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    Eli Lilly and Co (LLY)

    Q1 2024 Earnings Summary

    Reported on Jan 10, 2025 (Before Market Open)
    Pre-Earnings Price$737.20Last close (Apr 29, 2024)
    Post-Earnings Price$775.00Open (Apr 30, 2024)
    Price Change
    $37.80(+5.13%)
    • Eli Lilly anticipates Medicare Part D reimbursement for tirzepatide (Mounjaro/Zepbound) due to new indications like obstructive sleep apnea, potentially expanding patient access and driving revenue growth.
    • Eli Lilly has a robust pipeline of next-generation obesity treatments, including nine assets in Phase I and II, aiming to improve upon current drugs like tirzepatide and strengthen their leadership in metabolic diseases.
    • Eli Lilly is confident in its manufacturing capacity to meet future global demand for orforglipron, their oral GLP-1 receptor agonist, potentially offering advantages in production scalability over injectable treatments.
    • Reimbursement challenges for new indications like sleep apnea: Despite promising data, there is uncertainty around reimbursement for tirzepatide's new indications under Medicare Part D, as policies may not pass in 2024.
    • Limitations and side effects of leading drug tirzepatide: Even though tirzepatide is effective, some patients experience gastrointestinal side effects, and not all achieve desired weight loss levels, leaving room for improvement and potential competition.
    • Uncertainties in early-stage pipeline drugs: Many of Lilly's obesity drugs in development, such as bimagrumab and amylin receptor agonists, are in early stages with unclear efficacy and differentiation, posing risks to future growth. ,
    1. Capacity Expansion and Guidance Raise
      Q: Explain the capacity dynamics leading to the guidance raise?
      A: The company is ramping up capacity across multiple sites globally, including six sites under construction or ramping up in North Carolina, Indiana, Germany, and a recently purchased seventh site. Confidence in increased capacity supports the guidance raise. For example, the approval of the Kwikpen in Europe came slightly ahead of expectations, enhancing their ability to serve patients.

    2. Mounjaro Pricing Trends
      Q: Comment on adverse pricing trends for Mounjaro?
      A: In Q4, there was a significant one-time adjustment for Mounjaro. The $25 savings card was terminated on June 30, 2023, but patients already enrolled are grandfathered until June 30, 2024. While there may be some benefits in the first half of 2024, typical pricing headwinds are expected in the second half.

    3. Tirzepatide Part D Reimbursement
      Q: Will tirzepatide secure Part D reimbursement differently?
      A: With CMS's early April announcement to reimburse obesity-related comorbidities based on the SELECT trial, the company is confident that new data, such as sleep apnea, will be reimbursed under Medicare Part D. They expect similar reimbursement for other comorbidities, assuming positive approvals.

    4. Competitive Landscape for Zepbound
      Q: Thoughts on competitors' upcoming weight loss drugs?
      A: While data on Amgen's AMG 133 is limited, the company is interested in their results. Novo Nordisk's CagriSema adds more agonism on top of GLP-1, similar to their own tirzepatide, a dual agonist. They have advanced their amylin agonist to Phase II and believe tirzepatide currently has unsurpassed efficacy, while preparing next-generation assets.

    5. SURPASS CVOT Confidence
      Q: Confidence in SURPASS CVOT achieving superiority?
      A: The primary analysis focuses on noninferiority to Trulicity, a drug known to reduce cardiovascular risk. While avoiding specifics on interim analyses, the company remains increasingly confident in the readout. Additional data from the OSA study bolsters this confidence, highlighting benefits that could lead to cardiovascular advantages.

    6. Tirzepatide and Retatrutide in NASH
      Q: Thoughts on tirzepatide's NASH data and next steps?
      A: The Phase II NASH data for tirzepatide is exciting, showing a profound effect on the disease. The full data will be presented at EASL in early June. Discussions with the FDA will determine the best path forward. They also have retatrutide, which may offer additional liver benefits due to its glucagon component, providing options in addressing NASH.

    7. Lepodisiran Phase III and Differentiation
      Q: How will lepodisiran differentiate in Phase III?
      A: While Phase II data isn't published yet, Phase I data showed a long-lasting and deep reduction in Lp(a) levels after a single dose. Potential differentiation includes greater depth of Lp(a) clearance, frequency and durability of administration, and studying both secondary and primary prevention populations.

    8. Amylin Agonist Development
      Q: Why advance amylin over GIP agonists for obesity?
      A: While GIP agonism is effective and included in tirzepatide, the company is exploring long-acting amylin, which has moved to Phase II. Amylin represents another mechanism to enhance treatment and may serve as combination therapy, maintenance therapy, or monotherapy. It's early, but they're investing in multiple mechanisms to improve patient outcomes.

    9. Zepbound CMS Coverage Expectations
      Q: Will Zepbound get CMS coverage like Wegovy?
      A: Based on CMS's April announcement, they expect obstructive sleep apnea for Zepbound to be covered under Medicare at launch. Next would be broader coverage pending positive heart failure data and approvals, followed by other indications as planned.

    10. Tirzepatide Prescription Data Accuracy
      Q: Is IQVIA data accurately representing tirzepatide volumes?
      A: While Lilly Direct volumes are relatively low and may not be fully captured by IQVIA, the data provider has methodologies to estimate this channel. Utilization of Lilly Direct is increasing weekly, but any underrepresentation in IQVIA data is minimal at this stage.

    11. Kwikpen Use in U.S.
      Q: Why not use Kwikpen in U.S. to relieve capacity?
      A: Kwikpen utilizes existing assets and was introduced in the UK and Europe to meet patient needs more quickly due to less time lag. While not currently used in the U.S., they haven't ruled it out and are exploring all options to meet high demand and address supply constraints globally.