Hi, everyone. Thank you so much for being with us today. It is my pleasure to be sharing the stage with Dan Skovronsky, Chief Scientific Officer, as well as Chief Product Officer at Eli Lilly. We will be having, hopefully, an insightful conversation on the company and particularly, given his role, the approach to R&D at Lilly and how that continues to evolve. While I have a long list of questions that I'm really excited to ask Dan, I also recognize that there's a bunch of people in this room that also have questions that might differ from mine. We do have the Pigeonhole app. Please feel free to add any questions that you have of interest into that app, and I'll do my best to work them into the conversation. Please dive into that so that we get the most robust conversation that we can today. With that, I want to start with a little bit of scene setting, perhaps. Sure. Eli Lilly is, and has just had its 150th birthday. A relatively old company and it's certainly been around for a while. It has become a relative household name, though, in recent times, now with the GLP-1s, and certainly even with a broader base of investors as its market cap has headed towards the trillion-dollar mark. That wasn't always the case, though. Can you please start just by setting the scene for us on what makes Lilly unique relative to its peers and how we should think about this company? Yeah. Thank you, Courtney, for that question and thanks for hosting us here today, and thanks everyone for joining and spending time listening to us. The 150th anniversary of Lilly was like a chance for reflection on this very question, what makes this company durable and successful in a way that actually, to my knowledge, there is no other company that is both this old and this successful. At its core, it's just a durable idea, which is that the best way to improve human health is by application of science. Science can lead to great medicines. Combined with the idea that improving human health is valuable. That's what Lilly's built on, improving human health through science. Probably a lot of pharmaceutical companies would say the same thing. I would argue we live it better than most. In the last, say, 10 or 15 years, we've been much more successful than other pharmaceutical companies. At the core of it is probably what I see as a very differentiated approach to R&D. Maybe I just highlight a few of those elements, if I can, Courtney. Please. First of all, we invest more in R&D and we have invested more in R&D as a percent of our revenue than anyone else in this industry. We believe that's how we create value, is through research and development. The way we do that is different. For one thing, we choose what to work on differently than our peers. We try and work on big medical problems that are at the intersection of unmet medical need and breaking science. We try and tune out the noise of the industry, which is, "Look what's working today. Here's a fast-growing market. Why aren't you in it?" I hear that sometimes from investors. I used to hear it a lot more. Now my peers hear it and of course, they all follow into obesity because that's working, or Alzheimer's disease because that's working, but those are paths that we cleared. We used to hear it about immuno-oncology, and most of our competitors followed the kind of lure of immuno-oncology, and yet, for most companies, it wasn't productive. We pick our areas carefully, we try not to waver from them, and we persist in them. We've been working in diabetes and metabolic disease for 100 years. We've been working in oncology for 50 years, Alzheimer's for 30 years. We just keep plugging away at hard problems because if a problem is worth solving in medicine, it's probably really hard and you're not going to solve it at your first attempt. Tirzepatide, or MOUNJARO or ZEPBOUND, wasn't our first incretin. It was our third one to launch, and probably our seventh or eighth one that we tested in humans. Our Alzheimer's drug that we launched was our probably sixth one that we tested in humans. These things take time, and we just have that persistence and long-term outlook that competitors lack for various reasons. Second is because we stay in these areas, we try and go really fast, and that's relatively new. I would say when I came to Lilly, we were among the slowest in the industry at drug development. We get these statistics every day, every year from third parties who can just look at when you started phase I, phase II, phase III, launch. We decided about a decade ago that the number 1 organizing principle for R&D was to try and be the fastest in every task we've optimized for speed, and we are now the fastest. For the last couple of years, we've been number 1 in the industry. We're about 3.5 years faster than the average company. That means our products get to patients faster. That's great, but more importantly, it means we have faster learning cycles, which is important if you're going to stick in an area. You want to just keep learning and get better and better more quickly than anyone else. We do that. The next thing I just highlight that's differentiated at Lilly and related to these other topics is our ability to invest in platforms, new ways of making medicines, and new technologies. If you're focused on revenues in the next two or three years, it may not make sense to invest in a platform that's going to pay off 10 years from now or 15 years from now. We take the long-term outlook. We invest in these platforms. The first ever biotechnology product, actually, Lilly licensed technology from Genentech to make the first recombinant protein, which was human insulin. That's been a platform that's been extremely productive for us and others in the industry. Now we're building out other platforms, like genetic medicines or cellular reprogramming. Then the last is, we recognize we're part of a important ecosystem that is academia, it's biotechnology, it's other smaller pharma companies, it's governments. If that ecosystem is healthy for innovation, we'll do well. So we invest a lot. We're one of the leading investors in capital for biotechnology companies. We give them space, we give them expertise, we make molecules, we share our artificial intelligence tools with the broader community to raise the tide of innovation. As the biggest ship on that ocean, we think if that tide is improved, we'll do better too. Those are kind of the core R&D philosophies at Lilly, that I think each one is a bit different than competitors and kind of has led to where we are today. Super, super useful context setting and kind of the dynamics that are really driving a lot of your decision-making. I think we'll touch on a bunch of those throughout the conversation today. I do want to recognize that you're in a room of investors today, and in many ways, they're making similar-- these to invest in, either internal or through external, through M&A. As a portfolio manager of kind of the R&D spend of Lilly, how do you decide where that next R&D dollar goes? Balancing between perhaps the therapeutic areas, doubling down in some versus going after others, those newer opportunities like neurodegeneration, genetic medicine, pain, that we're beginning to see more and more prevalent in your portfolio. Yeah. These are the most important decisions we make. I think the thing for investors to know is we have to make these decisions 10 years in advance. For us, it takes about, say, six years, six and a half years maybe, from first human dose to launch of a molecule. Before we have any sales. Before we can even start testing in humans, it's a couple years of tinkering in the labs and with animals. Say, you're making decisions for 10 years away. If you make them by looking in the rearview mirror, you will always be a decade behind your competitors. A lot of our competitors are doing that today. That's thought number 1. Thought number 2 is, you also, because you can get good in certain areas, there's a tendency in this industry for companies to launch a really good product and then just try and protect that one product, even from their own innovation, for as long as is possible. We don't do that either. A core kind of asset allocation idea is invest in your own next-generation innovation that will cannibalize or obsolete your current innovation. Tirzepatide has made Trulicity, which was our biggest selling drug ever before we launched tirzepatide, has made it more or less, maybe it's not quite obsolete yet, but it's made it a lot less used prior to its patent expiry. We now have three next-generation incretins all in phase III clinical trials that maybe will be better than tirzepatide. I think that's one kind of asset allocation. The other is to recognize that over time, diseases get solved, and I hope that a few more generations of innovation in obesity, and that'll be a solved disease. We're already making asset allocation decisions to move more resources into other areas, just as our competitors are doing the opposite, moving more into obesity to try and catch up to us. We see breaking science and huge opportunity in neuroscience, in oncology, and immunology. We kind of have our thumb on the scale for those areas. If you took out incretins, Lilly would still be the fastest growing pharmaceutical company. We're outgrowing our competitors in those other areas, but they're still relatively small. Our goal is to scale those areas up to be kind of a mega size like we're doing in incretins. Fantastic. Super, super helpful. I have one more really big-. Yeah ...picture question before we dive into some of the pipeline and particular products you have today. We've spent a lot of this conference, I think investors are spending almost all of their time thinking about AI, be it in healthcare or any other place. What is your overarching thesis on the role of AI in pharma? Can you help describe anything that looks different at Lilly today in terms of drug discovery or R&D on account of kind of AI investments you're choosing to make? Yeah. Everything is different. We use AI in just about every step of the process. It makes things better, faster, cheaper, in sort of the same way that personal computers did, I imagine, decades ago. Just the work is easier and often less expensive. The bulk of clinical development, the bulk of the six or seven years it takes us to develop a drug, is enrolling patients in clinical trials, finding the patients and asking them to participate, and then treating them and waiting for their disease to progress or not based on the treatment. You can't do a three-and-a-half year Alzheimer's prevention study in three weeks because you have AI. It still takes the same amount of time. You can't screen 60,000 patients in the real world with AI. I think the idea that AI is going to invent a drug and then tomorrow we'll launch it probably won't work. It'll make all these things work a little smoother, but it's not going to revolutionize them. It may change the economics and who gets paid for doing all these tasks. The place where it has the most potential in our business is on the drug discovery side. Drug discovery right now is really hard. Highly trained chemists kind of using their intuition and all of their knowledge to design a molecule. Right now, already, every chemist uses AI as a tool. AI is learning alongside them and suggesting, "Maybe make this structure instead of this one." That's helpful. It's an important tool for chemists to discover molecules or for protein engineers to engineer an antibody or a protein. I see the greatest potential there. It's making that work more powerful, but of course, we're also reaching higher. There are things that we would have said a few years ago were undruggable, and then because of improvements in technology, now we can drug them. We have to, because all the things that were easy to drug, we solved. The new problems are, almost by definition, are harder than the old problems. We need better tools. AI is one of those tools. I know I'm going too long here, but just to finish the AI thought, the problem is that the AI models that we all have today were trained on language and on the internet. There's not a lot of biological or chemical data available to train models. Like even known to humanity, there's not a lot. Of what is known to humanity, most of it is sequestered behind the walls of a few big companies like Lilly. I do see that data as a competitive advantage. We are increasing our own data that we have to train AI models for drug discovery extraordinarily quickly through our own experimentation, through partnerships with other companies that are providing us with their data in return to access to our models, and finally, through kind of custom-built data factories that we're working on with NVIDIA that just massively produce experimental data to train models. Fantastic. Super helpful. Interestingly, we had gotten a question that had come through asking about kind of, is there a scenario in where that proprietary data becomes table stakes and kind of where are some of the other competitive moats? I think you're saying kind of this data is actually incredibly important competitive moat. Is that right? I think so. What we found is that when we use models that haven't been trained on a lot of real data, they don't perform very well, and they don't perform differently than each other, by the way. When they're trained on data, that's when they become really powerful tools. I think that perhaps even further emphasizes if you're willing to be persistent in a certain disease area or a certain category or modality- Yes. ...that training algorithm perhaps even. That's right, because the training is local. Exactly. It's like in that space that you're working, the training matters. Perhaps diving into kind of, I guess, one of the most talked about topics at Lilly, which is the incretin franchise. Perhaps it's sometimes the absence of anything else. MOUNJARO and ZEPBOUND have transformed what people expect from obesity care. For the non-scientists in the audience, you've obviously got a number of other assets in the pipeline that are going to continue to contribute to this portfolio. What could the future of obesity treatment look like as we think about pills, triple agonist, muscle preservation, combinations, long-acting? Yeah. Kind of what's the next frontier in your mind? Well, I think maybe just start with what is the problem we're trying to solve. I think we want to eradicate obesity in the world and also alleviate the burden of metabolic disease, cardiovascular, and other diseases, diabetes, that are caused by obesity. How are we doing on that goal? Not so well. Even here in the U.S., where utilization is the highest, utilization rates of incretins to treat obesity are less than 10%. The most important thing we can do is solve the obstacles for broader utilization of these medicines, which are a combination of things. It's cost, for sure, and access, and we're working on that with the deals with the government and with payers, including some that were announced today. Good progress there. It's people don't want an injection, not because a needle is painful, it's actually not painful for most people, but because it seems like they're sick if they're taking an injection. That's a perception people and doctors have, too. We probably need pills. We just launched one a couple of months ago, excited about that. That are easy to use and fit in people's lives. Some people have side effects from these drugs, so we need medicines with fewer side effects. We've got one of those in phase III. We have a medicine in phase III that in an earlier clinical trial, the weight loss looked very similar to ZEPBOUND, tirzepatide, but the tolerability looked very similar to placebo. If that reproduces in phase III, this is eloralintide, our amylin agonist. It's kind of unique in the industry in having these properties. That could be a game-changer for people who find kind of the GI tolerability as a reason not to take these drugs. I think longer-acting drugs will have a role, too, and we're working on those. We'll eventually probably move in the maintenance setting from once a week to once a month or even longer duration. Our strategy here is not to guard our core franchise or core molecules. Our strategy is to have the best molecule in each of these applications, whether it's better tolerability, less frequent dosing, more weight loss. Many people need more than the 20%-25% we can offer today, and our latest drug offered 30% in clinical trials. There'll be people for whom that's important. Each of these areas we aim to, and I think we're on track to have the best next-generation molecule. Far, we've only launched two, tirzepatide, ZEPBOUND, and orforglipron, which is FOUNDAYO, the oral pill. As I said before, three more in phase III, and then many more behind that in early clinical trials. Fantastic. It's a very exciting time. Perhaps just on one of those three that's in the pipeline. What is the most exciting or underappreciated non-obesity indication that you're currently testing GLP-1s in? Yeah. Retatrutide has a long list, obviously. Yeah. I probably give you two answers, and they're both categories rather than individual indications. One thing which is really kind of neat is when we started on this journey, we thought about incretins as drugs that work in the pancreas. That's how they were discovered, as hormones that cause the pancreas to make more insulin. That's not actually the main pharmacology of these drugs. The main pharmacology is in the brain. There are brain receptors for GLP and GIP, amylin, and glucagon, and the main pharmacology is through regulation of brain pathways involved in food and food craving. I'm really excited about other brain applications. It turns out that when we evolved as human beings, craving food and having a huge drive to get food and then store that as calories was an important survival advantage. It's not today, obviously. Those pathways are really hardwired in our brain, and they're hijacked by drugs of addiction, and they're hijacked by diseases. We think that by modulating those pathways with incretins, we could have a powerful impact on addiction, depression, schizophrenia. These are all underway, and so I'm excited to see that. The second is that it turns out that metabolism and your immune system are closely linked. It's been profound to see the anti-inflammatory effects of these medicines in patients. We can measure that in the blood. We raised the hypothesis that if these drugs are decreasing inflammation, could they be used in autoimmune diseases? Now we've tested it in phase III trials for psoriasis and psoriatic arthritis. We have trials ongoing in inflammatory bowel disease and asthma. In the first two trials that read out, it worked kind of profoundly well and quickly. In other words, people's autoimmune diseases improved before they lost weight on these medicines, again, suggesting there's an important anti-inflammatory effect. We have customized molecules that are tuned for the brain and other ideas for the immune system, but I think we're going to see incretin biology play out, not just for metabolic disease, but also for brain health and also for immune health. You sound like wonder drugs, huh? Well, it does show the power of focusing on a core physiologic pathway, rather than a particular disease. Absolutely. With all of those profound kind of potential impacts as well, the launch of the oral is especially important because this helps- Yes. ...expand access, gives you the volume kind of capability that perhaps is a little bit more challenging with injectables. You've obviously begun the launch inside the U.S. I'm sure you guys are getting a nonstop flurry of questions from people in this room about that nonstop. You also have the upcoming launch ex-U.S. as well. What do you think the role of FOUNDAYO will be in the oral market? Will it be kind of the primary choice? Will that be exclusively ex-U.S., or kind of in the U.S., do you think that this is going to be the foundational product- Yeah. ...here too? I think it'll be foundational globally. Maybe the name betrays our thinking, a foundational daily oral, FOUNDAYO, for treatment of obesity. The reason I say that is because this was designed to be easy to use for patients. There's no food or water restrictions. You take it like any other medicine any time of day. Then in clinical trials, we showed benefits across all of the most important things that primary care doctors worry about. When you go to see your primary care physician, check your blood sugar and your A1C, yes, we have clinical data on type 2 diabetes, and we're going to get it approved for that in the future. Check your weight. Yes, of course. That's what it's approved for. Your blood pressure. Yes. We have trials ongoing. It lowers your blood pressure. Check your cholesterol. Yes, it lowers your triglycerides and your LDL. Here you have, in a single easy to use pill, kind of an improvement in all of the main health parameters that we care about in the primary care setting. I see this as a foundational medicine across all of those indications. We're not there yet. We have to get those approvals. That's coming and this is probably where most people will start their treatment journey, and for many people, it should be adequate because of those attributes here in the U.S., and around the world. That's paired with kind of a manufacturing platform that it's just a normal small molecule, so we can make it at scale. It doesn't require refrigeration or biotechnology. We have adequate supply to launch around the world. This is the medicine that we've actually, in our history, submitted for approvals globally, the fastest sort of parallel path in every country that we focus on, and those approvals will start rolling in later this year and early next year. I look forward to seeing the uptake around the world. Absolutely. Very exciting when access has been such a challenge for these products to date. Yeah. I'm going to perhaps pivot a little bit back outside the GLP-1s. Sure. Give everyone a break from that topic. This week, Lilly announced three new acquisitions. It's also been a very acquisitive year so far for you all. We'll continue this conversation more broadly as well. These were three new acquisitions this week with the vaccines companies, totaling just under $4 billion. This hasn't really, at least to the outside observer, hasn't been an area of focus necessarily for Lilly. Why is now the right time to enter this market, and why specifically these vaccines? What makes you excited about this particular opportunity? Yeah. Thanks. You're highlighting a bigger trend here, which is we're quite active in BD. Last year, we were the most prolific deal maker in the industry. We've been on that trajectory for a couple of years. We just believe that there's great ideas outside our walls. We should bring them in. We also believe that we should bring them in at early stages because we can add a lot of value that way. We do more deals than anyone else. We don't necessarily spend more money because other companies are buying fully cooked, late-stage things that are near commercial. It's not that we'll never do that. Our typical deal is earlier stage. These vaccine deals exemplify a few of those themes. Large unmet medical need, technology platforms that we can invest in the long term. Here, I think we're motivated by breaking science that shows that there are long-term sequelae of acute infection with certain viruses. Just in the last couple of years, two of the most amazing discoveries in infectious disease were that EBV, Epstein-Barr virus, the virus that causes infectious mononucleosis, also causes multiple sclerosis. If you don't have EBV infection, you probably won't have multiple sclerosis. Yet, we all just tolerate EBV infection and mono and shrug our shoulders and say there's nothing we can do. There is. We can create a vaccine, and we want to do that. It doesn't seem like anyone else is on track to get that done, and so we're excited to harness breaking science to do that. Similar observation with varicella-zoster virus, VZV, which causes chickenpox in kids and shingles in adults when the virus comes back. There is a vaccine against that. We've learned that shingles is linked to stroke, and vaccination can protect against stroke and dementia. Just startling research that shows that vaccination against shingles protects against incidence of dementia many years, decades, later. This link between acute infection and chronic disease is powerful. We should all be vaccinated against these viruses to prevent those chronic diseases. The shingles vaccine that we have today, it offers great protection, but a lot of people don't use it because there's pretty significant side effects of fever, chills, pain at the injection site. Then some people who get it only get one dose, which is no good. You don't get the protection unless you get the second dose. This company that we're acquiring developed a technology that allows, in a head-to-head trial, they showed that their vaccine has the same kind of protection as the standard one, but has much lower rate of these side effects. That sounds like a good idea to us, and I just imagine a future where vaccination will be much more common for these kinds of adult diseases that then cause a chronic illness as we get older. That's two of them, and then the third one is bacterial vaccines. Everyone reads about bacterial resistance to antibiotics, and one of the most common is Staph aureus, and that's the number 1 cause of hospital infections after a patient has surgery that are often quite bad and sometimes antibiotic resistant. The theory here is we could immunize against them before people go for surgeries and then not worry the post-op infections. That's the third idea. Fantastic. Lots of long-term, chronic, longevity-oriented questions. Yeah. For you guys to have. Yeah, sort of linked to the rest of our business. It's not that we have an ambition to compete with the vaccine companies today where they are, but we want to invest where they're not investing for the next generation of important pathogens. Perhaps within your internal pipeline or the things you've brought in, outside of the GLP-1s, which pipeline assets are you most excited about and perhaps feel that they aren't getting enough attention- Yeah. ...from this read or investors or other communities that should be paying attention? I'd probably highlight three near-term big ideas, then maybe one or two that are a bit longer term. Let me just start with Alzheimer's disease. We have a drug to treat Alzheimer's disease. It's doing well in the marketplace. It's still early days. That's a really important advance. What we have ongoing now with that drug and another one, we have two drugs in basic clinical trials for prevention of Alzheimer's disease. These are people, like all of us, hopefully, who don't have any cognitive impairment, but they are above the age of 50 or 55, and they've agreed to have a blood test. We invented this blood test to do this trial, which took many years. If the blood test is positive for p-tau217, it means they have Alzheimer's pathology happening in their brain. It just hasn't caused symptoms yet. We're treating them with a fixed duration of treatment, so they finish therapy, and we hope that they'll have a lower risk of getting Alzheimer's disease symptoms after that. These trials take many years of follow-up, as I was saying earlier, but they're ongoing now, and I can't wait to see that data. The first one reads out next year. I can envision a future where we're all screened every year, just like we're screened for cholesterol or high blood sugar or hypertension. We're all also screened for our Alzheimer's risk, and if it's positive, we have a treatment that can lower your risk. That's a huge opportunity. If they're risk-adjusted, it may not work. But if it does work, I expect Lilly to be a leader there. Another huge society-changing opportunity is in cardiovascular disease, and we're working here on Lp(a), which is probably the second most important risk factor for heart disease after LDL cholesterol. Unlike cholesterol, your diet doesn't matter, your exercise doesn't matter. You are born with either high risk of high levels of Lp(a) or low levels of Lp(a). 15% of people have high levels of Lp(a), and they're at risk for heart attacks. I think we can change that, so we have two drugs in large phase III trials there. We're working on other heart disease ideas, including PCSK9 gene editing. We recently shared data on that. With a single dose of drug, we can give people a lifetime of protection from high cholesterol levels and probably a lifetime protection from heart attacks. It's early, but it looks like the science is going to work. It's our job to shape society to accept a once in a lifetime drug and figure out how to pay for it and things like that. The science looks good. The cardiovascular prevention, I think it's just a way of keeping people healthier and living longer. The third that I'll highlight is what we're doing in early breast cancer. This is in the adjuvant breast cancer setting. We already have one drug approved, which is our Verzenio CDK4/6 inhibitor. Now we're testing in the extended adjuvant setting after people are done with CDK4/6, our oral SERD. This is a pill that causes the estrogen receptor to be degraded and inhibits endocrine signaling in these tumors. If that works in this setting, that's really a huge opportunity for long duration treatment in one of the most important cancers in the world, or certainly in women, of breast cancer. Excited about those. Those are all near term readouts in the next year or two that I think at any other company, any one of those would be the biggest opportunity that they're working on. We have all of them. Fantastic. You've mentioned a couple of times through this conversation so far, kind of platform orientation. Yeah. You've also mentioned some of the gene editing opportunities. It does look like Lilly has been kind of doubling down on genetic medicine. We've seen a number of kind of preclinical and early clinical acquisitions over the last, quite a few years, actually. Yeah. What is the rationale? Where do you see the greatest- Yeah. ...promise in the application here? Particularly if you're thinking about the challenges that exist in deploying the science, both scientifically but also commercially, as you just raised, what gives you confidence that you can succeed here? Yeah. I think it's actually inevitable that genetic medicines will play a hugely important role in human health. Actually, for the first, say, 50 years of my company and the first thousands of years of medicine, nearly all medicines were things that we extracted from the natural world. Like we ground up plants, or we extracted insulin from animals. That was how we got drugs. People started fiddling with chemistry, and then that was how we got drugs. All drugs actually became either natural products or chemicals. As I said earlier, Lilly was the first to make a biotechnology. We could reprogram cells to make drugs for us, and those drugs aren't made out of atoms, they're made out of amino acids, proteins, and that turned out to be a huge idea. Now we realize we can make drugs out of nucleic acids, DNA, and RNA. It is inevitable that this will be a huge part of how we treat disease. The other things don't necessarily go away, although natural products are kind of pretty small today. It opens up a whole vast area of biology of targets that we just couldn't address any other way. It also gives us durability, drugs that could be given once a year or once a lifetime. Finally, the most amazing thing about genetic medicines is these are drugs that are programmable. With synthetic chemistry, every molecule, it's like a work of art that chemists have to create. Because you made one great one, then when you work on the next one, it's like starting from the beginning again. With these, you can take a drug for one disease and just change the genetic code of it and have a drug for another disease if you've solved all of the other problems. The other problems are, how do you get it to the cell of interest? How do you make it safe? How do you manufacture it? We're sort of knocking out all those problems. As we do, I think we'll have a platform that can scale across a large number of diseases. Yeah, I can give you an example of it. Yeah. We made a drug that restores hearing in kids who are born deaf, it's amazing. It works. These kids are born without a certain gene in their ear. We can put it back in and solve that problem. That's a pretty small opportunity. Not for the people who are affected, it's life-changing, but overall, that's rare. Because we did it for one cause of hearing loss, it's now so much easier to do it for the next one. We solved how to get it in the ear, how to get it expressed. All we have to do is change the DNA code, and we're solving a second, and a third, and a fourth cause of hearing loss. As we solve those problems, that technology platform continues to improve. What we're really working on at the same time is, what if we had a genetic medicine in the ear that can restore hearing in age-related hearing loss? Because probably half of us will eventually have loss of hearing as we get older. To my knowledge, no one else is working on that, but that's how the technology platform could build as we reprogram these medicines. Wonderful. It is super exciting to see that immediate, meaningful impact on a patient that has such an acute challenge, but the potential being much, much larger. Yeah. That's kind of the perfect win-win scenario, and it's how we think about these rare diseases. Yeah. I don't think we're going to propel Lilly's growth by million-dollar-a-pop drugs for rare diseases. We'll help these patients, but then we'll also learn better science that we can apply to common diseases, which is where we ought to spend most of our time. Wonderful. I do want to jump back to M&A a little bit. Sure. You mentioned that Lilly has been one of the most prolific- Yeah. ...in this space. In some ways you've been the most prolific, but you also haven't been spending as much as some of your peer set as well. Can you talk a little bit about what makes the right type of acquisition for Lilly? How do you consider those parameters? Is there ever an instance where you would go large? Another question that came in on this topic is the consideration of China. There are obviously a lot of innovation, research occurring now- Yeah. ...outside the U.S., in Europe. I think we've seen early-stage number of clinical trials in China is outpacing many other regions now. As you look at assets in that space, do you change the type of diligence you're doing? Is there any extra scrutiny that you're bringing to those opportunities and evaluating and bringing them into Lilly? Yeah, thanks. Those are all really excellent questions. Maybe starting with the first one, which is like how do we evaluate and what are we looking for in business development? Then the second one was like would we consider really big things? The third is the China question. Starting with how we evaluate a business development, I think it's different than other companies actually. Most of my peers actually start with a commercial forecast and an NPV, and we do that. Of course, we have to do that, but that's actually pretty low in the priority list. The reason why, and this is true of every company in our industry, is if you look at forecasted sales versus actual sales, and you can do your forecast the day you launch it, and then actual sales five years later, there's no correlation. None of us analysts, internal companies, are good at forecasting individual drugs in a way that correlates with reality. We do get it right in bulk. If you're forecasting a group of five or 10, there's not a bias to our forecast, there's just too much noise in there. We do those kinds of assessments, but we take that with a grain of salt. What we're really interested in is there unmet need? Are people suffering? Is there great science and are there great people? Because if they're great people, they're not going to choose to spend their time working on bad science. That's like a quick test. Great people are going to gravitate to great ideas. The team and the science are our first priority, and then understanding how that will translate into helping people that are suffering from important unmet medical needs. We tend to like ideas that have multiple kind of asset potential, not just one asset that we buy and then dissolve the team. Sometimes we'll do those deals if the asset's compelling enough. I prefer a team and a platform that can continue to boost our output over time and then kind of compound the returns on business development. Again, that's a more patient approach that requires a company to have a longer-term outlook and probably more willingness to invest OpEx over time, rather than just buy something that's fully done. Would we ever do a big deal? Sure. We're not constrained here by capital or access to capital. Most of the big deals are actually commercial stage assets. You have to believe either you're better at selling them than anyone else, or you see a sales forecast that's higher than anyone else. It might happen to Lilly, that there could be commercial stage assets that have that fit, but it's harder to imagine. Yeah. We would have to have a differentiated hypothesis why Lilly could make a better commercial case than anyone else on a particular asset, and I haven't seen those, so we haven't done those deals. The China question is a really important one as you point out, the innovation in China is rapidly progressing. You can see that year over year, just huge change in what's possible in China. The speed of drug discovery and drug development is intense there. There's a lot of innovation coming. Some of it is me too innovation or me better, like a new version of a drug that is different in some way, but it's kind of an incremental change rather than like a whole new class of drugs. We see a lot of that, but also that kind of innovation now, because it's faster and cheaper, allows kind of an empiric innovation where you could make five different things and test them all in humans and see which one really works the best. In the U.S., because development time and cost is higher, we would spend more time to find out what's the best one and only test that one in humans. That empiric innovation that's possible in China seems to be important. We are spending more time looking at China innovation, of course with diligence and carefully. At the same time, though, it's spending more time thinking about what can we learn to make innovation here in the U.S. and other countries in the world better? I think the industry is best served if China gets better and the U.S. gets even better and China gets better. We can compete with each other, but innovation ecosystems can be improved around the world, and this is a moment to do that here in the U.S. I think there's good momentum behind that to make it easier to do drug discovery and drug development in the United States. This is still where most of the best ideas come from, and we can continue to accelerate that. One other question that is come through from the audience is just diving into kind of some of your AI comments around that data moat especially. Yeah. Also then tying it to M&A. You're getting in data rooms, you're looking at external innovation all of the time. Are you using your own internal scientific knowledge and integrating that with or using that to assess the best assets? There is a little bit of a joke out there that every time there's a new category of GLP-1s, Lilly seems to be holding the best one. As you look at this, how is it that Lilly's able to do that, and how are you integrating and perhaps building more knowledge? Yeah. Well, I would say on the GLP-1 story, it is not an AI answer there. It is just we have been at this a long time. We have learned a lot of lessons. We may not share them all broadly all the time, but when the time is right, we do have some of the best molecules. We have been working. We launched the first incretin in the world in the 1980s, I think. It has been a long time. We have iterated many, many times and tested a lot of things in humans and in animals. We know a lot. I don't know if we've really done any business development meaningful in this space, because when we look at things on the outside, we're like, "Oh, yeah, that's fine, but we have something better that we've been working on for a couple of years already." That's a story of just persistence and focus. I do think it's kind of a generalizable theme that we feel best at business development when it's an area already of strength at Lilly, because then we have internal scientists who've been working in the lab, and they're like, "Oh, yeah, that molecule's good. We've been trying to make something like that for the last three years." That is the best kind of diligence when we're experts. We have to be the most cautious when we move into a new area, like vaccines. Are we expert enough to evaluate the technology outside and really know what's good and bad? Sometimes in those areas, even a year or more before we do the BD, we'll start hiring the scientific team, so that we can do the kind of evaluation that we need to do to make sure that we're smart and we have good taste in what we buy. It's hard. That depth of knowledge can be incredibly important. Another angle, just to pose a couple of questions on. The market for healthcare is changing. Yes. We're seeing LillyDirect become a larger and larger portion of at least the incretin business today, kind of bringing Lilly closer and closer to the patients who use the products. Is this trend influencing how you think about R&D dollars, how you think about different therapeutic markets, how you think about opportunities? Yes. What is it guiding you towards these days? Yeah. It's a trend we're betting on. I think it's real. I think it's generally good, Courtney. We were part of creating the trend with our work on incretins and LillyDirect. More than 1 million people use LillyDirect to get their medicines. That's kind of a shockingly big number for a consumer health platform. I think even independent of that, there's a movement towards people taking more interest and more control and investing more in their own health. particularly in staying healthy. That's great, actually. As long as the people are getting reasonable information, and that's not always the case. Sometimes people are misled by fraudulent actors on the internet or whatever. At the same time, there's better information that's available to patients than ever before, and AI is going to help, is helping already accelerate people learn about that. I'm excited about that trend. We've catalyzed it with incretins and with LillyDirect, and I'm excited about seeing what else we can do to reach patients directly and maybe move a little bit away from a paternalistic style of medicine, which is the doctor always knows best and just listen to what your doctor said, but let patients take some ownership of their healthcare decision and so when we see opportunities that could fit into that trend, we like them a little bit more. Of course, I don't expect that the next best cancer drug is going to be sold direct to consumers through LillyDirect. I think for serious diseases and complicated treatment paradigms, of course, we're going to need the best doctors in the world to manage patients. There are other areas of health that are probably easier to manage that patients can take more control over. Fantastic. We've got a couple of minutes left, I want to make sure that we end kind of big picture- Yeah. ...and longer term. I know you and I were speaking earlier this morning about kind of these three big questions that investors tend to be asking about Lilly. Kind of one is, how big is that leadership position and how big is that TAM in the obesity space? The second is, where does that next leg of growth come from? The third is kind of does the terminal value kind of inflect for this company as you think about drug discovery capabilities, AI embedding, and kind of the focus and the way that you're deploying your R&D investments today? I think that with pressures like kind of patent cliffs and other things on the horizon, it causes investors to kind of continue to ask these questions. I want to pose to you kind of what needs to go right for Lilly's revenue and earnings per share to grow through the 2030s? Particularly, which of the factors are most within the company's control to ensure this success? Yeah. Thanks. These are the right questions. I feel good about where we are in the incretin space. I think not worried about patent expiries. It's technical obsolescence because we'll have better and better molecules that matters here. That's good. What has to go right, though, is we have to grow this space from one in 10 Americans, the U.S. is like 10% of the obesity problem around the world. It's like we're something like 1% of obesity penetration today. We need to change that's a big lift to go from 1% penetration to 5%, 10%, 50% of obesity patients getting treated. I think it's possible. We've seen it in other chronic diseases. These are great medicines, we have the potential, there's work ahead to do that in the U.S. and around the world. That has to go right. Second is we can't fall into the traps that other large pharmaceutical companies have fallen into when they had mega blockbusters, and those traps are like, protect that asset, don't try and cannibalize it, don't invest in anything else, keep investing in that one. We've already pushed all of our R&D funding beyond tirzepatide. Even though it's the biggest product ever in this industry, we're investing in the next generation products and the next after that. Avoiding those mistakes, even though from a short-term kind of financial optimization standpoint, probably every incremental dollar spent on tirzepatide will have the best return in the next couple of years. In the long term, that will be a fatal error, which we've seen others make. The next, I think, is just to be open and investing in breaking science in other areas for the long term. This industry works. Investing in science to solve medical problems works in the long term, but it doesn't work when everyone piles on in the short term on the same ideas in the rearview mirror, and we need to avoid that, and that's kind of the siren song that's always in the background. I think if we can do those things, and at the same time kind of stay humble and have really hardworking, motivated people in our company, which we're lucky to have today, I think we will have a sustained period of growth that hasn't been seen before in any company in this industry. That's our goal. We're focused on this problem, and we're committed to doing something that's never been achieved before. Thank you, Dan. Yeah. That was a wonderful way to end. Thank you, Courtney. Thank you all so much for joining us. Yeah. Thanks so much. Thank you so much. Yes. Have fun.