Good morning. Thanks everybody for joining us for Eli Lilly and Company's Q3 2023 Earnings Call.

I'm Joe Fletcher, Senior Vice President of Investor Relations. And joining me on today's call are Dave Ricks, Lilly's Chair and CEO; Anat Ashkenazi, Chief Financial Officer; Dr.

Dan Skovronsky, Chief Scientific and Medical Officer; Anne White, President of Lilly Neuroscience; Ilya Yuffa, President of Lilly International; Jake Van Naarden, President of Loxo at Lilly; Mike Mason, President of Lilly Diabetes and obesity; and Patrik Jonsson, President of Lilly Immunology and Lilly U.S.A. We're also joined by Michaela Irons, Mike Springnether and Lauren Zierki of the IR team.

During this conference call, we anticipate making projections and forward-looking statements based on our current expectations. Actual results could differ materially due to several factors, including those listed on Slide 3.

Additional information concerning factors that could cause actual results to differ materially is contained in our latest Form 10-K and subsequent Forms 10-Q and 8-K filed with the Securities and Exchange Commission. The information we provide about our products and pipeline is for the benefit of the investment community.

It's not intended to be promotional and is not sufficient for prescribing decisions. As we transition to our prepared remarks, please note that our commentary will focus on non-GAAP financial measures.

Now I'll turn over the call to Dave.

Thanks, Joe. In Q3 Lily continued the progress we made so far this year.

We delivered strong financial results continue to advance our R&D pipeline and invested in our future through several business development transactions. As you can see on slide 4, we continue to make progress against our strategic deliverables this quarter.

Excluding revenue from the olanzapine portfolio, and COVID-19 antibodies, revenue grew 24%. Our new products and growth products combined contributed approximately 17 percentage points toward volume growth, with over 12 percentage points coming from our growth products.

Last week, we announced that the FDA approved Omvoh for the treatment of moderately to severely active ulcerative colitis in adults. This marks Lilly's first approval in the U.S.

for a type of inflammatory bowel disease. And it's important for Lilly's growth in its immunology portfolio.

In addition to the FDA approval for Omvoh, we had several other important pipeline updates since our last earnings call. Specifically Jardiance was approved by the FDA for the treatment of adults with chronic kidney disease, at risk of progression.

And we reported positive Phase 3 results from the VIVID-1 trial which evaluated the safety and efficacy of mirikizumab for the treatment of adults with moderately to severely active Crohn's disease. In Q3, we announced that the FDA issued a Complete Response Letter for lebrikizumab based on inspection findings at a third party manufacturer.

The letter stated no concerns with the clinical data package, the safety or the label. We will continue to work with the third party manufacturer and the FDA to address the findings to make lebrikizumab available to patients as quickly as possible.

In terms of business development, we once again had a very active quarter. In Q3, we completed the divestiture of the olanzapine portfolio, which will further enable us to focus on our current and new product launches.

The financial impact of this transaction is reflected in the Q3 results. Additionally, within the quarter, we completed the acquisition of two clinical stage companies, adding to our Phase 2 portfolio, DICE Therapeutics and Versanis Bio as well as the acquisition of Emergence Therapeutics and Sigilon Therapeutics.

We also announced that we reached an agreement to acquire POINT Biopharma, which, if approved, has the potential to expand our oncology capabilities into next generation radioligand therapies. And lastly, we distributed over a $1 billion in dividends this quarter.

On slide 5, you'll see a list of key events since our Q2 call, including several important regulatory clinical and other updates we're sharing today. Now let me turn the call over Anat to review our Q3 results.

Thanks Dave. Slide 6 summarizes financial performance in the third quarter of 2023.

I'll focus my comments on non-GAAP performance. We're pleased with the strong financial performance this quarter, highlighted by continued acceleration of revenue growth, representing robust momentum in our core business.

Q3 revenue increased 37% versus Q3 2022. Excluding revenue from the olanzapine portfolio and from the COVID-19 antibodies, revenue increased 24% in Q3.

This represents a quarter-over-quarter acceleration of revenue growth, driven by Mounjaro and the continued strong performance of Verzenio and Jardiance. Gross margin as a percent of revenue increased to 81.7%.

Gross margin in the quarter benefited from the divestiture of the olanzapine portfolio, the absence of COVID-19 antibody sales in Q3 2023, and higher realized prices partially offset by increases in manufacturing expenses. Marketing, selling and administrative expenses increased 12%, primarily driven by higher expenses associated with new product launches and additional indications, as well as compensation and benefit costs.

R&D expenses increased 34%, primarily driven by higher development expenses for late stage assets and additional investments in early stage research. This quarter, we recognized acquired IP R&D charges of $2.98 billion, which negatively impacted EPS by $3.29.

In Q3, 2022, acquired IP R&D charges totaled $62 million, or $0.06 of EPS. Operating income decreased 71% in Q3, driven by acquired IP R&D charges, partially offset by higher revenue associated with the divestiture of the olanzapine portfolio.

Operating income as a percent of revenue was approximately 6% for the quarter, and reflected a negative impact of approximately 31 percentage point attributable to acquired IP R&D charges. Our q3 effective tax rate was 84.6%.

This represents an increase of approximately 74 percentage points compared to the same period in 2022. The increase in the effective tax rate was primarily driven by the non-deductible acquired IP R&D charges incurred this quarter.

Other than the impact of acquired IP R&D, the underlying tax rate was consistent with previously providing guidance. At the bottom line, we delivered earnings per share of $0.10 in Q3, a 95% decrease versus Q3 2022, inclusive of an increase of $1.22 of EPS associated with the divestiture of the olanzapine portfolio and a negative impact of $3.29 from the acquired IP R&D charges.

On slide 8, we quantify the effect of price rate and volume and revenue growth. This quarter U.S.

revenue increased 21%. When excluding revenue from the olanzapine portfolio and COVID-19 antibodies, U.S.

revenue grew 32% driven by robust growth of Mounjaro, Verzenio and Jardiance. Net price in the U.S.

increased 13% for the quarter driven by Mounjaro, access and savings cards dynamics. Excluding Mounjaro, net price in the U.S.

decreased by high single digits. As mentioned in prior earnings calls, we expected Mounjaro access and saving card dynamics to have a meaningful impact on reported U.S.

price changes in the second half of 2023, which was evident in Q3. Europe continued to post robust growth against this again this quarter.

Excluding revenue from the olanzapine divestiture, revenue was up 7% in constant currency driven by volume growth of 11% primarily from Verzenio, Jardiance and Taltz. For Japan, Q3 revenue decreased 16% in constant currency.

Excluding Mounjaro, which had a one time upfront payment associated with the sales collaboration agreement in the base period, revenue in Japan decreased 3% in constant currency, driven primarily by customer buying patterns related to [indiscernible]. Moving to China revenue increased 20% in constant currency with volume growth of 25% partially offset by price decline.

Volume growth in Q3 was driven by Tyvyt and Verzenio. We're encouraged by the growth we have seen this year in China.

Revenue in the rest of the world increased 23% in constant currency, as volume growth of 28% was driven by Mounjaro, Verzenio and Jardiance. Slide 9 shows the contribution to worldwide volume growth by product category.

As you can see the new product and growth product categories combined, contributed approximately 17 percentage points of rolling growth for the quarter. The absence of revenue from COVID-19 antibodies compared to the base period was a headwind of nearly six percentage points to volume in Q3.

This headwind will abate as COVID-19 antibody sales were minimal after the third quarter of 2022. Lastly, revenue from the sales of rights to the olanzapine portfolio delivered nearly 22 percentage points of growth this quarter.

Slide 10 provides additional perspective across our product categories. First, I would like to highlight Verzenio, which saw worldwide sales growth of 68% in Q3, driven by robust volume growth.

The continued positive momentum is driven by the early breast cancer indication with steady performance in the metastatic indication. Jardiance continued its strong 2023 performance with worldwide revenue growth of 22% for the quarter.

As you heard earlier in Q3 Jardiance was approved by the FDA for the treatment of adults with chronic kidney disease at risk of progression. In Q3 we saw worldwide Trulicity revenue decline 10% as volume growth in the U.S.

was more than offset by lower prices driven by changes to estimates for rebates and discounts in both periods, as well as unfavorable segment mix and higher contracted rebates. In international markets, Trulicity volume continues to be affected by measures we have taken to minimize potential disruption to existing patients, including communications to healthcare professionals, now [ph] to start new patients on Trulicity.

Moving to slide 11, we continue to be pleased with the strong performance of Mounjaro, as more type 2 diabetes patients benefit from the medicine. Mounjaro revenue grew to just over $1.4 billion globally this quarter, up from $980 million the previous quarter.

In Q3, we continued to make progress in expanding access to Mounjaro. As of October 1 access for patients with type 2 diabetes in the U.S.

reached 78% in aggregate across commercial and Part D, including 85% access for commercial patients. This expanded access gives more patients the opportunity to start therapy on Mounjaro for type 2 diabetes.

As communicated last quarter, since the $25 non-covered copay card program expires on June 30, we now consider all prescriptions paid. As a reminder we define paid scripts as those prescriptions outside of the $25 non-covered copay card, but inclusive of the $25 covered copay card.

We expect Mounjaro net price will continue to benefit from the higher percentage of paid prescription, but will also continue to face a headwind for more rebated volume as access improves. Looking forward to the end of the year with increased access we expect to continue to see overall growth in prescription trends.

In terms of Mounjaro supply, we're continuing to make progress in our manufacturing expansion agenda. Given strong demand, we continue to experience tight supply throughout most of Q3, which impacted results for the quarter.

Most recently U.S. product shipments have increased and inventory levels at U.S.

wholesalers have improved with all doses of Mounjaro now listed as available on the FDA shortage website. While supply constraints have eased in the U.S., outside the U.S.

Trulicity and -- outside the U.S. to Trulicity and Mounjaro supply remains tight, which materially impacted performance in these regions.

With device assembly online at RTP, we are on track to achieve our goal of doubling capacity by the end of this year from where we were a year ago, and are gradually increasing production each quarter. We're also continuing to focus on other parts of the supply chain, as demand is expected to remain high and production bottlenecks may shift over time.

As we mentioned in last quarter's earnings call, we are moving forward with different presentation of Mounjaro to reach more patients around the world faster. We have launched with a single dose vial in Australia, and plan to launch in other markets outside the U.S.

in the coming weeks and months. The introduction of a single dose vial presentation in these geographies is intended to serve as a bridge to a multi-dose quick pen, which we expect will be available starting in 2024.

We're also preparing for potential launch of tirzepatide for obesity in the U.S. this year.

Our auto injector capacity and output continues to increase. And we look forward to bring tirzepatide to more patients in the months and years ahead.

On slide 12, we provide an update on capital allocation. In the first nine months of 2023, we invested nearly $12 billion in our future growth through a combination of R&D expenditures, capital investments and business development outlays.

In addition, we've returned nearly $4 billion to shareholders in dividends and share repurchases. Slide 13 presents our updated 2023 financial guidance.

Guidance for the first four line items including revenue, gross margin percent, marketing and selling and administrative expenses and R&D expense is unchanged. I would note that we are trending towards the higher end of our estimates for gross margin and the top end of our ranges for operating expense categories.

You'll see that we've updated guidance for acquired IP R&D charges, OID, tax rate EPS, to reflect the inclusion of IP R&D charges for completed transactions through Q3, and year-to-date results on equity investments and GAAP guidance. These updates do not include the effect of potential charges associated with pending or future business development transactions after Q3.

We will provide our initial 2024 guidance when we report Q4 results. Now I will turn the call over to Dan to highlight our progress in R&D.

Thanks Anat. This quarter, we had significant pipeline progress as well as a high volume of activity at the major medical congresses, where we presented new data on multiple products across all of our therapeutic areas.

Starting with oncology, since our last earnings call, we announced top line results from the LIBRETTO-531 study evaluating Retevmo versus physicians' choice of multi kinase inhibitors as an initial treatment for patients with advanced or metastatic RET mutant medullary thyroid cancer. As we presented at ESMO the study met its primary endpoint demonstrating a 72% improvement in progression-free survival compared to Cabozantinib or Vandetanib.

These data should establish Retevmo as the standard of care for the initial systemic treatment of patients with progressive advanced RET mutant medullary thyroid cancer, and we have work to do to ensure that all of these patients are identified and properly diagnosed. We also shared detailed data from the Phase 3 LIBRETTO-431 study at ESMO in October, showing that Retevmo more than doubled progression free survival compared to chemotherapy plus Pembrolizumab in patients with advanced or metastatic RET fusion positive non-small cell lung cancer.

We hope these data in addition to others recently published, for other driver positive lung cancers will help accelerate genomic profiling at lung cancer diagnosis to guide initial treatment selection. The results of LIBRETTO-531 and of LIBRETTO-431 were each simultaneously published in the New England Journal of Medicine.

Also at ESMO we should landmark five year results from a pre-planned interim analysis of the Phase 3 monarchE study, evaluating Verzenio in combination with endocrine therapy, compared to endocrine therapy alone, in patients with HR positive HER2 negative no positive early breast cancer at a high risk of recurrence. The impact of two years of Verzenio treatment is observed well beyond the treatment period, reducing the risk of long term recurrence by 32% at five years.

These data reinforced two years of Verzenio plus endocrine therapy as the standard of care for high risk early breast cancer patients. Lastly, we shared data on imlunestrant, our oral SERD being studied in Phase 3 as a single agent and in combination therapy.

The data shared included the first clinical data for imlunestrant in combination with everolimus or alpelisib as well as updated monotherapy from the Phase 1 EMBER study in patients with ER positive HER2 negative advanced breast cancer. We hope that imlunestrant could be an important future endocrine therapy backbone, in certain settings of breast cancer.

And these new data show that the medicine can be safely combined with other agents utilized with endocrine therapy in advanced breast cancer. Looking earlier in oncology pipeline, we shared preclinical data on three of our new pipeline agents at the triple meeting on molecular targets in cancer therapeutics in October.

We shared preclinical data for first, a highly potent inhibitor of KRAS G12D, that is selective against wild type KRAS. Second, a highly potent and isoform selective pan-KRAS inhibitor, with activity against a broad spectrum of the most common activating KRAS mutations, and high selectivity of a wild type H RES and N RES.

And third, a fully human monoclonal anti-Nectin-4 antibody conjugated to a topoisomerase I inhibitor. These programs are among the next slate of oncology agents we expect to enter the clinic over the next year.

They represent years of focused work to create potentially differentiated molecules against exacting target product profiles. Turning to our diabetes and obesity portfolio, in Q3, we announced the FDA approval of Jardiance for treatment of adults with chronic kidney disease at risk of progression.

In the EMPA-KIDNEY Phase 3 trial Jardiance significantly reduced the risk of kidney disease progression and cardiovascular deaths in adults with CKD. This approval adds to the treatment options for the more than 35 million adults in the U.S.

affected by chronic kidney disease. Since our last earnings call, we presented detailed results from the SURMOUNT-3 Phase 3 clinical trial at the obesity weight conference in October, with the results simultaneously published in Nature Medicine.

Also in October, we presented detailed results from the SURMOUNT-4 study at EASD. These results will be subsequently published in a top tier peer reviewed medical journal.

Data from these Phase 3 trials of tirzepatide showed that participants achieved up to 26.6% total mean weight loss. The detailed results from these studies clearly show the importance of continued therapy for sustained weight management, and that if approved, tirzepatide could be an important part of obesity management, for those having difficulty maintaining weight loss with diet and exercise alone.

Our pipeline, as shown on slide 14, now includes a high dose tirzepatide NILEX in Phase 2, since we have initiated a study exploring higher doses of tirzepatide in participants with type 2 diabetes and obesity. Earlier in the pipeline, we presented Phase 1 data on Muvalaplin at the European Society of Cardiology Congress with simultaneous publication in JAMA [ph].

Muvalaplin is the first oral agent specifically developed to lower Lp(a) levels. In this Phase 1 study Muvalaplin was well tolerated by participants and resulted in dose dependent lowering of Lp(a) of up to 65%.

Muvalaplin is currently in Phase 2. As shown on slide 14, we've advanced our SCAP siRNA into Phase 1 for NASH.

We've also completed our acquisition of Versanis and NASH Bimagrumab [ph] in Phase 2. We are excited about the potential combination of Bimagrumab and tirzepatide.

Lastly, we're happy to share that since our last earnings call the Retatrutide TRIUMPH Phase 3 core registration trials are now all actively enrolling to pursue simultaneous indications for chronic weight management, obstructive sleep apnea, and knee osteoarthritis. Turning to our neuroscience portfolio, the FDA has shared with us that the Donanemab review will extend into Q1 2024 needing additional time to complete their review.

We've completed submissions in Europe and Japan, and submissions to other global regulatory authorities are either completed or underway. Recently, at the clinical trials on Alzheimer's disease meeting, we presented new insights from donanemab development program during a symposium session.

As part of this symposium, we shared ARIA data from a pooled analysis that included more than 2000 participants dosed with donanemab, and explored ARIA E association across a number of baseline variables, highlighting a few key factors most strongly associated with ARIA risk, including baseline amyloid levels, evidence of a prior bleed and high blood pressure. Interestingly, this data also suggested use of antihypertensives decreased the risk of ARIA.

Additionally, we shared analyses from our open label addendum of over 1,000 patients treated with donanemab. These results included a post hoc analysis of patients with no brain tau, and demonstrated similar or even stronger biomarker results than our main TRAILBLAZER-ALZ 2 study.

In a separate post hoc analysis from the TRAILBLAZER-ALZ 2 Phase 3 study, related to activities of daily living and independence, in people with early symptomatic Alzheimer's disease we showed that compared to placebo, people treated with donanemab preserved more of their ability to perform many of the items measured, including their ability to make meals, to use appliances, keep appointments, perform pastimes, and be safely left unattended. We also shared an update on our validation data for our Plasma P tau 217 test for identifying amyloid positive patients demonstrating robust performance of this immunoassay.

We expect to have this test commercially available in a phased approach first, as a laboratory developed test by the end of this year. As you recall, we use Plasma P tau 207 to identify pre symptomatic individuals for our TRAILBLAZER-ALZ 3 trial.

This is an event driven trial and we have now recruited a sufficient number of qualifying pre-symptomatic participants and expect to have efficacy results within three years. We're excited to announce today that our Otoferlin Gene therapy asset from Akouos has begun dosing patients in a Phase 1/2 trial for hearing loss.

In immunology, as Dave noted, we're happy to have FDA approval for Omvoh for the treatment of moderately to severely active ulcerative colitis in adults. This approval offers new hope for patients, who are searching for an effective option that can offer rapid and lasting improvements.

Omvoh will be approved --available to patients in the U.S. in the coming weeks.

We were also excited to have the Phase 3 readout for this molecule, mirikizumab in Crohn's disease. In the VIVID 1 Phase 3 study mirikizumab met the co-primary in all major secondary endpoints compared to placebo.

Mirikizumab demonstrated clinical remission and endoscopic response for patients with moderately to severely active Crohn's disease through 52 weeks. We were thrilled to see that more than half of participants on mirikizumab achieved clinical remission at one year, and that robust efficacy was seen in both participants who are naive to biologic therapy, as well as participants who previously failed a prior biologic therapy.

Helping patients achieve long term clinical remission is a key goal for us in our pursuit of treatments for inflammatory bowel disease. These new data in Crohn's Disease build on the high levels of long term remission seen with mirikizumab for ulcerative colitis, and help reinforce the differentiation of this important potential medicine.

This successful Phase 3 trial will be the basis of global regulatory submissions for Crohn's Disease. As Dave noted earlier in Q3, we announced that the FDA issued a complete response letter for lebrikizumab, based on findings at a third party manufacturer.

In Q3 we completed the acquisition of DICE and now reflect the two oral IL-17 assets, DICE 853 and DICE 806 in Phase 1 and Phase 2 of our pipeline respectively. Additionally, two new molecules began Phase 2 studies in immunology this quarter.

First, our CD200R monoclonal antibody, known as Ucenprubart for atopic dermatitis, and second, our RIPK1 inhibitor for rheumatoid arthritis. We've removed our BTLA monoclonal antibody agonist from Phase 2 in our pipeline, after the Phase 2a study failed to demonstrate efficacy.

Q3 was another productive quarter for R&D at Lilly. I'll now turn the call back to Dave for closing remarks.

Thank you, Dan. Before we get to Q&A, let me briefly sum up our progress in the third quarter.

This quarter revenue growth accelerated as our recently launched product portfolio continued to gain momentum, of course led by Mounjaro. Excluding revenue from the divestiture of the olanzapine portfolio and the sale of COVID-19 antibodies in 2022, revenue grew 24%, driven again by Mounjaro, Verzenio as well as Jardiance.

By continuing to invest in recent and upcoming launches, late stage medicines and early phase capabilities as well as in business development, we are confident that we have positioned ourselves for growth now and in the coming years, with the opportunity for continued margin expansion. We achieved meaningful advances in our late stage pipeline, with the FDA approval of Omvoh for the treatment of moderately to severely active ulcerative colitis, as well as Jardiance for the treatment of adults with chronic kidney disease, and the positive Phase 3 VIVID 1 results for mirikizumab for adults with moderately to severely active Crohn's disease.

Looking forward, we are expecting regulatory responses before the end of the year on our submissions for pirtobrutinib, and accelerated approval in CLL as well as tirzepatide for obesity. In Q3, we completed several targeted acquisitions, intended to bolster our early and mid stage portfolio.

Directly following the quarter we also announced an agreement to acquire POINT Biopharma which will further expand our R&D capabilities in oncology. Lastly, we returned over $1 billion to shareholders via the dividend.

A few weeks ago, we announced several leadership changes. Mike Mason, our Executive Vice President and President of Lilly Diabetes and Obesity will retire from the company at the end of 2023 after 34 years with Lilly.

In his current role, Mike is overseeing tirzepatide, late stage development and an unprecedented type 2 diabetes launch. Mike leaves behind an enduring legacy that reflects his deep compassion for patients and his commitment to our people.

With this being Mike's last earnings call, I would like to thank him for his many years of outstanding service to Lily and wish him all the best in his next chapter of life. Patrick Johnson will assume leadership of Lilly Diabetes and Obesity.

In addition to his current responsibilities as President of Lilly USA Dan Skovronsk, our Chief Scientific Officer and president of Lilly Research Labs will take on the additional role of President of Lilly Immunology from Patrick. And in a related move, David Hyman is assuming the role of Chief Medical Officer for the company from Dan, overseeing the full Lilly portfolio.

Leigh Ann Pusey, our Executive Vice President for Corporate Affairs and Communications has decided to leave the company at the end of 2023. Leigh Ann has left a lasting impact on Lilly and the patients we serve.

And we're grateful for her many contributions over the past six years. So as we begin this new chapter of growth for our company, we are very confident that our deep experience of our leadership team will allow us to continue to accelerate our efforts to make medicines and be more effective and more innovative in the years ahead.

So now, let me turn the call over to Joe and he'll moderate the Q&A session.

Thanks, Dave. We'd like to take questions from as many callers as possible and conclude the call in a timely manner.

So consistent with last quarter we will respond to one question per caller. So ask that you limit to one question per caller.

As we'll aim to end the call at 10 am. If you have more than one question you can reenter the queue, and we'll get to your question if time allows.

So Paul, please provide the instructions for the Q&A session and we're ready for the first caller.

Thank you so much. I have a question on obesity and persistence on therapy, which I think has been a big question mark.

I know you haven't formally launched yet, but guessing you might have some idea, a best guess if nothing else. So in your view is this going to be like most other drug categories where persistence on therapy is often low?

I think the rule of thumb is that at the one year mark 50% of patients drop off chronic medicines. So really, the question is, if you took 100 patients who start on one of these contemporary obesity drugs, how many of that initial 100 would likely still be on therapy, let's say three or four or five years down the road.

Thanks, Tim. Mike, you would you like to weigh in on the persistence of therapy on obesity?

Yeah, thanks for the question. Maybe I'll first answer with the data that we do have, because it's hard to speculate on what it's going to be for obesity.

The best data we have for tirzepatide is in Type 2 diabetes patients who started Mounjaro prior to our savings card changes last fall Mounjaro persistency for those patients is tracking higher than those patients that were started on trulicity and Ozempic, over that same period of time. So while it's too early to project the average length of therapy or how many out of 100 will still be on therapy after a couple of years, I think that this early data is encouraging.

As for obesity, time was time was going to tell. I think we've all looked at Wegovy data, but I don't think this is the right benchmark at this point because of novel supply constraints.

And there's been just a very dynamic market. I think, as you said, this -- having persistency on a chronic treatment isn't just an issue for anti-obesity medications.

It's a goal for all chronic treatments. I think what's different about obesity is that, on many chronic treatments, consumers don't feel differently or experience any acute impacts from stopping treatments.

So what we've seen in this SURMOUNT clinical trials, with tirzepatide is that some consumers will feel their appetite increase and experience weight regain when they stopped tirzepatide. And so this should help reinforce treatment adherence, seeing in our market research how important it is for people who live with obesity to lose weight and maintain it.

I do think you're going to see just a high motivation as people have lost weight that they do want to maintain it. And we do know for our SURMOUNT program that, chronic use of tirzepatide is a good component, an important component of maintaining weight loss.

So it's too early to project it. But I do think there's things that's rolling in favor of tirzepatide having a good length of therapy in the obesity patient.

Thanks, Mike. Next question, Paul.

Great. Thanks so much for the question.

So I really wanted to drill into orforglipron, and those Phase 3 programs. Dan, I was just hoping that you could clarify for the market, if there's any monitoring in that study related to liver enzyme elevations.

I think there was one case in the Phase 2 diabetes study that you conducted. Just wanted to know if there's any related concerns associated with that.

Or if this is kind of as expected, an all hands on deck moving forward opportunity. Thanks.

Thanks, Seamus. Yeah, I like the way you phrase it all hands on deck moving forward on orforglipron.

We're really excited about this molecule. In terms of, liver safety, I think we commented before that, what we saw in Phase 2 is what we thought would be probably be typical for a trial of that nature in this population.

So not a heightened level of concern, but always concerned about safety going into Phase 3 from a variety of factors, including for all small molecules, especially liver function. So it's routine in our Phase 3 studies across the portfolio to monitor liver function.

And sure we're doing that in orforglipron, but not aware of any special precautions there. So super excited that that program is going fast.

Thanks, Dan. Paul, next question.

Great, thanks so much for taking the questions. Anat you had mentioned shifting the date of your 2024 guidance call early next year.

Just want to know what drove that change? And if you can assure us that there are no issues with tirzepatide OBC review and/or manufacturing?

Thank you.

Sure. So let me first start with reassuring you that there are no issues behind our decision to move the guidance date to -- or have it aligned with our Q4 earnings call.

What it does do is it does help us have the yearend full results when we provide guidance for 2024. So previously, if we didn't have that, investors had to look at guidance range for the year and estimates based on midpoint, etc.

This does enable us to close the year and then have a full view into 2024. It is aligned with our internal planning processes as well.

And obviously is the way most companies and I believe all companies in our industry do that. So nothing unique going into that other than just having the full data set for 2023, going into that other than just having the full data set for 2023.

Thank you Anat. Paul, next question.

Great. Thank you very much for taking my question.

And my question is regarding the P documents [ph], seven biomarker data you have shown at CTAD. It seems like the predictability is getting to 94% of these tests, even C2N was pretty good.

So do you have any thoughts on at this point, how close are we to actually make this -- bring this to prime time? And when the donanemab gets approved do you think this could be the test doctors use?

Or it will still take some time to get to that?

Thanks Mohit, for the question. You broke up a little bit there.

But I think we got the gist. I'll hand off to Anne.

Yes. So we shared at CTAD, we were pleased with the data that we saw.

And we're also pleased to see progress across the field in blood biomarkers. We definitely believe that this is incredibly important to drive access and early diagnosis in Alzheimer's disease.

So you've seen us invest in a number of fronts, our own p tau 217, but also partnering with others who are working on good tests to elevate the area. So it's a strategy of raising all boats.

But yes, we did share our data. And we intend to make this available in a phased approach commercially as an LDT starting at the end of this year, in a couple of sites, and then continuing to expand over 2024.

But at the same time, you'll see us continue to publish the data. We think that what's incredibly important in the field, is that good correlative data, particularly with amyloid PET, which is the gold standard in diagnosis is published and shared so that we can continue to make sure that we have high quality tests out there.

So that's part of our goal with delivering this test is to really set a standard for what blood tests should look like. So look forward to hearing more over the next coming months as we publish that data and then make that more broadly available.

Thanks, Anne, and thanks Mohit for the question, Paul, next question.

Hi, thanks for taking my question. So I want to ask you, do you think the approval of additional oral potential -- approval of additional oral diabetes drug could impact the pricing for injectables?

Why or why not? Thank you.

Thanks, Louise, for the question. I'll hand over to Mike about the potential approval for other oral diabetes drugs and potential impact on injectables?

No, I don't think that'll have an impact. I mean, traditionally, we don't see a new class of diabetes agents coming in and affecting a current class.

Usually the competition happens within a specific class within a diabetes market.

Thanks, Mike. Paul, next question.

Good morning, everyone. Thanks for the question.

Just had one on tirzepatide supply. I know you guys have, a plant in North Carolina and another one coming online next year.

But if you look beyond that, if you have demand anywhere near what's modeled, and even outside of obesity and diabetes, obviously, supply could remain tight. So the question is, is there a threshold of treated patients like in the near term that will inform your decision on adding manufacturing capacity?

And how much does the outlook for or orforglipron have on that? Thank you.

Thanks, Geoff for the question. I'll hand over to Dave.

Yeah, thanks, Geoff. Obviously a hot topic.

We work on this multiple hours every day. You're citing the announcements we've made and as mentioned great progress is showing manufacturing agenda RTP sort of on track to deliver on its goal.

But as we exit the year, and then that kind of in market volume following that Concord, which is a few hours away, and kind of a replica site also, well on track for coming online in '24. So that's good news in the ERMA [ph] presentation, which is -- what we call our auto injector, from trulicity, and the current presentation from Mounjaro in the U.S.

We've announced previously that we're introducing now single use vial presentation ex-U.S., so that we aren't basically sitting on approvals and connect patients have access to the medication. That will follow them by a multi use injector that uses different property, plant and equipment than what we're talking about here.

So a couple of things to point out. You're noting kind of new greenfield site expansions.

We've rightfully made a big deal out of. We're not done with those.

I think you might hear more about that in the future. Of course, we are aggressively planning that and not banking on or forced upon to rescue us from this.

We think that there is a need to take up parenteral incretin supply pretty dramatically from the current levels. And we plan to do that.

But that will be in a combination of the current syringe-based auto injector, the vial capacity, we've already talked about. The multi use injector, which will come online sometime next year, and is a highly efficient play for us because it uses current systems and different ones from the auto injector.

And then there's third party agreements that have been ongoing in the background. And to point out here, we are not relying on one.

We have a diverse portfolio of third parties, recognizing that, the probability of full supply from any one is probably less than one. But buying up as much capacity as available in all those systems.

So we've got a, I think the all hands on deck phrase was used earlier. I mean, this is really all hands on deck.

And it's a problem we work every day. So we're not at all happy with the capacity.

We've announced already, you'll see more. Some we don't announce that we'll just layer in to the volume we ship.

And of course, long term new presentations like solid oral opens up even more possibilities, but we need to do everything we can now given the huge potential for global obesity treatment for our medicines to play a key role in that, and then ultimately impact hundreds of millions of people. So a lot of work to do here yet ahead.

Thanks for the question.

Paul, next question?

Hi, thanks for taking my question. So I think it's clear from your results that the next steps in Mounjaro is rapidly in progress.

But how should we think about the ex-U.S. trulicity contribution going forward, which did look weak this quarter?

But at the moment you're still supply restricted? Can we expect a return to growth into next year as constraints ease or should we now assume Trulicity is ex-growth as you push the shift into Mounjaro?

Thank you.

Thanks, Laura for the question. I'll hand over to Ilya Ufa, President of Lilly International.

Ilya, do you want to address Trulicity ex-U.S. contributions in the quarter and going forward?

Sure, first, thanks for the question. From a trulicity standpoint, we had healthy growth coming into later part of last year.

And we've been pretty transparent with both physicians as well as regulators that due to the tight supply, we are encouraged not to start new patients. We continue with that, to be transparent.

We think it's the right thing to do. And as we think about the growth in incretin, we're looking as we build up capacity, as David mentioned.

As we increase capacity both in the single use vial and introduce Mounjaro in additional markets as we have in Australia and we will continue over the next number of weeks and months in other markets and then transition towards a multi-use platform in quick time in introducing Mounjaro. And so the overall growth in incretin will be mainly driven by as we are able to launch Mounjaro in new markets that's probably will go get the growth.

Thank you for the question.

Thanks Ilya, Paul. Next question?

Hi, guys. Thanks for taking my question.

I realize Mounjaro has not approved in obesity yet. But I'm just very curious how you're thinking about the pros and cons heading into that pricing decision, if there is any, because Novo does have that price premium, as you know, on Wegovy or Ozempic.

So on the one hand, while Mounjaro price could be the same because the dose is the same, but on the other hand, Novo has this dynamic where it can offer a lot more rebate for the obesity indication than you can, if you leave the price unchanged. I'm just curious what your thought process is heading into that.

I'll hand over to Mike.

Yeah, thanks for the question. Obviously, we're not going to talk about price prior to approval.

We're evaluating every scenario. We will make the right decision for patients who live with obesity.

Thanks,

Paul, next question.

Yes, thanks very much. And thanks for all the updates today.

So some major payers seem to under appreciate the broad health savings potential that incretins offer the non-diabetic obese population, and instead focus on criticizing drug pricing. So ahead of the results from Mounjaro's morbidity and mortality outcomes trial in 2027, how does Lilly plan to better inform payers about Mounjaro's health economics benefits in non-diabetic obese patients?

Thanks very much.

Thanks, Dave for the question. Mike, do you want to talk a little bit about that, about the longer term appreciation for the broader health benefits of medicines, like tirzepatide?

Yeah, no, David, it's a good question. One that we've obviously spent a ton of time on and done a lot of internal analysis and a lot of planning on.

We will have a whole suite of real world evidence and pragmatic trials so that we can answer this question clearly, for payers and other stakeholders. In our conversations with payers, while they're concerned about the short term budget impact, they do understand that losing weight will have benefits.

It's not that hard of a sale, because they do understand the benefits are intuitive. If you look at the total number of like obesity rate of complications, there's over 200.

And you look at some of these are just really devastating and very costly, like type 2 diabetes, coronary heart disease, hypertension, dyslipidemia. And then when you look at the cost of these, on the U.S.

alone, there's $370 billion in direct medical costs associated with obesity-related comorbidities, and over a trillion in indirect annual cost. When payers see that, people living with obesity and overweight, drive 2.7 times greater healthcare costs, than normal individuals, that data does get their attention.

And so I think over time will continue to provide health economics data, but also I think the voice of those living with obesity will be very important in this. This is a disease that, that really materially impacts someone's both health and mental functioning.

And is really important for people who live with obesity. Their goal is to is to lose weight and maintain that so they can help their long term health benefits.

And they're going to have a loud voice in this. I think both in commercial insurance as well as in states and the federal government.

And so I do -- I am confident over time that we will see increase in access. I think the most recent report shows that there's 50 million people in the U.S.

that has access to obesity medication. So it will take time, but I think -- do think more and more payers are appreciating the value that anti-obesity medications especially when we get approval for tirzepatide will offer them.

Thanks.

Thank you, Mike. Paul, next question.

Hi, thank you so much for giving me the question and congrats on the progress. So given the executive changes announced in October, how should we think about the direction of the immunology business now with Dan at the helm?

Thank you guys.

Thanks, Evan. Dave, do you want to take that?

Sure, I can start and let Dan comment. Look, we've been really pleased with this business, which I think is important to take the long view here.

I mean, I was involved in creating this like 10 years ago, and both [indiscernible] and now mirikizumab, and hopefully soon Lebrikizumab will form a really core portfolio for us, really exploiting ideas that we had some time ago. What's next, and you see here today advancing another checkpoint agonist into Phase 2 is a lot of decisions about, okay, what's next to take immunology to the next level.

And that's largely going to be about key decisions, both internal portfolio and potentially externally, like with our DICE acquisition, to find a new set of either single agent or combinations that can raise the standard of care in tough immunology diseases, noting, in particular in IBD and RA, the standard of care is hardly satisfied today. We measure real pretty low performance status of success.

So that's the mission that Dan and we've hired Mark Genovese to the company and others to really build a portfolio the future. So I don't Dan, if you want to

No, excited about the opportunity. There's lots of work to do in immunology, given the depth of unmet medical needs and the science is great here.

So I hope we can continue to bring great drugs to market as we're doing with mirikizumab. And we hope to do with Lebrikizumab soon and more to come.

Thanks, Evan, for the question. Next question, Paul.

Great. Thanks so much.

Just as we're thinking about the upcoming tirzepatide obesity approval, just interested in your perspective of how we should anticipate commercial coverage ramping, as we think of maybe the first couple of quarters post launch versus where it could be in a year or two from now, a business how quickly can we think about coverage coming on board? Thank you.

Thanks, Chris. I'll hand over to Mike to comment on anticipation of commercial coverage over time, Mike?

Yeah, no, it's a good question. It will ramp up.

We're trying to be disciplined. And we're trying to make sure that we bring on access as quickly, as is prudent.

And so just like we did with Mounjaro we will take and make sure that we sometimes access has to materialize at an organic pace where it makes sense. And we'll make sure and use our judgment.

So just like with Mounjaro, while we'd love to get out of the gate quickly, most importantly, as a setup for long term success. So you'll see a kind of a natural ramp up that you would with any new product.

And I think it's important, as you look in the first quarter of our launch last January, when you saw Wegovy resupply. They were resupplying into a market where they already had capacity.

So I think when you look at our access, and you look at our volume as we head into next year, you'll see a ramp up in volume as you see a ramp up in our access.

Thanks, Mike. Paul, next question.

Oh, thank you very much. A question on why Lilly is evaluating higher doses of tirzepatide.

There is risk and adverse event is uncovered and taints the franchise, and of course there are IRA considerations. Does this suggest some reservation about the pipeline either Triple G or orforglipron, the former, which has safety signals, the latter of which took five years to get to Phase 3.

It would also be interesting to know whether it's the exact same molecule or it's been enhanced in some way. Thank you.

Thanks, Steve for the question, Dan.

So there's no hesitation or trepidation there at all. I think though notwithstanding those two molecules, which I expect to be great and important contributors to human health, we have, tirzepatide.

I'm not exactly sure if we've maximized the dose response, if we hit the flat part of the dose response curve yet. It looks like we might be close.

But we want to explore it. And so we're testing the higher doses in Phase 2.

I think we've had enough patients on this drug for long enough that I expect the risk of uncovering a new safety signal with sort of marginally higher doses is extremely low. So not worried about that at all.

Let me just jump in here maybe on questions like this. And we have a number of research projects and obesity and related mechanisms.

In some people ask, well how does this one affect that or whatever. That's not really the mindset in which we're pursuing this.

We're -- we see ourselves a leader in the space and have a unique opportunity. And our goal is to exploit every single idea till we get data that says we shouldn't.

And so high dose tirzepatide just another version of that. But it doesn't have a read through to other things.

Were just in all the above mode in obesity. Thank you.

Paul, next question.

Thank you. Good morning.

In about a week or so we'll get detailed results from the SELECT cardiovascular outcomes trial, the American Heart meeting. Can you share with us what perhaps three key questions that the Lilly team will be looking at when we get detailed results?

Dan, do you want to weigh in on--?

I don't know. I can start maybe.

Maybe Mike has some to add here. Look, I'm excited to see that data, of course, as everyone else's.

But the top line looks good. For me, I think we're sort of creating now data points on a line that connect the level of weight loss with the degree of cardiovascular benefit.

I think this point fits on that line reasonably well. That line which was greater health benefits, including better, a fewer mace outcomes with greater degrees of weight loss bodes very well for Mounjaro data, given the very high degrees of weight loss that we saw in our trials.

I'll leave it at that. See if Mike wants to add.

Probably the key question I'm looking at is like how much of the effect was driven by drug effect versus weight loss is probably the key question we're looking at.

Thanks, Dan and Mike. Paul, next question.

Great. Good morning.

Congrats on the progress. May be following on, on the prior question, but maybe more on sort of the impact of the flow data, and your thoughts there.

Specifically, you guys have taken sort of a different approach with your more recent assets there in terms of targeting that population. Is Lily's view that those benefits will accrue to the class and maybe just talk about how you think about targeting that segment down the road?

Thank you.

Thanks, Carter for the question. Dan you want to comment on the flow data?

Yes, so you're asking about kidney disease. I mean, I think the profound effect that incretin seem to be having on the kidneys is really a nice and important additive benefit here.

This is something that's been observed with multiple class members now and they expect it will extend into our incretins as well. So it's exciting and I think proof that these drugs perhaps in addition to weight loss and A1C control, could have other direct metabolic benefits including the kidney.

Paul, next question.

Morning, all. Thanks for squeezing me in.

Just one on Mounjaro U.S. pricing.

So by our calculations, we think that 3Q '23 the net price is around 440 per TRX. For the rest of the year do you think that net price can continue to go up and above the saving card price of 450 [ph].

Although payers willing to pay for this, or is this broadly capped now until that saving card ends? And for next year, can you just give us your thoughts on if net price can meaningfully keep increasing?

Thanks.

Thanks, Trung. Mike, do you want to make any comments around Mounjaro pricing?

Yeah, no, I'd be happy to do that. I think maybe at a macro level, I would say that our gross to net for Mounjaro in Q3, that kind of normalized.

Before then we had a number of saving card changes that that, made our gross to net rate dynamic. Our last and copay card change occurred late in Q2, so at the end of June.

And so Q3 was a kind of a pure quarter, where we didn't have any other copay card changes. And I would say that our Mounjaro rate normalized at that point, you know, going forward, I think what you'll see is what you see normally for a product at this point in the lifecycle that as we pursue gaining access, there'll probably be some pricing pressure related to that.

But we don't have any other coping card changes planned in the near future.

Thanks, Mike. Paul, next question.

Good morning. Thanks for taking our question.

This is Nicole [indiscernible] on for Robyn. Going back to obesity, how are you thinking through the impact on Mounjaro if Ira [ph] stays and Wegovy and Ozembic prices decline in the 2026-20 27 time frame?

Thanks, Nicole for the question. I think it's very -- if I heard you right, you're thinking about IRA impacts to maybe semaglutide and potential impacts to Mounjaro.

Mike, do you want to comment on that briefly?

Yeah, and I'll happy to do that, Obviously, it's too early to really impact how IRA will have an impact and the impact will have another product within the class. I think what you know, what's important for tirzepatide is it is the first dual acting incretin.

And we do think it has a unique profile. And in head to head results in type 2 diabetes, it did show superior, both I1C and weight to semaglutide.

And so at the end of the day, I think the profile of the product will carry the day. And obviously more to come on the IRA.

As the first products go through the negotiation, we see the impact, but we're confident in the profile of tirzepatide.

Thank you Mike. Paul, I think we have two calls left in the queue.

Why don't we go through those two quickly, and then we'll wrap up?

Oh, great. Thanks for the follow up question.

So just in terms of how you're thinking about the introduction of oral treatments, and the importance of pushing for what would be hopefully a maintenance type regimen. Is Lily looking at oral therapies as more of a maintenance regimen opportunity, or do you see a broader opportunity here, perhaps bringing in other mechanisms that perhaps could aid in pursuing, I guess, the ever elusive metabolic set point?

Thanks.

Dan, do you want to comment on that?

Yeah, thanks, Seamus. Maybe to paraphrase Dave's previous answers, it's sort of in all of the above here, I think there's great opportunities on the oral as a standalone therapy for initiation of therapy.

Also, yes, for maintenance therapy globally. And also, yes, for potential combinations.

You know, I point out the obvious fact that this is a GLP. One monotherapy.

So we benchmark it against the best injectable GLP1 monotherapy. But I don't expect as an oral it will achieve the same levels of efficacy we can see with dual agonism like tirzepatide.

So the future certainly will hold combinations like that. Thank you.

And the last question, Paul from the queue.

Thank you. What's the latest thinking on the topic of get agonism versus antagonism.

Tirzepatide is the former Amgen drug is the latter. I've never seen two drugs in any category that have a similar clinical effect but opposing underlying activity the biologic target.

Amgen says get antagonism is the way to go supported by their genetic analyses. What is Lily saying?

Have you looked similarly at genetic analyses to inform your view?

Thank you, Tim, for the last question, Dan.

Yeah, I'll take that. I, of course, say we have now I think more data on GLP agonism than anyone in the world and starting with tirzepatide, of course, which is a combo GLP1 GIP agonist and the head to head study against a pure GLP1 agonist and you can see some profoundly different effects here looking at, for example, efficacy relative to tolerability.

It looks like the GIP is boosting efficacy while also reducing the side effects that limit tolerability. So that was our initial evidence in human trials that involved well now tens of thousands of patients have been on tirzepatide in trials.

And then we went out to sort of prove this point by creating a pure GIP 1 agonist that just agonizes GIP to see what that could do alone. And again we saw a very highly tolerated drug consistent with what we understand about the mechanism of GIP 1 that probably could suppress actually nausea, vomiting that lead to weight loss.

So, I think human data trumps everything here, and we've got a ton of that. So we're pretty excited about gap agonism.

I can't really say what will happen with antagonism, but like you said, it's pretty unusual to have opposing mechanisms both work in similar ways.

Thanks, Dan for the last one, Dave.

Okay, thanks, Joe. We appreciate everyone's participation in today's earnings call and of course your ongoing interest in Eli Lilly and Company.

As I said, it's been a very productive year for Lilly so far, and we look forward to continuing this momentum through a busy end of year in fourth quarter. So thanks for dialing in today.

Please follow up with the IR team if you have questions we did not address on the call. And hope everyone has a great rest of the week and rest of the day today.

Take care.