Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Yeah, I'm sitting down now with the CEO of Eli Lilly,
Speaker 2: Dave Rix.
Speaker 3: It's great to see you in person, Dave.
Speaker 1: Great to be with you, Katie.
Speaker 3: Let's start with.
Speaker 2: The news that you have out this morning, and that
Speaker 2: is that Eli Lilly is buying Scorpion Therapeutics breast cancer
Speaker 2: program for up to two point five billion dollars. And
Speaker 2: I'll start with the basics why this deal and why now?
Speaker 4: Yeah, Well, it fits in really well with what we're
Speaker 4: doing in breast cancer, which is changing the lives for
Speaker 4: so many people who suffer from that condition. Of course,
Speaker 4: Versenio's a our leading product in that space. This is
Speaker 4: a targeted therapy for specific mutation in breast cancer effects
Speaker 4: thirty to forty percent of women with breast cancer, and
Speaker 4: Scorpions developed this program.
Speaker 1: Through phase two.
Speaker 4: It's a big Phase three program to do to get
Speaker 4: this to market, and so it's a great transaction for
Speaker 4: both sides and it adds to what we're doing.
Speaker 1: We also have another.
Speaker 4: Oral medication for breast cancer coming. We read out data
Speaker 4: last year, so a growing cluster of medicines there to
Speaker 4: really help people live longer with breast cancer. It's an
Speaker 4: exciting deal for us, and we're pleased to work with
Speaker 4: Scorpion to bring an in house.
Speaker 2: Yeah, and this deal was really interesting because it's a
Speaker 2: nice reminder that, of course el Lily does more than
Speaker 2: just weight loss. So give us some context on the
Speaker 2: overall portfolio here, how the oncology fits with of course
Speaker 2: the weight loss and everything else.
Speaker 1: That you do.
Speaker 4: Yeah, well, we have four therapeutic areas and of course
Speaker 4: the diabetes and weight loss has been the story all
Speaker 4: last year, and it's exciting because it's growing and big.
Speaker 4: But that's about forty percent of the company. The other
Speaker 4: sixty percent is also doing incredibly well breast cancer. We
Speaker 4: mentioned in oncology here, we have other oncology assets, including
Speaker 4: for hematology that are in the market and doing great.
Speaker 4: Immunology is another important area for us, and products like
Speaker 4: Ebgliss for atopic dermatitis, which just launched in Q four, along.
Speaker 1: With Tolts for psoriasis.
Speaker 4: And then neuroscience Alzheimer's launched last year in the fourth
Speaker 4: quarter and we're ramping that now. So the company's got
Speaker 4: a broad portfolio. We want to work on medicines for
Speaker 4: terrible diseases of all kinds, not just obesity, but of
Speaker 4: course the OBCD story is exciting and broad as well.
Speaker 2: And before we get into some of the specific areas
Speaker 2: there when it comes to M and A, obviously there
Speaker 2: is a ton of optimism as it relates to the
Speaker 2: M and A environment under a second Trump administration.
Speaker 3: What is your M and A strategy?
Speaker 2: Where are there more opportunities for inorganic growth?
Speaker 4: Yeah, well, we've been very consistent and it's working for us.
Speaker 4: The motion for us is to go early and stay
Speaker 4: in our lane basically, so focus on the therapeutic areas
Speaker 4: where we know a lot that makes us a smart buyer,
Speaker 4: and by going early, we take more risk, but do
Speaker 4: smaller deals. I know there's been a lot of talk
Speaker 4: about M and A under the Biden administration and how
Speaker 4: hard it's been.
Speaker 1: But for us, not so much.
Speaker 4: We've done one hundred deals in the last three years,
Speaker 4: that's the most in biopharma, but a lot of them
Speaker 4: are small, below the radar, but it builds that early
Speaker 4: stage pipeline strength for us and Lily maybe in a
Speaker 4: little different position because our near term outlook, maybe our
Speaker 4: midterm outlook is so strong we don't need to plug
Speaker 4: a sales gap. We're just trying to find assets where
Speaker 4: we can add value and create great medicines for patients.
Speaker 4: This deal with scorpions another example of that.
Speaker 2: Yeah, and a great point too about flying under the
Speaker 2: radar there with those bite sized deals.
Speaker 3: Let's get to glp ones. Of course, there is a.
Speaker 2: Lot of anticipation and excitement around your oral weight loss drug.
Speaker 2: Of course there's some forthcomic data and if that trial
Speaker 2: in particular is successful, how long.
Speaker 3: Do you think it would take to get approval here?
Speaker 4: Yeah, so a lot of development's going on in our
Speaker 4: incretin portfolio or forg lepron is the name.
Speaker 1: Of the medicine. Yeah, Yeah, it's hard. I had to
Speaker 1: practice too, and we should.
Speaker 4: Get data before the middle of the year, the first
Speaker 4: set of studies. It's highly anticipated and really important one
Speaker 4: because it's convenient, could be an oral pill.
Speaker 1: Two efficacy point.
Speaker 4: Is it as good as ozepic essentially or semi glue
Speaker 4: tide that's the goal for us, and as tolerable. If
Speaker 4: it is, it could be approved in early twenty six
Speaker 4: And the benefit here is not just the convenience of
Speaker 4: the pill, but the ability to scale it. We all
Speaker 4: know the production systems for injectibles have really been stretched,
Speaker 4: and we continue to build sites and so forth. But
Speaker 4: with the oral technology, we can make more and get
Speaker 4: this medicine to more people around the world.
Speaker 1: And I think that's an.
Speaker 4: Exciting development for the company if the data is positive.
Speaker 2: And I know Mike co Ancher in New York, Matt
Speaker 2: Miller is listening very closely right now. He would tell
Speaker 2: you himself he'd like to get in one of these trials,
Speaker 2: but when he did have them, call me, well, when
Speaker 2: we get to the approval stage, I mean, what do
Speaker 2: you see as the dynamic between the oral medications and
Speaker 2: the injectibles. How much of the market do you see
Speaker 2: the orals potentially taken.
Speaker 4: Well, I think we'll see over the next three years
Speaker 4: fragmentation as you see in any scaled market. Right now,
Speaker 4: total incretins in the world are probably exiting forty to
Speaker 4: fifty billion, and so that's a big market in pharma,
Speaker 4: and it likely is going well north of that, and
Speaker 4: so we'll expect people to carve out niches.
Speaker 1: One niches medicalization.
Speaker 4: So for instance, at the end of last year, zep
Speaker 4: bound or Manjarro showed success in sleep apnea, so here's
Speaker 4: like a targeted condition like ten million Americans, and it's
Speaker 4: the only drug approved in that space, so people with
Speaker 4: that condition will seek the medication. We have also people
Speaker 4: who just want to lose weight for general health, so
Speaker 4: that's a broad based and then you know products like
Speaker 4: coming like our triple acting Angerton retatritide, which is in
Speaker 4: phase three studies now, will likely be segmented towards more
Speaker 4: the people who need to lose more weight, so their
Speaker 4: BMIs are over thirty five, they have more to lose.
Speaker 4: So I think you'll see new medicines come out covering
Speaker 4: different segments of this very.
Speaker 1: Large and growing market. And the oral likely serves that sort.
Speaker 4: Of first line broad based need and that's great because
Speaker 4: we can produce a lot of it. It also will
Speaker 4: be an important medicine for middle income markets like China
Speaker 4: and Brazil where there is India lots of obesity. But
Speaker 4: we just can't get enough of our product there at
Speaker 4: the right price point right now because the injectible systems
Speaker 4: are expensive and hard to scale.
Speaker 3: Well let's talk a little bit more about pricing here.
Speaker 2: And I know that it's earlier still in trials, but
Speaker 2: if approved, do you expect that the orals would be
Speaker 2: priced cheaper than zet bounds.
Speaker 4: Well, I mean we prices that bound cheaper than semaglutide
Speaker 4: when we launched which and it's a better product. We've
Speaker 4: proven that you lose almost fifty percent more weight when
Speaker 4: we do pricing. Of course, the value in the actual
Speaker 4: clinical data is very important, so we'll have to see that.
Speaker 4: But also we need to think about this segmentation we
Speaker 4: just discussed, So more to come on pricing. We're not
Speaker 4: going to announce it today. We need to first get
Speaker 4: the phase three study done. But our goal will be
Speaker 4: to reach the masses with that product, and so we
Speaker 4: need a price and strategy and concert with that.
Speaker 3: Well, I tried on the pricing, but.
Speaker 1: Welcome back on your show and we'll talk about it.
Speaker 3: I will follow up with you on that. Let's talk
Speaker 3: a little bit about politics here.
Speaker 2: Course, the incoming president Donald Trump, you met with him recently.
Speaker 2: When it comes to the new administration, what sort of
Speaker 2: pricing policies are you potentially anticipating there?
Speaker 1: Yeah, I mean it's a good question.
Speaker 4: We are still waiting for them to be seated, inauguration
Speaker 4: next week and confirmations, etc. I would say first that
Speaker 4: this idea of incoming administration that's focused on the health
Speaker 4: of Americans is one that excites us. And there's a
Speaker 4: lot of common cause with the farmer industry in Lily.
Speaker 4: We wake up every day trying to make America healthy again.
Speaker 4: So if that's the goal, we have common interests how
Speaker 4: that happens. We need to learn more what the strategies are.
Speaker 4: But of course you know, with for instance, with our
Speaker 4: zep bound and what a great tool to really improve
Speaker 4: the overall health of America.
Speaker 1: So we'll seek partnerships with.
Speaker 4: Them to say, how can we expand access, how can
Speaker 4: we get new medicines like or forger prontter proof faster.
Speaker 4: How can we improve insurance coverage and reduce.
Speaker 1: Costs for Americans?
Speaker 4: Those are all, you know, topics we want to engage on,
Speaker 4: and you know, they also want to make the system
Speaker 4: work better. I think the Presence talked about the role
Speaker 4: of the middleman, and of course we need a way
Speaker 4: to get our drugs to patients, but the way the
Speaker 4: systems set up, like so many things in healthcare, is
Speaker 4: too complicated and non transparent, and so we support those
Speaker 4: kinds of changes as well.
Speaker 2: You said, make America healthy again? So I have to
Speaker 2: bring up RFK Junior. Have you met with him?
Speaker 4: He was at the dinner. I think that was widely reported. Yeah, yeah,
Speaker 4: so and we talked about that.
Speaker 1: Where's the common ground? Okay?
Speaker 4: I mean we are focused on people who want to
Speaker 4: get healthy, so we have a lot in common there.
Speaker 3: And I am curious.
Speaker 2: I mean when it comes to specific policies, you mentioned
Speaker 2: this optimism that you have when it comes to the
Speaker 2: inflation Reduction Acts specifically, do you think that Trump will
Speaker 2: finalize that proposal from Biden about the Medicare and negotiations
Speaker 2: or what are your feelings.
Speaker 1: On Well, they've done one round already.
Speaker 4: I mean to our eye, it had all the costs
Speaker 4: and none of the benefits that were promised. So it
Speaker 4: was promised to lower the cost for patients. I don't
Speaker 4: think the new drug pricing will do that at all.
Speaker 4: But in the IRA there were provisions to address the
Speaker 4: way that party benefits are delivered, smoothing costs, capping.
Speaker 1: Out of pocket.
Speaker 4: Those are good things we supported as industry. But the
Speaker 4: idea of the government negotiating drugs directly and then having
Speaker 4: essentially PBMs and other entities implement the program, we think
Speaker 4: is flawed and it won't change value for America or Americans.
Speaker 4: So we're actually going to ask the administration just to
Speaker 4: pause that negoti to the next round of negotiation and
Speaker 4: work make the program work a little better for us.
Speaker 4: It's all about price at the pump when people go
Speaker 4: to the pharmacy counter. How can they have a consistent
Speaker 4: and low cost for benefits that.
Speaker 1: Are helping their health. That's what insurance is for.
Speaker 4: And I'm not sure the construct we just went through
Speaker 4: does that. So there's ways to fix it. We have
Speaker 4: ideas about that.
Speaker 1: Well.
Speaker 2: I appreciate, of course the context there, and I only
Speaker 2: have time for one more question.
Speaker 3: Okay, So I want to go back to Alzheimer's. So
Speaker 3: we were talking a little bit in the commercial.
Speaker 2: Break about it, and you know, in the context of
Speaker 2: Eli Lilly being more than just weight loss drugs. Your
Speaker 2: Alzheimer's treatment received clearance in July of twenty twenty four.
Speaker 2: What indications can you give us about adoption so far?
Speaker 4: Yeah, And it's so exciting for us because we've spent
Speaker 4: so much time, like thirty years working to get a
Speaker 4: medicine approved.
Speaker 1: It's been very difficult.
Speaker 4: We launched in like September we make a number of
Speaker 4: the diagnostics, and the good news is we see a
Speaker 4: lot of people seeking answers to the question if I
Speaker 4: have dementia symptoms, do I also have amyloid? And am
Speaker 4: I a candidate for the medicine? So that's growing pretty
Speaker 4: rapidly right now. And then Cassunla our brand, we're seeing
Speaker 4: utilizations start to ramp, particularly in December.
Speaker 1: So that's good news and we're not done there yet.
Speaker 4: I think there's studies to read out ahead, maybe late
Speaker 4: this year, early next year in Alzheimer's prevention, which is
Speaker 4: I think a much better answer why way too you
Speaker 4: get the dementia symptoms that's prevented if you have amaloid
Speaker 4: excess amyloid in your brain. And then more broadly, I
Speaker 4: think for viewers interesting, I am super bullish on neurodegeneration
Speaker 4: as a category we can address with medicines and what
Speaker 4: are those are the scariest conditions we think about Parkinson's,
Speaker 4: als Alzheimer's. I think there's more medicines coming in Alzheimer's
Speaker 4: and more medicines coming in these other conditions, hopefully from Lily.
Speaker 4: But that's an area where science is moving rapidly and Lily's.
Speaker 1: At the forefront.
Speaker 2: Well, Dave, I so enjoyed this conversation. Hope to speak
Speaker 2: to you again soon. That, of course, is Eli, Lilly's CEO,
Speaker 2: Dave Rix