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

Okay. It looks like we are on to the second discussion today. Earlier, we had Novo Nordisk as part of our discussion. And this is a really exciting opportunity for us. I just want to thank everybody for joining us here today. It's a 50-minute discussion with Eli Lilly's Chief Scientific Officer, Dan Skovronsky. I'm Seamus Fernandez. Many of you know me. I'm one of the senior therapeutic analyst here at Guggenheim. And I'm really pleased that we've got Dan for this unique strategy series, which is really just focusing on the innovation and strategies that biopharma companies are -- obviously employment benefit patients, but also to drive growth over the next decade or 2. So really excited to have Dan here with us. Thanks so much again. Before we dive into questions, I'm just going to give a very quick background of Dr. Skovronsky here. Many of you know Dan as the Chief Scientific and Medical Officer of Eli Lilly. He serves as the Senior Vice President of Science and Technology and is President of Lilly Research Laboratories. He also has responsibility for global business development. Many of you may or may not know is that Dan also joined Lilly in 2010 when Lilly acquired Avid Radiopharmaceuticals, where he had been CEO since the founding of the company. So uniquely, Dan brings 10 years of experience at Lilly. So as part of our next-decade discussion, he's got the past decade to inform him and -- but also as founder of Avid, it really is a foundational part of Lilly's strategy in Alzheimer's disease. So excited to kind of capture his unique perspective there.

I don't want to belabor the introduction for too long here, but just as part of the innovation imperative that we like to talk about as it relates to large pharma, patent expirations are a natural part of the industry. We estimate that every 10 years or so, most large biopharma companies need to replace 40% to 80% of sales as cheaper generic or biosimilar alternatives are introduced. And some investors that we talked to think that the $200 billion market cap or $30 billion to $40 billion of sales is just extraordinarily challenging to move past without executing something to the tune of a mega transaction. Lilly, obviously, is now in that sort of verified era of market cap from pretty impressive overall development. So I just want Dan to tell us how do we get here to some degree, but more so really just wanted your opening remarks on how Lilly Research is approaching the innovation challenge that we're talking about and how do you see the success going forward?

Yes. Great. Thank you, Seamus. It's great to see you and be together here virtually. You and I were just reminiscing about sort of the first event that got canceled in the pandemic that we were almost together at it in March of last year. And we're sort of thinking like how much has happened since then at Lilly and the whole world, for sure. But at Lilly, since then, we've had Verzenio adjuvant readout. We've had the tirzepatide Phase IIIs. We've had pirtobrutinib or LOXO-305 readout. We've had donanemab in Alzheimer's disease. Plus in that time frame, we created from scratch COVID drugs that we launched and probably saved tens of thousands of lives with. So I don't know what I would have talked about back then, but we've really been on a good roll here with data readouts for very meaningful drugs in really important diseases, which I think is the answer to your question. That's how pharma companies get big. It's creating medicines that people care about. The core principles here though, it's not, I think, to earth shatter for us. It really starts with the science-first mentality. It always has. That it's easy to say it's a lot harder to do. It takes a long time to build a solid scientific foundation in any disease area. You mentioned my personal history in Alzheimer's disease. I have been working for decades on basically the same idea, amyloid and tau and pathology of Alzheimer's disease, the same kind of commitment over many decades in diabetes that real metabolic disease working on incretin biology. It's these kinds of foundational work where you build a suite of tools, including biomarkers and diagnostics and good drugs that can fully interrogate targets in humans and then design smart appropriate clinical trials on the right patients. That doesn't happen overnight. That's just the science-driven philosophy. That's not always taken. There's sort of the shiny object problem where competitors are excited about something and everyone jumps in that direction. It's different way of going. I think the science-first mentality for us also is boosted by heavy investment and commitment to platforms. It's just drug development is too hard for each drug to be a brand you start from scratch effort. So sometimes a platform could be a disease state understanding, like in Alzheimer's disease with biomarkers and tools or an incretin biology combinations in peptides. Sometimes it will be a drug modality, like peptides or like antibodies or like siRNA, so that it could be devices like our platform in autoinjectors, which I think has been hugely impactful for drugs like Trulicity and will confirm many more. So building those core capabilities in certain platforms, and then knowing where your strengths are, that's usually important and a big advantage of big pharma biotechs can't really do that. I think there's a lot of effort in our industry and excitement about what's the next big thing in biology. Is there some new target that's going to unlock some disease and were wanting experiment a way for finding that target? Maybe sometimes that happens rarely at pharma companies. I don't think that's something you set your sights on. Probably our role is more about making a really great drug and discovering a brand new, really great target. And a great drug and developing it smartly is a hard thing to do. Those examples I just mentioned, the BTK inhibitor pirtobrutinib, donanemab, tirzepatide, these aren't lightning in a bottle. It's not a flash of inspiration that no one else had. It's more like a massive infrastructure project where we've been investing heavily for many, many years with a perfectionistic attitude. How can we make something better for patients than it's ever been done before and sustained investment over time, a clear understanding of what you want to do and what you want to achieve. I think that kind of mentality is much more bankable in the industry than, hey, we're so smart and we're going to discover that lightning in a bottle. So that's a little bit how we think about R&D at Lilly.

Got it. Great. And one of the things that I think we've talked about in the past is -- has been the ability for Verzenio, which I think maybe had a little bit of a slowish start prior, I guess, maybe you and the team really getting your hands on it, to drive it forward into the monarchE study. But can you talk a little bit about some of the work that Lilly has done to sort of establish the importance of best-in-class, but also the value of being at least close to first-in-class if nothing else.

Yes. It's a good point. You kind of need to have both. I think if you look at Verzenio, objectively now, given the data we have in the adjuvant setting, from monarchE, the overall survival benefit in metastatic disease, HER2+ data, the monotherapy, you feel like this is a differentiated agent versus other CDK 4/6 inhibitors. So it's a good example of best-in-class, but obviously, it was third to launch and therefore, hasn't captured the full potential that I could have imagined if we had launched first with that profile, it would be untouchable. So it's important to be differentiated. It's important to go as quickly as possible and try and get there first. Lilly's track record there had been mixed, I think, for some time. And if you go back about a decade or so, we were amongst the slower ones in the industry at drug development, very -- probably bureaucratic and cautious in our time lines and activities. We looked at that and we did some introspection and we said that's not who we want to be as company. We want to be the fastest in the industry and really reinvented how we do drug development from start to finish with a goal of doing that. And now we are. If you look at our average development cycle times, we're amongst the fastest in the industry, well above the mean for big pharma. And I think that's paying off. You can see how quickly we've developed some of our more recent programs, including pirtobrutinib, including tirzepatide, including, of course, the COVID program, where now speed is an advantage for Lilly. And if we start first, we certainly end first and often, we overtake competitors through drug development.

Great. And maybe we can talk a little bit about some of the learnings from COVID, in particular, and the decision to collaborate with AbCellera. And then just the pace at which you really were able to move that program forward. What were some of the kind of barriers that you needed to break down structurally to be able to execute that in sequence.

Yes. So I think it's a good example for us. It was eye-opening even internally how fast we could go. And I think we learned something about operational excellence, what it really looks like to take in every day matters kind of mentality. The whole world was taking that mentality and watching our industry for sure. That helps focus the mind. But of course, all of the diseases we work on have huge tolls on society. Cancer and metabolic disease and Alzheimer's disease, these claim as many lives as COVID-19 did. And what we learned, though, is how we can execute in a differentiated way that we hadn't done before. So from the moment that we engaged in our COVID efforts, picking the target literally an overnight exercise, let's go after the spike protein. The partner, AbCellera, again, same-day decision. Yes, we're going to partner with AbCellera, doing business development in a couple of days to hammer out a contract instead of months, which it can take. And then moving through a drug discovery process really starting with nothing and saying we're going to find an antibody, engaging all of the CMC and manufacturing on day 1 saying, "At this day, we're going to have an antibody, so let's be ready to manufacture it and putting that capacity and scale in place." It's something we've never done before, and we didn't think -- we weren't sure if we could do it, but we did. And then clinical development and saying, "Look, we're going to move from Phase I to II to III in months and have a full data package really within about 8 or 9 months from inception of a project." It was unthinkable. But we just sat down and we did it. We put the time lines together and then we execute it like mad like there was a lot of hard work for many, many people in my team. But I think what we learned is, one, this is possible for really, for any company. Two, specifically that Lilly can do it, probably better and faster than anyone else. I think the COVID project demonstrated that we surpassed competitors here. Lots of companies talked. We moved. And then I think, along the way, we captured lots of very specific lessons about how to work together internally, how to work with regulators, how to work with clinical trial sites, how to bring trials directly to patients that we are already applying across all of our programs. So this will have -- we were already before COVID, among the fastest in our industry. This will have direct effects on continuing to accelerate clinical trials. At the same time, through the COVID experience, we've learned some lessons about things that we don't like. We saw the whole world saw disparities in health care delivery based in the United States on race that were hugely disappointing and disparities in participation in clinical research that were hugely disappointing. We're redoubling our commitment and efforts to fix that. We saw the necessity of bringing clinical trials to the patients that you can't just wait for them to turn up at your academic medical centers. Go where they are to the primary care, to the testing centers that we set up in parking lots and things like that. Go to the nursing homes directly. We learned about technology, interacting with patients like this virtually instead of asking to show up in offices, sending nurses to their homes to do study procedures and sending study direct to their homes. Those are important lessons that we carry forward, our clinical trials will be more diverse. They will be more patient-centric, and they'll meet the patients where they are using digital technologies. All of that will pay off in faster cycle times in the industry and more access to medical research for patients. So I'm excited about all of that.

Got it. Great. No, first off, thanks for -- knowing my family or was affected directly, except for one person who unfortunately -- not unfortunately, fortunately, they got the Regeneron drug. But they didn't think it worked. My impression -- what I told them after the fact was actually it probably did work. The reality is that it could have been a lot worse if that hadn't been the case. So that was -- those -- that's sort of the feedback that you get occasionally. And I thought it didn't work. I still have lung COVID symptoms, and it's like, well, imagine if he hadn't. So I have to jump into Alzheimer's. It's the topic of the day. And I think in terms of sort of transforming the industry, I think that this was the decision of the decade by the FDA as it relates to aducanumab. Just wanted to kind of hear your preliminary thoughts on what this decision itself means for Alzheimer's patients, what you think it means from a regulatory perspective and then what it means for Lilly.

Yes. Well, probably many people were surprised by the FDA action here. Really interesting approach to take an accelerated approval based on plaque lowering as a surrogate for Alzheimer's disease. I think we probably separate what does it mean from a policy perspective in terms of drug review and standards for drug approval versus what does it mean from a science perspective and is the science sound. I think on the latter, look, I've been an advocate for amyloid as a surrogate for Alzheimer's disease for decades. I believe the science is right and supportive of that. You have to know which patients and how much do you remove amyloid and what's the balance of safety and efficacy. And there's a full data package to be elucidated there that hasn't been yet, I think, for adu. But at the heart of it is, is the science right that removing amyloid in Alzheimer's patients is a good thing. I think probably yes. From a policy perspective, it is a lower bar for accelerated approvals than we expected in Alzheimer's disease. And certainly, there's been much said and written about that. From a patient perspective, what does it mean? Well, patients now have access to that drug. I think there's some excitement for sure from patients. There's also a great deal of skepticism from doctors given the way it was approved and the data package behind that. That is what it is. I think for us, the important piece here is to ensure that we have a level playing field. If the criteria for approving Alzheimer's drug is reduction in amyloid plaque, I think the data that we showed from our TRAILBLAZER trial is that we can achieve that faster and to a greater extent than had ever been seen before, with something like 40% of our patients being completely clear of amyloid plaque in 6 months and 70% or so completely clear at the end of the trial. So this rapidly clears amyloid plaques. And I don't remember how many 0 is in the p-value there. But if this is sort of the new PFS, if amyloid clearance is to Alzheimer's what progression-free survival is to oncology trials, I think we have impressive data behind us and like the opportunity to discuss that with the FDA. So if there's to be a level playing field here, we could see accelerated options for patients. Still though, I think if drugs don't have that clinical efficacy data or have confusing clinical efficacy data, that will slow their uptake in utilization. So that's really important to us. We're committed to doing that. That's not going to take us 10 years. Our TRAILBLAZER-2 trial, which is a large Phase III trial intended to replicate the compelling efficacy data we saw in TRAILBLAZER-1 is enrolling quickly. We look to complete enrollment even this year and 18 months later, have a definitive confirmation of the data. That's important. So that's the path we're on now. And a lot of confidence in donanemab that's only gotten stronger, I think, with the regulatory actually taken on aducanumab.

Is there like a credible path? I mean the data set that you have so far is relatively small from a safety perspective. Is there a possibility that with enough safety data, Lilly could pursue an accelerated filing? Is that at least something that you're planning to talk with regulators about? What are sort of the key thresholds for Lilly? Obviously, the horse is out of the barn on TRAILBLAZER-2, and we're going to learn whether or not the iADRS score delivers replication of your Phase II data set. So that's coming, no matter what. I guess the question is, is the pace at which we can see donanemab reach the market.

Yes, Seamus. I think you've hit the nail on the head here in terms of safety exposures. That seems to be the important topic for discussion now. It's funny, right, if we've had this meeting a month ago, we would be talking about iADRS and is it acceptable or not. Well, now it turns out that clinical efficacy appears not to be the bar at all. It's just plaque lowering and plaque safety in [indiscernible]. If that's the case, we're in good shape. I think we'll -- I'm very confident based on what I've seen in our interrogation TRAILBLAZER-1, that we will replicate on iADRS, and we won't have long to wait. So if we were to go for an accelerated approval earlier, it would be pretty low risk from the FDA because by the time we're launching, probably you're months away from having the definitive trial data and resolving that question. I think how much safety data is needed is important. And I think that's what you're getting at and when does Lilly get that data and what is that trigger in terms of discussions with the FDA. So it's a big trial that's ongoing, 1,500 patients in the world by the end of the year, I expect. So that starts to give us an [ indication ] of the management of safety data we get. And then how long do you need the patients on therapy, surely something less than the last patient being 18 months should be adequate. I don't know exactly when that is and how much exposure is necessary, but it could happen a great deal sooner, I guess, than that last patient visit in [indiscernible]. So that's an important discussion topic on the management of the safety data. That's required and something that we look forward to interacting with regulators on. The path for accelerated approval shouldn't be present there just for one drug. That should be a new regulatory standard. And of course, even before this decision, we've been, I would say, robust in our discussion with the FDA about our expectations around a level playing field here for all sponsors.

Got it. Great. And any chance to -- my recollection is that sola really didn't have much, if any, meaningful impact on amyloid plaque. Just wondering if there's an application there or any thought process? Or really, we just -- we should be waiting for the A4 Study to wrap up?

Yes. It's interesting. So you're right. Solanezumab targets this amyloid beta, so this is really lower plaques. I think if the FDA had said, "Well, the situation is so desperate in Alzheimer's disease, the glimmers of efficacy from adu are enough and we'll accept that." Then you'd say, well, sola certainly has glimmers of efficacy, maybe even stronger than adu. If you could pick and choose the best subsets among the best trials, sola looks pretty good and a very safe drug, I think even averaging across all of the trials if you did that for adu, you did that for sola. It's -- hey, this is very similar efficacy, maybe even more promising on safety. But since that's not the standard for approval, since the FDA went the other way and said, "Okay, it's plaque lowering." That probably doesn't open the door for sola. So it opens it much wider for donanemab. It will be closed a little for sola. Now we'll have to wait and see that A4 data. It's probably true though, that plaque lowering has a benefit, as I said before, targeting soluble amyloid beta may have a small benefit as well. It may be different. I don't know if these benefits are additive or not. I'm excited to see that A4 trial. It's still a bit away, but it will be good to see it. So we've got a lot coming in Alzheimer's disease for sure between the TRAILBLAZER-2. We announced the TRAILBLAZER-3 trial, which is a preclinical study with, I should say, asymptomatic Alzheimer's study with donanemab. The A4 trial with solanezumab and then we have another version of donanemab, really, we call it N3pG4, which is coming along as another enhanced plaque-clearing antibody [ proteins ] for subcu delivery, if we can swing it. So I think the doors is now open, and we'll have multiple agents and multiple indications coming out of it. So I'm really confident about the future in Alzheimer's disease for Lilly. And for patients and the timing certainly is reduced from where I would have said it was just a few months ago. We're excited.

Great. And then as we think about one other product data, I think we're having some Phase II data on, we just got another tau antibody piece of information from Biogen that was disappointing. What are your thoughts on zago and tau? And what would you hope to see in that trial to continue advancing it?

Yes. I've been cautious in the outlook here for zago and maybe a little more cautious now with Biogen data. But look, tau is a great target. I don't -- I haven't lost any confidence in tau as a target. Antibodies for drugging tau aggregates is a hard thing to ask an antibody to do for a couple of reasons, starting with the fact that the tau aggregates are inside of cells, which is typically not amenable to antibodies. And then second, there's a lot of nonaggregated tau, of soluble tau floating around the brain. So once your antibody gets in the brain, mostly binds to soluble tau. Zago at least is preferentially for binding to aggregated tau, so it doesn't have that sort of sync problem. But still, it's a tough ask for the antibody to sort of get into the synapses probably where the aggregates are spreading from neuron to neuron and stop that spread. I think given the data from competitors and whatnot, we're cautious. The hope here though is that we'll see some slowing of tau spread in the brain. I think if amyloid is sort of a surrogate for the amyloid on drugs, the downstream consequence of lowering amyloid, and we saw this quite clearly with TRAILBLAZER-1, slowing the spread of tau. And so slowing the spread of tau, I'm very confident is an important surrogate for Alzheimer's drugs. If you slow the spread of tau, you'll eventually have a beneficial effect. So that's what I'll be looking for in the zago trial, satisfy clinical efficacy for a second, if we can see that biomarker effect, then there's hope for that antibody in combination perhaps with donanemab, really attractive to think once you clear someone out of plaques, now hit them with an anti-tau drug. Whether that's an antibody like zago or a small molecule, and we have our [indiscernible], and other small molecule approaches like the tau, the aggregators or even a genetic siRNA approach, where you could stop tau expression. I think all of that is on the table and we'll continue to work on tau-targeted drugs for some time.

And I did have -- did get a question. I have to imagine -- there are a couple of questions that came in over on donanemab. So the one question that I do have is, is there a number or could you clarify the number of patients that would be sufficient from a safety perspective to at least approach FDA as it relates to an accelerated approval.

Yes. Okay. Somebody is asking a question again. But more specifically, no, I don't know what the specific number is that the FDA has in my mind for accelerated approval for an Alzheimer's drug. I do think though that it probably is drug-specific. Donanemab, for example, is limited treatment duration. So it's not a drug you take for the rest of your life. You take up until your plaques are clear and you're done. That should sort of logically, therefore, have a lower burden on safety than a drug like adu that you'll be taking for the rest of your life. So that's something and we continue to characterize the safety and probably will have opportunities -- certainly do have opportunities, I should say, for safety reviews as TRAILBLAZER-2 is ongoing. That's a normal course of business. We have blinded safety reviews, [ a full ] data as well as unblinded DMC reviews of safety at any point that can be shared with the FDA and facilitate a review. I think the question specifically asked is there something that you need to have to approach the FDA for discussions on accelerated approval, no, certainly not. I think those discussions can start at any time.

Got it. Okay. Great. So -- and just now I need to get back to my questions. Just kidding. So maybe we can go to Verzenio, though, and maybe there's a little bit out of Alzheimer's and pursue a little bit of the conversation on Verzenio. I think many of us were a little bit surprised on the first quarter results call when it sounded like FDA was pushing back a little bit, saying we'd like to see some more data. Could you just maybe clarify a little bit of that discussion for us. And it also sounds like you're very confident that as additional data has accrued from that interim time point, that some of those questions will be satisfied for the FDA, but just wanted to maybe start there and we can drill in a little bit more.

Yes. I pretty much agree with everything you just said, Seamus. I'm not -- I understand that people were a little bit surprised. We were a little bit surprised, too, and we knew it. There was a disconnect there between investor perception, so that's why we wanted to get it out on the call as quickly and clearly as possible. Look, I don't think there's any controversy here about the primary efficacy data from the adjuvant trial, we hit on IDFS and distant relapse-free survival. And those effects, as we commented on, grew over time. So there's not any question about that. And DRFS is very highly correlated over time with OS. The comment here was not that we need to hit a stat sig benefit on OS or anything like that. Studies aren't designed to do that in the adjuvant setting or power to do it. It's really a question of trend on OS and when that can be seen. That's fine, I guess. It's not sort of what we expected or anticipated, but I understand it. And I think we have a high degree of confidence that we get there. There were so few OS events when we published the data at JCO. Something like 30, actually out of 5,000. And yet, we know that the patients who've had recurrence of disease, ultimately, many of them, unfortunately, will die from this disease. So we're not hoping that, that happens faster than normal. But of course, it will happen over time. And as that happens, the benefit that we saw in DRFS will translate into a benefit into OS. So I'm extremely confident. I couldn't be more confident that, that we'll hit that. And that will show that benefit rather and that trend will manifest itself and we'll have approval for adjuvant breast cancer with Verzenio.

And when we just sort of think about the time lines, I know it's impossible to predict, but should we anticipate that we would see an update on some of those data at, let's say, kind of in line with the potential updated FDA dynamics at ESMO of this year where we could see additional data from the monarchE study?

Yes. Well, I don't know about time lines for...

I know you guys don't [ publish ] meetings but...

Yes. Yes, exactly. I was headed in that direction. But how about this -- we'll keep investors updated about our discussions with the FDA and to how different data could impact that, which is a bit different than saying we're presenting the data at some meeting, I don't know, but we'll try and be as transparent as possible as we go here. But as I said, we're very, very confident here. And we will have Verzenio as a treatment for adjuvant breast cancer -- as an adjuvant treatment for [ oral estrogen ].

Yes. And I guess in that context then, as we look at protein degradation opportunities, you guys had your oral SERD presented at ASCO. And so I think this is your -- is it your second oral SERD that you presented some data on? I can't recall. But this is the first one that I remember seeing. And maybe you could just talk a little bit about how you see the oral SERD's kind of playing a role given where you're positioned with Verzenio in particular.

Yes. Sure. I can't remember actually if we've had oral SERD. I'm not sure that we had another in the clinic, but it is a target we been working on for quite some time. It's been a number of efforts at Lilly as there have been at many companies. It's clearly an important and obvious targeted drug. We're encouraged, I think, at the opportunity of combining it with CDK 4/6 inhibitor, Verzenio. I mean that's obvious. And I think even more obvious is that the key opportunity for SERD, at least in my mind, is in the adjuvant setting. I think first line is tough and will really differentiate in first line. I think second line, yes, there's just a small opportunity there. But treatment duration is smaller, and so the opportunity is smaller. I think adjuvant is where an oral modality like this will play out with the biggest effect in combining it with Verzenio, something we can sort of uniquely do here. So I like that opportunity. And if you're asking if we didn't have CDK 4/6, would I be so excited about SERD? Probably not quite as excited although others are. So with specifics on our molecule, we presented a Phase I data at ASCO. This is what we were hoping for and what we were expecting out of a Phase I trial, which is to say this is a heavily pretreated population and hormonal therapies, I guess, don't really have high ORRs. So we weren't looking for that. We were focused on PK. Or could we get exposures adequate to engage the target? Yes. And I think we can do that in a way that's above what [indiscernible] does. So excited about that. Safety, can we do it in a way that's safe and that's been a huge overhang for this class. And I think we're satisfied with what we saw there. And the 400-milligram dose appears to engage target highly and fully and also give us acceptable safety profile. And then we saw some degree of efficacy that sort of just makes us think that our calculations around PK are right in the sights playing out. But it's still early and our follow-up time is short, but we'll see how that responder population evolves over time. So I like where we are coming out of Phase I. And we talked about speed earlier, Seamus. We announced we're moving this to Phase III. It's -- the Phase III study will start soon later this year and sort of 1.5 year since we dosed the first patients, we're moving with haste here. Combination with Verzenio is key, and that's -- those cards are moving quickly as well to make sure that, that's good. So we'll see readouts from competitors and then we'll see our own Phase III data and see how this class evolves.

Great. Maybe we'll move to tirzepatide because ADA is this weekend. And I think you guys have like an entire day at ADA, which the entire session for sure, which I think we've seen that before. In terms of your thoughts around tirzepatide, the one question that I think is really intriguing is the possibility that normal glycemia could make its way into guidelines now that you have a treatment that can potentially get you there. What do you think are the possibilities from that perspective? And maybe just what percent of patients could achieve that at the really well-tolerated 5-milligram dose or perhaps even 10-milligram dose.

Yes. I think you're right that normal glycemia, A1Cs that are in the [indiscernible] of people who don't have diabetes are now achievable with the tirzepatide. It will take time for that to make its way into guidelines, treatment guidelines. I think it's quite eventually it will be -- it will get there as a treatment goal. Why not if it can be achieved safely. It surely will translate into longer-term benefits less diabetes complications than higher prior levels of A1C and less adequate glucose control. The important thing here is we're doing it without increasing the risk of serious hypoglycemia, which is the reason why lower targets haven't been in the guidelines because you have more hypos, which turn out to counterbalance the benefit of better glucose control. So I think we've finally broken that conundrum with tirzepatide. With the 15-milligram dose, it was close to half of the patients. With the 10-milligram dose, depending on which patient group it was, how long they've had diabetes and where the A1C was the baseline and what prior concomitant therapies, it was between about 1/3 and sort of high 40% or 45%, 50% that achieved normal glycemic A1Cs. And then with the 5-milligram dose, it's about 1/4 to 1/3. So pretty significant chunks of the population that can take this drug and sort of less than a year later, look at their hemoglobin A1C, a measure of chronic blood sugar and say, wow, back in the normal range, which I've sort of never been before since my diagnosis of diabetes. It's just incredible to think about it and I'm excited about that. I think that along with that and this data is yet to fully come, we hope to be able to see a normalization of other parameters related to diabetes and abnormal metabolism. So we certainly have talked about achieving a normal BMI. There are other aspects related to abnormal metabolism, NASH and cardiovascular disease and others that I think we can correct. And so we're getting to a stage with diabetes or metabolic syndrome or obesity, where we can actually talk about reversing the disease and getting patients to normal. That's huge. This -- a family of diseases really is still amongst the #1 cause of morbidity and mortality in the developed world. And to think that we can now, for the first time, reverse that is exciting. I don't expect treatment paradigms to change overnight, though. So initially, this will just be seen as a better incretin that's stronger and just better effects. Fine, that's a reasonable place to start, and we've seen with Trulicity and semaglutide that, that's a big opportunity. But ultimately, our sights are set quite a bit higher than that. And moving this drug and drug like this earlier in the treatment paradigm. So going to help more patients achieve this parameters to the normal range and possibly prevent the consequences of diabetes. That's where we want to go, and we'll continue to generate data that will support that use.

And what about the approach? I know you guys have a triagonist that includes a glucagon receptor agonist as well as some other approaches in diabetes. Maybe you can talk about what's next because that's what investors care about. No, I'm just kidding about that.

Oh you care about it, too, [indiscernible]

Yes, exactly. We should.

Yes. So look, I open by saying it's decade-long, decades long, scientific interrogation of diseases and pathways that ultimately pays off for companies. And incretins is an example, we're doing that multiple mechanisms here under investigation at Lilly and a firm understanding of what translates from mice to nonhuman primates to humans. I remember going out on a limb 5 or 6 years ago at our investor meeting is showing preclinical data from tirzepatide, literally mouse data. So I think this one is going to be good, and it was. And then a few years ago, commenting on GGG, it's the next one, which now it's glucagon, as you said, to GIP and GLP-1. Some comments on GGG coming up and said this is moving forward in development in kind of our last call. It's exciting adding glucagon, I believe, to GIP and GLP, can give even greater benefits. We're pretty strong on A1C. There's not much more room to go there. But on weight loss, probably on NASH as well, there could be additional benefits from glucagon therapy. So excited about that molecule as well as other combinations of incretins or incretin-like molecules that we're working on. It's really a breakthrough now in a golden age in incretin therapies is coming, proud to be a leader in the space for sure. Part of it though is cracking, I think, the commercial and medical acceptance of drugs for obesity. We really have to make sure that, that society understands the medical benefits to weight loss, that this isn't just sort of a cosmetic or social issue. This is really a huge cause of morbidity and mortality, and weight loss will change that and be highly cost-effective and reduce on the medical costs and death. So that's work that's ahead of us, and you'll see as we roll out various aspects of our BC program, a lot of emphasis on the medical benefits from weight loss.

Great. And then we didn't talk about this and might -- if it's okay, we'll maybe run a little bit if it's possible to run a little bit long, we'll do that. But the one question that I had as it relates to Alzheimer's disease and incretins, do you think that there is a link or a tie between that? We talked a little bit about that with Novo earlier today. But it's an expensive incremental program, certainly for Lilly to execute.

Yes. It is a little bit incremental, I would say, because the incretin effect on sort of cognitive decline. It's probably real, but it's probably smallish. Is it directly related to Alzheimer's pathology? I don't know. Maybe it might also just be related to overall sort of vascular health and we see less strokes on these drugs and presumably less microinfarcts as well that's difficult to measure, which would translate into slower cognitive decline. That's great. It's good news for patients. Will this become a mainstay of treatment for Alzheimer's patients? I don't know if the effect is going to be strong enough or not. But maybe in combination with amyloid-lowering drugs. So it's certainly something we think about. And look, it's obvious we're uniquely positioned here. I think we have the strongest amyloid drug and the strongest incretin drug to think about how these could play together for patients, but we haven't made any decisions or commitments there, but remain open to further understanding the science. I think one approach we've taken, as I commented earlier, is really understanding the patient and segmenting patients and understanding which patients respond best to which therapy. And there could be groups of patients that will respond particularly well to these kinds of therapies. So that's something important to understand. Yes.

So maybe just to wrap it up with the last question. Lilly has really made a decision, particularly as it relates to oncology development. If I look at your portfolio, IO targets and targets like LAG-3, TIGIT that are certainly gaining attention, aren't part of the sort of Lilly portfolio. I guess, the one -- there's sort of the fear of missing out, but you've also made a very concerted decision to pursue targeted oncology therapies and agents that combine well with your lead therapy. So how should we think about the Lilly oncology development portfolio going forward as you continue to evaluate these outside potential opportunities?

Yes. And look, we're not saints here, we've sort of dabbled in IO in the past and tried to find that lightning in a bottle the next big thing without luck, right? And I think luck is probably the right word here. The science isn't good enough, and we have to just be humble that it's difficult to predict which next IO target is going to make a big difference? And is there another PD-1 lurking somewhere in the sidelines? Or is it going to have to be combined? And then how do you distill all the data, there's so many false starts here. So I think out of a deep sense of humility, we've pulled away from that and said instead, "Let's focus on things where we know the science is good, where we have a ton of confidence that if we can just make a drug that work, a drug that hits the target, the target biology will play out." And there's still just a lot of opportunity there that we see is much more predictable and much lower risk than trying to find that next IO target. So that's where we'll focus our attention. That's okay if someone else find success in that area, we'll find success for sure in our area, and you're seeing it start to play out already. You talked about Verzenio and we talked a little bit about pirtobrutinib. We have more behind that, talk about SERD, KRAS. But then I think you're going to start to see the fruits of the Loxo Oncology at Lilly investment, where we sort of combined our internal capabilities, the Loxo capabilities to set out to discover more targeted therapies against validated targets where we can make best-in-class small molecules, and we're going to have a steady stream of them. I'm excited. It's still early and we don't have candidates or first human doses yet to show you, but we will soon. And I think it will be a steady stream of exciting molecules that will follow in the mode of what you've seen so far. Some of them will turn out to be huge opportunities exceeding our expectations like pirtobrutinib. Others will be medium, large like Retevmo. Others might be smaller like [ the track ], but things like that, that just offer huge response rates for the right patients, those are important drugs we'll continue to work for [ our patients ].

Fantastic. And maybe just as a wrapping up, if there's anything that other pads or other platforms that the team has acquired, you kind of just stepped into gene therapy a little bit. You talked about RNAi. Any other sort of platforms that Lilly is working towards that you're particularly excited about?

I probably lump gene therapy, gene editing, siRNA, mRNA. Clearly, you could just think about the revolution in our industry cause when we discovered that we could link amino acids together to make protein therapies, antibodies or peptides or proteins. That's biotechnology that had a huge boost in productivity for the entire industry. Now we're seeing the same thing happen with linking nucleic acids together to make nucleotide-based therapies in different ways. That's just another step change for what's possible in human health. Lilly is going to be a part of that. Lilly's going to be a leader in that. That's my commitment. So we will continue to invest and work hard. And we have a slate of products in SI and a couple of gene therapy products in neuroscience in clinical trials. So that's an exciting platform. I think another one that maybe slightly overlooked perhaps is what's happening in small molecule chemistry, probably aided by a better structural biology, understanding of the targets as well as computational techniques here to design molecules. We can make much more complicated small molecules, which now give us access to targets that previously were only large molecule targets. So for example, oral GLP-1 or oral GLP, GIP, we have an oral IL-17 inhibitor. We have an oral Lp(a) molecule. These are -- they're not small, small molecules. They're big, but they're still chemicals made in the lab and orally bioavailable that could really open up a lot of disease space for treatment for many, many patients. So I'm excited about that. We're investing heavily in that area, and you'll start to see some data from some of those programs that could be game changers. Imagine an oral IL-17 drug like Taltz, probably pretty cool if we can do it.

Great. Well, Dan, thanks for giving us the extra time. Thank you so much for a phenomenal discussion and really looking forward to all of the additional data that I'm sure we're going to see throughout the balance of this year from Lilly and over the next decade. So again, thanks so much for a great discussion and look forward to our next chat.

Yes. Likewise. Thank you very much, guys. Have a great day.