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Pharmaceutical company Eli Lilly is known for breaking ground in insulin, polio vaccines, penicillin, and antidepressants, most famously developing Prozac. Now, in the age of GLP-1 medications, which have transformed obesity and diabetes treatment, the company has shown it can move fast. Eli Lilly brought tirzepatide (sold as Mounjaro and Zepbound) from clinic to market in six years, compared with the company’s usual 11-year development cycles. An ongoing battle for Lilly, as well as Novo Nordisk, involves fighting copycat versions of its GLP-1 products made by compounders, and forcing them to modify their disputed claims. The FDA has warned patients and health care professionals about the dangers of compounded GLP-1 drugs and unapproved weight-loss medicine.

Change the World

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

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Eli Lilly, the Indiana-based pharma company, is celebrating its 150th anniversary in grand style: Its revenues have tripled since 2018, to $65.2 billion last year. It owes its surge to Mounjaro (for diabetes) and Zepbound (for weight management), which together command about 60% of the manically growing U.S. market for GLP-1 drugs.

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The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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Eli Lilly ranks 69 on this year’s Fortune 100 Best Companies to Work For – Europe list.

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

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The Future 50

Founded over 145 years ago in Indianapolis, pharmaceutical company Eli Lilly established its first European affiliate in 1934. Lilly has provided more than two million doses of diabetes and cancer medicines to hospitals and patients in Ukraine via humanitarian partners, and its Foundation aims to extend Lilly's reach and impact and support programs that align with its philanthropic priorities. The pharma company's Skills First approach gives individuals without four-year degrees access to job opportunities that may not be available through traditional recruiting practices; apprentices receive a combination of formal training, on-the-job learning and mentoring in a key functional area to equip them for a full-time role.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are insurance and managed care, medical products and facilities, pharmacy services, and pharmaceutical companies.

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The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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WMA 2024-Eli Lilly

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Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

This pharmaceutical giant has produced some of the most game-changing drugs in modern history, including the first commercially available insulin product for diabetics and Prozac, widely used by psychiatrists to treat depression. The company’s sales grew this year thanks in part to its antibody drug bamlanivimab, used for treating COVID-19.

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F500-2020-145-Eli-Lilly

The pharmaceutical giant was founded in Indianapolis in 1876. It introduced the world's first commercially available insulin product, Iletin, in 1923 for the treatment of diabetes. It was also the first company to manufacture and globally distribute Jonas Salk's polio vaccine. Today Lilly is known best for clinical depression drugs Prozac (1986) and Cymbalta (2004) and antipsychotic medication Zyprexa (1996), though its biggest revenue drivers are diabetes drugs Trulicity (2014) and Humalog (1996). Still headquartered in Indiana's capital city, the company made its largest acquisition ever in 2019 when it purchased Stamford, Conn.'s Loxo Oncology for $8 billion.

This year's Fortune 500 marks the 65th running of the list.

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This year's Fortune 500 marks the 63rd running of the list.

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Impact Segment

Eli Lilly is the powerhouse behind today’s blockbuster drugs Mounjaro (tirzepatide), prescribed for weight loss; erectile-dysfunction treatment Cialis (tadalafil); Humalog, a rapid-acting insulin; and diabetes treatment Trulicity. Founded in 1876 by Civil War veteran Eli Lilly, it was the first to mass-produce insulin in the 1920s, one of the first to mass-produce penicillin during World War II, and an early producer of the polio vaccine. The company has also developed several major mental-health drugs, including Prozac (fluoxetine), one of the most widely prescribed selective serotonin reuptake inhibitors in the world. Eli Lilly operates in over 100 countries.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Eli Lilly (LLY): Company Profile, Stock Price, News, Rankings

legacy

Eli Lilly

eli lilly

Ladies and gentlemen, thank you for standing by and welcome to the Lilly Q4 twenty twenty four 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, Mike Zappar, Senior Vice President of Investor Relations. Mike, please go ahead.

Good morning. Thank you for joining us for Eli Lilly and Company's Q4 twenty twenty four earnings call. I'm Mike Sabar, Senior Vice President of Investor Relations. Joining me on today's call are Dave Ricks, Lilly's Chair and CEO Doctor. Dan Skrovansky, Chief Scientific Officer and President of Lilly Immunology Lucas Montarce, Chief Financial Officer Anne White, President of Lilly Neuroscience W.

UFA, President of Lilly International Jake Van Naarden, President of Lilly Oncology and Patrick Johnson, President of Lilly Cardio Metabolic Health and Lilly USA. We're also joined by Mark Heeman, Wes Tall and Wei Huang of

During the call, we anticipate making projections and forward looking statements based on our current expectations. Our actual results could differ materially due to several 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. It is 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 our non GAAP financial measures. Now, I'll turn

Okay. Thanks, Mike. Twenty twenty four was a productive year for Lilly. We grew our top line, advanced our pipeline and invested in our supply chain to meet the increasing demand for our medicines. Most importantly, we delivered for patients by bringing life changing medicines to more people around the world.

In 2024, full year revenue grew 32% compared to 2023, exceeding our first time guidance by $4,000,000,000 Revenue grew 45% in the most recent quarter as our recently launched products gained momentum. Last year, we announced positive Phase three results for Imlumestrant, insulin elsotora alpha and three additional tirzepatide trials. We also started Phase three programs for lepidisiran, pramternatug and olimaracib based on positive earlier phase data. We continued to complement our pipeline through acquisitions and collaborations. We acquired Morphix Therapeutics and announced a collaboration with OpenAI to invent novel antimicrobials.

We opened the Lilly Seaport Innovation Center in Boston as a hub for Lilly's genetic medicines efforts and announced a new Lilly Gateway Lab in The UK to collaborate with European research. We advanced our manufacturing agenda, announcing investments to expand our footprint in Indiana, in Wisconsin and in Ireland. Since 2020, our commitments to build, expand and acquire manufacturing facilities now total more than $23,000,000,000 Importantly, we brought innovative new medicines to patients. In 2024, we received regulatory approvals for Kysunla, Eglis and a new indication for ZEP bound in OSA. This progress strengthens our portfolio of new products and enhances our capacity to drive top tier growth and margin expansion.

As you can see on Slide five, we continue to make progress against our strategic deliverables in Q4. Revenue grew 45% in our new products growing by more than $3,100,000,000 led by a strong uptake of Monjaro and Zepbound. Q4 also saw solid performance across oncology, immunology and neuroscience. Our business excluding Engraton's grew by 20% in the quarter compared to Q4 twenty twenty three, excluding the one time benefits of business development. Since our last earnings call, we achieved several key pipeline milestones.

We received approval for a new indication of ZEPOUND and Ombo. We submitted Imblumestrant for metastatic breast cancer and tirzepatide for heart failure. We also announced positive Phase III results in the SURMOUNT5 study, where ZEPTOUND demonstrated a 47% greater relative weight loss compared to Wegovy. We strengthened our overall supply position and delivered on our production target to make 1.5 times the saleable doses of INKRA to medicines in the second half of twenty twenty four compared to the second half of twenty twenty three. With more patients using Lilly Direct, the uptake of single use outbound vials increased.

We had no wholesaler backorders as we closed 2024

wholesalers have been fulfilling orders from pharmacies at very high levels. We continue to augment our internal pipeline with external innovation, announcing plans to acquire Scorpion Therapeutics' mutant selective PI3KA inhibitor program. This transaction will add a clinical stage breast cancer asset to our oncology pipeline. And lastly, we returned $3,000,000,000 to shareholders via dividends and share repurchases. In addition to that, we announced at the end of the year a $15,000,000,000 share repurchase program and the seventh consecutive 15% increase in our quarterly dividend.

to our Q3 call including the milestones I mentioned here and several other updates. Now, I'd like to turn the call over to Lucas to review our Q4 and 2024 full year results and provide details on the 2025 guidance. Thanks, Dave.

Slide seven summarizes our financial performance in the fourth quarter and Slide eight for the full year. As Dave mentioned, our revenue grew 45% in Q4, primarily driven by Monjaro and Zepa. Performance of our non increasing portfolio was also strong as revenue grew 20% excluding one time payments related to business development. Gross margin as a percentage of revenue increased to 83.2% in Q4, primarily impacted by favorable product mix. R and D expenses increased 18% from continued investment in our early and late state portfolio.

In total, we started eight new Phase III programs in 2024 and advanced several new assets into the clinic. Marketing, selling and administrative expenses increased 26%, mainly driven by promotional efforts to support ongoing and future launches. This includes U. S. Direct to consumer advertising on Sefana and Moncharo and U.

S. Launch activities for Quesanla and Netlist. We also increased our commercial investment outside The U. S. To support international launches of Moncharo.

Operating income more than doubled increasing to $5,600,000,000 driven by higher revenue from new products. The effective tax rate was 13.2%. We delivered earnings per share of $5.32 inclusive of $0.19 of acquired IP R and D charges. This compares to $2.49 in Q4 twenty twenty three that includes $0.62 of acquired IP R and D. On Slide nine, we quantify the effect of price, rate and volume on revenue growth.

U. S. Revenue increased 40% in Q4, driven by robust volume growth of 45%. Ceva and Moncharo were again the largest growth contributors, partially offset by declines in Trulicity. Realized prices decreased 5% in The U.

S. Due to favorable changes to estimate for rebates and discounts related to Moncharo in Q4 twenty twenty three. Europe revenue grew 82% in constant currency. We continue to be pleased with the uptake of Monjaro and have now launched in all major European markets. In addition to growth from Moncharo, European revenue benefited from one time payment associated with the amendment of our alliance with Boehringer Ingothem.

This was recorded in Jardiance revenue in Q4. Excluding this one time payment, Europe revenue grew 61%. Japan revenue grew 27% in constant currency. Volume growth was driven by Monjaro, Ombo, Jardiance and Bersenio. In China, revenue increased 13% in constant currency.

Private and Bersenio drove volume growth. Monjaro was recently made available in China and will proceed with a limited launch as supply becomes available. We expect modest initial Monjaro sales in China due to supply limitations, a more meaningful contribution in the second half of twenty twenty five. Revenue in the rest of the world grew 46% in constant currency, driven by volume growth of Moncharo and Bersenia. Slide 10 provides an update on our performance of new and growth products.

New products more than doubled in Q4 to $5,600,000,000 led by global Moncharos sales of $3,500,000,000 and U. S. CEPAN sales of $1,900,000,000 U. S. CEPAN performance is going very well.

We began promotional activities this quarter and we continue to see a strong uptake. In Q4, Sepan became the market leader in the anti obesity market as measured by new prescriptions. As shown in ILN 11, we combined U. S. Increase in analog market grew 45% compared to Q4 twenty twenty three.

We increased three percentage points in share of market in Q4 twenty twenty four. Jipercap worldwide revenue was $114,000,000 adding another solid quarter of sequential revenue growth. Worldwide onboard revenue increased to $57,000,000 With the recent FDA approval in Crohn's disease, we look to drive broader use in an additional patient population. The KYSANDA launch is progressing well and prescriptions in The U. S.

Have been steadily increasing. While it is early, we saw positive momentum across key indications key indicators including volume of diagnostic ordered, access in priority integrated health systems, coverage by Medicare and commercial plans and number of infusion sites placing orders. We are encouraged by the launch of EPLIS in The U. S. We saw early positive receptivity and high levels of physician engagement.

In addition, we expect commercial access with two of the largest pharma benefit managers beginning in March. We now plan an accelerating investment in commercial activities to drive new patient start. Growth products also performed well as revenue increased by 13% compared to Q4 twenty twenty three. Fresenius growth trajectory continued as U. S.

Total prescription grew by 15%. In addition to strong execution in the early breast cancer indication, Resenio revenue benefited from increased U. S. Wholesalers target at year end. Worldwide Trulicity revenue declined 25%, driven by Monjaro switches and to a lesser extent lower realized prices.

On Slide 12, we provide an update on capital allocation. Moving to Slide thirteen and fourteen, I will discuss our 2025 financial guidance. As previously shared, we expect 2025 revenue to be between $58,000,000,000 and $61,000,000,000 The midpoint represents approximately 32% growth compared to 2024. We anticipate continued U. S.

Increasing class growth, consistent with the trajectory of total prescriptions seen in 2024. We expect to launch Moncharo in new markets outside The U. S. And Europe throughout the year. Monchar international revenue will contribute to overall performance more significantly in the second part of twenty twenty five.

Given the uptake of newer ingredients, we expect Trulicity volume to continue declining as fewer new patients are starting on Trulicity. We expect oncology, neuroscience and immunology to also grow revenue in 2025 as Epsilis, TIPIRCA, Onbone, Kysandra launch updates continue. At the portfolio level, we anticipate foreign exchange to be a headwind as the dollar has strengthened relative to other currencies. In addition, we forecast overall net prices to decline by mid to high single digits in percentage terms, including U. S.

Part D changes. We continue expanding our manufacturing capacity and estimate to produce 1.6 times the amount of increase in saleable doses during the first half of twenty twenty five compared to the first half of twenty twenty four. Our facility in Concord is anticipated to begin shipping medicines this year and we plan to make continued progress on expanding our manufacturing network. Our expected ratio of gross margin less OpEx divided by revenue is expected to be between 41.543.5%. At the midpoint, this reflects approximately three forty basis points of margin expansion compared to 2024.

In SG and A, we will continue to invest behind our new launches including direct to consumer efforts in The U. S. To drive new patient activation. In addition, we plan to increase investment outside The U. S.

To support the launches of Monjaro in new and existing markets. In R and D, we plan to accelerate our investment in early and late phase activities. As Dan will share later, we started eight new Phase three programs in 2024 and anticipate that investment in those programs will run as the studies enroll patients. We also plan to initiate new Phase three programs in 2025. While we keep a high bar for what we advance into clinic dial development, we expect to scale our investment in R and D this year.

Other expenses is expected to be $600,000,000 to 700,000,000 driven by interest expense. We estimate our effective tax rate to be approximately 16%. Earnings per share or EPS is expected to be $22.5 and $24 on a non GAAP basis. This doesn't include a forecast for charges related to IP R and D. Now I will turn the call over to Dan to highlight our progress in R and D and to provide an overview of potential key events we in 2025.

Thanks, Lucas. Lilly R and D had another productive quarter. I'll cover pipeline progress in Q4, then the 2024 key events and finally provide potential key events for 2025. Since our last earnings call, two new indications were approved in The U. S, ZEPOUND for obstructive sleep apnea in adults with obesity and AMBO for moderate to severe Crohn's disease.

Both approvals are important milestones and mark an expansion in the number of patients who can benefit from each of these medicines. Moving to regulatory submissions, we completed submissions in The U. S. And EU for tirzepatide for heart failure and global submissions for imelinesterin for metastatic breast cancer and for J. Perka with the Bruin CLL321 data.

I'm also pleased to share that we've submitted an update to the Kisonla U. S. Label to include the dosing modification data from Treblazer AL6 and the FDA has granted the submission a priority review. In our Phase three portfolio, we initiated a new program for orforglyphron in obstructive sleep apnea. This program includes two studies under the same master protocol to evaluate if people with obstructive sleep apnea and obesity can benefit from orforglyphron.

After Zephon was approved in The U. S. As the first and only prescription medicine for obstructive sleep apnea, we're excited to explore if an oral GLP-one can also deliver a benefit in this disease. Earlier in the pipeline, we advanced a second oral GLP-one into Phase two in obesity and advanced eltrecovart into Phase two for ulcerative colitis. Three Phase II assets and one Phase I asset have been discontinued based on clinical readouts.

In Q4, we also began Phase I studies for four new molecules, one in each of our therapeutic areas. Q4 capped off a productive year of advancing new medicines at Lilly. In total over the year, we started eight new Phase III programs. We disclosed Phase III data from 21 trials, including 17 major publications and top tier medical journals. We received regulatory approvals for two new medicines, at Gleeson Kasimla, as well as many new indications around the world.

And we added 14 new programs to the early phase pipeline. On Slide 16, we detail these outcomes for our twenty twenty four milestones. I'm pleased that nearly all of our anticipated milestones came to fruition positively in 2024. Turning our focus to 2025, Slide 17 shows key R and D milestones we expect this year. Starting with our late stage portfolio, we expect to initiate two new Phase III programs this year.

First, in oncology, we'll begin an adjuvant non small cell lung cancer Phase three program for our KRAS G12C inhibitor, olamiracib, building on its ability to be administered with immunotherapy. Our current metastatic program is progressing well and we've aligned with the FDA on our Phase three dose through the Project Optimus pathway. We shared a clinical update at the World Conference on Lung Cancer last fall and we are encouraged by the ability to safely combine olamoracit with other agents. Our new Phase three program will focus on moving to an earlier setting and combining with existing approved agents in both resectable and unresectable KRAS G12C mutant lung cancer to prevent cancer from recurring. The second program is in cardiometabolic health, where we plan to initiate a Phase three trial for orforgliploprot in hypertension, adding to the ongoing trials in Type two diabetes, obesity and obstructive sleep apnea.

I'm excited that this year we're looking forward to reading out multiple orphaned Lipron trials. We expect to see data from up to five studies in Type two diabetes and two studies in obesity. Our goal is to generate efficacy, safety and tolerability profile that is similar to that of an injectable single acting GLP-one, but through an orally available medicine. The first orforgliopram Phase three trial to read out will be ACHIEVE-one, which is a forty week study in patients with Type two diabetes. These patients have a baseline hemoglobin A1c between 79.5% and a body mass index of 23% or greater.

The trial utilizes six escalating doses in four week increments to a maximum dose of thirty six milligrams. Based on prior studies of oforgliperone as well as other GLP-one therapies, we expect weight loss in people with diabetes to be significantly less than in people living with obesity who do not have diabetes. We anticipate ACHIEF one will read out in Q2 this year, followed by up to four additional Type two diabetes trials in the second half of twenty twenty five and a potential submission for this indication in 2026. The orforglyphron Phase three trials in people with obesity, ATHAINE one and ATHAINE two are expected to read out in Q3 of this year. These trials will form the basis of our first orforglipron regulatory submissions, which will be for the treatment of obesity and we expect to occur late in 2025.

This year, we also expect data from the tirzepatide cardiovascular outcome study surpass CBOT. Of course, this is an event based trial and the timeline is dependent on the accrual of cardiovascular events. We anticipate data in Q3. While designed to measure both non inferiority and superiority compared to Trulicity, a positive outcome in either would demonstrate that tirzepatide reduces the risk of cardiovascular outcomes and would support a labeled indication. Late this year, we expect to see the first data from our triple acting incretin, redetrutide, which combines GLP-one, GIP and glucagon.

We believe this potential new medicine can deliver even more weight loss than tirzepatide and could potentially provide additional health benefits. The initial study to read out TRYMP4 is a sixty eight week study in patients with osteoarthritis of the need who have a body mass index of twenty seven or greater. We'll also see multiple additional JPRCAD data sets this year. Physician feedback is very positive on experience with JPRCA in the currently approved indications and we hope that generating data in earlier lines of therapy will enable broader use within CLL and MCL. We could see data from additional trials in the first line or BTK naive settings this year.

Moving to neurodegeneration, while we don't have a key event listed in 2025 for taneumab, we're closely watching the preclinical Alzheimer's disease study TRAILBLAZER ALS3. This trial screened patients with a blood based diagnostic and utilized a fixed duration of treatment with thanenimab. By moving earlier in disease progression, the goal is to reduce the risks of developing any symptoms of Alzheimer's disease. While the current primary completion is projected for 2027, the study will read out when the target number of progression events are accrued. A new focus area first in 2025 will be to study potential new applications of Inpritin biology across diseases in neuroscience and immunology.

With a pipeline of InkerTins in clinical development and deep scientific expertise in this space, Lilly is well positioned to match the biologic properties of specific molecules to the desired indications being studied. We plan to start several clinical trials assessing potential benefits of our incretins in areas that could include brain health, substance use disorder, pain, neuropsychiatry and inflammation. We'll be prepared to move rapidly into Phase three trials based on clinical data and where our conviction is high. Lastly, we expect a number of important regulatory submissions in 2025, including oforgliperone for obesity as I detailed, insulin epsitaur alpha for type two diabetes, tirzepatide for cardiovascular outcomes and multiple potential datasets for JAY PIRCA. Twenty twenty five will be another exciting year for Lilly R and D.

Now I'll turn the call back to Dave for some closing remarks.

Yes. Thanks, Dan. So we had a strong financial performance in Q4 and throughout 2024. We finished $4,000,000,000 above our first time revenue guide and $4 per share above our first time EPS guide when taking our PR and D charges into account. The incremental market continues to grow rapidly and Manjaro and ZepBound are both gaining share of market.

We believe both products are still very early in their launch cycle. In addition, our oncology, immunology and neuroscience therapeutic areas continue to progress, launching new medicines and delivering strong revenue growth. We have an exciting outlook for growth in 2025 as well. New indications, new manufacturing capacities, new access opportunities and new markets are all tailwinds to our financial performance. We made significant advances across our pipeline in 2024 and have several exciting readouts, which Dan just highlighted, expected throughout 2025.

So now let me turn the call over to Mike to moderate our Q and A session.

Thanks, Dave. We'd like to take questions from as many callers as possible and conclude our call on time. So to that end, consistent with prior quarters, we will respond to one question per caller and we'll end at 11AM. If you have more than one question, you may reenter the queue and we will get to your question if time allows. Paul, please provide the instructions for the Q and A and we're ready to take the first caller.

Thank you. At this time, we'll be conducting a question and answer session. And the first question today is coming from Tim Anderson from Bank of America. Tim, your line is live.

Thanks so much. Just a question on the guidance, the 2025 guidance. So I think everyone knows the prescription uptake trend didn't show acceleration, hasn't shown it yet. That's been viewed by some as a concern. Does the twenty twenty five guidance require acceleration?

Or can you get their scripts just continue on the same trajectory and the slope of that line doesn't change? When I do back of the envelope math, it seems like that's frankly all that needs to occur. And one of your slides suggests that might be the right way to think about it as well. But can you just confirm?

Great. Thanks Tim for the question. We'll go to Lucas to talk about the guidance assumptions.

Yes. What you mentioned in my notes that what we expect to see, Tim, is a continuation of basically the total prescription growth that we have seen in 2024. So that's what we built in our 2025 guide for the market.

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

Great. Thanks so much. I was just wondering if you could maybe elaborate on your expectations for ZepBound payer dynamics and access this year, particularly the impact from the OSA label? I know you've also filed for heart failure and how you expect that to play out over the course of the year? And then anything on next steps on the compounding litigation that we should be focused on?

Dangerously close to a two part question there, Terrence. But we'll go to Patrick's talk about access and then come back to Dave to make a quick comment about compounding.

Thank you very much. When we look at the commercial access, it remains strong with 87% coverage in the commercial space still. And of course, the employer opt in is a second step of high importance. That made progress in 2024, and we expect in terms of employer opt in that we're north of 50% today. OSA remains an opportunity for us to gain access also in the Medicare segment, And CMS confirmed recently that they will reimburse OSA if Plan D plans decides to list it.

And they have one hundred and eighty days to make that decision from the FDA approval and we're working with plans right now. And we anticipate to get some Medicare coverage by the second half of this year. And similarly, OSA is also an opportunity for us to get more Medicaid states signed in. We expect that PIF when and if approved to have a similar role as OSA, an access opportunity, particularly in Medicare and Medicaid.

Yes. So regarding compounding, I think our position has been pretty clear. We've been in supply since August and FDA took us off the list formally later in Q4. Of course, the compounding associations are suing to delay that. We oppose that and then join that suit.

I think the next day coming up is February 18, where the FDA said that's when you need to stop one form of compounding. Our position has been clear all along. We don't think there's a place for this because we have full supply and there's no reason to have non approved, kind of illegitimate product out there. So, of course, new sheriff in town, new government and court case pending. So we don't know the outcome of all that.

But that all said, I mean, I think our business is growing nicely in Q4 and we can see that prescription trends early this year. It's just an unsafe practice that shouldn't exist and long term probably isn't great for innovators. So, we'd like to move on from this and hope that's what the courts and the government decide to do.

Great. Thanks, David Vacher. Next caller please.

The next question is coming from Courtney Breen from Bernstein. Courtney, your line is live.

Hi everyone. Thanks for taking the call today. I just wanted to zoom in to offiglipron, specifically and I think you made took the chance to make the point about diabetes and diabetes population and their weight loss. Can you just talk a little bit more about kind of the potential positioning particularly in the context of kind of that single injectable GLP Q1 kind of anticipated efficacy that you're guiding to?

Great. Thanks, Courtney. We'll go to Dan to talk about the right comparable to lebron.

Yes, sure. I'll start on the efficacy expectations and then maybe Patrick can talk about the market positioning here. So you're right, it's a single GLP-one and we take pains to mention that because we're not expecting the kinds of efficacy or tolerability actually that we see with tirzepatide, which is a dual acting agent. Still, as you know, monotherapy with GLP-one has provided important benefits to many patients, and so we're setting our sights there. This is a first study in Type II diabetes patients where, as I noted, weight loss is typically quite a bit lower than you see in people without type two diabetes.

So we sort of index on the efficacy that we've seen in the past with Ozempic and we'll get that data soon and excited to see it. Patrick?

And from a positioning perspective, we like the idea of having an oral with an injectable GLP-one like efficacy and there is a big portion of patients that actually have needed for your exatimetry review as to be twenty percent to twenty five percent and also a group of patients that doesn't necessarily need the amount of weight loss or HbA1c reduction as tirzepatide generates. That might be an opportunity in the maintenance space as well. But lastly and very importantly, it's an opportunity to scale in markets outside The U. S. Taking into account that we don't have a need for refrigeration.

Great. Thanks, Patrick and Dan. Next caller, please.

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

Great. Thanks so much. Just another orforglopram question. You've now launched a pretty wide range of studies, I guess, to say hypertension beyond the initial obesity and Type two diabetes studies. Can you just elaborate a little bit more on what gives you confidence in running such a wide range of programs without having seen those initial readouts, particularly maybe some of the tolerability profiles with the drugs titration, etcetera?

I'm just trying to think how you balance kind of the risk taking there with the confidence in the asset you have right now? Thank you.

Great. Thanks, Chris. I'm going to answer that question.

Yes. Thanks, Chris. It's a smart question. Of course, going into Phase III with any drug, particularly a small molecule such as orforgliperone, the biggest risk is safety. And I think as these trials proceed, even though we're not seeing the safety data, we grow more confident in the overall safety profile of the drug because trials continue uninterrupted.

Of course, we won't know for sure until we get that first data readout and then subsequent data readouts. But it's correct that we grow more and more confident in the success of this molecule as each day passes. As for specifics around tolerability and titration and discontinuation, those don't really factor into our thinking. We haven't had a look at unblinded data for any of those things. So we can't make assumptions on that yet.

Great. Thanks, Dan. Next question please.

The next question will be from Geoff Meacham from Citibank. Geoff, your line is live.

Hey, guys. Thanks for taking the question. Just had one on commercial tirzepatide in bigger settings like diabetes prevention or if the surpassed CVOT is successful, would these be a tipping point on broader reimbursement or excess? I mean, it's clear you have a benefit there, but I wasn't sure if commercial payers or Medicare are looking for yet even more data to support kind of risk benefit. Thank you.

Great. Thanks, Jeff. We'll go to Patrick to talk about the broader landscape there.

Thank you very much, Jeff. I think, yes, the somewhat one extension is definitely defined as game changing at the provider level and we are in discussions of both with regulatory agencies, but there is no precedent for a Type two prevention as an indication. But the data itself, I think we will utilize to really drive increased employer opt in, seeing the benefits of outcome studies and treatment of people with pre diabetes and obesity.

Maybe just a broader point, which we've said before, Jeff. I think a lot of investors are looking for some single event that will trigger the broad reimbursement or not. And I don't think we've ever really thought of it that way, but rather an accumulation and sort of weight of everything that will grow reimbursement steadily over time. And I think that's actually what we've seen since we launched that bound last year. U.

S. Commercial insurance picking up several points during the year, and even ex U. S. Now with UK reimbursement, etcetera. But different payers will make different decisions at different times.

And I think the data sets you mentioned will be some of the more compelling to create moves, but still then the way affordability and budget constraints, etcetera. That all said, by the time we get to the end of the decade, it's hard to imagine we are not using obesity medications to prevent what is the precursor condition to so many chronic diseases. And already the health economics are pretty compelling and there'll be more data coming beyond that. So long term, we remain really, really bullish on this whole category being reimbursed like we expect to reimburse all other medications. Just the schedule for that is going to be more slow and steady, I would say, as you model expectations on a global scale and in The U.

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

Hi. This is Colleen on for Seamus. Thanks for taking our question. We just wanted to ask on the sustainability of operating margin expansions. Looking at some of the longer term forecasting from sell side consensus, we're seeing estimates nearing 50% by the end of the decade.

Do you view this as realistic? Or how are you thinking about the balance between the margins and then also ensuring you're not underinvestigating on the pipeline?

Great. Thanks for the question, Kalia. I'll go to Lucas to talk about the

long term operating margin philosophy. Well, we are very pleased with the results that we've seen in 2024 and Q4 and we provided a guidance for 2025 that is a continuation of that margin expansion with I mentioned three forty basis points expansion in 2025. Thinking more long term, our view is how we continue to drive growth in a sustainable manner. And in order to do so, we believe that if we invest into the business, in particular in R and D to drive that innovation and growth into the future is critical success factor for our business. So from that perspective, we mentioned before that we believe that getting into high 40s or 50% is not actually a good way to drive that sustainable growth into the future.

Eli Lilly (LLY) Q4 2024 Earnings Call Transcript

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