Q2 2025 Eli Lilly & Co Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the Lily, Q2, 2025 earnings conference 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. Should you request assistance? During the call? Please press star, then zero and an operator will assist you offline.
I would now like to turn the conference over to your host. Mike zapar, Senior vice president of investor relations. Please go ahead.
Good morning. Thank you for joining us for Eli Lilly & Co's Q2 2025 earnings call. I'm Mike Saveur, Senior Vice President of Investor Relations.
Joining me on today's call are Dave Ricks. Please chair and CEO, Lucas montarse Chief Financial Officer. Dr. Dan skowronski, Chief scientific officer and president of Lily Immunology.
And white president of Lily neuroscience.
President of Lily USA and Global customer capabilities. Jake van naarden president of Lily oncology Patrick. Yansen president of Lily International and Ken Custer. Newly appointed, president of Lily cardio, metabolic health,
We're also joined by. Mark heymann, Susan hedglin and Wong of the investor relations team.
During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results May 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 10K and subsequent filings with the SEC.
The information we provide about our products and pipeline is for the benefit of the investment Community. It's not intended to be Promotional and is not sufficient for prescribing decisions.
As we transition to our prepared remarks, please note, our commentary will focus on our non-gaap financial measures.
Now, I'll turn the call over to Dave.
Thanks, Mike Q2 was a strong quarter. We delivered robust Revenue, growth shared Topline clinical data from multiple phase 3, programs and invested in several initiatives that will support our future growth.
Today, we share positive, Topline data from the attained 1 or 4 group on trial in people with obesity.
In attained, 1 patients, taking the highest dose of our foreground lost more than 27 pounds or 12.4% of their body weight.
In addition, the safety and tolerability and attained 1 was consistent with the injectable glp1 class.
or foreground also met all secondary, end points in the study, improving key markers of metabolic Health, such as blood pressure, cholesterol and inflammation,
This is the second.
Positive phase 3, trial for, or foreground. We reported this year and we're encouraged by these results.
Create a medicine that has a clinical profile consistent with approved GOP ones, while offering the convenience of a once daily pill and the production flexibility of small molecule chemistry to meet Global demand.
we believe this medicine has the potential to make a significant impact on human health and we will now work with urgency to submit our forgo prawn around the world, to meet the global challenge of OB
On slide 6, we list key Q2 financial metrics and highlight progress related to our strategic deliverables.
Revenue grew 38% compared to Q2, 20224 driven by our key products. These include ebl J, Perka, mungarro, roseno and zepol
In the US, we continue the robust uptake of Zap bound and Mauro and Lily gain market share in the Anker analog class for the fourth quarter in a row.
Morrow. Also recently became the market leader in the US in total prescriptions within the type 2 diabetes. Tankerton Market.
Outside the US, we continue to launch, morrow in new countries, these include Mexico and Brazil. Most recently
We have now launched morrow in most major markets.
Q2 was also a quarter of continued investment for Lily, in addition to increasing commercial activities, to support our newest medicines, we started multiple new clinical programs,
While the company is experiencing rapid Revenue growth. We're also increasing our R&D investment as early phase program data continues to impress us,
And to support our future growth of the company.
Our financial performance in the first half of 2025 was strong. And as we as a result, we raised our revenue and earnings per share guidance.
Lucas will cover this in more detail during the financial update.
In addition to the results from attained 1, we achieved several key Milestones, since our last earnings call these include the US FDA approval of a new dosing schedule. For Cassandra the positive European chmp opinion, for kasama.
Announced positive results in the surpassed cvot faced 3 trials for tide and people with type 2 diabetes and heart disease.
We announced positive results in the Bruins CLL 314 Phase 3 trial of perv ert nib in CLL and SLL, and we launched the two highest doses of Zep found in vials in the United States.
We now can close the acquisition of sight 1 therapist. Which expands Lily's pain portfolio and as a clinical stage non-opioid pain program to our our our mix
and verb Therapeutics which adds new genetic medicines for cardiovascular disease with potential to only be administrators once in a person's lifetime.
we made progress in Q2 and throughout the first half of 2025 to bring new manufacturing capacity, online,
we produced more than 1.6 times the amount of saleable increased doses, during the first half of 2025, when compared to the first half of 2024,
This includes a significant Step Up in capacity from our recently. Constructed facility, in Research, Triangle Park, North Carolina,
We will continue to bring more capacity online in the second half of 2025. We expect our production capabilities to increase further.
We also plan to announce the location of 2 of our new US manufacturing facilities later. This quarter.
During the quarter, we distributed 1.3 billion dollars in dividends and executed approximately 700 million dollars in share repurchases.
Before I turn the call over Lucas, I'd like to offer some perspective on the drug pricing, uh, reform discussion that's going on.
While we support the administration's position, that medical research costs need to be shared more equitably across developed countries.
It's also true that the US pharmaceutical Market has significant defects which shift costs to Consumers and increase red tape.
These problems also require urgent reform and make apples to apples comparisons of xfactory pricing, inaccurate and misleading.
At Lily, we've already implemented several initiatives which directly lower patient costs for our most commonly used medicines.
We operate a direct to Consumer model at scale through Lily direct which provides more affordable access to Lily Madison's. This includes our leading weight loss medications that found at a discount of more than 50% off the list price.
We also LED in resolving, insulin pricing issues in our country by reducing list. Prices by 70% and ensuring broad access to $55 monthly patient costs including for Medicare.
co-pays and without administrative hurdles, like prior authorizations,
there are also no intermediaries that distort prices and hospitals, do not seek profit by selling medicines and marking them up.
If we import foreign price controls and insert them into a US system that isn't built to function for patients, we risk embracing the worst of 2 Worlds, the low productivity and output of Europe's biofarma sector with the high out-of-pocket and distorted prices of the US Insurance Market.
Both today's patients and the future of new cures and treatments will suffer along with the United States competitiveness.
Of course we will engage in our committed to working instructive with the administration to find solutions that both benefit patients, while preserving the hope, for tomorrow's cures, and the scientific base that is make made America the Envy of all in global fee, pharmaceutical innovation.
Now, I'll turn the call over to Lucas to review our Q2 results.
Thanks Dave.
As shown on a slide, Q2 was another strong quarter of financial performance.
Revenue growth 88% compared to Q2 2024, driven by our key products.
Gross margin as a percentage of Revenue was 85% in Q2.
An increase of 3 percentage points versus the same quarter last year.
The increase in gross margin was, primarily driven by improved cost of production and favorable product mix.
Market in selling and administrative expenses increased by 30%.
as we continue to increase investment to support our newest launches across therapeutic areas and geographies,
R&D expenses increased 23% driven by higher expenses, for late stage assets, and additional investment in early stage research.
Our non-gaap performance margin, which we Define as gross margin less R&D marketing selling and administrative expenses. As a percentage of Revenue was 45.9%.
Performance margin increased by more than 6% percentage points from Q2 2024 driven by Revenue growth.
Our Q2 effective tax rate was 16.5% consistent with Q2 2024.
At the bottom line earnings per share, increased 61% to 6.31 cents including of a negative impact of 14 cents from acquired IP R&D charges.
This compares to $3.92 in Q to 2024 which also include 14 cents of acquired IP R&D charges.
On a slide, a, we quantify the effect of price rate and volume on Revenue growth.
Us Revenue increased 38% in Q2 driven by strong volume growth of Sean and Mauro partially offset by an 8% decline in price.
In Europe, Revenue growth 777% in constant currency reflecting the strong uptake of Morrow.
In China Revenue, increased 19% in cost and currency driven by volume growth of monjaro.
Revenue in the rest of the world, decreased by 1% in cost and currency driven primarily by stocking in the base period related to monjaro launches in New Markets.
This impact was largely offset by volume growth of Monjaro and Veno this year.
Slide 9 provides an update of the performance of our key products.
Beginning with Immunology, at least continues to perform well in a topic dermatitis.
New patient starts and revenue. Trends are strong and total prescription have nearly doubled since q1.
We also made progress, securing access, enables is now covered by all 3 of the largest Pharmacy benefit managers that represent 90% of people with Commercial Insurance.
For we are 1 full quarter into the launching Chrome disease and are making progress in a competitive market.
The new site with free formulation is available in most major markets, and we are seeing positive Trends in new patient. Starts in the US Germany, Japan and other International markets.
Moving to oncology physician pick feedback on Charter, continue to be very positive.
While still only approving later lines of CLL and MCL. We have seen a strong uptake within the label population and encouraging Trends regarding time on therapy.
That we believe will support and expand the label and use in early settings.
We recently announced positive results of Brewing 3, 14 in CLL and CLL in an is another positive step forward those goals.
Your Global sales, grew 12% in Q2 driven by volume growth.
Veno. Continue to be the NBS and PRX market leader in the US and standard of care in high risk, early breast cancer.
U.S. prescriptions grew by 4.5% in Q2 compared to Q2 2024, and international volume grew by 18%.
Within Neuroscience Kanda is continuing a steady launch trajectory and we are making significant progress in driving Health Care System, Readiness and adoption.
In the US, we are seeing a strong diagnostic growth driven by pet and the acceleration of blood biome maker test.
This momentum is leading to more people being diagnosed and accessing treatment.
Over 1500 Physicians and 150 of the top Healthcare organization have started patients on Cassandra.
Outside the US airports are progressing as well with approval in 13 countries.
In Europe, we anticipate approval and launch later this year following the recent chmp, positive opinion.
Finally moving to cardio. Metabolic health, onaro and seban both deliver impressive performance.
Monaro posted 5.2 billion dollars of global sales and exited the quarter with more than 50% of new type 2 diabetes, including prescriptions in the US.
Monaro also became the US market leader, in total, type 2, diabetes, increasing prescriptions in July and has gained 8 percentage points in total prescription share of market during the first 7 months of 2025.
with the recently announced positive results from so far cbot we look forward to submitting this data to Global Regulators to support a label cardiovascular indication
Outside the US to set it out is now launched in most major markets.
As a reminder marus Market as a single brand for both, chronic wave management and type 2 diabetes in all International markets except Canada and Japan.
While the initial reception of recent launches in Mexico, Brazil, China, and India has been excellent. The commercial activities have been measured to ensure the man doesn't exceed Supply and that patient and Physicians have a good experience.
Sepan performance was strong in Q2 contributing 3.4 billion dollars of sales.
7 continues to be the US market leader in the Branded anti-obesity Market, with 2/3 of total patients, taking Ceiba
We recently launched the 12.5 and 15 milligram single-use files in Lily Direct.
All those is of sep are not available in the vital presentation. When we work to secure broaden your investment of anti-obesity medicines. We are encouraged by the object of seban in BIOS.
The cash pay bios were approximately 20% of total us sep and prescriptions and over 35% of new prescriptions in Q2.
As a reminder effective, July 1st the CVS Pharmacy. Benefit manager began.
Excluding 7 as an offering for patients on its template formula insurance plans.
This has caused significant disruption to patients and we strongly disagree with the decision to restrict access to medicines for patients.
As demonstrated, in randomized, clinical trials, in creating medicines for chronic wave management. Are not all the same.
What is still early? We have seen this decision, negatively impact safebound, prescriptions during July and expected to be a headwind to the rate of volume growth in Q3.
We remain confident in the long-term growth outlook for 7 as the most widely used. Increasing therapy in the Branded anti-obesity Market.
On a flight 10. We provide a view on the US. Incret in analog Market which include frustration for both type 2 diabetes and chronic wave management.
Q2 was another quarter of steady market growth, as total prescription grew by 41% compared to Q2 2024.
Lily performance was again strong with share of Market reaching above 757%.
And an increase of 3.8 percentage points compared to q1 2021 202025.
Whole population is still low and we believe significantly more patients can benefit from increasing therapy.
On a slide 11. We provide an update on Capital allocation
moving to slide 12 is our updated expectation for our 2025 financial performance.
We are encouraged by and by the underlying performance. We saw across the business in the first half of the year.
We are increasing the bottom and the top end of the revenue range as well as our expectation for performance, margins and earnings per share.
We now anticipate, our Revenue will be between 60 and 62 billion dollars.
This range, reflects the strong performance and a Tailwind from foreign exchange rates.
We will continue to invest to support our newest launches, and to develop new benefits.
Giving our updated expectations for Revenue growth. We now, expect non-gaap performance margin to be between 43 and 45.5% as a percentage of Revenue.
The potential effect of tourists remains Dynamic and we will continue to update our estimate assistance, patient changes.
We expect that 2025 impact of current currently announced tariffs to be modest and this has been factored into our 2025 guidance range.
At the bottom line, we have increased our outlook for non-gaap earnings per share and expect EPS of 21 211.75 to 23 dollars.
As Dave mentioned earlier, we exceeded our increasing syllable doses production in the first half of the year and expect to bring more capacity online during the second half of 2025.
We expect to produce at least 1.8 times the number of syllable in creating doses in the second half of 2025. Compared to the second half of 2024,
Now, I will turn the call over to Dan to highlight our progress on R&D.
Thanks. Thanks, Lucas. We we've made quite a bit of progress since our last earnings call during just the past 2 weeks, we shared 3 phase 3 readouts from some of our most important molecules. I'll start with this.
Last week, we announced results from the TARES Appetite Surpassed CVOT trial, where TARES Appetite demonstrated cardiovascular protection in a landmark head-to-head trial, which was the first-ever cardiovascular outcomes trial comparing two therapies in people with type 2 diabetes and cardiovascular disease.
It included over 13,000 participants across 30 countries and it is the largest and longest study of epatite to date.
as shown on slide 13 to
Appetite showed consistent results across all 3 components of the maze 3 composite endpoint.
We were particularly impressed to see the rate of all cause mortality was 16% lower on tapete versus dual glutide.
Because this trial did not include a placebo arm. We conducted a prespecified, indirect comparison analysis of match patient level data from the rewind and surpassed cbot studies
This analysis showed that tapete reduced the risk of Mace 3 by 28% and reduced all cause mortality by 39% compared to puted placebo.
We're very pleased with these results, which show that in addition to the well established best-in-class weight loss and A1C control, which is appetite. Now, also provides a cardio protective benefit and may provide more wide reaching Health improvements including greater kidney protection and a reduced overall risk of death.
We look forward to detailed results being presented at the easd meeting in September and published in a peer review, journal.
We plan to submit these data to Global Regulators by the end of this year.
The surpass cvot results. Reinforce our enthusiasm for surmount MMO.
Which enrolled over 15,000 participants with obesity and will assess the impact of Transit on reducing morbidity and mortality.
This is an event-based study and the rate of a cruel will dictate the timing of the readout.
While surpassed cbot and surmount MMO are likely, the largest randomized trials will conduct with tete. We'll still explore additional indications for this molecule and we're excited to have started a new phase 3 trial in people with type 1, diabetes.
Moving on to Oreo glyra.
As Dave mentioned today we're excited to announce Topline results from our second or for liberon phase 3 trial detain 1.
Diabetes.
As shown on slide 14 patients in attain 1 lost on average between 7.8% and 12.4% of their body weight after 72 weeks depending on the dose.
At the highest dose, the average participant unauthorized, lost more than 27 pounds.
And approximately 40% of people on this dose lost more than 15% of their body weight.
We also saw notable improvements on important drivers of cardiovascular risk, including non-hdl cholesterol, triglycerides, and blood pressure
Moving to slide 15. We are very pleased with the safety profile of or for Jaren and attained 1.
The most commonly reported Adverse Events were gastrointestinal which is consistent with the glp1 class.
Discontinuation is due to Adverse Events were low with 5 to 10 of patients discontinuing, or for glyph Brown across doses. There were no hpat safety signals.
We look forward to sharing detailed results from Attained 1. Also, at the E ASD meeting in September and in a peer-reviewed publication.
With today's read out. We've now seen results from 2, large phase 3, clinical trials, involving over 3600. Participants and more highly encouraged with what we've seen thus far.
The data from these first two pivotal studies provide evidence that a once-daily oral GLP-1 can achieve efficacy and safety in line with injectable GLP-1.
Or for gyprone has a potential to be a more convenient alternative to injectable treatments and to be utilized to support early disease, intervention in the primary care setting.
With this data in hand, we're now working to move quickly towards our first regulatory submissions yet this year.
We expect results from 4 additional or for clip, run phase 3 trials over the next 5.
Months.
Three trials involving people with diabetes from our chief program and one additional trial from the ATTain program in people with diabetes and obesity.
The 101 and attained 2 will support Global submissions for chronic weight management which we expect in Q4.
In addition to the ongoing phase 3 trials for or for gyprone and diabetes, obesity weight, maintenance, and obstructive sleep apnea, we initiated a new program for or for clip around this quarter attain hypertension focused on reducing systolic blood pressure. At 36 weeks as the primary endpoint.
This is the first study of or for lip run that includes patients with a baseline BMI as low as 25.
We also announced plans to initiate a new phase 3 trial in people with knee, osteoarthritis, pain, and overweight or obesity, starting later this year.
Moving to per Brute.
We announced positive results from the Bruin CLL 314 phase 3 trial of pirtobrutinib compared to ibrutinib in people with CLL SLL.
This trial included treatment naive patients as well as patients. Previously treated, but not with a BTK inhibitor.
For met the primary endpoint of response, rate non-inferiority, compared to ibrutinib and had a nominal P value for superiority. That was less than 0.05.
What? Progression, free survival data, were immature. There was a positive trend in favor of perto Britain.
Additional testing for progression, free survival was planned as part of a future analysis.
Of note, the sub-population of treatment naive patients, had a particularly pronounced progression-free survival Trend in favor of Proto brute nip.
This subpopulation had the longest follow-up.
Which is encouraging for what we might see more broadly across the total study population over time.
This is the second positive phase 3 trial to read out for pirtobrutinib. As we continue to build evidence, supporting the potential role to this medicine in earlier settings.
We look forward to the readout of Bruins CLL 313 which assesses perturb versus chemo. Immunotherapy in treatment naive. CLL SLL later this year.
We expect these data in combination with Bru and CLL 314 to form the basis of regulatory submissions globally.
In addition to our recent phase 3 readouts. We also have updates on several other important molecules daab reattached and Ola morass.
Virginia map. We had 3 important Milestones since our last earnings call
First we were pleased to receive a positive opinion from the chmp in the EU. We look forward to approval and launch their later this year.
Second, the modified dosing schedule was approved in the US further, strengthening the safety profile for denim map and we expect the modified dosing regimen to be part of the EU labeling at launch as well.
Finally, we shared long-term extension data from Trailblazer ALS 2.
Have treated participants showed increasing clinical benefit?
despite most participants, having completed treatment within the first 18 months of the trial,
in a separate part of the extension study patients, initiating dynamap
after 18 months of placebo also, demonstrated disease, slowing once they started dynamap
These data reinforced the value of early intervention, and support the limited duration, dosing approach with sustained and increasing long-term benefits for treatment.
Prevent a true tide. We started a new phase 3 trial in chronic low, back pain, and overweight or obesity called Triumph 7.
This is our second pain study for Reit. True died. In addition to the ongoing study in osteoarthritis pain of the knee Triumph 4 from which we expect results later this year.
We are excited to announce plans to initiate a phase 3 study and high-risk metabolic dysfunction Associated. Static static liver disease or muscle D later this year.
this trial includes both Reddit true tide and tapete, and it will utilize non-invasive tests to enroll patients, who are at high risk of major adverse, liver outcomes with a primary objective of reducing the occurrence of such outcomes,
This novel trial, design more closely mirrors. How Physicians diagnose this disease in clinical practice
and will enable simultaneous development of both medicines, each compared to placebo.
In a prior Phase 2 trial in massel D, re a true tide reduced liver fat by over 80%.
And in a phase 2 trial in Mash, to zappitell led to over half of patients, meeting criteria for resolution of mash, without hoarseness of fibrosis.
We Believe each of these medicines has the potential to make a profound impact on this disease, and we look forward to initiating the study later this year.
Moving to Ola, morass.
We started a phase 3 trial in unrestricted, adant lung cancer.
This marks the fourth indication. We are simultaneously pursuing Ola morass in COS G12C, mutant lung cancer, as part of the Sunray 1 and Sunray 2 programs.
We believe all of our acid in combination with immuno-oncology agents. In an early setting. Could improve the standard of care for patients with krash g12c. Mutant lung cancer.
I'm also excited that through Business Development, we've added new molecules to our portfolio and new colleagues to our team.
And it's a pleasure to welcome new team members from Site 1 and Verve to Lilly this quarter.
With site 1. We added a new pain asset into our Neuroscience portfolio. Stco 04 is a nav 1.8, inhibitor that's shown encouraging early data to treat pain. We believe this molecule could be an important non-opioid therapy for pain in the future.
Through the acquisition of Verve Therapeutics. We added several genetic medicines for cardiovascular disease. That may only need to be given once in a lifetime
the most advanced programs are Verve 102, which targets pcsk9 and Verve 2011 which targets angptl3
And in our early phase portfolio, we Advanced nicotine, our pyy analog Agonist into a phase 2 trial in people with diabetes.
And we initiated Phase 1 clinical trials for glucose sensing insulin at ptk's 7 antibody drug conjugate and oncology and a Next Generation triple Agonist in cardio, metabolic health.
We also discontinued two Phase 2 programs: KB 1.3, an antagonist for psoriasis, and Nazis soine for paint.
And 2 Phase 1, programs that economic and Immunology and scaped S on a in Mash.
It was a productive period since our last earnings call and we still an ambitious R&D agenda for the last 5 months of 2025.
I'll now turn the call back to Dave, for some closing remarks.
Thanks Dan. We're really pleased with all the progress in Q2 across our street, strategic agenda. We've had another quarter of strong financial results, we continued the build out of our manufacturing footprint in advanced our pipeline as Dan just highlighted with external and internal R&D projects.
We have good momentum as we enter the second half of 2025 and we're focused on execution with our currently marketed products and we're investing in the next wave of medicines that we expect will drive growth in the near and more distant future.
So now, let me turn the call over to Mike to moderate a Q&A session.
Thanks, Dave, we would like to take questions from as many callers as possible. So, consistent with prior quarters. We will respond to 1 question for caller and we'll end the call promptly at 9:30.
Conducting a question and answer session. If you have any questions, please press star 1 on your phone at this time.
We ask that participants limit themselves to 1 question on today's call. If you do have a follow-up question, please rejoin the queue by pressing star 1 at any time. We also ask that while posing your question, you please pick up your handset if listing on speakerphone to provide Optimum sound quality.
Please hold while we pull for questions.
The first question today is coming from Chris shot from JP Morgan. Chris, your line is live.
Uh great. Uh thanks so much for the question. Um, just wanted to kick off with with Oro Gipper run. Uh this is obviously a bit of a debate out there this morning on the weight loss profile, you're showing for the product which clearly looks efficacious. But maybe a touch below wi, can you just help put the data into context and and just in general, you're thinking of where Oro fits into the treatment landscape versus Zep benoi. Now that you have these results in hand, thanks so much.
Great. Uh thanks Chris we'll go to Ken's. Answer the question about the orphan profile. Yeah thanks Chris for that question about or for we're really pleased with the data. We've disclosed this morning. Really the idea that you can get 27 pounds of weight loss from a single pill and also get really encouraging effects on other important biomarkers, things like blood pressure lipids, inflammatory biomarkers, and fasting glucose. Those are a lot of the things that hcps are really managing when they think about preventive care. Now, you're getting that all from a single oral pill that we can manufacture at scale. We also know that simplicity
Matters in this space. In the instructions for use. Here are going to be pretty simple. Take it once a day without regard to food and water. Of course, the data we're sharing today are inpatients with overweight and obesity, but we are evaluating uh, or equipment and a lot of other settings that includes other disease, areas like diabetes, and obstructive sleep, apnea and OA knee pain, but also evaluating in other contexts for the treatment of obesity right now. Hey, we have the attainment maintained study ongoing, which is also testing oral as a potential maintenance therapy for patients who have lost drugs, who lost weight on drugs like that, found to see whether they can keep that weight off. So we really see a wide ranging opportunity for Orphan LeBron who couldn't be more pleased with the totality of the profile. We disclose this morning.
Excellent. Uh thanks. Chris. Next question, please.
The next question will be from Sheamus. Fernandez, from Guggenheim Sheamus, your line is live
Oh, great, thanks so much for the question. Um, mine's actually on pricing and the pricing environment going forward. Um, just hoping, you know, Dave, you could, uh, discuss a little bit more, your views on the path for Price, uh, with orthon and the growing number of assets, uh, coming to Market. I think that's been probably the number 1 overhang, um, especially as it relates to the continued availability of compounding. Um, so, you know, just trying to get a better understanding of, of, where you see price going, um, and maybe if you can, uh, provide some thoughts on compounding in that context and and how you maintain your appetite compounding,
Uh off-market when it's being ignored with semaglutide, thanks so much.
Thanks Jamis. Uh, Dave we'll go to you talk about the broader pricing environment and potentially weaving in some compounding commentary.
Okay. Yeah thanks Sheamus. Um you know as relates to compounding let me just deal with that first. You know, we've always been concerned about this because of the patient safety um risk that exists. And you know, every day we get calls from patients concerned that they are getting ill on a medicine, they think is ours and it's not, um,
Yeah, this um, of course, was allowed during drug shortage, there's no drug shortage, um, and we really think that regulators and law enforcement officers in the US need to step up their game, um, to really eliminate this. That's why we have an FDA and a structured regulatory process in the US. Um, and so, you know, we want to see that in mostly because people are being harmed, we see robust growth in the marketplace, in the US 42%, total incurred in growth over the last year. Good sequential growth. And of course Lily's growth is, you know, more than double that. So we're we're the business is fine but um should people shouldn't be harmed?
That's it. I think on on pricing we've always have a philosophy across all medicines including with ingrains to price to value.
Pricing while maintaining um, you know uh a value point on list that makes makes good sense. That's not. Um,
Considering any new policy environment, but that's that's our philosophy going forward. So as we have a suite of products with some with perhaps more value in patients, with more complicated um, obesity or those that um, maybe have less complicated obesity, but medicines like or foran that could reach the masses. Of course, we'll consider those factors in price setting at the list level. And then the net will find its level, uh, in negotiations. And you can continue to expect Lily to offer consumer level pricing as long as we have such a large hole in coverage, uh, in our country for a important chronic disease like obesity, that should be covered. Um, those are our views on on pricing.
Thank you. Dave next question, please.
The next question will be from Jeff Meacham from City Bank, Jeff. Your line is live.
Great. Uh, morning guys. Thanks for the question. Um, Dan on orthon, you know, looking at the discontinuation rates, it looks competitive for attain and Achieve. But can you talk about how the, the GI adverse event rates, change over the course of the studies, um, and where their common features among those with the highest adverse event rates, obviously, thinking how this could play out from a commercial context? Thank you.
Thanks Jeff. Dan. We'll go to you to talk about some of the Oro GI profile over time. Yeah, thanks Jeff. No no surprises in there to GI profile was as expected for a glp-1 Agonist which is to say that most of the side effects occur early in the disease, early in the the treatment course or or with dose escalations. And and then they go down over time. In terms of any specific patient characteristics, that predicted that I don't believe we we sell that in, in the study nor have we seen that in, in Prior, studies, with with glp1. So, um, but really, but no, no differences here that we thought were noteworthy versus monotherapy, glp1, uh, injectables
Great. Thank you. Dan. Next question, please.
Uh, thank you. I wanted to ask uh,
It's kind of a compounding question in a way I guess.
Canadian generics for Nova's. Saget.
They're likely to launch an early 26. I think everyone can agree that tresp tide is a better product but you know what, this still cause a lot of trouble on the market.
Where there's a big cash pay Channel and where we already know that patients have proven themselves to be price sensitive and willing to use a lesser product, like a knockoff, some magnetized, uh, seems to me Canadian generics or just a replacement for that compounding Channel and they'll keep that headwind alive. Even
Even if Compounders get shut down, and we're talking about a product here, that will have gone through a regulatory review cycle, not by FDA, but by another regulator. So with that launch 6 months away,
is that a headwind that we should expect may continue? Um,
Thanks.
Okay. Thanks Tim for the question on the Canadian generics impact. We'll go to Elio, to answer that 1.
Yeah. Um, thanks for the question would be all. Um,
touch on what we're currently seeing in the US market and
if you assume looking at the self-pay market that
What we're seeing in Vile performance. And overall Market is continuing to grow at rapid pace.
we're seeing that our offering with the vial with set down and the profile that we have with set down is, um,
Is, is meeting a, a need for a patient, even in the context of, uh noise, whether you have compounded or, um, some in the market. Uh, you take a look at just the growth that we've seen in Q2, we've generated over 1 million TRX, in dial in Q2. Uh, and we've re recently launched last week, the highest doses of file available for zapb and we're continuing to see health and network at roughly 20% of all of our TRX is coming from the cache Pay Market.
Get your continued to see strength overall both in self-pay and in covered, where we're seeing around 65% share market in new therapy starts for UH Zet bound overall. So we see health in the market and where is that? Bound provides a greater value.
Great. Uh, thanks milia. We'll go to the next question, please.
The next question will be from Dave Risinger from learning Partners. Dave, your line is live.
Yes. Thanks very much. So I um,
I was hoping to better understand the evolution of us employer coverage for anti-obesity medicines.
Um, and the prospects. So, my understanding is that, um, coverage has been pretty flat on a net basis, uh, over the last 18 months. Let's say since January of 24, meaning, uh, the net, uh,
Covered lives has been flattish if you can confirm that, that's correct. And then can you talk about the outlook for the net change in US? Employer coverage for anti-obesity medicines uh over the next 6 months or so. For January of 26, thanks very much.
Great. Thanks. Dave, for the question. Uh, we'll go to Ilya to talk about as the progress in the debt found employer coverage often
Sure. Uh, thanks for your question. Dave. Uh you know as we take a look at employer coverage we
It's important for us to grow coverage over time.
What we've seen in different offerings across the different plans, um, some are more complex than others. Um, we've seen an increase overall, but it has been steady around 50% to 55%.
Employer opt-in coverage at the same time. Uh, we are seeing new benefit designs. Like for instance, ever Norse a cap on out of pocket for employees that make the uh, prior authorization or simplify. And that may grow employer opt-ins over time. That's something that we're working through. Our Outlook is that as evidence grows and we find new ways, uh, and also different plan, designs are available to different employers that that will continue to increase.
Great, thank you Ilya. We'll go to the next question, please.
The next question will be from Terrence Flynn from Morgan Stanley. Tyrants? Your line is live.
Great. Thanks for taking the questions, congrats on all the progress. Um, just wondering on Orphan in light of the attained 1 data, if you can just frame expectations for us Dan for the upcoming attained 2, phase 3 data. And then any early insights into the potential, um, cmmi obesity, Medicare Medicaid pilot that. I think we saw some uh press reports about thank you.
For that. We'll go to to Ken to answer the question on expectations for 10 2. Yeah thanks for the question on at 102. You know, we're very pleased with what we disclose this morning and attained 1 which is our first phase 3 study in obesity uh without diabetes and of course we had a great result with achieved 1 in patients uh with diabetes. Uh so as we look ahead to attain 2, we expect uh similar.
The encouraging result. Uh, the exciting thing about a chain too is that'll be our third phase 3 study, uh and it sets us up to submit an obesity by the end of this year. So really no change in expectations here. The team's Full Speed Ahead. Preparing for a submission by year end in a potential approval next year
Great. And if you want to hop back in the queue Terrence, we'll see if there's time for your second 1. Next question, please.
The next question will be from Courtney Greene from Bernstein. Courtney, your line is live.
Okay. Thanks so much for taking the question today. Um, just coming back to to another question on also, um, as we looked at at kind of comparing the data between, uh, attained 1 and Achieve 1. We do see that kind of nausea vomiting constipation, all up here a bit higher in this achieved 1 Study um can you talk a little bit about the the differences in those data points that we're seeing between those 2 studies? And what that might mean for adherence in the real world? Thank you.
Hey Courtney. Yeah, thanks for the question on comparing achieve versus attain. I think Dan. Maybe a couple quick comments. Yeah sure. Thanks. Courtney. I think the side effect profile in in both of these trials was consistent with past experience for glp1 monotherapy. In these populations which are different. As you're pointing out, the side effect profiles can be different in people with type 2, diabetes versus um people without type 2 diabetes and and with obesity. So it I think we we feel quite confident overall about the profile here.
Of course, I think it just emphasize once again, this is a glp-1 monotherapy. We know that dual agonism with glp-1 and Gip 1 uh, can offer Superior results that we have that as an injectable, as as tappity, but I think actually, this is as good as it gets for glp1 monotherapy here in once a small molecule or also a pretty excited with the profile.
Great. Thanks. Dan next question, please.
The next question will be from Mohit pansal from Wells. Fargo Mohit. Your line is live?
Great, thank you very much for taking my question.
Split in the offer, get from study if there was any difference versus uh any other trials, uh, for glyph 1, that you would want to highlight here.
Thank you, sure. Thanks Mo for the detailed question. We'll go to Ken to talk about the gender split. There's anything to flag. Yeah, thanks Mo, gender. Split for Baseline population in a team 1. Uh, was about 64% across the board board. Well, balanced across, 64% female across arms balanced. Nothing really, to to remark on here.
Great thanks. Thanks, Kat. Next question, please.
The next question will be from Assad Hider from Goldman, Sachs Assad. Your line is live.
Great. Thanks for taking the question and congrats on the quarter, just going back to channel Dynamics, uh, on the Lily direct Channel. Clearly Z bound growth, has been getting a lot of momentum with the new to Brand prescriptions or where do you think this could stabilize and how is that segment changing the landscape on pricing. And then related, I think Lucas you've previously framed. This DTC offering for Z bound as a hedge or a bridge solution as you continue to grow access in the reimburse channel. So any evolution in your thinking on that front giving given DTC offerings are now getting framed as 1 way to satisfy the administration's demands on drug pricing. Thank you.
Okay, thanks for the question. Assad. Lucas. You want to give some comments area on the blue direct sort of Revolution and Outlook from here? Yeah, sure. Uh, thank you, sad for your question. Uh, first of all, I just wanted to find out the, the great products that we see in leaded direct, I think India loaded up about total TRS prescription that we see in the second quarter, 1.1 million, TX, fantastic growth. And now, we are adding the 12.5 and 15 milligrams launch as well. Um, so great progress that we are seeing in you, you see that data as well that you have access to that in terms of uh the number of total DRX as a percentage of the total seban business. So progressing very nicely, very pleased with that. You mentioned about again the Hedge. Yes, I shared that with you a time ago and that's the way that we think about it. Going back to the previous questions about employer as we see that progressing. But we, we always thought that it would be a gradual progression on the employer, uh, access. We see the, the
leader direct as an option to bridge that right as a hedge strategy to bridge that. So we still see it the same way, but it's progressing very nicely and it's growing very. It's it's it's actually contributing to our performance, this quarter and for the rest of the year as well. So um, that that's more of the commentary and the color that we can provide today on that.
Thank you. Lucas next question, please.
The next question will be from Umar refaat, from evercore Umar. Your line is live.
Morning, guys. I'm just still trying to get my head around the orphan data. Um, on the 1, I see your, um, efficacy as demand at 11.5% Placebo adjusted being very consistent with what Novo showed with their oral SEMA data, uh, in Oasis 4. But on the more important, it like treatment estimate, oros tracking, at 9%, Placebo, adjusted. Um, oral SEMA is almost 14%, Placebo adjusted, and I, I'm just trying to understand what explains that Delta and does it prompt the need for a 45 milligram cohort considering how the safety is tracking?
Okay. Thanks Omar. We we'll go to Dan to provide maybe some final commentary on what I'm saying. Yeah, thank you. I'm not sure. I I tracked exactly with with your numbers um but look I I think overall the the profile here landed are pretty much where you could expect a glp1 monotherapy to land.
Uh it's tough to compare different trials, done at different time, periods in different populations. Um, but I think overall given the patients we enrolled in the trials, we ran, this is what glp1 agonism can give you. Uh, I don't see this as a, uh, any um, issue at all in in the real world or in, in for patients, or for doctors, I know Wall Street has kind of focused on the exact numbers here and making cross trial comparisons, but I don't
I think that carries over to to the real world at all.
Great. Thank you. Dan. Next question, please.
Next question will be from Steve Scala from TDC. Oh, thank you.
Thank you so much with what is widely viewed as disappointing. Orthogonal data. It seems injectables are where it's at for the foreseeable future on the q1 call. Lily said the likely impact of the novo deal with CVS would be modest.
But today, you are saying, there could be an impact in Q3, and for Lily, to call it out in the prepared remarks, it must be pretty meaningful. So can you tell us what changed in the marketplace for the injectables? Thank you.
Market and we're zipped on has gained uh share. And we added around 1.7 million TRX and Q2 the overall impact. I think what we discussed
Prior is a couple hundred thousand TRX volume that may vary. It's still early in the transition to CVS, and obviously, that creates frustration for employers, for providers for patients. And we don't agree and disappointed with CVS decision at the same time.
In terms of impact, you'll have some medical exceptions and overall in the context of growing 1.7 million TRX.
We view, and you look at July TRX as a proxy where it's on average back to around May average TRX. We see continued growth and very good performance across all segments for Zapb, both in covered as well as our cash pay market. We expect continued growth. I think the commentary is more about the rate of growth. Obviously, some new patient starts related to CVS Template only may have some impact on growth, but overall, the growth is healthy across all other segments.
Great. Thank you. Ilya, our next question, please.
The next question will be from Alex Hammond from Wolfe research. Alex. Your line is live.
so, I noticed
A total discontinuation rates in the pr when you normally don't does that suggest that you think there was an underlying driver of these uh, unusually elevated dropper rates, across all arms, and could they have impacted efficacy?
Thanks Alex. We'll go to. Can we talk about the inclusion of the overall discontinuation rates and how that may have been in some other press releases as well. Yeah, thanks. Alex for the, the question, on discontinuation rates, what we disclosed, uh, of course, uh, with the rate of discontinuation and attain, 1 for Placebo of 29.9%, and then for orphic lapan ranging from 22 to 24%. We don't think there's anything remarkable there, uh, and we've disclosed these information on previously programs, I think on certain amount 1, we did, you know, maybe to put this in a little bit of context. If you look at it, analogous, uh, studies, uh, you know, obesity really Placebo rates or, or in the 20s. If you take maybe Step 1, uh, 22% Placebo, uh, rate for discontinuation at about 5 Points, lower for, uh, active comparator. That's exactly what we see here on a Delta. So, really nothing remarkable here, the more important thing to look at, you know, of course, patients can discontinue a study for a whole host of reasons, they can just withdraw their consent, does it? Because it doesn't fit with their life. Maybe they're not getting the efficacy they need. And that's why we typically see lower rates.
Rates in the active drugs, which is what we see here or an adverse event. Now, the rates for Adverse Events is Dan, noted range between 5 and 10 percent for a Cerrone. That's exactly where we'd expect to be for an oral, uh, GOP, 1, single Agonist. Uh, so really nothing remarkable here.
Great. Thank you Ken. We'll go to the next question, please.
The next question will be from Akash tari, from Jeffrey's, a cash, your line of 5.
Hey thanks so much. Um, what's Lily's, appetite to comedian to launching new products, at net parody pricing between the US and Europe, given a significant amount of your newly launched products in Europe are actually not getting reimbursed anyway and more broadly. It sounds like we're in an impasse between the administration and the industry. What's your confidence? We'd be able to get kind of a bespoke solution with the administration absent new legislation, thank you.
Great. Thank you, Akash. We'll go to Dave, to talk on the engagement with Administration and kind of new product launch strategy.
Sure. Yeah. Um, I mean, just on the discreet question. You're asking, I think we believe, um, long term. We should rebalance
Pricing, um, between us and Europe. In terms of who's bearing, the cost for really the advertised R&D and the risk we took, um, that's a rational thing. And it's, you know, in my career it's gotten more and more out of whack. Um, so I think, you know, here at the president's right to call that out, the question is really how and as you know, the um, European governments don't exactly. Um, they're not signing up to pay more.
For drugs. So we need trade tools um to rebalance that equation we've been very clear on that advocacy with both European and US governments. And in the US we need to deflate the gross to net bubble because there's this huge artificial thing that needs to get deflated. The problem with doing that suddenly is all those cash, flows into hospitals, and premium support for seniors in part D. Etc. You can't collapse at all at once and be very difficult. I think. So the idea of new products gives it sort of a ramp
You know, we are narrowing the Gap substantially on new products and uh some of that's for the reason you point out that some countries reimbursements, just a tough equation. Um so what's the point of of lowering that so you know, watch that space. I think this is an area. There could be progress under the presence agenda and I think you'd see most most uh Pharma companies interested in. Moving in that direction. The question is, how do you step into it?
Great. Thank you Dave. Uh, we got time for probably 2 more quick questions. The next question, please.
My next question will be from Carrie Halford from Baron bury, your line is live.
Thank you a question from me, please on the cash Channel.
So yesterday, nobody
Available private paying later this year? Are you planning to do the same for Manjaro? And if not, why not
And I'm not sure if you mentioned this earlier, but can you confirm whether you intend to use the cash channel for all for Leon once that comes to Market?
Great, thanks. Gary for the question. Um we'll go to to Ilya to comment on our our thoughts on the cash Channel.
Sure. Uh, well, first, I think we're learning a lot and the cash channel will be direct and a lot of that has to do with the consumer journey and it's varied across different segments of where you have significant coverage versus not, and with Mauro, we have significant coverage. So over 90%, coverage in both commercial, as well as.
Part D and so I'm not sure if that necessarily provides an additional Avenue. Uh with that bound, we see significant growth because we do have coverage gaps in commercial. And obviously we also have garbage gaps without having uh the ability to cover and the Obesity medications in part D. So we see this as an opportunity for us to meet that need uh of course we'll evaluate. Uh other brands that we put through uh lonely direct. We have um a number of avenues to come to Lily Direct.
Hi guys, thank you so much for taking my question, a follow-up on the MSN conversation, you know, appreciate it. And you're not going to share the details of your interaction with the administration, but can you provide some practical examples of what you and the industry can do to help achieve the goals of you know getting price parity globally. Thank you so much.
Thanks Evan. Uh we'll go to Dave to answer the question and then to provide the closing remarks
Yeah, sure. I don't have a lot to add to what I said to the prior question, you know, I think long term it makes sense to rebalance this. Um,
and, you know, the
having a an on-ramp makes sense to me, because a sudden change in either environment, would be difficult to sustain or Justify. So, um, you know, the idea of new products is a is a reasonable proposition provided that the reimbursement rates in Europe, can rise really based on, you know, cost for Quality analysis and other things and the US gross in net situation can change and easing into. It seems to be, you know, rational thing to do the other piece, which, you know, the DTC Channel being suggested by the administration. And for the prior question, in addition to offering an outlet for people who don't have coverage, it does provide a kind of real price transparency to Consumers employers and others, and that's a good thing. So we support that as well. Um, we'll have to see how this plays out, as I said, we're constructively engaging. Hopefully through some progress can be made and I think, um, it's in the industry, long term interest to kind of pull these things closer together. And uh, we'll work hard to try to do that.
Thanks for being with us today everyone. Um, and for as many questions as we got to, I know there's always some. We we did not. So as in Prior quarters, if you have unresolved questions, please contact our IR team and um we appreciate your interest in in the company, as always, and look forward to Future interactions have a great day.
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 September 11th at midnight.
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