One's 46th Annual Healthcare Conference. We are absolutely delighted to have Eli Lilly back at the conference again this year. Representing the company is Lucas Montarce, who is the CFO, as well as Mike Czapar, who is the Head of Investor Relations. Thank you so much for making the journey. It's great to have you here. Much to talk about at Lilly, so many dynamics to dig into, so many details to explore. We'll dig right into it.
Should you have questions anywhere along the line, please just raise your hand and we'll do our best to get your question answered. Probably the number one thing on people's mind is orforglipron. We're all just holding our breaths waiting for its approval and launch. Maybe you can give us an update on how the review is going, what stage you in, and what's your level of confidence that on April 10th we will get a letter of a positive nature.
Yeah. Thank you for having us, Steve. A pleasure to be here. Yes, orforglipron is front and center. We are well on track for regulatory approval. We mentioned that the timeline, we are expecting that early Q2. Nothing has changed from that perspective. Of course, as you can imagine, we are prepared for a full commercial implementation and launch in the U.S. We talk about all U.S. markets, that takes more time. Again, the regulatory process, we'll think about again at most likely at 2027 type of broad market access outside the U.S. as well. Well on track in the U.S. expect to see potentially that product coming into the market as early as Q2.
Excuse my naive question because I've never actually worked at a company, but how quickly can orforglipron be on trucks and leaving Lilly docks and getting into the hands of patients?
After the FDA approvals, it depends on the dates and so on, but takes within a week or so to see the product shipping to the patients, to the customers and the patients then afterwards.
You must already be in conversations with payers and preparing the reimbursement landscape. What should we expect the landscape to look like as we exit 2026? Is it going to be broad access to orforglipron, or will it be more limited? What should be our expectation?
Well, I think given that all the information on incretins is broadly available and public at this time, I'm not planning to open it up anything that is not in the public domain. What you think about, again, the access for orforglipron, of course, the product will be available once they get the regulatory approval on LillyDirect. We already actually announced as a result of the MFN deal, the starting dose price at $149, that will scale again the price up to $399. That's what we have communicated already. We have now the Medicare access on anti-obesity medication that will start no later than July 1st. orforglipron will enjoy that access in Medicare for Medicare patients, potentially in the future into Medicaid as well.
Again, expect to see more broader access on the anti-obesity medication as a result of the Medicare deal. Last but not least, on commercial, we are in negotiation. By the way, we have our commercial leader seated here with me, James, and we are in negotiations with all the PBMs as we speak, to get also commercial access. Expect that to materialize, but again, those conversations are dynamic at this time.
Okay. I think, there's a good number of investors who expect the launch of orforglipron to be, at least Wegovy pill-like, if not even more impressive because of the obvious, easier to tolerate, administration profile. Would you walk that expectation back, or is that an okay expectation that this is going to be Wegovy-like squared or something like that?
Yeah. Our expectations, thinking about the opportunity in the marketplace, bringing an oral option for patients that nowadays, as you know, we have a large patient population opportunity, not only in the U.S., but globally, is significant. There is a significant number of patients that they are not willing to get treatment for injectables, and they're waiting for an oral solution. We are very pleased with what we are seeing with Wegovy pill as of the first five to six weeks after the launch. Thinking about the expectation for us is to continue to drive that market expansion, starting in the U.S. and going on US as well. Then you have the dynamics when you got first to the market and second to the market. If you reference back, I think you all agree that Zepbound nowadays is the market leader.
We have almost 70% of share of market versus Wegovy. You need to go all the way back two years ago that actually Wegovy was first to the market, and it took us a time to get that market leadership. Usually the second to the market has some time to get that market leadership. How we think about this opportunity is more about to drive that market expansion, and we feel very strongly that orforglipron will drive that market expansion over time with the access as well in Medicare, bringing the product in LillyDirect as well.
A frequent investor question is, you know, really impressive Wegovy pill rollout good or bad for orforglipron? It seems that you're in the good camp, that it's just exemplifying the patient population out there that want the oral tablet. Is that correct? You could also say that all the people who wanted the oral formulation are going to the competitor now, so they will not be patients for orforglipron.
You have a bonus of patients that when you have a product launching into the market that will get and seek the treatment. At this time for that all out, you have the competitor basically serving those patients. We are very excited about the opportunity with orforglipron that will bring. You talk about the profile. We feel very good about the profile, and it has this actually simplicity in my eyes or convenience, how you think about it, on not having water or food restriction as well. Remember that this is a daily treatment, so simplicity and convenience is very important.
Len, you had a question? Yes.
Yeah. You talked about the opportunity for people who don't want an injection, but could you also see a significant opportunity with orforglipron for the maintenance phase of taking the drug 'cause you need to stay on the drug to not regain the weight. People for convenience or for another reason of pricing, if they're paying out of pocket may opt to say, "I've taken an injectable, but now I'd like to switch to an oral." Because you don't have, as Steve alluded to, the complications with concomitant meds and food, this might be very convenient for that longer maintenance.
The question is, can orforglipron fit very nicely in that maintenance setting for patients who have already lost weight on the injectable?
Yeah. The primary focus, as I mentioned again once we launch, is to expand the market. To those patients that they have a BMI on 30, 3 0+ that they can get to their basically weight loss target that they have, that they can achieve it with orforglipron. That will be our initial focus. Of course again, we are thinking about maintenance as well. That's why we run the basically the study on attain maintain. That showcase basically to your point that patients that are switching either from sem injectables or tirzepatide, that they can maintain certain weight, basically reduction over time as well. In particular versus sem injectable, both basically GLP-1s, was pretty much maintaining the same weight loss when they were switching from high-dose Sema 2.4 to basically orforglipron as well. There is a component that will educate and inform physicians on how they think about the maintenance treatment as well.
There's about $1.5 billion in pre-launch orforglipron inventory on the balance sheet for Lilly. W hat does that tell us about expected or anticipated 2026 revenue?
I wouldn't correlate the pre-launch inventory with, again, an estimation of the forecast for 2026. The way that we think about it, in particular given the learnings that we had two years ago with the situation that we have with supply challenges that we face, it was to have the ability to basically scale our supply to have a global launch. I wouldn't correlate again the estimation of the inventory levels that we have nowadays with our 2026 revenue. As you know, the pre-launch inventory is a number basically based on several stages of where the product is in the process. I wouldn't use that as a proxy. We feel really good about the projections of the revenue that we have for orforglipron in the U.S. We'll build over time. We'll expand the market. In particular, also thinking about all U.S. 2027. There is a strong preference of orals in all U.S. markets as well that we can scale and provide that solution for patients around the globe.
Okay. Lilly has four key assets, at least in this domain. Zepbound, Mounjaro or orforglipron and retatrutide e ventually. Can you rank the peak sales potential of these products? What would be at the top, and what might be closer to the midpoint and bottom?
Yeah, interesting question. I, thinking about ranking them, I would think first, again, they are all Lilly assets and part of our portfolio that we can serve more patients. I think most likely our manufacturing organization will be very interested on my answer because, again, it's not the same if you think about an oral versus an injectable. We try to still build global platforms, so we have the flexibility to adjust based on the market demand. I think it's early days. The way that I would think about it is tirzepatide is the foundation of our platform that we have, both for obesity and diabetes and will continue to be the case. Thinking about orforglipron will bring this oral opportunity to expand the market and serve more patients at scale globally.
Retatrutide, given the initial study that read out in Q4 last year in osteoarthritis in the knee, but provided significant weight reduction, actually up to a 28%, 29% weight reduction. We have more data readouts both in obesity and type 2 diabetes that all will read out this year as well. Everybody gets super excited about the level of efficacy of retatrutide, but the way that we think about it is the vast majority of the patients will be already served by tirzepatide. I think we always think about retatrutide as more this segment of patients that will have a BMI over 37, maybe over 40, that needs to be served with a drug to get to the weight level reduction that they expect to have. It's a more targeted population.
I see. Maybe sticking with retatrutide. The people in this room, we're all paid to worry. We're watching new Lilly start new studies that are looking at different dosing or titration schedules and doses of retatrutide. That kind of tells us that Lilly isn't quite where it needs to be relative to dosing of retatrutide. Is that incorrect?
I would say so. I think the dosing was very clear even when we started the TRIUMPH-1 , 2, 3, and TRANSCEND-T2D-1 , 2, 3. Again, we are running, if you look at not only for retatrutide, for orforglipron, for tirzepatide, what we call a wall of studies to educate basically a clinician and the medical practice on a daily basis. These studies that you reference, I think you're referencing like TRIUMPH -8 and 9. There are other studies that will continue to educate. Now, in this case, for example, TRIUMPH -8 will educate basically the efficacy and tolerability of retatrutide low dose. TRIUMPH -9 will be actually the dose regimen if you start scaling at a lower pace through those doses over time. Will that change how we think about the dosing? No, it does not.
Okay. Questions from the audience? Another frequent question from investors is: how will the market dissect between oral and injectables? You know, we have KOLs who come to conferences like this and will be here on Wednesday who will say, you know, "This is really or should remain an injectable market. It's the way to treat patients. Injectables are easy to deal with," and so forth. They think the majority of the value will be in injectables. Does Lilly agree or disagree with that?
As I said, I think it's less so about agreeing or disagreeing. It's to provide a portfolio of products that will let the physicians, as you described, some of these physicians that feel more inclined to prescribe with injectable versus orals. I think there is also an strong preference of consumers or patients to decide in this equation as well, and we hear that a lot, that patients go basically to the physicians with an idea already that either they see in social media and so on, that they are interested to get treatment with an oral or an injectable. Educating the physicians, providing these options of portfolio opportunities across injectables, orals or different platforms, different options, single-acting, dual-acting, triple-acting like retatrutide, will actually help us to have a breadth of a portfolio to serve all the patients at the global level.
Okay. Where is the larger market opportunity for obesity agents? Is it U.S. or ex-U.S.?
You want to comment on that one?
I mean, we can start with just sort of people. I mean, certainly if you look at the globe, there's, you know, over 900 million people around the world outside the U.S. that could be a good potential patient for an incretin medicine, and the U.S. is over 100 million. Just from a sheer volume standpoint, that's kinda how things shake out. I think that much like your question about oral/injectable, U.S./ex-U.S., I mean, our benefit and our luxury is that we don't really have to pick and segment. It's only an issue if you only have a U.S. oral or an ex-U.S. injectable. You know, we just want to have a broad portfolio that we have, and we want to serve as many patients as possible. That's the goal and that's the undertaking, and we're very early in that uptake. You know, in the U.S., there's very low penetration into this eligible population. Ex-U.S. is even later because the launches were a little bit behind. There's a lot of room to run in the future.
Okay. One area where Lilly isn't present is in a monthly GLP-1. Are you talking with your feet that you just don't feel it's a real market, or do you just not have the candidate, or what should we read into that?
No, we do, by the way. It's in early stages, but we are going after, as you can imagine, a broad portfolio. As I said, we have single-acting, dual-acting, triple-acting. We are going between orals and injectables. Frequency of dosing. Tolerability. We didn't talk about tolerability, but we have a eloralintide as well that is an amylin with low levels basically of side effects associated with this drug as well, that we could have potentially similar efficacy on some of the drugs, including tirzepatide, but with lower side effects. There is a breadth of that portfolio. I mentioned portfolio like four or five times because we truly believe that, again, thinking about the different combinations, we are going to try to have all of them in the marketplace, including basically that dose frequency as well.
The next question has seven parts, and there's no w ay I could answer this question, but I'm not the one who has to answer it. Which one? Can you rank these in terms of risk? Like, what do you worry about out of these seven things? So, I'll put them in groups. U.S. pricing or foreign pricing, that's two. Compounding, that's three. Portfolio concentration. A lot of eggs at Lilly are in the obesity/diabetes basket. four, challenges outside diabetes and obesity, so maybe in oncology or something else. IP, just the overall global respect for IP. What do you worry about the most out of that list?
It's a good list. Pricing, I would say both U.S. and non-U.S., is certainly one of those things that are basically a headwind to the industry as a whole. I don't think that is just individual for the incretin space, but it's to the entire pharma industry. The way that we are addressing that is through innovation, and it's growing volume and offsetting that erosion of prices. If you look at the price erosion, putting aside the 2026 that it was a reset year, we have been on that mid to high single digit. I don't feel that that will be anything different in the future, right?
How we continue to drive growth, and you see that in the growth trends that we've seen with Lilly performing again and growing and outpacing the price erosion over time. That's the best way to address that risk. I don't think that it will get worse. It's just a continuation of the same risk that we continue to see nowadays. This year is more predominant in the U.S. because of MFN. Different years could be all U.S. as well. You have, again, new changes on the regulatory system in many countries, and that could vary by year as well. We know the system rules, and we know how to operate on those schemes as well. The second one, I think is a reality. I think you call it more the concentration on the obesity and diabetes.
The reality is that we are in that space, and we are happy that we are in the space, and it's happening in the situation that the market is growing exponentially, in particular on the obesity side, and we are the market leader. We are not shying away of that. We are actually driving that and ensuring that not only that we maximize the opportunity, but actually we provide a portfolio of products, so we don't take, again, one risk on one single asset, but we have the breadth of the portfolio to continue to innovate in that space.
Our role on that is to continue to reinvest into the rest of the therapeutic areas in oncology, neuroscience, immunology, to basically continue to drive that growth in the other therapeutic areas that are very important for us. I know that, again, obesity is getting a lot of time and effort, but we are all very much focused to driving growth, and we have e, actually a very impressive pipeline, in particular in oncology, to drive that growth into the future as well.
I'm sorry, did you mention compounding?
I did not.
Okay. Does that mean you're not worried about it ?
I think the compounding is, I mentioned that last year that I was getting that question almost every day. It's a reality. We continue to drive, again, our legal case and in trying to enforce that FDA takes action on this case. It's part of the reality of the business. I feel really good about the health of the business and where the business is heading showcase that basically the brand is, are being prioritized in the marketplace and driving consistent growth over time.
Okay. Questions from the audience. Let's leave the incretin space and look at some other products that Lilly has. What non-incretin pipeline assets do you think have the most significant potential to impact Lilly revenues over time?
Yeah. Thinking about, of course, again, we brought to the market several products over the last few years like Jaypirca, Ebglyss, Omvoh, Kisunla. All those products, they are in a very nice trajectory of growth and will continue to drive that growth over the next 10 years. Thinking about the pipeline, very excited opportunities. We are getting into cardiovascular. Nobody noticed that space, we used to call it diabetes. We extended to then, chronic weight management and diabetes. Now we are getting into cardiovascular. We are actually having two assets that will potentially treat a cardiovascular risk like Lp(a), and we have lepodisiran and muvalaplin. This is a large space, and could potentially have a large impact for patients, in particular getting into the next decade as well. We talk about Kisunla.
I know that front and center is the data readout of TRAILBLAZER . I'm glad that you didn't ask yet about it. Again, getting into preclinical for Alzheimer could be another unlocking of a large opportunity in terms of patients that many of them will not have symptoms nowadays that could more significantly reduce the cognitive decline, and even the risk of ARIA could be lower as well. That could unlock a significant opportunity. It still will be gradual to growth, but it's a large patient population that is not being served nowadays. Those are two in my eyes that could drive significant growth in the future.
Can I throw one and two just to round out the TAs? I mean, in oncology. You know, there's a lot of talk about oral SERDs amongst competitors. Lilly actually has an oral SERD that's approved on the market in the metastatic setting. We have a trial ongoing number 4 in the adjuvant setting. That's projected to read out by 2027. As in oncology, all these trials are event-based, that dictates when they read out. That's a big prevalent pool of patients that are currently on endocrine therapy, and that's a great opportunity where patients typically take these medicines for multiple years. Large prevalence pool times long duration of therapy equals big market opportunity.
We do have a breast cancer panel on Wednesday. I'm sure SERDs will be a hot, very hot topic on that panel. Let's go to Kisunla for a second. We're again, as you said, we're awaiting the TRAILBLAZER-ALZ 3 readout, which I know is sometime in 2027. Are you more or less confident than a year ago that it could read out early?
At this time, our position has not changed, Steve. Again, completion is 2027. As you know, it's event-driven. That could read out again anytime. I don't have a view on this time when that will happen.
Okay. Is Lilly privy to the event accumulation across this study, not necessarily in each group?
You want to comment on that?
I mean, look, we don't get into lots of details here. I mean, obviously, you have blinded events that dictate when things read out. T his is a common question, and this wouldn't be a Steven Scala panel without multiple choice and true false.
T hat's right. Sticking with Alzheimer's disease, you have another very exciting drug in remternetug. You're doing this study, which honestly it seems kinda odd. The Trailblazer ALZ-1, not Trailblazer, Trail Runner-
TRAILRUNNER-ALZ-1 , it's kind of like, is there a scenario where you can file the drug on this? If not, why are you doing it?
Sure, I can take that. TRAILRUNNER and TRAILBLAZER, we tried to make them as interchangeable to confuse people as possible. Remternetug is a program that's also in a phase III trial that's assessing preclinical. It's ongoing right now. It's projected in the back part of this decade to read out. That's where we see the medicine and where we think the biggest use case is. We also have a trial that was basically more like a dose-finding study. TRAILRUNNER-ALZ-1 looked that subQ, IV, different dosing schedules, and so it really was meant to inform the phase III design. It's not fileable, but we'll see more data from that later this year.
Okay. Questions from the audience? A couple of hot topics at conferences like this, and other venues are both AI and China. Maybe you could talk about China first. When I think about China, and I think about the pharma industry, Lilly's not a name which kind of rises to the top, right? I don't think your presence there is particularly large compared to other companies, and your kind of tentacles into the country to bring out innovation seem, you know, competitive, but not kinda standout. Tell me why those two statements might be completely incorrect if they are.
No. Again, comparing to other pharmas, again, the split of the business could be different depending on the therapeutic area that they stand. We have a long-standing commercial footprint in China. For example, very recently, we opened a Lilly Gateway lab as well in Beijing. We have been expanding and partnering as well in the Chinese business, and it's not new. You have, again, access to our filing. You can see that actually last year, I think the size of the business was roughly $2 billion out of the 65. You can, again, do the math about the representation of that business. It's growing very nicely.
I mentioned that, again, as of January first, they got a NIDL reimbursement for Mounjaro in type 2 diabetes that will provide and unlock an opportunity to drive significant growth in the years to come. I always get the question, "Well, you will have generic of semaglutide in the future." The way that the system works in China, they have two different basically path for the generics and the branded products. We have a path for our business to be protected in the future as well. We expect to see significant growth in the future. If you look at very exciting is the timing between the launches in the U.S. and the launches in China. Again, five, 10 years ago, there was a significant lag, you see that actually shrinking more and more. Expect that to continue to happen in the future, that we will have those launches again, in a more sequent basically launches that you see in the U.S. getting into the all U.S., but in particular China as well.
You brought up the semaglutide patent expiration. Does Lilly see its obesity and diabetes assets growing through the semaglutide patent expiration?
The answer is yes. Yeah, you see it nowadays even, because already many countries we have a premium to semaglutide, and in some countries it's up to 50% the premium that we have, and we have market leadership position. There is already a premium differentiation of our brand versus even the original semaglutide. There are markets that are more generic-driven that could potentially have an impact, but we feel very strongly about our position even to navigate growth through the generic entrance, you know, of semaglutide all U.S.
Okay. Questions from the audience? We only have a few. Yes.
What's your strategy in, should we say, associated effects from GLPs like bone loss, this kind of thing?
You want to comment?
The strategy on basically adverse events associated with GLP-1s, is that the question? Okay.
Yeah. I can take that. Specific to like the muscle-bone composition idea, I mean, we're looking at that. We have obviously a study in phase II that read out last year at ADA, bimagrumab. It was in combination with semaglutide. I think it's TBD on exactly what the path forward for some of those medicines look like, what the regulatory path is, as well as kinda what the need is looking to assess is. I would broaden it a little bit more to say what are we looking at is actually a lot of other effects that GLP-1s have that are positive. Outside of just obesity and some of the cardiometabolic diseases, we're looking in immunology, neuroscience, things like alcohol use disorder, tobacco cessation, we're looking at an asthma study, there's really a wide aperture of different conditions that we're looking to treat, I think can be positive.
Only a couple more minutes. When you look at your P&L, which line is most likely to benefit from AI?
Over time, all of them. Short -term, I would say SG&A naturally so, starting with back office. Again, we are seeing that nowadays that we are growing significantly, and we are actually leveraging AI to close books and records to automate all our processes, forecasting. I think manufacturing maybe midterm is one of the one to follow, in particular with all the new sites that we are putting in place. We are leveraging automation and AI significantly to make the lines as efficient as possible. That will continue to drive significant value in my eyes.
The third one, it takes us always more time, but of course is R&D, starting from discovery all the way to clinical trials and late phase that could benefit from AI, but it will take more time to get there. We are investing heavily. You've seen some of the partnerships that we've signed. The supercomputer that our chief technology officer called it out last week is already up and running in our offices. We have this new Conn Innovation Lab that we bring basically our best scientists with their best technical people to continue to drive that innovation.
Okay. In our remaining minute, we try to close every panel with the following question. That is, over the next decade, what do you think the biggest surprise or change will be at Lilly?
Okay. Well, interesting. I've been in with Lilly 25 years, and if I look back 10 years ago, our size of the business was roughly $20 billion. You look nowadays, again, our guide is $80 billion-$83 billion, right? 10 years pass, and we have almost quadruple the size of the business in that timeframe. Significant growth that we have seen, and we are not planning to stop here, as you can imagine, right? You think about the four molecules that you described that will continue to drive significant growth. That's, I think in my eyes, a big enabler of that part of the growth, thinking about mir, but also long- term. It's again, new platforms, new modalities, tolerability, as we discussed. Might mention as well getting incretins into outside of the obesity and type 2 diabetes space as well.
Again, areas like immunology, areas like in neuroscience. Again, we see and we are running studies on that space. Expect to see that in our leadership position on how we leverage that position to get into those spaces. Continue to drive again and putting our capital to work. We will leverage this time to continue to reinvest, to drive that growth into the other therapeutic areas. Of course, we will remain our discipline on what we invest in. Expect again that we will continue to drive that growth and that penetration in the other therapeutic areas.
Great. Sounds exciting. Exciting future.