Eli Lilly (LLY) Q3 2024 Earnings Call Transcript

Eli Lilly (LLY -6.28%)
Q3 2024 Earnings Call
Oct 30, 2024, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Lilly Q3 2024 earnings call. [Operator instructions] I would now like to turn the conference over to your host, Joe Fletcher, senior vice president of investor relations. Please go ahead.

Joe Fletcher — Senior Vice President, Investor Relations

Thank you, Paul, and good morning, everybody. Thanks for joining us for Eli Lilly and Company’s Q3 2024 earnings call. I’m Joe Fletcher, senior vice president of investor relations. And joining me on today’s call are Dave Ricks, Lilly’s chair and CEO; Dr.

Dan Skovronsky, chief scientific officer and president of Lilly Immunology; Lucas Montarce, chief financial officer; Anne White, president of Lilly Neuroscience; Ilya Yuffa, president of Lilly International; Jake Van Naarden, president of Lilly Oncology; and Patrik Jonsson, president of Lilly Cardiometabolic Health and Lilly USA. We’re also joined by Susan Hedgelin, Michaela Irons, Mike Sprengnether and Lauren Zierke of the IR team. During this 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 4.

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’s 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 non-GAAP financial measures.

Now I’ll turn the call over to Dave.

David A. Ricks — Chair and Chief Executive Officer

OK. Thanks, Joe. In Q3, Lilly continued to make progress across the business. We delivered strong revenue growth, we advanced and expanded our pipeline, and we invested in new product launches, and continued expanding manufacturing network.

On Slide 5, you can see details of our financial performance and progress related to our strategic deliverables. Revenue grew 42% after excluding the impact of revenue from the olanzapine portfolio, which we divested in Q3 2023. New product revenue grew by over $3 billion, led by Mounjaro and Zepbound. U.S.

demand for Mounjaro and Zepbound has been strong and continues to grow as we expand both access and supply. U.S. sequential quarter-over-quarter prescription volume growth was 25% in Q3. All doses are available for order from Lilly in both the wholesale channel and early direct pharmacy solutions.

The launch of a single-dose Zepbound vials in the U.S. exclusively through LillyDirect’s self-pay channel, further expanded supply and access in the quarter. And finally, we remain on track to exceed the production target of at least 1.5 times the saleable doses of incretin medicines in the second half of this year compared to the second half of last year. We continue to see strong performance across the balance of our portfolio in oncology, immunology, and neuroscience.

Excluding revenue from the olanzapine portfolio, the non-incretin growth of the company was 17% in Q3. We achieved several key pipeline milestones this quarter, including the approval of Eliquis in the U.S. for the treatment of moderate to severe atopic dermatitis, the approval of Japan and Great Britain for the treatment of early symptomatic Alzheimer’s disease; disclosure of positive 176-week data from the SURMOUNT-1 phase 3 study of tirzepatide in adults with prediabetes and obesity or overweight; and the recent presentation of positive data from the phase 3 TRAILBLAZER-ALZ 6 study, evaluating different dosing regimens for donanemab. Our manufacturing expansion agenda remains a top priority.

In September, we invested nearly $2 billion to increase our manufacturing footprint in Ireland. This brings the total commitments to build, upgrade, and acquire manufacturing facilities announced since 2020 to more than $20 billion. And beyond this $20 billion commitment, we also announced a separate $4.5 billion investment to develop the Lilly Medicine Foundry. This first-of-its-kind facility will be dedicated to research and development for manufacturing process design and to develop high-quality investigational medicines for our clinical trials.

It will be located in Lebanon, Indiana, a short drive from the corporate headquarters. This investment underscores our confidence in our pipeline and the urgency we bring to our innovative medicines to patients around the world. In August, we closed the acquisition of Morphic Therapeutics, adding oral integrin assets to our early phase immunology portfolio. And lastly, we returned over $1.6 billion to shareholders via dividends and share repurchases.

On Slide 6, you’ll see key events since our Q2 call, including the milestones I mentioned earlier and several other key updates. Last month, we appointed Lucas Montarce as Lilly’s executive vice president and chief financial officer. Lucas has 23 years of experience at Lilly and has worked with the executive team and the board for a long time, so congratulations, Lucas. Now let me turn the call over to Lucas to review our Q3 financial results and provide an update on our 2024 financial guidance.

Lucas Montarce — Executive Vice President, Chief Financial Officer

Thanks, Dave. Slide 7 summarizes our financial performance in the third quarter, which is highlighted by strong revenue growth across our new products as well as our non-incretin medicines. As Dave mentioned, revenue grew 42% after excluding the impact of revenue from the olanzapine portfolio and was primarily driven by Mounjaro and Zepbound. Revenue from our non-incretin portfolio grew 17% after excluding the impact of revenue from the olanzapine portfolio.

Gross margin as a percentage of revenue increased to 82.2%. Gross margin primarily benefited from favorable product mix and higher realized prices, partially offset by the sale of rights for the olanzapine portfolio in Q3 2023 and higher manufacturing costs. R&D expenses increased 13%, driven by continued investment in both our early and late-stage portfolio. We recognized $2.8 billion of acquired IPR&D charges primarily related to the acquisition of Morphic Therapeutics.

Marketing, selling, and administrative expenses increased 16%, primarily driven by promotional efforts supporting ongoing and future launches. Operating income increased to nearly $1.8 billion, driven by higher revenue from new products, partially offset by operating expenses growth. The effective tax rate was 37.6%, reflecting the unfavorable impact of nondeductible acquired IPR&D charges. Other than the impact of acquired IPR&D, the underlying tax rate was consistent with previously provided guidance.

We delivered earnings per share of $1.19, up from $0.10 in Q3 2023. And this includes a negative impact of $3.08 from acquired IPR&D charges. On Slide 9, we quantify the effect of price, rate, and volume on revenue growth. U.S.

revenue increased 46% with volume growing 35%, driven by Zepbound and Mounjaro, partially offset by declines in Trulicity. Realized prices increased 11% in the U.S., primarily driven by Trulicity, Humalog, and Verzenio. While Mounjaro and Zepbound demand remains strong and growing, quarter-by-quarter revenue growth in 2024 has been impacted by supply and channel dynamics. As we highlighted in Q2, increasing supply led to higher shipments that allow us to fulfill the majority of wholesalers’ back orders, serving as a tailwind to sales.

In Q3, we saw channel inventory decrease as wholesalers continue to navigate the complexities of high-volume cold chain products across a dozen different dose and brand combinations. We estimate this inventory decrease impacted Q3 sales of Mounjaro and Zepbound by mid-single digits as a percentage of aggregate use sales of these products. Europe revenue grew 39% in constant currency when excluding the impact of the divestiture of the olanzapine portfolio. This growth was primarily driven by Mounjaro, Verzenio and Jardiance.

We continue to be pleased with the Mounjaro quick-pen launches in Europe and have now launched in the U.K., Germany, Spain, and most recently, Italy. Revenue in the rest of the world grew 45% in constant currency, driven by volume growth of Mounjaro and, to a lesser extent, strong performance of Verzenio and Jardiance. Moving to China. Revenue increased 17% in constant currency.

This increase was driven by volume growth of Tauvid and favorable pricing impacts for Humalog. Finally, Japan grew 17% in revenue in constant currency. Volume growth of 20% was driven by uptick of Mounjaro, Verzenio, and Jardiance. Slide 10 provides additional perspective of performance across our product categories.

Mounjaro sales were $3.1 billion globally with almost $2.4 billion of net sales in the U.S. We continue to see solid uptake of Mounjaro outside the U.S. with sales in Q3 totaling $728 million. Verzenio continues its growth trajectory with worldwide sales increasing 32%, driven by strong execution in the early breast cancer indication.

Jaypirca worldwide revenue was $81 million. When excluding the impact of Japan collaboration milestones recognized in Q2, Jaypirca continued its sequential quarter-over-quarter growth trend, demonstrating sustained uptake in both the MCL and CLL patient population. Onboard revenue increased to $41 million. We are pleased with our progress gaining commercial access for the U.S.

As of January 2025, we will have first-line access at 2 out of the three major PBMs. We were also excited to receive U.S. approval for Kisunla and Ebglyss in Q3. The Kisunla launch is underway and progressing, and the Ebglyss launch began early this month.

We are pleased to have already secured formulary access for Ebglyss with one of the major PBMs. Worldwide Trulicity revenue declined 22%, driven by lower volume, partially offset by higher realized prices. Slide 11 provides an update on the U.S. launch of Zepbound.

We continue to see strong growth trends leading to sales of over $1.2 billion. We have broad formulary coverage for Zepbound. As October 1st, Zepbound has approximately 87% access in the commercial segment, and we are making ongoing progress expanding our employer opt-ins. We are in the early days of launching single-dose Zepbound vials in the U.S.

exclusively through LillyDirect. 2.5- and 5-milligram single-dose vials are currently available to self-pay patients at a 50% or greater discount compared to the list price of other incretin medicines for obesity. This offering helps even more adults living with obesity access Zepbound, including Medicare beneficiaries and those without [Inaudible]. On Slide 12, we provide an update on capital allocation.

On Slide 13, you can see our updated guidance for the full year. We are updating our revenue guidance range to $45.4 billion to $46 billion. The new midpoint range represents approximately 50% growth in Q4 2024 compared to the same quarter last year, demonstrating a continuation of revenue growth acceleration. We are investing heavily in increasing supply of tirzepatide and have been carefully balancing our demand creation activities and launches into new markets with our production to support continuity of care for patients.

In Q3, we continue to be prudent scaling up and demand generation activities. This is the driver for lowering the top end of the range. We continue to expect that we will exceed our goals to increase production of incretin saleable doses by at least 50% in the second half of 2024 compared to the second half of 2023. Now with all the doses of Mounjaro and Zepbound available, we will accelerate demand activities, and while there is a lag to flow-through revenue, we expect to see the impact of these efforts in Q2 and into 2025.

Lastly, we also expect new Mounjaro launches internationally to contribute to growing in Q4. Our expected ratio of gross margin less opex divided by revenue remains unchanged on both a reported and a non-GAAP basis. Other income and expense is now expected to be in the range of $425 million to $325 million of expense on a reported basis and is unchanged on a non-GAAP basis. We have updated our estimated effective tax rate to be approximately 17%, driven by the impact of non-deductible IPR&D in Q3.

EPS is now expected to be in the range of $12.05 to $12.55 on a reported basis and $13.02 to $13.52 on a non-GAAP basis. Both ranges reflect the updated mentioned earlier as well as acquired IPR&D charges through Q3 of approximately $3.1 billion. Now I will turn the call over to Dan to highlight our progress on R&D.

Daniel M. Skovronsky — Executive Vice President, Science and Technology, Chief Scientific Officer

Thanks, Lucas. Lilly R&D had another productive quarter. Let me begin by sharing some late-phase updates, including some exciting phase 3 data that we shared at recent medical congresses. Starting with neuroscience.

Yesterday, at the clinical trials in Alzheimer’s Disease Conference, we were pleased to share positive results from our phase 3 TRAILBLAZER-ALZ 6 trial, which evaluate different dosing regimens for initiation of donanemab treatment to understand their effect on ARIA-E. In this trial, we tested a modified titration, which shifted 1 vial of donanemab from the first infusion to the third, as shown on Slide 14. We designed this modified titration to achieve identical total dose of donanemab administered in the first three months as does our standard dosing regimen, but we hypothesized that the smoother increase in dose could result in less ARIA. We were pleased to see in this trial that indeed by pharmacokinetic analysis, we achieved equivalent cumulative exposure between the modified titration and the standard dosing regimen.

And as a result, we achieved similar levels of amyloid plaque removal and phospho-tau217 reduction. Importantly, we also confirmed our hypothesis on ARIA and showed that the modified titration reduced the incidence of ARIA-E to 14%, compared to 24% for those receiving the standard dosing regimen. As well, lower frequency of symptomatic ARIA-E, lower radiographic severity of all categories of ARIA-E and lower ARIA-E in ApoE4 genotype carriers was observed using the modified titration as compared to the standard dosing regimen. We plan to submit a supplemental BLA to the FDA in the coming weeks for this modified titration.

Our efforts on remternetug continue to progress, and we are starting a phase 3 efficacy study of remternetug focused on preclinical stages of the disease, similar to our ongoing TRAILBLAZER-ALZ 3 trial for genetumab, where we are trying to reduce the risk of progression of symptomatic Alzheimer’s disease. In this upcoming phase 3 registrational trial called TRAILRUNNER 3, we are evaluating a fixed duration of monthly subcutaneous administration of remternetug, offering what we see as a potentially convenient option for this earlier patient population. We’ll share more details about the study design of TRAILRUNNER 3 tomorrow at CTAD. Turning to cardiometabolic health.

Last month, we shared data from our remaining phase 3 studies for our weekly basal insulin called insulin efsitora alfa. As a reminder, efsitora phase 2 consists of 5 global registration studies, four of which are in adults with type 2 diabetes and one is in adults with type 1 diabetes. We are pleased that each study met its primary endpoint of non-inferior A1c reduction versus insulin glargine or insulin degludec, which are the most frequently used in daily basal inputs. In the studies evaluating efsitora in people with type 2 diabetes, the results demonstrated that efsitora achieved meaningful A1c reduction with relatively low hypoglycemia rates.

We were particularly excited with the results for QWINT-1, in which efsitora was administered via fixed doses using a single-use auto-injector. In this 52-week study in people with type 2 diabetes, efsitora lowered participants’ A1c by 1.31%, compared to 1.27% for insulin glargine. This impressive A1c reduction was achieved with low hypoglycemia rates, Actually, efsitora had approximately 40% lower rates of severe or clinically significant hypoglycemia than just daily insulin glargine. These data highlight the power of an easier-to-use dose form or weekly insulin for people who are just initiating basal insulin therapy for the first time.

We look forward to discussing the results from the QWINT phase 3 program with global regulatory agencies. It has also been a productive quarter for our late-phase incretin programs. First, as shown on Slide 15, we shared positive 176-week data from the SURMOUNT-1 phase 3 study of tirzepatide in adults with prediabetes and obesity or overweight, which demonstrated a remarkable 94% reduction in the risk of developing type 2 diabetes. This is the longest-duration tirzepatide data to date, and we are highly encouraged to see that patients on the 15-milligram dose achieved a sustained weight loss of nearly 23% over more than a 3-year treatment period, and that this weight loss was accompanied by a significant reduction in risk of developing diabetes.

We look forward to sharing the detailed results next week at Obesity Week. These results add to compelling data showing the benefit of the combined pharmacology of dual GIP and GLP-1 receptor agonism in several of these related complications, including type 2 diabetes, metabolic dysfunction-associated steatohepatitis or MASH, moderate to severe obstructive sleep apnea, and heart failure. We are working quickly to bring tirzepatide to more adults living with obesity and its complications, and we are pleased to share that we expect U.S. regulatory action for tirzepatide in adults with obesity and obstructive sleep apnea yet this year, and that we will submit for U.S.

approval of tirzepatide in adults with obesity and heart failure with preserved ejection fraction before the end of this year. Another avenue to advance patient care is the maintenance of body weight reductions. We are conducting 2 phase 3b weight loss maintenance trials. The first is SURMOUNT MAINTAIN, which compares either tirzepatide 5 milligrams or tirzepatide maximum tolerated dose to placebo.

The second is ATTAIN MAINTAIN, which evaluates our oral GLP-1, orforglipron, versus placebo after tirzepatide or semaglutide in participants who complete SURMOUNT-5, the IIIb head-to-head study of tirzepatide versus semaglutide. We look forward to sharing the top line data readout for SURMOUNT-5 later this year. Next, in oncology. The phase 3 EMBER-3 study evaluating our oral SERD, imlunestrant in patients with second-line ER-positive HER2-negative metastatic breast cancer was positive.

The study evaluated 3 arms, imlunestrant as a monotherapy, investigator choice of endocrine therapy monotherapy, and imlunestrant in combination with abemaciclib. Based on the results from this trial, we expect to submit an NDA to the FDA by year-end, and we look forward to sharing detailed results at an upcoming medical meeting. The phase 3 portion of the olomoracib first-line KRAS G12C lung cancer study is now underway, the first phase 3 trial for this class of medicines in newly diagnosed, locally advanced or metastatic lung cancer, regardless of PD-L1 expression. This comes after recently defining the dose of the medicine in combination with standard of care regimens in consultation with the FDA under Project Optimus.

We continue to believe we could have a leading agent in this class and look forward to execution of the late-stage program. Finally, in immunology, we’re excited by the recent U.S. FDA approval of lebrikizumab as Ebglyss for adults and children 12 years and older with moderate to severe atopic dermatitis. Ebglyss provides a new first-line biologic treatment that targets a main cause of eczema inflammation that offer significant early skin clearance and itch relief with convenient once-monthly maintenance dosing following the initial phase of treatment.

We recently shared compelling long-term data showing that lebrikizumab provides sustained disease control for up to three years in more than 80% of patients with moderate to severe atopic dermatitis, who responded to Ebglyss treatment at 16 weeks. We have also initiated two phase 3 studies of lebrikizumab in adults with perennial allergic rhinitis and chronic rhinositis with nasal polyps. As we continue to expand our immunology portfolio to help more patients, we’re conducting two phase 3 studies evaluating ixekizumab and tirzepatide together in patients with obesity or overweight in either psoriatic arthritis or moderate to severe plaque psoriasis. Obesity is associated with an increased risk of developing autoimmune diseases and can negatively impact disease outcomes.

Taltz has already demonstrated strong efficacy in treating psoriatic arthritis and plaque psoriasis. And we are excited to see the potential for additional benefits for patients when combined with a significant and sustained weight loss offered by Zepbound. Slide 16 shows select pipeline opportunities as of October 28, and Slide 17 shows potential key events for the year. I’ve already covered our late-phase progress so now I’ll quickly cover updates for the early phase pipeline.

Starting again with neuroscience. We recently initiated a phase 2 study of an epiregulin antibody in chronic neuropathic pain associated with distal sensory polyneuropathy. We had previously shown this molecule in phase 1 of the pipeline as an undisclosed mechanism in pain. We also have begun phase 1 studies on two new neurodegeneration assets, an alpha-synuclein-directed siRNA and a tau-directed siRNA.

Earlier this morning at CTAD, we disclosed detailed results from our phase 2 study of our oral anti-tau agent. While neither does slow clinical decline in early symptomatic Alzheimer’s disease, biomarker data suggests potential impacts on tau pathology volume and neuro inflammation. Safety follow-ups for the study are ongoing. Turning to cardiometabolic health.

In the coming days, we will initiate a phase 2 study of lenti, our long-acting amylin receptor agonist for chronic weight management in combination with tirzepatide in patients with type 2 diabetes and the phase 2 study of bimagrumab alone or in combination with tirzepatide for chronic weight management and participants without type 2 diabetes. We will also be advancing Volenrelaxin our long-acting relaxin molecule into phase 2 in adults with chronic kidney disease. We removed the phase 1 APOCIII siRNA asset in cardiovascular disease as it did not meet our bar for continuing clinical development. In oncology, 2024 continues to be a very productive year for new clinical starts.

Since the last call, we advanced 3 new molecules into phase 1 studies. Our oral SMARCA2 or BRM inhibitor, our KRAS G12D inhibitor, and our Pan-KRAS inhibitor. These three initiations bring to total new clinical starts in oncology in 2024 to 7, exceeding the goal we shared earlier this year to put at least 5 new potential medicines in the clinic. And we’ve done that across three different modalities, emblematic of our strategy to utilize therapeutic modality diversification to combat treatment resistance and improve patient outcomes.

We expect this new slate of clinical programs will set us up for an exciting 2025 as we look to see which programs deliver differentiated and important early clinical data sets for patients. Finally, in early stage immunology, we’re also excited to initiate several new phase 2 studies. First, we moved DC853, an oral IL-17 inhibitor from the Dice Therapeutics acquisition into phase 2 in adults with moderate to severe plaque psoriasis. And we removed DC806 in the pipeline in favor of 853, which is a more potent molecule.

Second, we are initiating a phase 2 study combining altrecabart and mirikizumab in adults with moderately to severely active ulcerative colitis. In addition, we are terminating the phase 2b study of parasolimab in rheumatoid arthritis due to the overall benefit risk profile of the molecule in this study. Finally, after welcoming our Morphic colleagues to Lilly in August, our pipeline now reflects the oral alpha-4-beta-7 integin inhibitor, MORPH-057 in phase 2 for moderate to severe ulcerative colitis and moderate to severe Crohn’s disease. Q3 was an exceptionally productive quarter for Lilly R&D, and we’re pleased with our important progress we’re making for patients across all of our therapeutic areas.

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

David A. Ricks — Chair and Chief Executive Officer

OK.Thanks, Dan. Before taking questions, let me briefly summarize our progress in the quarter. We had strong revenue growth across both Mounjaro and Zepbound as well as our oncology, immunology, and neuroscience medicines. Significant advancements in our pipeline included approval of Ebglyss for moderate to severe atopic dermatitis in the U.S., Kisunla for early symptomatic Alzheimer’s disease in Japan and Great Britain, and positive data disclosures for phase 3 studies of tirzepatide and donanemab.

We are confident in Lilly’s bright future. We have now launched in major geographies that cohort of medicines that we expect will serve as the driver of our growth through the balance of this decade. That is Mounjaro, Jaypirca, Zepbound, Kisunla, and Ebglyss. We expect these products, together with our already launched products will contribute to strong growth of the company in 2025.

In addition, we plan to continue to scale R&D and step up our investment across manufacturing and commercial to support the successful launches of these medicines to help even more patients next year. So now I’ll turn the call over to Joe to moderate a Q&A session.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Dave. [Operator instructions] So Paul, please provide the instructions for the Q&A session, and then we’re ready for the first caller.

Questions & Answers:

Operator

Certainly. [Operator instructions] Our first question today is coming from Chris Schott from J.P. Morgan. Chris, your line is live.

Chris Schott — Analyst

Great. Thanks so much. Just to kick off the questions. Can you just help bridge a bit from the 3Q sales we just saw reported to the 4Q implied results? It’s obviously a substantial step-up in sales.

It sounds like part of this is you’re now accelerating demand generation efforts, given the improved capacity. But I was just hoping to get a little bit more color on exactly what those efforts are and how quickly you expect those programs can translate to an acceleration in prescriptions.

David A. Ricks — Chair and Chief Executive Officer

Thanks, Chris, for the question. I’ll maybe hand over to Patrik since I’m guessing a lot of the question is around tirzepatide-related but let Lucas jump in as needed. Patrik?

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

Thank you very much, Chris. I think it’s first important to emphasize that the overall performance and for both Mounjaro and Zepbound are very strong. And we saw a slightly accelerated growth in Q3 of more than 25% and also the market, the underlying market for both type 2 and obesity continues to grow. We took a more prudent approach than we anticipated in Q3, pretty much driven by the need to deliver a good consumer experience.

That has been one of our triggers for any investment based upon the experience we faced in the first half of the year when a lot of the calls to our customer service center was about supply, actually more than 20%. We are now down to less than 1% of those being supply related. So what we are doing right now is that we are investing heavily in our DTC effort, which we haven’t done in the past, supply allows us to invest strongly there. But it’s not a demand issue.

And similarly, we’re fully leaning in on all the HCP promotional efforts, also providing samples in the marketplace to providers. So we remain very confident based upon the underlying trend in the marketplace today and also the growth of both Zepbound and Mounjaro in terms of TRx, NBRx, and TRx that we are after a good Q4.

Lucas Montarce — Executive Vice President, Chief Financial Officer

Maybe just to add to that. Thank you, Chris, for the question. When you look at the midpoint that I mentioned, 50% growth that we expect for the fourth quarter, compared with the 42% is a step-up of 8%. When you remove the channel dynamics that we alluded in Q2, the step-up of growth is very consistent throughout the quarters, so the acceleration and the drivers are the ones that Patrik mentioned.

Maybe just to add to that, OUS as well, we continue to advance and get new countries that we are going to be launching Mounjaro as well that will drive that part of that growth acceleration in the fourth quarter.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks. Paul, next question.

Operator

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

Geoff Meacham — Analyst

Hey, guys. Thanks for the question. I guess related to that, I just want to dig into the 3Q volatility. I mean, Dave, you mentioned the script demand sequentially.

I guess, so given that, why would you see such a big drawdown this quarter? I guess investors are trying to figure out if the sequential trends are perhaps a leading indicator of a moderation demand or if it’s just the lumpiness of the rollout in access?

Joe Fletcher — Senior Vice President, Investor Relations

Dave, you want to field that?

David A. Ricks — Chair and Chief Executive Officer

Yeah. Maybe to give us kind of a macro thing you’re asking there, I think first of all, there is a lot of lumpiness in channel stocking. I think all the sell-side analysts on this call have probably struggled with that as we have. Exiting Q1, we can recall that we had a number of our dosage forms back order, and we pretty much reached a nadir of supply in the wholesalers.

That was restocked in Q2 and then we saw a drawdown in Q3. I think what we really don’t control and don’t attempt to but as a reality is that downstream customers from Lilly wholesalers and retailers are making their own decisions about which of the 12 different dosage forms they want to stock in at what level. There are some physical constraints to that. Cold chain capacity is constrained.

And there are financial constraints, working capital that they’re managing to. Those are their decisions to maintain their customer service levels. I think what we’ve done is sort of move our set point of how much stock we want to have on hand before we go initiate demand-stimulating activities, which we had more or less caused from in the first half and never started for Zepbound. Remember, we launched in December of last year.

So I think in-market data, you guys can all read and you see, Geoff yourself, and we do see acceleration of both brands in Q3 over Q2 in actual consumption. And our estimate is that will continue or accelerate as we add U.S. stimulation to that demand, which, as Patrik said, we’re going to begin doing here really mid-November in earnest. Ex-U.S.

demand is another factor that affects sales and that, too, we moved out launches by about a quarter just to make sure we had enough buffer. So when customers want a prescription, they could get it filled reliably. And I think that’s an important thing for us to keep that trust going forward. So at a macro level, is there a demand problem here? No, actually.

Is there a supply problem? No. Although if we had unlimited demand, there would be. So we’re carefully gating those two things together as we escalate supply in Q4, which, as I mentioned, we’re going to beat the 50% growth number. You’ll see us grow our demand stimulation as well.

And I think that’s really about Q4 but even more about Q1 of 2025 and continuing acceleration there. So business is super healthy. We feel good about where we are. Obviously, there was some choppiness this quarter, but I think underlying growth here is as strong as we would have hoped.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Dave. Paul, next question.

Operator

The next question will be from Evan Seigerman from BMO Capital. Evan, your line is live.

Evan Seigerman — Analyst

Hi, guys. Thank you so much for the question and Joe, congrats on your new job. I want to touch on compounding. Given the headlines, do you believe that compounded drugs are impacting demand? And secondarily, how do you frame kind of the FDA’s waffling on the shortage list as it relates to compounding? It seems that this has been a hot issue so I’d love your perspective.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Evan. Yes, hot topic indeed. Maybe in terms of talking about whether there’s a financial impact that we see that, I’ll let Patrik field that, and then maybe the broader question around the FDA, I’ll let Dave chime in. So Patrik?

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

So thank you very much, Evan. I think as we all know, there is not one reliable source when it comes to quantifying the compounding market. know that it’s a and mainly cash and are probably reasons to believe that some of those patients are off-label. So from our perspective, we actually don’t estimate there to be a huge financial impact of compounding on our business.

And our major concern here has been driven by safety with thousands of people in the U.S. getting medicine that is not approved by the FDA for quality, safety or efficacy purposes. So that has been our concern, and we are mainly leaning in now, as we said earlier, to drive demand in the U.S. marketplace for patients with obesity and type 2 diabetes.

David A. Ricks — Chair and Chief Executive Officer

Yes. I mean, I can’t really speculate too much what’s going through the FDA’s mind. But I think other commentators have mentioned that the longer this goes on, the more risk they have to their own regulatory framework. And so my guess is the FDA is concerned about that and they want to win this case, and they’re putting their ducks in a row to do so.

There is an alternate, I guess, perspective that they don’t care, but I think they do care. The other thing I’ll say is we work closely with the FDA to approve new capacities. And it’s important to note here, we could do more with that and we communicate this to them directly. They’re not hearing anything here they haven’t heard from you already.

But we have invested massively in parenteral filling capacity and API capacity. And a big part of the delivery schedule for that, which can take two to four years is actually the regulatory process itself. So it’s difficult to think about a world where the workaround to that is to unleash unregulated product. The workaround should be to collaborate with the companies to speed up legitimate product delivery, and we would embrace that discussion fully.

We have a lot of things in queue now with the FDA or about to be that could speed up what already is an impressive production ramp. We would welcome that opportunity.

Joe Fletcher — Senior Vice President, Investor Relations

Thank you, both. Paul, next question.

Operator

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

Seamus Fernandez — Analyst

Thanks. My question is actually on how you feel the compounding situation could be resolved by the availability of an oral small molecule that can be provided at substantial scale. It seems like this is the easiest and most straightforward answer to the compounding crisis. Once that occurs, does it make sense with that availability regardless of products, that the agency would move to resolve the crisis? Or is this a product-by-product situation such that if Novo can’t get their house in order in that context, that we’ll end up with having this compounding issue just draw out over time?

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Seamus. Yes, I’ll hand back to Dave. I mean, if you’re referring to our — of course, our oral GLP1 non-peptide agonist, orforglipron, I mean, that’s still a ways away from the phase 3 turning over and then ultimately coming to market. But Dave, maybe what would you add to your prior comments?

David A. Ricks — Chair and Chief Executive Officer

Yes. Well, I mean, in the long run, of course, there’s a potential 1 billion customers on the planet. And I think we’ve said, I’ve said that probably the only way that a big chunk of those are served well is with the oral products because of the production system efficiencies there versus parenteral filling of proteins. So it’s important.

Of course, we’re in the lead there and we want to see orforglipron to be successful what we need the data and the submission and launch would put that sometime something like less than two years from now. But first of all, I wouldn’t characterize compounding as a crisis. It certainly isn’t one for us. I think the problem is people are being harmed and duped, right? And so that’s kind of what we like to see stop.

But as Patrik said, we don’t really see a financial impact on Lilly of compounding. I think as an industry, we should probably be worried that if this grows and is allowed to continue, then it sort of creates us back to our generic world. But as I said, I think the FDA wants to stop that for good reasons, for public safety reasons, and they’ll do that. At the end of the day, FDA uses this as a product-by-product analysis.

And right now, tirzepatide is not in shortage and therefore, for mass compounding should not be permitted. a stay, etc, at the court, but we think that should be the state there. As it relates to semaglutide that you want to ask, no about that, although we’re working hard to help not with their supply problem by reducing demand for semaglutide and increasing a purchase appetite. So maybe it will resolve that way.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Dave. Paul, next question.

Operator

The next question will be from Mohit Bansal from Wells Fargo. Mohit, your line is live.

Mohit Bansal — Analyst

Great. Thank you very much for taking my question. Maybe if I can ask the demand question and supply question differently. So now you will be starting some demand generation activities in the later half of the — latter part of the year.

How are you thinking about the access side of it? Do you think that there is some convergence between access, demand generation, and supply into 2025? Because we are hearing that some of the payers are restricting it even more now. So I would love to understand your thoughts on the access side, given that you are probably — you have done the negotiations at this point.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Mohit. I’ll hand over to Patrik to talk about maybe access updates and go forward.

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

Maybe just a few comments on Mounjaro the products moving into Zepbound. I think with Mounjaro, we have really good access and it’s 93%. And I think we are pretty much where we need to be across commercial and Medicare. In terms of Zepbound, I think we’ve made progress in record time here, close to 90% commercial access, and we’ll continue to see improvement in terms of employers opt-in.

You are correct, we hear stories about some employers opting out, but the major trend is actually in favor of opting in to beat the medications. We are definitely north of the 50%. And I think we will have some new data in the first part of 2026 since most of the employees are making those decisions effective 1/1 in the new year to come. So I think we are very, very optimistic in that part of our business but also continuing to make progress in access for Medicaid.

And just since we connected last time, we have gained six incremental states for Medicaid, and most recently effective 10/1, we have California and Massachusetts. So big states are now covering more than 30 million lives, and we expect to continue to make progress in that space. And lastly, I would just emphasize the potential approval here of obstructive sleep apnea, the approval of obstructive sleep apnea will help us with employer opt-in. Of course, we know that outcome studies are critical to convince employers.

But on top of that, it also opens up the door for access in Medicare and with the decision that CMS announced back in April this year, we are confident that we will gain access out of and Medicare. So I think we have many reasons to be excited about the outlook for 2025, driven by improved access across the commercial America space as well as the investments we have done with LillyDirect.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Patrik. And Mohit, even though you didn’t ask about OUS access and I don’t allow multipart questions, maybe I’ll see if Ilya wants to chime in and talk a little bit about OUS access progress to date and what we see going forward. Ilya, do you want to — would you like to chime in on that?

Ilya Yuffa — Executive Vice President and President, Lilly International

Sure. Overall, we have seen significant progress on our launches OUS. We have both access for type 2 diabetes, where in some of the markets like U.K., Germany, and Japan, and we’re seeing some good progression of our share in those markets where we’re already seeing leading share of market in new patient starts in those places. Of course, we need to continue to develop access in other markets.

And then on the chronic pain management side, we feel good about the prospects of adding countries to drive access. At the same time, there’s also developed self-pay markets like U.K., UAE, and Saudi, where we’re already seeing significant progression of our share and penetration where we actually have leading share of market in TRx in these markets. And we continue to focus on both developing the self-pay but also increasing access for both type 2 diabetes and chronic pain management over time. And that will be gradual as we enter new markets.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Ilya. Paul, next question.

Operator

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

Terence Flynn — Analyst

Great. Thanks for taking the question. I was just wondering, I know you’ve already framed out kind of where supply would be for the second half of this year. Again, as we look out to 2025, can you give us an early read on how your supply capacity efforts have been progressing and how we should think about the amount of new capacity, especially on the auto-injector side that you can bring on for 2025? Thank you.

David A. Ricks — Chair and Chief Executive Officer

I can start, Lucas jump in. I mean, we’ll have a chance to lay out that as we did this year in our guidance call in early February. But qualitatively, you can see the flow of our investment and capex into the space, and you could kind of go backwards three years or so and expect the capacities we announced then to be coming on full line and in that time frame and then rolling that forward. So of course, we made an announcement this year, and those are a couple of years away from having full impact.

But if you go back to ’21, ’22, ’23, we are working hard to bring those online and expect good growth next year. So I think Lucas mentioned, we’re seeing acceleration in demand but that means acceleration in supply during this year, and we expect strong growth on the total for next year, and we’ll lay out the details. Let me get into the guide. I don’t know if you have anything else to add to that, Lucas?

Lucas Montarce — Executive Vice President, Chief Financial Officer

Maybe just one comment from my side. When we talk about more so from the demand perspective, I think in the U.S., in particular, the proxy that we alluded to on the growth that we see across both Mounjaro and Zepbound in TRx of that 25% sequential quarter on quarter, it’s a good proxy to start basically trending out into next year, moreso to provide more perspective from the market side and the demand side than the manufacturer.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, both, Paul, next question.

Operator

Next question will be from Umer Raffat from Evercore ISI. Umer, your line is live.

Umer Raffat — Analyst

Hi, guys. Thanks for taking my question. Maybe just to spend one more minute on the inventory dynamic in the quarter. I’m trying to think out loud.

Could the launch of cash pay a single vial option via LillyDirect have impacted channels interest in filling out their inventory given how the launch is going? And/or were there any changes in your incentives or fees to the distributors that could have impacted?

Joe Fletcher — Senior Vice President, Investor Relations

I’ll let Patrik quickly handle that.

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

Overall, we launched LillyDirect set by just a month ago. We are pleased with the uptake, but we also realize that it takes some time to healthcare system to adopt the self-pay in their EMR systems. But so far, I would say that the impact of TRx has been quite limited and will be defined as being at a low single-digit level. We expect our self-pay go to be a very important channel to grow new therapy starts moving forward, but not significant in Q3.

Daniel M. Skovronsky — Executive Vice President, Science and Technology, Chief Scientific Officer

I think the short answer to both your questions is no and no. We didn’t change our terms and I don’t think we see any change in retail stocking of the auto-injector because they are paid.

Joe Fletcher — Senior Vice President, Investor Relations

Thank you. Paul, next question?

Operator

Next question will be from Steve Scala from TD Cowen. Steve, your line is live.

Steve Scala — Analyst

Thank you so much. For a product with a seemingly unlimited market opportunity, what appears to be great market awareness, and persistent supply shortages, DTC for Zepbound really shouldn’t be necessary, particularly now. DTC, in my experience usually signals concern about patient volumes awareness or competition. So the question is if DTC were not instituted, what would be the trajectory of Zepbound over the next, say, 12 months? Would consensus be achieved? And if competition is the concern, are you getting ahead of data due out soon?

Joe Fletcher — Senior Vice President, Investor Relations

That’s a lot to unpack, Steve. I don’t think we’re going to speculate around a hypothetical demand curve. But maybe — I think Patrik kind of touched on this in his first answer with regard to why we’re doing DTC now. Maybe just reiterate that point, very briefly, Patrik, around .

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

Yes, I think we are comparing a very different market, the first half of ’25 versus the second half of 2025. We faced some significant supply constraints. And it wouldn’t be responsible for us at that point in time to drive any major DTC investments and just provide consumers with a bad experience at the pharmacy level. We have much more confidence now in terms of the supply moving forward.

And this is not a demand issue problem. It’s actually just a supply opportunity, and we want to drive that consumer awareness. So why we’re doing extremely well. We just need to have in mind, but the penetration in terms of obesity is just at a low single-digit level, 4% to 5%.

And there is still a huge market. Whatever we can do here to drive patient activation is going to serve us very well moving forward.

David A. Ricks — Chair and Chief Executive Officer

I would just add that actually unaided awareness for Zepbound, although we’re — everyone on this call is highly aware of the brand name, is actually not very high and that we launched this drug almost a year ago and have done no advertising. So I think it is time to introduce the brand and so people are aware of that when they speak to their doctor.

Joe Fletcher — Senior Vice President, Investor Relations

Great. Thank you. Paul, next question.

Operator

The next question will be from Dave Risinger from Leerink. Dave, your line is live.

David Risinger — Analyst

Yes. Thanks very much. A number of my questions have been asked. So with respect to parasolumab, I’m hoping that you could just provide a little bit more color.

You mentioned that it was dropped due to the benefit risk ratio. But do you see any specific safety problems? And what is your view of the opportunity to develop another PD-1 agonist for I&I disease in the future?

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Dave. And I was getting worried that Dan wouldn’t get a chance to speak on the Q&A so maybe I’ll hand this over to Dan for his thoughts.

Daniel M. Skovronsky — Executive Vice President, Science and Technology, Chief Scientific Officer

Thanks for the good question, Dave. Yes, I mean, parasolimib was a really interesting mechanism for us, and we were excited when we saw the phase 2a data. It was a small number of patients but had a relatively profound effect on RA symptoms particularly in patients who had failed the previous biologics. So we start out to replicate that on a larger phase 2b study.

Unfortunately, when we came to the end of that study, the benefit risk that we’ve seen in the phase 2a study was not fully borne out in phase 2b. So just based on the overall profile, which includes both the efficacy and the safety of the drug, we decided not to pursue that. As to your question on a follow-on PD-1 agonist, we don’t have one that we’re pursuing right now. So that’s what I’ll say about that.

And I think, of course, we’ll look forward to presenting the full data package at the future meeting.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Dan. Paul, next question.

Operator

The next question will be from Kerry Holford from Berenberg. Kerry, your line is live.

Kerry Holford — Analyst

Thank you very much. Kerry Holford Hall for Berenberg. My question actually on Vesneo, please. So your competitor in this space, Novartis recently received a broad approval in early breast cancer, which obviously includes the high-risk patient group.

So I would just be interested to hear you speak about your expectations for market share efficient in that space, how you protect your position with the in a high-risk setting. And then also if you can talk to the impact of IRA that you expect on that brand as you move through Part D reform next year and whether or not you expect the drug to be on the negotiation lift for 2027.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Kerry. Sort of a two-part question but I’m excited to ask Jake to chime in and maybe talk about presenting potential impact as well as IRA. Jake?

Jake Van Naarden — Executive Vice President and President, Lilly Oncology

Yes. Happy to take it. Thanks for the question. Our position and expectation here around market share with respect to the adjuvant setting for Verzenio versus Kisqali hasn’t really changed sort of pre-approval versus now.

I think we have a very robust clinical data package with a lot of follow-up on our data set, which is critically important for prescribers and a two-year regimen where patients can finish their adjuvant therapy and move on with their life, hopefully remaining recurrence-free. That’s a pretty compelling proposition. It has been and I think is recognized as such in a variety of treatment guidelines that for the high-risk population, the monarchE patient population, prefer Verzenio over scale of standard of care. Those expert guidelines have weighed in over the past couple of months.

I don’t expect that to change materially. Of course, with a new market entrant, the percentage of patients in the setting who get any CDK4/6 inhibitor as adjuvant therapy could go up and that would benefit us. And I expect that there will be some patients for whom Kisqali is a more appropriate choice, but I don’t expect it to be a significant shift in our overall market dynamics. And of course, the node-negative population is not where we’re indicated, and that where we’re used and that’s a story for them to tell.

On the second part of your question around Part D reform, it will have an impact. Of course, there’s a push and pull here on the amount we have to contribute for catastrophic coverage being a downside and of course, the co-pay cap out-of-pocket cap on patients, particularly in Medicare, where that could be a tailwind on the brand I think it’s hard to know exactly where that will net out. It probably nets out sort of in the neutral range. I don’t think it will end up being a headwind or tailwind sort of in totality, but we have to see how that shakes out.

On the last part of your question around negotiation list, I don’t want to speculate on that. I don’t think we have enough information yet given the evolving nature of all of the different medicines that could be up for negotiation to actually say one way or another, which ones will be there just yet.

Joe Fletcher — Senior Vice President, Investor Relations

Thank you, Jake. I know we’re running short on time. So Paul, maybe just two or three more questions.

Operator

The next question will be from Chris Shibutani from Goldman Sachs. Chris, your line is live.

Chris Shibutani — Analyst

Great. Thank you very much. Lucas, welcome to these calls. Just curious, there’s a little bit of a tension point between of what the operating margins, and I know Lilly use is a very unique and specific precise calculus for that with most people longer term forecasting at least among the sell side, approaching high 40s percent.

And I believe some of your commentary suggested that perhaps that would not be where you would aim for. Can you just maybe clarify for us your view, your take on where you think the operating margin trajectory would go under your purview?

Joe Fletcher — Senior Vice President, Investor Relations

Well, Lucas, go ahead.

Lucas Montarce — Executive Vice President, Chief Financial Officer

Yes. Sorry. Thank you, Chris, for your question, and thank you for calling me about this new ratio. The gross margin minus opex divided by revenue is quite a lengthy ratio.

But just going to your question. In the short run, you see that we have grown our ratio in the last few quarters as we have been having this cycle of significant growth trajectory, and we are starting to ramp up our investment, both in SG&A and R&D. That will — that effect will continue for sure for getting to the fourth quarter of the year. That is included as part of our guidance.

And what we expect to see moving into 2025, going into your question is we do expect to ramp up our demand generation activities in SG&A that will pay down into 2025 as well as we will scale our R&D. We talked about some of the assets in our portfolio that moves into phase 2 and phase 3 that will continue to play out as we ramp up those investments to drive long-term sustainable growth. So I would expect that in the short term, we continue to see some operating margin expansion on this ratio. In long term, again, we will continue to expand and drive sustainable growth.

That would basically justify the investments that we do in SG&A and R&D.

Joe Fletcher — Senior Vice President, Investor Relations

Thanks, Lucas. Next question?

Operator

The next question will be from Trung Huynh from UBS. Trung, your line is live.

Trung Huynh — UBS — Analyst

Hi guys. Thanks for squeezing me in. So in your PR, you note favorable changes to estimates for rebates and discounts for Mounjaro. If you ex on our numbers, if you ex out mid-single-digit destock, it does look like price has gone up for the year for that product.

Also Zepbound pricing looks pretty stable. So perhaps can you just talk about what you see in pricing evolution for the rest of the year but also next year as you’ll have potentially sleep apnea and HFPEF on the label, which may mean that you go into more government settings.

Joe Fletcher — Senior Vice President, Investor Relations

Lucas, you like to talk kind of high level or any net pricing dynamics worth sharing?

Lucas Montarce — Executive Vice President, Chief Financial Officer

Yes, sure. And thank you for the questions. Going back to the Mounjaro so far in the year, we kind of signaled throughout the year that once we were sunsetting last year the co-pay program that we had, that we will see that basically tailwind on the price year-on-year comparison that played out as what we expected. And the sunset of course, takes again a little bit of time to see that playing out.

So you see a little bit of that spillover effect into getting into Q4, we don’t expect to see major dynamics on that. And what you’re starting to see basically in Q3 is what we project into the fourth quarter of the year. Maybe getting into the strategy to sleep apnea indication, any comments that you would like to add, Patrik, on that front?

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

I would just say, in terms of Zepbound, we are still very early on in launch. And I think you clarified the stability in pricing, Q3 over Q2, Lucas. What we need to have in mind is that we will continue to increase access. We will see launches outside of the U.S.

as well now with quick-pen being approved and also can impact the global net pricing dynamics moving forward.

Joe Fletcher — Senior Vice President, Investor Relations

Thank you both. Maybe last question, Paul, and then we’ll wrap up.

Operator

The final question today will be from Courtney Breen from Bernstein. Courtney, your line is live.

Courtney Breen — AllianceBernstein — Analyst

Hi, there. Thank you so much for the question and for squeezing me in. Coming back to obesity and perhaps looking a little longer term, you spoke to the ATTAIN MAINTAIN trial off the back of SURMOUNT-5. I note that for orforglipron, this is placebo-controlled.

And I just wanted to kind of get your thoughts on kind of that being the comparator. For us, kind of that being the comparator suggests that this is about kind of duration of treatment, expansion to patients, which would really be an expansion of the total market rather than kind of displacement of necessarily another obesity product. Can you just talk a little bit about orforglipron and kind of the future of how this could expand the market?

Joe Fletcher — Senior Vice President, Investor Relations

Yes. Thanks, Courtney, for the question on orfo. Maybe I’ll hand to Patrik to talk about that in some of the commercial — potential commercial strategy and the ATTAIN MAINTAIN trial. Thank you for noticing that.

Patrik?

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

Thank you very much, Courtney. But we are looking forward to the readout of the orfo phase 3 trials next year, 2025. But I think overall, we see a significant opportunity here. It’s going to be the first oral if we deliver on the lines that we saw in phase 2 with an efficacy along the lines of an injectable, along the lines of semaglutide.

So I think that will really position us to scale globally. We are avoiding the cold chain requirements, etc. But also in the U.S. we see an opportunity to further penetrate because we know that even if the experience with the auto-injector, once you have tried it, it’s really good.

We know that there is a needle here in the marketplace but probably impacts 20% to 25% of the population. So I think there is a huge opportunity to expand. When you refer particularly to the ATTAIN MAINTAIN, I think there is an obligation on our side to really better understand how can you best keep patients on treatment for a longer period of time, knowing that obesity is a chronic disease. That’s why we’re leaning in on some of MAINTAIN to see what is the lost efficacious that you can keep patients on during a longer time.

And similarly, with ATTAIN MAINTAIN, we don’t expect a major shift on by clinicians from injectables autos. And I think this is one alternative to continue treat patients or the periods they need to be on medication, which is a chronic disease, and we are doing whatever we can to improve our and improve patient outcomes.

Joe Fletcher — Senior Vice President, Investor Relations

Great. All right. Thank you, Patrick, and I think we’re wrapping up, Dave.

David A. Ricks — Chair and Chief Executive Officer

OK. Great. Well, thank you for joining us today, everyone. I want to end the call by just thanking Joe Fletcher, who is moving on from his role as Head of IR to a new role, a critical role of CFO of Manufacturing.

I think you all agree Joe did a great job in representing Lilly to the Street over the last many years, and we welcome Mike Sapar into the role, returning to IR actually after various rotations of the business, and it will be an exciting time ahead with Mike as your main point of contact. So thank you all for joining us today. And as usual, if you have follow-up questions, please give this call at the IR team and look forward to seeing everyone on the road over the coming months. Take care.

Operator

And ladies and gentlemen, this does conclude our conference for today. This conference will be made available for replay beginning at 1:00 p.m. today running through December 4th at midnight. You may access the replay system at any time by dialing (800) 332-6854 and entering the access code 987290.

International dollars can call (973) 528-0005. [Operator signoff]

Duration: 0 minutes

Call participants:

Joe Fletcher — Senior Vice President, Investor Relations

David A. Ricks — Chair and Chief Executive Officer

Lucas Montarce — Executive Vice President, Chief Financial Officer

Daniel M. Skovronsky — Executive Vice President, Science and Technology, Chief Scientific Officer

Dave Ricks — Chair and Chief Executive Officer

Chris Schott — Analyst

Patrik Jonsson — Executive Vice President; President, Lilly Cardiometabolic Health; President, Lilly USA

Geoff Meacham — Analyst

Evan Seigerman — Analyst

Seamus Fernandez — Analyst

Mohit Bansal — Analyst

Ilya Yuffa — Executive Vice President and President, Lilly International

Terence Flynn — Analyst

Umer Raffat — Analyst

Dan Skovronsky — Executive Vice President, Science and Technology, Chief Scientific Officer

Steve Scala — Analyst

David Risinger — Analyst

Kerry Holford — Analyst

Jake Van Naarden — Executive Vice President and President, Lilly Oncology

Chris Shibutani — Analyst

Trung Huynh — UBS — Analyst

Courtney Breen — AllianceBernstein — Analyst

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