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Bristol-Myers Squibb Company (NYSE:BMY)
Q4 2017 Earnings Conference Call
Feb. 5, 2018, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Bristol-Meyers Squibb 2017 Fourth Quarter Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. John Elicker, Senior Vice President of Corporate Affairs and Investor Relations. Please go ahead, sir.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thank you, and good morning, everybody. Thanks for joining early on a Monday morning. We have a lot of information to discuss today, both from our Q4 earnings and 2018 outlook as well as results from 227. We are going to be using a slide deck today, which we normally don't do, so if you're on our distribution list, we mailed it to you about 15 minutes ago. The slides are also available on our website.

With me this morning are Giovanni Caforio, our CEO, Tom Lynch, our Chief Scientific Officer, Charlie Bancroft, our Chief Financial Officer, and Murdo Gordon, our Chief Commercial Officer. Giovanni, Tom, and Charlie will have prepared remarks, and then we'll be available with Murdo for Q&A. On Slide 2 is our Safe Harbor language. I'll read it really quickly. The presentation contains 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 of 1995. Actual results may differ materially from those indicated as a result of various important factors, including those discussed in the company's most recent annual report on Form 10-K and reports on 10-Q and Form 8-K. The documents are available from the SEC, our website, or from the investor relations group.

Any forward-looking estimates represent our estimates only as of the date and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if estimates change. The presentation also contains certain non-GAAP financial measures adjusted to include certain costs, expenses, gains, losses, and other specified items. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available on our website. Giovanni?

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Thank you, John. Good morning, everyone. We have a lot to discuss today, so let me share an overview of the call. As you've seen, we made an exciting announcement this morning on our lung cancer program. We consider today's results as a breakthrough in cancer research and we're excited for what this means for patients and the treatment of lung cancer. This result is a true example of the innovation that is core to our strategy.

Based on our understanding of this disease, we made bold and innovative changes to our program as the science evolved. Today's results validate our approach. I'm really proud of what our R&D organization has accomplished to advance the understanding of biomarkers in the treatment of lung cancer. Tom will walk you through the details in a few minutes. We also announced a very good quarter and strong performance overall in '17, which Charlie will share in more detail.

From my perspective, we are starting '18 with good momentum in our business and we see a number of opportunities in oncology and outside of oncology that we'll be focusing on this year. As I started to discuss in San Francisco last month, looking beyond '18, there are multiple growth drivers that position as well for the longer term. I'll talk more about this a little later in the call. With that, I'll hand it over to Tom to discuss today's announcements. Tom?

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Thank you, Giovanni. If I could ask everyone to turn to Slide 6. Today, we are excited to announce that Study 227 met the coprimary endpoint of improved progression-free survival for the Opdivo/Yervoy combination versus chemotherapy for patients with high tumor mutational burden, or TMB, regardless of PD-L1 expression. Remember, we're looking at both pathologies in CheckMate 227. And, as we also announced, the DMC has recommended that the trial continue to completion for overall survival in a PD-L1-selected population in Part 1A.

While we plan to present the results at an upcoming medical meeting, what I can tell you now is that this PFS data is highly statistically significant and clinically meaningful. I strongly believe that this will make a difference for patients with advanced lung cancer. Let's just put this into context. When I first began seeing lung cancer patients 30 years ago, the only options were chemotherapy and radiation, both marginally effective and significantly toxic. Since then, lung cancer has become a group of related diseases defined by distinct biomarkers that drive biology and treatment -- EGFR, ALK, ROS1, RET, and PD-L1, just to name a few. Today, we add TMB to this list to define a subtype of patients who clearly derive benefit from a combination of immunotherapy treatment regardless of their PD-L1 status.

As I've consistently said, Bristol-Myers Squibb is a science-driven company. These results demonstrate the strength and importance of our translational capabilities and validate the innovative changes we made to the trial design in light of how quickly the science was evolving. Perhaps most importantly, the results today further validate the role of the CLTA-4 mechanism. Lung cancer is now the third tumor where we've shown benefit with the Opdivo/Yervoy combination in a randomized trial, and we look forward to the overall survival analysis from 227 as the data matures in the TMB population.

Now, if I could ask you to turn to Slide 7. What I'd like to do is answer the question, "Why do we choose to include TMB in our analysis plan?" First, from a mechanistic perspective, TMB measures the number of somatic mutations that are present in the DNA of a tumor compared to DNA of normal tissue. We believe some of these mutations can drive expression of neoantigens, and that these neoantigens could be more visible to the immune system and thereby drive an immune response.

Second, as you know, Bristol-Myers and others have generated data showing improved outcomes for patients with high TMB. We've shown this across multiple endpoints, and those include response rates, PFS, and overall survival, across multiple tumor types, including non-small cell lung cancer, and small cell, and we've shown it for both Opdivo monotherapy and the combination of Opdivo and Yervoy. This supported our hypothesis around TMB being an important potential biomarker.

Now, if I could ask you to turn to Slide 8. Now, let me take a step back and explain how we adapted 227. On this slide, you see the overall study design. As you know, 227 was originally designed as two companion studies, Part 1A looking at PD-L1 expressers and Part 1B looking at PD-L1 non-expressers. As more data emerged, we made three important changes to 227 to reflect the evolving science. All of these were key.

First, we increased the size of Part 1A. This gave us more statistical optionality and lowered the potential for imbalances in the PD-L1-positive patients. Second, we added a second part, Part 2, to 227. This is a study of about 750 patients who are enrolled regardless of histology and across the PD-L1 spectrum, comparing Opdivo plus chemotherapy versus chemotherapy alone. The third change we made was to our analysis plan for Part 1, which allowed us to include TMB, and we're disclosing details of that today.

Now, if I could ask you to turn to Slide 9. As I mentioned, Part 1A and Part 1B are technically two companion trials running at the same time. However, in discussions with the FDA, we executed an integrated analysis plan that brought together the Opdivo/Yervoy arms and the chemo arms across all of Part 1 in a predefined population of TMB patients.

Turn to Slide 10, please. Within that integrated analysis plan, we defined two coprimary endpoints across Part 1, and that is what we're reporting today. The first is comparing the combination of Opdivo/Yervoy versus chemotherapy for PFS in a TMB-selected population. The second is comparing the combination versus chemotherapy for overall survival in a PD-L1-selected population.

If I could ask you now to turn to Slide 11. For the PFS endpoint, we were able to assess the TMB status of the majority of patients across Part 1, which I'll remind you is more than 1,200 patients. Actually, it's more than 1,700 patients. Here, you can see that of all those assessed, roughly 45% were above a cutoff of greater than ten mutations per megabase, which is what we defined as high TMB. In our study, TMB was evaluated using Foundation Medicine's analytically validated assay Foundation 1.

Now, I ask if you could turn to Slide 12. We're very encouraged by today's results, which establish TMB as an important, new, independent biomarker for selecting patients that respond to immunotherapy. Clearly, we'll be sharing these data with health authorities, and we look forward to presenting the complete results at a future congress. We believe TMB could be important more broadly. We've started to incorporate it across our I-O trials, not just for Opdivo and Yervoy, but also for our next-generation oncology assets. In fact, we're studying TMB in over 100 studies in multiple tumor types and programs.

If we could now turn to Slide 13. As a reminder, what we're reporting today is just the first of many significant data opportunities from our broad lung program. For CheckMate 227, the analysis for patients from Part 1B is now formally complete. Part 1A continues for overall survival in PD-L1 patients. Remember that the overall survival is event-driven. We know that the interim occurred later than we expected, and we anticipate that the final results will be later this year or early next year. And, Part 2 of the trial is ongoing, with results expected in 2019.

I also remind you that the 9LA trial looking at Opdivo plus Yervoy concurrent with two cycles of chemotherapy is also ongoing, with results expected in the second half of 2019. And of course, we had the initiation of our IDO/Opdivo combination trials, with both insight to IDO and our own compound, which we're eagerly awaiting to see.

If I could now ask you to turn to Slide 14. Beyond lung cancer, we have significant data milestones with Opdivo in the combination over the next 24 months, with trials reading out in hepatoma, gastric cancer, small cell lung cancer, and head and neck cancer. As I've said, we are a science-driven biopharma company. I'm particularly excited about our opportunities across the areas of immunoscience, fibrosis, and cardiovascular disease, and we continue to accelerate the development of our most promising assets in those areas as well as immune-oncology. With that, I'll turn it back to Giovanni.

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Thank you, Tom. I want to reiterate that I'm really proud of what our organization has accomplished. This is an important result for lung cancer patients, and we are very excited by the opportunity ahead of us. Turning to Slide 16, please. 2017 was a very strong year thanks to superior commercial execution and good progress in our clinical programs. We're now entering '18 with good trends and momentum in our business.

Moving to Slide 17, we are starting the year in a very strong position with good top- and bottom-line growth in our business. There are a number of pillars in our business that can grow in '18 and beyond, and I'm really excited about the prospects. First, Eliquis is a very important and growing franchise for us. As we exit '17, Eliquis is the leading NOAC in its indications and has tremendous opportunity to continue to grow. With Opdivo, the existing business going into '18 has strong momentum. We see continued strength across the current indications for Opdivo.

Beyond our excitement about the first-line lung results announced today, we have a number of opportunities this year that we're focused on, including adjuvant melanoma and the upcoming PDUFA for first-line renal with Study 214. With today's results, I'm even more confident that we will play a meaningful role in first-line lung cancer and I'm looking forward to continued data readouts early this year and into next year that will build on today's announcement.

Thinking beyond '18, we see a sustained period of growth driven by important opportunities for Eliquis and Opdivo, so let me remind you of what those are. I previously mentioned renal as part of our growth in '18, and it also plays a role beyond this year in what we see as a significant opportunity for Opdivo. It's an area where we've started to make a difference in second-line and see significant growth potential in first-line now, based on Study 214. With the first-line indication, Opdivo will have a presence across the continuum of care in renal cancer.

Two other areas with $1 billion-plus potential where we are focused are gastric cancer and HCC, diseases with high unmet need and poor outcomes. Based on what we've seen from Phase I and II data on Opdivo in these tumors and anticipating data readouts from our Phase III program this year and next year, we believe these are important areas driving growth in the near and medium terms. In addition to this, we have important opportunities in small cell lung cancer later this year and head and neck in '19. Finally, our emerging pipeline across all therapeutic areas is one of the most promising in our history, with several opportunities contributing to sustained growth.

We are excited with several programs moving forward, such as IDO and lactrine oncology, and from our non-oncology pipeline, where we'll see FGF21 and TIG2 moving to the next stage of development this year. All of what I've just described gives me confidence in our future and in our ability to continue to deliver on our strategy. The significant opportunities ahead of us require us to ensure the right level of investment behind R&D and certain commercial capabilities, and we are doing just that.

Turning to Slide 18, please. A year ago, I spoke about the work we were doing to evolve our operating model, and today, I'm pleased to say we are delivering across the company with a disciplined approach to resource allocation. We are creating a better company, which moves fast and is more competitive. We are strengthening our capabilities, particularly in translational medicine, and we are investing in our pipeline and commercial capabilities to support future growth. This will continue to be a critical focus going forward. With that, I'll hand it over to Charlie, who will discuss some specifics on the quarter and how we are thinking about our financials.

Charles Bancroft -- Executive Vice President, Chief Financial Officer

Thanks, Giovanni and Tom, for your very exciting comments. I'll cast off from my Philadelphia Eagles winning the Super Bowl. Let me start by saying we delivered a very good 2017 with robust revenue and earnings growth driven by strong execution across the company. Moving to Slide 20, while total revenues grew 7% for the year, our prioritized brands were up 27%, as Giovanni just highlighted. The exceptional product performance on key brands drove the EPS growth.

With that, I'll provide some color on the strong trends we are seeing for Opdivo. It was another solid quarter for our Opdivo franchise. We delivered $1.4 billion of worldwide revenue and almost $5 billion in sales on a full-year basis. Similar to previous quarters, we were successful in maintaining our leading share in second-line lung and saw strong performance in other tumors, such as renal cell. While the trends are early, Opdivo has rapidly penetrated the second-line HCC market, and we are seeing good uptake of Opdivo in the adjuvant melanoma setting.

Outside the U.S., Opdivo continues to lead in key markets such as Germany, France, and Japan. Excluding the sales deferral impacting Q4 of 2016, international sales of Opdivo were up over 64% in the quarter. With these strong Opdivo trends and today's announcement, we see meaningful opportunities for growth in both the near and medium terms.

Turning to Yervoy, we are seeing pressure on U.S. sales due to the adoption of Opdivo in the adjuvant melanoma setting. Going forward, we expect these trends to stabilize, and our outlook remains positive with potential launches in first-line renal cell and first-line lung. From a franchise perspective, we expect the growth for Opdivo in adjuvant melanoma will more than offset the erosion of Yervoy.

Our strong commercial execution across the portfolio also resulted in substantial growth for Eliquis in the quarter. In the U.S., Eliquis extended its leadership position with almost 50% TRX share of the NOAC market. Internationally, we are seeing similar trends and strong brand momentum in leading new-to-brand share in top European markets. With this performance in mind, we believe Eliquis is well-positioned for a period of sustained growth going forward.

Now, turning to Slide 21 and our non-GAAP P&L. I'll start with our gross margin, which continues to be strongly influenced by product mix. The strong growth of Eliquis and decline in our virology franchise drove most of the pressure on our margins in the quarter. Moving to OpEx and building on Giovanni's comments about resource allocation, we increased investment in R&D during 2017 while prioritizing spend in MS&A. This was enabled by our ongoing operating model evolution that we will continue to execute going forward.

With respect to our tax rate, the favorability in the quarter was primarily driven by earnings mix, and thinking longer-term and taking into account tax reform, we expect our tax rate to be in the high teens within the coming years. With tax reform in mind, turning to Slide 22, we see no change to our balanced approach to capital allocation.

Business development remains a top priority for us, and 2017 was a very active year, in which we executed over 50 transactions. We expanded our translational capabilities, we licensed new assets and technologies, and we entered several late-stage clinical collaborations. The IFM acquisition, our partnership with Foundation Medicine, and our new relationship with Halozyme were a few important examples of transactions we executed last year. We also remain committed to our dividend. 2018 marks our ninth consecutive annual increase. With respect to share repurchases, we bought back 250 million in the quarter and nearly 2.5 billion for the year. Taken together, we returned over $5 billion to shareholders in 2017.

Turning to Slide 23 for additional color around 2018 guidance, our full-year non-GAAP EPS guidance represents strong growth over 2017 despite the roughly $200 million impact from the change in accounting rules affecting how certain royalties are recorded. On gross margin, we expected additional pressure to be driven by the continued growth of Eliquis and erosion of virology to be somewhat offset by the growth of Opdivo.

Our approach on OpEx reflects the continued prioritization in R&D while we drive efficiencies in MS&A. In conjunction with today's announcement, our guidance includes investment supporting the educational efforts to commercialize TMB. A quick note on OI&E: We have restructured a portion of our future AZ royalty rights and therefore will receive higher royalties in 2018 and 2019. Our tax rate of 20% to 21% takes into account tax reform and, as I mentioned, the potential favorability over the next few years.

In conclusion, we had a very solid 2017, with strong execution across the board. We are well-positioned to grow in 2018 and today's announcement increases our conviction in the growth outlook for the company. I'll now turn it back to John for Q&A.

Questions and Answers:

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Charlie, and I think we're ready to go to the Q&A session. So, as a reminder, we have Giovanni, Tom, Charlie, and Murdo here for any of your questions. Go ahead, please.

Operator

Thank you. So, ladies and gentlemen, if you'd like to ask a question over the phone at this time, please press *1 on your telephone. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. If you find that your question has already been answered, you may remove yourself from the queue by pressing *2. Again, please press *1 to ask a question. We will pause just for a moment to allow everyone the opportunity to signal. And, we take our first person from the queue: Seamus Fernandez from Leerink Partners. Please go ahead. Your line is now open.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Seamus, we can't hear you.

Operator

Sorry. Alex Afrei from Bank of Montreal Capital Markets. Please go ahead. Your line is now open.

Alex Arfaei -- BMO Capital Markets -- Analyst

Oh, good morning. Thank you very much for taking the questions and congratulations on the results. I'm just curious -- why is overall survival not being evaluated based on TMB as well? We know from CheckMate 026 that Opdivo monotherapy showed very encouraging results in this setting. How come Opdivo monotherapy is also not being included in the TMB analysis? Thank you very much.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Alex, thank you. I'll take both of these questions. Let me just take the second one. I can do it quicker, then we'll talk about the endpoints in the first one. Just to remind everybody, what we're reporting today are the two co-primary endpoints. We're reporting the PFS in the combination therapy -- which is a co-primary endpoint -- in the TMB high group, and then, we're reporting the fact that the second co-primary endpoint, which is a test for overall survival in the PD-L1 group, is continuing for maturity. We have not seen any overall survival data. I think that's very important to mention. The second thing to say is that we're not going to be reporting any secondary endpoints on the call. The data is very fresh to us. We look forward to reporting those at an important medical meeting, and we also look forward to publishing that as soon as we possibly can.

Let me just say a few things about endpoints in trials. As a physician, I think that PFS and overall survival are both important endpoints. Doctors use both endpoints -- PFS and OS -- to be able to make decisions. I would also say that when you have PFS, particularly in a very large, well-powered trial, you're able to get a very good sense of potential benefit, and that does predict for good benefit with patients, so we're very encouraged by the PFS benefit that we see today in the TMB population.

I really want to stress something else about this result. This is highly statistically significant and it's clinically significant as well. I think that's an important point to drive home with PFS. We look forward to seeing the PFS data when it matures in the TMB group just like I'm sure you're excited about seeing it, and we think that'll be something that will also be important for doctors in terms of making decisions.

I also want to stress one other point, Alex. This was across all PD-L1-expressing groups, and I think one other thing we think is important is right now, PD-L1 is an important decision-making factor for doctors when deciding how to treat people with lung cancer, and there are some people who are not getting immunotherapy because they're PD-L1-negative. I think what TMB gives us is the opportunity to identify patients who clearly benefit from low-dose Yervoy added to Opdivo in that setting. We could not be more excited to tell you about that today.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Alex. Can we go to the next question, please?

Operator

Thank you, and now, we'll take our next person from Seamus Fernandez from Leerink partners. Please go ahead. Your line is now open.

Seamus Fernandez -- Leerink Partners -- Managing Director

Can you guys hear me now?

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Yes, Seamus. Thank you.

Seamus Fernandez -- Leerink Partners -- Managing Director

Okay, great. Something wrong with my phone system here. First off, let me echo the sentiment on the Eagles from a Philadelphia fan in Boston. It was a unique event, so thanks for that comment there, Charlie. Second, in terms of the difference in the study design, congratulations on the creative change to incorporate TMB. I'm just hoping that you could give us a little bit of color on whether or not you guys have a relatively complete understanding of the benefits of the combination over Opdivo monotherapy. I know that you did comment a little bit on that on the margin, but is the clinical significance applied more to TMB and the analysis therein or the combination of Opdivo plus Yervoy?

And then, secondarily, as we think about the longer-term opportunity, Giovanni, I'm just hoping that you guys could give us a little bit of color on how you're feeling about the Opdivo-plus-Yervoy combination as a continuous treatment given some of the safety concerns -- or, at least, the safety information -- that we're seeing out there. Again, the clinical significance is clear, but we're just trying to get a better sense of directionally how confident you are that the Opdivo-plus-Yervoy regimen -- particularly as a continuous combination therapy at the six-week treatment dynamic -- is something that you think is going to really work its way into the lung cancer regimen over time. Thanks.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Seamus, thank you, and I've got to say as a diehard Patriots fan in a sea of Eagles fans here, it's been a rough morning. If we didn't have 227 to report. I don't think I'd get through it. So, let me just address a couple of your points here that I think are well-crafted and important. The first thing I'll say is that I feel very confident that this is both a TMB story and an Opdivo/Yervoy story. I think both are important because first, understanding the biology, selecting the patients who are going to benefit most, TMB looks like a very powerful biomarker. As I mentioned, we're looking at it across our spectrum of I-O agents, including our next-gen agents.

The second point comes down to the contribution of components and how important Yervoy is. For me, I have felt for some time that Yervoy is performing extremely well in a number of different settings. Remember, benefit in melanoma, benefit in renal cell cancer, and now, benefit in this case, in non-small cell lung cancer that's TMB-high. What I can tell you is that our analysis of the data thus far makes us very confident that Yervoy is a big part of what we're seeing today, and it's not just Opdivo, but that Yervoy is part of this as well. I want to mention -- as you said, it's low-dose Yervoy that's given every six weeks and has that advantage in terms of being well-tolerated by patients as we move forward. So, I think that's not just TMB or the combo, it really is a story about both, and I'll turn it over to Giovanni for his thoughts.

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Seamus, good morning. I just had a couple of comments. First of all, I want to strengthen and reinforce what Tom was saying about the importance of the combination of Opdivo and Yervoy. This is the third tumor type in which we have seen data that makes us really excited about the potential of this combination -- melanoma, renal, and now, non-small cell lung cancer. The second thing that I want to say is that I'm actually quite proud of the work that we've done in optimizing the regimen, and I think that's really important. The dosing schedule of Yervoy as part of the combination is really important.

Based on the totality of the data that we've seen so far, our confidence in our broad-line cancer program has only increased, and I think that's important because, in parallel, it also strengthens the overall growth outlook for the company. Obviously, it starts with patients, but I think this is a really important time for the company overall as well.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Seamus. Can we go to the next question, please?

Operator

Thank you. And now, we'll take our next person: Jami Rubin from Goldman Sachs. Please go ahead. Your line is now open.

Jami Rubin -- Goldman Sachs -- Managing Director

Thank you. Just a couple of questions. Murdo, maybe for you first, if you can address the commercial implications of TMB. I'm just curious what payers, KOLs, and doctors are saying about TMB. I know this is new and exciting, but how typical is this in their practice? And, if you could talk about the size of the front-line lung market affected by patients with high TMB. Your press release said that 45% of patients expressed high TMB, but is that 45% of the total market or 45% of a share of the market? I ask because when we go back and look at CheckMate 026, I think you evaluated 60% of the population, so if you could put that into perspective.

Lastly, maybe for you, Tom, how confident are you now in hitting overall survival for Part 1A of the study? Did I hear you write? I think earlier, you did say that you would also look at OS in TMB, although I wasn't clear. Lastly, is this trial a registrational trial? Thanks very much, and congratulations.

Murdo Gordon -- Executive Vice President, Chief Commercial Officer

Thanks, Jami. First off, I'm also excited that we were able to announce what we've been able to do today. Clearly, following the science and looking at tumor mutational burden as a biomarker has been the right scientific approach in first-line lung cancer, and congratulations to Tom and his team for being able to deliver on that. In the commercial and medical area, we're also very excited about TMB. It appears to be a highly predictive biomarker. As you know, the Foundation 1 test was recently FDA approved, and in parallel to that FDA approval, they're pursuing a national coverage determination for CMS Medicare coverage and reimbursement of that test upon indication of that as a companion diagnostic, so we're very excited about that.

In terms of the size of the front-line lung cancer population, clearly, you know the design of 227. We designed this trial to exclude ALK- and EGFR-positive patients, so the 45% number applies to the TMB patients that were tested in the trial, and I think you alluded to the ascertainment rate. While it was 60% in the trial, we have a lot of confidence that that will rise with improvements to methodologies, pathology techniques, as well as surgical techniques on a biopsy, so we're hopeful that that will improve over time.

I would say that we're very ready for this. The team at Bristol-Myers Squibb has been focused on the translational science, but also on helping educate physicians. I would say in the academic centers, there's a high degree of awareness of TMB and there's already quite substantial testing today. I would say it gets much lower than that when you go out into community oncology, and that's where we're focusing a lot of our education and continuing research efforts.

We have an ongoing safety clinical trial in first-line lung cancer, looking at patients with Opdivo and low-dose Yervoy being treated after having their TMB assessed, and that's being conducted through our I-O Icon network. We have a great partnership with a large network in community oncology, so we'll help to be able to generate data and describe the safety profile of the drug in a much larger community-based population. And then, of course, as we pursue regulatory approval, the commercial organization will be ready to focus on a number of different important audiences, inclusive of the ones you mentioned.

Lastly, I would say from a payer perspective, this is a very positive event. I think both clinicians and payers have been looking for a better way to segment the first-line lung cancer market, and I think with the advent and exciting information that we have that we hope will be presented, as Tom said, at an upcoming scientific congress and published thereafter, we hope that we'll be able to go to payers in the U.S. and around the world and say, "This is a patient population that discretely benefits from low-dose Yervoy plus Opdivo," so we're very excited about that in the commercial realm. Thanks, Jami.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Jami, let me just echo something that Giovanni said. I think when you have a dataset like this, which is highly statistically significant and -- probably more importantly -- clinically meaningful, I think that does increase our confidence in a number of different elements of our entire lung cancer program, not just Study 227. Remember, we've got Study 9LA, which is coming after this, we have Part 2, which is looking at the chemo column, then we have our IDO studies. So, I think that's an important finding today. I think the second thing you asked is about whether we'll be looking at OS in TMB. As I mentioned earlier, we will be looking at overall survival in TMB. As you know, that's event-driven, and when the data mature, we look forward to sharing them broadly at that point.

I think the second question you asked was about our confidence in hitting overall survival in Part 1. As you know, we have not seen any overall survival data. The hurdle for stopping a study early is usually extremely high, and again, it's event-driven, and we look forward to seeing that data when the required number of events occur at that point.

Your final question came down to the issue of do we look at this data as registrational? I think as we said earlier, we are eager to share this information with regulators in the United States and in the E.U. because -- I think Murdo put it very nicely. We think this is going to make a big difference for doctors and for patients, and as someone who's treated lung cancer for 30 years, to me, this kind of data is the kind of data that doctors are asking for. They want to be able to know which patients are going to benefit, and I think it's going to have the opportunity to really change the way we think about non-small cell lung cancer.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Jami. Can we go to the next question, please?

Operator

Thank you. Our next question comes from Andrew Baum from Citi. Please go ahead. Your line is now open.

Andrew Baum -- Citigroup Research -- Managing Director

Thank you, and congratulations. Three questions, please. Obviously, we're operating in the dark, so we can't see 189, 227, or the mono data from 227, but with that in mind, three questions. Is good the enemy of the great here? What I mean by that is, is the low friction associated with Keytruda chemo problematic in persuading commissions to adopt a more expensive and arguably more toxic therapy which requires educational support? Along the same lines of that, in terms of friction, you mentioned the need for continued education, but also, there's a 12-day turnaround for TMB. To what extent can that be addressed and how quickly can we migrate to the liquid TMB assays here?

And then, the last question is in terms of cutoffs, which picks up on one of Tom's points about the relevance of TMB to identify patient populations and other indications? Do you have a firm sense that this cutoff is transferable across indications? It strikes me this is not a harrowing decision as anything driven by science in terms of the identifiable number, so is there consistency here or is it going to be on an indication-by-indication basis? Many thanks, and congratulations again.

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Murdo, why don't you start with commercial, and then Tom can go?

Murdo Gordon -- Executive Vice President, Chief Commercial Officer

Yes. Thanks, Andrew. The way I would approach my view of the first-line lung cancer market is we've known for a while that PD-L1 expression has been an imperfect biomarker in being able to stratify and select patients. Now, with this very large dataset, we've been able to establish the value of a highly predictive biomarker in TMB and we have a compelling profile of Opdivo plus low-dose Yervoy as a result. I think that really is an opportunity for us to redefine the way in which clinicians, payers, and patients think about first-line lung cancer. So, we're excited about that. I think there will still be a role for PD-L1 expression to play to understand where other options and treatment modalities should be used, but I think the compelling nature of these data and the predictive nature of TMB will allow us to establish a very good presence in the market.

I would also say that the partnership with Foundation Medicine has been a good one for us. We've worked very closely with them to understand the logistics of how TMB testing and patterns of testing are currently occurring. I would say that academic centers are doing very well in turnaround time and tissue ascertainment, and I think that will propagate into the community. It will take some time, and obviously, when physicians see a very compelling clinical profile, I think that is likely to lead to an acceleration in testing and an improvement in turnaround times, although our hope is that we would establish testing for TMB as a panel type of test, as a test that occurs early in the diagnosis of a patient so that it is available to the primary treating physician early in that treatment decision-making process, and that's really our goal going forward. So, the turnaround time today will hopefully not be an impediment going forward. For the liquid biopsy question, I'll turn it back to Tom.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

So, Andrew, thank you for your question. One of the things I would start off by saying is that I'm incredibly proud of our translational capability, as Giovanni mentioned in his remarks, and how we approach this. Let me give you a little sense of how we got to a cutoff of 10 for TMB. What we did was look at a number of studies we had done in lung cancer. We looked at Study 12, Study 568, Study 026, and then we looked at different cut points of tumor mutational burden that were able to best segregate outcomes and best predict for who was going to have better response and better benefit than others, and we arrived at a cut point of 10.

Now, I have to say, let's stress something else: This is very early in the understanding of this biomarker. This is the first important report of it applied to a randomized trial. Remember, this was a prospective analysis that we did using archival tissue, but the analysis itself was a prospective, and I think that's important to keep in mind. I think you have to think about other biomarkers. Look at how we understand how to use Herceptin in patients with breast cancer. Was it 2-plus? Was it 3-plus? Then, it became understanding that amplification was the key issue.

And so, it really is early in the process, and while I think that with the data I've seen, 10 is going to be the number, and I hope that 10 is the number forever, can I promise you that someday, are we going to find out that number is not really 8 or 12? As other companies and other investigators look at this in their datasets, might we learn more? Absolutely, and I remain open to collaborating across investigators in that respect.

I think a second thing about the test that's important is this is a highly validated test. While the number might be something that, with time, might get adjusted for indication-by-indication, the test itself is highly validated, and on November 30, as of 2017, it was approved by the FDA. So, while we need to work with Foundation on the companion diagnostic indication -- and, we'll obviously work with them and the FDA at that point -- the test itself is solid, and we feel very good about that.

That brings us to the last question you asked, which is when do we think blood-based assays will come in? I think there's great promise for blood-based assays and I think that will make this process much easier for patients. On the other hand, we don't quite have them yet. We're close, and again, we look forward to working with a number of diagnostic companies that have insights into how we can create better ways of working with TMB.

What I can tell you today is I think that our findings in Study 227 make an increasing imperative in the urgency of coming up with better ways of assessing TMB, and I think blood-based biomarkers will be one of them.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Andrew. Can we go to the next question, please?

Operator

Our next question comes from Chris Schott from JP Morgan. Please go ahead. Your line is now open.

Chris Schott -- JP Morgan -- Managing Director

Great. Thanks very much for the questions and congrats on the data. I'm just questioning on the TMB dataset and the competitive landscape in front-line. When you consider the other datasets -- some of these all-comer chemo combo datasets out there -- what's the hurdle that you consider as you think about the commercial opportunity here? Basically, do we need to see improved hazard ratios in this TMB population relative to some of those overall competitor datasets -- the chemo combo datasets -- to see if physicians adopt, or do you think there's going to be debate here with I-O/I-O versus I-O/chemo? I'm trying to get a little bit of sense of how you're thinking about that.

My second question was just clarifying an earlier comment in filing. Do you think there is a potential pathway to file this data earlier than that late 2018, 2019 readout from the OS arm of the 1A study? I'm just trying to understand the filing dynamics there. Thanks so much.

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Chris, let me start there, and then I'll ask Murdo and Tom to jump in. First of all, the progression-free survival was the coprimary endpoint of the study, so given the strength of the data, as Tom mentioned, we will discuss that with regulatory authorities, but that was the coprimary endpoint of the trial, and in the TMB part of the study, that data is mature and ready.

With respect to your question about competitiveness, I think that's important here -- obviously, Tom has said many times and we believe that lung cancer is a very heterogeneous disease. It is a very broad set of diseases, in fact. 30% of it is treated by physicians in the academic and hospital setting and up to 70% is treated in the community, so it's obvious that defending on competitive datasets and our own data, there will always be physician preferences and patient profiles that will indicate different treatment options. But, I think what's important here is the ability to identify a patient population that has the potential to respond to a treatment strategy with a regimen of Opdivo plus Yervoy.

What's also important here is the ability to identify patients that are not likely to respond, and both are really critical. So, I think the biomarker here is very important. It identifies a population of patients that should be treated -- in our mind -- based on the data with Opdivo plus Yervoy, and it also defines which patients may benefit from a different treatment strategy because it is clear that for patients with low TMB, going for a combination of immuno-oncology agents may not be the right strategy. So, I think there is clearly room in this market for multiple treatment strategies, but the data are very compelling.

Murdo Gordon -- Executive Vice President, Chief Commercial Officer

Thanks, Giovanni. I would also echo that the way the market is right now, there are a lot of questions in the minds of treating physicians of what to do in lower PD-L1-expressing patients in terms of treatment options available. We know what the Keynote 021g dataset said. As you mentioned, we haven't seen the 189 dataset, but there are still a lot of patients in the market who have low PD-L1 expression who are not receiving an immunotherapy option.

With the TMB biomarker, we're able to look across all PD-1 expression and enrich for a population with TMB, and in this clinical trial, we've been able to demonstrate a benefit in PFS with Opdivo plus low-dose Yervoy, and I think that's a very compelling treatment option for clinicians going forward. The combination of PD-L1 and TMB may prove to also be, as Giovanni said, a very useful way to select patients out of immune checkpoint inhibition, but given the very broad program that we have with 227 and other clinical trials that Tom has described, we will be able to answer many more of those questions going forward. I'm excited about that.

I think that over the next year and a half or two years, we will be able to help physicians out there understand exactly when and where to use what treatment option, and I'm also pleased that we're developing all of those treatment options within our own portfolio.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

I echo those two comments, and again, I look at this as being data that we eagerly look forward to sharing with the regulatory agencies, and I think that answers your question about how we're going to proceed.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Chris. Can we go to the next question, please?

Operator

Thank you. The next question comes from Tim Anderson from Bernstein. Please go ahead. Your line is now open.

Tim Anderson -- Sanford C. Bernstein -- Managing Director

Thank you. I just want to stay on this issue of filability of this data. Bristol itself has commonly said that PFS is an imperfect predictor of OS, and I think we've seen that in certain datasets over time by different companies, including Bristol. If I think about TMB in 026, at least -- what was published as a later analysis on OS -- there was a big PFS benefit looking at TMB stratification, but there wasn't much of an OS benefit.

Tom, you said, "We're very early in our understanding of TMB as a biomarker," but without having OS data, I'm still struggling to see how this is data that the FDA would accept for approval, essentially. If you could maybe just clarify your comments earlier on the biomarker, saying we're very early in our understanding, but at the same time, saying it's very validated. Maybe that's just a technical point about validation. And then, last question is have you seen any Opdivo monotherapy data out of 227 such that you can put Opdivo-plus-Yervoy into context?

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Tim, thank you. I can answer the second question really quickly. As I mentioned today, we're commenting on the two co-primary endpoints, and there are a number of secondary endpoints in the study, and we look forward to sharing those at an upcoming medical meeting, publishing those, and going over those in detail.

To the first question -- again, thank you for the chance to clarify my answer to Andrew's question earlier -- when I'm saying we're early in the understanding of TMB, I'm not saying that we're early in understanding how to measure it and the validity of measuring it. The Foundation 1 test has been highly validated and FDA-approved as a test, meaning when you test somebody's tumor for TMB, the answer you're going to get is reproducible and meaningful in terms of being a validated test. This is not a test that does not have the rigor of other areas.

When I was responding to Andrew's question on a cutoff -- could the cutoff be different in a different cancer type or different tumor type? -- sure, it could. We don't have enough data yet. As I mentioned to you, we're looking at TMB in more than 100 different studies that we're doing, and is it possible that we'll find that TMB for colorectal cancer, pancreatic cancer, or gastric cancer might be different? It might be, and that's what I meant by saying we're early in TMB, not that we're early in this scenario of 227, so I think that's important.

The second question comes down to PFS versus OS. Now, as you know, many drugs have been approved based on PFS. In fact, our own 067 experience in melanoma was approved first based on PFS before we had the OS data. As you also noted, Tim, frequently -- almost always -- PFS data comes before OS data. Not always, but often, it comes before that in a study. We look forward to seeing the OS data in this trial. As I mentioned to you, we have not seen any overall survival data from 227 yet, and we have as much curiosity as you do about this.

What I will say is that one of the things doctors do is when they look at a study with the size and robustness of this trial -- the total number of patients on Study 227 is nearly 2,500 patients, so it's a large trial with a result which is highly statistically significant and clinically meaningful, and in that setting, I believe -- particularly when it's meeting an unmet medical need, when there are patients out there who are not getting I-O therapy that we have excellent data for now that shows you can benefit from I-O therapy -- I think that's a very compelling case for why this matters.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Tim. Can we go to the next question, please?

Operator

Your next question comes from Jeff Holford from Jefferies. Please go ahead. Your line is now open.

Jeffrey Holford -- Jefferies & Co. -- Managing Director

Hi. Thanks for taking the questions. So, three points here. I don't know if you're going to be able to tell us anything now about PD-L1 status. I assume that's going to be a subgroup in our system. Within this, I remember that when we looked at CheckMate 026, the high-TMB PD-L1 greater than 50% was a stunning result there. Maybe, perhaps, what we're going to be looking at here is something like breast cancer where physicians look at more than two points on a matrix like node status and hormone receptor status. Perhaps it could be tumor mutation burden and PD-L1 status that really drive the use of the combo, so maybe some comments on that.

Second, do you think the rationale for tumor mutation burden also works in chemo combo and triple combo with Opdivo/Yervoy/chemo? There's no reason why that rationale couldn't work just as well. And then, last, a few questions about the filability of this data here. Do you not think that the Keynote 021g approval acts as a strong precedent for filability here? Thank you.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Let's take these in order. First, I think your comment about PD-L1 status and TMB and the interaction between the two is a very interesting one. We just got this data, so we look forward to looking at that and looking at many of the other potential understandings and relationships we can have once we have some time with the data to take a look at that, but I do think there's a possibility that that might help to define the populations that might benefit.

I think one thing Murdo said earlier and Giovanni echoed as well is really important, which is that you could imagine a scenario where a combination of biomarkers -- PD-L1 and TMB -- could define patients who do not benefit from I-O agents at all and might say these are patients we should treat with another type of experimental therapy or chemotherapy in that setting. So, I share your enthusiasm for looking at that interaction between the two biomarkers, as we will look at the interaction among all the biomarkers that we look at in lung cancer.

The second point you raised, Jeff, was the question of rationalizing -- whether TMB will hold with chemo. As I mentioned, we're looking at this in more than 100 different scenarios, and again, we just haven't seen data yet in that setting, and we look forward to seeing that because I think that will add more color to the patients and how the patients benefit in that setting.

The final question of filability -- as you know, we don't comment on our relationships or actual discussions with the FDA, and we certainly don't comment on the strategy that other companies might have used in getting their trials approved. What I will say is that we do look forward to sitting down with the FDA and EMA and sharing this dataset with them because we think it has the potential to be highly significant for patients.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Jeff. Can we go to the next question, please?

Operator

Thank you. The next question is coming from Umer Raffat from Evercore ISI. Please go ahead. Your line is now open.

Umer Raffat -- Evercore ISI -- Managing Director

Hi. Thanks so much for taking my questions. John, I figured everyone else is asking multiple so, I'll ask multiple today as well. The first and main question I have is I just wanted to understand how you guys went about changing the staff plan. What informed that decision? Specifically, what informed these specific sets of changes? "Let's pool Part 1A, Part 1B, let's put only PFS but not OS in TMB positives." I'm just curious about that one.

Secondly, I know the slides say that CTLA-4's role is "validated." I was just curious if you could explain how. Presumably, you've seen the PFS curves on combo versus mono in TMB-high as well. Finally, I noticed Foundation Medicine defines high TMB as 20 mutations per megabase. Granted, all this is still in flux, and I know you guys are using 10 mutations per megabase. So, I guess my question is how does your data look for combo versus chemo in 10 to 19 mutations per megabase versus 20-plus mutations per megabase? I only ask because EMA has been doing some of this in prior regulatory reviews for [inaudible] Merck on Keynote 021g. Thank you.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Umer, thank you for your questions. I'll start off with the first one, which is how did we change the stat plan and why did we change the stat plan? Just to give you a sense, the data in lung cancer has been developing and emerging incredibly quickly. Our understanding of the biology of lung cancer has improved. So, we looked at Study 026, and I don't know if you guys know this, but Study 026 didn't exactly hit what we were hoping for in that setting, so we looked in great detail about why it didn't work and what the differences were. "Let's do a whole-exome sequencing of our patients in Study 026 to be able to look in great detail to understand what about our patient population might have been different."

While we were doing that, we began to understand -- based on some data with Yervoy, tumor mutational burden in the past, and other burgeoning data that was being generated by our translational medicine group -- that TMB might turn out to be an important marker, and that's how we came upon TMB, and then we looked at 568, which is a practice-informing study of about 300 patients from lung cancer, and that gave us more depth of data to look at TMB and lung cancer, and the same thing with Study 012. And so, those three things said, "Aha! This looks like it might be an important biomarker."

So, we changed the stat plan to enable us -- to give us a size. Remember, we nearly doubled the size of Part 1A of the trial. That was really important to be able to do. It gave us the statistical optionality to be able to look at a marker like TMB while still preserving the ability to look at OS in a PD-L1-defined patient group. So, that's the background for how we got there. What I can say about CTLA-4 being validated in this setting is from our look at the data we've seen so far, we believe that Yervoy is a very important part of this story, and we think that Yervoy is clearly critical to the benefit in this TMB-high patient population. That's what I'll say at this point.

Your last question is really interesting regarding -- Foundation might say 20 is high. What happens between 10 and 19? What happens between 6 and 10? Those are all excellent questions, Umer. We just haven't yet gotten to the point where we've been able to look at all the variations. What I can tell you is we look at the three datasets I told you about -- 026, 012, and 568. We found 10 was an endpoint that distinguished outcome in lung cancer, using the Foundation 1 assay. When we prospectively analyzed that in a patient sample using archive tissue, we were able to show this result. I can't tell you that patients who've got 25 don't do even better. They might. Patients who have 7 might also do well. Again, those are all things I think we're going to learn with more time.

Umer Raffat -- Evercore ISI -- Managing Director

Thank you, Tom.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Umer, thanks for the questions. Can we go to the next person, please?

Operator

Thank you, sir. The next person is Geoff Meacham from Barclays. Please go ahead. Your line is now open.

Geoffrey Meacham, Ph.D. -- Barclays Investment Bank -- Managing Director

Hey, guys. Good morning and thanks for the question. I just have a couple. On TMB, what work have you guys done in other tumor types beyond lung? At this point, what do you think is the next step in tumor types? You already have approval. You think you'll be redoing that, or do you think the logical paths are indications where you haven't seen more I-O activity? And then, on 227, Tom, as the data for Parts 1A and 1B mature, how important do you think overall PFS and OS are on an ITT basis, not the TMB segment? Thank you.

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Geoff, just a comment on your first question. As Tom mentioned, we are measuring TMB in over 100 trials. You will remember that one of the first trials in which we started stratifying for TMB status was 9LA. That's included in the study design. We're looking at TMB across multiple types of tumors and lines of therapy, and obviously, as our clinical development program evolves, we will learn much more about the role of TMB in selecting patient populations outside of lung cancer.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Geoff, thank you for the question on 227. I want to emphasize a couple things on what we have found and what we haven't looked at yet. In a group of patients with high TMB regardless of PD-L1 expression -- remember, these were also across histologies, so they included both squamous and non-squamous. The addition of low-dose Yervoy to Opdivo improved PFS in that setting. What we haven't reported is the overall survival from a PD-L1-selected group, and you'll be seeing that data down the road.

There's really not much more we can say about the survival data. I'd love to have the answer now, and I'm sure you would as well. We just don't have that data yet, and we look forward to having that dataset. Again, I keep coming back to the fact that we're still early in our understanding and there's a lot of data that's going to emerge, not just from our studies in lung cancer, but from other investigators working with other agents in this disease, and we're going to keep learning, and we're going to keep following that biology -- as we did in this circumstance -- to improve outcome.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Geoff. Next question, please.

Operator

The next question comes from Vamil Divan with Credit Suisse. Please go ahead. Your line is now open.

Vamil Divan -- Credit Suisse -- Analyst

Great. Thanks so much for taking my questions. Just two more around 227. So, following up on the prior comments, I'm still not clear on these. It sounds like very positive comments on around surrounding TMB and PFS. I'm wondering why you decided to stick with PD-L1 as the driver for the OS analysis for Part 1. When you were making the changes, why did you not change that to also be TMB? I know you can't talk about secondary endpoints right now, but maybe you can just clarify why the decision was made the way it was. The second part is that you mentioned that Part 1B is now finished. I'm curious as to why that's not continuing to the OS data. Why are you stopping that one now? Is it something you saw in the inner analysis or was that always the plan as you adjusted your stats plan, to not look for OS benefit in that population? Thanks.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Vamil, thank you for your questions. I'd say a couple things to answer them. The first question is Part 1B is finished because we used patients from Part 1B that were PD-L1 negative but high-TMB. They're in the TMB analysis. The second thing is that we then designed Part 2, which is asking the Opdivo/chemo question across a broad group of patients regardless of their PD-L1 status, and that's the way we designed this fiscal analysis. I think the first part of your question on overall survival for TMB versus overall survival in a PD-L1-selected patient population -- because this study is so large, that's one of the things -- again, when people asked earlier why we changed it, we wanted to have optionality to look at a couple of important questions.

While we reported PFS today on this, we just haven't seen the OS data for TMB, so it's entirely possible that we will see OS data from TMB, and we look forward to seeing that data, but we just have not seen that data at this point. We're waiting for that dataset to mature. At the same time, we have this preserved ability to look at overall survival in a PD-L1 population, so I think those are really important points to get across. Part 1B was the smallest of all the three parts of Study 227, and Part 2 has almost 750 patients, so if you're wondering about the chemo question with Opdivo, that will be answered in Part 2 of our study.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, Tom. I think we have time for two more questions.

Operator

Thank you. The next person is Marc Goodman from UBS. Please go ahead. Your line is now open.

Marc Goodman -- UBS Investment Bank -- Managing Director

Just a couple. First of all, I just want to make sure I understand -- remind us about 026, and when you describe that you hit on PFS but not OS, why -- in this case -- you feel confident that -- what are the key differences so that we can have more confidence that you'll hit on OS eventually here? Second, each quarter, you guys are pretty good about giving us Opdivo sales and the breakdown of where it comes from, so if you could do that for the quarter, that would be helpful. Third, you mentioned FGF. I know we've been waiting. Did you actually talk to the FDA, have you signed off on Phase III, when will you begin, and what should we be looking for as endpoints there? Thanks.

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Marc, let me start with FGF21, maybe. As you know, we had discussed that we were in conversation with the FDA to start the next phase of development for FGF21. One of the things we discussed with the FDA was the fact that in our original studies, we had not included a posttreatment biopsy of different doses, so we've decided to go ahead with a study that we'll be looking at posttreatment biopsies before we move into a large Phase III study, and that study is starting right now.

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Just to quickly address the question on the 026 -- I assume you're talking about the 026 retrospective look that we did that we presented at ACR last year that showed a PFS benefit -- you could separate them out by PFS based on TMB in that setting. Remember, there was a lot of crossover in 026, and again, it was used to generate hypothesis-generating data. It was not a predefined, prespecified, prospective analysis like 227 was. Murdo?

Murdo Gordon -- Executive Vice President, Chief Commercial Officer

Thanks for the question, Marc. For Opdivo sales by major tumor type -- I'll give you U.S. numbers and give you worldwide after that -- we currently enjoy roughly 44% to 54% of our business from lung. That's all lines because we continue to get a bit of off-label first-line cancer usage, particularly in squamous. In renal, about 18% to 22%, head and neck, around 5% to 10%, melanoma, 14% to 20%, and then, there are all others. You should think of this as probably early uptake in leading indications because of the approvals now in HCC and adjuvant melanoma. We've got about 9% to 15% there.

The reason I give ranges is it's obviously very hard to get specific point estimates by tumor type. I'll just give you the lung number when you go worldwide. That climbs to between 50% and 60%, and that's because of the strength we have in ex-U.S. markets in lung cancer because of the leading position we've been able to establish through earlier access approval, particularly strength in markets like Japan and France. So, there's a very strong performance in lung outside the U.S.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks. Can we go to our last question, please?

Operator

Certainly. The last person is Jason Gerberry from Bank of America Merrill Lynch. Please go ahead. Your line is now open.

Jason Gerberry -- Bank of America Merrill Lynch -- Managing Director

Hey, good morning, and thanks for taking my questions. One quick regulatory question on 227 -- so, it's the thought that in TMB-high, you'd need a favorable OS as a secondary endpoint to gain full approval and European approval, or that the co-primary endpoints in different subpopulations would be registration-enabling? I just wanted to get clarification of that in light of Merck's comments earlier in their 3Q about needing OS to drive approval in the target population they're going after. And then, just one other question: Can you provide the proportion of how prevalent TMB-high is in PD-L1-negative patients? Thanks.

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Jason, let me answer that question. We're not going to comment more on our regulatory interactions, but I just want to stress that the TMB part of the study met its primary endpoint, and the primary endpoint is progression-free survival in that study, and we look forward to discussing that with regulatory authorities around the world. I think that Tom said earlier that we have just received the top-line data. There is a significant number of secondary analyses that we will be conducting, and we look forward to presenting that data together with other analyses at a future meeting. Obviously, as we've mentioned, the study looked at TMB regardless of PD-L1 expression, so it included patients across the full spectrum of PD-1.

So, let me just close and thank everybody for participating in the call, and in closing, I'd like to reaffirm my enthusiasm for the results we've shared with you today. During my career and many years in oncology, I can't remember a time in which cancer research was advancing at the speed that we are experiencing today, and I'm very proud that we at BMS are at the forefront of incredible scientific advances. We had a great year in 2017 and I'm very confident in the multiple opportunities that we are pursuing to build a strong future for the company in '18 and beyond.

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Thanks, everybody. I appreciate your time.

Operator

Thank you. So, ladies and gentlemen, that will conclude today's Bristol-Myers Squibb 2017 Fourth Quarter Results Conference Call. Thank you for your participation. You may now disconnect.

Duration: 75 minutes

Call participants:

Giovanni Caforio, M.D. -- Chairman and Chief Executive Officer

Thomas J. Lynch, Jr., M.D. -- Executive Vice President, Chief Scientific Officer

Charles Bancroft -- Executive Vice President, Chief Financial Officer

Murdo Gordon -- Executive Vice President, Chief Commercial Officer

John Elicker -- Senior Vice President of Corporate Affairs and Investor Relations

Alex Arfaei -- BMO Capital Markets -- Analyst

Seamus Fernandez -- Leerink Partners -- Managing Director

Jami Rubin -- Goldman Sachs -- Managing Director

Andrew Baum -- Citigroup Research -- Managing Director

Chris Schott -- JP Morgan -- Managing Director

Tim Anderson -- Sanford C. Bernstein -- Managing Director

Jeffrey Holford -- Jefferies & Co. -- Managing Director

Umer Raffat -- Evercore ISI -- Managing Director

Geoffrey Meacham, Ph.D. -- Barclays Investment Bank -- Managing Director

Vamil Divan -- Credit Suisse -- Analyst

Marc Goodman -- UBS Investment Bank -- Managing Director

Jason Gerberry -- Bank of America Merrill Lynch -- Managing Director

More BMY analysis

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