Q2 2021 Eli Lilly and Co Earnings Call
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Ladies and gentlemen, and thank you for standing by and welcome to Lilly's Q2 earnings call. At this time all participants are in a listen only mode and we will conduct a question and answer session and instructions will be given at that time should you require assistance during the call. Please press star zero and an operator will assist.
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Lilly's earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct the question and answer session, and instructions will be given at that time. Should you require assistance during the call, please press star then zero, and an operator will assist you offline.
And you offline as a reminder, today's conference is being recorded I would now like to turn the conference over to your host Vice President of Investor Relations. Kevin Hern. Please go ahead.
Operator: As a reminder, today's conference is being recorded. I would now like to turn the conference over to your host, Vice President of Investor Relations, Kevin Hearn. Please go ahead.
Good morning, Thank you for joining us from Eli Lilly and company's Q2, 2021 earnings call I'm, Kevin Hern, Vice President of Investor Relations and joining me on today's call are Dave Ricks, Lilly's, Chairman and CEO and other Ashkenazi Chief Financial Officer.
Kevin Hearn: Good morning. Thank you for joining us for Eli Lilly and Company's Q2 2021 Earnings Call. I'm Kevin Hearn, Vice President of Investor Relations, and joining me on today's call are Dave Ricks, Lilly's Chairman and CEO, Anat Ashkenazi, Chief Financial Officer, Dr. Dan Skovronsky, Chief Scientific and Medical Officer, Anne White, President of Lilly Oncology, Ilya Yuffa, President of Lilly Biomedicines, Mike Mason, President of Lilly Diabetes, and Jake Van Naarden, CEO of Loxel Oncology at Lilly.
Dr Danske and Wronski, Chief scientific and medical Officer, Anne White, President of Lilly oncology, Julia youthful president of Lilly Bio medicines, Mike Mason President of Lilly diabetes, and Jake Van Dardens CEO of blocks of oncology at Lilly. We're also joined by Lawrence Jerky cancer away Huh and Sarah.
Kevin Hearn: We're also joined by Lauren Zierke, Kenta Ueha, and Sarah Smith of the Investor Relations team. During this conference call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on slide three. Additional information concerning factors that can 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 Securities 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.
Smith of the Investor Relations team.
During this conference call, we anticipate making projections and forward looking statements based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on slide 3.
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 Securities 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.
Kevin Hearn: 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 second quarter results. Thank you, Kevin.
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 second quarter results. Thank.
Thank you Kevin.
Dave Ricks: Q2 of last year was the peak of the pandemic's negative impact on our business, and one year later, I'm proud of the innovation and resilience displayed by my Lilly colleagues to deliver against our objectives in new ways while also mobilizing to develop treatments to help combat COVID-19. Looking ahead to Q2 2021, we were encouraged by the increasing worldwide vaccination rates, as well as the underlying environment in most of our major markets. Covid-19 related stocking in Q1 followed by destocking in Q2 of last year complicates quarterly performance comparisons. Therefore, looking at revenue growth in the first half of 2021 better reflects the underlying trends in our business. On today's call, we will provide year-over-year comparisons for both Q2 and the first half of the year.
Q2 of last year was the peak of the pandemic negative impact to our business and 1 year later I'm proud of the innovation and resilience displayed by my Lilly colleagues to deliver against our objectives and new ways. While also mobilizing to develop treatments to help combat COVID-19.
Looking at Q2, 2021 we were encouraged by the increasing worldwide vaccination rates as well as the underlying environment and most of our major markets co.
And 19 related stocking in Q1, followed by Destocking in Q2 of last year comparable Kate's quarterly performance comparisons.
Therefore, looking at revenue growth and the first half of 2020, 1 better reflects the underlying trends and our business.
On today's call, we will provide year over year comparisons for both Q2 and the first half of the year.
And the first half of 2021 we delivered 11% growth and our core business. This excludes COVID-19 antibody revenue.
Dave Ricks: In the first half of 2021, we delivered 11% growth in our core business. This excludes COVID-19 antibody revenue. Boy, this is buoyed by strong volume-driven growth across key brands and major geographies, including the US, Europe, and China. Turning specifically to Q2, revenue grew 23% compared to Q2 2020, or 20% in cost and currency. This performance was driven entirely by volume growth of 22%.
This was buoyed by strong volume driven growth across key brands and major geographies, including the U S Europe and China.
Turning specifically to Q2 revenue grew 23 per cent compared to Q2, 2020, or 20% and constant currency.
This performance was driven entirely by volume growth of 22 percentage points.
Dave Ricks: As previously highlighted, in Q2 2020, we saw a reversal of the $250 million pandemic-related product stockpile which occurred in Q1 2020. When excluding COVID-19 antibody revenue, the Q2 2020 COVID-19 related destocking, and the sale of Cialis in China, our core business grew 12% for the quarter, up from 7% in Q1. We are pleased to see sequential top-line growth in the core business this quarter, signaling that healthcare systems continue to recover from the pandemic and the strength of our underlying business. Key growth products continue to drive our revenue growth and represent 54% of our core business this quarter. Our non-GAAP gross margin was 79.3% in Q2, or 79.7% excluding the impact of foreign exchange on international inventories sold.
As previously highlighted in Q2, 2020, we saw a reversal of the $250 million pandemic related product stocking, which occurred in Q1.2020.
When excluding COVID-19 antibody revenue Q2, 2020, COVID-19 related Destocking and the sale of CLS and China, Our core business grew 12% for the quarter.
From 7% and Q1 on the same basis.
We were pleased to see sequential topline growth and the core business. This quarter signaling that health care systems continued recovery from the pandemic and the strength of our underlying business.
Key growth products continue to drive our revenue growth and represent 54% of our core business.
This quarter.
Our non-GAAP gross margin was 79, 3% and Q2 or <unk> 79, 7% excluding impact of foreign exchange on international inventories sold <unk>.
Dave Ricks: Excluding the FX impact, our gross margin increased by approximately 60 basis points compared to last year. Our non-GAAP operating margin was 29.4%, representing an improvement of nearly 140 basis points. We are pleased to see Operating Margin expand year over year, and we expect continued expansion. On the pipeline front, we achieved multiple milestones since our earnings call in April, including receiving breakthrough therapy designation for donautumab and announcing our plan to submit to the FDA under the accelerated approval pathway.
Excluding the FX impact our gross margin increased by approximately 60 basis points compared to last year.
Our non-GAAP operating margin was 29, 4%, representing an improvement of nearly 140 basis points.
We are pleased to see operating margin expand year over year, and we expect continued expansion and the second half of this year.
And the pipeline and front, we achieved multiple milestones since our earnings call and April including receiving breakthrough therapy designation for dinner and a map and announcing our plan to submit to the FDA under the accelerated approval pathway.
Announcing positive phase III results for <unk> surpassed 4 trial with planned global submissions of the surpass program for <unk> and type 2 diabetes by the end of 2021.
Dave Ricks: Announcing positive phase 3 results for terzipatide's SURPASS IV trial with planned global submissions of the SURPASS program for terzipatide and type 2 diabetes by the end of 2021, obtaining approval for JARDIANCE in partnership with Berenger Ingelheim for HEF-REF in Europe and announcing positive phase 3 results from the Emperor Preserve trial for JARDIANCE and HEF-PEF, the first and only successful trial for this patient population, and initiating phase 3 trial results for pertubrutinib in mantle cell lymphoma, terzipatide in HFPEF, and Resenio in HR positive, HER2 positive, early breast cancer and now prostate cancer. We also continue to augment our pipeline with business development deals and announce the acquisition of Protomer Technology.
Obtaining approval for <unk> and partnership with Boehringer Ingelheim for have Ref in Europe, and announcing positive phase III results from the Emperor preserve trial for Guardian and half path.
The first and only successful trial for this patient population.
And initiating phase III trial results for per day burden them and mantle cell lymphoma, true zipper tide and half path and.
And <unk> and HR positive her 2 positive early breast cancer and now prostate cancer.
We also continue to augment our pipeline with business development deals and announced the acquisition of Protium. Our technologies. We welcome program. The program team to Lilly and are excited to bring this technology to our diabetes pipeline as we believe glucose sensing insulin may become the next generation for insulin treatment to improve the quality of life for people living with <unk>.
Dave Ricks: We welcome the PROTOMER team to Lilly and are excited to bring this technology to our diabetes pipeline, as we believe glucose-sensing insulin may become the next generation for insulin treatment to improve the quality of life for people living with diabetes.
Diabetes.
Dave Ricks: Lastly, on financials, we returned approximately $1.3 billion to shareholders via the dividend and share repurchases in the quarter and authorized the repurchase of up to $5 billion in stock in addition to the $500 million authorization remaining under our 2018 share repurchase program. Moving on to slides five and six, you'll see a list of key events since our Q1 earnings call, including a May webcast that highlighted our updated environmental, social, and governance strategy and our sustainability efforts as well as the launch of a new ESG website to serve as a comprehensive resource to provide increased transparency regarding the company's ESG goals and progress. Furthermore, as part of our goal to become carbon neutral in our own operations at our manufacturing plant in Kinsale, we recently inaugurated a new solar field, which is now the largest in Ireland.
Lastly on financials, and we returned approximately $1.3 billion to shareholders via the dividend and share repurchases and the quarter and authorized the repurchase of up to $5 billion.
And stock in addition to the $500 million authorization remaining under our 2018 share repurchase program.
Moving on to slides 5 and 6 you'll see a list of key events since our Q1 earnings call, including EMEA webcast, which highlighted our updated environmental social and governance strategy and our sustainability efforts as well as the launch of a new ESG website to serve as a comprehensive resorts to provide increased transparency regarding the company's ESG goals and progress.
Further as part of our goal to become carbon neutral and our own operations at.
At our manufacturing plant and can sale, we recently inaugurated a new solar field, which is now the largest and Ireland.
Anat Ashkenazi: We also announced donations of COVID-19 therapies at no cost to low-income and lower-middle-income countries heavily impacted by the pandemic. We are proud of the impact we are having around the world as we work to combat COVID-19. Now, I'll turn the call over to Anat to review our Q2 results and provide an update on our financial guidance for 2021. Thanks, Dave.
We also announced donations of COVID-19 therapies at no cost to low income and lower middle income countries heavily impacted by the pandemic.
And are proud of the impact we are having around the world as we work to combat COVID-19.
Now I'll turn the call over to and not to review, our Q2 results and to provide and update on our financial guidance for 2020.1.
Thanks, David Slide 7 and 8 summarize financial performance from the second quarter and year to date.
Anat Ashkenazi: Slide 7 and 8 summarize financial performance in the second quarter and year-to-date. I'll focus my comments on non-GAAP performance. Revenue increased 23% this quarter compared to Q2 2020 for 12% excluding the items Dave mentioned earlier, representing strong momentum for our core business. Given the COVID-19 related stocking and destocking seen between Q1 and Q2 2020, our first half performance of 11% revenue growth, or 8% in constant currency, excluding COVID-19 antibody revenue, is a more accurate reflection of underlying performance.
That's my comment on non-GAAP performance.
Revenue increased 23% this quarter compared to Q2, 2020 or 12%, excluding the items, Dave mentioned earlier, representing strong momentum for our core business.
Given the COVID-19 related stocking and Destocking seen between Q1, and Q2, 2020, our first half performance of 11% revenue growth or 8% and constant currency. Excluding COVID-19 antibody revenue is a more accurate reflection of underlying performance and the sequential quarter over quarter.
Anat Ashkenazi: And the sequential quarter over quarter revenue growth better represents the trends in our core business. Sequential revenue growth from Q1 to Q2 for core business, increasing vaccination rates in many major markets, and the majority of our sales reps now being back in the field, suggests a recovery from the pandemic was in line with our expectations for the quarter. We're particularly pleased with the strong volume growth across key brands like Trlicity, Talt, Fresenio, and Jardian.
Revenue growth better represent that strengthen our core business.
Sequential revenue growth from Q1 to Q2 for a core business increase and vaccine right vaccination rates in many major markets and the majority of our sales reps now being back in the field suggest a recovery from the pandemic was in line with our expectation from the quarter.
We're particularly pleased with the strong volume growth across key brands like <unk>, presenting and chart in.
Anat Ashkenazi: Fresenio in the U.S. grew nearly 6 percentage points in total prescription sales exiting June compared to the prior year, while Trlicity, Tolts, and Jardians increased their leading market share in the same period while class growth accelerated. These products, along with other key growth products, represented 54% of revenue in the core business this quarter. Gross margin as a percent of revenue declined 30 basis points to 79.3% in Q2. The decrease in gross margin percent was driven primarily by the unfavorable effect of foreign exchange rates on international inventory sold.
<unk> in the U S grew nearly 6 percentage points and share of total prescriptions exiting June compared to the prior year.
<unk> talks and charity and increase their leading market share in the same period, while class growth accelerated.
These products along with other key growth products represented 54% of revenue and the core business this quarter.
Gross margin as a percent of revenue declined 30 basis points to 79, 3% and Q2.
The decrease in gross margin percent was driven primarily by unfavorable effect of foreign exchange rates on international inventory sold.
Anat Ashkenazi: Asserting this affects impact, gross margin, a percent of revenue, grew 60 points this quarter. Total operating expenses grew 18% this quarter compared to the same quarter last year. Marketing, sales, and administrative expenses increased 16% as the base period in Q2 2020 included a meaningful reduction in direct-to-consumer marketing and customer-facing expenses as healthcare systems closed. R&D expenses increased 20%, driven by investment in exciting late-stage pipeline opportunities, including pertubrutinib, trizepatide, denonamib, and lebrokizumab.
Excluding this FX impact gross margin as a percent of revenue grew 16.60 points this quarter.
Total operating expenses grew 18% this quarter compared to the same quarter last year.
King selling and administrative expenses increased 16% as the base period in Q2, 2020, including a meaningful reduction direct to consumer marketing and customer facing expenses as health care system closed.
R&D expenses increased 20% driven by investment and exciting late stage pipeline opportunities, including prints and Britain, and <unk> appetite to non and met and liberate Kisan and.
In Q2, we also invested approximately $85 million and Covid therapies R&D, bringing our total equivalent 19, R&D investment to approximately $300 million year to date.
Anat Ashkenazi: In Q2, we also invested approximately $85 million in COVID therapies R&D, bringing our total COVID-19 R&D investment to approximately $300 million year-to-date. Because of this COVID-19 R&D investment, operating expense growth was 18% compared to Q2 of 2020 and 10% for the first half of the year. Operating income increased 29% compared to Q2 of 2020, and operating income as a percent of revenue was 29.4% for the quarter, an increase of 140 basis points compared to the prior year.
And that of COVID-19, R&D investment operating expense growth was 18% compared to Q2 of 2020 and 10% for the first half of the year.
Operating income increased 29% compared to Q2, 2020 and operating income as a percent of revenue was 29, 4% for the quarter and increase of 140 basis points compared to the prior year.
Anat Ashkenazi: This increase was driven by revenue growth, outpace and expense growth, and we expect continued margin extension in the second half of 2021. Other income and expense was income of $5 million this quarter compared to expenses of $57 million in Q2 2020, driven by income from European patent settlements for Olympta. Our effective tax rate was 14.4%, an increase of 350 basis points compared with the same quarter last year.
This increase was driven by revenue growth outpacing expense growth and we expect continued margin expansion in the second half of 'twenty 'twenty 1.
Other income and expense was income of $5 million this quarter compared to expense of $57 million and Q2.2020, driven by income from European patent settlements for Alimta.
Our effective tax rate was 14, 4% and increase of 350 basis point compared with the same quarter last year.
Anat Ashkenazi: The effective tax rate for both periods was reduced by net discrete tax benefits, with the lower net discrete tax benefit reflected in the second quarter of 2021. At the bottom line, net income and earnings per share increased 29% in Q2 and 22% year-to-date, or 30% and 24%, respectively, in constant currency. On slide nine, we quantify the effect of price, rate, and volume on revenue growth across the world, and we are encouraged by the growth seen across most of our major geographies.
The effective tax rate for both periods were reduced by net discrete tax benefit with the lower net discrete tax benefit reflected and the second quarter of 2021.
At the bottom line net income and earnings per share increased 29% and Q2, and 22% year to date, or 30% and 24%, respectively and constant currency.
On slide 9 we quantify the effect of price rate and volume and revenue growth across the world.
And we are encouraged by the growth seen across most of our major geographies.
This quarter U S revenue grew 18% compared to the second quarter of 2020.
Anat Ashkenazi: This quarter, U.S. revenue grew 18% compared to the second quarter of 2020. Adjusting for COVID-19 Antibody Revenue and the Q2 2020 COVID-19-related destocking, the core business grew 8% in the U.S., up from 5% in Q1 on that same basis. These results were driven entirely by volume, led by Trlicity, Tulls, Verzenio, and Jordan.
Adjusting for COVID-19 antibody revenue and the Q2.2020, COVID-19 related Destocking. The core business grew 8% and the U S up from 5% and Q1 on that same basis.
These results were driven entirely by volume led by <unk> and jewelry and.
Anat Ashkenazi: Pricing was a 1% drag on U.S. revenue growth this quarter, with increased rebates to maintain excellent access and higher growth in lower-net price segments, largely offset by low utilization in the $3.40B segment, changes to rebates and discounts, and to a lesser extent, modest list price increases. The year-to-date price decline of 3% in the U.S. is in line with our net price expectations for the full year. Specific to Tulsa in the U.S., performance for the quarter was in line with the expectation we described on the Q1 earnings call, and we were pleased to see a return to net sales growth this quarter as volume gains more than offset price declines. Talt's Q2 performance benefited from a favorable change to prior estimates for rebates and discounts and COVID-19-related inventory destocking last year. Excluding these items, tolls still returned to double-digit growth in the second quarter.
Pricing was a 1% drag on U S revenue growth this quarter with increased rebates to maintain excellent axis and higher growth and lower net price segment, largely offset by lower utilization and the $3.40 B segment chain.
Changes for estimates to rebates and discounts and to a lesser extent modest list price increases.
The year to date price decline of 3% and the U S is in line with our net price expectations for the full year.
Specific to the Tulsa and the U S performance for the quarter was in line with the expectations. We described on the Q1 earnings call and we were pleased to see a return to net sales growth this quarter as volume gains more than offset price declines.
<unk> Q2 performance benefited from a favorable change to prior estimates for rebates and discounts and COVID-19 related inventory Destocking last year.
Excluding these items total still returned to double digit growth and the second quarter.
Anat Ashkenazi: We believe the net price decline for TALS in the first half of 2021 represents the underlying full price trend and that continued volume growth will drive net sales acceleration in the second half of the year. While mid-term price trends are currently stable, given increasing variability in pyramid mix, we continue to expect quarterly variability and reported U.S. net price changes across our business. Moving to Europe, revenue grew 27% in constant currency.
We believe the net price decline for pulse and the first half of 2020.1.
Represents the underlying full price trend and that continued volume growth will drive net sales acceleration and the second half of the year.
While mentor and price trends and are currently stable given increase and variability and peer and mix. We continue to expect quarterly variability and reported U S net price changes across our business.
Moving to Europe revenue grew 27% and constant currency.
Anat Ashkenazi: Excluding COVID-19 antibody revenue and the negative impact of Q2 2020 COVID-19 related customer buying patterns, revenue grew 14% in constant currency, driven entirely by volume growth, primarily for Tricity, Tulsa, Limta, and Illumia. We continue to be pleased with the momentum of our business in Europe and expect continued growth in the second half of this year, excluding the expected impact from the loss of exclusivity for In Japan, revenue grew 2% in constant currency, driven primarily by the launches of Volumiant and Mgali. However, revenue growth in Japan continues to be negatively impacted by the decreased demand for several products that have lost market exclusivity.
Excluding COVID-19 antibody revenue and the negative impact of Q2, 2020 COVID-19 related customer buying pattern revenue grew 14% and constant currency driven entirely by volume growth, primarily for <unk> tolls alimta and Illumina and.
We continue to be pleased with the momentum of our business in Europe, and expect continued growth and the second half of this year, excluding the expected impact from the loss of exclusivity for Alimta.
And Japan revenue grew 2% and constant currency driven primarily by the launches of ILUVIEN and I'm guilty.
Revenue growth and Japan continues to be negatively impacted by the decreased demand for several products that have lost market exclusivity.
Anat Ashkenazi: But our key growth products grew 21% in Q2 in Japan and represented approximately 50% of the business there. However, recent surges of COVID-19 cases continue to negatively impact recovery in Japan. So we currently expect improved revenue growth in the second half of the year based on the uptick of new products. In China, revenue grew 106% in constant currency, primarily driven by the divestiture of Cialis and the launches of Tyvet and Trulicity. Excluding the impact of the Cialis transaction, our revenue in China grew 35% in constant currency.
But our key growth products grew 21% and Q2, and Japan and represented approximately 50% of the business there.
Recent searches of COVID-19 cases continue to negatively impact recovery and Japan.
We currently expect improved revenue growth and the second half of the year based on the uptake of newer products.
And China revenue grew 106% and constant currency, primarily driven by the divestiture of CLI and the launches of pilot and <unk>.
Excluding the impact from the <unk> transaction, our revenue and China grew 35% and constant currency.
We are excited about the continued momentum in China and sales of new medicines have accelerated significantly in the past 3 quarters.
Anat Ashkenazi: We are excited about the continued momentum in China, as sales of new medicines have accelerated significantly in the past three quarters. Revenue in the rest of the world increased 5% in constant currency, driven primarily by our key growth products.
Revenue and the rest of the world increased 5% and constant currency driven primarily by our key growth products.
At the bottom of the slide is the price rate volume effect on revenue for June year to date results, which showed double digit growth across all major geographies, except Japan.
Anat Ashkenazi: At the bottom of the slide is the price-rate-volume effect on revenue for our June year-to-date results, which shows double-digit growth across all major geographies except Japan. As shown on slide 10, our key growth products continue to drive strong worldwide volume growth. These products drove nearly 17 percentage points of growth this quarter and continue to drive our overall performance and outlook. Slide 11 highlights the contributions of our key growth products. In total, these brands generated over $3.5 billion in revenue this quarter and made up 54% of our core business revenue in Q2. We were encouraged by the strength of our key products in Q2, collectively up over 34% compared to the same period last year. Tricity, Tulsa, Virginia, and Jordan all continue to outgrow their respective classes.
As shown on slide 10, our key growth products continue to drive strong worldwide volume growth.
These products drove nearly 17 percentage points of growth this quarter and continue to drive our overall performance and outlook.
Slide 11 highlights the contributions of our key growth products in total these brands generated over 3 and a half a billion dollars and revenue this quarter and made up 54% of our core business revenue in Q2.
We're encouraged by the strength of our key products and Q2 collectively up over 34% compared to the same period last year.
Solicitor Tulsa per is then you enjoyed and I'll continue to outgrow their respective classes.
We are now tracking above pre COVID-19, new to brand prescription baseline and the U S across our major therapeutic areas with the exception of oncology and the seeds ERP antibody class, which we expect will continue to recover in the second half of the year.
Anat Ashkenazi: We are now tracking above the pre-COVID-19 new-to-brand prescription baseline in the U.S. across all our major therapeutic areas, with the exception of oncology and the CGRP antibody class, which we expect will continue to recover in the second half of the year. On slide 12, we provide an update on capital allocation. In the first half of 2021, we invested $5 billion to drive future growth through a combination of after-tax investments in R&D, business development, and capital investment. In addition, we returned over $1.5 billion to shareholders in dividends and share repurchase.
On slide 12, we provide and update on capital allocation and the first half of 2021, we invested $5 billion to drive our future growth through a combination of after tax investments and R&D business development and capital investments. In addition, we've returned over 1 billion and a half to shareholders and dividends.
And and share repurchase.
As we look ahead to the second half of the year, we will continue to fund our growth of our key products and recent launches and invest in our pipeline and seek external innovation to augment our future prospects as well as return capital to shareholders.
Anat Ashkenazi: As we look ahead to the second half of the year, we will continue to fund our growth in our key products and recent launches, invest in our pipeline, and seek external innovation to augment our future prospects, as well as return capital to shareholders. Turning to our 2021 financial guidance on slide 13, we are updating our GAAP and non-GAAP guidance. While the COVID-19 pandemic is still impacting countries around the world, the pace of recovery from the pandemic was in line with our expectations in Q2.
Turning to our 2021 financial guidance on Slide 13, we are updating our GAAP and non-GAAP guidance.
The COVID-19 pandemic is still impact and countries around the world.
A recovery from the pandemic was in line with their expectations and Q2.
Anat Ashkenazi: New-to-brand scripts in most of the classes in which we compete are tracking above the pre-COVID baseline in the U.S., and health care systems in most major markets are largely returning to normal as we enter the second half of 2021. We are increasing our full-year revenue outlook for the core business by $200 million to reflect the strong performance and favorable impact from foreign exchange.
New to brand scripts and most of the classes and which we compete with are tracking above pre COVID-19 baseline and the U S and health care systems and most major markets are largely returning to normal as we enter the second half of 2020.1.
We are increasing our full year revenue outlook for the core business by 200 million to reflect the strong performance and favorable impact from foreign exchange.
Anat Ashkenazi: We are, however, lowering the top end of the range for COVID-19 antibody revenue by $400 million and confirming the bottom end of that range. Moving forward, we expect COVID-19 antibody revenues to be less of a factor, as demonstrated by Q2 revenue declining to $150 million from $810 million in Q1. As variants are growing, we recognize that situations across the globe can evolve quickly, and we plan to adapt as required. The net impact of these changes is an updated revenue range of $26.8 to $27.4 billion. Our outlook for the non-GAAP growth margin percent remains unchanged at approximately 79%.
We are however, and lowering the top end of the range for COVID-19 antibody revenue by $400 million and confirming the bottom end of that range.
Moving forward, we expect COVID-19 antibody revenues to be less of a factor and as demonstrated by Q2 revenue declining to $150 million from $810 million and Q1.
It's variance are growing we recognize the situations across the globe and evolve quickly and we plan to adapt as required.
The net impact of these changes and is an updated revenue range of $26.827 4 billion.
Our outlook for non-GAAP gross margin percent remains unchanged at approximately 79%.
Anat Ashkenazi: On a reported basis, we've lowered guidance for gross margin percent to approximately 75% to reflect the impact of COVID-19 antibodies' excess inventory charge due to the combination of changes to current and forecasted demand from the U.S. and international governments and near-term expiry of COVID-19 antibody inventory. For research and development in SG&E, our guidance ranges remain unchanged. However, investment in promising R&D opportunities and exciting potential launches could push us towards the top end of our guidance range for both R&D and SG&A.
And a reported basis, we've lowered guidance for gross margin percent to proximately, 75% to reflect the impact of COVID-19 antibodies excess inventory charge due to the combination of changes to current and forecasted demand from the U S and international governments and near term expiry of COVID-19 antibody.
Sorry.
For research and development and SG&A, our guidance ranges remain unchanged how.
However, investment and promising R&D opportunities and exciting potential launches could push us towards the top end of our guidance range for both R&D and SG&A.
Our non-GAAP operating margin guidance is now expected to be approximately 30% driven by lower COVID-19 antibody revenue.
Anat Ashkenazi: Our non-GAF operating margin guidance is now expected to be approximately 30% driven by lower COVID-19 antibody revenues. However, it remains approximately 31% excluding COVID-19 antibodies. Our gap operating margin is now expected to be approximately 24%. We are increasing our non-GAAP range for OID to an expense of $0 to $100 million to reflect the limited patent settlements in Europe I noted earlier. And our gap range is now income of $375 to $475 million, which also reflects the impact of equity investment gains in the first half of the year. On a non-GAAP basis, our expected tax rate remains unchanged. On a reported basis, we've lowered our expected tax rate to approximately 12%. Finally, the non-gap range for earnings per share remains unchanged at $7.80 to $8.00.
However, it remains approximately 31% excluding COVID-19 antibody.
Our GAAP operating margin is now expected to be approximately 24%.
We are increasing and our non-GAAP range for OID, 2 and expense of zero to $100 million to reflect the Alimta patent settlements and Europe I noted earlier and.
And our GAAP range is no income of $375 million to $475 million, which also reflects the impact of equity investment gains and the first half of the year.
On a non-GAAP basis, our expected tax rate remains unchanged on a reported basis, we've lowered our expected tax rate to approximately 12%.
Finally, the non-GAAP range for earnings per share remains unchanged at $7.80 to $8. While GAAP EPS is expected to be and the range of $6.73 to 693, primarily driven by the impact of the COVID-19 antibody inventory charge the impact of equity investment gains.
And the Alimta patent settlements and Europe.
We are confident and our ability to achieve our 2020.1 revenue goals for the core business, while delivering mid teens EPS growth.
Dan Skovronsky: While GAP EPS is expected to be in the range of $6.73 to $6.93, primarily driven by the impact of the COVID-19 antibody inventory charge, the impact of equity investment gains, and the Olympta patent settlements in Europe, we are confident in our ability to achieve our 2021 revenue goals for the core business while delivering mid-teens EPS growth. As we look at the underlying volume and share trends across our key growth products, we're confident in our full year outlook for the core business.
As we look at the underlying volume and share trends across our key growth products and <unk>.
Constant in our full year outlook for the core business.
And the pipeline successes and the first half of this year strengthen our conviction and our midterm and long term outlook for continued top tier revenue growth and operating margin expansion.
Now I will turn the call over to Dan to provide and update on our pipeline.
Thanks, Anna 2020, 1 is called clearly been a productive year for R&D at Lilly with continued strong progress and our pipeline and more potential catalysts on the way.
Before I get into the broader portfolio update I'll spend a few minutes highlighting several updates for our late stage pipeline.
Dan Skovronsky: And the pipeline successes in the first half of this year strengthen our conviction and our midterm and long-term outlook for continued top-tier revenue growth and operating margin expansion. Now, I will turn the call over to Dan to provide an update on our pipeline. Thanks, Anat.
I'll start with the Dent a map.
In Q2, the first amyloid lowering agent for the treatment of Alzheimer's disease was approved under the Fda's accelerated approval pathway based on plaque lowering.
Dan Skovronsky: 2021 has clearly been a productive year for R&D at Lilly, with continued strong progress in our pipeline and more potential catalysts on the way. Before I get into the broader portfolio update, I'll spend a few minutes highlighting several updates for our late stage pipeline. I'll start with denim.
Which we believe reflects a shift in policy and such a new path for Alzheimer's drug approval and the U S.
Lilly has long been and advocate for using Biomarkers for amyloid plaque and neuro February tangles to identify patients for treatment and to.
Monitor their response to therapy.
We were pleased to see the Fda's conclusion that improvements and brain pathology are appropriate surrogates for clinical efficacy of Alzheimer's drugs.
Dan Skovronsky: In Q2, the first amyloid-lowering agent for the treatment of Alzheimer's disease was approved under the FDA's Accelerated Approval Pathway based on plaque lowering, which we believe reflects a shift in policy and sets a new path for Alzheimer's drug approval in the U.S. Lilly has long been an advocate for using biomarkers for amyloid plaque and neurofibrillary tangles to identify patients We are pleased to see the FDA's conclusion that improvements in brain pathology are appropriate surrogates for clinical efficacy of Alzheimer's drugs.
Based on data we've seen to date, we believe day net a mab clears plaque faster and deeper than previously seen with other therapies and achieved complete plaque clearance and a majority of patients and trailblazer ALS after only limited duration of dosing.
On the basis of the clinical evidence for genetic map. We were pleased to have received breakthrough therapy designation from the FDA.
At the Alzheimer's Association International Conference last week, we shared additional important analyses from day minimum Trailblazer ALS briefly I'll highlight several findings first we share detailed exploratory statistical analyses comparing a variety of methods beyond mmm and DPM as summarized on slide 14.
Dan Skovronsky: Based on data we've seen to date, we believe Nanomab clears plaque faster and deeper than previously seen with other therapies and achieved complete plaque clearance in a majority of patients in trailblazer owls after only a limited duration of dosage.
We were pleased to see that these new analyses showed consistency of effects on primary and secondary outcomes across all statistical methods, notably all of the new analyses conducted showed good separation of treatment from placebo with statistical significance achieved for most endpoints at nearly all relevant and <unk>.
Dan Skovronsky: On the basis of the clinical evidence for Denetimab, we were pleased to have received breakthrough therapy designation from the FDA. At the Alzheimer's Association International Conference last week, we shared additional important analyses from Denetimab trailblazer alzheimer's. Briefly, I'll highlight several findings.
I'm points measured.
The robustness of the treatment efficacy across analytical methods increases our confidence and the potential clinical benefit of day nanometer.
Dan Skovronsky: First, we shared detailed exploratory statistical analyses comparing a variety of methods beyond MMRM and DPM, as summarized on slide 14. We are pleased to see that these new analyses showed consistency of effects on primary and secondary outcomes across all statistical methods. Notably, all of the new analyses conducted showed good separation of treatment from placebo with statistical significance achieved for most endpoints at nearly all relevant time points measured. The robustness of the treatment efficacy across analytical methods increases our confidence in the potential clinical benefit of denataminase.
While all statistical methods and evaluated showed similar results. We note that the BZ and disease progression model DPM closely reflected the raw observed data with the smallest standard error of any method.
These results reinforce our hypothesis that DPM is a preferred analytical method for Alzheimer's trials.
Additionally, we shared new data showing a relationship of amyloid plaque reduction and slowing of cognitive decline as shown on slide 15.
To our knowledge. This is the first time such results have been available.
When we initially reported the results of Trailblazer ALS, we commented that at a group level patients treated with <unk> showed both statistically better plaque reduction and statistically better slowing of cognitive decline at 18 months, but patient level correlations between degree of plaque reduction and magnitude of slowing of cognitive decline were not significant.
Dan Skovronsky: While all statistical methods evaluated showed similar results, we note that the Bayesian Disease Progression Model, DPM, closely reflected the raw observed data, with the smallest standard error of any method. These results reinforce our hypothesis that DPM is a preferred analytical method for Alzheimer's. Additionally, we shared new data showing a relationship between amyloid plaque reduction and slowing of cognitive decline, as shown on slide 15. To our knowledge, this is the first time such results have been available.
Now using a more sophisticated PK pet a dress exploratory analysis that uses all of the available time course data. We showed a highly significant relationship between degree of amyloid plaque reduction and slowing of cognitive decline with P less than 0.001.
The Colorado model shown here was published in 2014 and is the result of efforts from the coalition against major diseases, Cam D, which collected placebo data from 15 randomized trials, including almost 4500 participants reintroduced.
Dan Skovronsky: When we initially reported the results of trailblazer owls, we commented that at a group level, patients treated with nanomab showed both statistically better plaque reduction and statistically better slowing of cognitive decline at 18 months. However, patient-level correlations between the degree of plaque reduction and the magnitude of slowing of cognitive decline were not significant.
We introduced the treatment arm and incorporated percent amyloid plaque removal into this model to generate these results and we believe this is important and support for the use of amyloid plaque reduction as a surrogate for clinical efficacy.
Notably these data suggest that full clearance of amyloid plaque as required for highest efficacy as model results predict that patients achieving 100% clearance of amyloid plaque could have more than 40% slowing of disease progression.
Dan Skovronsky: Now, using a more sophisticated PK PET address exploratory analysis that uses all of the available time course data, we showed a highly significant relationship between the degree of amyloid plaque reduction and slowing of cognitive decline with P less than 0.001. The Conrado model, shown here, was published in 2014 and is the result of efforts from the Coalition Against Major Diseases, CAMD, which collected placebo data from 15 randomized trials, including almost 4,500 participants.
Moving to slide 16, we show and exploratory analysis looking at the effective day nano maps plaque clearance on development of Tau pathology.
Pathologies and exciting biomarker since measures of Alzheimer's disease Tau. Unlike measures of amyloid plaque have been correlated with clinical measures of cognitive and functional decline as noted here.
Importantly, we have previously shown that day net amount of treated patients had slower accumulation of regional brain Tau pathology than placebo treated patients.
This is an important finding because the amount of brain Tau pathology is an excellent predictor of subsequent cognitive decline finds.
Dan Skovronsky: We introduced a treatment arm and incorporated percent amyloid plaque removal into this model to generate these results, and we believe this is important support for the use of amyloid plaque reduction as a surrogate for clinical efficacy. Notably, these data suggest that full clearance of amyloid plaque is required for highest efficacy, as model results predict that patients achieving 100% clearance of amyloid plaque could have more than 40% slowing of disease progression. Moving to slide 16, we show an exploratory analysis looking at the effect of Denenimab's plaque clearance on the development of tau pathology. Tau pathology is an exciting biomarker since measures of Alzheimer's disease tau, unlike measures of amyloid plaque, have been correlated with clinical measures of cognitive and functional decline, as noted here.
And finding we observed with solar and as a matter of and expedition, 3 and reproduced once again and trailblazer ALS.
And now we've extended these results to show that the <unk> treated patients who achieved complete clearance of amyloid plaque by 6 months had the most marked slowing of tau spread with nearly complete abrogation of progression and the frontal lobe.
This reinforces our hypothesis that both deep and rapid amyloid plaque clearance or required for optimal drug efficacy.
With this new data we presented last week, we have now linked degree of amyloid plaque reduction with degree of clinical benefit as well as degree of amyloid plaque reduction with degree of benefit on brain Tau pathology, which is itself linked to clinical benefit.
As displayed on slide 17, we've just recently obtained data with our plasma Tau biomarker phosphates out $2.17. These.
Dan Skovronsky: Importantly, we have previously shown that Denetimab-treated patients had slower accumulation of regional brain tau pathology than placebo-treated patients. This is an important finding because the amount of brain tau pathology is an excellent predictor of subsequent cognitive decline. A finding we observed with Solonezumab in Expedition 3 and reproduced once again in Trailblazer Out. Now, we've extended these results to show that the Denenimab-treated patients who achieved complete clearance of amyloid plaque by six months had the most marked slowing of tau spread, with nearly complete abrogation of progression in the frontal lobe.
And these new data demonstrate that amyloid plaque clearance with the debt and map also resulted in a reversal of the typical increases of phosphorylated Tau scene and the blood.
With decreases from baseline of more than 24% and a change from the untreated arm with a P value of less than 0.0001.
This highly significant effect was seen as early as 3 months following initiation of treatment and could reflect a combination of less tau spread in the brain as well as less neuronal damage, which could account for tau leakage into the periphery.
You can see on the right side of the slide that the effect on plasma Tau is also correlated to the degree of plaque reduction with nearly every patient on treatment, who achieved substantial clearance showing flat or declining plasma phosphate Tao.
Dan Skovronsky: This reinforces our hypothesis that both deep and rapid amyloid plaque clearance are required for optimal drug efficacy. With this new data we presented last week, we have now linked degree of amyloid plaque reduction with degree of clinical benefit, as well as degree of amyloid plaque reduction with degree of benefit on brain tau pathology, which is itself linked to clinical benefit. As displayed on slide 17, we've just recently obtained data with our plasma tau biomarker, phospho tau 217.
We are delighted to see the potential utility of <unk> $2.17, not just for diagnosing disease, but also from monitoring treatment efficacy.
We believe this could be another important contribution to the Alzheimer's field.
Finally on slide 18, the significant relationship between plasma P. Tau $2.17 reduction and the slowing of cognitive decline has shown.
This additional biomarker for efficacy links that and none of them out and mechanism of amyloid plaque clearance with positive effects on both clinical outcomes and Tau pathology.
Dan Skovronsky: These new data demonstrate that amyloid plaque clearance with Nanomab also resulted in reversal of the typical increases of phosphorylated tau seen in the blood, with decreases from baseline of more than 24% and a change from the untreated arm with a p-value of less than 0.0001. This highly significant effect was seen as early as three months following initiation of treatment and could reflect a combination of less tau spread in the brain, as well as less neuronal damage, which could account for tau leakage into the peripheral nervous system. You can see on the right side of the slide that the effect on plasma tau is also correlated to a degree of plaque reduction, with nearly every patient on treatment who achieved substantial plaque clearance showing flat or declining plasma phospho tau.
These data suggest that patients who achieved a 30% decrease and <unk> 17 from baseline showed more than 40% slowing of disease progression.
The 3 main findings I just discussed 1 the consistency of clinical benefit across physical methods.
The correlation of plaque lowering the clinical benefit for patients who achieved the greatest plaque clearance I mean, the greatest opportunity for benefit.
And 3 the correlation between achieving complete pipe clearance and beneficial effects on Tau pathology is seen in the brain and measured and the periphery, which themselves are predictors from clinical benefit strongly support the efficacy of its denim app and give us confidence that the remarkable levels of amyloid plaque clearance achieved by day, not a mab could translate into a meaningful breakthrough.
For patients.
Moving to slide 19, Accordingly, we've announced that we plan to submit to the FDA under the accelerated approval pathway before the end of this year based on data from completed studies supplemented by additional safety data from the ongoing Trailblazer ALS 2 study.
Dan Skovronsky: We are delighted to see the potential utility of PTAU 217, not just for diagnosing disease but also for monitoring treatment efficacy. We believe this could be another important contribution to the Alzheimer's field. Finally, on slide 18, the significant relationship between plasma p-tau 217 reduction and the slowing of cognitive decline is shown.
We remain focused on enrolling trailblazer too with the aim to replicate the positive results of Trailblazer 1 <unk>.
Replication is important to overcome scepticism in the field.
We hope the trailblazer else too will generate important confirmatory data for patients physicians and payers and help us understand how to make sure. The right patient gets the right duration of therapy at the right stage of disease.
Dan Skovronsky: This additional biomarker for efficacy links the denenumab mechanism of amyloid plaque clearance with positive effects on both clinical outcomes and tau pathology. These data suggest that patients who achieved a 30% decrease in Ptau 217 from baseline showed more than 40% slowing of disease progression. The three main findings I just discussed. One, the consistency of clinical benefit across statistical methods, and the correlation of plaque lowering to clinical benefit. The patients who achieve the greatest plaque clearance, I mean, the greatest opportunity for benefit.
We are pleased to announce today that we have closed screening for trailblazer else too.
With an adequate number of subjects now in the trials screening process to fully enroll the study.
Given that conducting and processing and imaging studies use drink screening takes several weeks to complete we expect that the final subject to complete screening procedures and receive their first dose of <unk> or placebo.
Dan Skovronsky: And three, the correlation between achieving complete plaque clearance and beneficial effects on tau pathology seen in the brain and measured in the periphery, which themselves are predictors of clinical benefit, strongly supports the efficacy of dananamab and gives us confidence that the remarkable levels of amyloid plaque clearance achieved by dananamab could translate into a meaningful breakthrough for patients. Moving this slide, 19. Accordingly, we've announced that we plan to submit to the FDA under the Accelerated Approval Pathway before the end of this year, based on data from completed studies, supplemented by additional safety data from the ongoing Trailblazer ALS-2 study.
By the end of the third quarter and the study will complete 18 months later.
Given this progress and enrollment we are confident that we will achieve the number and duration of drug exposures needed to appropriately characterized the safety profile of day net a mab, allowing for regulatory submission by the end of this year.
Discussions with the FDA are consistent with our prior statements supporting a submission before the end of 2021.
I also want to provide a few comments and how we believe the national coverage determination opened for monoclonal antibody therapies targeting amyloid by the centers for Medicare and Medicaid services may impact Lilly and and that amount.
We believe this and CD is a clear opportunity to focus treatment on the patients most likely to benefit from amyloid plaque reducing therapies.
Dan Skovronsky: We remain focused on enrolling Trailblazer 2 with the aim to replicate the positive results of Trailblazer 1. Replication is important to overcome skepticism in the field. We hope that Trailblazer Owls 2 will generate important confirmatory data for patients, physicians, and payers and help us understand how to make sure the right patient gets the right duration of therapy at the right stage in time. We are pleased to announce today that we have closed screening for Trailblazer Owls 2, with an adequate number of subjects now in the trials screening process to fully enroll the study.
This would align with our goals, which have long been to use advanced diagnostic tools to identify the right patients that can benefit the most from amyloid reducing therapies, we're particularly encouraged that our progress with the plasma <unk> $2.17 assay could open up broader access to diagnostic tools.
Still despite the advances and diagnostics and the promise of genetic map, we acknowledged the current skepticism and the national discussion and we hope that each drug will be evaluated by payers and prescribers based on its own data.
Dan Skovronsky: Given that conducting and processing the imaging studies used during screening takes several weeks to complete, we expect that the final subject will complete screening procedures and receive their first dose of Denenumab or placebo by the end of the third quarter, and the study will end 18 months later. Given this progress in enrollment, we are confident that we will achieve the number and duration of drug exposures needed to appropriately characterize the safety profile of Denenimab, allowing for regulatory submission by the end of this year.
This could be particularly important given the data share today, which suggests that the degree of day net <unk> amyloid plaque clearance relates to clinical benefit.
In summary, we look forward to submitting to them and them. After the FDA later this year with the potential to bring a robust amyloid plaque clearing agent with limited treatment duration to market for early symptomatic Alzheimer's patients and 2022 with potential replicated clinical efficacy results expected in 2020.3.
Transitioning now to Virginia.
Dan Skovronsky: Discussions with the FDA are consistent with our prior statement supporting a submission before the end of 2021. I also want to provide a few comments on how we believe the national coverage determination opened for monoclonal antibody therapies targeting amyloid by the Centers for Medicare and Medicaid Services may impact Lilly and Inanimate. We believe this NCD is a clear opportunity to focus treatment on the patients most likely to benefit from amyloid plaque-reducing therapy. This would align with our goals, which have long been to use advanced diagnostic tools to identify the right patients that can benefit the most from amyloid-reducing therapy.
On the last earnings call. We commented that FDA had asked to see and overall survival trend in favor of Virginia, and the monarch E trial and adjuvant breast cancer.
We also noted that the OS dataset is quite immature and the overall population, which makes interpretation challenging.
We have now provided to the FDA additional data from the monarchy study and we were encouraged to see continued strengthening of the primary endpoint of invasive disease free survival idea FES as well as consistent benefit and the key secondary endpoint of distant recurrence free survival D. RFS of note with this continued <unk>.
<unk>, we can now confirm this benefit extends beyond the 2 year presenting other treatment period.
Dan Skovronsky: We're particularly encouraged that our progress with the Plasma P-Tau 217 assay could open up broader access to diagnostics. Still, despite the advances in diagnostics and the promise of Genetimab, we acknowledge the current skepticism in the national discussion, and we hope that each drug will be evaluated by payers and prescribers based on its own data. This could be particularly important given the data I've shared today, which suggests that the degree of denetimab's amyloid plaque clearance relates to clinical benefit.
We look forward to disclosing this new analysis at a medical meeting this fall.
Our discussions with the FDA have focused on the pre specified subpopulation of patients with high <unk> 67 index a marker of increased cell proliferation. These.
And these patients have more aggressive disease and higher risk of relapse and thus are more mature for overall survival analysis.
And this group, which makes up approximately half of the monarchy population are demonstrating an overall survival trend that favors the treatment arm and based on FDA feedback, we expect and initial approval and adjuvant breast cancer and this population before the end of the year in line with the current review cycle.
Dan Skovronsky: In summary, we look forward to submitting Denetimab to the FDA later this year, with the potential to bring a robust amyloid plaque clearing agent with limited treatment duration to market for early symptomatic Alzheimer's patients in 2022, with potential replicated clinical efficacy results expected in 2020. Transitioning now to Virginia.
Importantly, since the idea of FES and D. RFS hazard ratios favoring <unk> are similar and patients with high and low cash <unk> 67 index.
We expect that the OS trend first scene in the key 67 high population.
We will in time be replicated and the broader study population.
Dan Skovronsky: On the last earnings call, we commented that FDA had asked to see an overall survival trend in favor of Versenio in the Monarch E trial in adjuvant breast cancer. We also noted that the OS dataset is quite immature in the overall population, which makes interpretation challenging. We have now provided additional data from the monarchy study to the FDA, and we were encouraged to see continued strengthening of the primary endpoint of invasive disease-free survival, IDFS, as well as consistent benefit in the key secondary endpoint of distant recurrence-free survival, DRF.
We hope to expand the label to the entire enrolled population and the future once we see more overall survival events and the broader population.
To date regulators outside the U S have not raised the same questions on overall survival.
Finally, moving to Illumina and we shared in July that the FDA will not meet the <unk> action date for the supplemental new drug application for atopic dermatitis. This delays related to the FTC's ongoing assessment of JAK inhibitors.
Patient safety is critical to Lilly and we continue to further evaluate bearish it and a safety profile with ongoing randomized and observational safety studies.
We're confident that the efficacy and safety data for bear sit and have support a favorable benefit risk profile for the treatment of atopic dermatitis, and we look forward to continuing to work with the FDA during the remainder of the review process.
Dan Skovronsky: Of note, with this continued follow-up, we can now confirm that this benefit extends beyond the two-year Fresenio treatment period. We look forward to disclosing this new analysis at a medical meeting this fall. Our discussions with the FDA have focused on the pre-specified subpopulation of patients with high T67, a marker of increased cell proliferation. These patients have more aggressive disease and higher risk of relapse, and thus are more mature for overall survival analysis.
We do not have additional information on timing or specific action date from the FDA, but we see potential for regulatory action for atopic dermatitis and the U S. Later this year.
We're committed to bringing illumina to market and the U S to help meet the needs for people living with atopic dermatitis.
Yeah.
Slide 20 shows select pipeline opportunities as of July 30th and Slide 21 shows potential key events for the year.
Dan Skovronsky: This group, which makes up approximately half of the monarchy population, is demonstrating an overall survival trend that favors the treatment arm, and based on FDA feedback, we expect an initial approval for adjuvant breast cancer in this population before the end of the year, in line with the current review cycle. Importantly, since the IDFS and DRFS hazard ratios favoring Bresenio are similar in patients with high and low KSG67 index, we expect that the OS trend first seen in the key 67 high population will, in time, be replicated in the broader study population.
There have been several additional major developments since our last earnings call and I'll cover these by therapeutic area.
In May we share the positive results for <unk> appetite and surpass 4 and announced that the surpass program met regulatory submission requirements for evaluating cardiovascular risk and confirmed our intention to submit a registration package for <unk> and type 2 diabetes to global regulatory authorities by the end of 2021.
At Ada in June tours appetite was a large focus as we share detailed data for the first 4 studies from the tours appetite surpassed program for the treatment of type 2 diabetes.
These results support our belief that there's appetite may represent a substantial improvement and the treatment of patients with type 2 diabetes.
And with early and unsurpassed improvements and a 1 C and body weight reduction across doses.
Dan Skovronsky: We hope to expand the label to the entire enrolled population in the future once we see more overall survival events in the broader population. To date, regulators outside the U.S. have not raised the same questions about overall survival.
We remain on track for global regulatory submissions before the end of this year.
We are also excited about <unk> appetite opportunity across multiple indications, including cardiovascular outcomes obesity Nash and heart failure.
In Q2, we initiated summit, our planned phase III study purchase appetite and heart failure.
Dan Skovronsky: Finally, moving to Illumiant, we shared in July that the FDA will not meet the PDUFA action date for the supplemental new drug application for atopic dermatitis. This delay is related to the EFD's ongoing assessment of Jack and him. Patient safety is critical to Lilly, and we continue to further evaluate Barrett-Sitnick's safety profile with ongoing randomized and observational safety studies. We're confident that the efficacy and safety data for baricitinib support a favorable benefit-risk profile for the treatment of atopic dermatitis, and we look forward to continuing to work with the FDA during the remainder of the review process.
In July we achieved an important milestone with <unk> as the first and only medicine to achieve our primary endpoint for heart failure with preserved ejection fraction or half path.
The Emperor preserved phase III trial met its primary endpoint and demonstrated significant risk reduction with giants for the composite of cardiovascular death or hospitalization for heart failure and adults with health path.
This is a significant breakthrough for patients and we're proud of what we've achieved here and partnership with Beringer Ingelheim.
We look forward to presenting detailed results from this study at the European Society of Cardiology on August 27th.
And we expect to submit this indication to regulators later this year.
We also received approval in the EU for <unk> half RAF and.
Dan Skovronsky: We do not have additional information on timing or specific action dates from the FDA, but we see potential for regulatory action for atopic dermatitis in the U.S. later this year. We're committed to bringing Illumia to market in the U.S. to help meet the needs of people living with atopic dermatitis. Slide 20 shows select pipeline opportunities as of July 30th, and slide 21 shows potential key events for the year.
June and expect regulatory action and the U S and Japan later this year for this indication.
Additionally, we've advanced our GGG Tri agonist into phase 2 for diabetes based on the promising data we shared at Ada, which supports the potential for differentiated efficacy from <unk> appetite with respect to body weight, while maintaining and glycemic control.
Dan Skovronsky: There have been several additional major developments since our last earnings call, and I'll cover these by therapeutic area. In May, we shared the positive results for trizepatide in CERPAS4 and announced that the CERPAS program met regulatory submission requirements for evaluating cardiovascular risk and confirmed our intention to submit a registration package for trizepatide in type 2 diabetes to global regulatory authorities by the end of 2021. At ADA in June, terzapatide was a large focus as we shared detailed data for the first four studies from the Terzapatide Surpass Program for the treatment of type 2 diabetes. These results support our belief that terzapatide may represent a substantial improvement in the treatment of patients with type 2 diabetes, with early and unsurpassed improvements in A1c and body weight reduction across doses.
We also started 2 phase 1 studies for diabetes and cardiovascular disease.
And lastly removed 1 of our oral gift clip phase 1 molecules from our pipeline.
And oncology, we also continue to make important progress starting with <unk>, we've initiated 2 phase III studies since our last update.
As planned we've initiated and adjuvant study for HR positive her 2 breast cancer and we are announcing today.
As a result, as a result of a favorable blinded interim analysis for our phase II trial in metastatic castration resistant prostate cancer. We've also initiated the phase III portion of this adaptive study.
This action was based on a recommendation from the independent data monitoring committee or <unk>, the <unk> reviewed interim efficacy and safety data.
And concluded that the results met the pre specified expansion criteria based on radiographic progression free survival and recommended advancing the study to the Registrational phase III stage.
Dan Skovronsky: We remain on track for global regulatory submissions before the end of this year. We are also excited about SIRS Appetite's opportunity across multiple indications, including cardiovascular outcomes, obesity, NASH, and heart failure. In Q2, we initiated SUMMIT, our planned Phase 3 study for Chizepatde in the heart. In July, we achieved an important milestone with Jardians as the first and only medicine to achieve a primary endpoint for heart failure with preserved ejection fraction, or HFPEF.
While Lilly remains blinded to the study we are obviously very pleased with this development and have already begun dosing patients and the phase III portion of this trial.
Given that the expansion of phase III includes the cohort of patients who are in the phase II study. These data remain blinded and we will not be disclosing these and medical meeting.
On the development front and oncology, we also made progress with Petro brute nib and our oral surgery.
We've initiated the phase III study for per day, brute nib, and relapsed refractory mcl monotherapy executing on our commitment to a robust phase III program for this molecule regarding oral <unk>, we announced our plans to begin a phase III study later in 2021 based on the phase 1 results, we shared our <unk> and June that showed and efficacy and safety profile in la.
Dan Skovronsky: The emperor-preserved Phase III trial met its primary endpoint and demonstrated significant risk reduction with Jardians for the composite of cardiovascular death or hospitalization for heart failure in adults with Heph. This is a significant breakthrough for patients, and we're proud of what we've achieved here in partnership with Beringer Engelheim. We look forward to presenting detailed results from this study at the European Society of Cardiology on August 27th, and we expect to submit this indication to regulators later this year. We also received approval in the EU for Jardian's HEF REF in June and expect regulatory action in the US and Japan later this year for this indication.
And with our expectations and.
In addition, we've now achieved the first human dose for our next generation <unk> inhibitor.
Lastly, and oncology, we announced that the FDA has accepted our submission until I mab for non small cell lung cancer.
And the submission is an encouraging start for our collaborative efforts within event to makes until I mab available and countries beyond China.
And neuro degeneration, and addition to the denim avenues I just shared we anticipate a phase II readout from <unk> 10, and Mab later this year and note that our GPA 1 gene therapy asset from prevail started a phase II study and type 2 co shade disease.
Dan Skovronsky: Additionally, we've advanced our GGG triagonist into phase two for diabetes based on the promising data we shared at ADA, which supports the potential for differentiated efficacy from terzapatide with respect to body weight while maintaining glycemic control. We also started two phase one studies for diabetes and cardiovascular. Lastly, we removed one of our oral GIP-GLP phase 1 molecules from our pipeline. In oncology, we also continue to make important progress. Starting with Versenio, we've initiated two phase three studies since our last update.
For immunology, we do not have additional significant updates and Q2, but we're looking forward to the phase 3 readouts of <unk> and atopic dermatitis and beer citizen for lupus later this year.
We also submitted <unk> sitting in for alopecia area and Japan.
Lastly, we're moving our COVID-19 antibody therapy L Y co fortino, 4 now known as <unk>, the mab into phase II to address viral variance as part of our ongoing commitment to help combat COVID-19, if needed.
Dan Skovronsky: As planned, we've initiated an adjuvant study for HR-positive HER2 breast cancer, and we are announcing today that as a result of a favorable blinded interim analysis for our Phase 2 trial in metastatic castration-resistant prostate cancer, we've also initiated the Phase 3 portion of this adaptive study. This action was based on a recommendation from the Independent Data Monitoring Committee, or IDMC.
To recap Q2 was another positive quarter for R&D at Lilly and we're excited about a number of further readouts and important milestones coming later this year, reflecting continued advances on behalf of patients suffering from disease.
Now I'll turn the call back over to Dave for some closing remarks.
Thanks, a lot Dan I appreciate that.
Dan Skovronsky: The IDMC reviewed interim efficacy and safety data and concluded that the results met the pre-specified expansion criteria based on radiographic progression-free survival and recommended advancing the study to the registrational phase 3 stage. While Lilly remains blinded to the study, we are obviously very pleased with this development and have already begun dosing patients in the phase 3 portion of this trial. Given that the expansion of Phase 3 includes the cohort of patients who are in the Phase 2 study, these data remain blinded, and we will not be disclosing them at medical meetings.
Before we go to Q&A, let me sum up the progress we've made during this quarter.
We've seen strength and our core business and the first half of this year and increased momentum in Q2.
This was driven by strong volume driven growth across key brands and most major geographies.
We're pleased to see sequential topline growth this quarter.
As well as year over year margin expansion.
We made significant progress developing new medicines and Q2 was another positive quarter for our pipeline as we announced plans to submit <unk> and type 2 diabetes and.
And I'm out in Alzheimer's disease later this year as.
And as well as an approval for <unk> and have fresh and as Dan outlined positive results and half path.
We returned nearly $800 million to shareholders through dividends and completed $500 million and share repurchases, reflecting confidence and the ongoing strength of our business.
Dan Skovronsky: On the development front in oncology, we also made progress with pertobrutinib and our oral search. We initiated a Phase 3 study for pertubrutinib and relapsed refractory MCL monotherapy, executing on our commitment to a robust Phase 3 program for this molecule.
As we look forward to the rest of the year, we're quite confident and our long term prospects.
Before we move on to Q&A I would like to share also like to share that we will hold a live investor meeting. This December to highlight our R&D pipeline and progress for our investors.
Dan Skovronsky: Regarding Oral CERD, we announced our plans to begin a Phase 3 study later in 2021 based on the Phase 1 results we shared at ASCO in June that showed an efficacy and safety profile in line with our expectations. In addition, we've now achieved the first human dose for our next generation KRS-G12C inhibitor. Lastly, in Oncology, we announced that the FDA has accepted our submission of Centilumab for non This submission is an encouraging start for our collaborative efforts within InnoVent to make Scintillamab available in countries beyond China.
We will also provide our initial 'twenty to 'twenty 2 guidance at this meeting.
Given the limited physical space available. This event, we will have an accompanying webcast.
We're hopeful that we can host this event in person, but are watching the evolution of the pandemic closely and we'll adjust accordingly to a virtual event if needed.
Our IR team will be in contact and the coming weeks to issue invitations and provide more logistical details on this meeting.
Now, let me turn it over to Kevin to moderate our Q&A session.
Thanks, David.
We'd like to take questions from as many callers as possible. So we ask that you limit your questions to 2 per caller.
Dan Skovronsky: In neurodegeneration, in addition to the Denimab news I just shared, we anticipate a phase 2 readout for Zagatenimab later this year, and note that our GBA1 gene therapy asset from Prevail started a phase 2 study in type 2 Gaucher disease. For immunology, we do not have any additional significant updates in Q2, but we're looking forward to the phase 3 readouts of leperizumab in We also submitted Bear Sittin' for Alopecia Areata in Japan.
Louis can you. Please provide the instructions for the Q&A session and then we're ready for the first caller.
Thank you and ladies and gentlemen, if you wish to ask a question. Please ask 1 and zero on your telephone keypad and you will hear and acknowledgment tone that you been placed into queue and you may remove yourself from queue at any time by pressing 1 zero.
And if you're on a speakerphone please pick up your handset before pressing the number.
And our first question is from the line of parents Flynn from Goldman Sachs. Please go ahead.
Hi, Thanks for taking the question maybe.
Dan Skovronsky: Lastly, we're moving our COVID-19 antibody therapy, LY-CoV-1404, now known as Bevtelovimab, into phase two to address viral variants as part of our ongoing commitment to help combat COVID-19, if needed. To recap, Q2 was another positive quarter for R&D at Lilly, and we're excited about a number of further readouts and important milestones coming later this year, reflecting continued advances on behalf of patients suffering from. Now I'll turn the call back over to Dave for some closing remarks. Thanks a lot, Dan. I appreciate that.
And maybe Dan and I was just wondering if you could elaborate at all on your comments regarding your discussions with the FDA and Donato map it sounds like they're consistent with your expectations, but any more color you can provide if they've actually signed off fully on your plans to file the BLA and then how much additional safety data would they want to see from that.
Ongoing.
Trailblazer 2 study thank you.
Thanks Tara.
Sure Terence Thanks for that question on day, <unk>, and FDA and safety and in <unk>.
And when we got the breakthrough therapy designation, and we announced our expectations to file.
Dave Ricks: Before we go to Q&A, let me sum up the progress we've made during this quarter. We have seen strength in our core business in the first half of this year and increased momentum in Q2. This is driven by strong volume-driven growth across key brands and most major geographies.
The BLA by the end of the year that was based on our current understanding of the situation.
Since then things have progressed and and I would say and I'm, even more confident now than.
Dave Ricks: We're pleased to see sequential top-line growth this quarter as well as year-over-year margin expansion. We made significant progress developing new medicines. And Q2 was another positive quarter for our pipeline, as we announced plans to submit terzipatide in type 2 diabetes and donanimab in Alzheimer's disease later this year, as well as an approval for Jardians and HFREF, to stand for positive results in half-past. We returned nearly $800 million to shareholders through dividends and completed $500 million in share repurchase, reflecting confidence in the ongoing strength of our business.
And I was then.
And that we should have and adequate package to support a complete submission.
And by the end of this year that includes of course, our confidence that we have enough safety data to support a full evaluation of the benefit risk of this drug I think given the.
Limited duration of dosing.
That helps as well as given the.
Near completion now of enrollment.
In Trailblazer too.
So it's our intent then to use our combined safety data from the completed phase.
Phase, 1 and phase II studies.
As well as.
Dave Ricks: As we look forward to the rest of the year, we're quite confident in our long-term process. Before we move on to Q&A, I would also like to share that we will hold a live investor meeting this December to highlight our R&D pipeline and progress for investors. We will also provide our initial 2022 guidance at this meeting. Given the limited physical space available, this event will have an accompanying webcast.
And early look at safety data from that.
Ongoing phase 3 study to support the package now of course with any ongoing studies, there's always risk. We don't know what that safety data is going to show.
If it's consistent with the safety data we've collected prior to the study and I think we should also be confident.
That that would support a positive benefit risk assessment and put us on track to launch next year as we said.
Dave Ricks: We're hopeful that we can host this event in person but are watching the evolution of the pandemic closely and will adjust accordingly to a virtual event if needed. Our IR team will be in contact in the coming weeks to issue invitations and provide more logistical details on this. Now, I'll turn it over to Kevin to moderate our Q&A session. Thanks.
Thanks, Dan and Terry Thanks for your questions next caller, please and.
The next question is from Ronny Gal from Bernstein. Please go ahead.
Good morning, and thank you for taking my question too.
The first 1 and I'll stay with.
You have kind of suggested in Europe.
Comments, there that there will be a good chance to use some other biomarkers that you are developing in the early commercial use after that and Bob can you talk a little bit about what markets. Do you expect you have proved by when and how do you see that and thank you to the entire Ah patient.
Operator: We'd like to take questions from as many callers as possible, so we ask that you limit your questions to two per caller. Lewis, could you please provide the instructions for the Q&A session, and then we're ready for the first caller. Thank you, and ladies and gentlemen, if you wish to ask a question, please press 0 on your telephone. We will hear an acknowledgement tone that you've been placed into a queue, and you may remove yourself from the queue at any time by pressing 1-0.
Patient.
Passage through the use of day and I'm not going forward and how does it differ from other amyloid beta.
And second Boston Lager seems to have a bit of a price drop this quarter can you discuss a little bit what you're seeing here, what you're expecting with the approval of the first interchangeable biosimilars and any impact there and and as we go forward how should we think about that franchise.
Thanks, Ronnie will go to Dan for the question is on <unk>, and then Mike Mason for the questions on basic Laura.
Operator: If you're on a speakerphone, please pick up your handset before pressing the number. And our first question is from Terence Flynn from Goldman Sachs. Please go, Hi, thanks for taking the question. Maybe Dan, I was just wondering if you could elaborate at all on your comments regarding your discussions with the FDA on Denonimab. It sounds like they're consistent with your expectations, but any more color you can provide if they've actually signed off fully on your plans to follow the BLA, and then how much additional safety data would they want to see from the ongoing Trailblazer 2 study? Thank you. Thanks, Terence. Dan?
Thanks, Ronny for the question on Biomarkers and the commercial use of course. This has been a scenario of great progress and great investment by Lilly and we continue to put a lot of emphasis here.
Think objectively you wouldn't have had the progress that we're seeing now and Alzheimer's disease had it not been for the ability to select patients for treatment and and father response treatment with Biomarkers, we don't see that as a research only obligation and that should be available those kinds of tools.
And to patients.
And the clinical who are being clinically treated for Alzheimer's disease and the future. So the status of the tools right. Now is both of the pet agents the Tau pet imaging with Talbot that we use and the amyloid pet imaging. The name of it those are both of course FDA approved and availability is somewhat limited right now, particularly for <unk>.
Dan Skovronsky: Yeah, sure, Terence. Thanks for that question on Denenimab and the FDA and safety. You know, in June, when we got the Breakthrough Therapy designation and announced our expectations to file the BLA by the end of the year, that was based on our current understanding of the situation. Since then, things have progressed, and I would say I'm even more confident now than I was then that we should have an adequate package to support a complete submission.
But could quickly be scaled.
And with launch of denied and Mab and the future.
Third agent, which is probably the 1 that will be the most accessible to patients as the phosphates out $2.17 assay.
Dan Skovronsky: By the end of this year, that includes, of course, our confidence that we have enough safety data to support a full evaluation of the benefit-risk of this drug. I think given the limited duration of dosing, that helps, as well as given the near completion now of enrollment in Trailblazer 2. So it's our intent, then, to use combined safety data from the completed Phase 1 and Phase 2 studies, as well as an early look at safety data from that ongoing Phase 3 study, to support the package.
Just as we continue to work on that assay.
More and more impressed with its performance its ability to identify patients and even as I showed today track their progression. So this could be and answer for patients and in the near term.
And we'll work hard to make that available to borrowers often lower for in vitro diagnostics and in vivo diagnostics.
And.
I think there's there's good potential there you asked about the patient flow. Once all of these things are approved and available and presumably that that happens around the time and day, none of them at launch if not before.
Dan Skovronsky: Now, of course, with any ongoing study, there's always risk. We don't know what that safety data is going to show. If it's consistent with safety data we've collected prior to the study, then I think we should also be confident that that would support a positive benefit-risk assessment and put us on track to launch next year, as well. Thanks, Dan. Terence, thanks for your question. Next caller, please. And the next question is from Ronnie Gale from Bernstein. Please go ahead. Good morning, and thank you for taking my question. Two, the first one I'll stay with the Nanomap.
I think it would make sense and fit with with medical practices screening starts with some sort of simple cognitive exams by physician to assess a patient's eligibility as early Alzheimer's then they would move on to probably a blood based tests like phosphates out to 2017, if that's positive that could either be a basis for treatment depends.
And if data support that are that could triage patients to pet scans for further valuation.
Thanks, Dan and other Mike for the questions around basically our Q2 performance and sensibly interchange ability.
Dan Skovronsky: You have kind of suggested in your comments there that there will be a good chance to use some of the biomarkers that you were developing in the early commercial use of Dunanimab. Can you talk a little bit about what markets you expect to have proved by when and how you see that essentially the entire patient passage through the use of the NNMAP going forward and how it differs from other amyloids? And second, Basta Glard had a bit of a price drop this quarter. Can you discuss a little bit what you're seeing here, what you're expecting with the approval of the first interchangeable bisemilars, any impact there? And as we go forward, how should we think about that? Thanks, Ronnie.
Yeah. Thanks for the question on basic Lar.
And the performance that you're seeing and the second quarter and 21 has primarily been driven by pricing pressure and volume pressure and the Medicaid segment for basic Lar and let me give you a little bit and color on how the Medicaid segment works and there's really 2 different types of states those that have.
1 signal unified preferred drug lists across managed Medicaid and fee for service and.
Michael B. Mason: We'll go to Dan for the questions on Dananamab and then Mike Mason for the questions on basic R. Thanks, Ronnie, for the question on biomarkers and their commercial use. Of course, this has been an area of great progress and great investment by Lilly. We continue to put a lot of emphasis here.
And others that have.
And 2 different and unique.
Preferred drug list across field force service and a different 1 from managed Medicaid.
What we've seen with major borrowers when states decide to transition from having 2 preferred drug list to a unified preferred drug list. The economics for the state tends to favor the longstanding brands like Lantus and so at that point you see if we have and want to state for 4 and <unk>.
Dan Skovronsky: I think, objectively, you wouldn't have had the progress that we're seeing now in Alzheimer's disease had it not been for the ability to select patients for treatment and follow their response to treatment with biomarkers. We don't see that as a research-only application. That should be available, those kinds of tools, to patients in the clinic who are being clinically treated for Alzheimer's disease in the future. So, the status of the tools right now is both of the PET agents, the Tau PET imaging with TauVid that we used, and the amyloid PET imaging with amyloid. Those are both, of course, FDA-approved. However, availability is somewhat limited right now, particularly for TauVid, but could quickly be scaled with the launch of Dananamab in the future.
And as Medicaid and you'll see the transaction and transition back to Atlanta, and so so that's.
That's what you've seen.
Driving our Q2 performance also in the managed Medicaid space, we have seen some pricing pressure there from simply that has required us to put more rebates on the.
In order to preserve our volume for that and I'll, Let me turn to kind of well first of all before turning to assembly know that that the trends for babies and bar are fully baked into our guidance for the remaining part of 2021 now.
Dan Skovronsky: The third agent, which is probably the one that will be the most accessible to patients, is the PhosphoTau 217 assay. Just as we continue to work on that assay, we're more and more impressed with its performance, its ability to identify patients and, even as I showed today, track their progression. So, this could be an answer for patients in the near term. We'll work hard to make that available. The bar is often lower for in vitro diagnostics than for in vivo diagnostics, so I think there's good potential there.
Now, let me turn to assembly.
First of all understand and Assembly has gained interchange ability just with lantus notwithstanding lower so we don't anticipate any immediate impact on basic Laura if you look at simply performance to date and.
Captured about 2% share of market on the <unk> and about 1% of new treatment starts and the vast majority of that has come from Medicare part, a which is hospitals and the Medicaid segment.
Dan Skovronsky: You asked about the patient flow once all these things are approved and available, and presumably that happens around the time of Dananamab's launch, if not before. I think it would make sense and fit with medical practice if screening starts with some sort of simple cognitive exams by a physician to assess a patient's eligibility for early Alzheimer's. Then they would move on to probably a blood-based test like PhosphoTau 217 if that's positive.
If you look at the price points for Assembly. It's currently at $99 per vial and about $150 per byte pack and pins.
And you know with the with the move to interchangeability.
Really support any actions that help patients with diabetes and more affordable out of pocket experience, which is why anyone regardless of insurance status and <unk> by their monthly prescription that Lilly insulin and $435 or less insulin value program. The insulin value program has helped lower the average pocket out of pocket.
Dan Skovronsky: That could either be a basis for treatment, depending on if data support that, or that could triage patients to PET scans for further evaluation. Thanks, Dan. Now to Mike for the questions around basal RQ2 performance and synchronous interchanging.
Cost for a monthly prescription of Lilly insulin, which often requires our includes multiple miles are our insulin pen tax to $28.05 and the face of raising health insurance deductibles. So it's great and people living with diabetes and access to many options to lower their out of pocket costs and thanks for the question.
Michael B. Mason: Yeah, thanks for the question on Basiglar. The performance that you're seeing in the second quarter of 21 has primarily been driven by pricing pressure and volume pressure in the Medicaid segment for Basiglar. Let me give you a little bit of color on how the Medicaid segment works. There are really two different types of states, those that have one single unified preferred drug list across managed Medicaid and fee-for-service and then others that have, you know, two different kinds of unique preferred drug lists across fee-for-service.
Yeah.
Thanks, Mike Thanks, Ronny for your questions next caller. Please thank.
Thank you and the next question is from Tim Anderson from Wolfe Research. Please go ahead.
Hi, Thank you a couple of questions just your general thoughts on sub Q dosing with antibodies the plaque that offer meaningful differentiation.
And at a high level that benefits and seem quite obvious and being able to dose the drug at home.
Michael B. Mason: What we've seen with Bayes' Law is when states decide to transition.
But some argue that it falls outside of a Medicare part B frameworks, and maybe dock would be more inclined to stick with and infusion.
Michael B. Mason: from having two preferred drug lists for a year.
Michael B. Mason: The economics of the state tends to favor the long-standing.
Michael B. Mason: .. .. .. .. ...
Michael B. Mason: So that's what you've seen driving our Q2 performance. Also, in the managed Medicaid space, we have seen some pricing pressure there from SimGli that's required us to put more
And I believe you originally did not pursue sub Q, because you're worried you would get enough drug across the blood brain barrier Roche has shown us that they can achieve that so can we expect moving my.
Michael B. Mason: rebates on the in order to preserve volume for that.
And also pursue a sub Q and would this require a formal phase 3 study looking at plaque reduction and the primary endpoint.
Michael B. Mason: Now let me turn to, well, first of all, before we turn it to assembly, know that the trends for Baselgar are fully baked into our guidance for the
And then last quick question why wouldn't something like P. Tau to 1.7 and become a separate meaningful revenue stream and its own rate for Lilly.
Michael B. Mason: That's for the remaining part of 2021.
Thanks, Tim we'll go to Dan for all those questions. Okay. Thanks.
Michael B. Mason: Now, let me turn to Sim Glee. First of all, you should understand that SimGLEED has gained interchangeability only with Lantus, not with BASICAR.
It's a good question and line of questions here on sub Q dosing for for anti amyloid therapies.
Michael B. Mason: [inaudible] If you look at the price point for SemGli, it's currently at $99 per vial and about $150 per five-pack of pins. And you know, with the move to interchangeability, we really support any actions that help patients with diabetes have more affordable out-of-pocket costs, which is why anyone, regardless of insurance status, is eligible to buy their monthly prescriptions of Lilly insulin for $35 or less through our insulin value program. The insulin value program has helped lower the average out-of-pocket cost for a diabetic patient.
Really 2 factors that we have taken to account in addition to the ones you mentioned Hum.
First and most important is efficacy for patients and I think all of the data that we have so far.
And suggest and support the notion that deepen rapid clearance is key here.
And so if you're going to go to subject dosing, it's important to make sure you do get enough drug and so that you can quickly get patients to clear.
That's not going to always be possible with with every drug.
Michael B. Mason: which often includes multiple vials or insulin pen packs. $28.05 In the face of rising health insurance costs, so it's great that people living with diabetes have access to many options to lower their out-of-pocket costs.
The second consideration with sub Q dosing.
Is the duration of therapy. So if it's a limited duration of therapy. The difference between the IV and sub Q, if it's once a month for 6 months.
Michael B. Mason: Thanks for the question. Thanks, Mike. Thanks, Ronnie, for your questions. Next caller, please.
That's not a not a big difference between IV and sub Q, whereas if it's for the rest of your life, maybe that is a bigger difference.
Operator: Thank you. And the next question is from Tim Anderson from Wolf Research. Please go ahead.
Operator: Thank you. A couple of questions. Just your general thoughts on sub-q dosing with antibodies to plaque. Does that offer a meaningful difference? At a high level, the benefits would seem quite obvious to being able to dose a drug. But some argue that, you know, it falls outside of a Medicare Part B framework.
And finally with respect to our plans for sub 2 I do think it's an important option to offer patients.
And notwithstanding that the previous comments, even for a limited duration therapy. Some some patients may prefer assuming you can get the same kind of efficacy I think with dinner and a map that's unlikely to be possible and and we're not pursuing it given the doses, we need and the formulation. We have however, we have a second generation antibody.
Dan Skovronsky: So maybe, doc. And I believe you originally did not pursue Sub-Q because you were worried you wouldn't get enough drug across the blood-brain barrier. Roche has shown us how to achieve that. So can we expect Lilly, Mike..., also to pursue a sub-Q?
Body here that we'd call out and <unk>, 4 which I think is quite likely to be viable and a subcutaneous presentation and that is our focus of development around and 3 BG for.
Dan Skovronsky: Did this require a formal phase 3 study looking at plaque? And then last quick question, why wouldn't something like P-Tau 217... Thanks, Tim.
And my expectation around that is.
Is that it should be able to show comparable amyloid plaque lowering with subcutaneous dosing as day nano Mab does.
Dan Skovronsky: We'll go to Dan for all those questions. Okay, thanks. It's a good question and line of questions here on sub-q dosing for anti-amyloid therapies. There are probably two factors that we have to take into account in addition to the ones you mentioned. Um, the first and most important thing is efficacy for patients, and I think all of the data that we have so far suggest and support the notion that deep and rapid clearance is key here.
Dosing, if so given the similarities between the drugs.
Would seek accelerated approval pathway for that drug and the future is a sort of a subcutaneous version of day nanometer, although it is a new enemy.
Your second question was around the <unk>.
Phosphate Tao.
Assay and whether that's a significant revenue stream.
Dan Skovronsky: And so if you're going to go to subcutaneous dosing, it's important to make sure you do get enough drug in so that you can quickly get patients to clear. But that's not always going to be possible with every drug. I think the second consideration with Sub-Q dosing is the duration of therapy. So if it's a limited duration of therapy, the difference between IV and Sub-Q, if it's once a month for six months, that's not a big difference between IV and Sub-Q, whereas if it's for the rest of your life, maybe that is a bigger difference.
It's certainly conceivable and and we haven't sort of thought through all of our commercial plans around that but really for Lilly and it may be significant for some companies I think for Lilly, though our focus is on removing barriers for treatment to patients.
And so as we think about how we position position diagnostics and therapeutics in the marketplace, our focus will be on an unreal.
And really making sure that most patients possible can get treated appropriately and me.
Just to comment.
And.
Tim on on the access and <unk>.
Payment environment.
Dan Skovronsky: Um, finally, with respect to our plans for SubQ, I do think it's an important option to offer patients. Notwithstanding the previous comments, even for a limited duration therapy, some patients may prefer it, assuming you can get the same kind of efficacy. I think with Denenumab, that's unlikely to be possible, and we're not pursuing it, given the doses we need and the formulation we have. However, we have a second-generation antibody here that we call N3PG4, which I think is quite likely to be viable in a subcutaneous presentation. And that is our focus of development around N3PG4.
I think our priority at Lilly is always going to be how to make it easier for patients to get to a therapy and then we solve for value on the back and there are clearly benefits in a short duration treatment like Dan said with Danone and Mab and a.
Part B theyre going to be watched closely by their physicians. Initially anyway, there are real and important and side effects, which car imaging analysis for this class of drugs and so its intensively managed disease, but through time as we've seen with other classes as comfort level will rise and primary care in particular and.
And using therapeutic antibodies to treat Alzheimer's and.
More convenient form available at a local pharmacy, perhaps for self injection or injection by a caregiver would be preferred so.
Dan Skovronsky: My expectation around that is that it should be able to show comparable amyloid plaque lowering with subcutaneous dosing, as Denenumab does with IV dosing. If so, given the similarities between the drugs, we would seek an accelerated approval pathway for that drug in the future as sort of a subcutaneous version of Denenumab, although it is a new enemy. Your second question was around the phospho-tau assay and whether that's a significant revenue stream. It's certainly conceivable, and we haven't sort of thought through all of our commercial plans around that.
Planes and lineup with.
Pursuing both those channels, although in early days probably.
The intensive nature of the treatment and and specialist nature will will favor the infusion, but we're committed to both and we're solving for patient convenience at the end of the day.
Thank you, thanks, Dave and Dan and Tim Thanks for your questions next caller. Please.
The next question is from Chris Schott from J P. Morgan. Please go ahead.
Great. Thanks, very much for the questions just went on and on a map and then 1 on Virginia.
Dan Skovronsky: But really, for Lilly, and it may be significant for some companies, I think for Lilly, though, our focus is on removing barriers to treatment for patients. And so, as we think about how we position diagnostics and therapeutics in the marketplace, our focus will be on really making sure that most patients possible can get treated appropriately. And maybe just a comment.
I guess my bigger question on Danone and Mab is how are you thinking about the role of a beta antibodies, maybe prior to definitive cognition data being available.
So I guess do you see cognition data significantly expanding the market opportunity for these products.
Or do you anticipate where etsy broad usage, even the and the advent of let's just say the additional cognitive readouts you see under non and Mab were less definitive and what we saw and the phase 2 I'm currency do you think the whole market at this point she is going to move to plaque regression or reduction or.
Dan Skovronsky: Thanks, Dan. Tim, on the access and payment environment, you know, I think our priority at Lilly is always going to be how to make it easier for patients to get to a therapy, and then we solve for value on the back end. There are clearly benefits to a short-duration treatment, like Dan said, with dononimab in Part B. But they're going to be watched closely by their physicians initially anyway. There are real and important side effects, which require imaging analysis for this class of drugs.
These cognition is still very important I think in terms of the commercial opportunity and.
My second question was on the <unk> update just a 2 parter here just when do you think you'll have that incremental OS data for the other 50 per cent of the population and how hard is it to identify these higher risk patients as we think about maybe the initial commercial opportunity and.
Dan Skovronsky: And so it's an intensively managed disease, but, over time, as we've seen with other classes, as comfort levels rise in primary care, in particular, in using therapeutic antibodies to treat Alzheimer's, a more convenient form available at a local pharmacy, perhaps for self-injection or injection by a caregiver, would be preferred. So, you know, our plans line up with pursuing both those channels, although in the early days, probably, the intensive nature of the treatment and the specialist nature will favor the infusion.
Instrument. Thanks, so much.
Thanks, Chris go to Dan for Janina, Mab, and then and for the questions on <unk>.
So your question is maybe I break into 2 parts. The first part is like how important is in the near term to have additional cognitive benefit data for amyloid plaque lowering drugs and then and longer term what happens if the confirmatory studies.
Dan Skovronsky: But we're committed to both, and we're solving for patient convenience at the end of the day. Thanks, Dave and Dan. Tim, thanks for your questions. Next caller, please. The next question is from Chris Schott from J.P. Morgan. Please go ahead. Great, thanks very much for the questions.
Give a negative surprise so in the short term I just clarify that.
We have compelling clinical efficacy data for dinner and Matt the only trial of its kind to be successful a positive phase II study and its primary endpoint showing content benefits for genetic map, that's different and unique and exciting published and the new England Journal, that's exciting and.
Operator: Just one on Denonimab and then one on Versenio. I guess my bigger question on Denonimab is how you're thinking about the role of A-beta antibodies maybe prior to definitive cognitive data being available. So I guess, do you see cognition data significantly expanding the market opportunity for these products? Or do you anticipate we're going to see broad usage even in the event, let's just say, the additional cognitive readouts you see on Denonimab were less definitive than
I think that will be helpful. Even before we have the confirmatory data being and that unique position.
And there will be some physicians and I'm sure a bizarre today who's still say I don't want to use a drug until I have cognitive data and fine.
For those physicians, who are willing to.
And make that link between the surrogate efficacy data and the phase II data and does that and map it.
If you believe that lowering amyloid plaque is a good thing to do you're going to want the drug that lowers amyloid plaque the most and I think that's an exciting aspect of danone and map as well.
Dan Skovronsky: and what we saw in phase two. I'm trying to see, do you think the whole market, at this point, is just gonna move to black regression?
Dan Skovronsky: Thank you for watching. I hope you enjoyed it.
And then we come to the confirmatory studies I think Shirley.
Dan Skovronsky: I'm going to be back next week with more. I'm going to be back next week with more. I'm going to be back next week with more. I'll see you then.
Everyone have to acknowledge if from multiple sponsors multiple drugs are all clearly negative.
Dan Skovronsky: Bye. Bye. My second question was on the Resinio update. I just, just a two-parter here. When do you think you'll have that incremental OS data for the other 50% of the population? And how hard is it to identify these higher-risk patients as we think about maybe the initial commercial opportunity and enactment? Thanks. Thanks, Chris.
And that would be a bad thing and we would retreat and and say that this was a wrong way of thinking I think thats an area is extremely unlikely.
I think the most likely scenario is probably a mixed picture some drugs will be better than others. Some some trials we'll reach.
Others might not.
You've heard me speak about the confidence and our trial, but we have to see the data I think in that scenario that will strengthen that that would be good enough to reinforce the notion that amyloid as an important circuit and and reducing amyloid as it could.
Anne E. White: We'll go to Dan for the Denanamab questions and then Anne for the questions on Versenio. Yeah, so your question is, maybe I'll break it into two parts. The first part is like, how important is it in the near term to have additional cognitive benefit data for amyloid-plaque-alloyed drugs? And then, in the longer term, what happens if the confirmatory studies give a negative surprise? So in the short term, I just want to clarify that we have compelling clinical efficacy data for Denemap. The only trial that's going to be successful, a positive phase two study and its primary endpoint showing cognitive benefits for Denemap, that's different, unique, and exciting. Published in the New England Journal, that's exciting.
Thanks, Dan and on for Us anyhow.
Yeah, Chris Thanks for the question and as Dan shared we are incredibly pleased with what we're seeing out and presenting on the monarchy data and and as he share and key endpoints such as idea effects have continued to strengthen with further follow up and now we have 2 years of median follow up and so I'm very pleased with that and as he shared we remain very confident there will be and OS trend favoring and presenting them.
Dan Skovronsky: And I think that will be helpful even before we have the confirmatory data. Being in that unique position will be helpful even before we have the confirmatory data. There will be some physicians, I'm sure, as there are today, who still say, I don't want to use a drug until I have cognitive data. Okay.
And the broader population and we would work with the FDA to expand our label to include these patients and the future. So obviously this is event driven and so the timing of this will be determined by the event rate. So our next bill and analysis is in the second half of 'twenty 2 and this analysis will help us really further and form the timing.
Dan Skovronsky: For those physicians who are willing to make that link between the surrogate efficacy data and the phase two data and the data map, if you believe that lowering amyloid plaque is a good thing to do, you're going to want the drug that lowers amyloid plaque the most. And I think that's an exciting aspect of Denetimab as well. But then we come to the confirmatory studies. I think, you know, everyone has to acknowledge that if, for multiple sponsors, multiple drugs are all clearly negative, that would be a bad thing. And we would retreat and say that this was a wrong way of thinking.
That final analysis. So as you commented that the overall survival data and the broader population and still immature and we still have less than 50% of the events needed to do that final OS analysis, but with what we're seeing and again strong performance about the high and low 67, and we remain confident and you see this trend and O S favoring.
Any other to replicate and as far as key 67 and good news here is that this is really a familiar concept to physicians and is already accepted as a prognostic factor and breast cancer and its really easily performed through and IH, how you'd see assay. So very simple assay and these are broadly available in the pathology labs.
Dan Skovronsky: I think that scenario is extremely unlikely. I think the most likely scenario is probably a mixed picture. Some drugs will be better than others; some trials will reach significance, others might not. You've heard me speak about my confidence in our trial, but we have to see the data. I think in that scenario, that will strengthen, that will be good enough to reinforce the notion that amyloid is an important surrogate, and reducing amyloid is a good idea. Thanks, Dan. Anne, on Virginia?
And the assay and the methodology that we used a monarchy is straightforward and proven to be accurate and and really highly reproducible.
Our belief is that oncologists will move to quickly adopt us and practice and really this clarity and patients with the highest risk I think will help to accelerate uptake in this setting. So we look forward to launching in this setting.
Anne E. White: Yeah, Chris, thanks for the question. And as Dan shared, we are incredibly pleased with what we're seeing out of Vresenio and the monarchy data. And as he shared, key endpoints such as IDFS have continued to strengthen with further follow up. And now we have two years of median follow up, and we are so very pleased with that.
Thank you and Chris Thanks for your questions next caller. Please.
The next caller is Omar with that from Evercore. Please go ahead.
Hi, Thanks, so much for taking my questions I surprisingly also want to talk about all of our city and I have 3.
Anne E. White: And as he shared, we remain very confident there will be an OS trend favoring Vresenio in the broader population, so we will expand our label to include these patients in the future. So, obviously, this is event-driven, and so the timing of this will be determined by the event rate. So, our next planned analysis is in the second half of 22, and this... will help us really further inform the timing of that final event.
And part first are you expecting to use interim data from your ongoing phase III as part of the regulatory filing.
And we're doing the review and secondly, once the plaque is cleared and I think 60 per cent of patients have clearance by 12 months.
What rate of onset of new amyloid plaque you expect subsequently and I'm just trying to understand.
Anne E. White: So as you commented, the overall survival data in the broader population is still immature, we still have less.., of the events needed to do that final OS analysis. But with what we're seeing, and again, strong performance in both the high and low key 67, we remain confident to see this trend in OS favoring Resenio to rep, As far as Key 67, good news here is that this is really a familiar concept to the, It is already accepted as a prognostic factor in breast cancer, and it's really easily performed through an IHC assay, so a very simple assay, and these are broadly available in the pathology labs, and the assay and the methodology that we used on monarchy is straightforward and proven to be accurate and really highly reproducible.
Your expectation on finite duration of dosing versus biogen's opinion on continued dosing and.
And finally I'm also trying to reconcile the slide you showed on the on the non linear model, the Colorado models, suggesting a relationship between plaque decrease and a slowing and clinical progression.
Are you seeing there's a relationship or you think theres a causality because you might recall the new England Journal paper on your face you mentioned and there was no association between plaque and clinical benefit at the patient level and biogen's data suggested some of that thank you very much.
Thanks, Amer, Dan Okay, 3.3 great questions and were thanks. So the first question you asked if we'd use interim data I commented that we will take our safety cut of data and in the right way to support that submission we don't.
Anne E. White: So our belief is that oncologists will move to quickly adopt this in practice, and really, this clarity in patients with the highest risk, I think will help to accelerate uptake in this setting. So we look forward to launch.
Plan to support that submission nor do we see the need to support that submission with any any looks at efficacy data we have adequate efficacy data supporting the plaque lowering which would be the basis for submission and approval under accelerated approval.
Anne E. White: Thank you, Anne. Chris, thanks for your questions. Next caller, please. The next caller is Umar Rafat from Evercore.
Operator: Please go ahead. Hi, thanks so much for taking my questions. I surprisingly also want to talk about everything, and I have three subparts.
Your second question is once plaque clears.
Long does it take to come back.
Operator: First, are you expecting to use interim data from your ongoing phase three as part of the regulatory filing or during the review? Secondly, once the plaque is cleared, and I think 60% of patients have clearance by 12 months, what rate of onset of new amyloid plaque do you expect subsequently? And I'm just trying to understand your expectation for finite duration of dosing versus biogens, continued dosing. And then, finally, I'm also trying to reconcile the slide you showed on the nonlinear model, the Conrado model suggesting a relationship between plaque decrease and a slowing in clinical progression. Are you saying there's a relationship between them?
We have some some data on that that was also are presented and AIC I didn't highlight it.
This morning.
But what we found is that off therapy. There is very slow negligible really re growth of plaque I think if you sort of extrapolate it out.
It might take a 14 or 15 years or something like that to re grow amyloid plaque.
Average age of patients and this trial and 75 and remember we haven't fully halted progression of disease. So that doesn't feel like a near term thinking on re dosing will be necessary to keep them clear, but we'll have the ability to follow patients for many many years and confirm.
Confirm that finally.
Dan Skovronsky: Or are you saying there's a causality? Because you might recall the New England Journal paper on your face to mention there was no association between plaque and clinical benefit at p. Biogen's data suggested similar. Thank you very much. Thanks, Umar. Dan.
And you've correctly summarized the situation, which is that and our initial analysis, we didn't see a correlation and now we are reporting that we do see a correlation why why is that and of course I correlation can't prove causation and so it is just a correlation so why do we see it now and I.
Dan Skovronsky: Okay, three great questions, Umar. Thanks. So, the first question you asked if we'd use interim data. I commented that we'll take a safety cut of data in the right way to support that submission. We don't plan to support that submission, nor do we see the need to support that submission with any look at efficacy data. We have adequate efficacy data supporting plaque lowering, which would be the basis of submission and approval under accelerated approval. Your second question is, once the plaque clears, how long does it take to come back? We have some data on that that was also presented at AIC. I didn't highlight it this morning.
I think what we learned was quite interesting and and that's that the amount of pack you remove it depends a lot on how much <unk> you have to start with so if you only have 50 cent of Lloyd's of plaque there's only so much you can remove if you have 1 hundreds and hundreds of packet based on and you can move a lot more.
So that turns out to be a pretty important confound and these kinds of correlations. The people who are have more severe disease, perhaps longer duration lower cognitive performance older age they might have more plaque at baseline you can remove more but they still might be the worst progresses and people who have lower plaque and and you remove less.
Dan Skovronsky: But what we found is that off therapy, there is very slow, negligible, really, regrowth of plaque. Finally, I think you correctly summarized the situation, which is that in our initial analysis, we didn't see a correlation, and now we are reporting that we do see a correlation. Why is that?
So.
I think our thinking initially and maybe the field thinking was a little bit backwards on this to look for straight correlation between change and change without adjusting for all of those important.
<unk> co variants.
Dan Skovronsky: And of course, correlation can't prove causation. So, it is just a correlation. So, why do we see it now? So, I think our thinking initially, and maybe the field's thinking, was a little bit backwards on this to look for a straight correlation between change and change without adjusting for all of those important baseline covariates.
Thanks, Dan and thanks for your questions next caller please.
And our next question is from the line of Andrew Baum.
1 moment.
Please go ahead.
Thank you couple of questions. Please just going back to instrument outfits and trade it plays out too.
Not as much as you can support accelerated but.
To accelerate the readout and for the full.
Dan Skovronsky: Thanks, Dan. Umer, thanks for your questions. Next caller, please. And our next question is from the line of Andrew Baum. Please go ahead. Thank you. A couple of questions, please. I'm just going back to interim analysis for Traylor-Blazer out to not so much as use to support accelerated but to accelerate the readout for the full standard regulatory review. You're using a Bayesian disease progression model. Given that you're getting such a rapid clearance of Alzheimer's, and that's linked to cognition in those patients who have it, do we have to assume that the follow-up is going to go out to the full 72 weeks, or is that not possible? Of earlier unblinding driven by efficacy in those patients?
Full standard regulatory review, you're using a day T and disease progression model.
And that Youll get a such a rapid clearance about assignments and that's linked so called mission and those patients who have that.
Do we have to assume that the follow up is going to go out to the food and 72 weeks was that possibility of.
And blinding driven by efficacy and MS patients and then second.
Perhaps you could comment on the manufacturing capacity, so it did not and map as well as the regulatory outlook for your P. Tau assay and assuming that you obtained regulatory approval on the Saturday and thank you.
Thanks, Andrew and I'll go to you for those questions. So Andrew.
And if you've asked a follow up question here and important 1.
Dan Skovronsky: And then second, perhaps you could comment on the manufacturing capacity for Nanomab as well as the regulatory outlook for your P-Tau assay, assuming that you attain regulatory approval for the accelerators. Thank you.
And the potential even in the face of an accelerated review for the accelerated approval rather for and <unk>.
Plaque lowering whether we'd still be keen to get that cognitive data a bit earlier by pulling forward and.
Dan Skovronsky: Dan, we'll go to you for those questions. Yeah, so, Andrew, you've asked a follow-up question here, an important one, on the potential, even in the face of an accelerated review for accelerated approval, rather, for plaque lowering, whether we'd still be keen to get that cognitive data a bit earlier by pulling forward an interim on Trailblazer 2. We haven't ruled that out, but we also don't have plans at this moment in time.
And interim on Tripadvisor to we haven't ruled that out we also don't have.
And our plans at this moment in time I think we just need to see where we are and where the field is.
Really.
And the maintaining a pristine and phase II trial would probably be a pretty high priority, particularly accelerated approval gives a path for patients to have access to the medicine.
Dan Skovronsky: I think we just need to see where we are and where the field is. But really, you know, maintaining a pristine phase 3 trial would probably be a pretty high priority, particularly if accelerated approval gives the path for patients to have access to the medicine. Then it becomes less urgent to get that data faster.
And then it becomes less urgent.
To get that data faster so that's our current thinking.
And we've been working hard to make sure we have manufacturing capacity I feel good about where we are to support launch and growth of day, nano Mab and hopefully someday and through PG 4 even to follow that.
Dan Skovronsky: So that's our current thinking. We've been working hard to make sure we have manufacturing capacity. I feel good about where we are. To support the launch and growth of Danatomab and, hopefully, someday, N3PG4, even, to follow that. With respect to the commercialization of a P-Tau diagnostic, there are different paths forward for an in vitro diagnostic, including a lab-developed test, or LDT, which can be done in a centralized location, for example, under CLIA, and that's a pretty fast path, and that's one of the options that we consider. Thanks, Dan.
And with response with respect to the commercialization of the <unk> diagnostic theyre different paths forward for an in vitro diagnostic, including a lab developed test or <unk>, which can be done and.
A centralized location for example under CLIA.
And Thats, a pretty fast path and that's 1 of the options that we consider.
Thanks, Dan and Andrew Thanks for your questions next caller please.
Thank you and that quest.
Question comes from Louise Chen from Cantor. Please go ahead.
Dan Skovronsky: Andrew, thanks for your questions. Next caller, please. Thank you. And the question comes from Louise Chen from Kantor. Please go ahead.
Hi, Thanks for taking my questions. So first question I had for you and how do you think about a potential outcome from the national coverage determination of monoclonal antibody Alzheimer's disease and then second question is how would you think about pricing and then a mab and fit into print. Thank you.
Operator: Hi, thanks for taking my question. So the first question I have for you is, what do you think about the potential outcome for the National Coverage Determination of Monoclonal Antibodies to Treat Alzheimer's Disease? And then the second question is, how would you think about pricing Nanomab? Thanks, Louise. Dan
Thanks, Louise Dan Okay, Thanks, too to sort of commercially focused questions on deny them up I mean, the first 1 on the national coverage decision determination of.
Dan Skovronsky: Okay, thanks for sort of commercially focused questions on dynamap. I mean, the first one on the national coverage decision, determination of, you know, of course, that's important. When, you know, I think it was widely said that when the first approval came, it was quite broad an indication, and then subsequently, the FDA, working with the sponsor, focused the patient population.
Of course, that's that's important.
When I.
I think it was widely said that when the first approval came.
It was quite broad and indication and then subsequently the FDA working with the sponsor focused.
And the patient population I think there could still be opportunity for further focusing here.
And that's 1 direction the experts at <unk>.
Dan Skovronsky: I think there could still be opportunity for further focus here, and that's one direction the experts at CMMS may take. In that case, it could be requiring patients to have evidence of Alzheimer's pathology in the form of amyloid plaques or even tau pathology.
CMS may take.
And in that case it could be.
Requiring patients to have evidence of Alzheimer's pathology, and the form of amyloid plaques or even a tau pathology.
Dan Skovronsky: As I said before, I think that that matches our goals and what we think is right. It'll take some time for that to play out, probably over the next nine months or so, and surely we'll be part of some of those discussions and share our data and thinking in the right way. And then on pricing, I think I simply say it's too early to comment on that. We have some time yet.
And as I said before I think that that matches our goals and what we think is right.
And it'll take some time for that to play out probably over the next next.
9 months, or so and surely will be part of <unk>.
Some of those discussions and share our data and thinking and the right way.
And then on pricing I think I simply say, it's too early to comment on that.
We have some time yet.
Dan Skovronsky: Thanks, Dan. Thanks for your questions, Louise. Next caller, please. The next caller is Geoff Meacham from Bank of America. Please go ahead.
Thanks, Dan Thanks for your questions Louise next caller please.
The next caller is Geoff Meacham from Bank of America. Please go ahead.
Operator: Morning, everyone. Thanks so much for the questions. Dan, you're popular today. So I just have a couple more for you.
Yeah.
Good morning, everyone. Thanks, so much for other questions Daniel popular today. So I just have a couple more for you.
Operator: On the natum ab, is there a hurdle that FDA has provided in terms of the number of patients for safety either for the filing or during the review, and then as the data from trail bears are mature?
On banana Mab is there a hurdle that FDA has provided in terms of number of patients for for safety either for the filing or during the review.
And then as the data from Trailblazer matures and what is your estimate on what the duration of therapy benefit could also ultimately be and then real quick on <unk> appetite just wanted to know as you guys complete the filing you know at this point, what's the gating factor as you look at the different geographies and in your prepared.
Dan Skovronsky: So what is your estimate on what the duration of therapy benefit could ultimately be? And then, real quick on tersepatide, just wanted to know, as you guys complete the filing, you know, at this point, what's the gating factor as you look at the different geographies?
Michael B. Mason: Thanks Jeff. We'll go to Dan for the JNAMAB questions and then Mike Mason on Terzapotaid.
Thank you.
Thanks, Jeff will go to Dan for the dining and Mab questions and then Mike Mason and turns appetite yes.
Dan Skovronsky: Yeah, so with respect to the safety hurdle for Genetimab or for any drug, really, it's having adequate exposures and duration of exposures in a broad population to be able to fully assess the benefit risk of a given drug. Now, you know, that's not a number that depends on the particulars of the drug, the population, of course, that you hope to treat, the duration of therapy, of course, but also the particulars around the safety data and the efficacy data that you collect.
Yes, so with respect to the safety hurdle for 10 nanometer or for any drug really it's having adequate exposures and duration of exposures and a broad population to be able to fully assess the benefit risk of a given drug and know that.
That's not a number that depends on the particulars of the drug and the population of course that you hope to treat the duration of therapy of course.
But also the particulars around the safety data and efficacy data that you collect so.
Dan Skovronsky: So, it would be nice and easy, I think, for sponsors in the FDA if there was a particular line in the sand that could be drawn, but, as I said, it needs to be tailored for each drug.
It would be nice and easy I think for for sponsors and the FDA. If there was a particular line and the sand that could be drawn but as I said it needs to be tailored for each drug based on our current thinking and analysis and and discussions.
Dan Skovronsky: Based on our current thinking and analysis and discussions, as I said, I think we'll be there comfortably at the end of this year. Your second question was about, I think it was, the duration of benefits as the trailblazer data mature. I commented on the duration of plaque lowering, which appears to be sustained. But I think, Geoff, you're getting at the duration of the cognitive benefit. We see a slowing of decline on average, which means that patients are still declining. You could ask, are the lines coming together or going apart?
As I said I think we'll be there comfortably at the end of this year.
Your second question was about.
I think it was about the duration of benefit is the AAA user data and mature I commented on the duration of plaque lowering which appears to be sustained but I think Jeff you are getting at the duration of the cognitive benefit.
We see a slowing of decline on average which means that patients are still declining.
You could ask are the lines coming together are going apart.
Dan Skovronsky: I think on some of the cuts of the initial data, there might have been a perception that the lines were not diverging at the later time points. I think, you know, as I showed the additional statistical methods, and even as we look at the raw data, we're pretty comfortable here that we have lines that diverge over time. And therefore, I would expect that the benefit of slowing down would continue over time. But it is too soon to have real data on that. Thanks, Dan. What is Mike Hunter's epitaph?
I think on some other cuts of the initial data there might've been a perception that the lines were not diverging at the later time points I think you know as I showed the additional statistical methods and.
And even as we look at the raw data, we're pretty comfortable here that we.
We have lines that diverge over time and.
And therefore, I would expect that that that benefit of slowing would continue over time, but too soon to have real data on that thanks, Dan and Mike hunters appetite.
Yes, thanks for the question.
Michael B. Mason: Yeah, thanks for the question; our Phase 3 Surpass Program for Type 2 Diabetes is done and completed. Um, the only gaining factor here is how we summarize the data and submit it to the... Thanks, Mike. Geoff, thanks for your questions. Thank you. And the next caller is Carter Gould from Barclays. Please go ahead. Great. Good morning.
Phase III surpass program for type 2 diabetes is done and completed so and the only gating factor here is how quickly we can see.
Summarizing the data and submit to the regulators, which we plan to do by the end of the year and Uh Huh.
Hum global regulators.
Thanks.
Thanks, Mike and Jeff. Thanks for your questions next caller please.
Thank you and the next caller is Carter Gould from Barclays. Please go ahead.
Great Good morning, maybe.
Operator: I guess I'll try to take another stab at the pricing question. I appreciate it's early, but it is sort of the elephant in the room. And maybe Dave and the team could comment just on the appropriateness of the pricing benchmarks, space already today in Alzheimer's, as you think about it. And then obviously 3Q has tripped you up in the past around true lucidity dynamics.
I guess I'll take try to take another stab at the pricing question I. Appreciate its early but it is sort of the elephant in the room and just maybe if if if Dave and team could comment just on the appropriateness of the pricing benchmarks and the space already today in Alzheimer's.
As you think about it and then.
Obviously, <unk> has a trip and the.
Passed around Triplicity dynamics, and so I'm just hoping if you could just be offer a little bit more clarity there on as you think about pricing headwinds into <unk> specifically thank you.
Dave Ricks: I'm just hoping if you could just offer a little bit more clarity there as you think about pricing headway. Thanks, Carter. So we'll go to Dave for the question on pricing for Dynanomab and then Mike on Trilla City pricing dynamics. Yeah, appreciate the question. And we totally get the curiosity.
Thanks Carter So we'll go to Dave for the question on pricing for day, Nana Mab and then Mike on <unk> pricing dynamics.
I appreciate the question and we.
Totally get the curiosity.
Dave Ricks: There are, as you understand, probably a lot of limitations to what we would say at this stage. One of the reasons for the limitations is that, really, the ultimate label we have and the value we can demonstrate to customers is a key input at Lilly for pricing. And we have, fortunately, you know, the only study in the space that hit its pre-specified endpoint for disease reduction or disease progression reduction, and those are key.
As you understand probably latter limitations of what we would say at this stage and 1 of the reasons for the limitation is.
You know really the ultimate label, we have and the value. We can demonstrate to customers is a key input at Lilly for pricing.
And we have unfortunately, the only study and the space that hit its pre specified endpoint for disease reduction or disease progression reduction and those are key as we demonstrated AIC. We continue to cut that data I think there was an earlier question about.
Dave Ricks: As we demonstrated at AAIC, we continue to cut that data. I think there was an earlier question about that. You know, how we might differentiate and the NCD process, but, you know, that's one of them, is that we have this completed study with exquisite biomarker profiles of the product and can continue to elucidate what Deninamab does in the brains of Alzheimer's patients in ways that perhaps others could not, and those are inputs as well.
You know, how we might differentiate and and the NCD process, but that's 1 of them is we have this completed a study with exquisite biomarker profiles of the product and can continue to lose.
Elucidate, what Dan and I, Mab does and the brains of Alzheimer's patients and ways that perhaps others could not.
And those are inputs as well.
Dave Ricks: You know, finally, Lilly has been a leader in value-based concepts and really partnerships to make sure that the appropriate patients can easily access our medicines at low out-of-pocket costs, and we're applying that thinking to this problem as well in the U.S. as well as outside. Our goal isn't just to get approval but to make sure that all of the people, you know, millions in the U.S. who could qualify for it, could access it on day one.
Finally, Lilly has been a leader in value based concepts and.
And really partnerships to make sure that the appropriate patients can easily access and lower out of pocket costs.
Our medicines and we're applying that thinking to this problem as well in the U S and as well as outside our goal isn't to just get an approval, but to make sure that.
And all of the people and of millions and the U S who could qualify for it could access it on day..1 so those are all inputs into that process and without.
Dave Ricks: So, you know, those are all inputs into that process, and without, you know, throwing out a number here, which wouldn't be appropriate until we get approval, that's how we think about it. Hopefully, that gives you some color.
Throwing out a number here, which wouldn't be appropriate until we get and approval.
That's how we think about it and hopefully that gives you some color behind that behind the scenes.
Michael B. Mason: Thanks, Dave. And then to Mike on Truelicity for pricing dynamics and pricing trends. Yeah, thanks for the question. Really, I have nothing new to report on real estate pricing.
Thanks, Dave and then to Mike on the true Lisicki for pricing dynamics pricing trends.
And thanks for the question really nothing new to report on Felicity pricing.
And of the year, we gave guidance that.
Michael B. Mason: You know, at the beginning of the year, we gave guidance that, "Take a look at the increased rates and market. Um, second mix, offset by lower utilization, 340B, and modest list pricing." Yeah, let me just add more general comments on pricing movement through the year, and I know we've had numerous conversations about this, and it does, there does tend to be some volatility throughout the year. We do tend to see, as patients flow through the healthcare system, a more pronounced impact from the coverage gap in the second and third quarter of the year, so you see that dynamic throughout every, really every year.
And you take a look at these.
The impact of increased range and market.
And second mix and offset by lower utilization and 340, B and modest list price increases that you know for the year, we would see low single digit price decline from Felicity, that's what we're experiencing so really nothing new to.
To update at this point and the year.
Yeah, Let me just add more and general comment on pricing movement through the year and I know we've had numerous conversations on this and it does there does tend to be some volatility throughout the year. We do tend to see is patient flow through the health care system.
More pronounced impact from the coverage gap and the second and third quarter of the year. So you see that dynamic.
And every really every year.
Michael B. Mason: You know, as Mike said, we built those assumptions into our full year guidance in terms of pricing dynamics for the year, and obviously, as we have more color and insight, we'll provide that, but right now, as we look at the full year estimate for U.S. pricing dynamics, it's consistent with what we previously discussed in terms of overall erosion. You saw 3% for the first half of the year, which is what you should expect for the full year.
And you know as Mike said, and we built those assumptions into our into our full year guidance in terms of pricing dynamics for the year and obviously as we have more color and insight will provide that but right now as we look at the full year estimates.
For U S pricing dynamic it's consistent with what we previously discussed in terms of overall and Roche and you saw 3% for the first half of the year, which is what you should expect for the full year.
Michael B. Mason: Thanks a lot. Carter, thanks for your questions. Next caller, please. The next question is from Seamus Fernandez from Guggenheim. Please go ahead.
Thanks, and not Carter. Thanks for your questions next caller. Please.
The next question is from Seamus Fernandez from Guggenheim. Please go ahead.
Operator: Oh, great. Thanks for the question. So I'm really wanting to kind of focus in on benocyclib and prostate cancer and the update that was provided. I think in an abstract published at AACR, some of the details were provided with regard to the sort of threshold for moving forward as it relates to the hazard ratio. And it's like the hazard ratio of 0.64, 80% power, so that, you know, with a p-value of 0.1, to continue advancing into the next stage of Cyclone II.
Oh, great. Thanks for the question so.
Really wanted to kind of focusing on and give them a cyclic and prostate cancer.
And the update that was provided.
And.
And abstract published at ACR and some of the details were provided with regard to the the sort of threshold for moving forward.
And it relates to the hazard ratio and.
And it's like the hazard ratio of <unk> 6.4.
80% powered.
With a P value of 0.12, I think continue advancing into the next stage of cyclone too.
Operator: So just wanted to clarify if that information is consistent and a driving force for moving forward. That would seem like a robust piece of information to have as we head into that. And then, as incremental to that, just wanted to get a sense of the magnitude of the opportunity that Lilly believes this would represent for Brasenio going forward. And if there are, let's say, RB, so the retinoblastoma-related requirements for enrollment or any other biomarker requirements that could limit the size of the patient population.
So just wanted to clarify.
And if that information.
Consistent and.
And a driving force for moving forward that would seem like a robust.
Piece of information.
And I have as we head into that.
And then and incremental to that just wanted to get a sense of the magnitude of the opportunity that Lilly believes this would represent.
For poor presented going forward and if.
And there are let's.
And let's say RMB.
Retinoblastoma related requirements for enrollment or any other biomarker requirements that could limit the size of the patient population.
Dan Skovronsky: And then just as a follow-up, you know, in terms of the NCD determination, just wanted to clarify if the pricing of the initially priced product would have any impact on Lilly's ability to independently price its own product and if that's part of the reason why Lilly has argued for the products being treated separately as part of the NCD rather than as a class. Thanks. Thanks, Seamus.
And then just as a follow up.
In terms of.
MTBE.
And the termination.
Wanted to clarify.
The pricing of the initially priced product would have any impact.
Impact on Lilly ability to independently priced its own product and.
That's part of the reason why Lilly has argued for the.
And the products being treated independently.
And as part of the MTBE rather than as a class.
Dan Skovronsky: We're going to toss it to Dan first to start on Brasenio, and then Anne will follow to round that out. And then we'll go back to Dan for the NCD question. Yeah, you're asking Seamus very smartly about the criteria to expand the study from a Phase II study to a Phase III study. But I don't think we want to get into the very precise details on what that was.
Thanks, Seamus, we're gonna toss it to Dan first to start on <unk>, and then and we'll follow the round that out and then we'll go back to Dan for the NCD.
Question, Yes, you're asking your Seamus very smartly about the criteria to expand the study from our phase III study 2.2 and a phase III study and I don't think we want to get into the very precise details on what that was but you are correct that it was a very robust thresholds and so we're excited to see.
Dan Skovronsky: But you're correct that it was a very robust threshold, so we're excited to see that happen. We take Phase III starts very seriously at Lilly. We don't want Phase III failures. So when we have studies like this one, in any therapeutic area where we move from Phase II to Phase III without ever seeing the data, we set aggressive bars that the data really have to match to move forward to Phase III.
That happened, we take phase III starts very seriously at Lilly and we don't want to phase III failures. So when we have studies like this 1 and any therapeutic area, where we move from phase II to phase III without ever seeing the data.
And we set aggressive bars and data really have to match to move forward to phase III or you can expect.
Dan Skovronsky: So you can expect that's what we did here, and for more detail. Thanks Dan, for more detail there and also the magnitude of the opportunity we see in Prostate. Yeah, I mean, as Dan said, we were incredibly pleased with this outcome and the recommendation by the DMC, and we set a very aggressive threshold on this adaptive. I think it just continues to be another example of how Bresenio differentiates from the competition.
That's what we did here and.
And for more detail, thanks, Dan and for more detail there and also the magnitude of the opportunity, we see and prostate.
Yes, I mean as Dan said, we were incredibly pleased with this outcome and the recommendation by the DMC and we set very aggressive threshold on this adaptive design and were impressive and it met that threshold and I think it just continues to be another example of how theres any O differentiate from the competition. So the phase III is open it's already enrolling patients.
Dan Skovronsky: So phase three is open, it's already enrolling patients, on the question of market size. Cyclone II is a metastatic, cataract-resistant prostate cancer trial that really targets patients who have not yet received a prior novel hormonal agent, so an earlier setting. So our initial research shows that the addressable market could be in the range of 25 to 50% of metastatic CRT. So it's depending really a bit on how the market evolves, are the NHAs in that earlier setting. So in the U.S., for example, based on that, we currently estimate between 7,000 and 14,000 patients would match that inclusion criteria for cyclone.
<unk>, we anticipate the results and the analysis in 2024 and the <unk>.
Question on market size, so and cyclone too is it's a metastatic castrate resistant prostate cancer trial and it.
Targets patients who have not yet received a prior novel hormonal agents. So in earlier settings. So our.
Research shows that the addressable market could be and the range of 25% to 50% of metastatic CRP C. So it's depending really a bit on how the market evolves with the use of any change and that earlier setting so and the U S. For example, based on that we currently estimate between 7 and 14000 patients would match that inclusion criteria.
4 cyclone too.
Anne E. White: And exciting in this space is that, along with being a high unmet need and a large patient population, there's also a long length of anticipated treatment duration. So this could be a treatment duration of up to two years or longer. So that's why we're particularly excited about this opportunity. There is no R.B.
And exciting and this space is that as long as being a high unmet need and a large patient population and there's also a long length of anticipated treatment duration. So this could be a treatment duration of up to 2 years or longer. So that's why we're particularly excited about this opportunity and so when it delivers there there is no arb.
Or other biomarker requirements and the study.
Anne E. White: or other biomarker. The last question was on NCDs, and why did I say that we think each drug should be evaluated on its own merits? Is that an allusion to pricing or something like that?
Thanks, and then on the entity last question was on and see them.
Why did I say that we think we each drug should be valued on its own merits as that of allusion or pricing or something like that no.
Dan Skovronsky: No, my primary focus here is on the patient and the outcomes that a drug could deliver, which even within the same class could be different. Our theory, and I just presented data today to support that theory, is that the amount of amyloid you remove and how quickly you do that are important for predicting outcomes. If that's the case, you can easily imagine different drugs, even in the same class, having different benefits for patients, and some of those benefits may be above a threshold for coverage, and others may not.
My primary focus here is on the patient and and the outcomes that a drug could deliver which even within the same class could be different or.
Our theory and presented data to support that theory is that the amount of amyloid you remove and how quickly you do that is important for predicting outcomes.
If that's the case you can easily imagine different drugs, even with the same class, having a different benefits for patients and some of those benefits may be above a threshold for coverage and and others may not that's conceivable.
Dan Skovronsky: That's conceivable. Not what I anticipate is the most likely scenario, but we want to be prepared for all scenarios here. Thanks, Dan. Seamus, thanks for your questions.
What I anticipate is the most likely scenario, but we want to be prepared for all scenarios here.
Thanks, Dan Seamus. Thanks for your questions next caller please.
Operator: Next caller, please. The next question is from Vimal Devan from Mizzou Whole Securities. Please go ahead.
The next question is from them all day ban from Mizuho Securities. Please go ahead.
Operator: Great, thanks for taking my question. And thanks for all the updates on the pipeline. So maybe a couple of separate topics from that have been covered more on the call.
Great. Thanks for taking my questions and thanks, Charlie update them like range, maybe a couple.
So a separate topic from kind of been covered well nichole, so far 1 Olympic easy math.
Ilya Yuffa: So for one, LibriCusumab, you know, I feel like that one maybe gets underappreciated a little bit. We've got phase three data coming up. Can you maybe just set the expectation than what you're hoping to see? I know you have a dosing advantage potentially with that product. But obviously, you know, DUPI is a pretty formidable competitor there.
And then maybe get something under appreciate and literally we got phase 3 data come in and can you maybe just set.
And expectations on what you are hoping and Sienna.
And dosing advantage potentially with that product and Odyssey.
He's a pretty formidable competitor there. So maybe you can just sort of.
Michael B. Mason: So maybe you can just sort of frame what you're hoping to see. And then Terzepatide, just one quick follow-up. I know you mentioned you started, as you said, the PEPF study for that product. Are you looking at that for HEP4F as well? I just don't remember you mentioning that. And if not, I'm just curious why you wouldn't. Thanks, Vamal.
And what you're hoping to see and then tours appetizers..1 quick follow up I know you mentioned you started and you said would be.
[laughter] study.
And that product and you're looking at that.
Well I just I don't remember you mentioned and I don't know.
And just curious why you wouldn't pursue that.
Thanks, Rommel, we'll go to Ilya for the question on <unk>, and then Mike for tours appetite.
Ilya Yuffa: We'll go to Ilya for the question on lebrokismab and then Mike for terzapatide. Thank you for the question on Levitizumab. You know, we'll, we're excited to. We're gonna have to wait a year to see the data related to our inductees for Brachiosumab across a number of trials. And so what we're hoping to see and expect to see are the positive signals we saw in phase 2, where we have strong... [inaudible] that the Libertism app will have a very competitive profile, and we see Lever Kismet.
Yeah.
Alright. Thank you for the question on lubricants and map.
Well, we're excited time.
From the second half of the year to see the data related to our induction.
Fees from them, because I mab across a number of trials and so and what we're hoping to see and expect to see is replicating some of the positive signals, we saw and phase 2 where we have strong efficacy and skin and we believe have a very good safety profile and so we anticipate that never CASM and will have and.
Very competitive profile versus depiction and a growing and a significant unmet need.
Ilya Yuffa: ... but our overall presence and strength in dermatology and our growing immunology. Thanks, Ilya. Mike? Okay, thanks for the question. Yes, we have only announced a HEF-PEF study for terzapatide, and that's currently all we're planning on announcing at this. I think, you know, we're very confident in the opportunity for triseptide.
And we see lubricants and not being a and important asset for us as we think about not only atopic dermatitis, but our overall presence and strength and dermatology and our growing immunology franchise.
Thanks, Mike.
Okay and thanks for the question yes.
We have only announced a half.
Study 4 true overtime and that's currently.
All of our planning on on announcing at this point I think we're we're very confident and the opportunity and for simple died and they have a path when you look at and patients.
Michael B. Mason: are a large segment that also are obese, and obesity is a distinct phenotype in our phase two studies that give us, I think, confidence. So right now, our phase two studies give us, Mike. Vamal, thanks for your questions. Next caller, please. The next caller is Steve Scala from Cohen.
And that half half path.
Barge segment and also our and B's.
And you know our obesity is a distinct phenotype.
And this patient population. So I think we feel good about our.
The results we've seen.
And.
Our phase III studies that give us confidence that we'll be successful and and health and so right now our efforts are focused on have been thanks.
Thanks, Mike Valmont. Thanks for your questions next caller. Please the next caller, Steve Scala from Cowen. Please go ahead.
Operator: Please go ahead. Thank you. Two questions.
2 questions first on the Q1 earnings call Lilly said in monarch E. There had been 76 events 39 on <unk> 37 on control can you provide and update.
Operator: First, on the Q1 earnings call, Lilly said in Monarch E, there had been 76 events, 39 on Obamacik Lab, and 37 on control. Can you provide an update, with numbers on a like for like basis? And then, secondly, on your oral CERD, did Lilly see potential for differentiation in the ASCO data? And if so, what differentiation did it see, particularly as competitor data and news flow evolves?
With numbers on a like for like basis, and then secondly on your oral third did Lilly see potential for differentiation and the <unk> data and if so what differentiation did it see particularly as competitor data and news flow evolves. Lilly has previously said it would not pursue a.
Anne E. White: Lilly has previously said it would not pursue a Me Too CERD, so I'm wondering what is different about yours. Thank you. Steve, we'll go to Anne for the first question on Verzenio and then to Jake for the question on oral CERD differentiation. Thanks Steve, and as Dan shared, we're going to be presenting data from this recent analysis at a medical meeting later this year, so we won't be able to share further details and, obviously, due to the embargo, but as you can tell, we are very pleased to see the data continue to strengthen with more than two years of follow-up.
Amit to serve so I'm wondering what is different about yours. Thank you.
Thanks, Steve we'll go to and for the first question on <unk> and then Jacob for the question on oral <unk> differentiation.
Well, thanks, Steve and as Dan shared we're gonna be presenting data from this recent analysis and a medical meeting later this year. So we won't be able to share further details and then obviously due to the embargo, but as you can tell we are very pleased to see the data continue to strengthen and this latest analysis with more than 2 years of follow up as we said it.
Anne E. White: As we said previously, the overall survival data remains immature. So at this point, what I can share is we have less than half of the events. So less than 50% of the events needed for the pre-specified OS analysis.
Previously the overall survival data remains immature so at this point, what I can share and so we have less and half of the events needed to lessen and 50% of events needed for the pre specified O. S analysis. So the data remains immature and.
Anne E. White: So the data remains immature. Again, we were really pleased, even with that immaturity, to see that the patients with the highest risk already had this favorable outcome. But thanks for the question and look forward to sharing more at a meeting. Thanks, Anne. Jake
And we were really pleased with the immature to see that the patients at highest risk already had this favorable trend and thanks for the question and look forward to sharing more at our meeting later on.
Thanks Anne Jake.
Jacob S. Van Naarden: Sure, happy to take a question on CERD. We're pleased with how the drug is performing clinically; it's doing everything that we expected it to do from a pharmacologic safety and efficacy perspective. I think the data package that we presented at ASCO and that which we continue to see in the trial subsequent to ASCO placed the drug in a vacuum on par with the best agents in development from our peers. But you know, this is not a class of medicine that stands on its own, period. This is really a development program, and as it relates to me tooism, what I would say is that we're not interested in pursuing a me too development program.
Sure happy to take your question on third.
We're pleased with how the drug is performing clinically it's doing everything that we expected it to do from a pharmacology safety and efficacy perspective, I think the data package that we presented at <unk> and that which we continue to see and in the trial and subsequent to <unk> placed the drug and a vacuum on par with the best agents and development from our peers.
But this is not a class of medicines that stands on its own period. This is really a development program and I think as it relates to me 2 of them. What I would say is that we're not interested in pursuing and in pursuing a mi 2 development program and we stand by that statement and frankly, our leadership position and breast.
Jacob S. Van Naarden: And I, you know, we stand by that statement. And frankly, you know, our leadership position in breast cancer, in particular with emerging Brasenio data, as we've been talking about today, I think puts us in a unique position as it relates to this class of medicines. That all having been said, I also think we are a bit more cautious about the long-term role of these drugs in this landscape, and we're looking forward to some randomized data for the first time from some of our competitors later this year that I think will shed some light on where these drugs ought to fit in the overall treatment paradigm.
Cancer, and particular with with emerging presenting those data as we've been talking about today I think put us in a unique position as it relates to this class of medicines that all having been said I also think we are.
We're a bit more cautious about the long term role of absurd.
And.
And in this landscape and we're looking forward to some randomized data from the first time from some of our competitors. Later this year that I think will shed some light on.
And where these drugs at a fit and the overall treatment paradigm.
Jacob S. Van Naarden: Thanks, Jake. Steve, thanks for your questions. Next caller, please. And that comes from Matthew Harrison from Mulligan Stanley. Please go ahead.
Thanks, Jake Steve Thanks for your questions next caller please.
And that comes from Matthew Harrison from Morgan Stanley. Please go ahead.
Operator: Great. Thanks for fitting me in.
Great. Thanks for fitting me and I got I guess 2 from me. So first just just a follow up.
Operator: I guess two for me. First, just to follow up with two parts on the Conrado model. One, do we know regulators' view of this model? And then, secondly, maybe if you could just explain what we're seeing in a little bit more detail? It looks like you're seeing about a 40% regression and slowing at 100% clearance. I assume this is over 18 months. Would you expect that to continue to compound? I'm just wondering why only a sort of 40% slowing when you've cleared all the plaque. And then, just a second follow-up on CERD. Any plans to look at that in combination with CDK 4-6 or other combinations? Thanks.
2 parts on the Colorado model 1.
Do you know regulators you view of this model and then secondly, maybe if you can just explain what we're seeing and a little bit more detail. It looks like youre seeing about a 40% regression and slung at 100% clearance I assume this is over 18 months would you expect that to continue to compound and I'm just wondering.
Why only sort of 40% swell and when you've cleared all of the plaque and.
And then just a second follow up on answering.
Any plans to look at that in combination with CDK 4.6 or other combinations. Thanks.
Thanks, Matthew will go to Dan for the question is on the Colorado model and then Jake Unserved.
Thanks, Matt for the question there and.
Dan Skovronsky: Thanks, Matthew. We'll go to Dan for the questions on the Conrado model and then Jake for CERD. Yeah, thanks, Matthew, for the question there. No, we don't have a regulator's view on the Conrado model, but we're encouraged that this model was built, as I said earlier, on data from the CAMD Consortium and has been around for a while and used for various applications.
We don't have a regulator's view on the Colorado model, but we're encouraged that this model was built.
As I said earlier by the candy by data from the <unk> consortium and <unk>.
As.
Been around for a while and used for various applications.
And what we're doing here, though to be clear is is checking a patient's progression against what we predict their progression would be so knowing all of their baseline factors.
How much would they.
Predicted to have progress had they not been on drug versus how much did they actually progressed and.
Dan Skovronsky: And so that's essentially what you're seeing in the graph. You're right, even with full plaque clearance, there's still some progression. There's only a 40% decrease.
So thats essentially what youre seeing and the graph.
Youre right, even with full clearance theres still some progression.
Theres only a 40% decrease now that's as big and in fact has anyone ever has talked about and Alzheimer's disease.
Dan Skovronsky: Now, that's as big of an effect as anyone ever has talked about in Alzheimer's disease, but surely, over time, we're going to need additional therapeutics for Alzheimer's beyond just clearing the plaque, at least in this stage of disease, and I think that's probably where tau therapeutics come into play. So that's how we think about it. I think earlier in the disease course, it could be quite different. Perhaps if you get it early enough, you could have 100% disease.
But surely over time, we're going to need additional therapeutics for Alzheimer's beyond just clearing the plaque and at least in this stage of disease, and and I think thats, probably where <unk> therapeutics come into play.
And so.
How do we think about I think earlier and disease of course, it could be quite different perhaps so if you get it early enough.
You can have a 100%.
Dan Skovronsky: I saw a progression and, in essence, no Alzheimer's, but that is yet to be proven. Next stand, going to Jake for the question on CERD. Yes, the question on SIRD, of course, we plan to explore combining our oral SIRD with CDK4-6, in particular Bemacycline. We're doing that right now in the context of an expansion cohort of the Phase 1-2 trial, the same trial for which we presented data at ASCO has expansion cohorts that contemplate rational combinations, including Bemacycline.
A slowing of progression and.
And in essence, no Alzheimer's, but that that is yet to be true.
Thanks, Dan going to Jay for the question on <unk>.
Yes, the question and I'm, sorry of course, we plan to.
It's more combining our oral surgery with CDK 4 and 6 in particular, but I'm a cycle and we're doing that right now and the context of an expansion cohort of the phase 1.2 trial the same trial from which we presented data at <unk> has expansion cohorts that contemplate rational combinations, including with the denim cycle.
Jacob S. Van Naarden: Thanks, Jake. Matthew, thanks for your questions. And we've exhausted the queue. We'll go to Dave for the close.
Thanks Jake.
Thanks for your questions and we've exhausted the keel go to Dave for the close thanks, Kevin and thanks to Dan for answering all those questions.
Dave Ricks: Thanks, Kevin. Thanks to Dan for answering all those questions. We appreciate your participation in today's call and your interest in the company. Of course, we continue to see growth with our broad commercial portfolio. And we have strong momentum across our core business, supported by a breadth of brands and accelerating classes and robust growth across the US, Europe, and China. In addition, as you heard today, we believe we have a compelling pipeline with industry-leading opportunities, and we remain focused on bringing new medicines to patients and creating value for all our stakeholders.
We appreciate your participation in today's call and your interest and the comparable of course, and we continue to see growth with our broad commercial portfolio and we have strong momentum across our core business and supported by our breadth of brands and accelerating classes and robust growth across U S Europe, and China and.
In addition, as you heard today, we believe we have a compelling pipeline with industry, leading opportunities and we remain focused on bringing new medicines to patients and creating value for all our stakeholders.
Operator: Thanks again for dialing in. Please follow up with the Investor Relations team if you have any questions we have not addressed today, and I hope you have a great day. Thank you, and ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Teleconferencing. You may now disconnect.
Thanks again for dialing in please follow up with Investor Relations team. If you have any questions. We have not addressed today and hope you have a great day.
Thank you and ladies and gentlemen that does conclude our conference for today. Thank you for your participation and for using AT&T teleconference and.
You may now disconnect.
Yeah.
Right.
Yeah.
The other room.
Yeah.
Yeah.