Core Viewpoint - H.C. Wainwright initiated coverage on Evommune with a Buy rating and a price target of $35.00, citing favorable risk-reward dynamics ahead of key clinical readouts in 2026 due to recent share price weakness and reduced competition in the MRGPRX2 space [1] Group 1: Clinical Data and Safety Profile - Early human proof-of-concept data in chronic inducible urticaria supports potential applications in chronic spontaneous urticaria, highlighting the company's promising clinical data [2] - A clean safety profile across early studies is noted as a significant differentiator, especially in light of recent toxicity issues faced by other oral MRGPRX2 programs [2] Group 2: Company Background and Product Pipeline - Evommune was founded by the team that previously built Dermira, which was sold to Eli Lilly for $1.1 billion, and has successfully advanced lebrikizumab and Qbrexza into commercial products [3] - The company is advancing two clinical-stage assets: EVO-756, an oral MRGPRX2 inhibitor for chronic spontaneous urticaria and atopic dermatitis, and EVO-301, an IL-18 inhibitor for atopic dermatitis and ulcerative colitis [3] - Positive data expected in 2026 could enhance both the company's valuation and strategic interest from potential partners [3]

Financial Data and Key Metrics Changes - In Q3 2025, revenue grew by 54% compared to Q3 2024, driven by key products [6][9] - Gross margin as a percentage of revenue was 83.6%, an increase of 1.4 percentage points year-over-year [9] - Earnings per share increased to $7.02, compared to $1.18 in Q3 2024 [10] Business Line Data and Key Metrics Changes - Revenue from key products accounted for $12 billion in the quarter, with significant contributions from immunology, oncology, and cardiometabolic health [11][12] - EBGLYSS prescriptions increased by 41% in Q3 2025 compared to Q2 2025 [11] - Mounjaro's total prescriptions grew by over 60% in the U.S. [14] Market Data and Key Metrics Changes - U.S. revenue increased by 45%, with strong volume growth from Zepbound and Mounjaro, despite a 15% decline in price [10] - International revenue increased by over 100% in constant currency, reflecting strong uptake of Mounjaro [10] - Japan, China, and the rest of the world saw constant currency revenue growth of 24%, 22%, and 51%, respectively [10] Company Strategy and Development Direction - The company is focused on expanding its manufacturing footprint and has announced plans for new facilities in the U.S. [7][8] - Lilly aims to leverage its robust pipeline and R&D investments to maintain a competitive edge in the market [51][53] - The company is pursuing an "all of the above" strategy to expedite the launch of orforglipron [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance and market share gains in the incretin analogs market [6][9] - The company raised its revenue and earnings per share guidance for the year based on strong financial performance [6][15] - Management acknowledged the competitive landscape but emphasized confidence in their portfolio and execution strategy [51][53] Other Important Information - The company distributed $1.3 billion in dividends and executed approximately $700 million in share repurchases during the quarter [8] - Lilly achieved several key milestones, including FDA approvals and positive trial results for multiple products [7][26] Q&A Session Summary Question: Comments on orforglipron and its market launch - Management indicated a focus on getting orforglipron to patients quickly and is pursuing various strategies to expedite its launch [39] Question: Insights on Mounjaro's international ramp - Management noted strong performance in new markets and emphasized the importance of patient activation for obesity treatment [46] Question: Market dynamics and competitor behavior - Management expressed confidence in their competitive position and highlighted ongoing investments in R&D and execution [51][53] Question: Pricing and volume dynamics for orforglipron - Management discussed the importance of understanding price elasticity and the potential for significant market expansion with orforglipron [85]