Q4 2024 Eli Lilly & Co Earnings Call
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Unknown Executive: We look forward to talking with you Please hold the line and we'll be right back with Ladies and gentlemen, thank you for standing by and welcome to the Lilly Q4 2024 earnings call. At this time, all participants are on a listen only mode. Later, we will be conducting a question and answer session and instructions will be given at that time.
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Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the Lilly Q4 2024 earnings call. At this time all participants are in a listen only mode. Later, we will be conducting a question and answer session and instructions will be given at that time.
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Mike Zappar: I would now like to turn the conference over to your host, Mike Zappar, Senior Vice President of Investor Relations. Mike, please go ahead. Good morning.
Speaker Change: I would now like to turn the conference over to your host Mike Sapar Senior Vice President of Investor Relations. Mike. Please go ahead.
Mike Sabar: Thank you for joining us for Eli Lilly and Company's Q4 2024 Earnings Call. I'm Mike Sabar, Senior Vice President of Investor Relations. Joining me on today's call are Dave Ricks, Lilly's Chair and CEO, Dr. Dan Skovronsky, Chief Scientific Officer and President of Lilly Immunology, Lucas Montarce, Chief Financial Officer, Anne White, President of Lilly Neuroscience, Ilya Yuffa, President of Lilly International, Jake Van Naarden, President of Lilly Oncology, and Patrik Jonsson, President of Lilly Cardiometabolic Health and Lilly USA.
Mike Sapar: Good morning, Thank you for joining us.
The company's Q4, 2024 earnings call and Mike <unk> Senior Vice President of Investor Relations.
Dave Ricks: Joining me on today's call are Dave Ricks, Lilly's Chair and CEO Karl can answer Roski, Chief Scientific officer, and President and I believe immunology, Lucas month's RSA, Chief Financial Officer, and White President of Lilly neuroscience.
Mike Sapar: <unk> President of <unk> International.
Speaker Change: Jake Van Darden's President of Lilly oncology.
Johnson: Johnson President of Lilly Cardio metabolic health heavily USA.
Mike Sabar: We're also joined by Mark Keeman, Wes Tull, and Wai Wong of the Investor Relations During the 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 4. 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 SEC. The information we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions.
Mark Human: I'm joined by Mark Human West Hall, and why one of the Investor Relations team.
Mark Human: During the call, we anticipate making projections and forward looking statements based on our current expectations our actual results.
Mark Human: Else could differ materially due to several factors, including those listed on slide for 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 SEC.
Mark Human: The information, we provide about our products and pipeline is for the benefit of the investment community.
Mark Human: It is not intended to be promotional and is not sufficient for prescribing decisions.
Mike Sabar: As we transition to our prepared remarks, please note that our commentary will focus on our non-GAAP financial measures.
Mark Human: Let me transition to our prepared remarks. Please note that our commentary will focus on our non-GAAP financial measures.
Dave Ricks: Now I'll turn the call over to Dave. Okay, thanks, Mike. 2024 was a productive year for Lilly. We grew our top line, advanced our pipeline and invested in our supply chain to meet the increasing demand for our medicine. Most importantly, we delivered for patients by bringing life changing medicines to more people around the world. In 2024, full year revenue grew 32% compared to 2023. are exceeding our first-time guidance by $4 billion. Revenue grew 45% in the most recent quarter as our recently launched products gained momentum. Last year we announced positive Phase 3 results for Imlumistren, Insulin-Alpha-Sitora-Alpha, and three additional Terzapatai trials.
Dave Ricks: Now I'll turn the call over to Dave.
Dave Ricks: Okay. Thanks, Mike.
Dave Ricks: 2024 was a productive year for Lilly, we grew our topline advanced our pipeline and investing in our supply chain to meet the increasing demand for our medicines most.
Dave Ricks: Most importantly, we delivered for patients by bringing life changing medicines to more people around the world.
Dave Ricks: In 2020 for full year revenue grew 32% compared to 2023 exceeding our first time guidance by $4 billion revenue grew 45% in the most recent quarter as our recently launched products gained momentum.
Dave Ricks: Last year, we announced positive phase III results for <unk>.
Dave Ricks: <unk> Alpha and three additional searches appetite trials.
Dave Ricks: We also started Phase 3 programs for Lepidocirin, Repternatug, and Olamiracin.
Dave Ricks: We also started phase III programs for <unk> turn to tug and all of our asset.
Dave Ricks: based on positive earlier phase data. We continued to complement our pipeline through acquisitions and collaborations. We acquired Morphic Therapeutics and announced a collaboration with OpenAI to invent novel antimicrobial We opened the Lilly Seaport Innovation Center in Boston as a hub for Lilly's genetic medicines effort. and announced a new Lilly Gateway Lab in the UK to collaborate with European research. will advance their manufacturing agenda. announcing investments to expand our footprint in Indiana, in Wisconsin, and in Ireland. Since 2020, our commitments to build, expand and acquire manufacturing facilities now total more than $23 billion. Importantly, we brought innovative new medicines to patients.
Dave Ricks: Based on positive earlier phase data.
Dave Ricks: We continued to complement our pipeline through acquisitions and collaborations we acquired Morphic Therapeutics and announced the collaboration with open AI to invert novel Antimicrobials.
Dave Ricks: We opened the <unk> innovation center in Boston as a hub for Lilly's genetic medicines efforts.
Dave Ricks: And announced a new Lilly Gateway lab in the U K to collaborate with European research.
Dave Ricks: We advanced our manufacturing it yet.
Dave Ricks: Investments to expand our footprint in Indiana, and Wisconsin and in Ireland.
Dave Ricks: Since 2020, our commitments to build expand and acquire manufacturing facilities now total more than 23 billion.
Dave Ricks: Importantly, we brought innovative new medicines to patients in 2024, we received regulatory approvals for <unk>, <unk> and a new indication for step out in OSA.
Dave Ricks: In 2024, we received regulatory approvals for Kesunla, Eglis, and a new indication for Cepound in OSA. This progress strengthens our portfolio of new products and enhances our capacity to drive top-tier growth and margin expansion.
Dave Ricks: This progress strengthens our portfolio of new products and enhances our capacity to drive top tier growth.
Dave Ricks: And margin expansion.
Dave Ricks: as you can see on slide 5. as we continue to make progress against our strategic deliverables in Q4. Revenue grew 45% and our new products growing by more than $3.1 billion, led by a strong uptake of Monjaro and Zepal Q4 also saw solid performance across oncology, immunology and neuroscience. Our business excluding Anchor Tens grew by 20% in the quarter compared to Q4 2023, excluding the one-time benefits of business development.
Dave Ricks: As you can see on slide five we.
Dave Ricks: We continue to make progress against our strategic deliverables in Q4.
Dave Ricks: Revenue grew 45% and our new products growing by more than $3 1 billion led by a strong uptake of <unk> ends up out.
Dave Ricks: Q4 also saw solid performance across oncology immunology and neuroscience.
Dave Ricks: Our business, excluding <unk> grew by 20% in the quarter compared to Q4 2023, excluding the onetime benefits of business development.
Dave Ricks: Since our last earnings call, we achieved several key pipelines. We received approval for a new indication of Zep-Bound and Ombud. We submitted Immunostraint for Metastatic Breast Cancer and Terzapatide for Heart Failure. We also announced positive phase 3 results in the Surmount 5 study. where ZepFound demonstrated a 47% greater relative weight loss compared to we go We strengthened our overall supply position and delivered on our production target to make 1.5 times the saleable doses of Incarnative Medicines in the second half of 24 compared to the second half of 24. with more patients using LillyDirect, the uptake of single-use step-bound vials.
Dave Ricks: Since our last earnings call, we achieved several key pipeline milestones, we received approval for a new indication of <unk> <unk>.
Dave Ricks: We submitted an <unk> for metastatic breast cancer intercept side for heart failure.
Dave Ricks: We also announced positive phase II results and the surmount five study were.
Dave Ricks: We're set that demonstrated a 47% greater relative weight loss compared to we go.
Dave Ricks: We strengthened our overall supply position and delivered on our production target to make one five times the sale will doses of anchor to medicines in the second half of 'twenty four compared to the second half of 'twenty three.
Dave Ricks: With more patients using literally direct the uptake of single use Zip and vials increased.
Lucas Montarce: We had no wholesaler back orders as we closed 2024 and wholesalers have been fulfilling orders from pharmacies at very high level. We continue to augment our internal pipeline with external innovation, announcing plans to acquire Scorpion Therapeutics Mutant Selective PI3KA inhibitor program. This transaction will add a clinical stage breast cancer asset to our oncology pipeline. And lastly, we return $3 billion to shareholders via dividends and share repurchase. In addition to that, we announced at the end of the year a $15 billion dollar share repurchase program and the seventh consecutive 15% increase in our quarterly dividends. On slide six, you'll see a full list of key events since our Q3 call, including the milestones I mentioned here and several other updates.
Dave Ricks: Had no wholesaler back orders as we closed 2024.
Dave Ricks: The wholesalers have been fulfilling orders from pharmacies at very high levels.
Dave Ricks: We continue to augment our internal pipeline with external innovation announcing plans to acquire Scorpion therapeutics.
Speaker Change: Selective <unk>.
Speaker Change: <unk> inhibitor program. This transaction will add a clinical stage breast cancer asset to our oncology pipeline.
And lastly, we returned $3 billion to shareholders via dividends and share repurchases. In addition to that we announced at the end of the year of $15 billion share repurchase program and the seventh consecutive 15% increase in our quarterly dividend.
Speaker Change: On slide six Youll see a full list of key events since our Q3 call, including the milestones I mentioned here and several other updates.
Lucas Montarce: Now I'd like to turn the call over to Lucas to review our Q4 and 2024 full year results and provide details on the 25 guides. Thanks, Dave. Slide seven summarizes our financial performance in the fourth quarter and slide eight for the full year. As Dave mentioned, our revenue grew 45% in Q4, primarily driven by Bonjaro and Sep Performance of our non-increting portfolio was also strong as revenue grew 20% excluding one-time payments related to business development. Gross margin as a percentage of revenue increased to 83.2% in Q4, primarily impacted by favorable product mix R&D expenses increased 18% from continued investment in our early and late-stage portfolio.
Speaker Change: Now I'd like to turn the call over to Lucas to review, our Q4 and 2020 for full year results and provide details on the 25 guidance.
Lucas: Thanks, Dave.
Speaker Change: Slide seven summarizes our financial performance in the fourth quarter on slide eight for the full year.
Speaker Change: As Dave mentioned, our revenue grew 45% in Q4, primarily driven by one Giro unsettle.
Speaker Change: The performance of our non integrated portfolio was also strong as revenue grew 20%, excluding onetime payments related to business development.
Speaker Change: Gross margin as a percentage of revenue increased to 83, 2% in Q4, primarily impacted by favorable product mix.
Speaker Change: R&D expenses increased 18% from continued investment in our early and late stage portfolio.
Lucas Montarce: In total, we started eight new Phase 3 programs in 2024 and advanced several new assets into the cloud. Marketing, selling and administrative expenses increased 26%, mainly driven by promotional efforts to support ongoing and future loans. This includes U.S. direct-to-consumer appetizing on Sepon and Moncharo and U.S. lunch activities for Quesadilla and Epi. We also increase our commercial investment outside the U.S. to support international launches of Moncharo. Operating income more than double increasing to 5.6 billion dollars driven by higher revenue from new products. The effective tax rate was 13.2%. We deliver earnings per share of $5.32, inclusive of $0.19 of acquired IPR&D charges.
Speaker Change: We started a new phase III programs in 2024, and advanced <unk> and new assets into the clinic.
Speaker Change: Marketing selling and administrative expenses increased 26%, mainly driven by promotional efforts to support ongoing and future launches.
This includes U S direct to consumer advertising onset, one and one gyro on U S launch activities focused on Annapolis Reorders.
Speaker Change: We also increased our commercial investment outside the U S to support international launches up one genre.
Speaker Change: Operating income more than doubled increasing to $5 $6 billion.
Given by higher revenue from new products.
Speaker Change: The effective tax rate was 13, 2%.
Speaker Change: We delivered earnings per share of $5 and 32 interested of 19th of acquired IP R&D charges.
Lucas Montarce: This compares to $2.49 in Q4 2023 that includes 62 cents of acquired appearance.
Speaker Change: This compares to $2 49 in Q4 2023 that includes 62 cents of acquired IP R&D.
Lucas Montarce: On slide 9, we quantify the effect of price, rate and volume on revenue growth. U.S. revenue increased 40% in Q4, driven by robust volume growth of 45%. Stefan and Moncharo were again the largest growth contributors, partially offset by declines in truly Realized prices decreased 5% in the U.S. due to favorable changes to estimates for rebates and discounts related to Moncharo in Q4 2023 Europe revenue grew 82% in constant currency. We continue to be pleased with the uptake of Moncharo and have now launched in all major European markets. In addition to growth from Monjaro, European revenue benefited from one-time payment associated with the amendment of our alliance with Beringer-Ingotham.
Speaker Change: On slide nine we quantified the effect of price rate and volume on revenue growth.
Speaker Change: U S revenue increased 40% in Q4, driven by robust volume growth of 45% stake.
Speaker Change: <unk> Giro were again, the largest growth contributors, partially offset by declines in <unk>.
Speaker Change: Realized prices decreased 5% in the U S. Due to favorable changes to estimates for rebates and discounts related to one Giro in Q4 2023.
Speaker Change: Europe revenue grew 82% in constant currency, we continue to be pleased with the uptake of <unk> Giro and have now launched in all major European markets.
Speaker Change: In addition to growth from a general European revenue benefited from one time payment associated with the amendment of our alliance with Boehringer Ingelheim.
Lucas Montarce: This was recorded in Jardians Revenue in Q4. Excluding this one-time payment, Europe Revenue grew 61%. Japan Revenue grew 27% in constant currents Volume growth was driven by Moncharo, Ombud, Chargens and Bersin In China, revenue increased 13% in cost and current David and Arsenio draw volume growth Monjaro was recently made available in China and will proceed with a limited launch as supply becomes available. We expect modest initial Moncharo sales in China due to supply limitations. A more meaningful contribution in the second half of 2025. Revenue in the rest of the world grew 46% in constant currency, driven by volume growth of Moncharon Percent.
Speaker Change: This was recorded in <unk> revenue in Q4.
Speaker Change: Excluding this onetime payment Europe revenue grew 61%.
Speaker Change: Japan revenue grew 27% in constant currency.
Speaker Change: Volume growth was driven by more gyro onboard charging standby, saying, yes.
Speaker Change: In China revenue increased 13% in constant currency.
Speaker Change: <unk> drove volume growth.
Speaker Change: <unk> was recently made available in China, and we will proceed with a limited launch of supply becomes available.
We expect modest initial Amun gyro sales in China due to supply limitations.
Speaker Change: Or meaningful contribution in the second half of 2025.
Speaker Change: Revenue in the rest of the World grew 46% in constant currency driven by volume growth Oakmont giron percent here.
Lucas Montarce: Slide 10 provides an update on our performance of new and growth products. New products more than double in Q4 to $5.6 billion, led by global Bonjaro sales of $3.5 billion and U.S. setback sales of $1.9 billion. USF performance is going very well. We began promotional activities this quarter and we continue to see strong updates. In Q4, SEPPAN became the market leader in the anti-obesity market as measured by new prescriptions. As shown in 2011, we combined U.S. inkjet and analog market grew 45% compared to Q4 2023. We increased three percentage points in share of market in Q4 2024.
Speaker Change: Slide 10 provides an update on our on our performance of new and growth products.
Speaker Change: New products more than doubled in Q4 to $5 6 billion.
Speaker Change: Led by global when gyros sales of $3 $5 billion and U S. <unk> sales of $1 9 billion.
Speaker Change: You have Stefan for four months is going very well.
Speaker Change: We began promotional activities this quarter and we continued to see strong uptake.
Speaker Change: In Q4, <unk> became the market leader in the anti obesity market as measured by new prescriptions.
Speaker Change: As shown on United May 11.
Speaker Change: Combined U S and create an analog market grew.
Speaker Change: <unk> grew 45% compared to Q4 2023.
Speaker Change: We increased three percentage points in share of market in Q4 2024.
Lucas Montarce: Chypirka, worldwide revenue was $114 million adding another solid quarter of sequential revenue growth. Worldwide on-board revenue increased to $57 million With the recent FDA approval in Crohn's disease, we look to drive broader use in an additional patient population. The Kisanla launch is progressing well and prescriptions in the U.S. have been steadily increasing. While it is early, we saw positive momentum across key indications, key indicators, including volume of diagnostic order, access in priority integrated health systems, coverage by Medicare and commercial plans, and number of infusion sites placing orders. We are encouraged by the launch of AppList in the U.S.
Speaker Change: J P workout worldwide revenue was $114 million.
Speaker Change: Adding another solid quarter of sequential revenue growth.
Speaker Change: Worldwide <unk> revenue increased to $57 million.
Speaker Change: With the recent FDA approval in Crohn's disease, we look to drive broader use in an additional patient population.
Speaker Change: Thank you Sunday lunch is progressing well and prescription in the U S have been steadily increasing.
Speaker Change: It is early we saw positive momentum across key indications key indicators, including volume of diagnostic ordered.
Speaker Change: Access in priority integrated health systems coverage by Medicare and commercial plans on number of infusion sites, placing orders.
Speaker Change: We are encouraged by the launch of at least in the U S. We.
Lucas Montarce: We saw early positive receptivity and high levels of physician engagement. In addition, we expect commercial access with two of the largest RMAP benefit managers beginning in March. We now plan an accelerated investment in commercial activities to drive new patient starts. Growth products also perform well as revenue increased by 13% compared to Q4 2023. Persenio's growth trajectory continued as U.S. total prescription grew by 15%. In addition to strong execution in the early breast cancer indication, Arsenio's revenue benefited from increased U.S. Host Service stockade at ERF.
Speaker Change: We saw early positive rest of DVD and high levels of physician engagement.
Speaker Change: In addition, we expect commercial access with two of the largest farm up benefit managers beginning in March.
Speaker Change: We now plan on accelerating investment in commercial activities to drive new patient start.
Speaker Change: Gross products also performed well as revenue increased by 13% compared to Q4 2023.
Speaker Change: <unk> growth trajectory continue.
Speaker Change: U S total prescription grew by 15%.
Speaker Change: In addition to strong execution in the early breast cancer indication.
Speaker Change: The annual revenue benefited from increased U S hold service took it at year end.
Lucas Montarce: Worldwide Trulicity Revenue declined 25% driven by Monjaro switches and to a lesser extent lower realized price On slide 12, we provide an update on capital allocation. Moving to slide 13 and 14, I will discuss our 2025 financial guide. As previously shared, we expect 2025 revenue to be between $58 and $61 billion. The midpoint represents approximately 32% growth compared to 2024. We anticipate continued U.S. increasing class growth, consistent with the trajectory of total prescription seen in 2024. We expect to launch Moncharo in new markets outside the U.S. and Europe throughout the year. Monjar International Revenue will contribute to overall performance more significantly in the second part of 2025.
Speaker Change: Worldwide <unk> revenue declined 25% driven by wound Giro switches and to a lesser extent lower realized prices.
Speaker Change: On slide 12, we provide an update on capital allocation.
Speaker Change: Moving to slide 13, and 14, I will discuss our 2025 financial guidance.
Speaker Change: As previously shared we expect 2025 revenue to be between 58, and <unk> $61 billion.
Speaker Change: At the midpoint represent approximately 32% growth compared to 2024.
Speaker Change: We anticipate continued U S in creating class growth consistent with the trajectory of total prescriptions seen in 2024.
Speaker Change: We expect to launch one genre with new markets outside the U S and Europe throughout the year.
Speaker Change: Montgomery International revenue will contribute to overall performance more significantly in the second part of 2025.
Lucas Montarce: Given the uptick of newer ingredients, we expect trulicity volume to continue declining as fewer new patients are starting on trulicity. We expect Oncology, Neuroscience and Immunology to also grow revenue in 2025, as Epsiglis, Chypirka, Ombo and Kisanla launch uptakes continue. At the portfolio level, we anticipate foreign exchange to be a headwind as the dollar has strengthened relative to other currencies. In addition, we forecast overall net prices to decline by mid to high single digits in percentage terms, including U.S. Part D change. We continue expanding our manufacturing capacity, an estimate to produce 1.6 times the amount of incredible doses during the first half of 2025 compared to the first half of 2024.
Speaker Change: Given the uptake of newer ingredients, we expect to elicit volume to continue declining as fewer new patients are studying aren't really sitting.
Speaker Change: We expect oncology neuroscience and immuno <unk> to also grow revenue in 2025.
Speaker Change: Absolutely type Utica ongoing Sunday lunch optics continue.
Speaker Change: At the portfolio level, we anticipate foreign exchange to be a headwind as the dollar has strengthened relative to other currencies.
Speaker Change: In addition, we forecast, albeit only met prices to decline by mid to high single digits in percentage terms, including U S. Part D changes.
Speaker Change: We continue expanding our manufacturing capacity and estimated to produce one six times the amount of increase in saleable doses. During the first half of 2025 compared to the first half of 2024.
Lucas Montarce: Our facility in Concord is anticipated to begin shipping medicines this year and we plan to make continued progress on expanding our manufacturing network. Our expected ratio of gross margin less OPEX divided by revenue is expected to be between 41.5% and 43.5%. At the midpoint, this reflects approximately 340 basis points of margin expansion compared to 2024. In SCNA, we will continue to invest behind our new launches, including direct-to-consumer efforts in the U.S. to drive new patient activation. In addition, we plan to increase investment outside the U.S. to support the launches of Moncharo in new and existing markets.
Speaker Change: Our facility in Concord is anticipated to begin shipping medicines. This year and we plan to make continued progress on expanding our manufacturing network.
I would expect the ratio of gross margin less opex divided by revenue is expected to be between 41, 5% and 43, 5%.
Speaker Change: At the midpoint. This reflects approximately 340 basis points of margin expansion compared to 2024.
Speaker Change: In SG&A, we will continue to invest behind our new launches, including direct to consumer efforts in the U S to drive new patient activation.
Speaker Change: Nation, we plan to increase investment outside the U S to support the launch of something on Giro in new and existing markets.
Lucas Montarce: In R&D, we plan to accelerate our investment in early and late phase activity. As Stan will share later, we started eight new phase three programs in 2024 and anticipate that investment in those programs will ramp as the studies enroll patients. We also plan to initiate new Phase 3 programs in 2025. While we keep a high bar for what we advance into clinic development, we expect to scale our investment in R&D this year. Other expenses is expected to be $600 to $700 million driven by interest expense. We estimate our affected tax rate to be approximately 16%.
Speaker Change: In R&D, we plan to accelerate our investment in early or late phase activities.
Speaker Change: As Dan will share later, we started a new phase III programs in 2024 and anticipate that investment in those programs will run as these studies enrolled patients.
Speaker Change: We also plan to initiate a new phase III programs in 2025.
Speaker Change: Why do we keep a high bar for what we advanced into clinical development, we expect to scale our investment in R&D This year.
Speaker Change: Other expenses is expected to be 600 to 700 million driven by interest expense.
Speaker Change: We estimate our effective tax rate to be approximately 16%.
Lucas Montarce: Earnings per share or EPS is expected to be $22.50 and $24 on an on-gap basis. This doesn't include a forecast for charges related to IPR&D.
Speaker Change: Earnings per share or EPS is expected to be $22 50.
Speaker Change: And $24 on a non-GAAP basis.
Speaker Change: This doesn't include a forecast for charges related to IP R&D.
Dan Skovronsky: Now I will turn the call over to Dan to highlight our progress in R&D and to provide an overview of potential key events we expect in 2025. Thanks, Lucas. Lilly R&D had another productive quarter. I'll cover pipeline progress in Q4, then the 2024 key events, and finally provide potential key events for 2025. Since our last earnings call, two new indications were approved in the U.S., ZepBound for obstructive sleep apnea in adults with obesity and OMBO for moderate to severe Crohn's disease. Both approvals are important milestones and mark an expansion in the number of patients who can benefit from each of these medicines.
Dan: Now I will turn the call over to Dan to highlight our progress in R&D and to provide an overview of potential key events. We expect in 2025. Thank.
Dan: Thanks Lucas.
Dan: R&D had another productive quarter I'll cover our pipeline progress in Q4 than the 2024 key events and finally provide potential key events for 2025.
Dan: Since our last earnings call two new indications were approved in the U S. ZIP bound for obstructive sleep apnea in adults with obesity and umbro for moderate to severe crohn's disease.
Dan: Both approvals are important milestones and market expansion in the number of patients who can benefit from each of these medicines.
Dan Skovronsky: Moving to regulatory submissions, we completed submissions in the U.S. and E.U. for trizepatide for heart failure and global submissions for imlinestrin for metastatic breast cancer and for JPERCA with the Bruin CLL 321 data. I'm also pleased to share that we've submitted an update to the Kusumla U.S. label to include the dosing modification data from Trailblazer L6, and the FDA has granted the submission a priority review. In our Phase 3 portfolio, we initiated a new program for orophoclipron in obstructive sleep apnea. This program includes two studies under the same master protocol to evaluate if people with obstructive sleep apnea and obesity can benefit from morphoclip bronchitis.
Dan: Moving to regulatory submissions, we completed submissions in the U S and EU for <unk> appetite for heart failure, and global submissions for inland <unk> for metastatic breast cancer and for Jay pickup with the Brewer in CLO 321 data.
Dan: I'm also pleased to share that we have submitted an update to the consumer U S label to include the dosing modification data from Trailblazer all six.
Dan: And the FDA has granted this submission and priority review.
Dan: In our phase III portfolio, we initiated a new program for <unk> in obstructive sleep apnea.
Dan: This program includes two studies under the same master protocol to evaluate people with obstructive sleep apnea and obesity could benefit for more for clip Brian.
Dan Skovronsky: After ZepBound was approved in the U.S. as the first and only prescription medicine for obstructive sleep apnea, we're excited to explore if an oral GLP-1 can also deliver a benefit in this disease. Earlier in the pipeline, we advanced a second oral GLP-1 into Phase 2 in obesity and advanced L-trecobart into Phase 2 for ulcerative colitis. Three Phase II assets and one Phase I asset have been discontinued based on clinical readout. In Q4, we also began phase one studies for four new molecules, one in each of our therapeutic areas. Q4 capped off a productive year of advancing new medicines at Lilly.
Dan: After his earthbound was approved in the U S. As the first and only prescription medicine for obstructive sleep apnea. We're excited to explore if an oral <unk>. One can also deliver benefit in this disease.
Dan: Earlier in the pipeline, we advanced a second oral <unk> into phase III in obesity and <unk>.
Dan: First I'll check a box into phase two for ulcerative colitis.
Dan: Three phase two assets in one phase one asset have been discontinued based on clinical readouts.
Dan: In Q4, we also began phase one studies for four new molecules one in each of our therapeutic areas.
Dan: Q4 capped off a productive year of advancing new medicines at Lilly.
Dan Skovronsky: In total, over the year, we started eight new phase three programs. We disclosed phase three data from 21 trials, including 17 major publications in top tier medical journals. We received regulatory approvals for two new medicines, Evgles and Casunla. as well as many new indications around the world and we added 14 new programs to the early phase pipeline. On slide 16, we detail these outcomes for our 2024 milestone. I'm pleased that nearly all of our anticipated milestones came to fruition positively in 2020.
Dan: In total over the year, we started eight new phase III programs, we disclosed phase III data from 'twenty, one trials, including 17 major publications in top tier medical journals.
Dan: We received regulatory approvals for two new medicines at classic is similar.
Dan: As well as many new indications around the world and we added 14, new programs to the early phase pipeline.
Dan: On slide 16, we detail these outcomes for our 2024 milestones I.
Dan: I am pleased that nearly all of our anticipated milestones came to fruition positively in 2024.
Dan Skovronsky: Turning our focus to 2025, slide 17 shows key R&D milestones we expect this year. Starting with our late-stage portfolio, we expect to initiate two new Phase III programs this year. First, in oncology, we'll begin an adjuvant non-small cell lung cancer Phase III program for our KRAS G12C inhibitor, olomeric acid, building on its ability to be administered with immunotherapy. Our current metastatic program is progressing well, and we've aligned with the FDA on our Phase 3 dose through the Project Optimist pathway. We shared a clinical update at the World Conference on Lung Cancer last fall, and we are encouraged by the ability to safely combine olomeric acid with other agents.
Dan: Turning our focus to 2025 slide 17 shows key R&D milestones, we expect this year.
Dan: Starting with our late stage portfolio, we expect to initiate two new phase III programs. This year.
Dan: In oncology, we'll begin an adjuvant non small cell lung cancer phase III program for our <unk> inhibitor all of our asset building on its ability to be administered with immunotherapy.
Dan: Our current metastatic program is progressing well and we've aligned with the FDA in our phase III dose through the project Optimists pathway.
Dan: We shared a clinical update at the World Conference on lung cancer last fall.
And we are encouraged by the ability to safely combine <unk> with other agents.
Dan Skovronsky: Our new Phase 3 program will focus on moving to an earlier setting and combining with existing approved agents in both resectable and unresectable KOSG12C mutant lung cancer to prevent cancer from recurring. The second program is in cardiometabolic health, where we plan to initiate a phase three trial for or for glipron and hypertension, adding to the ongoing trials in type 2 diabetes, obesity and obstructive sleep apnea. I'm excited that this year we're looking forward to reading out multiple Orford-Wipron trials. We expect to see data from up to five studies in type 2 diabetes and two studies in obesity.
Dan: Our new Phase III program will focus on moving to an earlier study and combining with existing approved agents in both Resectable and Unresectable <unk> 12, <unk> mutant lung cancer to prevent cancer recurrence.
Dan: The second program is in cardio metabolic health, where we plan to initiate a phase II trial for forklift, Brian hypertension, adding to the ongoing trials in type two diabetes obesity and obstructive sleep apnea.
Dan: I'm excited that this year, we're looking forward to reading out multiple upward blip on trials, we expect to see data from five studies in type two diabetes in two studies in obesity.
Dan Skovronsky: Our goal is to generate efficacy, safety and tolerability profile that is similar to that of an injectable single acting GLP-1, but through an orally available method. The first ORFRA Glyph on Phase 3 trial to read out will be Achieve 1, which is a 40-week study in patients with type 2 diabetes. These patients have a baseline hemoglobin A1c between 7 and 9.5% and a body mass index of 23 or greater. The trial utilizes six escalating doses in four week increments to a maximum dose of 36 milligrams. Based on prior studies of Opraglibron as well as other GLP-1 therapies, we expect weight loss in people with diabetes to be significantly less than in people living with obesity who do not have diabetes.
Dan: Our goal is to generate efficacy safety and Tolerability profile that is similar to that of an injectable single-acting DLP, one but through an orally available medicine.
Dan: The first ore from <unk> phase III trial to readout will be achieved one which is a 40 week study in patients with type two diabetes.
Dan: These patients have a baseline hemoglobin <unk> C between seven and nine 5% and a body mass index of 23 or greater.
Dan: Trial utilizes fixed escalating doses in four week increments to a maximum dose at 36 milligrams.
Speaker Change: Based on prior studies of Volcker Glib, Brian as well as other <unk> therapies, we expect weight loss in people with diabetes to be significantly less than in people living with obesity, who do not have diabetes.
Dan Skovronsky: We anticipate Achieve 1 will read out in Q2 this year, followed by up to four additional type 2 diabetes trials in the second half of 2025 and a potential submission for this indication in 2026. The ORFOR GLIFRON Phase 3 trials in people with obesity, ATTAIN1 and ATTAIN2, are expected to read out in Q3 of this year. These trials will form the basis of our first ORFOR-GLIPRON regulatory submissions, which will be for the treatment of obesity, and we expect to occur late in 2025. This year, we also expect data from the Terzapatite Cardiovascular Outcomes Study surpass CBOT.
Speaker Change: We anticipate achieved one will readout in Q2. This year followed by up to four additional type two diabetes trials in the second half of 2025 and a potential submission for this indication in 2026.
Speaker Change: The offer different phase III trials in people with obesity attain one <unk> two or.
Speaker Change: Our expected to read out in Q3 of this year. These.
Speaker Change: These trials will form the basis of our first offer clip on regulatory submissions, which will be for the treatment of obesity and we expect to occur late in 2025.
Speaker Change: This year, we also expect data from the tours appetite cardiovascular outcome study surpassed cbot.
Dan Skovronsky: Of course, this is an event based trial and the timeline is dependent on the accrual of cardiovascular events. We anticipate data in Q3. While designed to measure both non-inferiority and superiority compared to trulicity, the positive outcome in either would demonstrate that tergepetide reduces the risk of cardiovascular outcomes and would support a labeled indication.
Speaker Change: Of course this is an event based trial and the timeline is dependent on the accrual of cardiovascular events.
Speaker Change: We anticipate data in Q3.
Speaker Change: <unk> designed to measure both non inferiority and superiority compared to <unk>. The positive outcome in either would demonstrate that there's appetite reduces the risk of cardiovascular outcomes and it support our labeled indications.
Dan Skovronsky: Late this year, we expect to see the first data from a triple-acting incretin, Rettetrutide, which combines GLP-1, GIP, and glucagon. We believe this potential new medicine can deliver even more weight loss than tercepatide and could potentially provide additional health benefits. The initial study to read out, Triumph 4, is a 68-week study. in patients with osteoarthritis of the knee who have a body mass index of 27 or greater. We'll also see multiple additional JPRCA datasets. Physician feedback is very positive on experience with J-PERCOT and the currently approved indication And we hope that generating data and earlier lines of therapy will enable broader use within CLL and MCL.
Speaker Change: Late this year, we expect to see the first data from a triple acting Incretin, <unk>, which combines <unk> Gi and glucagon.
Speaker Change: We believe this potential new medicine could deliver even more weight loss than <unk> appetite and could potentially provide additional health benefits.
Speaker Change: The initial study to readout train four is a 68 week study.
Speaker Change: In patients with osteoarthritis of the need to have a body mass index of 27 or greater.
Speaker Change: We will also see multiple additional <unk> data set for this year.
Speaker Change: Physician feedback is very positive on experience with <unk> and the currently approved indications and we hope that generating data in earlier lines of therapy will enable broader use within CLO and <unk>.
Dan Skovronsky: We could see data from additional trials in the first line or BTK Naive settings this year.
Speaker Change: We could see data from additional trials in the first line of BTA naive settings. This year.
Dan Skovronsky: Moving to neurodegeneration, well, we don't have a key event listed in 2025 for denetimat. We're closely watching the preclinical Alzheimer's disease study Trailblazer ALS-3. This trial screened patients with a blood based diagnostic and utilized a fixed duration of treatment with denetimat. By moving earlier in disease progression, the goal is to reduce the risks of developing any symptoms of Alzheimer's disease. While the current primary completion is projected for 2027, the study will read out when the target number of progression events are accrued.
Speaker Change: Moving to neuro degeneration, but we don't have a key event listed in 2025 nanometer.
Speaker Change: Closely watching the preclinical Alzheimer's disease study Trailblazer <unk> III.
Speaker Change: Trials screen patients with a blood based diagnostic and utilized it fixed duration of treatment with de Minimis right.
Speaker Change: Moving earlier in disease progression. The goal is to reduce the risks of developing any symptoms of Alzheimer's disease.
Speaker Change: The current primary completion is projected for 2027 study will readout when the target number of progression events are accrued.
Dan Skovronsky: A new focus area for us in 2025 will be to study potential new applications of inkitchen biology across diseases in neuroscience and immunology. With a pipeline of incretins in clinical development and deep scientific expertise in this space, Lilly is well positioned to match the biologic properties of specific molecules to the desired indications being studied. We plan to start several clinical trials assessing potential benefits of our incretins in areas that could include brain health, substance use disorder, pain, neuropsychiatry and inflammation. will be prepared to move rapidly into phase three trials based on clinical data and where our conviction is.
Speaker Change: A new focus area for us in 2025 will be the study potential new applications are in kitchen biology across diseases in neuroscience and immunology.
Speaker Change: With a pipeline of Aker <unk> in clinical development and deep scientific expertise in this space really is well positioned to match the biologic properties of specific molecules.
Speaker Change: To the desired indications being studied.
Speaker Change: We plan to start several clinical trials assessing potential benefits of our anchor tenants in areas that could include brain health subs.
Speaker Change: Substance use disorder.
Speaker Change: Pain neuropsychiatry and inflammation.
Speaker Change: We'll be prepared to move rapidly into phase III trials based on clinical data and where our conviction is high.
Dan Skovronsky: Lastly, we expect a number of important regulatory submissions in 2025, including Orford Glypron for obesity, as I detailed, Insulin Epsitora Alpha for type 2 diabetes, Gergeptide for cardiovascular outcomes, and multiple potential data sets for Jay Perkins. 2025 will be another exciting year for Lilliard.
Speaker Change: Lastly, we expect a number of important regulatory submissions in 2025, including or for clip Ron for obesity is that detailed.
Speaker Change: Insulin <unk> to our outlook for type two diabetes.
Speaker Change: <unk> appetite for cardiovascular outcomes and multiple potential data sets for <unk>.
Speaker Change: 2025 will be another exciting year for Lilly R&D.
Dave Ricks: Now I'll turn the call back to Dave for some closing remarks. Yeah, thanks, Dan. So we had a strong financial performance in Q4 and throughout 2020. We finished $4 billion above our first-time revenue guide and $4 per share above our first-time EPS when taking RIPRD or charges into account. The Incredent Market continues to grow rapidly, and Manjaro and ZepBound are both gaining share We believe both products are still very early in their launch cycle. In addition, our oncology, immunology and neuroscience therapeutic areas continue to progress, launching new medicines and delivering strong revenue growth. We have an exciting outlook for growth in 2025 as well.
Speaker Change: Now I'll turn the call back to Dave for some closing remarks, yes. Thanks, Dan.
Speaker Change: So we had a strong financial performance in Q4 and throughout 2024.
Speaker Change: We finished 4 billion above our first time revenue guide and $4 per share above our first half EPS guide.
Speaker Change: When taking our IP R&D charges into account.
Speaker Change: The <unk> market continues to grow rapidly and Monteiro <unk> Ziff found are both gaining share of market.
Speaker Change: We believe both products are still very early in their launch cycle.
Speaker Change: In addition, our oncology immunology and neuroscience therapeutic areas continue to progress launching new medicines and delivering strong revenue growth.
Speaker Change: Okay.
Speaker Change: We have an exciting outlook for growth in 2025, as well new indications you manufacturing capacities to access.
Dave Ricks: New invitations, new manufacturing capacities, new access opportunities and new markets are all tailwinds to our financial performance. We made significant advances across our pipeline in 2024 and have several exciting readouts, which Dan just highlighted, expected throughout 2025.
Speaker Change: <unk>.
Speaker Change: The new markets are all tailwind to our financial performance.
Speaker Change: We made significant advances across our pipeline in 2024 and have several exciting readouts, which Dan just highlighted expected throughout 2025.
Mike Zappar: So now let me turn the call over to Mike to moderate our Q&A session. Thanks Dave. We'd like to take questions from as many callers as possible and conclude our call on time. So to that end, consistent with prior quarters, we will respond to one question per caller and we will end at 11am. If you have more than one question, you may re-enter the queue and we will get to your question if time allows. All please provide the instructions for the Q&A and we're ready to take the first caller. Thank you. At this time, we'll be conducting a question and answer session.
Speaker Change: So now let me turn the call over to Mike to moderate our Q&A session.
Mike Sapar: Thanks, Ed.
Mike Sapar: I'd like to take questions from as many callers as possible and conclude our call on time, so to that end consistent with prior quarters. We will respond to one question per caller and will end at 11 a M. If you have more than one question you may reenter the queue and we will get to your question if time allows.
Mike Sapar: Paul Please provide the instructions for the Q&A and we are ready to take the first caller.
Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you have any questions. Please press star one on your phone at this time.
Unknown Executive: If you have any questions, please press star one on your phone at this time.
Unknown Executive: we ask that participants limit themselves to one question on today's call if you do have a follow-up question please rejoin the queue by pressing star 1 at We also ask that while posing your question you please pick up your handset if listening on speakerphone to provide optimum sound.
Speaker Change: We ask that participants limit themselves to one question on today's call. If you do have a follow up question. Please rejoin the queue by pressing star one at anytime.
Speaker Change: We also ask that while posing your question you. Please pick up your handset if listening on speaker phone to provide optimum sound quality. Please hold while we poll for questions.
Tim Anderson: First question today is coming from Tim Anderson from Bank of America. Tim, your line is now Thanks so much. Just a question on the guidance, the 2025 guidance. So I think everyone knows the prescription uptake trend didn't show acceleration hasn't shown it yet. That's been viewed by some as a concern. Does the 2025 guidance require acceleration? Or can you get their scripts just continue on the same trajectory and the slope of that line does When I do back and envelope math, it seems like that's frankly all that needs to occur. And one of your slides suggests that might be the right way to think about it as well.
Speaker Change: And the first question today is coming from Tim Anderson from Bank of America, Tim Your line is live.
Speaker Change: Thanks, so much.
Tim Anderson: Just a question on the guidance.
Speaker Change: 2025 guidance so.
Speaker Change: I think everyone knows the prescription uptake trend didn't show acceleration hasn't shown it yet.
Speaker Change: That's been viewed by some as a concern.
Speaker Change: Does the 2025 guidance require acceleration.
Speaker Change: Or can you get there are scripts just continue on the same trajectory in the slope of that line doesn't change when I do back of the envelope math. It seems like that's frankly, all that needs to occur and.
Speaker Change: One of your slides suggest.
Speaker Change: Suggest that might be the right way to think about it as well but can.
Unknown Executive: But can you Great.
Speaker Change: Can you just confirm.
Lucas Montarce: Thanks, Tim, for the question. We'll go to Lucas to talk about the guide's assumptions. Yeah, we mentioned in my notes that what we expect to see, Tim, is a continuation of basically the total prescription growth that we have seen in 2024. So that's what we built in our 2025 guide for the market.
Speaker Change: Great. Thanks, Tim for the question, we'll go to Lucas to talk about the guidance assumptions.
Speaker Change: You mentioned in my notes that what.
Lucas: We expect to see TMA continuation of basically the total prescription growth that we have seen in 2024 so.
Lucas: What are we built in our 2025 guide to the market for the market.
Unknown Executive: Great. Next question, please.
Lucas: Great. Thanks.
Lucas: Next question please.
Terence Flynn: The next question is coming from Terence Flynn from Morgan Stanley. Terence, your line is live. Great, thanks so much.
Speaker Change: The next question is coming from Terence Flynn from Morgan Stanley. Your line is live.
Speaker Change: Great. Thanks, so much.
Terence Flynn: I was just wondering if you could maybe elaborate on your expectations for ZEP bound payer dynamics and access this year, particularly the impact from the OSA label.
Terence Flynn: I was just wondering if you could maybe elaborate on your expectations for us that bound payer dynamics and access this year, particularly the impact from the OSA label I know you've also filed for heart failure, and how you expect that to play out over the course of the year and then anything on next steps on the compounding litigation that we should be focused on thank you.
Terence Flynn: I know you've also filed for heart failure, and how you expect that to play out over the course of the year and then anything on next steps on the compounding litigation that we should be focused on. Thank you.
Patrik Jonsson: Dangerously close to a two-part question there, Terrence, but we'll go to Patrik to talk about access, and then I'll come back to Dave to make a quick comment about compounding. Thank you very much. When we look at the commercial access, it remains strong with 87% coverage in the commercial space still. And of course, the employer opt-in is the second step of high importance that made progress in 2024. And we expect in terms of employer opt-in that we're north of 50% today. OSA remains an opportunity for us to gain access also in the Medicare segment. And CMS confirmed recently that they will reimburse OSA if Plan D plans decide to lift it.
Terence Flynn: Dangerously close to a two part question there tenants, but I will go to <unk>.
Speaker Change: Patrick to talk about access and then I'll come back to David make a quick comment about compound it. Thank.
Speaker Change: Thank you very much and we look at the commercial access it remains strong with 87% coverage in the commercial space and of course, the employer opt in as a second step.
Speaker Change: High importance that made progress in 2024, and we expect in terms of employer opt in that north of 50% today.
Speaker Change: <unk> remains an opportunity for us to gain access also in the Medicare segment, and CMS confirmed recently that they will ramp.
Speaker Change: Hey, <unk>.
Patrik Jonsson: And they have 180 days to make that decision from the FDA approval. And we're working with plans right now. And we anticipate to get some Medicare coverage by the second half of this year. And similarly, OSA is also an opportunity for us to get more Medicaid states signed in. We expect PF, when and if approved, to have a similar role as OSA, an access opportunity, particularly in Medicare and Medicaid.
Speaker Change: And decides to lease it and they have 180 days to make that decision from the FDA approval and we are working with plans right now and we anticipate to get some Medicare cap rate by the second half of this year and similarly, let's say, it's always an opportunity for us to get more Medicaid states.
We expect to win and if approved at the same level asset so, let's say an access opportunity, particularly in Medicare and Medicaid.
Dave Ricks: Yeah, so regarding compounding, you know, I think our position has been pretty clear. We've been have not received any medical supplies since August. The FDA took us off the list formally, later in Q4, of course the compounding associations are suing to delay that, we oppose that, haven't joined that suit I think the next date coming up is February 18th, where the FDA said that's when you need to stop one form of compounding Our position has been clear all along, we don't think there's a place for this because we have full supply and there's no reason to have non-approved, kind of illegitimate product out there Of course, new sheriff in town, new government and court case pending, so we don't know the outcome of all that But that all said, I think our business is growing nicely in Q4 and we can see that prescription trends early this year It's just an unsafe practice that shouldn't exist and long-term probably isn't great for innovators So we'd like to move on from this and hope that's what the courts and the government decide to do Great.
Speaker Change: Yes, so regarding compounding I think our position has been pretty clear we've been.
Speaker Change: In supply since August.
Speaker Change: The FTAA took us off the list formerly later in Q4 of course, the compounding associations are suing the delay that we oppose that I'm enjoying that suit I think the next day coming up this February 18th.
Speaker Change: FDA said, that's when you need to stop one form of compounding our position has been clear all along we don't think there's a place for this is because we have full supply and there's no reason to have non approved kind of illegitimate product out there. So.
Speaker Change: Of course, new Sheriff in town, New government and.
Speaker Change: A court case pending so we don't know the outcome of all of that but that all said I mean.
Speaker Change: I think our business is growing nicely in Q4 and we.
Speaker Change: We can see that prescription trends early this year.
Speaker Change: It's just an unsafe practice that shouldnt exist in long term probably isn't great for innovators, so we'd like to move on from this and hope that with.
Speaker Change: But the courts and the government decided to do.
Unknown Executive: Thanks, David and Patrick. Next caller, please.
Speaker Change: Great. Thanks, David Patrick next caller please.
Courtney Breen: The next question is coming from Courtney Breen from Bern Courtney Irland. Hi everyone, thanks for taking the call today. I just wanted to zoom into Orphoglipron specifically and I think you took the chance to make the point about diabetes and diabetes population and their weight loss. Can you just talk a little bit more about kind of the potential positioning, particularly in the context of kind of that single injectable GOP1 kind of anticipated efficacy that you were guiding to?
Speaker Change: The next question is coming from Courtney <unk> from Bernstein.
Speaker Change: Your line is live.
Courtney: Hi, everyone. Thanks for taking the call today I just wanted to zoom in to also grant Brown, specifically and I think you made.
Speaker Change: Took the chance to make the point about diabetes and debbie's combination in their weight loss can you just talk a little bit more about kind of the potential positioning, particularly in the context of kind of that.
Speaker Change: Single injectable GL coupon kind of anticipated efficacy that you're guiding to.
Dan Skovronsky: Great. Thanks, Courtney.
Speaker Change: Okay, great. Thanks, Courtney, we'll go to Dan to talk about our REIT comparable with Brian.
Dan Skovronsky: We'll go to Dan to talk about the right comparable flip run. Yeah, sure. I'll I'll start on the efficacy expectations and then maybe Patrick can talk about the market positioning here. So you're right. It's a single GLP-1 and we take pains to mention that because we're not expecting the kinds of efficacy or tolerability, actually, that we see with terzapatite, which is a dual acting agent. Still, as you know, monotherapy with GLP-1 has provided important benefits to many patients. And so we're setting our sights there. This is a first study in type two diabetes patients where, as I noted, weight loss is typically quite a bit lower than you see in people without type two diabetes.
Speaker Change: Yes sure.
Speaker Change: On the efficacy expectations and then maybe Patrick can talk about the market positioning here. So.
Speaker Change: Youre right its a single <unk> and we'd take pains, Ted mentioned that because we were not expecting the kinds of efficacy or tolerability actually that we see with tours appetite, which is a dual acting agent still as you know.
Speaker Change: Monotherapy with <unk> to provide important benefits to many patients and so we're setting our sights. There. This is our first study in type two diabetes patients wear.
Speaker Change: As I noted weight losses is typically quite a bit lower than you see in people without type two diabetes. So we sort of index on the efficacy that we've seen in the past with epic.
Dan Skovronsky: So we sort of index on the efficacy that we've seen in the past with Osempic and we'll get that data soon and excited to see it. And from a positioning perspective, you know, we like the idea of having an oral with an injectable GLP-1 efficacy. And that is a big portion of patients that actually have needle fear. It's estimated in the US to be 20 to 25 percent. And also a group of patients that doesn't necessarily need the amount of weight loss or HPA1C reduction as terzapatite generates. That might be an opportunity in the maintenance space as well.
Speaker Change: We'll get that data as soon as excited to see it.
Speaker Change: Patrick and from a positioning perspective.
Speaker Change: The idea of having an all around.
Speaker Change: And the injectable <unk>, one I can't be gassy and that is a big.
A portion of patients that actually have need as theory, mainly in the U S to be 20% to 25% and also a group of patients that doesn't necessarily need the amount of weight loss on HVA. Once he reduction a stair step of high generates and that might be an opportunity in the maintenance base is when at last and very importantly, it's an opportunity to scale and markets out.
Dan Skovronsky: But last and very importantly, it's an opportunity to scale in markets outside the US, taking into account that we don't have a need for refrigeration. Great.
Speaker Change: The U S taking into account that we don't have a need for refrigeration.
Unknown Executive: Thanks Patrick and Dan.
Speaker Change: Great Thanks, Patrick and Dan Our next caller please.
Chris Schott: Next caller please.
Chris Schott: The next question is coming from Chris Schott from J.P.
Speaker Change: The next question is coming from Chris Schott from J P. Morgan Chris Your line is now live.
Chris Schott: Morgan. Great. Thanks so much. Just another Orford Glyphron question. You've now launched a pretty wide range of studies, I guess, to hypertension beyond the initial obesity and type 2 diabetes studies. Can you elaborate a little bit more on what gives you confidence in running such a wide range of programs without having seen those initial readouts?
Chris Schott: Great. Thanks, so much just another <unk> question, you've now reached a pretty wide range of studies I guess today hypertension.
Chris Schott: Beyond the initial obesity and type two diabetes studies can you just elaborate a little bit more on what gives you confidence in running such a wide range of programs without having seen those initial readouts, particularly maybe some of the tolerability profiles with drugs titration et cetera, I'm, just trying to how you balance kind of the the risk taking there with the confidence in the.
Unknown Executive: http://www.youtube.com.au Great. Thanks, Chris.
Chris Schott: That you have right now thank you.
Dan Skovronsky: We'll go to Dan for that question. Yeah. Thanks, Chris. It's a smart question. You know, of course, going into phase three with any drug, particularly a small molecule such as oproglyphron, the biggest risk is safety. And I think as these trials proceed, even though we're not seeing the safety data, we grow more confident in the overall safety profile of the drug because the trials continue uninterrupted. Of course, we won't know for sure until we get that first data readout and then subsequent data readouts. But it's correct that we grow more and more confident in the success of this molecule as each day passes.
Chris Schott: Great. Thanks, Chris So the answer to that question, yes. Thanks, Chris. It's smart question of course going into phase III with any drug, particularly a small molecule such as our forklift, Brian the biggest risk is safety.
Chris Schott: I think as these trials proceed even though we're not seeing the safety data.
Chris Schott: We grow more confident in the overall safety profile of the drug because Charles continue uninterrupted.
Chris Schott: Of course, we won't know for sure until we get that first data readout and then subsequent data readouts, but it's correct that we grow more and more confidence in the success of this molecule as each day passes.
Dan Skovronsky: As for specifics around tolerability and titration and discontinuations, those don't really factor into our thinking. We haven't had a look at unblinded data for any of those things. So we can't make assumptions on that.
Chris Schott: As for specifics around Tolerability.
Chris Schott: The titration and.
Chris Schott: Discontinuation.
Chris Schott: Don't really factor into our thinking we haven't had a look at unblinded data for any of those things.
Chris Schott: We can't make assumptions on that yet.
Unknown Executive: Great. Thanks, Dan.
Geoff Meacham: Next question, please. The next question will be from Geoff Meacham from Citibank. Geoff, your line is open.
Chris Schott: Alright, Thanks, Dan next question please.
Chris Schott: The next question will be from Geoff Meacham from Citibank. Your line is live.
Patrik Jonsson: Hey guys, thanks for taking the question. Just had one on on commercial terzapatide in bigger settings like diabetes prevention, or, you know, if the surpass CVOT is successful, you know, would these be a tipping point on broader reimbursement or access? I mean, it's clear you have a benefit there, but I wasn't sure if commercial payers or Medicare are looking for yet, even more data to support, you know, kind of risk benefit.
Geoff Meacham: Hey, guys. Thanks for thanks for taking the question.
Chris Schott: Just had one on.
Chris Schott: On commercial terms appetite and bigger settings like diabetes prevention or.
Chris Schott: If the surpassed cbot is successful would this be a tipping point on broader reimbursement or access I mean, its clear you have a benefit there, but I wasn't sure if commercial payers and Medicare looking for yet even more data to support kind of risk benefit. Thank you.
Unknown Executive: Thank Great. Thanks, Geoff.
Chris Schott: Great. Thanks, Jeff will go to Patrick to talk about the landscape there.
Patrik Jonsson: We'll go to Patrik to talk about the rural landscape there. Well, thank you very much, Geoff. I think for someone with one extension, it's definitely defined as game-changing at the provider level. And we are in discussions, of course, with regulatory agencies, but there is no precedent for a type 2 prevention as an indication. But the data itself, I think we will utilize to really drive increased employer opt-in, seeing the benefits of outcome studies and treatment of people with pre-life issues.
Chris Schott: Thank you very much.
Chris Schott: Somewhat one extension, it's definitely is defined as game changing as it provided an evident and we are in discussions with both with regulatory agencies, but there is no precedent for type two prevention as an indication of the.
Chris Schott: To date <unk> five I.
Chris Schott: I think we will utilize really drive increased employee loyalty and seeing the benefits of our <unk> and treatment of people with pre diabetes and obesity.
Patrik Jonsson: Maybe just a broader point, which, you know, we've said before, Geoff. You know, I think a lot of investors are looking for some single event that will, you know, trigger the fraud reimbursement or not. And I don't think we've ever really thought of it that way, but rather an accumulation and sort of weight of everything. that will grow reimbursement steadily over time. And I think that's actually what we've seen since we launched that found last year, US commercial insurance, you know, picking up several points during the year. And even X us now we have UK reimbursement, etc.
Speaker Change: Maybe just a broader point, which we've said before Jeff.
Chris Schott: I think a lot of inverse.
Chris Schott: Investors are looking for some single event that will trigger the broad reimbursement or not and I don't think we've ever really thought of it that way, but rather an accumulation of sort of weight of everything.
Chris Schott: That will grow reimbursement steadily over time and I think that's actually what we've seen since we launched step out last year U S commercial insurance picking up several points during the year.
Chris Schott: And even ex U S now with UK reimbursement et cetera.
Patrik Jonsson: But different payers will make different decisions at different times. And I think the data sets you mentioned will be some of the more compelling to create moves. But still, then the way affordability and budget constraints, et cetera.
Chris Schott: With different payers to make different decisions at different times.
Chris Schott: And I think the datasets you've mentioned there will be some of the more compelling to create moves. There's still then the way affordability and budget constraints et cetera.
Patrik Jonsson: That all said, you know, by the time we get to the end of the decade, it's hard to imagine. We are not using obesity medications to prevent what is the precursor condition to so many chronic diseases. And already the health economics are pretty compelling and there'll be more data coming beyond that. So long term, we remain really, really bullish on this whole category being reimbursed like we expect to reimburse all other medications.
Chris Schott: By the time, we get to the end of the decade, it's hard to imagine we are not using OECD vacations to prevent what is the precursor condition to so many chronic diseases and already to help economics are pretty compelling and there'll be more data coming beyond that so long term, we remain really really bullish on this whole category being reimbursed like we expect to.
Chris Schott: Reimburse all other medications just the schedule for that is going to be more slow and steady I would say.
Patrik Jonsson: Just the schedule for that is going to be more slow and steady, I would say. This is the University Model Expectations on a global scale and in the U.S. as well.
Chris Schott: As you model expectations on a global scale and in the U S as well because of the diversity of players.
Unknown Executive: Great. Thanks, David and Patrik.
Speaker Change: Great. Thanks, David and Patrick next question. Please.
Seamus Fernandez: Next question, please. The next question will be from Seamus Fernandez from Guggenheim Securities. Seamus, your line is live.
Speaker Change: The next question will be from Seamus Fernandez from Guggenheim Securities Seamus Your line is live.
Colleen: Hi, this is Colleen on for Seamus. Thanks for taking our question. We just wanted to ask on the sustainability of operating margin expansions, looking at some of the longer term for longer term forecasting from sell side consensus, we're seeing estimates nearing 50% by the end of the decade. Do you view this as realistic? Or how are you thinking about the balance between the margins and then also ensuring you're not under investigating on a pipeline?
Speaker Change: Hi, this is calling in for Seamus. Thanks for taking our question. We just wanted to ask on the sustainability of operating margin expansion.
Speaker Change: At some of the longer term for longer term forecasting from sell side consensus we're seeing estimates nearing 50% by the end of the decade do you view this as realistic or how are you thinking about the balance between.
Speaker Change: The margins and then also ensuring youre not under investing.
Speaker Change: On the pipeline.
Speaker Change: Under.
Lucas Montarce: Great. Thanks for the question, Colleen.
Speaker Change: Great. Thanks for the question <unk>.
Lucas Montarce: We'll go to Lucas to talk about the long-term operating market. Well, we are very pleased with the results that we've seen in 2024 and Q4. And we provided a guidance for 2025. That is a continuation of that margin expansion with I mentioned 340 basis points expansion in 2025. I think in more long term, our view is how we continue to drive growth in a sustainable manner. And in order to do so, we believe that reinvesting into the business, in particular in R&D to drive that innovation and growth into the future is critical success factor for our business.
Lucas: Lucas to talk about the long term operating margin philosophy.
Lucas: We are very pleased with the results that we've seen in 2020 for Q4, and we provided a guidance for 2025 that is a continuation of that margin expansion.
Lucas: Mentioned 340 basis points expansion.
Lucas: In 2025 thinking.
Lucas: Thinking more long term our view is how we continue to drive growth in a sustainable manner and in order to do so we believe that reinvesting into the business and particularly in R&D to drive that.
Lucas: Asian and growth into the future is critical success factor for our business. So from that perspective, we mentioned before that we believe that getting into high <unk> or 50% is not actually a good way to drive that sustainable growth into the future. So what we are seeing now in that low 46 in particular at this.
Lucas Montarce: So from that perspective, we mentioned before that we believe that getting into high 40s or 50% is not actually a good way to drive that sustainable growth into the future. So what we are seeing now on that low 40s is, in particular at this time, the right basically balance that we have in terms of investment into the business and also the returns that we generate as well. Great.
Lucas: Time, the right basically balance that we have in terms of investment into their way into the business and also the returns that we generate as well.
Unknown Executive: Thanks, Lucas. Next question, please.
Speaker Change: Alright. Thanks Lucas next question please.
Evan Seigerman: The next question will be from Evan Seigerman from BMO Capital Markets. Evan, your line is open.
Speaker Change: The next question will be from <unk> <unk> from BMO capital markets. Your line is live.
Conor McKay: I know this is Conor McKay on for Evan. Thanks for taking our question. Given some of the slower launches we've seen from peers in the Alzheimer's space, can you maybe talk a bit about the lessons you've taken from those? And then as well as sort of your experience early days in the Kisumu launch.
Speaker Change: This is <unk> on for Ed Thanks for taking our question.
Speaker Change: Given some of the slower launches we've seen from peers in the Alzheimer's space can you maybe talk a bit about the lessons you've taken from those.
Speaker Change: And then as well as from your experience early days in the kitchen and the launch thank you.
Unknown Executive: Thank you. Great.
Anne White: Thanks, Connor, for the question.
Speaker Change: Great. Thanks, Colin for the question, we will go to and to talk about the summer well. Thanks. So much my question.
Anne White: We'll go to Anne to talk about Casunla. Well, thanks so much for the question about Casunla. And I'll tell you, we are pleased with our momentum so far. What our system, our team is focused on really is system readiness and growth. That's still a significant area of opportunity in the space. So we're partnering with health care providers to scale and reach more patients. As far as how it's going so far, Lucas mentioned key indicators that we're watching. To date, we've achieved P&T approvals of over 80 percent in our key accounts. We have over 800 prescribers.
Speaker Change: And I'll tell you we are pleased with our momentum so far let our system. Our team is focused on really is system readiness.
Speaker Change: Still a significant area of opportunity in this space. So we're partnering with health care providers scale and reach more patients.
Speaker Change: That is how it's going so far and Lucas mentioned key indicators that we're watching to date, we've achieved P&G approvals of over 80% and our key accounts, we have over 800 prescribers and then an important leading indicator is the diagnostics and those results also continues to be encouraging and loaded usage more than doubling in the last year and the new supply.
Anne White: And then an important leading indicator is the diagnostics front. And those results also continue to be encouraging. Ambivid use is more than doubling in the last year. And the use of blood diagnostics grows significantly each month as well. The true challenge here is the system's health, health care system's readiness. And I think most critically, the capacity to detect and diagnose patients. And so we have a number of solutions that we're working on with the health care providers to help them increase that capacity, increase the throughput for patients. A lot of educational series as well on how to quickly diagnose and treat these.
Speaker Change: Diagnostics grows significantly each month as well and to challenge here is the systems help health care systems readiness and I think most critically our capacity to detect and diagnose patients. So we have a number of solutions that we're working on with the health care providers to help them increase that capacity increase the throughput for patients a lot of <unk>.
Speaker Change: <unk> series as well how to quickly diagnose and treat these patients.
Anne White: Importantly, I think we're hearing a lot of enthusiasm about the Pro-5 Consumma, and that actually helps with these capacity constraints. The once monthly infusions, the ability to stop dosing once you've cleared, all of those positions have told us are going to help with some of these capacity constraints. So it's been it's been a strong start so far. We didn't learn lessons from the first launch that went out there and applying that learning to what we're doing now. But it's been really positive so far in the terms of the level of support and collaboration that Lilly's been able to bring with her expertise in the field and our long relationship.
Speaker Change: Importantly, I think we're hearing a lot of enthusiasm about the profile and that actually helps with these capacity constraints and once monthly infusions the ability to stop dosing on duplex cleared all of those.
Speaker Change: And told us they're going to help with some of these capacity constraints. So it's been it's been a strong start so far we have learned lessons from the first launch that went out there and applying that.
Speaker Change: Turning to what we're doing now, but it's been really positive so far in the terms of the level of support and collaboration at least been able to bring our expertise in the field and our long relationships with.
Speaker Change: Customers.
Unknown Executive: Great. Thanks, Anne.
Umer Raffat: Next question, please. The next question will be from Umer Raffat from Evercore. Hi guys, thanks for taking my question. It's certainly very encouraging to see the range of new phase 3 trials being initiated with Orfoglipron in the past few months.
Speaker Change: Great. Thanks, and next question please.
Speaker Change: The next question will be from <unk> <unk> from Evercore.
Speaker Change: Your line of life Hi.
Speaker Change: Hi, guys. Thanks for taking my question.
Speaker Change: It's certainly very encouraging to see the range of new phase III trials being initiated with the oilfield clip Ron in the past few months.
Umer Raffat: But there's one trial in particular I noticed has not been initiated or may not be in the plans, which is an outcomes trial. I'm just curious what's the thought process behind that?
Speaker Change: But theres one trial in particular I noticed.
Speaker Change: It has not been initiated or may not be in the plans, which is an outcomes trial I'm just curious what's the thought process behind that thank you.
Unknown Executive: Thanks. Great.
Dan Skovronsky: Thanks, Umer, for the question.
Speaker Change: Great. Thanks, so much for the question, we will go to Dan to talk about the <unk> development plan, yes.
Dan Skovronsky: We'll go to Dan to talk about the Oral Development Plan. Yeah. Thanks, Umer. Of course, we're trying to cover a broad landscape of indications here that we think would be important and fit with the advantages an oral medication has, sort of primary care, broad use kinds of applications being prioritized.
Speaker Change: Thanks, Tim Murray of course.
Speaker Change: We're trying to cover a broad landscape of indications here that we think would be important and fit with the advantages and oral medication has sort of primary care broad use kinds of applications being prioritized.
Unknown Executive: Outcome setting is an interesting idea. The challenges here in maintaining patients on placebo make it more and more difficult to do those kinds of studies in the U.S., but it's certainly an idea that we're exploring around the world and more thinking to come in the future. Great.
Speaker Change: <unk> is an interesting idea.
Speaker Change: Challenges here in maintaining patients on placebo and we get more and more difficult to do those kinds of studies in the U S. But it certainly is an idea that we're exploring around the world.
Speaker Change: But more to come in the future.
Steve Scala: Thank you, Dan. Next question, please.
Dan: Thank you Dan next question please.
Steve Scala: The next question will be from Steve Scala from TD Cowen. Steve, your line is live. Well, thank you so much.
Speaker Change: The next question will be from Steve Scala from TD Cowen Steve Your line of lives. Thank.
Speaker Change: Thank you so much I apologize in advance for this question, but over the past six to nine months. There has been a consistent cadence of data points questioning the size of the addressable and accessible obesity market, none of which are news but include.
Dave Ricks: I apologize in advance for this question. But over the past six to nine months, there has been a consistent cadence of data points, questioning the size of the addressable and accessible obesity market, none of which are news, but include Slowing prescription trends, Lilly meeting demand at least a year early, Lilly instituting DTC and extending copay cards despite struggling to meet demand, Lilly launching in OUS markets despite struggling to meet US demand, and significant stocking fluctuations and challenges in guiding Taken collectively, these points are concerning. I think you will say that they all relate to the unprecedented size of the market and meeting its demand.
Speaker Change: Slowing prescription trends Lilly meeting demand at least a year early Lilly instituting DTC and extending copay cards. Despite struggling to meet demand literally launching an O U S markets. Despite struggling to meet U S demand and significant stocking fluctuations and challenges and guiding to.
Speaker Change: Taken collectively these points are concerning I think you will say that they all relate to the unprecedented size of the market and.
Dave Ricks: But can you state that there has not been any conversations within Lilly questioning whether we are all significantly over our skis on this market and that the manufacturing buildout may simply be too aggressive?
Speaker Change: And meeting its demand, but can you state that there has not been any conversations within Lilly questioning whether we are all significantly over our skis on this market and.
Speaker Change: And that the manufacturing build out may simply be too aggressive.
Dave Ricks: Great. Well, Steve, thanks for the apology and the question. I'll go to Dave for that one. Yeah, Steve, I think you've been calling into our calls for most of my career. I've never had the apology up front. So I appreciate that. I know why you're asking it. And I think the perspective we have is that it's early days on a very, very large opportunity. there's turbulence, you know, I'll own that we always seek to put projections out that we can hit with confidence, but that are also, you know, within the range of possibilities. And, you know, the back half of that year, last year, we fell short of that.
Dave Ricks: Great Steve Thanks for the apology on the question I'll go to Dave for that one yes, Steve I think you mean, calling into our call through most of my career I've never had the apology upfront. So I appreciate that.
Dave Ricks: I know why you're asking it and I think the perspective, we have is that it's early days on that.
Dave Ricks: Very very large opportunity there is turbulence.
Dave Ricks: I'll open that we.
Dave Ricks: While we seek to put projections out that we can hit with confidence, but there are also within the range of possibilities.
Dave Ricks: The back half of that last year, we fell short of that.
Dave Ricks: But everything we've said is true. And we continue to believe it that, you know, this is a market with hundreds of millions of people globally, that there is a unique thing here, and that we can both prevent a large portion of chronic disease with obesity drugs. And last year, we saw proof points on that from Lily and our competitor. That's not just weight loss. It translates into chronic disease outcomes. You'll hear and see more of that. And people love taking these drugs. We know that because when we run out, which we did last year, they get very angry with us.
Dave Ricks: Yes.
Dave Ricks: Everything we have said is true and we continue to believe that.
Dave Ricks: This is a market with hundreds of millions of people globally.
Dave Ricks: There is a unique thing here and that we can both prevent.
Dave Ricks: A large portion of chronic disease with obesity drugs in last year, we saw proof points on that from Lilly and our competitor that's not just weight loss it translates into chronic disease outcomes, you'll hear and see more of that.
Dave Ricks: And people love, taking these drugs, we know that because when we run out which we did last year, they get very angry with us.
Dave Ricks: And so I, you know, have been a person who represents to the board, the CapEx decisions. I have zero doubt that we have. Still more building to do, and that the capacity we've put it put in the ground so far is not sufficient to meet global demand. You'll hear more about that from us.
Dave Ricks: And so.
Dave Ricks: It.
Dave Ricks: The person who represents the to the board of the Capex decisions I have zero doubt that.
Dave Ricks: We have.
Dave Ricks: Still more building to do and that the capacity we put it put in the ground. So far is not sufficient to meet global demand and Youll hear more about that from us.
Dave Ricks: Of course, as highlighting on this call, we're getting close to, I think, a relief valve on that, which is the idea that you can have an oral, which is scalable in a way that injectable systems just aren't really test the question legitimately, what is the edge of the demand curve, but we don't think we're close to it right now. We're still gating promotion and gating launches globally. That's a different thing. And we're building facilities as fast as we can to match up those two things, what we can make and what we can sell. And although we're supplying the US market, Well, right now, we'll need to do more.
Dave Ricks: Of course as highlighted on this call we're getting close to I think a relief valve on that which is the idea that you could have an oral.
Dave Ricks: Which is scalable in a way that injectable systems, just aren't really catch the question legitimately what is the edge of the demand curve, but we don't think were close to it right now, we're still gaining promotion and gaining launches globally.
Dave Ricks: Different thing.
Dave Ricks: We're building facilities as fast as we can to match up those two things what we can make and what we can sell and although we are supplying the U S market.
Dave Ricks: Well right now we.
Dave Ricks: And I'm pretty confident in that. So hopefully that gives you some color on the mindset here and wouldn't overread the turbulence and prediction challenges we have. But long term, we're, we're very bullish and you'll see us act according to that belief. Thank you, Dave.
Dave Ricks: We will need to do more.
Dave Ricks: I'm pretty confident of that so hopefully that gives you some color on the mindset here.
Dave Ricks: I wouldnt over read the turbulence and prediction challenges behalf.
Dave Ricks: But long term, we're very bullish and Youll see US act according to that belief.
Mohit Bansal: Next question, please. The next question will be from Mohit Bansal from Wells Fargo.
Dave Ricks: Thank you David next question please.
Speaker Change: The next question will be from Mohit Bansal from Wells Fargo Mohit Your line of life.
Patrik Jonsson: Mohit, your line is now Great. Thank you very much for taking my question. And I have a question regarding sleep apnea. Now that you have sleep apnea on Zepon label, how have the discussions with the prescribers as well as payers have gone so far? The one pushback we hear is that these patients are often treated by sleep specialists and there's a general shortage of those specialists here. Could you talk a little bit about the call points and then how you're...
Mohit Bansal: Great. Thank you very much for taking my question.
Speaker Change: I have question regarding sleep apnea now that you have keep that Zip on levo.
Mohit Bansal: How how have the.
Speaker Change: The discussions with the prescribers as well as peers have gone so far.
The one pushback.
Speaker Change: These patients are often treated by <unk>.
Speaker Change: This is generally a shortage of those specialist here. So could you talk a little bit about <unk> and how you're thinking about this.
Patrik Jonsson: Great. Thanks, Mohit.
Speaker Change: Great. Thanks, Mohit will go to Patrick for the question on sleep apnea, what the discussions are like with some of the prescribers in the initial experience so far.
Patrik Jonsson: We'll go to Patrick for the question on sleep apnea, what the discussions are like with some of the prescribers and the initial experience so far. Thank you very much, Mohit. Yes, you're correct. It's the first pharmacological treatment ever approved for obstructive sleep apnea. There is a lot of lifting on our side, and we will approach that as we are approaching any new disease area, partnering with advocacy organizations, health care providers, and massive, massive efforts in terms of medical education. We expect this to go beyond the sleep specialist, but of course, we are starting our efforts with the sleep specialist community, and I think that's been very well received so far, and we are meeting with them regularly, conducting speakers trainings, but with the aim to move to primary care, which is a necessity, because this is also a patient population that, to a large extent, remains undiagnosed.
Speaker Change: Thank you very much.
Speaker Change: Yes, you are correct its been tough pharmacological treatment approved for obstructive sleep apnea.
Speaker Change: Cost of lifting on our side and we weren't approached about that.
Speaker Change: Approaching any new disease area offering with advocacy organization has kept provide us and massive massive airports in terms of medical indications.
Speaker Change: We expect to be able to go beyond the sleep specialist but of course, we are starting our efforts with the sleep specialist community and I think that's been very well received so far.
Speaker Change: We are meeting with them regularly conducting speaker training that's been the aim to move to primary account, which is a necessity. Because that's also a patient population that has dropped to a large extent remains on diagnosed so primary carrier relative to what would be required.
Patrik Jonsson: So primary care efforts are going to be required. Great.
Unknown Executive: Thank you, Patrick. Next caller, please.
Speaker Change: Great. Thank you Patrik next caller please.
Dave Risinger: The next question will be from Dave Risinger from Lyrinc Partners. Dave, your line is Thanks very much. So my. related questions have been asked.
Speaker Change: The next question will be from Dave Risinger from Leerink Partners. Your line is live.
Dave Risinger: Thanks, very much so my <unk> related questions have been asked I wanted to.
Dan Skovronsky: I wanted to just pivot to the long acting, relaxing candidate, Fallon, relax. So the company had advanced it into a CKD trial in the fourth quarter, but then recently canceled both the heart failure and CKD program. Dan, I'm hoping you could provide some more color on what drove the action, plus how you now view the long-acting relaxin mechanism, including potential for future development and other cardiopulmonary Thanks very much.
Speaker Change: Just pivot to the long acting relax and candidate pool and relax and so.
Speaker Change: The company and advance it into a <unk> trial in the fourth quarter, but then recently canceled both the heart failure and COPD programs, Dan I'm, hoping you could provide some more color on what drove the action.
Speaker Change: How you now view, the long acting relaxing mechanism, including potential for future development and other cardio pulmonary diseases. Thanks very much.
Dan Skovronsky: Great. Thanks, Dave.
Dan Skovronsky: We'll go to Dan to talk about the Bullen relaxin program. Thank you. I was disappointed with the results from the basic trial for sure. Relaxin is an interesting mechanism, I think sort of validated by normal human physiology during pregnancy. But unfortunately, the results that we got in this trial didn't support proceeding with this molecule. I read that as speaking to the mechanism, but rather than the molecule. But I know others pursuing this mechanism and I wish them success where we didn't have it.
Speaker Change: Great. Thanks, Dave we'll go to Dan to talk about the <unk> program.
Dan I'm: Thank you.
Speaker Change: Disappointed with the results from the phase two trial for sure.
Speaker Change: Relax and is an interesting mechanism I think sort of validated by normal human physiology during pregnancy, but unfortunately the results that we got in this trial didn't support proceeding with this molecule.
Speaker Change: I read that is speaking to the mechanism, but rather than the molecule.
But I know others pursuing this mechanism.
Speaker Change: Some success, where we didn't have it.
Unknown Executive: So we'll have to wait.
Speaker Change: Et cetera.
Speaker Change: Thank you Dan next question please.
Akash Tewari: Next question, please.
Lucas Montarce: The next question will be from Akash Tewari from Jeffreys. Akash, your line of... Thanks so much. So at J.P. Morgan, your team mentioned you expect GLP-1 pricing to be relatively stable in 2025. Are you implying that while you'll give additional discounts to the channel to improve access, that will be offset by improved adherence? Or is it more, we'll at least reach a steady state on discounts, at least until semi-glutide gets put under IRA negotiation in 2026?
Speaker Change: The next question will be from a cash to Ari from Jefferies. Your line is live.
Speaker Change: Thanks, so much so at JP Morgan you mentioned, you expect <unk> pricing to be relatively stable. In 2025 are you implying that while you'll give additional discounts to the channel to improve access that will be offset by improved here adherence or is it more literally reached a steady state on discounts at least until semi bleed type gets.
Speaker Change: Under Irish negotiation in 2026.
Lucas Montarce: All right. Thanks, Akash.
Speaker Change: Alright, Thanks, Lukasz well go to Lucas to talk about GOP, one price insurance.
Patrik Jonsson: We'll go to Lucas to talk about GOP1 pricing trends. Thanks for the question. In terms of the pricing trends that I alluded to in the JP Morgan conference and getting into 2025. First, we talked about the Q4 and into 2025, what we mentioned basically is a continuation of the trends. Remember that we had in the base period in 2023, an uncovered copay that basically created quite a lot of noise on the year-on-year comparison. So we talk about basically adjusting by that still single-digit erosion on our pricing trends. And that is the same trends that I alluded that will continue into 2025.
Speaker Change: Thanks for the question in terms of the pricing trends.
Speaker Change: During the JP Morgan conference on getting into 2025, we talk about the Q4.
Speaker Change: Into 2025, whatever you mentioned basically a continuation of the trends remember that we had in the base period in 2023 and uncovered compared that basically created quite a quite a lot of noise on the year on year comparison.
Speaker Change: So we talked about basically adjusting by that Theres still single digit erosion on our pricing trends that you're seeing trends that I alluded that will continue into 2025.
Patrik Jonsson: In terms of some of the dynamics on the access side, I don't know if you want to comment anything, Patrik, on your side. I think we have really good access on the Monjaro side, over 90% in commercial and Part E. And I've already covered the commercial space for Seton. We expect access to continue to improve in 2025 as well.
Patrick: In terms of some of the dynamics on the access side I don't know if you want to comment anything Patrick on your side.
Patrick: I think we have really good access on their own genre side over 90% in commercial and part D and I have already automated cabin in the commercial space for that asset bone, we expect access to continue to improve in 2025 us with in terms of adherence and I think we just need to reflect on the dynamics, we have experienced in this market if possible.
Lucas Montarce: In terms of adherence, I think we just need to reflect on the dynamics that we have experienced in this market, partly due to supply constraints, but we are encouraged with what we see on Monjaro. For patients that started in Q2 2023, we actually see a longer adherence with Monjaro than we do with both Trulicity and Endocentric. And as Dave referred earlier, in terms of Seton, we expect adherence to be long here, based upon the thousand experiences that consumers have.
Patrick: Due to supply constraints, but we are in time with what we see on mangano for patients that started in Q2 2023, we'll have to see a longer not hearing onsweep mangano than we do with both <unk> and <unk> and Mozambique, and a statement of thoughts in terms of set down we expect adherence to belong here based up on the thoughts on experiences.
Patrick: Consumers have.
Unknown Executive: Great. Thank you, Patrick.
Speaker Change: Great. Thank you Patrick Thank you Lucas next caller please.
Alex Hammond: Thank you, Lucas. Next caller, please.
Patrick Jonsson: The next question will be from Alexandria Hammond from Wolf Alexandria, your line is live. With the Roe partnership, how does Lilly envision this relationship? Follow up, can you help frame the opportunity associated with step on vials? And how is it expected?
Speaker Change: The next question will be from Alexandria, Hammond from Wolfe Research Alexandra Your line is live.
Alexandria Hammond: Thanks for taking the question with a real partnership how does Lilly envision this relationship evolving and a follow up can you help frame the opportunity associated with Stefan vials and how is it expected to shift over time.
Patrick Jonsson: Great.
Patrick Jonsson: Thanks, Alex. We'll go to Patrick to talk about ZeppFound Vials and Rho. We launched the sales pay system with Lilly Direct back in late August, and we're pleased with the performance so far. In terms of TRX for ZeppFound, it's still low to mid-single digit, but in terms of new therapy start, it's actually in the low T, so very good start.
Speaker Change: Great. Thanks, Alex will go to Patrick to talk about.
Speaker Change: <unk>, yes.
Speaker Change: We launched the self pay is system with leading direct back in late August and we are pleased with our performance. So far in terms of an extra set boundaries.
Speaker Change: Low to mid single digit.
Speaker Change: So a new therapy starts it's actually in the low teens. So a very good start the partnership the grille, if not the financial on a marketing partnership at all and it's just the opportunity for eligible patients.
Patrick Jonsson: The partnership with Rho is not a financial or a marketing partnership at all. It's just the opportunity for eligible patients to have the option of using the Rho platform to purchase FDA-approved authentic medicines, and it's really about connecting that software to Lilly Direct's sales pay pharmacy. Now, we will lean into additional partnerships along those lines with partners that really want to ensure that the patients get access to authentic and FDA-approved medicines.
Speaker Change: The option of using the <unk> platform to purchase FDA approved authentic magazines, and it's really about connecting via software to Toledo.
Speaker Change: A pharmacy.
Speaker Change: Leaning into additional partnerships along those lines.
Speaker Change: We partner really well and to ensure that patients get access to authentic and FDA approved medicines.
Unknown Executive: Thank you, Patrick.
Chris Schibutani: Next caller, please. Next question will be from Chris Shibutani from Goldman Sachs, Chris, your line is open. Chris, please go ahead with your question.
Patrick: Patrick next caller please.
Speaker Change: The next question will be from Chris <unk> from Goldman Sachs. Chris Your line is live.
Speaker Change: Chris. Please go ahead with your question your line is live.
Chris Schibutani: Your line is Apologies, I was on mute. So the Orford Lipron launch, you previously stated that you're doing manufacturing scale up to be prepared for a full launch at potential approval. What is embedded in that assumption? Can you talk a little bit about the approach for timing of Orford Lipron in terms of diabetes versus obesity? Will it be simultaneous or one before the other? US versus international? We certainly saw the injectable business do a prioritized US launch. And then should we also expect the similar kind of, quote, new product launch cadence with patient assistance programs and the implementation of channel tools like Lilly Direct?
Speaker Change: I apologize I was on mute for the offer grip on launch previously stated that youre doing manufacturing scale up to be.
Speaker Change: For a full launch at the pump potential approval what is embedded in that assumption can you talk a little bit about the approach for timing of offense that Brian in terms of diabetes versus obesity would've been simultaneous or one before the other U S versus international we certainly saw the injectable business.
Speaker Change: Prioritize U S launch and then should we also expect a similar kind of new product launch cadence with patient assistance programs and the implementation of channel tools like really direct should all of those be at the outset.
Unknown Executive: Should all those be at the outset?
Dave Ricks: Thanks, Chris, for the very detailed question.
Dave Ricks: Thanks, Chris for the very detailed question, we'll go to Dave to talk a bit about the orphan launch prep, okay waiting for all allow it.
Dave Ricks: We'll go to Dave to talk a bit about the Oracle LaunchPrep. Okay, waiting for I'll allow it at some point. Yeah, look, the goal here with ORFOR, because it's using different production systems that are available to us, it's a long cycle. Processing to get commercial product, but that's very predictable and we have access to those platforms inside and outside the company. So we are building for a full launch in the normal pharma sense. And here, pointing out maybe the flip of the earlier question about demand, you know, we have had to gate all these things to make sure we carefully match supply and demand for the injectables as our competitor.
Dave Ricks: Yes look I have to go here with work for because it's using it in production systems that are available to us it's a long cycle.
Dave Ricks: Processing to get commercial product, but that's very predictable and we have access to those platforms inside and outside the company. So we are building.
For a full launch in the normal pharma sets in here are pointing out maybe the flip with the earlier question about demand we have had to gain all of these things to make sure we carefully match supply and demand for the Injectables versus our competitor, we do not plan for that with <unk>. So we will plan to launch our <unk>.
Dave Ricks: We do not plan for that with Orfor. So we will plan to launch or submit and have approvals and then launch in a full sense, including activities you're used to seeing for primary care products like sampling, copay, full formulary access and globalization of Orfor Glupron as rapidly as possible. And we're building capacities to do that. And hopefully that will begin in early 26. I think as Dan mentioned, the first complete package for submission in the U.S. will be OBC. But we expect diabetes to shortly follow and then these other indications that have been discussed today.
Dave Ricks: <unk> and have approvals and launch in a full sense, including activities you're used to seeing for primary care products like sampling co pay full formulary access and globalization of ore for good Brian as rapidly as possible and we are building.
Dave Ricks: Capacities to do that.
Dave Ricks: And hopefully that will begin in early 2006, I think as Dan mentioned, the first complete package for submission in the U S will be obesity.
Dave Ricks: But we expect diabetes to shortly follow within these other indications that have been discussed today hope that answers the question.
Unknown Executive: Great.
James Shin: Thanks, Dave. Next question, please.
Dave Ricks: Great. Thanks, Dave next question please.
James Shin: The next question will be from James Shin from Deutsche Bank. James, your line of... Thank you. Good morning. Thanks for the question.
Speaker Change: The next question will be from Jamie Shen from Deutsche Bank James Your line is live.
Jamie Shen: Thank you good morning. Thanks for the question another one for Dan or for lip Ron I. Appreciate the earlier comments on indexing offer coupons efficacy to summer and the phase II titration schedule, sorry, excuse me.
James Shin: Another one for Dan or for Glypron. I appreciate the earlier comments on indexing or for Glypron's efficacy to SEMA and the phase three titration schedule. Sorry, excuse me. But can you go over how this titration schedule may impact the phase two weight loss, A1C and safety results published in Lancet and New England Journal?
Jamie Shen: Can you go over how this titration schedule may impact the phase two weight loss <unk> and safety results published in lancet in Newland Journal. Thank you.
Dan Skovronsky: Great.
Dan Skovronsky: Thanks, James, for the question. We'll go to Dan to talk more about ORFL. Yeah, it's a good question, James, and reminiscent of the theme we had when the terzapotite trials were going. It was a similar transition from a faster titration in phase two to a more gradual titration in phase three. I think that strategy served us well in the case of terzapotite. I'm hopeful for the same kind of outcomes in ORF or glifron, which is to say that it mitigated tolerability concerns. So, the GI side effects that are just known to this class seem to be significantly mitigated by slower titration.
Speaker Change: Great. Thanks, James for the question will go to Dan to talk more about <unk>.
Dan I'm: Good question James the reminiscent of the theme we had one that there's appetite trials for growing it was a similar transition from a faster titration in phase II.
Dan I'm: A more gradual titration in phase III I think that strategy served us well in the case that there's appetite im hopeful for the same kind of outcomes for cliff.
Dan I'm: Brian which is to say that it mitigated tolerability concerns.
Speaker Change: GI side effects that are just known to this class seem.
Speaker Change: Seem to be significantly mitigated by slower titration and longer studies. The first study to read out is not the longest study we have here in.
Dan Skovronsky: And in longer studies, and the first study to read out is not the longest study we have here, in longer studies, we were still able to obtain the sort of plateau kind of efficacy that we expect for the mechanism. So, that's what we're hoping for ORF or better tolerability and similar efficacy in phase two.
Speaker Change: And longer studies, we were still able to obtain the sort of plateau kind of efficacy that we expect for the mechanism. So that's what we're hoping for or for better tolerability and efficacy.
Speaker Change: It's too.
Unknown Executive: Next question, please.
Thank you Dan next question please.
Trung Huynh: Next question will be from Trung Huynh from UBS, Trung your line is live Hi guys, thanks for taking my question. So for the first ORFO study on diabetes, thank you so much for the level set there.
Speaker Change: The next question will be from Trung Nguyen from UBS. Your line is live.
Trung Nguyen: Hi, guys. Thanks for taking my question so.
So for the first <unk> study on diabetes. Thank you so much for the level set there I have a similar question on <unk> side, we noticed in your slides there was a phase III readout in obesity and overweight patients with osteoarthritis of the knee as a potential event to 'twenty five.
Dan Skovronsky: I have a similar question on retitutide. We noticed in your slides there was a phase 3 readout in obesity and overweight patients with osteoarthritis of the knee as a potential event for 25. So one of the primary endpoints is weight loss. Could that be a reasonable comp for the obesity studies in 26, unlike what you flagged with ORFO and diabetes?
Trung Nguyen: So one of the primary endpoints just weight loss could that be a reasonable comp for the IPC studies in 2006, Unlike what you flagged with orphan and diabetes.
Dan Skovronsky: Thanks for the question, Sean.
Dan I'm: Thanks for the question, we'll go to Dan to talk about brand tree thought, yes, I am glad you asked the question.
Dan Skovronsky: We'll go to Dan to talk about Breda-Trutide. Yeah, I'm glad you asked the question. It's a super smart question. You're probably noticing that the osteoarthritis trial is shorter than any of the other ones. We've commented before that Breda-Trutide is going to need longer trials. Most of ours are 80 week plus trials to reach maximum efficacy. This is a 68 week trial. I think we also know, at least by analogy from the SEMA trials that looked at osteoarthritis and obesity versus a more pure obesity population, that even for similar length studies, there's a diminution of efficacy in terms of weight loss in the OA population for a number of reasons, including different baseline demographics, male, female, BMI, etc.
Dan I'm: Super Smart question, Youre, probably noticing that the osteoarthritis trial is shorter than any of the other ones.
Dan I'm: We've commented before the gratitude is going to need longer trials. Most of ours are 80 week plus trials.
To reach maximum efficacy. This is a 68 week trial I think we also know at least by analogy from the semi trials that looked at osteoarthritis and obesity versus a more pure obesity population.
Dan I'm: Even for similar studies, there's a stimulation of.
Dan I'm: Efficacy in terms of weight loss in the OA population for a number of reasons, including different baseline demographics male female BMI et cetera. So I think we know how to extrapolate out from the OA population to the general population, but I don't think you should take the OA population as a point estimate for what will be achieved.
Dan Skovronsky: So I think we know how to extrapolate out from the OA population to the general population. But I don't think you should take the OA population as a point estimate for what will be achieved in a broader obesity population. We should do quite a bit better.
Dan I'm: Broader obesity population, we should do a quite a bit better than that.
Unknown Executive: Great.
Dan I'm: Great. Thanks, Dan next question please.
Unknown Executive: Next question, please.
Kripa Devarakonda: The next question will be from Kripa Devarakonda from Truist Securities. Great, thanks for taking our question.
Speaker Change: The next question will be from prepaid effort to combat from Truest Securities Prepay. Your line is live.
Speaker Change: Great. Thanks for taking our question that we can call on for Cooper Kennan.
Dan Skovronsky: This is Nicole for Kripa. Can we see some BEMA data this year? And do you still see some benefit with a muscle preserving drug? The recent data from VR showed preservation of lean mass, but no incremental weight loss. So BEMA, do you expect incremental weight loss or weight control, but better body composition? Is that what you're looking for?
Speaker Change: Can we see from BMO data this year and do you still people benefit with another preserving drug.
Speaker Change: Data from Dr showed preservation of cleanup.
Speaker Change: Rental fleet will be.
Speaker Change: Do you think incremental weight loss or weight neutral, but better body composition, what youre looking for.
Dan Skovronsky: Thanks for the question. We'll go to Dan to talk a bit about how we're thinking about the BIMA data. Yeah, thanks for a good question on BIMAGRMAB. I think our thesis here has been, in combination with Terzapatide, that we could get incremental weight loss or perhaps a similar weight loss, but as you point out, with preservation of what we call lean mass. I think to really show a benefit for combining the two drugs, we're probably going to either need to see the incremental weight loss or we're going to need to see some real functional benefits to lean mass preservation.
Speaker Change: Thanks for the question well go to Dan to talk a bit about how we're thinking about the limiter. Yes. Thanks for good question on <unk> I think our thesis here has been in combination with tours appetite that we could get incremental weight loss.
Speaker Change: Or perhaps a similar weight loss, but as you pointed out with the preservation of what we call lean muscle mass lean mass.
I think to really show a benefit for combining the two drugs, we're probably going to either need to see the incremental weight loss.
Speaker Change: Or we're going to need to see some real functional benefits to lean mass preservation.
Dan Skovronsky: I think just lean mass on its own, we don't really know how to understand that. And we previously noted that we don't see any signs that lean mass changes on tersepatite or, to my knowledge, on any incretin are actually adverse in any way.
Speaker Change: Lean mass on its own we don't really know and understand that previously noted that we don't see any signs that lean mass changes on tours appetite or to my knowledge on any anchor tenant.
Speaker Change: Adverse in any way.
Dan Skovronsky: On the other hand, growing muscle could be a positive in different ways. So we're looking for new positive effects with the Magrimap.
Speaker Change: On the other hand growing muscle could be a positive it differently. So we're looking for new positive effects with the macro about the beginning of your question I realize it in country, which is when do we see the previous phase II study, which was completed.
Dan Skovronsky: The beginning of your question, I realized I didn't come to, which is when do we see the previous phase two study, which was completed? We haven't been clear on exactly when when we'll show that data. But this year is the safest.
Speaker Change: We haven't.
Speaker Change: Been clear on exactly when we will show that data, but this year is a safe assumption.
Dan Skovronsky: Great. Thank you, Dan.
Speaker Change: Great. Thank you Dan I think we have time for one last question.
Unknown Executive: I think we have time for one last question.
Dave Risinger: And the final question today will be a follow up from Dave Risinger from Lyric Partners. Dave, your line is... Yes, thanks very much. I was just hoping you could clarify the comment earlier. I think there was a comment about additional PBM coverage coming in March. I didn't quite catch that. If you could just provide some more color and quantify the potential impact on, you know, on the opportunity for script trends following that occurring. Thank you.
Speaker Change: The final question today will be a follow up from Dave Risinger from Leerink partners. Your line is live.
Dave Risinger: Yes, thanks very much.
Dave Risinger: Just hoping you could clarify the comment earlier I think there was a comment about additional pbms coverage coming in March I didn't quite catch that if you could just provide some more color and quantify the potential impact on.
Dave Risinger: On the opportunity for script trends following that occurring thank you.
Patrik Jonsson: Let me cover that and then I'll just close. I think, Dave, that was referred to Epigliss, which is very new in Cycle, and we do expect two of the three PBMs to cover it. gets us excited about activating consumers and raising awareness for them. have full PPM coverage.
Dave Ricks: Let me cover that and then I'll just close I think Dave that was referred to <unk>, which is very new and cycle and we do expect two of the three pbms to cover it.
Dave Ricks: It gets us excited about activating consumers in raising awareness for that brand.
Dave Ricks: Except that much of a half full ppm coverage already.
Mike Zappar: So great, let's conclude it there.
Dave Ricks: So great let's conclude it there thanks for dialing in everyone and your interest in today's earnings call and of course, and everything about Eli Lilly and company. If you've got follow up questions or things, we didnt cover enough detailed today in the Q&A. Please follow up with the IR team Mike's part leads that now.
Mike Zappar: Thanks for dialing in, everyone, and you're interested in today's earnings call, and of course, in everything about Eli Lilly and Company. If you've got follow-up questions or things we didn't cover in enough detail today in the Q&A, please follow up with the IR team.
Unknown Executive: Mike Separ leads that now, and everyone have a great day.
Dave Ricks: Everyone have a great day.
Unknown Executive: Thank you, and ladies and gentlemen, this does conclude our conference for today. This conference will be made available for replay beginning at 1 p.m. today, running through March 13th at 9 p.m. You may access the replay system at any time by dialing 800-332-6854 and entering the access code 443-263. International dialers can call 973-528-0005. Again, those numbers are 800-332-6854 and 973-528-0005. with the access code 443.
Dave Ricks: Thank you and ladies and gentlemen, this does conclude our conference for today.
Dave Ricks: This conference will be made available for replay beginning at one P. M. Today running through March 13 at midnight.
Dave Ricks: You may access the replay system at anytime by dialing 803, three to 684 and entering the access code 400, 43262 International Dialers can call 970, <unk> 5280005 again those numbers are 833 to six eight by four.
Dave Ricks: On 907 35280005 with the access code 4432 <unk>. Thank.
Unknown Executive: Thank you for your participation. You may now disconnect your
Dave Ricks: Thank you for your participation you may now disconnect your lines.