LLY - Earnings call transcript Q4 2017

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2017 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Instructions will be given at that time.

If you should require assistance during the call, please press star then zero.

conference recorded. this reminder, a is being As I to our like to conference over turn the host, would now Mr. Dave Ricks. Please go ahead, sir.

David Ricks

Good for Eli XXXX for joining Company’s and you Dave quarter Chairman I’m earnings morning. fourth call. Lilly’s CEO. Lilly Thank and Ricks, us

on Diabetes Josh Smiley, Bio-Medicines; today’s of Dr. Mahony, and Lundberg, Lilly Dr. our Conterno, Enrique Lilly are President Research of Health Animal Simmons, Shaw, Jeff President Lilly Lilly USA; and of Labs; call President Oncology; President me CFO; Jan Elanco Joining President of of Christi Lilly Sue our business.

Kristina We’re also joined Hern Chris by the Wright, of Phil IR team. and Johnson Kevin Ogden,

making our this we anticipate statements forward-looking current projections During expectations. on based call, and

is those latest is listed in benefit we Slide those investment results outlined XX-K The the products and Forms and new on community X% revenue actual pipeline promotional for differ to We growth, another driven growth delivering quarter, not was for Worldwide and could strong a including progress. Our closed X our XX-Q XX% our due XXXX about once only. our operating decisions. information SEC. pipeline the materially filed sufficient not intended by and growth, income and provide prescribing It with the number pharmaceutical revenue is products. with factors, it of of be important again to

margins. our to addition, expand continue In we

prevention EU, the in well for European as resubmission arthritis. active and for approved baricitinib the submissions made of revenue a roughly progress We declined The for accepted FX effect as of basis The of the over revenue approved points U.S. by on international a inventories increased our the pipeline. the our by FDA to active percent migraine margin rheumatoid basis Excluding galcanezumab total Commission of FDA gross psoriatic points, sold, XXX for launched psoriatic for arthritis as advancing Taltz percent expense Taltz and in arthritis and XX.X%. we XXX as

On baricitinib not clinical gastric clinical ecosystem, We front, as program our we for benefit Cyramza the Phase on our an and well cancer, clinical initiated did in line clinical a a show survival dermatitis. III atopic that work development in overall we as automated connected initiated announced trial insulin evaluate and delivery insulin including pen technology. system on the to connected work diabetes first

In more call. terms closed strategic repurchased of note beyond. strategic are well in deliverables and would as confidence since our is alternatives details events the we positioned dividend, announced well. our in in Elanco of X% continued for prospects XXXX X I events capital of October Slide proceeding well strong stock. that of growth our deployment, achieve we XXXX also earnings reflecting to we other million and increase contains our on the the We company, momentum with an and $XXX as these key analysis

to on decision track July. earnings our our QX on communicate We’re in call

million and This additional see a QX for quarter, year. the recent you’ll where on Elanco revenue product slides we’ve in million back-up $XX launches delivered $XXX included few of that

leading pain the a Atlantic for DNA Galliprant, anti-inflammatory canine took industry XXXX’s Product. for publication treatment was top salmon January a We in honors the osteoarthritis a Food vaccine announced Animal are Companion proud that Clynav, and Best as Animal that Product named first-in-class Best

receiving organization the Canada. protects in approval New and ticks, important dogs January EU which as authorization fleas achieved milestones R&D States as against Elanco’s product Credelio, in momentum Galliprant and launch well marketing continued United with as receiving

to footprint. Elanco in distribution business model our exploring manufacturing reduce and for RBST continued changes execute QX, to the including agreements, options U.S. business, steps exiting on We select taking our

our since U.S. reform. biggest affecting call tax news was Lilly the Finally, last

reform playing field global will administration race companies allow be on competitors. We’re companies This innovation. Lilly the a U.S. places that the our reform tax pleased level enacted for like in U.S.-based and more more that foreign-based to Congress competitive with

an it the our global come and multinational to does this enable entry cost XXXX reform access net rates. through positive as will companies, lower one-time cash headquartered but us effective will repatriation U.S. our For with tax it’s toll a tax,

Now the XXXX. the guidance our U.S. review to an call of results, impact QX tax and I’ll implications turn Josh update reform, over on to our provide full-year and financial discuss and for

Joshua Smiley

by we the charge stated Slide and release, in Dave. reform. impact X, Thanks the tax Lilly, estimated billion totaled as we of earnings, deferred approximately the to recognized assessed which offset U.S. on in fourth to a including to taxes in This cash US. our tax territorial is comprised quarter deferred from the system, of re-measurement financial On partially $X.X XX% of changes from press transition to $X.X billion, outline overseas related XX%. the the toll an and pact charge resulting taxes

our by reform rate the to effective The from ongoing XXXX expect lower basis on our initial is lower income the of Based XXX about other corporate other financial prior the provisions tax new law. our effect tax tax our Lilly effective XX.X% tax impact we assessment, the U.S. to XXXX benefits for roughly points partially tax XX%. on rate tax of guidance reflects of The U.S. approximately to rate. by rate offset

total to $X for international new obtaining any the not do cash we long regulations term. day billion U.S. is across than of the tax is as and cash In and investments rate investments XXXX more operations. our rapid we issues hold to guidance that now Our guidance we won’t in in for and billion access to held operations, may are amount further of issued. be and to estimate subject this this $X We intend and not U.S. utilize funds. dollars law and day both subsequent Essentially required interpret revised we as in these change all do anticipate that

XXXX of we’ll our into course this deploy thoughtfully across priorities. capital the XXXX, cash Over and allocation

our line fund current our strategy. in and we’ll products pipeline, with investments, First, including existing marketed capital

return increases to share then via shareholders and cash dividend business future bolster the we’ll invest to our Next, in buybacks. prospects, to development growth and we’ll

continue tax or reform look presence to diabetes, funds, of does areas core ready it augment to neurodegeneration, opportunities pipeline priorities. in commercial therapeutic While to oncology, could alter This to come via development for and additional our in-licensing provide not and immunology, We’ll our does bolster access acquisition. pain. our business

we’ve and U.S. legislation billion we’ll debt stated to of will our reliance previously, concept. debt much reduces going be As of our reduce cash debt In level. forward. assets of will the cash roughly on repatriated term, the adjust gross clinical $X cash use our to stage needs, levels near tax we our efforts U.S. our on the fund pre-proof new focused Since in

conduct impact under repurchases billion authorization, intend better existing we still tax to and expect how some level our gives cash. of we the remaining. which this share of to a use reform understanding of Finally, Hopefully you our $X has global

quarter while Now underlying Slide on measures of presentation please to non-GAAP fourth the non-GAAP in let’s results measures, a a adjusted results. my the GAAP our our our today’s of changes so business, our insights press summary provide our refer GAAP our trends summarizes X of results. year-on-year X in move results. to and into to comments for GAAP detailed release description Slide provides financial focus I’ll

effect This non-GAAP X% by partially sold rates as Dave revenue the manufacturing by realized of was of measures increase Gross the that foreign margin inventories earlier. on at mentioned to decrease efficiencies on of percent primarily X, offset and revenue Looking international see driven product and you’ll exchange XX.X%. a Slide the decreased higher mix, prices.

Total X% Excluding inventories points. expense increased selling expense expense operating decreasing increasing of sold, a flat roughly revenue essentially R&D XXX percent and basis the FX of X%. with marketing, administrative on effect international as gross margin remained and

total As of quarter of to on net $XX to a year’s due $XX income primarily million this gain QX investments. over declined to compared income percent Other of expense was and compared of in higher opex by XXX points revenue, million basis sales last income quarter, XXXX.

high share of tax compared points XX%. bottom compared was same by basis XX Our measures QX significantly the and reported per our earnings last non-GAAP quarter increased between quarter At lower full to increased XXXX. XX.X%, revenue XX% income a increase growth same a this EPS. net primarily this provides benefit earnings Slide growth tax while digit with year, significant achieved ratio, opex single non-GAAP leverage We the again reconciliation for Slide and these quarter line, delivering year details an creating driven discrete positive reducing by the rate net while XXX XX

You’ll find these details XX. adjustments on additional on XX Slides and

foreign take was exchange XX, price Moving on of this to let’s growth. of quarter. volume effect and revenue a look effect The Slide minimal at the rate

this quarter. By each and rebates partially related favorably across was Excluding offset a by recent discounts pharma Effient fourth worth and Basaglar driven growth by X% X%. the for Taltz quarter a main human Trulicity, was decline and you’ll pharma on U.S. that the revenue in both our noting volume notice volume. Strattera, tailwind of and major primarily Axiron volume were the drivers losses increased adjustment and utilization slight volume worldwide growth, drove in to a growth by It’s our for performance of portfolio. business, impacted Cialis. exclusivity of revenue this growth and price the was an again basis for by lower growth price primarily geography driven Medicaid in from U.S. that geography, FX, X%

revenue approximately Strattera, it’s Effient XX% by LOEs noting by also worth new of that products. when driven for For U.S. normalizing our pharma, the Axiron, recent and grew

grew revenue the excluding pricing X% and countries. entirely to pharma Alimta despite pressures, erosion in loss competitive FX, Europe, driven certain due headwinds volume, exclusivity to of generic on Moving Cialis for by and

X% pharma Excluding Japan, and our led portfolio driven Cialis Taltz, generic our the new In performance and last and of European - increased rest pharma basis, grew on Alimta, Cymbalta, June, FX, Jardiance the entry Trulicity of revenue Zyprexa XX% Olumiant, Trulicity, revenue Lartruvo. Cyramza. by product by despite a excluding launch

by and of revenue X% the increased in Humalog pharma performance the Our quarter, led on Trulicity, rest basis world this a Forteo.

health, acquisition, revenue revenue same full pressures BI animal XX% worldwide this companion down companion information outlines performance distributor parasiticides. Optiflex, for driven driven reduction Slide revenue U.S in by primarily driven volume. results. pressures was animal our revenue as FX, revenue health as competitive to well animal for and our in the market a for Posilac excluding XX% X% headwinds essentially animal excluding Food by by year competitive decreased with access impact decreased while inventory of flat. primarily XX% animal XX basis, a U.S. by declined Turning the On vaccines levels

take our look XX. I’ll on of Cyramza, comprised Olumiant, our new volume of worldwide growth. were volume engine drivers Basaglar, the Jardiance, Lartruvo, our Taltz, In of products, Trulicity, Portrazza, at total, a worldwide growth Slide and Now the Verzenio

and loss XXX of a provided Evista XXX and Cymbalta, while drag XX products uptake. You of can points Slide The of In our see these of drove basis that nearly of Zyprexa Cialis of basis Strattera, points in XX.X XX% revenue brands and health total, volume XXX Axiron, percentage quarter represented our in points, XXXX. these generated exclusivity from accounted growth. animal volume Effient, decline worldwide new respectively. billion product a provides total of revenue, XX% and up this $X.X for view QX over

as minimal foreign earlier, Slide XXXX EPS mentioned revenue growth on Similarly, growth. consequently effect changes income our growth. on impact Moving XX, our a of and and operating cost to had FX in have on QX meaningful had effect sales rates no expense on did, FX however, large a exchange on operating growth.

year FX, in non-GAAP largely full EPS in XX% the constant consistent XXXX. terms. effect with of while the growth was for XX%, XX% growth currency This example, the including For almost was

Slide impact per on of remain rates to the items non-GAAP reform. that line you earnings guidance Turning share estimated affects XXXX other This all updated unchanged. our we’ve our tax tax and to will and financial U.S. estimated reflect while guidance XX, our GAAP see

$X.XX. we’ve are note and XXXX as we EPS estimated of $X.XX, per GAAP regulations $X.XX both tax $X.XX tax on U.S. XX% weakness revised to the EPS guidance rate range substantially. inventories would tax of due appropriate, is and while interpret April sold our our law and, of modest impact revised our have the increase seen subject our to issued. dollar on our revenue would share effect on a foreign on rates international I Our range revised to guidance course if will non-GAAP and recent Also, dollar item reform subsequent the would FX change movements but in guidance and the this is impact EPS. earnings of only further over the tax as new our QX is the approximately call. expenses, If likely value update and GAAP sustained, weeks are line to non-GAAP I FX weaken monitor

events. future Dave to over back and pipeline call the the to turn I’ll review Now key

David Ricks

XX as initiation Josh. for Thanks disease, and dementia antibody Phase shows oral II our XX. earlier, for the our as DX monotherapy NXpG termination I ILXX of as combination our for cancer an IDOX Slide for well monoclonal last NMEs call of immunology, January Movements select and potentiator I insulin testing automated since starts as the earnings in Alzheimer’s as I with mentioned of for BACE both for molecule. and Phase well for Phase oncology inhibitor; one as the system inhibitor include

pipeline NILEX initiation the select III for cancer cell baricitinib for on non-small abemaciclib gastric the Our shown XX squamous reflects in line cancer. also ramucirumab atopic for and Slide Phase and program for dermatitis of first attrition lung

our XXXX, events had progress guidance for can Slide December. see XXXX, considerable the projected we XXXX highlights covered key expected for XX on key on to you XX, in made Slide events Turning we while which we call the our

the of combination of line actions extensions, Merck’s Phase abemaciclib. initiations psoriatic III event expected date study the and Taltz noting will for for data well new release baricitinib recent the as regulatory be Alimta and that with III you press the we’ve XXXX several to on an Keynote-XXX an study and for results as with Keytruda. addition of disclosure promising we of arthritis, Phase approval year molecules added announcing important see for In potential readouts expect for based galcanezumab, will the positive in

of products our the forward. total we nearly up new revenue, XX% Q&A in XXXX. we moving me just Before XXXX in made the up X% let go progress our from to delivered XXXX, sum briefly session, In and priorities

operating strong Our We X% for full improvement more of drove line driving growing medicines margin while of year. top XXX portfolio the this maintaining relatively result new operating points growth than excluding achieved flat basis FX. expenses,

strong recently a potential driven new complemented as our development stages medicines in pain many are from launched with launched by by for of deep period a products. and We neurodegeneration remains products. well for immunology, as portfolio our early The growth revenue the diabetes, in late-stage of indications pipeline additional oncology, recently

on improvement. our and our line XXXX, remarks. deliver bottom Moving while operating we replenishing into launching This remain focused continuing growth concludes excellence with prepared to pipeline and margin

Q&A call to session. over Johnson the turn I’ll Now the Phil to moderate

Phil Johnson

Great, your thank parts. provide Operator, to so Dave. would can for you with the as questions the to possible, Q&A we’re take session, ready We started. two, or do you, to and many please single questions that callers a from you limit we question instructions to two like as get ask if

Operator

Please [Operator instructions] We ahead. will go to Steve Scala with go Cowen.

Steve Scala

anticipate that of for Thank - and you any discussion? you FDA say, subject first beyond you ad there by, DVT so the be much. can questions that us reassurance will comm is baricitinib a safety do give not Two question. midyear, issue That’s an you

focus products of decades, the over to last, two investors Lilly that Second would to one pipeline one always today. three a could big is two potential say, had dimension less Lilly on. the in appear This

us or tell the Thanks have not so in lasmiditan. including tanezumab, mid-stage pipeline, much. billion lanabecestat, please dollar-plus disagree, so probably galcanezumab, what you so You opportunities

Phil Johnson

Great Steve, questions. for you thank the

Christi? take So if baricitinib you’ll expect comment might or addressed then you’d be you Dave Christi, we not are that be there beyond safety issues the any held; to excited such comm. think an ad would about. assets should additional an if FDA whether on pipeline maybe if for DVT are ad we mid-stage that and comm Jan, on like and question and

Christi Shaw

Steve. hi Sure,

they’ll they the commenting an the publicly known. do. said a committee, date to we We of FDA As is won’t timing that expect be the but do on before to FDA we before, that have make and up advisory

and other the regard ad issues the safety, in we other major terms resubmission. don’t anticipate safety and to comm. In questions really of

Phil Johnson

thank Dave, Great, Christi. you, Jan?

David Ricks

to start? you Jan, want

Dr. Jan Lundberg

Okay, start. I can

two see. could which data, Let interesting is first we the new clinical in are Clearly look us we some dependent II at enhance an Phase have already also since data is, regimen clinical trials. that for that some dementia, NXpG dosing as probably the we disease Parkinson’s potentiator Phase programs have antibody, both from more are also molecule that Ib DX potentially but Phase in has we remember, the it motor now and and but and function. we larger a into cognition immunogenicity, The program putting optimized II somnolence, plaque-removing you on

an beta. we it shut inhibitor are BACE with amyloid then We production off also which oral will combining of know the

[indiscernible] now Phase Alzheimer’s, are we III, not data, and tools only problems, really not trying for In disease. population, the homogenous fact, patients way We of patient of get has by and and to in to are in target trying hundreds in Phase but a imaging amyloid we both using are then early we positive happen, addressing the more make one stopping in production. doable, which are II all to a amyloid the also thousands been hit in if that we maximal patients, to have at removing want and our in of

to of is is how GLP-X, with effects GLP-X have agent other body we study I II emphasize a volunteers, the agent data some in now GIP want The a than healthy more larger Phase to in them interesting much that see powerful lowering body the weight and I Phase and so an have current on can seen reduce option ulcerative co-agonist, and potential we our want I options colitis psoriasis also effect. time powerful also glucose but indications, interesting mirikizumab believe and where for first-in-class, [indiscernible] indications. the potentially a blood be to Il-XX actually then that weight has lowering same have molecule, potential we other including at a this for IBD, variety it’s

Phil Johnson

or--? anything have you add, to Do

David Ricks

I said. don’t. would have what That’s I exactly

Phil Johnson

thank please. can the go we Operator, if to caller, you. Excellent, next

Operator

with Baum Citi. Please Andrew to Certainly. the of go We’ll go line ahead.

Andrew Baum

questions. A Thank couple you. of

in we’ve company. given joining move There ascension nothing wrong we capital Were since deals first an could small I intent or question. to expecting been IO, are but other, for, there the on guess, activity? if has Sue, sheet just you Levi an and delayed the to was and such that have the your been may to external balance share particularly commit accelerating barriers, Dave, Enrique your assume rebuild or That’s it CEO, in First us valuation which what be to substantive. oncology, oncology, with

barriers a Enrique, could the on of excitement fair Second give you could potential have expressed us of class, the in we diminishing of we for SGLTX clinical are the where go perception order pending your and you. other, concerns and the safety trial what to, catalysts get question degree including overcome Jardiance. Perhaps and commercial class be cardiovascular there? what to to attuned data, should us Thank

Phil Johnson

Andrew, franchise, thank class. oncology external for the SGLTX Dave, the potential question development to questions. you’d Dave? the and comment the business forward you if like for Enrique, then for the strategy on on going

David Ricks

grow Sure. guess our our oncology would as to do that. plan to capacity statement level, a I use assumptions much aren’t We very capacity ambition Andrew, wrong. at Well, about as business say to your sheet well top I balance income

adding looking talent, you as many, We’re many noted, opportunities at are and there.

pricing assets also novo about we’re I long course, the in sure to to we value, we’re investors fill we’re what something oncology, to our deals which can efforts a but holes doing complement committed not just pipeline strategic we’re enter for over existing strategy our bound by just want the in is and versus Of carefully make make sense term, that to de and doing, think space. what and think add to

be we’re work directionally the expect process. I for but our oncology, think given a for deals, don’t translate busy work, We’ll in about careful Lilly. that’s wrong. reasonable I through would So your are those year into think business that, it to development in points competitive oncology a Whether price assumptions but

Phil Johnson

Thanks Dave. Enrique?

Enrique Conterno

Sure.

progression than we Type updated to we that I we class, continue I SGLTX particular overall and think have I SGLTX and at label Clearly class, the chronic had much comes some be for for use quite That diabetes, to its more are it better competitors fact focused today some because when like frame has referred of having X at that by on X there’s number Type be for we the look at as do growth the the just for enter headwinds need of to the see for to When for but a look we the on catalyst class. to class. Invokana. Jardiance Jardiance’s the that a increased heart the predictor When promotion been the a leader bullish that be do been additional headwinds, was look SGLTX failure some much be of of trials have should [indiscernible] we going to class. we overall do what headwind a but diabetes, of and the the So challenges those class. in disease. Jardiance, We

helpful I actually to going is think be that to Jardiance.

just Type all Finally, a beyond physicians to protection able diabetes. about they’re when it’s for AXC higher with being patients thinking cardio X make much priority

progress we progress continue encouraged we by needed. is are the see, but to So that more much

Phil Johnson

Operator, we caller, Enrique. thanks the Great, if please. next can go to

Operator

Certainly.

Next Fernandez we’ll ahead. Please with Leerink. line of go Seamus go the to

Seamus Fernandez

Thanks for the questions.

So couple just ones. a quick

capital allocation First you guess by one little guys--I a off, I guess I’ll ask two this the parts. so can confused discussion, in I’m

are in capital guys and reduce to can the tune $X it billion the your explain the debt, moving trying with allocation position, and a discipline forward cash I’m it’s bit to you’re there reducing there. little You a seem considerations. of need like--maybe yet sense the decision would that confusing just of the other you net so just if your debt to regard given get deal potential

under Thanks. board already the points, capital review? reviewed that of that and the so move dynamics a part of basis is you on allocation is the has tax wake on can same in allocation coming reform debt second decisions but decision priorities and question go-forward capital other immediately, are The or

Phil Johnson

Seamus, up for alley. one’s right your that Josh, capital On questions. the allocation, Great you thank

Joshua Smiley

Thanks Seamus.

for net we a a cash over to position time, to mentioned overall in sure. comments so going in expect in we’re over it as our position very but be to relates as now, net right that First the position, time work debt I we’re slight down

$X billion as leverage is the think down of of for billion I EBITDA times $XX.X that X.X target to specifically billion about have $X by and to really to at debt, ratio. of--we get relates work our it our

do board, past, I didn’t the question raised actually Now, $X we few have very that’s been raised--without opportunities, mentioned, opportunities to that, to the in the is legislation, the we have share in start. methodical priorities, and see see of as new increases clear, basis course about accretion so that reform that’s ahead you last we we is debt the development to we reason have--we’ve to leverage mentioned, make Again, allocation investments try for do to us business, business we’d our see target, and that I pretty X.X we over U.S. you through back the expect just a will cash give where should of access shareholder work we and all us, tax Seamus, billion about and investments we dividend and free that value so it, capacity capital just--the Dave we’ll increased expect we’ll a now like really think, to year now to years of last not long-term just our get and on here ratio. cash buybacks Then as to see to when the time. your in

Phil Johnson

please. Great, thanks Josh. Operator, caller next

Operator

Boris John to the and with ahead. go Please of we’ll SunTrust. line go Certainly,

John Boris

taking for questions. the Thanks

you rebating at insurance you, and - utilization. - noise seems you just as give for a unleashing high into more in insights some First into question of I sequentially employer would rebates, us but you there. going anticipate a question that on there discounting hands is about go experience going drug that? from pretty was so having though lot patients? about a and, some Lilly of on, of groups and it certainly within trapped maybe anticipate, pricing? drug how to of administration degree value though a the Can Dave as getting a the with diabetes seems it importantly, there higher self into some It model lowering least system discounts model, do insurance you Then How some and do go the self is of Thanks. think has how back your

Phil Johnson

you’ll of for on drug talk John, might be about forward. here pricing and then addressed U.S., Enrique, and what’s diabetes comment if the into with questions. the can Dave rebating dynamics insights going thank going you in some on how Enrique? obviously that the

Enrique Conterno

products. I rebating see When to our results, and pressure we think QX look in continue across pressure all diabetes perspective there we a particular. insulin so was the Basaglar pricing at on both on our believe Trulicity our But from So Humalog of that are we being Jardiance. top our prospects, with the so have and is and ’XX axis disciplined all basically example brands, we we for of extremely extremely like positioned and overall we that for is well portfolio,

Phil Johnson

Enrique. Thank Dave? you,

David Ricks

Thanks John.

make them as can. similar the a you’re positions. try out our what’s We as connection think actions well I between healthcare we as to to right Lilly’s point as as provider of benefits policy employees to

out market. in think, for our Of general in risk pocket health medication, for programs in our out eliminated because beneficiaries you actually bias a we’ve the patients of that argument bias average, prescription other we them that of should for efficiency think could four things a other do insurance toward the financial that. course, so pay but you have medications of there’s two that on I that parts and we drugs system, have our whereas own insure, health medication that, should the we make healthcare stand no think times do the our the go versus services, is One know we programs, we good for bias I employees self and marketplace away, from of

is pass-through for rebate a is program. pass-through. rebate executed We’ve which new The other for employee us thing population our

the through beneficiaries. D see unique to role here that Part because would program, as for particular market the in calling pass-through we CMS rebate government, so for directly D are a We pharma like in and a has Part maker from

think Washington know, year of administration to pharmacy a progress immediately. mechanisms are at you hole-exposed way rebate for are is this all costs across something try as both make pro-innovation actually and very an who the in market on to we act that on have the cover struggling we’re expect prescriptions, pharma to busy their the to would levels the seniors things, they to impact and introduce of donut As lower for XX that probably and patients, in pocketbooks. good administration counter idea look should positive those I like regulatory-wise patients’ positive That immediate a could partner a we’ll affects closely with and so XX%.

Phil Johnson

can to Thanks the caller. next Operator, go we Dave.

Operator

the to go We’ll ahead. line Certainly. go Tim of Bernstein. Please Anderson with

Tim Anderson

occasional in principle case couple a healthier populations, we with that a studies what’s Europe, An unique are Phase Novo’s, outcomes because show the cardiovascular technology be that future higher your - in if in exactly? commercial in of disparity Novo view, III I’m fail higher. - bar not, the much play is does indeed initiatives been questions. could Trulicity why U.S. there Trulicity, than why whereby or your a to program the does second trials. you, this difficulty the so and have of Rewind that conclusion earlier bear wondering and have a on Thank risk Then your Lilly’s had timelines showing out nearing replicating, is it of and to either oral or multiple the a is not? it’s who reason on GLP-X a trial question would the XXXX, impact your such benefit negative purely scenario benefit Can trial the has

Phil Johnson

Great the Tim, questions. thank you for

should oral of our Enrique, on the and GLP-X then and potential timing be negative, those. efforts Rewind the you, impacts for So on

Enrique Conterno

have we Rewind, designing So space, of clearly to how that’s so has for continue out. comes when diabetes clearly be a Carolina a reading that the bit there in negative year are about a out designed - speculate trial I Lilly don’t reading our Carmelina that would want to in cardiovascular we clearly. experience the case cardiovascular to not where about but linagliptin quite feel results. this are trials and good is, of and trials are trials also what trial it really our optimistic we - we number about be

important. outcome to about As having going we benefit therapies, is cardiovascular think diabetes increasingly future be a

Phil Johnson

GLP-X? oral the on And

Enrique Conterno

are our working progressing I that highly getting in the successful that one interested phase, the have as sure this basis. space the in we bio-availability think to we can GLP-X, this is pursuing basically make worldwide commercially on right for a order think we on about hurdle of make product So we and clinical and to oral

Phil Johnson

Great. want to Jan? anything, you add Did

Dr. Jan Lundberg

eating at look interactions, you here after oral time for dilemma drug, substance. assume [indiscernible] having then the remains so not we If lot X about agent. Yes. of means bio-availability, need you peptides also high which or and hindered a it’s level, we Novo natural of that for only because has the some have mechanists, product and fasting that lose the you food by suboptimal this The is take the X% most really a oral

molecule have better more be it would a much so think for to traditional I receptor. small this

Phil Johnson

Jan. go please. you, Operator, Thank we can the if to caller, next

Operator

the Jami Sachs. Certainly. with ahead. line Please Rubin to We’ll Goldman go of go

Jami Rubin

your launched we’re including do Ozempic, very market, any, of well? to are out Ozempic about What Hi. know and fact XXXX, lot sema what semaglutide changes obviously overall plus nausea, result GLP-X, already. a much. the Staying very and but we you to Trulicity’s obviously food franchise, touched replicate impact, oral do and will while upon a data see as on effects oral potential II, oral a market trials Victoza oral along expect going now read it your if are to GLP-X? that be the sema claim CV Trulicity in share of hasn’t concerns essentially has Phase Thanks and successful diabetes there see shortly the having if as you if the changes you sort of Then that of lines

Phil Johnson

Jami. for questions, the Thanks

from on the oral you So update, label that semaglutide might expect impact III. CV successful and in franchises the Victoza and Enrique, Ozempic Phase you, potential Trulicity, on our impact back thoughts if to to then is the

Enrique Conterno

with we the to growth. of be Trulicity significant had continue So Trulicity. performance quarter-on-quarter sequential very pleased

seen in when for yes, continued Our despite CV to the gains events. over overall share, so it first we’ve XX% market Victoza is a for indication for share the last an benefit comes now has fact that, week time, the

to from One basal we in are room XX% huge that really for GLP-Xs the insulin premises there going U.S. class think is the of so the about is of today. how for benefit underutilized think the look that is that. When big and Trulicity example, believe expansion we utilization, is about we at GLP-X we

type that experience for extremely able our forecasts launch. about We We be to patients. the for we any effectively. products. that We very feel are experience of believe semaglutides providing well don’t I share do compete unmatched, so we prepared of are good provide we will be will any think that

Phil Johnson

the And that may in how terms semaglutide, various dynamics the affect franchises have? within we that the oral of

Enrique Conterno

for of I Yes, the so fasting [indiscernible] need some real a end point at is look when of has made so this require life difficult price treatment, and we payors compete how and we the the injectable work the oral early to of and you given product effect forth, this, it of today, so that explicitly important but value some different think that profile, other so comes intake is I to in going the and it’s end orals, given position reference to a Phase the is to how trials see to GLP-X. GLP-X, the see may extreme and going product day, with adherence perform product the how the to extremely expressed desire be need more at the water to that some first, that to so day in product to what we it efficacy, look is comparable will very side for between an SGLTXs going we Novo some match, to example, at also be view to to going that this going proposition much Jardiance, for that which III continue of this at - think it’s price to data.

lot how that rest the see and provide is speculation the data there could on and of sense more we be the before educated we of impact a need that successful product to can of So more a diabetes market.

Phil Johnson

Great, thanks Enrique. Operator, next caller please.

Operator

to of Please line the We’ll Certainly. go with JP Chris Schott ahead. Morgan. go

Chris Schott

Great.

arthritis? questions your curious this the psoriasis can maybe that magnitude at of psoriatic opportunity on two could. the equal highlighted I we Just about of market a think launch One, Taltz just original for bit one thinking on as more has I look competitors little you’re just in opportunity elaborate how label. you if to as I’m the Taltz, ’XX. in

pricing your environment second the just very past, the we’ve out market going ’XX. about on seen interested question The pricing think couple this data competitive about this year is for a and had Taltz Thanks pricing longer to is dynamics more about how much. this in term. on points thoughts we in than being a in We’ve shake and as

Phil Johnson

Chris. you, Thank

and you if head can this opportunity the arthritis we psoriatic Christi, we as So the see dynamics in into that about talk year? pricing

Christi Shaw

Absolutely.

were very excited approved in of of in the the are opportunity Europe. Taltz we we competitive. this be that opportunity Cosentyx really arthritis about market, think in Cosentyx believe large our for the so scripts we’re December, psoriasis. That January in than and for actually similar addition in - A to a already ankylosing very to in launch U.S. dermatology psoriatic to will we’re at as and arthritis, the we be in So the Japan, approved large we Cosentyx very PSA expect less in we in will think and is would look marker be office, the uptake psoriatic spondylitis, XX%

that patients well data has the the the data, rheumatologists and our our last TNF, year. very so have and this as patients a who they don’t us year label We’re be areas, see in be other Taltz continuing, the as that also and a as to this so and will year similar have like very of like that to structure get IL-XX being PASI with not only responded scores, in you that dynamics, for of access relates going terms lot an year to versus to we unlike of competitive, marketplace where, the market and think how to competitive last in with pricing that Then to Taltz to continually patients. an believe actually same at we for new us. so entirely - Remember going this a issue customer, the will do over, we’re not that launch we’re XXX be great access rheumatology. office From well access, will we is turn uptake that

Phil Johnson

Christ. to caller. we Thanks next can the go Operator,

Operator

the Please Certainly. with We’ll go go line ahead. of Morgan Stanley. Risinger David to

David Risinger

I much. questions. so have Thanks three

next in and to then health can but to The quarter, out the you the first coming growth fourth is growth, quarters. I’m expect return animal down frame prospects hoping you that was the if top with Obviously revenue you in flatten business part drivers quarter of could it two, Also revenue us you three us our be in as product two health. if in would commentary, animal the new to the remind that help modeling that just are helpful. what or could

Alzheimer’s The the then you tax Thank on your you. XXXX rate third, beyond is II the expect could decline second as with data, comment timing question and to efficacy of optimize you cognitive you structuring? Phase readouts do tax

Phil Johnson

thank for you the Dave, Great questions.

quarters you and mind, beyond coming Jeff? to of So on the to some drivers. and Jan, go prospects if don’t for go of to new you Josh, going XXXX; readouts in I’m comment like next, for the growth if animal tax then space. Jeff, timing II we’ll Alzheimer’s to product for Phase rate on health you some key the the you’d

Jeff Simmons

that things, said price importantly in few that guidance kind starting a to X% return of increasing note consistent driven slightly we we a and health. results and to animal expect David, XXXX level excluding be FX, In at higher December, versus our Yes, set. in XXXX, increased I quarter specifically the flat the expectations was were QX this make market quarter. revenue volume, our in but X% say by and would we’re on a is I growth to we fourth fourth see with revenues would to then the other decreased we

competitive to look I when say look the impact we XXXX and That’s in and would driven this our animal the companion growth what’s modeling, again, underestimated market. competition, results, and - So pressures you food that. and impacted of to some clean

in against mix expect product negative the top for year growth. we specifically, continue here, we flat revenue from to I’ll the headwinds, see eight XXXX primarily will to as half launches, of continuing of up, impact growth a we XXXX first we year those expect second our food, our to and evolve drive be of So line on of be clean the XXXX the forecast transition to growth touch however slightly half slightly we

to we to portfolio single in expect the food animals low within offset growth by animals. low mid decline in companion single So digit digit

As think Galliprant we Dave grow. will continue see noted, I to

in HeartGard a canine taken pain growth Lohmann share. vaccine Plus U.S., parasiticide combine portfolio continue up this we animal last going share broader side, being our Credelio seeing year’s the key in our big Then all Europe that - market that well. portfolio for see Interceptor quarter a we animal launch business, to the driver vaccines tick-flea in Japan, is that major continue that and the growth salmonella, third. so We Credelio, the on key we would being with be acquired to would on first as three We’re our from XX% markets, market, growth the to and another driver. launch, be from we’ve driver food our to with close see companion of quarter-on-quarter then would XX% we’re and I that see

growing gives So to in companion slightly business and little first second our hopefully year, the you a and on guidance of would half, flat I food half animal that ’XX. again emphasize

Phil Johnson

Jeff. Thanks Josh?

Joshua Smiley

of other advantage XX%, to course certainly over the time. are today take XX% assessment, On built will is interpretation we complex, from XXXX, future regulations It’s improvement read think look XXX as IRS, that’s that’s which is based for think waiting will, we have are law of Like about sustainable for that and company saying that guidance and our first to are prior we of that but point based caveat still tax very from the down the every outlook. by on about planning basis or on estimating we the that to and law. incentives a bring the mentioned we reported rate, through into we I

and assume of over go there, opportunities bring but down lot it XX% to then a still a certainly So time. work sustainable to

Phil Johnson

you thank Josh. Great, Jan?

Dr. Jan Lundberg

treatment years. has and dementia, program about and studies, in somewhat dementia take Parkinson’s longer there, The an to relation so one the is NXpG In there may a that in is since symptomatic XX-month two readout mid-XXXX.

Phil Johnson

Operator, please. thank to Great, go you, Jan. the caller, can next we

Operator

Certainly. the Gilbert with Bank. Deutsche ahead. Please line Greg to of We’ll go go

Greg Gilbert

you. Thank

in thought Secondly, but Merck First Enrique, obviously, say of but focus what pace curious buy, the when and with was happen what on that, you? answer impact will could for in if about and Merck, you to that it could you Dave, of guesswork what how GLP-X there market’s that lots a around specific hard given combo SGLTX, you that or at changes DPPX you focus, Are might into the might of of and has next? some be, took to what in team the are buy, you when combo products, would and combo the going etc, do enters predicting have a focus what the kind learned you any, diabetes, least affect launched this from while, - and what lots in marketplace over? of changes of like in since you in space how team, about you priority, they how the expecting Thanks. to willingness you can point use that changes things something haven’t changed what BD, you’re short to, bit

Phil Johnson

changes any to the comment in; if in Enrique, you as can since Enrique? of another on and approach CEO. Greg. coming impact potential Dave, you’ve combo you, Thank DPPX SGLTX over taken BD then our

Enrique Conterno

Very good.

the also an catalyst additional main as I beneficiary. class, paradoxically position, mentioned, it’s into to we strong the Jardiance’s class and help be for going will because we important likely to as going we positive that’s coming a given growth believe but competitors SGLTX be the view So

physicians prescribing was proposition as to We the at specific prescribe have ertugliflozin to current experience Merck’s they not view with we can’t that of question diabetes combinations. practices look do a I with Merck. long-term DPPX. when comment [indiscernible], for we that but strategy, on so prefer combo fixed Your dose a from products,

is, all strategy their of for have what to exactly first they’re successful, but prepared. are of going ertugliflozin, the product know don’t we to we course clearly be of benefit Now, that so to establish

terms feel it in the where of each stands entering terms the brands competitors of provides. number I a very today one in good benefit have We space, but of of that diabetes our

Phil Johnson

you, Enrique. Thank Dave?

David Ricks

Yes, game has to things and thanks Greg course have In but occurred can’t that through for haven’t time, pipeline happened undertaken up BD. a in the things a bit have our do to comment done step we that investigate we we’ve space. we ambition on less of why the in essence question, of where series yet,

after in pretty last there’s at our of target, main I not is decided points just that’s the which we clinical more think ambition think and price Phase under-represented, I, that, lot where clear and are is about we pre-proof Phase relatively earlier because attractive. the Lilly to go been it’s that’s through the assets II, so concept we’ve because year a

the done which have public specific organization. people company. about know thing in Lilly of function Labs, We is some realignment nested One business things R&D the development the within our Research our

that’s think core company a important our shift psychologically innovation not our an part toward I labs. of we in our along strengthening attitude becoming if as change, own this with

increased yet to bringing things a all also check capacity deals how so to of thing do we strong just strategies, discipline what execute right number produce--have have that’s the they friction our is time, I’ll We final through but do fit are going them the therapeutic is they and now know that for across. look the enhance income deals, in. both say can changed terms support, statement prospects done at so shareholders to for hasn’t they the they in. as we not quote-unquote, have undertake to we’re substrate producing that evaluating, bring to value execute balance make What enough can in and good we core at resources, boxes shot financial be not a sheet then without strategic, so have metrics sure once we of at The allocating these human looking we’re we we - we’re and

Phil Johnson

next Great, thank you please. Dave. caller Operator,

Operator

with ahead. go to the of Evercore. We’ll Please go Raffat Certainly. Umer line

Umer Raffat

questions. so much Hi for my taking thanks guys,

can the deaths color and get what some post-dose baricitinib, pre periods and I of perhaps risk play commercial question to experience in to when water with from thoughts based into on finally volumes, my and visibility concomitant many the guys does and setting world the specific the real into fasting you calibrated sema on NSAID oral NSAIDS your out seen love diabetes passing, that is may, us meds? how how like NGF, X give the I to you some Then a usage if would manage happened? please RPO usage do all seen any on First, taken? know you with Type mentioned Secondly, are real-world you setting, carefully mitigate have DVT in but a concomitant how concomitant seek

Phil Johnson

very for you the thank questions. Great, much

summarize. me Let

for the you - out that then tanezumab. can we’ve DVT going be share second on seen we I’m market in dosing baricitinib with Christi, and in clinical then our Enrique? things world, to related would the So some issues sema intend with we oral question out start we actually, and any as other how the to concomitant with information usage manage on of would Enrique, see potential future playing the two to trial in program, how go with to NSAID real deaths we

Enrique Conterno

the Yes, lives we be products. about is can that so that a Novo products that developing a about benefits, than offer us, how with we of and has people basically adhered is of but number anything simply, number probably complexity a think for diabetes for look that a frame, introduces our in that to as develop better headwinds, question of our mantra

Phil Johnson

you, Enrique. Christi? Great, thank

Christi Shaw

and there and more events after of pool we the after have looked that disclosed the days methotrexate one the reported the first days patients Sure, of largest note, and to we our of group in deaths data exposed in the XXX note is we the resubmission so trial trial one to all it methotrexate in our X.X treatment. X.X, XXX where FDA, resubmitted baricitinib, trials as in as we of group Remember, that things pulmonary Of after on One clinical program. have part so X resubmission that’s well death that’s at derm, extension also RA baricitinib study, as death our occurred well. for well. the dose, was were with within patients of in embolism in Phase the were of background clinical two of the atopic occurred rate the and of to milligrams as X.X didn’t of of clinical package see PE the a X.X, the the X II background we DVT in milligram, well as RA, found and rate that incidence so any so

Phil Johnson

terms that’s of then utilization commercialization? with And managed clinical how concomitant playing envision might how and we in and of out trials the NSAIDS tanezumab in being upon that

Christi Shaw

what NSAIDS we’ll future, the We once the looks comes like, and the commercialize exclude to--in did how you trial, use we’ll concomitant the be in like chronic and it our able what data FDA looks the label of able once be out we’ll and tell and it. then to label see approves use,

Phil Johnson

the go Operator, can if caller. Christi. you, we next thank to Great,

Operator

UBS. line the go Certainly. go ahead. We’ll Please Goodman to Mark with of

Mark Goodman

Yes, good morning.

a get understanding of just understand completely a pricing was ramp? the this pricing better ramping Just that could in fourth of the the really or quarters there. is a nicely flavor what in also you. but very just product, quarters, inventory couple on U.S. to could here with I’m clean second couple on obviously quarter four respect anything talk Thank we we was underlying up quarter, Basaglar, Trajenta if maybe mentioned the or you all if just to you can Then was what curious there give little us past strange just the a U.S. you Then previous Trulicity, the questions. so in the of the in for product of strange a wondering can to relative including rebates. just I looked quarter happened so the bit

Phil Johnson

all Mark, and if comment you, Trulicity, of seeing thank for U.S. the the you’d Basaglar. we’re some dynamics for Trajenta, to Enrique, like on you questions. for

Enrique Conterno

Very good.

the an unfavorable rebates due as did We to revenue. So $XX to Trajenta. start Lilly for relates in me let with roughly the discounts estimates it impact case of in have changes million Trajenta, and for our quarter

an recall quarter, sequentially that it of QX anomaly. may XXXX, adjustment, You actually had favorable we so so look like last in does a

to Basaglar accrual of this You high sequential at we’re today in do asked weeks, about excellent strong see basically sequential have few inventories. rebates. was of a to buy-in, at starting that, expected look TRX new excited seen looking the do the is we basically are Basaglar. January We picture look say having. to gross we about of there I really the we’ve what we Then growth at Basaglar try Trulicity, it in capturing once When roughly Part more way look at Trulicity rolling we them do our very diabetes when $XX about Outside increased lot quarter-on-quarter. so complete But it net growth the movement about a it We forth, utilization at and over - Part time comes when X, quarters. see uptake. the prospects. when first for D million basal to--given the some products get about is XX% at by to channel to but comes XX% would now so comes is the when look and again excited by growth and insulin of that we class, patients when

Phil Johnson

Great, thank you, Enrique. Operator, next caller.

Operator

to go go Barclays. Meecham with ahead. of line the Please We’ll Certainly. Geoff

Geoff Meecham

a you’re of value, the for one guys. product Elanco the - I contribution? view about tax change good Then still how for trends cycle or policy new the late its product XQ is couple it of or in questions, strategic questions, your thanks a know still but its Morning, review, margin launches for Dave, Forteo product. the does internal

and pricing with Just Then action either a how we for XQ you. on then with does recent [indiscernible] Europe forward. some investment saw your going help in insight there? Thank your opportunity abemaciclib, us or impact

Phil Johnson

for Great. questions. the you thank Jeff,

process. a recent talk the in and in So CVKX-X of Forteo you Sue, on space Elanco on tax the Dave, go if to in then of about for our some the factors we’ll can start then policy made competitor product with the on some Christi were some I here other question on decision-making impacts pricing that of Europe, the U.S. the question to you of Dave? and announcements

David Ricks

question. assumptions way review On our conducting we’re the Yes, thanks strategic Elanco, more analysis the [indiscernible], for the or haven’t and basic announced less we since the changed. in really the

tax more we’ve in course, Of two-part on bit valuable thinking. a I story. I makes everything a and our the One on little is Elanco, think line, and top there’s quarter. that’s innovation this been contemporized that commented think,

forward a going well think significant is animal animal for the of things been all piece progress, in margin as health health. true. so the those one are that in opportunity very on, this focused team products factoring as and I approvals a we’re there’s expansion a both is growing company introduction as recently. great of in the That’s new Then

I and and other to But or direction think the is of the the way, started in as that the assumptions we path more ongoing. hold, we must Lilly as still valuable to to continue when good most news partner those less, work analysis this, of that’s then what’s forward project. to spin, that’s through same ask, course for some shareholders -

Phil Johnson

Sue? Dave. Great, thanks

Dr. Sue Mahony

geographies say ready year are expecting Japan in hopefully and this approval in Pfizer’s on launch those What in both our Europe and we submitted comment is we announcement. last Europe. can’t year. later for I are in I We can Yes,

a are unmet patients for is reimbursement access need for We Europe. in where prepared appropriate launch and considerable for we’re prepared there and

update in We in line the so on approval performance looks well as first the the XX% an Monarch on really the so very the year this Again, we very anticipating are the date, the on of the that’s of good and X, feel been the Just feel - that about to in performance patients first populations uptake opportunity U.S. the the and as Monarch based good far indication. based - half far. performance and that’s is and available, Monarch Europe so We promising. has confident X X about U.S. Japan.

Phil Johnson

Great, thank you, Sue. Christi?

Christi Shaw

Our question rebates QX price U.S. unique in quarters to was increases. QX most the the from lower to sales One for discounts Medicaid, in benefited the QX. rebates price the and XX% so related the realized from was benefit of dynamics net there we of thank adjustment because grew list and XX%, you discounts Forteo some where versus

that had in volume was to that increase the thing we for second The QX. volume the in acceleration, led wholesaler an terms of buy-ins

Phil Johnson

the can next you, we caller, please. Thank go Christi. to if Operator,

Operator

line America. go question next the from The of with Gerberry Bank comes of Please ahead. Jason

Jason Gerberry

thanks for my morning, taking good Hi, and questions.

Just me. two for

expectations your the patent Firstly you thoughts if alternative on the lose or suit form, Alimta, to salt XXXbX with were the generic.

that salt in of upon or the tomorrow, any think Thanks. you DPPX you catalyst, see if starting could on you driver setting. your study the if Carolina I space profile don’t My that know SGLTX the do value what to drives like of your in was were alternative that conversion the more just brands have form the question to do trial for trying conversion second curious the diabetes as for on thoughts of that little proprietary of kind capture type SUs, a a study, oncology more cardiovascular sulfonylurea I bit and depending low-cost sort market Just get a analogs, with share mainly positive, curious see of but as higher there. front, cost sense you just broadly, thoughts or something classes broader have to been other obviously GLP-X? to

Phil Johnson

the for question. you thank Great,

impact Sue, So lose your is form provide then can on soon, thoughts SGLTX were you both thoughts alternative Sue? and the potentially that if salt potential affect might we Carolina starting to positive, how DPPX if the if utilization. on some case and Enrique,

Dr. Sue Mahony

opportunity in this defend with IO. the form you we consolidate in first be we guidance, are that. this confident to Yes, salt revised line yet we to presented drive that confident here to our do in continue case a standard our combination at in and think setting but regards Court and Keynote care being really look feel opportunity said, as very believe Alimta got XXX case We as of preferred happen, to Alimta this in patent really feel a and patent, can Indiana, with great a chemo later to Clearly we’ve regards continuing this District the hearing and the to would year. to to week we performance didn’t that alternate continue we the Alimta have at time in with we with data point of the

Phil Johnson

Enrique? Sue. you, Thank

Enrique Conterno

SUs market. about the of diabetes XX% oral still overall represent

As declining particular not in most is that DPPXs a would over that to it the has accelerate time. Jardiance, the limited about significantly will positive would acceleration class. see a benefit, SGLTXs, would My view Carolina of be and in GLP-X the particular, is declining market, a classes that. as and basically share class, also we been and trial Clearly but Trajenta

Phil Johnson

we’ll Thanks our Operator, next caller. Enrique. go to

Operator

to ahead. Divan Vamil go of line go We’ll the Certainly. Credit with Please Suisse.

Vamil Divan

the much so co-pay the my hearing that question where questions. co-pay count a I taking for towards to these accumulator had deductible. new about, the some programs Thanks provide individual’s we’re plans about manufacturers support

offset more you wondering to Lilly in other terms your some that the the it’s pressures, in product that can about CGRP, you’ll trying the - on of differentiate of do terms if product could be think curious from specialty competitors presentation companies that just wondering comment you of this can there with or of pharma Second your seeing on share terms the is needle you anything to Just ways issue device, you’re one drugs Taltz like the what around a in how little specifically I’m of gauge, commercial Thanks. some delivered. if of question?

Phil Johnson

you questions. for Great the much very Vamil, thank

you comment commercial whatever of you share on for you Dave? on the be some can can you and might accumulators, not respond, the to fully then if Dave, can question but on co-pay - galcanezumab. presentation So CGRP, Christi, share able whatever

David Ricks

the the accumulators, idea of rebalance to talking this people and not between than actually [indiscernible] new it really insurers get that. There the past in A in co-pay back are manufacturers that well about a are differently and is lot idea. year. forth ways credited Yes,

will others. we’re in and have time just to-ing a is for fro-ing ways those do. without basically shift the an rest through can mind, not as plans be a through would I increases policy-wise to it. we’ll we’re rebate compete high consumers pass-through, which assured think on around exposure I products bad continued their overall and across points you are thing compensating that’s and this measure. There There so It the patients and tactical it, and important implementing our implementing these concerning Taltz deductible like idea, the program think by that be we

need issue bigger the with for issue. is rebate price think go do back for and patients issue pass-through chronic I make list affordable the more we to spread for big plan. is increasing how medications paying them, deductible the patients That country again a we a

Phil Johnson

Thank you, Dave. Christi?

Christi Shaw

the strong our that standpoint auto from obviously galcanezumab. history with in plan a a have and we commercialization Yes, injector, be will

Phil Johnson

Great, thank please. Operator, next you. caller,

Operator

Partners. Guggenheim Tony go to ahead. line Please of We’ll the go with Certainly. Butler

Tony Butler

Germany, to much. XX/XX, can in extent has and by Thanks very much. other on question I I curious simply as X baricitinib Number have ratio information CGRP episodic wanted for principally Europe, use would just like both other you some dose? think that and chronic it the per thanks utilization the the a in would Yes, if la you some two I’m be very would words, users? be users, injection milligram stick good month, you also that in provide or of been the once fact use; to ask, do an to who permutation, expect with many one. to be may That’s or if principally is you X those percentage a

Phil Johnson

Thanks Tony.

out use Christi, the principally, So in of going in pull comment that sure not both hat we CGRP, use if questions, to you’ll I the IR or think expect on the in to don’t if that’s also and so. be then Germany rabbit these X milligram chronic the not? group, have or episodic, a to we you I’m information have if on X where and be

Christi Shaw

also Okay, preventative in we - XX so we off but that is medicines, could be preventative be their the that are the one X about estimate patients million reason fallen preventive, or about medicine alone patients the to have safety. other expect obviously. they for million U.S. most to on in of or because the usage X There efficacy eligible

two be cluster most is So cluster, chronic, episodic, to use The those the and about that of at platform the has all agents lasmiditan three chronic. we look also Lilly headaches, use, thing study expect in we thing galcanezumab in across studying do use expect you we’re a also is for great third areas. in so as acute

Phil Johnson

you, the Thank X milligram in dose. your we’re up between question in and Germany follow we’ll seeing Christi, the on X utilization Tony, and that

Christi Shaw

just X we We you that can the the give tell is you in majority milligrams, can’t split.

Phil Johnson

we Okay. the next to Operator, caller, please. can go

Operator

line Jefferies. Please Jeff the to go We’ll go Certainly. Holford with of ahead.

Jeff Holford

some standing my on on questions. Elanco, be maybe to of Hi, this think thanks year. focus of own for a concerns There the taking seems at trend that lot is that I business there unsupportive some point its

evolves through on the Tremfya, impact Thank if of adjustments? wondering seeing X%-plus and margin globally kind of give can outlook growth a were to longer kind basis on top for get your bit really of Taltz term seeing on in rates the of just that midterm we’re kind Cosentyx XXXX. thoughts price as animal - you that you more the market in quick business health, commenting and what reasonably some and to the being you the you. - product So still aggressive on I of industry question the the the line, gets are efficient? more what point see when think on used on maybe also mix opportunity Second, they’re of from this Novartis does price

Phil Johnson

Jeff. questions, the for Thanks

in and on you please growth, expansion? for can some Jeff, as free impact the Christi, pricing Elanco you trends Our longer like, margin comment class. like dynamics the comment feel you’d to if if comment see Tremfya from and forward then you Dave, term on IO-XX and of outlook that to well as the going Jeff?

Jeff Simmons

go being Yes, changing keeping those and as the and really three. innovation; we with margin we’ve noted Jeff three, segments; margin - we good context in plan, strategy higher two three are one, as is as our forward, assessment, priorities definitely to this had question. go the growth is We’ve and expansion mix forward to our this accelerating we

we midst very noted, I we right be what return higher feel pipeline our and growth quality Dave in launching we’re good now. believe, going will think and us that products the higher That about forward. will to, of margins as

will noted, I’ve to So increasing continue forward. see that slightly to growing going flat we ’XX, and in as it

our so first just at BST the expansion in year footprint a significant really the large - margin we’ve help. most couple as term, see think as of we levers One continuing change. the the We mix is in for key to the example initiatives, I is I and BST look cost just the to of will have one. here a well and Wood integration, parts of Augusta, things our so this pulled we this story as dollars hit that. and think well contrast after and with the There’s think companion a that is to XXXX announced as the assessment near right-sizing in medium companion animals billion the footprint, demonstration consolidation I animals time, a of two

we so clean forward little food. XX% a said medium the clearly a in margins at term. in it increasing margins, have we bit very like of that taking be the to short we albeit we see forces, But as longer December that see, said path investor go and do we some these expansion, given So XX margin operating on as to returning conference, do will

Phil Johnson

Jeff. thanks Great, Christi?

Christi Shaw

of expectations from the patients similar really launch agents--and switch the we in what as newer we’ve marketplace agents in psoriasis believe seeing more ensure--to So we’re before, agents seen that and with to patients we’ve the quickly increasing ones. other said newer physicians, uptake older Tremfya has of a newer the what had as is to biologics are space, really

last haven’t the piece, because launch it great the price and In on at unlike before was patients get thing. clear growth years where adjustment, actually single what of good having digits, we we the agent access at routinely, to we’ve we look that spite eye that’s we’ll and skin a we PASI closely XX%, patients but saw to XXX the that utilize access, Cosentyx been one was fact, market it What continue very seen we an two want to Then continue on has years that. to had ensure so not in continue another, scores. for to keep who from off cycle go think

Phil Johnson

caller Christi. Operator, you, please. next Thank

Operator

Certainly. We’ll Arfaei to with BMO go ahead. Please line the Alex Capital. of go

Alex Arfaei

the folks, for morning Good much if taking may. thank Three, you questions. I very

your makes a Basaglar, First, on do specific Alzheimer’s? could that on the should NXpG you additional the comments something we Is expect of hurdle met? milestone or comment to data third, specific expect Was you that there a for Second on your efficacy antibody when achieved in safety insulin that basal Then follow-up a pass-through patients, when you’re on and pursuing? for Basaglar? interchangeability rebate lot sense. bio-similars, which was

other in leaders. happening, much. what it’s involved expectations commercial pharma Thank D you your in this be you We’re from comments to similar of discussions, very are setting? or hearing seem actually whether the Since the Part policy

Phil Johnson

the us Jan, pursuing Enrique and if data in showing of come was to achieved Jan? spaces. like rebate in the and Basaglar for then the that, the that NXpG competition, Alex, additional Phase that comment now the when II on on for that milestone you’d to thank you column, specific enacted be understanding being some those pass-throughs for on commercial interchangeability either for might for producing government and Dave of likelihood our from the or in questions.

Dr. Jan Lundberg

criteria some I met our here, imaging NXpG immunogenicity. specific that safe the the regimen Without in secondly seems we say and a having studies numbers Alzheimer’s being in too on can amyloid that for spite of patients, reducing signal dose have

Phil Johnson

Thank Enrique? you, Jan.

Enrique Conterno

basal are up held of additional Some due the entrants now to right the into space litigation.

is question for and that a think really Sanofi. them I for

imminent. As away. we as to will years it There’s studies think eventually be view interchangeability, nothing I this this but The to right relates happen. conducted, need will

Phil Johnson

Great, Dave? you. thank

David Ricks

pass-through, it’s is good it rebate happen. about it because should talking On everyone

it the a other table. fact, rebate should course, and the already proposal regs pull happening but not cost D we of that. others advocate premiums on D think of I actually know there we that allow burden looked increase passing change insurance I the unanimity versus players happening larger through spreading the the and are of plan, and and proposal rebates in is for plans. It’s and to a we’re the fall, that’s one at comment in being is both you HHS, in that and subjects the proposed much very have senators amongst pass-through? is to a cost I can probability funding CMS out - for a put to the to larger simplest I there difficult pharmacy There commercial modest executing is at and between of in for In our over got base, weighed and know serious the Hill tell in number on support in of to the Part the that because, drugs speculate ill as the is it therefore It what strong pull we counter it. not on Part on push for me It’s because well. in that for to We’re manufacturers. is levers a America. large in think we’ve happening,

U.S. but do the that mean it, will should think happen, I doesn’t it though.

close keep one and you stay updated. we’ll to that have we’ll to So

Phil Johnson

you, Thank please. Dave. caller, Operator, next

Operator

Certainly.

from of with Steve comes Our go final question the line Cowen. Scale Please ahead.

Steve Scala

you business provide Phase times see any II risks or in thoughts study completed December. Thank either NAFTA you animal a you. in specific, any do mix a more you TPP? and to opportunities you. related few Jeff, Can baricitinib what on be or XXXX. mentioned saw? food Secondly, change you Can in Thank you SLE

Phil Johnson

you thank the questions. Steve, for

business, you ’XX that can agreements the Christi for mix animal for the have Jeff, So and the some of could baricitinib change on our then questions. and trade potentially comment opportunity food on

Jeff Simmons

Thanks Steve.

don’t BST the of alternatives, Just but food at in see health look the antibiotic these to our segments pipeline, an looking through. less I would year would I all major us was at idea specifically, I we’re this gives would movement forward. business the in focus three really see X% the all now so way representing what growth is accelerating on mix, in say animals the continue side. our nutritional very then going pipeline leaning on see really see that back to primarily vaccines, impacting intentional did agreements areas, we we I built and changes food going the U.S. when is hit clean of companion BST. rate, to that trade our very assumptions any all the food or to We that are - we’ve at can you nutritional I speak decline accelerated that. in there. alternatives, it change. got guess been drove we’ve than compete know health, We’ve on portfolio in we forward but starting all areas antibiotic I vaccines, our trade in Then intentionally these be our our we anything there animal no nice side, of note, Trade note--I and see higher on the portfolio, from an are mean, we we that open, critical some our we is growth on and there, That’s of

Phil Johnson

Thank you, Christi? Jeff.

Christi Shaw

very year, pleased We’ll lupus. with actually Phase disclosing by data a meeting this in II evaluating We’re we’re the to that a start data of major medical options the Phase be and XXXX. III end at

Phil Johnson

to very That you’d if here. the a minutes of early you ahead does Dave, bottom close the exhaust queue go like much. the hour thank call? Great, the few and before

David Ricks

all Eli faster margins, our products. Phil, thanks in earnings generated In revenue we XXXX, Company. participation by you. of new strong growth human growth. to and appreciate leading significantly to We and your call in Lilly pharmaceutical thanks driven improved Sure, even income your today’s and We interest

a and call contributions follow team him day. expect will have and our great XXXX, his you the on portfolio, we be capacity, continued investment of we expansion. didn’t prospects product As decade. I’d call. given if few his believe IR growth Have Please of our to see We That Lilly additional our thank Chris also address considerable growth compelling remains Today this of stock the to thank the top the bottom our we like current questions and efforts. into last strength concludes really the for up line the move - with significant pharmaceutical call. in years Ogden any the new over earnings to over balance products his today’s IR margin a last

Operator

will XX:XX replay you. and through this January XX, Thank Ladies be today gentlemen, after available for conference XXXX.

Those the and conference Teleconference conclude AT&T X-XXX-XXX-XXXX system Teleconference using participants access may You Service. participation are code replay the again your XXXXXX. for XXXXXX. time with AT&T any does Executive for Thank access you our entering for XXX-XXX-XXXX, code dialing access at X-XXX-XXX-XXXX XXX-XXX-XXXX. and numbers by International That dial today. and

now may disconnect. You

Eli Lilly and (LLY) 31 Jan 182017 Q4 Earnings call transcript