The paragraph is an introduction to Eli Lilly and Company's Q4 2024 Earnings Call. Mike Czapar, Senior Vice President of Investor Relations, introduces key company executives who will speak during the call, including CEO Dave Ricks and leaders from various departments. The call will discuss projections and forward-looking statements, with a focus on non-GAAP financial measures. Dave Ricks highlights the achievements of 2024, mentioning growth in revenue, pipeline advancements, and supply chain investments, all directed towards delivering important medicines to more patients globally.

In 2024, the company experienced a 32% increase in full-year revenue compared to 2023, surpassing their revenue guidance by $4 billion, with a 45% growth in the most recent quarter attributed to newly launched products. Key achievements included positive Phase III results for certain drugs, initiation of new Phase III programs, and strategic acquisitions and collaborations such as with Morphic Therapeutics and OpenAI. The company expanded its innovation and manufacturing capabilities globally and secured regulatory approvals for multiple new medicines. Q4 saw a 45% revenue increase, driven by strong sales of products like Mounjaro and Zepbound, alongside robust performance in oncology, immunology, and neuroscience. They achieved several key pipeline milestones and continued advancing their strategic objectives.

The paragraph discusses the company's recent activities and financial performance. It highlights the submission of imlunestrant for metastatic breast cancer and tirzepatide for heart failure. The company announced positive Phase III trial results for Zepbound, showing significant weight loss compared to Wegovy. Production of incretin medicines increased, and there were no wholesaler back orders by the end of 2024. They are also acquiring Scorpion Therapeutics' cancer program, enhancing their oncology pipeline. Financially, they returned $3 billion to shareholders and announced a $15 billion share repurchase and a dividend increase. Revenue grew by 45% in Q4, driven by Mounjaro and Zepbound, with a 20% growth in the non-incretin portfolio. Gross margin rose to 83.2%, and R&D expenses increased by 18%.

In 2024, the company initiated eight new Phase III programs and advanced several assets into clinics. Marketing and administrative expenses rose by 26% due to promotional activities for new product launches, including advertising and international launch investments. Operating income more than doubled to $5.6 billion, mainly due to increased revenue from new products, with a tax rate of 13.2% and earnings per share at $5.32. U.S. revenue in Q4 increased by 40% due to a 45% growth in volume, driven by products like Zepbound and Mounjaro, while Europe and Japan saw substantial revenue growth, particularly from Mounjaro and Jardiance. In China, revenue rose by 13%, with Tyvyt and Verzenio contributing to the volume growth, and Mounjaro was newly introduced with a limited launch.

The paragraph discusses the financial performance and growth prospects of several pharmaceutical products. Initial sales of Mounjaro in China are expected to be modest due to supply issues, but more significant contributions are anticipated in the second half of 2025. Global revenue for new products doubled in Q4 to $5.6 billion, driven by Mounjaro and U.S. Zepbound sales, the latter of which became the market leader in the anti-obesity sector. Other products like Jaypirca, Omvoh, Kisunla, and Ebglyss showed positive momentum and growth, with plans for increased commercial investment. Overall, growth products, including Verzenio, saw a 13% revenue increase compared to Q4 2023.

The paragraph discusses financial and operational expectations for 2025, highlighting revenue projections, market trends, and growth strategies. Verzenio's revenue is boosted by U.S. wholesaler stocking, while Trulicity's revenue declines due to switches to Mounjaro and price reductions. The company anticipates significant revenue growth in 2025, driven by U.S. incretin market expansion, launching Mounjaro in new international markets, and increasing contributions from oncology, neuroscience, and immunology products. Currency exchange is a concern, and net prices are expected to decline due to U.S. Part D changes. Manufacturing capacity is being expanded, with a new facility in Concord expected to start shipping. Margin expansion is projected, with gross margin less OpEx anticipated to improve compared to 2024.

The paragraph discusses the company's future investment plans, focusing on SG&A and R&D. They plan to invest in new product launches and expand direct-to-consumer efforts in the U.S., as well as support international launches for Mounjaro. The company will accelerate R&D investments, with eight new Phase III programs started in 2024 and more anticipated in 2025. Other expenses are projected at $600-$700 million due to interest expenses, with an estimated tax rate of 16%. Expected non-GAAP EPS is $22.50-$24, excluding IPR&D charges. Dan Skovronsky then details recent R&D progress, highlighting new U.S. approvals for Zepbound and Omvoh, regulatory submissions for tirzepatide, imlunestrant, and Jaypirca, and an update for Kisunla.

The paragraph discusses recent advancements and future goals in the pharmaceutical company's research and development efforts. It highlights the priority FDA review for a new dosing modification from the TRAILBLAZER-ALZ 6 study and the launch of a Phase III program for Orforglipron in obstructive sleep apnea and obesity. The company also progressed an oral GLP-1 into Phase II for obesity and advanced Eltrekibart for ulcerative colitis while discontinuing some Phase II and Phase I assets based on clinical outcomes. They initiated Phase I studies for four new molecules and started 8 new Phase III programs over the year, along with 21 Phase III trial data disclosures and two new medicine approvals, Ebglyss and Kisunla. Looking forward to 2025, they anticipate launching two new Phase III programs, including an adjuvant non-small cell lung cancer trial for the KRAS G12C inhibitor, olomorasib.

The paragraph outlines progress in two main programs: a metastatic program for KRAS G12C mutant lung cancer and a cardiometabolic program focusing on Orforglipron. The metastatic program is advancing through the FDA's Project Optimus, aiming to prevent cancer recurrence by combining olomorasib with approved agents. The cardiometabolic program is preparing for Phase III trials of Orforglipron in hypertension, with ongoing trials in type 2 diabetes, obesity, and obstructive sleep apnea. Key trials include ACHIEVE-1, a 40-week study in type 2 diabetes, and ATTAIN-1 and ATTAIN-2 for obesity, with various readouts expected soon. The goal is to develop an oral medicine with efficacy comparable to injectable GLP-1 therapies.

The paragraph outlines several ongoing and upcoming clinical trials related to various medications. Regulatory submissions for Orforglipron, aimed at treating obesity, are expected by late 2025. Data from the tirzepatide cardiovascular study, SURPASS-CVOT, anticipated in Q3, could support its use in reducing cardiovascular risks. Retatrutide, a triple-acting incretin, is expected to demonstrate significant weight loss benefits, with initial data from the TRIUMPH-4 study due this year. The company is also gathering data on Jaypirca for treating CLL and MCL to expand its indications. In neurodegeneration, the TRAILBLAZER-ALZ 3 study investigates donanemab for early Alzheimer's, with primary completion projected for 2027, contingent on progression events.

In 2025, Lilly plans to focus on exploring new applications of incretin biology in neuroscience and immunology, leveraging their pipeline and expertise to match molecules to specific disease indications. They intend to initiate clinical trials targeting brain health, substance use disorder, pain, neuropsychiatry, and inflammation, and move quickly to Phase III trials based on promising data. Key regulatory submissions expected in 2025 include Orforglipron for obesity, insulin efsitora alfa for type 2 diabetes, and tirzepatide for cardiovascular outcomes. Lilly had strong financial performance in 2024, and anticipates continued growth in 2025 with new product launches, manufacturing capabilities, and market opportunities driving revenue.

The paragraph is a transcript from a conference call's Q&A session where Tim Anderson from Bank of America asks about the 2025 guidance and its relation to prescription uptake trends. He inquires whether acceleration in prescription trends is necessary for achieving 2025 guidance. Lucas Montarce confirms that the 2025 guidance is based on the continuation of the prescription growth seen in 2024. Terence Flynn from Morgan Stanley asks about expectations for Zepbound's payer dynamics and market access, particularly considering recent filings for additional medical indications.

In the article paragraph, several executives discuss the state of their commercial and government healthcare access, particularly focusing on Medicare and Medicaid. Patrik Jonsson reports strong coverage in the commercial sector and a positive employer opt-in trend, and expresses optimism about gaining Medicare and Medicaid coverage for their product OSA. Daniel Skovronsky addresses the issue of compounding, asserting their opposition to non-approved compounding despite ongoing legal challenges, and notes positive prescription trends and business growth in the recent quarter.

The paragraph discusses the potential positioning and expectations for Orforglipron, a single GLP-1 treatment for diabetes, in contrast to the dual-acting tirzepatide. Daniel Skovronsky and Patrik Jonsson highlight that while Orforglipron's efficacy may not match tirzepatide's, it offers important benefits as a monotherapy, especially for patients with type 2 diabetes who experience less weight loss. The focus is on achieving efficacy similar to Ozempic. Patrik adds that an oral GLP-1 could appeal to patients with needle fear, estimated at 20-25% in the U.S., and those who do not require the extensive weight loss or HbA1c reduction that tirzepatide provides, potentially serving a role in maintenance therapy.

The paragraph discusses the expansion of studies related to the drug Orforglipron beyond obesity and type 2 diabetes, including into hypertension. Christopher Schott from JPMorgan questions the confidence in pursuing these studies without initial readout data, particularly concerning the drug's safety and tolerability. Daniel Skovronsky responds by stating that confidence in the drug's safety grows as trials continue without interruptions, although conclusive safety data will only be known after the first readouts. He notes that specific tolerability factors like titration haven't been assessed as they haven't reviewed unblinded data. The conversation then transitions to a question from Geoff Meacham about the commercial potential of tirzepatide in broader settings and its impact on reimbursement or access.

The paragraph discusses the potential for broader reimbursement of obesity medications, focusing on the SURMOUNT-1 extension's impact at the provider level and ongoing discussions with regulatory agencies. While there's no current precedent for type 2 prevention as an indication, the positive data from outcome studies on prediabetes and obesity could increase employer interest. The speakers suggest that reimbursement will grow steadily over time rather than being triggered by a single event, with progress seen in U.S. and U.K. insurance coverage. They anticipate that by the end of the decade, obesity medications will be widely used to prevent chronic diseases, supported by compelling health economics and growing data. Overall, the long-term outlook for reimbursement of obesity medication is optimistic.

The paragraph is a discussion during an investor call, where Colleen Garvey from Guggenheim Securities inquires about the sustainability of operating margin expansions and long-term margin forecasts nearing 50% by the end of the decade. David Ricks directs the question to Lucas Montarce, who explains that while they have achieved margin growth, the company believes in reinvesting in research and development to sustain future growth. Montarce suggests that aiming for margins in the high 40s or 50% may not support sustainable growth, and that the current margins in the low 40s represent a balanced investment and return strategy.

In the paragraph, David Ricks and Anne White discuss the early stages of the Kisunla launch in the Alzheimer's space. They highlight the successful momentum and focus on system readiness and growth, noting over 80% P&T approvals in key accounts and over 800 prescribers. Challenges include healthcare system readiness and the capacity to diagnose patients, with solutions being developed in partnership with providers. The enthusiasm for Kisunla's profile, particularly its once-monthly infusion and dosing flexibility, is helping address capacity constraints. They emphasize learning from previous launches and applying those lessons to their current efforts.

The paragraph discusses a discussion between Umer Raffat from Evercore and representatives from Lilly, focusing on the company's ongoing Phase III trials with the drug Orforglipron. Umer notices the absence of an outcomes trial and inquires about it. Daniel Skovronsky from Lilly responds that they are prioritizing broad applications for the oral medication but acknowledges the challenge of conducting outcomes trials due to maintaining placebo groups, especially in the U.S. Meanwhile, Steve Scala from TD Cowen raises concerns about the obesity market, noting recent trends such as slowing prescriptions, Lilly's early demand fulfillment, marketing strategies, and the challenges faced in guiding and stocking, which collectively raise questions about the market's size and accessibility.

In the paragraph, David Ricks from Eli Lilly addresses concerns about the company's aggressive manufacturing build-out for obesity drugs, acknowledging the challenges but affirming confidence in the market's potential. He notes that while there was a shortcoming in meeting projections last year, the demand for these drugs, which not only aid weight loss but also impact chronic disease outcomes, remains strong. Ricks states that there is no internal doubt about the need for further expansion to meet global demand and assures that the capacity established thus far is insufficient, indicating more development is necessary.

The paragraph discusses the company's optimism about addressing demands with scalable oral solutions compared to injectables and mentions ongoing global efforts to expand production and sales. Despite challenges in prediction and the need for more U.S. supply, the company maintains a positive long-term outlook. The conversation shifts to Mohit Bansal from Wells Fargo, who inquires about the discussions concerning Zepbound's new label for treating sleep apnea, an area often managed by sleep specialists, which are in short supply. David Ricks passes the question to Patrik Jonsson, who explains that as the first approved pharmacological treatment for obstructive sleep apnea, significant efforts are being made in advocacy, healthcare partnerships, and medical education to extend beyond traditional sleep specialists.

The paragraph consists of a discussion during a conference call involving multiple participants. David Risinger from Leerink Partners asks about the discontinuation of the heart failure and chronic kidney disease (CKD) programs for the long-acting relaxin candidate, VOLENRELAXIN. Daniel Skovronsky responds, expressing disappointment with the Phase II trial results, indicating that they did not support further development of the molecule, although he still finds the relaxin mechanism intriguing. He suggests that the issues may lie with the molecule rather than the mechanism itself and acknowledges that others are still exploring this area. Then, Akash Tewari from Jefferies poses a question about GLP-1 pricing stability in 2025, questioning if increased discounts to improve access will be balanced by better adherence.

The paragraph discusses the pricing trends and market dynamics for Lilly's GLP-1 medications, mentioning the continuation of single-digit pricing erosion into 2025. It highlights the challenges in the 2023 baseline due to an uncovered copay. Patrik Jonsson comments on market access, noting strong access for Mounjaro and improving access expected in 2025. There's also a mention of improved patient adherence to Mounjaro compared to other drugs like Trulicity and Ozempic. A question is then posed by Alexandria Hammond on the evolution of Lilly's partnership with Rowe and the potential opportunities related to Zepbound vials, to which David Ricks responds.

In the paragraph, Patrik Jonsson discusses the launch and early performance of the self-pay system with Lilly Direct for Zepbound, noting modest TRx levels but promising new therapy starts. He clarifies that the partnership with Rowe is not financial or marketing-related but provides patients access to authentic FDA-approved medicines through Rowe's platform. Chris Shibutani from Goldman Sachs asks about the launch plans for Orforglipron, focusing on manufacturing preparations for potential approval and the timing of its launch for diabetes and obesity in the U.S. compared to international markets. Mike Czapar refers the detailed question to David Ricks, indicating that Orforglipron will utilize different production systems.

The paragraph discusses the launch and development plans for a pharmaceutical product, Orforglipron. It outlines the strategy to ensure a balance between supply and demand for injectables, contrasting with their approach for Orforglipron, which will include typical activities for primary care products like sampling and global access. The company aims to begin full launch preparations by early 2026, starting with obesity treatment in the U.S., followed by diabetes and other indications. Additionally, it addresses a question regarding the impact of titration schedules on Orforglipron's trial outcomes, highlighting successful strategies from previous trials with another drug, tirzepatide, in managing tolerability concerns.

The paragraph discusses how the gastrointestinal side effects associated with a specific drug class can be reduced through slower titration. It highlights the potential of longer studies to achieve expected efficacy levels despite these mitigated side effects. Trung Huynh from UBS questions the applicability of findings from an osteoarthritis trial involving overweight patients to broader obesity studies. Daniel Skovronsky explains that while the osteoarthritis trial is shorter, it is not directly comparable to other obesity studies due to differences in demographics and baseline characteristics. He suggests that results from the osteoarthritis population shouldn't be seen as indicative of broader obesity outcomes, which are expected to show better results.

In the article paragraph, Nicole Germino, speaking on behalf of Kripa Devarakonda from Truist Securities, inquires about the potential benefits of bimagrumab, especially in terms of weight loss and body composition when combined with tirzepatide. She references recent data showing lean mass preservation, without additional weight loss benefits. Daniel Skovronsky responds by explaining their aim to achieve either incremental weight loss or functional benefits from preserving lean mass with the combination of the two drugs. He notes that while lean mass changes haven't shown adverse effects with tirzepatide or any incretins, growing muscle could have positive outcomes. Skovronsky mentions they expect to present their Phase II study data later in the year. David Ricks then transitions to the last question, which relates to additional PBM coverage expected in March, as queried by Dave Risinger from Leerink Partners.

In the paragraph, Daniel Skovronsky and David Ricks discuss the coverage of the Ebglyss medication by two out of three pharmacy benefit managers (PBMs), highlighting their excitement about increasing consumer awareness for the brand. They also mention that Zepbound and Mounjaro have full PBM coverage. David Ricks concludes the earnings call by thanking participants and instructing those with further questions to contact the Investor Relations team led by Mike Czapar. The operator provides instructions for accessing a replay of the conference, available from 1:00 p.m. until midnight on March 13, using specified phone numbers and an access code.

This summary was generated with AI and may contain some inaccuracies.