Eli Lilly and Company (LLY) Earnings Call Transcript & Summary

At least in the space of migraine. So we are right now having our sales reps out during the first week and really driving the understanding and the adaptation of CGRPs in primary care as well. And I think the second part is patient activation. Patient activation, we know that migraine sufferers, to a large extent, are finding that information through the digital channels. And I think there were quite a few insights from last year that are now being applied to really drive patient escalation to the primary care office. And we believe that, that will have an impact on market growth as well.

So where do you think we are in terms of the penetration of the addressable opportunity for, let's say, the preventative treatments in migraine? Are we sort of 1/3 of the way in, a 1/4 of the way in or...

I think we have just started. I think we have just scratched the surface. Among the migraine sufferers, I think it's defined that 6 million are eligible for preventative treatment of migraine. Currently, 3 million are being treated in the U.S. only, and approximately 500,000 of those being treated have been treated with injectable CGRPs. So I think that it's a lot of work that remains to be done. And based upon the patient feedback, the health care provider feedback we get, we really believe that this is just the beginning of a journey. There is still much more work to do.

Okay. Now I mentioned Emgality's successful launch. You came to the market later than some of your competitors, but the product's doing pretty well. Could you talk about that? And what's been the key to that success?

We are extremely proud of our performance with Emgality. And entering as #3, it's not necessarily a destiny that you desire, but I think we've done extremely well driven by a couple of factors. We entered during the second half of 2018, and already after less than a year, Emgality was a leader in terms of new-to-brand. And we closed 2019 with 47% new-to-brand. So it's obvious that we became the injectable CGRP of choice. And we saw that in terms of NTS in December as well. When we understand, okay, what have we done well or why is Emgality differentiated, I think there are several factors. In the label, we are the only ones that have defined both 50%, 75% and 100% efficacy response in the labels. We have a device. We have a device for Emgality that is from the same platform as Trulicity, widely recognized by millions of patients as being a very, very good device and really supportive of doing self-injections. I think it's also important to emphasize some of the side effect reports during the second half last year, mainly in terms of constipation. But it's not being seen with Emgality, and we see a larger switching rate to Emgality as well, such as from Emgality to others. So I think there is a combination of both features and benefits that have enabled us to take this strong leadership position in new-to-brand that we hope also will translate into a total market leadership in the preventive market.

And Patrik, how is the treatment persistence going for Emgality so far? I know it's relatively early days, but you must be getting a sense of what the likely duration of therapy will be for patients starting on the medicine?

We have some data, and we realize that much more needs to be understood. But the first adherence data would support an adherence of approximately 220 days, which I think is around 8 months. In those 8 months, that's, of course, an average of patients being enrolled. But those 8 months compare very favorable to the standard of care and also based upon the same data favorable to a competitor, Aimovig. I think we'll do more research in this field and particularly driven by real-world evidence.

And Lundbeck's IV was recently approved. So what effect might that have in the market?

I think taking into account that there has been very limited news in the space of migraine until 2018, I think more tools in the toolbox. It's, first of all, it's beneficial for patients. It drives some market growth. It drives patient activation. But it's important to have in mind that an IV formulation will have a limited usage in primary care. And the majority of those patients are going to be found in primary care. So I think for a small group of patients, it will truly provide some benefit, but I think it's going to be a relatively niche product, taking into account the invasive treatment methodology.

Okay. And then to the other extreme, how about the orals? What effect the orals -- do you think that the orals will have in the market? And could they supplant the subcu injectables?

Well, I think we've seen the first oral CGRP approved already, and it's approved for the acute treatment of migraine. And I think we just launched Reyvow ourselves, and we have had it for 2 weeks, well, commercial product available. I think the first data are extremely supportive of the orals. When it comes to the preventive market, I think it's a different story. I think there is so much more we need to understand, both in terms of efficacy and safety, and daily intake is very different from own demand. But I think, if anything, even the oral CGRPs will help driving growth. 30 million Americans are suffering from migraine, and only a small group of those are being treated regardless if it's for acute treatment or for preventive treatment. We believe we are uniquely positioned, with both an injectable CGRP for preventative treatment, but those patients normally need an acute treatment as well, and we believe that with the complement of Reyvow here can be very nice.

Okay. Now just a couple of pipeline questions in the neuroscience area. There's some confusion in the market about whether sola is still alive for Alzheimer's disease. I know you have one kind of Phase III-ish trial ongoing. But is solanezumab still a potential treatment and potential commercial opportunity for Lilly? Or are you moving to the OA compound molecule?

We had the DIAN-TU readout just a couple of weeks ago and although that was extremely disappointing for patients because we're talking about a very small group of Alzheimer patients, 1% of the total population with a rapidly progressive kind of Alzheimer. So it's dominantly inherited. The study was extremely small, 50 patients, and 36% -- 36 of those stayed for 4 years. So it's a very small patient group in a rapidly progressive kind of Alzheimer's. And even if they were allowed to increase the dose to 1,600-milligram from 2017, only 25% of the doses were given in high dose. So is sola alive? Yes, sola is alive. We are still running the A4 trial, and the A4 trial is very different from that of the DIAN-TU trial. It's a trial with asymptomatic Alzheimer's disease. It's a trial for -- will last for 4.5 years, 1,100 patients being enrolled. And it's a study that we are conducting in partnership with the academia. I think the most important is that there is no readthrough from DIAN-TU to A4. But I think, if anything, we have been in Alzheimer for 3 decades, and we have realistic expectations. But of course, we are hopeful and we are keeping fingers crossed but realistic when it comes to sola and the readout that will take place in 2022. But our commitment to Alzheimer's goes far beyond solanezumab. So if you believe that Alzheimer's or really from Alzheimer's, the disease-modifying impact is generated by aducanumab as a plaque-clearing agent, we have the most potent plaque-clearing agent in the marketplace. We have donanemab. And donanemab is also being studied for early Alzheimer's disease, and the readout will take place in 2021. And there is nothing that is clearing plaque faster and deeper than donanemab. And we're also studying our anti-tau antibody, and that one is also going to read out in 2021, and also with early Alzheimer's disease. So we have several opportunities here to get closer to providing clarity and hopefully some relief of those people suffering from Alzheimer's with 3 assets in development and readouts over the coming 2 years.

And maybe just to add on. As Patrik said, we've got a number of well-designed experiments, but just the donanemab and the tau antibody are Phase II trials. So just the readout coming this year versus the sola is a Phase III trial. So just to make sure we have the stages of development clear.

And a couple of other details, Mike. The A4 Study, what dose are you using? Is it DIAN-TU peak dose? Or is it the original dose that you study in the OA trials?

It's the same time frame. So in Q2 '17, we gave patients the option to up-titrate in both the DIAN-TU and the A4 trial. So patients have been able to move to the higher dose, to 1,600 mg, but it was a midstream. So that study started in 2014. So patients have moved up. But again, there'll be some portion of that time frame that was on the lower dose.

So hypothetically, if A4 was positive, would you believe it was likely that you could be approved with a study that had a significant dose modification midway through and where you only have one positive trial?

Yes. But I think all these next steps are going to be data-dependent. And it's premature to get way ahead of ourselves on this. I think we're -- it's an interesting study. We'll see the results in 2022, and we'll have an update from there.

I mean I hate to ask the question, but you -- Lilly must also be making bets on the outcome of the aducanumab submission and approval. Are you hedging your bets one way or another? Or is your expectation that they get a positive review, which, of course, would open up the field for you?

Yes. I mean I'm sure there's lots of -- I know there's lots of bets being made throughout the various questions on that. I mean that's a good question for them. We're obviously keen to see some of the additional information we'll learn, whether it's submitted, whether submission's accepted, if there's an outcome, what the outcome says. So lots of interesting things to track throughout this year. So stay tuned...

To show you're paying attention. Mike, just a couple of quick questions on the diabetes franchise. I have tremendous excitement about the oral sema out there. Do you think that your diabetes business can continue to grow in the face of that agent? And then do you think that you can expand into other indications from your drip line?

Sure. So a lot of great momentum right now in the diabetes business. I think, Geoff, as you highlighted, Trulicity is the market leader in the GLP-1 class, which is growing at a very sustained growth rate of near 30% in volume. It's got about 46% -- 45% share of market, the oral sema, the Rybelsus, has been off to a launch. We've been tracking that closely. The scripts for Trulicity have held up really well, and we're really encouraged by the fundamentals of the business, doing really great about the GLP landscape. Still a lot of use of basal insulin as the first injectable. And so we think there's a big opportunity to really grow the use of GLP-1. In SGLT2, Jardiance is the market share leader, over 60% in prescriptions. That class is growing really, really nicely. I think 40%, 50% new therapy starts is the last data that I saw. And then I think you mentioned tirzepatide. So that's our dual incretin. That's a GIP/GLP that's in Phase III right now. We'll have a readout in Q4 for the first set of that diabetes program, and then the obesity trial, the obesity program they just started late last year as well as the Phase II in NASH. So really excited about what we have currently in the market and what's behind it as well.

Terrific. All right. We've reached the end of our time. So thank you very much, gentlemen. I appreciate it, and good luck.

Thank you very much, Geoff, so much.

Thanks, Geoff.