Eli Lilly and Company (LLY) Goldman Sachs 45th Annual Global Healthcare Conference

Summary of Eli Lilly and Company Conference Call Company Overview - Company: Eli Lilly and Company (NYSE: LLY) - Event: Goldman Sachs 45th Annual Global Healthcare Conference - Date: June 10, 2024 - Participants: Patrik Jonsson (Executive Vice President, President of Lilly Diabetes and Obesity and Lilly USA), Chris Shibutani (Goldman Sachs) Key Points Industry and Market Dynamics - Obesity and Diabetes Market: There is an unprecedented demand for obesity treatments, with an estimated 110 million people in the US and 650 million globally suffering from obesity [10][12] - Manufacturing Capacity: Eli Lilly has invested over $18 billion in manufacturing since 2020, with plans to increase capacity significantly to meet demand [10][11] Product Launches and Pipeline - Current Products: - Mounjaro for Type 2 diabetes has been successfully launched. - Zepbound for chronic weight management was launched six months ago [6][8] - Pipeline Developments: - Two promising medicines in Phase 3: Orforglipron (oral GLP-1RA) and Retatrutide (combines glucagon pharmacology) [7][8] - Lepodisiran for Lp(a) has entered Phase 3 [8] Supply Chain and Manufacturing - Supply Challenges: Supply has been a limiting factor, but Lilly is expanding manufacturing capacity with new facilities in North Carolina, Indiana, Germany, and Ireland [10][11] - Production Timelines: The second site in North Carolina is expected to start production by the end of 2024, with additional sites coming online in 2025 [11] Pricing and Access - Commercial Access: As of April 1, 2024, 67% commercial access for Zepbound has been achieved, which is considered high for a new product [16] - Employer Opt-in: Approximately 50% of employers are opting in for anti-obesity medications, with expectations for gradual increases [17] - Medicare Coverage: The Treat and Reduce Obesity Act (TROA) has bipartisan support, and there are positive movements for Medicare coverage of anti-obesity medications [18][32] Pricing Dynamics - Net Pricing Trends: Net pricing is expected to decrease over time as access increases, which is typical for new product launches [19][21] - Out-of-Pocket Costs: More patients are paying out-of-pocket for Zepbound compared to Mounjaro, primarily due to access issues [28][29] Patient Adherence and Treatment Duration - Adherence Expectations: Patients are expected to stay on treatment longer due to the significant benefits experienced, with a longer duration anticipated compared to other chronic medications [35][36] Future Developments - Orforglipron: Expected to democratize access to obesity treatments, with a Phase 3 readout anticipated in 2025 [24][47] - Retatrutide: Expected to provide significant weight loss and cardiometabolic benefits, with data readouts in 2026 [51] Additional Mechanisms and Research - Amylin and GIP Agonists: Lilly is exploring new mechanisms such as Amylin receptor agonists and GIP agonists, with ongoing studies to assess their efficacy [53][56] - Alzheimer's Disease: Lilly is investigating the potential impact of GLP-1s on cognitive decline through improved vascular health, although the primary focus remains on obesity and diabetes [58] Conclusion Eli Lilly is positioned strongly in the obesity and diabetes market with significant investments in manufacturing and a robust pipeline of innovative treatments. The company is addressing supply challenges while navigating pricing dynamics and access issues, with a focus on improving patient outcomes and adherence.