LLY - Earnings call transcript Q3 2018

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2018 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.

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

David A. Ricks

good for I'm Thank Eli you morning. Thank and you Chairman CEO. Company's XXXX Lilly's Lilly QX joining Earnings Ricks, Call. Dave and & for us

Lilly and Josh Jeff as the earnings calls, Enrique by Joining morning. our their Medicines; joined having Officer; joining and team. of of Conterno, team. also Substantive Bio quarterly Simmons Phil Elanco President Lilly the We're Chief the Investor President our and Diabetes their on Smiley, regarding Research and me President new own Johnson Skovronsky, call Elanco's first that Labs White, IR Dan Lilly Chief President directed Anne is outlook call Financial the Shaw, who earlier is Wright, today's Kevin not Oncology. for of Mike call on this to Lilly us questions now of should performance U.S.A.; time Relations be today, Suppar (X:XX), are Christi Dr. our the including Hern, Scientific note as and Kristina Lilly first of their Officer; is business the Please

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

be pipeline And decisions. our our It of Our those forms actual XX-K XX-Q number listed results and those SEC. a products is about sufficient not investment provide and not for it is could promotional. the we to for community. Information the is intended in including differ latest prescribing our materially benefit at on factors, and of due to outlined slide X filed the

EPS quarter and in of XXXX We operating and of growth continued revenue non-GAAP XX%. income X% of our with a non-GAAP performance third XX% growth strong

Taltz, quarter, pharmaceutical to Trulicity, the products, growth, be of continue the Pharma XX% in led which our by Verzenio. human and worldwide New driver of revenue represent now

diabetes volume New XX% growth growth, products Pharma XX% by highlighted U.S. and volume volume-based continue growth. strong the the to drive

We margins quarter. this continue our to expand

Excluding diabetes and Rapid superiority X demonstrated broad of for reduction Type this revenue important These REWIND gross percent Ultra X inventory on patients, adverse with of And X basis announced the yesterday points of Phase sold, is people called percent a major by of are of a cardiovascular the people progress in of of by and the precedent approval now higher for significant a increased XXX events income millions Emgality readout positive range And XXXX. a Type for across positive results with increased FX GIP/GLP, X X with Lispro Trulicity to revenue and CV U.S., in basis non-GAAP XXX U.S., made effect the over in submission in the readouts as opinion operating QX points risk international nearly positive which that the who non-GAAP margin in for trial. pipeline as in We Type setting disease. of as over as in quarter, X Type the the diabetes. we diabetes including XX.X%. well launch diabetes Europe, a the Phase X lasmiditan a Emgality Type for tirzepatide, face CHMP

as with simply XXXX. for plan data a diabetes. Trulicity's submit These the and data people these will authorities ADA further at data, delivered, to validate efficacy, powerful present regulatory proven option detailed We to well-established with in along extensive Trulicity

GLP-X connection transferred Health with business Elanco the for announced in to business that We majority as capital, Elanco debt a oral billion Health public Elanco cancer purchased development development and a Pharmaceuticals, of Animal IPO. In and collaboration we And novel transactions, of consideration in billion million vast of was the including capital discovery and Inc., which we raised Through partial licensing an utilizing of NextCure their agonist; via Pharmaceuticals associated for the a on publicly-traded $XXX immuno-oncology the became technology research offering, to a a with RNAi repurchased offering. several Animal terms therapies; licensing stock. agreement platform; the with which Lilly $X Dicerna over collaboration initial We Lilly IPO priority focused $X company via dividend. provided and deployment, a returned review nearly Chugai well-received the voucher.

and since slides key call. our on more X Moving you'll on events July see to earnings detail X,

and to XXXX. review Now for provide the financial over call on I'll turn results update an to our Josh guidance to QX our

Joshua L. Smiley

X our trends Thanks, Dave, in on slide and measures and our results. non-GAAP non-GAAP into our of provides our morning. focus good Slide measures, summary insights underlying results comments adjusted I'll business. to X GAAP presentation while the GAAP a provide of summarizes my

to So the please press release of earnings third results. a for detailed today's in changes our quarter refer year-on-year description GAAP

increased increase Looking revenue the measures percent at revenue the slide mentioned non-GAAP X% you'll to earlier. on a XX.X%. of see of Gross Dave margin as X, that

over this was income operating quarter. structure. Dave inventory XXX R&D a of for actions revenue. the mix, of increased foreign on Total international to FX on from points operating a excluding And XX.X%, points selling at expense gross effect Other revenues, percent of last XXX to as basis our the benefiting percent our the favorable year's announced quarter. Excluding compared XXXX, XX.X% last points, earlier, million of income remained $XX.X quarter. by inventory compared income on to partially Operating our XXX extent, taken increased manufacturing versus by of X%, XX% to price an marketing, Total offset expense lesser impact revenue and $XX.X of administrative sold, sold, a and, declined expense cost of quarter, company's increasing effect efficiencies as operating impact XXXX improvement of income rates to roughly expense reduce QX was the negative mentioned XX.X% to put the as driven basis X%, expense relatively international margin QX revenue which and exchange compared of increased expense with year's previously the basis operating nearly of margins in while primarily million product flat.

basis non-GAAP carefully from XX was while growth provides by XX decrease quarter. again for a We our the increased digit earnings measures profitability per details revenue a points expenses, this with share Slide impact of these last and net improving reconciliation between slightly growth, single same shares earnings XXX same repurchases. significant quarter XX.X%, delivering this reduction rate a slide driven to achieved outstanding managing due bottom XX%, the At while the reform. by significantly date, operating tax increased high non-GAAP line, share Our year September tax faster EPS. in while reported of income primarily to U.S. year, XX%, compared at

XX. will adjustments You find slides XX on these details and additional on

slide to Moving XX.

at the volume rate look a and take revenue effect price growth. on of Let's

quarter, foreign had modest on This exchange a effect revenue.

partially performance Trulicity, the geography. X%, volume in quarter XX%, XX%, by Our driven in delivered XX% each volume Pharma increased volume, Pharma revenue offset QX worldwide was represented growth Taltz Verzenio, a Basaglar, revenue a by seventh U.S. straight major of price. growth led by growth basis by increase impressive offset price. partially on and driven our human business by

growth this our diabetes environment. business we growth through as evolving quarter. U.S. strategy based an grow Dave delivered our is again earlier, volume As This yet critical volume U.S. performance affirms mentioned XX% pricing

corresponding price X% new quarter. of have the in Medicare for and which quarter. year's D, decline was we didn't last points price Nearly U.S. declined You this in by driven access will U.S. Basaglar volume Part see X

net Humalog, late we also We and affordability this access patient and across of estimates year effect also increases last which programs have Taltz took of for decline the and discounts rebates approximately drove of increases offset associated and year. by The impact points point volumes. with segments, of X partially remaining to to the in is changes our price decline increased early

the volume Europe, largely by achieved driven Pharma loss for to was revenue Cialis. Moving by X%, grew of exclusivity This offset growth price. despite volume,

the effect Cialis significant Cymbalta. QX. impact XX%. growth volume price with revenue growth Trulicity, Taltz, X%, also price from driven than and Taltz, with In LOE, from Japan, biannual by volume which contribution namely was new This Volume was by took led Olumiant, in growth Jardiance, Excluding and the Pharma the a offset of products, Jardiance. decreased Trulicity, coming by the robust cuts, of Lartruvo, volume grew more Olumiant, impact over

on namely Trulicity, products, revenue volume of Basaglar, rest world Pharma the this new growth the and Jardiance, strong as Taltz, in basis performance quarter, from XX% Lartruvo, a from increased Our Cyramza, volume growth by as Humalog. well led

same higher and Swine, Turning to control X% Elanco information which of Disease that sales partially are being Higher IPO. and worldwide Total exited, XX outlines quarter, our basis Companion Slide and by this has a lower products were grew year-to-date by including prices Companion driven volume. higher sales Lilly performance Animal September products the after retained Animal Ruminants Health. Therapeutics Prevention, results. offset for Animal of the this products on of revenue

at drivers Taltz, our of volume Verzenio, a the of including take volume the our engine XX% worldwide Olumiant, Now and were Trulicity, let's our In growth XX. products, Jardiance, on slide Basaglar, Lartruvo, new Cyramza total, look worldwide growth.

billion XX.X versions drag volume this Effient, this that revenue. and volume market, quarter, represented our accounted of exclusivity our updates. erosion Cialis of human Cymbalta of $X.X the of end the the Axiron, of decline. of U.S. basis XXX Slide result rapid view robust of quarter. points of In Zyprexa, excluding expected generated Strattera, loss of worldwide rest basis volume can decade. new which had At quarterly is LOEs our provided for volume see brands product XXX of total of You products revenue approximately XX%. sales. generic our a points Pharmaceutical September, entered and Evista, representing in in XX% and while for points, drove provides total, a Cialis The XX of these percentage to Cialis, This nearly this XX% When Pharma growth these performance revenue products our growth growth strongest volume

launches a submission Emgality and leg growth an fourth forward pain story, Lilly we immunology, oncology, and adding our With and the diabetes, demonstrating launch that product recent of look new is to franchise. to joining lasmiditan, the innovative building in also of

with XX. quarter, positive Moving minimal a FX with revenue non-GAAP slide statement our negative explanations, impact on relatively and on earnings. effective income small Continuing on impact the a this had a impact to our small

per our out over narrowing operational we're to performance. share guidance range decreasing this XXXX guidance see billion; of note $X.X our XX, backing XX%, our guidance to which you of the on $XX.X from We're we've noncontrolling from range to midpoint impact narrowing the been negative $X.X and tax billion for continued $X.XX to issued recently At rate for primarily represents reflect the prior XXXX. our that range financial XX% strong to in to and $X.XX. due of our narrowing U.S. interest billion the slide reform; $XX.X updated profits I the $X.XX included fourth non-GAAP a non-GAAP portion would tax to raising that to the Turning revenue SG&A to XX% had quarter, assumes will to on billion; of expense range, increase to range earnings guidance. EPS not the revised $X.XX an this Elanco in elements

quarter updated between and which Our EPS $X.XX, consensus. $X.XX of fourth guidance implies current non-GAAP exceeds

gains cash be full total, our products, achieve and strong investments transaction, This which we expect for competition our performance our the along share third late targeted in Olumiant, EPS range lower it now in well in stage However, Emgality; than In due capital to that our of I per Elanco are allows U.S. investments us which led raised support year the quarter interest to late quarter a the mirikizumab, $X.XX allocation new Cialis positions for capital On financial as higher robust to including mentioned R&D the GIP/GLP; earlier. additional for finally deploying is strong from well $X.XX expenses portfolio and flow, to $X.XX] to generic Elanco Taltz to our with basis, priorities. is the to (XX:XX). [$X.XX volume fourth September; entry we as XXXX the in thoughtfully attributed performance, investment, for in of reported by long-term across NILEX, launch objectives. pegilodecakin earnings expected and minority XXXX (sic) and and provides

launches, move lifecycle we As with in we prioritize our and our continue funding will our in to forward replenishing existing products, new line opportunities, pipeline. strategy, marketed

business prospects, future addition, saw to as pipeline In our leverage we to development of you upgrade announcements recent several growth continue and deals. with development business

excess and return we'll to via the increases to dividend buybacks. cash Finally, shareholders share

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

David A. Ricks

Thanks, Josh.

lasmiditan. the In I shows Emgality as mentioned October the Slide So XX positive the pipeline the call, select quarter of opportunities beginning of of my for XX. movements and at summary

our from the the since X/X X. On provide combo earnings note, line an the we X. alopecia of the in of of call a Phase study a Olumiant Phase movements are Please for expected study a as arm indication X; the adaptive NXpG and in cancer XXXX. attrition areata; includes, Phase studying NXpG attrition last in start events still of and Phase Additional BACE for Phase slide from on X key plus Olumiant second the lupus; update bladder Cyramza's XX, we start monotherapy for ongoing

In the addition regulatory authorities to see added will of the to for already submit pipeline to year. by movement we've I reflect to expectation regulatory have you our actions axial and line Taltz a the spondyloarthritis that new end noted,

Under X submissions, our publications section, for added that has line to designation second of reflect new liver Emgality FDA to cluster submission indication cancer. EASD Tradjenta you breakthrough China Under reflect the diabetes data new Boehringer see the this Japan approval to and studies of as will submit regulatory the granted a end. for Phase presentations CARMELINA outcome see for indication the Cyramza the Europe we of and we've the Ingelheim. in with the X empagliflozin, Europe In presentations and action, in Japan and Elunate. at study In the you'll collaboration in trade of type see as by X fruquintinib indication. the EASE in for well plans approval in CV year Verzenio for line addition, in headache you'll and regulatory name And a Verzenios the under I

and X the for ixekizumab. Phase section, disclosure This Trulicity And In of the addition axial line spondyloarthritis top Lispro, addition Rapid in COAST-W our in presentations positive to COAST-V contributing at studies the advancement ACR for readouts to for we Ultra X agent. earlier, productive quarter, readout to was Phase pipeline tau data Phase in which XXXX. imaging X another and I flortaucipir, also mentioned continued had a

to go performance continued made in operating newest the we me Before delivering briefly we revenue and QX, this progress we Q&A by driven growth products. XX% growth, up strong our the volume let quarter. In sum XXXX, section, our X%

earlier, this As the was our growth Pharma Josh strongest decade. volume stated

realize operating efficiencies points, to significant of cost continue to XXX our exchange of inventory sold. We expansion in basis international leading margin the excluding impact over foreign structure, on

product exciting type of type with the launch migraine major for quarter for The as presentation X excellent reduction broad approval our in our data for U.S., REWIND new FDA made submission the lasmiditan setting a the events across progress positive is launch pipeline this X news II the have We tirzepatide this trial. Emgality adverse well: and cardiovascular Lispro; since range and for that Trulicity the in demonstrated superiority of patients Ultra Rapid precedent Phase of XXXX; in diabetes; XXth acute Phase II migraine; diabetes in yesterday's of people of in data just

Elanco oral early our development phase IPO several completing Phil And turn with I'll We of addition and the an moderate Q&A completed the We GLP-X, shareholders dividend call bolstered business other repurchases. while over and concludes pipeline also via to deals. remarks. returned This the billion session. to $X.X now share prepared to the our

Philip Johnson

Thank Great. you, Dave.

with at in had Also, recent issues limit single exhausted two call prior in session, we full many on side conclude intend you fact so minutes to and possible calls given calls, we we As a do not parts. to XX our the the that take XX:XX. two some ask scheduling scheduled, question like would have to that we today's we do or during questions Q&A the your questions as as

the ready if instructions session. Q&A could And you So the we're for caller. for provide then with Lola, first the that,

Operator

Certainly. Chris to the we'll Schott with of line first go And JPMorgan.

Chris Schott

much questions. for Thanks My on Great. was results. so first the one REWIND

diabetes strong prepared prior issues touched I outcome this results. summer. in to setting. of there the patients of kind think first the expectations those speak in was healthier know much. try just as question, you Can any one-time on next this few color remarks. But after think we bit a below balance of Thanks coming terms you a color My I any sharing think provide, about half bit talk precedent get referred GLP-X we a you're affected in longer to versus XQ, additional progs any context of you very in you that we second had I or little the them in CV results? study. data about As to can portfolio quarter's as about, Humalog follow-up results of, so studies? But that full kind some Basaglar,

Philip Johnson

you. for you for Thank both Chris. those Enrique, the are Great. questions,

Enrique A. Conterno

setting of the precedent Type of cardiovascular diabetes, majority good. longest X It REWIND but – and low also without is disease. indeed a baseline a X.X. five AXC with It the over follow-up, median trial. Very years, included patients without had

the can think at stage share is I what we on press this really what's release.

diabetes portfolio, growth XX% more We sharing see volume it it on a XXXX. did at Related to year. decline Basaglar comes in to first, indication. we next our the on vis-a-vis to We for portfolio. be intend the diabetes we're ADA very presentation Humalog Clearly new submit information detailed price to the XXXX REWIND QX comes will think not of overall do until pleased intended a Humalog, I overall and with when when

erosion basis, this, That's that Just impacted It points the product is another it look a Patient portfolio. I to year-to-date X lot to trend think maybe to when on at we we a of provide on property a do price. favorable basically are mix digit gained on at to did year. provide mid-single are is basis. a Part And The (XX:XX) adjustment Maybe a more yes, this last year-to-date as instructed, X to different, and and in comparator a try little see we And be unfavorable access of in then we a points. this volatility we quarter. we better that's seeing the had that with year's affordability look slightly XX. a that on any more that have is Basaglar little in color on access segment first about see Basaglar not in Humalog. dynamics D, insulin

we look segment rebated. a are So on price. highly the compare, basically at on we that that And when comparing has an impact is

the price look we when XXXX versus for see is of year Now some year. you there not XXXX on at of magnitude QX QX but that erosion Basaglar, same

Philip Johnson

for go to if you the the Lola, please. we thank caller, next answers. can Enrique, Great.

Operator

Certainly. go Wolfe Research. line And next, of we'll Anderson with to the Tim

Timothy Minton Anderson

Thank you spending can of very giving talk and December, out tailwinds side call headwinds? much. official can guidance won't you but the ahead revenue you A both questions. at least you and XXXX, until couple hoping official there are of trends on be maybe some that that I about know guidance.

spend, example, obviously program. GIP/GLP-X your I eight be on LOE. be going for you're trials – So R&D think will to is Cialis about starting Phase If X

So on then would any second category. XXXX And question color on a be insulin appreciated.

some interchangeable occur? if then to as as And is you deem more biosimilar than that when? happens as point, XXXX? not substitutable could not may brand. XXXX, likely FDA and And insulins with So Do this think soon be at that something

Philip Johnson

Josh? first and on if voice good headwinds. the had the back. to question hear Welcome And question on XXXX interchangeability Great. then, Enrique, answer Tim, you for tailwinds insulins. again. Josh, the your would Tim

Joshua L. Smiley

Tim. the Yes. question. to started answer Thanks, you And

as experience the that tailwinds quarter headwind – we main the here the overhang in in will U.S. main the erosion think I the Cialis is fourth see XXXX, we'll in or the

great since So in we're head growth in we've That medicines a new launch as that XXXX. being XX certainly said, the seeing XXXX. will we headwind be

the products expect for more compensate we those we've will we'd many to from of So said tailwinds than the see. that volume

compare. a see will we difficult So

the line The of in change on will donut other we've D, top the thing move in XX%. to about talked a terms be the Medicare provision Part XX% in from the that headwind hole

strongly. in are diabetes As got Basaglar that we've Enrique segment mentioned, in products, our

will growth headwind think I components a expect that But and of that we'll XXXX. continue into saw quarter pleased main volume we of bit little see that there. with a the we're So the this really

very ahead of R&D us. set robust the side, X opportunities Phase have On of we a do

which starting mirikizumab tirzepatide, mentioned You In X. broad that mid-XXXX. in will into got Phase we've be we a sense moved

there, have expensive, continue expect are we'll As IL-XX, given that, in those you know, ARMO there. push data we'll the so program. XXXX. And to see our that we'd cost positive a on to And asset, trials then data

investments expect there. targeted and growth make see should we'll R&D to So some in

about I been to prospects base expansion on all, total clear that products manage growth have. level. think line and of XXXX compound new our a and big component which the Emgality think that will compound XXXX Forteo well launch flat midterm, are investments But midterm we'd next we Cialis X% operating that annual, Certainly, margin XXXX. we've meet year. We're X% XXXX pretty we our annual we'll redirect margin launch to to pretty be are in competitively of and track and resources look sales have and at and minimum opportunities to like between a XXXX for SG&A like the products operating in the All others we on to excited spend we'll XX%. objectives, our minimum

we we good about feel are So there. where

Philip Johnson

Thank Josh. Great. Enrique? you,

Enrique A. Conterno

to require away. believe the to And appropriate it's such imminent. is a years comes designation. provide few it the it the a pharmacy not FDA level, at likely will studies At insulin do When best, we interchangeability for this

Philip Johnson

next you, Thank Great. caller, Lola, please? Enrique.

Operator

Certainly.

will to Next Bank Gerberry we of Shall America. Mr. with line go Jason Gerberry? on? of move

Philip Johnson

slot then reconnect? put if if next Jason Yes, able he's could. And you you. into the Thank maybe to

Operator

next with And we'll Certainly. of Andrew the line Baum go to Citi.

Andrew S. Baum

upon net thanks. price the to may and reducing a on the patients a the Tier than at brand X be questions increasing within current in Many for And world second Jardiance Jardiance which especially? Thank could Enrique, particular, in whether penetration the of helpful Could to Whether usage? pricing, a for potentially education? ground broader it's of net rather the formulary you you. burden talk And be you preparing us? by Medicare Reimbursement price copay? seems status that, list prohibiting then please. outline barriers related to for Couple

Philip Johnson

X If I address them, you questions. ways of business. that, the Andrew, you face and status brand that opportunity a in thank some Tier to for Medicare, that see Okay. Enrique, usage book would the be barriers for formulary Jardiance and patients change and maybe of got first, issues second potentially to the that to

Enrique A. Conterno

to by to see dynamics answer I question, going of that I'm color Andrew, a a that because and maybe just try I particular. we when Jardiance, are I Jardiance on But there overall very of Yeah. are class some do how positive bit see number see barriers. look at the in

new in XX% reminds of that – of growth the range. see XX%, patient We clearly single things reacceleration look are overall the the of a digits, the high when importantly, accelerate. developing? GLP-X bit that we evolving digits. growing First, we right patient And at class now But is, new and class Trulicity seeing in starts more is in class It single the the launched. one starts was how the now is me back

and are that important those tailwind. EASD. And ADA improved an there guidelines access going be think helpful. for very that's to finally, have We Jardiance. Importantly, guidelines improvement. And new by That's published been both significant have we a are

know, you excluded major the of were one accounts. As from we

of X. starting coverage, important of the it be We for January now to XXs. is And are January in access that's a back in Jardiance. to going as When very XXXX comes

opportunity the in excellent relevant So SGLTXs, that an we additional basically to us on. have for capitalize emphasized GLP-X for but that's it's I class, foundation is which additional now, an And point, class. the Jardiance when confirming of those it that are that. from capitalize from to best competitors. benefits importantly, data investments And to the competitors is in the comes CV on

the lot And hopeful are for to signs dynamics a growth an the be to the see ability and that. acceleration about Jardiance capitalize of I So on evolution. and there of overall

full Medicare, with whether I that's Honestly, Clearly, opportunities on we that. are we it. to are the Jardiance do asked much You as new you to issue these and Jardiance. for second to – the be implied understand But care be about going offer when not we to and a for ensure helpful comes continuing patients. – launching of about use can think focused assess where health your would it more that brands. all that guidelines And the our professionals I they educate to Jardiance always see brand extremely question benefit

Philip Johnson

Great. Thank Enrique. to next caller, please? you, Lola, go the we if can

Operator

Certainly. America. line next And Gerberry Jason Bank of to the with we'll go of

Jason M. Gerberry

guys me? you hear Hi. Can

Philip Johnson

certainly Yes. can. We

Jason M. Gerberry

Great.

on as do with access Sorry of we into you then terms [Novo obviously these there about on data Novo's about with with is that to you some launching? leading oral as competitor to GIP/GLP? the market can already Nordisk's] the on just you been it the product in with going [semaglutide], second here, first little think relative With position do product GLP-X, the Yeah, challenges sema outlook Can question. agents? And And has few market talk as talk in bit oral think Taltz. HUMIRA, especially about some you believe a interleukin question dosing. my about what great are that next of hope to pertains accomplish And new that any which that. you these the years a markets, confers advantage

can go, looking for So what of you're in profile? no-go talk about terms of sort you

Philip Johnson

Great, Jason. Thank you for the questions.

on Taltz outlook GLP-X if the oral take And you, goals Dan, program. Christi, to So, going you'll for forward. then question for over our the

Christi Shaw

Sure.

also going that dermatology starting just significant. we excited in just Dave will in American year just we year I And this we Taltz. office. saw arthritis, continuing of probably the end I We ankylosing And Taltz. College of growth mean coming Rheumatology, that specifically, the was grow year. over well. quarter, with our And position launch off a year-over-year which launched great the rheumatology our which before the mean data our the same. very year, as we're And to have grew of the TRx we're in So volume is submit over office psoriatic you with with spondylitis, said. the XX% demonstrated

And little prevented So bit see, the from same about in of that as unfortunately, access But up access. with hasn't that, would on rheumatology we're less like – Taltz. Optum this choose from customers Taltz a from. now, we're the seeing Taltz many your who And growth in looking beginning of [OptumRx] And to and see due therapies different about future. need and patients winning well. the Right different point as can as we to the change through it variety getting mechanisms the a as marketplace, cycle you us is in that to dermatology, therapies. year. our we're what they Because patients COSENTYX, is of continuing in beefing the in

look at entire have be able our JAK the looking inhibitor, our the coming patients, portfolio agents. advent and So those broad and a to newer we payers those to of IL-XX we're to the broaden customers, provide portfolio with newer agents to access of IL-XX, you that and out

Philip Johnson

Great. Thanks, Christi, Dan?

Daniel M. Skovronsky

you important GLP-X for a oral Chugai pre-Phase thank this question but there with moving agonist. the our a on partnership comment quickly receptor on towards This An X still human that agonist. non-peptidic molecule, Yeah, this trials. is is is

from is molecule oral peptide. of you this a This – this differently approach. think So an is small very should

of We on dosed translate better practice. peptide be also hope would But in in much the As does when outcomes. – testing bioavailability that and improved this is will humans mean the ultimately, in patients? – see into should this a expect approach. terms translate experience, people higher trials, into such, certainly that kind that have will and we how molecule than and for a you for it be of for oral any to what What we'll

forward early, about still getting the but it's And look we're some very potential excited human to data. So here.

Jason M. Gerberry

Great. Thank you.

Philip Johnson

next you, Thank Lola, please? caller, Dan.

Operator

Barclays. line of Certainly. And with Geoff go next we'll the to Meacham

Olivia Brayer

Thanks This guys. Brayer question. for Geoff. taking is the Olivia Hey, on for

Just two me. from

Can you provide We SURPASS your on yesterday Phase updates us that the X dual-receptor to was with on that is question agonist. X noticed any trial? First posted ct.gov.

So the on REWIND. you've to what we of another the design you about? you talked that enrollment was point And improve can expectations that is Phase any tolerability timelines? previously study to just steps last saw second course, on completed taken X? And curious question there how Phase that the that then influenced by Just overall titration And in month. recently X

on is change the treatment much. view Any Thanks GLP-X incremental on your Just the paradigm? might overall thoughts class the And the how here. so what curious opportunity on on be? impact it what might

Philip Johnson

Thank Great. questions. you the for

we'll those. you maybe have Enrique, attack So,

or would Phase learned tirzepatide, we program, the with how titration, And the So you any in enrollment on timing. market. Phase and one GLP-X with on done that then forward are our being GIP/GLP out things comments things X have first going X for REWIND playing see then

Enrique A. Conterno

Yeah.

Phase maintenance to So study shared mg. planning as as at are program, X, XX part three tirzepatide's and we XX of doses X we've

increments smaller is I we've should that think time. over what we titrate in and learned

As optimal we've a what year. study are have next to the in But the intend from titration that titration we share we clearly study schedules. terms of shared, a details the lot we've learned

when enrollment. are planning and aggressively starting trial We it starting to comes this

comes hearing our when be X to you'll Type it more trial So for diabetes soon.

shown when what and as GLP-Xs other that far that But is to I speculate for class this Novo the in cannot it confirms comes heard want same, get. will resist, As REWIND, we call. also have benefit. to not think them. it we indication the don't clearly, sorry, agree And, on particular I important were the seeing I that but mentioned they with And I GLP-Xs all Nordisk's I'm

Philip Johnson

Thank Enrique. you,

caller? to the we next if can Lola, go So,

Operator

Yes. And line go Scala the next Steve with we'll Cowen. of to

Steve Scala

I have you. couple a Thank questions.

gaining there question. this price So Basaglar, the mentioned But gain a You Taltz, access that's Humalog. increase? from volume one-time the was reflected U.S. volume U.S. for hit XX% in the from first and

precedent of setting precedent because SUSTAIN studied? big than of mean leader less you Or to because is population second optimal a REWIND. in both? perhaps Or statement. X? the The avoided go is to questions setting outcomes is precedent question the REWIND Novo's the I it setting on back Is have

all the to of guess we any in accomplish. you I to assume you. hit have primary components absence which color, the is not able three something Novo was So of Thank endpoint,

Philip Johnson

Steve. you the Great, for questions. Thank

by U.S. if the precedent Enrique, Josh, that we offsets mean REWIND. for you'll then, take was there gaining. the So, And on on if also setting price, there volumes what in comment we're

Joshua L. Smiley

which Basaglar growth. Thanks, I mentioned was Yes, at significant this that both you And decade. in we've if the seen grew the the most quarter absolutely volume Steve. that to for third contributed Dave at U.S., XX%, volume it growth look and

we around Part all the mentioned contributing and that XX% that access So as growth, Medicare D in patient got other new we to are launches. is the elements the access the of

And with in grew you business growth, can see is a it at offset total, the even positive negative-X% So that overall. there. U.S. XX%

Philip Johnson

Great. Josh. Thanks,

Joshua L. Smiley

Yeah.

Philip Johnson

Enrique?

Enrique A. Conterno

discussed part follow-up disease. detailed next of be AXC cardiovascular patients a low year. has when mentioned areas as sharing longest is precedent first setting We'll the results question, and I It REWIND median baseline. As I it of the ADA the at first the it without some because includes

Philip Johnson

Great. caller? Thank you, next Enrique. Lola,

Operator

Next with Umer we'll line Evercore. of the go to Raffat

Umer Raffat

taking for much so questions. my Thanks Hi.

activity I on your monotherapy randomized are running maybe oncology trials and IL-XX in But decent you're lung noticed in First, have you renal cell the pancreatic. for setting. the side, the

thought the XXXX. just And those Is process the that first consideration? there. are lung wanted half a So open-label also trials to that in confidence your out on I get coming

do adjusted clinically at trial into NGF definitely trial. the efficacy this on And replacements this you. the that latest the question on like adjusted Thank readout. latest And seems being look efficacy Second, as thoughts joint meaningful? you it faded is, from your placebo on also my placebo just current

Philip Johnson

Thank Umer. the questions. Great, you for

Dan, So, efficacy our safety trial and those we NGF. think about development what And initial the findings on results IL-XX. the that's for go then for for any readout to also from strategy you the we'll the

Daniel M. Skovronsky

thanks, questions. for good Yeah, Umer, those

the So pegilodecakin starting with at IL-XX.

forward and pancreas. cancer. trial X that that mentioned The non-small there As studies that's in you in seeing look at data in FOLFOX. excited combination Phase the about you cell point Phase out, X randomized two We're lung randomized ongoing are with trials is to

first combination setting, one in that patients. the opportunity. line the low PD-LX trials our line starting We're is second setting in those to will PD-LX which the the data absolutely setting see both first from is second The I/O. with inform in progress high excited And in one in year, in next

Phase that years, right had molecule setting. of this is the back there for of X the that you're part in monotherapy which activity and basis As that monotherapy the study, we was exciting, early RCC, the active in

I our is. that working think indications, other of we're indication in still what plan terms and through

Some day. to share of already the with With in data that respect for we depend more be the a we We total as to of joint about get of had these full respect both couple question on have. to data development plans you think our efficacy at that there tanezumab, able molecule I will you and December as that on well to our trials, that replacements. R&D the with hope next safety

it's hard efficacy, make cross-trial comparisons. the to On

resistant, where the as molecule And say population, than be. potential the We efficacy the efficacy is those drove small comparable efficacy to expect we the more population can in different would this more data this before expect. there this trial. of excited fully on course, trial. severe course joint Maybe to don't differences we think, studies. perspective. trial small prior results them from of Still, this in coming. a we're was would replacement, in a really, question forward is the treatment in looks what the quite are total that's full Of So balance, study. And is, to some we from an I we said small we all But a the placebo that look group all, to what But I about The safety understand imbalance imbalance. adequately discharge risk? an

of I total the number period, noticed these the than replacements. follow-up we about was events think that occurred factors in on-treatment imbalance there the were in joint of that period. One a most rather

adverse were patients enrollment. not associated at that general, most any finding in these the or – adjudication. and was Another joint in it It cases, their observation joints, it was in most in who events in any index were not the with was event generally severe is

partners, readout that on next we when big year, Pfizer, will of for get large be So we'll study. keep course, our eye the XX-week that. And us our with

Philip Johnson

Dan. go the to Lola, if can we you, caller. Thank next Great.

Operator

Certainly. And Arfaei Capital. with it's Alex next BMO

Alex Arfaei

you. positive congratulations on a REWIND And Thank Great. readout.

REWIND, results. on a XXXX Enrique, the to First time long like June for seems wait

plan mentioned file indication You to you XXXX. the in

should Then new slowed a to questions of when down Trulicity we have on expected. So seems a to than Verzenio, please. have I The label? we see more market expect couple

we which market? the overall give could you moved year And thoughts by up You're but if clinicaltrials.gov. one what's your us is wondering with share, you on for on going there? study the noticed Just adjuvant the timeline great, gaining

wondering about is Just the or expected benefits? Or very changed expectations of much. based your you trial? if about, it on study Thank the powering just you the anything

Philip Johnson

Thank for Great. you the questions, Alex.

we're growth on for change timing on you'd Anne, in update potential the market and Enrique, for adjuvant REWIND, seeing the And CDKX/X So the for a you. for timing then, with what label handle Enrique? study. clinicaltrials.gov if to class

Enrique A. Conterno

a a planning to standard indication XXXX are under Well, and we an in clearly, review. pursue submission

We label at a XXXX. be looking will update in

we data working can be possible. we are expedite to course, to to as as we won't share the fast working Of be able that with authorities. much as ADA. as the REWIND And we'll prior try to regulatory Unfortunately,

Philip Johnson

Anne? Enrique. you, Thank Great.

Anne E. White

growth the Great. others commented. question as the some class we have the in Well, for thanks the on CDKX/X slowing in yes, market, have And, of Verzenio. seen

as particularly However, class still they physicians we potential Verzenio. and do growth, this trial more as see trial

So to specific with And as its by continue a encouraged you are mentioned, couple we be factors. teens. we in our And pleased NBRx rate of growth. the high is

with experience. what good to trial continue And that with we seems is becoming really physicians Verzenio trial do on so resonate prescribe to again, have as that first, poorer adopters. And characteristics, with Verzenio, concerning it the Verzenio. they when to seeing a particularly fact clinical is U.S., So likely drive certain we're indicate physicians well patients what that in a prognosis, the they're

So a bone. visceral that's patients with these are or the not confined high metastases, disease, liver grade, tumor cancer to

and be fact that about Europe. shortly. in publishing that we've enthusiastic the we'll additional also We're data very so received Japan approval And

work, drivers. your our HERX OS population, readouts those markets see as opportunity potential And enrolling importantly, the readout do see breast the growth the breast said, market, what is seeing related than then in from XX% in as positive then study. question the you significant in we're we MONARCH adjuvant well. broader X adjuvant very very following specifically, enrolled. is It's around we study adjuvant, And third, that more On So cancer. cancer future

So we're quite encouraged timeline. by that

twice cancer is market, And the expect look that adjuvant of as we XXXX. do breast really because market. size the you results know, metastatic forward we So to really in

So for opportunity growth a in the future. significant Lilly

Philip Johnson

caller. Great. Thank to if we can Lola, go next you, Anne. the

Operator

Certainly.

David with be Risinger? Morgan Mr. will Risinger Stanley. Next

David R. Risinger

Yeah.

Can on Sorry. mute. me hear was you I now?

Philip Johnson

Yes, Dave. can. We

David R. Risinger

Okay. Great.

be outlook and strong. XXXX could questions continue pricing? on list First, growth for that very comment been So quick Lilly's you assumptions? has price XXXX? set the in volume But in have to third, please XXXX? you to to exposure up step fill the Thanks very is three co-pay hole your accumulators much. a to your exposure planning And in in in your Second, growth donut on

Philip Johnson

the for expectations moving on you Thank questions. price? Josh, Dave. to Great, answer like questions forward on if you'd those

Joshua L. Smiley

that assuming do So, and can for I pricing XXXX any our guidance the in we're for you year. we'll increases December, then. for Dave, this gave, not additional assumptions we'll we provide our tell XXXX guidance price

said In when where terms we provision, now. for million course exposure that – we're is $XXX impact And right And the in particularly portfolio, before specialty of here. significant it's comfortable a Forteo we're exposure of we've least piece, co-pay these to accumulators Taltz about that of the look in our now, drugs, and there for not at XXXX. we donut incremental impact then hole the change on across the are

David A. Ricks

of the a analysts in out-of-pocket single-digit costs of for and Taltz, on specialty exposed I've patients notes us that. industry actions really that's industry affected. other commentators impacts on terms actions. to of And seen comment co-pay from segments, that, accumulators, is which with payer as roughly in different major are maybe follow these the not well net as actually Just product

a an not it's So overall of driver the issue, huge but it's picture.

Philip Johnson

Thank you. Great.

David R. Risinger

guys. you, Thank

Philip Johnson

Lola, the caller? Thanks, Dave. if go next can we to

Operator

Divan - it will Securities K. Thanks Suisse Vamil questions. Credit Suisse. Vamil taking for LLC And Hi. Great. with Certainly. (USA) be Divan Credit my

So U.S. uptake, few good the in European first in of sort market months uptake on Olumiant. on one limited like the pretty Looks the but still just

get other just So much and bit different maybe I maybe sort medications. still your about just And newer I less. little to market. U.S. but to a But – one sense one that that growth a the a I one, little a is And little I'm that access much. talk into keep about can little I'm for And it's longer-term Thanks asked how in that of interest we is of better a bit of of penetrated then the potential sort trying position better you the just think of a just in And market. more talk you bit. is about mean product get initial growing. maybe trying Obviously, product that slowing don't the on of think a sense Lartruvo. so product. to still there

Philip Johnson

you Great, Thank the Vamil. questions. for

terms in there. for to the to over and you'd like if what And market uptake what seeing you in the of talk Christi, Anne, then, So, here opportunity we're access physician about we're U.S. and seeing experience with Lartruvo

Christi Shaw

Sure.

for you question, So the thank Vamil.

in outside terms Olumiant, whole. the the prescription. EU as the start as actually suggested, been we for two quarters the in Europe Lilly In two-week September Japan, of I will And in the with were U.S. a growth growing on has just or fastest in you The last lifted Olumiant in of volume volume in

So restriction that we're lot is And the that U.S., we're a usage. now of getting uptake in significant seeing off.

physicians you from physicians, office is uptake. onset. In our see the feedback we're more really terms uptake, are on in what hearing their importantly, positive patients the so to of samples that giving But that the we of are having won't on speed

comfortable see key not is evolve of they symptom the and deliver. back patients efficacy launched, the onset Just like their we with significant. patients the for indications And U.S. come productive the get where back, of And to then other is but for the we've in RA, life. in in countries days it saw It's Europe really Olumiant us. continues well. XX as just so the which we physicians more truly really Olumiant. the feel to as helping early prescribing helps And obviously is them And relief, continue to those changing.

three Phase adaptive Phase for alopecia in areata. that have atopic lupus, We a dermatitis, study X we're in in and X/X recruiting studies, obviously,

of well, patients in So of unmet lot out we'll as looking significant Olumiant with high for uptake as readouts need. a those helping come be

Philip Johnson

Thank Christi. Great. Anne? you,

Anne E. White

Yes.

it launch. been are pleased has Lartruvo, So and on with uptake the we steadily increasing since

longer the actually well, it's Lartruvo you in and It (XX:XX) to live [ph] in a saw year that market helps a just the that dates, leader see excited So share dox passing first-line four were soft increase about a we've dox-eligible market. XX% leader alone. the in [doxorubicin-eligible] the we XX% patients, And has at Vamil, now only the over year quarter. And as decades U.S. the in this increase tissue in XX% patient had year dox to last compared it's medicine when XX% share. then is metastatic of this market focilfide sarcoma. as now market you a And know

we're top of refer leaders encouraged growth we're also particularly, in fairly accounts, And very seeing standard by as routinely strong. the that thought our to So fact care. it the is

have now In since fact, posted of XX% XXX sales Lartruvo. launch institutions of the top

still seeing are gaining in access. Europe and still We launch

we So growth think still obviously that there's market. in for potential

major of decisions focus is the made. in Our the lot really and key community driving excellence, are on awareness centers these in where treatment a of

So we bit it's of population. orphan quite growth disease an potential at I will a still do see acknowledge for though Lartruvo,

pleased one we're and that at yet. are a we so And potential growth good point penetration. see we We will still on how doing. don't see But see

Philip Johnson

Anne. can Thank if next please? Great. Lola, caller, to you, go the we

Operator

Louise Cantor with be will Chen It Fitzgerald. Yes.

Louise Chen

Hi. Thanks for my two taking questions.

approved mean relative you about opportunity could internal products injectable for market do have reduction? Thank entire the you? incremental do the or it you. first existing market to and of my talked on So products? historically out secondly, come what oral REWIND. from side? you Has risk more And kind landscape is then you think on it how for with grow and question share your will on injectable see playing this sales expectation And the And CGRPs, this three take met

Philip Johnson

thank Great. you questions. Louise, for the

CGRP So, you. REWIND on question, for Christi, Enrique, And then, please. on question another the

Enrique A. Conterno

This a Trulicity of broad positive On patients of the in showing diabetes. trial. is course. range with X Type superiority is expectations, a

Philip Johnson

Christi? Great. you. Thank

Christi Shaw

Yes.

think prescribed we've I've since the patients to I we unmet discussing don't seeing, thousands over So we with marketplace. the been preventive talked about a tens you as extremely now. of And year, received high migraine excited the are you're now I label. mean actually our of already being last need

of received really we're terms label differentiation. the happy with in we So our

We Headache have Society the able and presented data fast. positive the at unique outcome data XX%, the Also functional is American which migraine-free that just measures, for Emgality, we for And XXX% promote. in works XX%, is we're to our that Emgality label.

get how Our and And then where induction medication they it They dose, themselves. do teach quickly, get to patients they in so office actually then the they the it doctor's a autoinjector. go on. once the do can take them and it month

about Lastly, for that the other And very patients in therapy – is treatment differentiation approved cluster. in – had no suicide that the no headache population. we're we have got treatment breakthrough designation who excited

therapies oral initially. look class marketplace, our those compete preventive and being will right of now We compete. continuing we it coming the So in year, in a And to with like grow. the with as chances and we agents see competitive the able to next at agents are out that not different lasmiditan terms

have pain we we're to in preventative acute, and of continue entire migraine time. both the migraine a with think franchise So we're a out over we leader know in and it and will leader. we prove And

Philip Johnson

to the Thank Great. next can Christi. go we you, if caller? Lola,

Operator

Securities. the And line next Seamus Fernandez we'll with of Guggenheim go

Seamus Fernandez

for much very Thanks the question.

quite be when When the a of look seems looking the your holdbacks we the to much. understand class, should more about a so to GLP-X the opportunity the the just large it a at And So a love more Emgality Thanks talk relative the headache thinking look for specifically? firm Enrique, will cluster bit about? Is this what I help position? population bit up And internationally? you about be like the couple. Or would And in we're it be just an overall? at greater. growth I can classes, indication market international is know you at and would a other as for frankly, second, us that large Can see U.S. Or little then patient perhaps that opportunity new opportunity opportunity third sales you what are? class we to differentiate

Philip Johnson

hear take growth question for you thank welcome GLP-X then, on you as line. well. for opportunity international the And for and voice the back on if the class. to to Seamus, Good the the Christi, cluster you'll questions, Enrique, the Great. for your for Emgality. opportunity

Christi Shaw

Thank Seamus, you, the question. for

Emgality. the obviously And patients severe earlier, number it excited these said with although unmet the of is also think are high cluster. patients provide obviously your that the patients. cluster of part it's again who to second I population, efficacy is we're for we general privileged a less But As so such confirming than need it's that. significantly I to of moderate help for that to question, the And have migraine good

As I benefit. one XXX% in only which now stated before, XXX% that to of a be ever will significant in any Emgality able is and migraine one actually given has demonstrated halo with is efficacy efficacy, month. Emgality who we – of in efficacy, across the effect being coupled that relieve expect And migraines no showed cluster,

Philip Johnson

Great. Thank Enrique? you, Christi.

Enrique A. Conterno

of So The class. healthy the there the outside of GLP-X growth. the is class U.S. very is U.S., the for GLP-X markets, growing in just outside a in the like mid-XXs significant opportunity, in most so U.S.

significant of insulin at size we first as unique which, we basal market, being to basal know, injectables GLP-Xs choice, international Something markets we the the see prior the injectables look a of represents when the insulin. is opportunity, as

opportunity, that playing see we very So a out time. significant over but

Philip Johnson

caller, the go next Enrique. can Appreciate to Lola? you, it. Thank please, If we

Operator

It'll Cowen. Certainly. Steve be with Scala

Steve Scala

questions. couple A you. Thank

in Regarding dropping disease, early Alzheimer's great. the was the NXpG-plus BACE data

monotherapy this the monotherapy has the the first year. was thought restarted? that reason So But monotherapy what And continues. was product? was that's for So it I the discontinued Or the dropping question. mentioned earlier

year. not in I diabetes file the you. XXXX, had data? type you expectation been question Second insulin given for positive filing Why Thank X is this are that the you on an as would Jardiance. that adjunct think

Philip Johnson

Enrique, Steve. type Dan? Great, X we take questions. filing and to more like NXpG if to you and combo, And are the for NXpG question. BACE you'd with you'd Thank answer if the broadly. the like Dan, where then,

Daniel M. Skovronsky

Steve. Yeah, thanks,

Sorry for the confusion there.

does the dropped so inhibitors, field BACE various where So The BACE, of was with we've a we've factors. continue. NXpG on trial, what decision the these on drugs this NXpG across BACE was seen couple based arm see BACE the drop some a increased don't to of that some And rate increases events With did actually our as benefit. cognitive gave us we particular well cause as psychiatric brain adverse BACE rate increased on changes shrinkage. of have One in imaging, some pause, worsening. they inhibitor,

shows, continues And X great BACE that. So Phase combination plaque-clearing showing antibody, that and be which NXpG, designed beneficial you of and discontinue BACE, deep to in preclinical basis study. inhibition data, mice. to really of is a the think, clearance decision excited plaque NXpG brain, we're despite amyloid in the this to on I demonstrate was our rapid from however, as which about for the evidence efficacy. of said really is This

Philip Johnson

Great. Enrique? Thank you, Dan.

Enrique A. Conterno

studies, [Boehringer And regulatory control. Jardiance we we and able X, in glycemic across BI that we are we to can this to as Jardiance type we patient clearly, type On showed studied. of working saw as basically the Yes. And more time, Ingelheim] an At steps. EASE that in insulin on part level next this point be adjunct the with doses X all to shortly. with share of have hope additional

Philip Johnson

Lola, you, Thank next Enrique. please? caller,

Operator

no at queue. in this And one time, there's

Philip Johnson

then Fantastic. go to you'd if ahead Dave, the with like remarks. conclude and call final some

David A. Ricks

and appreciate call Great. in Phil. we Thanks, your & in interest your Lilly Well, earnings participation today's Eli Company.

through and our the in of profitability the continued for and execution highlights of XXXX towards progress confidence revenue nine XXXX. increasing first goals the the strong Our months delivery

Thanks look compellingly up more tirzepatide, pipeline the a Investor and outcome progress our pegilodecakin; opportunities underscores launch with study. the XX Hope have XXXX; everyone for XXXX. have We Please superiority call. mirikizumab since forward in. in Trulicity our beyond has great of providing pipeline on stage our Meeting. to on not growth progression, ambitious the team follow product including a if detailed during continued IR dialing December We again we you CV our and addressed questions REWIND opportunities seen new for update This have XXth day. for

Operator

today. that does Executive AT&T using participation your your And, conclude you ladies Teleconference. Thank conference and and for gentlemen, for

now disconnect. You may

David A. Ricks	Eli Lilly & Co.
Joshua L. Smiley	Eli Lilly & Co.
Philip Johnson	Eli Lilly & Co.
Enrique A. Conterno	Eli Lilly & Co.
Christi Shaw	Eli Lilly & Co.
Daniel M. Skovronsky	Eli Lilly & Co.
Anne E. White	Eli Lilly & Co.
Chris Schott	JPMorgan Securities LLC
Timothy Minton Anderson	Wolfe Research, LLC
Andrew S. Baum	Citigroup Global Markets Ltd.
Jason M. Gerberry	Bank of America Merrill Lynch
Olivia Brayer	Barclays Capital, Inc.
Steve Scala	Cowen & Co. LLC
Umer Raffat	Evercore Group LLC
Alex Arfaei	BMO Capital Markets (United States)
David R. Risinger	Morgan Stanley & Co. LLC
Vamil K. Divan	Credit Suisse Securities (NYSE:USA) LLC
Louise Chen	Cantor Fitzgerald Securities
Seamus Fernandez	Guggenheim Securities

Eli Lilly and (LLY) 6 Nov 182018 Q3 Earnings call transcript