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

Yes. So I think there's a couple of things going on here. So as you mentioned, the initial indicated population is about 1,000 patients in the United States. And unfortunately, even with Jaypirca treatment, duration of therapy isn't terribly long. So this is a modest sort of beginning for us. That being said, relevant -- relative to the available therapy options for patients with relapsed mantle cell we've already seen a covalent BTK inhibitor, Jaypirca adds a lot of value for those patients because their natural history outcomes are unbelievably bad, unfortunately. So hence, the reason to bring this to market quickly and I think why regulators were amenable to that. But small population. I think what's critical though with the medicine and sort of what we're conveying with the medicine to prescribers is the ability to reestablish BTK inhibition in patients for whom previously they were under the impression that BTK inhibition was sort of over for that patient. And that's what's different about Jaypirca relative to the covalent inhibitors, and that's a message that -- or a concept, I should say, that is true in mantle cell lymphoma and, of course, true in CLL as well. So I think we spent -- and we're spending a lot of time educating on the idea that a noncovalent BTK inhibitor, in this case, Jaypirca, can do something different for their patients than what they've come to accustom from the covalent drug, and that's an efficacy proposition. And it's worth saying, sort of emphatically, that the proposition of the drug is efficacy. It just so happens -- and this was not something that sort of we saw as imperative, but of course, we're very happy about it. It just happens that the tolerability profile of Jaypirca is very, very good. And we continue to hear that from physicians that it's sort of on par with whatever they perceive today to be their most tolerable covalent inhibitor. And so we don't talk a lot about tolerability in part because we don't have comparative evidence yet. But I think, anecdotally, particularly in those physicians who use the drug in the context of the clinical trials, they already have a sense for that. And so we're rightsizing this launch, which we're in the middle of right now, for the indicated population, but recognizing that this is sort of the first inning of this commercial journey given the wealth of evidence generation that's going to be coming with the randomized trials reading out over the next couple of years and, over time, addressing bigger patient populations.

Yes. And maybe I'll just add briefly. Like the initial framing of your question kind of put Jaypirca in kind of direct near-term competition with the covalent BTK inhibitors. And whereas there may be some future state where that is a relevant question, and we actually are running head-to-head clinical trials, we could talk about that, really, the near-term opportunity, and I think both from a regulatory and just from a clinical need, is actually to extend the benefits of BTK inhibition in those patients whom either couldn't tolerate or the covalent BTK inhibitor stopped working. And I think, in general, physicians understand that Jaypirca is really establishing a new line of therapy for those patients. Obviously, I think the reason that so many of the questions we get about Jaypirca are of in direct comparison to the covalent inhibitors is because they've all been fighting for the same population of patients in the same market. We really are establishing a new line of therapy for patients that we think could be incredibly beneficial. And you see that in the mantle cell indication now. But hopefully, we can mirror that in larger patient populations.

And when we think about the addition of additional indications, obviously, the relapsed/refractory CLL opportunity is probably the largest of the group or at least that's how I think about it.

And the most -- to David's point, I think it's the most natural home for the medicine. If you think about the landscape and the unmet need that exists today, relapsed CLL post-BTK inhibitor is a space with real unmet need and not a ton of great options. And it's where I think Jaypirca sort of -- the data show you that it's doing something truly different and meaningful for patients. Could it do that same -- do something different and meaningful for patients in the first line? It could. We're running that experiment, but we don't know that today, and we won't know that for a while.

And what are you guys seeing in the market now with regard to BCL-2? And what's your interest in whether it be marrying your own BCL-2 or BCLX type mechanism to Jaypirca?

Look, I think it's pretty clear that in the second line, so in this exact population we're talking about, the really only regimen that is out there that physicians have really any interest in using is the MURANO regimen, so venetoclax/Rituxan for 2 years. And obviously, in certain geographies, it's widely adopted, like in more cost-centric countries like in Western Europe. In the United States, it's sort of a mixed bag. The regimen comes with some real complexity, which I think physicians over time have gotten used to figuring out. But if they didn't have to do that, would they? And what I'm really referring to is tumor lysis monitoring and inpatient stays on the front end. It's a different proposition from let me stick with BTK as my target, switch to a different class of BTK inhibitor and send the patient home with a script for an oral medicine they take once a day. I think those are different phenomena. That having been said, we see, over time, the benefit of Jaypirca playing in both fields. And so we're running a monotherapy study of Jaypirca dose continuously until progression, and we're running a study that adds on to the MURANO regimen, where it's venetoclax/Rituxan plus pirto, versus venetoclax/Rituxan for -- as a time-limited 2-year regimen also in a BTK -- or mostly BTK-pretreated population. So I think we're going to enable physician optionality and sort of country optionality for either of these 2 ideas in that relapse setting.

Great. And so maybe we can sort of shift gears to the opportunity to extend and life cycle-manage a product like Verzenio. I'm sure you guys are already thinking about that. We know that there's a lot of opinions out there on oral SERDs. Just want to hear where your oral SERD is today and then also how PI3K might actually work into that, if it does work into that at all or if it's more kind of a second-line opportunity post Verzenio that you see.

Why don't you start with SERD one?

Yes. So our oral SERD imlunestrant is currently in 2 global randomized studies, one we call EMBER-3, and that's a study looking at the second-line endocrine therapy space in metastatic breast cancer. It's a study that's looking at imlunestrant versus fulvestrant or imlunestrant and abemaciclib Verzenio versus fulvestrant. So actually, one of the things we've heard from prescribers, we understand, is that the outcomes of second-line endocrine therapy following CDK4/6 inhibition is not what prescribers or patients want. Obviously, one strategy to improve that is to bring the drug like imlunestrant to market. But we know that physicians are also interested in adding targeted therapy onto the regimen. So we're actually, to our knowledge, the only company exploring, in a registrational manner, a targeted therapy combination with an oral SERD right now in the second-line metastatic breast cancer space. We also have an adjuvant program, we call EMBER-4. It's is a very large study, about 6,000 patients, in the extended adjuvant setting. So this is in patients that have received 2 to 5 years of initial adjuvant endocrine therapy that may contain a CDK4/6 like Verzenio. And then there's still a need to further decrease the recurrence risk. And so we're looking at switching to imlunestrant versus continuing the current endocrine therapy thereon. We've also heard this is a highly relevant question, again, for people that are increased risk of occurrence. What you'll notice we don't have in that list of randomized experiments is a first-line metastatic breast cancer study. We've kind of looked at the treatment landscape and also the available clinical data, including the PARSIFAL study, and concluded that, that study is very, very high-risk study and really, arguably, is not really addressing the area of greatest need right now to patients that people feel pretty good about the first-line metastatic breast cancer therapy options they have, including Verzenio. So where this may have been natural to add-on to our own CDK4/6 inhibitor, we made the decision not to do it. I think your kind of broader question about the oral SERD space is the way we kind of look at it is, really, this is about adjuvant therapy. Oral SERDs or SERD as a class has not been able to access the adjuvant space because of the intramuscular injections. We've always thought that's the opportunity. We also see an opportunity to help women that -- on an efficacy proposition, but also a convenience proposition. So I think when we speak to providers and patients about what they want, they love the idea of more efficacy in the second-line metastatic breast cancer setting, but they also find the kind of visits and intramuscular injections painful and inconvenient. So if you can offer some improvement in efficacy and improvement in convenience, that's like an all-around win for patients. So that's kind of the oral SERD proposition. In terms of PI3-kinase, we already know these drugs. The drug like alpelisib is effective, but very, very poorly tolerated, and that really comes from the wild-type inhibition. So we designed this drug called LOXO-783 right now to be exquisitely selective for the most common mutation, the -- called H1047R. It's about 40% of the mutations in this gene or about 15% of breast cancer overall. And we think we can deliver improved tolerability and potentially improved efficacy to patients that have this alteration. Exactly where that fits into the treatment landscape, I think, is still to be defined.

Which has to do both with the clinical profile of 783 as it emerges. It also has to do with the sort of landscape of biomarker testing in breast cancer, which is not -- other than like ER/PR, HER2 is not really routinely done on a genomic basis in the first-line setting. And so we'll weigh those sort of considerations as we move forward. The only sort of bigger picture comment I would make is, just latching on the -- how you framed the question is, we tend not to make these decisions sort of around life cycle management, so to speak. Like it's just -- we tend to sort of call our shots on a program-by-program basis. Can we make the medicine we want to make? Is it going to be differentiated? Is it going to work? Can we develop it? It just so happens that we have a clustering of medicines in breast cancer. That's great. That wasn't -- we didn't start with breast cancer and then say where can we go. We've landed in prostate cancer with Verzenio. Like did we have any "right" to be in prostate cancer? Maybe, maybe not. I don't know that I even care. We have a medicine we think it's going to work in prostate cancer and improve patients' outcomes. So we'll figure out how to be in prostate cancer.

We don't let the kind of life cycle management drive us to do things that we think are like unnatural from a medical perspective. And again, you can look at the kind of the fact that we're not running a first-line metastatic imlunestrant Verzenio study as a kind of example of voting with our feet on that.

Yes, yes. That's great. Maybe just as a final question, Jake, I know we asked this question to you a lot. As you look at the landscape in oncology and also some of the changes that are occurring in the landscape or could occur in landscape from a legislative perspective, what would you say are kind of the sort of 2 or 3 strategic realities, whether it be from a business development perspective or from a commercial perspective, as you look at the longer-term opportunities for Lilly Oncology?

I think it's forcing us to be even more disciplined than we were. I think when you look at the sort of combination of the Inflation Reduction Act and some of the regulatory changes afoot, like Project Optimus and other things like that, and sort of what's going with accelerated approvals in general, Jaypirca notwithstanding, I think it is overall forcing companies, and we're not the only ones in this respect, to accelerate and pull in sort of riskier and larger spend on any given program earlier in a program's life cycle than you normally would. And that's okay, but it forces people like us to sort of be willing to take on more risk, rather than do so what would be a more typical sequential risk reduction. So in certain situations, we'll have the conviction to do that. In other situations, we won't. I do think, though, like when I take a step back, I think this clustering of changes, I do think -- like in a zero-sum game world, definitely biases success towards large pharma. I -- having come from a small company, I don't know how, at least in oncology, small companies can really like take things to the finish line like reliably anymore from a standing start. It's just -- it's too capital intensive, too complicated and sort of too competitive. Now what we haven't yet seen in many cases is sort of valuation reality in the context of business development actually recalibrate to that -- to the new normal, which has been a little surprising. I imagine over time that will happen, but it hasn't yet. But I think to develop new cancer medicines from a standing start, I think having the capital and the operational wherewithal of the large pharmas is much, much more valuable now than it's ever been.

Yes. Great. Well, thanks very much. Unfortunately, we -- I believe we are actually out of time. It's never enough 25 minutes. But thank you so much both of you for joining us. Congratulations on the very impressive trajectory that we're seeing Verzenio on, and looking forward to the launch of pirtobrutinib and all of the great catalysts through the balance of the year.

Thank you.

Thanks very much. Thanks for having us.

Thanks, yes.