Ladies and gentlemen, thank you for standing by, and welcome to the Lilly Q4 2023 Earnings Call. At this time all participants are in a listen-only mode. Later, we will be conducting a question-and-answer session and instructions will be given at that time. 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 and thank you, Paul. Thanks for joining us for Eli Lilly and Company's Q4 2023 earnings and 2024 guidance 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 Officer and President of Lilly Immunology, Anne White, President of Lilly Neuroscience; Ilya Yuffa, President of Lilly International; Jake Van Naarden, President of Loxo at Lilly; Patrik Jonsson, President of Lilly Diabetes and obesity 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.

All right, thanks, Joe. 2023 was a year of advancement across our company. We grew our top-line. We progressed our pipeline. It advanced our external innovation agenda through partnerships and collaborations. We continue to invest in quality, the reliability and the resilience of our company's manufacturing infrastructure, and most importantly, delivered new life-saving and life-changing medicines to more patients. In 2023, revenue grew 20% for the full year and 28% for the most recent quarter, as our newly launched portfolio continued to gain momentum. This past year, we announced positive Phase IIIs for Donanemab, Tirzepatide, Mirikizumab and Pertibrutinib. We also announced a positive Phase II result for Orforglipron as well as Retatrutide and moved these two important molecules into Phase III. In terms of external innovation, in 2023, we continued to complement our pipeline through acquisitions and collaborations. These transactions included the acquisition of DICE Therapeutics, POINT Biopharma, Versanis Bio, Emergence Therapeutics, Mablink Biosciences, Immunotrac as well as Sigilon Therapeutics. We have several significant investments in manufacturing, including plans to expand capacity at the company's Research Triangle Park facility and the two manufacturing sites within the LEAP Innovation Park in Boone County, Indiana. Most recently, we announced plans to construct a new high-tech manufacturing site in Germany. This facility will further expand the company's global injectable product and device manufacturing network, including for our diabetes and obesity portfolio. Most importantly, this past year, we brought innovative new medicines to patients. In 2023, we received regulatory approvals for Zepbound, Jaypirca, Omvoh, in the EU and an expanded label for Verzenio and two new indications for Jardiance. This progress will serve as a foundation to drive top-tier revenue growth and margin expansion over time. As you can see on Slide 4, we continue to make progress against our strategic deliverables in Q4. Revenue grew 28% with our new products growing by over $2 billion. Since our last earnings call, we achieved several key pipeline milestones in addition to the Zepbound and Jaypirca CLL approvals; today, we announced top line results for the Tirzepatide Phase II SYNERGY-NASH trial as well as the Verzenio Phase III CYCLONE 2 trial. Dan will talk more about this update in his update. In terms of business development, in Q4, we completed the acquisitions of Mablink Bioscience and POINT Biopharma, the latter of which expands our capacity and capability into Radioligand therapies. Lastly, we announced a 15% dividend increase for the sixth consecutive year and distributed over $1 billion in dividends in the fourth quarter. On Slide 5, you'll see a list of key events since our Q3 earnings call, including several important regulatory, clinical, and other updates. Now I'll turn the call over to Anat to review our Q4 results.

Thanks, Dave. Slide six summarizes financial performance in the fourth quarter of 2023, and I'll focus my comments on non-GAAP performance. We are pleased with the strong financial performance in the fourth quarter and for the full year. Our performance was highlighted by continued acceleration of revenue growth, driven by our new products and growth products. Q4 revenue increased 28% compared to Q4 2022. Excluding divestiture, this represents a quarter-over-quarter acceleration in revenue growth driven by Mounjaro, Verzenio, Jardiance, and the recent launch of Zepbound. For the full year, revenue increased 20% driven by robust volume growth of 16%. Gross margin as a percent of revenue increased to 82.3%. Gross margin in the quarter benefited from higher realized prices, partially offset by higher manufacturing expenses. Marketing, selling and administrative expenses increased 17%, primarily driven by higher expenses associated with launches of new products and additional indications as well as higher incentive compensation costs. R&D expenses increased 28%, primarily driven by higher development expenses for late-stage assets and additional investments in early-stage research as well as higher incentive compensation costs. In Q4, we recognized acquired IPR&D charges of $623 million, which negatively impacted EPS by $0.62. In Q4 2022, acquired IPR&D charges totaled $240 million or $0.23 negative impact to EPS. Operating income increased 29% in Q4, driven by higher revenue from new launches, partially offset by operating expense growth. Operating income as a percent of revenue was approximately 28% for the quarter and included a negative impact of approximately seven percentage points attributable to acquired IPR&D charges. Our Q4 effective tax rate was 13.1% compared to 7.3% in Q4 2022. The higher effective tax rate for Q4 2023 was primarily driven by a lower net discrete tax benefit compared to the same period in 2022 and the new Puerto Rico tax regime. At the bottom line, we delivered earnings per share of $2.49 in Q4, a 19% increase compared to Q4 2022, inclusive of the negative impact of $0.62 from acquired IPR&D charges compared to $0.23 in Q4 2022. On Slide 8, we quantify the effect of price, rate, and volume on revenue growth. U.S. revenue increased 39% in Q4, driven by robust growth of Mounjaro, Verzenio, and Zepbound. Net price in the U.S. increased 27% for the quarter, driven by Mounjaro access and savings cards dynamic as well as the one-time favorable change in estimates for rebates and discounts. Excluding Mounjaro, the net price in the U.S. decreased by high single digits. Europe continued its trend of strong growth in Q4. Excluding $65 million in revenue associated with milestones received for the EU approval and launch of Revenue was up 11% in constant currency, driven primarily by volume growth of Verzenio, Jardiance, and Taltz. For Japan, we are pleased to see robust growth in Q4 as revenue increased 15% in constant currency, driven primarily by volume growth of Verzenio and Mounjaro. Moving to China, Q4 revenue increased 7% in constant currency with volume growth of 10% partially offset by price declines. Volume growth in Q4 was primarily driven by Pivot. We are pleased to see China return to growth in 2023. Revenue in the rest of the world decreased 10% in constant currency. However, when you exclude the impact of the Q4 2022 sales of rights for Alimta Korea and Taiwan, sales grew 9% in constant currency, driven primarily by volume growth of Mounjaro and Verzenio. Slide nine shows the contribution to worldwide volume growth by product category. As you can see, the new products and growth product categories combined contributed approximately 15 percentage points of volume growth for the quarter. Slide 10 provides additional perspective across our product categories. First, I would like to highlight Verzenio, which saw worldwide sales growth of 42% in Q4 driven by robust demand growth and, to a lesser extent, higher realized prices. The continued positive momentum is driven by the early breast cancer indication with steady performance in the metastatic indication. Jardiance continued its strong 2023 performance with worldwide revenue growth of 30% for the quarter. In the U.S., Jardiance revenue increased 29%, driven by increased demand. In Q4, worldwide Trulicity revenue declined 14%. U.S. revenue decreased 18%, driven by lower volume and lower realized prices. We experienced intermittent delays for filling orders of Trulicity. Starting in early December and going through January, all dose strengths of Trulicity were indicated as having limited availability on the FDA drug shortage site. We expect to experience intermittent delays of certain doses in the coming months. In international markets, Trulicity volume continued to be affected by measures we have taken to minimize potential disruption to existing patients, including communications to health care professionals not to start new patients on Trulicity. Moving to Slide 11, Mounjaro continued its robust growth as more Type 2 diabetes patients benefited from the medicine. Q4 revenue grew to over $2.2 billion globally, up from $1.4 billion in Q3 2023. In the U.S., Mounjaro revenue of $2.1 billion in Q4, up from $1.3 billion in Q3 2023, benefited from a one-time change in SMS for rebates and discounts. Adjusted for this one-time change, sequential net sales in the U.S. would have grown approximately 30% in Q4. Since our last call, we further expanded patient access to Mounjaro. As of February 1, access for patients with Type 2 diabetes in the U.S. was 90% in aggregate across commercial and Part D, including 92% access for commercial patients. This expanded access puts Mounjaro near parity with established injectable Incretins and gives more patients the opportunity to start therapy on Mounjaro for Type 2 diabetes. Since the $25 noncovered co-pay part program expired on June 30, we now consider all prescriptions paid. Compared to Q4 2022, the Mounjaro net price in Q4 2023 benefited from this change to the co-pay part program in the U.S. Recall that after a change to the noncovered co-pay program in late 2022, patients already started on the $25 co-pay card could remain in the program until June 30. Today, commercially insured patients without coverage utilize the current noncovered co-pay program and pay roughly half the list price for the Mounjaro prescription. Turning to Slide 12. In November, we received FDA approval for Zepbound for adults with obesity or those who are overweight and have weight-related comorbidities. We then announced on December 5 that Zepbound was available at U.S. pharmacies, and we started building commercial formulary access before the end of the year. We are pleased with the early access of approximately one-third of commercial lives covered as of February 1. Access in this market will be more gradual as individual employers need to opt in to coverage after the typical formulary contracting takes place. We are focused on building formulary access and employer opt-ins, but we expect that it will take some time before we reach broad open access in this market. Meanwhile, the commercial savings for our program is available at U.S. pharmacies for those who do not yet have coverage. In Medicare Part D, weight loss drugs are still prohibited from reimbursement. In Q4, we recognized $176 million in sales for Zepbound, with approximately 3/4 of that coming from initial channel stocking. The initial prescription trends we have seen are encouraging. On Slide 13, we provide an update on capital allocation. Looking forward to 2024 and beyond, we have confidence in our existing commercial portfolio, bolstered by the recent launches of Mounjaro, Jaypirca, Omvoh, and Zepbound and the potential launches of Donanemab and Lebrikizumab, all of which we expect to serve as drivers for contained growth through the balance of the decade. On Slide 14, you'll see a summary of our outlook; outlining our capital deployment decisions in relation to the achievement of our strategic deliverables. We will invest in our current portfolio and in the future innovation through R&D, business development and a comprehensive manufacturing expansion agenda designed to drive revenue growth and speed life-changing medicines to patients. We will continue to return capital to our shareholders through dividend increases in line with earnings growth over time and share repurchases with excess capital. Moving to Slide 15, we highlight some of the dynamics that may impact our 2024 financial results. We expect continued robust revenue growth with revenue from our core business, which excludes revenue from divestitures, growing nearly 30% at the midpoint of our guidance range, driven by positive momentum from our launch products. In Incretins, anticipated growth will be led by Mounjaro and Zepbound. In 2023, we made tremendous strides in expanding access from Mounjaro, and we entered 2024 with 90% of commercial and Part D lives covered. Zepbound coverage is off to a good start in its early December launch, and we expect both Tirzepatide to contribute substantially to Lilly's revenue growth in 2024. While we expect Mounjaro and Zepbound to be drivers of revenue growth, this will be partially offset by an expected continuation of the softer Trulicity sales trends that we saw in the second half of 2023. Recent revenue declines for Trulicity in the U.S. have been driven by supply tightness. Volume has also been impacted by our actions outside the U.S. As for the supply outlook for Emberton, our manufacturing organization continues to execute well on the most ambitious expansion agenda in our company's long history. Given strong demand and time required to bring capacity fully online, we continue to expect demand to outpace supply in 2024. In late 2022, we showed our expectation that by year-end 2023, our capacity for Incretin auto-injector pens would double. This goal was achieved through significant efforts from our manufacturing colleagues and partners around the globe. In 2024, our capacity execution efforts will continue with equal urgency and will be accomplished not just through increased auto-injector capacity but also through alternative presentations like our multi-use Quick Pen, which received regulatory approval in the U.K. in late January. We expect our manufacturing site in Concord, North Carolina, will initiate production as early as the end of 2024, with product available to ship in 2025. And we are pursuing a host of projects, internal and external, large and small, to further expand capacity. Now I'll provide a bit more context on the timing and pace of our Incretin supply plans in 2024. While we're continuing to expand supply every quarter, we expect the most significant production increases to come in the second half of the year. We expect our production of sellable doses in the second half of 2024 will be at least one and a half times the production in the second half of 2023. Note that while last year, our commentary focused on the capacity of auto-injectors and devices compared to 2022, we're now referring to sellable doses produced, which is more relevant to patients and investors. Beyond Incretin, we look forward to progressing our launch project for two other medicines approved and launched in 2023, Jaypirca and Omvoh. Jaypirca was initially approved by the FDA in January 2023 for adult patients with relapsed or refractory lymphoma under the Accelerated Approval Program, received FDA approval also on the Accelerated Approval Program in December 2023 for adult patients with CLL or SLL that have received at least two prior lines of therapy. We look forward to the ongoing opportunity to help patients with this medicine as our best Phase III program continues. Omvoh was approved in October 2023 in the U.S. and earlier that year in Japan, Europe, and other markets and represents a compelling new option for patients struggling with moderate to severe ulcerative colitis. And in 2024, we look forward to potential U.S. launches of two more medicines, Donanemab and Lebrikizumab. We continue to expect FDA regulatory actions on Donanemab in Q4 2024 and remain confident in the substantial potential for Donanemab to benefit patients with Alzheimer's disease. With the current state of diagnostic and treatment readiness, initial uptake will be somewhat limited, and we expect Donanemab to contribute only modestly to growth in 2024 once approved. Lebrikizumab, which last year was approved and launched in Europe under the brand name by our partner, received regulatory approval in Japan in January. As for the U.S., we look forward to the potential proof of Lebrikizumab by the end of the year. We believe the efficacy, safety and dosing of Lebrikizumab can make it a compelling option for patients and prescribers in a large and growing market for the treatment of moderate to severe atopic dermatitis. Given the expected timing of FDA regulatory action, we expect Lebrikizumab to contribute only modestly to revenue growth in 2024. Beyond our recently launched portfolio of medicine, we expect continued growth from Verzenio driven by the early breast cancer indication where the magnitude and maturity of our clinical data reinforce it as a standard of care treatment in node-positive high-risk early breast cancer. Jardiance has been another outstanding contributor to growth, and we expect revenue growth to continue in 2024 though at a slower pace as strong growth may be dampened by pricing dynamics in the U.S. Outside the U.S., we expect an acceleration of growth in every major geography led not only by the anticipated launches of Tirzepatide but also continued strong growth of Verzenio, Jardiance, and Taltz. Lastly, we seek to create long-term value beyond this decade. We will continue to invest across our value chain, in our recent and upcoming potential launches, in our pipeline, and in our manufacturing footprint. Slide 16 summarizes our initial 2024 financial guidance. Starting at the top line, revenue is expected to be between $40.4 billion and $41.6 billion. Using the midpoint of the 2024 range, this represents roughly 20% growth or 29% growth for our core business, which excludes the impact of divestitures that took place in 2023. In terms of the phasing of our revenue growth throughout 2024, while we don't provide quarterly guidance, we expect revenue growth to accelerate in the second half of the year, consistent with the increased availability of Incretin doses. In terms of pricing for our core business, which excludes divestitures, we expect a high single-digit percent price decline in 2024. The lingering base period impact of the Mounjaro non-covered co-pay card dynamics will dampen these price declines in the first half of 2024, with more significant price declines expected in the second half of the year. During this year, we are taking a streamlined approach to our guidance line items related to expenses. Rather than provide three separate guidance line items for gross margin, research and development costs and marketing and sale and administrative costs, we are presenting a single new ratio representing our margin after planned costs, calculated by subtracting R&D costs and marketing and administrative costs from gross margin and dividing that figure by revenue. We express this ratio as a percentage, and for 2024, we expect it to be in the range of 31% to 33% on a non-GAAP basis. While we are not providing a specific guidance number for gross margin as a percent of sales, our expectations remain consistent, but we will maintain gross margin of approximately 80% on a non-GAAP basis as productivity gains and volumes are offset by pricing pressures and the cost of new manufacturing facilities. As for our expense growth across key categories, we expect marketing and administrative expenses to again grow in 2024 though at a slower pace than revenues, with growth driven by marketing investments in our recently launched and upcoming launch products. We also expect R&D expenses in 2024 to increase, driven by growing investments across all phases of our pipeline as we invest for the future, with the majority of dollar growth driven by ongoing and new late-phase opportunities. We expect R&D expense to increase at a higher rate than marketing, selling, and administrative expenses. Other income and expense is expected to be between $400 million and $500 million of expense, primarily driven by higher interest expense. Turning to taxes; we expect our 2024 non-GAAP effective tax rate to be approximately 14%. Note that this rate does not assume or repeal the provision of the 2017 Tax Act, requiring capitalization, amortization of research and development expenses for tax purposes. Should such a change take effect, our effective tax rate for 2024 would be moderately higher. Earnings per share is expected to be in the range of $12.20 to $12.70 on a non-GAAP basis. Consistent with our prior practice, we are not including any potential or pending acquired IPR&D and milestone charges in our 2024 guidance, and we will provide updates each quarter from the impact of IPR&D on earnings per share as acquired IPR&D and development milestone charges are incurred. For guidance modeling purposes, we're currently estimating diluted weighted average shares outstanding for 2024 to be approximately 903 million. We entered 2024 with strong momentum and a remarkable opportunity to help millions more patients with our medicines. For our investors, 2024 should be another exciting year, driven by expected revenue growth in our core business nearing 30% and continued investments to drive future growth. Our outlook for top-tier revenue growth and operating margin expansion remains on track. Now I'll turn the call over to Dan to highlight our continued progress in R&D.

Thanks, Anat. I'll start with our progress against diabetes, obesity, and complications thereof. Today, we announced positive results from SYNERGY-NASH, the Phase II study of Tirzepatide in adults with biopsy-proven metabolic dysfunction-associated Steatohepatitis, also known as MASH. As shown on Slide 17, the study met its primary endpoint with up to 74% of participants achieving an absence of MASH with no worsening of fibrosis at 52 weeks compared to less than 13% of participants reaching this endpoint on placebo. We are equally encouraged by results seen in the secondary endpoint, evaluating improvement in fibrosis. While the study was not designed to be statistically powered to evaluate improvement in fibrosis, the study results showed a clinically meaningful treatment effect across all doses on the proportion of participants achieving a decrease of at least one fibrosis stage with no worsening of MASH to placebo. The adverse events were consistent with those observed in other clinical trials studying Tirzepatide in people living with obesity or Type 2 Diabetes. The full SYNERGY-NASH results will be presented at a medical congress later this year. As you know, late last year, we received FDA approval on Zepbound, which marks Lilly's first approved treatment for obesity. This is a landmark occasion for patients and for the field as Zepbound is the first and only approved treatment activating two Incretin hormone receptors, GIP and GLP-1 to tackle the underlying cause of excess weight. Also, in early-stage development, we have now advanced our glucose-sensing insulin receptor agonist for the treatment of diabetes into Phase I and our long-acting Atrial natriuretic peptide for treatment of heart failure into Phase I. We've advanced mastatide into Phase II for obesity as we've begun to dose patients in that study. We are pleased that early this year, our partner, Innovent, reported positive results in the Phase III GORE-I study of mastatide in Chinese adults with obesity. In helps the development and commercialization rights for in China, and Lilly retains the rights to the rest of the world. Moving to oncology. Today, we shared that in the Phase III CYCLONE 2 trial, Verzenio added to abiraterone did not meet the primary endpoint of improved radiographic progression-free survival in men with metastatic castration-resistant prostate cancer. For the study, we employed an adaptive Phase II/III design. And while the Phase II stage met the prespecified threshold for the independent data monitoring committee to recommend initiation of Phase III, the signal was not confirmed in the Phase III portion in a larger sample size. The overall safety and tolerability profile was consistent with the known profiles of the medicines. We anticipate sharing full results from the CYCLONE 2 study at a future medical meeting. Since our last earnings call, Jaypirca received approval under the FDA's Accelerated Approval program for the treatment of divergence with CLL or SLL who have received at least two prior lines of therapy, including a BTK inhibitor and a BCL2 inhibitor. We also reported that the Phase III confirmatory trial intended to convert this approval to traditional approval, known as BRUIN CLL 321 met its primary endpoint, and we plan to present these data at an upcoming medical meeting. With the CLL and SLL approvals, Jaypirca is now the first and only FDA-approved non-covalent BTK inhibitor that can extend the benefit of targeting the BTK pathway in CLL and SLL patients previously treated with a covalent BTK inhibitor and a BCL-2 inhibitor. This was the second approval for Jaypirca in 2023 with the first in patients with MCL. We believe these two indications only represent the beginning of the eventual impact Jaypirca can have for patients, and we look forward to seeing the data from the rest of the Phase III program across CLL, SLL, and MCI. In Q4, we completed the acquisition of POINT Biopharma, which begins Lilly's entry into radioligand therapy, a promising technology with the potential to deliver meaningful advances against a range of cancers. We welcome our new Point colleagues to Lilly, and we look forward to building on their work to grow this capability at Lilly. 2024 is also poised to be a particularly productive year for new clinical starts in oncology, as we begin to see the results of the new oncology R&D strategy that we implemented about four years ago after the Loxo acquisition. Through a combination of internal discovery efforts and business development, we expect to put at least five new molecules into the clinic this year, a wild-type of selective KRASG12D inhibitor, a pan-KRAS inhibitor, two antibody-drug conjugates with two biasomere's payloads, one against Nectin-4 and one against folate receptor alpha, and an actinium PSMA radioligand therapy. I'll speak in a moment about our clinical KRASG12C program, but you can see that we're putting real effort into developing a suite of restorative therapeutics. And we're excited to see those discovery efforts result in three potential medicines so far. Of course, we'll have to see which of these deliver on our target clinical profiles, but we're optimistic about this early phase portfolio, and we've certainly diversified the modalities in our pipeline. In addition, we're excited that our KRASG12C inhibitor has progressed into Phase II as we're finalizing dose selection under Project Optimus for the Phase III program, which we plan to start later this year. You can now see the full design of that study on clinicaltrials.gov. By way of reminder, we started this program years behind our competitors. And through focused effort behind what looks like a great molecule to us, we've made up the vast majority of that time. We believe we're now neck and neck with our closest competitors with a medicine that we hope to show combines better with PD-1. Lastly, in oncology, we terminated development of our RET inhibitor two as it did not meet our threshold to move forward with internal development. In immunology, we moved two new assets into Phase I, and we advanced our KV1.3 Antagonist for psoriasis into Phase II. Lebrikizumab was approved in the EU for atopic dermatitis under the brand name Akouos, which is marketed by our partner, Amaral there. In January this year, we were pleased to have Akouos approved in Japan. In neuroscience, in January, our wholly-owned subsidiary announced positive clinical results for the Phase I/II AK-OTOF-101 study which demonstrated hearing restoration within 30 days of a single administration in the first participant, an individual with more than a decade of profound hearing loss. The surgical administration and the investigational therapy were well tolerated and no serious adverse events were reported. These results highlight our commitment to help solve some of humanity's most challenging health care problems and make life better for individual patients. We now show OTP gene therapy in Phase II on our pipeline chart as we've begun enrolling younger patients in the Phase II portion of the study. On Slide 18, we highlight our select pipeline assets with updates since the last earnings call, and Slide 19 summarizes our key events for 2023. I note the key updates on each of these slides in my therapeutic area of comments. Turning to Slide 20. We'd like to highlight potential key events for 2024. As you can see, this year will be another important year as we look to progress our late-stage pipeline. In 2023, we initiated Phase III development projects for our next generation of Incretins, which are our oral agent glyprone and our novel weekly Injectable Tri-agonist, Retatrutide. These programs are progressing and enrolling well. We look forward to seeing the first set of Phase III results next year. This year, we're planning to initiate a Phase III program in Type 2 diabetes for Retatrutide, complementing the ongoing trials in obesity and related complications. Also this year, we are planning to initiate a Phase III program for Lepodiserin, our LPA-lowering siRNA therapy in cardiovascular disease. On Tirzepatide, we're looking forward to a number of additional key data readouts this year. Beyond SYNERGY-NASH, we expect to see results from the Phase III obstructive sleep apnea and Phase III heart failure studies this year. We note increased investor interest in the timing of SURPASS-CVOT, and we reiterate that we expect the data in 2025, notwithstanding the clinicaltrials.gov listing which will be updated soon to reflect our current assumptions based on event rates. By the end of 2024, we expect to have results of SURMOUNT 5, which is our head-to-head study of Tirzepatide compared to high-dose semaglutide in participants with obesity. We also expect the full Phase III program readout on our weekly basal insulin, insulin efsitora alfa later this year. Moving to neuroscience. We're looking forward to FDA action and the potential launch of Erenumab in Q1 of this year, and we are progressing with regulatory reviews around the world. We've now launched a PT 217 blood-based diagnostic test, and we will continue to scale this throughout 2024. We'll also continue to partner with others in the field to ensure physicians have multiple tools to aid in timely and accurate diagnosis of Alzheimer's disease. In immunology, following the Mirikizumab positive Phase III data at Crohn's disease, we plan to submit to the FDA for this indication this year. Additionally, following the U.S. FDA complete response letter on Lebrikizumab, we expect regulatory action by the end of the year in the U.S. Finally, in oncology, as I mentioned before, we look forward to moving our KRASG12C inhibitor Olomorasib, Phase III later this year following Phase II dose selection. Lastly, we're looking forward to seeing the results of our emlinesterat Phase III study, EMBER-3 in participants with metastatic breast cancer in both monotherapy and in combination with Verzenio. This past year was busy and productive, and we expect more of the same in 2024 as we make meaningful progress advancing our pipeline for the benefit of patients. I'll now turn the call back to Dave for closing remarks.

Thanks, Dan, and congrats to you and the team for a big year. Before we go to Q&A, let me briefly sum up our progress in the fourth quarter. Q4 revenue growth accelerated as our recently launched product portfolio continued to gain momentum. We achieved meaningful advances in our late-stage pipeline with the FDA approvals of Zepbound and Jaypirca. We continue to invest in recent and upcoming launches, late-stage medicines, early phase capabilities, and in business development, all of which will serve as a foundation for future growth. In Q4, we completed the acquisition of POINT Biopharma and announced plans to build a new manufacturing site in Germany. We returned over $1 billion to shareholders via dividends. Lastly, in January, we announced that Jana Norton, our Executive Vice President of Global Quality, will be retiring at the end of July after 34 years of service. During her tenure, Jana has overseen significant expansion, modernization, and improvements in our quality and manufacturing processes. I'd like to thank her for her many years of outstanding service to Lilly. Now I'll turn the call over to Joe to moderate our Q&A session.

Thanks, Dave. Before diving into Q&A, I wanted to clarify one point. We may have had some muffled sound during the prepared remarks regarding the timing of regulatory action on Donanemab. And as Dan mentioned, the timing is expected to be Q1 of 2024 this year. We received some notes that there were some muffled sound, so I just wanted to clarify that important point. Now for Q&A, we'd like to take questions from as many callers as possible and conclude the call in a timely manner. So consistent with prior quarters, we'll respond to one question per caller, so I ask you to limit it to one question per caller, and we'll end the call at 11:15 a.m.

The first question today is coming from Terence Flynn from Morgan Stanley. Terence, your line is live.

Great. Thanks so much for taking the question. Congrats on the progress. Just wondering for your GLP franchise, ex U.S., you under-index versus your key competitor. Just wondering what are some of the hurdles to closing that gap as we think about the ramp in '24 but also into 2025?

Thanks, Terence, for the question. I'll hand over to Ilya Yuffa, President of Lilly International for that question.

Thanks, Terence. As we think about Mounjaro launches outside the U.S., we have already launched in a number of select markets. We have the foundation to be competitive in many of our markets, and we anticipate continued launches. We've just launched in vial format in select markets outside of the U.S., mainly in Australia, Canada, Germany, and Poland. And we just received QuickPen approval in the U.K., and so we're anticipating a launch there. As we get additional regulatory approvals for a multi-use QuickPen and we monitor our ramp-up in capacity for supply, we'll continue to launch in other markets throughout the year. And so we anticipate further growth, with anticipated launches of Mounjaro outside of the U.S. and to continue with that throughout the year as well as into 2025.

The next question is coming from Chris Schott from JPMorgan. Chris, your line is live.

All right, great. Thanks so much. On Zepbound, seems like you're making strong progress on coverage but just interested in expectations for the remainder of this year as we think about just where coverage could go and just how to think about ASP. I guess the core question is, is it reasonable to think that most payers who cover will add Zepbound this year?

Thanks, Chris. I'll hand over to Patrik to comment on that question about Zepbound coverage.

Yes. Thank you very much, Chris. As we stated, we are pleased we are so early in launch with the 35% commercial access, having contracts. Our efforts moving forward will really be to continue to expand payer access, but we will do that with a very disciplined approach as we did with Mounjaro, but also to make sure that we get to employer opt-in. And as Anat alluded to in her prepared remarks, that's going to take some time. But we are assuming that with the current access we have, that our access will be along the lines of what the competition has referred to, around 50%. Let me just emphasize that when it comes to employer opt-in, there is not one reliable source for employer opt-in. So I think that's something that we need to continue to monitor and we'll come back with more data in the coming earnings calls. So overall, a good start and we will continue our efforts to increase payer access. I think we are quite encouraged with what we have heard from the marketplace so far. Employer opt-in will take longer, but we believe that we are well positioned in that regard as well.

The next question is coming from Seamus Fernandez from Guggenheim. Seamus, your line is live.

Oh, thanks very much and congrats on all the progress and success here. But I just wanted to add a quick sense from Dan. Do you see a prospect from SYNERGY-NASH for accelerated approval? And can you confirm that while clinically significant, the secondary endpoint of fibrosis improvement was not statistically significant?

Thanks, Seamus, for the question. Dan?

Yes. Thanks, Seamus. This is really quite new to us, but we're really excited about it. We haven't had a chance yet to talk to the FDA here at all about next steps, but we're looking forward to having that opportunity. Of course, this was a small trial of about 190 participants, but it did use liver biopsies, of course, to assess the endpoints here. With respect to the improvement in I think probably previously stated that I was unsure whether it would be possible for Incretin-based therapies to reverse fibrosis in patients based on competitor readouts in the field. But I'm really excited to see this data with clinically meaningful improvement in fibrosis. There are different doses, and there are different statistical methods that can be applied here, accounting for dropouts, particularly in placebo group. So we have to wait for the scientific presentation to see all the p-values there. But we're pretty positive on this data package as a whole and what this could mean for patients, both in terms of stopping progression of MASH and reversing fibrosis.

The next question is coming from Umer Raffat from Evercore. Umar, your line is live.

Hi, guys. Thanks for taking my question. Dave, as you think about manufacturing build-out in various sites, which is obviously very important for all the existing GLP demand, I'm curious, how are you balancing that dollar investment with your probabilities on Orforglipron's clinical and commercial, especially with all the blinded data that's coming in?

Thanks, Umer. Dave?

Yes, I'm happy to answer that. As we enter this phase of significant growth in the Incretins, we are focused on capital allocation, but our primary goal is to create new capacities. Currently, our constraints are not financial, so you can expect us to invest fully. We are not slowing down due to cash flow concerns. The constraints we face are more about technical capacities, including our workforce and suppliers' ability to bring facilities online, especially on the parenteral side. Regarding Orforglipron, we intend to build ahead of Phase III, taking on some risks. Based on our internal assessment of its probability and the potential payoff from a successful Phase III, we consider this a wise investment. As previously mentioned, this project involves very different assets both within and outside of Lilly, including organic chemistry, active pharmaceutical ingredients, and tablets and capsules, which require a distinct approach. We are coordinating this with our strong investments in injectables. If our assessment proves incorrect, we will address that later if it doesn't turn out to be a strong product. However, if it is successful, it could significantly improve our supply dynamics in this category, making it a worthwhile endeavor.

The next question is coming from Tim Anderson from Wolfe Research. Tim, your line is live.

Oh, thanks. On SURPASS-CVOT, you mentioned it slipped to 2025. I assume that implies the one interim look has come and gone. And then you're evaluating both non-inferiority and superiority. Would you agree that superiority is really what you need to show here and what you're confident in achieving that?

Thanks, Tim, for those couple of questions. Maybe we'll field the one on the interim look, Dan?

Yes, sure. Well, thanks for that question, Tim. As you know, Lilly doesn't comment on interims. Probably most trials in our portfolio do have opportunities for interim looks. But that has not, I think, germane at all to the question on the timing on clintrials.gov, which was before and continues to be the time point at which we'll have final data. When we initially put that time point in clinicaltrials.gov was in early 2020, we hadn't started enrolling the trial yet so that was based on our assumption on enrollment rates but probably more importantly on event rates. And as the trial matures, we get a view on event rate. So I know it's frustrating for investors and for us perhaps to wait to longer time to get events, but of course, that's great news for patients when the event rates are slower, remembering that this is a head-to-head trial with a drug Trulicity that we already know is active in preventing.

The next question is coming from Mohit Bansal from Wells Fargo. Mohit, your line is live.

Thank you for taking my question. I would like to inquire about your sleep apnea study. What level of improvement from baseline do you believe is necessary for the results to be considered clinically significant? Is it 50% or more? Additionally, do you think the size of the trial is sufficient to pursue a label?

Thanks, Mohit, for the question. Dan, back to you.

Yes, thanks. There isn't really a well-established threshold for clinical meaningfulness in sleep apnea. Of course, the commonly used measure here is an index of how many apneic or hypoxic events a patient has while sleeping. Certainly, drugs in this category, I think, have great potential to improve that. We're excited to see what Tirzepatide can accomplish, probably in addition to the absolute percent improvement in AHI that we'll be looking for, I'd also like to see patients switching from one category, for example, from intermediate to mild disease or things like that. So we'll be looking at a number of things to assess clinical meaningfulness here, but I'm quite optimistic.

The next question is coming from Louise Chen from Cantor. Louise, your line is live.

Hi, thanks for taking my question. I wanted to ask you how you think about sizing the downstream opportunities for GLP-1 such as Tirzepatide, maybe in NASH, some of the other indications that you're going after as well.

Thanks, Louise, for that question. So about the downstream opportunities in NASH and elsewhere, Patrik, do you want to field that?

Thank you very much. I think there are two important aspects. The first one is when we refer to employer opt-in. I think employees are really looking actively into the benefits of listing anti-obesity medications. And whatever data we can generate here being in the cardiovascular space, being in national average indications will be extremely important for increased employer opt-in. The second piece will be in Medicare Part D. As long as it is not passed, I think data in those comorbidities will be critical to enable access for patients in Medicare Part D. So those are truly the key drivers for those indications.

The next question is coming from Kerry Holford from Berenberg. Kerry, your line is live.

Thank you for taking my question. It's on Tirzepatide obesity. I'm interested to hear why you've taken the decision not to launch under the Zepbound brand outside the U.S. but rather seek a label expansion for weight loss to Mounjaro. Does that relate to simplicity, perhaps faster reimbursement access? And I wonder if you foresee any risk here that ex-U.S. governments prefer ultimately to keep diabetes and obesity budgets separate.

Thank you, Kerry, for the questions. I'll hand over to Ilya to talk about the branding of Tirzepatide OUS.

Sure, yes. So the broader Tirzepatide outside the U.S. depends on a number of different factors, whether it's regulatory or competitive market dynamics. There are some payer dynamics as well. We don't anticipate that being a challenge in terms of negotiating reimbursement either for Type 2 diabetes or for management. We continue to have those discussions in a number of markets and are optimistic about our ability to commercialize under different brand scenarios.

The next question is from Geoff Meacham from Bank of America. Geoff, your line is live.

Morning, guys. Thanks so much for the question. Dave, I know you guys formally announced Lilly Direct last fall. Should we view it as a platform to just streamline access to providers and Lilly meds? Or is there a monetization model or some market differentiation that could also play out over time?

For that I can start, Patrik, jump in. Yes, thanks for the question. The idea was really actually borne out of the challenges patients face every day in the U.S. and sometimes seeing doctors. And you'll know we have a Doctor Finder tool as well as telehealth partners on the platform for migraine, diabetes, and obesity. Finding medicines and their pharmacies, that's been a challenge. And I think particularly as supplies are tight, many patients report driving to 5, 6, seven pharmacies to find the medicine they need that simplifies that process. And then I think in addition, there's been a lot of noise about drugs that are illicit or copies or compounded versions of Zepbound or other weight loss drugs and that's concerning to us. And I think it's concerning to patients. So by going to Lilly Direct literally, they have confidence in the supply. And finally, application of our savings programs has also been a challenge at the pharmacy counter, and that happens 100% of the time on Lilly Direct. We haven't thought about it as a way to create some new retail distribution business. It's a way to serve the patients that want our medicines better. That's sort of the frame we're in now. Early days. We're trying to develop it to be smoother, better, include more products over time, have better information about physicians and telehealth providers. So look for more developments there, but it's a good start so far. A lot of energy and enthusiasm from the patient community.

The next question is coming from David Risinger from Leerink. David, your line is live.

Yes, thank you and congrats on today's updates. My question is for Dave and Dan on lean muscle loss associated with Incretin use. Could you help me understand Lilly's take on this debate and comment on Tirzepatide data to date relative to semaglutide? What I've observed is that SURMOUNT-1 showed a 3:1 lean muscle loss ratio, whereas SEMA's STEP one trial showed a 1.5:1 ratio, albeit with a slightly different assessment.

Thanks, David. I'll have Dan field that.

Yes. Thanks for your question. Maybe just starting with our take on lean versus fat mass. I think the ratio of lean to fat mass is an important thing to think about. Body composition, not just weight, matters to patients, for example, in risk of Type 2 diabetes or cardiovascular disease; that ratio seems to be important. The good news is that for patients on Tirzepatide, that ratio appears to improve. As you pointed out, they lose far more fat mass than lean mass. And so in every trial we've done, at the end of the trial, if we measure body composition, it's better, a higher ratio of lean to fat than at the beginning of the trial. So we see this changing body composition as a benefit, potential benefit of Tirzepatide to be further explored. Of course, it's also a benefit we want to further extend. You've seen us try to improve the total amount of body weight loss. We're also trying to improve further improve, I should say, the change in body mass composition. And that's why you saw us acquire and experiment with drugs.

The next question is coming from Evan Seigerman from BMO Capital Markets. Evan, your line is live.

I would love to get your take on how you're thinking about the opportunity for the oral GLP-1s. We've seen some mixed data from competitors. And I just would love to get how you see this evolving in the context of your investment in Orforglipron.

Thanks, Evan, for the question. Patrik, maybe you can talk about how we think about an oral agent.

Thank you very much. When we look at the opportunity in obesity, we have more than 110 million in the U.S. and 650 million globally. I think taking into account the current supply constraints across markets, it's impossible to reach all of those with injectables. So I think that's the big opportunity we have for Orforglipron. And what we have seen so far in Phase II, if we can replicate that data in Phase III, we have an oral medicine here with a weight loss along the lines of the best competitive Incretin, not at the level of Tirzepatide, but that's the level of the best Incretin in the marketplace and with no food or water restrictions. So we really see the opportunity here with Orforglipron to reach patients across the globe. And there is another component as well. If we look at the current market, approximately 20% of patients with obesity are actually concerned about taking an injectable. So that's another opportunity with Orforglipron. So we believe that's a really strong drug in our hands moving forward in the space of chronic weight management.

Next question is from Steve Scala from Cowen. Steve, your line is live.

There could be several reasons why Lilly is not initiating a Phase III trial of Tirzepatide in NASH. First, Lilly believes it has better molecules. Second, there is something in the Phase II data which is less than ideal. Or third, Lilly will do a Phase III. It just hasn't gotten around to finalizing plans, but that really can't be yet. To draw a parallel, you're starting a Phase III with LPA without even telling us the Phase II was positive. So what would be best for us to conclude about Tirzepatide and NASH?

Yes. Thanks, Steve, for the clever analysis here. So first of all, I should just say, we literally just got this Phase II data, so give us a chance to determine our next steps on the plans, probably debug at least one of the hypotheses here. There's nothing bad in the data that would stop us from going to Phase III. In terms of having a better molecule, probably we do; and of course, we don't have that kind of Phase II data here for Retatrutide. And so that's based on liver fat reduction, which was just incredible in the Phase II trial. Still though, I think having a positive Phase II trial here with really meaningful data in NASH obligates us to think about next steps. As I said, that's going to the FDA to talk to them. I would say in terms of planning a Phase III for any drug in NASH, a really important priority for us is to move away as much as we can from liver biopsies and replace them with non-invasive testing. I think we and others in the field have made a lot of progress there. We see analogies here to other disease areas. And we hope that in the future, it will be possible to conduct Phase III NASH trials without relying on biopsies. That would really have a profound effect on the feasibility of running these trials quickly but also in the clinical application of NASH drugs, where those non-invasive biomarkers could be identified patients for treatment and monitor response to therapy rather than biopsies.

The next question is from Chris Shibutani from Goldman Sachs. Chris, your line is live.

Duration of use of the GLP-1s across the diabetes and obesity populations. Previously, you've characterized the duration in the range of 15 months for diabetes and have commented that you don't believe we have enough experience. Any updates there? And when do you think we will have enough experience to be able to get a better gauge of duration of use median in the obesity population, at least initially?

Thanks, Chris. Patrik, do you want to comment on duration of therapy?

Yes. Thank you very much, Chris. I think you're right. It's quite challenging. It's still early days with both Mounjaro in particular and Zepbound, and we have been facing some specific dynamics in terms of supply and also changes to the co-pay program. However, when we look at the recent data for Mounjaro, it's encouraging and it suggests that patients that start therapy back in Q1 2023 are having persistence at least along the lines of other injectable Incretins. For Zepbound, definitely too early, but we strongly believe that patients will be motivated when they see the benefits of the drug. And there will, of course, be many factors impacting both supply, macroeconomic, and microeconomic, but we are convinced that there will be a final duration of treatment also for obesity since when we look into even real-world scenarios in Type 2 diabetes, more than a 12-month period of adherence is considered long. But encouraging data in Type 2 diabetes so far. And with Zepbound, we will see, that will for sure be an end of duration based upon what we have seen in other chronic diseases, but we believe that the features itself will be motivating for patients.

The next question is coming from Akash Tewari from Jefferies. Akash, your line is live.

So David, at JPMorgan, you made an interesting comment on Orforglipron, where you mentioned the molecule has lots to prove here. Can you elaborate a bit on what you mean by this? And what's your confidence on Orforglipron's CDI profile? It seems to have a bit of CYP3A4 inhibition. So will this drug be able to get dosed with SGLT2s, given they were excluded in some of your earlier studies?

Thanks, Akash. Dave?

I would frame like why I said that, but maybe Specific DDI question in the SGLT2 coadministration. I just said that because we're just starting the Phase III. And we all know small molecules; there's a bit of empiricism in terms of eliminating safety risk. And of course, every day, as we expose more patients to the drug and we have higher doses, that's a good day where we don't announce that the drug has a problem. At some point, we reach a lot of confidence. We just weren't at that point. We're not at it now. I think we're running the Phase III experiment and we need to discharge the off-target safety that is inherent in small molecule discovery, and we've seen in this class from others. But nothing specific on my mind. Maybe Dan can further reassure us.

Yes. Dave, of course, that's just the normal Phase III types of risk, new safety signals, which could always arise. I think with respect to DDI and coadministration with SGLT2s, we expect that to be possible, and we have that ongoing in our Phase III trials. There are patients who achieve tolerability just with our base for Orforglipron as well as other drugs like SGLT2s.

The next question is from Trung Huynh from UBS. Trung, your line is live.

Can I just ask your thoughts on GIP agonism versus antagonism, given data yesterday from a competitor suggesting more limited effects on things like blood pressure and lipid modifications. Just how differentiated do you think an agonism approach is versus antagonism and why you think agonism is the way forward?

Dan?

Yes. Well, first of all, it's an unfair comparison. We have so much data now on the benefits of GIP agonism from tens of thousands of participants in randomized clinical trials for Tirzepatide. So we're extremely confident here about the benefits of GIP agonism. Adding to that data, we have experimented with a pure GIP one agonist that doesn't have any GLP-1, and we reported the benefits there in our Phase I study. We're contrasting that here to a small Phase I study that was recently published with a drug that has both GLP-1 agonism and GIP antagonism. I noted in that publication, the GIP antagonism is at a much lower affinity. So it probably only starts to antagonize GIP at very high doses. It's probably a question for that company. But I noted at the high doses actually an increase in free fatty acids and complete attenuation of the decrease in triglycerides in the clinical trial. Those are some effects that we attribute to GIP. And so I'm not surprised that antagonism of GIP is starting to have some negative effects once that kicks in. We also see GIP agonism as having positive benefits on tolerability, reducing potentially nausea and vomiting. Then again, I think maybe at the higher doses, you could probably see some hints of the opposite effect with antagonism. So we're pretty glad with the decision we took, and let's see how the field continues to evolve.

The next question is from Carter Gould from Barclays. Carter, your line is live.

I guess over the prior two earnings calls, there have been at least an acknowledgment that CMOs were going to be part of the equation going forward for supply on the Incretin side. I guess, does the development fee yesterday have any sort of direct or indirect impacts as you think about that part of the equation going forward?

Thanks, Carter. Anat, do you want to field that?

Sure. So we've, and I've mentioned on this call as well that we have a very expensive expansion agenda, which does include third parties. While our strategy is and has always been to develop more internally, we do have third parties as well. So we saw the announcement that came out from NOVO yesterday regarding the intent to acquire Catalent. And we certainly have questions about that transaction and need to learn more. And we don't know, Catalent is an integral part or a manufacturer of both commercial and pipeline products for the industry, especially in diabetes and obesity, and we have products with these sites as well. So our focus today is on ensuring that the continuity of supply of medicine for patients is uninterrupted, and we intend to hold Catalent accountable to their contract with us as we look and we gain more information on this proposed transaction.

The next question is coming from James Shin from Deutsche Bank. James, your line is live.

I just want to circle back to Carter's question. Given Lilly is well-capitalized and manufacturing capacity being the priority, could you expect more buy versus build to get around some of the technical bottlenecks and the nontrivial FDA process? I just want to get your thoughts there.

Dave?

Yes, I appreciate the question, James. As I mentioned earlier regarding Orforglipron, we don't see ourselves as being limited by capital when it comes to buying or building in this space. The issue is that there isn't available capacity to build on. Most of the capacity in use is already allocated to the leading products in the GLP-1 market, and any new capacity takes three to four years to develop. The recent capacities coming online, such as the large site in Concord, North Carolina, represent significant capacity for the sector and for Lilly. That facility was announced two and a half years ago and will only start production at the end of this year. This highlights the complexity of the situation. Building new facilities is challenging, repurposing existing ones is also tough, and these facilities are technically sophisticated. Moreover, there's a limited number of experts who can set them up, and the supply chain for manufacturing equipment is also under strain. Therefore, I don't see a straightforward solution at this moment. Even in recent announcements, there are many questions regarding this issue. Competitors have indicated that it will take years for them to enhance their capacity following their acquisitions. This isn't an easy challenge to address. However, I believe that over time, we will see more capacity become available from us, our competitors, and possibly others, along with the emergence of new technologies like Orforglipron or other oral options, which utilize a different resource base. I understand this situation is frustrating for investors, and it's equally challenging for us and even more so for patients. But we are committed to gradually improving our manufacturing capabilities over the next several years, with the potential for more significant advancements thereafter.

Thank you, everyone for participating in today's call. The call is now concluded. You may disconnect your lines.