Eli Lilly and Company (LLY) Presents at UBS Biopharma 2023 Conference (Transcript)

Eli Lilly and Company (NYSE:LLY) UBS Biopharma 2023 Conference November 8, 2023 3:00 PM ET

Company Participants

Patrik Jonsson – President, Lilly Immunology

Conference Call Participants

Trung Huynh – UBS

Trung Huynh

Okay. We’re at the hour now. My name is Trung Huynh. I’m the U.S. pharma analyst here at UBS. Thank you, everyone, for joining in the room and also online. It’s my pleasure today to host Eli Lilly, and we’ve got Patrik Jonsson, the President of Lilly Immunology. But upon Mike Mason’s retirement, he’s going to be — his new title will be President of Lilly Diabetes and Obesity as well as the President of Lilly U.S.A.

So welcome, Patrik.

Patrik Jonsson

Thank you so much, Trung.

Trung Huynh

We’ve got Lilly on a momentous day today with the approval of Zepbound. So I appreciate there’s going to be a lot of interest in diabetes and the obesity space, but I will be touching later in immunology, which is Patrick’s current day job at the moment.

Question-and-Answer Session

Q – Trung Huynh

But I think it’ll be wrong if I didn’t start off with obesity and the approval today. We see in the press release the price is 20% less than Wegovy so on par with Mounjaro today. It’s a surprise to me that you’ve come in lower than a competitor. You don’t often see that. Perhaps why can you — why did you price at this price point?

Patrik Jonsson

First and foremost, let me say I think it’s quite natural to start with questions on obesity today. Having the approval of Zepbound, I think it’s a game-changing day for people with obesity and it’s definitely a historic day for the efforts that we have been putting into R&D in this space. So the press release came out a couple of hours ago, and I — we announced a price of $1,059 for Zepbound, very close to Mounjaro.

But I think we have been listening to the key players in this space for quite some time. Getting access for obesity is going to be very different compared to type 2 diabetes. So of course, we need to get the access through the PBMs, but we have also the employer opt-in. And I think currently, 50 million patients opted in through their employers for obesity treatments that are in the marketplace. I think we are aiming for more than that over time.

But the only price that is visible to the employers of a list price. So that’s just a signal from our side that we are taking that feedback and that concern seriously. So that’s why we are pricing it pretty much at parity with Mounjaro. So that’s just taking into account the feedback we hear from employers and improving access and increasing employer opt-in. That’s the rationale for the pricing we have decided to go for.

Trung Huynh

And perhaps can you talk about some of the coupon strategy that you also announced in the press release today?

Patrik Jonsson

I am happy to do that as well. So I think we are offering for covered patients the $25 copay card. And for non-covered, I think we learned through the launch of Mounjaro in type 2 diabetes that we offered a very generous patient assistance program for Mounjaro, which we actually terminated by the end of June this year. So what we’re offering here for non-covered patients is $550 co-pay for non-covered patients for Zepbound.

Trung Huynh

Okay. And given this and the price on par with Mounjaro, is it reasonable to expect the rebates to be in the same sort of range as with Mounjaro? Or given the fact that you’ve now gone for two different brand names, you think that rebates in diabetes will be different from rebates in obesity?

Patrik Jonsson

Maybe I address the last part of your question first, two brand names or trademarks. Why? I think the fact that we are talking about two different diseases is extremely important. The access piece, of course, we know that the process to gain access for obesity is going to be very different compared to type 2 diabetes. Some similarities but also some significant differences in terms of opt-in. That’s why we believe two trademarks are important.

The second piece would be two trademarks also enabled us to target and do some more precision marketing efforts for the different patient segments here because a person with obesity are very different from a person with type 2 diabetes, so it actually generates an opportunity for precision communication. So I think in terms of pricing, a lot of different dynamics. And what we are seeing in the obesity market today is with the employer opt-in, we have different qualities of access as well.

So I think there are so many factors that are playing a role here. Like now you see prior authorizations, you see utilization management. So I think it’s very difficult to compare gross to net across two different disease areas and with different dynamics. But the drivers for the two trademarks were the ones I refer to. It is actually to make sure that our access efforts in obesity doesn’t negatively impact type 2 diabetes and vice versa, but also to be able to reach patients with information that is relevant to them.

Trung Huynh

Excellent. So jumping on some of those comments. You’ve now got just less than two months. You can talk to two months less than the year. And are you actively in discussions now with PBM access? And can you just give us some feedback you have from the PBMs? Any early feedback you have there? And I guess jumping on one of your comments there, is it your expectations that you’re going to see a step-up within that prior authorization step edits?

Patrik Jonsson

Yes, we are definitely in discussions with the PBMs, and I think that’s a part of the natural efforts prior to a launch. I think similarly, as we said, at the time of the launch of Mounjaro, I think we are very clear, we are aiming for broad and open access also for Zepbound. And we see it very clearly that you’re not — we are aiming for a very, well, disciplined approach when it comes to access as well. And that has paid out very well.

So currently, when we look at Mounjaro, we are at 78% combined access in commercial and Part D. And if you look at commercial alone, it’s 85%, and we expect that to continue to increase over time. So coming back to Zepbound, I think we will take a very similar approach when it comes to Zepbound. We will aim for open and broad access with Zepbound, and we will take a very disciplined approach here as well to make sure that what we do today is also something that is — that’s sustainable over time and it’s the right decision for mid- and long term as well. So that’s pretty much the efforts we have in place, and that’s the recipe that we will comply with when it comes to the launch of Zepbound as well.

Trung Huynh

Okay, excellent. And you have a broad portfolio of other GLP-1s in obesity. How do you think about balancing what you have here? You’ve got certainly some towards the higher end of the efficacy scale in your pipeline. You’ve got some which are oral. You’ve now got one which is approved. So how do you think about when these are out — and it’s probably going to be in the next few years, how are you balancing all of this?

Patrik Jonsson

Yes. I actually get that question quite often. And it’s probably quite natural because if you look upon the data on Mounjaro in type 2 diabetes, having 75% to 90% of patients achieving an HbA1c below 7, which is a target by the American Diabetes Association and in obesity actually getting up to a weight reduction in the most recent study, above 26%. That’s huge. That’s significant. That’s a game changer across both type 2 and obesity.

However, having said that, we know from the study populations that there is a huge variation in terms of response, and we will just continue to raise the bar. So when we look at the assets that are currently in development for obesity and type 2 diabetes, retatrutide, for example, the sometimes [indiscernible] We believe that we will probably see even greater weight loss with retatrutide than we see with tirzepatide.

That is relevant if you think of a patient with a BMI of 35 or both. They might actually need even further weight decrease beyond the 25%, 26% we can see with tirzepatide. So particularly target the Class II, Class III obesity patients for retatrutide. And I think we have currently an unmet need but we probably can address even better with retatrutide.

Moving on to Orforglipron, which is the second asset in Phase III. Currently, that’s the oral medication for obesity. We have learned through patient market research, that is quite a big group of patients that have a strong preference for oral treatment. And that’s particularly true for the ones that are injection-naive. So I think that’s one reason to be really excited about Orforglipron because you can meet other patient segments compared to what we are able to address today with tirzepatide.

But it’s also another factor when it comes to oral, so markets outside the U.S. trust heavily oral markets. I used to run our business in Japan for six years. And Japan is one of those markets that are very heavily leaning in towards oral. To China as well. So I think when you look at the portfolio, I think we’re providing both health care providers and patients an opportunity to even further target the therapy to the needs of the individual patients.

And lastly, stated very clearly in the last earnings call last week. When it comes to the incretins and the medications for chronic weight management, the flywheel within Lilly is swinging quite fast today. And we just want to out-innovate ourselves and maintaining that leadership position far beyond tirzepatide. It’s really exciting today, but we see us making a significant difference for patients suffering from obesity not just during the remainder of this decade and next but even beyond that. So that symbolizes our efforts in that space.

Trung Huynh

And one of the interesting — more interesting products within that pipeline is also your acquisition of the Versanis products, where that seems to preserve lean mass. Perhaps what gives you encouragement from the data that you’ve seen for that product today? And perhaps can you outline some of the time lines we should be looking at going out over the next few years?

Patrik Jonsson

Yes. Obviously, acquisition was finalized just a few months ago so I think there is still a lot of work in progress in that space. But I know that our early development colleagues really spend some quality time to dig into the data on For us, and I think it’s well known today that with not just incretins and treatments but also with bariatric surgery, through diet and exercise, you see muscle loss when you reduce your weight.

And we have seen that with incretins and with as well. You see approximately 2/3 of fat loss and 1/3 of lean volume mass loss. And out of 1/3 of the mass loss, you also see some muscle loss. And muscles are important because we know that they require energy and they also impact the metabolite. So I think what we believe here and the hypothesis we are going to study is by adding bimagrumab to tirzepatide, you would actually be able to stabilize muscle mass and maybe even increase muscle mass during treatment. That actually could be extended, and you would see a continued weight loss over a longer period of time, maybe slightly higher as well. So that’s what we are studying.

And in terms of the time lines, the acquisition was just finalized. So I think we are all hands on deck to make sure that we are developing the best development plan for bimagrumab as well and taking the entirety of the portfolio — having the totality of portfolio in our mind as well.

Trung Huynh

There’s a hell of a lot of different mechanism is being studied within obesity today by all other companies. Is there any other mechanism out there that sort of excites you guys? What — any particular area that you’re looking in big focus beyond GLP-1?

Patrik Jonsson

I think, Trung, the way you should read the — today, I think we are defined as being a leader in the chronic weight management. And there is nothing going on in this industry that we are not very much digging into. And I don’t think there is a BD deal being done in this space without opting consulting. We have some of the leading experts in the world and across research and development and commercialization. So I think, yes, we are always curious and we look into whatever is going on. And if we believe in it, we will fully lean in.

Trung Huynh

And in terms of penetration, this is a big topic for all investors today, especially into obesity. But as a segment of the market, the Medicare/Medicaid population that’s not being reimbursed at the moment. You have the Act, which is going through Congress, I guess, at the moment. It’s a bipartisan rule. What’s your — where are we now with regard to TROA?

Patrik Jonsson

No, I think we’re very encouraged by the movement on TROA. As you said, there is a strong bipartisan support for TROA today, and I think that could provide an opportunity to treat patients in Medicare and Medicaid as well consistently with treatment protocols for government employees and anyone in — on a private insurance. We are still waiting for the scoring from CBOs. I think that’s a critical milestone that hasn’t taken place yet and I think that’s a key event.

Having said that, I think there was a hearing in the House Energy and Commerce Committee back in September that was quite encouraging. And when members actually raised the importance of providing access for patients in Medicare and Medicaid as well. But particularly with the downstream benefits to underserved populations, including people of color and the potential impact of all of those 200 diseases that are currently linked to obesity.

So I think TROA, I think it’s not a matter of if, it’s a matter of when. At least for our lens, we don’t believe it’s a near-term hit but we believe it’s going to hit. In the meantime, in order to provide access for patients in Medicare and Medicaid, I think the readouts that we will have next year, sleep apnea, hep, those are indications that are currently reimbursed in [Part D] as well. And while it doesn’t cover everyone with obesity but it’s a huge overlap. We have 8 million people in the U.S. suffering from sleep apnea, and 70% of those have also obesity. is a smaller population, around 3 million and 75% of those have obesity as well. So in an essence, yes, I believe that there will be progress made on TROA. I think that will, in the future, be access provided to patients in Medicare and Medicaid as well. I don’t think it’s around the corner. In the meantime, we have important readouts next year that at least could provide access for segments of people with Medicare and Medicaid.

Trung Huynh

Excellent. And touching upon some of that, what should — what’s your expectations of some of the data that we should see next year for things like sleep apnea, heart failure at NASH? Perhaps can you talk about your expectations for when this data comes out?

Patrik Jonsson

I think first and foremost, sleep apnea, I think we have been very encouraged with the data we have seen in smaller scale so far. And we know that there is a huge need, where it’s no other pharmacological treatment approved. And we’re talking about a significant need, 8 million Americans. And of course, we have a strong belief that this is going to read out positively. But I think that’s pretty much what I can say today, but we are really, really excited about the readout next year in sleep apnea and the same goes for HPE. And I think we have reasons to believe that those are going to read out well.

When it comes to CKD and NASH, those are only in Phase II. And I think we haven’t declared yet what we are going to proceed to Phase III and indications for those, but we want to bring the science forward in the space for both NASH and CKD. And at the time of readouts, but those will inform our decisions for further development with tirzepatide, potentially with any of the other assets we have in our pipeline.

Trung Huynh

And this weekend, we have some data coming out from Lilly with CV outcomes data in obesity. Do you have any thoughts on what potentially could show here or anything on the secondary endpoints that Lilly is going to be looking at?

Patrik Jonsson

You mean the select readouts from Novo coming out at AHA? I think first and foremost, we were extremely excited when we saw the readout of SELECT. I think just coming back to the steps you need to pass in order to gain assets for people with obesity, you have the employer opt-in. And I think in order to make significant progress on the employer opt-in space, you need to present some outcome data.

And I think the outcome of SELECT is really going to confirm the benefits of weight loss for this patient population, not just in terms of weight but also in terms of the cardiovascular benefit. I think we will definitely follow the readout of the secondary endpoints with a high amount of interest that we are truly encouraged.

We also believe that since we see a significant higher weight reductions with tirzepatide, we don’t see this as being unique for one asset. It’s going to bring a benefit to the entire class. And that’s going to be the first readout of many more to come. We have a readout of our CV outcome study in 2025, and we have also announced our mobility mortality outcome study that is going to read out in a few years from now. But that’s going to be key to really demonstrate the downstream benefits.

And in parallel, there are a lot of real-world evidence readouts and real-world evidence studies that we are triggering now with the approval of Zepbound as well. So expect much, much more outcome data over the coming quarters and years. That’s going to be key.

Trung Huynh

And you touched upon your readout in 2025. What are the main differences between the two studies here? So as a risk reading across this data to your clinical study.

Patrik Jonsson

Well, in terms of the major differences between SELECT and trial, I have to say I can’t respond to that one today. But I think particularly the mobility mortality study includes significantly more endpoints, and I think it’s a slightly longer study as well. So I think the mobility mortality study is going to be really breakthrough data in this space.

Trung Huynh

Okay, excellent. Let’s move on to diabetes. How’s your communication been with the administrators, employers this year? And how do you think that’s going to develop next year? I think we previously talked about step edits and prior authorizations increasing. How are we looking for next year?

Patrik Jonsson

I have to say, overall, we have had very productive discussions with the payers. And as I shared earlier, we are pleased with where we are today in terms of the access, 85% commercial, and we see opportunity to further grow in that space. I think we are well positioned for 2024. Of course, with even further access, you would probably expect some increased discounts and rebates.

But at the end of the day, we see a huge majority after we stop the non-covered co-pay card, scripts are being fully paid. So I think we are quite optimistic in terms of the outlook for 2024. So I think in the diabetes space, I think it’s relatively straightforward based upon the work we have done in 2023 preparing for 2024, if some opportunities to subgrade coverage at a few places. Yes.

Trung Huynh

Pricing pressure within GLP-1, is that still sort of the kind of low single-digit to mid-single-digit space?

Patrik Jonsson

No, we haven’t announced specific discount rates by product. I think we have stated as a company also in the most recent earnings call that we are expecting a mid-single-digit pricing headwind over the coming years, and that’s for the entirety of the portfolio. But I think this is a space where you will see a lot of competition. So I think you have seen more or less every major pharmaceutical company is announcing an appetite to move into chronic weight management.

I think for us, it’s just coming back to out-innovating ourselves. That’s why we have a very rich pipeline, and we will continue those efforts to constantly raise the bar and being able to target treatments even better for patients. And we know that when you bring superior profiles to the market, you have a better position when you negotiate for access as well.

Trung Huynh

Okay. And at the last conference call, you spoke a lot about capacity. Penetration and capacity has been an issue this year. Where are we now today with the research triangle upgrade, Concord coming online fully next year? Perhaps can you quantify your 2024 capacity goals?

Patrik Jonsson

I think we refer to in the Q3 earnings call that the Mounjaro has been on the shortlist by the FDA until late Q3. It’s not anymore, not for any other strengths. So I think we have seen that in the marketplace as well. If we look at the capacity, I think we need to look at this through several lenses, not just the RTP side. But we announced that back in Q2 that we are up with commercial production and out of RTP. We also announced that we expect our second site in North Carolina, Concord, to start commercial production in Q4.

What we haven’t disclosed though is the number of lines for filling and assembly at RTP of a total capacity of RTP. And each of — every single of those lines need to go through a process validation, regulatory approval, start-up production and then optimize production. So I think what you will see in 2024 is a regular release of updates on new lines starting production. So I think in terms of RTP, we are absolutely on track with the part that we committed to or announced back in late 2022 to double our capacity.

And now in 2024, we will see that ramp-up of capacity turning into production and supplying the marketplace from RTP. Beyond that, I think it’s important to underscore the tremendous work that has been done to improve manufacturing and supply production out of our current sites. So we have invested heavily in our current site as well to upgrade those. We’ve taken other investments to support supply of incretins. And those efforts will continue in 2024.

And the third component is while we have a preference for our own supply chain, just to control supply and quality at time of launches and years after launch, we also partnered with contract manufacturers and that will be — continue to be the case for tirzepatide as well. So those are three important components taking into account.

And lastly, our efforts to develop new presentations for tirzepatide. And we announced earlier this year that we have got the approval and launched Mounjaro in single vials in Australia and Canada, and that has been very well received. We plan to continue to launch single vials outside of the U.S. as a bridging into a multi-dose quick pen, which we expect to get approval for in 2024.

So in an essence, I think we have all hands on deck to make sure that we are doing everything that we possibly can to ensure the best possible supply of both Mounjaro and Zepbound. But I think we need to reflect on the fact that we are facing an unprecedented demand. And we also had one uncertainty with the competition’s ability to supply. So I think there will, for sure, be some constraints in 2024 as well. I think that’s realistic to expect. But I think we are really doing everything we can across those four levels that I refer to. And I’m extremely proud of my colleagues in manufacturing and quality that effort. And I think we are on a good path, but it’s not perfect yet.

Trung Huynh

Can I talk a bit about the multidose pen? I mean, one of the things that initially set tirzepatide apart from the competition was the administration device and excellence. So can you talk about how this multidose pen kind of is differentiates perhaps needle size, what makes it convenient?

Patrik Jonsson

I think first and foremost, we still believe that the auto-injector is a premium device. So I think the auto-injector is what we are foreseeing to continue to be the presentation in the U.S. market. However, we always need to have some flexibility coming back to the discussion we had in terms of supply uncertainties and the competitive landscape, et cetera. But the auto-injector is a premium device and that’s how we view it as well.

But taking into account the challenges we faced in 2023, we have had experiences in — with other medicines with a multidose device, and that has been very well received in the marketplace. And that’s why we had an opportunity to breach the markets outside the U.S. with a multidose device, which is really good, and it’s a good breaching from the vials. I think the vials are probably the ones that we don’t foresee remaining on the marketplace for a very long time. But taking into account the huge demand across the globe, that was a good entry point in several markets outside the U.S.

Trung Huynh

Okay. So just wrapping up our discussion on GLP-1. Your competitors, there’s been people out there who discussed the market size of GLP-1. You’ve not really said or really haven’t really talked about the potential market size. So perhaps what are your thoughts there? And if you’re not willing to give us a number, then what should we be thinking about?

Patrik Jonsson

Thanks a lot. Yes, I will probably not quantify the market size for you but I can share with you at a holistic level how we are thinking about it. The first off with type 2 diabetes. In Q3, you saw TRx growth of 60% of incretins. Still, incretins and but only 1/3 of the branded market for treating type 2 diabetes. And we believe, based upon the data we have seen right now, that there is an opportunity to move a medicine like a GIP/GLP earlier on in the treatment.

And that means actually getting to disease control and weight loss much earlier. And there is an abundancy of a current treat-to-failure model that has been existing for type 2 diabetes for quite some time. So I would say just in type 2 diabetes per se, the opportunity for continued growth is quite significant.

Then obesity, I think we have discussed quite a few times. But obesity, you know the numbers for the U.S., 110 million approximately suffer from obesity. Outside the U.S., it’s 650 million people, so close to 1 billion worldwide. That’s a tremendous, tremendous opportunity to make a difference and an opportunity to — for a medicine like Zepbound. And then we have the other indications, and most likely to come, sleep apnea and HFpEF. But again, we have an overlap with obesity.

So all of that is really going to drive a continued strong growth for incretins and GIP/GLPs. I think it’s just important to have in mind that the employer opt-in and the barriers to access for obesity, that’s something we need to overcome. And that just underscores the importance of outcome data and we are starting to generate rules now. But we need to overcome those barriers at the employer level. I think that’s probably the biggest barrier to really capitalizing on the tremendous opportunity and the needs, the medical needs that are there. So that’s how we are looking at the market at a holistic level.

Trung Huynh

Yes, it’s interesting you talk about the access side of things because when you see $100 billion market for GLP-1 being thrown around, I mean, how realistic is that from, one, the capacity standpoint; and two, an access standpoint? And do you think, and we discussed very briefly there with orals, do you need to have orals there so you can have a $100 billion market because of the capacity

Patrik Jonsson

I think there are several aspects to take into account here as well. If you think of the entire global need for obesity medications, I think even if you combine the capacity of and Novo Nordisk in a few years from now, that will probably not be sufficient to satisfy close to 1 billion people across the globe. So I think that’s one important aspect of it.

B, I think, yes, we have stated very often that we will need to have an effective oral, and I think that’s what excites us with Orforglipron, because Orforglipron actually has demonstrated in Phase II a weight loss in parity with the most effective GIP, not comparable to tirzepatide, but the most effective GIP and with no restrictions in terms of food and water intake. So I think that represents a tremendous opportunity for us as well. So yes, I think you need more options here in this space to really meet the entire needs, but I think it’s going to be a gradual ramp up here as well.

The last component would be just if you look at markets outside the U.S., currently, most of those are single-payer markets. And in most those markets, in a majority of those, obesity is not yet reimbursed and probably driven by the prior experiences in the obesity space, medications that were launched 10 years ago, in best case, generated a weight loss of 5% to 6%, some significant side effects. When those one single player starts seeing outcome data, seeing the benefit from a cardiovascular perspective, from a hepatic perspective, from a type 2 diabetes perspective, I think there are quite a few of those single players that actually will change their mind as well. And we will see reimbursement of chronic weight management medicines outside the U.S. to a significantly higher extent than we do today.

Trung Huynh

Yes, those single players just much more joined up than it is in the U.S. so they’ll see that benefit. Okay. So we’re approaching the last 10 minutes. I did promise we would be talking about immunology as well. So Patrik, you are currently the President of Lilly Immunology. It continues to be an area of investment for pharma. You can see that with R&D budget spend Phase III trials, BD. What makes immunology still attractive to Lilly because it also is quite a competitive environment and there are pricing headwinds and generics coming in?

Patrik Jonsson

I think when many people are reflecting on immunology, they are thinking about the progress that has been made in disease states such as psoriasis, some dermatological disorders but there are so many different diseases in the immunology space where the unmet needs are still huge: lupus, hidradenitis suppurativa, even rheumatoid arthritis. Today, we are still measuring progress with ACR50. We would never bring a medicine with [50] today to the market to treat psoriasis.

So I think in the space of psoriasis, we are in a good, good position. But across most of the immune-mediated diseases, there is still so much more to be done. And I think even in some of the areas where we have seen a lot of competitive movements over the last 12 to 18 months such as IBD, Crohn’s and ulcerative colitis, the penetration of biologics and overall is very low. In IBD, it’s 15% for ulcerative colitis, for example. So I think based upon the unmet needs, I think when you’re targeting a variety disease areas, there is still so much to be done in that space. And that excites us.

Trung Huynh

And you have a recent approval with or I think how to pronounce that? Is that [indiscernible] In D.C., you’ve had positive Phase III data in Crohn’s. Perhaps can you talk a bit about that data, what excites you there? And how this will differentiate itself within a very competitive market today?

Patrik Jonsson

Yes, happy to. We’re very pleased to have received the approval for thrombo in the U.S. as well. We launched in Japan and in Germany earlier this year. The feedback from the marketplace, always very early days, is very positive. When we look at the launch of and the future prospects here, I shared the low biologic and oral novel penetration in that space. That’s a huge opportunity. But B, for patients with ulcerative colitis and also Crohn’s disease, they cycle through treatments very rapidly because the level of remission that most of them achieve is far too low.

And I think what encourages us first in UC is for remission data. And we acknowledge that we don’t have head-to-head trials. But with all of the limitations of cross-trial comparisons, if you look at where we are with the emission data with 50% of patients achieving remission by week 52, that it’s really good, and it compares very favorable to what’s currently in the marketplace and what is in the pipeline of competitors.

The second piece of differentiation, particularly in ulcerative colitis is agency. When you talk to patients suffering from ulcerative colitis and from pruritus, it’s now being recognized as one of the most bothersome symptoms with ulcerative colitis and really devastating in terms of quality of life. We are the first ones to truly lean in on bowel urgency and starting that with a numeric scale compared to the binary one that normally exists in clinical trials.

And we could demonstrate a significant difference from placebo already after week two. And at week 52, around 40% of all patients are bowel urgency-free or almost bowel urgency-free. And the beauty of results is that you see a similar response in the bio-naive and the bio population. So I think that in its entirety positions us very nicely as launching as a first [indiscernible] and ulcerative colitis with a differentiated profile. So we’re excited about this opportunity.

the data we just released a few weeks ago as well. And I think there are some similarities, particularly when it comes to remission. And we have 54% of patients achieving remission by week 52. And similarly here, consistent results across bio-naive and bio populations. So I think we are well positioned entering into gastroenterology for the first time with two differentiated profiles across those two diseases. I think by default, we will probably be positioned second line to start with, but I think we have the data and the plans to work our way up to a first-line position in both UC and Crohn’s disease.

Trung Huynh

Excellent. And is there much infrastructure that’s being put in here because like you say, this is a novel or a different area than you’re used to?

Patrik Jonsson

Well, yes. When we are moving into a new disease area, we need to build some new capabilities and bring in some new expertise. But I think this — that was something that we started pretty much by the investments in IBD. And we announced, I think it’s three years ago, that with medicasumab, we also have the data for psoriasis. But we said we don’t see a huge unmet need in that space, but we have much more to do in IBD. So we actually, we started those investments three years ago. And of course, we have a separate sales force for gastroenterology. But we also have a strong infrastructure base foundation in immunology that we capitalize on across the different disease areas.

Trung Huynh

Yes. And you have Labrie, hopefully, next year at some point. You’re working through a CRL. How quickly do you think you could work through that? But also how should we think about the ramp there? Because if you got approved this year, potentially you could have spoken to some formularies. But next year, you’re kind of late for next year being in the formularies. And also this is a very competitive area. Again, do you expect to have a patient assistance program put in place? So just trying to think about the ramp for next year for that product.

Patrik Jonsson

You have first maybe the CRL to make it clear to everyone, the CRL faced no concerns when it comes to the efficacy, the safety of a label It was all related or driven by a multi-company-sponsored inspection as a third-party manufacturer. And as we shared when we got the CRL from we said we are going to work very closely together with the FDA to solve this as soon as possible. And we are saying the same we We will work very closely together with the FDA and the third party manufacturer.

This doesn’t impact our confidence in lebrikizumab at all. And we have also made the commitment that when we have something major to share, we will do that as we did at the time of resubmission of Miri and we’ll work that through in pretty much six, seven months time period. But we are doing everything we can to accelerate the approval of lebri.

When we launched in atopic dermatitis, yes, it is a competitive space from one perspective. But if you look upon the medicines that have launched in atopic dermatitis, it’s still extremely dominated by one, Dupixent. And I think there was a huge disappointment with the ABI data, pretty much replicating the very weak Phase II results in Phase III and also with a number of injections with I actually don’t think that they have given a tough competition to Dupixent.

And the JAKs have been placed very late in the treatment algorithm. So I think the consistent feedback we hear from the community, from the PBMs is the desire to have a profile along the lines of lebri. And when you look at the data here from Phase III, and we just recently released the two-year data as well, would 80% of patients be achieving skin clearance by week 52? And with each release, quality of life improvements and what we saw in the two-year data, still 80% of patients actually with clear skin and good disease control that we saw that with a Q4W formulation. That level of efficacy and differentiating with the Q4W versus Q2W in the marketplace today.

We believe that lebri positions us actually to launch a first-line biologic targeting the most relevant cytokine when it comes to atopic dermatitis, IL-13 and doing that with a slow off rate and higher potency and affinity. And timing makes a difference in terms of contracting for sure. We can’t neglect that. But what we currently experience is actually a strong interest at the PBM level for a product with the profile of lebri. But we will also here think about a value-based approach in our pricing and negotiations with the PBMs. Of course, we believe that the potential with lebri is quite significant.

Trung Huynh

Okay, excellent. I can see the clock is counting down for a minute. So I have one last question left for you. As you exit your role in immunology, what’s the main challenges that you leave behind for Dan?

Patrik Jonsson

Well, I want to make sure I keep him busy for a few years. So I think for Dan, probably different levels. The first one is not unique to immunology, but IRA is impacting immunology development as well, particularly with the orals. So I think it’s just how we are lining up the different unmet needs by molecule. I think that’s a big one and a very important one.

The second one, specifically immunology are the rebate walls. I think immunology has been very particular in that regard. I see some light at the end of the tunnel. And I think the launch of a biosimilar will partly change the landscape here. And I also think our presence in immunology will make a difference because we will have a nice portfolio, the only ones with both an IL-13, 17, 23 and a JAK inhibitor, hopefully by the end of 2024.

And lastly would be just all hands on the CRL, continue the efforts to solve this as soon as possible for But I think also are at a macro and a more detailed level what I believe we’ve done on top of everything that needs to be done on a daily basis to remain extremely competitive in the marketplace and continue to raise the bar in terms of how we best serve patients with immune-mediated diseases.

Trung Huynh

Excellent. Well, thank you very much for your time. It’s a momentous day for Lilly. It looks like you’re going to have your hands full this time next year. But thank you again for your time.

Patrik Jonsson

Thank you, Trung. And it’s — yes, it’s truly exciting for Lilly. And today is a game-changing day for patients and a historical day for Eli Lilly and Company, but thanks a lot for the opportunity to be here.

Trung Huynh

Excellent. Thanks very much, everyone.