. Look at the development path, and then what is the unmet need. The way our development plan, I think, was quite innovative and agile and reflects the argenx way. Our, a competitor, did a big phase II study, so we were able to leverage the data from that competitor in FcRn that really demonstrated that the biology rationale was there. What we did was a small, very focused, phase II study where we went deep to really understand the drivers of the disease, and really understand the how to run a clinical trial so that we were able to execute, and I would say leapfrog ahead. As you say, we have data coming out next year and it's certainly an exciting indication. In terms of the third category that we always look at, Sjögren's, I mean, it's a big patient population. 300,000 patients. What we see is, especially in the sort of around 100,000 more severe patients, there's a real serious unmet need and patient need. It goes beyond just dry eyes. There's systemic manifestations of the disease, and that's where we think we'll have the biggest benefit. Okay. The investments that you would theoretically be making now into rheumatology would be for all indications, right? That's right. That's right. That's right. With the targeted physicians, we've talked about the overlapping, let's say, of neurologists who treat CIDP and gMG. When you make the decision into moving into various rheumatology indications, is it, is it too simplistic to say that any rheumatology indication would be something that the community physician of community rheumatologist would be treating or are there specializations within that? I think it will. We still need to do the workup. It'll be more specialized than that. Even when you look at neurology, when, you know, we have over 5,000 neurologists that are writing VYVGART, and so very a lot of breadth. That's not all of neurology. You know, there are some neurologists that mostly treat migraine. As an example, we're not targeting them. It'll be the same in rheumatology. What we'll be able to do once we have the data and once we, in, as part of our launch preparation, is really target where do we need to focus our energy to get the best return on investment. Okay. Let's maybe move on to MMN, which is another pivotal study that's gonna read out on the fourth quarter, I believe. That's right. It's gonna be your first foray of a late-stage study that's not efgartigimod. It's gonna be with empa. Maybe talk to us about, you know, the excitement that you guys have internally about this particular program because it could open the door to many other indications for this different drug. Yeah, absolutely. We're very excited about empasiprubart. You know, when I talked earlier about the long-term strategy for the company, it is to become a leader in immunology. This is our next medicine, C2 as the target and MMN as the first indication. When you look at MMN, I think it's a very argenx-like indication. Very clear biology rationale for C2 with MMN. You know, a really strong development path that we can unpack a little bit more in terms of a head-to-head versus IVIg based on very strong phase II data. Importantly, a very high unmet need. I mean, it's another place that there hasn't been innovation for decades in MMN. It's a progressive disease. IVIg is the only option, and patients continue to progress even with very high doses of IVIg. This is a great first indication, but empasiprubart is a pipeline in a product, so we see more indications coming and, you know, one of them that we've announced is obviously CIDP, but there's even more beyond that. Can you maybe just talk to us about the trial design for MMN and what we should be looking at in particular? Yeah. Absolutely. The trial design is a head-to-head versus IVIg. And the reason for that is because we have such confidence based on the phase II data that we can design a phase III study, non-inferiority, versus IVIg. The primary, it's a 24-week endpoint, and the primary endpoint is actually on grip strength. And that's important because what we've learned in CIDP is that grip strength is a really meaningful endpoint to prescribers and to patients, mostly because it's very easy to understand. I mean, if you're losing the ability, you know, losing nerve function and you can't, you know, pick up your coffee cup in the morning, if you can, you can understand as a patient, as a layperson, "Oh, my grip strength is improving." What we actually saw in the phase II study is grip strength was able to improve over time, not just slowing the decline. It's an important endpoint that's meaningful to doctors, understandable to patients, and I think really shows functional improvement potential for empasiprubart. Then what about quality of life? Like, maybe talk to us about, you know, what patients feel they need to have that they don't have right now? Yeah, I mean, this is another a indication where, at the very simplest level, a patient's immune system is attacking their nervous system. They lose the ability to use their hands to walk, to You know, they lose strength. From a quality-of-life perspective, grip strength is one of the, is a good endpoint. We also have an endpoint MMN-RODS, which is more holistically looking at various quality-of-life measures to be able to assess the impact on the disease. One of the most important data points from phase II that we saw was when you asked patients to compare how they felt on empasiprubart versus at their peak on IVIg, nine out of 10 patients said they felt better on empasiprubart. There's a lot of secondary endpoints, also more of those qualitative, quality-of-life outcomes. Which of those quality-of-life measures are you looking at or will you be looking at? We have a very long list of secondary endpoints that look at physician rated quality of life, patient rated quality of life, MMN-RODS as I say. It's a deep study. Okay. Maybe just one more question on mechanism C2 versus, let's say, C1. On the complement cascade, you know, some might think of is, are those really that different from each other? You know, on the work that argenx has done, maybe explain why C2 might make more sense. Yeah, absolutely. I mean, whenever we look at and identify targets for argenx, we always like to work with world-leading experts to really understand what's the best target from an efficacy and safety perspective that's going to be able to open up this pipeline in a product. For us, C2 is that in the complement cascade. Why is that? First of all, it's at the intersection between the classic and the lectin pathway. You're able to capture indications that are driven by both of those pathways while leaving the alternative pathway free, if you will, which has an important safety benefit. You can still mount an immune response to a bacterial infection. There's also the other reason for C2, in addition to having the indications opened up for the classic and lectin pathway, is that we think that it's the safest place to intervene in that complement cascade. We've seen that with the strong safety and the data that we've generated in phase II as well. Yeah. You've focused in on safety, which was gonna be my next question. I guess, in particular, is there any reason to think baseline assumption that, you know, you know, any kind of black box warning would be part of what a label could theoretically look like? Yeah, I mean, with complement inhibitors, obviously, there's always the consideration of a black box warning around vaccinations and consideration. In our clinical trials, yes, we do run the clinical trials with vaccination, but we're also working very hard in developing data packages alongside that to demonstrate that you can still mount that immune response and so that we can start to work towards and I think we're relatively confident that we should be able to get to a good place in terms of the vaccination requirement. Okay. Same question as before, what to expect at the top line level disclosure? Yeah, I mean, here again, we will be as transparent as we can. We'll balance that need for making sure that we can, especially in this indication. I mean, we are first in class in this indication, first innovation in decades. You can imagine how much excitement there will be in the medical community. We wanna make sure that we get a good, are able to have a good presence at Congress as well as share the top line results when we get them. We'll be as transparent as we can. Okay. What is the specialty that treats MMN? It's neurology. It's also a strong overlap with our current footprint. Okay. Maybe in the couple of minutes we have left, I did wanna touch upon IgAN because you will be beginning a program for 121. I think some people find it interesting that the company wants to invest time and money into this, just considering the view that it's becoming a quickly crowded space given the APRIL and APRIL/BAFFs that have launched, will be launching. Just quickly, mechanistically, why do you think there is still room for a new entrant like this? Yeah, absolutely. Two things. One, when we looked at MG, whenever it was, and I remember I was like, when others looked at MG, they also felt like it was a competitive space and there wasn't enough room, and look how much that's transformed. I think there's plenty of space in IgAN if we do the same thing as we have in MG, which is provide transformative outcomes. I think we have the opportunity to do that because our IgA sweeper, what it's differentiated because it drops IgAs. It targets only IgA, it drops them rapidly and sustained. If you think of kind of this idea of time is nephron, we think we can provide more rapid efficacy, and that's gonna be important for these patients. What about on safety? There's some questions about risk of infection for the APRIL/BAFFs. Just theoretically, what do you think that profile could look like for 121? Yeah, I mean, we'll have to see it play out. I mean, you have people that are walking around, and from a genetic perspective, don't have IgA and there's no risk infection. We think actually targeting IgA is gonna actually produce a good safety profile and will allow us to compete there. Okay. What is the status of the program? It's enrolling? It's, nope, we're starting the program shortly. Okay. Not necessarily data this year then? No data this year. Okay. No. Yep. Okay, great. With that, we're just about out of time. I'll say thank you for making the trip all the way to Las Vegas. I know you travel a lot, so I'm not even sure where you might have traveled from to get here, but thank you. Thanks everybody for sitting and listening to the session. Great. Thank you. [Break] For the next company presentation at the BofA Annual Healthcare Conference. My name is Jason Gerberry. I cover Pharma and Biotech at BofA, and I'm pleased to be moderating our next fireside discussion with Johnson & Johnson and John Reed, Executive Vice President, Pharma R&D. John, thanks so much for joining us. Yeah, it's great to be here. Looking forward to the chat. Well, look, you, as a company have had a lot of momentum, I think, in the R&D organization. You know, looking forward to just maybe at a high level framing first, where you're at in terms of the pipeline and BD consideration versus in-house developed. You guys have shown a propensity, obviously, to have success on both fronts, and I imagine you're always opportunistically looking for best science, right? Exactly. We get that dynamic. You know, are there priority areas within the portfolio that from your seat you're looking at saying, "Hey, we maybe want to address and augment through external innovation"? I know you probably don't wanna tell your hand too much to the external community, but maybe if you can just frame that dynamic first, 'cause there's been so much activity with your pharma peers on the M&A front that it's topical. Yep. No, we're, first I would say that, you know, we really have become a more focused company in the last few years. Oncology, immunology, and neuroscience are really the foundational elements. We do a little bit here and there in some other areas, but those are the key areas. Our strategy for some time has really been one of trying to roughly have half of our products coming from internal discovery and internal invention and half through BD M&A, and we tend to track pretty closely. I think right now about 60% of the development stage portfolio actually happens to be internally derived, but even many of those started with some collaboration or something. It's a mixed picture like that. We, you know, we're both interested in products and sometimes platforms. You know, maybe a good example of a recent one that kind of checked both those boxes was towards the end of last year, we acquired a small company called Halda that had a lead candidate, an oral for prostate cancer. J&J's number one in prostate cancer, so that's a good fit for us. That is based on a technology called RIPTAC that uses these cleverly designed bidentate oral small molecules that will grab onto a target of interest, in this case it was the androgen receptor, and then also grab some essential protein and sequester it so the cell can't have it, and without it, the cell dies. It's a hold and kill mechanism. We're able to bring in, essentially a phase III-ready asset. On top of that, got this nifty chemistry platform with several other projects in various stages of progression that we're excited about taking across a number of areas in oncology, but also in some other therapeutic areas too. It's a nice example, I think. Okay. I feel like every year at our conference there's a little bit of drama with FDA, and there's been some recent headlines. I'm not sure the net outcome, what that's going to look like. If you can maybe frame how productive the interactions have been with the agency, with a lot of change and potentially more change coming. Yeah. I've had the opportunity to interact quite a bit with Makary and the leadership there at the agency. You know, they recognize that it's become progressively more difficult to do clinical development in this country compared to some other locations, and that we need to speed some elements of that and rethink some elements of that and with a mindset to what would it take to make America a more attractive place to see studies conducted. I certainly applaud the agency for many of the things they're trying to do to rethink the requirements for INDs, the pace with which INDs can be approved in this country and a number of other dimensions too. I mean, you saw that they, you know, they also now provided some fresh thinking about how many clinical trials do you actually need to get an approval and some other things too. I think there's a lot of good opportunity there and good intention. The commissioner has invited members of the pharma companies community from time to time, you know, to even submit white papers with our suggestions so that, you know, he's not trying to read our minds. To understand what are the things that might make it easier for us to do manufacturing in this country or do studies in this country, et cetera, and then, you know, he and his team can take it under advisement. I feel there's been a good, you know, goodwill there to work collaboratively. Obviously, there were big impacts on the agency with the DOGE effort, et cetera, that, you know, has created, I think, some workload issues for the agency. The more I interact with the staff there, the more I appreciate just how hardworking they are. Yeah. You know, they turn these applications around, and they've got a big, full plate, so appreciative for their service. Got it. Okay. Maybe we'll switch gears to some of the therapeutic areas. Immunology is one of the core TAs for you guys as a company. Let's start with ICOTYDE, which the company, I would argue, maybe a more bullish tone coming out of Q1, just on the revenue opportunity, and we have validated set of indications for where ICOTYDE will have an opportunity in psoriasis is the nearer term opportunity. I guess I wonder, first, you know, it's a drug with lower bioavailability. You know, as we think about in UC, you're still approximating the efficacy of the biologics, right? There's perhaps some underpinnings there in terms of receptors in the gut that might make it feasible for you to achieve that level of efficacy. Is it realistic to think that you could push dose in psoriasis to narrow that efficacy gap that you see with IL-23 biologics? I guess that's one question. How confident are you in kinda your dosing strategy broadly in IBD? Right. Right. Yeah, several dimensions to the, to the question. First, just to remind the audience, if you don't know that ICOTYDE was just approved this year for psoriasis. It's a oral therapy that targets the IL-23 receptor, a targeted oral peptide. What we've been seeing is biologics like efficacy combined with a very pristine safety profile and the convenience of a once-a-day. The reason that we're excited about it is because if you look at the patient populations in this country and elsewhere that have an autoimmune disease, they're eligible for a biologic, only 20%-30% of them are actually taking one. Many people just do not wanna commit to a lifelong of injections with a biologic. This offers an oral option with efficacy on par with biologics. You know, in psoriasis, for example, if you look at the data that we generated, we have five out of five positive phase III studies published in the New England Journal, published in The Lancet head-to-head against the leading TYK2 inhibitor. In psoriasis, one out of every two patients had completely clear skin. That's the IGA 0. That's right on par with the best biologics. We were able to get that done with a 200 mg dose. You know, as you know, the health authorities make us do dose ranging because they want us to use the minimally effective dose. They don't want us to push doses any more than we have to in order to reduce risks of some safety event. We do dose ranging in all our indications. We'll see where we land in the end with the inflammatory bowel disease, as you said, because it's orally absorbed. You know, maybe you'll get higher local concentrations in the gut. You know, we'll do the studies, and we'll land on whatever the minimally effective dose is for those indications. We feel quite confident because the IL-23 class is validated there. We'll have to see if we get that kind of on par with biologics type of efficacy. I'd say one other thing too that we're really happy, since you mentioned FDA, is with the adjudication of the label with them, we were able to get a very clean label. There's no laboratory monitoring required. There's not a requirement to do TB testing up front, unlike many other biologics. It's really easy for the dermatologist to write the script and feel confident around the safety of ICOTYDE. How quickly do you think old ways change, right? These doctors are almost preconditioned to look for these things, right? You know, what some doctors have said to us is, well, like, maybe there's a psychological predisposition to doing these things still, right? Is that at all a factor, you know, when you guys think about how these dynamics change with Otezla, right, which was the last successful oral therapy in psoriasis, commercially speaking? It was kind of an easy ride, right, for community dermatologists, and it seems like at least in psoriasis, right, the idea is to kind of expand the category. Yeah. I think the clean label really helps in that regard so that, you know, you don't have to do a bunch of laboratory testing or wait for a TB test to come back or things like that. As we know in medical practice in the community, it does take some time for patient education, et cetera, but the interactions we've had, and that's with the KOLs, you know, which maybe are not always representative of your, you know, your average dermatologist, but they're really excited because what they talk about is they have patients with psoriasis. They're trying to manage it with topicals, but it's a systemic disease really. So at some point, they realize this is just not cutting it, historically, the dermatologist would say, "Okay, I think it's time for you to go on an injectable." What they would describe to us is the patients would go, "L et me think about that. I'll get back to you." They don't come back. With this way, you know, you write a script, they start taking a pill once a day. It's just an easy transition from the patient to get from trying to manage their disease with topicals to now on a systemic therapy. You know, we're excited. We think it's gonna be a real market expander. Yep. Okay. With IBD, this is a big component, I think, of the peak sales outlook for ICOTYDE. I guess what I wonder is, we haven't seen a really great commercially successful oral outside of maybe mesalamine. Right. Which had a lot of volume utilization. If you listen to how AbbVie frames it, and they're looking at I and I combinations, you had the recent DUET data. You wanna go with your biggest gun early, avoid things like fistulas, you know, later downstream in the patient. I guess I wonder where ICOTYDE fits in all that, right? Where you and competitors are looking at these combination products. You've got biologics that work really well there. How do you think about the oral opportunity in IBD? Yeah. I think, again, there are a lot of a large percentage of patients that are eligible for a biologic, but not taking one in IBD as well. I think there must be You know, there's clearly a large patient population there that would like an alternative. I think the key for us will be the efficacy data that we deliver in the studies. Is it, you know, right there on par with the biologics? That gives patients and healthcare providers another option to consider. You mentioned DUET. For those who don't know, that's some studies we did with patients who are on the more severe refractory end of the scale where a monotherapy is not getting the job done for them. There we've created a co-formulation of our TNF inhibitor and our IL-23 inhibitor, two antibodies co-formulated at the right doses so that a single injection, the patient gets both of those. Had seen that in patients who have failed two or more prior lines, that this really then started to get into a range of efficacy is essentially double what you saw with the monotherapies in that patient population where monotherapy is just not getting the job done for them. It won't be a one-size-fits-all. I think, you know, with these patients, some will gravitate to an oral, others injectables, some may need more than one drug depending on their disease. Unfortunately, with IBD, as you know, fewer than half of patients achieve and sustain a complete remission. It is one of those diseases, despite even our best medicines, there's room for improvement, and we're gonna keep pushing at it. Okay. well, maybe that's a segue for DUET, which was recent data that you presented, and AbbVie a week or two earlier had interim data for its IL-23 integrin. Just curious the strategy why prioritization of, say, TNF versus, say, other combination partners that you could have paired with your IL-23? Right. Well, to some extent, it was logical for us at J&J because we brought the first TNF inhibitors to market with REMICADE and golimumab, which is the product of SIMPONI, was in our portfolio, and then guselkumab, TREMFYA. It made sense for us to do exploratory work with those combos. What we did first, though, was pilot studies where they were biomarker-driven, where we put patients on one or both and then take biopsies from the intestine and do deep molecular profiling, single-cell transcriptomics. That taught us that the two together really had a synergistic suppression of inflammatory pathways. We thought, "Okay, this could really make sense." As we got in the clinic, we were of course watching safety, because when you start taking out a couple of these cytokines, what's gonna happen to safety? There we found that the safety was consistent with each of the underlying components. We did not see incremental adverse events. We were good on those, and then when we did the studies, you know, we started to see these really promising data. That's how we started in this journey. It's not to say that other combos wouldn't be logical to also give a try, and, you know, we'll probably do some of that ourselves down the road, but this was a good entry point for us to, you know, to bring together two mechanisms. You know, we're poised to be the company that delivers the first of a dual mechanism with these co-antibody therapeutic. We're trailblazing with this and really excited to be able to offer more hope to these patients who are really tough to treat. Your just general thoughts on your having TNF-based combinations and potential with a black box warning. Others in the space would say, "Hey, we wanna, like, combine two really safe MOAs, orthogonal, that lack the black box warning." Maybe the counterargument to that is when you start to deal with settings like IBD or RA, you need big guns, and then that risk-benefit-wise, a black box warning in the grand scheme may be an acceptable trade-off. Yeah. I mean, the black box in this case goes with the TNF class. Because that class has been around so long, we find patients are very comfortable managing those risk profiles. It's something that they're very familiar with. IL-23 doesn't really have the black box issues. I mean, if you compare it, you know, some patients who end up on a JAK inhibitor, all right, you know, talk about your black box warning. You know, they have the infection risk warning, they have the cancer risk warning, they have cardiovascular event warnings, they have thrombosis warnings. I think, you know, when patients are desperate enough and physicians are desperate enough, sometimes they'll even put up with that. You know, compared to a JAK inhibitor, this is far more benign. Yet we see, you know, people reaching for JAK inhibitors with some of these refractory patient populations. I think, you know, the risk benefit is, you know, it's very attractive, I think, for many physicians and patients. Okay. With, and following the DUET data, what are next steps with that? Would the plan be to go directly to phase III? Are you happy with what you saw? If you can kind of outline that? Yeah, we're going straight to phase III in ulcerative colitis because we already did a dose-ranging phase II. We have defined what the dose will be. In Crohn's, we're doing a seamless phase II-B, phase III. We'll do some dose ranging and then start the phase III component. I don't think we've revealed all the details of that. That's the plan there. We're also gonna do a study in psoriatic arthritis, which is another one of the autoimmune diseases where there are a significant percentage of patients where monotherapy is just not enough. We're doing a study there as well. We'll go head to head against in the case of the inflammatory bowel disease, we're going head to head against guselkumab, TREMFYA. The regulators agreed that we did not need to do also the TNF single therapy, so it's just it's basically guselkumab versus the co-antibody therapeutic, those two arms, basically. Okay. Then any efforts, it sounds like, to interrogate different orthogonal mechanistic combinations, either with a co-formulation or bispecifics, is that something that J&J can do internally? Does it need to go out externally to find assets that can facilitate that strategy? Right. I think it's some of both. In some cases we certainly from a technology standpoint, we have a very robust bispecific platform. We have the ability to do the co-antibody therapeutics, and as we bring more and more orals, there could be oral-oral combinations, and sometimes those could be co-formulated, a fixed dose combo. Because there are different targets that you might want to pair in different ways, in some cases we might have both targets in hands. In other cases, we might want to go externally and grab one from another partner. It'll be some of each, I think, as we get into this sort of combinatorial aspect of autoimmune diseases. Okay. Maybe we'll shift to neuroscience, an area that you guys have been acquisitive in. My question was around SPRAVATO. Just given t he surprising commercial success that you guys have had. I think it speaks to just the unmet need in MDD. I feel like every time there's a new category, it's not zero-sum game, it's expanding the market. Yep. When we talk to physicians who treat patients either with, like, ketamine clinics or with SPRAVATO, it seems like it's a very unique segment of the market relative to your typical SSRIs or even atypical antipsychotics. Right. There's some changing going on in the landscape too around psychedelic therapies that they could be potentially, at least if you listen to how some of them portray their therapies as more of a durable benefit. You don't need to have as many follow-up treatments as SPRAVATO, which can be time-consuming. As you look at, like, what's going on in the psychedelic therapy pipeline competitively, is that a risk to SPRAVATO, or is that something that's like an opportunity for you to augment SPRAVATO and the portfolio down the line potentially? Yeah. I think we're waiting for data to come in on the psychedelics to really understand it all. Just to back up a little bit on SPRAVATO. You know, it's a particular enantiomer of ketamine that's formulated for delivery through the intranasal route with a device. It's another good collaboration between med tech and pharma at J&J. And it was the first example of an antidepressant that had rapid action. In other words, within minutes to hours, patients could see their depression symptoms relieved. Was approved for treatment-resistant depression, which is patients who failed two prior antidepressants at least, as well as for the really urgent situation of depression with suicidal ideation. Altogether, we've taken it through 36 clinical trials. A quarter of a billion people have been treated with SPRAVATO. It's approved in multiple countries. It really added a new weapon to the battle against chronic depression, which affects a quarter of a billion people around the world and is a heterogeneous disease, right? It's not a one size fits all, so we need different mechanisms. SPRAVATO was the only depressant ever awarded breakthrough designation by the FDA. Twice we got priority review too, so it's really a new step forward. Now, how does it work? It's thought to work by affecting neuroplasticity, which is what the psychedelics are thought to do, right? Different mechanisms. SPRAVATO works through a thing called NMDA receptors. The psychedelics, it's not entirely clear, but there's theories that it might be a certain type of serotonin receptor. The idea is you're affecting this phenomenon called neuroplasticity, and that's, you know, where this may be then giving this real breakthrough in terms of getting at that really treatment-resistant depression, as well as maybe the more durability because you're actually changing the connections of the neurons. In the case of SPRAVATO, we have data showing that 50% of patients stay at remission for five years on SPRAVATO. Now, they need to take it at different schedules, you know. Some are once a week, some are twice a week. Different schedules for different people, great durability for an antidepressant if you think about it. Real breakthrough. Excited to have that in our armamentarium with other mechanisms now to try to help patients battling with depression. This just occurred to me, is there the possibility that over time, as the drugs gets better characterized, to lessen the need to do the inhalation, the nose inhalation at home potentially for patients? Yeah. I think that we could see it moving that way. You know, the issue was that sometimes when patients initially take SPRAVATO, they have these dissociative out-of-body-like sensations. They typically last only minutes. Some patients don't even get them at all, or they only get them on the first few doses. I think it's something that we will be continuing to have conversations with the regulatory authorities around, you know, is there a opportunity to start bringing this more into the home as opposed to having to, you know, go to the clinic and sit in a quiet room while you wait for two hours for your post your SPRAVATO, you know, snorts, so to speak. Yeah. To see how you're faring. Okay. Maybe we'll pivot to multiple myeloma. Sure. You've got arguably an embarrassment of riches with assets here, right? I guess the one thing that I really struggle with, on the one hand, you know, BCMA-directed therapies, you know, the book says go with the CAR -T first, 'cause you'll have lessened efficacy if you use a BCMA-directed bispecific in advance of that, right? You have data now for both modalities that look pretty competitive, right? I think you guys have said, "We're just gonna give patients choices and providers choices," right? If you want a one and done, we've got the option for you. If you want, as a community oncologist, not that this is what you want per se, but, like, community oncologists don't want to give up their patient, right? That's just the practical reality of that, right? How do you see this playing out? Well, as you said, we have a lot of tools to work with. five approved therapies, more in the pipeline, it is becoming a very dynamic space in terms of how the therapies can come together. That's what, you know, we've been doing now, is to bring them together in combinations in different lines of therapy. You know, we started the journey with VELCADE, the world's first proteasome inhibitor. Behind that, daratumumab, DARZALEX, the first biologic for myeloma, the CD38. Even with those two, combined with other medicines, you know, when we started this journey at J&J, the average life expectancy of a myeloma patient was two years. Now, with DARZALEX, VELCADE, plus other meds, the life expectancy for the transplant eligible is almost two decades, and for the transplant ineligible, almost a decade. Even there, you know, we have achieved enormous benefits for patients. You know, we're not stopping there. Bringing now the T cell engagers. You know, TECVAYLI, our first-in-class BCMA. TALVEY, our first-in-class GPRC5D. You know, these together with DARZALEX in earlier lines are giving miraculous data. The most recent approval was for TECVAYLI, where in second line, the data were so impressive that the FDA called us and said, "May we offer you a commissioner's priority review voucher? 'Cause we'd like to get this to the American people as fast as possible." 55 days from submission to approval. You know, just unprecedented progression-free and overall survival data seen. Now we wanna move into frontline, where we've been doing pilot studies and seeing that if we can combine a T cell engager, which could be Tec, Tau, or now we have a trispecific, ramantamig, that does both Tec and Tau in a single molecule with Dara, we can get 100% MRD negativity. Minimal residual disease negativity, which that was recognized as a valid surrogate endpoint by the FDA last year for progression-free survival. You know, really excited about evolving these paradigms. T cell engagers, Dara in the frontline. You know, CARVYKTI, CAR -T cells probably for second line. Even there, you know, who knows? One of our investigators at Dana-Farber took patients with smoldering myeloma. Gave them CARVYKTI. 20 out of 20 have minimal residual disease negativity, no evidence of disease, a one and done treatment nipping it in the bud. There's so many opportunities now to offer patients. Yeah. Different ways to try to tackle this. As you say, you're testing a lot of permutations in frontline, and if we think about the frontline strategy, do you think MRD would be enough to both enable accelerated approval, but ultimately be practice changing for physicians to want to adopt? There are certain settings, right, of oncology, right, where you could get by on PFS, but if you don't have OS data, you're not getting used. You're not getting used at a high rate. When you think about the, maybe the commercial bar, right, for frontline, is MRD enough? We would always do PFS and OS as well. It'd be nice if the FDA would allow us to have an accelerated approval based on MRD, but we would continue to follow patients. You know, the rest of the world hasn't adopted that standard of MRD might be sufficient. Since we try to bring our patients. We try to bring our product globally to the patients around the world, you know, we know that we're gonna be held to more the traditional endpoints. It is exciting to think that, particularly in frontline where, you know, the current standard of care is so good that you would have to wait a long time to find out, it is exciting to think that perhaps FDA would allow us to have an accelerated approval so we could bring these innovations to patients faster. We really see we are on the cusp of curing myeloma. So, you know, that would be so exciting if we could use that as a way to just get these new combinations to the patients even faster. Yep. Well, we've got less than two minutes here, so maybe ahead of ASCO- Yeah. RYBREVANT. You've got some data in head and neck. Yeah. What is the OrigAMI-4 trial? Right. Cohort one. Right? It's described in the title as pivotal data. Maybe if you can just set the table 'cause, you know, as we think about sort of the opportunities beyond lung cancer, head and neck and CRC have been flagged as big opportunities, and just trying to think through your second line monotherapy strategy, you know, and if these data are fileable. Yeah. No, we think they could be. RYBREVANT, just to contextualize, is a bispecific antibody that neutralizes two growth factor receptors approved in lung cancer for EGFR receptor mutant. It was the first bispecific ever approved for a solid tumor indication incidentally. In head and neck, which is the eighth most common cancer, we saw really promising data. KOLs tell us they've never seen a more active agent in head and neck. The first entry is in patients who failed front line, so now they're in second line. The bar against we're going, typically those patients have been treated with either cetuximab or taxanes, and overall response rates 10%-20% on a good day. That's the bar, and that's why I think FDA is open to even a single line you know study, which is where we have breakthrough designation. We also, I think, are gonna show some of our pilot data in front line, where we're doing combo of pembrolizumab and oxaliplatin in front line, and then going against the standard of care regimen, the chemo immunotherapeutic standard of care there too. That regimen only has overall response rates of about 30-35% and a durability of less than seven months. You know, we'll see what RYBREVANT brings. You'll get a little hint of the data, but super excited about RYBREVANT's possibility to really create the next standard of care in head and neck. Then, you know, we're also pursuing in colorectal and got two big phase III studies going there, one in front line, one in second line. RYBREVANT's just getting started. All right. Awesome. Well, thank you so much. We're out of time. Appreciate the conversation. All right, Jason. Thank you. [Break] Contacts? Just for reading that. Oh. Yeah. I'm telling you, man. Up and fast. It's coming. Can I have one of those waters? Great. Thanks, everybody. We're gonna kick off our luncheon panel discussion. I'm Andy Bressler with Bank of America, our Washington Healthcare Policy Analyst. Always, we've got a great panel again, once again this year. Real briefly, we'll introduce them. I'm not gonna spend a whole lot of time on the details, but to my left here is Barrett Thornhill. He's a Partner with Forbes Tate, now actually FTP, not Forbes Tate. As a 20-year, more than 20-year career in healthcare policy, got his start on Capitol Hill working for Senate Finance Committee Chairman Mike Crapo. Deep knowledge and expertise on FDA, life sciences, CMS policy issues. To his left is Nick Bath. Nick is a Partner as well. He's a Veteran Healthcare Policy Expert. Nearly two decades of experience also on healthcare policy issues, ranging from life sciences, CDC, FDA. He had been previously the health policy director, the U.S. Senate Committee on Health, Education, Labor and Pensions for eight years. He has his background as well on Capitol Hill. To his left is Monica Popp. Monica is the Co-President and Co-Founder of Marshall & Popp. Again, with decades of experience, across a range of different areas in healthcare policy. Significant contributions on bipartisan legislative efforts. As a senior Republican aide, she had been Chief of Staff to Senate Majority Whip John Cornyn up on Capitol Hill, and has also spent time in the executive branch and in state government as well. With all that, we do have some news obviously this morning, breaking out of D.C. We no longer have Dr. Makary as the FDA Commissioner. Maybe I'll just kick it off with, hey, what's happening at FDA? There's obviously been a lot of turnover, a lot of turmoil in leadership at FDA. Been through several directors who have left. We've got a lot of acting directors, not clear what the direction is going there. Now we have a opening with the FDA Commissioner. Maybe it'll give it to you, Barrett. You wanna kick it off and give us your thoughts on where we are with FDA, Dr. Makary leaving today, and where we go from here? Yeah, I can start. Then we can get into the who's next scuttlebutt. I thought this actually was about 10 days too late. I was assuming Mr. Makary, Dr. Makary would be departing in April. I This was to me, this was more choreographed and planned than it might be let off to be. There is some change coming to the FDA. The White House in general is pretty darn tired of seeing the FDA on the editorial page of the journal in a constant fashion. Trump himself has been lobbied so consistently from companies and CEOs regarding their specific problems and enough was enough. I think it was a White House agreement that it's time to move on. I don't know who the next candidate's gonna be, but I do think it's a positive thing. I mean, Dr. Marty Makary was getting beat up from too many different angles to be successful in that job, and I think it was agreed that he was ready to go as well. I'm told Tracy Beth Høeg never even unpacked her boxes at the agency, like in her office. There's other people that I think will be departing as well. I think Lowell Zeta and Kyle Diamantas will hold down the fort until they get a new Commissioner appointed and then put into place. Hopefully, I think it's a good trend for biopharma. I've been personally involved in three different campaigns right now for drug companies who are petitioning the agency for various topics. I can see that the Makary line of thinking was not seeping down to the division directors sufficiently. There was a lot of pushback. To me, that was a situation that could not be resolved. It was not going the right direction. I think this is a good time to reset, and we'll see who the next Commissioner is. Yeah, happy to toss around some names, but I think this is a positive thing for Biopharma. For the device guys here, CDRH is in good hands. I don't think there will be any change there. I've heard nothing but acclaim for what CDRH has been doing, so I think that's a positive trend there. The cell and gene therapy side is a different matter. That is gonna remain to be controversial in my opinion, and I don't think there's gonna be a clear change of the guard or change of the thinking. That's probably the area I would look to being still of greatest concern. Nick, thoughts? I mean, it's gonna be interesting to see who's willing to take on that beast, right? I mean, what you've seen with Makary, as Barrett was just talking about, was the effect of this sort of grinding friction between MAHA ideology and sort of more traditional Republican innovation-focused efficiency. You know, you see that sort of having its taking its public toll on whoever's in that top spot. There's the couple of sorta high-level dynamics I'd highlight there. You know, you see Kyle, I don't know if it's Diamantis. Who's taking over as the acting, who's the head of the food division of FDA. You know, I mean, there's sort of a bundle of issues there, right? Like food, vaping, you know, non sort of core drug and device issues that MAHA, that are very important to that movement. Then you have, you know, some of the policy issues that are underway right now that I'd say is sort of more traditional speeding innovation type of initiatives, like, you know, renovating and lifting back up the rare disease portfolio after the departure of Vinay Prasad and trying to show the rare disease community that FDA is serious about speeding those products to market through single arm trials and real world evidence feedback into clinical trials. You know, I think the vacancy or the acting Commissioner is gonna sort of freeze that dynamic in place, right? You don't have a Senate confirmed Commissioner, it's sorta hard to make big policy moves. You know, that's probably a downside for those who supported, for example, on the rare space, further regulatory innovation. On the acting side and just sort of the logistics of the Senate confirmation process, we were just talking about this before we walked on. I think it's 210 days under statute that you can be acting, which, interestingly, in the Senate, the committee of jurisdiction is the HELP Committee, which is chaired by Bill Cassidy from Louisiana, who's in sort of the political fight of his life, facing a primary challenger from the right in Louisiana. That 210 days expires December 6th, or so ChatGPT told me when I couldn't count for myself earlier today. You know, even if Senator Cassidy loses, that's before the entry of the new Congress, it'll be interesting to see sort of how those calendars intersect and interact. I know that some of the names that have been bandied about, and with this I'll kick it over to Monica, are, Steve Hahn, the Commissioner from the first Trump administration, Brett Giroir, who was at HHS in the first administration. You know, to me, those names raise this question of MAHA, that this MAHA mainstream tension, right? They were both big supporters of Warp Speed and the administration's admirable legacy of innovation in the first term, which has fallen somewhat out of favor. Yeah, I mean, I agree with everything these guys have said. The one thing I want to take folks back to is when you think about the structure of HHS, CMS obviously is core to the economy, core to many of you in the room as you're tracking many issues that flow through CMS, but the difference between CMS and FDA is pretty critical when it comes to process. What has happened over the last year and a half at FDA is obviously the loss of talent, the loss of seniority, the loss of personnel, but even more importantly, the loss of predictability in a process. CMS has the ability to issue policy, and then there's notice and comment, and there's a regulatory process that can allow people to have some predictability and the ability to mobilize grassroots. FDA doesn't have that exact process, and when predictability falls for the FDA, what happens is what happened to Makary, which is the investor community starts to rise. They start to go to the White House. The president heard a tremendous amount from folks in the room and beyond. Two, the pro-life community became very frustrated on mifepristone, so he lost a critical part of the base for Trump going into a midterm. Most recently, what Nick just said. When you start to get into some of the more critical issues that matter, certainly in elections, but more importantly are just issues that are base, tobacco and vaping being one of them. There was some frustration that was raised over the last couple of weeks. The president was engaged. The secretary had been engaged. At some point, you know, the cat can only have so many lives. Makary had been surviving since the end of last year. At the core of what happened to him is that he did not follow process. When you have a lack of predictability for markets and you create a lack of predictability internally, you can simply not survive at HHS, because there's no way to make sure that FDA remains that very stable force within the department. It's not an agency that's typically over-politicized. We don't As lobbyists, we don't typically build movements around the FDA. We try to keep our hands off of any scientific process. That certainly has changed in the last year and a half. Next year's the PDUFA year. Right. I was just going to bring that up. How much is this going to hinder or cause issues around the user fee negotiations without a, you know, a confirmed Commissioner here? That can be a challenge. I mean, it's. Especially if the House flips, which I'm sure we'll talk about. You know, that's a separate challenge. Does the typical bipartisan nature of PDUFA/MDUFA reauthorizations, does this change for the year? Does the MAHA view about FDA being too close to industry get into the negotiation as well? There's some elements there, and I think that's something to worry about a little bit of what FDA's increased march into utility trials and considering the clinical value of the products versus just the clinical efficacy and safety. Those are all themes you could see bleeding into next year's negotiations. If the House does flip, it's a additional challenges, or if the Senate flips too. Yeah. Yeah. Nick? Yeah, no, I mean, I was just gonna say, I mean, It's a great point about the user fee cycle, and there's, like, two policies that were in the president's budget. You know, the budget was pretty light on legislative proposals except for in FDA, There were just two that I'll note there that I think are sort of indicative of this battle between sort of MAHA and more traditional innovation-based ideology, which is one of them, not to get too into the weeds, was a proposal to give FDA more authority to make public complete response letters in the drug space, which, I was listening to a panel last week in D.C. in which industry was complaining about, like, how many complete response letters there had been in the last for rejections of drugs there had been in the last year, just as many as in the previous five or something like that. That's a very transparency-focused, you know, one might say skeptical of industry position that the administration has proposed. In the same document, they proposed an accelerated pathway for biologics that's sort of a middle pathway analogous to what small molecule drugs have now, which is a very, one might say, traditional, you know, pro-industry, pro-innovation stance. You know, as we lead up to a midterm election, you know, that's the battle between those two kinds of policies is gonna be key in who they pick and how they message what the agency's gonna be next year. Great. Turn to the other big issue. A year ago, everybody was trying to figure out what's happening with most favored nations drug pricing, and we're now down that path a little bit on MFN pricing, and we've got a lot of different irons in the fire with different demonstration programs. Maybe, Monica, you wanna lead off? Kind of where do you think we are on MFN? Obviously, there's been an effort to try to codify it, or proposals to codify MFN that has not really gotten off the ground. Where do you think we are in the whole MFN process, and how much of an impact do you think this has all had, and where do we think it's going? Yeah, I mean, I think when we were here last year, we all probably didn't expect there to be such a rapid pile-on of agreements, I think we all saw the writing on the wall that the industry was extremely exposed on this issue. What the agreements have done, though, is buy time. They ultimately buy time from any legislative output, at least in a unified government format, which is what we're in right now. The vulnerabilities that they create, though, is that whatever was agreed in the sort of framework of that setting will be ripe for oversight, I'm pointing to Nick 'cause he's gonna tell you everything the Democrats are gonna do to those agreements. It's not as though I think many of our clients who cut the agreements cut bad deals. I think we're all smart enough in the room to know these were not bad deals, or they wouldn't have cut them. The problem is that the terms of these deals may have components and policies that could be codified, and one of those policies, in my opinion, this is just my opinion, is prospective MFN. It is the easiest to draft. It is the easiest to put into a reconciliation vehicle that gets around a lot of the Senate procedural rules. Frankly, it's really hard politically to fight against. If you're a conservative Republican, of which I am one, who opposes price controls, you can see a narrative coming out of conservative corners talking about why prospective MFN may not be a price control because it's behavioral in nature. Companies can determine that up front and make their plays based on their own market strategies. That is a long-term vulnerability for this industry. I think everybody knows that. Depending on what happens next year, does it become part of a bipartisan conversation? Unlikely as long as the president's there, prospective MFN, once scored, it's easier to draft than it is to score, just because there are so many assumptions. It could easily become an offset for the future, and so I think that's a vulnerability. The only other thing I would add is the medium and small guys that are in there now, those conversations are ongoing. They're going well. The administration has presented, certainly on 232, opportunities for orphan drug as potential exemptions. The exemptions included in the IRA and BBB continue to be on the table, not just for big guys, but for the small guys. There really, there has to be parity there. They wouldn't be able to give the big guys something they can't give the medium and small guys. The difference here, in my opinion, is what do the medium and small guys agree to on prospective MFN, knowing that now legislation is something that's being discussed? When you if you remember, the large guys agreed to these deals absent a legislative framework. Everything happened the week before New Year's Eve. There, there's a different environment for these negotiations outside of what was happening at the end of 2025. Nick? Yeah. I mean, I, you know, I think, you know, the big question with all of these MFN models, whether it's GENEROUS, GLOBE or GUARD, has always been sort of is this a, you know, sword of Damocles that is designed to hang over the industry, you know, much the way, sort of unintentionally, Clinton healthcare reform hung over the HMO market in the 90s and sort of, you know, industry responded and, like, held down premiums or, in this case, prices? Or is it, you know, something that is actually going to be followed through on? My general sense is, you know, I agree with Monica, that the prospect of the administration implementing a mandatory MFN model is not one I'd put money on. I do think it lights a fuse, as it were, for future administrations and puts tools on the table that previously were considered, you know, untouchable. I mean, just to state the obvious, these agreements expire, right? I mean, they're not infinite. So what happens? You know? Yes. I mean, you know, the Democratic side is going to go bananas with oversight and trying to get the, you know, CEOs to testify about what's in the agreements. Yes, there will be a huge public relations battle about, you know, what kind of sweetheart deals there are or not sweetheart deals. I do think, you know, even if one policymaker doesn't agree with the notion of European reference pricing, which is what this is, sort of, you know, the, the expiration or what's next, after these MFN agreements go away, I think is one that's unavoidable. For my money, I think the most likely legislative outcome is some sort of incorporation to the IRA drug negotiation scheme as, you know, one of the factors or benchmark factor that anchors the negotiation in some way. You know, the In the Biden administration, the House-reported Medicare negotiation bill had a ceiling price of, I think it was 120% of a market basket of countries. I'm not saying that's gonna be it, but I think that's much more likely than, you know, a full multi-market mandatory reference scheme. Barrett, any thoughts? I think we're in the second inning of MFN and the theme of price controls. I think the administration has a lot more up its sleeve that's going to be challenging over the next 24 months plus. In my opinion, the fallacy behind MFN is that it requires somebody to come up with what is the actual prices that is being set in European countries, and there's not really a good index for that. You saw this recently in the Council of Economic Advisers report. They were like, "Why don't you just tell us what you're getting paid overseas?" It's like, "Eh, we're not doing that." How do you actually reflect all of the actual discounts and rebates that other countries are receiving for various issues? In my opinion, and actually to legislate this, you need to go to actually putting in place some degree of health technology assessments at the launch of the drug, not at the mid-cycle or end of cycle for the drug, and that's where the real money is, that's where the savings are. In my opinion, this is where Trump's talking about MFN is leading us. Trump's taken MFN, though, from a trade perspective. He is treating pharmaceuticals as tradable goods, and that is actually altering how European countries and Japan and other innovative states are having to respond to this in terms of trade policy. I think what you will see over time is the transition from a trade policy discussion into one that's actually a health policy one, using value equations and more equitable standards for valuing drugs at launch vis-à-vis the class they're in and vis-à-vis the innovation they're actually providing. That's the trend that is coming. That's where the real worry is in terms of where the innovative response is. One thing. Yeah. Nick mentioned the three-year term limit on these agreements. No chance these things are lasting three years, in my opinion. The administration is going to make them come back to the table. I mean, every company that cut a deal or will cut a deal between now and the end of December should just expect that they're coming back to the table in the last two years of the Trump administration. Why? That is how they intend to codify these agreements. They intend to codify these agreements by, one, potentially securing money for TrumpRx for implementation, maintenance, and development. Two, you extend these agreements from three to 10 years, three to five years, anything beyond the next administration. How do they do that? Well, the Dems are likely to talk about what Nick just talked about, IRA expansion. Will Trump respond no to that? He doesn't necessarily need to. He can. While I joke about this, I'm pretty serious. The Democrats would probably rather drink poison than cut a deal with the president in the next term. The president doesn't have to have that same reaction. He has nothing to lose. He's done. He can sit back and let the Democrats develop what it is they might be proposing for drug pricing and leave that on the table. That becomes leverage. They implement GUARD and GLOBE, which they are now talking about doing with the medium and small guys. That's out in the atmosphere. The Democrats are talking about IRA expansion. The companies will be facing a decision. Do you cut a 10-year deal, buy yourself more time, or do you prepare for an IRA expansion? Those two roads will meet at some point, not legislatively. It's just sort of like, what room do you want to walk into as a company, as an industry? You're gonna have to choose, they're all going to be saying You know, Democrats will be saying, "We're really good on drug pricing." Republicans will be saying, "No, we're better on drug pricing." The industry will have to choose where to go. That's great. You mentioned kind of the different demonstrations which are out there, which are, you know, being worked on and developed. Anything specifically that we, the audience, should kinda know about, whether it's GUARD, GLOBE, or even BALANCE or BRIDGE, GENEROUS, you know, all the different demos which are kinda lined up here that are in process? What should people be thinking about? Or is it just, like, a lot of noise, and yeah, mostly gonna be exempt from a lot of this anyway, so don't worry? I think there will be a lot of exemptions. I joke that sometimes I feel like the keyboard characters got removed when they're naming these demos. It's like Wheel of Fortune, just having seven letters to choose from. There will be exemptions in GUARD and GLOBE. I think that's actually become an interesting policy conversation because now in the medium and small world, where you're so heavy on orphan only, you have this dynamic where you have, like, orphan only, plasma, much more complicated therapies that CMS recognizes they can't just paint with a broad brush. So they have to think about, all right, well, these guys are coming to the table. They're willing to put these drugs on the table for a potential negotiation. What do we do about GUARD and GLOBE? If we include them in GUARD and GLOBE, the guys that didn't come to the negotiation are obviously exposed, and the guys that did come for a negotiation, we're gonna carve out. They this is a little bit of a maze for them to figure out how to simultaneously negotiate with medium and small and finalize the policies of GUARD and GLOBE. I think that's also what you're seeing on 232. You saw the document come out yesterday on onshoring agreements. It kind of builds on the proclamation, but they're gonna need to issue more on the proclamation to make sure that orphan only companies know what they're getting into if they don't cut an onshoring agreement, for example. It's a very long way of me saying it's becoming more complicated quickly for them, and if it's about implementation, they're gonna have to take some time. If it's just about political messaging, they can finalize, and we can face litigation. The other one on the BALANCE program now being delayed and pushed out, effectively the Part D plan saying, "Yeah, we're not so sure we wanna play in this game that you've kind of cooked up here." How do you see that going, or has this just become sort of that BRIDGE model effectively becomes more semi-permanent? Yeah, that's a weird one. I mean, it does feel very much like the Part D, Biden Part D demo at this point, right? Where it's, like, just a straight up subsidy. Right. It's a payoff. Right. I mean, it's. We cheated before we loved it. Exactly. I mean, you know, arguably, the constituency for this BRIDGE program is much stronger than it was for the Part D demo, which no one understood and was about, you know, where standalone PDP plans are. I mean, I, I feel like if I were the Trump administration, I'd just keep on kicking the can and hand this one to the next, man or woman and then to say, you know, "Figure, figure it out," how to get plans to the table on this one. Yep. Barrett? Maybe to your question of what investors should think about, I think the GLOBE and GUARD demos are almost unable to be actually put into force. They don't make any sense. When you remove the exceptions, is it exceptions by a company? I mean, the companies negotiated deals on individual drugs. Is their entire portfolio exempt now and in the future? Like, what, how, what is this? I don't even think this is legal. I don't see how exactly you're able to you know, situationally withdraw companies from demonstrations. It just doesn't make any sense. I don't think it's actually gonna get into force, and that's one reason I don't think you can codify it, too, because there's no savings there, frankly. In my opinion, though, what does the investor should look at? They are really driving states to do more aggressive. You have a few states that are finally using their upper payment limit authority that they've created under their PDABs. I think that's a place to be considering things. I think it's reflective of how the plans at PBMs are now having higher profit margins as well, 'cause they're taking greater liberties and able to use the rebate schemes a bit better. I think those are the trade-offs that you're seeing. Yeah, my opinion that they're inactive. They're unable to act at the federal level. That is gonna drive people to say, "Okay, well, that didn't work, so what else can we be doing to make sure affordability and is a higher priority over profitability?" That's where the trend's going. Just following on, Monica, you mentioned Section 232. Obviously, there's a lot of carve-outs there for different products, obviously orphan drugs, generics, you know, down to specialty products, all kind of exempt. Then you have country exemptions as well on top of that. Then you have the company exemptions as well if they've cut an agreement. Where is this whole heading? Is this just sort of a negotiating, you know, a continued negotiating tactic of like, "Hey, you never know what we'll pull out with regard to tariffs," or is there kind of something more to this? It seems like there's not a lot of there there when you look at all the tariffs right now. Yeah. I mean, the key term of the administration is leverage, right? They're constantly looking for a deal. They're constantly looking to negotiate. They're always creating this dynamic where they take you to a pressure point, hope that you're coming into the room, and then they relieve the pressure a little bit over time. I agree with you that at some point, the 232s don't really matter. There will be so many exemptions. The problem, in my opinion, is still the number of companies that are not going into the room to negotiate at this point. There's a lot of uncertainty for those companies because they're taking the risk of saying, "We think the guys that are going in and negotiating will get us exemptions that will cover us, and so we'll be fine. We don't need to go in 'cause we don't have the right product mix to negotiate. Our drugs might be too new. We don't have enough orphan. We don't have enough plasma. You know, like, all sorts of different formulas there. At some point, these guys have a list of who cut a deal and who didn't. As a company, you're making a decision, do I have anything to bring before CMS between now and December of 2028? If I do, I probably need to think about going in. If I don't, I keep my head down, 'cause to Barrett's point, even if they finalize, it's probably in litigation mode, or it's so complicated they can't finalize. I think the thing to watch, though, is the 301s, because you know Germany's obviously the clear example before everyone. The debate at some point needs to turn from these agreements, MFN, and the IRA, and how far we expand it or what new price control we wanna put there versus the Europeans are not doing what they need to do to bring reimbursement up. Absent that, this whole thing collapses. This doesn't work. I'm just, like, kinda waiting for that point. The administration at least has been saying, "We'll do more in the foreign freeloading. We'll keep pressing." Members of Congress are saying they're gonna keep pressing. It's hard to communicate that to the American public. In an election year, you can't go out there when everyone's talking about affordability and saying, "Yeah, your drugs are too high, but we're gonna take it to Germany." That doesn't resonate with people, it's a much more difficult political message to carry. Another question on Section 232. There's another investigation ongoing for the devices. What do you expect to kinda come out of that? Similar sort of pathway game plan for the administration to kind of leverage that, use leverage to get some commitments from different device companies? Is that essentially where we're headed? In my opinion, yes. I think that's right. I think it's, yes. Onshoring commitments is the name of the game for the device industry, so it's riskier. In the component parts is the one thing that I'm not sure they've been able to wrap their heads around, because so many If you actually track the component parts of a PMA device, it's not easy. It is incredibly difficult to have a country-specific situation for those products, unless you have tiers for the meaningfulness of each of those product lines. It's a major burden on manufacturers. I worked for a few lab tool companies, and they were trying to do this themselves, and it's an absolute nightmare. Again, this is trying to apply trade policy to a product area that really has not been imposed upon these trade policy ideas before, and it's complicated and very difficult. It's the whole Warren Buffett VUCA kinda situation, where I can't tell you what the result's gonna be. Trump loves tariffs, and today the CFC put a stay on the first cohort's dismissal of the 122s. He's like, "Oh, I'll just go do them in a different, in a different era." What he's talking about is 232s and 301s, which do have a higher, you know, certitude and sanctity because they require investigations, and it goes through regular order. It's a process. They're harder to throw out, but that is where he wants to go. He loves using these trade policies as the cudgel, because what they want is voluntary agreements. They don't wanna go through regulations. If you talk to Dr. Oz or somebody, they will tell you, like, "We don't really want to go through these machinations with the rulemaking. We actually want individuals to come in and provide us these deals on their own. That is what they're going for. That is worth their wait. Nick, any thoughts on that? No. Yeah. Yep. Phase next year, which is, there's sort of funny, is that we're gonna see Democrats trying to reverse tariffs and Republicans voting for tariffs, which, like, in our lifetime. Yeah, very different. Political theory. Incredible. It's really reversed. Exactly. Exactly. Shifting to a little bit somewhat related issue around China. Obviously, the President's heading to China right now. Obviously, biopharma and Chinese competition has been a huge issue. Huge. A lot of interest on Capitol Hill from this perspective. Where do you think this kinda ends up? Did get the BIOSECURE Act is now going to be rolled out over the next couple of years here. Where do you think we're heading as far as either regulatory actions and/or legislative actions on Chinese competition for biopharma? I mean, the pricing and China are about to meet. There's no doubt in my mind that this is how the administration thinks. They think, "All right, guys, we have cut these deals with you on pricing. We want 10-year agreements. We also now wanna think about China." From the administration perspective, the president's budget gave some carrot policies on the China front that the industry may want. Now we're seeing the flip side of that, with some stick policies, as we've seen coming out of the House Appropriations language. What do I mean by that? Banning phase I, phase II trial data would be a shock to the system. It's a narrative that's catching steam. At some point, there are too many members on both sides of the aisle that are saying, "What do you mean when you say we are going to China because it is faster and cheaper? Define faster and cheaper." If faster and cheaper means deregulation, lower bioethical standards, and subsidization by a communist government, you're losing that message politically. Republicans and Democrats will unite, and that's what you saw in this report language. Report language, as you guys know, is not necessarily binding. It is very hard to remove once it's in one chamber. The Senate needs to speak to what the House has laid out. Appropriations is a long process. There's plenty of time to do that. The industry did a really good job on BIOSECURE and did a good job on BioCompete and explained why there's so much supply chain disruption with some of these policies. It becomes more complicated when what you are talking about to the U.S. government is that China's doing it better, because that's a whole different conversation, and the U.S. government will wanna know, what is it about China that's so much better? We're willing to think about policies that will make it faster for you, but if that means that you're still going to stay in China, that the political pressure will absolutely rise, and I think that's gonna intersect a lot for this administration. I think they'll be much louder on China. Think about the members that are also up coming into 2028, the members who are gonna be running for president in 2028. The last thing I'll say on that is this. The industry has a really hard time answering that question about what's faster, what's cheaper, what's better in China. Depending on your size and your standards, you have the ability, if you're a larger company, to potentially go up to Congress and say, "We're all above par." This is how we do it. If you are medium and small, you're having a harder time answering those questions, and that, to me, becomes a very difficult place and a huge vulnerability for some of these guys who are gonna face bipartisan congressional questions and inquiry and also from the FDA itself. Yeah, no, totally agree. I mean, it's bipartisan through and through. I mean, you saw a through line from what Trump one to Biden to Trump two on this. You know, I mean, there have been companies, I'm thinking of one in particular, you know, six, seven years ago that went belly up based on some comments by then head of FDA's Cancer Center, Rick Pazdur, on whether or not data from phase I and II from clinical trials in China was acceptable and then said it wasn't, and the entire business model was based on the former. You know, it's trending in the wrong direction for supply chains rooted in or clinical trial infrastructure rooted in China. I think, I'm just repeating what Monica said, but the toolbox on BIOSECURE is a great example, right? I mean, that, you know, industry, and those who are focused on, you know, not making the clinical trial infrastructure seize up and make it rigid need to do some really hard thinking about, moderate, messageable legislative changes that can be described as onshoring changes but actually don't affect the core market fundamentals of the business model. I mean, I think that's the lesson of BIOSECURE. For sure. This is such a fascinating topic. I mean, I was in Shanghai last summer for a week, and I think a few of you guys were there. It was an amazing experience. I'm gonna go back this August as well to dive in a bit deeper. You know, China's a rule of nine. They're 3 times faster, 3 times cheaper, and we should be paying notice. In fact, the policymakers in the U.S. are not. They're coming up with baloney proposals. Oh, we'll give $10 billion to do this, or Makary's ideas to get priority review vouchers and stuff. That is garbage. You are missing the boat entirely. People are not appreciating how willing the Chinese government and the universities and the physicians are actually focused on this and using bioeconomy and establishing a very strong, very capable, very safe, very efficacious development center in China. There's not a day that goes by there is not two or three deals from U.S. companies or European countries making deals with Hengrui or Zai Lab or BeOne. I mean, today there's one from Bristol, just had a huge agreement to take the pipeline from, I think it was Hengrui. This is amazing. I think it's actually good for U.S. patients. I think it is terrific. I think the data that they're presenting in phase II, phase I, phase II is absolutely admirable and safe and should be relied upon. I don't think the U.S. Congress or the states or whoever are going to be able to deny products based upon having early-stage data developed in China. I think that's just the way of it, companies are racing over there. When I was there in Shanghai, the BD teams from every single top 10 company were there too. They are looking for opportunities constantly. That is where all the investment and growth is. We should be instead of responding with limits and trade limits and stuff, it's like, okay, well, how do we respond? How do we make it even better here in America? We still are the capital investment center, but the majority of clinical trials are being run in China. That's just a fact of it. I've got a kid with a rare disease, and I can tell you up front, the only drug in phase III for his condition is in China. Why? Well, they have a far higher willingness to conduct that research and a far higher appreciation for the value it may cause. In America, they wanna go for the largest condition, for the largest product to satisfy the European, the U.S. market. In China, in 2016, they changed their reimbursement structure. This is something you should go back and look at, 'cause this is the fundamental reason why China has risen so fast over the past decade, is that in 2016 they changed their reimbursement model, and they far widened the amount of people who could benefit from new drug discovery. It is not U.S. doctors going over to China. It is not, you know, U.S. companies or Chinese people stealing data and files. It is the fact that their government changed how they get reimbursed for product. It has unleashed their domestic market to such a huge extent. It's very fascinating to see and watch. People say, "Well, we should, you know, put limits on things." I say that, it's the opposite. What can we do to actually accelerate this? It's even down to the IRBs at hospitals. I did a Johns Hopkins IRB last week. Oh my God, it's painful. It took like, you know, three weeks. This guy has got to approve it. In China, they're doing it overnight. It's a single form. I've seen it. It's a single form. They get it done in a day. Here in America, it takes weeks and weeks and weeks, and it's an entire culture shift has to change. Good luck to us, but I think this trend is the cat's out of the bag. I don't see any way you could pull it back in, and I think every company here would push back on you tremendously if you try to shut off the pipeline of Chinese innovation. Sorry, just to not spend too much time on this, but I mean, you see the FDA and the regulatory science ecosystem, if you can call it that, in the U.S., like scrambling to respond to this, right? Just to use IRBs as an example, right? Everyone agrees IRB needs reform. You know, the fact is that's an incredibly powerful I mean, the academic medical center community, you know, no offense meant to anyone who's here, but I mean, it's an incredibly difficult guardrail to suddenly reinvent overnight. I mean, right? The entire notion, you know, generations of researchers and regulation and law has been built on the notion of the review board and what it means to go through that and its independence, right? Similarly, clinical trial recruitment. I mean, you know, just on my point earlier about, like, I think the good job the industry did on BIOSECURE, you know, we need to, investment community and industry need to think about ways to answer the attack about what it means to recruit for a clinical trial in China versus here, right? I mean, like, that's an issue. It needs to be answered in a confident, you know, forward-leaning, and regulatory, regulator reassuring way, because I think Barrett's right. Like, it's coming, and the question is it gonna be orderly, or is there gonna be some backlash that sets us back, or are we gonna be able to move forward? Great. Lot to talk about on China. We could probably have a whole session just on China issues and biopharma. Turning a little bit, I do wanna get to questions, so if you have questions, you know, get them ready. Here in a few minutes we're gonna open it up for your guys' questions as well. Shifting gears a little bit to the remainder of this year. We've got a skinny reconciliation 2.0, which is on the table now, which really doesn't implicate healthcare at all. There'd been talk about a larger reconciliation 3.0 that could implicate some healthcare provisions that some Republicans, particularly in the House, would like to kinda roll out. What do you see happening the rest of this year? I mean, we're already now into May. Elections are coming up relatively fast. What can potentially get done from a healthcare legislative standpoint? Thinking about, well, do we just kind of push this stuff into potentially a lame duck, session, at the end of this year? Monica, do you wanna- Sure. Tack on that? I, you know, look, it's legislative malpractice for a party in a unified government to not use reconciliation. Let me just say that at the top. Democrats do it, Republicans do it. It is not an easy vehicle, but when you've got full control of the car, you drive it. They've gotta do 2.0, however difficult that may be over the next couple of weeks. They need to deliver by the 1st of June per the president's deadline. 3.0 is interesting because 3.0 is much more difficult to think about how do you get the votes in the House and how do you get the votes in the Senate knowing that there are so many tough elections going into the fall, and be able to deliver that before November, which is why you're seeing more and more members talk about maybe doing that in the lame duck and building up the agenda for what that could look like over the next couple months. There's one hiccup. Planned Parenthood, the ban on Planned Parenthood funding expires in- July. July. The first week of July. The life groups, from their perspective, have received 0 from this administration. They are a huge turnout base for Republicans in many districts, but especially in some states. There's gonna be pressure to do reconciliation 3.0. Do I think the votes are there to be able to do it by July? Not right now. I don't know what the framework would be to get, you know, everyone from Susan Collins to Massie in the House to agree to something, as you know. If you just put the life issue on the table, if you just put Planned Parenthood on the table, you potentially lose Murkowski and Collins right off the top in the Senate, your margin is very, very small. With that said, nobody in their right mind is gonna stop talking about 3.0, because, one, you don't wanna get hit by the President. The leadership is gonna keep talking about 3.0. They're gonna keep working on it. You're gonna see a lot of, you know, peaks and valleys of the policy discussion over the next couple of months. Site neutral, MFN, MA cuts. Like, you'll see it flow, but building it is much more difficult. No, I think the game is to be caught trying on reconciliation 3.0, right? I mean, you wanna be seen as all for it. I think everyone knows that, you know, system disruption does not an election year message make, and doesn't seem like something you should do before a crucial midterm election. I mean, a lame duck reconciliation, that would be something. I'm not sure we've had one of those in a long time, with members who have been voted out of office voting for a system change. Well, usually they don't even come back. Right. Exactly. You have to go pull them out of their homes. Right. To vote for a bill. That would be something else. Go ahead. Yeah. Yeah. I agree. No. I see very little chance for any kind of healthcare package, and it's all gonna be reauthorizations and- Right. Administrative actions. Stuff, extensions. Extensions. That sort of stuff. Yep. That makes sense. Turning to obviously the big package from last year, the One Big Beautiful Bill. From a healthcare perspective, a lot of it really hasn't taken hold yet. We started, I guess Nebraska was the first state that just started its. I believe so. Work requirements last week, they're on board. Most of that's not really kicking in until 2027 and 2028. Kinda looking forward, a lot of questions that we get, investors kind of focus on, well, hey, you know, what will this ultimately mean? Will all this actually get implemented? Will there be efforts to kinda roll it back? You know, I'm old enough to remember the BBA that got rolled back in some form, back in the late 1990s where, yeah, there's a big effort at cutting things, a lot of pressure builds and things change. Where do you see things kinda going, particularly if we have changes in Congress next year? More likely a Democratic House, in theory, I guess, a potential Democratic Senate. Where do you see things happening with the implementation, particularly on the Medicaid side of the house for the One Big Beautiful Bill provisions? Who wants to take that? It's gonna be right here. Yeah, right. Yeah, I've already got it. Yeah, I mean, I think from, you know, the investor and market perspectives that, you know, the story is, you know, hospital margin pressure, maybe some 340B eligibility rollbacks because of, you know, fewer DSH hospitals. You know, in terms of whether any of this is gonna get turned back by Congress, I mean, not until there's a new president in the White House. It feels to me I mean, I'm sort of, you know, thinking out loud here. It feels to me like work requirements or community whatever are here to stay. You know, the, the dials that seem most amenable to turning to me are provider taxes and state-directed payment restrictions, which, you know, eventually every state, red, blue or purple, is gonna need at some point, especially in the current environment. I mean, the all that being said, you know, I may not be quite as old as Andy, but I also remember that, you know, we repealed the Cadillac tax, the device tax, and another one. Not the drug industry tax, though. The one that still remains is the drug industry tax. We love that one. Yeah. That's a hell of a lobby there. The Rural Transformation Funds. It's $10 billion a year. There have been calls for, "Hey, that's not enough." Never. Even like Hoeven and others, Yeah, it's never enough, right? Is there any thinking that, boy, if we saw a lot more pressure strictly on rural guys, that there'd be more done for the rural providers out there? If 3.0 reconciliation happens before November, I guarantee you there will be more money in the Rural Health Transformation Program. I don't know how many more hospitals we can build in Alaska, but we will build them. There will be more money for Alaska. There we go. There we go. All right, any questions out there? I'll kind of open it up. I've got more that I can continue to ask, but if somebody's got some, there are mics kind of floating around, if anybody's got a question here. We've got one right here in the middle. Yes, Kevin. Yeah. Can you talk a little bit about what you think the appetite is for Medicare Advantage reform? There seems to be a lot of focus on coding in particular, we've seen two discrepancies. As far as, you know, MedPAC saying it's as much as 14%, and then there's something out from CMS more recently, right? Chris Klomp and company saying more like 2%-4%. Like, where does D.C. think the problem is? Is it 2%-4%? Is it 14%? Somewhere between? Is there willingness for this administration to make one last change administratively before they're out? It's a great topic. Here's the deal. I sort of said this before, but I think there's a running appreciation that MA plans are doing a great job and are making a lot of money, and their margins, I'm sure, are far higher than people would like to believe. It is a heck of a powerful lobby, though. I don't think every time CMS tries to change the star ratings or tries to change some factor in their payment mechanism, they get the pushback is just monumental, to the point that it's just like, "It's not worth it. Let's move on." This is one category where you really can't get voluntary agreements, which I said before. This is the modus operandi of this administration. They like voluntary agreements. You know, it's that's why Trump called them all in the White House, said, "Oh, you guys are need to lower your prices and focus on affordability." They go, "Yes, sir. Yes, sir. Absolutely." What do they do? They go back and they're reporting some very generous MLRs. I think that's my point here, is that there is an appetite for reform, but I have never seen a Congress that's willing to take on even a modicum of the necessary reforms, whether it's around the third-party vendors they're using or their home risk assessments or I can give you a few more examples, but it's just they all seem to fall flat. The only thing I can point to is that, man, that is a powerful lobby. They do a great job of maintaining their, you know, their margins and their operations. I would say it's an opportunity for reform in the future. I don't know. I think you're gonna have to have administration change or it'll let Oz and Klomp go crazy. No, I mean, I totally agree. I mean, I feel like absent some, like, trust fund crisis, you know, I mean, like, you saw it in the proposed versus final rule situation this year, right? I mean, the proposed rule comes out, like, guns blazing. We're gonna, you know, we're gonna throw risk adjustment in the garbage can and redo it, and what do you end up with? Like, chart review coding reform? That's it, right? I mean, it's shocking. Yeah. Is it's sort of like 340B. Like, no one understands it. It's not politically messageable. Like, you're not gonna go out on the campaign trail and talk about how, what an awesome job you did on Medicare Advantage coding intensity. It's just not a thing. Yeah, I mean, I don't want to say that you're giving D.C. too much credit, but a little bit, right? 'Cause you're asking a very sound policy question around where the dial falls. That's not how folks think about policy development. What they first would have to define in order to get to go after MA is what's it buying. They have to figure out what's the actual political thing that's popular that they would then spend MA dollars on. It can't be non-Medicare, 'cause you're gonna get hit for using Medicare dollars for a non-Medicare item. You could potentially build it out for, like, MA for hospitals, MA for something else in the Medicare space. It's very I mean, I agree with these guys. It's very difficult to cut MA. With that said, it takes a while for folks to get hit. The narrative on MA has been going on for a few years now. Eventually, there will be a hit. It's just a matter of, like, what is it paying for? What is it buying? I don't know if I mean, everyone has a sound lobby in Washington. I like to take credit for it. We're all lobbyists. I feel like we're good at our jobs. This is the biggest difference between MA, hospitals, pharmacists, basically everyone but pharma. The only way that pharma ever communicates with patients is through those ads, and just about everyone mutes those or ignores those. They don't have the ability to communicate directly with a patient about why things cost what they cost, why they're seeing their exposure at the counter. Everyone else in the industry has the ability to directly communicate with a patient. Why do I raise that with you? Because in politics, there is no greater thing than direct engagement with a voter. All of these guys, yes, they have good lobbies, but the reason they have good lobbies, whether it's the nursing homes, the hospitals, the MA plans, is because they have the ability every single day to send communication to a patient, and that is why they tend to be more successful. It's not because of the millions of dollars they're giving the ballroom or what that doesn't matter, in my opinion. It's just the way that the industry is able to relate to the actual voter. I think you one day you will see, unfortunately, giant reform to the health insurance sector. I think you're gonna see it first from the hospitals. I would say when you do your surveys and investment analyses, consider when large employers are starting to push back and say, "We cannot take these double-digit premium increases again. This is no more." When the plans, I mean, when the large employers go, "Maybe we are better off with single payer or public-run healthcare," that's when you know the game is over. That's where I'd say it's, this is, monumental change is coming. I don't know that we're there yet. We're getting close. I say that's the, that's one thing to start thinking about, is when the employer and the rest of the plans starts to go, "Oof, this is not, this is no longer fun for us to do, and we can't keep passing these costs on. Yep, yep. Do you think that certainly over the last couple of years, as you mentioned, Monica, I mean, there's been a little bit of a shift here. You now have Republicans, Bill Cassidy, the No UPCODE Act, claiming there's hundreds of billions of dollars of potential savings there, and more Republicans willing to kinda take on MA as an issue, which we didn't see, you know, three, four, five years ago. Do you think that accelerates and we're kind of hitting a, you know, some point here, hitting a tipping point? You kinda said, you know, maybe it's a few years down the road, but we're gonna hit that tipping point, or is this kind of, like, just a wave and it subsides? No, I think everything hits like, at some point there will be site neutral. At some point there will be MA cuts. It's, you know, it just takes time to get there, and whether or not it's called site neutral or to Nick's point, it's called something totally different but is site neutral, it just, These kind of policies have to be socialized, they have to be discussed, and it takes time for members to figure out, what exactly do we wanna do here? In the moment, they have to sell a political package. It's much harder to cut an industry as a unified government. That's why you take on Medicaid. Even for Republicans who took on the hospitals this last round, you're able to then use that money and do the Rural Health Transformation Program. It's very rare that one industry wants to take on a sector like that. It typically is more in a bipartisan format. Here's a funny stat. I mean, when you survey seniors, the portion of insurance they love the most is actually their Medigap plans, which is the most inefficient waste of resources possible, right? That is the one they love the most, 'cause they see it the most, and they feel it the most. That just shows you the power of that, of that sort of, emotional connectivity to their insurance model. Yeah, I'm gonna zag a little bit here just real quick, which is that, I mean, obviously MA is growing. It's the majority of Medicare enrollees, et cetera. I mean, like, you could see, you know, like, we, Democrats tried to do I mean, I think Monica's point about what's it buying is crucial. Like, what are you messaging, right? You could see Democrats and unified government doing Medicare vision and dental and fee for service paid for by MA. The problem with that is, though, you also have to look at, like, the political distribution of beneficiaries enrolled in MA and their voting patterns, which are not good for that kind of reform, right? The people who are benefiting from fee for service dental and vision or, like, fee for service long-term care or fee for service deductible and co-pay reform, you know, aren't voting in the same patterns that Medicare Advantage enrollees are. Yep. No, good point. Couple other quick ones if anybody's got a question, fire up. Yep, we got a question right down here and down here. Yeah, hi. I have a question on the GLP-1 BRIDGE program and the BALANCE program. Is it your view that Part D plans just wanna see a year of experience so they know what the program might look like in the future and have some data to base their assumptions on? Like, is there a legitimate discussion there, or is it just more of a political, you know, we wanna give a bunch of seniors coverage ahead of the midterms and wanna show that it's not gonna turn off a month after they vote? Who wants to take that one? We're both. Yeah, right. I think, well, I'm not an expert I mean, I feel like the plans are like, "We don't wanna get selected against. Please leave us alone". Right. I think it's a real financial issue for the plans. Yeah. They're like, "We don't wanna get caught. They're gonna get risk". Yeah, they don't want it. I mean, I think, bottom line. I think they're making more money, not as much money, but they're still making good money off of the other programs they're running with the manufacturer. I don't think. I think it's a really, a big selection issue, that they feel like, hey, they get down this path, and they kind of get on board. The numbers could go really big against them if there's, you know, a big surge, both on the cost side and the utilization side. Yep, that's their risk. Yep. Yeah, question down here. Thank you. Back to China. I was speaking to some European biotech companies, and their view was that the advantages China have, some of which you have mentioned, investigator led trials that can start tomorrow, basically. Big patient population, you know, orders of multiples bigger than the U.S. with all sorts of conditions, et cetera, et cetera. Their view was that China's going to pull ahead, and this is going to be like the EV market where they pull so far ahead. That it leaves everyone else in the dust. I'm wondering, do you think there is political will, capital capacity to learn from those mistakes or, you know, it just wants to kind of put roadblocks and cut your nose to spite your face, basically? There's definitely, I think, a bipartisan appetite for that. It's obviously a very good comparison. There's a great opinion piece in Stat today on this very thing, which is the industry expediting its own demise? To some extent, it's this conversation around. It's not like the Chinese are hiding the playbook. We all know the playbook. We've seen the playbook, rare earth, EVs, chips. Like, we've seen it out there. We know what it looks like. More importantly, Congress knows what it looks like. The gap in the policy debate comes down to the fact that the only members who are so strategically engaged in this conversation sit in the national security realm. They see China as a national security threat, and they don't think about the nuance of what it means to bring biotech into the conversation. They put the policies out there, and then there's this lag in the policy development where the biotech industry has to come around and explain what some of the supply chain disruption could look like. That's the fundamental problem. If you go to the members today and you explain the issue, they're like, "Yeah, we've seen this before. We don't wanna do CHIPS 2.0. We'd like to get out on the front end of this." The industry now has a real challenge, which is to explain what are we going to do as an industry to make sure that that doesn't happen, and what can the administration do. All these guys have said it very well. What can the administration do today that's not small ball, that's big, that will actually stop some of the bleed? I think everyone agrees we're not, we're not gonna reverse course completely. We can't. It is too far gone. Some of these guys, I think, are much more attuned than others, and it really is a little bit of where they sit on committees, which is the unfortunate sort of format of Congress. They're all in the Intel Committee. If you watch any member on any of these cable news shows talking about China, they are almost always coming out of Senate Intelligence or House Intelligence. Because they're on these committees, they're, like, in SCIFs all day, right? They're not really thinking a lot about the biotech industry, and I think it's incumbent upon the industry, it's incumbent upon investors to explain what exactly has happened and is there any way to slow the bleed. We can't exaggerate and say, "If FDA does this, we're gonna completely reverse course." We all know that that's not going to happen. We need to come forward with some policies that I think are real. They will slow this. They will allow us to stabilize the bleed a little bit, and then I think you get bipartisan support. Yeah. I don't think that, like, you know, China 10 years ago had less than 5% of clinical trials. Now they have over 50% right now. I think that's telling. I don't think that trend is gonna stop. Congress is very reactionary, not proactive. There's very few people that want to get ahead of it. I've tried to have conversations, and I know many of you, I'm sure, have as well. I think it's too far gone. I would bet this too. As soon as Trump leaves office, every single major American and European company is going to race into China and build manufacturing like you would not believe, okay. That's gonna happen. Nothing's gonna be able to stop him. Whether it's a new Republican or new Democrat president, there's no one who's going to have that threat again that, you know, thou shall not go to China. Yeah, I think this is a trend that is going to dramatically accelerate. Maybe that's good for the world. I don't know. I think it is too far gone, and Europe is, I mean, largely speaking, they're kind of in trouble. I mean BeOne will be the first European company to have, you know, a drug approved. I think Roche is right behind them. I mean, they're all, you know, European washing themselves for the future, and that's the trend. Yeah, I mean, I don't disagree with Barrett. I don't know that I totally agree. I think the fundamental problem for the Americans politically is that you can race to China, the minute you have to come back here, it will be much more difficult because your brand. This is a lot like pricing. I think about Mallinckrodt a lot. It just takes one company, one story, one clinical trial, one bad subpar, unethical clinical trial for the entire industry to suffer the consequence of it. What I worry about, right, is the Chinese playbook is pretty clear. At some point, they want to own our companies. We know that. Everyone in Congress knows that. At what point are we going to stop that? That's the more difficult part of the conversation. This is where I do agree with Barrett. The members tend to not wanna get out ahead. They do wait for that critical moment. They're all talking about it. It's just a matter of, like, is the industry willing to say today we need to do something today, not once it's all gone? 'Cause once it's all gone, if we're coming back for a CHIPS Act as an industry, it is rude. I can't even imagine what the pricing policies would be at that point. Not to mention what it would mean in a pandemic, what it would mean when our supply chain is further controlled by the Chinese, what it means when there's serious disruption because all of the research and manufacturing is done over there. I mean. You can tell I get a little bit passionate about this because I went through the CHIPS Act. Who's the next big pharma company, speaking today? Anybody know? Ask them. Go in front and ask them, whoever it is, and say, "At what point in time is your, is the majority of your pipeline gonna be Chinese discovered?" Then say, "Are you at all worried for the U.S. Congress to come in and tell you cannot have a pipeline that is entirely Chinese discovered products?" See what they say, and say, "Is that a threat to you? Are you willing to go to Congress and say, 'Help me,' or are you so excited about what's coming out of China now that you wouldn't even raise the topic?" Let's see if I'm right. All right, I think we're getting ready to wrap up. Last question. Always good to get everybody's predictions. Election's coming up. Where do you guys think we end up, House, Senate, for this fall? Implications for healthcare coming out of that based on your assumptions for the elections. I think the Republicans will most likely lose the House. I think the margin will be very small. Sometimes I surprise people when I say this. I'm sure you guys know this number. We're not talking about a massive number of seats. We're talking about 30 House seats. That's all this election is. I think redistricting obviously is a huge element of the conversation. I think we, the Dems take over the House. They're gonna have a lot of fun with oversight. I can see Nick smiling through the side of his face. Senate I think stays Republican, smaller margin. I do think we probably are likely to lose at least one seat, if not two in the Senate. I think regulatory agenda is, healthcare equals regulatory is the way I would sum that up. Going into 2020, both camps will kinda be working on their agendas for 2028. Obviously, the Democrats have more pressure to define what their agenda will be going into 2028, this is gonna be a kind of battle with the administration all the way until December of 2028. Yeah, no, exactly. I don't have anything to add. I think the oversight dynamic will be interesting to watch. What the president will want to do. Will he have deal-making in mind? Will he be focused on something completely different? Will he care about the position of his, of the candidate in 2028? I'm not smart enough to know the answer to those questions. That there will be a ton of oversight which will, you know, certainly obviously divided government slows any legislative change, and I think it will also slow the pace of regulatory change as well. Yeah. You think, on the regulatory side, you think Trump would, or the wheels of the regulation efforts would slow even, you know, because of a divided government, or do you think Trump's like, "You know, screw it, I'm going forward with regulatory fraud and abuse, whatever," on that side of it? Yeah, I mean, I don't think he's likely to, you know, pull the pedal off the metal, but I do think that having one house of Congress gives you more levers to push back. I mean, it gives you more of a bullhorn, right, to push back on regulatory proposals that you don't like, demand more process, muck up the headlines, which as we just saw today with Makary's ouster, the President cares about. I'm not saying it's, like, a huge factor, but I do think on the margins it'll be, they can slow it down. Yep, great. Barrett, last word. I think the House may not flip. I think it's entirely dependent upon oil prices. Yeah, I wouldn't take I think Polymarket is, like, 80/20, so I don't know if that's a good bet. Actually, that is a good bet. I would, I would take it at 20%, 'cause I think it's a little higher than that. It's all to do with inflation, which you saw today, the numbers weren't terrific, and it's gonna get worse. The administration's gonna continue to push as hard, as fast as possible until the courts or Congress stops them in every single situation. With Democrats taking over the House, potentially it might make that a little more challenging, but that is gonna be the MO from here on out. Yeah, I think this is, the president remembers who his friends are and who they're not, and he has a long memory, if you haven't seen his revenge list. It's, I think we're in for not a very enjoyable next two years, in my opinion. All right. Well, on that sunny note, thank you everybody for sticking around, and, yeah, have a great rest of the conference. Yeah, thanks.