I would now like to turn the conference over to your host, Mike Zappar, Senior Vice President of Investor Relations. Please go ahead.

Thank you for joining us for Eli Lilly and Company's Q1 2026 earnings call. I'm Mike Zappar, Senior Vice President of Investor Relations. Joining me on today's call are Dave Ricks, Lilly's Chair and CEO, Lucas Montarse, Chief Financial Officer, Dr. Dan Skoromsky, Chief Scientific and Product Officer, Adrian Brown, President of Lili Immunology, Dr. Carol Ho, President of Lili Neuroscience, Ilya Yufa, President of Lili USA and Global Customer Capabilities, Jake Van Narden, President of Lili Oncology, Head of Business Development, Patrick Janssen, President of Lili International, and Ken Custer, President of Lili Cardiometabolic Health. We're also joined by the Investor Relations Team, Jim Graffay, Susan Hedgeland, Mark Keeman, and Wes Tall. During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to various factors, including those listed on slide four. Additional information concerning factors that could cause actual results to differ materially is contained in our latest Form 10-K and subsequent filings with the SEC. The information we provide about our products and pipeline is for the benefit of the investment community, not intended to be promotional or otherwise influencing prescribing decisions. If we transition to our prepared remarks, please note our commentary will focus on non-GAAP financial measures. Now, I'll turn the call over to Dave.

2026 is off to a strong start. During the quarter, we delivered robust revenue growth, advanced our pipeline across all four therapeutic areas, announced multiple business development transactions, and invested to drive our future growth. Earlier this month, we achieved an important milestone as OrforgaPron was approved by the USFDA under the trade name Fundeo. Foundeo has been proven highly effective for weight management, offering the benefits of GLP-1 therapy in a pill form and can be taken at any time of day without food or water restrictions. Foundeo is a new molecule, a new modality for agonizing GLP-1, and it's a new brand. This is the first time a new incretin medicine has been launched with obesity as its indication first. First, while the Fondeo launch has just begun, we're encouraged by momentum against our 2026 launch priorities. These are broad digital and traditional distribution availability, high levels of awareness with consumers of this new option for weight management, educating a broad group of HCPs, helping them start new patients and get comfortable with a new GLP-1 molecule, and, of course, building broad access in commercial, Medicare via the BRIDGE program, and later Medicaid access for patients. And while the U.S. approval is an important first step, there are over 1 billion people around the world with obesity and related conditions that can be helped by taking an Inkerton-like FoundAO. Recall that a key advantage of FoundAO is scalability and that oral GLP-1s for obesity have not yet been introduced outside the U.S. Regulatory reviews are ongoing in over 40 countries for obesity and type 2 diabetes. And we plan to submit Foundeo in the U.S. for type 2 diabetes later this quarter. Included in the U.S. type 2 diabetes submission will be the results from the ACHIEVE-4 trial, which we shared a few weeks ago. In the seventh positive phase 3 registration trial, Foundeo showed cardiovascular safety and a lower risk of all-cause death in adults with type 2 diabetes and obesity without increased cardiovascular risk. In addition to the obesity and diabetes programs, we're actively studying FOUNDEO in six phase 3 programs in other diseases, and we will continue to generate new data for this important new medicine in the quarters and years to come. On slide 5, we list the Q1 financial metrics and the highlights of our progress related to the strategic deliverables of Lilly. Revenue grew 56% compared to Q1 2025. Our key products, currently defined as EbbGliss, Inlurio, Jperka, Kisunla, Monjaro, Omvau, and ZepBound, grew by more than $7 billion. Within key products, our immunology, oncology, and neuroscience medicines collectively grew by 160% compared to the same quarter last year as we continue to invest to drive growth across all of our therapeutic areas. In addition to the progress on FoundAO, we achieved several key pipeline milestones since our last earnings call, including positive Phase III data for JPERCA in combination with a time-limited regimen in adults with previously treated, CLL, positive phase 3 data for EVGLIS in pediatric atopic dermatitis, positive phase 3 data for TALTS plus ZEPBound in adults with psoriasis and obesity, positive phase 3 data for ritatritide in adults with type 2 diabetes, and the initiation of a new phase 3 programs for alloralintide, sofetibartmipetecan, and vernapetide. Consistent with our capital allocation strategy to expand investments in business development, we announced agreements to acquire multiple companies with clinical stage programs. Orna Therapeutics, a company with an in vivo CAR-T pipeline to treat autoimmune diseases. Sintesa Pharmaceuticals, a company developing a new class of medicines for the treatment of excessive daytime sleepiness and other neurologic conditions. Colonial Therapeutics, a company developing an in vivo platform to treat multiple myeloma in other cancers. And Ajax Therapeutics, a company developing next-generation JAK inhibitors for people with blood cancers. We expect to remain active in business development to complement our internal portfolio while maintaining the discipline to create shareholder value. We also distributed $1.5 billion in dividends in the first quarter and executed $2.4 billion dollars in share repurchases. Two important updates occurred this quarter to expand access to obesity medications. First, we launched Lilly Employer Connect. This is a platform introduced as a new way for employers to offer obesity management medicines to their employees. While it's still very early for this innovative model, we're encouraged by the level of employer interest. Second, CMS announced the extension of the Medicare GLP-1 Bridge Program, which provides access to obesity medicines to people with Medicare. The program will begin no later than July 1, 2026, and run through December 2027. This program has the potential to help improve the health of millions of seniors while capping their out-of-pocket costs at $50 per month. Now, I'll turn the call over to Lucas to review our Q1 financial results.

Thanks, Dave. As shown on slide 6, Q1 was another strong quarter of financial performance. Revenue grew 56% compared to Q1 2025, driven by Zeman and Monjaro, and solid momentum across all therapeutic areas and geographies. Gross margin as a percentage of revenue was 82.6% in Q1, a decrease of approximately one percentage point versus the same quarter last year. the change was driven primarily by low ice prices marketing selling and administrative expenses increased 19 as we continue to invest in promotional activities to support ongoing and plan new product launches r&d expenses increased 28 driven by continued investments in our pipeline including 42 active phase 3 programs our non-gap performance margin was 50 percent, an increase of approximately seven percentage points from Q1 2025, driven by revenue growth. Non-GAAP earnings per share was $8.55, including acquired APR&D charges of $0.52. This compares to non-GAAP earnings per share of $3.34 in Q1 2025, inclusive of $1.72 of acquired APR&D charges. On slide 7, we quantified the effect of price, rate, and volume on revenue growth. U.S. revenue increased 43% in Q1, primarily driven by volume growth from CEPAN and Monjaro, as well as contributions from our immunology, oncology, and neuroscience portfolio. U.S. price declined by 7%, including the impact of the previously announced direct-to-patient prices for CEPAN. U.S. price was positively impacted by a one-time adjustment to estimates for rebates and discounts, primarily impacting Zepan and Monjaro. Excluding this impact, U.S. price would have declined 10%. Europe revenue grew 37% in constant currency, driven by sustained, strong volume growth of Monjaro. In Japan, revenue grew 42% in constant currency, driven by Monjaro for type 2 diabetes. In China, revenue growth accelerated with the inclusion of Monjaro on the National Reimbursement Drug List for Type 2 Diabetes, and in the rest of the world, revenue more than doubled in constant currency, as Monjaro achieved rapid share gains in Latin America and Asia. On Slide 8, we provide an update on the performance of our key products. Within immunology, we continue to increase our presence in atopic dermatitis with abdlis. U.S. new patient starts increased by 90% compared to Q1 2025, and we steadily gained share within the specialty dermatology market. We continue to focus on patient activation and expanding HCP engagement to drive additional gains in share of market. In oncology, Jaipirca posted a strong quarter of growth, gathering additional momentum in the U.S. from the expanded post-BTK indication in CLL. Worldwide sales grew 79% compared to Q1 2025, and we continue to hear positive feedback from physicians globally. We believe Jaipirca has the potential to be a foundational therapy across multiple settings and regimens within CLL. Although still early, InLurio performance in the U.S. was encouraging during its first full-quarter launch, achieving over 35% share of all ALSERT new patient starts in metastasis breast cancer in Q1. But ALSERT market growth also increased, largely driven by the launch of InLurio. In neuroscience, Kisanla continues to be the U.S. leader in amyloid-targeting therapies. The market continues to steadily increase as diagnostic capabilities for Alzheimer disease expand. We expect European launches to begin contributing to growth throughout 2026. Finally, in cardiometabolic health, Monjaro and Zepan global revenue was $12.8 billion combined, contributing $6.7 billion of growth compared to Q1 2025. As seen on slide 9, the U.S. increasing analog market continued robust growth in Q1. The recent approval of oral GLP-1s expanded the market, enabling more people to benefit from the GLP-1s. Within the U.S. increasing analog obesity market, total prescriptions grew by over 80% in Q1, and Zepan prescriptions grew at an even faster rate. ZepBAN performance was driven by continuous stroke and uptake in self-pay channel, as well as steady growth in the commercial segment. However, the loss of Medicaid access in certain states had a negative impact on Q1 prescription growth in the high single digits. We recently launched ZepBAN in the U.S. in a new QuickPen device that includes a full month of supply of medicine in one pen. Self-PACE continues to be an important segment for ZEPBAN and accounted for approximately 45% of total ZEPBAN prescriptions in Q1 and 55% of new prescriptions. In the U.S., type 2 diabetes-syncretin analog market, total prescriptions grew 11%, and Monjaro gained another 3 percentage points of market share compared to the end of 2025. Outside the U.S., Monjaro continues steady progress within the Incretin analog market. Slide 10 shows aggregate trends in the international Incretin analog market. The total international market has increased by 77 percent since the same period last year, as measured by IQVIA gross sales. In Q4 last year, Lilly became the market leader outside the U.S., And the strong growth of Monjaro in Brazil, UK, Korea, and China, among others, has resulted in additional share-of-market gains in Q1, 2026. We expect continued strong performance outside the U.S., but with share-of-market leadership already established, increased patient activations will be key to drive sustainable growth. Lastly, on a slide in heaven, is an update of a Nifondello launch. Early feedback from payers, physicians, and patients is encouraging. Pundeo was broadly available in pharmacies on April 9th and is available on more than 12 major telehealth platforms. Discussions with payers have been productive and commercial access has been confirmed at two of the three largest U.S. pharmacy benefit managers, effectively mid-May. In addition, the GLP-1 bridge program will start no later than July 1st, which brings new access to anti-obesity medicines for people with insurance through Medicare. While HCP digital awareness campaigns went live shortly after approval, we began in-person promotion to HCPs on April 17th. We expect to drive brand awareness and differentiation through full-scale consumer promotion, including direct to consumer tv advertising beginning in q3 we are focused on commercial execution to drive long-term growth on slide 12 we provide an update on capital allocation moving to slide 13 we share updated expectations for 2026 financial guidance we have increased the top and the bottom end of the revenue range by 2 billion dollars and now expect full year revenue to be between 82 and This reflects the strong underlying performance of Monjaro and Zepan in Q1. The midpoint of the new revenue range represents 28% growth compared to 2025. We still expect price to be a headwind in the low to mid-teens for the full year. We expect our non-GAAP performance margin to be between 47% and 48.5% driven by higher revenue. Our tax rate remains unchanged, and we now expect non-GAAP earnings per share of $35.50 to $37, an increase of $2 to the top and bottom of the non-GAAP earnings per share. We are pleased with our Q1 results and confident in our ability to deliver another year of industry-leading growth. Now, I will turn the call over to Dan to highlight our progress on R&D.

Thanks, Lucas. Since our last earnings call, we've been busy with portfolio progression and significant business development in each of our major therapeutic areas. I'll share updates by area, beginning with cardiometabolic health. In addition to the U.S. approval of Fundeo for obesity, we also announced positive top-line results from Achieve 4, the seventh and final Phase III trial in our global registration programs for type 2 diabetes and obesity. This trial evaluated the time-to-first occurrence of MACE events for Fundeo compared to insulin glargine in adults with type 2 diabetes and obesity or overweight who are at increased cardiovascular risk. As shown on slide 14, Fundeo met the primary endpoint of non-inferiority with a 16 percent lower risk of MACE IV events, and Fundeo met the secondary endpoint with a 23 percent lower risk of MACE IV events. Additionally, in a pre-planned analysis not controlled for multiplicity, the survival advantage for patients on Fundeo was 57% compared to insulin glarging. These data add a new dimension to Fundeo's well-characterized effects on reducing A1C in weight, as demonstrated in multiple previous Phase III trials. Now, with results from Achieve IV, cardiovascular safety and a lower risk of all-cause death are added to the clinical profile. Adverse events were generally consistent with other incretin-based therapies, and no hepatic safety signal was observed in ACHIEV4 nor across the seven positive Fundeo Phase III registrational trials. ACHIEV4 is also the last trial required for the U.S. Type II Diabetes Core Registration Package. We plan to complete the U.S. submission for Type II Diabetes in late Q2 and anticipate regulatory action before the end of this year. Moving to retitrutide, our GIP, GLP-1, and glucagon triple agonist, we announced positive top-line results from TRANSCEND-P2D1, the first phase III trial of retitrutide in people with type II diabetes. Given the potential counter-regulatory impacts of glucagon activity on blood sugar control, We were excited to see profound improvements in hemoglobin A1C, as shown on slide 15. Compared to placebo, redditrutide lowered A1C by an average of 1.7 to 2.0 percentage points across doses. Importantly, we saw that participants lost an average of 11.1 to 16.6 kilograms, or 25 to 37 pounds. While cross-trial comparisons have limitations, these data suggest retitrutide can deliver glycemic control in line with the most widely prescribed incretin therapy for type 2 diabetes, terzepatide, while delivering additional weight loss. This is critically important given the difficulties people living with type 2 diabetes face when trying to lose weight and the significant need for better weight loss medications for this population. With these data on hand, we're optimistic that ratatutide can meet this need. Adverse events seen with ratatutide were generally consistent with what had been observed in clinical trials of incretin-based therapies, and discontinuation rates due to adverse events were 5% or less across all arms. We look forward to presenting detailed Transcend T2D1 results at the American Diabetes Association scientific sessions in June. Together with a positive TRiN4 results in obesity and knee osteoarthritis, we are beginning to establish a favorable clinical profile for retitrutide, consistent with our goals for this molecule. The next retitrutide trial to read out is TRiN1, an 80-week study in people with obesity. We look forward to sharing top-line results later this quarter. Also in cardiometabolic health, we initiated three additional Phase III programs for aloralintide. In addition to the ongoing Phase III obesity programs, we initiated Phase III programs in OA knee pain, obstructive sleep apnea, and as an add-on therapy for obesity. As a selective amylin receptor agonist, or SARA, aloralintide has shown a unique profile in Phase II trials with GLP-1-like weight loss and improved tolerability. We're eager to explore additional indications for this promising molecule in what we expect to be a very robust Phase III program across a number of potential indications. We also recently completed our acquisition of Ventix Biosciences, which brings a pipeline of small molecule therapeutics, including NLRP3 inhibitors designed to treat inflammation across a broad range of diseases. Both NLRP3 inhibitors are now shown in the Lilly pipeline. We also announced a licensing agreement with CSL for clasicizumab for certain indications, and that molecule will be reflected in our pipeline chart once Lilly trials have begun. Moving to immunology, we recorded two important datasets for EbGliss and atopic hepatitis. First, in the AdLong Phase 3B open-label extension study, EbGliss delivered durable disease control control for up to four years with once-month maintenance dosage. Nearly all patients achieved meaningful skin improvements, 75 percent achieved near-complete skin clearance, and 80 percent maintained their results without the need for topical corticosteroids. For people living with chronic relapsing diseases like atopic dermatitis, sustained control delivered with convenience is the ultimate goal. We're pleased that our once every eight weeks maintenance regimen is currently under FDA review and we expect regulatory action later this year. If approved, less frequent dosing may be a more convenient option to improve the patient experience and further differentiate EFGLYS from competitors. The second readout was the phase three adorable SLIM trial. EFGLYS delivered positive outcomes for children as young as six months old with moderate to severe atopic dermatitis. As shown on slide 16, 63 percent of children treated with EBGLYS achieve significant skin improvement as measured by EZ75. In addition, 44 percent achieve clear or almost clear skin as measured by IgA01 score. This makes EBGLYS the first and only selective IL-13 inhibitor with positive Phase III data in this age group where there are fewer approved medicines than in adolescents and adults. We plan to submit these data to regulators later this year for potential label inspection. Also in immunology reported positive top-line results from TOGETHER PSO, a Phase 3B study of exekizumab plus terzapetide in adults with psoriasis and obesity. In TOGETHER PSO, 27% of participants on terzapetide plus exekizumab achieved the co-primary endpoint of total skin clearance and 10% or more weight loss compared to less than 6% of patients on exekizumab alone. These results are the second successful trial, highlighting the benefits of treating psoriatic disease in OB with concomitant exekizumab and terzapatide therapy. This result provides further evidence that incretins may have a broader role in treating immunological diseases. We have additional ongoing Phase 3B combination trials in immunology studying merikizumab plus terzapatide in Crohn's disease and ulcerative colitis. We continue to assess other immunology settings where incretins may provide additional benefits. We also announced business development in immunology with our agreement to acquire Orna therapeutics. Orna's in vivo CAR-T pipeline includes potential best-in-class programs to reset the immune system and address B-cell-driven autoimmune diseases. We look forward to exploring the full potential of Orna's platform together with the Orna Turning to oncology, we announced positive top-line results from a Phase III erthibrutinib trial, BRUIN-CLL322. This ambitious study evaluated pertibrutinib in addition to a fixed-duration regimen of venetoclax and rituximab in patients with previously treated CLL or SLL. Pertibrutinib significantly extended progression-free survival compared to the fixed-duration regimen and was the first medicine to utilize and outperform a venetoclax-containing control arm in a Phase III treatment in the history of CLL drug development. As shown on Slide 17, Pertibrujiv has now been successful in four Phase III studies in CLL, each with compelling efficacy and possibility. Pertibrujiv has been studied across early and later line settings of CLL, demonstrated efficacy as a monotherapy and in combination, and shown efficacy head-to-head against key chemoimmunotherapy, a covalent BTK inhibitor, and now a venetoclax-based regimen. The breadth of evidence suggests protobridinib has potential to become a foundational therapy in CLL. Data from Bruin CLL313 and Bruin CLL314 are currently under review by regulators for potential label expansion into the first-line setting, and we plan to submit the results of Bruin CLL322 to regulators later this year. Building on the Breakthrough Therapy designation received in January for platinum-resistant ovarian cancer, we initiated second Phase III trial of Sofetabart's Mepetecan, our folate receptor alpha antibody joint conjugate for platinum-sensitive ovarian cancer. We also announced the acquisition of Colonia Therapeutics. Colonia's lentiviral in vivo CAR-T platform has shown very promising early clinical results in people with multiple myeloma, and we look forward to rapidly advancing the LEAD program with the Colonia team, as well as building future medicines using this technology platform. Earlier this week, we announced the acquisition of Ajax Therapeutics, the LEAD program, the Phase I, JAK2 inhibitor for myelofibrosis and polycythemia vera, builds on Lilly's established capabilities in blood cancers. Moving on to neuroscience, we initiated a Phase III program for Bernapetide, or GIFT-GLIP-1 Dual Agonist in major depressive disorder. This trial will assess if Bernapetide can delay time to relapse, a significant unmet need in psychiatry where rates remain high despite available treatments. We've also begun Phase II trials of Bernapetide in opioid use disorder and schizophrenia, and initiated Phase II trials for two pain assets, a NAV 1.8 inhibitor and an AT2 receptor antagonist. Lastly, we announced an agreement to acquire CENTESA pharmaceuticals, which will expand our neuroscience portfolio and capabilities into treating sleep disorders. CENTESA, a leader in EREX and science, is advancing a pipeline of EREX and receptor two agonists that target the neurobiological system governing the sleep-wake cycle. The lead candidate, Clement Orexton, has demonstrated a potential best-in-class profile. We look forward to welcoming the Sintesa team to Lilly later this year and continuing the development of these important molecules. Slide 18 shows pipeline movement since our last earnings call, and slide 19 shows the full list of key events expected in 2026. I'll now turn the call back to David.

Thanks, Dan. We're pleased with the progress to start this year. We executed well, both in driving business results and bringing new medicines to patients. We posted another quarter of impressive revenue and earnings growth, shared top-line results from five positive Phase III trials, announced four acquisitions, initiated six new Phase three programs and launched an important new Lilly Madison productive quarter and yet a lot more to come in 2026 let me turn the call over now to Mike for the

Q&A session thank you Dave we'd like to take as many questions as possible so consistent with prior quarters please limit yourself to a single one part question Paul please provide the instructions for how to join the queue and then we're ready for the first caller thank you at this time we will be

conducting a question and answer session. If you have any questions, please press star one on your phone at this time. Again, we ask that participants limit themselves to one question on today's call. If you do have a follow-up question, please rejoin the queue by pressing star one at any time. We also ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. And please hold while we pull for questions. And the first question today is coming from Jeff Meacham from Citi. Jeff, your line is live.

Great. Hey, guys. Congrats on the quarter. Thanks for the question. Maybe this one is for Dave. You know, investors seem to be acutely focused on pricing and incretions with not a lot of impetus on volume. I know you don't want to get too specific, but when you talk about, you know, at a high level, the margins under a wide range of price scenarios for Lilly, how do you see the investments you've already made in, say, manufacturing, and how does that add to the dynamic and what that means in terms of the competitive mode. Thanks.

Great. Thanks, Jeff. Dave, do you want to talk about pricing in anchor towns?

Sure. Thanks for the question, Jeff. Maybe a couple things to point out now that we're five or six quarters deep into this sort of post-shortage world and we can really pursue expansion on volume in an aggressive way. I think you can see something just a little different about the obesity, and weight loss category from what we think about in other pharmaceuticals, where, you know, the barrier is typically more informational, not price sensitivity. But here, clearly, because the out-of-pocket nature, 75% of ex-U.S. business for Montero is out-of-pocket, U.S. is a meaningful portion as well, that we see, you know, quite expansionary volume, perhaps nonlinear to price reductions. Of course, there's a floor on that, and we have sensitivity on our cost structures, et cetera, but pretty much every time we reduce pricing, we see a pretty large expansion. You also see built into this, the primary pricing affecting Q1 are actually negotiated outcomes with governments, both the MFN package we negotiated with the Trump administration, your cut out-of-pocket costs. You see strong growth, like Lily's up on Biles really had quite a strong quarter in Q1 at slightly lower prices. And then in China, we negotiated for diabetes access at a meaningful price reduction, but you can see the volume far outstripping the price concession. So kind of a different dynamic. And I think if investors can think about this category, perhaps unlike other pharmaceutical categories in the past. You know, in terms of margin sensitivity, it remains true that, you know, for this category, for us at least, the unit economics are really driven by fixed costs that are either sunk in the past or unmovable, depending on the volume in the present. And as a result, both covering the amortized R&D costs as well as CapEx is a concern from an accounting perspective. But at the margin, we do have latitude. That said, we want to invest in future medicines. And I think that's probably the biggest, as we've said before, as we think about long-term operating margin for the company, you know, the X factor. If we have good projects, we won't hesitate to invest in them, whether it be existing medicines. I think you see kind of a record load of phase three Nilex at Lilly right now, or for new medicines. And we've got a very full phase two and phase one pipeline that we are deploying capital against. So we've got a lot of latitude here, Jeff, and I think this market works a little differently, and we're all sort of just getting used to that, but I think good news for Lily in our incumbent position.

Thank you, Dave. Paul, next question, please. The next question will be from Chris Schott

from J.P. Morgan. Chris, your line is live. Great. Dig a little bit more into international Manjaro, and can you just share some of the learnings from, I think it's been a much better expected launch than we opportunity you expect any impact to the ramp from the entry of generic SEMA in select markets or is this such an early stage of penetration great thanks Chris for the

the question about international Monjaro and the potential impact of generic SEMA we'll go to Patrick

thank you very much Chris you know when we look at the first quarter it's truly a strong group of all our prioritized products across international but of course particularly in Monjaro and now we have fully launched in more than 55 countries, and we have seen a very strong speed of uptake and also a rapid market share gain. Also in the market, we launched the second half of 2025, referring to Brazil and Korea, where we currently have an estimated market share of 60%. And of course, also the China type 2 NRDL reimbursement. When we look at the generics, we only have a few weeks of data from India. but it seems like it's really stimulating the growth in the overall obesity market and that includes our product and the Monjaro has actually been holding market share quite nicely. When we look at the Monjaro prescriptions they are about 10% higher in recent weeks compared to the period prior to generic center. So I think it just underscores that dual agonism trumps single agonism. Moving forward, I think we should expect a very strong continued year-on-year growth and some sequential growth. We saw in the slide earlier that we have a market share above 53% OUS, and that's an average. And in many international markets, we have a market share along the lines of what we see in the U.S. with set-bound. And when you get to that level of share, incremental share gain is getting harder. And of course, we will focus our efforts on patient activation, driving increased penetration in the chronic weight managed market and market growth. And also, secondly, what we have seen during the second half of the year has been some seasonality, mainly driven by the holiday season in Europe, where patients tend to take a drug holiday break or actually delay that initiation of the new therapy start. But overall, strong growth across regions seems like generic semaglutide is stimulating market growth, and we continue to do well. We expect a continued strong year-on-year growth, sequential growth driven by patient activation.

Great. Thank you, Patrick. Next caller, please, Paul.

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

Oh, great. Thanks for the question. So really, we just wanted to get a better understanding of how the market, as you see it, is starting to segment and could segment going forward more as you look forward to the potential introduction of Reditrutide amidst the Foundio launch, as well as then the follow-on to that being the LRL entunch. Where do you see the market really opening up with each of these potential assets reaching forward. Thanks so much.

Great. Thanks, Seamus. For that question, we'll go to Ken to talk a bit about the broad elite portfolio and how we see the market segmenting.

Thanks for the question, Seamus. I think it's reasonable to expect in this large and growing market and opportunity in obesity that with the number of patients around the world living with overweight or obesity, numbering perhaps in the billions, that many of them are going to want different types of medicines that are tailored to their individual needs and preferences. We're in early innings in that regard. We're now sort of bringing the third segment, I guess, in. We've had GLP-1 single agonists and then dual agonists and now oral medicines. But we see many other sort of plausible opportunities to tailor medicines to different groups. As you noted, retitutide is one of those ideas, which very obviously could play to individuals who are seeking greater weight loss, although I will say we see opportunities for retitutide elsewhere and across the spectrum of obesity. A loralentide, we can position that a few ways based on the phase two data that we've seen. The first of which is that this could be a great medicine for patients seeking a non-GLP1-based mechanism, perhaps due to tolerability they've experienced or tolerability that they're fearful of. It may also be a good drug that could be added on top of existing incretin therapies to provide incremental weight lowering. But there's many other ideas out there Lily's investing in. That includes medicines that can be dosed even less frequently, perhaps those that dial in additional metabolic benefits, and maybe some that are sort of ultra-long-acting using genetic medicine approaches. We see all of these as compelling ideas, and we also feel we're in a leading position in most, if not all, of those spaces. You know, in terms of how the market will ultimately shake out in terms of percentage of use across those different ideas, it's hard to prognosticate that, but many of these ideas are tied to common manufacturing platforms and we're making the investments to support any of them, should they prove to be really the most favorable option for managing the OHA in the BC. Great. Thank you, Ken. We'll go to the next

question, please, Paul. The next question will be from Alex Hammond from Wolf Research. Alex,

your line is live. Good morning, guys. Thanks for taking the question. On Medicare access, can you walk us through your strategy to activate these patients? And when do you kind of see this playing out in terms of either maybe a 4Q dynamic or more of a 2027 as these patients pull through. And I guess as well, with the attractive price point, how do you think about persistence in this population?

Okay. Thanks, Alex. For the question about Medicare access and sort of staging over time, we'll go to Ilya.

Yeah, great. Thank you for the question. Obviously, we're excited about having Part D access starting to activate for obesity medicines starting in July. In the way that we think about it, there are millions of Part D beneficiaries that are . And so the path to that with having a long trajectory with a big program of not only starting in July through 2027 is an important aspect. Obviously, that will take time to build. We need to have the education across physician-based pharmacies as well as consumer-based. to understand the full path of different medicines that we have and available for treating obesity. And so that will be a gradual path in 26 as it starts and then continued growth in 27. And obviously, the $50 a month copay is an important element of affordability for seniors. We've already seen for ZepBound as well as Manjaro that they've had great persistency overall relative to other chronic conditions and we continue to see that obviously the $50 copay and affordability will only just add to that in addition to all the health benefits and experiences that people will have over time. So we're excited about expanding access very soon. Thank you

Ilya. Next question, please, Paul. The next question will be from Evan Siegerman from BMO

Capital. Evan, your line is live. Hi, guys. Thank you so much for taking my question. Bigger picture, strategically, you know, as you think about the next, you know, levers of growth for the business, what do you need to see from either the INI, neuroscience, or oncology franchises to kind of match the scale of the obesity metabolic businesses or particular assets? Is it, you know,

BD or something else. Thank you. Great. Thanks, Evan. We'll go to Dan to talk about some of the important programs that he's focused on to drive growth in the future. Yeah, thanks, Evan, for that

question. And it's an important one to us. At starters, you're asking about scale, but I point out in growth rate that those businesses are growing extremely fast. Even without the obesity and metabolic business, Lilly would be the fastest or surely one of the fastest growing pharmaceutical companies in the industry. So we're proud of what we're doing in those three areas. And I think each of them has very significant unmet medical needs that we can scale into as our medicines are successful. So we like what we got. We like the direction we're going. Of course, in each of those areas, we also see opportunities to get a lot bigger. And we've highlighted some of the themes already in those areas, you'll also see us address some of that through business development. So for example, the CENTESA acquisition allows us to play in a new area here in sleep-wake medicines. The WARNA acquisition allows us to play in new areas of immune reset, for example.

Great. Thanks, Dan. Next question, please, Paul.

The next question will be from Asad Haider from Goldman Sachs. Asad, your line is live.

Great. Thanks for taking the question. And congrats on the continued strong execution. Maybe just going back to Fundio, I appreciate all the color on early launch dynamics, which is sort of playing out along the lines of your messaging, that the initial launch trajectory is going to live below that of oral regovi, but then there's going to be an acceleration as we move into the back half of the year. So just now with a few weeks of launch under your belt, I think you said 15,000 patients have started taking the drug already. What's your level of confidence on that launch curve framing in the context of the early experience? And then related on the guidance range, are you able to provide any high-level commentary on what type of contribution was factored in for Fendio, recognizing that you said that the revised range reflects mainly the strong underlying performance of Manjaro and Zeppan?

Thanks for the question, Asad. Ilya, do you want to talk about some of the early launch metrics that you're tracking and the feedback you're hearing, and then maybe just a short comment from Lucas about the guide.

Well, first, it is early days, but we're pretty pleased with the trajectory and encouraging first start to launch. Obviously, we just started Active Salesforce Promotion just over a week ago, having broad availability in the supply channel just two weeks ago. Really, we're encouraged by the initial leading indicators. And the way that we think about it, There are probably three key factors and catalysts of growth, and those three are, one, growing the familiarity among healthcare providers on the clinical profile of Foundeo, building out the access, and growing the awareness of Foundeo with consumers, and we're making progress on all three fronts. And so on HTPs, if you think of the early indicators, we now have over 8,000 prescribers of Foundeo, a third of which who have not previously written in oral GLP-1. And so this is expansive, and the current sentiment so far what we're hearing is really positive on the overall efficacy and kind of the no-hassle factor on a daily oral GLP-1. So that's an important aspect. We'll continue on the execution related to HCPs around sampling, continued promotion through our Salesforce, as well as educational seminars, and we're fully in the field with our promotional efforts with HCPs. So good progress there. On access, we've confirmed commercial access at two of the large PBMs by middle of May, so just in a couple of weeks. And to the earlier question on Medicare, Medicare access will start at the beginning of July. And so those are continued catalysts of growth upcoming in the next couple of months. And so we see that as an important unlock and expansion as well. And then on the third piece, on the consumer front, we now have just over 20,000 patients treated to date. And one important element there is that 80% of those Fandero prescriptions are new to class. So this is expansive in bringing new people into being treated for overweight or obesity. We've done a number of aspects already around the direct-to-consumer on digital, on social media and others, but obviously we will continue those efforts on a full-scale direct-to-consumer and TV launch in Q3. Important there is just to ensure that prescribers have familiarity around the profile of FANDAO before we do that. So bottom line, I think we're pleased with the progress. early indicators are positive and moving in the right direction, and the trajectory will build over time. This is a new brand, new medicine that we're bringing to the market. So we're pleased

and ready to go. Maybe on the second part, going to the guidance, just to highlight a couple of things. Of course, again, the increase on our guide is driven by the strength of the entire portfolio that we mentioned during the call, starting, of course, with the incrementing portfolio, both in the U.S. and our U.S. In terms of Fundello, per se, you've heard already from Ilya about how we continue to see progress and very encouraging feedback that we hear from payers, physicians, and patients as well. We set up the plan at the beginning of the year, and it's very early days. We have three weeks of data at this time, so it's tracking to our expectations, and we will continue to see how this progress over the year, but we feel very confident on the trajectory

that we've seen so far great thanks Lucas Paul next color please the next

question will be from James Shen from Deutsche Bank James your line is live

hey good morning guys thank you for the question this was for Dave with bridge extending into 2027 Dave what's next for balance is Lily working stakeholders on

revisions to secure longer-term Medicare access thank you thanks James Dave you want to share two comments about the bridge balance dynamics sure yeah look

When we signed the agreement with the administration, we all knew bridge was going to be put in place because it was a mid-year launch, and we had understood at the time that there was a commitment to 27 if, as a contingency, the Part D plans did not choose to opt in at a certain rate. Of course, we now know they didn't, and maybe that's not so surprising. You know, they operate on inner margins. There's been other disturbances and market events in the Part D program, for instance, the IPA products, et cetera, that have changed their economics. And unfortunately, I guess, not being a part of those discussions, but they couldn't cross with the major players for calendar 27. So the government's doing what they said, and they're extending bridge. I think for manufacturers, there's some puts and takes in that, but the fact that there'll be access to the consumers at $50 a month, I think, is a very compelling proposition, as Ilya highlighted before, will drive great persistency. And in an 18-month window, I think we will start to see population-level health improvements if these are used at scale. That will then set up the 28th discussion. I would expect the government to lean hard into getting Part D plan participation in 28 and normalizing obesity care as a standard preventative treatment and something that should be used to treat comorbidities of obesity within the senior population. We may have the evidence to support that as we exit 27. It may need a little more time, but I think they're going to push to help make that happen. And I think that normalization is overdue in the commercial market, so it'll be a good leading indicator for us across the U.S. business. We'll continue to work with the government closely through that period and, of course, try to work with them to activate patients and make sure they can find success on our medicines. So stay tuned. Probably more news as we exit 26 on the actual 28 plans.

Thank you, Dave. Next question, please, Paul.

the next question is coming from Mohit Pansal from Wells Fargo we'll hate your

line is live great thank you very much for taking my question and congrats on the progress I just want to touch upon the employer connect program that you are embarking upon so it seems like the insurance of commercial insurance has been relatively stable ish year over year so this seems to be the way to grow it and employers are worried about you know their costs long term and everything so we love to understand what are the steps to convince employers to buy in into the Employer Connect program and the mechanics of it thank you

thanks Mohit you want to make a few comments about Employer Connect and the

progress and focus sure thanks Mohit yeah listen as you mentioned the overall commercial access has been pretty steady around 50% and one of the One of the key aspects that we're excited about is having an Employer Connect platform where we work with a number of third parties to actually go out and talk to different employers about the value of covering obesity care. But there are several that are a little bit different with our Employer Connect program. One is a transparent price that is known to all of the employers and providing the flexibility and design around the employer-employee contribution towards obesity coverage. And so we do think that this is a positive element to increase the number of employers to opting in. Obviously the selling cycle and the timeline for making decisions for 26 has already passed. So while we are currently having positive conversations and positive feedback from employers around this new platform, that will most likely have a gradual impact in the back half of 26 and most likely incremental opt-ins for 27. And then as part of that, obviously, there's going to be more data on real-world evidence and also components of where employers do cover what are the benefits to their employees overall, both in their health and productivity over time, and as that data comes out, that will only reinforce the positive decision to provide coverage for obesity care.

Great. Thank you. Next question, please, Paul.

The next question will be from Terrence Flynn from Morgan Stanley. Terrence, your line is live.

Great. Congrats on all the progress. I had a question broadly. You talked to the portfolio that you're going to be – you currently have, but you're also rolling out across the Incretan area. And so as you think about the evolution, I guess, of the DTC channel, what are some of the things you're considering to kind of leverage Lilly's scale on that channel? And then also anything that you think will help there from a commercial side in terms of driving additional coverage in terms of having scale across the portfolio?

Thanks for the question, Terrence. We'll go to Dave to talk a bit about the portfolio strategy and leveraging DTC.

Sure, and Ilya and Patrick can jump in here. I think you're pointing out something that has evolved and been developing part of the story here for our growth, which is consumers wanting to take charge of their own health and activate the digital platforms to control weight and obesity. I think this is here to stay, and it's a big part of our business now and probably something we need to continue to invest in. And we're doing just that, so you should expect continuous improvement in that experience for consumers in the U.S. and then expansion nationally with the current offerings. I would also say, you know, this notion as we move into other kinds of medicines that could be more preventative could be quite a useful platform to reach more people. We all know that the financing of the current health care system is a struggle everywhere, and with, you know, all the noise around PAs and other barriers to care people need. People want to take it in their own hands. And I think, of course, we need to do that within the confines of the regulations and law, but there's a lot of room for improvement for consumers, and it's a great outlet potentially for us. So let me ask Ilya or Patrick to add to that, if they have anything to add on Lilly Direct and our offerings.

Just maybe a few key components of what we've seen on Lilly Direct, But even with ZepBound, you've seen that currently around 55% of new patient starts are coming through self-pay for most of which is coming through the direct or telehealth players, which is a component of reducing some of the frictions in place. And even early in our launch of Foundeo with limited promotion, we're seeing that that reduced friction level and understanding direct-to-the-consumer is an important lever. About 45% of our volume for Foundeo early on is coming through Lilly Direct. And so we continue to look at ways to improve on the experience for both providers and for consumers in the way they get their health and enter their journey for disease. And obviously, it plays a significant role for obesity currently.

Similarly, outside of the U.S., I referred earlier to us being at a very high market share in most of the markets already, and patient activation is going to drive most of the coming And we have seen that the markets are responding to patient activation efforts, although it's a slower ramp. But that's going to be key, taking into account the low penetration of incretins outside of the U.S.

Thank you. Let's move to the next question, please.

The next question will be from Umair Rafat from Evercore. Umair, your line is live.

Hi, guys. Thanks for taking my question. I thought I'll spend a quick second on ZepBound's commercial dynamics in the U.S. And really what I'm trying to understand is, for example, 1Q, 7 million TRX, and 4.1 billion sales for ZepBound in the U.S., meaning it's about $580 per prescription. And even if you adjust for some of the one-timer adjustments, adjustments it's still about 550 dollars per rx whereas we understand the cash pair prices to be about 450 or so i mean that prices too i guess what explains that delta or maybe ims is just

not capturing some of your online channels thank you great uh umar well uh lucas to talk a bit

about uh pricing dynamics in the us yeah umar thank you for your question and uh quick math Your math is pretty spot on, by the way. So just to highlight, yes, and even normalizing by these period period adjustments. First of all, again, going back to the initial question on pricing, if you are about what we agreed on MFN side as well back in November, and then the NRDL access, prices has been relatively stable quarter on quarter. I think it's going back to what we discussed last time about maintaining that price discipline. We continue to see that happening while we continue to grow significantly on the volume side as well. And yes, again, going back to your analysis on the pricing, yes, you have the Lili Direct prices that, as you know, we have adjusted down starting in December. And those prices have been very stable on that front as well. And then the rest, basically, by difference, you get into the commercial business, mainly that that's the different portion that it gets to that net 550 that you highlighted.

Maybe just one add, I think that isn't widely appreciated, is there is a reasonable amount of medical exception and OSA usage that moves across channels at close to an undiscounted price. So I think that's probably the piece of your math, Umar, that you might want to take a look at.

Great. Good. Thanks, Dave. Next question, please. We'll try to get through a couple more if we can.

The next question will be from Courtney Breen from Bernstein. Courtney, your line of life.

Hi, guys. Thanks so much for taking the question today. I know there's been a huge amount of focus on kind of the first few weeks of FoundEo and specifically kind of the launch strategy and activation of the different channels. Perhaps, Ken, it would be helpful if you could talk through how does this compare to kind of a traditional primary care launch? What things are you accelerating? What things are you holding back? And for what reasons, particularly in the context of the fact that you've got extreme amounts of inventory pre-prepared for the launch of this

product? Okay. Thanks, Courtney. Ilya, do you want to make a few more comments about the Foundaya

launch vis-a-vis primary care? Sure. Yeah, maybe just probably the three elements I discussed earlier are probably the same for all of our primary care launches, where you need to grow the prescriber base and understanding of the profile of the medicine, and that's what we're doing here with Fandaio. Building out access, and quite frankly, this is actually getting access very early in launch, both on the commercial side, having two of the three being activated in the next couple of weeks and getting Part D, which is usually lags in July, is a faster ramp on access, and so we're excited about that aspect. The piece that is probably on the primary care side an important element that many have noted is around DTC, and we activated from day one in the first week a number of both digital, social media, and out-of-home advertising on the brand itself, but it does take time to build out consumer understanding and awareness of the brand. The current sentiment, if you follow the total number of impressions and what consumers are saying about the ProfileFoundeo is resonating, so both in the efficacy as well as the overall profile on not having food or water restrictions, and so that element is positive. Now, obviously, having full DTC launch, we're still activating that probably earlier than normal because there is familiarity around GLP-1, but we do want to take a moment and have, be disciplined in the approach of making sure that physicians actually understand what Pandejo is before activating fully. But overall, this is following an accelerated path in primary care. And if I compare, we've had the opportunity to launch many brands within primary care with Trilicity, with Valjaro, Zetbound, Jardians, all of which have gone towards leadership in those categories in a competitive space. So we feel pretty good about all of the actions we're taking, the three key factors, and the pace at which we are activating all three components.

Just to reiterate one thing, which we said earlier, but just so it's not lost, is the three major products that are used in obesity in the United States are all line extensions. So the molecule was on the market before, and in some cases the brand name was used before. So consumer awareness, which is the brand name, and the molecule itself, which is the position part. We're starting from a much lower baseline. We've got to build that. But we're hugely confident we'll be able to build it. We've launched many, many primary care drugs that are new successfully. And then the final thing I'll say is related to your inventory. I mean, that really speaks to the international rollouts. That's why we keep mentioning there's 40 different countries under review. And we expect that to happen also in one of the most accelerated cadences, perhaps, in the history of the industry. So expect launches as we exit this year into next year in quite scaled markets. And we know from what we're seeing on this call with Manjaro and International, there's a huge opportunity for FoundEo around the world.

Great. Thanks, Dave. We'll do one last quick question, and then we'll go to the close.

Final question today will be from Dave Reisinger from Lyric. Dave, your line is live.

Dave, are you there? Yes, thanks, Harry. Yes, sorry. Can you hear me okay now? Yes.

Sorry about that. Thanks for taking the question. So, Dave, I was hoping that you could just frame your vision for employer coverage in the United States. So in the U.S. pharmaceutical business, employer coverage is most important for drugs, particularly drugs that treat various medical conditions beyond cosmetic. And so I understand that you have the employer direct initiative, But I'm just trying to get my head around what you think will happen with regular employer insurance coverage in coming years versus coverage that will involve greater cost sharing by participants that engage with Lilly Direct for consumers to pay more out of pocket than they are paying today under regular employer coverage. Thanks very much.

Okay, thanks, Dave, for the question. Obviously an important factor, and we do think, just as a policy matter, that obesity and overweight medications should be broadly covered. I think a big step in this journey is actually the July 1 Medicare. There's often spillover benefits into commercial from there, and I think setting a standard that people in America should expect, if they've paid into their insurance program or their employer has, that it will cover their health needs. That said, I think the likely path from here to what I think will ultimately begin to look like other chronic medication markets like diabetes and hypertension, I think we will get there with this category. But it won't be a straight line. It won't be a straight line. It won't be kind of everything we want on day one. Because the economics you're mentioning, it's a very broad disease. Seventy percent of adults have overweight or obesity and are potential candidates for these medications. and it's the last thing in, and we know that despite the fact that it could be one of the most valuable healthcare interventions available, it's the last one we see, so it's easier to say no to. But, you know, we do see progress there. As Lily said, Employer Direct is all about creating new options to get to yes with employers, alternate pathways. We'll continue to publish data, as I'm sure Novo Nordisk will, that demonstrate that pretty much all of these drugs in this category have had profound effects and are probably cost effective at their current prices. And of course, prices have been trending down. So we'll continue to make progress. I should also say we have a number of new indications coming. And per Umar's question earlier, that actually is a pretty good unlock for us when we get directly indicated populations with acute comorbid disease. So all those things will pull together. And in some future year, we'll look back and say, you know, we got there. But it's going to be more incremental progress quarter on quarter. and we'll keep updating the street with what to expect as we issue our guidance. Dave, do you want a few comments to close? I will. So, again, I appreciate everyone dialing in today on our call and your interest in Eli Lilly and company. We hope you'll join us later this year. We're announcing a Lilly Investment Community Update Day. This will be on Monday, December 7th, and details on location and exact timing are to follow. Please follow up with the IR team. if you have any questions that we didn't address today and hope you have a great day thanks thank

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