Ladies and gentlemen, thank you for standing by, and welcome to the Lilly Q3 2023 Earnings Call. At this time all participants are in a listen-only mode. I would now like to turn the conference over to your host, Joe Fletcher, Senior Vice President of Investor Relations. Please go ahead.

Good morning. Thanks everybody for joining us for Eli Lilly and Company's Q3 2023 Earnings Call. I'm Joe Fletcher, Senior Vice President of Investor Relations. And joining me on today's call are Dave Ricks, Lilly's Chair and CEO; Anat Ashkenazi, Chief Financial Officer; Dr. Dan Skovronsky, Chief Scientific and Medical Officer; Anne White, President of Lilly Neuroscience; Ilya Yuffa, President of Lilly International; Jake Van Naarden, President of Loxo at Lilly; Mike Mason, President of Lilly Diabetes and Obesity; and Patrik Jonsson, President of Lilly Immunology and Lilly U.S.A. We're also joined by Michaela Irons, Mike Springnether and Lauren Zierki of the IR team. During this conference call, we anticipate making projections and forward-looking statements based on our current expectations. Actual results could differ materially due to several factors, including those listed on Slide 3. Additional information concerning factors that could cause actual results to differ materially is contained in our latest Form 10-K and subsequent Forms 10-Q and 8-K filed with the Securities and Exchange Commission. The information we provide about our products and pipeline is for the benefit of the investment community. It's not intended to be promotional and is not sufficient for prescribing decisions. As we transition to our prepared remarks, please note that our commentary will focus on non-GAAP financial measures. Now I'll turn over the call to Dave.

Thanks, Joe. In Q3 Lilly continued the progress we made so far this year. We delivered strong financial results and continued to advance our R&D pipeline and invested in our future through several business development transactions. As you can see on slide 4, we continue to make progress against our strategic deliverables this quarter. Excluding revenue from the olanzapine portfolio, and COVID-19 antibodies, revenue grew 24%. Our new products and growth products combined contributed approximately 17 percentage points toward volume growth, with over 12 percentage points coming from our growth products. Last week, we announced that the FDA approved Omvoh for the treatment of moderately to severely active ulcerative colitis in adults. This marks Lilly's first approval in the U.S. for a type of inflammatory bowel disease. And it's important for Lilly's growth in its immunology portfolio. In addition to the FDA approval for Omvoh, we had several other important pipeline updates since our last earnings call. Specifically, Jardiance was approved by the FDA for the treatment of adults with chronic kidney disease, at risk of progression. And we reported positive Phase 3 results from the VIVID-1 trial which evaluated the safety and efficacy of mirikizumab for the treatment of adults with moderately to severely active Crohn's disease. In Q3, we announced that the FDA issued a Complete Response Letter for lebrikizumab based on inspection findings at a third party manufacturer. The letter stated no concerns with the clinical data package, the safety or the label. We will continue to work with the third party manufacturer and the FDA to address the findings to make lebrikizumab available to patients as quickly as possible. In terms of business development, we once again had a very active quarter. In Q3, we completed the divestiture of the olanzapine portfolio, which will further enable us to focus on our current and new product launches. The financial impact of this transaction is reflected in the Q3 results. Additionally, within the quarter, we completed the acquisition of two clinical stage companies, adding to our Phase 2 portfolio, DICE Therapeutics and Versanis Bio as well as the acquisition of Emergence Therapeutics and Sigilon Therapeutics. We also announced that we reached an agreement to acquire POINT Biopharma, which, if approved, has the potential to expand our oncology capabilities into next generation radioligand therapies. And lastly, we distributed over $1 billion in dividends this quarter. On slide 5, you'll see a list of key events since our Q2 call, including several important regulatory clinical and other updates we're sharing today. Now let me turn the call over to Anat to review our Q3 results.

Thanks Dave. Slide 6 summarizes financial performance in the third quarter of 2023. I'll focus my comments on non-GAAP performance. We're pleased with the strong financial performance this quarter, highlighted by continued acceleration of revenue growth, representing robust momentum in our core business. Q3 revenue increased 37% versus Q3 2022. Excluding revenue from the olanzapine portfolio and from the COVID-19 antibodies, revenue increased 24% in Q3. This represents a quarter-over-quarter acceleration of revenue growth, driven by Mounjaro and the continued strong performance of Verzenio and Jardiance. Gross margin as a percent of revenue increased to 81.7%. Gross margin in the quarter benefited from the divestiture of the olanzapine portfolio, the absence of COVID-19 antibody sales in Q3 2023, and higher realized prices partially offset by increases in manufacturing expenses. Marketing, selling and administrative expenses increased 12%, primarily driven by higher expenses associated with new product launches and additional indications, as well as compensation and benefit costs. R&D expenses increased 34%, primarily driven by higher development expenses for late-stage assets and additional investments in early-stage research. This quarter, we recognized acquired IP R&D charges of $2.98 billion, which negatively impacted EPS by $3.29. In Q3, 2022, acquired IP R&D charges totaled $62 million, or $0.06 of EPS. Operating income decreased 71% in Q3, driven by acquired IP R&D charges, partially offset by higher revenue associated with the divestiture of the olanzapine portfolio. Operating income as a percent of revenue was approximately 6% for the quarter, and reflected a negative impact of approximately 31 percentage points attributable to acquired IP R&D charges. Our Q3 effective tax rate was 84.6%. This represents an increase of approximately 74 percentage points compared to the same period in 2022. The increase in the effective tax rate was primarily driven by the non-deductible acquired IP R&D charges incurred this quarter. Other than the impact of acquired IP R&D, the underlying tax rate was consistent with previously providing guidance. At the bottom line, we delivered earnings per share of $0.10 in Q3, a 95% decrease versus Q3 2022, inclusive of an increase of $1.22 of EPS associated with the divestiture of the olanzapine portfolio and a negative impact of $3.29 from the acquired IP R&D charges...

Thanks Anat. This quarter, we had significant pipeline progress as well as a high volume of activity at the major medical congresses, where we presented new data on multiple products across all of our therapeutic areas. Starting with oncology, since our last earnings call, we announced top-line results from the LIBRETTO-531 study evaluating Retevmo versus physicians' choice of multi-kinase inhibitors as an initial treatment for patients with advanced or metastatic RET mutant medullary thyroid cancer. As we presented at ESMO, the study met its primary endpoint demonstrating a 72% improvement in progression-free survival compared to Cabozantinib or Vandetanib. These data should establish Retevmo as the standard of care for the initial systemic treatment of patients with progressive advanced RET mutant medullary thyroid cancer, and we have work to do to ensure that all of these patients are identified and properly diagnosed. We also shared detailed data from the Phase 3 LIBRETTO-431 study at ESMO in October, showing that Retevmo more than doubled progression-free survival compared to chemotherapy plus Pembrolizumab in patients with advanced or metastatic RET fusion-positive non-small cell lung cancer. We hope these data in addition to others recently published for other driver-positive lung cancers will help accelerate genomic profiling at lung cancer diagnosis to guide initial treatment selection. The results of LIBRETTO-531 and of LIBRETTO-431 were each simultaneously published in the New England Journal of Medicine. Also at ESMO we shared landmark five-year results from a pre-planned interim analysis of the Phase 3 monarchE study, evaluating Verzenio in combination with endocrine therapy compared to endocrine therapy alone, in patients with HR positive HER2 negative no positive early breast cancer at high risk of recurrence. The impact of two years of Verzenio treatment is observed well beyond the treatment period, reducing the risk of long-term recurrence by 32% at five years. These data reinforced two years of Verzenio plus endocrine therapy as the standard of care for high-risk early breast cancer patients. Lastly, we shared data on imlunestrant, our oral SERD being studied in Phase 3 as a single agent and in combination therapy. The data shared included the first clinical data for imlunestrant in combination with everolimus or alpelisib as well as updated monotherapy from the Phase 1 EMBER study in patients with ER positive HER2 negative advanced breast cancer. We hope that imlunestrant could be an important future endocrine therapy backbone in certain settings of breast cancer. And these new data show that the medicine can be safely combined with other agents utilized with endocrine therapy in advanced breast cancer.

Thank you, Dan. Before we get to Q&A, let me briefly sum up our progress in the third quarter. This quarter revenue growth accelerated as our recently launched product portfolio continued to gain momentum, of course led by Mounjaro. Excluding revenue from the divestiture of the olanzapine portfolio and the sale of COVID-19 antibodies in 2022, revenue grew 24%, driven again by Mounjaro, Verzenio as well as Jardiance. By continuing to invest in recent and upcoming launches, late-stage medicines and early-phase capabilities as well as in business development, we are confident that we have positioned ourselves for growth now and in the coming years, with the opportunity for continued margin expansion...

Thanks, Dave. We'd like to take questions from as many callers as possible and conclude the call in a timely manner. So consistent with last quarter we will respond to one question per caller. So ask that you limit to one question per caller. As we'll aim to end the call at 10 am. If you have more than one question you can reenter the queue, and we'll get to your question if time allows. So Paul, please provide the instructions for the Q&A session and we're ready for the first caller.

Thank you so much. I have a question on obesity and persistence on therapy, which I think has been a big question mark. I know you haven't formally launched yet, but guessing you might have some idea, a best guess if nothing else. So in your view, is this going to be like most other drug categories where persistence on therapy is often low? I think the rule of thumb is that at the one-year mark, 50% of patients drop off chronic medicines. So really, the question is, if you took 100 patients who start on one of these contemporary obesity drugs, how many of that initial 100 would likely still be on therapy, let's say three or four or five years down the road.

Yeah, thanks for the question. Maybe I'll first answer with the data that we do have, because it's hard to speculate on what it's going to be for obesity. The best data we have for tirzepatide is in Type 2 diabetes patients who started Mounjaro prior to our savings card changes last fall. Mounjaro consistency for those patients is tracking higher than those patients that were started on Trulicity and Ozempic, over that same period of time. So while it's too early to project the average length of therapy or how many out of 100 will still be on therapy after a couple of years, I think that this early data is encouraging. As for obesity, time will tell. I think we've all looked at Wegovy data, but I don't think this is the right benchmark at this point because of novel supply constraints. And there's been just a very dynamic market. I think, as you said, having persistence on a chronic treatment isn't just an issue for anti-obesity medications. It's a goal for all chronic treatments. I think what's different about obesity is that, on many chronic treatments, consumers don't feel differently or experience any acute impacts from stopping treatments. So what we've seen in these SURMOUNT clinical trials, with tirzepatide is that some consumers will feel their appetite increase and experience weight regain when they stop tirzepatide. And so this should help reinforce treatment adherence, seeing in our market research how important it is for people who live with obesity to lose weight and maintain it. I do think you're going to see just a high motivation as people have lost weight that they do want to maintain it. And we do know for our SURMOUNT program that chronic use of tirzepatide is a good component, an important component of maintaining weight loss. So it's too early to project it. But I do think there's factors rolling in favor of tirzepatide having a good length of therapy in the obesity patient.

Great. Thanks so much for the question. So I really wanted to drill into orforglipron, and those Phase 3 programs. Dan, I was just hoping that you could clarify for the market if there's any monitoring in that study related to liver enzyme elevations. I think there was one case in the Phase 2 diabetes study that you conducted. Just wanted to know if there's any related concerns associated with that, or if this is kind of as expected, an all-hands-on-deck moving forward opportunity. Thanks.

Thanks, Seamus. Yeah, I like the way you phrase it: all hands on deck moving forward on orforglipron. We're really excited about this molecule. In terms of liver safety, I think we commented before that what we saw in Phase 2 is what we thought would be probably typical for a trial of that nature in this population. So not a heightened level of concern, but always concerned about safety going into Phase 3 from a variety of factors, including for all small molecules, especially liver function. So it's routine in our Phase 3 studies across the portfolio to monitor liver function. And sure, we're doing that in orforglipron, but not aware of any special precautions there. So super excited that that program is going fast.

Great, thanks so much for taking the questions. Anat, you had mentioned shifting the date of your 2024 guidance call early next year. Just want to know what drove that change? And if you can assure us that there are no issues with tirzepatide OBC review and/or manufacturing? Thank you.

Sure. So let me first start with reassuring you that there are no issues behind our decision to move the guidance date. What it does do is it helps us have the year-end full results when we provide guidance for 2024. So previously, if we didn't have that, investors had to look at guidance range for the year and estimates based on midpoint, etc. This does enable us to close the year and then have a full view into 2024. It is aligned with our internal planning processes as well. And obviously is the way most companies and I believe all companies in our industry do that.

Thank you for taking my question. I'm interested in the P documents and the seven biomarker data you presented at CTAD. It appears that the predictability of these tests has reached 94%, and C2N also showed promising results. Can you share your thoughts on how close we are to implementation? Once donanemab is approved, do you believe this will be the test that doctors adopt, or will it require more time before that happens?

Yes. So we shared at CTAD, we were pleased with the data that we saw. And we're also pleased to see progress across the field in blood biomarkers. We definitely believe that this is incredibly important to drive access and early diagnosis in Alzheimer's disease. So you've seen us invest in a number of fronts, our own p-tau 217, but also partnering with others who are working on good tests to elevate the area. So it's a strategy of raising all boats. But yes, we did share our data. And we intend to make this available in a phased approach commercially as an LDT starting at the end of this year, in a couple of sites, and then continuing to expand over 2024. But at the same time, you'll see us continue to publish the data. We think that what's incredibly important in the field, is that good correlative data, particularly with amyloid PET, which is the gold standard in diagnosis is published and shared so that we can continue to make sure that we have high-quality tests out there. So that's part of our goal with delivering this test: to really set a standard for what blood tests should look like.

Hi, thanks for taking my question. So I want to ask you, do you think the approval of additional oral potential diabetes drugs could impact the pricing for injectables? Why or why not? Thank you.

No, I don't think that'll have an impact. I mean, traditionally, we don't see a new class of diabetes agents coming in and affecting a current class. Usually the competition happens within a specific class within a diabetes market.

Good morning, everyone. Thanks for the question. Just had one on tirzepatide supply. I know you guys have a plant in North Carolina and another one coming online next year. But if you look beyond that, if you have demand anywhere near what's modeled, and even outside of obesity and diabetes, obviously, supply could remain tight. So the question is, is there a threshold of treated patients like in the near term that will inform your decision on adding manufacturing capacity? And how much does the outlook for orforglipron have on that? Thank you.

Yeah, thanks, Geoff. Obviously a hot topic. We work on this multiple hours every day. You're citing the announcements we've made and as mentioned great progress is showing manufacturing agenda RTP sort of on track to deliver on its goal. But as we exit the year, and then that kind of in market volume following that Concord, which is a few hours away, and kind of a replica site also, well on track for coming online in '24. So that's good news in the ERMA presentation, which is what we call our auto-injector, from Trulicity, and the current presentation from Mounjaro in the U.S. We've announced previously that we're introducing now single use vial presentation ex-U.S., so that we aren't basically sitting on approvals and connecting patients have access to the medication. That will follow them by a multi-use injector that uses different property, plant, and equipment than what we're talking about here. So a couple of things to point out. You're noting kind of new greenfield site expansions. We've rightfully made a big deal out of. We're not done with those. I think you might hear more about that in the future. Of course, we are aggressively planning that and not banking on or forced upon to rescue us from this. We think that there is a need to take up parenteral incretin supply pretty dramatically from the current levels. And we plan to do that. But that will be in a combination of the current syringe-based auto-injector, the vial capacity we've already talked about. The multi-use injector, which will come online sometime next year, and is a highly efficient play for us because it uses current systems and different ones from the auto-injector. And then there's third-party agreements that have been ongoing in the background. And to point out here, we are not relying on one. We have a diverse portfolio of third parties, recognizing that the probability of full supply from any one is probably less than one. But buying up as much capacity as available in all those systems. So we've got a, I think the all hands on deck phrase was used earlier. I mean, this is really all hands on deck. And it's a problem we work every day. So we're not at all happy with the capacity. We've announced already, you'll see more. Some we don't announce that we'll just layer in to the volume we ship. And of course, long term new presentations like solid oral opens up even more possibilities, but we need to do everything we can now given the huge potential for global obesity treatment for our medicines to play a key role in that, and then ultimately impact hundreds of millions of people. So a lot of work to do here yet ahead. Thanks for the question.

Hi, thanks for taking my question. So I think it's clear from your results that the next steps in Mounjaro are rapidly in progress. But how should we think about the ex-U.S. Trulicity contribution going forward, which did look weak this quarter? But at the moment you're still supply restricted? Can we expect a return to growth into next year as constraints ease, or should we now assume Trulicity is ex-growth as you push the shift into Mounjaro? Thank you.

Sure, first, thanks for the question. From a Trulicity standpoint, we had healthy growth coming into the later part of last year. And we've been pretty transparent with both physicians as well as regulators that due to the tight supply, we are encouraged not to start new patients. We continue with that, to be transparent. We think it's the right thing to do. And as we think about the growth in incretin, we're looking as we build up capacity, as David mentioned. As we increase capacity both in the single-use vial and introduce Mounjaro in additional markets as we have in Australia and we will continue over the next number of weeks and months in other markets and then transition towards a multi-use platform in quick time in introducing Mounjaro. And so the overall growth in incretin will be mainly driven by as we are able to launch Mounjaro in new markets, that's probably will go get the growth. Thank you for the question.

Hi, guys. Thanks for taking my question. I realize Mounjaro has not been approved in obesity yet. But I'm just very curious how you're thinking about the pros and cons heading into that pricing decision, if there is any, because Novo does have that price premium, as you know, on Wegovy or Ozempic. So on the one hand, while Mounjaro's price could be the same because the dose is the same, but on the other hand, Novo has this dynamic where it can offer a lot more rebate for the obesity indication than you can if you leave the price unchanged. I'm just curious what your thought process is heading into that.

Yeah, thanks for the question. Obviously, we're not going to talk about price prior to approval. We're evaluating every scenario. We will make the right decision for patients who live with obesity. Thanks.

Yes, thanks very much, and thanks for all the updates today. So some major payers seem to underappreciate the broad health savings potential that incretins offer the non-diabetic obese population, and instead focus on criticizing drug pricing. So ahead of the results from Mounjaro's morbidity and mortality outcomes trial in 2027, how does Lilly plan to better inform payers about Mounjaro's health economics benefits in non-diabetic obese patients? Thanks very much.

It's a great question, David. We've dedicated extensive time and conducted significant internal analysis and planning on this matter. We will provide a comprehensive suite of real-world evidence and pragmatic trials to clearly address this question for payers and other stakeholders. In our discussions with payers, while they are initially concerned about the short-term budget implications, they recognize the long-term benefits of weight loss. It’s not difficult to convey this, as they understand the intuitive health advantages. There are over 200 obesity-related complications, with some being particularly devastating and expensive, such as type 2 diabetes, coronary heart disease, hypertension, and dyslipidemia. The financial impact is substantial, with $370 billion in direct medical costs associated with obesity-related conditions in the U.S. and more than a trillion in indirect costs annually. When payers realize that individuals living with obesity incur healthcare costs that are 2.7 times higher than those of individuals with a normal weight, that data captures their attention. We will continue to supply health economics data over time, and importantly, the perspectives of those living with obesity will play a significant role. This condition profoundly affects a person's health and mental well-being. For those living with obesity, their priority is to lose weight and sustain that loss for long-term health advantages. Their voices will be influential in both commercial insurance and government programs. I am confident that, over time, we will see improved access to treatments. Recent reports indicate that about 50 million people in the U.S. currently have access to obesity medications. It may take some time, but I believe that more payers are starting to understand the value that anti-obesity medications will provide, particularly with the anticipated approval of tirzepatide. Thank you.

Hi, thank you so much for giving me the question and congrats on the progress. So given the executive changes announced in October, how should we think about the direction of the immunology business now with Dan at the helm? Thank you guys.

Sure, I can start and let Dan comment. Look, we've been really pleased with this business, which I think is important to take the long view here. I mean, I was involved in creating this like 10 years ago, and both mirikizumab and now lebrikizumab will form a really core portfolio for us, really exploiting ideas that we had some time ago. What's next, and you see here today, advancing another checkpoint agonist into Phase 2 is a lot of decisions about, okay, what's next to take immunology to the next level. And that's largely going to be about key decisions, both internal portfolio and potentially externally, like with our DICE acquisition, to find a new set of either single agents or combinations that can raise the standard of care in tough immunology diseases, noting that in particular in IBD and RA, the standard of care is hardly satisfied today. We measure real pretty low performance status of success. So that's the mission that Dan and we've hired Mark Genovese to the company and others to really build a portfolio for the future. So I don't Dan, if you want to add.

No, excited about the opportunity. There's lots of work to do in immunology, given the depth of unmet medical needs and the science is great here. So I hope we can continue to bring great drugs to market as we're doing with mirikizumab. And we hope to do with lebrikizumab soon and more to come.

Great. Thanks so much. Just as we're thinking about the upcoming tirzepatide obesity approval, just interested in your perspective of how we should anticipate commercial coverage ramping, as we think of maybe the first couple of quarters post launch versus where it could be in a year or two from now, a business how quickly can we think about coverage coming on board? Thank you.

Yeah, no, it's a good question. It will ramp up. We're trying to be disciplined. And we're trying to make sure that we bring on access as quickly as is prudent. And so just like we did with Mounjaro, we will take and make sure that we sometimes access has to materialize at an organic pace where it makes sense. And we'll make sure and use our judgment. So just like with Mounjaro, while we'd love to get out of the gate quickly, most importantly, as a setup for long-term success. So you'll see a kind of a natural ramp-up that you would with any new product.

Oh, thank you very much. A question on why Lilly is evaluating higher doses of tirzepatide. There is risk and adverse events are uncovered and taints the franchise, and of course there are IRA considerations. Does this suggest some reservation about the pipeline either Triple G or orforglipron, the former, which has safety signals, the latter of which took five years to get to Phase 3? It would also be interesting to know whether it's the exact same molecule or it's been enhanced in some way. Thank you.

So there's no hesitation or trepidation there at all. I think though notwithstanding those two molecules, which I expect to be great and important contributors to human health, we have tirzepatide. I'm not exactly sure if we've maximized the dose response, if we hit the flat part of the dose response curve yet. It looks like we might be close. But we want to explore it. And so we're testing the higher doses in Phase 2. I think we've had enough patients on this drug for long enough that I expect the risk of uncovering a new safety signal with sort of marginally higher doses is extremely low. So I'm not worried about that at all.

Let me address the questions being raised. We have several research projects focused on obesity and related mechanisms. Some people inquire about how one aspect impacts another, but that’s not our approach. We view ourselves as leaders in this field and recognize a unique opportunity. Our aim is to explore every single idea until we obtain data that suggests otherwise. High-dose tirzepatide is simply another option within that framework, and it doesn't necessarily connect to other factors. We are pursuing a comprehensive strategy regarding obesity. Thank you.

Thank you. Good morning. In about a week or so, we'll get detailed results from the SELECT cardiovascular outcomes trial, the American Heart meeting. Can you share with us what perhaps three key questions that the Lilly team will be looking at when we get detailed results?

I don't know. I can start maybe. Maybe Mike has some to add here. Look, I'm excited to see that data, of course, as everyone else is. But the top line looks good. For me, I think we're sort of creating now data points on a line that connect the level of weight loss with the degree of cardiovascular benefit. I think this point fits on that line reasonably well. That line which was greater health benefits, including better, fewer MACE outcomes with greater degrees of weight loss bodes very well for Mounjaro data, given the very high degrees of weight loss that we saw in our trials. I'll leave it at that. See if Mike wants to add.

Probably the key question I'm looking at is how much of the effect was driven by drug effect versus weight loss is probably the key question we're looking at.

Great. Good morning. Congrats on the progress. Maybe following on the prior question, but maybe more on sort of the impact of the flow data, and your thoughts there. Specifically, you guys have taken sort of a different approach with your more recent assets in terms of targeting that population. Is Lilly's view that those benefits will accrue to the class and maybe just talk about how you think about targeting that segment down the road? Thank you.

Yes, so you're asking about kidney disease. I mean, I think the profound effect that incretin seems to be having on the kidneys is really a nice and important additive benefit here. This is something that's been observed with multiple class members now, and I expect it will extend into our incretins as well. So it's exciting and I think proof that these drugs perhaps in addition to weight loss and A1C control, could have other direct metabolic benefits including the kidneys.

Morning, all. Thanks for squeezing me in. Just one on Mounjaro U.S. pricing. So by our calculations, we think that Q3 '23 the net price is around $440 per TRX. For the rest of the year, do you think that net price can continue to go up and above the saving card price of $450? Although payers are willing to pay for this, or is this broadly capped now until that saving card ends? And for next year, can you just give us your thoughts on if net price can meaningfully keep increasing? Thanks.

Yeah, no, I'd be happy to do that. I think maybe at a macro level, I would say that our gross to net for Mounjaro in Q3 kind of normalized. Before then we had a number of saving card changes that made our gross to net rate dynamic. Our last and copay card change occurred late in Q2, so at the end of June. And so Q3 was a kind of a pure quarter, where we didn't have any other copay card changes. And I would say that our Mounjaro rate normalized at that point. Going forward, I think what you'll see is what you see normally for a product at this point in the lifecycle, that as we pursue gaining access, there'll probably be some pricing pressure related to that. But we don't have any other coping card changes planned in the near future.

Good morning. Thanks for taking our question. This is Nicole on for Robyn. Going back to obesity, how are you thinking through the impact on Mounjaro if the IRA stays and Wegovy and Ozempic prices decline in the 2026-27 time frame?

Yeah, and I'll be happy to do that. Obviously, it's too early to really impact how IRA will have an impact and the impact will have on another product within the class. I think what you know, what's important for tirzepatide is it is the first dual-acting incretin. And we do think it has a unique profile. And in head-to-head results in type 2 diabetes, it did show superior, both A1C and weight to semaglutide. And so at the end of the day, I think the profile of the product will carry the day. And obviously, more to come on the IRA. As the first products go through the negotiation, we see the impact, but we're confident in the profile of tirzepatide.

Oh, great. Thanks for the follow-up question. So just in terms of how you're thinking about the introduction of oral treatments, and the importance of pushing for what would be hopefully a maintenance-type regimen. Is Lilly looking at oral therapies as more of a maintenance regimen opportunity, or do you see a broader opportunity here, perhaps bringing in other mechanisms that could aid in pursuing, I guess, the ever-elusive metabolic set point? Thanks.

Yeah, thanks, Seamus. Maybe to paraphrase Dave's previous answers, it's sort of in all of the above here. I think there's great opportunities on the oral as a standalone therapy for initiation of therapy. Also, yes, for maintenance therapy globally. And also, yes, for potential combinations. You know, I point out the obvious fact that this is a GLP-1 monotherapy. So we benchmark it against the best injectable GLP-1 monotherapy. But I don't expect as an oral it will achieve the same levels of efficacy we can see with dual agonism like tirzepatide. So the future certainly will hold combinations like that. Thank you.

Thank you. What's the latest thinking on the topic of GLP-1 agonism versus antagonism? Tirzepatide is the former; Amgen drug is the latter. I've never seen two drugs in any category that have a similar clinical effect but opposing underlying activity at the biologic target. Amgen says that antagonism is the way to go supported by their genetic analyses. What is Lilly saying? Have you looked similarly at genetic analyses to inform your view?

Yeah, I'll take that. I, of course, say we have now, I think more data on GLP-1 agonism than anyone in the world and starting with tirzepatide, of course, which is a combo GLP-1 GIP agonist. And in the head-to-head study against a pure GLP-1 agonist, you can see some profoundly different effects here looking at, for example, efficacy relative to tolerability. It looks like the GIP is boosting efficacy while also reducing the side effects that limit tolerability. So that was our initial evidence in human trials that involved, well now, tens of thousands of patients have been on tirzepatide in trials. And then we went out to sort of prove this point by creating a pure GIP-1 agonist that just agonizes GIP to see what that could do alone. And again, we saw a very highly tolerated drug consistent with what we understand about the mechanism of GIP that probably could suppress actually nausea, vomiting that lead to weight loss. So, I think human data trumps everything here, and we've got a ton of that. So we're pretty excited about GLP-1 agonism. I can't really say what will happen with antagonism, but like you said, it's pretty unusual to have opposing mechanisms both work in similar ways.

Thanks, Dan. And thanks for the last one, Dave. We appreciate everyone's participation in today's earnings call and of course your ongoing interest in Eli Lilly and Company. As I said, it's been a very productive year for Lilly so far, and we look forward to continuing this momentum through a busy end of year in the fourth quarter. So thanks for dialing in today. Please follow up with the IR team if you have questions we did not address on the call. And hope everyone has a great rest of the week and rest of the day today. Take care.

Thank you. And ladies and gentlemen, this does conclude our conference for today. This conference will be made available for replay beginning at 1 pm today running through December 7 at midnight. You may access the replay system at any time by dialing 800-332-6854, and entering the access code 544467. International dialers can call 973-528-0005. Again, those numbers are 800-332-6854 and 973-528-0005 with the access code 544467. Thank you for your participation. You may now disconnect your lines.