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Yeah, I'm sitting down now with the CEO of Eli Lilly, Dave Rix.
It's great to see you in person, Dave.
Great to be with you, Katie.
Let's start with.
The news that you have out this morning, and that is that Eli Lilly is buying Scorpion Therapeutics breast cancer program for up to two point five billion dollars. And I'll start with the basics why this deal and why now?
Yeah, Well, it fits in really well with what we're doing in breast cancer, which is changing the lives for so many people who suffer from that condition. Of course, Versenio's a our leading product in that space. This is a targeted therapy for specific mutation in breast cancer effects thirty to forty percent of women with breast cancer, and Scorpions developed this program.
Through phase two.
It's a big Phase three program to do to get this to market, and so it's a great transaction for both sides and it adds to what we're doing.
We also have another.
Oral medication for breast cancer coming. We read out data last year, so a growing cluster of medicines there to really help people live longer with breast cancer. It's an exciting deal for us, and we're pleased to work with Scorpion to bring an in house.
Yeah, and this deal was really interesting because it's a nice reminder that, of course el Lily does more than just weight loss. So give us some context on the overall portfolio here, how the oncology fits with of course the weight loss and everything else.
That you do.
Yeah, well, we have four therapeutic areas and of course the diabetes and weight loss has been the story all last year, and it's exciting because it's growing and big. But that's about forty percent of the company. The other sixty percent is also doing incredibly well breast cancer. We mentioned in oncology here, we have other oncology assets, including for hematology that are in the market and doing great.
Immunology is another important area for us, and products like Ebgliss for atopic dermatitis, which just launched in Q four, along.
With Tolts for psoriasis.
And then neuroscience Alzheimer's launched last year in the fourth quarter and we're ramping that now. So the company's got a broad portfolio. We want to work on medicines for terrible diseases of all kinds, not just obesity, but of course the OBCD story is exciting and broad as well.
And before we get into some of the specific areas there when it comes to M and A, obviously there is a ton of optimism as it relates to the M and A environment under a second Trump administration.
What is your M and A strategy?
Where are there more opportunities for inorganic growth?
Yeah, well, we've been very consistent and it's working for us. The motion for us is to go early and stay in our lane basically, so focus on the therapeutic areas where we know a lot that makes us a smart buyer, and by going early, we take more risk, but do smaller deals. I know there's been a lot of talk about M and A under the Biden administration and how hard it's been.
But for us, not so much.
We've done one hundred deals in the last three years, that's the most in biopharma, but a lot of them are small, below the radar, but it builds that early stage pipeline strength for us and Lily maybe in a little different position because our near term outlook, maybe our midterm outlook is so strong we don't need to plug a sales gap. We're just trying to find assets where we can add value and create great medicines for patients. This deal with scorpions another example of that.
Yeah, and a great point too about flying under the radar there with those bite sized deals.
Let's get to glp ones. Of course, there is a.
Lot of anticipation and excitement around your oral weight loss drug. Of course there's some forthcomic data and if that trial in particular is successful, how long.
Do you think it would take to get approval here?
Yeah, so a lot of development's going on in our incretin portfolio or forg lepron is the name.
Of the medicine. Yeah, Yeah, it's hard. I had to practice too, and we should.
Get data before the middle of the year, the first set of studies. It's highly anticipated and really important one because it's convenient, could be an oral pill.
Two efficacy point.
Is it as good as ozepic essentially or semi glue tide that's the goal for us, and as tolerable. If it is, it could be approved in early twenty six And the benefit here is not just the convenience of the pill, but the ability to scale it. We all know the production systems for injectibles have really been stretched, and we continue to build sites and so forth. But with the oral technology, we can make more and get this medicine to more people around the world.
And I think that's an.
Exciting development for the company if the data is positive.
And I know Mike co Ancher in New York, Matt Miller is listening very closely right now. He would tell you himself he'd like to get in one of these trials, but when he did have them, call me, well, when we get to the approval stage, I mean, what do you see as the dynamic between the oral medications and the injectibles. How much of the market do you see the orals potentially taken.
Well, I think we'll see over the next three years fragmentation as you see in any scaled market. Right now, total incretins in the world are probably exiting forty to fifty billion, and so that's a big market in pharma, and it likely is going well north of that, and so we'll expect people to carve out niches.
One niches medicalization.
So for instance, at the end of last year, zep bound or Manjarro showed success in sleep apnea, so here's like a targeted condition like ten million Americans, and it's the only drug approved in that space, so people with
that condition will seek the medication. We have also people who just want to lose weight for general health, so that's a broad based and then you know products like coming like our triple acting Angerton retatritide, which is in phase three studies now, will likely be segmented towards more the people who need to lose more weight, so their BMIs are over thirty five, they have more to lose. So I think you'll see new medicines come out covering different segments of this very.
Large and growing market. And the oral likely serves that sort.
Of first line broad based need and that's great because we can produce a lot of it. It also will be an important medicine for middle income markets like China and Brazil where there is India lots of obesity. But we just can't get enough of our product there at the right price point right now because the injectible systems are expensive and hard to scale.
Well let's talk a little bit more about pricing here.
And I know that it's earlier still in trials, but if approved, do you expect that the orals would be priced cheaper than zet bounds.
Well, I mean we prices that bound cheaper than semaglutide when we launched which and it's a better product. We've proven that you lose almost fifty percent more weight when we do pricing. Of course, the value in the actual clinical data is very important, so we'll have to see that. But also we need to think about this segmentation we just discussed, So more to come on pricing. We're not going to announce it today. We need to first get
the phase three study done. But our goal will be to reach the masses with that product, and so we need a price and strategy and concert with that.
Well, I tried on the pricing, but.
Welcome back on your show and we'll talk about it.
I will follow up with you on that. Let's talk a little bit about politics here.
Course, the incoming president Donald Trump, you met with him recently. When it comes to the new administration, what sort of pricing policies are you potentially anticipating there?
Yeah, I mean it's a good question.
We are still waiting for them to be seated, inauguration next week and confirmations, etc. I would say first that this idea of incoming administration that's focused on the health of Americans is one that excites us. And there's a lot of common cause with the farmer industry in Lily. We wake up every day trying to make America healthy again. So if that's the goal, we have common interests how that happens. We need to learn more what the strategies are.
But of course you know, with for instance, with our zep bound and what a great tool to really improve the overall health of America.
So we'll seek partnerships with.
Them to say, how can we expand access, how can we get new medicines like or forger prontter proof faster. How can we improve insurance coverage and reduce.
Costs for Americans?
Those are all, you know, topics we want to engage on, and you know, they also want to make the system work better. I think the Presence talked about the role of the middleman, and of course we need a way to get our drugs to patients, but the way the systems set up, like so many things in healthcare, is too complicated and non transparent, and so we support those kinds of changes as well.
You said, make America healthy again? So I have to bring up RFK Junior. Have you met with him?
He was at the dinner. I think that was widely reported. Yeah, yeah, so and we talked about that.
Where's the common ground? Okay?
I mean we are focused on people who want to get healthy, so we have a lot in common there.
And I am curious.
I mean when it comes to specific policies, you mentioned this optimism that you have when it comes to the inflation Reduction Acts specifically, do you think that Trump will finalize that proposal from Biden about the Medicare and negotiations or what are your feelings.
On Well, they've done one round already.
I mean to our eye, it had all the costs and none of the benefits that were promised. So it was promised to lower the cost for patients. I don't think the new drug pricing will do that at all. But in the IRA there were provisions to address the way that party benefits are delivered, smoothing costs, capping.
Out of pocket.
Those are good things we supported as industry. But the idea of the government negotiating drugs directly and then having essentially PBMs and other entities implement the program, we think is flawed and it won't change value for America or Americans. So we're actually going to ask the administration just to pause that negoti to the next round of negotiation and work make the program work a little better for us. It's all about price at the pump when people go
to the pharmacy counter. How can they have a consistent and low cost for benefits that.
Are helping their health. That's what insurance is for.
And I'm not sure the construct we just went through does that. So there's ways to fix it. We have ideas about that.
Well.
I appreciate, of course the context there, and I only have time for one more question.
Okay, So I want to go back to Alzheimer's. So we were talking a little bit in the commercial.
Break about it, and you know, in the context of Eli Lilly being more than just weight loss drugs. Your Alzheimer's treatment received clearance in July of twenty twenty four. What indications can you give us about adoption so far?
Yeah, And it's so exciting for us because we've spent so much time, like thirty years working to get a medicine approved.
It's been very difficult.
We launched in like September we make a number of the diagnostics, and the good news is we see a lot of people seeking answers to the question if I have dementia symptoms, do I also have amyloid? And am I a candidate for the medicine? So that's growing pretty rapidly right now. And then Cassunla our brand, we're seeing utilizations start to ramp, particularly in December.
So that's good news and we're not done there yet.
I think there's studies to read out ahead, maybe late this year, early next year in Alzheimer's prevention, which is I think a much better answer why way too you get the dementia symptoms that's prevented if you have amaloid excess amyloid in your brain. And then more broadly, I think for viewers interesting, I am super bullish on neurodegeneration as a category we can address with medicines and what are those are the scariest conditions we think about Parkinson's,
als Alzheimer's. I think there's more medicines coming in Alzheimer's and more medicines coming in these other conditions, hopefully from Lily. But that's an area where science is moving rapidly and Lily's.
At the forefront.
Well, Dave, I so enjoyed this conversation. Hope to speak to you again soon. That, of course, is Eli, Lilly's CEO, Dave Rix