Lilly(US:LLY)2025-05-01 14:00Financial Data and Key Metrics Changes - Revenue grew 45% compared to Q1 2024, reaching $7.5 billion, driven by key products [8][9][14] - Gross margin as a percentage of revenue was 83.5%, an increase of one percentage point year-over-year [14] - Earnings per share (EPS) was $3.34, compared to $2.58 in Q1 2024, reflecting a significant increase despite the negative impact of acquired R&D charges [16][29] Business Line Data and Key Metrics Changes - Key products, including Evglis, Jaypirca, Kisunla, Monjaro, Umvoh, Verzenio, and Zefbound, contributed over $4 billion to revenue [9] - Monjaro sales exceeded $3.8 billion, more than doubling from the same quarter last year, establishing it as the market leader in new prescriptions for diabetes incretin [24][25] - Zepbound sales increased significantly, with the U.S. branded anti-obesity market leader reaching 60% of total prescriptions [26] Market Data and Key Metrics Changes - U.S. revenue increased by 49%, driven by strong volume growth, despite a 7% decline in price [17] - European revenue grew 71% in constant currency, with a one-time benefit of $370 million from restructuring an alliance [17] - Revenue in China increased by 21% in constant currency, primarily driven by Mounjaro [18] Company Strategy and Development Direction - The company is focused on expanding its manufacturing capabilities in the U.S., with over $50 billion in new investments since 2020 [10] - Plans to submit regulatory applications for obesity treatments by the end of 2025, with ongoing clinical trials for orforglipron [8][30] - The company aims to enhance access and reimbursement for its products while navigating complex tariff and trade environments [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, emphasizing the importance of innovation and access to medicines [39] - The impact of tariffs on financial outlook is considered limited, with ongoing monitoring of the external environment [29] - Management highlighted the potential of orforglipron to provide a convenient oral option for diabetes and obesity treatment [30][31] Other Important Information - The company distributed $1.3 billion in dividends and executed a $1.2 billion share repurchase in Q1 [10] - The effective tax rate for Q1 was 20.2%, impacted by non-deductible acquired R&D charges [16] Q&A Session Summary Question: Concerns about CVS formulary announcement favoring Wegovy over Zepbound - Management acknowledged the competitive dynamics and emphasized their focus on expanding access and improving product offerings [42][43] Question: Positioning of orforglipron in the market - Management indicated that orforglipron could be positioned for multiple indications beyond weight loss, with a focus on primary care [49][51] Question: Role of orforglipron in the obesity and diabetes market - Management highlighted the significant opportunity for oral medications, noting that many patients prefer oral options over injectables [56][59] Question: FDA requirements for tirzepatide in heart failure - Management noted that the FDA requires additional trials to support the indication, despite strong data from the SUMMIT trial [100][102] Question: Impact of CVS formulary decision on pricing and market dynamics - Management reiterated their commitment to innovation and differentiation, focusing on expanding access rather than reducing it [75][76] Question: Update on Alzheimer's portfolio and TB3 study - Management confirmed enrollment completion in the TB3 study, with expectations for earlier readouts than previously indicated [82][83] Question: Evolus tracking against sales expectations - Management expressed confidence in the uptake of Evolus, noting positive feedback from physicians and ongoing efforts to improve access [88][90]