John Elicker - Investor Relations Executive Lamberto Andreotti - Chief Executive Officer, Director, Member of Executive Committee and Member of Science & Technology Committee Charles A. Bancroft - Chief Financial Officer and Executive Vice President Elliott Sigal - Chief Scientific Officer, President of Research & Development, Executive Vice President, Director, Member of Executive Committee and Member of Science & Technology Committee Giovanni Caforio - President of U.S.

Pharmaceuticals Beatrice Cazala - Executive Vice President of Commercial Operations

Jami Rubin - Goldman Sachs Group Inc., Research Division Alison Yang - Barclays Capital, Research Division Tim Anderson - Sanford C. Bernstein & Co., LLC., Research Division Seamus Fernandez - Leerink Swann LLC, Research Division Christopher Schott - JP Morgan Chase & Co, Research Division Mark J.

Schoenebaum - ISI Group Inc., Research Division Gregory B. Gilbert - BofA Merrill Lynch, Research Division Marc Goodman - UBS Investment Bank, Research Division John T.

Boris - Citigroup Inc, Research Division David Risinger - Morgan Stanley, Research Division

Thanks, Rufus, and good morning, everybody. Thanks for joining us to review our Q1 results.

With me this morning are Lamberto Andreotti, our Chief Executive Officer; and Charlie Bancroft, our Chief Financial Officer. They'll both have prepared remarks.

And joining us for Q&A are Elliott Sigal, our Head of R&D; Beatrice Cazala, Commercial Operations; and Giovanni Caforio who runs our U.S. business.

First, before we get started, let me take care of the legal requirements. During this call, we'll make statements about the company's future plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's SEC filings. These forward-looking statements represent our estimates as of today and should not be relied upon as representing our estimates as of any subsequent date.

We specifically disclaim any obligation to update forward-looking statements even if our estimates change. We will also discuss non-GAAP financial measures adjusted to exclude certain specified items.

Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available on our website. Lamberto?

Well, thank you, John, and good morning, everyone. We have just completed another good quarter.

The external environment is certainly not becoming easier, particularly in Europe. We had challenges across all dimensions, but Bristol-Myers Squibb is staying on course.

We continue to execute our strategy in a consistent manner. Our focus remains balanced on both short-term results and long-term growth as we keep increasing our sales and earnings, while delivering clinical and regulatory results.

Taken together, we started the year from a good position. With respect to sales, we grew by 5%, and this growth was broad-based and included some of our more recent product launches.

I was particularly pleased with the performance of our virology franchise and other key in-line brands, including ORENCIA, SPRYCEL and ONGLYZA. For YERVOY, we had strong stable demand in the U.S., and I am particularly encouraged by improving U.S.

trends in recent weeks and increased adoption in the European markets. With respect to regulatory developments, we are moving forward on multiple fronts, 2 of which are especially significant.

Regarding FORXIGA, which for those of you who do not know it yet, is the brand name for dapagliflozin, we have received a positive opinion from the CHMP in Europe. We expect the decision on marketing authorization in a few months and together, with AstraZeneca, we are already planning for an eventual launch.

We are glad about this European recognition of FORXIGA's benefit/risk profile for treating type 2 diabetes. And also, by the fact that the agency spoke specifically of the need for additional treatment options, while highlighting the significant unmet medical need in diabetes.

We will work with the FDA to clarify a path forward in the U.S., and we continue the regulatory process in all other geographies. Regarding ELIQUIS, we are looking forward to the FDA's upcoming decision on the atrial fibrillation indication, which will hopefully be followed by decisions in Europe and Japan where we have also filed.

In partnership with Pfizer, our focus now is on implementing the most effective launch plan. With respect to clinical developments, our pipeline remains robust and encouraging.

As discussed at last week's EASL meeting, we are increasingly well-positioned to meet the unmet medical need of the 170 million people worldwide who are chronically affected by hepatitis C. The data presented highlighted the broad portfolio of HCV assets that we have today, including a first-in-class NS5A inhibitor and demonstrated our diversified hepatitis C strategy based on multiple mechanist and combinations.

Thanks to the acquisition of Inhibitex and its potent nuc, we have broadened our portfolio of investigational HCV compounds and increased the potential opportunities to provide the right regimen for diverse patient populations. This is a high priority for our company, and we are devoting significant resources to it.

We are also making good progress with our immuno-oncology late stage pipeline, from our YERVOY development program, exploring additional indications in prostate and lung cancer, to our work with anti-PD-1 and other potential important asset entering Phase III for renal cell carcinoma, non-small cell lung cancer and melanoma. We plan to present data on anti-PD-1 at ASCO.

So we are moving forward on many fronts and maintaining our focus on balancing both short-term results and long-term investments, remaining firmly committed to commercial execution, as well as scientific advancement. This balance is particularly important as we continue to transition to our portfolio of the future and build a foundation for sustained long-term growth.

With that, let me turn it over to Charlie who will give you some additional information and walk you through some of our numbers. Thank you.

Thank you, Lamberto. We did have strong operating results to start the year.

In the first quarter, we delivered non-GAAP EPS of $0.64, an increase of 10% over 2011. Sales growth across our key products was partially offset by an increase in investment spending.

We reported first quarter net sales of $5.3 billion, up 5% compared to last year. Volume was down 1%, partially, driven by PLAVIX and AVAPRO, which I'll touch on later, price was favorable by 7% and foreign exchange had a negative 1% impact on sales.

As Lamberto mentioned, we are pleased by the trends of our key brands that are important to our future growth. Let me provide a few highlights.

We continue to be encouraged by the performance of YERVOY. As the U.S.

melanoma market continues to evolve, share for YERVOY was stable in the quarter, and as Lamberto stated, we have seen encouraging weekly trends over the past month or so. During the quarter, we reported YERVOY sales of $154 million, with U.S.

sales of $117 million. In all markets where YERVOY is commercially available, we are focused on ensuring that physicians understand the long term survival profile of YERVOY.

We continue to make progress on access and importantly, we received a permanent J code in the U.S. earlier this year, which has helped to reduce the reimbursement cycle times.

As you know, the process for getting access and reimbursement in Europe takes time as negotiations take place in each country. We believe we are making good progress with positive decisions in Belgium and Netherlands this quarter.

Our virology franchise had a very strong quarter with BARACLUDE and SUSTIVA delivering sales growth of 18% and 13%, respectively. International sales of REYATAZ were impacted by the timing of a tender in Brazil that occurred during the first quarter last year that we expect to occur in Q2 this year.

The ONGLYZA franchise delivered $161 million of sales. In the U.S., the franchise delivered 10% prescription growth sequentially versus Q4, with KOMBIGLYZE up 22%.

Going forward, we are focused on driving adoption earlier in treatment as the first add-on to metformin, leveraging our head-to-head data versus sulfonylurea, and our label update for the use of ONGLYZA in combination with insulin. SPRYCEL was up 34% in the quarter, reflecting successful commercial execution and the launch of the first-line indication.

We continue to make share gains in both first-line and the continued expansion of the second-line opportunity. The ORENCIA franchise was up 28%.

Our IV volume continues to outperform the market, up 4% compared to 1% for the overall market. ORENCIA subcu was launched during the fourth quarter last year in the U.S.

and had sales of $31 million in Q1, which includes a modest impact from de-stocking. The prescribing physician base is broad, and we are encouraged by the business coming from new ORENCIA prescribers.

Global sales for ABILIFY were flat. Total prescriptions in the U.S.

were up 4%, outperforming the overall market, but reported sales were down 4% due to de-stocking and another step down in our Otsuka contractual share to 51.5%. Finally, you know that we are coming to the end of the market exclusivity period for PLAVIX and AVAPRO in the U.S.

and have lost exclusivity in Canada. During the quarter, sales for PLAVIX and AVAPRO were down 4% and 29%, respectively, driven in part by U.S.

prescription trends. Now let me just give you a few comments from the rest of our P&L.

As John mentioned, I will focus my remarks on our non-GAAP results, where reconciliations to our GAAP results are available in our press release in our website. Gross margin was 75.2%, up 150 basis points compared to first quarter last year.

This favorability was driven primarily by favorable product mix and foreign exchange. Marketing, selling and administrative expenses increased 8%.

This was driven primarily by increased investment behind new brands. Also included was a $12 million bad debt expense in Europe.

In terms of the rest of the year, we still believe that MS&A will decrease compared to 2011 per our guidance. You may recall that in Q4 2011, we increased investments and recorded certain onetime expenses which we do not expect to recur in 2012.

Advertising and promotion expenses were down 9%, reflecting decreased spend behind PLAVIX and AVAPRO. R&D increased 2%, driven by overall portfolio spend.

The effective overall tax rate was 26.7% in the quarter. The increase compared to first quarter 2011 is primarily due to 2 factors.

Firstly, the R&D tax credit has not been extended yet. We assumed the extension on our full year guidance, but it will not be reflected until it is -- the rate is approved.

Second, last year, we had certain discrete tax releases that did not recur in 2012. Now turning to guidance.

You have seen that we have confirmed our 2012 GAAP and non-GAAP EPS guidance of $1.90 to $2, and there is no change in our line item guidance. I would now like to turn it over to your questions.

Thanks, Charlie. And Rufus, I think we're ready to go to the Q&A.

And just a reminder, that in addition to Lamberto and Charlie, we have Elliott, Beatrice and Giovanni here to answer any questions you might have. Rufus?

I have a few questions related to the company's hep C program. Obviously, the data that was presented at EASL, the combination of your NS5A with Gilead's 7977, was very positive.

My questions to you are this though. Just given Gilead's public stance that it is likely to develop its own combination, just if you can fill us in on what Bristol's development path forward is, and specifically where we are in the de-risking process of your own nuc?

Secondly, will you comment on the study dose of 50 milligrams of 189? My question is this, is this a new consideration to go forward for the Phase III or is this part of the study design that has been in place?

And then just thirdly, on your NS5A, what is the timing to getting that product to the market just according to clinicaltrials.gov, it looks like you're starting a Phase III trial for the genotype 1b population and just wondering what the sort of overall strategy is?

Sure Jami. This it Elliott.

Let met try to take those questions. First of all, we too are extremely excited by the field's reaction to very strong data presented at the European Liver Conference.

This showed, for the first time, the combination of 2 oral agents achieved in a Phase II study, 100% cure of genotype 1 patients. Based on the strength of this data, we feel it's in the best interest of patients that the 2 companies pursue vigorously a clinical collaboration.

And should Gilead decide to do that, we are quite open to discussions. Having said that, I am more confident than ever of the potential of our broad portfolio.

The success of this trial validates our acquisition of Inhibitex, the addition of a very potent nuc, 189, to our hepatitis C portfolio. And we are -- we have plans to combine that agent with several agents, including, of course, daclatasvir, our lead 5A compound.

If we step back a bit, we've been talking for some time as what it would take to achieve an all-oral regimen, and we're happy to be one of the handful of companies in the forefront here. There's some success, but there's some unanswered questions.

It's clear now that monotherapy will not be sufficient. It's possible that just 2 agents will be sufficient.

It's possible that a nuc may not be the only important ingredient. Some of the data presented at the conference mentioned a non-nuc.

So our portfolio is very strong with the nuc, a non-nuc, a 5A, a protease and multiple collaborations. Some of the unanswered questions have to do with exactly which combination mechanisms are going to be required and whether 12 weeks or 24 weeks of an all-oral agent will be sufficient.

And again, we have multiple options. So let me address first the plan for our 5A, which is well underway and where we are with the earlier program in our nuc and its progress.

We believe that not all 5As are the same. Ours is differentiated first, and at present best-in-class.

And we've presented important data with a protease, as well as with the nuc now. We started our Phase III program for daclatasvir in 2011, and we will continue to roll out additional studies throughout this year.

Our Phase III program for daclatasvir will include studies in combination with other oral agents, as well as on top of interferon-based regimens. We will also have an active control for an approved protease inhibitor.

Importantly, we see a major commercial opportunity in Japan, and we have started a Phase III combination trial, which is going very well, combining our protease inhibitor with our NS5A. We expect that this trial to be registrational, and it should complete in 2013.

We also plan to start a related trial with the 5A and our protease inhibitor in null and partial responders, patients that are intolerant to PEG riba and also treatment naive patients that have the genotype 1b, and this will be a global trial relevant to the U.S. and Europe and other countries.

The registrational trial will complete around 2014. In addition, adding this dual regimen on top of PEG riba forms a quad that we feel will be very useful in many situations for salvage.

And we've had very encouraging Phase II data. This is moving into Phase III in the U.S.

and Europe in null patients, and it's registrational program could complete in 2013. We also have several other trials where we add daclatasvir on top of interferon for special populations that will complete in 2014.

Now I am, as I said, even more excited about our nuc from Inhibitex than at the time of registration because of the new data. You referenced a 50-milligram dose that would only be one possible dose we would use.

We feel that there are multiple doses that are safe for human testing from 50 to 200. We will be getting more experience with 200 throughout this year.

We will have safety data on a range of doses of 50 to 100, which we will at least have internally and hopefully talk about towards the end of the year. We will initiate a Phase IIb study later this year with our nuc in combination with NS5A with the range of doses, and this will help inform the doses and regimens to take forward in a 2 component all-oral agent into Phase III some time in 2013.

My name is Alison Yang. I'm calling in on behalf of Tony Butler.

I wanted to ask a couple of questions on ipilimumab. Firstly, could you give us a sense on first line and second line penetration based on BRAF status?

Secondly, could do you comment on -- at ASCO we'll see a series of results from Roche's ZELBORAF, including BRIM, Break 3 [ph] and Break MB [ph]. How do you expect that, that's series of data will impact the volatility in that melanoma market?

So let me start, this is Lamberto. Let me start with a couple of general comments about YERVOY and then I will ask Giovanni to continue.

And Elliott, if you have to add something, please do it. First of all, let me say that, as you are all aware, this product YERVOY, is a very important product for metastatic melanoma patients, their physicians and of course, for our company.

We are continuing to focus on ensuring that the truly differentiated long-term survival profile of YERVOY is well understood by oncologists in all the countries where it is commercially available. There is a lot of work behind this.

As both Charlie and I said, in the U.S., we saw strong sales in Q1 and in addition, in recent weeks, we have been seeing some even more encouraging trend in demand. Though reimbursement and access environment outside of the U.S.

continues to be somehow challenging, we continue to pursue -- ensure that as many patients as possible have access to YERVOY. And for those countries where the product is commercially available like Germany, we are glad to see that it is doing well and in the other countries we keep working diligently the pricing and reimbursement processes.

Now Giovanni why don't you give some more color on -- about what we are doing of the U.S.

Yes, good morning. This is Giovanni.

As Lamberto said, we had a strong quarter in the U.S., with sales of $117 million, which is stable both in terms of sales and shares versus the previous quarter at a time in which the market continues to evolve. Going to your question, our share of new treatment initiations in the first quarter was again similar to Q4.

We saw very high shares in BRAF negative patients across first and second line, and we continue to see using BRAF positive patients, including the first-line setting. At this point, approximately 70% of our business is coming from the first-line use and 30% of our business is coming from second line.

Now as Lamberto also mentioned, in the last few weeks, we've seen encouraging trends in terms of demand and sales in the U.S. More importantly, as more physicians have become experienced with using YERVOY, we've seen that the perception of the product has continued to advance.

Physicians are valuing increasingly the long term survival benefit for YERVOY and are becoming comfortable with its use. And we've seen continuing increase in the number of accounts ordering and using YERVOY.

In terms of our thoughts regarding the transition in the market and further evolution of metastatic melanoma, I would say, the last 12 months have seen very, very significant changes in the market. We've gone from the use of old agents and the primary focus on palliation, to the adoption of new agents and the primary focus becoming the improvement of patient outcomes.

And while that adoption of new agents has been quite rapid, that has been primarily the result of what is happening in the institutional setting, in the hospital setting and within the community, only in those physicians that are more experienced in melanoma and see more patients. But going forward, we see that the percentage of physicians in the community that are continuing to use older agents will shift over time to focus on survival.

And when that happens, we will be very well positioned as YERVOY. So we're encouraged with the recent trends and the evolution of the market in the U.S.

As a reminder, YERVOY has very strong long term survival data, and that is independent from BRAF status, and it applies broadly to all of the segments of the patient population in metastatic melanoma.

A couple of questions. On ELIQUIS, assuming you receive full approval at the June PDUFA, how quickly would you be ready to launch?

And second question is on the commercial potential of hep C therapies, the patient pool is large, but for most patients, the disease is asymptomatic and even though the cure rates are high, with a largely silent disease like this, I'm wondering if the ramp up may not be quite as high and as fast as some are expecting. And if that's the case, then that kind of race to be first to the market may not be quite as important, and you could end up with a crowded category with a bunch of players where everyone takes a part of the market?

Yes, Tim, it's Lamberto. If you can imagine, we are very excited about the opportunity to launch ELIQUIS in atrial fibrillation.

We have a differentiated profile for a disease that there's still a very high unmet medical need like atrial fibrillation is. What I would like to add on the line is that, in addition to the great profile of the product, we have 2 strong companies, Pfizer and Bristol-Myers Squibb, with a strong legacy of success in CV commercialization getting ready for the launch and will behind both companies will behind the launch very effectively.

We are preparing for the launch. We have been working with Pfizer to be ready sooner as we can to launch the product.

And Giovanni, why don't you give some more color about what we are doing there?

Yes, thank you, Lamberto. This is Giovanni.

So building on what Lamberto said. Clearly, we are very focused on the profile of ELIQUIS and the differentiated profile of ELIQUIS not only versus warfarin, but also versus the other new agents, because of the benefit in efficacy, bleeding and mortality versus warfarin.

Lamberto mentioned our and Pfizer's legacy in CV. In the U.S., we are also are very excited with the fact that we truly have complementary capabilities.

We at BMS, for example, develop strong expertise in the hospital setting, Pfizer is very experienced with integrated healthcare systems in the U.S., and they clearly have with us a broad reach in primary care. So we are focusing very actively on preparing for launch, and working together to leverage our complementary capability and experience in this disease area.

Regarding launch and uptake, we have learned that establishing early access and reimbursement is very critical to a successful launch. And that will be our focus in the first 4 to 6 weeks after we receive approval.

During that period, which will likely be during the summer months, we will also be focusing on training our sales force and medical organizations to begin promoting and supporting the product. Once we begin to promote, we expect that the primary opportunity for ELIQUIS at launch will be to compete for new patient starts and patients who are no longer well-controlled on warfarin.

And based on our profile, we plan on working to establish ELIQUIS as the leading new agent for these patients. Over time, as physicians become more comfortable with the profile of ELIQUIS and its overall value, we believe that other patient segments such as those on aspirin or switches from patients that are controlled on warfarin could become significant opportunities.

In the long term, the size of the opportunity of ELIQUIS will ultimately be dependent on a number of factors: The incidence of A-fib and how it grows annually; the evolution of the percentage of patients that get treated; the share that new agents capture, and within that, our share with ELIQUIS; and finally duration of therapy. So in summary, we're excited with the profile of the product, with Pfizer as 2 companies which have significant experience in CV, but also complementary capabilities in the U.S.

market. We're working very hard to prepare to launch, and we will be ready to execute the commercial launch when we're approved by the FDA.

And Beatrice, did you want to comment on the HCV opportunity?

So you're asking our views on the commercial opportunities and the way the market could shape up. You heard Lamberto talking about 170 million people worldwide.

What's important to realize, it's only 20% of patients that are infected that are currently diagnosed. And only 10%, even less than 10% in some geography are treated.

So the magnitude of the opportunity is significant. We know that physician, payers and patients are looking for safer and more tolerable regimen, with better cure rates and with shorter duration of therapy.

Once this is available, we believe that there will be a rate of patient coming into the health care system that will need to be treated. So delivering on these advances could drive a strong expansion of the number of treated patient and result in significant commercial potential over time.

When we looked at the various criteria for critical success factor, we are well aware, and we are analyzing those and monitoring them regularly. The change that this would create would impact significantly.

At the moment, we have very conservative assumption. The potential increase in treatment rate with safer, easier to use, and more effective therapy will be also key.

And we don't know yet which products will be there available and in which regimen. The share of patient treated with each regimen, because each regimen will be about efficacy, but it will also be about safety and individual patient tolerability and acceptance of those regimen.

The payor response might be very different in different geographies to the development of novel treatment options, the price expectation [ph] and finally, the sequence as you mentioned of competitive launch is something very important. So working on those adds, you heard from Elliott the strength of our portfolio.

We believe we will be ready for all scenarios because we have a very complete scope of products, and we mentioned the dias [ph], but we also as you know, have alonda [ph] interferon in development. So we feel that we are very well positioned to succeed adding and monitoring all the criteria for critical success factor in this market.

Just very quickly, can you guys update us on what happens, and if there were any changes quarter-to-quarter with regard to stocking as it relates to ABILIFY and also if there were any trend changes on REYATAZ that you can just update us on quickly? Separately, with regard to the ELIQUIS launch, it sounds like you guys are talking about this as an incident-type patient population.

Can you just remind us the size of the global patient population? And how we should be thinking about the sequence of the launch opportunity?

It seems like incident patient population opportunities and new patient opportunities rather than switch opportunities have been relatively slow launches. And then the last question is with regard to ELIQUIS, some of the feedback that we continue to get from physicians on a regular basis has been with regard to inertia and part of that is related to the patient and the price of therapy and the cost of therapy associated with that.

Obviously, access is a big part of that, but access is also baked to price globally. So maybe you can just talk to us about whether or not you think apixaban warrants a price premium or if you think a price premium is flawed?

We've seen a different approach from Regeneron, where they came in at a lower price and have actually generated an absolutely phenomenal launch, at least in the short term.

Let me say the following. Giovanni can you take ABILIFY and REYATAZ, and Beatrice to speak about the global opportunity and some of the access considerations on ELIQUIS.

Obviously, we are not going to discuss the price that we are going to charge for ELIQUIS in the future. It's too early, and it is clearly -- we're not going to discuss it today.

So Giovanni?

Yes. Very quickly on the performance of ABILIFY and REYATAZ starting with ABILIFY.

From a DRx perspective in the U.S., we continued to see strong performance for the brand. We grew 4% versus prior year in DRxes, which is significantly higher than the total market.

We had some inventory work-down during the quarter, and the change in our agreement with Otsuka, which impacted net sales versus previous. But from a demand perspective, it's a really good picture with 4% DRx growth.

REYATAZ, we also did grow 3% in demand versus the same quarter of last year. We continue to be the #1 prescribed PI.

There are a lot of new competitors in the market, but we continue to have a very strong position in the marketplace.

Yes. I would just add to that.

Recall in my remarks, Seamus, around the tender business, which is quite large in Brazil to the government there. We didn't really have much of a tender in the first quarter this year.

As I said, we expect it in Q2. And then last year, we did have the tender.

So there was a timing issue there on a global basis for REYATAZ.

Beatrice, on ELIQUIS?

Yes, regarding the global opportunity, you were asking the size. I mean, we have to recognize that there is about 10 million people which have today worldwide the A-fib conditions.

So representing about 15% to 20% for stroke. So when you look at that, it's clear that there is a significant potential.

So you are talking about where are the opportunities mentioning that, obviously, the new patient are easier because you don't have to switch them to get and again [indiscernible] as was already mentioned to you, of what we are going to do in the first stage of the launches. Overall, when we look at the global market, including switch for warfarin, an important part of what we want to achieve.

You know that a lot of patient are not well controlled in terms of the INRs with warfarin. So understanding fully what control means over time.

It's not going to be easy to convince everybody, but we believe we have a strong data, which will allow us to be able to access both segment of the market, both the naive patient, as well as the warfarin currently only-treated patients. So when you look at the sequences of launches and what could happen on a worldwide basis, it depends on the ability to get first the registration, and we are finding in most of the geography.

But also the ability to get access, and I will mention in particular Europe, you mentioned some of the launches there. It's clear that based on what we are hearing as you know, ELIQUIS has been launched in some of the European market today, and we are gaining reimbursement.

Relatively, I would say, positively across Europe. I don't know how much.

In all the discussion we are having with the authorities on pricing, we feel very encouraged by the dialogues we have talking about our product, its profile, and they're asking us when are we going to come with A-fib. So we see a positive acceptance of our current profile with very important data we have on both ARISTOTLE and AVERROES.

You also know that in some geographies, not just warfarin patient, those are important, but there's also aspirin-treated patients. There are many geography where it's aspirin that has been used because they don't and cannot use warfarin.

So in those market with our data, we feel again, we have a unique opportunity versus some of our competitors regarding a broad scope of studies, allowing to face the different patient types. With that, you mentioning the speed of penetration, one has to realize that a lot of the patient are coming to the hospital first.

And it's half of the population going to the hospital for diagnosis and treatment before going to the cardiologist and the PCP. And because of that, nature of the -- you need a certain time to establish formularies, to follow the patients through the continuum of care, to be able to follow the chain of treatment, all the way to the PCPs.

So we have been working, Giovanni mentioning to you, but it in every geography we are looking at that very carefully to optimize our launch penetration.

So let me add one comment on ELIQUIS. I have very many reasons to be proud of my R&D team.

And Elliott and his team have done a great job also on ELIQUIS, and I'm very proud of the fact that this is a global filing. We have filed in the U.S., we have filed in the EU, and we have filed in Japan.

So this is really a global successful approach to the development of our product.

Just a couple of follow-ups on those, and I appreciate those comments on ELIQUIS. One view that seems to be out there as part of the reason we saw PRADAXA quickly ramp then slow as the product captured a lot of the kind of low-hanging fruit in the market here of "really difficult to treat" warfarin patients.

How are you kind of factoring that in as you kind of think of it being, while very differentiated product, the third kind of new oral coagulant -- anticoagulant kind of entering here and as you're thinking about the launch trajectory? The second question, you've mentioned again going after aspirin, going after existing warfarin patients, can you just give us a sense of just how long of a timeframe you are thinking here till those become a reality?

Is that 1 year or 2? Is that 3 to 5 years?

Just trying to kind of frame up how you're thinking about how long that opportunity takes to play out? And then just a final question and shifting back to hep C, markets obviously rapidly evolving, you've got a lot of assets, do you expect once the dust settles though, we're going to see 1 or 2 regimens really dominating globally?

Or will this end up being a pretty fragmented market with a lot of different combinations used in different geographies, in different patient genotypes, et cetera? Just any comments there will be appreciated.

Yes, this is Giovanni. Let me start in clarifying some of those comments I made earlier on ELIQUIS.

You're right. As we think about the source of patients for ELIQUIS at the beginning, we do think that accumulation of early switch patients were probably already picked up by PRADAXA.

And so as we think about the opportunity for ELIQUIS, the primary opportunity at the beginning will be to compete for new patient starts, and that's where our strong profile will be helpful there, and we will be focusing on that as a primary area of focus at the beginning. We did describe a sequence of opportunities in different segments of the market becoming available over time.

That will take time. And it will be different one country and one market from the other, but we do see those segments becoming available over time, and our strategy will be to really think about the sequential approach.

Yes, Chris, with regard to the hepatitis C market, I think at this time it's prudent for a company to envision some segmentation geographically. And our strategy is based on that.

For example, in Japan, I see -- since the genotype of the virus is predominantly 1b, and we have very high cure rates in Phase II with the protease and the 5A, that oral regimen, I think, looks like it could have a very, very important contribution and hard to improve upon perhaps. And in the developing countries, specially with a predominance of the host genotype leading to a very good response of interferon-based regimen, and the access pressures being such that a lot of the new oral medicines may not be as attractive over there, we have a strategy based on improved interferon that will improve the number of patients and be a very good value to enable access without a very complicated or expensive regimen.

With regard to the rest of the world, especially U.S. and Europe, I think we're off to the start of simplicity of perhaps 2 agents, and the question's whether it will be 12 weeks or 24 weeks.

And then what to do with the smaller percentage of patients that don't respond to regimens. And our program, as you see, is directed in those large segments.

I thought perhaps I'd address these for Elliott, if it's appropriate. Noticed you partnered with Medavir and Tibotec on their protease inhibitor.

Are you interested in a partnership with Gilead or would you rather go it alone? The second question is some companies in the hep C space have said -- have made statements that the FDA might allow them to move into a Phase III trial, combining novel oral agents without a significant Phase II experience.

Is that consistent or inconsistent with the feedback that you've gotten? And then finally, on your NS5A, Elliott, you mentioned you think it's best-in-class.

I was wondering if you could help us understand what the attributes are for your 5A that may be better than the other ones out there?

So taking some of these questions in the reverse order. What we look for, we've had a lot of experience with NS5A, and we have a whole series of backups and improvements should they be needed.

And a lot of experience of how the different molecules perform. The 3 criteria we look at, of course, are the PK to make sure that at reasonable doses, you're getting appropriate drug levels.

We look at resistance profile, whether one mutant or multiple mutants are required to escape the regimens drugs. And we look at potency across different genotypes.

And in those 3 categories, I'm quite pleased to-date, but never complacent for tomorrow with regard to where our 5A is. And I think, I would not make assumptions that all compounds are the same.

I don't think we've ever done that in pharmaceutical development. Chemical changes and dose changes and resistance changes, ask new questions that have to be answered typically in a good Phase II study.

So that's the assumption we have made. That's the feedback we get, although, with our experience, there are a lot of ways for us to have very, very competitive timelines.

Well, you asked specifically about Gilead. We've offered for a matter of months a pure and simple clinical collaboration to get these 2 lead compounds together in Phase III data that would benefit patients, instruct physicians, when both compounds come to market.

So because that regimen can be, I think, in a significant lead position in the field and make a major contribution. I think it's good for patients.

That's our business model. It's very good for us.

If it's determined to be good for Gilead, we're open to the collaboration.

I'll start with Elliott on dapa. Do you have any sense at all what the FDA bar is based on the interactions you've had with them or do you need an official meeting for that?

And then a bigger picture question for the team, from an M&A perspective, is the company open to acquisitions that enhance existing commercial franchises, but then don't have much of a pipeline elements? Or you can just answer the question that you think I'm probably asking.

Well, let me just take that one first, Greg. It's John.

We're not going to comment on any rumors or speculation. Charlie can comment in a minute about our capital allocation priorities, but Elliott do you want comment on dapa?

Yes, I'm not sure yet because the complete discussions have not occurred with regard to the FDA. Of course, we are very pleased to have received a positive opinion from the CHMP on April 19, and expect that will be followed by European approval.

I took note of their comments, of their concern about the increasing prevalence of the disease, the progressive nature of the disease, the need for combination therapy. And the note -- as we note, that other drugs that are out there have side effects.

And therefore, their determination of the benefit risk was in keeping with the way we saw the clinical data. And while we are working on our approvals around the world, we will be meeting with the FDA soon to discuss a path forward.

And we hope that a similar recognition of the unmet medical need will guide our discussions with the agency.

Let me just briefly touch on BD. I would say in summary, nothing has changed regarding our overall BD strategy.

As we've said many times, business development is one of our top priorities as evidenced by our recently completed acquisition of Inhibitex. And even with that transaction, we continue to view business development as a key priority within the framework of a balanced capital allocation approach.

We continue to be interested in small molecules, as well as expanding our biologics capabilities that are aligned with our key therapeutic areas. And we will continue to look for BD opportunities that can help deliver long-term growth.

And we are also interested in near-term opportunities that would improve the overall growth profile of our company. And of course, we will remain disciplined with regard to focusing on transactions that are strategically, scientifically and economically sound.

First, can you give us an update just on SPRYCEL and the share that's going on and how much are you taking there? First line versus second line and how that's moving?

And second on ORENCIA, can you talk about just how much of the sales are subcu right now? What percent of shipments?

Just give us some sense of what's going on and your share of that marketplace?

SPRYCEL, progress -- significant progress in establishing it as important medicine in CML. In the very competitive market, we grew the business by 51 -- 52%, in fact, in the U.S.

and 27% in international markets compared to Q1 of last year. In the U.S., we saw growth, driven by both continued adoption in the first-line setting and our continued leading share in the second-line segment.

Outside of the U.S., I'm very pleased by the strong adoption of SPRYCEL in first line in Japan. And our European business continues to do well now that we have first-line reimbursement in many countries that include Germany, Italy and Spain.

Do you want to add something Giovanni? And maybe you can also continue on ORENCIA.

This is Giovanni. Just to add on what Lamberto said, we had very strong performance in the U.S.

with SPRYCEL similar to what happened in other parts of the world. We grew over 50% versus prior year, and 8% versus prior quarter, driven by demand, primarily.

We continue to see the GLEEVEC business slowly eroding. There are approximately slightly under 76% of patients in the U.S.

now still on GLEEVEC, but we continue to make inroads in both first and second line in both segments of the market. In first-line, we're slightly ahead of the TASIGNA.

In the second-line setting, we're capturing about 58% of that opportunity. So the SPRYCEL business continues to grow very nicely.

On ORENCIA, we also had in the U.S. a strong quarter versus last year.

We had over 20% growth in sales versus last year. And let me make you a couple of comments and describe how we are doing in the IV segment, which to-date has been our core business, and then what is happening with the launch of subcu.

So we have strong performance in IV. We grew volume by 4% versus last year.

The total IV market grew less than 1%. Our current share in patients in IV is about 24%, and we are capturing approximately 30% of the new patient opportunities.

In Q1 versus Q4, our IV business was stable, which we consider to be very important. Since October, we've been focusing on the launch of ORENCIA subcu and that launch is going well.

In the first part of the launch, we focused on access and reimbursement, and approximately at the end of Q1, approximately 80% of commercial lives are covered, and we have open access in more than 60% of that market. We've seen good uptake in demand for subcu in the first quarter.

Our sales were $31 million, which also included $2 million of inventory work-down. And what we've seen is a couple of things.

First of all, the base of prescribers and trials has grown very, very nicely. And the majority of the prescribers are not heavy prescribers of ORENCIA IV.

So they're new prescribers for us. And second, over 80% of the business we've captured so far has actually been new business that has not been the result of cannibalization of existing IV business.

And so this is very consistent with our objective of leveraging the launch of ORENCIA subcu to establish a strong presence in the 60% of the market, which is subcu.

And Giovanni, I'll follow with a brief research update that following the approval last year in the U.S., we've submitted in Europe the subcu application, and we're pleased to be presenting at EULAR. I think one of the first comparative studies of its kind head-to-head with ORENCIA subcu and HUMIRA.

And that will be in early June.

One on ELIQUIS, do you have launch quantities built since there's only a couple of months here before FDA action, and then have you completed label negotiations with the FDA on ELIQUIS? And if so, have you done any market research testing with that label and what are the top attributes at least that would cause physicians to want to pen a prescription for that of ELIQUIS?

And then I have a follow-up for Elliott on hep C.

With regard to ELIQUIS, both sides are heavily engaged in this very extensive file. We don't comment on the details until the FDA is completed.

The label is one of the last things completed, but I am pleased with the progress and confident in the presentation of the data that I expect to be in the label.

And then in terms of launch quantity, Lamberto?

Sorry, I didn't understand I was supposed to give this answer, but we are in shape. Yes, of course, yes.

John, we may have lost you for your follow-up on hep C, so please give us a call once the call is over.

I dialed in a little bit late, so I apologize if I'm repeating anything, but Elliott, I was hoping that you could just talk about your process of figuring out the right dose for the nuc, plus NS5A used in Phase III. Specifically, I know that there is an 90-patient study #094 in combination with PEG interferon and ribavirin.

But I'm just not sure if that will help you understand the toxicity better. And specifically, how that will inform the decision on a different combination for Phase III.

So if you could just talk about the process and the additional data that you'll be looking at to help you decide by the end of the year the right dose for Phase III that would be helpful. And then the second question on that is, do you still plan to do Phase III, plus or minus ribavirin?

And then the final question is a commercial question, and I apologize if this was addressed, but obviously, YERVOY did not grow sequentially in the first quarter versus the fourth quarter in the United States as expected given the BRAF introduction. Just wanted to get your sense for when you would expect YERVOY in the U.S.

to start growing against sequentially?

David, you might have called a little bit later, so I suggest that the information about YERVOY that Giovanni gave before, and I'll repeat it now. But the good thing is that, as we said, and Giovanni confirmed.

the trend of prescriptions is positive in the last few weeks.

And I can give a quick answer to what we were discussing before, David. That the current Phase II you referred to of 90 patients, we believe will contribute, important to our safety database.

But we are designing for starting this year a Phase IIb of daclatasvir in combination with a variety of doses of our nuc. And the result of that Phase IIb will define the dose and regimen with or without ribavirin for our Phase III next year.

So thank you for your many and good questions. Summary, good quarter.

We are working hard on delivering both our short term and long-term objectives, and we are excited about this transition to new post-AVAPRO, post-PLAVIX era that we have initiated. Thank you.

Thanks, everybody. That concludes our call.