Patrik Jonsson, up on stage with me, who is Lilly's EVP and President, Immunology, Lilly USA, Chief Customer Officer. Lots of titles.
Yep.
Patrik, give us, from an I&I perspective, you know, most investors have talked about Mounjaro and Alzheimer's. This is a franchise that has some differentiating assets, you know, a great pipeline. Maybe give us a higher level of that franchise and how valuable it is to Lilly today.
Absolutely. Thank you very much, Jeff. Very happy to be here. I know there is a lot of attention now on both Alzheimer's disease with the TRAILBLAZER-ALZ 2 readout last week and the most recent SURMOUNT-2 for tirzepatide and obesity. It's a lot of exciting stuff going on in the space of immunology as well. This is probably the disease area where we have only been for less than a decade. We are very pleased with where we are. We see our current medicines in the marketplace, Olumiant and Taltz, as really the cornerstone of our immunology franchise. Despite all the competitive activities, we also see a continued strong volume growth of Taltz in psoriasis and rheumatoid psoriatic arthritis.
Extremely pleased with being the first one to bring Olumiant in as first in disease when it comes to alopecia areata. Some really awesome patient stories there to share. We are excited about what we have in the future. This year, we are looking forward to most likely launching first mirikizumab for ulcerative colitis. We're dealing with a Complete Response Letter there, but we're working very closely with the FDA. Secondly, launching lebrikizumab, an IL-13 for atopic dermatitis. Most likely by the end of this year, we will be the only company with four mechanism of actions. With an IL-17, 23, and a 13, and a JAK inhibitor. By the end of 2025, we will be approved for at least 11 indications. That is really the base of our immunology franchise.
We are setting the bar higher, and we are aiming to be a top player in immunology. After just six, seven years in the market, we already ranked number five. When we look into the early-stage development pipeline, we are really raising the bar and saying that we shouldn't aim for anything less than resolution. I think particularly the checkpoint agonist that we have in pipeline today, we are a leader in checkpoint agonist with 3 in clinical development. Probably the most advanced one is the PD-1, where we presented data in rheumatoid arthritis, the first proof of concept in rheumatoid arthritis last year. We have accelerated our efforts there with the Phase II b, with the CXCR1/2 for hidradenitis suppurativa.
We presented first clinical and safety data at AAD a few months ago, where we clearly demonstrated strong both efficacy and safety profile, and we will announce some further moves there. It's an exciting time at Lilly.
Yeah.
Also a lot of exciting stuff going on in Lilly Immunology.
Right. Perfect. Well, at a higher level, when you think about the commercial backdrop, you'll have, you know, Humira biosimilars this year, next year, Stelara. You know, give us some perspective on, you know, the kind of pricing reimbursement environment in that sort of context as it relates to Lilly's I and I portfolio.
Yeah. No, thanks, Jeff. I think we're all monitoring the entrance of the biosimilars to Humira, and I think it's fair to say so far, the impact has been quite modest in the marketplace. We also realize that there might be more of an impact seen in 2024 with the 2024 contracting process going on right now. At the macro level, we don't foresee that the biosimilars will have an impact on the innovative molecules in the immunology setting, but more impact in the dynamics among the TNFs.
Right. That makes sense.
Mm-hmm.
Okay. Well, you mentioned so mirikizumab, lebrikizumab. Let's talk first about, you know, lebrikizumab. It's a, you know, great data, you know, lead indication and AD. Talk about kind of the value of that indication for you guys versus, you know, line extensions and given the mechanism, you know, down the road.
Yes. I will. You know, at first, atopic dermatitis is probably where psoriasis used to be five, seven years ago. If we look at the biologic penetration, it's still relatively low. We also know that atopic dermatitis is a heterogeneous disease, so there will be a need for more treatment options. I think there is a huge unmet need still there. B, if we look at the totality of the data of lebrikizumab, and we don't have any head-to-head trials, but in cross-trial comparisons, I think we can say that we are comparing very favorable to what's in the marketplace and what's in the pipeline within Lilly and with others as well.
We saw that 80% of patients that responded at induction actually maintained skin clearance at week 52, and statistical and clinically meaningful improvements on itch, on quality of sleep. We saw the same results in both Q2W and Q4W. Based upon the data, we actually had a significant interest from not only providers, but also from payers. Of course, we are extremely engaged in that space right now to make sure that we are really aiming for full access for lebrikizumab once we get the approval for atopic dermatitis. We believe we are extremely well positioned to compete there. B, it also makes perfect sense with our presence in dermatology. We have a strong infrastructure today in dermatology with TOLS, and we will continue to build on that. We will start with atopic dermatitis.
We have also announced a couple of Phase III b studies there with the DUPI experience population. The first one to really do a study, significant study in skin of color, where we are looking into specific outcomes for people with skin of color such as hyperpigmentation and hypopigmentation. Librey, we see a tremendous opportunity. We'll start with atopic dermatitis. Since we have seen the result in atopic dermatitis, we are not likely to stop there. We'll consider other indications as well. We are excited to have what we believe is an asset here that really targets the most relevant Cytokine when it comes to treating atopic dermatitis, being IL-13, and doing so with a high binding affinity, high potency, and a slow off rate.
Start with atopic dermatitis, but more to come, and that will be announced at another conference, I guess. Yeah.
All right. Perfect. Thanks. You, you mentioned, you know, Taltz and Olumiant. These are, you know, your commercial products, and you've built an infrastructure and, you know, your, your perspective is interesting in that, you know, Lilly is relatively new to I&I. How can you leverage that, you know, from a, you know, sort of from a profitability perspective when you think about lebrikizumab, mirikizumab launching? I'm just trying to get a sense for, you know, you know, taking advantage of the, of the wins that you guys have had in immunology, and really trying to maximize the value.
You know, Jeff, I think we are trying to take any opportunities here to really scale our presence in immunology. The acquisition of Dermira was an excellent example, which was finalized back in Q1 2020. On decision to launch Ebglyss building on the infrastructure we have in dermatology. I think that makes perfect sense. We referred earlier to the upcoming launch in the IBD space. We are launched with mirikizumab, but we also have an early-stage pipeline with other indications in the IBD space to come. I think that's how we see ourselves scaling, and we have similar plans across dermatology, rheumatology, and gastroenterology, and also considering adjacent areas to those.
Right. Yeah. Let's talk about Taltz for a second. When you think about the next, you know, couple years, what sort of, you know, commercially, you know, what needs to be done to inflect? You know, are there still conversations to be had with respect to formulary status that, you know, wins that you could drive growth there? From an investment perspective, you know, how are you thinking about this franchise in the next couple of years?
Yeah. In terms of Taltz, psoriasis is getting quite crowded. I think we have seen new orals being launched. We expect another IL-17 most likely to be approved later this year. It will continue to be extremely competitive. Even over the last years, we saw in Q1, we continue to outperform the market in the U.S. We saw volume growth globally of 27%. I think we can genuinely say that we expect to see a continued strong volume growth in psoriasis. In terms of access, I think we learned the hard way that you need to aim for full access early on. With Taltz today, we are the leader among the IL-17s when it comes to access for dermatology, and we're slightly behind Cosentyx in rheumatology.
We're working hard to make sure that we can improve that access. Of course, it needs to be at a realistic price as well. With the two assets we currently have, we think that the immunology portfolio will help us getting improved access for EBGLYSS and mirikizumab as well.
Gotcha. On Olumiant, you had a bit of a benefit right from COVID. Talk a little bit about, you know, kinda the attitudes towards the JAK class. You know, I think with next gen assets, like Olumiant, you know, like Rinvoq, you know, I think you have maybe less hesitation on behalf of, you know, physicians, you know, on the, on the safety tolerability. That does seem like we've moved the ball a little bit on safety tolerability.
Yeah. You know, Olumiant for us has probably been two different place. One outside the U.S. Outside the U.S., we have done extremely well with Olumiant. If we look at the uptake in rheumatoid arthritis, atopic dermatitis, we have done well. Olumiant is really serving as one of our growth engines for our OUS business. In the U.S., I think it's fair to say that we didn't have a huge success with Olumiant rheumatoid arthritis, very much driven by only getting the low dose approved. I think we have made a huge difference in alopecia areata. The uptake there has been actually far beyond what we could expect, and it's extremely well received among both providers and patients. I think makes a difference being first in disease, of course, there is a huge unmet medical need.
I think moving forward for us, the U.S. play with Olumiant and the JAK is pretty much going to be in alopecia areata. For the competition or what's happening, I still believe that the placement of the JAKs is impacting the uptake. We made the decision not to launch an atopic dermatitis because we didn't agree with the FDA on the placement of Olumiant in treating atopic dermatitis. We don't believe it made the biggest difference for patients that have failed biologics, but it should be earlier in the treatment paradigm.
If we look upon those that launched in atopic dermatitis and with our launch in alopecia areata, if we line up those uptakes, I think it's fair to say that we have probably done more in alopecia areata than the JAK inhibitors have done in atopic dermatitis. I think there is probably an interest among healthcare providers to look at combinations, particularly in the IBD space. I think that's where we have seen a decent uptake of Rinvoq, but I think quite a few of the gastroenterologists, I'm just coming from the DDW in Chicago, quite a few of those are referring to an increased interest in combining JAK in induction with other assets, as, for example, the IL-23s.
Right. That makes sense. Let's go to mirikizumab. Talk a little bit about, you know, the CRL. Was it a surprise to you guys? You know, what are the steps forward to resolution?
Yeah. Well, a CRL is never anything that you're expecting. I think it's fair to say that's something that we are working through right now. We've been quite clear that there is no concern with the medical or the safety profile of mirikizumab, and not with the label either. The FDA raised objections in terms of the proposed manufacturing process for mirikizumab, and we believe that we are on top of that. We're working very closely with the FDA to resolve this as quickly as possible, and we are still expecting to be the first IL-23p19 for treating ulcerative colitis in the U.S. as well. In the meantime, we're focusing on the launch in Japan.
We got the PMDA approval late March and the positive opinion from the CHMP just a few days after, and just working very diligently with the FDA to resolve this as quickly as we possibly can. We remain very confident.
Right. Should we look to, you know, manufacturing, the basis, I guess, for the CRL? Is there a read-through to, you know, to other franchises with regard to manufacturing, or was it a mirikizumab-specific issue?
Well, that's a good question, Jeff. No, no read-through to other assets, and we are very confident with the quality of the medicines we are producing and having in the marketplace today. This is a mirikizumab-specific objection only, and only related to the proposed manufacturing process of miri, nothing else. We don't foresee that it will have an impact on the upcoming launches in Japan or in Europe either.
Gotcha. When, when you prepare for, you know, for those launches, you know, Put it in the context of maybe the, you know, the U.S. opportunity. I mean, how, you know, for maybe for mirikizumab, but may I say the entire I&I portfolio, is there a OUS component here that, you know, investors are sort of missing in terms of a peak opportunity?
Well, you know what? I think when we look at specifically mirikizumab-
Yeah.
Yeah. The US opportunity is by far the biggest. I think that's the case for miri, and that's likely going to be the case for lebrikizumab as well. The launch in Japan is an important one. I think we have high expectations in Japan. We have high expectations in Europe as well. Of course, the U.S. market is going to be key for success.
Right. Okay. Just with respect to, the, you know, the competitive landscape here, when you think about Skyrizi and others, right? Their competitive landscape, you know, in the IBD market, lots of, you know, assets from orals to injectables coming. How do you see this fitting in the treatment paradigm?
You know what? I think by default, I think we will be used and so will other 23s and many other mechanism of actions as a second line treatment to start with, and after TNFs. I think that's where we see the big opportunity, at least in the beginning as well. The totality of the data also for miri looks very good, and we saw that more than 50% of patients remain in clinical remission at week 52, and almost 100% of those patients were steroid-free at week 52 as well. I think the data are compelling in that regards, and we are the first ones that studied bowel urgency using a numeric rating scale from one to 10, not just a binary scale.
We could see a clinically significant difference already at week two in terms of bowel urgency. Bowel urgency is probably one of the most debilitating symptoms for patients suffering from ulcerative colitis, impacting the quality of life tremendously. I think starting as a second line, I think that's probably by default where we will end up in the beginning. We are aiming for a first-line position over time, again, driven by the safety of the IL-23s. That was the consistent feedback from the four leader community at DDW. They want the IL-23s in ulcerative colitis. Of course, we have the Crohn's readout. That's a very important readout for us coming up in Q4 as well this year. We're looking forward to that.
In Crohn's, what, you know, what are the nuances that you would see in terms of the opportunity for, you know, for mirikizumab, just, you know, compare and contrast maybe the UC versus Crohn's as you, as you see it?
You know what? I think both UC and Crohn's, we see patients are cycling through a lot of treatment. We also see a low biologic penetration or penetration of novel orals across UC and Crohn's disease. It's 15% in UC, approximately, and 30% in Crohn's disease. There is absolutely a need for new drugs. And several people said just the balance that we strike with the miri data, the safety of an IL-23 and the remission date at week 52 being steroid-free, that's an appealing value proposition for a longer-term treatment of patients with both UC and Crohn's disease.
Patrik, you've mentioned, you know, a few times on the mechanisms. Are there newer mechanisms in I&I that, you know, you think are untapped or, you know, I'm just trying to think of the sort of internal versus external kind of balance.
Yes, definitely. You know, we're having a good progress in immunology today. Of course, we are looking into opportunities to get our free cash flow to work. We are looking into... There is not an opportunity out there today that we are not thoroughly assessing from a BD perspective. Whatever is out there, we will thoroughly assess, and it's going to be driven by a couple of guiding principles. First and foremost, is there an unmet need from a patient's perspective? The second one would be, okay, do we believe that the scientific conviction of this mechanism of action is strong enough? Thirdly, it's a matter of the business case evaluation.
Those are the 3 guiding principles that we will apply for any asset out there when we are making our decision to compete or not compete. I think the beautiful part is that we are not at a place of desperation where we need to go for an asset regardless of the price. We have 10 molecules in internal development now in phase I, phase II, with proof of concept across the three disease areas of dermatology, rheumatology, and gastroenterology. We're setting the bar high. If they meet those three criterias.
Yep.
Patient need, scientific conviction, it makes business sense, we will compete externally as well.
Gotcha. Talk a little bit about the a platform, right? Some products can be, you know, a pipeline and a, and a product. Is there a kind of newer access to technologies that you see out there that, you know, Lilly doesn't have expertise in? Not just in I&I, but maybe more broadly.
Yes, that's one of the drivers. I think we have been relatively consistent in our approach to BD over the last years. We're first looking into those disease areas we are committed, immunology, neuroscience, oncology and diabetes, obesity, but also new platforms. I think the acquisition that we made back in Q4, Akouos for hearing loss, that's an excellent example. It's outside of our core business, but we get access to a new platform that we eventually can amplify in other disease areas as well. One example in immunology would be the checkpoint agonists that I referred to earlier. I think that's an really interesting area and where we had the proof of concept last year in rheumatoid arthritis. We see opportunities there across many different indications and with three different checkpoint agonists.
We are looking into both, SLE, rheumatoid arthritis, and atopic dermatitis as proof of concepts.
Gotcha. Thinking about the next couple of years and with respect to the I&I pipeline, you know, what, maybe talk us, you know, through, like, what, you know, value-creating events, you know, beyond the ones you're talking about that we'd that we could see? Not just in the, you know, unapproved drugs, but like in line extensions and the like.
Yeah. No, very happy to. First the approvals of Omvoh and lebrikizumab
Yeah.
That's going to be key, huh? I think the first major readout is going to be in Q4. That's going to be mirikizumab in Crohn's disease. That's going to be very important. If we look... In 2024 as well, we will have a readout on the DUPI experience patients on lebrikizumab. In 2024, I think a couple of really interesting readouts from the pipeline. We will have the phase II b readout of our PD-1 in rheumatoid arthritis. That's coming next year. We have a readout as well on the BTLA checkpoint agonist. That's coming in 2024. We will have a readout of the skin of color in 2024. Those are really important events over the coming 18 months, I would say, in the space of immunology.
Gotcha. Thinking about, you know, the I&I portfolio, you know, overall, when you look at, you know, some of the companies in this space, they've evolved the kind of the market, you know, from the core indications like the top, say seven or so you'd get with TNFs, to some more nichier indications. I wouldn't call them orphan, but they're, you know, they're more rare. How, you know, what's Lilly's view on that? Do you... I know the goal is to maximize value and number of patients, but how do you guys look at, you know, more rarer indications across the I&I portfolio as opportunities?
I would say that's just the way we are assessing any opportunity. When we have a mechanism of action, we have a proof of concept, I think the first thing we do, together with AJ and his team, we're looking into, okay, where are the opportunities? Where can we make a difference for patients with this asset? Again, through the same lens of pursuing external development, we are looking into the unmet medical need, the scientific conviction, and of course, does it make business sense? That includes the smaller indications and several of those where there currently are very limited, if any, treatment options. Very often that can make a very big difference from an access perspective as well.
Right. Just in the context, you know, it'd be remiss if I didn't ask, you know, on Mounjaro, does your success today in diabetes and going forward in obesity and Alzheimer's, does that sort of change how you're thinking about internal and external investing? Just the having to, you know, the impact factor of other franchises, you know, on the top line.
Yeah. I'm so excited with the cards we have in our hands today at Lilly across the different disease areas. you know, we are currently at a position of strength. I think if anything, it just enable us to really look into opportunities across all of those four disease areas where we have decided to play and to play to win. I think if anything, it gives us just more opportunities. We are not changing the bar. We are not at the place of desperation. We will just ask ourselves, do we make a difference for patients? Do we believe in the science? Does it make business sense?
Right. As Chief Customer Officer, let me just ask you on the Mounjaro, you know, launch, obviously historic demand. This, you know, middle part of the year, we're gonna get through the sort of anniversary of the launch and a lot of the reimbursement, you know, copay kind of things. How should we think about kind of the back half of the year for that business for, you know, Mounjaro and diabetes from a sort of pricing reimbursement access perspective?
That's a great one. You know, we are so excited, I think it's important to have in mind, even when we made the changes to the co-pay card back in October, this is an uptake that is unheard of in the U.S. marketplace. It continues along those lines of the changes to the co-pay card as well. We have seen an increase of 100% in terms of paid TRX since October until the end of Q1. We saw an increase in Q1 versus Q4, 55% of our TRX were paid. We have 60% commercial and Part D coverage today. You should expect that to continue to improve along those lines. Mid this year, we will terminate the grant offering of the first rounds of the co-pay card.
Most likely, you will see a decrease in TRX, but you will continue to see an increase in paid TRX. Towards the end of 2023, we have also announced that our RTP site in North Carolina will be opening up, and we will double our supply of incretins by the end of 2023. The outlook for Mounjaro continues to look very, very positive. With the SURMOUNT-2 readout, I think we also announced that we are finalizing the rolling submission to the FDA, and we could expect an approval as early as late this year for tirzepatide in obesity. Truly exciting.
From a branding perspective, when you look at Mounjaro, you know, and for diabetes and tirzepatide, you know, for obesity. Talk us through kind of how you view at a high level the, you know, your incretin business. How much, you know, sort of investments would you have to make to build awareness, to drive access from an obesity context? I'm just trying to get a sense for, you know, the lessons learned initially with access and all the commercial, you know, considerations for Mounjaro and diabetes?
Yeah. I think we have learned quite a lot over the last year. I think first and foremost, the obesity market is different than type 2 diabetes market. In a way, we will continue to lean in fully on both of those.
Yeah.
Obesity specifically, I think the near-term opportunity is more looking into patient activation. If we look at the coverage today with a competitive product, we know that they have a good commercial coverage, but only 50% of employers have actually bought into that. I think through patient activation, we can get much more employer engagement, and I think that's an area where we'll spend much more time and investments over the coming months. Secondly, we know that the willingness to pay in the obesity space is higher than in the type 2 diabetes space as well. That opens up for some new models of access as well for direct to patients.
Gotcha. There's some, you know, obviously some nuances between the U.S. and European launch. I mean, the cadence of it is different. Just, you know, at a high level, like considering your, you know, your background in the I&I portfolio, are there lessons to be learned from kind of the U.S. rollout for, you know, Mounjaro and diabetes and then obesity that you can apply to, you know, to accelerate the launch around the world, particularly in Europe?
Absolutely. I think we often get the question, "How are you going to manage to launch five new medicines within 12 months?" You know, that's a great challenge to have, doing that with five assets that we actually maybe we are full of ourselves in that regard, but we believe they are bringing huge value to patients. The downside here is that they are resource intense, and they are investment intense. Sometimes you just need to be concerned about the level of focus. The upsides are just coming back to what you said. The tremendous learnings we have across the different disease areas, how we have launched Mounjaro, how can we apply those learnings when we launch in obesity or when we launch in atopic dermatitis.
I think there are a lot of a place when we're launching that actually can be replicated across different disease areas, and we're building capabilities, we're building expertise internally that we never had before, and that actually would take years to get, unless you had those launch opportunities so tied to each other. We are forced to work very closely together today, and that's a great position to be in.
Sounds great. Well, thank you, Patrik, for the time.
Thank you very much, Jeff.