LLY - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Lilly Q1 Earnings Conference Call.

At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, your conference call today is being recorded.

I’ll now turn the conference call over to your host, Vice President of Investor Relations, Kevin Hern. please. ahead, Go

Kevin Hern

you Company’s Thank Vice us Eli for of Good XXXX for earnings and QX Relations. Hern, call. Lilly Investor morning. joining I’m President Kevin

and are Joining Mike today’s Chief Mason, Bio-Medicines; Diabetes. Patrik Scientific President Lilly Officer; Dave Jonsson, CEO; White, Skovronsky, Josh Anne President Lilly Ricks, Dr. me of Dan Smiley, call and Lilly’s of on Officer; President Financial Chief Lilly Chairman Oncology; of

Relations team. also Czapar Investor We’re by of [ph] Sarah Mike and joined Smith the

General In like Senior who President of joined would healthcare Her legal addition, well prior a of working as joined and recently experiences a across number profession. the for and as with WellCare Anat Hakim I industry Watkins. Anat at Latham welcome to broadly and the & Counsel. Associate Lilly wealth Lardner, Vice as at Foley in Counsel Lilly & years more Counsel Abbott General experience of include Health Plans General

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

materially three, our could XX-Q with as of factors, duration any of the actual the including outlined results those Securities on the number a XX-K, Exchange X-Ks, and due effects listed slide pandemic, factors and to as extent other of COVID-XX latest well forms and in the filed Our and differ Commission.

be the The our to and is the and of benefit for community. sufficient information investment about is for is provide intended promotional we pipeline prescribing not It not products decisions.

from XXXX present prepared full as offer measures, on exclude commentary focus disposition share was financial will the transition during though X, which to our and exchange our contribution financial via on XXXX. As a remarks, January per the that reminder we complete earnings the non-GAAP Elanco

the turn comments. Now, for to opening call Dave some I’ll over

Dave Ricks

Thanks, Kevin.

all of and the importantly, as of for business millions affected way has the we us COVID-XX these people. way wellness most the we of times health live, the pandemic challenging conduct are Well, and

we’re as hopeful effective speed you, implement virus. then of COVID-XX distancing to all will decisions curb to to industry therapies to and enhance and our treat social urgently that Like of the prevent the to works spread market be the testing

Today’s structure call will a than normal. different have

impact results, discuss general on we actions our we’ve describe QX resulting business the to the the in we’ll and COVID-XX our is pandemic and of taken global having respond to crisis. Before the

patient by were benefit QX Our of a very supply from negative fundamentals is result as future. the benefit, Despite the driven our pandemic near-term COVID-XX across to additional the in the is results on have likely increased that level. with strong chain, COVID-XX including the a inventory This at pandemic. business impact

visiting world. We patients potentially demand to from expect rising recent unemployment the such fewer resulting in supply as surge, chains as [Technical a potential systems Difficulty] physician’s in from healthcare pricing U.S. government-funded changes in prescriptions result and the later offices, on beyond, and segment mix of normalize decreases around XXXX the pressures new as in the destocking headwinds due

hopeful the across months academic that vaccine resources will calendar While duration massive of an ‘XX. yield labs like effective the technical we’re the extent and around impacts, not these industry we occurring multiple collaboration and everyone do in mobilization in world, effective know the and and government in scientific coming therapies with of yet this and

manages time. remain true research for address in likely development and equally of clear through seems midst to the leading industry has role. clear is to this and then this human that difficult will investing conquer a and pandemic, of outbreak and it been more play seems disease some never our the how predict it’s While in specifics it aftermath, world the important, the its In to

the impact and efforts financial of the then treatment through forward. on acted our navigated our COVID-XX provide our crisis, ongoing our the and will of communities develop Dan for in. we operate with needs response, serve speed walk and Josh focusing outlook we’ve agility, potential will to going of a describe we’ve a employees As I’ll patients, summary and

our four to-date. approach and Slide strategic actions summarizes

see, we focused five can safe medical our of employees strain a treatment the medicines; to maintaining supply our and access you communities. virus; on keeping As on our areas, safe; the developing a system; reducing supporting the and for

our steps early XX-million-plus that of around the supply their have sites reduced manufacturing the medicines, robust materials personnel To and safety from a we we is to the at source, number one operate to required keep minimum from virus, ensure enhance to To already for we their limit in of to world. medicines The serve we the our on chain to of majority our And supply access took multi-sourced. cleanliness. we facilities to outbreak, exposure and inventory hand the sufficient disruptions. patients avoid bare precautionary measures supply maintain

includes inventory This the production and insulin. forms meeting Even our we issues for with through of needs currently and any sufficient remainder customer products. the have And all capacity stocking, increased anticipate all patient don’t pandemic. of demand we

sites U.S., through China in and the crisis. manufacturing Europe this Our operational have remained

them. the efforts who’ve our patients of of manufacturing to extraordinary medicines worked around the who colleagues, our world supply depend proud diligently We’re to on

insurance helping Solution committed patients benefit to to we in the Lilly new note, daily or priority, the a we with $XX since affordability programs seen addition need. Center, people be medicines calls has the Of continues significant this allows Center the Diabetes access top announced. to limit increase Patient insurance monthly for to a Value the of they was remain prescription. to announced per and Program. This Insulin Solution currently commercial insulin out-of-pocket to expenses without numerous their In introduction through available

a and are right because to thing strain responders workers for these repurposing testing during also and our testing part here on COVID-XX, customer for do in do the spread to to new enrollment visits suspending healthcare made of pausing to the programs, of the challenging combat took our actions We which COVID-XX. the starts facility ongoing labs number area. physicians, first reduced and system. include the Indiana creating they times most for to decisions These Indianapolis medical a these conduct We’ve our drive-thru and clinical in in-person diagnostic

Dan the will changes like of update significant complete give for do delays would indications our ongoing mirikizumab. previously we timelines for to later, but not studies, I antibody, for expect highlight to pipeline announced the a more GI the that our IL-XX late-stage except

pointing opportunities, summer, clinic in unmet participating include therapies, will expect hope of potential COVID-XX. of treatment a explore inhibitor, use with trial Infectious Phase which COVID-XX addressing of Adaptive National option. targeting and the COVID-XX, our Allergy we antibody partnering Disease, antibody clinical we’ve reducing upon Institute to which in JAK progression potential related terms Angiopoietin result acute X X significant acted in develop will trial several an a In its we the to These respiratory of treatment need syndrome AbCellera the with this baricitinib, to enter with distress the treating initiating

created sites, including is helping compensation for mobilized medical need a testing remote urgent, record those and and volunteer coming work a priority. employees to to such drive additional we’ve The facility. opportunities also hours during at health development provided essential manufacturing. staff, implemented work and pace. through We’ve for our practices, also and system, Company is safe top our medicines We’ve benefits as team to for added employees of routinely healthy support those Keeping our running in wellness our course new smoothly employees our and

associated tested people Indiana, expenses. State the has while COVID-XX, Lilly of represents all of third which nearly To-date, tests absorbing a all XX,XXX for over conducted in

the capacity this on building phase of antibody that by in are We critical will tests developing pandemic. be the next serological

In addition, our providing the we’ve deploying communities local supporting campaigns to by resources and to available awareness well as pandemic. public funding or been contributing health fight as assistance

the timelines drug industry, for need the medical COVID-XX to our forward for innovative minimize development as from our to other created fight the appreciation note, responsiveness the medicines. and the also by and FDA we’re of government partner cooperation U.S. agencies COVID-XX, address the pandemic. would and collectively acute Across to we abroad biopharmaceutical negative in around to high-level driving the I other the and clock, working together impact

to that, regular pipeline efforts turn COVID-XX details and treat the over further to to provide the to more I’ll And update. call our Dan elaborate on on now ongoing

Dr. Dan Skovronsky

Thanks, Dave.

efforts highlight combat we have proud ongoing to COVID-XX. the I’m to

As an effort pace industry-wide unprecedented develop an part at moving earlier, to Dave of as COVID-XX. we’re a mentioned treatment for

incredibly demonstrated and be when a a am physician, cause. ways As for at Lilly impressed I a an thankful important organization united new an and teams disease. large and to working impact against focused make scientist can how nimble truly our the as are behind this We’ve

of programs Slide active three five provides the pursuing. we are overview an therapeutic

is inhibitor Incyte. with This JAK is collaboration First, our in baricitinib.

activity case anti-inflammatory clinical Infectious and when hospitalized trials, have the treatment are have which the in believe occurs potential baricitinib and from preclinical COVID-XX Institute COVID-XX to recently requiring we known it lungs, on part in baricitinib, inflammation Allergy We of trial. that studies dampen National a announced Disease, to Adaptive recent combat often patients data Based is could ventilator. their of fighting the cytokine reports of to leads sponsored investigator storm the

the the help baricitinib in indication Europe Asia begins approved warnings U.S. with arm treat results expected and infection. to expansion rheumatoid of also months. the developing risk two month the are optimistic cautiously While with arthritis note study next planned of about patients potential we’re about baricitinib includes COVID-XX, this The important in to the it’s for the serious to and

AngX trial X with a multiple of humans. and the AngX antibody syndrome X a strongly in in are hospitalized risk acute correlated respiratory against studies higher Phase a or ARDS. distress to The at with monoclonal started plasma we based pneumonia to who COVID-XX Next, is ARDS Angiopoietin patients severity, risk or on in level progressing

to with This monoclonal Our States. mechanical reduce antibody across of patients has a the our already ARDS the trial begun can for with inhibiting United or test trial enrolling ventilation. the the AngX effects at progression we’ll centers need

results the from expect trial months. in this We coming

Our third therapies is announced collaboration prevention we antibody with part of program significant previously where for AbCellera, and of potential COVID-XX. our most the and treatment pursuing are potentially

shows entered allow testing the of potent FDA start manufacturing. working We of partners to NIH virus. GMP end program who clinical May, most advanced now to submit from been virus-neutralizing in scientists and obtained U.S. to of and The characterize from the academic neutralization of the this antibodies Our by AbCellera, one patients. has antibody virus, first to in live have the patients recovered with an IND together plan

financial is the industry pharmaceutical COVID-XX and is and we very pursue are scientific capabilities our challenge. government our leveraging which possible colleagues, and for at advanced of private in and pace a battle been our of treatment The with through number potential need partnership solutions. treatments to great, to facing to rising efforts these The our and the and rapidly we’ve society tireless resources challenges our are The research staggering, options partners. development significant has economy the

and provide and pediatric now brief U.S. for XXth. an one empagliflozin of of previously approval mentioned earnings I’ll six COVID-XX April on the trial and for the Taltz project, complete baricitinib of approval of for Phase opportunities as select X Japan, psoriasis Slide Movement based program update. advancing letter X, removal AngX, to from early pipeline response the the FDA. type a includes diabetes, phase our pipeline Lyumjev attrition since a last shows call the of EU initiations in the and

Moving we occurred key provide have quarter. our during events an update slide to XXXX seven, that on the

for collaboration solanezumab, announced in studying meet psoriasis primary headache opinion in of galcanezumab with CHMP did to a cluster moderate negative the approvals, also Phase received Pfizer, addition pain its first In X in the trials submission from Europe mentioned to primary met trail and its two tanezumab for for DIAN-TU of the osteoarthritis which we endpoint, endpoints, in mirikizumab the previously severe not Europe.

update, to entire that combat the to close emphasize R&D remain like in advancing to important medicines our efforts portfolio. we across I ongoing committed Before new I’d to addition COVID-XX, our

most starts in we announced developing we discovering to committed and remain programs, new patients serve. new pause treatments trial we our Although, to the and for enrollment

mirikizumab With with important trial communicated our for remains line clinical indications, timelines. our to track the previously exception GI in on deliver data, of late-stage portfolio

we rapidly world. the COVID-XX and by year. tirzepatide advancements These the develop X treatments across to times industry vaccines and type first later enrolled, this But, around is note, all are program unprecedented the for diseases. Of community to scientific I’m to results to diabetes potential response sustain Phase the share expect challenging and X and new encouraged the trial in SURPASS fully the pharmaceutical

on COVID-XX Now, performance Josh turn over the our discuss of I’ll going outlook to to call forward. impact and financial QX the our

Josh Smiley

you, And morning, Thank good Dan. everyone.

Dave As navigate well business we earlier, ahead. confident and our shared strong fundamentals are that that positioned obstacles are the to we’re

impact term near a our and be industry will to undoubtedly there our However, company.

uncertain. are effects the of magnitude and length the So,

a results. framework I’ll thinking So, review forward, going a how few we our of impact a about this financial then our before spend providing QX discussing and for impact COVID-XX minutes potential are on performance, detailed the financial of more providing

and trends with momentum and We in began XXXX, positive observed prescription January robust February.

for economic throughout business. out. and normal COVID-XX Patients world spreads and to changes hospitals many not level which bought following and prescriptions fewer supply administration new increased cities treatment that activity the unless abandoned As the utilization or has slows prescriptions avoided and adequate starts at run hospital. a they in Patients COVID-XX. hospital for larger require ensure the physician’s per prescription counter. were seeking behaviors as in and regions, units retailers affected largely increased, those existing observed typically refilled didn’t preference in that significantly earlier clinics Wholesalers office on pharmacies, number inventory than the do retail they a our a of patients or therapy ensure slowed larger hand order in that resulted visits medicines at Mail of pharmacy and a supply. Reduced to filled we the

$XX impact We by and in stocking, U.S. $XXX that portfolio to $XX Taltz insulins worldwide patient net impact products, with increased approximately $XXX million QX occurred channel $XX million approximately $XX the increased diabetes believe results and the our increased by roughly Trulicity in think of sales estimate, impact million, majority million where resulted U.S. to U.S. our in and stocking million $XX million approximately these We QX trends million, the we approximately of the million. notable which to by of $XX impacted by in include,

While ultimate reverse uncertain. in much medicine this excess stocking in as are the and supply in and we levels is timing of expect to future patients’ quarters consumed, channel cabinets the the

will calls outlook. We these and our provide utilize factors update earnings to continue to quarterly closely our to monitor

are lists factors a of may our impact number Slide eight that we performance. monitoring financial

had U.S., ending declined we this grow the prescriptions new-to-brand new starting therapy for averages. pre-COVID-XX fewer starts total While reported negligible XXth periods across XX% a in see April impact industry QX, week IQVIA impact during by fewer the reduced an as the into as translate new future In impact could starts are prescriptions. to versus

and our this we anticipate pain to and diabetes. to our products For immunology for portfolio, pronounced more impact and be so oncology less

lifted. their distancing as social expect return this to to patients impact temporary we However, will as be seeing doctors restrictions are

the significant be in in Over insurance shift a government we increase lower could unemployment headwind. to net uninsured. midterm, are insurance or result unemployment seeing may the of Increased the to a in patients being from U.S. price commercial

this while effect in this lessen strengthens. could the when monitoring it We’re near-term, create economy dynamic the eventually headwinds closely. And global should

around significant products patients the outlook and growth competent million benefits our the long-term Given we revenue world, to margin for provide XX in expansion. our remain

In ratings liquidity investment of and terms balance capital, Moody’s and S&P. and grade managing we have sheet from our are strong both

seen at ability valuable to strength and Financial capital impact commercial asset including substantial an paper maintain markets, business period our intend generate reasonable flow to ratings, to a our is confident we during invest rates. future prospects. operating access enhance not have in ability and cash opportunities We’re and to business to our in this development credit current balance using sheet our while pursue and growth the our capacity

our financial potentially we strength XXXX business the outlook results our on expect impacts strong. remainder year the of provide I’ll into our the and on shortly, summary, but but and do details is momentum the in more in underlying through XXXX,

by uptake executing developing We margin While momentum patients. very remain XXXX the the COVID-XX medicines newer expansion, our priority, new driven our strong revenue focused pandemic we of with products. of growth exited top strategy and in is on combating a for

you’ll that nine, customers described. momentum buying augmented business and in as continued patterns XXXX COVID-XX-related delivered we estimated slide the strong underlying QX see On I performance by patients just from

percentage Revenue in Net COVID-XX the which for impact, contributed growth quarter This revenue was growth. versus constant XXXX volume, strong constant increasing the QX of currency. or XX% accelerated growth by in estimated driven in XX QX, XX% XX% was performance currency. points of

growth, revenue representing of continue half Our the the newer our this than more of driver to medicines quarter. in be

operating made We’ve progress in last year. productivity as our XX% grew agenda income QX on versus good

basis quarter Our patterns the non-GAAP XX%. COVID-XX XXXX operating our on margin. impact growth of our discussed revenue as The expect buying to non-GAAP a XXXX points operating of outpaced margin impact estimated improved target full operating call, also year But, by XX.X% positive as XXX we expenses. we our throughout margin on to achieve during the XXXX financial our operating guidance build year the to for had

in QX and including in Lyumjev since Japan, We’ve U.S. and of and our announced both milestones multiple the new for XXXX Europe Taltz earnings pipeline approval call, indications Trulicity

QX, the dividend. shareholders billion via we to returned During share approximately $X.X repurchases and

previously to increased near dividend cushion order As and the XX% do repurchases the we point, of in continued not announced, expect a At and in this additional we share dividend capacity growth. investment make XXXX. for by for maintain term, liquidity to

for closed a the on complementary business. our Dermira, developing focused company is dermatology enhancing which new pipeline chronic lebrikizumab, therapies conditions, X of of addition we the Phase to our with skin acquisition Finally,

Slide of earnings XX includes since last the summary our call. events key

COVID-XX when financial our robots, Moving for XX, described impact to the QX in slide earlier. even non-GAAP performance was adjusting

strong XXXX and was revenue XX% a stable percent QX margin In of and performance, mix increased at gross costs by manufacturing COVID-XX. price versus as addition were greater to as efficiencies with approximately favorable partially associated top-line product offset

late result and selling cost investments travel modestly lower down productivity last in the products. growth administrative at X% expenses and Travel offset did than as P&L. meeting and increased by Marketing, interactions year’s of restrictions measures expenses. versus the Operating in quarter. key and in-person revenue containment in Moving the expenses grew slower customer quarter, suspension X%,

we recognized grew higher offset prescription throughout expenses that a is expenses manufacturing XX%, for higher late-stage reflecting QX. drug increased by R&D in branded assets that U.S. development fee XXXX. it However,

in Our on had starts limited pause clinical trial QX. impact

as Operating income XXXX strategy resulting track outpaced executing our of full-year momentum good in to XX.X% XX% as operating target income with sales growth, on a margin of XXXX expense QX XX%. for increased our are compared growth of the quarter. revenue and begin We to XXXX operating percent achieve

of driven by to equities. primarily expenses $XX quarters, XXXX, quarter pursuing generated in million income public QX that equity on COVID-XX. now was XXXX. both companies investments this in In and this gains are of income for gains QX compared vaccines was Other by Mark-to-market prior investment income million were $XX in

highlight, As public can item as be fluctuate. we line volatile this valuations regularly market

Our points an tax an quarter tax discreet was tax of primarily by XX.X%, the basis jurisdictions, partially in earnings by rate XX increase net in increase year, same offset last with benefits. compared higher the mix driven of

bottom XX%. So, share at increased the line, earnings per

On of effect revenue slide and growth. on volume quantify the we XX, rate price,

mentioned of constant currency by offset partially As revenue we of QX, by driven growth XX% volume grew net which the at of in was worldwide price. during This patterns. buying COVID-XX estimate XX% impact earlier, XX%, strong

impact net from Foreign programs the this of had revenue in and of declined on exchange impact a quarter. government-sponsored the in price China. X% modest negative growth Alimta Tyvyt inclusion Price

compared XX%, Verzenio, Humalog, the Emgality, to led quarter Alimta, grew was first revenue U.S. of Volume Taltz, of Trulicity, Basaglar. XXXX. by and XX% growth

stocking due wholesale As approximately at earlier, we revenues that to contributed this I patient quarter. million and $XXX mentioned of COVID-XX level saw the

While the XXXX. expect we course the remains largely this situation fluid, to of reverse impact do over

price U.S. discounts due This with changes driven was driven guidance. of and drag Emgality our in diabetes by for for by in growth reduced patient growth estimates line which reimbursement. utilization this segment, rebates X% offset to on commercial and by XXXX quarter, to was partially programs assistance primarily recalls lower our Pricing products, a was revenue increased primarily

portfolio We throughout D access the commercial have Medicare and have intact and QX. strong Part remained across

QX impacted a to growth, benefited due of this the of occurred by approximately divestiture led in and in majority Olumiant, XX% stocking grew also constant Europe. in effect exchange were We total significant driven and international estimate by Taltz of by foreign $XX and Spain. of growth product of million by in the XX% to Revenue Europe. legacy and Volume price. currency, Moving negative partially offset the COVID-XX volume impact was the Trulicity, results Verzenio from

underlying to have are our trends strong, very the products newer However, as continued scale.

XXXX. contributors impact modest Japan, government constant Forteo and in growth, In to headwind somewhat grew due growth, effect mandated and by went X% Alimta were offset driven increased by revenue currency, the from volume partially in into price Olumiant Verzenio, generic Cyramza, that to of offset Strattera. the decreases competition pricing Trulicity, a key by

partially China, grew concessions In and driven constant pricing currency, associated XX% programs. Tyvyt the Alimta with growth, revenue in offset in by sponsored by government volume of inclusion XX%

We’re medicines. for very volume products these increase saw significant access these disease increases and cancer the to ability our to with for pleased we important patients

new March. business COVID-XX during in peaked of and meaningful decline patients in saw China our the QX Outside a Tyvyt Alimta, starts during as spread

appears we situation with in rest Jardiance the be in XX% drivers, Taltz, the As Cyramza patient key driven and drove by customer increased initiation volume cautiously new to from Trulicity, in moving that have in toward and growth collaboration in-person Revenue begun Boehringer growth encouraged are of currency, to Ingelheim, increased QX. Cialis stability, interactions more constant world resume. the our

As from growth. products slide I while new increased also delivered key this to nearly growth worldwide earlier. benefiting percentage that medicines the continue stocking These volume our on XX points XX, impressive of described shown drive growth quarter,

our this making in brands up XX% nearly generated the highlights of revenue. growth revenue key of XX total, contributions Slide $X products. these total In quarter, billion

we growth on of investment through and tax capital R&D. In to a On billion future $X.X after development, update our QX allocation. invested slide an capital business drive XX, provide we XXXX, combination in expenditures

access to In returned remain investments, markets share dividends billion cash rates. to shareholders attractive QX $X.X We closed repurchases. ability and well-capitalized with $X and approximately addition, and debt at billion via the approximately of we and

updated reduction benefit the us and at the and updated business as quarter of new pandemic. this XX, the the estimate we’re impact second the our course patient of of QX headwinds Europe; into of in resume stocking changes This doctors reverses activity from of increased normal our of insight unemployment; financial in is utilization our and patient extent clinical consumer the guidance. Moving duration returns as in existing the our the find view of slide in direct year, largely increased travel, the on transparency spending and peaks interactions affordability the to assumptions surrounding balancing near-term investments seeing advertising in in programs U.S. segment Key you’ll new XXXX; time and due much promotion based patients; supporting include near-term mix with resumes in-person half new as the XXXX enrollment as well and current studies, to the uncertainty decreases in midyear; digital and this COVID-XX prescriptions, over levels to guidance the trials best initiation customer healthcare and more on increases. and second support price of

more do patient The will potential recovery depending economic term, be pronounced on unemployment impact the the but impact will employment. be impact temporary, likely reduction an new and We XXXX will near to shape could in performance. U.S. starts the XXXX, programs in more the from believe increased but stimulate muted the our of be in government

most downside the remainder While COVID-XX the duration our within gives confidence by is revenue uncertainty the revenue our the COVID-XX -- the the addition in underlying additional in previously the QX patterns, for year benefit positive community related from range. business of outlook, of the potential estimated accommodated momentum buying in extended augmented our from drives that us impact

uncertainty cause the of to see accommodates could of range, we revenue fall revenue today. that range the our believe outside most there end we are either scenarios While

the In non-COVID-XX the to earlier, of recovery period, distancing on resumption addition and economic the of the main prescription and during are healthcare impact pace the social of impact monitor unemployment variables timing new will of we described activities. trends

most the in normalize, prescriptions and we in the pure occur impact show the new likely of headwinds anticipate as to prescriptions up While to currently QX are levels inventory new compound. QX, and impact on pronounced QX

the manufacturing keep around our do as gross percent income keep to basis we basis. medicines and workers associated anticipate down a confirming XX% higher prior world. We on flowing extraordinary non-GAAP measures roughly be GAAP XX% the patients on and taking margin safe a costs are to statement, Moving we’re of with to to revenue a manufacturing for our the expectations

though to by be offset from expect We benefits this manufacturing higher volumes.

a year from in to decreased maintaining for administrative for the marketing, offset and and key promotion growth be the investments savings travel are range anticipated digital capabilities reduced second products. and in We’re half expenses expenses as increased selling by of marketing

and pause for guidance range to research pursue trial unchanged COVID-XX, therapeutic XX%. as the change activity to also described as Therefore, no expenses percent revenue are investments our a non-GAAP from treatments our is Dan development Our earlier. of for savings income operating clinical there’s by to offset of as

some We’re updating other reflecting expense, has going the this QX forward X Obviously, of to we’ll volatility $XXX our accordingly. to portfolio. million range of number income expense in and and gains equity update

expected of to of Turning a per share Earnings now $X.XX the range to $X.XX be non-GAAP taxes. There’s guidance approximately no basis. in rate change to our GAAP is tax and non-GAAP on XX%. to effective

EPS in $X.XX expected GAAP to $X.XX. be to is Our range of the

of business to the the increasing are the our of uncertainty range We for reflect remainder to impact the the year.

confident fundamentals. of highlights in underlying as first net business. business performance Our benefit, strength And of the introduction, we remain outlook Dave mentioned in his in our for quarter, COVID-XX the our the long-term

So remarks. I’ll turn to Dave, back you it closing for

Dave Ricks

Thanks, Josh.

global COVID-XX The has pandemic impacted in all unforeseen us ways.

Although to do times rise strength best The challenge. outlook in long-term Company exist, crisis our great in And the continue and in out for Lilly the to bring fundamentals. our will of companies. of that people near-term we and remain the confident challenges can

would there to certainties uncertainty are of I remains, deal attention. which great a few draw your While

discovering challenging for that commitment disrupted people work They mission our around and First, collective the rallied exceptional. and circumstances inspiring. are expertise better routines, they’ve life the the of of make is spirit, my Lilly and colleagues world to fulfill supplying Despite medicines world. around

pivoting and of therapeutic focus swiftly, the critical against the to capabilities leveraging agility our to by pandemic moved fight Second, join COVID-XX on testing the fronts. continue both deep speed our and business. our be We’ve the expertise success scientific to and

and certain And of been more a industry. the biopharmaceutical importance of healthy never lastly, vibrant I’ve

return we to to COVID-XX, more enabling situation, of world It’s and will lives future economic While industry any this the people will activity recover. normally across it developing the a to new we a part treatments will pandemic. catalyst, take are vaccine clear, vital time to grow. or And the living allowing and their to be primary combat solution current long-term for fighting pharmaceutical the exit any

And to prepared our turn I’ll moderate concludes over This to Q&A session. now, call remarks. the the Kevin

Kevin Hern

Thanks, Dave.

questions the caller. ask We’d questions then,, for take from session. per your first many so the And we’re Q&A Alan, we as limit you like possible, two to caller. as instructions please to for the callers that ready provide

Operator

Absolutely. [Operator Flynn Go the of Sachs. question with Our from first line come Instructions] will ahead. Goldman Terence

Terence Flynn

Thanks taking the about M&A in Josh, expand side, increasing on mentioned, stand environment prep you question. BD maybe could second repurchases just do an regulatory opportunities? launch share And first how in you I number the could the with then, I you But approach Hi. capital your term. you for for be there does where actually interactions And just selpercatinib. think of size? it you think near changes less allocation. change had the was I if to how was Maybe wondering, know on

Thank strategy. if at your you. COVID go-to-market wondering Just changes all

Kevin Hern

Anne the We’ll one Terence. go first then question selpercatinib. on Thanks, Josh to and for for the

Josh Smiley

our are growth opportunities we’ve the business areas key Thanks. outlined, Terrence. best-in-class our capital really bring pipeline. therapeutic really focus focused to component or our or into assets see do in strategy. as long-term allocation, key in external to type are Hi, of as continue of And a where we’re But, -- strategy. we sticking we first on innovation On what we can on development

ease. we as And strong, to I helps anything terms discussions, is the acquisition. anything changes from in take or work companies there We’re home travel slow have of down being biotech that able continues. Certainly, of I of scale think our large to a continuing -- different think that or may size, it we their cash work think I activities. seen smaller see of of advantage types extent a that. that runway in function types don’t and of are not how engender don’t haven’t I to business about more as terms in views that benefits we’ll mentioned,

distancing these things And that think long ability don’t So, for our as on we’ll kinds focus are as I to as to impacting of continue in see we’re I that we focused the on. transact. restrictions, social

Kevin Hern

Josh. Anne? Thanks,

Anne White

question the selpercatinib. for thanks Terence, Yes. on

to been selpercatinib. the responsive through I’m for that collaborative the working FDA challenges, these no time. extremely in regulatory timeline delay has and there’s So, pleased in And share been

So, under we as you they’ve And in just the thank it’s them for currently we the commitment They priority know, review. December, progress continue submitted speed application. to and the had.

the have expect we PDUFA in regulatory So, by date QX. to action

shared, this interesting their prioritize to we your of launch, a and it is is Dave times, Regarding And combating on also as and healthcare on to case coronavirus, for of behalf efforts load continue recognize and as we’re our Company, professionals, express carrying we their appreciation that spread aware questions the of time that this need patients. all the at obviously. the they’re incredibly for of

RET that thyroid fusions and profile we has So, efficacy a cancers favorable RET striking or recognize safety with shown lung with also in and treating though that, mutations. selpercatinib really very

it’s think RET to and patients And important physicians medicine there’s the aware first specifically alterations. new still and target that are available, a so, that we very

with activity have So, candidates doing who good committed making for is launch sure access. we’re they will what selpercatinib look we’re are But patients that to different.

assuming So, sure via channels going efficacy we approval focus and on the interactions key we and other data the we still have. initially in-person customers on when of launch, that and that we’re hold to digital that safety making email are inform

details customer the peer and to that peer leverage going data when give we’re colleagues. then, those in be course, We’re we’ll publication, make in of journal in virtual also make the through we’re sure as sharing a them also their to when medical meetings. sure going data information. tier to to And quick with product to we as requests more And engage that provide opportunity addition, the leaders virtual top to the thought share upcoming programs appropriate, well

incredible have So, now sure aware new Loxo incredible And patients an goal medicine make partnership that been are RET. -- an just teams. for the and Lilly that we’ll the that’s sure targeted that we is to make and specifically physicians here informed it’s with and

about we’re approval it, X, in think May dosed here you XXXX, patient XXXX. first medicine looking of and If this Phase started at in

really FDA at the And our thanks the review. which speed for So, it’s goes through to moving the they’re remarkable.

Operator

everyone We’ll line -- JPMorgan. We conference apologies the moment, to Go Instructions] from the to line Chris the with [Operator one will session. Our next Instructions] [Operator Schott question the question-and-answer My move come on call. please. restarting next are of ahead, please.

Chris Schott

Thanks Great. appreciate I the much all very and color the on today. call

two questions. my Just

near-term to disruption on First prescription.

immunology. Trulicity. I and think guess, specific have in healthy been growth GLP-X You an do But, we’ve very I question when areas less relative on seeing pain about a category the to mentioned I impacted product that area as diabetes general, here. and like

maybe new We’re of we and some visits market go it Is more anticipate as physician a see build? to reduced product starts. impact XQ a start through seeing slowdown that could as broadly the the of you patient significant a

that my to mix question impact of Could this deviate to net very like from price than to the was so? guess, U.S. could in much. second could mix high-single-digit low-single-digit a more as So, the or we frame cause Thanks impact time. over the us then, this could look erosion specifically, something more payer price year got seeing? you’ve next think that? price a we’re I adverse And is meaningfully just you mid become on payer help that modest erosion you from see you over magnitude or out

Kevin Hern

to on Chris. then you, Thank question go Trulicity, question Josh, on We’ll payer for Mike the and mix. Mason the

Mike Mason

I and predict is crisis, compliance what at medication can And market complications diabetes, Trulicity patient tell the that and crisis of it’s with for a GLP risk change the greater who that. on you to length currently and from the increase long-term impact XX%. are will uncertainty it’s on It’s COVID-XX they at that volume COVID-XX, difficult over impact Trulicity, On month that how little strong. and But, live with the visits. the economy into given Okay. remain have TRX the who the patients the also, unclear

seen level And yet. so, TRx the the haven’t impact at we

GLP volume overall we’re and has on the NBRx. the in that NBRx the NTS and of NBRx. decline market. a seeing impact What pharma seen GLP XX% is have market decline seen has XX% Josh We market a the kind in for Trulicity of post-COVID, shared both for

itself seen yet. volume TRx the in haven’t manifest that we Now,

rate, you only a it’s for the at low for If of take marketplace. and look which is NPRx Trulicity, TRx turnover the a the relatively X.X%

very other it’s the the So, that, products, Trulicity again, Trulicity’s of say impact can to we uncertainty therapeutic to that areas the we think in other in XX% a relative hard situation. on strong will predict What have COVID as have impact and fundamentals. and length from saw patient of XX% revenue we’re is visits. the QX. in we We kind slower But economy confident growth of volume QX growth

So, confident very-strong Trulicity. we’re of in the very fundamentals

question. So, Chris, for the thanks

Kevin Hern

Thanks, Mike. Josh?

Josh Smiley

That’s still in a And that price -- economy, in what it’s could the Chris. you given our predictions. assumed too to Thanks, think already U.S. in current the to seeing and going going we’ve first, net early On highlighted what in guidance. lot in question to XXXX. on with your see. to for between the net many too happen negative already as we’re question, prices I we’re see your make now forward U.S. There’s the

a moderate is I on probably see So, happens that. impact would whatever here

keep may in for other losing commercial many multiple what But, to with commercial be I plans in in we’re employment, general, and are a begin negative. commercial net across things. their not move exchanges patients, the Medicaid Lily’s who first the first Certainly, of portfolio, wave, well-insured mind -- losing have segments. it’s spread in to a is to they patient payer from great think, a my assumption, we

So, still here. see there’s to happens a what lot

patients to announced Dave insurance our who $XX to medications have programs. Our We, view change program. losing the is, we’ll access and that ensure are as the mentioned, our diabetes

can our on everything to that impacts them, have people we’ll be access XXXX but continues like. have But, and the do and our trend, not about better these end medications can believe at sense looking expectation is the business. thinking temporary price then stay looks net and change that ensure of by to we’re of our we much a So, some on overall, the I’d will to what fundamental the the this a year declines, say,

Operator

Go Citi. Baum will Andrew of We next the line with move ahead. to

Andrew Baum

Thank you. topic. Same

a high exposure your You have peers to to commercial relative book. the

you populations, guidance, you’re to Many you’re population well as U.S. on baricitinib about of Where can a talks anti-inflammatory the as respiratory then, For targeting. the could volume effect, expansion, of anything earlier just an potential some kinds here then thanks. Medicaid your help And literature you’re XXXX? us different going potentially the loss rates with antiviral full the I’m separately, on rest as well and say magnitude you assuming, year trying the suggest would COVID-XX. as what Olumiant distress. trials? The to which potential unemployment patient both effect, which two understand, patient clinical of

Kevin Hern

bari Thanks, for Andrew. COVID. first on question Josh to the We’ll and go then Dan ‘XX

Josh Smiley

Thank you, Andrew.

our to bridge our Again, the I are unemployment, -- relates programs be include just I end if to absolute next say, just thinking XXXX, what of and year. the the range, I place we we’re year we’re sales looking factors think on described pricing. think, as from the I it think have we’ll in And I’d sales to of there of looks probably this not in levels guidance incremental it’s do lower pretty at. it’d what think that sort on muted impact range look like. And otherwise. I and then, see gap it’s some

year, potential early specifics around one. range this rollout again, strong moves I from I our have point, little position the given to impacts insurance So, this think we’re starting or range, -- to short-term our QX, think for pricing Medicaid. potentially at this incremental a But it’s accommodates

Dr. Dan Skovronsky

potential of COVID-XX. action baricitinib Thank Andrew question for and the on mechanism on and

a mechanism about comments your for action baricitinib. for in dual right of a potential You’re

both, response discussed inflammatory that patients. that Adaptive effects be role in with we COVID-XX publication is the came on beneficial in the they modeled COVID-XX could NIAID out entry a first on think that potential is trial in from called The baricitinib hospitalized this I the on where and BenevolentAI group trial of disease. viral

as a inflammatory baricitinib of trial that So, it’s of with the that conceived currently design later look factorial primarily the in remdesivir. It’s the progression. rather trial at that the design on disease to is effects And cascade. notable is of

addition Of be to look factors the these other with patients clinical also evaluated. outcomes load, course, at viral in and will of

think, the of confidence given looking mechanism hospitalized give see could right that us mixed those earlier in the here, patients. disease there, go I if action we’re success sort we course. But, to at now,

Kevin Hern

thanks questions. for Andrew, your Dan. Thanks,

caller, Next please?

Operator

Risinger David ahead, Go from come will Morgan with That please. Stanley.

David Risinger

Yes. Thanks much. very

So, have two questions. I

do event discuss that at baricitinib just that First, time? you Would in year? the to the steps? and capacity when manufacturing the for AngX, next restart AngX you. to and/or what you And with in then, respect second, enrollment you volume of then, your amount the to And June, this could with filing succeed approval Thank majority in the expect the trials, could be trials? respect of are you later the clinical produce

Kevin Hern

Thanks. Dave, we’ll go to Dan of those. both for

Dr. Dan Skovronsky

Dave. Thanks, Yes.

the it’s the is if So, It’s approved already expectations produced starting at for successful in to probably for the what any in our rheumatoid are most be straightforward geographies answer. Baricitinib molecule with and COVID-XX. around can of large out capacity arthritis. a molecules that small world

if potentially the could we successful. could depending quality the very, expect patients, So, see very the of it’s on risks data and that quickly, you move that COVID-XX in benefit

sort of investigational spectrum. end production and antibody, the longer, lead and is the is monoclonal times is more opposite this trial. are of Phase type constrained a This AngX is X

against you which most in I think your on, question, neutralizing though, ask the COVID-XX. about the is didn’t focused one antibodies that directly we’re

sick paradigm. which then use, have only where to could broad prophylactic in large this but see think, like work with you technical one of with viruses, success, can probability we’ve also demands imagine a are that’s I a other a given Antibodies our and likely neutralizing pre-clinically sort what relatively And quantities. against antibodies where of potentially treatment success given high not we project. patients, that’s also seen

But note manufacturing very internally think for partnerships, the baricitinib. the just I use that to think, also neutralizing antibody, a one chronic I if time our that aren’t expand working of these with time They’re deploy, programs, period in case successful. all and are be short of still, you therapies. ready antibodies to capacity both we’re of these would diligently or in

facilities signal quite those a we making advance. already investments prepared to antibody. scale mentioned, and to we support in our manufacturing at neutralizing with see we’re rapidly, if started positive I the a We’re GMP clinical trials

on Your timelines. clinical trial second was restart question

a I for much think we think, the important ability with starting and it’s to new maintain enrolling about wasn’t context our trials. patients stopped problem so why new clinical It clinical trials. the to

where directly to confident In obligations, of or by today confident with patients, more directly ago, it’s would sites our sponsor sites, have other in ability needed to to all quite even even fact, at drug or our either I’m been meet ability than -- month to deliver I means a patients. our the measure to outcomes

desire clinical So, trials. relieve the burden the the I’m really confident a and of It’s in carry our trials. sites to out hospitals ability of running to

COVID-XX attention decisions can of we’re devote So, based with when watching same trial trials. they’re clinical to the burden make they much can and them the that time our starting clinical We’ll sites question and many you are are having on to restart. already ask how carefully, they of them along

Operator

Fernandez with ahead, Go Seamus please. Guggenheim.

Seamus Fernandez

couple -- is consulting estimates increases. enrollment sort There’s the group Medicaid here. a of that A -- a medical HMA

expectations into -- the just of regard. for the that I of by that volume enrollment us -- for that could XX of if hoping percent around you your guess, little bit can in put sales million. understand just help flows Medicaid XX group that Lilly’s XX I million, flows by around context to if estimates And I currently, enrollment. This context granularity put currently, little us just more little guys Medicaid Medicaid Medicaid increase versus bit and uninsured could to So, increase you the could a of into maybe think a that percent was XX a estimates just help volume

on Just this question sort year expecting that’s progressing? the anticipate the or of there Alzheimer’s in the great. this Could data antibody. second I expected NGC X XXXX much. so then, that think update Thanks second Dan, the And us second half we of would for Dan. that in how Is a year, an timeframe? update still be that were in Phase of just should half you the for we and

Kevin Hern

to go question question then We’ll for first and on donanemab your Josh Thanks, Dan readout. for Seamus. the

Josh Smiley

Seamus. Thanks, Sure.

In U.S., right rest about or about portfolio, D, entire and volume volumes. our XX% hospital-based now, Part the terms Part our or the uninsured commercial of Medicaid is -- of in other of B XX% is then is across or types insurance, XX%

lot those in a As between about insured the before, to I would a we are moving There well talked of think things biggest patient challenge happening. of really sort Medicaid. steps be commercial

guidance terms function As looked in and better see that would could our the sense. could to updates all what some it’s say, prior increase on right that does that. Medicaid a I’d provide I we our when and of as for the we may But net But sale And question, at more I a long-term again, again, impact say we we’ll XXXX mentioned, those for are of in now look or anticipating we’ve -- estimates fact sales be. guidance moves XXXX that we accommodate that increase see some the have near-term uninsured. in

Dr. Dan Skovronsky

Alzheimer’s on Thanks X Phase question Seamus portfolio. the for our

really enrolled. that in demonstrate proceeding You efficacy study means study the is X previously and robust the to fully about of which is and our donanemab, quite It’s plaques designed can clearing patient It’s timelines, patients. a communicated Phase XX-month quite know extent relatively homogenous well. along large plaque an Alzheimer’s to last clear great antibody. anti antibody. population We a asked quickly This as our it DX specifically a moving efficacy, NXpG-a studies are beta similarly said. And end timeline. timelines will than rather fully antibody after symptomatic that But, December. communicated then, most trial. X year, we’ll for talk about and that, Phase likely shortly of be tau as although have the previously designed Similarly, probably PAM, those visit on as January to changes in our to well data in as this all a the the along you no enrolled This

no the portfolio So, Alzheimer’s in change there.

Kevin Hern

for questions. your thanks Seamus, Dan. Thanks,

caller, Next please.

Operator

be Scala Cowen. from will Steve That Go ahead.

Steve Scale

that new couple clinical programs you. questions starts. It was to Good mentioned A morning. most are Thank related paused for this. of

long-term long Lilly’s to sales outlook that vision, the to different. realize how is for will But every say have impact last pause XXXX? through trial generally I First, speaking,

are have And according XXX recruiting status Lilly in actively of X that then, only trials changed clinicaltrials.gov, had weeks. second, the last to recruitment five

days. what wondering believe Just XX said. you are about reflect and within any to release the I companies this relative to obligated changes said what

changes you. why Thank So, have really curious reflected. I’m just no been

Kevin Hern

Steve. Hey, to of those questions. We’ll both go for Dan

Dr. Dan Skovronsky

Okay. for questions. Thanks, Steve, those

question it half that enrollment have very about, the year. a delay long-term be first know starts just well clinical to our rounded the was So, or you timelines to your think, long Look, I to and does estimates. impact how before and the calendar timelines are just usually sometimes give We like those financials? trial often year enrollment

of So, case worst as you think delay. for these being day-to-day a can scenario now, a

So, day delay stay that enrollment, a were paused when data. it’s to every the we for get

trials ambition think there’s our can couple of why And sort latent beat we we to clinical these is that. accumulating. demand Now, do a that. a be of reasons There’s to that’s in

able patients the reasons. see up put to some again and be enrollment. switch enrollment, So, allow the both, we make think when we’ll That’s lost on one the to we of time

by world not up Another the similarly be everywhere we better geographies, stagger reason can can day-by-day in the different COVID-XX. some make is even our time and affected that why we is in than enrollment fact

more the shift So, continue to majority while countries apply could those be where to certain enroll our on comments enrollment pausing countries. geographies, might our or also even enrollment to of we there

As updating, new way on those are to and really procedures that who can you’re case-by-case, who imagine a those in because There’s update. patients screening could be a we trial. allow a procedures are undergoing for study patients trial-by-trial, geography-by-geography say already lag enrollment stopping and enrollment, continue often right We there’s that enrolling there clinicaltrials.gov that through in part of in a the time the no basis. time lag although you also

COVID-XX through I’m patients. have and earlier, treating So, said day beyond a on burden all I hospitals But, we gotten it takes of this back turn little looking to time these the clinical to trickle sites the trial when for bit forward the of system. can as when

Kevin Hern

Thanks, questions. Dan. your Steve, for Thanks,

please? Next caller,

Operator

UBS. be will Jacob Navin Go That ahead. with

Navin Jacob

if may. Trulicity, Just on I

in to is to the the know beat barely relative just insulins kind as Is well? now. Trulicity as profitable But, want And here. that any with spoken I a to in -- should would that related regards on about I’m spoken horse as a I price looks U.S., strong. may have to if pressure dead to insulins Taltz, to how Sorry that you negative onerous it’s be quite guided you’ve channel. quick true And X% understand, thinking Medicaid to about or I we switch assuming just is that that helpful Trulicity. it But if for question, of were to then, color for not happen. be being

You changes Any of color and would as be Taltz helpful. also kind in mentioned pricing rebates around discounts. for well

Kevin Hern

Trulicity Thanks, to Navin. go of price-related for Josh questions We’ll Taltz. and both on these

Josh Smiley

Thanks, Navin.

same And, single but declines something maybe outlook point I now, the that the in the range U.S. for year the or still in that still case, in digits range. we’re digits. price the of a it’s pessimistic think at we’re I that in more low the that our looking was First, the low in mentioned, beginning net at could add single as adds

Medicaid. for in is about are pay insulins We we Medicaid. effect mealtime our in profitable specifically question your in not products, insulins on rebates are XXX% To what said patients who

So, the patients that’s you are commercial to a I see from moving a Medicaid. extent if where the think challenge that insurance real to place --

net a of in plan. as commercially patients. issue. wouldn’t just than of still less a but move be It’s for is an our it as big insured be Trulicity, Medicaid mealtime would commercial price insulin But On it general it’s lower positive segment

various through think, as is And more their do our as in had estimated. we patients to are segment to portfolio. rest is than in PAs a the our have we estimates strong for net how our QX transpire Trulicity, is few actually We plan. What on we is what patients that it last not price there. many things restrictions On highlighted the for of step years cases or through Trulicity make found access we we’ve were I in of on utilization going Trulicity getting

got a bit So, of a there. benefit we’ve little

bit sort maintain we kind I and of you’ll for and at think, challenging of constant that the And little a have still prices. now that the for Taltz a these the downs year, we’re that see we access same reason I mentioned. ups relatively in assuming it’s

trend stable downs. see the ups You’ll and see that sort But, we underlying is pretty of quarterly the pretty stable pricing, access.

Kevin Hern

Navin, Thanks, your Josh. Thanks questions. for

Next caller, please?

Operator

Meacham of will That America. with Geoff Bank be

you. All right. is open. [Operator Your Thank line Instructions]

Evercore. One Raffat be Umer will moment, please. question with from Next

Umer Raffat

program across XX only whether me question. Phase safe. CV you’re about it, concern questions taking And you safety it’s is you the hope would Hi. ask event my could it you’ve Thanks to be been And I rate the what so seeing staying There and just would’ve after European much if Blinded in thought so on for helpful has everyone just X your Josh, I GIP some paper. secondly, with I let XXth expected? know line one. gotten speak

you. net in the those to You Medicaid? high-deductible mentioned pretty for patients you stable still as produce pricing price speak in Lilly the plans diabetes whether private business. Thank Can same in

Kevin Hern

GIP around Thanks, to and for Dan safety Umer. pricing. Josh We’ll go then

Dr. Dan Skovronsky

a don’t for tirzepatide. question. with to applicable polymorphisms. study looked Umer of epidemiological the of Thanks referring GIP think Yes. seeing you’re that’s risk directly what I we’re that Surely, to sort at small a

have we’re tirzepatide, GLP, Here, they of population obviously would and cardiovascular is GIP diabetes. improving effect a beneficial, trials this on which look that outcomes. quite know a like in they physiological X studying that are Phase our has we And effects from combined the strong and

super we’re confident about that. So,

limiting the we In in about. the studies, not though that’s is terms rate in or blinded rate factor certainly submission. rates event our the something events But, disclose talk of those that of ongoing

cardiovascular any events in our discharge get to can risks, tail we so submit long tirzepatide. a is that’s submission we enough can to waiting So, safety

Kevin Hern

Josh? Dan. Thanks,

Josh Smiley

plans, one are much commercial on think we companies for the other think from I and at that know sort Hi, you to without have you it patients copay try is you very other yes, burden too high to pharmaceutical deductible they’re cash in sort of retail and into think pharmacy. made, Umer. cards when just of the which a question. things that phase, and detail, move fair of dynamics I say driven I was, And at Thanks plan I that comments It’s alleviate in And deductible much by building don’t look getting can to the to otherwise. Medicaid. the

still of not about be and But, just like we’re things look lots it’s probably think it very price what So, specific the just move around as one are to what lots those cases again, net was of and make XXXX think for low to you to your in a general implying prescriptions many lower look too than I think I here to looks we sort I Medicaid are a commercial concerned and mass do us of -- the back But like. learned I that the I for premature saying to of as you is be on it’s look as probably commercial a at reasons think to could -- prescription. a not may that when Medicaid gets like. what assumptions economy There in basis way complexities earlier, question. from Medicaid will

Kevin Hern

Thanks, Umer, questions. thanks Josh. for your

Next caller, please?

Operator

return line of Go of We with America. ahead. will Geoff the Bank to Meacham

Geoff Meacham

P&L question. the for a much Josh, so you. for Thanks number of guys. questions Hey,

You quantified few a impact for COVID forward the products. pull

happening the dynamic on be those to the the And U.S. Just of you in of expect or the mirror expect are ask of would more U.S.? things normalization XQ your XQ kind OUS eventually you to guidance, type and today wanted a event? you, then to market do of

effect? at then COVID of pricing to just policymakers the And with Dave, clearly beginning to with the headwinds on your highlighted real discussion industry end, a and but having would quick, versus respect year, today you response characterize somewhat drug halo you how of the

Josh Smiley

the as and we million, So, million we estimated $XXX in about in QX, the categories. we mentioned, talked U.S., are $XXX three just on added the about big product

sort I think, of -- mention the didn’t nominally spread rest I is product others. the those among

wholesale a -- million at than is look third -- in that only $XXX at less the of level. U.S., we the that As wholesaler

in -- So, the homes. we way we’re estimate at the some patients’ Most saw or wholesaler. is down to the channel in modest retail either of patients build that all making

be I assuming turn top, that. to will this I and think assume is wholesaler mean, to at we’re I pretty start prediction able think But, seeing would I the make difficult. normalize around. to that more So, quickly I sort we’re think it’s a going will being point piece that of

-- is think more of some associated will be otherwise, bit The I of it a tail -- more portfolio. a was in a most think our retail assume think in will likely probably one social we be it about and be knows, this million. with function what estimate and patient in And around saw there long normalize of we of it, diabetes may the distancing $XX of some happens little to year. second I that the have a What that. And half Europe, piece little I who is

homes. So, going about piece this in transparent all channel that Geoff, or U.S. be variability in try move we’ll as to that’s quarter. be to think the there the I the is I think to we patient through some But, retail way

Dave Ricks

Yes.

the I the maybe were have a sort of and behaviors Many pressures side, subtext broad are actually we these two that just there, Lilly think both and I that sides were I to policy actions acceptance should undesirable feeling. a right One with. by agrees little aisle that curbed. of On mean COVID of across the think it you which prior certain was there be industry -- there’s

strategies about create maybe them they Senate-related So, case trust And actions these. things. And that think the we a to this I of involve don’t think and for the in industry. case patent of worst perhaps using a generally is bunch to is do and There’s abusive. suppression because way evergreening incentives best in designed for do respect a systems those foretaste I we’re curb create and in that

will collaborative solutions of of those the And problem. own producers a those on will, response think sure and and which our nobody in could less we’re pressure be that about there from it’s access has because acting Again, But, tremendous. industry, I that a will really to that there’s lot Lilly speaking constructive from that clear crisis, as perspective, be will Company, affordability to make some those amplified, maybe the the think is under the been the those. solving reasonably. actually really within say, areas. I quickly my pure have and But continue of be commercial solutions the the come this. and broad amidst It’s there, and even projects, spirit focused to could of on I’m be many items I collaboration across actions industry, COVID side scrutiny they we’re coming strike peers

In fact, of been we’ve for those proposals. in many

left the itself motive more the this industry is perhaps and think pharmaceuticals profit the hand, that OUS the far On in in in U.S. bad certain from there’s, circles I a other the is flawed thing. idea and

in vehemently think, the Of I are realizes industry with are that disagree of those everyone of course, point we quieted And view. thing the this that significantly voices built-up do capacities today as very escape presence pandemic, premium; may scarce will really the important. seem a like that the And a the a those allow of to those seem absence COVID-XX. pandemic, in and world while of

that I’m so, encouraged kind We time the actions with good to we word use taste, view bullish I as so our appropriately on need come. solve problem. if extreme that And I’m behave that balance and dissipated But to ourselves for and being more can of far. some to with more significantly by

I and said others the profit and behaviors in comments, curbing a just we’re earning we’ve of So, a to making put which it’s to not we think in a place reset place patients I reputation for sense respect create to from got industry, make and policies just abusive has COVID in that once with kind alike. motive, a policymakers balance clearly a opportunity medicines, generation and sure new as the think, unique, in my but

So, work the on to first, we got solving problem. anyway, And over that’s that next now. pandemic energy of certainly couple But all work we’ll years. right my need the on

Kevin Hern

thanks Geoff, for questions. your Dave. Thanks,

please? caller, Next

Operator

Chen That Louise will be Go with ahead. Cantor.

Louise Chen

here. Hi. Thanks for taking my questions

do Thank from any earnings benefit any you COVID question there candidates expecting then, items, development my your a of non-operational for the you. second And they it’s first and is, COVID is impacts question So, is, economic in growth, are work? sense you if even if extract you just us underlying the any give way if could qualitatively? if

Kevin Hern

Josh?

Josh Smiley

Hi, Louise. Thanks.

attributing you else and buying a get -- -- for just take if of think, so. more QX at or very hold we just on patterns, sort earnings, to out $XXX of attributing high I the XX% if the to basis million level, you EPS normalized revenue to same, we’re we’re a everything the growth down that about

that’s look a I business. at So, think reasonable the probably

mentioned As now. sometime with every a normalize the million things some of out starting could through that’s normalize that our in we’ve But I we we’re for where sort And least other there as quarter, think year, at are. probably we that’s are expecting point. But that $XXX to there. guidance good

much any treatments then, around on interested at no, economic in benefit sure up patients with there question otherwise. think benefits, our point. from this and more this trials no is point, in more some to mentioned getting for the I the probably costs assumed guidance of and in Dan these treatments these that manufacturing the And we’re just say, the associated assuming scale investment frankly, I’d at in

thinking now. that items some of in is So, already line our embedded

Kevin Hern

your Thanks, thanks questions. Josh. for Louise,

Next caller, please?

Operator

Divan That will with Mizuho Securities. Go Vamil ahead. be

Vamil Divan

couple pipeline. all Thanks questions my taking the for Thanks Great. just the on for I questions. of on color call. had a

other kind product guess, if sort that being top for before. data? of appreciate about initial mirikizumab, talked then, I or there’s I’ve that positive comments on I a that you to psoriasis. you share you’ve have mentioned a wondering line in relative the trials, the back a top-line unique about of the more one, on potentially. of And So to And data your going can Alzheimer’s, anything differentiation timing, update just think now you from especially been I Maybe some more IL-XX. GI opportunity any

from DIAN-TU regarding saw Just what from and we and gantenerumab. sola kind also of

that plaque it the of might way in sort reduction, impact mentioned around change seen you’ve do know, of thoughts in plaque on the I see results it be the the would just your we a the any the helpful. the biomarker perspective You was DIAN-TU donanemab. with at Does trial? clinical impact any not that that correlation because small but and trial, reduction end have day, outcome

Patrik Jonsson

the the what secondary that mirikizumab is Thank you very much. co-primary which OASIS-X trial, in as XX first the met And key in endpoints We placebo-controlled well. and announced we expected weeks psoriasis. all is trial that

in high Taltz. extremely the with We are setting psoriasis bar

now time We superiority, of level have clearance those clearance. and of of five head-to-head demonstrate onset, in of able and three in then, psoriasis, the been to to the terms in a sustainability trials both

we secukinumab indication. So, for particularly we trial, is second I progress how head-to-head Phase will decision psoriasis the inform think versus our are trial waiting now XX-week And which X data. the that on with

colitis that for ulcerative the have miri, For low. colitis, data we the mirikizumab. that I we the stated have we in think in around also believe top and need. readout and top And previously XXXX. but this that QX line big asset we biologic very expect is clearly, excitement is And and we best-in-class unmet in know big there line we ulcerative induction And disease. a the relatively is Crohn’s have potentially And the year really shared maintenance in first-in-class also penetration

do line we announcement disease, announced XXXX. will Crohn’s For top we a in earlier, but have

will a COVID-XX, those that in time programs. one are we be certain both this delay or At and there with of

the we the impact. understanding centers, perform for the those. of as to the to better mitigate ability well impact as infusion as the delay situation state to our but However, ability access And of will here that’s And conduct and also the we believe a quantify by premature have it’s some sites, evolves, endoscopies. difficulties particularly important it’s study those driven to and to is centers

a guide overall, will Crohn’s secukinumab colitis and forward our head-to-head So, level psoriasis. on both disease, ulcerative high and decision excitement for of the moving versus data still

Dr. Dan Skovronsky

this As Alzheimer’s is of for in really population. mean, Alzheimer’s, the heroic difficult I and DIAN-TU, course, a study effort drugs to effective dominantly inherent

a especially the number just small of trial, who higher is completed there unfortunately, for think, with patients the I solanezumab. dose

make sola as any works out, clinical of you about there. effects sola is to It tough on soluble conclusions So, antibody. But, plaque-lowering not a A-beta. point

from draw So, I data. solanezumab conclusions can’t about plaque-lowering

again, a outcomes. you draw look look population. little trial, X of think a perhaps, lowering. I you the a clean hypothesis data very add confidence a results right are DIAN to small off is I But at the once and trial, to from our test the hard to plaque think if it’s most biomarker far homogenous bit outcomes, around about of think, study biomarker things And important in though, the could should clean those now. relatively not the in a I That conclusions. which forward be Phase

Kevin Hern

to going please. we’re the caller, And next

Operator

with Wolfe Anderson That would from Tim be Research.

Your open. line is

Tim Anderson

more was likely knows questions, we didn’t you everyone messages are the to I line, think. couple of and to this as On a see ago, on to from company that, top just the mixed set A China-only of another, don’t year like much if then, of form of I’ve know answer. an is China. feel of question Tyvyt, XXXX, get or importance members of product, talking that’s was Is smaller likely mentioned I a And of the time, management still Maybe that please. last of it be asked about and kind I senior or product. tirzepatide, some it one results results in it’s publication on the whether or current view. I described in a quarter. second in I gotten I importance. of But, your PD-X presentation? over point

outside in really more Europe here of twofold The considered types; perhaps next developed or of importantly, China else U.S., tumor So, Tyvyt. that’s your the in take question development to developed? program is from this markets, plans on terms China and traditionally anywhere into

Kevin Hern

Tyvyt. to take go for then the Thanks, We’ll Tim. tirzepatide the question and will Mike Dave

Mike Mason

the for Thanks question. Yes.

in for have we’ll meetings directly, do going well then readouts XXXX. additional as our QX first of the XXXX Thanks of program at Just as first top-line readouts, believe trial we and SURPASS for the top-line medical the into question.

Dave Ricks

wrong. commentary I Yes. think Tim, your the don’t as read it prior relates to is Tyvyt, of

first -- Innovent have think China-only changed, cancer, a two and I which -- and China few think, are for things a I play originally But, the time. and biologics we we’re collaborated there other opportunities. out as biosimilar with breaking today, for

the put But Tyvyt that’s the in only changed. the PD-X one what third that’s nationally is PD-L maybe was on that So, thing China.

of economic for in data profile pemetrexed which I first it second certainly does certainly that combination is the cell Chinese the And the does positive and and change of business. for very-encouraging China. non-small So, in us that think that the line with the lung the is released trajectory cancer, was in change

focused very growth we’re the short China in for now, there that. right and Tyvyt on great a remains part I as is mentioned, Josh the of our course, opportunity, volume Of think, key a our oncology focus that and term. in Chinese remarks, And in portfolio, his was

business, a a ago So, innovators. bit pleased And a local job. think do anyway, way great is to successful really been our it’s about Innovent. with with how They in little And great partnership that’s a local building progressed. through China which underrepresented with we’re decade partnerships

Kevin Hern

for thanks your Tim, questions.

please? caller, Next

Operator

Barclays. That Carter Gould will Go with ahead. be

Carter Gould

there. I probability guess, I you later thinking Is wait on just following the budgets into specifically government-funded I appreciate come to and the Thanks up looking year, still Tyvyt have on could pressure something that inevitable When viewing this pressure that thoughts question. will healthcare, over or I to Good about there. the it the are incremental next? for until or or data pressure in likelihood I discussion. year guess of fiscal to guess, the guys morning. any a expect out half the there’s we And ORION-XX in taking the wanted Europe, presented? pricing as could then the be comment Europe into dig half Thank this year? first you. possibility, back the on we

Kevin Hern

go Thanks, Carter. about for for for the We’ll question Europe, and Anne to Dave the question Tyvyt the ORION-XX then data.

Dave Ricks

Yes.

relates by other these we crisis methods say well, every saw Australia, on a - their economies. tax a for look it Europe then, crisis. reduce will fiscal will It’s ‘XX -- to in health will following jurisdiction in there isn’t this need Well, as the the lower a government-run fiscal many this Canada, It be systems And ‘XX, nearly like to response brought pandemic Japan spending. crisis. to governments of receipts. policy and I fiscal the As would to extrapolates

absolute can predict almost that we think, with certainty. I

series they don’t rules. Australia, and economy in And drug it’s Canada. saw four-year we can three and the relative create in list the negotiate. just pricing on many that items the is drugs or certainly need policy or their depending happen of often their a negotiated like because They of change be input on an that strength suppressed of One that moves, places Europe cases, to

future. So, we’re that projecting in the

me a in we to to mentioned, ‘XX industry. pricing That’s lead ‘XX, lot a beyond the don’t in Josh As to tax ‘XX of certainty that. see across that happening falling receipts and in ‘XX, which leads suppressed probably actions legislative

innovative portfolio? be to your And can then, relatively leverage a the how have real question when using relative policies of Because substitutability. is lot these there’s tend governments is

hard whole, the of be be an a more innovative we’ll industry. immune everyone’s will these these side you And the positive as Obviously, the -- another. across pressures So, more of equation. themselves international to the working degree we’re I present or as on some end hopefully, that the on industry there will to suspect portfolios the become portfolio, things. But,

Kevin Hern

Thanks, Anne? Dave.

Anne White

the question on for Tyvyt. Thanks Yes.

a this medical that for an So, in and you with China. we’re second ORION data meeting of analysis positive, the know interim submission we Innovent that was with And to will the Phase X year. the study, half in that initiating about very regulatory as is submitting excited be authorities

the So, of see half XXXX. it second in you’ll

Kevin Hern

Great. Thanks, queue. for the exhausted your questions. Anne. We’ve Carter, thanks

to go we’ll So Dave to close.

Dave Ricks

we appreciate Thank are and many and hope interest different healthy I your all right. well your And sell this are the times know you’re East in Obviously, through on you Coast, community families Company. a functioning certainly All all. the of just side and call participation in and personal crisis. We your based on the today. note, the

calls questions Take directed be well. care. you in or be As touch incredible can hope we’ll to usual, any follow-up team. our Investor soon. again, stay Relations really And all And

Operator

for Thank teleconference AT&T that and conclude gentlemen, your participation conference for using call executive and your today. Ladies will for service. you

disconnect. now may You

Eli Lilly and (LLY) 23 Apr 202020 Q1 Earnings call transcript