Q3 2025 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Lilly Q3 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to your host, Mike Czapar, Senior Vice President of Investor Relations. Please go ahead.

Good morning. Thank you for joining us for Eli Lilly Company's Q3 2025 Earnings Call. I'm Mike Czapar, Senior Vice President of Investor Relations. Joining me on today's call are Dave Ricks, Lilly's Chair and CEO; Lucas Montarce, Chief Financial Officer; Dr.

Dan Skovronsky, Chief Scientific Officer and President of Lilly Immunology; Anne White, President of Lilly Neuroscience; Ilya Yuffa, President of Lilly USA and Global Customer Capabilities; Jake Van Naarden, President of Lilly Oncology; Patrik Jonsson, President of Lilly International; and Ken Custer, President of Lilly Cardiometabolic Health. We're also joined by Marc Kemen, Susan Hedglin and Wes Taul, of the Investor Relations team. During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to several factors, including those listed on Slide 4. Additional information concerning factors that could cause actual results to differ materially is contained in our latest Form 10-K and subsequent filings with the SEC.

The information we provide about our products and pipeline is for the benefit of the investment community. It is 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 the call over to Dave.

Dave, we'll turn the call over to you.

Sorry. Thanks, Mike. Appreciate it. Q3 was another strong quarter for Lilly.

We made progress across all our strategic deliverables. We delivered compelling financial results, advanced our pipeline and achieved key milestones to expand our manufacturing footprint. This is all shown on Slide 6. In Q3, revenue grew 54% compared to the same period last year. Revenue from key products more than doubled as our medicines continued to increase their global impact.

In the U.S., Lilly gained market share in the incretin analogs market for the fifth consecutive quarter. Lilly medicines account for nearly 6 out of 10 prescriptions within this large and growing class. Outside the U.S. Mounjaro performance accelerated, driven by robust uptake around the world.

As a result of our strong financial performance, we raised our revenue and earnings per share guidance. Lucas will cover this in more detail later in the call. Since our last earnings call, we achieved several key milestones, including U.S. FDA approval for imlunestrant under the brand name Inluriyo for ER+, HER2-, ESR1-mutated advanced or metastatic breast cancer.

The EU approved Kisunla for early symptomatic Alzheimer's disease. Positive results from Phase III trial of Jaypirca in treatment of naive CLL. Positive overall survival data for Verzenio in high-risk early breast cancer. Positive results from the second Phase III trial of orforglipron in obesity, enabling now global submissions to begin later this year.

Positive results from 3 additional Phase III trials of orforglipron in type 2 diabetes, including 1 trial that demonstrated head-to-head superiority versus oral semaglutide. We also made good progress executing our manufacturing expansion agenda. We announced plans to build 2 new U.S. facilities that will make active pharmaceutical ingredients and the expansion of an existing facility in Puerto Rico. The new facility in Virginia will support our bioconjugate and monoclonal antibody portfolio.

And the new facility in Texas and the expansion in Puerto Rico will support our small molecule portfolio, including orforglipron. We plan to announce updates on our 2 remaining new U.S. manufacturing facilities in the coming months. During the quarter, we distributed $1.3 billion in dividends and executed approximately $700 million in share repurchases. Now I'll turn the call over to Lucas to review the Q3 results.

Thanks, Dave. As shown on Slide 7, Q3 was another strong quarter of financial performance. Revenue grew 54% compared to Q3 2024, driven by our key products. Gross margin as a percentage of revenue was 83.6% in Q3, an increase of 1.4 percentage points versus the same quarter last year.

This improvement was driven by favorable product mix, partially offset by lower realized prices. Research and development expenses increased 27% driven by continued investments in our portfolio. We have initiated 16 new Phase III programs since the start of 2024 and continue to advance our pipeline. Marketing, selling and administrative expenses increased 31% as we continue to increase investment to support ongoing and future launches across therapeutic areas and geographies.

Our non-GAAP performance margin, which we define as gross margin less R&D, marketing, selling and administrative expenses as a percentage of revenue was 48.3%. Performance margin increased by more than 8 percentage points from Q3 2024, driven by revenue growth. At the bottom line, earnings per share increased to $7.02 inclusive of $0.71 of acquired IPR&D charges. This compares to $1.18 in Q3 2024, which included $3.08 of acquired IPR&D charges.

On Slide 8, we quantify the effect of price, rate and volume on revenue growth. U.S. revenue increased 45% in Q3, driven by strong volume growth of Zepbound and Mounjaro partially offset by a 15% decline in price. Price was negatively impacted by a favorable one-time adjustment to estimates for rebates and discounts in Q3 2024. Excluding this base period effect, U.S. price declined by high single digits. In Europe, revenue increased by over 100% in constant currency, reflecting the strong uptake of Mounjaro.

Revenue was positively impacted by $380 million onetime benefit related to a milestone payment and business development. Excluding this impact, revenue grew 81% in constant currency. Japan, China and Rest of the World delivered constant currency revenue growth of 24%, 22% and 51%, respectively, driven by Mounjaro volume growth. On Slide 9, we provide an update on the performance of our key products, which accounted for $12 billion of revenue within the quarter.

Beginning with immunology, EBGLYSS delivered strong performance in atopic dermatitis as U.S. total prescriptions increased by 41% compared to Q2 2025. We saw increased use in the first-line setting, which now accounts for more than 50% of new EBGLYSS patients. Omvoh continued a steady uptake and the newly published 4-year data in ulcerative colitis show long-term safety and efficacy benefits. Within oncology, Jaypirca continued to build momentum both in the marketplace and with new data from Phase III trials. Dan will talk more about this later during the R&D update.

Verzenio remains the market leader in the U.S. for the node-positive, high risk early breast cancer population, reflective of its position as standard of care in this setting. In the U.S., prescription grew by 3% compared to Q3 2024 and international volume grew by 14%. In neuroscience, Kisunla total prescription grew by 50% compared to Q2 2025 and continue to increase share of market versus the competition. We also recently received marketing authorization by the European Commission, and we are in active reimbursement discussion across Europe and expect launches beginning this quarter and throughout 2026. Finally, moving to cardiometabolic health, Zepbound and Mounjaro both posted a strong global performance.

Beginning outside the U.S. Mounjaro performance was robust. We have now launched in 55 countries and all major markets. We have seen a strong reception globally and have gained significant share in most major markets as a result.

While obesity reimbursement remains limited internationally, we are encouraged by the strong uptake. Approximately 75% of Mounjaro revenue outside the U.S. is coming from people with obesity, paying out of pocket, demonstrating a high level of clinical need and high willingness to pay. Moving to the U.S., Zepbound prescription tripled in Q3 2025 compared to the same period last year. While the impact of the CVS template formulary change was disruptive to patients and physicians, the impact on Zepbound performance was modest.

Share of total U.S. prescription in the branded anti-obesity market declined by approximately 2 percentage points compared to Q2 2025. However, performance is back to Q2 levels and Zepbound exited Q3 with 71% share of new prescriptions. We saw strong uptake of Zepbound in vials, which comprise approximately 30% of total U.S. Zepbound prescriptions and over 45% of new prescriptions in Q3. Mounjaro posted robust Q3 in the U.S. as total prescriptions grew by over 60%. Mounjaro also gained share of market in the type 2 diabetes incretin analog market, increasing by 4 percentage points compared to Q2 2025. Mounjaro is the most widely prescribed incretin for people with type 2 diabetes in the U.S.

As shown on Slide 10, the combined U.S. incretin analog market growth was strong, increasing by 36% in Q3 compared to the same period in 2024. Lilly incretin gained share of market compared to Q2 2025 and approximately 2 out of every 3 new prescriptions in the incretin analog market is a Lilly medicine. On Slide 11, we provide an update on capital allocation. Moving to Slide 12. We share our updated expectations for Lilly's 2025 financial results. Based on the strong underlying performance and the favorable impact of foreign exchange rates, we are increasing the midpoint of our revenue range by over $2 billion and now anticipate our full year revenue will be between $63 billion and $63.5 billion.

Given our updated expectations for revenue growth and performance margin over the first 9 months of the year, we now expect non-GAAP performance margin to be between 45% and 46% of revenue. At the bottom line, we have increased our outlook for non-GAAP earnings per share and expect EPS of $23 to $23.70. Now I will turn the call over to Dan to highlight our progress on R&D.

Thanks, Lucas. Lilly R&D had another productive quarter. I'll summarize progress by therapeutic area, beginning with cardiometabolic health. Since our last call, we announced results from 4 additional positive Phase III trials for orforglipron.

Of note, one of those trials was attained too, in people with both obesity and type 2 diabetes. As a reminder, patients with obesity and type 2 diabetes are less responsive to weight loss on GLP-1 monotherapy than those without type 2 diabetes. For example, in the STEP-2 clinical trial of people with obesity and type 2 diabetes, semaglutide at 2.4 milligrams and 1 milligram resulted in 10.6% weight loss and 7.6% weight loss, respectively. As shown on Slide 13, ATTAIN-2 demonstrated 10.5% weight loss and 7.8% weight loss at the 36-milligram and 24-milligram doses of orforglipron, respectively, aligned with our goal to deliver efficacy similar to injectable GLP-1 monotherapy in an easy-to-use daily pill.

This trial completed the clinical package required to initiate global regulatory submissions for the treatment of obesity. These submissions are beginning imminently, and we anticipate launching orforglipron in the U.S. for treatment of obesity next year. We also made great progress on orforglipron for type 2 diabetes since the last call, with positive results from ACHIEVE-2 and ACHIEVE-3. Orforglipron demonstrated superior glycemic control and weight loss compared to dapagliflozin and ACHIEVE-2 and compared to oral semaglutide and ACHIEVE-3. As shown on Slide 14, in ACHIEVE-3, both the 12-milligram and 36-milligram doses of orforglipron were superior to the highest available dose of oral semaglutide on both A1c reduction and on weight loss.

People taking orforglipron saw an average A1c reduction of 2.2% from baseline and lost nearly 20 pounds on the highest dose of orforglipron. We also announced results from ACHIEVE-5 which demonstrate that orforglipron has the potential to provide benefit as an add-on therapy to titrated insulin glargine. With 4 positive Phase III diabetes trials now completed, we believe orforglipron has the potential to be a foundational treatment for type 2 diabetes. We now await results from ACHIEVE-4, which will trigger submission of orforglipron for treatment of type 2 diabetes anticipated in the first half of 2026. With data from over 8,000 participants across 6 completed Phase III orforglipron trials, we've observed benefits across multiple cardiometabolic health measures as well as consistent safety and tolerability.

Overall, orforglipron has delivered a profile consistent with our goal of developing an oral and scalable small molecule GLP-1 with efficacy, safety and tolerability comparable to injectable monotherapy GLP-1s for treatment of obesity and type 2 diabetes. Outside of the core registrational programs for these 2 important indications, we have several additional ongoing Phase III orforglipron trials shown on Slides 15 and 16, including new Phase III starts for treatment of osteoarthritis pain and for treatment of stress urinary incontinence, a new indication that we think could benefit from weight loss seen with orforglipron.

The next study to read out will be ATTAIN-MAINTAIN, a Phase III study of weight loss maintenance. This study is the first of its kind. It's designed to measure the impact of switching from injectable semaglutide or injectable tirzepatide to oral orforglipron. Our goal in this novel trial is to measure what level of weight loss patients can maintain after switching from an injectable incretin to orforglipron.

Since the patients in this trial were previously escalated to a maximal tolerated dose of semaglutide or tirzepatide and treated for 72 weeks, this is a very ambitious trial. For those people switching from tirzepatide, maintaining weight loss after switching to orforglipron is a high bar given the strong efficacy of tirzepatide as a dual incretin agonist. As this trial includes moving patients off of an active therapy onto a placebo maintenance arm ATTAIN-MAINTAIN allows patients who are randomized to placebo to switch to orforglipron as a rescue therapy if weight regain exceeds a specified threshold.

This will be a rich data package, and we look forward to seeing the results in the coming months, either late this year or early next year. Moving to retatrutide, our GIP GLP-1 glucagon triple agonist. We expect results from up to 6 Phase III studies by the end of 2026 to support the obesity and related complications program called TRIUMPH and the type 2 diabetes program called TRANSCEND. With its first-of-a-kind triple acting mechanism, we expect retatrutide can deliver deeper and more rapid weight loss than existing obesity medicines even more than tirzepatide.

Of course, not all patients may need this potentially very high level of efficacy. And we believe retatrutide will likely be best suited for patients with a very high BMI or with obesity-related complications that require a high degree of weight loss. While the global development program for retatrutide includes people with a broad range of BMIs, spanning across overweight and obesity, we anticipate we'll be focused on the clinical profile of this medicine in patients where the clinical needs are at the highest. The first trial to readout TRIUMPH-4 compares retatrutide to placebo in patients with obesity and knee osteoarthritis pain.

This 68-week study is designed primarily as a pain relief study to support an indication for treatment of knee osteoarthritis pain in combination with other trials in the TRIUMPH program. We look forward to sharing top line results from TRIUMPH-4 later this year. Given this is the first Phase III trial for retatrutide, we'll be cautious not to over extrapolate from these results. We have 7 more Phase III trials reading out in 2026 and 2027 and we'll likely need to see data from at least a few of these before we more fully understand the profile of this medicine across a wide range of patients.

For the obesity indication specifically, we look forward to results from 3 additional Phase III studies in the second half of 2026. Moving now to muvalaplin, which is our once-daily oral small molecule inhibitor of lipoprotein(a) or Lp(a). Lp(a) is a biomarker associated with increased cardiovascular risk. In Phase II, muvalaplin demonstrated over 85% reduction of this biomarker at the highest dose compared to placebo. Based on these data, we've now initiated a Phase III study in people with elevated Lp(a) levels and atherosclerotic cardiovascular disease, known as the MOVE-Lp(a) trial.

Muvalaplin is the first small molecule approach to Lp(a) and our second program in Phase III development against this important target. In other updates from cardiometabolic health, we submitted our once-weekly insulin called insulin efsitora alfa in the U.S. for treatment of type 2 diabetes and we announced plans to initiate 2 Phase III trials with baricitinib in type 1 diabetes. From the early phase portfolio, we look forward to presenting Phase II data from our selective amylin agonist eloralintide at Obesity Week in November. Moving to oncology.

We're very pleased to have received U.S. FDA approval of imlunestrant under the brand name Inluriyo as a monotherapy for ER-positive, HER2-negative, ESR1 mutated metastatic breast cancer. Imlunestrant is also being studied in an ongoing Phase III trial called EMBER-4, which compares imlunestrant to the standard of care endocrine therapy in high-risk early breast cancer. This 8,000-patient trial is the largest oncology trial we've ever conducted, and it is on track to be fully enrolled by early 2026. The positive results in the metastatic setting provided an important signal that imlunestrant could have a role in early breast cancer, where we believe an oral SERD could have the largest patient impact.

Also in oncology, we top lined the study readout from the third positive Phase III trial of pirtobrutinib in the BRUIN CLL development program. In BRUIN CLL-313, a trial of pirtobrutinib compared to chemoimmunotherapy in treatment naive CLL/SLL, pirtobrutinib demonstrated a highly statistically significant and clinically meaningful improvement in progression-free survival. Pirtobrutinib demonstrated the most compelling effect size ever observed for a single BTK inhibitor in a treatment-naive CLL study compared to this comparator. We look forward to sharing these data at an upcoming medical meeting.

As we continue to build evidence supporting the potential role for pirtobrutinib in treatment-naive CLL, we expect these data in combination with BRUIN CLL-314 to form the basis of regulatory submissions globally. We also presented updates from our early-stage oncology portfolio at the recent European Society for Medical Oncology meeting, including data on our mutant-selective PI3-kinase alpha inhibitor for people with advanced breast cancer and PI3 kinase alpha mutations, our folate-receptor alpha antibody drug conjugate for treatment of ovarian cancer vepugratinib, our FGFR3 selective inhibitor for FGFR3 altered metastatic bladder cancer.

We continue to be encouraged by the emerging clinical profiles we've observed across each of these 3 programs. And we plan to initiate Phase III trials for these medicines in 2026, if not sooner. In Neuroscience, we received the EU marketing authorization for Kisunla. Importantly, this approval came with the modified titration dosing in the label, which is also approved in the U.S. and now approved in Japan.

The modified dosing schedule is thus approved in most major geographies and we're pleased that it's being used to further lower the risk of ARIA. Our Phase III trial with remternetug is also progressing well, and we've now completed enrollment in TRAILRUNNER-ALZ 3 which is evaluating subcutaneous remternetug in treatment of preclinical Alzheimer's disease with a similar time-to-event design as we are pursuing with the ongoing TRAILRUNNER 3 ALZ trial for donanemab. Separately, we're pleased to announce that we've initiated our Phase III program in alcohol use disorder with brenipatide, the GIP/GLP-1 dual agonist that we believe could have the optimal properties for neuroscience indications.

Growing evidence from real-world clinical studies suggest that incretin therapies may reduce cravings, an observation that is supported by nonclinical studies that show decreased dopamine release in reward pathways after treatment with incretin therapy. Given the data we've observed thus far with brenipatide, we believe it has the potential to treat a range of diseases. We expect to initiate several additional Phase II and Phase III trials in the coming months, including testing this medicine in important but extremely challenging unmet medical needs, such as opioid use disorder. In addition to neuroscience applications, we will test brenipatide in immunologic disease including a Phase II trial in asthma, which has recently begun enrolling patients.

Also in immunology, new data were presented for lebrikizumab at the 2025 Fall Clinical Dermatology Conference. Lebrikizumab delivered durable disease control in people with moderate to severe atopic dermatitis, when dosing was reduced from once every 4 weeks to once every 8 weeks, reducing the number of maintenance doses to as few as 6 doses per year could provide flexibility and reduce the treatment burden on patients. We've now submitted these data to the FDA for a potential label update and continue to explore opportunities for even less frequent dosing of this medicine for people with atopic dermatitis.

While we continue to pursue innovative modalities across several immunological disorders, we're also developing combination therapies with the potential to deliver differentiated efficacy. We recently began 2 new studies combining mirikizumab with tirzepatide in people with ulcerative colitis and people with Crohn's disease. These 2 new studies complement the previously initiated TOGETHER studies of ixekizumab plus tirzepatide in people with psoriasis and psoriatic arthritis. We expect the first data from the TOGETHER trials to read out in the next 6 months.

Slide 16 shows additional milestones and updates to our clinical portfolio. It has been a very productive period since our last earnings call, and we still have an ambitious R&D agenda for the last 2 months of 2025. Slide 17 shows the remaining list of potential key events expected yet this year. I'll now turn the call back to Dave for some closing remarks.

Thanks a lot, Dan. A lot to talk about there in the pipeline. We're pleased with all the progress in 2025, and we've had another quarter of really strong execution both in driving the business results and making investments that will help us discover and develop new Lilly medicines to help more people around the world. Now I'll turn the call over to Mike, who will moderate our Q&A session. Mike?

Yes. Thanks, Dave. We'd like to take questions from as many callers as possible. So consistent with prior quarters, we will respond to 1 question per caller and end the call probably by 11. If you have more than 1 question, you can enter the queue, and we will get to you as time allows. Paul, please provide instructions for the Q&A and then we're ready for the first caller.

[Operator Instructions] And the first question today is coming from Terence Flynn from Morgan Stanley.

Congrats on the quarter. A lot of focus obviously on orforglipron and path to market. I was surprised that it wasn't on the first list of the Commissioner's National Priority Review Voucher program. And so maybe you could just comment on kind of if you guys are seeking that voucher?

And then if not, why not? And then how to think about time lines for launch and some of the puts and takes as we think about maybe consensus expectations for 2026.

All right. Great. Thanks for the question, Terence. We'll go to Dave to talk a bit about orforglipron.

Thanks, Terence, for the call. I think as we've said before, we're interested in getting orforglipron to as many patients around the world as fast as we can, including those in the U.S. So without commenting on specific vehicles, I think investors can expect us to be pursuing in all of the above strategy to get the medicine out more quickly. Also, I'd point out that if you look at this new voucher program, I think orforglipron checks, at least 3 or 4 of the boxes laid out.

So yes, we'll see. It's obviously government decision about which pathway they choose and the review time itself. But we're focused on speed here and we're ready to launch. So the package will go in, in the quarter, and we hope to get approval as soon as we can after that.

The next question is coming from Chris Schott from JPMorgan.

I just wanted to touch base a bit more on the Mounjaro international ramp. It's obviously had a pretty impressive step up in sales these past 2 quarters. Can you just elaborate a little bit more on how some of these new country launches are trending relative to your expectations? How to think about growth off of this new higher base?

And is just there any meaningful stocking as we appreciate kind of look at these numbers? Just a little bit more color on what's been driving this big step-up.

Thanks, Chris. Thanks for the question. On Lilly International, we'll go to Patrik for that to talk a bit about Mounjaro uptake, new country launches, growth.

Thank you very much, Chris. I think we are very encouraged by what we're seeing outside of the U.S. And the business, as we shared earlier, is 75% out-of-pocket and 25% type 2 diabetes. What we have seen is, of course, an initial stocking in those markets where we launched, and we refer to the big ones being in Q2 being China, Brazil, Mexico and India.

Since then, we have seen a lift in the performance also in those markets in Q3 and a continued very strong performance globally. Looking forward, I think the major opportunity is, number one, in type 2. We have reimbursement currently in 8 markets, and we'll continue those efforts across all of the U.S. markets, but that's going to take some time. Secondly, the big opportunity when it comes to obesity is really about patient activation, and we will lean in on all of those efforts also in 2026. When you look at international, it's important to -- while it's one line in the income statement, we are referring to more than 55 countries and there are different market dynamics, different buying patterns.

So as we have seen over the last several quarters, it's not going to be a straight line, but there are significant opportunities outside of the U.S. also moving forward across type 2 and chronic weight management.

The next question will be from Seamus Fernandez from Guggenheim.

So mine is actually on some of the behaviors that we're seeing in the market around M&A and how the competitors' dynamics are playing out and how you, Dave and Dan see the market evolving from here. You've commented on retatrutide, perhaps segmenting the heavier patient population with greater comorbidities. You have orforglipron potentially targeting a maintenance and lower end portion of the market that's massively scalable and you also have tirzepatide kind of blowing the numbers out and potentially cornering the competitor to some degree in other markets. Just wanted to get a sense of if that behavior would be concerning to you, if you don't really spend much time thinking about it because you're so focused on your own business or if there are other considerations as you work to further segment the market and take a deeper leadership position?

Thanks for the very long and involved question there Seamus. I think we'll go to Dan actually to talk about that.

Yes, sure. Thanks, Seamus for a good question. Of course, Lilly has been focused on the obesity opportunity for quite some time. We have a very strong R&D engine behind it.

I think when you look at where the science leads us and sort of every kind of reasonable or logical target to pursue, we have robust programs against those targets. And in nearly every case, I think we have either a best molecule or first molecule or both, actually. So I like our portfolio. Clearly, the late-stage clinical molecules that the Street is paying attention to, we like where they are.

But behind it, I can assure you there's a robust pipeline that we like. No surprise then that every -- probably just about every other company in this industry looks at that and wants to improve their own position. So that doesn't surprise us. We watch that and of course pay attention but we haven't seen anything that changes our view about the competitiveness of our portfolio or the lead that we have in this space, which we intend to maintain through robust investments, not just in research and development, but as you've seen today, in multiple Phase III trials and new indications.

Maybe just to add just I think that -- sorry, Mike, maybe just to add, I think that's a great answer. I think for a long time, we've all been saying we're focused on every logical target and pursuing the full extent of what these medicines can do for various conditions. I mean today's call highlights that with some of the new studies Dan highlighted. But it's also important to note, in addition to innovation, you need to execute.

This is a highly scaled business and reaching potentially tens or even hundreds of millions of people. And here also, I think Lilly has really done well. It's a combination of those 2 things that, I think, built the lead we have. And we are very focused on both of them, both innovation Dan talked about, but also executing with manufacturing build-out, in market performance, new ways to reach consumers.

Of course, everybody would like to be in our position, but we're focused on defending it and mostly just executing the play we have. So it's a good question. We'll probably see more dynamics and noise from other pharmaceutical manufacturers, that's normal. What we need to do is run the strategy out that we've outlined.

Thanks for the question.

The next question will be from James Shin from Deutsche Bank.

I got one for David. David, you previously mentioned narrowing the gap between list and net pricing. Cigna recently announced drug rebates would be replaced with GPO fees. And it sounds like it's going to lead to greater discounts as well as more employer opt-ins.

So does that suggest greater GTM pressure than what you would normally have with rebates? Does this make clinical profiles more relevant to form like positioning or access? Like what kind of changes should we expect?

Great. Thanks, James. We'll go to Dave to talk about some of the recent announcements from PBMs on business model.

Yes. I think you're talking about the Cigna move, and there's also -- I'd also point out, increasing share in large employer market from kind of nontraditional PBMs, I guess we call them -- I applaud this. I think it's a good move for innovators. It's a good move for patients.

It's a good move for payers, for the commercial payers and probably smart of Cigna to make this first move to recoup market share or gain market share. I think that everyone wants more transparency and lower out-of-pocket for patients. And this kind of model will produce both of those. And what we want is to make the basis of competition, one of clinical differentiation that doctors and patients both appreciate in a way, the nontransparent rebates and other behind the scenes activities that determine which medicine a patient gets is not in our interest.

So as an innovator, probably the leading spender on innovation in the sector coming up, we're for this. I think David and his team at Cigna did a good thing here. And we hope others follow and the market in the U.S. can rapidly transition to such a system. I don't think that per se that reads through to some pricing effect.

What I hope is that more valuable medicines will have that value recognized in pricing and less valuable medicines will have a harder time competing now because you can't just rebate away some number and find formulary position ahead of a better medicine. So we're for this. And again, it's a good move. Hats off to David Cordani and the team.

And hopefully, others rapidly follow.

The next question will be from Geoff Meacham from Citi.

Just had another one on orforglipron. When you guys think about commercial strategy, would you characterize it as more consumer-centric through LillyDirect? Or should we think about it as a more typical pharma launch with PBM and payer negotiations being really critical on day 1. And I guess the puts and takes of both of those.

Okay. Great. Thanks for the question, Geoff. Orforglipron kind of a U.S. bench. So we'll go to Ilya to talk about some of the orfor launch thinking.

Sure, Geoff. Thanks for the question. Obviously, we're excited about the profile of Orforglipron and how to commercialize it in the U.S. and outside the U.S. as well. Obviously, we think about this similarly to how we've viewed Zepbound, where we need to drive great commercial and overall access for patients for accessibility, but we also recognize that there is significant demand in the consumer segment related to finding ways to get outside some of the frictions in the health care system.

And so we see both looking at broad coverage as well as looking at expanding how we do our direct-to-consumer platform and ensuring that every patient has the ability to access medicines across the portfolio.

The next question will be from Steve Scala from TD Cowen.

I know it's Lilly's policy not to comment on interims, but it's also a bit unusual for Lilly to speak about them in some detail. And Lilly has spoken in some detail about the TRAILBLAZER-ALZ 3 interim on both the Q1 '25 and Q4 '24 calls in likely other forms as well. So with that said, has the TRAILBLAZER-ALZ 3 interim already been taken? The initiation of remternetug in the same setting would not seem the best sign for donanemab in Alzheimer's prevention.

Well, thanks, Steve, and thanks for the question on Alzheimer's. We'll go to Anne to talk about some of our clinical trials in early Alzheimer's.

Great. Well, thanks for the question. Yes, I think we're all looking forward to these results. As you know, we tend not to comment on interims.

As we've shared previously, we have completed enrollment in TRAILBLAZER-3. So now it just continues to be a matter of reaching the sufficient number of events, and this is an event-based trial. In clinicaltrials.gov, we listed date of 2027, though it could be earlier than that. We are pleased, though, and this is what I think we commented on to see momentum and awareness in the space. I think that was really evidenced by the enthusiastic enrollment in our remternetug preclinical study as well.

And as Dan mentioned, what we have the opportunity there is to innovate with a subcu dosing formulation as well as a monthly dosing in a -- and again, in a fixed duration dosing paradigm. So we continue to innovate in the Alzheimer's space, and you'll see us continue to commit to that even as we build on the foundation of a very strong Kisunla performance. There's a couple of things that we're doing right now to make sure that we're ready for this readout, I will mention in preclinical because it does require a few fundamental shifts. It requires awareness and education on the importance of treating in that earlier stage of disease and the need to be proactive really around brain health.

And very importantly, it requires a simple and accessible blood test to make the diagnosis in the preclinical space, which is also referred to as Stage 1 and 2. So there's quite a bit to do. So you'll hear us continue to talk about the readiness work that we need to do to get ready for this readout, but more to come in the future.

Next question will be from Mohit Bansal from Wells Fargo.

Congrats on all the progress. I would love to understand or think through your thoughts around evoke trial and GLP, GIPs in general for Alzheimer's disease. How do you think about this space evolving? And could brenipatide the new GLP/GIP be a drug for Alzheimer's given that this has neuro properties?

Great. Thanks, Mohit, for the question about evoke as well as just brenipatide. So we'll go to Dan to take both of those.

Yes. Thanks, Mohit. Obviously, we follow this space closely. I think we are leaders in Alzheimer's disease and also leaders in incretin therapy.

You correctly point out that brenipatide has got some of the attributes that make us excited about it for use for CNS indications that could be inclusive of Alzheimer's disease, although we haven't laid out any plans there yet. We're sort of on the verge of seeing, I believe, evoke data. That will be very informative. I think given our strength in our portfolio, almost regardless of that outcome, we have opportunities to build there and create something that could potentially be more meaningful for patients.

So we'll wait, we'll see that, and then you can expect us to talk in more detail about our next steps.

The next question will be from Courtney Breen from AllianceBernstein.

I wanted to loop back to orforglipron, which I know has lots of focus on. You seem to be preparing for a very large-scale launch. And by our calculations on the basis of some of the comments you've made, you could have enough doses to support at least 5 million patients for a full year based on the inventory already built. And I think, Dave, you've mentioned kind of this could be the GLP-1 for all.

Can you help us understand kind of the potential for expansion to the market with orfo? And should we expect to see a slowdown in getting new starts during the initial period of that orfo launch.

Yes. Courtney, it was a little hard to hear, but I think some of the questions was thinking about how to expand the market for orfo in different indications, different opportunities. So we'll go to Ken to talk a bit about some of our ambitions for orforglipron.

Sure, Courtney. Thanks for the question. Now with 6 Phase III studies in hand, I think we really understand the profile of this emerging medicine. It continues to recapitulate the efficacy and safety of injectable GLP-1s.

In fact, Dan recapped some of that during the early part of the call, recapping the ATTAIN-2 data, which seemed very consistent with STEP-2 as well as the ACHIEVE-3 data showing superiority versus oral semaglutide. So we think this is a great profile. You're getting glucose benefits, weight benefits, improvements in blood pressure, lipids, inflammatory markers, all that in a simple once-daily pill with no restrictions on food and water and of course, which we can manufacture and distribute at scale. So we tend to think at a different magnitude about the opportunity here than historically what we've done with incretins.

In the United States, there's probably 8 million or 8.5 million people on incretins out of maybe 170 million who might benefit. And globally, that's a much bigger number, probably measured in the high hundreds of millions or even billions. So this is now, I think, the generational opportunity to figure out how to get an incretin to a much larger group of people. We can do that to the simplicity of the profile, which is also easier to manufacture and distribute.

So really, our plan will be about accomplishing that at an international level, getting it out there as quickly as possible. Of course, we're also developing orforglipron in a lot of other settings beyond obesity and diabetes. Dan recapped some of those new NILEX that we've announced. And of course, just to recap as well, we see an opportunity not just as a starter incretin here with orforglipron, but also something that could potentially be used for patients to continue the success they've had with a drug like Wegovy or Zepbound.

We're assessing that now in the ATTAIN-MAINTAIN study and look forward to sharing those data later this year.

The next question will be from Asad Haider from Goldman Sachs.

Congrats on all the ongoing progress. Just sticking with orforglipron, maybe given it's importance, just a high-level question on pricing and volume dynamics ahead of the launch. So the cash pay channel is where you're continuing to see the most rapid growth in the obesity market. Zepbound vials are now almost 40% of new scripts.

And related on ex U.S. price elasticity, you saw a shift in volumes in the U.K. when Mounjaro prices increase. So I guess what are the learnings from this for the orforglipron ramp next year as it relates to the elasticity of demand across different price points? And I guess my question is specifically related to how you're thinking about U.S. versus OUS volume unlocks for orforglipron as launches -- as it launches in a world of potential MFN equilibrium prices?

Okay. Thanks, Asad. I think we'll -- maybe we'll start with Ilya to discuss some of the U.S. dynamics? And then maybe, Patrik, if you want to make a couple of brief comments about some of the OUS learnings from the U.K. as well.

Yes. Thank you for that question. Obviously, we have experienced significant growth overall in the total market. So we've seen sequential growth in the covered.

Overall the sequential growth is 15%. But we're seeing significant more volume go through a direct-to-consumer platform with LillyDirect, which says a lot about, one, what consumers and patients as well as providers see as the benefit of Zepbound in particular and also the ability to remove some of the friction and the ability to have accessibility to medicine. And so we see this channel as a significant channel now and into the future. And then as part of that, obviously having more offerings, whether you include being able to pick up your Zepbound vial at a local Walmart, which we announced yesterday or expanding the offering on having another treatment like orforglipron.

That's an important element for us to expand the ability for patients to get treated. That is the main goal that we have is to improve overall health outcomes, and we have multiple medicines and different platforms to achieve that.

Patrik?

Maybe just a few additions from an OUS perspective. I think, first and foremost, in the U.K. with a raise in price that was effective September 1, I think we learned pretty much what we expected to learn. What we did was just to take the U.K. price at the level of -- raise it to the level of a European price. And even if there were regulations in the U.K., we actually saw export of medicines out of U.K. to other markets.

So that has probably stopped with intervention we did put in place. Secondly, we're also learning something about consumer pricing elasticity. So that exists. But most importantly, I think orforglipron will meet a slightly different need of the marketplace.

We know that obesity is a heterogeneous disease. And for people with a BMI below 35 and that might not need a weight loss drug like tirzepatide, we believe there is a significant opportunity in OUS. And also driven by the other features that Ken referred to earlier, the opportunity to scale here and to reach other patient populations and with no need of refrigeration, et cetera. So we see those as being very complementary in the OUS business setting as well.

Next question will be from Tim Anderson from Bank of America.

I have a question on GLP-1 pricing. So with Novo's sema, we get an IRA negotiated price within the next month. My sense from talking to some industry folks is that, that negotiated price may be more favorable than the investment community is expecting, meaning less degradation to the current net price. And that, of course, would be good for everyone in the space.

What is Lilly picking up on this? And whatever that level of discount ends up being, would you agree that it quite likely has a direct impact on pricing of Lilly's own products in 2027? Or do you think sema's negotiated price just won't translate across?

Okay. Thanks for the question, Tim. We'll go to Ilya talk a bit about just some of the broad thinking about sema IRA negotiations acknowledging we're not part of the discussion.

Sure. Thanks, Tim, for the question. Obviously, we're -- we don't know the price is being negotiated at the same time. There are several things that are important to note.

One, that it only applies to sema in Part D beginning in 2027. Overall, if you take a look at our volumes, Medicare Part D is a small proportion of our overall volume. Obviously, predominantly in type 2 diabetes since there's lack of coverage in obesity. Probably the most important element to include here is that tirzepatide has demonstrated superior efficacy versus sema in head-to-head trials, which is a strong foundation for any value-based discussions that we have with payers, not only in our data, but you see that as well in provider preference as well as patient preference that you see in the market.

Great. And then Dave, do you want to add a couple of comments?

I think he covered it well. Maybe just one thing because we've been talking about orforglipron and its upcoming launch. We think about single-acting GLP-1s as one category and double and triple acting as others. And probably both weight loss and clinical value will be quite different between these medicines.

And of course, we're paying close attention to the sema price. But as Ilya said, it's a Part D-only channel. So let's let it all play out. I think we're in a good position because we have so many options.

The next question will be from Alex Hammond from Wolfe Research.

Can you walk us through the importance of the upcoming ATTAIN-MAINTAIN trial to orforglipron's commercial opportunity? And is there an outcome that might meaningfully change your view on how quickly orforglipron's launch may scale.

Great. Thanks, Alex, for the question on ATTAIN-MAINTAIN, we'll go to Ken.

Sure. Thanks for the question, Alex. on ATTAIN-MAINTAIN. This is a really first of its kind study, and we're looking forward to these data later this year. We took advantage of the opportunity to rerandomize patients for the SURMOUNT-5 study who were maximally tolerated on either semaglutide or tirzepatide and randomized them to orforglipron or placebo, and we're going to measure the percentage of the weight that they lost over the course of 72 weeks that they keep off while taking orforglipron.

Of course, this is a first of its kind study. We don't know exactly what the results will be, but we're hopeful that orforglipron will provide a simple once-daily oral option that lets patients keep the majority of their weight off. And so we think this is really an opportunity to expand the market even further for orforglipron. Of course, we have very bullish expectations for it as a first-line starter incretin, but also this is an opportunity to continue to grow that.

I don't think -- as we think about orforglipron, we don't think about sort of cannibalization in that way. This is an opportunity to grow the market at a very different rate, and we think the data from ATTAIN-MAINTAIN could be really just an exciting boost and allow us to have some medical information to disseminate to physicians about how they can help patients switch from drugs like Wegovy and Zepbound. But of course, we also know that all weight management drugs are, of course, indicated for maintenance. So these are just data to help HCPs and patients guide between these medicines.

The next question will be from Umer Raffat from Evercore.

I just wanted to touch up on GLP pricing. And on the one hand, there's a lot of commentary on some of the expectations you've laid out on orforglipron pricing framework. If you could expand on that. But then also, on the other hand, there's a lot of actions and changes at your main competitor over the last few months.

And I almost wonder, do you think they will stay a mature player from a pricing front? Or will that no longer be a base case for us?

Great. Thanks, Umer, for the question on GLP-1 pricing. Maybe we'll hear from Lucas to weigh in on those dynamics.

Yes. Thank you for the question, Umer. Maybe just thinking about the pricing dynamics when you actually unpack our Q3 performance, you see that actually, our pricing continued to perform as what we expected, right? So I think it's a good data going after the CVS move that we didn't see again, a significant price erosion, but actually was very much in line to what we said early in the year for the full year as well.

So maybe just had a good data point that you can take from that perspective. And thinking more broadly about the competition in the marketplace, again, we always pay close attention on the competition in the marketplace, but also how we differentiate both commercially, but also on the level of the product. And Ilya, Dan, Ken mentioning about the differentiation. And you see that in the marketplace.

So if you take, for example, a good proxy that for me is LillyDirect we have been priced over the last maybe 6 months already at that starting point at $349 going to $499 and maintain that price and you see the penetration and the competition is placed at the same level as well. So we don't see materially changing the dynamics that we see from that perspective and as we continue to penetrate the market and mobilize patients to seek more treatment.

Next question will be from Akash Tewari from Jefferies.

So at the All-In Summit, Dave, you noted if orfo was priced at $100 a month, there'd be no incentive for new medicines in that category to kind of create the next big thing. A few weeks later in Chicago, you mentioned how Lilly has already made billions of doses for orfo and it could have an impact on human health at a global level. Can Lilly achieve both goals of kind of preserving continuous innovation in obesity and having orfo be a drug for hundreds of millions of patients with the parity pricing model between the U.S. and rest of world?

Thanks, Akash. We'll go to Dave to address those 2 comments.

Yes. Thanks, and thanks for tuning into all my podcasts and public event. So I mean, yes, our strategy is to bridge both. We think, as you're pointing out, that flatter pricing between U.S. and other developed countries is important.

But there's like 3 ways that this works. And I think one important thing here that just to point out on all these pricing questions that is different in this GLP-1 category is the consumer self-pay channel. We haven't really seen that at scale in other categories. And it certainly is a channel here, partly because of under insurance, but partly because the benefits of these medicines manifest so consistently.

There really aren't that many nonresponders at all and produce a very desirable short-term effect in addition to enhancing long-term health benefits. It really is a unique situation. So we have seen price elasticity, as was mentioned, and that it's, on the one hand, in our interest to offer consumers a compelling price where they can afford to self-pay. It's also in our interest to continue to build out indications for chronic disease, as Ken and Dan were outlining earlier.

And we are committed to doing both, having a strong consumer offering, but also proving the health benefit. And that should not compete for consumer dollars, but for health care dollars, either government or from private payers. So it's a both end, and I do think these can bridge because we have so much evidence coming of long-term benefit, we should compete with other classes of medicines in chronic diseases or even create whole new classes. And at the same time, we'll probably continue to see consumer self-pay demand, whether it be for prevention or there are other needs.

So I think it's entirely possible to do both. And I think Ken mentioned earlier some of the numbers that we are literally just scratching the surface of global treatment here. And there really is a tremendous opportunity to reach tens or even hundreds of millions of more people in the coming years, and that's our goal.

The next question is coming from Evan Seigerman from BMO Capital Markets.

Dan, you recently commented that you were super excited about your presymptomatic Alzheimer's program. I appreciate that you don't want to comment on an interim look, but could you expand on what drives this view and how it has changed since the initiation of the program?

Okay. Great. I double back on the presymptomatic Alzheimer. So we'll go Anne to talk a bit about that.

Okay. Thanks, Evan. I apologize, I didn't say super excited on this call. I'm still super excited about the Alzheimer's opportunity here to treat in the preclinical space.

The reasons for my excitement go back to the data that we saw actually in TRAILBLAZER-1 and TRAILBLAZER-2. In both of those trials where we're treating symptomatic patients, we saw the largest treatment effect on patients who were the earliest in their disease course, whether you measure early disease course by symptoms or pathology, et cetera, that's where the drug had the biggest effect. And in fact, we looked at prevention of progression as an outcome in that trial in those patients, we have really profound results. I actually expect the same in TRAILBLAZER-3 as well as TRAILRUNNER-3, which is the trial with remternetug.

So I remain extremely excited. No change here at all to my level of enthusiasm or confidence and success.

Great. Thanks. With that, we'll close the Q&A. And Dan -- I go to Dave for you for a couple of closing remarks.

Thanks, Mike, and thanks to everyone who called in today and for the excellent questions from the sell-side community. We appreciate everyone's participation here. And as always, follow up with our excellent IR team if you have questions that didn't get answered today. And have a great rest of your day. Take care.

Thank you. And ladies and gentlemen, this does conclude our conference for today. This conference will be made available for replay beginning at 1:00 p.m. today running through December 4 at midnight. You may access the replay system at any time by dialing (800) 332-6854 and entering the access code 797327. International dialers can call (973) 528-0005. Again, those numbers are (800) 332-6854 and (973) 528-0005 with the access code 797327. Thank you for your participation.

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