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

Ladies and gentlemen, thank you for standing by, and welcome to the Lilly Diabetes Update at ADA. [Operator Instructions] As a reminder, today's call is being recorded. I will now turn the call over to your host, Sara Smith. Please go ahead.

Good morning. Thank you for joining us for Eli Lilly and Company's Diabetes Business Update. I'm Sara Smith, Director of Investor Relations. Joining me on today's call are Mike Mason, President of Lilly Diabetes; Dr. Jeff Emmick, Vice President of Diabetes Product Development; Dr. Ruth Gimeno, Vice President of Diabetes and Metabolic Research; and Jamie Croaning, Global Development Leader for tirzepatide. During this conference call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on Slide 3. Additional information concerning factors that could cause actual results to differ materially is contained in our latest Forms 10-K, 10-Q and in the 8-K filed with the Securities and Exchange Commission. The information we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions. I'll now turn the call over to Mike to provide some introductory remarks.

Thanks, Sara, and thank you for -- to everyone for joining us today and for your interest in Lilly Diabetes. It continues to be an incredibly exciting time for us to provide novel treatment options for people living with diabetes. Before we move to the presentation on tirzepatide and our early-stage pipeline, I'd like to spend a few minutes highlighting our progress and momentum in diabetes, as well as our overall strategic vision for continuing to discover medicines that could potentially deliver breakthrough outcomes. Lilly has been a leader in the fight against diabetes for nearly a century, and our innovation over the past decade has been particularly strong. We have developed and launched best-in-class medicines that address unmet needs for patients around the world living with this burdensome disease. Since 2010, Lilly Diabetes has launched several products that have increased our market coverage across the continuum of care beyond our insulin offerings, including oral medicines like Jardiance from our alliance with Boehringer Ingelheim, as well as injectables like Trulicity. Supported by additional indications and line extensions, these medicines have driven significant growth for our diabetes business, more than tripling revenues in the past decade to roughly $12 billion in 2020, as shown on Slide 4. We expect this momentum to continue over the next decade, driven by Trulicity and Jardiance, connected solutions for our insulin portfolio and sustained innovation from our rich pipeline of potential new medicines, which we aim to change treatment paradigms in diabetes and related metabolic disorders. Trulicity, which launched in 2014 as the fifth GLP-1 to market, now has captured 49% share of the injectable GLP-1 class prescriptions, and we are encouraged by the reacceleration of the class in the first half of 2021. As the market leader, we expect Trulicity to continue driving the expansion of the class as more health care providers utilize GLP-1s as their first injection choice. Positive cardiovascular outcomes benefits in a broad type 2 diabetes population, powerful efficacy across 4 doses, a great customer experience and the highest adherence of any diabetes medication are all catalysts for further growth for Trulicity. Jardiance, our SGLT-2 inhibitor, is also a market leader with 60% share of market in a class with accelerated growth over the past 2 years, from single-digit growth in 2018 to approximately 20% annual growth now. Jardiance has shown an impressive cardiovascular benefit and has potential opportunities for growth in the treatment of heart failure and chronic kidney disease. Our vision for the future is to maintain a relentless focus on both advances in diabetes and improving metabolic health for patients. We anticipate sustained growth for our business will come from innovation for diabetes treatments and in other serious chronic diseases, including obesity, NASH and heart failure. We believe this will be possible due to the innovation from our pipeline with products like tirzepatide, basal insulin Fc, our GGG agonist and oral incretins, all of which we'll discuss in detail today. We are highly focused on the opportunity of bringing tirzepatide to patients around the world in 2022, if approved. We continue to believe tirzepatide may represent an important evolution in incretin innovation as it showed robust A1C, weight and lipid reductions, as well as lowering of blood pressure, which could potentially translate to improved outcomes for patients. In addition, the remarkable results demonstrated in the Phase III SURPASS program support our belief that tirzepatide could improve metabolic health across multiple indications. We are thrilled with the results observed in the SURPASS studies and are encouraged by the excellent performance across all 3 maintenance doses. I'll now turn the call over to Dr. Jeff Emmick, who will provide an overview of tirzepatide and additional context regarding the recently presented SURPASS data.

Thanks, Mike. The results we have generated to date for tirzepatide in the SURPASS program have indeed surpassed our own expectations. Tirzepatide, a novel dual GIP and GLP-1 receptor agonist, has shown clinically meaningful levels of both A1C and weight reduction across 3 maintenance doses, which lead us to believe that we have an opportunity to change the treatment paradigm in type 2 diabetes. Historically, type 2 diabetes has been a disease where physicians have followed a treat-to-failure paradigm. Many currently available therapies have limited durability, which results in glucose deterioration over time and a need to intensify treatment, including the addition of new treatments as well. We believe early treatment with tirzepatide, which provided rapid glucose and weight control and brought a meaningful proportion of patients back to levels of normal glycemic levels in the SURPASS studies, could translate to better outcomes. Before I talk about the results from SURPASS-1 through 5 in detail, I would like to spend a few minutes providing an overview of tirzepatide and the key study design features of the SURPASS studies, which were really an integral part of achieving the excellent Phase III outcomes for tirzepatide. Moving to Slide 6. Tirzepatide is a dual receptor agonist that binds to both the glucose-dependent insulinotropic polypeptide, or GIP; and glucagon-like peptide 1, or GLP receptors. Based on our growing understanding of GIP biology and the known pharmacology of GLP-1, dual signaling is expected to potentially result in improved control of both carbohydrate and lipid metabolism and lower body weight in patients with type 2 diabetes beyond that observed with selective GLP-1 receptor agonists. Tirzepatide has a mean half-life of approximately 5 days which enables weekly dosing and is administered using the same user-friendly auto-injector pen as Trulicity. Three years ago at EASD, we were very excited to share the results from our Phase IIb study of tirzepatide, which showed impressive A1C reduction and weight loss compared to placebo and to dulaglutide in type 2 diabetes patients after just 26 weeks. And our goal for the Phase III SURPASS program was to replicate these results. As part of the Phase III design, we implemented an optimized dose-escalation scheme, shown on the right side of the slide. The optimized dose-escalation scheme included a low starting dose of 2.5 milligrams and slower dose escalation in 4-week 2.5-milligram increments until reaching a target dose as compared to the more rapid escalation that we did in the Phase II study. The Phase III SURPASS program, which is outlined on Slide 7, collectively tested tirzepatide in thousands of patients with type 2 diabetes against widely used diabetes medicines or placebo and across the spectrum of the disease progression. To date, 7 of these studies have been completed, including 2 studies in Japan that are required for local registration there. We plan to share the data from the Japan studies at an upcoming scientific meeting. We also have 2 ongoing studies: SURPASS-Asia Pacific, which will help enable a submission in China; and of course, our large cardiovascular outcome study, SURPASS-CVOT. We believe each SURPASS study has been well executed against the backdrop of the COVID-19 pandemic, and I'd like to take a minute to really thank all of the patients and investigators who have participated in the SURPASS programs in the face of this pandemic. It was not easy. It took a lot of extra effort to keep patients in the studies and bring these to conclusion. With completion of the 5 global registration studies and 2 studies in Japan, we intend to submit tirzepatide for the treatment of type 2 diabetes to global regulatory authorities by the end of 2021. On Slide 8, you will see the range of key baseline characteristics across SURPASS-1 through 5, which highlight the spectrum of disease we studied, including hemoglobin A1c, which ranged from a mean of about 8 to 8.5; body weight from a mean of approximately 86 kilograms to 95 kilograms; mean duration of diabetes, which was as low as 4.7 and as high as 13.3 years; and background oral hypoglycemic medications, which range from no background therapy to any combination of metformin, SGLT-2 inhibitors and sulfonylureas. The SURPASS program also studied tirzepatide across multiple comparators, including semaglutide, insulin degludec and insulin glargine. Tirzepatide has delivered consistent efficacy results across all SURPASS clinical trials we reported to date, and the overall safety profile has been similar to the well-established GLP-1 receptor agonist class, which I will discuss in a few slides. We believe these results demonstrate an exciting advancement and innovation for patients with type 2 diabetes as tirzepatide has consistently shown superiority in both A1C and weight reduction against widely used diabetes medications or placebo and across a spectrum of the disease progression. Remarkably, patients taking tirzepatide experienced A1C reductions of up to 2.6% with the highest dose of tirzepatide, as shown on Slide 9. Slide 10 depicts the proportion of patients achieving A1C levels of less than 7 and less than 5.7. Between 81% and 97% of patients achieved an A1C of less than 7, the recommended target level established in the ADA guidelines. At the highest tirzepatide dose, up to 62% of patients achieved an A1C of less than 5.7. We feel this is important because it is the threshold for what is considered to be the level of normal A1C. The proportion of patients achieving this level of A1C reduction has never been safely attained before with a therapeutic agent. We believe that bringing patients back to a near-normal A1C level early in the disease course could deliver potential long-term benefits for patients. We are also very encouraged by the degree of weight loss observed across the SURPASS studies to date, as seen on Slide 11, with nearly 14% weight loss on the 15-milligram treatment arm. We believe that providing patients with the potential to lose more weight compared to all alternative treatments currently available is critical to the management of type 2 diabetes and to unlocking a significant opportunity for patients. The final efficacy detail I'd like to highlight across the SURPASS program is the proportion of patients achieving weight loss greater than or equal to 5%, 10% and 15%, which are shown on Slide 12 for SURPASS-1, 2, 3 and 5. Impressively, up to 43% of patients on the highest dose of tirzepatide achieved 15% or greater body weight loss. Moving on to safety and tolerability. On Slide 13, you will see the tolerability profile across SURPASS-1 through 5, which was similar to the well-established GLP class for the relevant patient populations. We were pleased to see the dose-escalation scheme used in the SURPASS program has improved the overall tolerability of tirzepatide. The incidence of gastrointestinal-related adverse events was lower than we saw in our prior Phase IIb study and is aligned with our expectations. Importantly, most GI adverse events were mild to moderate in intensity and occurred mostly during the dose-escalation period across all doses of tirzepatide and SURPASS studies. On Slide 14, you will see a summary of safety takeaways from the SURPASS program, inclusive of highlights from the CV meta-analysis, which has met regulatory submission requirements for evaluating cardiovascular risk. Tirzepatide demonstrated an overall safety profile consistent with the GLP-1 receptor agonist class in the patient population studied. Discontinuation of study drug due to adverse events ranged from 3% to 11% across the doses, which I will note is comparable to GLP-1 registration trials that have been done in the past. And hypoglycemia was low in the SURPASS program when tirzepatide was not combined with sulfonylurea or insulin. With respect to cardiovascular safety, a CV safety meta-analysis was conducted across the clinical program, consisting of 116 patients with MACE-4 events. Comparing pooled tirzepatide across pooled comparators, a hazard ratio of 0.1 was observed with a confidence interval of 0.52 to 1.26. The majority of the events for the CV meta-analysis came from SURPASS-4, our study of tirzepatide versus insulin glargine in patients with high cardiovascular risk. The hazard ratio observed in SURPASS-4 was lower than the pooled data at 0.74 with a 95% confidence interval of 0.51 to 1.08 with all 4 MACE components contributing to the results. To further evaluate tirzepatide's potential in cardiovascular disease, we have also recently initiated SUMMIT, a Phase III study evaluating tirzepatide in patients with heart failure with preserved ejection fraction. Together with the ongoing SURPASS-CVOT trial, we look forward to these future readouts and have confidence in the potential cardiovascular benefit tirzepatide could show in these studies. I would now like to spend a few minutes showcasing the results from SURPASS-2, the head-to-head trial of tirzepatide versus injectable semaglutide 1.1 milligram at a selective GLP receptor agonist. Head-to-head studies are the gold standard for assessing the efficacy of investigational treatments, and these impressive results show that tirzepatide, even at the lowest dose, was superior to semaglutide. The results from this study underscore our belief that tirzepatide could deliver efficacy beyond what we have seen from semaglutide for patients living with type 2 diabetes. Slide 15 shows the change in A1C over 40 weeks from the SURPASS-2 trial, which demonstrates both the early onset and magnitude of A1C reduction we observed with tirzepatide, and these level of A1C reductions were achieved without a significant increase in the risk of hypoglycemia, as we have previously reported. Additionally, 51% of patients taking tirzepatide 15 milligrams achieved an A1C of less than 5.7. And as I mentioned earlier, that is the level seen in people without diabetes, compared to 20% of those taking semaglutide. Moving to Slide 16, you can see the significant weight loss observed over 40 weeks, where weight loss on the highest dose of tirzepatide roughly doubled the weight loss observed with semaglutide. Notably, the semaglutide weight reduction in SURPASS-2 is also consistent with that reported in STEP 2, the obesity trial that was done in patients with diabetes, where the 1-milligram dose produced weight loss of 7.26% and the 2.4-milligram dose produced weight loss of 10.6%. On the right side of this slide are the weight loss thresholds from SURPASS-2, which showed that 40% of patients taking tirzepatide at the 15-milligram dose achieved 15% or greater weight loss compared to 9% of patients on semaglutide 1 milligram, which is encouraging as this level of weight loss may lead to meaningful metabolic and non-metabolic health benefits. Additionally, we evaluated a prespecified exploratory composite endpoint comprised of participants who achieved an A1C level of less than or equal to 6.5%, weight loss of 10% or greater while not experiencing hypoglycemia less than 54 milligrams per deciliter or severe hypoglycemia, as shown on Slide 17. We believe this endpoint provides insightful information for physicians about not only the level of glycemic control achieved but also the weight loss it reached, both with no clinically significant increases in hypoglycemia. Across the 5-, 10- and 15-milligram doses of tirzepatide, 32%, 51% and 60% of patients, respectively, achieved this composite endpoint compared to 22% of patients taking semaglutide. Lastly, a leading indicator that informs our belief that tirzepatide has the potential to meaningfully improve metabolic health is the lipid profile that we have observed in patients taking tirzepatide across our SURPASS program. Tirzepatide demonstrated improvement in the fasting lipid profile from baseline consistently across the program. Of note, in SURPASS-2, tirzepatide delivered significant and clinically meaningful mean reductions in triglycerides and very low-density lipoprotein cholesterol and increases in high-density lipoprotein, or HDL cholesterol, compared to semaglutide. Additionally, not only did many patients who received tirzepatide show an improved lipid profile, they also showed an improvement compared to baseline in blood pressure, biomarkers of insulin sensitivity and liver enzymes. These results, coupled with levels of near-normal glycemia and weight loss, give us confidence in tirzepatide's potential to improve metabolic health and a reason to believe that we could see a favorable profile in our ongoing cardiovascular outcomes trial. Tirzepatide has a novel mechanism of action that integrates the actions of 2 incretins, GIP and GLP-1, into a single molecule, representing a new class of medicines being studied for the treatment of type 2 diabetes. We have always believed that this dual mechanism of action is a key differentiator and underlies its ability to drive profound efficacy for both A1C and body weight reduction. The strong results observed across the SURPASS program support this notion, and we continue to study the mechanism of action by which tirzepatide may bring benefits to patients with diabetes. The tirzepatide program includes an ambitious plan to seek to demonstrate the GIP and GLP-1 contributions to the tirzepatide mechanism of action, as outlined on Slide 18. We designed 4 studies to further examine the underlying efficacy of tirzepatide on glucose and body weight. We are particularly excited about the insulin secretion and insulin action study, which will allow us to assess whether the weight-independent insulin-sensitizing effects of tirzepatide that we observed preclinically in a post-hoc analysis of our Phase II data are substantiated in this gold standard clamp study. In addition, we will be able to assess the effects of tirzepatide on beta-cell function, which will provide important clues as to the possibility for durability of glucose control mediated by tirzepatide. This study, which is now complete, will be included in our submission for tirzepatide in type 2 diabetes. On Slide 19, the next steps for tirzepatide in type 2 diabetes are outlined. With the completion of the 5 global registration studies, the SURPASS program has now met regulatory submission requirements, and we remain on track for submissions to global regulators by the end of this year. At the upcoming EASD meeting, we plan to share further detailed results from SURPASS-4; our SURPASS-3 continuous glucose monitoring, or CGM, and MRI data; and the insulin secretion and insulin action MOA study that I referenced on the previous slide. We are also pleased with the enrollment progress of SURPASS-CVOT, which is testing cardiovascular outcomes of tirzepatide against Trulicity, and we anticipate sharing the top line results of this event-driven study in 2024. We are excited about the potential to bring tirzepatide to markets around the world in 2022 and want to highlight a few considerations that are important to us as we focus on developing our commercial strategy for tirzepatide in patients with type 2 diabetes. As we have mentioned several times on this call, we hope the unsurpassed results across all tirzepatide doses will allow us to challenge current perceptions and move health care providers to consider incretins as an earlier treatment option for patients with type 2 diabetes. The performance of the 5-milligram dose has remained one of the most exciting aspects of the results across our SURPASS program. Even at the 5-milligram dose, we believe tirzepatide has the potential to be a best-in-class incretin on efficacy with tolerability that is consistent with the GLP-1 class. While most patients taking 5 milligrams achieved an A1C of less than 7% across our trials, the 10- and 15-milligram doses demonstrated additional glucose lowering and weight reductions which may be beneficial for a broader range of patients. This potential optionality for even greater efficacy may further differentiate tirzepatide from currently available treatment options. As mentioned earlier, in the SURPASS program, again, up to 62% of patients actually reached this A1C level of below 5.7 and have -- we saw weight loss up to 14% at the highest dose of tirzepatide. Beyond type 2 diabetes, we believe tirzepatide could be very well positioned to improve metabolic health and offer strong clinical potential across multiple indications, including obesity, NASH and HFpEF, as shown on Slide 20. We also continue to assess opportunities for other indications where tirzepatide could offer additional value. Before I conclude on tirzepatide, I'd like to highlight the tirzepatide obesity program, SURMOUNT, which is outlined on Slide 21. It is estimated that over 100 million people are living with obesity in the United States, while only 3 million adults are actually treated for their condition pharmacologically. Though the ultimate treatable population depends on a successful program and the resulting label, if approved, we believe there is significant patient population who may benefit from tirzepatide. The ongoing SURMOUNT studies are evaluating weight loss in a broad population of patients, including patients both with and without type 2 diabetes, as well as evaluating maximizing weight loss and a maintaining weight loss. The first study of this Phase III program was initiated in Q4 of 2019 with 4 additional studies, SURMOUNT-2 through 4; and SURMOUNT-J, or SURMOUNT-Japan, initiated in Q1 of this year. The SURMOUNT program is evaluating 5-, 10- and 15-milligram doses of tirzepatide and uses the same dose-escalation scheme as the SURPASS program. Importantly, the SURMOUNT-3 and SURMOUNT-4 studies use the maximum tolerated dose construct similar to SURPASS-CVOT, which have been adopted to maximize the number of patients who can take the drug at the highest dose tolerated by each individual. We look forward to the first readout from SURMOUNT-1 in 2022. Having seen up to 14% weight loss in our SURPASS trials only furthers our anticipation for the potential weight loss we could see in people with obesity, both with and without diabetes. To summarize, we are very pleased with the impressive, consistent results we have observed across the SURPASS program. We are focused on completing global submissions later this year and look forward to bringing this potentially practice-changing medicine to patients with type 2 diabetes in 2022. Further, tirzepatide's dual-acting GIP/GLP-1 mechanism has raised the bar for incretin innovation, and data to date suggests the potential to show benefit in other indications that could lead to improved metabolic health. Now I'll turn the call over to Dr. Ruth Gimeno to showcase a few of the assets in early-stage development within our diabetes business unit.

Thanks, Jeff. Lilly has a robust early-phase diabetes pipeline aimed at raising the bar for innovation and improving metabolic health. Today, I would like to highlight a few of these opportunities. First, I'd like to discuss our weekly basal insulin Fc, also known as BIF, on Slide 23. Our goal for this program is to develop a best-in-class weekly basal insulin that optimizes both efficacy and safety and provides a simple solution for people with diabetes. We anticipate that the convenience of a once-weekly insulin with a simple titration regimen could result in earlier adoption of insulin therapy and may improve compliance and adherence to therapy, leading to better patient outcomes. In fact, we expect weekly insulin could become the standard for basal insulin therapy. We developed this with a goal to have a very flat, best-in-class PK profile, and we achieved this with a very low peak-to-trough ratio of 1.14. This could result in more consistent and predictable glycemic control and may translate to lower rates of hypoglycemia. At ENDO and ADA this year, we shared data from our first Phase II study, which showed that in individuals with type 2 diabetes previously treated with insulin, BIF had similar efficacy compared to insulin degludec with lower hypoglycemia rates. These results are shown on the left-hand side of the slide. In addition, at ADA, we presented CGM data from the study, which showed that BIF had lower intraday glucose variability when compared to insulin degludec, a lower relative risk of hypoglycemia and a duration of time in hypoglycemia that was numerically lower than insulin degludec and independent of the time of post administration These findings are consistent with the flat PK profile of BIF. It is worth noting that our study compares BIF with insulin degludec, a molecule that has shown the lowest hypoglycemia rate among basal insulins. We have 2 ongoing Phase II studies with BIF, one in type 2 insulin-naive patients and one in individuals with type 1 diabetes. We look forward to sharing the results from these studies once they are available. Our goal is to initiate Phase III studies for BIF in early 2022. Moving on to our early-phase incretin portfolio. Our GIP/GLP-1; and glucagon receptor agonist, or GGG, shown on Slide 24, represents our ongoing commitment to innovation in the incretin class. GGG is a multifunctional peptide agonist that aims to preserve the pharmacology of tirzepatide and adds balanced glucagon receptor activation to provide additional pharmacology. We know that glucagon can increase energy expenditure in humans, providing an opportunity for more profound and durable weight loss when added to dual GIP and GLP-1 receptor agonism. In addition, the direct effects of glucagon on the liver may provide unique benefits in NASH. In a preclinical model, shown on the right-hand side, we found that GGG showed significantly more weight loss than tirzepatide or other single- or dual-incretin peptides. At ADA, we presented additional preclinical data for GGG, demonstrating increased energy expenditure and profound decreases in liver fat and liver enzymes. Thus, based on preclinical data, we believe GGG has the potential to deliver differentiated efficacy on body weight and liver health above and beyond what can be achieved by selective GLP-1 receptor agonists, oxyntomodulin analogs or even tirzepatide. We just completed Phase I studies with GGG, shown on Slide 25, and we're excited to find a profile that appears to be consistent with our preclinical data. In our single-ascending dose study in healthy volunteers, shown on the right, GGG showed a decrease in body weight that reached 3.5 kilograms at the highest dose, 3.4 kilograms when adjusted for placebo. The half-life of GGG was 6 days, supporting once-weekly dosing. Despite decreasing drug exposure after 1 month, weight loss was sustained with up to 2.5 kilogram weight loss 43 days after a single dose. This profile speaks to the potential for improved durability of weight loss with GGG. We just completed a 12-week combined multiple-ascending dose proof-of-concept study in patients with type 2 diabetes. While still early, data from this study support the potential for differentiated efficacy from tirzepatide with respect to body weight while maintaining glycemic control. The safety and tolerability profile of GGG was similar to other incretins with GI side effects as the most common adverse events. Based on this promising data, we initiated a Phase II program for GGG designed to assess this molecule for type 2 diabetes, obesity and NASH, and we look forward to seeing results from the study next year. Lastly, I would like to highlight our oral incretin programs, specifically our GLP-1 NPA molecule, which is the most advanced asset in this portfolio, as shown on Slide 26. Our goal for oral incretins is twofold. First, we would like to provide a once-daily oral GLP-1 that is simple to use with no food or water restrictions. We believe that our GLP-1 NPA molecule can meet this bar. This molecule, which we licensed from Chugai in 2018, binds to the GLP-1 receptor in a unique way, resulting in partial and biased agonism, similar to the action of tirzepatide at the GLP-1 receptor and quite different from other GLP-1 receptor NPA molecules. We are in the middle of Phase I, and it is still very early, but data obtained in the clinic so far support once-daily dosing with no food or water restrictions and a pharmacodynamic and side effect profile consistent with the GLP-1 receptor agonist class. A 12-week proof-of-concept study in patients with type 2 diabetes is ongoing and expected to read out later this year, potentially allowing Phase II initiation in late 2021 or early 2022. We expect that we will disclose our Phase I data at a scientific meeting next year. Our second goal for oral incretins is to aim for tirzepatide or GGG-like efficacy using orally delivered peptides. We are currently evaluating 2 GIP/GLP-1 coagonist peptides in the clinic that are potentially suitable for oral administration, and we have initiated oral studies for one of these molecules. I would like to conclude with a view of our early-phase diabetes portfolio, shown on Slide 27. In addition to our weekly insulin and next-generation incretins that I highlighted today, we have several novel targets focused on obesity, diabetes and NASH. We have also increased our investment in diabetes-related disorders, such as cardiovascular disease and heart failure, where we build on our expertise and successful late-phase readouts with dulaglutide and empagliflozin. We are excited about the breadth and depth of our early-phase diabetes pipeline, and we look forward to updating you as we progress. This closes the summary of our early-phase diabetes portfolio. I'll now turn the call back to Mike to provide some closing comments.

Thanks, Ruth. Before we go to the Q&A session, let me briefly sum it up. Lilly has had tremendous growth in diabetes over the past decade. We look forward to continuing this momentum as we build on the strength of Trulicity and Jardiance while expanding beyond type 2 diabetes into related metabolic health conditions driven by our rich pipeline. We anticipate tirzepatide could be a foundational medicine with outstanding clinical results in type 2 diabetes and is leading our expansion in the metabolic health with anticipated readouts in obesity, NASH and heart failure in the next several years. We continue to innovate in our early-phase diabetes pipeline as we invest in next-generation incretins and our weekly basal insulin. We remain committed to bringing new first-in-class and best-in-class medicines to patients around the world. This concludes our prepared remarks. I'll now turn the call back to Sara to moderate the Q&A session.

Thanks, Mike. We'd like to take questions from as many callers as possible. [Operator Instructions] Kevin, please provide the instruction for the Q&A session, and then we're ready for the first caller.

[Operator Instructions] We will go to the first line, and that will be Seamus Fernandez, Guggenheim.

So just 2 questions. First, the SURPASS-2 data set, I was just hoping you guys could reconcile the deaths that we saw beyond just the COVID-related deaths. Obviously, there were some questions around the cardiovascular offset there versus what we saw with semaglutide. I believe this was an open-label study. There could be characteristics from baseline that are different. Just wanted to get an explanation there because there is a wide differential between the 0.74 hazard ratio that you've seen at the interim in the SURPASS-4 data set and at least what was generating some concern or questions from investigators at ADA. And then the second question, just your efforts with the GGG and dual-incretin oral agents. When might we see the first dual-incretin oral data? And at what point are we likely to see the GGG obesity and NASH data in the next -- is that next -- maybe 2023, somewhere in that time frame for those data sets?

Thanks, Seamus. We'll go to Jeff for the first question on SURPASS-2.

Yes. Seamus, I think it's first important to note, and you probably recognize this as well, the randomization in SURPASS-2 was 3:1 between tirzepatide and semaglutide. It was also probably one of our most affected studies in terms of COVID as we've looked across all of the studies. I know there was some question when weren't they all ongoing in parallel. But in fact, this was the last study to enroll and had a significant patient population in Latin America, specifically Argentina, which had its peak in its first wave fairly late. So we saw, throughout that entire study, a fair number of COVID events. And as we've noted, COVID-19 was a cause or significant confounder in nearly half the deaths. The second most common cause of death was cardiovascular related, of which the majority of patients had multiple preexisting cardiovascular risk factors. But let me elaborate on it a little bit further. Several of the non-COVID deaths occurred 1 or more months after the last dose of study drug, which I think is an important consideration. And that then left a small number of cardiovascular deaths, again, which were in patients with mostly multiple risk factors. I think it's also important to point out that we've seen very small numbers of cardiovascular deaths across the other studies, SURPASS-1, SURPASS-3 and SURPASS-5, which are in similar patient populations. But most importantly, and you referenced this a bit, we've already announced the results of our CV meta-analysis, which is across the entire program. That hazard ratio, as I said, was 0.81. And the point estimate for all 4 MACE components was less than 1 at meta-analysis. The upper bound of the confidence interval, as we've noted, was 1.26, which is well below the 1.8 required for the 2008 guidance for approval and actually below the 1.3 that's required by that guidance post approval. And then within SURPASS-4, which was conducted in patients with high cardiovascular risk, in fact, that patient population in SURPASS-4 really mirrors a CVOT population, that study provided the majority of the MACE-4 events across the meta-analysis. And we had 1:1 randomization between tirzepatide and insulin glargine, which is also an important factor. And in that study alone, the MACE-4 hazard ratio was 0.74, again with all 4 components contributing to the results. Finally, and as I'm sure you know, we have multiple biomarkers of cardiovascular risks that are significantly improved with tirzepatide, including triglycerides, VLDL, HDL, blood pressure and even some inflammatory markers. And when we take this all together, we remain very confident in the CV safety profile of tirzepatide. We look forward to the results of our CVOT study which is enrolling well. And our confidence is also reflected in our decision to conduct SUMMIT, our study in patients with heart failure and a preserved ejection fraction with obesity that is already enrolling.

Thanks, Jeff. We'll go to Ruth for the second question.

So with respect to the dual-incretin oral administration, we have 2 new molecules that were optimized for oral delivery. In Phase I clinical testing, we obviously need to assess the molecules first, and then we are moving on to oral formulations. One of these molecules currently is being evaluated in the first oral formulation study. We expect to show data from this program likely in 2022. With respect to the tri-agonist data disclosures, our PoC study, 12-week PoC study was in patients with type 2 diabetes. So you will see that data first, and that will likely be next year. The results from the ongoing Phase II study in obesity as well as diabetes will likely be released in 2023.

Thanks, Ruth. Thanks, Seamus, for the question.

Next question is from the line of Steve Scala of Cowen.

Novo has a GIP/GLP fixed-dose combination in Phase II now. From a basic pharmacology standpoint, would you expect tirzepatide to have a differentiated profile given the GIP/GLP activity is in the same molecule rather than a fixed-dose combination? Or would you not a priority expect a difference in -- based on the basic pharmacology? And secondly, given that all the tirzepatide data is now available and has been available for a while, can you narrow tirzepatide's filing to a quarter? And is the team within Lilly that is working on the filing of tirzepatide the same team that is actively working on the donanemab filing?

Thanks, Steve. We'll go to Ruth for the first question.

So we know that there can be a difference if you have 2 activities in the same molecule and if you activate 2 receptors on the same cell type as opposed to having them in 2 different molecules. So certainly, it is possible that a molecule that has the 2 -- that having the 2 activities in 2 separate molecules will result in a different profile. I'd also like to remind you that the GLP-1 component of tirzepatide has some unique attributes that are not shared by semaglutide. Specifically, we see a biased agonism as well as a partial agonism on the GLP-1 receptor, and there are some quite compelling preclinical data that, that could contribute to the efficacy as well. So I would say it's too early to tell. We look forward to seeing some of the data from Novo.

Thanks, Ruth. Jeff, for the question on submission.

Steve, regarding filing, as we've announced, we plan to submit for global registration later this year or I can't comment any -- with any further detail on specific timing. I can confirm for you that it's not the same team that is working on the donanemab submission.

Thanks, Jeff. Thanks, Steve, for the question.

And that is Geoff Meacham, Bank of America.

Great. Congrats on all the good data. Just had a few questions. On the dose titration, do you think physicians will make a decision on dosing a priority or get to the 5 mg and then go up from there? And does that have any regulatory consequence? And the second question is on weight loss. When do you guys see ultimately hitting a trough? I wasn't sure what the longest period of follow-up has been. And maybe what implications does that have when you look to the obesity study?

Thanks, Geoff. We'll go to Mike Mason for the first question on dose titration.

Thanks, Geoff, for the question. Our physicians practice in type 2 diabetes and how we market our products is we really try to customize the treatment for the patient and their needs for that individual patient. So I think what you'll see with tirzepatide is -- and in our market research, what we hear back is they really like the flexibility of the dosing, and they can optimize whether their #1 goal is A1C for that patient or weight loss. And they have the tools to be -- and then the flexibility to be able to titrate up and titrate down in order to meet that individual patient's needs. So I think what you'll see is that's going to be on a patient-by-patient decision that a physician will work with and see how they respond to tirzepatide and get to an optimum dose for that patient at that point in their care.

Thanks, Mike. We'll go to Jeff Emmick for the second question on weight loss.

So Geoff, you've probably noted that in our studies, which have ranged from 40 to 52 weeks, at least the primary endpoint, that we still don't appear to have reached the trough in weight loss. I will note that SURPASS-4 followed patients, at least a portion of the patients, for longer because it also meets our 18-month exposure requirements. It was also event driven in terms of its completion. And we plan to report out data, the longer-term data in terms of A1C and weight loss at EASD this year and certainly would have additional details when we do a full scientific data disclosure of that study. So more to come.

Thanks, Jeff, and thanks, Geoff, for the questions.

And we'll go to the line of Gregg Gilbert, Truist.

Going to start with the obvious. Mike, how are you thinking about the impact of tirzepatide on the GLP-1 market, including Trulicity? And then secondly, what have you observed, so far, since the oral GLP-1 launch in terms of the commercial experience and how and when and where it's being used? And how does that shape your thinking about where an oral product fits in, in the future for Lilly?

Okay. Thanks for all those questions, Gregg. I think, first, on tirzepatide, we're blessed to have the market-leading GLP-1 and Trulicity as well as really a game changer in tirzepatide. On this call, I'm not going to go through our marketing strategy there for obvious competitive reasons, but we always take a very patient-driven approach. And as we're looking in market research, I mean, our goal is to optimize and maximize the growth of our entire incretin portfolio, both tirzepatide and Trulicity. We're not looking just at a conversion approach. Now when we do our market research and we really kind of focus on those patients who can best benefit from tirzepatide, what we'll see is that there's definitely patients who were on GLP-1 that are good potential patients to get additional benefits from tirzepatide. We also see patients who aren't on GLP-1s yet that also can benefit from tirzepatide. So we're very bullish about the opportunity, blessed to have 2 great products in the marketplace. With Rybelsus' launch, to your second question, what we expected going into launch is we thought that it would have a bigger impact on growing the overall GLP-1 market than necessarily impacting the injectable market. And that's what we've seen from our Rybelsus' launch. We've seen that it has helped accelerate the overall GLP-1 market while not really impacting Trulicity's growth at all. I think in the future, as we look at oral GLPs, I think there'll be a role for oral GLPs in both type 2 diabetes and obesity. And as a product -- as a company that's very focused on incretin development, we think we need to have a broad portfolio of both injectable and oral medications.

Thanks, Mike. Thanks, Gregg.

We'll go to the line of Chris Schott, JPMorgan.

Great. Just coming back to kind of commercial dynamics with tirzepatide. I guess if we look at the experience of Ozempic versus Victoza, would you view that as a decent proxy about how we could think about the mix of your GLP-1 franchise as we think about the commercialization over the next few years? And then just a second question is just how you're thinking about pricing of the product. I mean it seems like there's obviously a very different profile at 15 mg versus 5. Should we think about a flattish pricing structure here? Or should we think about price differentiation of the low dose versus the higher doses?

Thanks, Chris. We'll go to Mike for both of those.

All right. Good question. I think on the first one, like I said previously, we're looking at maximizing the entire growth of our incretin portfolio. We think there's opportunities for further growth and further acceleration of the class. I do think what you saw with Ozempic was a lot of conversion from Victoza over to Ozempic. And I think, for us, we would like to see more market expansion with the opportunity for -- with tirzepatide. And we do think tirzepatide and its twin-incretin approach is really a new class that can provide, really, I think, game-changing efficacy, both on A1C and particular on weight for people who have type 2 diabetes. So we'd be looking more for kind of driving further market growth. On pricing, obviously, we're a year out. We can't disclose our pricing. Know that we'll try to maximize the value that we generate from this tremendous innovation while also balancing, making sure patients can have access to the product because patients only benefit on products that they can take. And so -- and they can afford. So we'll properly balance, trying to capture value as well as access for the product.

Thanks, Mike. Thanks, Chris.

Next, we'll go to the line of Terence Flynn, Goldman Sachs.

Great. Two for me. I guess, first, would just be curious to get the latest thoughts on a diabetes prevention trial with tirzepatide, given again you're getting a large percentage of patients to normal levels of glycemia and what the design would look like, how long that could take. Then the second question is just a follow-up on the SURPASS-4 study. Can you just confirm that there's not an imbalance in SAEs amongst those arms?

Thanks. We'll go to Jeff for the first question on prevention trial.

Yes. Thanks, Terence, for the question. So within SURMOUNT-1, which is our first obesity trial that we started, we actually are tracking patients who had prediabetes and conversion to diabetes within that trial and an extension. We've reported that before. So that will be our first opportunity to take a look at that. We have not yet announced a specific question or a specific trial, looking at diabetes prevention. But as I mentioned, we continue to look at other potential opportunities and indications for tirzepatide as we obtain more data. So that's a constant ongoing discussion internally. They are long trials, as you've noted, and typically taking years, not weeks, not a 40- or 52-week trial. So you're talking about a several-year trial in all likelihood. But I might invite my colleague, Ruth, to comment a bit more on her thoughts around diabetes prevention as well.

Well, thanks, Jeff. I think it's -- obviously, if we lower body weight to a degree, we would expect to see substantial improvement in glucose control. The improved insulin sensitivity with tirzepatide, I think, will really help in terms of preventing diabetes. So from a scientific perspective, we'd actually see -- expect to see some very nice benefits if we use tirzepatide in an obese prediabetic population in terms of diabetes prevention. But other than that, I think everything else is speculation. And as Jeff said, we have not announced any concrete plans.

Thanks, Ruth. Thanks, Jeff. Next question on SURPASS-4 SAEs, so Jeff?

Yes. Terence, I can confirm there was not any imbalance. In fact, the numerically highest number of SAEs in SURPASS-4 actually occurred on the insulin glargine arm.

Thank you, Jeff. Thank you, Terence.

Next from the line of Vamil Divan of Mizuho.

Great. So maybe one follow-up question on the submission for tirzepatide. I'm just curious, does Lilly still have a priority review voucher? And if so, are you thinking of using it for tirzepatide submission? And then the second question, more on the commercial side. Just curious kind of basing it on your market research and what you're hearing from the field, do you see physicians adopting tirzepatide sort of quickly after approval? Or do you think there would still be a desire to wait for the full CVOT data to come out in -- I think in 2024?

Okay. Thanks. I'll take both of those questions. First, on the priority review voucher. Yes, we have one, but we have not announced publicly yet how we're going to use that voucher. So more to come on that. With regards to market research in tirzepatide, I mean, I think with any new product, there's always a ramp-up in access. And usually, you get to a tipping point when you get to about 60% access where physicians now will kind of turn on the promotion, and it's worth their time to talk to physicians -- or patients about that product. And so that's kind of the natural tipping point. What we see in our market research is that physicians are compelled by the efficacy, even without the CVOT trial. Obviously, we're looking forward to the CVOT trial results. But even without that, you look at both the A1C and the weight profile of tirzepatide, it is impressive, not only to us, but also to health care professionals who are trying to improve the outcomes of people that live with type 2 diabetes.

Thank you, Mike. Thanks, Vamil.

Next is Louise Chen of Cantor.

So first question I had was is there a way to quantify how much GIP adds to the efficacy of GLP/GIP combo? Or how should we think about it or how should you -- how would you think about educating the market about GIP? And then not to steal your thunder on SURPASS-4, but is there a metric or some thought on where you think this weight loss could actually plateau?

Thanks, Louise. We'll start with Ruth.

Yes. So that's a difficult question. I don't think there's really a way to quantify it. The way we are going to look at the GIP contribution to the mechanism of action of tirzepatide is really through a multipronged approach, so we will be obviously relying on those 4 mechanism-of-action studies. I think we'll get clues from how that compares to semaglutide as well as getting -- how well that compares to semaglutide. And we will also be looking at our long-acting GIP molecule, and we'll be looking at biomarkers in this study as well as in our ongoing clinical studies. As we think about the mechanism of action and what the GIP contribution is, there's really 4 areas that we are most excited about. First of all, I think we now have very good preclinical, but more important, the clinical data, that GIP contributes additively to insulin secretion, even in patients with type 2 diabetes. I think we've seen some very nice data at ADA to that regard. We have very good preclinical data that GIP by itself can increase insulin sensitivity. Post-hoc analysis of our Phase II study is consistent with this and showed weight-independent insulin-sensitizing action. And our first mechanism-of-action study, which will compare tirzepatide directly with semaglutide, will provide definitive data on both insulin sensitivity and insulin secretion with a gold standard clamp method. GIP, obviously, has direct effects on neurons in appetite regulatory centers of the brain, again lots of presentations at ADA there. We don't fully understand the pathways yet. But certainly, preclinically when added to GLP-1, GIP can reduce further food intake, improve energy expenditure. And very interesting, there was also a presentation that GIP can counteract the nausea induced by GLP-1. So we'll have 2 mechanism-of-action studies where we directly evaluate the effect of tirzepatide on energy handling. Our energy expenditure study that uses a metabolic chamber will be very interesting in this study. We compare tirzepatide to a group of patients that -- where we try to achieve a similar weight loss as tirzepatide but using food restriction. And this will allow us to directly look at the effects of tirzepatide and whether they're weight independent. We'll also directly look at the effect of tirzepatide on the brain using MRI and compare that to dulaglutide. And then finally, GIP has some intriguing effects on the alpha cell, increasing glucagon secretion when glucose levels are low, decreasing it when glucose levels are high. And we'll certainly try to tease this effect out more in our hypoglycemia recovery study. So unfortunately, not a simple answer here, but it will all be coming together. And I think we'll also get some interesting data from the long-acting GIP molecules that Novo is investigating right now, and we have one in Phase I clinical development as well.

Thanks, Ruth. We'll go to Jeff for the second question on SURPASS-4 weight loss.

Louise, well, as I said, what we've reported out so far from SURPASS-4 is the week-52 data. I don't want to say anything about the longer-term data from that study. We'll show that at EASD and in the manuscript. But as we look forward, I would say the most robust look will come out of SURMOUNT-1. That is our longest obesity study, the first to start, and we're expecting a top line from that next year. So in addition to the data that we'll see from EASD on SURPASS-4, I look forward to SURMOUNT-1 as the real answer to this question next year.

Thanks, Jeff. Thanks, Louise.

We'll go to Aaron Gal, Bernstein.

So 2 questions. The first one about the weight loss program. Can you discuss a little bit what is your current understanding of what CMS will need? Or what's your current hypothesis about what CMS will need to begin to cover GLP-1s given the cardiovascular effect? Essentially, what is the bar that you're currently anticipating or you're working based on that assumption? And related to that, in the early GLP-1 trials, we saw, when patients discontinue using the drug, there is a rapid regaining of the same weight. Have you thought about this potential health effect or potential questions from regulators about the health effect of cessation of therapy? Have you seen patients in your trial, will stop taking the drug, regain the weight and how you think essentially thinking about handling this? And related, you kind of mentioned the biased agonism of your oral GLP-1. There's a Pfizer Phase II coming up soon. Any thoughts about the features of that molecules and what should we be looking for when we look at that data, what would you be looking for in your peer's data when it comes out?

Okay. Thanks, Ronny. We'll go to Mike Mason on your first question for CMS reimbursement and what's the cardiovascular bar.

Yes. Could you mind restating that question? I just want to make sure I'm -- it's an important question. I want to make sure I'm answering your question properly.

Yes. So far, CMS have not been willing to reimburse drug -- a weight-lowering drug on the assumption that this is not driving clinical benefit or health benefit. You obviously had this in mind as you designed your obesity program. It's important that payers cover this. What is your current assumption about what bar will be required to get payers to begin to cover weight loss medications for the broader non-comorbid population given their long-term health care benefit?

Okay. Great question, and I appreciate the additional background. I think the decision that CMS will have will be very similar to what both employers and commercial payers will have, which is, is this a lifestyle drug? Or is this a -- is obesity a chronic medical condition? And also, are the agents have enough efficacy in order to make a difference, if they see it as a chronic medical disease? I think, clearly, what you see is that it's not a lifestyle product. It is a chronic disease that definitely leads and contributes to cardiovascular disease, diabetes, NASH, and it needs to be taken very seriously. It's really sad to think 110 million Americans live with obesity, and only 3% are treated right now. So I think as a country and as a pharmaceutical industry, we can do better than what's happening today. And I think that's the key to it is are the therapies willing to do more than just lower weight? Are they -- do they have the ability to really kind of change the metabolic outcomes of people living with obesity? And the current agents right now have 5%, 6%, 7% weight loss. I think when you start seeing the impact of what tirzepatide can offer, I mean, we showed up to a 14%, the highest dose in type 2 studies. When you look at the physiology of type 2 diabetes and compare that to obesity, we think it can do actually better with weight loss and obesity than what we saw in type 2 diabetes. So we do think we're getting to the level of weight loss where you're going to see medical benefits. I think the key to this, obviously, health care professionals and payers, they are intimidated by the physical size of this class. They understand the benefits and the chronic outcomes of untreated obesity. And I think the key to us and what we're working on is how can we best help payers identify those people with obesity who most need therapy and have the most urgent needs. And that's what the focus will be, both from a development and commercial perspective, as we launch tirzepatide, hopefully after approval with obesity.

Thanks, Mike. We'll go to Jeff for the next question on maintaining weight loss.

Yes. Aaron, it's a good question. And actually, as part of our registration package and not dissimilar from a study in the STEP program, we do have a study that's focused on looking at maintaining weight loss. The way that study is conducted is all patients start on tirzepatide and titrate to 15 milligrams. And then they're re-randomized, either tirzepatide maximum tolerated dose or placebo, and then the final endpoint at 88 weeks. So it's a fairly long study. So we'll be able to assess this in the program. There is an expectation from previous studies that if patients come off weight loss medications, they do regain their weight. So -- but we will study that specifically as a part of our global registration program.

Thanks, Jeff. And then we'll go to Ruth for the last question on oral GLP-1.

Yes. So obviously, Pfizer's molecule is dosed twice a day, which could certainly prove to be a burden relative to our asset that we anticipate to be dosing once a day. There are some interesting differences in terms of the pharmacology of the 2 molecules. We have shown in our recent preclinical publication that our molecule is a biased and partial agonism GLP-1 receptor, in many respects, very similar to the GLP-1 component of tirzepatide, obviously without the GIP component. And you know it binds to the GLP-1 receptor in a manner that's different from Pfizer's molecule. Now it's too early to know how this translates to clinical efficacy, but it will certainly be interesting to see how it develops. In terms of what we'll be watching for in the Pfizer program, I think, certainly, GI and adverse events are going to be something we'll be watching for. It will be very interesting to see the dosing decisions as they move into Phase III. We know with any incretin that a reasonably flat PK profile is an important advantage because that would minimize the adverse events. And I think that's going to be sort of the key thing we'll be looking at in their program.

Thanks, Ruth. Thanks, Ronnie, for the questions.

Our next call, Andrew Baum of Citi.

A couple of questions, please. Firstly, could you share with us the GLP-1 penetration in Medicare versus the commercial segment in the U.S.? I'm asking because I'd be interested in how your views that -- of imposition of an out-of-pocket cap in the event of Medicare reform could effectively materially increase your penetration in that segment by reducing the financial friction on patients. Second, just going back to the previous question in relation to primary prevention, the consequences in obesity. Is there any scope for an inclisiran-like trial and thinking of the trial that Novartis, the medicine company, have initiated in the U.K. using a very large planned population health approach in order to assess long-term outcomes and therefore provide the value for the payers of such an intervention?

Thanks, Andrew. We'll go to Mike for the first question on Medicare penetration for GLP-1.

Yes. It's a good question. I think what we see is similar growth rates between both commercial and Medicare Part D segments, and our share is very similar across both. I think we -- if Part D reform leads to better patient out of pocket, I think that's really important for people who live with chronic diseases, like diabetes, and I think patients will benefit. And there may be some upside from a volume perspective for Part D products. But I think it's really a need for patients who live with chronic diseases to have stability from month to month what their out of pocket is. That's what we hear when we talk to people who -- seniors in the Part D is that they do suffer from not having that continuity from month to month of knowing what they have to pay. And I think this is something that Congress needs to focus on, and I think it will really benefit seniors across America.

Thanks, Mike. We'll go to Jeff for the question on primary prevention.

Yes. Andrew, so I would say first and foremost on that, our first look would be our head-to-head CVOT with Trulicity. Obviously, that's a large outcome study focused on cardiovascular outcomes, of course, but I think, still, a very important study. Clearly, we're having discussions once we get to market about what kind of real-world evidence studies we might do to assess long-term benefits in both patients with diabetes but patients without diabetes who are obese. And as I've mentioned, as we continue to think about other indications where tirzepatide might bring value, we continue to look at that patient population who is overweight without diabetes to see what we might be able to do there. So hopefully, more to come there, but I think the answer is yes. We will look at a number of real-world evidence studies once the drug is hopefully on the market to assess long-term benefits and demonstrate the benefit the drug can bring to payers.

Thanks, Jeff. Thanks, Andrew.

And that's Kerry Holford of Berenberg.

Two questions for me, please. Firstly, on tirzepatide. You discussed here that having the potential best-in-class drug, even at the lowest 5-mg dose. So I wonder if you can talk more about what proportion of patients in the clinic, in real life you think will be adequately treated with the low dose, those that might require titration up to the highest dose. And then on the weekly insulin, you are behind Novo here to report Phase III data to [ lay ] into an [ IPD ] next year. What can you do to close that gap? Is that a key focus for you? Or actually, do you see a differentiating element to this? I mean do you; worry less about coming second to market with weekly insulin?

Thanks, Kerry. We'll go to Mike for the first question.

Okay. Thanks for that question. Let me address it probably 2 ways. One is the -- anyone who goes through and ends up on 10 or 15 will start on 2.5 and then 5, and so I think you'll see a high percentage of -- or a decent percentage of our usage will be in 5 milligram, just because of that alone. I think the results that we saw from the SURPASS program, the 5-milligram performance was really important, not just for the 5-milligram maintenance dose, but also for the 10 and 15 maintenance dose because what we've seen with Trulicity is patients really benefit from early efficacy. Whenever anyone is changing a habit, which includes deciding to take a new product, they want to see results and they want to see results fast. And that's what we saw in the SURPASS program of 5 milligrams. In particular, what I was impressed with is, if you look at someone at home, testing their blood sugar, they typically will check their fastings one time a day at this point in their diabetes. And what we saw by week 4, which is our first checkpoint in our -- in most of our clinical trials, we saw up to a 30% to 40% drop in fasting blood glucose by week 4. And so I think that definitely is important for patients and will help us with adherence because they see that quick efficacy, and that will help in the acceptance of a new treatment and benefit from that. I think from there, like I said earlier, it's really going to be determined what dose is really what's best for that patient and what are you trying to achieve. Are you trying to get them -- is someone in -- at their proper weight and they're just trying to improve A1C, then they may optimize and get to the right dose where they're trying to just get A1C performance. If someone needs both A1C and weight loss is their priority, then they very well could titrate up to the right dose that gives them the efficacy they need on weight. So I think 5 milligram will be important for both reasons, but we're blessed. And I think that's what physicians continue to tell us is we really like having options, and we really like the dosing options that tirzepatide offers.

Just as -- this is Jeff. I thought I would add just a few clinical comments and maybe a clinical perspective, and this is regarding patients achieving normal glycemia. Really, we don't have current treatment guidelines that target that because it's not been possible to achieve safely with any medicine to date, as we've pointed out. And there was a question about this. I think the big question will be will the guidelines change, and that came up during our SURPASS symposium at ADA, if you listen to some of the Q&A and the commentary at the end, that this could drive a change in guidelines over time, particularly if we could show some outcomes benefits of achieving 5.7. So I think that will also, over time, may impact the balance of patients that are on 5 milligrams versus the higher doses, if we see a move in the guidelines.

Thanks, Mike and Jeff. We will go to Ruth for the question on BIF.

Yes. Thanks for that question. So we do believe we have the potential for a differentiated profile with BIF. Just want to remind you that our molecule is actually quite different from Novo's molecule. Novo is an isolated insulin. Our molecule uses the Fc technology to achieve half-life extension. We have a significantly longer half-life, and that results into a much lower peak-to-trough ratio. We think we're going to have the flattest profile amongst basal insulins, and that will be predicted to decrease glycemic variability as well as result in lower hypoglycemia. We've opted to conduct a very robust Phase II program, so we're starting not just patients with type 2 diabetes but also patients with type 1 diabetes in our Phase II program. We are very encouraged by the results from our first Phase II study, where we looked at our molecule in patients that have been previously exposed to insulin. And importantly, we compared it to insulin degludec, which is really the molecule or the insulin -- basal insulin that has shown the lowest rates of hypoglycemia to date. So we're very happy to see that we had a similar glucose lowering but actually lower rates of hypoglycemia. So we think that actually speaks to the hypothesis of the flat profile, and we'll look forward to see the remaining Phase II studies and are quite confident that this will be a very interesting molecule to evaluate in Phase III.

Thanks, Ruth. Thanks, Kerry, for the question.

Next caller, Umer Raffat, Evercore.

This is Mike DiFiore in for Umer. Two for me. Number one, just a question on your GGG agonist. How confident are you that the balance of glucagon agonism in relation to GIP and GLP-1 is optimized? And by extension, what effect, if any, did -- adding glucagon have on the no adverse event level or safety margin? And then separately, I know it's a long ways away. But any thoughts on how you would intend to position tirzepatide versus oxyntomodulin versus the GGG agonist, assuming all get approved?

Thanks. We'll go to Ruth.

All right. So in terms of having hit the right ratio, there are a couple of things we were looking for. Obviously, we know that glucagon can increase glucose levels, if we have too much glucagon activity. This is why it was important for us to conduct our PoC study in patients with type 2 diabetes, and we were very happy to see that we had very robust glucose lowering. So we certainly haven't overshot on glucagon. Have we undershot, we don't think so either because we actually see really very nice weight loss, much more than what we would expect to see with tirzepatide. So we think we are close to the optimal ratio. We'll never know for sure, but I think that's pretty much what we know with respect to GIP and GLP-1 component. We actually designed this molecule to have a very similar ratio between GIP and GLP-1 as what we see in tirzepatide. So from that perspective, we are also quite confident about this. In terms of adverse events, we were pleasantly surprised that we actually had a safety profile that was very similar to what we see with dulaglutide. We do anticipate that this will be a titrated molecule, but we don't see any bigger effects there.

Yes. We're blessed to have tirzepatide, not only commercially and medically, but also from a discovery perspective, because it sets a high bar. And Ruth knows that she can't bring anything forward, unless it has differential efficacy and whether that be type 2 diabetes or obesity or NASH. And so as we bring forward and were to advance GGG or oxyntomodulin, we will only do there if it has a clear advantage in 1 of those 3 therapeutic areas. And if it does have a clear advantage, then the marketing position becomes pretty easy. So we're blessed to have a very rich incretin pipeline, not only that we have today that we'll continue to add on in discovery, and we're looking for continued advancements. People living with type 2 diabetes, obesity, NASH, cardiovascular disease really needs innovation in the space. And we're blessed to have Ruth and her team who's done a phenomenal job of bringing innovation to the market.

Thanks, Mike. And thanks, Mike, for the questions.

That's from the line of David Risinger, Morgan Stanley.

So I have 2 questions. First, could you discuss the non-type 2 diabetes obesity opportunity for tirzepatide, which should obviously be significant given the drug's transformational impact on weight loss? And then second, I have a basic question on the SURPASS-4 trial. How do the adjudicators conclude that the tirzepatide arm's CV events were not drug related?

Thanks. We'll go to Mike for the first question.

Okay. Yes. When you look at the -- we'll just look at the American population. There is 88 million Americans who live with obesity who don't have type 2 diabetes. And that -- as we said earlier, 3% or less of those are treated. And so it's a phenomenal opportunity. But also when you look at really improving the health of Americans, this is a mission that our commercial and discovery and development teams all take a great pride in because we know that if we can bring innovation that really improves the BMI of people living with obesity, that we can profoundly change the health of those individuals in America across this. So this is a mission that we take very seriously and we're very passionate about on a daily basis.

Thanks, Mike. We'll go to Jeff for the question on SURPASS-4.

David, just first, let me clarify. The investigators make the determination of drug relatedness for adverse events. The Adjudication Committee, which is independent from the investigators, do not render a relatedness assessment. They view whether it's cardiovascular or non-cardiovascular death, so they do their best with the details that are provided around the patient and the patient profile to determine what kind of a death or other event, MI, et cetera. In terms of relatedness, I mean, investigators look at a variety of factors. When was the last dose of drug? I mentioned that sometimes, we have patients that have been off drug for 200-plus days. So when was the last dose? What were the patient's background, confounding illnesses, concomitant illnesses and medications? Do they have multiple cardiovascular risk factors? So they look across the spectrum and then make a judgment. And of course, then we look at that in totality across the whole program. But I would go back again to both our CV meta-analysis and the results from SURPASS-4, itself, in terms of MACE events, and those numbers continue to bring confidence to us that -- around the CV safety of tirzepatide at this point.

Thank you, Jeff. Thanks, Dave, for the questions, and this exhausts the queue. So now we'll go to Mike to close the call.

In closing, it's a transformational time for people living with diabetes, and we are excited to be on the leading edge of these innovative efforts. We are focused on expanding our existing commercial portfolio and are confident in our future growth opportunities. We appreciate your participation in today's investor call and your interest in Eli Lilly and Company. Please follow up with our Investor Relations team if you have questions we have not addressed on the call. Enjoy the rest of your day and this holiday weekend. Thank you.

Ladies and gentlemen, that does conclude your conference. We do thank you for joining. You may now disconnect. Have a good day.