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pww.comEli Lilly and Company Presents at Morgan Stanley 18th Annual Global Healthcare Conference, Sep-16-2020 03:30 PM - NYSE:LLY

NYSE:LLY

Joshua L. Smiley [Former Executive Officer] 💬

** Key Points from Joshua L. Smiley's Presentation**

  1. Prescription Market Recovery

    • By Q4, prescription trends are expected to return to pre-pandemic levels, particularly in new prescriptions.
    • Utilization trends in therapeutic areas are back up to 90% relative to pre-lockdown levels.
    • Physicians and patients have found safe ways to manage healthcare despite the pandemic.

  2. R&D Productivity and ROI

    • Significant improvement in development speed, moving from among the worst to one of the best in the industry.
    • Enhanced success rates in Phase III trials due to better Phase II data.
    • Focused on 5 therapeutic areas with strong scientific expertise.
    • Improved ROI on R&D investments, with a strong portfolio value.

  3. Diabetes Portfolio

    • GLP-1s are gaining traction, capturing about 50% of new injections versus basal insulin.
    • Total GLP-1 prescriptions are about 1/3 of the injection space, with significant growth potential.
    • Higher doses of Trulicity and next-generation GLPs like tirzepatide offer expanded opportunities.
    • SGLT2 inhibitors, like Jardiance, have a 15% market share with strong cardiovascular benefits, indicating room for growth.

  4. 2021 Revenue Prospects

    • Over 90% of formulary contracts are finalized, ensuring good access.
    • Net pricing is expected to decline in the low single digits, primarily due to increased Medicaid utilization.
    • Volume opportunities are strong, with double-digit growth expected in core brands.
    • New products like Retevmo and adjuvant Verzenio will contribute to growth.

  5. Financial Impact of Equity Investments

    • Mark-to-market accounting for public equities has led to significant gains.
    • These gains are favorable but create volatility in the income statement.
    • Potential exclusion of these gains from non-GAAP earnings to provide clearer financial insights.

  6. COVID Therapeutics

    • Olumiant (baricitinib) shows a 1-day faster hospital discharge when combined with remdesivir.
    • Financial impact is modest, estimated in the tens to low hundreds of millions of dollars.
    • Antibody treatment (LY-CoV555) is promising, with potential for significant financial returns if successful.
    • Focus on increasing production capacity to meet demand.

  7. Neurodegeneration and Alzheimer's Disease Candidates

    • Donanemab (amyloid antibody) Phase II trial results expected early 2021.
    • Anti-tau antibody Phase II trial results expected later in 2021.
    • Donanemab shows deeper and faster plaque clearance compared to aducanumab.
    • High-stakes readouts with significant implications for Alzheimer's treatment.

  8. Long-Term Growth and Operating Margins

    • Expected high single-digit net revenue growth through 2025.

    • Double-digit volume CAGR is anticipated.

    • Operating margin expected to move from 31% in 2020 to mid- to high 30s by 2025.

    • Continued investment in R&D to sustain growth post-2025.

    • Potential for 40% steady-state operating margin by 2030.

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