Q1 2023 Eli Lilly and Company Earnings Call

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I would now like to turn the conference over to your host Joe Fletcher.

Senior Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us for Eli Lilly <unk> Company's Q1, 2023 earnings call I Am Joe Fletcher Senior Vice President of Investor Relations and joining me on today's call are Dave Ricks, Lilly's, Chairman and CEO , not Ashkenazi Chief Financial Officer, Dr Dance, Gawronski, Chief scientific and medical Officer and White press.

Didn't have Lilly neuroscience area youth.

President of Lilly International Jake Van Norden CEO of lock so at Lilly, Mike Mason, President of Lilly diabetes, and Patrik Jonsson, President of Lilly Immunology and Lilly USA. We're also joined by Mike Spring. Another can do warehouse and Lauren <unk> 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 several factors, including those listed on slide three.

Additional information concerning factors that could cause actual results to differ materially is contained in our latest Form 10-K, and subsequent filings with the securities and Exchange Commission.

The information, we provide about our products and pipeline is for the benefit of the investment community. It's not intended to be promotional is not sufficient for prescribing decisions as we transition to our prepared remarks. Please note that our commentary will focus on non-GAAP financial measures now I will turn the call over to Dave.

Thanks, Joe.

We're off to a strong start in 2023 with volume driven revenue growth led by our <unk> portfolio <unk> and <unk>.

At our Q1 earnings last year.

We shared the exciting data from surmount won the first of our hepatitis obesity phase III trials today.

Today, we're excited to share the positive topline results for this surmount two phase III trial for <unk>, which examine the safety and efficacy. If there is upside in chronic weight management in type two diabetes population.

So about one set a new bar for weight loss possible from a pharmacologic agent in non type two diabetes population with obesity or overweight.

In a phase III trial.

And surmount two does the same in the type two diabetes population.

Before discussing our financial results and pipeline updates I'd like to also note the actions Lilly announced on March 1st to improve insulin affordability in the United States. We are proud to have led these efforts to make it easier for people to access Lilly insulin <unk>.

Including through the broad implementation of our $35 out of pocket cap and a significant reduction in list price for most of our most commonly used insulins.

That said, there remains substantial opportunity and need to reduce existing systemic barriers to insulin access and affordability brings.

Bringing affordable insulin to those who need it will require action and engagement by all stakeholders and our health system.

But together, we can create real change to improve access and affordability for people who use insulin.

Moving to our results you can see this on slide four that the progress we've made on our strategic deliverables. So.

So far this year.

Q1 revenue, which includes sales of COVID-19 antibodies.

Sorry excludes excluding sales from Covid, 19, and <unk> grew 10% or 12% on a constant currency basis, driven by volume growth of 18%.

Volume growth in Q1 was underpinned by <unk>, which is leading the new product category, which also includes <unk> <unk> and we expect will include additional products in the months and years to come.

The new product and growth product classifications represent an evolution from our prior designation of key growth products. We believe that these classifications will help investors see the performance of both our newest products. In addition to those with ongoing growth potential.

In the first quarter of this year, the new product category contributed $574 million of revenue and the new product and growth product categories combined to contribute 20 percentage points of volume growth in Q1.

These products as well as expecting expected upcoming product launches reinforce our belief in the strength of <unk> growth outlook throughout this decade.

Last Monday, we broke ground at the site of our two new manufacturing facilities in Boone County, Indiana.

We also announced a further $1 $6 billion investment in addition to the previously announced $2 $1 billion investment.

In this project to expand Louise manufacturing network for active ingredients and new therapeutic modalities.

And our progress continues as planned towards production. Starting later this year at our research Triangle Park site in North Carolina.

On the business development front. This past week, we entered into agreements to sell the rights of our olanzapine portfolio, including Zyprexa and the rights to <unk>.

These two transactions will enable us to further focus our time and effort on our next generation medicines.

And our pipeline.

<unk> had several important updates since our Q4 earnings call, including label expansion for <unk> in advanced breast cancer in the U S for <unk> approval in Japan, and a positive <unk> opinion in the EU.

As well as the Fda's issuance of a complete response letter in the United States.

<unk> submissions in the EU for <unk> for chronic weight management and in Japan for liver <unk> for atopic dermatitis.

And a positive phase III top line readout for some out too.

Second global study evaluating evaluating <unk> for adults living with obesity are overweight, which will enable completion of our rolling submission with the FDA under fast track designation.

Dan will discuss this further but we are excited with the topline results of the phase III surmount two trial as shared late last year, we received fast track designation from the FDA and initiated a rolling submission for <unk> in chronic weight management based on the results of this amount one trial.

And we align with the FDA that completion of the submission would come following surmount to readout.

We anticipate completing our submission to the FDA in the coming weeks.

We believe addressing obesity could make an enormous difference in millions of People's lives significantly impact public health and reduce health care costs.

We are encouraged by this important next step in the journey to redefine obesity care.

Finally, this quarter, we distributed 1 billion in dividends and completed $750 million in share repurchases.

On slide five Youll see a list of key events since our Q4 earnings call, including several important regulatory clinical and other updates we are discussing today.

Now I will turn the call over to <unk> to review our Q1 results.

Thanks, Dave Slide six summarizes <unk> financial performance in the first quarter of 2023, and I'll focus my comments on non-GAAP performance.

In Q1 revenue declined 11% versus Q1 2022.

When excluding revenue from COVID-19, antibody revenues increased 10% or 12% on a constant currency basis.

Highlighting solid momentum for our business. Despite a substantial headwind from Alyssa alimta loss of exclusivity in the United States, which did not yet face meaningful generic competition in the base period.

Gross margin as a percent of revenue increased 230 basis points to 78, 4% in Q1 2023.

The increase in gross margin percent was driven primarily by lower sales of COVID-19 antibody, partially offset by lower realized prices.

Total operating expenses increased 15% this quarter marketing selling and administrative expenses increased 12% driven by higher marketing and selling expenses associated with recent and upcoming product launches and indications.

R&D expenses increased 23% driven by higher development expenses for late stage asset.

This quarter, we recognized the acquired IP R&D charges of $105 million.

10 cents of EPS in.

In Q1, 2022 acquired IP, R&D and development milestone charges totaled $166 million or <unk> 15 of EPS.

Operating income decreased 38% in Q1, driven by lower revenue, primarily due to <unk> sales of COVID-19 antibodies this quarter paired with higher R&D and SG&A expenses.

Operating income as a percent of revenue was 23% for the quarter and reflected a negative impact of approximately 150 basis points attributable to acquired IP R&D charges.

Our Q1 effective tax rate was 12, 8%.

This represents an increase of 250 basis points compared to the same period in 2022, driven primarily by the tax impact of the new Puerto Rico tax regime.

At the bottom line, we delivered earnings per share of $1 62.

On slide seven we quantify the effect of price rate and volume and revenue growth.

This quarter U S revenue declined 14%.

As a reminder, COVID-19 antibody revenue in Q1 of 2022 totaled approximately $1 5 billion <unk>.

Compared to zero in Q1 of this year.

When excluding revenue from COVID-19 antibody U S rental revenue grew 19% driven by robust volume growth Portland genre, presenting <unk> city in Jordan.

We experienced a net price decline of 5% in the U S for the quarter, driven primarily by human Logins <unk>.

As we move into the second half of 2023, we expect U S pricing headwind versus prior year will ease considerably driven by inland zero access and saving cards dynamics.

Europe continued its steady growth trajectory with revenue in Q1 growing 8% in constant currency, driven primarily by volume growth for presenting a solicitor Giants and tall.

Volume in Europe increased 13% in Q1.

For Japan, Q1 revenue increased 7% in constant currency as the base period impact of generic competition to Cymbalta and Alimta wind and we continue to see strong robust growth in our newer medicines led by presenting <unk> and to a lesser extent Jordan.

Moving to China revenue declined 1% in constant currency with volume growth of 19% offset by net price decline.

Volume growth was driven by presenting <unk> and to a lesser extent increase in shipments of ILUVIEN.

Price declines were largely driven by human lung, which was added to the volume based procurement scheme in Q2 of last year.

Revenue in the rest of the world decreased 9% in constant currency driven by the sales of rights to see Allison, Taiwan, and cellular Arabia for $95 million in Q1 of 2022.

Partially offset by growth in Brasilia Montero and Jordan.

Slide eight shows the contribution to worldwide volume growth by product category.

As Dave mentioned earlier, we have evolved our prior product categories nation from key growth products, which include the 10 key products launched since 2014.

To now focus on two categories. The first called new products in the second cold growth product.

The new product categories led by Manzano and also includes <unk> <unk> and we expect it will expand to include new products in the coming months and years.

The growth product category is made up of select products that have been in the market for several years with continuing exclusivity.

As you can see the new and growth product categories contributed over 20 percentage point of volume growth for the quarter, which was largely offset by the previously mentioned decline in COVID-19 antibody revenue.

While the lack of revenue from COVID-19 antibody will be a headwind to growth throughout the year.

The most substantial impact was in Q1 as I mentioned earlier in Q1 2022, we realized approximately $1 billion of half of revenue from COVID-19 antibody.

Representing 75% of the $2 billion sold in the full year of 2022.

Slide nine provides additional perspective on the trends in specific highlights across our product categories.

I'll speak more about the months are shortly but first let me highlight the continued outstanding performance of Brasilia.

Which is a worldwide sales growth of 60% in Q1 is the long term monarchy follow up data share that the San Antonio breast cancer Symposium last December and the recently expanded label support continued uptake in adjuvant breast cancer.

<unk> is now the standard of care and is category, one and CCN listed for high risk adjuvant breast cancer.

<unk> also continued its outstanding performance with worldwide sales growth of 38% for the quarter.

In Q1, we were pleased to announce that based on the results of the phase III Dynamo trial. The FDA accepted the supplemental new drug application for Jordan for children, 10 year and older with type two diabetes.

And lastly, we continue to be encouraged by the strength of <unk> performance and a growing and dynamic in certain markets.

Worldwide sales of <unk> grew 14% in Q1 anchored by the product's robust efficacy and safety profile, coupled with our convenient and easy to use device.

Looking more holistically at solicit and Montara together U S revenue for these two products grew 59% in Q1, 2023% versus Q1 2022.

Moving to slide 10, let me share some commentary in context and launch of our performance for the quarter.

We're pleased with the positive momentum over the course of Q1 as it means more patients with type two diabetes are realized and the substantial benefits of treatment with <unk>.

Well the trajectory of prescription growth shifted volumes our actions in Q4 to reinforce the intended use of <unk> savings program by type two diabetes patients with.

Have continued to see a positive overall trend.

Our focus is on driving new to brand growth will continue to expand access.

In Q1, we initiate our first months are a direct to consumer television campaign, and we continue to steadily build access for <unk> for type two diabetes.

As of April 1st extra stood at just under 60% for patients with type two diabetes across commercial and part D.

We estimate that the percentage of paid scripts from onshore in Q1 with just over 55% upfront proximately, 40% in Q4 2022.

As a reminder, we define paid script as those prescription outside the $25 non Cobra coverage copay card, but inclusive of the 25 dollar covered copay card.

Looking forward to Q2 and the rest of the year. We expect continued improvement in access in the proportion of paid scripts and a new to brand prescription.

On slide 11, we provide an update on capital allocation in.

In Q1, 2023, we invested $2 7 billion.

In our future growth through a combination of R&D expenditures business development outlet and capital investments. In addition, we returned just over $1 billion to shareholders in dividends and repurchased $700 million in stock.

Slide 12 represents our updated 2023 financial guidance.

Starting with revenue we are increasing the revenue guidance range by 900 million to now being the range of $31 2 billion.

$131 7 billion.

Since announcing our 2023 financial guidance in December the U S. Dollar has weakened against most major currencies.

We have updated our full year revenue outlook based on recent spot rates.

This this FX update is driving approximately $650 million of the $900 million increase in our revenue guidance.

The remainder of the increase is attributable to underlying business performance.

Our guidance for gross margin as a percent of revenue remains unchanged.

In terms of operating expenses, we are increasing the range of marketing selling and administrative costs by $100 million to reflect our updated exchange rate assumptions.

This results in an updated range of $7 billion to $7 $2 billion.

We are also increasing the range for research and development expenses by $100 million driven.

Driven by updated exchange rate assumptions and investments in our late stage portfolio.

This results in an updated R&D range of $8 3 billion to $8 five.

We have incorporated IP R&D charges that have been incurred all realized as of the date of earnings which totaled $105 million.

Consistent with prior quarters, we have not included any IP R&D charges associated with potential or pending business development transactions.

Additionally, the recently announced agreements to sell the rights of our Linzess <unk> portfolio and a vaccine have not been included in guidance.

Each transactions will be factor into our financial guidance after it closes.

Other income and expense expenses and tax rate guidance remain unchanged.

Based on these changes we are raising our full year reported EPS guidance to now being the range of $8 18.

The $8 38 per share and raising our non-GAAP EPS guidance to be in the range of $8 65.

<unk> to $8 85.

Now I will turn the call over to Dan to highlight our progress in R&D.

Got.

Let me start with today's exciting announcement the positive results for <unk> appetite in the surmount two phase III studies.

So as appetite met the co primary study endpoints and also hit an all pre specified secondary endpoints.

Participants with obesity or overweight and with type two diabetes achieved up to 16% weight loss at 72 weeks, which translates to a mean weight loss of 34 pounds Adil.

Additionally, 86% of people, taking 15 milligram <unk> achieved at least 5% body weight reduction.

This was in line with our expectations based on our surpassed three data in a similar population.

With this surmount two data we now have two positive phase III trials for <unk> appetite and obesity, one in patients without type two diabetes and one in patients with type two diabetes. We now look forward to completing our rolling submission to the FDA in the coming weeks.

I'll cover this amount to results in more detail, but first let me spend a few minutes, providing an overview of the surmount phase III program.

This amount program has enrolled more than 5000 people with obesity are overweight to cross eight studies.

On Slide 13, you can see key trial design elements for the core surmount one through four studies as well as the more recently announced surmount MMO instruments five studies.

Five of the six studies compare efficacy and safety of <unk> appetite to placebo as an adjunct to reduced calorie diet and increased physical activity. While the most recently posted trials surmount five compares tours appetite to two four milligrams semi <unk>.

As a reminder, surmount one was designed to evaluate treatment with tours appetite compared to placebo for people without type two diabetes with obesity or overweight with at least one comorbidity and it delivered up to 22, 5% mean body weight reduction.

Surmount, two which we're reporting today.

The rate of treatment with <unk> appetite compared to placebo for people with obesity are overweight and type two diabetes.

Surmount three will provide data on maximizing weight loss following an intensive lifestyle program.

And surmount for evaluates maintaining weight loss.

Surmount five is an open label trial that will enroll 700, adults, who have obesity or overweight with weight related comorbidities without type two diabetes.

And we will compare the efficacy and safety of <unk> appetite to Semgroup tied to four milligrams.

Finally, surmount MMO is our phase III morbidity and mortality in obesity study to evaluate improved outcomes for patients with obesity.

We expect the next two studies surmount three and surmount four to readout later this year, perhaps around.

Five is anticipated to complete in the first half of 2025.

Surmount MMO has an outcome study will take several more years to complete.

On Slide 14, you can see the first co primary endpoint in this trial to study where tours appetite 15 milligram delivered 15, 7% mean body weight reduction in adults with type two diabetes with obesity are overweight.

With a baseline weight across the study of 222 pounds to its appetite treatment led to a mean body weight reduction of 34 pounds on the 15 milligram arm of the study.

We're also very pleased to see how the 10 milligram tours appetite performed with a 13, 4% mean body weight reduction also at 72 weeks for the efficacy estimate.

Results for the treatment regimen estimate were similar to the efficacy estimate and are detailed in this morning's surmount two press release.

Moving to slide 15, <unk> achieved the second co primary endpoint of achieving at least 5% body weight reduction.

Mt. Two showed up to 86, 4% of patients achieved this level of weight reduction at 72 weeks again, using the efficacy estimate this as compared to 36% of patients on placebo as an adjunct to diet and exercise.

Furthermore, over half of all participants in the 15 milligram treatment arm achieved at least 15% weight loss.

It has been previously observed in Christian obesity trials that weight loss and a type two diabetes population is less than weight loss seen in a non type two diabetes population.

Finding consistent with the results we have now reported from the surmount, one and surmount two trials.

The average weight reductions reported in this throughout two trial in patients with type two diabetes ranged from 7% to 8% less than those seen in surmount, one which was an exclusively non type two diabetes population.

There are a number of potential mechanisms that may explain this effect, including the weight gain promoting effects of some classes of anti hypoglycaemic medications used in the treatment of type two diabetes.

Improving insulin sensitivity with tours appetite treatment.

Tenda differences between two populations.

And just diminished caloric loss effects with glucose area.

These differences manifested as we expected and this amount to topline results represent the most robust weight loss seen in phase III pharmacological clinical trial, consisting entirely of type two diabetes patients with obesity and overweight.

Our highly pleased with these results.

Moving to slide 16, you can see the safety profile from our surmount two study tours appetite was well tolerated in the study participants with the overall safety and Tolerability profile similar to <unk> based therapies approved for treatment of obesity.

As instrument, one and the surpass program. The most commonly reported adverse events were Gi related were generally mild to moderate in severity and usually occurred through dose escalation.

Treatment discontinuation rates due to adverse events were three 8% and seven 4% for the 10 and 15 milligram <unk> appetite treatment arms, respectively compared to three 8% for placebo.

The overall treatment discontinuation rates were nine 3% and 13, 8% in the 10 and 15 milligram <unk> appetite.

Treatment arms compared to 14, 9% for placebo.

We look forward to sharing more data from surmount two at the American Diabetes Association meeting in June and to submitting the results for publication in a peer reviewed journal.

Obesity is a widespread in chronic disease in need of more effective treatment options the.

The FDA fast track designation that there's appetite received for obesity reflects the seriousness of the condition and the substantial unmet medical need.

With impressive trial results now in hand for some out to surmount. One studies, we look forward to completing our rolling submission to the FDA for <unk> appetite for the treatment of adults with obesity, we're overweight with weight related comorbidities in the coming weeks.

With respect to regulatory action in Europe , as Dave mentioned, we have already completed our submission to the EMA for chronic weight management indication.

The EMA submission was initiated based on the results from the surpass trial program in type two diabetes and this amount one phase III trial in obesity, we expect to have a European Commission decision in the first half of 2024.

In addition to all the work on <unk> appetite for obesity. We also disclosed earlier this month on clinical trials Dot Gov. The initiation of a bio equivalent study to compare the pharmacokinetics of <unk> appetite administered using the existing auto injector device and a new test device, we expect to work on <unk> appetite and other injectable and curtains for a long time.

And we intend to explore different presentations for these medicines to meet our goal of bringing the benefits to as many patients as possible as quickly as possible.

Moving on from <unk> appetite to the rest of the portfolio Slide 17 shows select pipeline opportunities as of April 24th and Slide 18 shows potential key events for the year.

There have been several important developments since our last earnings call and I'll cover these by therapeutic area.

Continuing within diabetes and metabolic disease earlier earlier. This month, we began recruiting for the first phase III clinical trial for or forklift Brock our oral G. L. P. One non peptide agonist. This achieve four trial is an open label study of all FERC clip, Ron compared with insulin <unk> in adults with.

Type two diabetes and obesity or overweight at increased risk for cardiovascular events.

This is the first in what will be a broader series of studies for our for a clipboard.

As the largest and longest trial in the program, which is why we chose to initiate this trial first.

Enrollment is now underway and we expect patient dosing to occur shortly after which offer a clip problem. When we placed with our phase III assets on the summary slide.

Youll also see we have advanced our relaxin long acting molecule to phase two development for treatment of heart failure.

Shifting to immunology it was a quarter of mixed progress for America's map, our IL 23 P. 19 inhibitor. We were pleased with the approval in late March in Japan Premier Tis map under the brand name one vial for adults with moderately to severely active ulcerative colitis.

A few days later, we are similarly pleased with the positive <unk> opinion from the EMA.

However, regarding <unk> regulatory path in the United States, We announced earlier this month that we received a complete response letter from the FDA.

The letter did not cite any concerns regarding the safety or efficacy profile of mirror kissam, app, but focused exclusively on certain aspects related to the proposed commercial manufacturing of <unk>.

We remain confident in <unk> phase III data and its potential to help people with ulcerative colitis.

We look forward to working with the FDA to address the manufacturing questions in order to achieve our goal of bringing <unk> to patients in the U S.

Also in our late phase immunology portfolio we.

We completed the regulatory submission in Japan for <unk> for patients with atopic dermatitis.

Moving earlier in our immunology pipeline during last month's American Academy of Dermatology meeting, we shared data from the single dose phase II trial for <unk> part, our CX <unk> two antibody in patients with hydro Adenitis support Achieva.

The data showed good tolerability and clear separation between <unk> and placebo, along with a reduction in abscess and nodules, reflecting reduced disease activity.

Lastly, in immunology, we've removed risk peg aldis lucan from our pipeline.

In February following the top line data announcement from the Phase II study in systemic lupus erythematosus, we informed our partner Nektar therapeutics that we do not intend to advance the asset into phase III development.

Moving on to neuroscience.

Last month, we announced that our last active solan is a map trial the anti amyloid in asymptomatic Alzheimer's disease study or a four study did not meet its primary or secondary endpoints.

The <unk> study was conducted through an innovative public private partnership and we were thankful for the time and effort of the clinical study staff participants and study partners. This.

This study formally formally concludes our clinical development of Solana is a map.

The 84 results, while disappointing were not a surprise given the advancements in our understanding of Alzheimer's disease. Since the study initiated almost 10 years ago. So in asthma have only targets soluble amyloid beta and does not clear plaque to net <unk> and <unk> on the other hand have been specifically designed to bind to and clear amyloid.

Plaque and we now understand that substantial plaque clearances required in order for anti amyloid drugs to show clinical efficacy.

Accordingly, we were pleased to share new data for <unk> in Rome, Terna tug during the international conference on Alzheimer's and Parkinson's disease in late March.

For dynamic map, we shared data from our Trailblazer <unk> T. The phase III long term follow on study of Trailblazer ALS.

While study limitations include a relatively small number of patients the data showed encouraging trends in the longer term effects on amyloid and tau levels and clinical progression.

We also disclosed the trial design and objective for Trailblazer al six the phase III <unk> study to expand the science and understanding of ARIA in relationship to amyloid lowering through imaging and blood based biomarkers and different dosing paradigms.

The study will leverage enhanced MRI sequences as well as blood based biomarkers and other patient characteristics that may predict ARIA and will investigate the effect of different dosing regiments on the frequency and severity of ARIA.

Of course, we expect the next key milestone for genetic map will be later this quarter. When we obtain the results for our confirmatory phase III Trailblazer ALS II trial, we look forward to sharing these results and to advancing the regulatory process for genetic mab assuming positive data from this trial.

This quarter. We also shared the first clinical data from <unk> from a phase one multiple ascending dose study, which highlighted the potential speed and depth of amyloid plaque lowering in patients with Alzheimer's disease.

These data on amyloid clearance safety and Tolerability supported our decision to move this asset into phase III and we look forward to sharing further updates as the program progresses.

Youll also notice we have a number of developments in our early stage neuroscience portfolio with a phase II entry for our GBA, one gene therapy asset and negotiated disease type one indication along with two phase one pain asset entry and one phase II paint asset discontinuation.

Shifting now to oncology just yesterday JP <unk> received a positive opinion from the <unk> for the treatment of relapsed or refractory mantle cell lymphoma.

In early March the FDA approved an expanded indication for <unk> for the adjuvant treatment of adult patients with HR positive. Her two negative note positive early breast cancer at high risk of recurrence high.

High risk patients can now be more easily identified where the removal of the cash 67 score requirement for patient selection.

Moving earlier in our oncology pipeline, we presented data from our phase one study of our <unk> inhibitor as part of the ACR meeting last week.

These data show promising efficacy and the potential for a differentiated safety profile in combination with <unk>.

Working on finalizing dose selection for our drug in combination with parallelism happen.

At ACR, we also shared data from cyclone one the single arm Unblinded study, which was the first to investigate <unk> in prostate cancer. This early study inform the design of our cyclone to adaptive phase three trial, which last year cleared our preset threshold to advance to phase III and for which we expect to re.

Early stage neuroscience portfolio with a phase II entry for our GBA, one gene therapy asset and negotiate disease type one indication along with two phase one pain asset entries and one phase III paint asset discontinuation.

Shifting now to oncology just yesterday J <unk> received a positive opinion from the <unk> for the treatment of relapsed or refractory mantle cell lymphoma.

It out as soon as late this year.

Q1 was another busy and productive quarter for pipeline advancement at Lilly now I'll turn the call back to Dave for closing remarks.

In early March the FDA approved an expanded indication for <unk> for the adjuvant treatment of adult patients with HR positive. Her two negative note positive early breast cancer at high risk of recurrence.

Thank you Dan before we go to Q&A, let me briefly sum up our progress to start the year.

Our core business, which excludes COVID-19 antibody revenue grew 10%.

Driven by non gyro, Zinio Felicity and Guardians.

High risk patients can now be more easily identified where the removal of the cash 67 score requirement for patient selection.

This growth was achieved despite headwinds related to pricing.

Moving earlier in our oncology pipeline, we presented data from our phase one study of our <unk> inhibitor as part of the ACR meeting last week.

To generic erosion of Alimta in the U S and have moderated, but still negative foreign exchange impacts.

In the coming quarters, we expect the impact of COVID-19 antibody revenue in the prior periods will as well.

These data showed promising efficacy and the potential for a differentiated safety profile in combination with <unk> with.

Our new product and growth product categories of medicines will drive continued revenue growth and meaningful operating margin expansion.

At ACR, we also shared data from cyclone one the single arm Unblinded study, which was the first to investigate <unk> in prostate cancer. This early study inform the design of our cyclone two adaptive phase three trial, which last year cleared our preset threshold to advance to phase III and for which we expect to read.

While the quarter was not without some challenges, which I am confident will overcome we made meaningful advances in our pipeline, including the approval of an expanded label of <unk>. The first approval of <unk> in Japan submission of <unk> appetite for obesity in the EU and positive results from our second phase III trial for <unk>.

As soon as late this year.

In obesity.

Q1 was another busy and productive quarter for pipeline advancement at Lilly.

We also demonstrated leadership to improve insulin access and affordability for millions of Americans.

Now I will turn the call back to Dave for closing remarks.

Thank you Dan before we go to Q&A, let me briefly sum up our progress to start the year.

Lastly, we returned approximately $1 $8 billion to shareholders via the dividend and share repurchase.

Our core business, which excludes COVID-19 antibody revenue grew 10%.

We remain committed to both executing on the significant opportunities before us and to continuing the important and often difficult work to discover develop and bring to market innovative medicines to address some of the greatest areas of unmet medical need.

Driven by Zoro, <unk> Felicity and Guardians.

To generic erosion of Alimta in the U S and have moderated, but still negative foreign exchange impacts.

Now I'll turn the call over to Joe to moderate the Q&A session.

In the coming quarters, we expect the impact of COVID-19 antibody revenue in the prior periods will as well.

Thanks, Dave we'd like to take questions from as many callers as possible and conclude the call in a timely manner. So we ask that you limit to one question per caller as we're going to end the call at 11 15, a M. Paul Please provide the instructions for the Q&A session and we are ready for the first caller.

While our new products and growth product categories of medicines will drive continued revenue growth and meaningful operating margin expansion.

Certainly at this time, we will be conducting a question and answer session.

Have any questions. Please press star one on your phone at this time.

We ask that while posing your question. Please pickup your handset listening on speaker phone to provide optimum sound quality.

Please hold while we poll for questions.

<unk> in obesity.

Okay.

On the first question today is coming from Seamus Fernandez from Guggenheim Shame.

Seamus Your line is live.

Great. Thanks, so much.

So.

Question is for Dan.

<unk>.

We remain committed to both executing on the significant opportunities before us and to continuing the important and often difficult work to discover develop and bring to market innovative medicines to address some of the greatest areas of unmet medical need.

Dan can you just give us your thoughts on I guess, what many investors are sort of viewing the potential goldilocks scenario.

That would be necessary to really successfully compete with the <unk>.

I am sure you have your own thoughts on that.

Now I'll turn the call over to Joe to moderate the Q&A session.

That are quite detailed so just wondering.

Thanks, Dave we'd like to take questions from as many callers as possible and conclude the call in a timely manner. So we ask that you limit to one question per caller as we're going to end the call at 11 15, a M. Paul Please provide the instructions for the Q&A session and we are ready for the first caller.

How you believe the sort of commercial opportunity.

But really the clinical opportunity.

Is likely to.

Play out once we see the data assuming the study is positive. Thanks, so much.

Yep, Thanks, Jamie So I'll start.

Certainly at this time, we will be conducting a question and answer session.

On the data expectations and how it might fit in in maybe annualize some things on commercial opportunity. So.

Have any questions. Please press star one on your phone at this time.

I think we had a very compelling data in phase II, 32% slowing of disease progression.

We ask that while posing your question. Please pickup your handset of listening on speaker phone to provide optimum sound quality.

If in phase III, we can replicate those kinds of results this will be a very important and meaningful drug.

Please hold while we poll for questions.

Okay.

The first question today is coming from Seamus Fernandez from Guggenheim Seamus.

I know, it's interesting for investors to sort of speculate on competition between two different pharma companies. So its not exactly how I think about it I think theres a huge opportunity here for patients.

<unk> Your line is live.

Great. Thanks, so much.

So.

Question is for Dan.

<unk>.

Dan can you just give us your thoughts on I guess, what many investors are sort of viewing as the potential goldilocks scenario.

<unk> is not really about competition, it's about how do we help the medical system better identify patients diagnosed.

That would be necessary to really successfully compete with the <unk>.

And move them into treatment regimens of course, requiring reimbursement.

I'm sure you have your own thoughts on that.

I think the two drugs. However have some important differences Dana mab targets, specifically amyloid plaques, we think thats the relevant species to hit in Alzheimer's disease, I think we're pretty confident about that in the past probably the salon is a map data, which targeted just saw soluble a beta.

That are quite detailed so just wondering.

How you believe the sort of commercial opportunity.

But really the clinical opportunity.

Is likely to.

Play out once we see the data assuming the study is positive. Thanks, so much.

It's even more confidence to that statement.

Yeah. Thanks, David So I'll start sort of on the data expectations and how it might fit in in maybe annualize some things on commercial opportunity. So.

As a result of hitting just amyloid plaques that allows us to have fixed duration dosing regimens as an option for patients, let's see how the data turn out but I expect that many patients will be able to stop dosing even as soon as 12 months, that's a big difference than being prescribed a drug that you might have to take the rest of your life.

I think we had a very compelling data in phase II to 32% slowing of disease progression.

If in phase III, we can replicate those kinds of results this will be a very important and meaningful drug.

And I think that could be exciting and important for patients. So lots of ways for <unk> to win I think the most important thing though is is showing consistent strong efficacy like we did in phase II.

I know, it's interesting for investors to sort of speculate on competition between two different pharma companies. So its not exactly how I think about it I think theres a huge opportunity here for patients.

<unk> is not really about competition, it's about how do we help the medical system better identify patients diagnosed.

And then getting this drug approved and bring it to patients and what are your thanks, and yes, we do remain confident in the mid and long term opportunity for dynamic and I think it's important to remember it will take time to build this market and so as Dan said, we're investing in these efforts now building awareness of diagnostics.

And move them into treatment regimens of course, requiring reimbursement.

I think the two drugs. However have some important differences to net a mab targets, specifically amyloid plaques, we think thats the relevant species to hit in Alzheimer's disease, I think we're pretty confident about that in the past probably this one is a map data, which targeted just sold soluble a beta.

The awareness of treatments are coming making sure that the health care systems are ready for these medicines and that the care pathway is setup and then most importantly, as you said that patients have access and reimbursement and just echo. His comments I don't think we really think of this as a cost of drugs, we need to fight over market share. It is an opportunity to build a new class on behalf of people.

Adds even more confidence to that statement.

Disease, driving awareness driving diagnosis and then getting access so that's important to us in the near term.

As a result of hitting just amyloid plaques that allows us to have fixed duration dosing regimens as an option for patients, let's see how the data turn out but I expect that many patients will be able to stop dosing even as soon as 12 months, that's a big difference than being prescribed a drug that you might have to take the rest of your life.

Thanks, Paul next question.

Thank you. The next question is coming from Terence Flynn from Morgan Stanley . Your line is live.

Great. Thanks, so much for taking the question maybe two part for me just I know youre not going to give us a decision on whether youre going to split the turns appetite brand into here, but maybe you could just talk through some of the key considerations as you think about kind of.

And I think that could be exciting and important for patients.

So lots of ways for <unk> to win I think the most important thing though is is showing consistent strong efficacy like we did in phase II.

Access side pricing IRA although all of those things as you think about the puts and takes.

And then getting this drug approved and bring it to patients and what do you add thanks, Dan Yes, we do remain confident in the mid and long term opportunity for dynamic and I think it's important to remember it will take time to build this market and so as Dan said, we're investing in these efforts now building awareness of diagnostics.

And then on North Carolina manufacturing, just any update on timelines as to when we can expect that to come on board. Thank you.

Thanks, Terence I will go to Mike for those questions.

The awareness of treatments are coming making sure that the health care systems are ready for these medicines and that the care pathway is setup and then most importantly, as he said that patients have access and reimbursement and just echo Matts comments I don't think we really think of this as a class of drugs, where you need to fight over market share, it's an opportunity to build a new class on behalf of people.

On branding strategy considerations, and then any update on RTP.

Alright, Thanks, Terence for the question.

On the branding question, obviously, we're not going to provide any clarity on that I think if you look at the kind of pros and cons on one versus two brands. The pros are.

It is a more efficient.

Disease, driving awareness driving diagnosis and then getting access so that's important to us in the near term.

Our supply chain and manufacturing.

For one brand for two brands or some.

Access benefits.

Thanks, Paul next question.

So you have a kind of empty vessel for the <unk>.

Thank you. The next question is coming from Terence Flynn from Morgan Stanley <unk>. Your line is live.

Commercial promotion of.

Of.

Great. Thanks, so much for taking the question maybe two part for me just I know youre not going to give us a decision on whether youre going to split the turns appetite brand into here, but maybe you could just talk through some of the key considerations as you think about kind of.

RBC indication.

For what.

With the two brand scenario, so thats kind of the puts and takes on that part on the supply.

I think.

I'll answer the overall supply question I'm sure there may be other questions on there.

Access side pricing IRA although all those things I, just think about the puts and takes.

We talked about last year last year that our focus was to <unk>.

Double capacity by the end of this year and where are we are progressing towards that goal. Our manufacturing team is working hard every day and indirectly delivering over our manufacturing plan this year.

And then on North Carolina manufacturing, just any update on timelines as to when we can expect that to come on board. Thank you.

Thanks, Terence I will go to Mike for those questions.

We believe that our channel inventory for Q2 will be a bit better per monitor all of them. What we saw on and obviously as you bring up the important milestone is a spring in our first port in your line of ramp up fully online.

On branding strategy considerations, and then any update on RTP.

Alright, Thanks, Terence for the question.

On the branding question, obviously, we're not going to provide any clarity on that I think if you look at the kind of pros and cons on one versus two brands. The pros are.

This year the manufacturing team is progressing toward that goal.

It is a more efficient.

And then long term.

We're investing more.

Supply chain and manufacturing.

Where we need to in order to create.

For one brand for two brands that are some.

Well.

Yes again.

Access benefits also you have a kind of empty vessel for the.

Supply across our entire <unk> portfolio to meet what we think is going to just be a tremendous demand globally for the product and for all of our endocrine portfolio.

Commercial promotion of.

Of.

RBC indication for.

Thanks, Mike Paul next question.

With the two brand scenarios. So that's kind of the puts and takes on that part on the supply I.

The next question is coming from Chris Schott from J P. Morgan, Chris Your line of life.

I think.

I'll answer the overall supply question, because I'm sure there may be other questions on there.

Thanks, So much just a two parter as well.

Just maybe talk about bigger picture, what you've been seeing in the <unk> market. It seems like we first had this nice very strong ramp up <unk> and then we saw a further step up in category growth with novo's capacity issues being resolved. So I guess when youre seeing kind of the underlying demand thats out there is that changing at all how you think about either investing in the <unk>.

We talked about last year last year that our focus was to <unk>.

Double capacity by the end of this year.

And where are we are progressing towards that goal. Our manufacturing team is working hard every day and indirectly delivering over our manufacturing plan this year.

We believe that our channel inventory for Q2 will be a bit better per monitor all than what we saw.

Base or just your go to market strategy for both <unk> and then <unk> appetite obesity. When that's approved I'm trying to get a sense of just how are you.

<unk>.

And obviously as you bring up the important milestone is us, bringing our first port in your line of ramp up fully online.

I think we're all surprised by the volume trends and just how you are kind of adapting within Lilly to kind of think about that beyond just the capacity side more of the investment side.

This year the manufacturing team is progressing toward that goal and then long term.

And then the second question from me on <unk>. Just can you just a quick update of where we stand right now in terms of use in diabetics versus non diabetics given the change in the bridge program. Thank you.

We're investing where were.

Where we need to in order to create.

If again.

Supply across our entire <unk> portfolio to meet what we think is going to just be a tremendous demand globally for the product and for all of our endocrine portfolio.

Thanks, Chris for the two part of there Mike We'll go to you for the first first part around bigger picture in the <unk> market and category growth and how we're thinking about that and then the second around Houston.

Thanks, Mike Paul next question.

Patients with diabetes versus non.

The next question is coming from Chris Schott from Jpmorgan, Chris Your line of life Oh, great. Thanks, So much just a two parter as well can you just maybe talk about bigger picture, what you've been seeing in the <unk> market. It seems like <unk> had this nice very strong ramp up of <unk> and then we saw a further step up.

Okay I'll answer the second question first.

With our savings card changes as well as our continued focus of our promotion on only for people with type two diabetes.

Someone to for a new patient to come on to Manganaro.

To have a low out of pocket costs, they have to have formulary access.

And category growth with novo's capacity issues being resolved so I guess when youre seeing kind of the underlying demand thats out there is that changing at all how you think about either investing in the space or just your go to market strategy for both <unk> and then <unk> appetite obesity. When that's approved I'm trying to get a sense of just how are you.

We are only contracting for diabetes access form on <unk>. So at this point our assumption is that.

The vast majority of new people.

Who are new to Mondro have type two diabetes.

I think we're all surprised by the volume trends and just how you are kind of adapting within Lilly to kind of think about that beyond just the capacity side more of the investment side.

On the on the inkjet market yes.

It's really growing both across type two diabetes is really surge as well as on the PC front.

And then the second question from me on Mudra is just could you just a quick update of where we stand right now in terms of use in diabetics versus non diabetics given the change in the bridge program. Thank you.

We planned.

Aggressively promote.

And offer this product in both.

In both disease classes and invest appropriately to.

Thanks, Chris for the two parter there Mike will go to you for the first first part around bigger picture in the <unk> market and category growth and how we're thinking about that and then the second around Houston.

Two the opportunity we're not surprised by the market growth in type two diabetes. We think there is a big opportunity to to.

Really help people who have type two diabetes early in the course of treatment to improve our long term health outcomes and then since around two data.

Patients with diabetes versus non.

Okay I'll answer the second question first.

With our savings card changes as well as our continued focus of our promotion on on only for people with type two diabetes.

Demonstrated there's just a tremendous unmet need in the <unk>.

In the obesity market and we're not surprised by the <unk>.

For someone to new patient to come on to Manganaro.

Take after the resupply and re launch and I really think it.

To have a low out of pocket costs, they have to have formulary access.

<unk>. This is a tremendous opportunity that we have to really help patients that meet the needs of the marketplace. So really no changes for us we felt that both markets would have good growth opportunities we're prepared to be successful.

We are only contracting for diabetes access for months. So at this point our assumption is that the.

The vast majority of new people.

Who are new to Montara have type two diabetes.

And both grow the market and grow our share.

On the on the Ingram to market yes.

And type two diabetes and established yourself in the product with management market.

It's really growing both across type two diabetes is really surge as well as on the PC front.

Thanks, Mike Paul next question.

The next question is coming from Colin Bristow from UBS Colin Your line is live.

We plan to aggressively promote.

And offer this product in both.

Thank you good morning, and congrats on the quarter and the two data.

In both disease classes and invest appropriately to.

No.

Two the opportunity we're not surprised by the market growth in type two diabetes, and we think theres, a big opportunity to to really help people who have type two diabetes early in the course of treatment to improve their long term health outcomes and then as this around to data.

Tom you guys can add color.

Comforting to see Hudson the step up from <unk> I was wondering can you help us think about the sort of continued cadence of improvement of the balance of the year and then more importantly, how should we think about gross to net post the tiguan obesity is it reasonable to expect another kind of step down temporarily or would that not be.

Demonstrated there's just a tremendous unmet need in the <unk>.

Okay, and then just on the inventory.

In the obesity market and we're not surprised by with Dolby.

Can you just walk us through the anticipated timelines here and the potential use of the priority review voucher. Thank you.

After the resupply and re launch and I really think it really points to this as a tremendous opportunity that we have to really help patients that meet the needs of the marketplace. So really no changes for us we felt that both markets would have good growth opportunities we're prepared to be successful.

Okay.

Nick.

Go ahead.

Cover these points kind of general gross to net thoughts and trends and then Collyns question about potential use of a priority review voucher.

Okay I appreciate that on the gross to net.

Both the.

The market and grow our share.

Progression form on <unk> I think it's best to look at our <unk>, which we define as those patients is not supported by our $25 non covered savings program that was our original program at launch.

Diabetes, and then establish ourself in the chronic management market.

Thanks, Mike Paul next question.

The next question is coming from Colin Bristow from UBS.

You see from the slides that are not presented early on that we have seen just really good growth of the paid <unk> over time, if you take a look at the growth from Q1 versus Q4. It was a 55% growth in <unk>. If you look at the point in time of the week.

Your line is live.

Thank you good morning, and congrats on the quarter.

<unk> data.

So on inventory.

And then Tom can add.

We continue to see the step up from <unk> I was wondering can you help us think about the sort of continued cadence of improvement of the balance of the year and then more importantly, how should we think about gross to net post the tiguan obesity is it reasonable to expect another kind of step down temporarily or would that not be the.

Before we started the savings card changes to last week, we've increased pay T. Rx growth by almost two five times. So we're very happy with that that's the trend we need to see to improve gross to net now at the same time, we look at kind of what we define as unpaid scripts, which is those that are supported by.

And then just on the inventory can you just walk us through the anticipated timelines here and the potential use of a priority review voucher. Thank you.

The original 25 dollar non covered change programs those are decreasing so really that's the two trends you need to see to lead to improved gross to net of paid scripts.

Okay.

Mike.

Go ahead.

Cover these points kind of general gross to net thoughts and trends and then Collyns question about potential use of a priority review voucher.

Okay I appreciate that.

Greasing and unpaid scripts decreasing also we expect we expect those trends to continue.

The gross to net.

Progression form on Zoro, I think it's best to look at our <unk>, which we define as those patients is not supported by our $25 non coverage savings program that was our original program at launch.

We also have a milestone coming up at the end of June when the original $25 Don covered savings card are set to expire with.

You see from the slide that are not presented early on that we have seen just really good growth of the paid <unk> overtime. If you take a look at the growth from Q1 versus Q4. It was a 55% growth in <unk>. If you look at the point in time.

With chronic weight management approval, we'll talk about that.

And pricing in that at the appropriate time after approval with regards to our submission chronic weight management.

Our plan as Dave said the team is taking this data right now and working feverishly to two.

Week before we started the savings card changes to last week, we've increased pay T. Rx growth by almost two five times. So we're very happy with that that's the trend we need to see to improve gross to net now at the same time, we look at kind of what we defined as unpaid scripts, which is those that are supported.

To submit that in the coming weeks, we do have fast ash designation from the FDA took I expect that to expedite it we have a rolling submission we are submitted the <unk> one data and.

We are excited.

Also talk about that while we think the FDA will react quickly with the fast track destination, we wanted to remove any uncertainty and so we will be using <unk>.

The original 25 dollar non covered change programs those are decreasing so so really that's the two trends you need to see to lead to improved gross to net of paid scripts, increasing and unpaid scripts decreasing.

And I expect that we will get approval as early as the end of this year.

Thanks, Mike.

Question.

We expect we expect those trends to continue.

The next question is coming from Evan <unk> from BMO capital markets. Your line is live.

We also have a milestone coming up at the end of June when the original 25 dollar non covered savings card are set to expire with.

Hi, all thank you for taking my questions first off congrats on the great data today are very exciting for patients. So just taking a step back I'd love to get some color as to how we plan for the balance of the commercial potential of <unk> in both diabetes and obesity with estimate that really could the top selling pharmaceutical products now without overstretching the U S health care.

With chronic weight management approval, we'll talk about that.

And pricing in that at the appropriate time.

After approval with regards to our submission chronic weight management.

And especially <unk>.

Essentially balancing volume and cost of the system. Thank you guys.

Our plan as Dave said the team is taking this data right now and working feverishly to to submit that in the coming weeks, we do have fast ash designation from the FDA to expect that to expedite it we have a rolling submission we submitted the Mt. One data.

Thanks, Evan for the question, Mike We'll go back to you balancing commercial potential with.

Potential stress to the system.

No. It's a good question.

When we look at.

<unk>.

The opportunity within let's.

We are excited.

Also talk about that while we think the FDA will react quickly with a fast track designation, we wanted to remove any uncertainty and so we will be using <unk>.

Let's say the chronically management marketplace, it's easy to look at the number of people who.

We live with obesity, both in the U S and globally and look at this this could have a big impact.

And I expect that we will get approval.

As early as the end of this year.

On health care cost.

I think if you look more at the real true potential that we focus so much on weight loss, but when you look at not only the what is weight loss really provide there's over 200 complications associated with living with obesity.

Thanks, Mike.

Our next question.

Our next question is coming from Evan <unk> from BMO capital markets. Your line is live.

Hi, all thank you for taking my question first off congrats on the great data today very exciting for patients.

Taking a step back I'd love to get some color as to how you plan to balance the commercial potential of <unk> in both diabetes and obesity with estimate that really could the top selling pharmaceutical products now without Overstretching U S health care system, especially.

And as we get more and closer to the marketplace and look at our modeling we do think that this was going to relieve.

And reduce the risk of complications associated with obesity and there will be medical cost savings associated with using these agents.

Essentially balancing volume and cost of the system. Thank you guys.

Which will I think be.

Be great societal value also when you look at the at the quality of life results that we saw from surmount one.

Thanks, Evan for the question, Mike We'll go back to you balancing commercial potential with a potential stress to the system.

They were remarkable and at times, it's hard to quantify those.

Okay.

Good question.

When we look at.

Cost effectiveness model, but in real life.

The opportunity within.

Those impact patients.

Let's say the chronically management marketplace, it's easy to look at the number of people who.

Significantly and I think it really does highlight how important these treatments are two people who live with obesity and so I think as you look at the impact not at a population level, but on a patient level.

Who live with obesity, both in the U S and globally and look at boy. This could have a big impact on health care cost.

These agents on towards appetite will provide great value to society.

I think if you look more at the real true potential that we focus so much on weight loss, but when you look at not only what is weight loss really provide there's over 200 complications associated with living with obesity.

Yes, maybe just to add I think the latest data from.

The Medicare Trust us that we're spending about a trillion a year as a country.

Obesity related complications and comorbidities.

And as we get more and closer to the marketplace and look at our modeling we do think that this was going to relieve.

I think we always do a very good job of thinking about <unk>.

<unk> Pharmaceuticals is an investment in future savings in our health.

And reduce the risk of complications associated with obesity and there will be medical cost savings associated with using these agents.

Maybe we do better when it's acute like Covid I think we spent tens of billions on COVID-19 therapies and didn't question as much but here's what I.

Which will I think be great societal value also when you look at the at the quality of life results that we saw from surmount one.

I think even in the most rosy forecast, we're not going to sell a trillion dollars of of obesity drugs. So the question is more of like over time can we demonstrate that treatment today reduces costs downstream.

They were remarkable and at times, it's hard to quantify those.

We're highly confident that that will be a multiple of 510 times savings.

Cost effectiveness model, but in real life.

The impact patients.

For whatever people invest in the medicines.

Significantly and I think it really does highlight how important these treatments are two people who live with obesity and so I think as you look at the impact not at a population level, but on a patient level.

We have to prove that that's our job as an innovative companies to do the outcome studies that demonstrate that I think our competitors are doing the same thing and that'll be good for the field and as I've said before it's hard to imagine by the end of this decade that everyone doesn't just accept that pharmacologic treatment for overweight and obesity should be the standard of care and it will save the health care.

These agents towards appetite will provide great great value to society.

Yes, maybe just to add I think the latest data from.

System trillions of dollars over time.

The Medicare Trust us that we're spending about a trillion dollars of year as a country.

That's our position and we need to fight for that position, we also need to do the work and.

BCD related complications and comorbidities.

Right now we are talking about weight loss numbers not outcomes, but that data is coming soon as early as next year for <unk>.

I think we always do a very good job of thinking about.

<unk> Pharmaceuticals is an investment in future savings in our health.

Thank you both Paul next question.

We do better when it's acute like Covid I think we spent tens of billions on COVID-19 therapies and didn't question as much but hears it.

The next question is coming from Chris <unk> from Goldman Sachs. Chris Your line is live.

Great. Thank you very much within in a map and thinking about its safety and Tolerability profile I think we have a base level of precedent data that sort of frame expectations for what the <unk> rates are including last fall. When you have the head to head for <unk> home, where I think there was some relative improvement recognizing that there is differences in patient population.

I think even in the most rosy forecast, we're not going to sell a trillion dollars of obesity drugs. So.

There is more of like over time can we demonstrate that treatment today reduces costs downstream.

We're highly confident that that will be a multiple of 510 times savings.

I think youre doing this trailblazer.

For whatever people invest in the medicines.

Six study.

Aspects of this.

We have to prove that that's our job as an innovative company is to do the outcome studies that demonstrate that I think our competitors are doing the same thing and that will be good for the field and as I've said before it's hard to imagine by the end of this decade, everyone doesn't just accept that pharmacologic treatment for overweight and obesity should be the standard of care and it will save this health care.

Dosing intervals that include placebo.

So talk about using blood based Biomarkers can you help us frame expectations for what would be a meaningful differential should we have baseline expectations that reflect more of the prior data or is there really room to improve and when you think about all of these MRI and blood based biomarkers how much is this going to be.

System trillions of dollars over time.

That's our position and we need to fight for that position, we also need to do the work.

Logically natural relative to how patients are cared for or is this also going to require some threading in new ways that patients are managed which I know that you are investing tremendously in but just help us with the logic of the results from these studies like television.

And right now we are talking about weight loss numbers not outcomes, but that data is coming soon as early as next year for purchase at the time.

Thank you both Paul next question.

The next question is coming from Chris <unk> from Goldman Sachs. Chris Your line is nice.

Thank you.

Thanks, Chris that's a lot to unpack the question, but I'll hand over to Dan for Us commentary on television.

Great. Thank you very much.

Thanks, Chris I'm glad you raised this it's a topic that we think a lot about.

Turning to map and thinking about its safety Tolerability profile I think we have a base level precedent data that sort of frame expectations for what the <unk> rates are including last fall. When you have the head to head for <unk> home, where I think there were some relative improvement recognizing there is differences in patient population now that youre doing this trailblazer.

Probably just starting with maybe correcting a misperception that field around ARIA rates.

I think we don't really know why asymptomatic ARIA means is sort of incidental finding an advanced brain scan.

We don't want to over index on that we want to focus on symptomatic ARIA and symptomatic ARIA rates.

Study.

Aspects of this where you have dosing intervals that include placebo.

What the patient experiences is adverse.

You also talked about using blood based Biomarkers can you help us frame expectations for what would be a meaningful differential should we have baseline expectations that reflect more of the prior data or is there really room to improve and when you think about all of these MRI and blood based biomarkers how much is this going to be.

Our range for sort of 5% to 10% or less across the class.

We don't understand all the factors that could cause one patient of symptomatic ARIA and another patient to have asymptomatic ARIA, which we see is not a problem.

What we want to understand better in this study are there things that we can see on baseline mris or on blood biomarkers that might predict who is going to have those symptomatic cargoes and then are there adjustments to dosing that you could have in those patients. So they can still get the benefit of the drug without getting the symptomatic ARIA.

Sort of logically natural relative to how patients are cared for or is this also going to require some threading in new ways that patients are managed which I know that you are investing tremendously in but just help us with the logic.

From these studies like television.

I don't see this is a study where there is a positive outcome or a negative outcome. It's not a not a binary thing here what it's going to do is add to our understanding of how best to identify patients and how best to change dosing in patients who have the highest risk that overall that should lead the field to have more comfort using these drugs the entire classes.

Got it.

Thanks, Chris that's a lot to unpack in the question, but I'll hand over to Dan for Us commentary on television.

Thanks, Chris I'm glad you raised this a topic that we think a lot about.

Just starting with maybe correcting a misperception of the field around ARIA rates.

I think we don't really know why asymptomatic ARIA means is sort of incidental finding an advanced brain scan.

Drugs probably.

More responsible ways.

Thanks, Dan.

Paul next question.

The next question is coming from Geoff Meacham from Bank of America Merrill Lynch, Jeff Your line is live.

We don't want to over index on that we want to focus on symptomatic ARIA and symptomatic ARIA rates, that's what the patient experiences is adverse.

Great. Good morning, everyone. Thanks for the question and congrats on the data you just have a couple of related ones for Dan.

Our range for sort of 5% to 10% or less across the class.

That's about four I know, we don't have data yet but are there lessons to be learned commercially about the rebound effect. Once you discontinued <unk> appetite and just wasn't sure what your thoughts are.

We don't understand all the factors that could cause one patient of symptomatic ARIA and another patient to have asymptomatic ARIA, which we see is not a problem.

That's what we want to understand better in this study are there things that we can see on baseline mris or on blood biomarkers that might predict who is going to have those symptomatic cargoes and then are there adjustments to dosing that you could have in those patients. So they can still get the benefit of the drug without getting the symptomatic ARIA.

On continuity of therapy in the real world.

And the second one is that when you think about <unk> appetite development in other settings like sleep apnea et cetera. There are a lot of indications that you could still go after but havent officially announce them. When you look outside of diabetes obesity, what is the criteria for selecting tours appetite development versus say the oral versus triple.

I don't see this is a study where there is a positive outcome or a negative outcome. It's not a binary thing here, but it's going to do is add to our understanding of how best to identify patients and how best to change dosing in patients who have the highest risk and overall that should lead the field to have more comfort using these drugs the entire class of <unk>.

So thank you.

Okay.

Thanks, Jeff, Okay, I'll start and I'll, let Mike follow up on commercial questions here.

Starting with your question on surmount for sort of asking what our expectations and implications of what happens when people come off the strike I think unfortunately, Trish appetite is probably like every other drug we have which is.

It's probably in more responsible ways.

Thanks, Dan.

Paul next question.

The next question is coming from Geoff Meacham from Bank of America Merrill Lynch, Jeff Your line is live.

It requires you to take it to continue to get the benefits. That's the expectation we have for blood pressure drugs.

Great. Good morning, everyone. Thanks for the question and congrats on the data you just have a couple of related ones for Dan.

Lipid lowering drugs and probably we should have that for some time for drugs to manage.

Obesity.

So about four I know, we don't have data yet but are there lessons to be learned commercially about the rebound effect. Once you discontinued for exemplified in just wasn't sure what your thoughts are.

What does that mean in the real world for patients.

My expectation is many patients may try coming off the drug completely to see what happens maybe some will be successful in maintaining their weight, but many of them will probably experience some regression of their weight back towards baseline and this could prompt them to come back on the drug that's probably natural and we can expect that although.

Continuity of therapy in the real World and the second one is that when you think about <unk> appetite development in other settings like sleep apnea et cetera. There are a lot of indications that you could still go after but Havent officially announced then when you look outside of diabetes or VC, what is the criteria for selecting appetite.

Mike will comment in a second on commercial dynamics in terms of other indications, we really look at things that could have a big impact weight loss, there's never been a drug like <unk> appetite that can cause this amount of weight loss.

<unk> versus say the oral versus triple G et cetera. Thank you.

Thanks, Jeff.

I'll start and I'll, let Mike follow up on commercial questions here.

We were looking through literature on things like bariatric surgery, and seeing what kind of benefits that can lead to her diet and exercise and that's how we've gotten to a few indications that you mentioned sleep apnea and heart failure among others.

Starting with your question on surmount for sort of asking what our expectations and implications of what happens when people come off the strike I think unfortunately tours appetite is probably like every other drug we have which is.

Terms of which drug could be best right now of course, we have the most confidence around tours appetite.

Requires you to take it to continue to get the benefits.

Expectation, we have for blood pressure drugs.

But there might be some indications, where a drug like <unk>, which adds glucagon and call. It triple G could be better for example, our glucagon has profound effects on on fat and deliver so maybe that plays better for complications of obesity related to liver disease like Nash or for <unk> on the other hand, our oral.

Lipid lowering drugs and probably we should have that for some time for drugs to manage.

Obesity.

What does that mean in the real world for patients my expectation as many patients may try coming off the drug completely to see what happens maybe some will be successful in maintaining their weight, but many of them will probably experience some regression of their weight back towards baseline and this could prompt them to come back on the drug.

Unlikely to have as much weight loss is profound metabolic improvements sisters appetite does because it doesn't have any Gi P, which is an important constituent of tours appetite.

But on the other hand, the ease of use may make it more applicable to some broader more primary care indications. So that's a little bit of thinking on how we sort those out.

That's probably natural and we can expect that although Mike will comment in a second on commercial dynamics in terms of other indications, we really look at things that could have a big impact weight loss, there's never been a drug like <unk> appetite that can cause this amount of weight loss. So mostly were looking through literature.

Mike.

Yes on the commercial side.

<unk>.

Launch into the.

Alright, great management market for touch appetite will be very upfront with payers and health care professionals and consumers.

Sure on things like bariatric surgery, and seeing what kind of benefits that can lead to her diet and exercise and that's how we've gotten to a few indications that you mentioned sleep apnea and heart failure among others.

<unk> is a chronic disease and a chronic medication that needs to be adhere to long term.

When you look at how this product works.

One of the most important aspects of it is that it controls and reduces appetite when someone tries to gain and lose weight.

Terms of which drug could be best right now of course, we have the most confidence around tours appetite.

But there might be some indications, where a drug like red tide, which adds glucagon and call. It triple G. It could be better for example, our glucagon has profound effects on on fat in the liver. So maybe that plays better for complications of obesity related to liver disease like Nash or for <unk> on the other hand, our oral.

Diet and exercise as someone is successful and losing weight.

The body actually works against that and tugs at the opposite way by by increasing the appetite that's why.

These agents.

Unlikely to have as much weight loss is profound metabolic improvements as far as appetite does because it doesn't have any Gi P, which is an important constituent of appetite.

Appetite does work because it does reduce the appetite so while on therapy, we anticipate that the appetite will.

We will be lowered and maintain.

But on the other hand, the ease of use may make it.

And then you.

You have stopped then the appetite will increase now this is something that unlike most drugs you don't know if you stop taking like a statin or something else you don't really feel any effects. We do think that that will be a noticeable fact that will begin.

More applicable to some broader more primary care indications, so that's a little bit of thinking on how we sort those out.

Rick.

Yes on the commercial side.

<unk>.

Launch into the.

Alright, great management market for Trish appetite will be very upfront with payers and health care professionals and consumers that this is a chronic disease and a chronic medication that needs to be adhere to long term.

Soon after stopping therapy, even before you start seeing weight gain so I think we think that'll be an important kind of.

Signal for a patient to understand that this is a chronic disease and needs and needs to be.

When you look at how this product works.

Term.

One of the most important aspects of it is that it controls and reduces appetite when someone tries to gain to lose weight.

As it goes into the maybe one other aspect on the.

On the additional indications we talk a lot about access.

And the need for.

In order to get access into part D and obviously that will be an important thing overarching, but these additional indications are important for the senior population.

Diet and exercise as someone is successful in losing weight.

The body actually works against that and tugs at the opposite way by by increasing appetite that's why.

Complications.

Ron with living with obesity.

These agents.

Appetite does work because it does reduce the appetite so while on therapy, we anticipate that the appetite will.

And they emerge into complications.

When you reach.

This.

We will be lowered and maintain.

Medicare.

Type two diabetes like sleep apnea and heart failure and so we believe these are important indications. This study because we think these are important health conditions, but also commercially. We think this is important because this will help us get access for these really important complications that are really important to the senior population.

And then.

If stopped then the appetite will increase now this is something that unlike most drugs you don't know if you stop taking like a statin or something else you don't really feel any effects. We do think that that will be a notable fact that will begin.

Soon after stopping therapy, even before you start seeing weight gain so I think we think that'll be an important kind of.

So commercially we think these are really important thanks for the question.

Signal for a patient to understand that this is a chronic disease and needs to be.

Thanks, Mike Paul next question.

The next question is coming from Omar <unk> from Evercore ISI.

Term.

As it goes into the one other aspect on the.

Your line of lives.

Hi, I have a question on drug pricing, especially as it relates to majority a what's your expectation on net price per patient beyond the first year on my Giro and I realize the compliance as well as maintenance pricing would be considerations.

On the additional indications.

We talk a lot about access.

And the need for.

In order to get access into part D and obviously that will be an important thing overarching, but these additional indications are important for the senior population.

And secondly, in a scenario, where <unk> and <unk> are in the IAA basket in 2027 should it be our base case that there would not be an impact to the non Medicare book of business and would not impact other members in the class like Ontario, I feel like it's not super clear I'd be curious about your thoughts. Thank you.

Complications.

Run with living with obesity.

And they emerge into complications.

When you reach.

This.

Medicare like type two diabetes like sleep apnea, and like heart failure and so we believe these are important indications. This study because we think these are important health conditions, but also commercially. We think this is important because this will help us get access for these really important complications that are real.

Thanks, Thanks, Mike I'm sorry.

Maybe go to Mike for the kind of a question about net pricing on <unk> and how that might evolve.

And then also on general commentary around for example, because then the IRA basket what might the impact be to others Mike.

Yes, no good question.

Important to the senior population. So commercially we think these are really important thanks for the question.

Net pricing, we have one price point for Vermont, Zoro, we are flat pricing across the.

Thanks, Mike Paul next question.

In dosage form so people can feel free to.

The next question is coming from Omar <unk> from Evercore ISI.

Find the right dose that works for them at the same price that will be the same price for new starts and it is for people on maintenance treatment.

Your line is live.

Hi, I have a question on drug pricing.

Especially as it relates to majority eight what's your expectation on net price per patient beyond the first year on Giro and I realize.

Yes.

I got your question right and just to clarify it's not clear to us that <unk> tied and do a good side will be eligible in the same year for IRA.

The compliance as well as maintenance pricing would be considerations.

And secondly in a scenario where <unk> are in the IAA basket in 2027 should it be our base case that there would not be an impact to the non Medicare book of business and would it not impact other members in the class like Ontario, I feel like it's not super clear I'd be curious about your thoughts. Thank you.

If they are eligible depending on sales two.

Two years prior and the various ways. The government is proposing to do this.

But let's just play it out if semi is selected because it's small molecule in nine years from launch et cetera, what will happen in the commercial market nobody knows because in the draft guidance, there really isn't a lot of clarity about how.

Thanks, Thanks, Mike I'm sorry.

Maybe go to Mike for the kind of a question about net pricing on <unk> and how that might evolve and then also on general commentary around exempt because then the IRA basket what might the impact the two others Mike.

The government proposes to effectuate.

The so-called maximum fair price to the consumer level.

They are entertaining a few ideas. It appears from their initial guidance I think we're expecting more.

Yes, no. Good question I mean on net pricing, we have one price point for where Manganaro, we have flat pricing across the.

Regulatory.

Either definitive regulatory statements or proposals for comment.

Coming 90 days <unk>.

In dosage form so people can feel free to.

But I can tell you what we'd prefer her is that since we're not a party to that transaction as manufacturers. In this example, not us but someone else.

Find the right dose that works for them at the same price now it would be the same price for new starts and it is for people on maintenance treatment.

We would probably need a third party to determine is that a valid part D. Prescription is it eligible for the maximum fair price and then to step in and match that transaction up post hoc, we did something like that when the donut hole was created.

Yes.

I got your question right and just to clarify it's not clear to us that <unk> tied and do a good side will be eligible in the same year for IRA.

If they are eligible depending on sales two.

And it worked pretty well with third party administrators. This what we've suggested that the administration will be the best thing and in that scenario you would not have.

Two years prior and the various ways. The government is proposing to do this.

But let's just play it out if semi is selected because it's small molecule in nine years from launch et cetera, what will happen in the commercial market nobody knows because in the draft guidance, there really isn't a lot of clarity about how.

Wholesale price reduction to reach the national debt.

Maximum fair price you would do it after the fact.

And I think in that way be able to keep the two segments commercial and government a little bit more separate.

The government proposal to effectuate that.

That is obviously advantaged for for the industry and probably for payers as well and maybe for patients, creating certainty and lack of arbitrage across.

So called maximum fair price to the consumer level.

They are entertaining a few ideas. It appears from their initial guidance I think we're expecting more.

Physical distribution channels, so to be determined there, but but as that detailed comes out we'll have more commentary on it but balls in the government's court now.

Regulatory.

Either definitive regulatory statements or proposals for comment and the coming 90 days <unk>.

Thanks, Mike and Thanks, Dave Paul next question.

But I can tell you what we'd prefer is that since we're not a party to that transaction as manufacturers. In this example, not us but someone else.

Next question is coming from Tim Anderson from Wolfe Research.

Line of life.

Thank you I.

We would probably need a third party to determine is that a valid part D. Prescription is it eligible for the maximum fair price and then to step in and match that transaction up post hoc, we did something like that when the donut hole was created.

I wanted to ask some questions about the obesity opportunity in ex U S markets, because I know it seems like all the discussion is about the U S markets, but in your opinion, how will it play out ex U S relative to the U S. When you think about obesity over the longer term to me it seems like payer.

And it worked pretty well with third party administrators. This what we've suggested that the administration will be the best thing and in that scenario you would not have.

Ours are likely to be much more restrictive ex U S with a product like this.

Wholesale price reduction to reach the Nashville.

Is that a fair characterization or do you think low enough pricing will fully offset any sort of hesitation and basically open up the markets equally likely will happen in the U S.

Maximum fair price you would do it after the fact.

And I think in that way to be able to keep the two segments commercial and government a little bit more separate.

That is obvious advantage for for the industry and probably for payers as well and maybe for patients, creating certainty and lack of arbitrage across.

Thanks, Tim for the really good question I'll hand over to <unk> President of Lilly International for to weigh in on that.

Hi, Tim.

Physical distribution channels, so to be determined there, but but as that detailed comes out we'll have more commentary on it but it falls in the government's court now.

Thanks for the question as we take a look at the chronically nascent market internationally outside the U S. It's a significant opportunity we already see significant utilization of current therapies that don't provide as much weight loss and benefit and still providing significant commercial opportunity in and also.

Thanks, Mike and Thanks, Dave Paul next question.

The next question is coming from Tim Anderson from Wolfe Research Your line is live.

Access to patients a lot of that is happening in many markets out of pocket at the same time there are markets that are already moving towards reimbursement.

Thank you I.

I wanted to ask some questions about the obesity opportunity in ex U S markets, because I know it seems like all the discussion is about the U S markets, but in your opinion how long.

UK and other markets in Europe already looking at ways to reimburse, especially in the higher BMI.

Let it play out ex U S relative to the U S. When you think about obesity over the longer term to me. It seems like payers are likely to be much more restrictive ex U S with a product like this.

Categories of obesity, and so this will play out over time on both.

As we look at data and outcomes to drive.

Is that a fair characterization or do you think low enough pricing will fully offset any sort of hesitation and basically open up the markets equally likely will happen in the U S.

Further expansion of access.

And also we do foresee a significant out of pocket market.

Many countries, including Asia.

Thanks, Tim for the really good question I'll hand over to <unk> President of Lilly International for to weigh in on that.

<unk> America.

And Europe , as well and so I think youll see that grow over time, but significant opportunity. If you take a look at the total population globally.

Okay.

Thanks for the question as we take a look at the chronically management market.

Obese or overweight.

There is a significant opportunity outside of the U S for content management in the <unk>.

National <unk> outside the U S. It's a significant opportunity we already see.

We'll look to invest in expanding that both through the introduction of.

Utilization of current therapies that don't provide as much weight loss and benefit and still providing significant commercial opportunity in and also access to patients a lot of that is happening in many markets out of pocket at the same time there are markets that are already moving towards reimbursed.

Non gyro tours appetite in chronically imagine, but also improving access over time.

Thanks, Elliot and thanks, Tim for the question running low on time, so I'll try to get through as many questions as possible. Paul next question.

The next question is coming from Steve Scala from Cowen.

<unk>.

UK and other markets in Europe already looking at ways to reimburse, especially in the higher BMI.

Steve Your line of lives. Thank.

Thank you very much I appreciate that data presentation is key to fully answering the question, but what opportunities are still available to <unk> in the adjuvant setting now that we have seen the top line of Natalie It would be easy to conclude Natalie is a significant risk to pursue neo adjuvant use in that for <unk>.

Categories.

The city and so this will play out over time on both.

As we look at data and outcomes to drive.

Further an expansion of access.

And also we do foresee a significant out of pocket market in many countries.

Adjuvant use will decline.

What other scenarios would you like us to consider and what aspects of Natalie would you like to highlight thank you.

<unk> Asia.

Uh huh.

South America.

And Europe , as well and so I think youll see that grow over time, but significant opportunity to take a look at the total population globally.

Thanks, Steve for the question I'll hand over to Jake Van Norden to weigh in on.

The opportunity.

Yes, Thanks, Steve for the question I'm not sure I agree with your framing I'm not sure we agree.

Obese or overweight.

There is a significant opportunity outside of the U S for clinically management in the.

Natalie success is not really a surprise to us we said publicly we expect that it to be positive. We frankly thought it would be positive actually at the last interim analysis at the end of last year. Just by way of reminder, we studied presenting on the adjuvant setting given for two years, specifically in a high risk population, which has a population that we and.

We will look to invest in expanding that both through the introduction of.

Non gyro tours appetite in chronically imagine, but also improving access overtime.

Thanks Elliot Thanks, Tim for the question running low on time, so I'll try to get through as many questions as possible. Paul next question.

I think physicians agree.

The next question is coming from Steve Scala from Cowen.

The one that really requires intensification of therapy and now presenting a as the standard of care in that setting.

Steve Your line of lives.

Thank you very much I appreciate that data presentation is key to fully answering the question, but what opportunities are still available to <unk> in the adjuvant setting now that we have seen the top line of Natalie It would be easy to conclude Natalie is a significant risk to <unk> adjuvant use in that for <unk>.

We don't really expect that to change actually.

We have mature follow up on our on our data as last presented at San Antonio in December we have a category one NTT enlisting presenting in this setting I think presenting those roll in high risk adjuvant <unk> positive breast cancer is pretty clear.

Yeah.

Adjuvant use will decline.

We seem to hear a lot of noise about.

What other scenarios would you like us to consider and what aspects of Natalie would you like to highlight thank you.

<unk>.

The at risk population, a population that we didn't study a population for whom I think the risk benefit is a little bit more questionable.

Thanks, Steve for the question I'll hand over to Jacob Arden weigh in on.

And.

To the extent that the data we see at <unk>.

The opportunity.

Yes, Thanks, Steve for the question I'm not sure I agree with your framing I'm not sure we agree.

Provides a role for that drug in that setting.

Sure that's fine that's really doesn't pose any threat to <unk>.

Natalie success is not really a surprise to us we've said publicly we expect it to be positive. We frankly thought it would be positive actually at the last interim analysis at the end of last year. Just by way of reminder, we studied presenting on the adjuvant setting given for two years, specifically in a high risk population, which has a population that we and.

Forecasted opportunity for presenting and the higher a setting where we still.

We remain very confident in its prospects.

Thanks, Jake Paul next question.

The next question is coming from David Risinger from Seb Securities. David Your line is live.

I think physicians agree is the one that really requires intensification of therapy and now presenting a as the standard of care in that setting.

Thanks very much.

So congrats on all the updates I just wanted to get your take on Novo's. We go we select cardiovascular outcomes trial and potential implications. So.

We don't really expect that to change actually.

Mature follow up on our on our data last presented at San Antonio in December we have a category one NTT and listing for presenting in this setting I think presenting those roll in high risk adjuvant <unk> positive breast cancer is pretty clear.

I think expectations are that the efficacy could be modest could you comment on that scenario and then also comment on the scenario that the trials surprisingly fails thanks very much.

Okay.

Thanks, Steve I'll hand over to Dan for pick up from here.

We seem to hear a lot of noise about.

Thanks, Dave.

<unk> intermediate risk population a population that we didn't study a population for whom I think the risk benefit is a little bit more questionable.

Maybe some of those questions are better addressed to Novo I think based on passing an interim.

Without stopping early you could sort of put an upper limit on how good the efficacy could be.

And to the extent that the data we see at <unk>.

But.

But.

We don't know exactly what that will be I expect I think most people reasonably expect the trial will be positive we know that weight loss has so many benefits including cardiovascular benefits.

Provides a role for that drug in that setting.

That's fine that's really doesn't pose any threat to the forecasted opportunity for presenting are in the high risk setting where we still.

We remain very confident in its prospects.

And thats likely to be demonstrated in a large clinical trial.

Thanks, Jake Paul next question.

No idea of what the number will be here, the stat, sig or anything like that but I'll be surprised if weight loss doesn't translate into into benefits. We of course have our own studies growing both in the type two diabetes population and in the obesity population will look forward to those outcomes. Thanks, Dan Thank Dave Paul next question.

The next question is coming from David Risinger from Seb Securities. David Your line is live.

Thanks very much.

So congrats on all the updates I just wanted to get your take on Novo's. We go we select cardiovascular outcomes trial and potential implications. So alright, I think expectations are that the efficacy could be modest could you comment on that scenario and then also comment on the scenario.

The next question is coming from Kerry Holford from Bahrenburg carry your line is live.

Thank you.

Thanks Anthony.

The trials surprisingly fails, thanks very much.

Can you provide any more detail on that.

Sure.

And that when you are expecting.

Thanks, Steve.

I hand over to Dan for pick up from here.

I think you would anticipate.

Okay.

Thanks, Dave.

Maybe some of those questions are better addressed to Novo I think based on passing an interim.

When Easter eggs.

The U S.

Yeah.

Secondly.

Stopping early you can sort of put an upper limit on how good the efficacy could be but.

On a not on any of prioritization.

Even now that's contained in quick succession.

We don't know exactly what that'll be I expect I think most people reasonably expect the trial will be positive.

Interest in <unk>.

Anything driving that.

Are there any additional non core asset.

No that weight loss has so many benefits including cardiovascular benefits.

10 minutes.

And then it seems like an excellent asset.

And thats likely to be demonstrated in a large clinical trial.

What are your priorities and the use of cash.

Thank you.

No idea of what the number will be or the stat, sig or anything like that but I'll be surprised if weight loss doesn't translate into into benefits.

And in R&D.

I'm wondering if we can expect.

Ex tango and.

DNS.

We of course have our own study is growing both in the type two diabetes population and in the obesity population, we will look forward to those outcomes.

Okay.

Thanks, Carrie and maybe in the interest of time since we have just a couple of minutes, let's focus on the first question. We can connect with IR on the second questions. Afterwards, So <unk> map update hand over to Patrick for that.

Dan Thanks, Dave Paul next question.

The next question is coming from Kerry Holford from Bahrenburg carry your line is live.

Think about amounts carried that sounds stated earlier.

Thank you.

All right.

Thanks, Ed.

Did not cite any concerns in regards to the clinical profile of maybe about the only soften aspect of our proposed commercial manufacturing process and generally we don't disclose the details about the timing of our interactions with the FDA, but I can say about the way I welcome very closely again with the FDA today smart questions and also discussing the details for the next.

Can you provide any more detail on that.

Sandy.

Hey, Matt.

When do you expect.

Whether you would anticipate Ola <unk>.

Okay.

Thank you.

Yeah.

Secondly.

Alright.

Steps to understand the timeline how quickly you mean that the confidante to launch maybe as fast and klos in ulcerative colitis is often in the U S. In the meantime extremely happy we've been all I'm sure will be approval in Japan, and a positive opinion by the European regulatory body and we're looking forward to launches outside the U S. That's already estimate Q2.

On any plant utilization.

You may now.

Quick question.

Just interesting.

And then in driving that.

Are there any additional non core asset.

10 minutes.

And then anything.

Yes.

What are your priorities and the use of cash.

Thank you very much Patrick Paul maybe time for one last question. So may be sent through the last.

Andy.

I'm wondering if we can expect.

One last question from the queue.

Thanks, Tim.

Secondly, the last question is coming from Mohit Bansal from Wells Fargo Rohit. Your line is live.

R&D investment.

Okay.

Thanks, Carrie and maybe in the interest of time since we have just a couple of minutes, let's focus on the first question you can connect with IR on the second questions. Afterwards, So <unk> map update hand over to Patrick for that.

Great. Thank you for squeezing me in and congrats again.

Just a question on long term capacity for <unk> I know you are talking.

Thinking about doubling this year, but.

Longer term you had talked about doubled off to Lisa.

Think about amounts to carry that sounds stated earlier.

If you look at consensus numbers on what students projecting even that may not be enough. So how are you thinking about.

Did not cite any concerns in regards to the clinical profile of maybe about the only soften aspect or the proposed commercial manufacturing process and generally we don't disclose the details about what the timing of our interactions with the FDA, but I can say that we have welcomed very closely again with the FDA today February it's about questions and also discussing the D.

Increasing the capacity and longer term fud Machado.

Thanks, Mohit I'll hand to Dave for that.

And then we'll round out okay I'll go right to wrap up after that thanks for the question. Obviously key right now we have the unique situation of having a product. So useful we can't make enough of it really in and I think when we expand the label. It will continue to put pressure on that I suspect. This whole category will have supply pressure for some time, we're basically and in all of the.

So the next steps to understand the timeline how quickly that the confidante to launch maybe as fast and klos in ulcerative colitis almost in the U S. In the meantime, extremely happy with the launch it will be approval in Japan, and a positive opinion by the European regulatory body and we're looking forward to launches outside the U S. That's already escalate Q.

Above moment here in terms of investing in capacity and thinking of alternative ways to expand use and make us.

Two.

Fulfill the need that's out there. So we've made certain announcements we've talked about the RTP site. This year, our Concord sister site in North Carolina really the following year beginning to produce that's of equivalent size.

Thank you very much Patrick Paul maybe time for one last question. So maybe sent through the last.

One last question from the queue.

Secondly, the last question is coming from Mohit Bansal from Wells Fargo Rohit. Your line is live.

Great. Thank you for squeezing me in and congrats again.

We've also made additional capacity investments in the original RTP site, which will expand the numbers further and then today, we're talking about other delivery systems that could be.

Just a question on long term capacity for Mongiardo I know youre.

Thinking about doubling this year, but.

<unk> talked about double of two Lisa.

Providing even more capacity available.

If you look at consensus numbers on what students protecting even that may not be enough. So how are you thinking about.

For global demand fulfillment. So we're on a roadmap here that we're excited about and the endpoint I think we'll probably all be a little more.

Increasing the capacity and longer term funding gyro.

Frustrated and impatient in the short term with the rate of expansion, but rest assured.

Thanks, Mohit I'll hand to Dave for that.

And then we'll round out okay I'll go right to wrap up after that thanks for the question, obviously key right now.

The line is going up into the right at a pretty steep angle in terms of our volume and output and.

The unique situation of having a product so useful we can't make enough of it really in and I think when we expand the label. It will continue to put pressure on that I suspect. This whole category will have supply pressure for some time, we're basically and in all of the above Loma here in terms of investing in capacity and thinking of alternative ways to.

And we expect that to continue for several years to come.

So.

We're working hard on this problem happy with the progress need to make more progress and we've got plans to do that from.

From here I'll also just closed that comment by just punctuate a little bit the importance of the <unk> program in terms of meeting fully meeting the demand that could be something like hundreds of millions of patients per year.

Expand use and make us.

Fill the need that's out there. So we've made certain announcements we've talked about the RTP site. This year, our Concord sister site in North Carolina really the following year beginning to produce that sort of equivalent size.

Oral solid.

No. The globe has massive capacity, it's cheaper and easier to make.

And that product has a lot of promise clinically but also.

We've also made additional capacity investments in the original RTP site, which will expand the numbers further and then today, we're talking about other delivery systems that could be.

Significant promise in terms of addressing needs, particularly in middle income markets in China, and other very large opportunities with that let me close the call today and thank you all for participating in this earnings call once again and your interest in Lilly and what we're doing it's been an eventful and productive start to 2023.

Providing even more capacity available.

For global demand fulfillment. So we're on a roadmap here that we're excited about and the endpoint I think we'll probably all be a little more.

As we execute on our innovation based strategy and bring all of these new medicines to patients I want to thank you again for dialing in and please follow up with the IR team I know, we didn't get to all the questions today.

Frustrated and inpatient in the short term with the rate of expansion, but rest assured the line is going up into the right at a pretty steep angle in terms of our volume and output.

You have additional questions. Please give them a call today have a great one and we'll talk again soon thanks.

And we expect that to continue for several years to come.

So.

Thank you ladies and gentlemen, this does conclude our conference for today.

We're working hard on this problem happy with the progress need to make more progress and we've got plans to do that.

This conference will be made available for replay beginning at one P. M. Today running through May 11th at Midnight you may access the replay system at anytime by dialing 833 to 684 and entering the access code eight.

From here.

So just close that comment by just punctuate a little bit the importance of the <unk> program in terms of meeting fully meeting the demand that could be something like hundreds of millions of patients per year.

02917 International Dialers can dial 970, 35280005 again those numbers are 833 to <unk> four.

Oral solid we know the globe has massive capacity, it's cheaper and easier to make.

And that product has a lot of promise clinically, but also <unk>.

970, 35280005 with the access code eight zero to 907. Thank you for your participation you may now disconnect your lines.

Significant promise in terms of addressing needs, particularly middle income markets in China, and other very large opportunities.

Let me close the call today and thank you all for participating in this earnings call once again and your interest in Lilly and what we're doing it's been an eventful and productive start to 2023, and we as we execute on our innovation based strategy and bring all of these new medicines to patients I want to thank you again for dialing in and please follow up with the <unk>.

Our team I know, we didn't get to all the questions. Today. If you have additional questions. Please give them a call today have a great one and we will talk again soon thanks.

Yes.

Thank you ladies and gentlemen, this does conclude our conference for today.

This conference will be made available for replay beginning at one P. M. Today running through May 11 at Midnight you may access the replay system at anytime by dialing $803 three to 6854 and entering the access code.

Eight zero to 91, seven international Dialers can dial 970, 35280005 again those numbers are 833 to six eight by four.

<unk> 907, 35280005 with the access code eight zero to 907. Thank you for your participation you may now disconnect your lines.

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