Eli Lilly and Co at Goldman Sachs Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : Excellent. It's a unique opportunity. I think so much of the science risks is still evolving, but it's kind of we've come to a clear inflection point, obviously, and we're thinking about commercialization, we've got to make the donuts, manufacturing, so many issues here to address. What did you feel was the most important sort of set of objectives for yourselves near and intermediate term as you assume this role, you were put in this hot seat essentially last fall, right? And I always think about Lilly's management team is having tremendous bench depth. People are well trained; they stay through the organization they filter through. So what do your tasked yourself with delivering? Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA Well, I think first and foremost, it's a super exciting time. And I think because we have in our hands right now, probably as good as they possibly can be. So for me, it's number one, making sure that we continue the very successful introduction of Mounjaro of people with type 2 diabetes. We just launched Zepbound for chronic weight management on obesity six months ago. So that's just the start, we have started in the US and a few selected markets outside the US. That's really the top priority. But beyond that, I think when we look at the pipeline, we have two really exciting medicines in Phase 3 orforglipron, which is an oral GLP-1 RA. And we have also tirzepatide, which is adding the pharmacology of glucagon. So I think those are both in Phase 3; super exciting. And I think that really brings a lot of promise for the future. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2024 / 8:00PM, LLY.N - Eli Lilly and Co at Goldman Sachs Global Healthcare Conference And lastly, working with my colleagues in development and in research to just ensure that we have the next wave of truly innovative medicines. And we just announced earlier this year that we are entering into Phase 3 with lepodisiran for Lp(a). So launched the assets we currently have in the market, just evolving the launch readiness for our current Phase 3 assets and then securing that the earlier-stage pipeline is progressing and meeting current unmet medical need.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : And there was a little bit of a shift in the language that was used. It was a year ago, they were talking about capacity. And as a therapeutics person, things get very big and we think about square footage of manufacturing facilities and all of these. They're certainly not white elephants, they're going to be galvanizing production facilities the world has never seen in Wisconsin and Everett, elsewhere. But then the vocabulary change to without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2024 / 8:00PM, LLY.N - Eli Lilly and Co at Goldman Sachs Global Healthcare Conference salable doses, what's the salable dose just so that we're all level set on what the denominator is because there could be a couple of salable doses in a single one of these [clever pens], right? Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA Yeah. First and foremost, the move was to a large extent based upon feedback from investors and other stakeholders. We used the capacity language because we made a commitment -- back at the end of 2022, we said, okay, we're going to double our product production capacity in 2023, and we did that. But we got a lot of question, okay, what does it mean with the increasing capacity? What does it really mean in terms of supply? And I think we realize the capacity -- if production lacks capacity and we've moved to the language of salable doses. And that takes account our salable doses of incretins. It takes into account our salable doses of the [irmav], the auto-injector that we mainly supply in the US, and the KwikPen outside of US as well.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : Yeah, that's kind of where we're certainly seeing that in other sort of therapeutic categories like immunology, we're expanding indications, love to sort of say, it's a pipeline within a product. But as you're getting a label expansion for cardiovascular benefit, OSA, et cetera, we would expect to see the expanded indications that also to pressure the net pricing as a logical path is what you're saying? Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA You are not -- I think particularly the outcome indications will help granting Medicare patients access to anti-obesity medications. I think we have said publicly -- when you look anti-obesity medications, I think you should expect the pricing headwind along the lines that you normally see for the average portfolio, which is low to mid-single digit over the coming years. But I think that's probably as much as I can go into details in terms of pricing.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : But then returning to the original premise of my question, pricing for oral therapeutics. How would you see that comparing with the injectables, assuming that we have comparable, but perhaps not as blue chip of response as you get with the tirzepatide? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2024 / 8:00PM, LLY.N - Eli Lilly and Co at Goldman Sachs Global Healthcare Conference Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA Chris, I would probably not dig more into the pricing question. Yes, I think it's a good second try. But I think there are many factors playing in as well as the overall market dynamics. So I think there is some work to do in that space. And I look forward to share much more when we get closer to launch.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : To ask another question about the Medicare related, we've certainly seen a very effective strategy and certainly, when the outcomes study SELECT for semaglutide read out positively, we certainly saw spark on both the leading parties benefit here. The FDA would be specific about updating the label for Wegovy. And what are you seeing at the actual interface of the payers? Are they willing to be as we see the read-across? And I would imagine that amongst customers and the clinicians, there's maybe a broader acknowledgment that it's not just specific to semaglutide, particularly the payers, how sticky are they being? Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA We were very pleased to see the read out of the SELECT trial, and I think that was very much what we anticipated. With weight loss, we would expect to see both cardiometabolic benefits. And I think across the different stakeholders, I think they expect to see at least the same, if not more with tirzepatide. We are reading out the CV outcome study for diabetes slightly in 2025. It's an event-driven trial. It's hard to give a specific timing, and we have a morbidity mortality outcome trial in obesity reading out most likely in '27. That's also event-driven in both primary and secondary prevention. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2024 / 8:00PM, LLY.N - Eli Lilly and Co at Goldman Sachs Global Healthcare Conference So I think those benefits are expected to be seen with tirzepatide well and taking into account the weight loss is significantly higher with tirzepatide and semaglutide. So probably higher expectations for that as well. But the most important point is that CMS announced that they will cover outcome indications in Medicare. So I think this opens up for the Medicare population to get access to anti-obesity medications, and we expect something similar with our approval of obstructive sleep apnea, we would expect something similar for the heart failure indication that is reading out later on this year and later on for the morbidity mortality outcome data as well.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : And Lilly, the house has commented that the GLP-1s in the diabetes indication has historically had kind of median duration of use that kind of settles out at kind of 15 months, would that be your expectation, do you see something on par? Or are we just getting better at using these and patients more motivated, so could it be longer? Or is there a reason why it'd be left? Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA Yes, we saw 15 to 18 months in type 2 diabetes, that's correct. I actually think we need to aim significantly higher. And I think there is at the patient level a mechanism here because if you stop your treatment, you have seen the benefits of getting down to a BMI of 27 or 28 to whatever it might be. And we saw in our study that when some people -- was designed you could continue with your tirzepatide medication or go on placebo. If you went on placebo after treatment, you increased your weight with 15% quite rapidly, while if you continued with tirzepatide treatment, that will continue to decline in the study of 7%. If you have experienced a benefit and you're rapidly regain, I think patients will rapidly try to get back on treatment. And I think there is an educational need here, that we and the competition needs to take the lead on to make sure that patients don't go on-and-off because we don't know the impact of that in terms of the body composition. But I think we should expect and aim for significantly higher adherence for the sake of patient outcome. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2024 / 8:00PM, LLY.N - Eli Lilly and Co at Goldman Sachs Global Healthcare Conference

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : They do? Okay. Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA They are very close to reality. So I don't think there is a huge gap when we look at what we believe is our estimate and where we are, but a great start. And most importantly, the consumer experience is better than in the current normal system.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : Yeah and almost makes me wonder what the endpoint be, whether it be an efficacy measure or on the adverse event side of the column, you could look at it from so many different ways theoretically. Let's attack another pipeline aspect, we mentioned it earlier orforglipron, on the oral side. And here, I think people are feeling quite confident and speak to your confidence in the level of de-risking here because we know that with orals, I mentioned the potential democratization, safety, safety, and safety, very important. And it seems as if you guys have that motor come of competence needed to begin to go into thinking about scaling up production even beyond where you are clinically. So make us feel comfortable with orforglipron. Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA (technical difficulty) anything, it's entirely the derisk. That's the reality of the business we are in. (technical difficulty) Phase 2, we felt very confident progressing into Phase 3. We have an independent safety monitoring group that (technical difficulty) [that looks after data] on a regular basis. There have been no signals. But of course, at the end of the day, we need to wait the full readout of the Phase 3. But based upon everything we've seen so far, we have a high degree of confidence in orforglipron and it from a different backbone compared to the Pfizer compound. So I think that's important to have in mind as well. But we will see the full readout in 2025 of all the -- of orforglipron, the Phase 3 trials, [by the] time when it's entirely derisked.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : Okay. Let's go (technical difficulty), which often gets thrown into a conversation in the same paragraph and we're starting talking about the adjacency that is the liver complications, NASH, NASH, when we think about mechanistic benefit. Bring us up to date with where we are with GGG and where you see it going? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2024 / 8:00PM, LLY.N - Eli Lilly and Co at Goldman Sachs Global Healthcare Conference Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA Yes, GGG, I think what excites us here is the addition of glucagon pharmacology. And what we saw in Phase 2 is that it's bringing incremental benefits on top of tirzepatide. First, it's the magnitude of weight loss. When we are direct close to the level that you see with bariatric surgeries, we are talking about weight loss at 25%, 26%. But it's not only the magnitude of weight loss, it's also the consistency of weight loss. Because what we saw with tirzepatide is actually about 100% of patients respond to tirzepatide and demonstrating a weight loss of at least 5%. So I think that consistency of response is a very important factor as well. And on top of that, you have the lowering of lipids, you've the lowering of liver fat, and you have the hypotension piece -- the blood pressure piece as well. So there is increased the cardiometabolic protection and potentially some benefits from a renal perspective as well. So we are super excited about tirzepatide as well. It doesn't read out until 2026, but it's just around the corner time (technical difficulty) conducting basket trial with (technical difficulty) the ANCHOR indication that we are also studying osteoarthritis and obstructive sleep apnea. And we have also initiated an outcome study with tirzepatide and in parallel studying type 2 diabetes. So this could be how we really raise the bar in the treatment of obesity beyond the revolutionary (technical difficulty) --

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : And then other mechanism would be GIP, to agonize or antagonize, what say thou? Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA If agonist or antagonist? Well, I think that debate has been quite heated over the last two months. We feel very confident that the GIP agonist is working, and we have done a small Phase 1 study on a pure GIP agonists on our own. And we saw the effect that we expected. We have also long acting GIP that has been demonstrating weight loss as well as decline of hosting glucose. I think those are really strong evidence for GIP agonist. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 10, 2024 / 8:00PM, LLY.N - Eli Lilly and Co at Goldman Sachs Global Healthcare Conference I think that is probably more to demonstrate in terms of GIP antagonism and I think those are data and answers. But I think many are looking to, okay, what does GIP antagonists might actually do in terms of long-term kind of cardiovascular safety, bone, cardio metabolic health overall as well as insulin sensitivity, HbA1C. So I think a lot of questions to be answered in terms of GIP antagonists, while I think GIP antagonist has been quite well demonstrated to induce both weight loss and reducing fasting glucose levels.

Question: Chris Shibutani - Goldman Sachs & Co. LLC - Analyst : The unmet need is (technical difficulty) -- Patrik Jonsson - Eli Lilly and Co - Executive Vice President, President of Lilly Diabetes and Obesity and President of Lilly USA I'm more excited about the outcome of the ad board today on donanemab. I think we are super excited to work closely together with the FDA to finally get donanemab up to patients that are suffering from Alzheimer's disease. And I think that's hopefully quite nearby right now.