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pww.comEli Lilly and Company Presents at 38th Annual J.P Morgan Healthcare Conference, Jan-14-2020 02:30 PM - NYSE:LLY

NYSE:LLY

David A. Ricks [Chairman, CEO & President] đź’¬

During the presentation at the 38th Annual J.P. Morgan Healthcare Conference, David A. Ricks, Chairman, CEO & President of Eli Lilly and Company, provided several insights and updates:

Opening Remarks

  • 2019 Performance: The company had a strong year in 2019, due to the hard work of his team.
  • Progress Since 2015:
    • Top-Line Growth: The goal was to grow the company at a 5% compound annual growth rate (CAGR) from 2015 through the end of the decade. After normalizing for the spin-off of Elanco, the actual CAGR was 6%, with a performance of at least 7%.
    • Product Launches: The goal was to launch 20 new products in 10 years. By 2020, 11 products had been launched, with at least three more under FDA review.
    • Operating Margins: The goal was to improve operating margins by over 1,000 basis points. The target for 2021 was to reach 31% operating margins.

Diabetes Category

  • Diabetes Pricing Dynamics:
    • There is a disconnect between the perception of high pricing and the reality of a deflationary period in diabetes pricing.
    • Payers have created an auction environment for certain categories, leading to price pressure.
    • Lilly aims to prove the value of its products rather than deflate pricing.
    • There is a low single-digit headwind in pricing across all diabetes categories to maintain access and reimbursement.
    • Access is stable, with over 90% of lives covered for Jardiance and Trulicity, while insulin coverage is around 50%.
    • There is no expectation of a precipitous event in pricing.
  • GLP-1 Share Growth:
    • About one-third of patients on a first-line injection are on GLP-1, while two-thirds are on basal insulin.
    • For new patients entering the category, the split is more like half-half.
    • GLP-1 share is expected to grow by up to 50% over the next couple of years.
    • Trulicity is well-positioned with best-in-class cardiovascular (CV) data and ease of use.

Competitive Landscape

  • Trulicity vs. Oral Semaglutide:
    • The launch of oral semaglutide (Rybelsus) has increased the overall growth of GLP-1 prescriptions.
    • Trulicity remains the best-in-class solution, with new data and dosage options expected to enhance its position.
    • Tirzepatide, the next-generation incretin, is showing promising results in Phase III trials, with significant improvements in HbA1c and weight loss.

Patient Affordability

  • Affordability Challenges:
    • Current insurance designs make insurance more affordable for healthy individuals but less beneficial for those who are sick.
    • Lilly is working on solutions such as copay assistance programs, indigent care programs, and launching authorized generics at half the price.
    • Reform to the insurance system and increased transparency in drug pricing are needed to address these challenges.

Oncology Franchise

  • New Structure and Pipeline Repositioning:
    • The acquisition of Loxo Oncology brought assets like selpercatinib and LOXO-305, and the talent has been integrated into Lilly’s early-stage oncology efforts.
    • The “Loxo at Lilly” structure aims to combine biotech principles with the scale and resources of a large pharmaceutical company.
    • While there are promising assets in the pipeline, Lilly is actively seeking more assets through acquisitions and internal development.

Capital Deployment

  • Bolt-On Acquisitions:
    • Lilly is interested in bolt-on activities that add to its clinical phase or late preclinical phase pipeline.
    • The focus is on assets that fit within Lilly’s five core therapeutic areas.
    • Oncology and immunology are areas of particular interest due to the availability of assets in these fields.

Pipeline Highlights

  • Late-Stage Readouts:
    • Mirikizumab UC induction data and additional data on bermekimab in atopic dermatitis.
    • HFrEF program for Jardiance.
    • Early phase Phase I programs in oncology.
    • Verzenio monarchE study, expected to read out in 2021.
  • Early-Stage Pipeline:
    • Exciting assets include a tri-agonist of various incretin pathways (GGG), an oral GLP-1 receptor agonist, and a weekly basal insulin in Phase II.
    • Pegilodecakin data from the Pegylated IL-10 program.
    • Checkpoint agonists in immunology to potentially resolve the cycle of autoimmunity.

Alzheimer’s Disease

  • DIAN Study:
    • The DIAN-TU study will provide insights into the efficacy of solanezumab in a narrow genetic population.
    • If positive, the data could support the submission of solanezumab.
    • Additional studies on donanemab and zagotenemab will provide further evidence on the role of soluble A-beta and tau in Alzheimer’s disease.

Closing

  • Future Outlook:

    • The company is proud of its achievements and excited about the future with promising assets in the pipeline.

    • The next decade looks promising with assets like tirzepatide and others in Phase III and the early-stage pipeline.

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