Eli Lilly and Company Q2 FY2025 earnings call

• Clinical data: Shared positive top line data from ATTAIN-1 orforglipron trial; FDA approved new dosing schedule for Kisunla; positive European CHMP opinion for Kisunla; SURPASS-CVOT Phase III trial for tirzepatide showed cardiovascular protection; BRUIN CLL-314 Phase III trial for pirtobrutinib had positive results. - Acquisitions: Acquired SiteOne Therapeutics and Verve Therapeutics. - Manufacturing: Produced more than 1.6x salable incretin doses in first half of 2025, plan to add more capacity in second half; announce location of new U.S. manufacturing facilities later in Q2. - Dividends and repurchases: Distributed $1.3 billion in dividends and executed $700 million in share repurchases. - Drug pricing: Stated U.S. pharmaceutical market has defects and outlined initiatives to lower patient costs, including LillyDirect for more affordable access.

Revenue grew 38% compared to Q2 2024. Key products driving growth include Ebglyss, Jaypirca, Kisunla, Mounjaro, Omvoh, Verzenio, and Zepbound. Ebglyss had strong new patient starts and revenue, with total prescriptions nearly doubling since Q1 and covered by major pharmacy benefit managers. Omvoh made progress in Crohn's disease launch. Jaypirca had positive physician feedback. Verzenio global sales grew 12% in Q2. Kisunla had steady launch trajectory. Mounjaro posted $5.2 billion in global sales and became U.S. market leader in type 2 diabetes incretin prescriptions. Zepbound contributed $3.4 billion in sales, with strong performance in the cash pay market.

• Raised revenue guidance to between $60 billion and $62 billion. - Non-GAAP performance margin expected between 43% and 45.5%. - Expect to produce at least 1.8x salable incretin doses in second half of 2025 compared to second half of 2024. - Potential effect of tariffs is dynamic and factored into guidance range.

• Impact of import of foreign price controls on U.S. system, risking low productivity of Europe's biopharma sector and high out-of-pocket costs in U.S. - Disruption in Zepbound prescriptions due to CVS pharmacy benefit manager excluding Zepbound, negatively impacting volume growth in Q3. - Uncertainty around tariffs and their impact on 2025 guidance.

Q: Chris Schott from JPMorgan asked about orforglipron's weight loss profile vs Wegovy.

A: Kenneth L. Custer responded on orforglipron's profile, biomarkers, and broad opportunities.

Q: Seamus Fernandez from Guggenheim asked on pricing and compounding.

A: David Ricks commented on pricing to value, consumer-level pricing, and concerns about compounding's patient safety risk.

Q: Geoff Meacham from Citibank asked on orforglipron GI adverse events.

A: Daniel M. Skovronsky noted side effects are consistent with GLP-1 monotherapy and decrease over time.

Q: Tim Anderson from Bank of America asked on Canadian generics impact.

A: Ilya Yuffa mentioned Zepbound's strong performance in self-pay and covered markets, with over 1 million TRx in vial in Q2.

Q: David Risinger from Leerink Partners asked on U.S. employer coverage for anti-obesity medicines.

A: Ilya Yuffa discussed employer coverage progress and LillyDirect as a bridge strategy.

Q: Terence Flynn from Morgan Stanley asked on ATTAIN-2 Phase III data for orforglipron.

A: Kenneth L. Custer expected encouraging results and submission by year-end.

Q: Courtney Breen asked on comparing ACHIEVE-1 and ATTAIN-1 GI data.

A: Daniel M. Skovronsky stated side effect profiles are consistent with GLP-1 monotherapy in different populations.

Q: Mohit Bansal asked on orforglipron study gender split.

A: Kenneth L. Custer noted balanced gender split in ATTAIN-1 baseline population.

Q: Asad Haider asked on LillyDirect channel and Zepbound growth.

A: Lucas E. Montarce discussed LillyDirect's growth and role as a hedge strategy for employer coverage.

Q: Umer Raffat asked on orforglipron efficacy vs oral sema.

A: Daniel M. Skovronsky stated profile is consistent with GLP-1 monotherapy and not an issue in real world.

Q: Steve Scala from TD Cowen asked on injectables market impact.

A: Ilya Yuffa mentioned Zepbound's continued growth despite CVS impact, with strong performance in all segments.

Q: Alex Hammond from Wolfe Research asked on orforglipron discontinuation rates.

A: Kenneth L. Custer stated discontinuation rates are consistent with analogous studies in obesity.

Q: Akash Tewari asked on pricing parity globally.

A: David Ricks discussed rebalancing pricing between U.S. and Europe and need for structural changes.

Q: Kerry Holford from Berenberg asked on cash channel for Mounjaro.

A: Ilya Yuffa discussed LillyDirect and evaluation of cash channel for other brands based on coverage gaps.

Q: Evan Seigerman from BMO Capital Markets asked on practical examples for price parity globally.

A: David Ricks discussed rebalancing pricing, narrowing gaps on new products, and constructive engagement with administration