Okay, great. I think we're gonna get started. Thanks for joining us this afternoon. I'm Terence Flynn; U.S. Biopharma Analyst at Morgan Stanley. Very pleased to be hosting Eli Lilly. We have Dan Skovronsky, who is the company's CSO and CMO. Before we get started, for important disclosures, please see the Morgan Stanley Research Disclosure Website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Well, Dan, thanks so much for joining us today. I know it's been a busy time at the company, so appreciate you being able to step away here and spend some time with us at our conference. I guess just, you know, the big picture one I had to start it off is just, you know, it's been a tremendously productive time for the company, as you've highlighted, you know, over the last year or so. So just as you think about that, like, how do you continue to build on that success as you think about the forward year? Yeah. Thanks. Thanks, Terence. Thanks for having us here. It's great to be together. I think, for me, there's sort of a dual mandate. So one is make the most of the opportunities we have. So where we have unlocked science, you know, how do we make sure that we continue to translate that science into medicines for patients? So, you know, clearly huge progress in diabetes, obesity, and huge progress in Alzheimer's disease. So the first sort of pillar of the mandate here is multi-generations of assets that continue to get better and better on behalf of patients. On the other hand, the second thing that we have to get right is have more breakthroughs like those. And that's the challenge. I think it's rare that a company can do both things. Usually, there's a challenge because when you have great science and great breaking assets, you just wanna keep investing in those and not do other things. And so for us, we wanna do both, and that means our areas of immunology, oncology, we wanna continue to make progress there. And I think we have some pretty big unlocks happening right now in both of those areas. And then also, where are some new areas that could, 10 or 20 years from now, be like obesity and Alzheimer's are today? Remembering that when we started in those areas, they were very much out of favor in pharma, and nothing was working, and... Well, what are those areas today? Yeah. Those are the things we think about. Okay, great. Maybe we'll, we'll dig in on the, the diabetes, obesity front, just given the, the tremendous amount of progress that's been made and, and a lot of focus. You know, you guys have been, working a long time in diabetes, but then more recently have been focused on obesity and running a number of trials here, with Mounjaro or tirzepatide, including the, the MMO study. But then you also have a number of indication-specific trials across a range of, of comorbidity indications. And so I think maybe the first place to start is just on, MMO. So Novo reported their Wegovy SELECT study recently. Maybe just what are the implications of that data set for your program, MMO, and what are you looking to see when we, we see their data at AHA? Yeah. First of all, great, great news for Novo, even greater news for the field and for patients that suffer from obesity. I think we've long known that obesity is a risk factor for cardiovascular negative cardiovascular outcomes, and we've also known that treating obesity by any other way that worked, which is essentially bariatric surgery and intensive lifestyle modification, which only works in some patients, led to cardiovascular benefits. And now we know that that same is true for GLP-1 mediated weight loss. So, that that's really good news for patients. I think for Lilly, it's also exceptionally good news. I think in tirzepatide, we have a drug that's shown levels of weight loss that haven't been seen before. We've reported in the last couple of months, SURMOUNT three and four weight loss trials that showed 26% body weight loss, which is tremendous. So far, all the data we have suggests that the level of weight loss is correlated with benefits on cardiovascular outcomes. I would predict that greater weight loss could lead to even greater benefits. So I'm really excited and optimistic for our own trial, which is still several years away, as we started a bit later here. But huge reason for optimism. When we look at the trial, of course, I'll just be focused on what you know, really understanding the mechanism that connects GLP-1 with the improvement in cardiovascular benefits. You know, the simplest hypothesis and the one to refute is weight loss. But I think probably what we're gonna see is just about everything can be attributed to improving BMI. Of course, with that improvements in BMI comes normalization of lipids, lower blood pressure, et cetera, all the things that we've seen with tirzepatide. So I think that the picture will be good for connecting the dots on weight loss. The reason that's important is the challenge here is getting the medical community and patients and doctors to connect obesity and losing weight among obese patients as sort of an inherently good thing to do. Yeah. And then maybe just thinking about you guys kind of set the groundwork here in the REWIND study, where you did a combination of primary and secondary prevention. You're doing something similar in MMO. I know the Novo study was only secondary prevention, but does that at all change the, you know, relative risk reduction we'd expect to see from a trial like MMO with a caveat of higher weight loss? I mean, how do you think through, like, the relevant patient- Yeah Populations that are included in the study? So, you know, surely, a higher weight loss has got to be considered a tailwind in the context of this trial. Then you're asking, what about inclusion of primary prevention? Is that a tailwind or headwind? I think for most diseases, treating earlier can have a bigger benefit. I think that's likely true for obesity and cardiovascular outcomes. One way to think about it is, you know, how much modifiable risk is there in a population? If someone is on the verge of an adverse, you know, outcome, can you really modify that, or is it too late? Whereas if you get someone early in the disease course, there's more opportunity to modify it. So I see the primary prevention as a positive here for relative risk reduction. For absolute risk reduction, of course, it's a population that's going to have fewer events, so a lower event rate. So it'll be a bit of a headwind on absolute risk reduction and a bit of a tailwind on relative risk reduction is my prediction. But let's wait and see the data. Okay, understood. I guess the, you know, as I mentioned, the indication-specific approach that the company is taking here, I think there are, you know, four different indications over the next eighteen months or so. Yeah. Maybe just give us a kind of remind us of the sequence of those trials and why you chose those indications that you did as kind of the first, beyond MMO, as the first place to go with tirzepatide and obesity. Yeah. So next year, we'll have two phase III read out on two new indications that I'm really excited about. One is obstructive sleep apnea. So we know that obstructive sleep apnea, about 80 million people in the U.S., 70% of them have obesity as a comorbidity and probably as a cause of OSA. And just like I said about cardiovascular outcomes, we know that among patients with obesity and OSA, if you correct their obesity through bariatric surgery or intensive lifestyle modification, you can have better outcomes and reverse OSA. So the evidence here feels really strong. Obstructive sleep apnea is a common disease, so strong biologic validity here, high unmet medical need. Then we do have, you know, approved therapies that are widely reimbursed in the form of CPAP. So I think it's also helpful for access for patients if we can show a benefit in OSA. That should provide access to a lot of patients with that disease. Importantly, obstructive sleep apnea is also linked, on its own, to cardiovascular outcomes. People with OSA will have a higher risk of negative cardiovascular outcomes, so reversing that should have a long-term benefit. So that's the first, and then HFpEF, right alongside it. Again, this is a HFpEF in patients with obesity, and obviously, this had a very high rationale, probably about the strongest rationale for expecting a positive benefit, going into the study, which has just gotten stronger since then with Novo's recent data. So excited about that, and those two indications could be important. Behind that, we have both NASH and CKD. NASH trial, probably, it's a phase II study, as all NASH studies are driven by biopsies right now. I expect a pretty powerful effect there based on all the biomarker data we've seen going into this. I, I'll be surprised if this isn't a positive study. And then the question becomes: how do you take a drug forward for NASH, knowing that treating obesity is really going to have a profound effect on this disease? Then after that, chronic kidney disease, where, again, all the biomarker evidence and outcome data from, you know, Trulicity and semaglutide, et cetera, have shown a good effect of this class of drugs on renal outcomes. So I expect that to be important as well. That's another phase II. Yeah. Okay, great. Maybe just one on, the sleep apnea side. Mm-hmm. The, you know, AHA is the primary endpoint. Help us think about what's clinically meaningful on that endpoint as you think about it. I mean, obviously, a high time, high confidence and successful trial, but what's enough in terms of clinical meaningfulness. Mm-hmm Especially in the context of, again, CPAP device? Yeah. It's probably not a number that many of us are intimately familiar with, but apnea-hypopnea index, AHI, just measures how many of those kinds of events a patient has per hour of sleep. And there are different categories of OSA that are defined. I think starting with, like, 5 being the trigger for therapy and then about 15 going from mild to moderate and maybe another 15 is severe, something like that. So certainly moving between stages for any given patient would be very clinically significant, and there could be smaller changes there, depending on the patient's severity, that could also be meaningful. I think we're well-powered to see an effect that will be clinically meaningful. Okay. And I guess the, you know, similar to, to my MMO question, as you mentioned, the Novo study in HFpEF, any differences in terms of either your population or the, the trial design, to think about here as we, as we think about your readout, relative to what we saw from, from Novo? On our HFpEF study, it's a larger study- Okay ... which I think is good news. Again, I should probably just say the biggest difference is the drug. So, I think the added benefits of tirzepatide should shine here as well. And then a larger study. So I think, you know, we'll quite likely see the same sorts of benefits that were demonstrated in that trial, but probably more adequately powered to say things about some of the harder outcomes that are difficult to show in a smaller, shorter duration trial. Okay. Maybe one other corollary question we get is just diabetes prevention. Yeah. Obviously, you know, there's some early interesting data from the SURMOUNT-1 study, where I think, you know, the number of patients treated who had prediabetes at baseline that converted to normal glycemia went to, from, to over 95%- Right ... versus 62% for placebo. I think there's a built-in analysis in MMO to also look at that. So is that an actual indication that ultimately could upend in the label, or how should we think about diabetes prevention? Yeah. It's really incredibly profound data from SURMOUNT-1 that you alluded to. I think something like 60% of patients at baseline had prediabetes, and 95% of them on drug at the end didn't have it. That's great news, and in fact, the next readout is going to be more from SURMOUNT-1 data, because those patients stay in the trial. Okay. And we'll have long-term outcomes and see if we can prevent, you know, continue to prevent them from having prediabetes. And certainly, that will prevent them from getting diabetes if they don't have prediabetes. So it'll be great to have that data. The question you're asking is, how does that translate into a label claim? I think that's more difficult right now. The FDA set a very high bar for proving or getting a claim of diabetes prevention that actually requires you to come off the drug and still have that benefit. That feels a little unfair from my perspective. I think if we ask that of statins, for example, to have a claim of modifying your risk of heart disease, that would, you know, not be productive. So we need ways, I think, to shape the environment among endocrinologists and ultimately regulators to find a way such that drugs which have benefits both in preventing diabetes and treating diabetes, which is a difference from what the statin analogy was. Drugs like that can get that kind of claim and offer that benefit to patients. So work to do. Okay. So longer-term discussion. Okay, again, I guess this is kind of a related question. There's been a lot of focus on how adherence in obesity will play out. Obviously, adherence in the type 2 diabetes side is very high because of, you know, the adverse outcomes that patients are aware of. And so there's a view that they're highly incentivized to, you know, stay on once-weekly injection. And I guess my argument on the obesity side would be patients see the benefits of weight loss, and so that would be a motivating factor. And then you have trials like Select that have a cardiovascular angle. But, you know, any early thinking on how adherence is going to play out on the obesity side for the injectable GLP-1s? Yeah. Well, I think the weekly injectables in type two diabetes have better adherence. I think Trulicity beats all of the orals, actually. So the injection issue is a bit taken off the table, and then you can ask what motivates people with type two diabetes, and as you said, maybe it's fear of long-term outcomes. Of course, in a pure type two diabetes population, which, you know, doesn't have obesity as a comorbidity, you're essentially treating a biomarker, which is a hard thing to do, but we can do it. In people with type two diabetes and obesity, of course, they can see the benefit of the drug, and I think that'll carry over in the obesity population. If you were able to eliminate sort of the confounds of access or cost or things like that, but if you set all those equal, I would predict that a patient who suffered from obesity would stay on the drug longer and have better adherence than a patient who has type 2 diabetes without obesity. The reason for that is partially weight loss, which is easily measurable and observable and feels like a positive, and now we understand the medical benefits of that, just like we understand the medical benefits of A1C correction. But there's something even more important, which I think is the behavioral changes that patients will experience. So the craving for food, the constant thinking about it, and trying to fight hunger, to fight obesity, it takes a toll on individuals and is unpleasant for anyone to experience. Being able to change that, I think, could be an important motivator for people to stay on the medicine. It's possible people will experiment coming off of it, and maybe people will have a good experience, and that would be great. I think for other patients, they'll find that the cravings and the thinking about food comes back more quickly, and perhaps for them, that'll be a reminder to get back on the drug. It's still early days, though, but I think the outlook is probably good. This is a chronic disease that likely needs chronic therapy, but it's one where there's a positive reinforcer to stay on chronic therapy for patients. Yeah. Okay, great. I want to get to, you know, maybe some of the up-and-coming assets- Sure ... on the obesity side. You had, you know, pretty compelling data for both retatrutide and orforglipron at ADA. And so maybe on retatrutide first, just kind of what's the latest on the phase three program? And then the other question we get a lot is just confidence in the safety profile here, given some of the arrhythmias. And do you think you can kind of, you know, manage that to a lower rate with some of the titration that you're working on as- Yeah You think about phase three design? Yeah. Thanks. Retatrutide is a really exciting molecule. I think really had the first weekly incretin in Trulicity, and then competitors followed. Then we had the first double-acting molecule in tirzepatide, and now there's several competitors following, CagriSema or others coming up behind us. And then I think with retatrutide, we'll have the first triple-acting incretin because it targets GIP, GLP-1, and glucagon together. The glucagon seems to have important metabolic effects, probably increasing under energy expenditure and driving additional weight loss here. That's exciting. I think there's a need for even greater degrees of weight loss than tirzepatide has offered in some people, people with more severe obesity, people with type 2 diabetes. So that's exciting. It also has a really, a very significant effect on hepatic fat. So we talked a little bit about NASH before. This could be an even better medicine for treating or even preventing fatty liver diseases. So excited about the overall profile as a weekly injectable that now has an additional glucagon activity. You asked about the safety. In Phase II, it looked very similar to other incretins. I think the cardiovascular effects of glucagon have been well described, and that's probably an appropriate area of focus. We looked at increased heart rate, and I think if you used a couple points of 10 beats per minute or 20 beats per minute increase in heart rate, it was very consistent. And in fact, a similar or less number or percent of patients with those kinds of heart rate increases as compared to approved incretins. So I like where we are with that. I do expect that those attenuate over time. We saw some of that in Phase Two, and I think that'll continue. In In addition, of course, titration as with most of the things side effects is likely to help, although it'll delay. The longer you titrate, the less timing you have for attenuation. So it'll delay the attenuation till later in the trial. So those are two sort of countervailing forces. In terms of the arrhythmias, I don't think they were beyond what we would have expected based on the heart rate changes that we saw on this trial. So feel comfortable. Of course, phase III is the time when you have thousands of patients exposed for a year or more, and that's really the time to fully explore the safety of the drug. So as we always do, we watch closely in phase III. The phase III trials are running for the obesity indication, and they'll be starting up soon for the type 2 diabetes indication. For type 2 diabetes, I expect this to show the greatest level of weight loss ever seen in type 2 diabetes, and probably be the second best for A1C control after tirzepatide. But we have to wait and see. Those are bold projections from our phase II data. Okay. Okay, great. Maybe just moving to orforglipron here again, you know, moving into Phase III, ADA data, very competitive profile for an oral agent. Obviously, won't have the food and water effects that some of the competitor drugs have. I guess the biggest question that we get is just where will an oral fit into the paradigm? If you've got, you know, Mounjaro, tirzepatide, setting a very, very high bar. We just talked about triple G and the efficacy you're seeing that bring to the table. You know, where does that leave the oral in terms of a positioning standpoint? Yeah, really excited about orforglipron, small molecule, oral. Our profile we're going for is once a day with no food or water restrictions, so really easy to use, fits into people's lives. On the other hand, I don't expect it to have efficacy or tolerability that's as good as tirzepatide. I think its efficacy and tolerability will match, that's our goal here, what you can achieve with GLP-1 agonism. So think about what you've seen with the high-dose sema as a target for what... You know, how good could GLP-1 alone be? So we're sort of turning back the clock to, you know, single incretin activity here. Still, I think that's a profile that could be beneficial for people in earlier stages of obesity, people who are worried about an injectable. You can imagine, you know, different clinical scenarios. One would be maybe people start, who have less severe obesity or earlier in the course of Type Two diabetes, could start with an oral like orforglipron, and then if they need something stronger, move on to tirzepatide or retatrutide. You could also imagine it the other way, that maybe some people could start on something stronger, and when they achieve their target, maybe they could dial back to an oral if they want. Probably the most important thing to think about with an oral is just the scope within the United States and globally of obesity. Close to 100 million people in the US and getting to be 1 billion people around the world, making 52 injections a year, you know, just producing that amount of injectable material is a strain on us and our competitors in this space and will be for a long time. And oral unlocks all of that. It can be produced at a much larger scale, doesn't require cold chain, easy to talk to patients about and easy for patients to use. So, it's a big market, and you're gonna need orals to address the size of the market. So I see orforglipron as really a huge potential for society and maybe one of the underappreciated assets we've got. Okay. Okay, great. Maybe just in the interest of time, we'll move on to donanemab. Again, another significant development for both the company, but also the field and patients. For the first time, you know, we have multiple disease-modifying medications now that are gonna be available. So I guess the first one is just from a regulatory perspective, do you expect an ad com panel here for donanemab? Yeah. So, we've submitted this to the FDA earlier this year on the backs of our successful phase III Trailblazer-2 data, levels of efficacy here in terms of disease slowing that haven't been previously seen in Alzheimer's disease. So really, you know, excited about this molecule, and we've said that we expect FDA action by the end of this year. Having said that, I don't expect there to be an adcom. It would be pretty unusual and put on any indication that would happen. Okay. And how about the other thing is this, the question on how do you expect tau testing to be incorporated into any potential label? Is that something that would be a requirement, or would it be up to the physician? Yeah. I think most likely up to the physician. We used tau levels by PET scan to stratify our patients. The sort of principal analysis that we focused on was the patients with intermediate tau levels, moderate amount of tau. But we also enrolled the patients with high tau. There was a consistent drug of benefit in terms of the delta on all the cognitive scales across both the populations, and the drug hit both in the subgroup and the full population. So I think most likely it'll be labeled for the full population, but I hope that we can be able to talk to doctors about the efficacy in the subgroup, as well as the efficacy in the full population. And then for doctors who have access to tau scans, they may choose to use that to try and better assess benefit risk on a given patient. Because these drugs do have, you know, sometimes serious adverse events, and on a patient-by-patient basis. The more you can know about what is the risk of the adverse events, what is the magnitude of benefit I should expect, the better doctors will be able to decide in- Mm-hmm ... and when they should use it and feel comfortable using it in those patients. Yeah. I'd imagine that's part of the ALZ 6 study, too, as well as- Exactly. Yeah. Yeah. You know, I think rather than shy away from adverse events or safety consequences of drugs, we wanna lean into it. So we wanna better understand how can we predict who's gonna have the side effect of ARIA? How can we better detect that with imaging? How can we best manage patients with that side effect? It's a side effect of the drug, and we wanna have the most information possible to give doctors. So we're running this trial to study just the side effect and hopefully we'll have that data, sort of middle of next year to be able to share with doctors, during the early launch of this drug. Okay, great. And the other trial that I think is important, that again, sometimes probably gets overlooked, is the ALZ 3 study. So this is looking at an early... even earlier stage population here. And when I think about evolution of the paradigm, it seems like we've seen this in other diseases, in oncology, the move to adjuvant setting, very similar here, where you wanna treat even earlier. Yes. And so maybe just remind us of, you know, the design and then the endpoint, 'cause I think that's the other- Yes ... novelty here. This actually could be the most important trial that Lilly is running right now. It's an Alzheimer's prevention trial, where we're taking people who don't have any symptoms of the disease, but they have a blood test that shows that they have pathology in their brain already. So the pathology is present, but they're pre-symptomatic, and we're trying to see if we can delay or even prevent the onset of symptoms by treating them with a fixed course of donanemab. So it's great for patients 'cause it's a blood test and then a fixed duration treatment. And then the endpoint is sort of the simplest endpoint possible, which is essentially progression on this global Alzheimer's scale that goes from unimpaired, where they are at the beginning, to mild cognitive impairment. That's the first step, then mild AD, then moderate, and then severe. Moving one of those steps is an outcome on the trial, and we're looking at the hazard ratio of people treated on drug versus placebo. By the way, we did that exact outcome in Trailblazer-2. Of course, in that study, everyone started at 0.5 or one And the hazard ratio we got was 0.61, and it was highly statistically significant. So I think that in an earlier population, as you were alluding to, we should expect to get, you know, an even stronger hazard ratio. But that would be incredible if we can beat 0.61 and show that maybe in half of the patients or more we've prevented or delayed dementia. I think that could really be a game changer for this disease. Yeah. And where does... You know, the related question: Where does remternetug fit into that part of the development? Yeah, this is our next generation Alzheimer's drug. Just like in obesity, we're gonna continue to innovate in Alzheimer's. I see this as a multigenerational opportunity for us. How can we improve on donanemab? We could get more plaque clearance, we could get less ARIA, we could go to subcutaneous dosing. So there's a couple avenues here that we're exploring, and this drug is started phase III, but more work to do to be ready to talk about all of the benefits. Okay. And I guess the other one is, you guys have an active development program, including for tau. And so maybe just remind us of kind of, you know, confidence in tau as a target and where that comes from. Yeah. And then when are we gonna know more? I would say my confidence that targeting tau in Alzheimer's disease is important is even higher than it was ever for amyloid prior to getting the data, of course. The challenge, though, with tau, is it's harder to hit. It's inside the cells. So we've tried a couple different approaches. We tried an antibody that didn't work very well. Now we're trying a drug, a small molecule, that affects the post-translational modification of tau. That's in phase II. It's a high-risk, but high-reward opportunity. And then down the road, we're looking at ways of inhibiting tau production as well. Sure. In the last seconds, anything else in the pipeline, mid-stage, early stage, that you wanna leave us with? You know, I think immunology is massively underappreciated at Lilly. It's a huge opportunity for us. We have mirikizumab, that's in Phase III for Crohn's, read out already for ulcerative colitis. Two-thirds of patients had a response, many of those patients as early as four weeks. And half of them stayed in response a year later. That's kinda data that I think hasn't been seen for biologics before in this disease, and we look forward to launching that. Lerucizumab for atopic derm. I think we've seen before in immunology, a trend that if you can be more specific against certain cytokines, that can translate to better outcomes for patients. You can think of the story in psoriasis with 12/23 going to 23. I think that could play out here for IL-15, and so excited about lebrikizumab in atopic derm. And it's, we tested Q4-week administration versus what's currently available at Q2 weeks. So I think that's a big opportunity for patients. And then behind that, in immunology, we have peresolimab, a PD-1 agonist, that really had incredible data in RA that we just published in the New England Journal. A whole new way of treating immune diseases that we're uncovering at Lilly. And then, I didn't say anything on immunology, but pretty excited about Jaypirca, our BTK inhibitor, that we just launched in MCL and hope to have the opportunity to launch it in CLL soon. That's gonna save a lot of lives, I predict. Great. So much to talk about and so much progress. Well, thanks so much, Dan. Really appreciate it. Good. Thanks for the great questions.