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

Yes. Glad. The second is around do HCPs and physicians understand the profile of Foundayo and have they actually tried it with patients entering their journey so that they get experience and understand the real-world efficacy and tolerability of Foundayo? And then I look at some other parameters around kind of our field execution. So maybe on the consumer awareness piece, we've amped up our consumer advertising and awareness at Foundayo. We just recently launched an ad with Martha Stewart. We're hoping that will build out some level of greater consumer awareness and consumer interest. The other piece is around the trial. I think we shared during our Q2 results that we've increased the number of trialists to over 36,000. That's continuing to increase. So we see progression around trialist. And then the other encouraging indicator is that for the people and the physicians that have tried to use Foundayo, the patients have they moved to adoption. And we're starting to see that also move in the right direction. Obviously, from our field execution, ensuring that physicians have samples readily available if they need to start a patient. We've improved on our access and coverage for Foundayo. We're doing a number of peer programs so that physicians can talk to other physicians around the profile of Foundayo. So a lot of our leading indicators are moving in the right direction. And the outcomes, of course, you guys and I look at the outcomes of that, we're starting to see movement in our share. So we now have more than 30% share in new starts within the oral GLP-1, so we're starting to see some progress, and that's a marked improvement just in the last 2 months of the new starts. So we're heading in the right direction. It'll be a gradual move and we're moving in all segments on the covered space and the commercial. We're moving in Bridge, and we're moving into self-pay. Obviously, with self-pay. You've got a -- you have to look at the mix around most of the stats are in self-pay currently that will shift over time. And those are at lower price points initially until people get through to higher doses.

Do you guys think you can get to over 50% steady-state share in the oral side as you think about the profile of the medicine and what you've seen now over the last couple of months or so?

I challenge my team to get leading share in pretty much any market. So if you ask me this question in pretty much every space, I'd probably answer, yes, I challenge my team to get leading share. We've done that with Inluriyo. We've done that with Zepbound. We've done that with Jardiance. We promoted it. We've done that with Mounjaro, and we'll continue to challenge our teams to do that with Foundayo.

Do you think you can get there by December, end of December?

I won't commit to a time when we get there, but we're continuing to make progress. So I think we have to continue to drive new trial I'm convinced that the experience itself should play out in a positive way and of course, ambitious in what we achieved. In the end, my hope is that more people are able to enter their journey, and this is expensive, and that's been our focus. I'd rather get there in a quality way and focus on the right patient population that can benefit and that we expand the number of people that get treated. That's probably more important to me than any other.

Okay. What -- maybe we'll pivot to OUS. You guys have launched in a few countries, as you said on the second quarter call, I think the ambition is to launch in over 40 markets, I think, by '27, which would be a very broad offering. And I think one of the key advantages, I guess, at Foundayo, it's a true small molecule scalable oral. So as you think about kind of maybe the second half of '26, how should we think about the pace of that rollout, and then we'll talk about '27 after?

Sure. Well, first, I think we've now launched in the UAE and the U.K., where we have approvals. And the early indication is that it's been positive in that it's been expensive. So new patients are getting treated as a result of us introducing Foundayo and there's interest in the oil segment for treating overweight and obesity. We just got approval in Saudi and also in Mexico. So we plan to launch there. And then as we -- it's submitted in over 40 markets. So as soon as we get approvals, our plan is to launch, we have supply rarely available. Our commercial teams are ready. And so it's just a matter of the timing of those approvals. Those will be gradual over time, and we'll enter those markets, obviously, predominantly for Mounjaro outside the U.S., it's a self-pay market. We have some markets that reimbursed for type 2 diabetes. We have some. We just got an approval for reimbursement in obesity in France. But it -- still around 75% of the market outside the U.S. is self-pay. And as we get approvals, we'll continue to launch Foundayo outside the U.S. as well.

Yes. And in those early launch markets, are you seeing that? It sounds like you are, but expansive to Mounjaro, meaning it hasn't really cannibalized Mounjaro. It's basically added new to GLP patients.

Correct. These are -- we see the total market growing and Lilly in terms of overall shares also growing both in Mounjaro because it's still early in our launch cycle for Mounjaro, and we're seeing new patients coming in with the introduction of Foundayo. So we see it expensive.

Okay. One more before we go to kind of the next topic is just on Foundayo. I was just how to think about adherence persistence relative to injectables, I think that's another longer-term debate in the market, not just for obesity medications but just for oral specifically?

Yes. Maybe I'll provide some context to it as well. First of all, it's early days for Foundayo, and I think the kind of the first indicator is second fill. And the second fill data is very good. So we see it being consistent with other medications and also not that far off from what we see on the injectable space. Context-wise, though, if you look at most therapies in the space diabetes or obesity, probably the gold standard from on adherence has been Trulicity, and we compare Trulicity to many oral therapies in diabetes space and Trulicity is a once-a-week injectable therapy has always actually had greatest adherence overall, approaching that kind of 16 months average adherence. We're seeing that in for Mounjaro and Zepbound to be in that same realm. So adherence being much greater than what we typically see in chronic therapy, and most chronic therapies have persistence that's less than a month. And so that's something to contextualize. Now this space is a little bit different in that many chronic diseases. The person taking a medicine doesn't always know or feel whether or not there's been a benefit until they go to their physician and get their blood work done to know whether or not it's been beneficial. Whereas in obesity, there is a component where someone sees it feels the benefit by staying on therapy. And so I do anticipate that we'll have probably better adherence than typical chronic disease. Will it be the same as injectable? We'll see. I think that's the gold standard in adherence. But just to have context into chronic disease, you typically don't see as great of adherence as we've seen in the past with Trulicity and now is at bottom job.

Okay. Great. The other thing that we and I think investors are watching is the rollout of generic semaglutide in some of these OUS markets. India, Canada, I think Brazil is coming soon. As you think about is there an analog for how this could play out in the U.S.? And I think the question is more around just not so much Mounjaro because I think you've already seen a lot of differentiation. People are voting with their wallets. They're effectively choosing it even though, in some cases, there is a pricing differential over branded sema, but more so for the Foundayo piece. So as you think about like a GLP to GLP, not a GLP to 2 mechanism. GLP to GLP, like what does this mean for Foundayo as you see the generic rollout of sema in some of these OUS markets?

Yes. I think our -- maybe the first part is what are we seeing currently in those markets. And by the way, this is not so different than what we've seen in the ED market in the past. When generic enters, what you typically see is an expansion of the number of people that actually get treated. So that's what we currently see in both India and Canada as if the market is expanding. What we're also seeing, although share naturally when the market expands significantly through generic share declines, but the overall volume, absolute volume is continuing to grow for Mounjaro in those markets. Now the moral of story is that there's both an innovation and profile of the medicine does matter, where there's differentiation where people do vote on what they feel could give them greatest benefit. And there's a brand loyalty component from a consumerized market that also plays a role. How much does one play versus the other? Hard to predict, but we've seen that in the ED space as well, where there is actually very little differentiation in some of the space. So now read through for Foundayo. Maybe I'll go back to your earlier question related to what is our ambition and vision of our portfolio and having a full portfolio of different options in a consumer-oriented market is important when you enter and you stay in the ecosystem as a consumer. And so I think that's an important aspect that we believe will play out. And we do think Foundayo as a true small molecule also has some advantages on being able to be a truly once a day, anytime pill.

Yes. And is there any of those markets that you think is more similar or different to the U.S. of the ex U.S. markets to pick like one that would be like a "proxy" I know there's not an identical one, but...

Difficult. I've spent 4 years running international. And what I can tell you is that there's -- the similarity is that the -- there's health care friction in all markets. That's similar. This hybrid, you typically -- and outside the U.S., you see predominantly kind of single payer decisions on coverage and then you see like in markets, there's no coverage, it's entirely self-pay. There's really nothing in between. Where the U.S. it's kind of in between where you are -- obviously, we need to grow access and affordability, but there's no like single market that plays exactly the same as the U.S. But there are components that are similar.

Yes. Okay. Maybe we'll just move on to some of the newer up-and-coming products in the pipeline. You mentioned retatrutide, elora. Maybe we'll start first on retatrutide. I think the question is just positioning in the market relative to tirzepatide. Again, I mean, phenomenal drugs, the standard of care in type 2 and obesity. And so how do you plan to position this new injectable product relative to tirzepatide?

Yes. We're really excited about retatrutide. I think there's a component which we knew as we studied in Phase II on the higher end of efficacy and getting bariatric like efficacy. And if you take a look at some of our Phase III results, on the proportion of people actually moving from obesity to no longer be in the category, weight category from BMI of obesity is pretty phenomenal. And so I think it will play a role for those people living with obesity that may not have enough efficacy in the current therapies that exist, where retatrutide can play a significant role, both for gaining access in that population because you typically have even more comorbidities in that population. But also, excuse me, I think that the great surprise was in the lower end of the entry of retatrutide, you see trizepatide like efficacy with like only one step, and you have very good tolerability. And so I do believe it will play a role on both ends of the spectrum on people entering their journey and finding that the lower doses that retatrutide can play a significant role. Now still the standard of care has been tirzepatide and Zepbound so I continue to see tirzepatide being a great standard of care, and you see that on any of the results comparing against tirzepatide. It is a great standard of care and preferential treatment. It will take time to build retatrutide in that space. but it's good to have those multiple options, both in the higher-end efficacy as well as people just entering their journey.

Okay. And similar question, I guess, on elora. I think the thing that struck me from ADA was -- Ruth made a comment this will be the largest development program in Lilly's history in terms of a Phase III program. So obviously, the company is very excited about this asset. Where does this fit in terms of the commercial opportunity and segmentation of the market.

Yes. If you look at our Phase II results, pretty encouraging on just efficacy in the monotherapy space and the tolerability. And even in the lower doses of eloralintide the starting point you get placebo-like tolerability with 13% efficacy, and you can get up to like 20% efficacy of monotherapy. And then we're also studying it with tirzepatide as well. And so could you see an add-on or amplification of efficacy without compromising on tolerability profile. And so we believe there could be some significant benefit for people that currently do make that trade-off. And so having those multiple options is a positive for building up the portfolio, and that's why the tolerability profile and how much efficacy you get as part of that can be a great both monotherapy as well as add-on for the future. So we're encouraged by that program in addition to retatrutide.

Okay. And then maybe one last one on obesity before we leave a couple of minutes for Alzheimer's is just...

It's about right.

Long acting, just I heard you guys have talked about opportunity in the maintenance setting. So just maybe what's the market feedback there in terms of where potential long actings could fit from a segmentation perspective?

Yes. To me, I think it's less about long acting. It's more about solving what is the actual consumer need and what are physicians looking for. And that's how do people maintain or adhere to therapy, and there are different aspects to that. We talked about tolerability as being one, frequency or administration being another, can less frequent and weekly be beneficial? Yes, we believe that could be beneficial. We're exploring options in that space. But we're looking at it as less about just a single asset or use case, but looking at all use cases on how do you answer the maintenance piece. We have a tan-maintain, we have [indiscernible] maintain that play a role in answering to some extent, what you could do once you get to your goal, how do you maintain and that serves one need to answer that question. And then we believe the rest of our portfolio can help answer the others.

Okay. So I'll just -- so we hosted Biogen earlier today, they obviously got the approval of LEQEMBI subcu for introduction. You guys -- your message has been focused on you've got a IV monthly versus there every other week. So as you think about the near-term dynamics, do you think that new subcu is going to change those share dynamics at all? Or you guys feel pretty confident in kind of the profile you have from a dosing data perspective?

Yes. I think first, it's good to see innovation in this space because it's needed from a patient unmet need. We feel good about our profile out leading share now, but the profile of having once monthly, but more importantly, kind of the treat to like a fixed duration until you meet the hurdle of removing plaque is an important one. The most important thing we do in this space is less about share and probably how do you improve the ecosystem. The time that it takes to get diagnosed and treated in Alzheimer's is like if anyone here has anyone in their family or in their close network battling and trying to get diagnosed. It's a messy process and takes too long. So the introduction of blood-based biomarkers is an important space. It's an important element of innovation. How do you scale that as a standard for confirmatory and make the process from once you get diagnosed to treatment? We've made progress there. We've doubled the number of people that are being -- that are treating. But there's a lot more to do here. And I think both companies should spend more time in establishing an improved ecosystem for the benefit of people living with this awful disease.

Great. Well, yes, we're out of time, but thank you so much.

Thank you. Appreciate it.