Q1 2021 Eli Lilly and Co Earnings Call
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Hmm, Okay, well, that's the ladies and gentlemen, thank you for standing by and welcome to the Lilly Q1, 2021 earnings conference call.
At this time all participants are in a listen only mode.
Later, we will conduct the question and answer session.
If you wish to put yourself and the question queue.
The express one the zero.
At this time of when instructions are given.
As a reminder, this conference is being recorded.
I would now like to turn the conference over to our host Mr. Kevin Hern. Please go ahead.
Good morning, Thank you for joining us for Eli Lilly and the company's Q1 2021 earnings call I'm, Kevin Hern, Vice President of Investor Relations. Joining me on today's call are Dave Ricks, Lilly's, Chairman and CEO and other.
Asking Aussie Chief Financial Officer, Dan The Wronski, Chief Scientific Officer, Anne White President of Lilly oncology.
The Uva president of Lilly bio medicines.
Mason President of Lilly diabetes, and we'd also like to welcome Jake Van Norden CEO of blocks of oncology at Lilly, who will be joining us today and moving forward. The answer your questions about discovery and early stage oncology efforts he's leading.
Now I'll turn the call over to Dave Sorry, and we'd also joined by Sarah Smith, and Loren geography of the Investor Relations team.
During this conference call, we anticipate making projections and forward looking statements based on our current expectations are.
Our actual results could differ materially due to a number of factors, including those listed on slide three.
Additional information concerning factors that could cause actual results to differ materially is contained in our latest forms 10-K, and subsequent forms 10-Q, and 8-K filed with the security and Exchange Commission.
The information, we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions as.
As we transition to our prepared remarks, a reminder, that our commentary will focus on non-GAAP financial measures now I'll turn the call over to Dave for a summary of our results from the first quarter of 2021.
Okay. Thanks, Kevin well, we enter 2021 focused on expanding our reach to over 45 million patients.
Scaling our key growth brands around the world.
Continuing the advancement of our pipeline following a very successful 2020.
And increasing productivity and the SGA SG&A line, while investing in research for sustainable long term growth.
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We are pleased with the progress we've made on these objectives and our first quarter. While also delivering hundreds of thousands of doses of our COVID-19 antibodies to patients to help the continued fight against COVID-19.
As we unpack this quarters results, we will attempt to give you a clear picture of the underlying trends and our core business.
We recognized this quarter was noisy catching the increased consumer stocking from the Q1, 2020 and our quarterly compare and increased COVID-19 therapy R&D spend in 2020 one the.
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Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Lilly Q1 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct the question and answer session. If you wish to put yourself in the question, please press one and zero at this time or when instructions are given. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Kevin Hearn. Please go ahead.
Kevin Hearn: Good morning. Thank you for joining us for Eli Lilly and Company's Q1 2021 earnings call. I'm Kevin Herm, Vice President of Investor Relations. Joining me on today's call are Dave Ricks, Lilly's Chairman and CEO, Anat Ashkenazi, Chief Financial Officer, Dan Skovronsky, Chief Scientific Officer, Anne White, President of Lilly Oncology, Ilya Yuffa, President of Lilly Biomedicines, Mike Mason, President of Lilly Diabetes, And we'd also like to welcome Jake Van Naarden, CEO of Loxel Onc Now, I'll turn the call over to Dave. Oh, sorry.
The items, coupled with the FX rate movement, and the number of changes to U S government purchase agreements for COVID-19 antibodies throughout the quarter make for a longer earnings call and press release, and we realized for those keeping score on the sell side model accuracy, perhaps some disappointment.
Nonetheless underneath all of that is a strong and growing core business for Lilly and a significant number of positive even compelling pipeline readouts in the quarter to support long term growth across all of our core therapy areas.
Sarah Smith: We're also joined by Sarah Smith and Lauren Zierke of Investor Relations. During this conference call, we anticipate making projections and forward-looking statements based on our current expectations. However, our actual results could differ materially due to a number of factors, including those listed on slide three. Additional information concerning factors that could cause actual results to differ materially is contained in our latest Form 10-K and subsequent forms 10-Q and 8-K filed with the Security and Exchange Commission. The information we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions.
And we continue to expect top line growth and margin expansion to accelerate throughout this year.
This quarter revenue grew 16% compared to Q1, and 2020 or 13% and constant currency. This performance was driven entirely by volume, which grew 17 percentage points.
As previously highlighted and cute Q1, and 2020, we had roughly a $250 million COVID-19 related inventory build that is impacting the year over year comparison.
When excluding COVID-19 antibody revenue and the Q1, 2020 stocking benefit our core business grew 7% for the quarter.
The key growth products continue to drive volume and revenue growth and now represent 52% of our core business in Q1 2021.
Dave Ricks: As we transition to our prepared remarks, a reminder that our commentary will focus on non-GAAP financial measures. Now I'll turn the call over to Dave for a summary of our results for the first quarter of 2021. Okay, thanks, Kevin.
Our non-GAAP gross margin was 75, 4% and Q1 and 78% excluding the impact of foreign exchange on international inventories sold.
Dave Ricks: Lilly Enter 2021 focused on expanding our reach to over 45 million patients by scaling our key growth brands around the world, continuing the advancement of our pipeline following a very successful 2020, and increasing productivity in the SG&A line while investing in research for sustainable long-term growth. We are pleased with the progress we've made on these objectives in our first quarter, while also delivering hundreds of thousands of doses of our COVID-19 antibody to patients to help the continued fight against COVID-19. As we unpack this quarter's results, we will attempt to give you a clear picture of the underlying trends in our core business.
Our non-GAAP operating margin was 27 five per cent for the quarter and 31% excluding the FX impact.
While foreign exchange on the international inventory sold has a modest effect on our Q1 on our results and 2019 and 2020 and the first quarter of 2021, we experienced over 250 basis point of negative impact on our gross margin and operating margin.
Recall that is purely a noncash accounting items.
On the pipeline front, we achieved multiple milestones since our Q4 earnings call, including the phase III initiation of per day brute nib, formerly known as Laakso three of five and four additional obesity studies in <unk> Surmount program.
Dave Ricks: We recognize this quarter was noisy, catching the increased consumer stock from Q1 2020 in our quarterly compare and increased COVID-19 therapy R&D spend in 2021. These items, coupled with the FX rate movement and a number of changes to U.S. government purchase agreements for COVID-19 antibodies throughout the quarter, make for a longer earnings call and press release, and we realize for those keeping score on sell-side model accuracy, perhaps some disappointment.
The FDA granted emergency use authorization for the administration of bandwidth isn't lab and at a set of the mab together as a treatment for COVID-19.
Positive phase III results from true sympathized surpassed two three and five trials in type two diabetes.
And positive phase phase III results for Mira, Kisan, Mab, and ulcerative colitis, and bearish, Sydney and alopecia Areata.
Dave Ricks: Nonetheless, underneath all that is a strong and growing core business for Lilly and a significant number of positive, even compelling, pipeline readouts in the quarter to support long-term growth across all of our core therapy areas. And we continue to expect top-line growth and margin expansion to accelerate throughout this year. This quarter, revenue grew 16% compared to Q1 2020, or 13% in constant currency. This performance was driven entirely by volume, which grew 17%. As previously highlighted in Q1 2020, we had roughly a $250 million COVID-19 related inventory build that is impacting the year-over-year comparison. When excluding COVID-19 antibody revenue and the Q1 2020 stocking benefit, our core business grew 7% for the quarter.
About a decade ago Lilly made the decision to enter into and invest and immunology with the phase III initiation of X The kids and Mab now known as Charles.
Since then we've added illumina and rheumatoid arthritis, and several new indications with first or best in category data for <unk>, and ILUVIEN and rheumatology rheumatology and dermatology.
This year, we see further expansion of our immunology strategy with the successful completion of phase III studies of miracles of Mab and ulcerative colitis. The first IL 23, P 19 of antibody medicine to demonstrate results in the setting.
We're also excited about <unk> potential to differentiate from depiction on edge sleep and safety, primarily and conjunctivitis and.
And what is an increasingly large and growing class with meaningful unmet medical need.
And we anticipate multiple phase III readouts for labor Kismet of later this year and monotherapy and in combination with corticosteroids.
Dave Ricks: Key growth products continue to drive volume and revenue growth and now represent 52% of our core business in Q1. Our non-GAAP gross margin was 75.4% in Q1 and 78% excluding the impact of foreign exchange on international inventories sold. Our non-gap operating margin was 27.5% for the quarter, and 30.1% excluding the FX impact. While foreign exchange on international inventory sold had a modest effect on our results in 2019 and 2020, in the first quarter of 2021, we experienced over 250 basis points of negative impact on our gross margin and operating margin. Recall that it's purely a non-cash accounting item.
We look forward to potentially reaching increasing numbers of patients and difficult to treat immunology conditions and the coming years.
We also entered into several business development deals, including the and licensing of a rip K one inhibitor from Rigel pharmaceuticals, and the divestiture of two Brexit, which was which along with <unk> was part of the day Mirror acquisition last year.
We also distributed nearly $800 million and dividends this quarter with the share the dividend per share increasing 15% versus last year.
Moving on to slides five and six you'll see a list of key events since our last earnings call.
We announced plans to host of webinar.
Dave Ricks: On the pipeline front, we achieved multiple milestones since our Q4 earnings call, including the phase 3 initiation of pertubrutinib, formerly known as LOXO305, and for additional obesity studies in terzipatide's Surmount program. Additionally, the FDA granted emergency use authorization for the administration of BAMLibamab and Edisadvomab together as a treatment for COVID-19. Positive phase 3 results from terzipatide surpassed 2, 3 and 5 trials in type 2 diabetes, and positive phase 3 results for muricizumab in ulcerative colitis and baricitinib in alopecia areata.
To provide an overview of the company's commitment and the areas of environmental social and governance for the investment community for media and the general public and May 4th 2021.
Additionally, we announced two planned retirements of long tenured executives and several additions to our leadership team.
Like to think Myles O'neil president of Lilly manufacturing and Melissa Barnes, our chief Ethics, and compliance officer for their leadership and service to our company.
We also extend a warm welcome to Edgardo Hernandez, who will be succeeding miles.
Two Alonso Williams, who will succeed Melissa and to do yoga row, who will be joining Lilly next month as chief information and digital officer, succeeding Artie Shaw, whose retirement was announced last fall.
Dave Ricks: About ten years ago, Lilly made the decision to enter into and invest in immunology with the phase three initiation of ixekizumab, now known as TALT. Since then, we have added Illumiant for Rheumatoid Arthritis and several new indications with first or best-in-category data for TULPS and Illumiant in Rheumatology and Dermatology. This year, we see further expansion of our immunology strategy with the successful completion of phase 3 studies of mirakizumab and ulcerative colitis, the first IL23P19 antibody medicine to demonstrate results in this setting.
Finally, we announced the appointment of of not Ashkenazi our CFO and.
And that has a deep experience having been the CFO of every part of our value chain for.
And for the last four years and not has a large has led a large portion of our finance organization with all of our divisional cfos reporting to him.
As well as our accounting and financial reporting team, our corporate strategy group and our business transformation office.
During this time and not worked closely with me, our Executive Committee and our board of directors to develop and implement our annual business and long term strategic plans I.
Dave Ricks: We're also excited about leberizumab's potential to differentiate from dupixen on itch, sleep, and safety, primarily in conjunctivitis, in what is an increasingly large and growing class with meaningful unmet medical needs. And we anticipate multiple phase 3 readouts for leperchizumab later this year as monotherapy and in combination with corticosteroids. We look forward to potentially reaching increasing numbers of patients in difficult-to-treat immunology conditions in the coming years. We have also entered into several business development deals, including the in-licensing of a RIP-K1 inhibitor from Rigel Pharmaceuticals and the divestiture of Q-Bregza, which, along with Leber Kizumab, was part of the Dermura acquisition last year.
I have no doubt that and not will perform extremely well the CFO of Lilly and expect no changes and our priorities our strategy or execution, given her significant involvement and all of those areas and.
And welcome to our leadership team and I will turn the call over to you for our Q1 results.
Thanks, Dave Slide seven summarizes our non-GAAP financial performance and the first quarter.
Dave mentioned revenue increased 16% this quarter compared to Q1 of 2020 or 7% when excluding the COVID-19 antibody revenue and the Q1 2020, COVID-19 related stocking benefit representing a good momentum for our core business.
Last year with the health and safety of our employees patients and providers in mind, we shifted from in person interactions to primarily virtual interactions and begin 2021 with few sales reps and the field and the U S.
Dave Ricks: We also distributed nearly $800 million in dividends this quarter, with the dividend per share increasing 15% versus last year. Moving on to slides 5 and 6, you'll see a list of key events since our last earnings call. We announce plans to host a webinar to provide an overview of the company's commitment in the areas of environmental, social, and governance for the investment community, the media, and the general public on May 4th, 2021.
We still good about our capabilities to work with providers virtually and are encouraged as we exited Q1 2021 with the majority of the U S reps back in the field.
As we navigate the early stages of the recovery, we are focused on operational excellence and both virtual and in personal and environment and are pleased with the volume and share growth and key brands. Despite.
The new pandemic related headwinds for several classes.
And we look and gross margin gross margin as the percentage of revenue declined 490 basis points to 75, 4%.
Dave Ricks: Additionally, we announced two planned retirements of long-tenured executives and several additions to our leadership team. I'd like to thank Miles O'el, President of Lilly Manufacturing, and Melissa Barnes, our Chief Ethics Compliance Officer, for their leadership and service to our company. We also extend a warm welcome to Edgardo Hernandez, who will be succeeding Miles, to Alonzo Weems, who will succeed Melissa, and to Diogo Rao, who will be joining Lilly next month as Chief Information and Digital Officer, succeeding Artie Shaw, whose retirement was announced last fall. Finally, we announce the appointment of Anat Ashkenazi as our new CFO.
Excluding the impact of foreign exchange and international inventory sold gross margin as a percentage of revenue was 78% and decrease of 260 basis points, primarily due to the unfavorable product mix driven largely by sales of COVID-19 antibody and to a lesser extent play lower realized prices and revenue.
Moving down the P&L operating expenses grew 11% compared to the same quarter last year marketing selling and administrative expenses increased 2%, while R&D expenses increased 21% driven primarily by $220 million of investments and COVID-19 therapies.
Anat Ashkenazi: Anat has deep experience, having been the CFO of every part of our value chain. For the last four years, Anat has led a large portion of our finance organization, with all of our divisional CFOs reporting to us, as well as our accounting and financial reporting team, our corporate strategy group, and our business transformation office. During this time, she has worked closely with me, our executive committee, and our board of directors to develop and implement our annual business and long-term strategic plan.
Net of the COVID-19 expenses R&D increased 5% driven by continued investments and our late stage pipeline.
Total operating expense growth was less than 3% compared to Q1 2020, when excluding the investments and COVID-19 therapies.
Operating income increased 6% compared to Q1 of 2020 and operating income as a percentage of revenue was 27 five per cent for the quarter and.
Anat Ashkenazi: I have no doubt that Anat will perform extremely well as CFO of Lilly and expect no changes in our priorities, our strategy, or execution given her significant involvement in all those areas. Anat, welcome to our leadership team, and I'll turn the call over to you for our Q1 results. Thanks, Dave.
And the decline of 250 basis points compared to prior year. This decline was driven entirely by the impact of foreign exchange on international inventory sold.
Other income and expense was income of $35 million this quarter compared to expense of $73 million in Q1 of 2020.
Anat Ashkenazi: Slide seven summarizes our non-GAAP financial performance in the first quarter. As Dave mentioned, revenue increased 16% this quarter compared to Q1 of 2020, or 7% when excluding the COVID-19 antibody revenue and the Q1 2020 COVID-related stocking benefit, representing good momentum for our core business. Last year, with the health and safety of our employees, patients, and providers in mind, we shifted from in-person interactions to primarily virtual interactions and began 2021 with few sales reps in the field in the U.S. We feel good about our capabilities to work with providers virtually and are encouraged as we exit Q1 2021 with the majority of U.S. reps back in the field.
Driven primarily by of benefit related to favorable European patent settlement from income.
As we noted previously beginning in 2021, we are excluding the gains or losses due to equity investments from our non-GAAP measures and have provided revised figures for 2020 and our investor workbook to enable year over year comparison on that same basis.
Our effective tax rate was 10, 8% and decrease of 210 basis points compared with the same quarter last year.
The effective tax rate for both periods was reduced by net discrete tax benefit with the larger and net discrete benefit reflected and the first quarter of 2021.
Anat Ashkenazi: As we navigate the early stages of the recovery, we're focused on operational excellence in both virtual and in-person environments and are pleased with the volume and shared growth in key brands, despite continued pandemic-related headwinds for several classes. As we look at gross margin, the percent of revenue declined 490 basis points to 75.4%. Excluding the impact of foreign exchange on international inventory sold, gross margin on the percent of revenue was 78%, a decrease of 260 basis points, primarily due to the unfavorable product mix driven largely by cells with COVID-19 antibodies and to a lesser extent by lower realized prices on revenue. Moving down to P&L, operating expenses grew 11% compared to the same quarter last year.
At the bottom line net income and earnings per share increased 16%.
On slide eight we quantify the effect of price rate and volume and revenue growth across the world.
The U S revenue grew 18% compared to the first quarter of 2020.
Net revenue decreased slightly excluding COVID-19 antibody.
Adjusting for the Q1 2020 stocking benefit the core business grew 5% and the U S. The.
These results were driven entirely by volume led by <unk> and <unk>, partially offset by a mid single digit price decline.
Pricing was a 6% drag on the U S revenue growth this quarter, driven primarily by Tulse improved access and corresponding higher contracted rates, partially offset by a modest list price increase.
Excluding the impact of pulp clean and ESI, we experienced low single digit net price decline and the less and the first quarter of 2021.
Anat Ashkenazi: Marketing, selling, and administrative expenses increased 2%, while R&D expenses increased 21%, driven primarily by $220 million of investments in COVID-19 therapy. Net of the COVID-19 expenses, R&D increased 5%, driven by continuing investment in our late-stage pipeline. Total operating expense growth was less than 3% compared to Q1 2020 when excluding the investments in COVID-19 therapy. Operating income increased 6% compared to Q1 of 2020, and operating income as a percent of revenue was 27.5% for the quarter, a decline of 250 basis points compared to the prior year. This decline was driven entirely by the impact of foreign exchange on international inventory sold.
We noted on previous calls and we expected Tulsa and experienced price headwind in Q1 beyond general rate pressure with the improved access position the.
There were two pieces of the ESI impact the first existing patients already covered through medical exceptions were moved to the newly contracted rates and <unk>.
And one time step down and prices as we move through 2021.
In addition, we were pleased with the update for new patient sit ESI at the contracted rate and we expect that that population will grow meaningfully over time.
And there is always the near term impact when we have stepped the significant step up in access and this win nearly doubled our commercial access.
Anat Ashkenazi: Other income and expense was income of $35 million this quarter compared to expense of 73 million in Q1 of 2020, driven primarily by a benefit related to a favorable European patent settlement. As we noted previously, beginning in 2021, we are excluding the gains or losses due to equity investments from our non-GAAP measures and have provided revised figures for 2020 in our investor workbook to enable year-over-year comparison on that same basis. Our effective tax rate was 10.8%, a decrease of 210 basis points compared with the same quarter last year.
We're encouraged by the volume growth, we saw and the first quarter and believe Tulsa of returned to net sales growth and the second quarter, which should continue to accelerate as we move through the year as the volume growth and the major access upgrade outpaces the releases related price and headwind.
Beyond toll segment income was not a major of the use of U S price performance and the first quarter as increased utilization and the more highly rebated government segment was offset by lower utilization and the three fully the segment primarily for of diabetes portfolio.
Well mid term trends are stable at present, given the increase and variability and payer mix. We continue to expect quarterly variability and reported net price changes. We also expect culture price impact to moderate as we move through the year and overall low to mid single digit total net price decline in the U S for the full year.
Anat Ashkenazi: The effective tax rate for both periods was reduced by net discrete tax benefits, with a larger net discrete benefit reflected in the first quarter of 2021. At the bottom line, net income and earnings per share increased 16%. On slide 8, we quantify the effect of price, rate, and volume on revenue growth across the world. U.S. revenue grew 18% compared to the first quarter of 2020, while revenue decreased slightly, excluding COVID-19 antibodies. Adjusting for the Q1 2020 stocking benefit, the core business grew 5% in the U.S. These results were driven entirely by volume, led by trlicity and tults, partially offset by a mid-single-digit price decline.
Moving to Europe revenue grew 15% and constant currency.
Excluding COVID-19 antibody revenue and the impact of Q1, 2020, COVID-19 related stocking revenue grew 5% and constant currency.
Despite the Lockdowns the number of European countries, and driven primarily entirely by volume growth for Alimta solicit and Tulsa.
We're pleased with the momentum of our business in Europe and are looking forward to continued strong growth in 2021.
And Japan revenue decreased 8% and constant currency driven entirely by decrease the volume for CLS and per tail.
Anat Ashkenazi: Pricing was a 6% drag on U.S. revenue growth this quarter, driven primarily by Tulsa's improved access and corresponding higher contracted rates, partially offset by a modest list price increase. Excluding the impact of Tall Twin NESI, we experienced a low single-digit net price decline in the U.S. in the first quarter of 2021. We noted on previous calls that we expected tolls would experience price headwinds in Q1 beyond general rate pressure with the improved access position. There are two pieces to the ESI impact.
And the impact for those post patent expiry product, Japan grew 5% and constant currency driven by versus any of the journey of the ins and collaboration with the eye and the ILUVIEN.
And China revenue grew 26% and constant currency driven by 32% volume growth primarily.
Primarily from <unk> and to a lesser extent our of diabetes portfolio.
We're excited about the momentum and China is a business that makes the accelerated significantly the past two quarters private continues its strong growth sure listen and the ILUVIEN are now and the <unk> deal and we look forward to launch uptake for Virginia.
Anat Ashkenazi: The first, existing patients already covered through medical exceptions were moved to the newly contracted rate, a one-time step down in prices as we move through 2021. In addition, we were pleased with the update for new patients at the contract degree, and we expect that that population will grow meaningfully over time. There's always a near-term impact when we have a significant step up in access, and this one nearly doubled our commercial access.
Revenue and the rest of the world decreased 1% and constant currency driven primarily by continued erosion of cialis.
As shown on slide nine our key growth products continue to drive impressive volume growth. Despite the Q1, 2020 COVID-19 related stocking benefit impacting year over year growth. These newer medicine delivered over nine percentage point of growth this quarter with COVID-19 antibodies also contributing roughly 14 percentage points of growth.
Anat Ashkenazi: We're encouraged by the volume growth we saw in the first quarter and believe tolls will return to net sales growth in the second quarter, which should continue to accelerate as we move through the year as the volume growth from the major excess upgrades outpaces their related price and headwinds. Beyond all, segment pick was not a major driver of U.S. price performance in the first quarter as increased utilization in the more highly rebated government segment was offset by lower utilization in the 340B segment, primarily for a diabetes portfolio.
The strong volume growth was partially offset by post alloy products as well as insulin whose volume growth was also meaningfully impacted by the Q1 2020 stocking benefit.
Slide 10 highlights of the contribution of our key growth products. In total these brands generated approximately $3 1 billion and revenue this quarter and made up 52% of core and business revenue.
We are particularly encouraged by <unk> performance three years ago for liquidity was the number two injectable glyph won and the U S market at roughly 40% share of market weekly scripts from of the class for approximately 180000.
Anat Ashkenazi: While mid-term trends are stable at present, given the increase in variability in Pyramix, we continue to expect quarterly variability and reported net price changes. We also expect Tulch price impact to moderate as we move through the year, and overall, a low to mid-single-digit total net price decline in the U.S. for the full year.
And the new weekly injectable entrants had just launched.
Since that time to solicit he has become the most prescribed slip one in the U S with the 48% share of the injectable market and of class that is now twice the size and trusted 360000 weekly scripts.
Anat Ashkenazi: Moving to Europe, revenue grew 15% in constant currency, excluding COVID-19 antibody revenue and the impact of Q1 2020 COVID-related stocking. Despite lockdowns in a number of European countries and driven primarily entirely by volume growth for a limited time, and told, We're pleased with the momentum of our business in Europe and are looking forward to continued strong growth in 2021. In Japan, revenue decreased 8% in constant currency, driven entirely by decreased volume for Cialis and Fortale. Because of the impact of those post-patent expiry products, Japan grew 5% in constant currency, driven by Verzenio, Jardins, in collaboration with BI and Lulumion.
Solicited continues to have the highest adherence of any diabetes medications oral or injectable.
And with the additional dose of 3% and $4 five milligram, providing the potential for solicitor to both extend the time of therapy for existing patients and compete for new patients as demonstrated by the need to brand share of market have increased more than four points since the launch of these additional doses and September 2020.
As we start 2021, we are pleased with <unk> ability to outgrow the injectable class and established all time highs and new therapy starts as well as total market share.
We see meaningful opportunity for continued robust class growth for <unk> is there still less than one and 10 diabetes script and.
Anat Ashkenazi: In China, revenue grew 26% in constant currency, driven by 32% volume growth, primarily from Taiwet, and to a lesser extent, our diabetes portfolio. We're excited about the momentum in China, as our business settings have accelerated significantly the past two quarters. Taiwet continues its strong growth.
And have significant opportunity for further penetration and the first injectable space as well.
With more positive readouts from the true set the tide and type two diabetes. This quarter, we remain focused on sustaining truly city and leadership position accelerating class growth and providing continued innovation and the incretin space.
Anat Ashkenazi: Trulicit and Illumiant are now in the NRDL, and we look forward to launch uptake for Versenio. However, revenue in the rest of the world decreased 1% in constant currency, driven primarily by continued erosion of Cialis. As shown on slide 9, our key growth products continue to drive impressive volume growth. Despite the Q1 2020 COVID-related stocking benefit impacting year-over-year growth, these newer medicines delivered over a 9 percentage point of growth this quarter, with COVID antibodies also contributing roughly 14 percentage points of growth.
On slide 11, we provide and update on capital allocation in.
And Q1, we invested nearly $3 billion to drive our future growth through a combination of business development capital expenditure and after tax investments and R&D. In addition, we returned nearly $800 million to shareholders via dividend.
We are focused and utilizing our cash flow of our strong cash flow to develop the next wave of new medicine through both internal and external sources is highlighted by the recently completed in licensing of the Rip kinase one inhibitor from Rigel pharmaceuticals.
Anat Ashkenazi: The strong volume growth was partially offset by post-LOE products as well as insulin, whose volume growth was also meaningfully impacted by the Q1 2020 stocking benefits. Slide 10 highlights the contribution of our key growth products. In total, these brands generated approximately $3.1 billion in revenue this quarter and made up 52% of core business revenue.
We will remain active and assessing and licensed and opportunities as well as bolt on acquisitions, where we believe we can create shareholders value and enhance our future growth prospects.
Turning to our 2021 financial guidance on slide 12, we are updating our GAAP and non-GAAP guidance.
Anat Ashkenazi: We are particularly encouraged by Trlicity's performance. Three years ago, Trlicity was the number two injectable glyphonine in the U.S. market, at roughly a 40% share of the market. Weekly scripts for the class were approximately 180,000, and a new weekly injectable entry had just launched.
We continue to support the health care professionals and navigating the ongoing pandemic and driving broad vaccinations to enable returned terminal mouthy for health care systems, and the second half of the year.
Despite some therapeutic class still at or below pre COVID-19 and baselines for the youth tariff of therapy starts and the highlighted inventory impact on year over year growth. We are confident of the performance of our core business we.
Anat Ashkenazi: Since that time, Trulicity has become the most prescribed liposomal one in the U.S., with a 48% share of the injectable market in a class that is now twice the size at roughly 360,000 weekly scripts. Trlicity continues to have the highest adherence of any diabetes medication oral or injectable, with the additional dose of 3 and 4.5 mg providing the potential for Trlicity to both extend the time of therapy for existing patients and compete for new patients, as demonstrated by the new to brand share of the market having increased more than 4 points since the launch of these additional doses in September 2020.
We are increasing our full year revenue outlook by 100 million to reflect the FX benefit realized on the top line and the first quarter.
We are however, and narrowing the range for COVID-19 antibody revenue from approximately $1 2 billion to one to one and a half 1 billion for the year.
Based on the rollout of the vaccine across major markets current unable the antibody of utilization rate existing U S government downloaded and that supply and the transition to only supply the inland isn't that a and Edison and that administered together and the U S.
Anat Ashkenazi: As we start 2021, we are pleased with Trulicity's ability to outgrow the injectable class and establish all-time highs in youth therapy starts, as well as total market share. We see meaningful opportunity for continued robust class growth for Glypoietin ones as they are still less than 1 and 10 diabetes scripts and have significant opportunity for further penetration in the first injectable space as well. With more positive readouts from the trucepatide trial and type 2 diabetes this quarter, we remain focused on sustaining Trulicity in the nutritive position, accelerating class growth, and providing continued innovation in the increting space.
We believe the update range contemplates a variety of potential scenarios.
We recognize the CIT situations across the globe can evolve quickly and we'll plan to adapt as required moving forward.
The net impact of these changes is an updated revenue range of $26 6 billion to $27 6 billion.
Our outlook for gross margin percent remains unchanged with the impact of COVID-19 antibody diluting our total gross margin percentage by approximately 100 basis points.
For research and development, we're increasing the range from six 5% to seven seven.
Anat Ashkenazi: On slide 11, we provide an update on capital allocation. In Q1, we invested nearly $3 billion to drive future growth through a combination of business development, capital expenditure, and after-tax investments in R&D. In addition, we returned nearly $800 million to shareholders via dividend.
269% to $7 1 billion.
This reflects the increase of $100 million and COVID-19 antibody expense to support the advancement of the third antibody L. Y 14 of form as we continue to address the COVID-19, pandemic and approximately $300 million on the core business driven by investments and Danone and that for the expansion of the phase III trial.
Anat Ashkenazi: We are focused on utilizing our cash flow, our strong cash flow, to develop the next wave of new medicines through both internal and external sources, as highlighted by the recently completed in-licensing of the REB-Kinase 1 inhibitor from IGEL Pharmaceuticals. We will remain active in assessing in-licensing opportunities as well as bolt-on acquisitions where we believe we can create shareholder value and enhance our future growth prospects. Turning to our 2021 financial guidance on slide 12, we are updating our GAAP and non-GAAP guidance.
Laser to study and the initiation of the new Phase III study Trailblazer, Alzheimers, three and as symptomatic Alzheimer's patients.
Our investments and the anatomy is consistent with our R&D strategy to continue to bolster our pipeline to ensure long term growth and based on the strength of the data invest meaningfully and innovative molecules and we believe have the potential to deliver practice changing data that can significantly improve patient outcomes and areas of high unmet.
Anat Ashkenazi: We continue to support healthcare professionals navigating the ongoing pandemic and driving broad vaccinations to enable a return to normalcy for healthcare systems in the second half of the year. Despite some therapeutic classes still being at or below pre-COVID baselines for new therapy starts and the highlighted inventory impact on year-over-year growth, we are confident in the performance of our core business. We are increasing our full-year revenue outlook by $100 million to reflect the FX benefit realized on the top line in the first quarter.
Need.
We're increasing our non-GAAP range for OID, two and expense of 100 to 200 million to reflect the Alimta patent settlement and Europe I noted earlier.
While our of GAAP range has no income of $150 million to $250 million, which reflects the impact of equity investment gains and the first quarter.
We are lowering our effective tax rate to approximately 13% to reflect higher discreet tax items in the first quarter and the lower base rates.
Anat Ashkenazi: We are, however, narrowing the range for COVID-19 antibody revenue from approximately $1 to $2 billion to $1 to $1.5 billion for the year. Based on the rollout of the vaccine across major markets, current antibody utilization rates, existing U.S. government Bemlanivimab supply, and the transition to only supply Bemlanivimab and Edesivimab administered together in the U.S., we believe this update range contemplate We recognize that situations across the globe can evolve quickly and will plan to adapt as required moving forward.
We're lowering our non-GAAP operating margin guidance to approximately 31% the.
The decrease in operating margin is driven entirely by the decreased investments in Alzheimer's for the <unk>.
And longer term margin expansion remains unchanged as we expect continued operating margin expansion to mid to high <unk>.
Our GAAP operating margin is expected to be approximately 26%.
Finally, the non-GAAP range for earnings per share is now $780 to $8.
The increase and the lower end of the range reflects the net benefit for the core business related to the changes to OID and tax rate as well as increased revenue offset by increased R&D for investments and day, none of them at the.
Anat Ashkenazi: The net impact of these changes is an updated revenue range of $26.6 billion to $27.6 billion. Our outlook for gross margin percent remains unchanged with the impact of COVID-19 antibodies diluting our total gross margin percent by approximately 100 basis points. For research and development, we're increasing the range from 6.5 to 7.7 to $6.9 to $7.1 billion. This reflects an increase of 100 million in COVID-19 antibody expenses to support the advancement of a third antibody, LY1404, as we continue to address the COVID-19 pandemic, and approximately 300 million in core business driven by investments in denonamab for the expansion of the Phase Tree Trailblazer 2 study and the initiation of the new Phase 3 study, Trailblazer Alzheimer's 3, in asymptomatic Alzheimer's patients.
The reduction and the upper end of the range reflects the narrow revenue range and increased R&D expense for COVID-19 therapy.
Yeah.
Our GAAP EPS is expected to be and the range of $7 three to $7 23, which reflects the increased to acquired IP R&D related to completed business trip and development transactions other specified items related primarily to the impairment COVID-19 inventory charges and acquisition integration costs and if so is the <unk>.
<unk> from net gains on investments and equity securities.
We're confident and our ability to achieve our 2021 revenue goals for the core business, while also delivering operating margin expansion and mid teens EPS growth.
As we move forward I would encourage you to look at trends and a core business for the first half of the year given the significant variability we saw in.
Anat Ashkenazi: Our investment in Nanomab is consistent with our R&D strategy to continue to bolster our pipeline to ensure long-term growth and, based on the strength of the data, invest meaningfully in innovative molecules that we believe have the potential to deliver practice-changing data that could significantly improve patient outcomes in areas of high unmet need. We're increasing our non-gap range for OID to an expense of $100 to $200 million to reflect the limited patent settlement in Europe I noted earlier.
And 2020.
As a reminder, revenue performance and the second quarter of 2020 was impacted by the reversal of largely all of the 250 million COVID-19 related stocking benefit from Q1 of 2012 as well as an additional $250 million due to the significant decline in new patients prescription as health care utilization decreased and system.
Temporarily closed down the face of a surge and pandemic.
As we look at underlying volume and share trends across our key products, we are confident and our full year outlook for the core business and the pipeline successes and the first quarter only furthers, our conviction and our midterm and long term outlook for continued revenue growth and operating margin expansion.
Anat Ashkenazi: Well, our gap range is now income of $150 to $250 million, which reflects the impact of equity investment gains in the first quarter. Additionally, we are lowering our effective tax rate to approximately 13% to reflect higher discrete tax items in the first quarter and the lower base rate. We're lowering our non-GEP operating margin guidance to approximately 31%. The decrease in operating margin is driven entirely by the decreased investments in Alzheimer's for the nanomeds.
And I will turn the co over to Dan to high alert progress and R&D.
Thanks, a lot of 2021 is clearly off to a very positive start for R&D at Lilly with strong pipeline progress already and more potential catalysts on the way before I get into the broader portfolio update I'll spend a few minutes highlighting results from two <unk> first for top line Readouts from the phase III surpass program, including the <unk>.
Anat Ashkenazi: Our longer-term margin expansion remains unchanged as we expect continued operating margin expansion to the mid to high 30s. Our gap operating margin is expected to be approximately 26%. Finally, the non-gap range for earnings per share is now $7.80 to $8.00.
Strong results from surpass to the head to head trial with some of <unk> one milligram.
And this program is aptly named as we've seen tours appetite surpass our expectations through these initial readouts displaying significantly greater hemoglobin day, when see reduction weight loss and present percentage of patients, reaching normal glucose levels than any G. L. P. One on the market.
Anat Ashkenazi: The increase on the lower end of the range reflects the net benefit for the core business related to the changes to OID and the tax rate, as well as increased revenue, offset by increased R&D for investments in the nanoMED. The reduction in the upper end of the range reflects the narrow revenue range and increased R&D expense for COVID-19 therapy. Our GAAP EPS is expected to be in the range of $7.03 to $7.23, which reflects an increase in acquired IPR&D related to completed business development transactions, other specified items related primarily to asset impairment, COVID-19 inventory charges, and acquisition integration costs, as well as the benefit from net gains on investments in equity securities.
On Slide 13, you can see impressive performance and the efficacy estimate of analysis and glycemic control for tours appetite with each dose demonstrating superiority and each trial across a range of patient populations competitors and background medications.
The clear highlight is the impressive <unk> reduction of the five milligram dose across each of these three each of these different patient populations, while the higher doses provide additional glucose control up two and surpassing two 5% <unk> reductions.
Moving to slide 14, you can see how tours appetite performed across all three doses in terms of patients achieving <unk> below five 7% of normal glycemia level seen and people without type two diabetes.
Dan Skovronsky: We're confident in our ability to achieve our 2021 revenue goals for the core business while also delivering operating margin extension and mid-team EPS growth. As we move forward, I would encourage you to look at trends in our core business for the first half of the year, given the significant variability we saw across the years in 2020. As a reminder, revenue performance in the second quarter of 2020 was impacted by the reversal of nearly all the $250 million COVID-related stocking benefit from Q1 of 2020, as well as an additional $250 million due to the significant decline in new patients' prescriptions as healthcare utilization decreased and systems temporarily closed down in the face of a surging pandemic.
We believe this is an exciting findings that may reset expectations for the impact of diabetes medications could have for patients.
You did and the efficacy estimate analysis across surpassed one two and three we see about half of the patients on the 15 milligram dose of true appetite achieved this remarkable level of HBA once the control.
And surpassed five which focused on patients on background insulin and <unk>, 62% of patients on 15 milligram true appetite achieved this level of <unk>.
Compared to only 3% of patients and the placebo group.
Remember this is the patient population on background basal insulin with an average duration of diabetes of over 13 years and achieving this level of glucose control and such a population is something that prior to <unk>, one agonists like <unk> appetite, we do not even contemplate as possible.
Dan Skovronsky: As we look at underlying volume and share trends across our key products, we are confident in our full-year outlook for the core business, and the pipeline successes in the first quarter only further our conviction and our mid-term and long-term outlook for continued revenue growth and operating margin extension. Now, I will turn the call over to Dan to highlight our progress in R&D. Thanks, Anat.
On slide 15, we show the efficacy estimate analysis for weight reduction across the four studies here again, we see levels of efficacy. The previously were thought unobtainable with the acreage and therapy and type two diabetes patients.
Dan Skovronsky: 2021 is clearly off to a very positive start for R&D at Lilly, with strong pipeline progress already and more potential catalysts on the way. Before I get into the broader portfolio update, I'll spend a few minutes highlighting results from Tezepatide's first four top-line readouts from the Phase III Surpass program, including the strong results from Surpass II, the head-to-head trial with semaglutide 1 mg This program is aptly named as we've seen Terzapatide surpass our expectations through these initial readouts, displaying significantly greater hemoglobin A1C reduction, weight loss, and percent of patients reaching normal glucose levels than any GLP-1 on the market.
As we and others have discussed studies like award 11, and sustain Forte have begun to show the limit of what fully hitting the <unk> mechanism can accomplish for weight loss and even see the appear to be diminishing returns as doses of <unk> alone fully saturate, the <unk> receptor mediated mechanism and a flattening of the dose.
Lance curve of curse and.
And then you look at this slide including importantly, surpassed two and you can see quite clearly the theres something different going on here is the.
The dual <unk> one receptor agonist is beyond the flattening of the dose response curve of GMP, one performance, which we believe evidence is the power of adding in the Gi P mechanisms.
Dan Skovronsky: On page 13, you can see impressive performance in the efficacy estimate analysis in glycemic control for terzepatide, with each dose demonstrating superiority in each trial across a range of patient populations, comparator, and background medication. The clear highlight is the impressive A1C reduction of the 5 mg dose across each of these different patient populations, while the higher doses provide additional glucose control up to and surpassing 2.5% A1C reduction. Moving to slide 14, you can see how terzepatide performed across all three doses in terms of patients achieving HbA1c below 5.7%, a normal glycemic level seen in people without type 2 diabetes.
Highlights from these studies include the 15 milligram dose delivering 14% weight reduction and surpassed three.
Noting here weight gain of 3% on insulin and decorate a comparator.
The 15 milligram dose nearly doubling the weight reduction of some of the <unk>, one milligram and surpassed two.
And strong performance from the five and 10 milligram doses was statistically superior weight loss, even as high as the 11% on the 10 milligram dose versus placebo or active comparator.
We're encouraged that in these 40% and 52 week studies, we haven't yet seen the weight loss curves plateau on the higher doses.
Dan Skovronsky: We believe this is an exciting finding that may reset expectations for the impact diabetes medications could have for patients. Using the efficacy estimate analysis across surpassed 1, 2, and 3, we see about half of the patients on the 15 milligram dose of terzapatide achieve this remarkable level of HbA1c control. In Surpass 5, which focused on patients on background insulin glargine, 62% of patients on 15 mg terzapatide achieved this level of A1c, compared to only 3% of patients in the placebo group.
It's really exciting to think about how to his appetite could potentially perform with the longer duration of treatment that we'll see and future studies.
We have a lot of confidence and the efficacy data coming out of phase II, but there was a lot we didn't yet know about safety and tolerability.
Recall for example of the primary phase two trial had only about 200 patients on therapy and patients were only on therapy for 26 weeks.
As we look at slide 16, we have been pleased to see through these four surpassed readouts that the overall safety profile was similar to the well established <unk> one receptor agonist class and the most commonly reported adverse events were gi related and mild to moderate and severity.
Dan Skovronsky: Remember, this is a patient population on background basal insulin with an average duration of diabetes of over 13 years. Achieving this level of glucose control in such a population is something that prior to GIP GLP-1 agonists like terzapatide, we did not even contemplate as possible.
We're particularly encouraged by the potential impact of the optimized dose escalation scheme.
And accordingly by the Tolerability profile observed and the phase III program, which improved greatly in comparison of phase II, including the lower rates of nausea, diarrhea, and vomiting, and we've seen consistent with what we saw in phase III studies for other well tolerated and highly used and cogent therapies, including our own <unk>.
Dan Skovronsky: On slide 15, we show the efficacy estimate analysis for weight reduction across the four studies. Here again, we see levels of efficacy that were previously thought unobtainable with Incretin therapy in type 2 diabetes patients. As we and others have discussed, studies like AWARD-11 and SUSTAIN-FORTE have begun to show the limit of what fully hitting the GLP-1 mechanism can accomplish for weight loss in A1c. There appear to be diminishing returns as doses of GLP-1 alone fully saturate the GLP-1 receptor-mediated mechanism, and a flattening of the dose-response curve occurs.
In addition, we're pleased with the discontinuation rates due to adverse events, which of range from 3% to 11% of across doses and these studies.
Stepping back from the data a bit we're excited about the safety and efficacy results across all doses, but perhaps especially so for the efficacy of the five milligram dose, which has performed well and each study, including showing superiority of <unk>, one milligram and surpassed two on both the <unk> reduction and weight loss.
Dan Skovronsky: And then you look at this slide, including, importantly, Surpass 2, and you can see quite clearly that there's something different going on here, as the dual GIP-GLP-1 receptor agonist is beyond the flattening of the dose-response curve of GLP-1 performance, which we believe is evidence of the power of adding the GIP mechanism. Highlights from these studies include the 15 milligram dose, delivering 14% weight reduction in Noting here a weight gain of 3% on the insulin-deglutate comparator.
I think these data show that the five milligram dose could be of great first <unk> the can potentially deliver best in class efficacy with tolerability that is as good or better than other leading acreages. So we have the low maintenance dose of five milligrams that if approved could potentially be appropriate for many patients with physicians knowing they could have higher doses available as they continue.
Management of disease.
There's appetite could provide patients with the opportunity to set treatment goals that might surpass what was previously thought possible and type two diabetes. Both in terms of getting patients to normal glucose control, which has never been contemplated as the potential treatment goal as well as for impressive weight loss with the highest dose of <unk> appetite, having roughly double the weight loss of stomach.
Dan Skovronsky: The 15 mg dose nearly doubled the weight reduction of semiglutide 1 mg in surpassed 2, and strong performance from the 5 and 10 milligram doses with statistically superior weight loss, even as high as 11% on the 10 milligram dose versus placebo or active comparators.
The type one milligram and.
And surpass II.
Dan Skovronsky: We're encouraged that in these 40- and 52-week studies, we haven't yet seen the weight loss curves plateau on the higher doses. It's really exciting to think about how terzepatide could potentially perform with the longer duration of treatment that we'll see in future studies. We had a lot of confidence in the efficacy data coming out of phase two, but there was a lot we didn't yet know about safety and Recall, for example, that the primary phase 2 trial had only about 200 patients on therapy, and patients were only on therapy for 26 weeks.
Today type two diabetes is largely of treat to failed disease with these results tours appetite if approved could prevent should potentially provide doctors options to enable early control of glucose and weight.
This has the potential of the translate to improved levels of and Oregon protection and a more meaningful reduction and disease complications and has yet been seen will be testing the potential fridges appetite and ongoing and planned studies and diabetes obesity heart failure and Nash.
The accordingly, we've now initiated Surmounts, two three and four for <unk> appetite and obesity and top line results from surmount one are expected next year.
Dan Skovronsky: As we look at slide 16, we're pleased to see through these four superior readouts that the overall safety profile was similar to the well-established GLP-1 receptor agonist class, and the most commonly reported adverse events were GI-related and mild to moderate in severity. We're particularly encouraged by the potential impact of the Optimized Dose Escalation and, accordingly, by the tolerability profile observed in the Phase 3 program, which improved greatly in comparison to Phase 2, including the lower rates of nausea, diarrhea, and vomiting that we've seen, consistent with what we saw in Phase 3 studies for other well-tolerated and highly used antigen therapies, including our own trulicity.
Moving back to diabetes, the top line readout for surpass four which is and a high cardiovascular risk population and we believe will provide an important contribution to our CV safety assessment is the gating trial for global submissions and type two diabetes.
Completion of this trial has always been contingent on accruing a pre specified number of CV events.
We've achieved the necessary events, which triggers bringing patients and for final treatment and safety visits before moving the trial to completion and based on this update we anticipate the top line readout by the middle of this year.
Dan Skovronsky: In addition, we're pleased with the discontinuation rates due to adverse events, which ranged from 3 to 11% across doses in these studies. Stepping back from the data a bit, we're excited about the safety and efficacy results across all doses, but perhaps especially so for the efficacy of the 5 milligram dose, which has performed well in each study, including showing superiority to semiglutide 1 milligram and surpassed 2 on both A1C reduction and weight loss.
We look forward to disclosing the results of surpass 123 and five at the Ada of 2021 virtual meeting, which will include a 90 minute <unk> symposium featuring these results the morning of June 29.
While we are excited with the progress of <unk> appetite, we think innovation and the acreage and space is not over at.
At 88 will also be discussing preclinical and phase one data for our glucagon G. L. P. G. IP Tri agonist also known as Triple G, which we're pleased to announce we'll be moving into phase two later this quarter.
Dan Skovronsky: I think these data show that the 5mg dose could be a great first incretin that can potentially deliver best-in-class efficacy with tolerability that is as good or better than other leading incretins. So we have the low-maintenance dose of 5 mg that, if approved, could potentially be appropriate for many patients, with physicians knowing they could have higher doses available as they continue the management of the disease. Terzapatite could provide patients with the opportunity to set treatment goals that might surpass what was previously thought possible in type 2 diabetes, both in terms of getting patients to normal glucose control, which has never been contemplated as a potential treatment goal, as well as for impressive weight loss, with the highest dose of Terzapatite having roughly double the weight loss of some of the type 1 milligram in surpassed 2. Today, type 2 diabetes is largely a
We've previously commented that in this space, we are of high bar for progressing molecules in development.
And that has been raised recently biters appetite.
While it's still early we're advancing triple G to phase III based on our belief that it could exceed the benefits seen with tours appetite.
With our Triple G molecule, we expect to see even more weight loss and what can be achieved with <unk> appetite, while preserving glucose lowering efficacy. In addition, due to glucagon direct action on the liver, we'd also hope to see benefits and Nash.
Consequently, our ambitious phase II program is designed to evaluate triple G for obesity type two diabetes and Nash.
In addition to our next generation and anchor tenants. We're also very excited by our novel weekly insulin basal insulin FC.
Dan Skovronsky: With these results, terzapatide, if approved, could potentially provide doctors with options to enable early control of glucose and weight. This has the potential to translate to improved levels of end organ protection and a more meaningful reduction in disease complications than has yet been seen. We'll be testing this potential for gizepatide in ongoing and planned studies in diabetes, obesity, heart failure, and NASH. Accordingly, we've now initiated Surmount 2, 3, and 4 for Tuesdeptide and Obesity, and top-line results from Surmount 1 are expected next year.
Thanks to lose work on <unk> weekly encrypted therapy is now the standard of care and the <unk> space and.
And together with theirs appetite, we hope encrypted and based therapies will become the standard of care and the first injectable space for people with type two diabetes.
For those people, who need basal insulin therapy, and addition to their acreage and therapy, we'd like to make weekly insulin therapy possible ultimately avoiding daily injections completely.
We'll give an update at Ada on our novel weekly basal insulin.
We plan to have and Investor call and the morning of July 1st to discuss the data releases at 88 purchase appetite Triple G and weekly basal insulin.
Dan Skovronsky: Moving back to diabetes, the top line readout for Surpass 4, which is in a high cardiovascular risk population and we believe will provide an important contribution to our CV safety assessment, is the gating trial for global submissions in type 2 diabetes. Completion of this trial has always been contingent on accruing a pre-specified number of CV events.
While the progress and our diabetes portfolio is compelling Lilly.
Lilly has continued to advance the rest of our pipeline this quarter.
Slide 17 shows select pipeline opportunities as of April 23, and slide 18 shows potential key events for the year. In addition to the progress on <unk> appetite I just discussed major developments since our last earnings call include.
Dan Skovronsky: We've achieved the necessary events, which triggers bringing patients in for final treatment and safety visits before moving the trial to completion. Based on this update, we anticipate a top line readout by the middle of this year. We look forward to disclosing the results of Surpass 1, 2, 3, and 5 at the ADA 2021 virtual meeting, which will include a 90-minute ADA symposium featuring these results on the morning of June 29. While we're excited with the progress of Trezepatide, we think innovation in the increase in space is not over.
Progress with the net of map on multiple fronts in terms of data. We presented detailed results at ADP day, showing the denim and met its primary endpoint significantly slow and cognitive decline compared to placebo on the integrated Alzheimer's disease rating scale of composite measure of cognition and daily function in patients with early symptomatic Alzheimer's disease and.
And the data for the secondary analyses show Jeanette and have consistently slowed cognitive and functional decline with the ranges between 20, and 40% and all secondary endpoints with nominal statistical significance at multiple time points compared to placebo.
Dan Skovronsky: At ADA, we'll also be discussing preclinical and phase one data for our glucagon GLP-GIP triagonist, also known as GGG, which we're pleased to announce will be moving into phase two later this quarter. We've previously commented that in this space, we have a high bar for progressing molecules in development, one that has been raised recently by Terzapita. While it's still early, we're advancing Triple G to Phase 2, based on our belief that it could exceed the benefits seen with Terzapotai.
On the clinical front as we discussed in detail on our call last month, we expanded trailblazer <unk> two to be of Phase III study and it's now enrolling quickly.
And today, we're announcing that we will start the new phase III study trailblazer, ALS, three and asymptomatic Alzheimer's disease.
This trial is anticipated to begin enrollment later this year.
Our goal here is to enroll patients who already have Alzheimer's brain pathology, but don't yet have any clinical symptoms.
Dan Skovronsky: With our triple G molecule, we expect to see even more weight loss than what can be achieved with trizepatide while preserving glucose, and lowering efficacy. In addition, due to glucagon's direct action on the liver, we'd also hope to see benefits in NASH.
The study will have development and progression of Alzheimer's disease symptoms as the primary endpoint and we anticipate it will take approximately three years from completion of enrollment to reach a sufficient number of events. We will be testing of a short course of to net of map treatment at the start of the trial can prevent progression and a substantial fraction of patients over the subsequent several years.
Dan Skovronsky: Consequently, our ambitious Phase 2 program is designed to evaluate GGG for obesity, type 2 diabetes, and NASH. In addition to our Next Generation Incretins, we're also very excited by our novel weekly insulin, Basal Insulin FC. Thanks to Lilly's work on Trulicity, weekly incretin therapy is now the standard of care in the GLP-1 space, and together with Terzapatide, we hope incretin-based therapies will become the standard of care in the first injectable space for people with type 2 diabetes. For those people who need basal insulin therapy in addition to their incretin therapy, we'd like to make weekly insulin therapy possible, ultimately avoiding daily injections completely.
These types of trials are extremely challenging to enroll and conduct but here, we are buoyed by our expertise and biomarkers, including both pet scans and importantly, our plasma and <unk> $2 17 assay.
On the regulatory front based on feedback from the FDA. We currently do not see a path forward for near term submission and approval based on the first Trailblazer all study alone.
As you know the unmet need and Alzheimer's disease is significant so while we remain focused on speeding up enrollment and completion of our second pivotal study trailblazer else too we're continuing to actively engage with the FDA and are fully exploring any opportunities per early submission.
Dan Skovronsky: We'll give an update at ADA on our novel weekly basal insulin. We plan to have an investor call on the morning of July 1st to discuss the data releases at ADA Purchase Appetite, GGG, and Weekly Baseline. While the progress in our diabetes portfolio is compelling, Lilly has continued to advance the rest of our pipeline this quarter. Slide 17 shows select pipeline opportunities as of April 23rd, and slide 18 shows potential key events for the year.
Another highlight this quarter was the initiation of perfect Bruton its phase III program with study start and chronic lymphocytic leukemia as monotherapy.
We're also proud of the continuation of our work against COVID-19, including the planned transition from bamboo and never Mab alone to the administration of Bama and never Mab and at the seven map together for the treatment of COVID-19, and the U S. Accomplished by first gaining emergency use authorization for bama and everyone up and at the <unk> administered together in February and then a request for ratification of the EU.
Dan Skovronsky: In addition to the progress under Zepatite I just discussed, major developments since our last earnings call include, Progress with Dynetimap on multiple fronts. In terms of data, we presented detailed results at ADPD showing that Nenumab met its primary endpoint, significantly slowing cognitive decline compared to placebo on the Integrated Alzheimer's Disease Rating Scale, a composite measure of cognition and daily function in patients with early symptomatic Alzheimer's disease, and data from secondary analysis showed that Nenumab consistently slowed cognitive and functional decline with ranges between 20 and 40% in all secondary endpoints, with nominal statistical significance at multiple time points compared to placebo.
And for bandwidth of map alone, which FDA subsequently granted.
Okay.
We also submitted bandwidth isn't map and at the seven Mab administered together for regulatory review in Europe, and we initiated the evaluation of Bama and roadmap would be of $78 31, and collaboration with Bayer and GSK as.
And as well as started trials with the new potentially broadly neutralizing antibody <unk> 14 O four and collaboration with the accelerator in case, new combinations are needed to fight the parents.
Dan Skovronsky: On the clinical front, as we discussed in detail on our call last month, we expanded Trailblazer ALS-2 to be a Phase 3 study, and it's now enrolling quickly. And today, we're announcing that we will start a new Phase 3 study, Trailblazer ALS-3, in asymptomatic Alzheimer's patients. This trial is anticipated to begin enrollment later this year. Our goal here is to enroll patients who already have Alzheimer's brain pathology but don't yet have any clinical symptoms. The study will have the development and progression of Alzheimer's disease symptoms as the primary end point, and we anticipate it will take approximately three years from completion of enrollment to reach a sufficient number of events.
We announced top line phase III results evaluating bear sitting up on top of standard of care, which did not meet statistical significance on the primary endpoint for treatment of COVID-19, but did result in a significant reduction of death from any cause by 38% by day 28.
And bear sit and have received regulatory approval in conjunction with the room disappearance of treatment for COVID-19, and Japan.
Our work on true Zepa tied to net of Mab and peer to Bruton nib brings great potential for patients and the long term and is highly prioritized at Lilly.
Our work on COVID-19 is another clear highlight where we moved quickly to help address the unmet medical need in the midst of the pandemic.
Dan Skovronsky: We'll be testing if a short course of Denenumab treatment at the start of the trial can prevent progression in a substantial fraction of patients over the subsequent several years. These types of trials are extremely challenging to enroll and conduct, but here we're buoyed by our expertise in biomarkers, including both PET scans and, importantly, our plasma p-tau 217a. On the regulatory front, based on feedback from the FDA, we currently do not see a path forward for near-term submission and approval based on the first Trailblazer Owl Study alone.
And we're optimistic though that this need will wane in the coming years.
Beyond the significant efforts, there's been progress across the many other commercial stage and clinical stage assets.
<unk> and oncology, we're pleased with the approval of Supper cabinet for non small cell lung cancer and fiery cancer and Europe.
We're also pleased that the results of monarch E. R. Adjuvant breast cancer study are now submitted and Japan, along with Europe, China, and the U S and.
As you know the primary endpoint for the study was invasive disease free survival, which we hit at the interim analysis and as anticipated. This hazard ratio continues to strengthen over time, there's more events of accrued.
Dan Skovronsky: As you know, the unmet need in Alzheimer's disease is significant, so while we remain focused on speeding up enrollment and completion of our second pivotal study, Trailblazer ALS-2, we are continuing to actively engage with the FDA and are fully exploring any opportunities for early submission. Another highlight this quarter was the initiation of Pertubrutinib's Phase 3 program with Study Start in Chronic Lymphocytic Leukemia as Monotherapy. We're also proud of the continuation of our work against COVID-19, including a planned transition from BAMLIN-IVMAP alone to the administration of BAMLIN-IVMAP and ETISEVIMAP together for the treatment of COVID-19 in the U.S., accomplished by first gaining emergency use authorization for BAMLIN-IVMAP and ETISEVIMAP administered together in February, and then our request for revocation of the EUA for BAMLIN-IVMAP alone, which FDA subsequently granted.
Important secondary endpoints of the study include distant relapse free survival and overall survival.
For the U S submission. The FDA has noted and we agree that the OS data are immature and thus unreliable and as we shared and the J C O publication last year.
FDA has therefore asked us to see and updated OS analysis. During the review cycle to determine that <unk> is trending in favor of Virginia.
Given the robust distant relapse free survival data, we're highly confident that the overall survival data will eventually reflect and reinforced the survival benefit but it takes time for these events to accrue, especially in the adjuvant setting.
And immunology, we had positive phase III readouts for bear sitting hip and alopecia areata and the disease with significant unmet medical need and we look forward to regulatory submission and starting in the second half of this year.
Dan Skovronsky: We have also submitted BAMLIN-IVMAP and X7MAP administered together for regulatory review in Europe, and we initiated the evaluation of BAMLIN-IVMAP with VIIR 7831 in collaboration with VIIR and GSK, as well as started trials with a new, potentially broadly neutralizing antibody, LY1404, in collaboration with Abcelera, in case new combinations are needed to fight PERI.
We also announced that the FDA extend of the review period for bear sitting in for atopic dermatitis by three months and other disease, where we think JAK inhibition could potentially alleviate important unmet medical needs.
With mere kids of map, we reported positive phase III results and ulcerative colitis, and the 12 week induction study hitting the primary endpoint and all key secondary endpoints and we look forward to seeing the maintenance data early next year.
Dan Skovronsky: We now have top-line phase three results evaluating baricitinib on top of standard of care, which did not meet statistical significance on the primary endpoint for treatment of COVID-19, but did result in a significant reduction of death from any cause by 38% by day 28, and Bear Sidney has received regulatory approval in conjunction with Remdesivir as a treatment for COVID-19 in Japan. Our work on terzapatide, denetimab, and pyrtobrutinib brings great potential for patients in the long term and is highly prioritized at Lilly. Our work on COVID-19 is another clear highlight where we move quickly to help address an unmet medical need in the midst of a pandemic. We're optimistic, though, that this need will wane in the coming year.
We also have updates of the mirror because of map psoriasis program.
And the Oasis program generated positive results with safety and efficacy similar to other IL 23, <unk>. We believe the psoriasis market is well served with highly effective treatment options, including tolls.
Lilly immunology strategy is to focus our new molecules and indications on the areas where patients have significant unmet needs not merely adding new options or leveraging commercial presence to create a space where effective solutions like <unk> already exists for patients.
Therefore, we will not pursue submission America's mab and psoriasis, but instead, we will focus our efforts on the ulcerative colitis, and Crohn's disease indications, where unmet medical need is higher and where we believe the potential of the IL 23 of <unk> 19 mechanism to create a new standard of care is greater.
Dan Skovronsky: Beyond these significant efforts, there's been progress across many other commercial-stage and clinical-stage assets. Starting in oncology, we're pleased with the approval of Selpercatinib for non-small cell lung cancer and thyroid cancer in Europe. We're also pleased that the results of MONARCH-E, our adjuvant breast cancer study, have now been submitted in Japan, along with Europe, China, and the U.S. As you know, the primary endpoint for the study was invasive disease pre-survival, which we hit at the interim analysis. As anticipated, this hazard ratio continues to strengthen over time as more events have accrued.
In addition of late stage progress of our early stage portfolio continues to advance with the introduction of five new phase one assets and the attrition of two.
In addition to the progress we've made and just the first few months of the year, we anticipate important developments for the remainder of 2021, including the final readout purchase appetite phase III type two diabetes program and surpassed four noted earlier.
Phase III results for Guardians and half path and.
Dan Skovronsky: Important secondary endpoints for the study include distant relapse-free survival and overall survival. For the U.S. submission, the FDA has noted, and we agree, that the OS data are immature and thus unreliable, as we shared in the JCO publication last year. FDA has therefore asked us to see an updated OS analysis during the review cycle to determine that OS is trending in favor of Resenium. Given the robust, distant, relapse-free survival data, we're highly confident that the overall survival data will eventually reflect and reinforce the survival benefit. But it takes time for these events to accumulate, especially in the adjuvant setting.
And for Lebrecht, Kismet and atopic dermatitis.
Regulatory actions for <unk> for half of RF.
<unk> and the adjuvant setting for ER positive breast cancer.
Sitting at but for atopic dermatitis, and <unk> for osteoarthritis pain, where we previously noted our disappointment and the outcome of the <unk> Advisory Committee.
The presentation of phase one data for our oral surgery.
And the initiation of phase one for Bcl, two inhibitor and <unk> inhibitor, along with the filing of an eye and D. For next generation Ret inhibitor later this year as we announced at ACR.
Dan Skovronsky: In immunology, we have positive phase 3 readouts for baricitinib and alopecia areata, a disease with significant unmet medical need, and we look forward to regulatory submissions starting in the second half of this year. We also announced that the FDA extended the review period for baricitinib for atopic dermatitis by three months, another disease where we think JAK inhibition could potentially alleviate important unmet medical With Mirakizumab, we reported positive phase 3 results in ulcerative colitis in the 12-week induction study, hitting the primary endpoint and all key secondary endpoints, and we look forward to seeing the maintenance data early next year. We also have updates to the Amerikism app, Sorais.
And the phase II readout for Zach Tanenbaum, our anti Tau antibody for early Alzheimer's disease.
We believe our continued pipeline success drives increasing visibility to meaningful long term growth and we look forward to continued progress across our portfolio and the coming quarters now I will turn the call back over to David for some closing remarks. Thanks, Tim.
If we go to Q&A, let me briefly some of the progress we've made to start the year.
And we had several moving pieces and a challenging healthcare environment. We are excited by the momentum we are seeing.
Our business grew 16% and the first quarter with the core business growing 7% adjusted for COVID-19 antibody revenue and last year's COVID-19 related inventory stocking benefit.
Dan Skovronsky: While the OASIS program generated positive results with safety and efficacy similar to other IL-23P19s, we believe the psoriasis market is well served with highly effective treatment options, including TALP. Lilly's immunology strategy is to focus our new molecules and indications on areas where patients have significant unmet needs, not merely adding new options or leveraging commercial presence to create a space where effective solutions like TULPS Therefore, we will not pursue submission of Merikizumab and psoriasis, but instead, we'll focus our efforts on the ulcerative colitis and Crohn's disease indications, where there is higher unmet medical need and where we believe the potential of the IL-23P19 mechanism to create a new standard of care is greater.
Our top line growth continues.
<unk> continues to be strong driven strongly by volume across our key growth products, which account for more than half of our core business.
Net of the significant impact from foreign exchange on engine and international inventory sold our operating margin was in line with our expectations.
As we continue to expect the operating margin expansion throughout the year and further expansion and years to come.
We made significant progress developing new medicines with many more data readouts expected this year.
Advances for <unk> don't own of map per day burden nib Resiny of America's Maverick, <unk> and ILUVIEN and serve as a reminder of the breadth and depth of opportunities we have to sustain robust long term growth.
Dan Skovronsky: In addition to late-stage progress, our early-stage portfolio continues to advance, with the introduction of five new Phase I assets and the attrition of two. In addition to the progress we've made in just the first few months of the year, we anticipate important developments for the remainder of 2021, including the final readout for Gizepitide's Phase 3 Type 2 Diabetes Program, Surpass 4, noted earlier. Phase 3 results for Jardians in Hef-Pef and for lebrokizumab in atopic dermatitis. Regulatory actions for Jardians in HEF REF.
We returned nearly $800 million to shareholders be and increased dividend, reflecting confidence and the ongoing strength of our business.
I want to say, thank you to my Lilly teammates who.
Whose commitment to excellence and dedication of our purpose of bringing innovative new medicines to patients is inspiring and drove these accomplishments amidst ongoing pandemic headwinds.
Dan Skovronsky: Verzenio in the adjuvant setting for ER-positive breast cancer, Baricitinib for atopic dermatitis, and Tenezumab for osteoarthritis pain, where we previously noted our disappointment in the outcome of the Tenezumab Advisory Committee. The presentation of phase one data for our oral CERD, the initiation of phase 1 for a BCL2 inhibitor and for a KRAS G12C inhibitor along with the filing of an IND for a next generation RET inhibitor later this year, as we will announce at AACR, and the phase 2 readout for Zagatenumab, our anti-tau antibody for early Alzheimer's.
While our people health care providers and patients continue to face near term challenges associated with COVID-19 of.
Our long term outlook is as bright as ever.
This concludes our prepared remarks, and now I'll turn the call over to Kevin and moderate the Q&A session.
Thanks, David wed like to take questions from as many callers as possible. So we ask that you limit your questions to two per caller. Tony can you. Please provide the instructions for the Q&A session and then we're ready for the first caller.
Thank you, ladies and gentlemen, if you wish to ask a question. Please press one and zero on your telephone keypad.
Dan Skovronsky: We believe our continued pipeline success drives increasing visibility to meaningful long-term growth. We look forward to continued progress across our portfolio in the coming quarters. Now, I turn the call back over to Dave for some closing remarks. Thanks, Dan.
You may withdraw your question at any time by repeating the one zero co man.
Our first question comes from the line of Chris Schott with Jpmorgan. Please go ahead.
Dave Ricks: Before we go to Q&A, let me briefly sum up the progress we've made to start the year. Amid several moving pieces in a challenging healthcare environment, we are excited by the momentum we are seeing. Our business grew 16% in the first quarter, with the core business growing 7%, adjusted for COVID-19 antibody revenue and last year's COVID-19 related inventory stocking benefits. Our top line growth continues to be strong, driven strongly by volume across our key growth products, which account for more than half of our core business. Net of the significant impact from foreign exchange on international inventory sold, our operating margin was in line with our expectations, as we continue to expect operating margin expansion throughout the year and further expansion in years to come. We made significant progress developing new medicine, with many more data readouts expected this year.
Great. Thanks, so much and appreciate all the all the color on today's call I'm sorry, the two on the pipeline I guess first of all in Virginia.
You mentioned the FDA is looking for updated of last you know as part of the reviews and I'm just wondering when youll have that data and does that push out approval timelines of any meaningful way that we need to think about and.
And then the second one I had was on the <unk> appetite I guess in light of the data that you've seen from the surpass studies does that kind of changed how you think about what patient populations, you'll focus on from a commercial standpoint or your go to market strategy and I guess as part of that and speaking about yourself and I said coming to market do you expect substantial switches from Travelocity.
Or is it yourself the tight growth of more about the new patient starts and the kind of expanding the market. Thanks. So much.
Thanks, Chris we'll go to and for the Resenting. Your question and then Mike on through its appetite.
Well, thanks, Chris for the question numbers anyhow, and so we will be delivering this data sets of the MTA without delaying our standard of review timing and we can't really comment on what the FDA will do with the data or the application of these discussions are progressing as planned and important as the data matures I think as Dan said, given the strength of the Drs.
Dave Ricks: Advances for Trecipitate, Donautumab, Pertubrutinib, Resenio, Mirakizumab, Ritefmo, and Illumiant serve as a reminder of the breadth and depth of opportunities we have to sustain robust long-term growth. We return nearly $800 million to shareholders via an increased dividend, reflecting confidence in the ongoing strength of our business.
Hazard ratio of the member with the six eight and enhanced ratio with the very strong P value. We are highly confident at the OFC will trend in favor of per cent anyhow. So really what we believe are discussing and when that will occur. So obviously as I said, we can't comment on the discussions that day, but we do look forward and working with them and bringing this medicine to patients and.
Kevin Hearn: I want to say thank you to my Lilly teammates. The commitment to excellence and dedication to our purpose of bringing innovative new medicines to patients is inspiring and drove these accomplishments amidst ongoing pandemic headwinds. While our people, health care providers, and patients continue to face near-term challenges associated with COVID-19, our long-term outlook is as bright as ever. This concludes our prepared remarks, and now I'll turn the call over to Kevin to moderate the Q&A session.
And maybe just a comment to reference how immature the state of and at the time of the interim analysis, and we publish and J C. O late last year and they were 39 deaths and the anthem of arm and 37 and the control arm.
That makes it really challenging to interpret this data when there's over 5000 patients per study.
Thanks for the question.
Thanks and Mike.
Chris Thanks for your question no. The drilling results have not changed the way we want to position the receptor.
Kevin Hearn: Thanks Dave. We'd like to take questions from as many callers as possible, so we ask that you limit your questions to two per caller. Tani, could you please provide the instructions for the Q&A session, and then we're ready for the first caller.
And in the marketplace.
And so very pleased with those results were also doesn't really blessed to have rolled solicit the interest or appetite and our goal will be the maximize our entire acreage and portfolio.
Operator: Thank you. Ladies and gentlemen, if you wish to ask a question, please press 1, then 0 on your telephone keypad. You may withdraw your question at any time by repeating the 1-0 command. Our first question comes from the line of Chris Schott with J.P. Morgan. Please go ahead. Great, thanks so much.
And once we have established a strong market position I think the the best data and the support that and it's just how we've been able to grow share of market and the face of of something from a balance and so it has a strong position of the marketplace and that will remain.
Chris Schott: Great, thanks so much, and I appreciate all the color on today's call. I'm just going to do two on the pipeline.
And as we think about true serpentine the dueling I'm kind of mechanism of Gi B component is really a game changer.
Chris Schott: I guess first, Virginia, did I hear you mentioned FDA is looking for updated OS data as part of the review? So I was just wondering when you'll have that data and does that push out approval timelines in a meaningful way that we need to think about? And then the second one I had was on terzapatide. I guess, in light of the data you've seen from the SURPASS studies, does that change how you think about what patient populations you'll focus on from a commercial standpoint or your go-to-market strategy?
You know Dan went through the results, but we just haven't seen the.
And the return someone living with type two diabetes, whether they are late or early summer.
Someone with diabetes and with type two diabetes progression back to normal UNC and in fact, we were able to get 50 to 60 per cent of people back is really incredible also weight loss and the highest dose up to 14%. So when you just take a look of that and you can look at the at the back of that 90% of people, who live with type two diabetes are overweight or obese and can.
Chris Schott: And I guess as part of that, as we think about terzapatide coming to market, do you expect substantial switches from Trulicity? Or is terzapatide growth more about new patient starts and kind of expanding the market? Thanks so much.
Really benefited from early treatment with type two diabetes and the real question is and why would you want to and put them on something else early on and why would you want and wait for them and have those kind of events. So these features appetite has the potential to really transform the market drive and earlier use of the anchor tenants in particular, there's appetite of dual mechanism and really.
Anne E. White: Thanks, Chris. We'll go to Anne for the Resenio question and then Mike on Thirst Appetite. Well, thanks, Chris, for the question on Resenio. And so we will be delivering this data set to the FDA without delaying our standard review time. We can't really comment on what the FDA will do with the data or the application, but these discussions are progressing as planned. Important to note, as the data matures, I think, as Dan said, given the strength of the DRFS hazard ratio, remember it was a.687 hazard ratio with a very strong p-value, we are highly confident that the OS will trend in favor of Resenio.
And the acreage and market. So you know I think there's appetite will clearly win some new patients and we're doing on neutral the city, you'll have some people who were maybe not performing well or not and are needed more efficacy that will go on to true appetite.
Our focus will be the profoundly changed and disrupt the type two diabetes marketplace by driving earlier use of of Microtrends winters appetite.
Thanks, Mike Chris Thanks for your questions. The next caller please.
Anne E. White: So really, what we believe we're discussing is when that will occur. So obviously, as I said, we can't comment on the discussions with the FDA, but we do look forward to working with them on this. And maybe just a comment to reference how immature this data is. At the time of the interim analysis that we published in JCO late last year, there were 39 deaths in the abema arm and 37 in the control arm. So that makes it really challenging to interpret this data when there are over 5,000 patients in the study. Thanks for the question. Thanks, Anne. Bye.
Yes. Our next question comes from the line of Geoff Meacham with Bank of America. Please go ahead.
Good morning, guys. Thanks for taking the question.
Also have two pipeline ones.
Just wanted to get your perspective on America's them out of the decision to focus on just the IBD and you have good head to head data and psoriasis. So is it more of a commercial focus or is it that you want to focus more on pulse and psoriasis.
And then and all farmers, you'll have zero turn them out of data and the second half of this year.
Michael B. Mason: Chris, thanks for your question. No, the trisepatide results have not changed the way we want to position trisepatide in the marketplace. We're obviously very pleased with those results. We're also just really blessed to have both Trulicity and trisepatide.
How are you thinking about the opportunities of combined potentially with the name of the Mab I wasn't sure what what steps need to happen prior.
Prior to to thinking.
And thinking about that type of the type of trial and maybe from a regulatory perspective, what do you think would be a gating factor. Thank you.
Michael B. Mason: Our goal will be to maximize our entire Inkerton portfolio. Trulicity has established a strong market position, and I think the best data to support that is just how we've been able to grow its share of the market. So it has a strong position in the marketplace, and that will remain.
Thanks, Jeff will go to earlier for the first question and Dan for the question on Alzheimer's.
Great.
Thank you for the question on milk, Here's the math.
Really as we see the greatest opportunity for unmet need for patients and we've said all along we believe America is and that has the greatest opportunity.
Michael B. Mason: But now, as we think about tersepatide, the dual-anchor-trim mechanism, that GIP component, is really a game-changer. Dan went through the results, but we just haven't seen the ability to return someone living with type 2 diabetes, whether they're late or early, someone with type 2 diabetes progression, back to normally. Seeing, in fact, we were able to get 50 to, is really incredible. Also, weight loss at the highest dose. So when you just take a look at that, and you take a look at..., the fact that 90% of people who live with type 2 diabetes are overweight or obese.
And the Gi and IBD and alternative colitis, and Crohn's disease, and we're pleased with the loosen the line the results and so we're looking forward to seeing the maintenance data and deep.
And early part of next year in terms of psoriasis as we take a look of the market and unmet need and we do continue to believe the tall as the gold standard and best in disease and I believe that really is a market well served and some of the decision from the port.
Volume standpoint is to focus our efforts and places where we believe we can have the greatest unmet need and Gi is where we're focused for Americans and Matt.
Michael B. Mason: They can really benefit from early treatment with type 2 diabetes. So the real question is, why would you want to put them on something else early on, and why would you want to wait for things to happen?
Thank you Celia Dan.
Yeah. Thanks, Jeff for the question and sorry could turn them out of our anti Tau antibody.
Michael B. Mason: So, we see trizepatide has the potential to really transform the market, drive an earlier use of incretins, in particular, trizepatide's dual mechanism, and really expand the incretin market. So, you know, I think trizepatide will clearly win some new patients that would have gone on to trilicity. You'll have some people who were maybe not performing well or needed more efficacy that will go on to trizepatide, but clearly, our focus will be to profoundly change and disrupt. Thanks, Mike.
Before I come to the combinations moving out just handicap the phase II trial quickly.
The pro here in favor of of towers is clearly the genetic validation and pathologic validation of the target. It's a great target for Alzheimer's disease. The commentary that we have to acknowledge as data from other <unk>.
Companies are tau antibodies, which hasnt been particularly promising and the difficulty and and hitting the tau targeted and the frame that we have of differentiated antibody here of that binds just aggregate of Tau.
So perhaps there's there's reason.
Michael B. Mason: Chris, thanks for your questions. Next caller, please. Yes, our next question comes from the line of Geoff Meacham with Bank of America. Please go ahead. Morning, guys. Thanks for taking the questions. I also have two pipeline ones.
I think we could get different results.
We're certainly eagerly awaiting those data and the second half of the year and you're exactly right. If we see efficacy combination would be an important consideration here for sure. The general theme of combining and anti amyloid drug with and anti Tau drug is a good one.
Geoff Meacham: I just want to get your perspective on mirakizumab, the decision to focus on just IBD. You know, you have good head-to-head data in psoriasis. So is it more of a commercial focus, or is it that you want to focus more on pulse and psoriasis?
Particularly when you have a drug like Donato map of where you can completely clear.
Amyloid plaques with the limited duration of therapy, and then perhaps at that moment.
Intervene with the where the anti Tau drug I do think that's the future of something we're actively.
Geoff Meacham: And then in Alzheimer's, you'll have zagatinumab data in the second half of this year. How are you thinking about the opportunity to combine it, potentially, with donatumab? I wasn't sure what steps needed to happen prior to, you know, thinking about that type of trial.
Considering pending of course, the data on the Tau antibody.
Thanks, Dan and Jeff Thanks for your questions. The next caller please.
Thank you. Our next question comes from the male Devine with Mizuho Securities. Please go ahead.
Great. Thanks, so much for taking the questions and then the one on talk and maybe just.
A little more clear.
Clarity of our Colorado the.
The pricing dynamics there.
You mentioned because of kind of picking returned to net sales growth and then.
Second quarter and and accelerating.
And just trying to think about it isn't capable of the full year of dynamics out of it.
The product level guidance, and how you'd think about sort of the the.
And a full year of comparison of our 2021 to 2020.
I assume you're still expecting growth year, and the whole sort of you can just sort of clarify any of that contract with ESI.
Not sure of is that of full year of contractors that go beyond one year I'm, just trying to get a sense of sort of pricing dynamics in 2022, and 2023 and and we should expect another step down and then one quick follow up just on the comments around Trailblazer three I don't know if you could maybe just share.
A little more in terms of the number of patients.
And to enroll in that trial, just didnt kind of get a sense of how long and Goldman.
Geoff Meacham: And maybe from a regulatory perspective, you know, what do you think would be a gain factor? Thank you. Thanks, Geoff. We'll go to Ilya for the first question and then Dan for the second question, and I'll stop. Great.
That could take thank you.
Thanks, Paul good of Ilya for the question on Tulsa, and kind of the full year picture and then Dan on Trailblazer three.
Sure. So on talks first and I'm, just saying, we're really pleased about the progress we're making on <unk> and the growth that we're seeing with the step up and access upgrades.
ESI and beyond and so as we take a look even though that we had.
The price impact in Q1, and there are some elements, there and where we have a number of patients that were on medical exception.
And are now and the rebate and contract and we have with ESI and of course, we're also seeing the increase and overall volumes with ESI. What's encouraging is that we're not only seeing improvements and overall volume based off of switches. We're also seeing significant improvement and of our new therapy.
Starts and somewhere where in dermatology and now the leading share.
And the dermatology with over 19%.
Sure and then and rheumatology, where almost doubling our share from previous previous year and sort of as we think about the year.
In terms of growth.
We do believe law and we'll get to net sales growth and Q2 and will continue to accelerate that volume growth and throughout the year the.
Ilya Yuffa: Geoff, thank you for the question. On Mirakizumab, really, as we see the greatest opportunity for unmet, and as we've said all along, we believe that mirakizumab has the greatest opportunity in GI and IBD and ulcerative colitis. I'm very pleased with the LUCENT1 results and so we're looking forward to..., and I will be back with more data in the early part of next year. In terms of psoriasis, as we take a look at the market and unmet need, we do continue to believe that TALS is the gold standard and best investment. I believe that that really is a market well served, and so the decision from a portfolio standpoint is to focus our efforts. I believe we can have the greatest unmet need and GI is... Thanks, Ilya.
And the contracting that we have for talks.
Dan Skovronsky: Dan? Yeah, thanks, Jeff, for the questions. I can tell you about our anti-tau antibody. Before I come to combinations, maybe I'll just handicap this phase two trial quickly. The pro here in favor of tau is clearly genetic validation and pathologic validation of the target. It's a great target for Alzheimer's disease. The con here that we have to acknowledge is data from other companies' tau antibodies, which haven't been particularly promising, and the difficulty in hitting the tau target in the brain.
Beyond one year and so we're encouraged about the volume growth of over 20% now and we continue to see encouraging signs and the market.
Dan Skovronsky: Now, we have a differentiated antibody here that finds just aggregated tau, so perhaps there's reason to think we could get different results. We're certainly eagerly awaiting those data in the second half of the year, and you're exactly right if we see efficacy combination as an important consideration here. For sure, the general theme of combining an anti-amyloid drug with an anti-tau drug is a good one, particularly when you have a drug like Tinetimab, where you can completely clear amyloid plaques with a limited duration of therapy and then, perhaps at that moment, intervene with an anti-tau drug. I do think that's the future of something we're actively considering, pending, of course, Thanks, Dan. Geoff, thanks for your questions. Next caller, please.
Okay.
Thanks, Dan.
Vamil Devan: Thank you. Our next question comes from Vamil Devan with Mizuho Securities. Please go ahead.
Thanks, very much for the question on the Trailblazer, three and and our enrollment goals here, we probably don't get into too. Many details here, but we are of course expecting to this to be of large trial involving thousands of individuals.
Vamil Devan: Great, thanks so much for taking the questions. Maybe one on talks, maybe just a little more Claire Dior on Colorado, and the pricing dynamics there. You mentioned you kind of expecting a return to net sale growth in the second quarter and then accelerating. I'm just trying to think about as we think about the full year dynamics. I know you'll give product level guidance, but how you think about sort of the kind of full year comparison for 2021 to 2020.
But yet we also set very ambitious enrollment goals.
And while we don't have all of the all the details of planned out on how to achieve this our goal is that we should be able to enroll this trial in about a year, that's pretty exciting to contemplate and.
Vamil Devan: I assume you're expecting growth for the year as a whole, but if you could just sort of clarify, is that contract with ESI, I'm not sure, is that a full year contract or does that go beyond one year? I'm just trying to get a sense of sort of pricing dynamics in 2022 and 2023 and if we should expect another step down. And then, one quick follow-up just on the comments around Trailblazer 3.
Vamil Devan: I don't know if you could maybe just share a little more in terms of the number of patients if you're looking to enroll in that trial, just so we can kind of get a sense of how long the enrollment might actually take. Thank you. Thanks, Paul. We'll go to Ilya for the question on Tulps and the full year picture, and then Dan on Trailblazer 3.
And Alzheimer's prevention trial is something that makes great sense, given the science and the biology here and what we know about the onset of Alzheimer's disease and its relation to years of having amyloid plaque in the brain, but there have been two major drawbacks that have not made these trials are really very.
The call first is finding the patients.
That has gone from impossible.
Before our introduction of of the amyloid pet scan to possible, but really hard with amyloid pet scans as we experienced firsthand and and the <unk> four trial to now something that's eminently feasible with our advent of the plasma Tao.
Ilya Yuffa: So on TALTS, first, let me just say we're really pleased about the progress we're making on TALTS and the growth that we're seeing with the step-up, access upgrades. As we take a look, even though we've had some price impact in Q1, there are some elements there where we have a number of patients that were on medical exception that are now in the rebated contract that we have with ESI. Of course, we're also seeing an increase in the cost of a new contract and overall volume.
Without the $2 17.
Assay that that's a huge advance that just unlocks this trial the.
And the second is if you think about this population, which is not experiencing symptoms is a bit younger than and Alzheimer's population.
And and introducing a therapy that is likely and infusion that they take for the rest of their lives.
That's also a pretty significant hurdle.
Ilya Yuffa: What's encouraging is that we're not only seeing, We're also seeing significant improvement in our new therapy starts. So we're in dermatology, now the leading share in dermatology with over 19.5% of all shares. And then in rheumatology, we're almost doubling from last year. And so as we think about the year in terms of growth, we do believe we'll get to net sales growth in Q2 and we'll continue to accelerate that volume growth throughout the year. The contracting that we have for tall,
Ilya Yuffa: ....
And again, we've I think of aggregated that risk with day net of Mab and of limited treatment duration to give lasting plaque clearance. So excited about the travelers and three trial.
Thanks, Dan well thanks for your questions next caller please.
Thank you. Our next question comes from famous Fernandez with Guggenheim. Please go ahead.
Oh, great. Thanks, so much for the question so.
And just the first off the question for a day.
David as you think about some of the the various proposals that are in Congress currently.
Could you just give us your thoughts on you know the the tax proposal.
And maybe and not could give a little bit of the the potential implications for Lilly and then.
Ilya Yuffa: , and we continue to see encouraging... Thanks, Ilya, Dan. Yeah, thanks for the question on Trailblazer 3 and our enrollment goals here. We probably won't get into too many details here, but we are, of course, expecting this to be a large trial involving thousands of individuals. But we have also set very ambitious enrollment goals, and while we don't have all the details planned out on how to achieve this, our goal is that we should be able to enroll this trial in about a year. That's pretty exciting.
Separately.
There's obviously a lot of controversy swirling on drug pricing.
And just wanted to get your sense of the proposals that are out there currently.
And if the industry is poised to or ready to step up.
With a with a more reasonable proposal and then just the the second question is.
On the the JAK inhibitor space and.
And Lilly has the opportunity with Lebron kids the mab.
Particularly in atopic dermatitis.
And it was the bit of a compare and contrast, only Lilly I think has both a.
Dan Skovronsky: And it's something that we're looking forward to contemplating. An Alzheimer's prevention trial is something that makes great sense, given the science and the biology here and what we know about the onset of Alzheimer's disease and its relation to years of having amyloid plaque in the brain. But there have been two major drawbacks that have not made these trials really very practical. First, finding the patients. That's also a pretty significant hurdle. Again, we've, I think, abrogated that risk with Denenumab and a limited treatment duration to give lasting plaque clearance.
And the opportunities in the space.
I think there's a lot of speculation that there is going to be of safety.
The update from the FDA, if not a full safety panel.
Hoping Dan that you could give us a little bit of your thoughts in that regard. Thanks. So much.
Thanks, Seamus less unpack there we will start with the Dave on some of the policy, maybe and not on the the tax piece of that and then we'll go to earlier on the on kind of what he sees from a Jack and Lubbock isn't other standpoint.
Yeah, Hi, Seamus look on taxes. It's this is a live discussion of course because of the.
The President's introduced a number of ideas on corporate tax changes.
I guess, we join a growing of course of large companies, who oppose that means to raise revenue, especially when the stated policy goal of the infrastructure plan is to build.
Build back of the economy of course, private money and and corporate actions make up the vast majority of the investment that could or would occur and taxing that seems like a bad idea of maybe the opposite idea from the bill itself.
Dan Skovronsky: So, I'm excited about the Trailblazer III trial. Thanks, Dan. Vamal, thanks for your questions. Next caller, please.
Within the Bill maybe just a couple of general comments and we can follow up if we need to.
Theres, the nominal rate discussion which of course.
Seamus Fernandez: Thank you. Our next question comes from Seamus Fernandez with Guggenheim. Please go ahead. Oh, great thing.
When we say moving from 21 to 28 as you know moving.
Seamus Fernandez: Great, thanks so much for the question. So, just first off, a question for Dave. You know, Dave, as you think about some of the various proposals that are in Congress currently, could you just give us your thoughts on, you know, the tax proposal? And maybe Anat could give a little bit of the potential implications for Lilly. And separately, there's obviously a lot of controversy swirling around drug pricing. Just wanted to get your sense of the proposals that are out there currently and if the industry is poised to or ready to step up with a more reasonable proposal.
Towards the middle of the pack is not true because of course and the U S. We have state level of income tax and it would really put the U S at the at.
The highest.
Developed economy in terms of corporate tax rate.
Additionally, we're the only major economy of the taxes overseas earnings of its the dumbest.
The company's and changing the so called guilty.
Tax of.
Foreign minimum tax.
It really.
And as punitive to our home companies and in multiple ways.
And it's something that would have a disproportionate effect on pharmaceutical companies.
And so you know both of these actions don't make a lot of sense to us and and we oppose we would favor of things like looking at.
Seamus Fernandez: And then just the second question is about the JAK inhibitor space and Lilly's opportunity with lebrokismab, particularly in atopic dermatitis. There's a bit of a compare and contrast. Only Lilly, I think, has both potential opportunities in the space.
The funding the IRS. So they can collect taxes from all of the people that don't pay and including businesses and other items that can be paid for us we certainly support infrastructure.
And in many ways of on drug pricing. This has been pushed out a little bit I wouldn't be surprised if we see HR three being debated soon but as you may have read apparently won't be part of the second package from the White House.
That's good because of HR three and those concepts are really.
Seamus Fernandez: I think there's a lot of speculation that there is going to be a safety update from the FDA, if not a full safety panel. I'm hoping, Dan, that you could give us a little bit of your thoughts in that regard. Thanks. Thanks, Seamus. Lots to unpack there. We'll start with Dave on some of the policy, maybe a knot on the tax piece of that, and then we'll go to Ilya on kind of what he sees from a Jack and Leverkis and Ives standpoint. Hi Seamus.
Set.
Set to take a huge piece out of the industry do nothing for patient out of pocket of affordability and you know really derail the innovation machine that is the only reason we're escaping from the COVID-19 pandemic. So we will oppose that with every ounce of our being a pharma that said we are all for changes to the system.
Dave Ricks: Look, on taxes, this is a live discussion, of course, because the president has introduced a number of ideas on corporate tax changes. I guess we join a growing chorus of large companies who oppose that means to raise revenue, especially when the stated policy goal of the infrastructure plan is to build back the economy. Of course, private money and corporate actions make up the vast majority of the investment that could or would occur.
Out of pocket costs.
And go down for patients.
There are a lot of ways to do this within the system that the industry is willing to put pay for some of the table. This is much more around the contours of and maybe what we saw with Senate finance or the reported proposals made and the 11th hour of the last administration, we will table of those ideas, we are tabling those ideas and.
I think probably and the second half you'll hear more about that and we think theres a great opportunity to improve affordability and strengthen the the health care system, and really address health care and equities as well that occur because people who are of lower economic means people of color of women are disproportionately affected.
Dave Ricks: And taxing that seems like a bad idea, maybe the opposite idea from the bill itself. Within the bill, maybe just a couple of general comments, and we can follow up if we need to. You know, there's the nominal rate discussion, which, of course, when we say moving from 21 to 28 is, you know, moving toward, you know, toward the middle of the pack, is not true because, of course, in the U.S., we have state level income tax.
And by Bad insurance design and bad benefit design, we can share those up and make the health care system work better for everyone.
Thanks.
Dave Ricks: It would really put the U.S. at the highest developed economy in terms of corporate tax rates. Additionally, we're the only major economy that taxes overseas earnings of its domiciled companies, and changing the so-called guilty tax, you know, the foreign minimum tax, really is punitive to our home companies in multiple ways, and is something that would have a disproportionate effect on pharmaceutical companies. And so, you know, both these actions don't make a lot of sense to us, and we oppose them. We would favor things like looking at funding the IRS so they can collect taxes from all the people that don't pay, including businesses and other items that can be paid for. We certainly support infrastructure in many ways.
Yeah Seamus so thank you for the other question as you noted.
And what we said on the call and we're right.
I'm excited about our progress and immunology as a whole and if we think about the growth opportunities within immunology atopic dermatitis is one catalyst.
For the company both.
And what we believe.
And homey and success and also never accuse them of them in terms of the question around Jackson, the FDA decision and I won't speculate on the on any decision of the after you may make when it's safe to say that the delay across all of Jack's and atopic dermatitis and other indications suggest that there's a broader review on JAK safety, we feel that illumina.
The robust safety.
Profile and with the dermatology being more safety conscious of.
We do believe that ammonia and has a and <unk>.
Very good prospect to compete in the space.
Dave Ricks: On drug pricing, you know, this has been pushed out a little bit. I wouldn't be surprised if we see H.R. 3 being debated soon. But as you may have read, apparently, it won't be part of the second package from the White House. That's good because H.R.
And especially after the topical failure and.
And the number because of map is one that and to watch out for four and the second half of the year as we get more data when we feel like we can compete and differentiate versus duplex and and so long term prospect and catalysts for growth are very good for having both mechanisms and we also see.
Dave Ricks: 3 and those concepts are really, you know, set to take a huge piece out of the industry, do nothing for patient out-of-pocket affordability, and really derail the innovation machine that is the only reason we're escaping from the COVID-19 pandemic. So we will oppose that with every ounce of our being at PhRMA. That said, we are all for changes to the system that make out-of-pocket costs go down for patients. There are a lot of ways to do this within the system that the industry is willing to put pay-fors on the table. This is much more along the contours of maybe what we saw with Senate Finance or the reported proposals made in the 11th hour of the last administration.
Catalysts for growth and alopecia Rihanna.
To be first and disease with all of them, yet and so we feel very good about our chances.
And not only compete but also to have a significant growth and and have meaningful outcomes for patients.
Thanks, Seamus Thanks for your questions next caller please.
Thank you. Our next question comes from the line of Louise Chen with Cantor. Please go ahead.
Hi, Thanks for taking my questions here. So first question I had for you was on Lubricates. The map what do you think will differentiate your product from others that are already approved and those and development and do you plan to pursue that lubricant and map of any other indication and then second question is on lots of those the meal five blocks of the 338, what do you think.
Dave Ricks: We will table those ideas, we are tabled those ideas, and I think probably in the second half, you'll hear more about that. We think there's a great opportunity to improve affordability and strengthen the healthcare system and really address healthcare inequities as well, because people who are of lower economic means, people of color, and women are disproportionately affected by bad insurance design and bad benefit design. We can shore those things up and make the healthcare system work better for everybody.
And your competitive advantages are of here versus the others that are trying to do the same thing. Thank you.
Great. Thanks, Louise will go to earlier for the first question and Jake for the second.
And we thank you for the question about number of kids and Mab.
In terms of area of differentiation and the focus.
And from that because of that is not only to what kept the efficacy of on scam and also one of them more.
Ilya Yuffa: Thanks to Ilya. Yeah, Seamus, so thank you for the question. As you noted, you know, and what we said on the call, we're quite, I'm very excited about our progress. And if we think about the growth opportunities within immunology, topic dermatitis is one catalyst for the company both. In terms of the question around Jackson's FDA decision, I won't speculate on any decision, But it's safe to say that the delay across all JACs, ENA-topic dermatitis, and others... for a broader review on Jackson safety. We feel that Illumiant has a robust profile and with Dermatology.
Impactful sometimes related to atopic dermatitis is huge and so we believe we may have the opportunity to differentiate on each of which also has impact on sleep.
And we believe it and <unk>.
And I may have.
And our safety profile and so that's where we believe we can differentiate.
And so we're excited to.
Get the results from the precursor member of the back half of the year in terms of new indications and I think it's early to.
And to take couple of cat and the new indications, we're obviously evaluating opportunities to grow the number it gives them up and but our focus right now is making sure we have successfully atopic dermatitis.
And just to jump in on top of that of course, there and there will be of dosing convenience and dosing certainty benefit with the liberty as well.
Ilya Yuffa: We do believe that Illumiant has very good prospects to compete, especially after a topical and then Lever Kizumab, one to watch out for, for the second half. So long-term prospecting catalysts for growth are very good, having both mechanisms. And we also see Catalyst for Growth and Alpi Shariata, a very, to be first, to not only compete but also to have significant growth and meaningful outcomes. Thanks, Ilya. Seamus, thanks for your questions. Next caller, please.
Yes.
Thanks, Jim.
Thanks for the question Louise about about sort of burden of lots, one and three and five and lots of 338 of the Bcl two inhibitor I think of as it relates the differentiation I point out of few things and <unk>.
First of all of obviously as I think you and others know per DAU burden of itself as a differentiated <unk> inhibitor that we believe of afford certain advantages and combination obviously.
Obviously, we need to prove that clinically, but that's our hypothesis right now so.
And so that that sort of stands on its own the locks of three three day program. The Bcl two inhibitor, we'll be putting into the clinic. This year and obviously important that that drug meets the human pharmacology goals. So that we know that that in itself is on track of the drug.
Louise Chen: Thank you. Our next question comes from the line of Louise Chen with Kantor. Please go ahead. Hi, thanks for taking my questions here. The first question I had for you was about leberkism.
Should that prove to be the case, which we expect it to we will then look the combine these two agents I think when you look out and others that are combining the PK and bcl two the latter of largely being venetic Lax I think what you see is a very fragmented landscape of asset ownership across companies and as a result of that.
Louise Chen: The first question I have for you is about Leberkizumab; what do you think will differentiate your products from others that are already approved and those in development, and do you plan to pursue Leberkizumab for any other indications? And then the second question is about Loxo 305 plus Loxo 338. What do you think your competitive advantages are here versus others that are trying to do the same thing? Thank you.
Oftentimes perverse incentives about how to combine those drugs and where we think it's important that if if you have and.
Ilya Yuffa: Thanks, Louise. We'll go to Ilya for the first question and Jake for the second. Yeah, Louise, thank you for the question about lebrokismab. In terms of area differentiation, the focus for lebrokismab is not only to look at the efficacy on the skin, but also one of the more impactful symptoms related to atopic dermatitis is itch. And so we believe we may have the opportunity to differentiate an itch, which also has an impact on sleep. And we believe that lebrokismab may have a role in So that's where we believe we can differentiate.
And a new and differentiated <unk> inhibitor like we believe we do with part of it and then we thought it was strategically important to own our own Bcl two inhibitor and so we think will be the the really the only player.
In the field, who owns both agents outright.
And that that to US is the key differentiating feature of downstream, but still you know a bunch of hoops, we have to jump through to enable that combination.
Thanks, Jason Louise Thanks for your questions next caller please.
Thank you and next we go to the line of Carter Gould with Barclays. Please go ahead.
Yeah.
Alright, good morning, guys. Thanks for the comprehensive update and for taking the question I guess first for for Dan or Mike you guys post the details of the summit study of two separate tied and half to half recently and I think the design and size and timeline were all surprising relative to expectations.
Ilya Yuffa: And so we're excited to, In terms of new indications, I think it's early to take a look at any new indications. We're obviously evaluating opportunities to grow lebrachizumab, but our full focus right now is making sure we have... Hey, Ilya, just to jump in on top of that, of course, there will be a dosing convenience and dosing certainty benefit with Levri as well Thanks. Thanks for the question, Louise, about proto-brutonib LOXO305 and LOXO338, the BCL2 inhibitor. I think as it relates to differentiation, I'd point out a few things.
I guess getting to a readout and much much faster than some of the had expected can you maybe just walk through some of those key design choices and the extent regulators have bought in and and also confirm that that single study would be sufficient for approval and that setting and then also you know historically Lilly has done I think done a better job of sort of franchise.
Building and in certain areas and some of its peers now with sort of mirror because of the map.
Risking data can you talk of around how you're thinking about building around that the ti portfolio. Thank you.
Jacob S. Van Naarden: First off, obviously, as I think you and others know, proto-brutonib itself is a differentiated BTK inhibitor that we believe affords certain advantages in combination. Obviously, we need to prove that clinically, but that's our hypothesis right now. So that sort of stands on its own.
Thanks, Carter will go to Mike for the question and answers appetite and Ilya for the question on Mary.
Yes, thanks for the question.
On the summit trial.
We're bullish on the opportunity for.
And if there's appetite and Uh huh.
We when you look at that.
Tom.
Really a large unmet need was nearly 4 million people living with help of path of heart failure, leading cause of them.
Hospitals nation and the U S. When you look at the scientifically.
Jacob S. Van Naarden: The LOXO338 program, the BCL2 inhibitor, we're putting into the clinic this year, and it's obviously important that that drug meets its human pharmacology goals so that we know that it itself is on track as a drug. Should that prove to be the case, which we expect it to, we will then look to combine these two agents. I think when you look out at others that are combining BTK and BCL2, the latter largely being venetoclax, I think what you see is a very fragmented landscape of asset ownership across companies, and as a result of that, some oftentimes perverse incentives about how to combine those drugs and where.
You do see that there was a b C related.
Have a phenotype that we believe that true up in time.
And I'm, a large role and and helping out and so that's what really drove our and investment and summit and I think the team has done a nice job of.
Coming up with creative approach and that will provide robust data for payers and clinicians and make that decision. So I think we're very confident and and this and both of our clinical trial design as well as the commercial opportunity.
Jacob S. Van Naarden: We think it's important that if you have a new and differentiated BTK inhibitor, like we believe we do with Pert-O-Brutinib, we think it was strategically important to own our own Bcl-2 inhibitor. And so we think we'll be the only player in the field who owns both agents outright. So that, to us, is a key differentiating feature downstream, but there's still, you know, a bunch of hoops we have to jump through to enable that combination. Thanks, Jake. Louise, thanks for your questions. Next caller, please.
Thanks, Mike.
We will go to Ilya for the next answer.
Yeah kind of listen as you noted in terms of building franchises across immunology, we've built up of our scale and our dermatology and excited about the increasing number of treatments there the.
And with the rheumatology and and the hope for.
Finding of lupus as well and then and G I.
And that will be our first entry into the Gi with ulcerative colitis and Crohn's disease, and then we do have.
Carter Gould: Thank you. Next, we go to the line for Carter Gould with Barclays.
And you're pretty robust pipeline in both the phase one of the and proof of concept studies and particularly around the <unk> conjugate that we're studying for ulcerative colitis as well and we look forward to bringing out new treatments and.
Carter Gould: Alright, good morning. Thanks for the comprehensive updates and for taking the question. I guess, first, for Dan or Mike, you guys posted details of the summit study of terzepatide and HFPAF recently, and I think the design, size, and timeline were all surprising relative to expectations. So, you know, getting to a readout much, much faster than some had expected.
Carter Gould: Please go ahead. All right, good morning. Thanks for the comprehensive explanation.
Across all three of those areas and the coming years.
Thanks, Julia Carter. Thanks for your questions next caller please.
Thank you. Our next question comes from Tim Anderson with Wolfe Research. Please go ahead.
Thank you a couple of questions on <unk> and the CDK class more broadly can you talk about what youre seeing and the U S and terms of Rebating.
Carter Gould: Can you maybe just walk through some of those key design choices and the extent regulators have bought in and also confirmed that that single study would be sufficient for approval in that setting? And then also, you know, historically, Lilly has done a better job of sort of franchise building in certain areas and some of its peers now with sort of Miracuzumab de-risking data? Can you talk about how you're thinking about building around that GI portfolio?
Of this oral oncology category my understanding is that the level of rebates, maybe stepping up and I'm not sure which company or companies are driving that and maybe what suppliers are driving that and as we try to hang onto market share.
Carter Gould: Thank you. Thanks, Carter. We'll go to Mike for the question on Terzapotai and Ilya for the question on Mary.
But what's the outlook for gross to net price trends in this category and the.
Michael B. Mason: Yeah, thanks for the question on the summit trial. We were bullish on the opportunity for trizepatide in HepPath. When you look at that, it's really a large unmet need with nearly 4 million people living with HepPath heart failure, a leading cause of hospitalization in the U.S. When you look at it scientifically, you do see that there is a BC-related HFPEF phenotype that we believe that trisepatide can play a large role in helping out. And so that's what really drove our investment in Summit, and I think the team has done a nice job.
Then on top of your PD, one from and event.
Chinese company <unk>.
Note that you will file for approval and non small cell lung and the U S. This here.
And it's really hard for me to see how you gain any share with this product given what would be of limited label and given the payer and prescriber dynamics were and things like part B you can't really compete on price. So what's realistic to expect with this product from a commercial perspective, not only U S but another.
Western markets like Europe.
Thanks, Tim we'll go to and way for both of those.
Well thanks, Tim for the question on price, So I think as you're mentioning it's incredibly competitive market with the CDK, four and <unk> and so we and all.
Michael B. Mason: We came up with a creative approach that will provide, I think, robust data for payers and clinicians. So I think we're very confident in both our clinical trial design as well as the commercial. Thanks, Mike.
Others continue do we need to do to make sure of that patients get access to the rate of medicines. So so we have a obviously a strong strategy there I can't comment on the specifics, but we do see competition and really what we're seeing I think youre seeing and Bruce any of what we're saying is incredibly nice trend.
Ilya Yuffa: We'll go to Ilya for the next answer. Yeah, Carter, listen, as you noted, in terms of building franchises across immunology, we've built up our scale in dermatology, and we're excited about the increasing number of treatments there. The same with rheumatology and the hope of finding out lupus as well. And then, GI. Merikizumab will be our first entrant into GI with ulcerative colitis and Crohn's disease. And then we do have a pretty robust pipeline in both phase one and proof of concept studies, in particular IL-2 conjugate, that we're studying for ulcerative colitis as well. And we look forward to bringing out new products across all three of those areas. Thanks, Ilya. Carter, thanks for your questions. Next caller, please.
Growing and Q1 and she thought we had positive momentum with the U S strong share growth in March and we saw tier acts of over 17% and <unk> of over 28%.
And so and this is despite as you've noticed a modest year on year to your ex market decline. So I think what we're seeing is both from a payer strategy, but also very much from a data strategy, we're seeing that percentage of those growing its share.
Share nicely and so like how all of our different programs are coming together and obviously, the the data and edge of breast cancer and reinforce the growing awareness of these medicines are different but we're really has been the focus for our execution has been capitalizing on the positive OS data and making sure that people are aware of that and we're seeing more trial.
Our adoption as we go through that so so very pleased how all of our strategies, but of course any of our coming together.
Ilya Yuffa: Our next question comes from Tim Anderson with Wolf Research. Please go ahead. Thank you.
On top of it yes, I mean, as you mentioned, it's a competitive space, obviously and well I can't really comment on our commercial strategy prior to approval.
Tim Anderson: Thank you. I have a couple of questions. On Virginio and the CDK class more broadly, can you talk about what you're seeing in the U.S. in terms of rebates for this oral oncology category? My understanding is that the level of rebates may be stepping up, and I'm not sure, you know, which company or companies are driving that. Maybe it's Pfizer driving that as they try to hang on to market share. But what's the outlook for gross to net price trends in this category?
Reassurance and we're looking at ways to differentiate and really add value to this innovative class of medicines. So obviously, we know that there is.
Certain commercial approaches will have to take to capture share is really of late entrant in the field and that.
But we see opportunity here and obviously the steel made sense with the partnership that we've had with <unk> and we're committed to the to the U S and so submission this year.
Tim Anderson: And then on Tyvit, your P1 from Inovant, a Chinese company, you note that you'll file for approval on non-small cell lung cancer in the U.S. this year. It's really hard for me to see how you gain any share with this product given what would be a limited label and given payer and prescriber dynamics where, for things like Part B, you can't really compete on price. So what's realistic to expect with this product from a commercial perspective, not only in the U.S. but in other Western markets like Thanks, Tim. We'll go to Anne White for both of those.
And so more to come as we as we look to launch the product and share that strategy and how we intend to.
Making opportunity here and as you said I wouldn't I wouldn't necessity of large opportunity for Lilly and opportunistic one that and we think makes sense makes sense for patients globally and driving value for them.
Thanks, and Tim Thanks for your questions, we will move to the lightning round. So we can try to get everyone and our answers will be brief and will actually ask each of you to only have one question for us the next caller. Please.
Thank you next we have Andrew Baum with Citi. Please go ahead.
Yes, the question to Dan on the does any of it and the monarch E filing as you outlined the survival data is thankfully kind of take a long time to mature.
Anne E. White: Well, thanks, Tim, for the question on Versenio. So I think, as you mention, it's an incredibly competitive market for CDK4-6s. And so we and others continue to do what we need to do to make sure that patients get access to the right medicines. So we have, obviously, a strong strategy there. But I can't comment on the specifics.
And it's the onset of the FDA and looking for more about the maturation of progression free survival, sorry does each free survival just given the historic precedent to the amount of PD data.
With power of the cyclic where you had the separation that been coming together and isn't.
Isn't that really of what the FDA wants given if you're waiting for the survival you could be waiting for very long time indeed.
Anne E. White: But we do see competition. And really, what we're seeing, I think you're seeing in Versenio, what we're seeing is an incredibly nice trend growing in Q1. As you saw, we had positive momentum with the U.S.'s strong share growth in March, and we saw TRX of over 17% and NBRX of over 28%. And this is despite, as you've noticed, a modest year-on-year TRX market decline.
Thanks, Andrew David.
Anne E. White: So I think what we're seeing is both from a payer strategy but also very much from a data strategy. We're seeing that Virginia is growing its share nicely. And so I like how all of our different programs are coming together. And obviously, the data in adjuvant breast cancer reinforced growing awareness that these medicines are different, but what really has been the focus for our execution has been capitalizing on positive OS data and making sure that people are aware of that.
Just take it quickly.
And Andrew it's the focus here is on the overall survival on the.
The distant real true survival is as we commented the the curves are not coming together are there actually separating more of it's improving as we get more of that so I'm not aware of any concerns around that.
Got it thank you.
Thanks, Dan Thanks, Andrew for your question next caller please.
Thank you ladies and.
And next we go to the line of Steve Scala with Cowen. Please go ahead.
Anne E. White: And we're seeing more trials and more adoption as we go through that. So, very pleased how all of our strategies with First NER are coming together. On Tybitt, yes, I mean, as you've mentioned, it's a competitive space, obviously, and while I can't really comment on our commercial strategy prior to approval, you can be reassured that we're looking at ways to differentiate and really add value to this innovative class of medicine. So, obviously, we know that there's... [inaudible] make an opportunity here. But as you said, I wouldn't, I wouldn't assess this as a large opportunity for Lilly but an opportunistic one that we think makes sense, is good for patients globally and drives value for them.
Thank you I think and it was stated that the number of CV events and surpass four has been reached if I heard that correctly if the.
That's correct and it looks like the study is going to achieve a 10 point earlier than expected. So my question is is that either the confidence building or concerning are you worried COVID-19, cardiovascular effects may have impacted the accrual of events.
And if there is appetite trends worst and insulin and go out and saying can you still file. Thank you.
Thanks, Steve we'll go to Mike on that.
Yes, thanks for the question.
No we have no concerns.
We will we have reached the the number and we needed to complete the trial and we're getting patients back and we'll have that data.
Should should start to see top line and in May and we will release that information.
And before the end of the corner.
We're very very excited about the serpentine and very confident and CB profile and looking forward to see and the surpass four day.
Thanks, Mike Steve. Thanks for your question next caller please.
Anne E. White: Thanks, Anne and Tim, thanks for your questions. We'll move to the lightning round so we can try to get everyone in. Our answers will be brief, and we'll actually ask each of you to only have one question for us. The next caller, please.
Thank you next week out of the line of Terence Flynn with Goldman Sachs. Please go ahead.
Hi, Thanks for taking the questions I was just wondering on monarchy, if theres any possibility of NCC and lifting before the FDA action and then can you give us an update on the <unk> launch dynamics this quarter. Thank you.
Andrew Baum: Thank you. Next, we have Andrew Baum with Citi. Please go ahead.
Andrew Baum: Yeah, question for Dan. On the Zemio and the Monarch e-filing, as you outlined, the survival data is thankfully going to take a long time to mature. It's the answer that the FDA is looking for more about further maturation and progression-free survival or, sorry, disease-free survival, just given the historic precedence of the Penelope B data with powder cyclic, where you had separation but then coming together. Isn't that really what the FDA wants, given that if you're waiting for survival, you could be waiting for a very long time, indeed?
Thanks, Terrence will go to and for the question on <unk> and the roots of milk.
Thanks for the question, so on the marquee and and see and I really can't comment for them. So obviously, we feel that the state is incredibly impactful I think one of our thought leaders of call. It the most notable.
The development and her two positive breast cancer and the last two decades, but we'll just have to wait and see what N. CCN decides to do and the number 10.
And this is going well. So we you know virtual launch in May we finished 2020 with $37 million of sales and we see cause the momentum in Q1. So we've had a great engagement of customers.
Dan Skovronsky: Dan? I'll just take it quickly. No, Andrew, the focus here is on the overall survival of the Distant Realty Survivalists. As we commented, the curves are not coming together, they're actually separating more, it's improving as we get more events. I'm not aware of any concerns around that.
The brand awareness of strong so we're quite pleased and this is an incredibly important medicine as you know.
Some patients over and 80% response rate so great response from the customers very enthusiastic about what we're seeing so far.
Thanks, and Sarah and thanks for your questions. The next caller. Please.
Dan Skovronsky: Got it, thank you. Thanks, Dan. Thanks, Andrew, for your question. Next caller, please.
Thank you. Our next question comes from Ronny Gal with Bernstein. Please go ahead.
Steve Scala: Next, we go to the line with Steve Scala and Cowan. Please go ahead.
Good morning, and thank you for making the diet and so we are seeing you.
Steve Scala: Thank you. I think it was stated that the number of CV events in exceeded four has been reached, if I heard that correctly. If that's correct, then it looks like this study is going to achieve its end point earlier than expected. So my question is, is that either confidence building or concerning? Are you worried COVID-19 cardiovascular effects may have impacted the accrual of events? And if trizepatide trends worse than insulin, glycogene can use Stilfyl.
The cost conscious strategies on both Paul and I'll be with kids and map and and I was kind of wondering if you got to look forward five years.
Where do you see immunology pricing band goes in terms of dollars per year, and so right now of the low to mid 30 of the way you can fit highest of the Oakland and we're gonna be and the May 20 under 2030, plus what do you see that the bandwidth.
Yeah.
Thanks, Ronnie will go to Ilya for the questions on immunology pricing trends.
Michael B. Mason: Thank you. I think Steve will get a mic on that. Yeah, thanks for the question. No, we have no concern. [inaudible] The number we needed to complete the trial, we're getting patients back in, we'll have that data, should start to see a top line. We're very, very excited about Trisepti. Thanks, Mike. Steve, thanks for your question. Next caller, please.
Yeah Ronny thanks for the question on <unk>.
In terms of our focus.
And my son.
Our conscious of is more related to looking at opportunities for growth, we have a long runway of protocols and.
And so we do believe the Talas is kind of at the foundation of our immunology strategy, we have numerous head to head.
And the real world evidence of 10.
I suggest and Tulsa is a best in disease a true.
Treatment and as part of our growth strategy and looking at and nearer to the math and Gi.
We do believe that.
Terence Flynn: Thank you. Next, we go to the line about Terence Flynn with Goldman Sachs. Please go ahead. Hi, thanks for taking the question.
Within the next five to 10 years, we can.
Across the multiple mechanisms and.
Terence Flynn: Hi, thanks for taking the questions. I was just wondering, on monarchy, if there's any possibility of an NCCN listing before FDA action?
And those three specialized groups dermatology rheumatology and Gi have significant growth and become a top tier immunology company and.
In terms of pricing I think they're all very competitive fields and so our goal is to have great evidence of.
Anne E. White: And then, can you give us an update on the Retevmo launch dynamics this quarter? Thank you. Thanks, Terence. We'll go to Anne for the question on Verzenio and Retevno. Thanks for the question. So on Monarchy and NCCN, I really can't comment for them.
And to create access opportunities for patients that need these treatments.
Anne E. White: So obviously, we feel that this data is incredibly impactful. I think one of our thought leaders called it the most notable development in HER2-positive breast cancer in the last two decades, but we'll just have to wait and see what NCCN decides to do. And then on RETEMMO, the launch is going well.
Thanks, Sylvia Ronny. Thanks for your question next caller please.
Thank you and next we go to the line of Kerry Holford with Aaron Berg. Please go ahead.
And can you just on the caveat and couponing and tell me if you can just.
Anne E. White: So we did a virtual launch in May, we finished 2020 with 37 million in sales, and we see positive momentum in Q1. We've had great engagement with customers, and unaided brand awareness is strong. So we're quite pleased. And this is an incredibly important medicine, as you know, some patients have over an 80% response rate. So great response from the customers, very enthusiastic about what we're seeing so far. Thanks Anne, and Terence, thanks for your questions. Next caller, please.
Got.
And it gives connect between you and know what 2021 sales guidance here and the highway safety.
R&D spend.
And that context do you have the budget kind of the minefield and getting rid of accident.
Thanks.
Thanks, Carol good enough of that sure. Thanks, Gary Let me start with the our budget. So we did inquiry.
The increased our guidance for the COVID-19 antibody and investment from three of 400 to for the 500 and the investments that we've announced this morning is really to address the growth and variance that we see globally and looking at additional antibody that can address that the lowering on the high end of the range really.
Stephen Michael Scala: Thank you. Our next question comes from Ronnie Gull on Bernstein. Please go ahead.
Stephen Michael Scala: Good morning, and thank you for making the time. We are seeing you adopting cost-conscious strategies on both TALS and the Meritism app. And I was kind of wondering, if you're going to look forward five years, where do you see immunology pricing going in terms of dollars per year? It's right now in the low to mid-30s, the way we can see it. Five years from now, we're going to be in the mid-20s, under 20, 30 plus.
And it relates to the changes you've seen here and the U S government as well as what we see globally in terms of progression of the disease.
But and this is one I know that it is more challenging to forecast given that there's not a lot of data and data for you to look at and we'll continue to update obviously with every quarter and maybe just to add of the mindset thing we didn't get into this because we were thinking about margins or business profile. It was to be useful during the pandemic.
Ilya Yuffa: Where do you see the bandwidth pricing going? Thanks, Ronnie. We'll go to Ilya for questions on immunology pricing trends. Yeah, Ronnie, thanks for the question on immunology. In terms of our focus, it's less on cross consciousness, more related to looking at opportunities for growth.
Ilya Yuffa: We have a long runway for TALS. And so we do believe that TALS is kind of at the foundation of our immunology strategy. We have numerous head-to-head studies and real world evidence to suggest that TULS is the best in the disease treatment, and as part of our growth strategy looking at Miracizumab and GI, we do believe that within the next five to 10 years, we can achieve significant growth across multiple mechanisms in those three specialized groups, Dermatology, Rheumatology, and GI, and become a top tier immunology company. In terms of pricing, I think they're all very competitive fields, and so our goal is to have great evidence and create access opportunities for patients.
Which is still going on and obviously raging and the other parts of the world. One other driver for the top line is the increasing it will be selling our products into lower price markets are giving it away.
And that's where the diseases and when the pandemic period and I think we can then take a different look at this and during business, but we're not there yet so we're making the investments we need to do the useful and selling the product where it's needed at the price structure. We had previously announced which is heavily discounted and low GDP and markets.
Thanks, David and not carry thanks for your question next caller. Please.
Thank you next week out of the line of Omar <unk> with Evercore. Please go ahead and hi, Thanks for taking my question Dan.
We've spoken of in March It seems like you haven't had a lot of regulatory discussions on banana mab, but it does feel like you've had them now so I'm curious the FDA feedback on the on the new endpoint I E. R. S as well as the beige and analysis and also very briefly on CD 73 mm Theres, an interesting emerging signal and some of the other 60, 70 threes and pancreatic setting.
Ilya Yuffa: Thanks, Ilya. Ronnie, thanks for your question. Next caller, please. Thank you. Next, we go to the line with Kerry Holford and Ehrenberg. Please go ahead. Thank you. Just on the COVID antibodies, I wonder if you could just...
And noticed you guys discontinued would love to find out of any additional color.
Kerry Holford: Thank you. Next, we go to the line for Kerry Holford with Ehrenberg. Please go ahead.
Thanks steamer Dan.
Yeah sure. So FDA feedback are as has.
And has been continuing I should say are we had some and it continues to come and I think we you know.
Our our view here is unchanged, we previously said that.
The idea of his concerns around the address because it combines cognition and function and there's always a risk that you could have a positive signal on a dress driven by cognition with no benefit on function of flux, you're going the other way of or vice versa and that wouldn't be acceptable for approval of the new drug.
Kerry Holford: Thanks Kerry, we'll go to Nat for that. Sure, thanks Kerry.
Anat Ashkenazi: Let me start with the budget. So we did increase our guidance for the COVID antibody investments from three to 400 to four to 500. And the investments that we've announced this morning are really to address the growth in variants that we see globally and looking at additional antibodies that could address that. The lowering on the high end of the range, really relates to the changes you've seen here in the US government as well as what we see globally in terms of progression of the disease.
And so so that's the risk there.
On the C 73 phase one the termination I don't have the additional comments.
Thanks, Dan and thanks for your question next caller please.
Yeah.
And last question comes from Gilbert with Truest Securities. Please go ahead.
Thanks, Dan on 10 of some of them.
The outlook any more hopeful than the optics of the outcome vote and can you comment on where pain fits into your overall R&D priority list at this point thanks.
Anat Ashkenazi: But this is one I know that is more challenging to forecast given that there's not a lot of TRX data or data for you to look at, and we'll continue to update it obviously with every quarter. And maybe just to add as a mindset thing, we didn't get into this because we were thinking about, you know, margins or business profile. It was to be useful during the pandemic, which is still going on and is obviously raging in other parts of the world.
Sure.
Greg. Thanks for the question pain is still a really important unmet medical need clearly the regulatory bar is high here in terms of safety and we saw that from the 10 hasn't had the advisory Committee meeting which was.
A pretty decisive outcome, there and one that we were disappointed and.
Anat Ashkenazi: One other driver for the top line is that increasingly, we'll be selling our products into lower-priced markets or giving them away because that's where the disease is. And when the pandemic period ends, I think we can then take a different look at this enduring business, but we're not there yet. So we're making the investments we need to be useful and selling the product where it's needed at the price structure we had previously announced, which is heavily discounted in low GDP markets.
Thanks, Dan Greg. Thanks for your question, that's the day for the close.
Okay. Thanks, Kevin and we appreciate your participation in today's call and your interest and Eli Lilly and company.
2021 has been has begun with good momentum and our underlying business. We remain focused on executing our innovation based strategy to bring new medicines to patients and create value for all our stakeholders.
Dave Ricks: Thanks David and Anat. Kerry, thanks for your question. Next caller, please.
As we continue to scale, our diverse commercial portfolio complemented by a pipeline of industry, leading opportunities. We believe Lilly continues to be a compelling investment.
Umar Rafat: Thank you. Next, we go to the line of Umar Rafat with Evercore. Please go ahead. Hi, thanks for taking my question.
Umar Rafat: Hi Dan, when we spoke in mid-March, it seemed like you hadn't had a lot of regulatory discussions on Nanomab, but it does feel like you've had them now. So I'm curious about FDA feedback on the new endpoint, IADRS, as well as the Bayesian analysis. And also, very briefly, on CD73. There's an interesting emerging signal in some of the other CD73s in the pancreatic setting. I noticed you guys are gone. Would love to find out any new information. Yeah, sure.
Thanks again for dialing in today, please follow up with our IR team. If you of any questions. We've not addressed on today's call and hope everyone has a great day.
Thank you, ladies and gentlemen that does conclude our conference for today.
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Okay.
Dan Skovronsky: So FDA feedback has been continuing, I should say. We have had some, and it continues to come. I think, you know, our view here is unchanged. We previously said that the FDA has concerns around iDRAS because it combines cognition and function. And there's always a risk that you could have a positive signal on iDRAS driven by cognition with no benefit on function or function going the other way or vice versa. And that wouldn't be acceptable for approval of a new drug. So that's the risk there.
Dan Skovronsky: On the C73 phase one termination, I don't have any additional comments. Thanks, Dan. Umer, thanks for your question. Next caller, please.
Gilbert: And the last question comes from Gilbert with Truist Security. Please go ahead.
Gilbert: Thanks. Dan, on Tenuzumab, is the outlook any more hopeful than the optics of the ADCOM vote, and can you comment on where pain fits into your overall R&D priority list at this point? Thanks. Sure. Greg, thanks for the question. Pain is still a really important unmet medical need.
Clearly, the regulatory bar is high here in terms of safety, and we saw that at the Tanezumab Advisory Committee meeting, which was a pretty decisive outcome there and one that we were disappointed in. Thanks, Dan. Greg, thanks for your question. Back to Dave for the close. Okay, thanks, Kevin.
We appreciate your participation in today's call and your interest in Eli Lilly and Co. 2021 has begun with good momentum in our underlying business. We remain focused on executing our innovation-based strategy to bring new medicines to patients and create value for all our stakeholders. As we continue to scale our diverse commercial portfolio, complemented by a pipeline of industry-leading opportunities, we believe Lilly continues to be a compelling investment. Thanks again for dialing in today. Please follow up with our IR team if you have any questions we have not addressed on today's call. Hope everyone has a great day.
Thank you, ladies and gentlemen. That does conclude our conference for today. We thank you for your participation and for using AT&T Event Conferencing Services. You may now disconnect.