Dan Skovronsky: previous Phase III trials. Now, with results from ACHIEVE-4, cardiovascular safety and a lower risk of all-cause death are added to the clinical profile. Adverse events were generally consistent with other incretin-based therapies, and no hepatic safety signal was observed in ACHIEVE-4, nor across the seven positive Fundale Phase III registrational trials. G4 is also the last trial required for the U.S. type 2 diabetes core registration package. We plan to complete the U.S. submission for type 2 diabetes in late Q2 and anticipate regulatory action before the end of this year. Moving to retatrutide, or GIP, GLP-1, and glucagon triple agonist, we announced positive top-line results from Transcend P2D1. the first phase 3 trial of retatrutide in people with type 2 diabetes. Given the potential counter-regulatory impacts of glucagon activity on blood sugar control, we were excited to see profound improvements in hemoglobin A1C, as shown on slide 15. Compared to placebo, retatrutide lowered A1C by an average of 1.7 to 2.0 percentage points across doses. Importantly, we saw that participants lost an average of 11.1 to 16.6 kilograms, or 25 to 37 pounds. While cross-trial comparisons have limitations, these data suggest retatrutide can deliver glycemic control in line with the most widely prescribed incretin therapy for type 2 diabetes, terzapatide, while delivering additional weight loss. This is critically important, given the difficulties people living with type 2 diabetes face, we're trying to lose weight and the significant need for better weight loss medications for this population. With these data in hand, we're optimistic that ratatoutide can meet this need. Adverse events seen with ratatoutide were generally consistent with what had been observed in clinical trials of incretin-based therapies, and discontinuation rates due to adverse events were 5% or less across all arms. We look forward to presenting detailed Transcend T2D1 results at the American Diabetes Association Scientific Sessions in June. Together with the positive TRIUMPH-4 results in obesity and knee osteoarthritis, we are beginning to establish a favorable clinical profile for retatrutide, consistent with our goals for this molecule. The next retatrutide trial to read out is TRIUMPH-1, an 80-week study in people with obesity. We look forward to sharing top-line results later this quarter. Also in cardiometabolic health, we initiated three additional Phase III programs for aloralintide. In addition to the ongoing Phase III obesity programs, we initiated Phase III programs in OA knee pain, obstructive sleep apnea, and as an add-on therapy for obesity. As a selective amylin receptor agonist, or SARA, aloralintide has shown a unique profile in Phase II trials, with GLP-1-like weight loss, and improved tolerability. We're eager to explore additional indications for this promising molecule in what we expect to be a very robust Phase III program across a number of potential indications. We also recently completed our acquisition of Ventix Biosciences, which brings a pipeline of small molecule therapeutics, including NLRP3 inhibitors, designed to treat inflammation across a broad range of diseases. Both NLRP3 inhibitors are now shown in the LILI pipeline. We also announced a licensing agreement with CSL for clasichizumab for certain indications, and that molecule will be reflected in our pipeline chart once LULI trials have begun. Moving to immunology, we recorded two important data sets for EBLIS and atopic dose sites. First, in the ADLONG Phase 3b open-label extension study, EBLIS delivered durable disease control for up to four years with one-to-one maintenance dosing. Nearly all patients achieved meaningful skin improvements, 75% achieved near complete skin clearance, and 80% maintained their results without the need for topical corticosteroids. For people living with chronic relapsing diseases like atopic dermatitis, sustained control delivered with convenience is the ultimate goal. We're pleased that our once every eight weeks maintenance regimen is currently under FDA review, and we expect regulatory action later this year. If approved, less frequent dosing may be a more convenient option to improve the patient experience and further differentiate EBCLS from competitors. The second readout was the Phase III Adorable Slime Trial. EBCLS delivered positive outcomes for children as young as six months old with moderate to severe atopic dermatitis. As shown on slide 16, 63% of children treated with EBCLS achieved significant skin improvement as measured by EZ75. In addition, 44% achieve clear or almost clear skin as measured by IGA-01 score. This makes EVGAS the first and only selective IL-13 inhibitor with positive phase three data in this age group, where there are fewer approved medicines than in adolescents and adults. We plan to submit these data to regulators later this year for potential label inspection. Also in immunology, we reported positive top line results from TOGETHER-PSO. the Phase IIIb study of exekizumab plus terzapetide in adults with psoriasis and obesity. In together PSO, 27% of participants on terzapetide plus exekizumab achieved the co-primary endpoint of total skin clearance and 10% or more weight loss compared to less than 6% of patients on exekizumab alone. These results are the second successful trial highlighting the benefits of treating psoriatic disease and obesity. with concomitant exekizumab and terzapatide therapy. This result provides further evidence that incretins may have a broader role in treating immunological diseases. We have additional ongoing phase 3b combination trials in immunology studying mirkizumab plus terzapatide in Crohn's disease and ulcerative colitis. We continue to assess other immunology settings where incretins may provide additional benefits. We also announced business development in immunology with our agreement to acquire Orna Therapeutics. Orna's in vivo CAR-T pipeline includes potential best-in-class programs to reset the immune system and address B-cell-driven autoimmune diseases. We look forward to exploring the full potential of Orna's platform together with the Orna team. Turning to oncology, we announced positive top-line results from a Phase III Hercabrutinib trial, Bruin CLL322. This ambitious study evaluated pertabrutinib in addition to a fixed-duration regimen of venetoclax and rituximab in patients with previously treated CLL or SLL. Pertabrutinib significantly extended progression-free survival compared to the fixed-duration regimen and was the first medicine to utilize and outperform a venetoclax-containing control arm in a Phase III trial in the history of CLL drug development. As shown on slide 17, protobrudinib has now been successful in four phase III studies in CLL, each with compelling efficacy and possibility. Protobrudinib has been studied across early and later line settings of CLL, demonstrated efficacy as a monotherapy and in combination, and shown efficacy head-to-head against chemoimmunotherapy, a covalent BTK inhibitor, and now a venetoclax-based regimen. The breadth of evidence suggests protobridumab has potential to become a foundational therapy in CLL. Data from Bruin CLL313 and Bruin CLL314 are currently under review by regulators for potential label expansion into the first line setting. We plan to submit the results of Bruin CLL322 to regulators later this year. Building on the breakthrough therapy designation received in January for platinum-resistant ovarian cancer, We initiated second phase three trials of sofetabarts with the TCAN, our folate receptor alpha antibody-blown conjugate for platinum-sensitive ovarian cancer. We also announced the acquisition of Colonia Therapeutics. Colonia's lentiviral in vivo CAR-T platform has shown very promising early clinical results in people with multiple myeloma. And we look forward to rapidly advancing the lead program with the Colonia team, as well as building future medicine using this technology platform. Earlier this week, we announced the acquisition of Ajax Therapeutics. The lead program, the Phase 1 JAK2 inhibitor for myelofibrosis and polycythemia vera, builds on Lilly's established capabilities in blood cancer. Moving on to neuroscience, we initiated a Phase 3 program for Bernapetide, or GIF-GLIP1 dual agonist, in major depressive disorder. This trial will assess if brenepatide can delay time to relapse, a significant unmet need in psychiatry where rates remain high despite available treatments. We've also begun phase two trials of brenepatide in opioid use disorder and schizophrenia and initiated phase two trials for two pain assets, a NAV1.8 inhibitor and an AT2 receptor antagonist. Lastly, we announced an agreement to acquire Sintesa Pongsu. which will expand our neuroscience portfolio and capabilities into treating sleep disorders. Sintesa, a leader in orexin science, is advancing a pipeline of orexin receptor 2 agonists that target the neurobiological system governing the sleep-wake cycle. The lead candidate, Lemon Orexin, has demonstrated a potential best-in-class profile. We look forward to welcoming the Sintesa team to Lilly later this year and continuing the development of these important molecules. Slide 18 shows pipeline movement since our last earnings call, and slide 19 shows the full list of key events expected in 2026. I'll now turn the call back to Dave for closing.
David A. Ricks: Thanks, Dan. We're pleased with the progress to start this year. We executed well, both in driving business results and bringing new medicines to patients. We posted another quarter of impressive revenue and earnings growth. We shared top line results from five positive phase three trials. announced four acquisitions, initiated six new phase three programs, and launched an important new Lilly Madison. Productive quarter and yet a lot more to come in 2026. Let me turn the call over now to Mike for the Q&A session.
Mike Mason: Great. Thank you, Dave. We'd like to take as many questions as possible. So consistent with prior quarters, please limit yourself to a single one-part question. Paul, please provide the instructions for how to join the queue, and then we're ready for the first caller.
Operator: Thank you. At this time, we will be conducting a question and answer session. If you have any questions, please press star 1 on your phone at this time. Again, we ask that participants limit themselves to one question on today's call. If you do have a follow-up question, please rejoin the queue by pressing star 1 at any time. We also ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. And please hold while we poll for questions. The first question today is coming from Jeff Meacham from Citi. Jeff, your line is live.
Jeff Meacham: Great. Hey, guys. Congrats on the quarter. Thanks for the question. Maybe this one is for Dave. You know, investors seem to be acutely focused on pricing in incretins with not a lot of emphasis on volume. I know you don't want to get too specific, but when you talk about, you know, at a high level, the margins under a wide range of price scenarios for For Lily, how do you see the investments you've already made in, say, manufacturing, and how does that add to the dynamic and what that means in terms of the competitive mode?
Mike Mason: Thanks. Great. Thanks, Jeff. Dave, do you want to talk about pricing and anchor towns?
David A. Ricks: Sure. Thanks for the question, Jeff. Maybe a couple things to point out now that we're five or six quarters deep into this sort of post-shortage world, and we can really pursue expansion on volume in an aggressive way. I think you can see something It's a little different about the obesity and weight loss category from what we think about in other pharmaceuticals, where the barrier is typically more informational, not price sensitivity. But here, clearly, because of the out-of-pocket nature, 75% of ex-U.S. business for Montero is out-of-pocket. U.S. is a meaningful portion as well. We see quite expansionary volumes. perhaps nonlinear, to price reductions. Of course, there's a floor on that, and we have sensitivity on our cost structures, et cetera. But pretty much every time we reduce pricing, we see a pretty large expansion. You also see built into this the primary pricing affecting Q1 are actually negotiated outcomes with governments, both the MFN package we negotiated with the Trump administration, your cut out-of-pocket costs, you see strong growth. Like Lilly's Upbound Biles really had quite a strong quarter in Q1 at slightly lower prices. And then in China, we negotiated for diabetes access and a meaningful price reduction, but you can see the volume far outstripping the price concession. So kind of a different dynamic. And I think if investors can think about this category, perhaps unlike other pharmaceutical categories in the past, You know, in terms of margin sensitivity, it remains true that, you know, for this category, for us at least, the unit economics are really driven by fixed costs that are either sunk in the past or unmovable depending on the volume in the present. And as a result, you know, both covering the amortized R&D costs as well as CapEx is a concern from an accounting perspective. But at the margin, we do have latitude. You know, that said, we want to invest in future medicines. And I think that's probably the biggest, as we've said before, as we think about long-term operating margin for the company, you know, the X factor. If we have good projects, we won't hesitate to invest in them, whether it be existing medicines. I think you see kind of a record load of phase three Nilex at Lilly right now, or for new medicines. And we've got a very full phase two and phase one pipeline that we are deploying capital against. So we've got a lot of latitude here, Jeff, and I think this market works a little differently, and we're all sort of just getting used to that. But I think good news for Lilly in our incumbent position. Thank you, Dave.
Operator: Paul, next question, please. The next question will be from Chris Schott from J.P. Morgan. Chris, your line is live.
Chris Schott: Great. Thanks so much for the question, and congrats on the progress. I just wanted to dig a little bit more into international Manjaro. And can you just share some of the learnings from, I think it's been a much better expected launch than we all had anticipated here, as we think about the ramp going forward and longer term opportunity. And maybe as part of that, can you just, should we expect any impact to the ramp from the entry of generic SEMA in select markets? Or is this such an early stage of penetration where that's less relevant? Thanks so much.
Mike Mason: Great. Thanks, Chris. For the question about international Monjaro and the potential impact of generic SEMO, we'll go to Patrick.
Patrick Parmenter: Thank you very much, Chris. You know, when we look at the first quarter, it's truly a strong growth of all our prioritized products across international, but of course, particularly Monjaro. And now we have fully launched in more than 55 countries, and we have seen a very strong speed of uptake and also a rapid market share gain. Also in the market, we launched the second half of 2025, referring to Brazil and Korea, where we currently have an estimated market share of 60%. And of course, also the China Type 2 NRDL reimbursement. When we look at the generics, we only have a few weeks of data from India. But it seems like it's really stimulating the growth in the overall obesity market. And that includes our product. And the Monjaro has actually been holding market share quite nicely. When we look at the Monjaro prescriptions, they are about 10% higher in recent weeks compared to the period prior to generics entered. So I think it just underscores that dual agonists Trump's single agonist. Moving forward, I think we should expect a very strong continued year-on-year growth and some sequential growth. We saw in the slide earlier that we have a market share above 53% OUS, and that's an average. And in many international markets, we have a market share along the lines of what we see in the US with SEPA. And when you get to that level of share, incremental share gain is getting harder. And, of course, we will focus our efforts on patient activation, driving increased penetration in the chronic weight management market and market growth. And also, secondly, what we have seen during the second half of the year has been some seasonality, mainly driven by the holiday season in Europe, where patients tend to take a drug holiday break or actually delay that initiation of the new therapy start. But overall, strong growth across regions. Seems like generic semaglutide is stimulating market growth, and we continue to do well. We expect a continued strong year-on-year growth, sequential growth driven by patient activation.
Mike Mason: Great. Thank you, Patrick. Next caller, please, Paul.
Operator: The next question will be from Seamus Fernandez from Guggenheim. Seamus, your line is live.
Seamus Fernandez: Oh, great. Thanks for the question. So really, we just wanted to get a better understanding of how the market, as you see it, is starting to segment and could segment going forward. More as you look forward to the potential introduction of Reta True Tide amidst the Foundio launch, as well as then the follow-on to that being the LRL and Tunch. Where do you see the market really opening up with each of these potential assets reaching forward? Thanks so much.
Mike Mason: Great. Thanks, Seamus. For that question, we'll go to Ken to talk a bit about the portfolio and how we see the market segmenting.
Ken Miller: Yeah, sure. Thanks for the question, Seamus. I think it's reasonable to expect in this large and growing market and opportunity in obesity that with, you know, the number of patients around the world living with overweight or obesity numbering perhaps in the billions, that many of them are going to want different types of medicines that are tailored to their individual needs and preferences. We're in early innings in that regard. We're now sort of bringing the third segment, I guess, in. We've had GLP-1 single agonists and then dual agonists and now oral medicines, but we see many other sort of plausible opportunities to tailor medicines to different groups. As you noted, retichutide is one of those ideas which very obviously could play to individuals who are seeking greater weight loss, although I will say we see opportunities for retichutide elsewhere and across the spectrum of obesity. Eluralentide, we can position that a few ways based on the Phase II data that we've seen. The first of which is that this could be a great medicine for patients seeking a non-GLP-1-based mechanism, perhaps due to tolerability they've experienced or tolerability that they're fearful of. It may also be a good drug that could be added on top of existing incretin therapies to provide incremental weight lowering. But there's many other ideas out there Lilly's investing in. That includes medicines that could be dosed even less frequently. perhaps those that dial in additional metabolic benefits, and maybe some that are sort of ultra-long acting using genetic medicine approaches. We see all of these as compelling ideas, and we also feel we're in a leading position in most, if not all, of those spaces. You know, in terms of how the market will ultimately shake out in terms of percentage of use across those different ideas. It's hard to prognosticate that, but many of these ideas are tied to common manufacturing platforms, and we're making the investments to support any of them, should they prove to be really the most favorable option for managing the overweight and obesity.
Mike Mason: Great. Thank you, Ken. We'll go to the next question, please, Paul.
Operator: The next question will be from Alex Hammond from Wolf Research. Alex, your line is live.
Alex Hammond: Good morning, guys. Thanks for taking the question. On Medicare Access, can you walk us through your strategy to activate these patients? And when do you kind of see this playing out in terms of either maybe a 4Q dynamic or more of a 2027 as these patients pull through? And I guess as well, with the attractive price point, how do you think about persistence in this population?
Mike Mason: Okay. Thanks, Alex. For the question about Medicare access and sort of staging over time, we'll go to Ilya.
Ilya Yuffa: Great. Thank you for the question. Obviously, we're excited about having Part D access starting to activate for obesity medicines starting in July. In the way that we think about it, there are millions of R&D beneficiaries that are eligible. And so the path to that with having a long trajectory with a big program of not only starting in July but all through 2027 is an important aspect. Obviously, that will take time to build. We need to have the education across physician-based pharmacies as well as consumer-based. to understand the full path of different medicines that we have and available for treating obesity. And so that'll be a gradual path in 26 as it starts and then continued growth in 27. And obviously the $50 a month copay is an important element of affordability for seniors. We've already seen for ZepBound as well as Manjaro that they've had great persistency overall relative to other chronic conditions. And we continue to see that. Obviously, the $50 copay and affordability will only just add to that in addition to all of the health benefits and experiences that people will have over time. So we're excited about expanding access very soon.
Mike Mason: Great. Thank you, Ilya. Next question, please, Paul.
Operator: The next question will be from Evan Siegerman from BMO Capital. Evan, your line is live.
Evan Siegerman: Hi, guys. Thank you so much for taking my question. Bigger picture, strategically, as you think about the next levers of growth for the business, what do you need to see from either the INI, neuroscience, or oncology franchises to kind of match the scale of the obesity metabolic businesses or particular assets? Is it BD or something else? Thank you.
Mike Mason: Great. Thanks, Evan. We'll go to Dan to talk about some of the important programs that he's focused on to drive growth in the future.
Dan Skovronsky: Yeah, thanks, Evan, for that question. And it's an important one to us. As far as you're asking about scale, but I point out in growth rate, those businesses are growing extremely fast. Even without the obesity and metabolic business, Lilly would be the fastest or certainly one of the fastest growing pharmaceutical companies in the industry. So we're proud of what we're doing in those three areas. And I think each of them has very significant unmet medical needs. that we can scale into as our medicines are successful. So we like what we got. We like the direction we're going. Of course, in each of those areas, we also see opportunities to get a lot bigger, and we've highlighted some of the themes already in those areas. You'll also see us address some of that through business development. So, for example, the Sintesa acquisition allows us to play in in a new area here in sleep-wake medicines. The WARNA acquisition allows us to play in new areas of immune reset, for example.
Mike Mason: Great. Thanks, Dan. Next question, please, Paul.
Operator: The next question will be from Asad Haider from Goldman Sachs. Asad, your line is live.
Asad Haider: Great. Thanks for taking the question, and congrats on the continued strong execution. Maybe just going back to Fundayo, appreciate all the color on early launch dynamics, which is sort of playing out along the lines of your messaging, that the initial launch trajectory is going to live below that of oral Regovi, but then there's going to be an acceleration as we move into the back half of the year. So just now with a few weeks of launch under your belt, I think you said 15,000 patients have started taking the drug already. What's your level of confidence on that launch curve framing in the context of the early experience? And then Related on the guidance range, are you able to provide any high-level commentary on what type of contribution was factored in for Fundayo, recognizing that you said that the revised range reflects mainly the strong underlying performance of Manjaro and Zepan? Thank you.
Mike Mason: Great. Thanks for the question, Asad. Ilya, do you want to talk about some of the early launch metrics that you're tracking and the feedback you're hearing, and then maybe just a short comment from Lucas about the guide?
Ilya Yuffa: Sure. Well, first, it is early days, but we're pretty pleased with the trajectory and encouraging first start to launch. Obviously, we just started active Salesforce promotion just over a week ago, having broad availability in the supply channel just two weeks ago. Really, we're encouraged by the initial leading indicators. And the way that we think about it, there are probably three key factors and catalysts of growth. And those three are, one, growing the familiarity among healthcare providers, on the clinical profile of Foundeo, building out the access and growing the awareness of Foundeo with consumers. And we're making progress on all three fronts. And so on HTPs, if you think about the early indicators, we now have over 8,000 prescribers of Foundeo, a third of which who have not previously written an oral GLP-1. And so this is expansive. And the current sentiment so far, what we're hearing is really positive on the overall efficacy and kind of the no-hassle factor on a daily oral GLP-1. So that's an important aspect. We'll continue on the execution related to HCPs around sampling, continued promotion through our sales force, as well as educational seminars, and we're fully in the field with our promotional efforts with HCPs. So good progress there. On access, we've confirmed commercial access at two of the large PBMs by middle of May, so just in a couple of weeks, and To the earlier question on Medicare, Medicare access will start at the beginning of July. And so those are continued catalysts of growth upcoming in the next couple of months. And so we see that as an important unlock and expansion as well. And then on the third piece on consumer front. We now have just over 20,000 patients treated to date. And one important element there is that 80% of those found AO prescriptions are new to class. So this is expansive in bringing new people into being treated for overweight or obesity. We've done a number of aspects already around the direct-to-consumer on digital, on social media, and others. But Obviously, we will continue those efforts on a full-scale direct-to-consumer and TB launch in Q3. Important there is just to ensure that prescribers have familiarity around the profile of Foundeo before we do that. So bottom line, I think we're pleased with the progress. Early indicators are positive and moving in the right direction, and the trajectory will build over time. This is a new brand, new medicine that we're bringing to the market. So we're pleased and ready to go.
Lucas Johnson: Maybe on the second part, going to the guidance, just to highlight a couple of things. Of course, again, the increase on our guide is driven by the strength of the entire portfolio that we mentioned during the call, starting, of course, with the Incretin portfolio, both in the U.S. and OUS. In terms of Fundello per se, you've heard already from Ilya about how we continue to see progress and very encouraging feedback that we hear from payers, physicians, and patients as well. We set up the plan at the beginning of the year, and it's very early days. We have three weeks of data at this time. So it's tracking to our expectations, and we will continue to see how this progresses over the year. But we feel very confident on the trajectory that we've seen so far.
Mike Mason: Great. Thanks, Lucas. Paul, next caller, please.
Operator: The next question will be from James Shin from Deutsche Bank. James, your line is live.
James Shin: Hey, good morning, guys. Thank you for the question. This one's for Dave. With Bridge extending into 2027, Dave, what's next for balance? Is Lilly working with stakeholders on revisions to secure longer-term Medicare access? Thank you.
Mike Mason: Thanks, James. Dave, do you want to share a few comments about the Bridge balance dynamics?
David A. Ricks: Sure, yeah. Look, when we signed the agreement with the administration, we all knew Bridge was going to be put in place because it was a mid-year launch. And And we had understood at the time that there was a commitment to 27 if, as a contingency, the Part D plans did not choose to opt in at a certain rate. Of course, we now know they didn't. And maybe that's not so surprising. You know, they operate on their margins. There's been other disturbances and market events in the Part D program, for instance, the IPA products, et cetera, that have changed their economics. And unfortunately, I guess, not being a part of those discussions, but they couldn't cross with the major players for calendar 27. So the government's doing what they said, and they're extending bridge. I think for manufacturers, there's some puts and takes in that, but the fact that there'll be access to the consumers at $50 a month, I think is a very compelling proposition, as Ilya highlighted before, will drive great persistency. And in an 18-month window, I think we will start to see growth population-level health improvements if these are used at scale. That will then set up the 28th discussion. I would expect the government to lean hard into getting Part D plan participation in 28 and normalizing obesity care as a standard preventative treatment and something that should be used to treat comorbidities of obesity within the senior population. We may have the evidence to support that as we exit 27. It may need a little more time, but I think they're going to push to help make that happen. And I think that normalization is overdue in the commercial market, so it'll be a good leading indicator for us across the U.S. business. We'll continue to work with the government closely through that period and, of course, try to work with them to activate patients and make sure they can find success on our medicines. So stay tuned. Probably more news as we exit 27. 26 on the actual 28 plans. Great.
Mike Mason: Thank you, Dave. Next question, please, Paul.
Operator: The next question is coming from Mohit Pansal from Wells Fargo. Mohit, your line is live.
Mohit Pansal: Great. Thank you very much for taking my question, and congrats on the progress. I just want to touch upon the Employer Connect program that you are embarking upon. So it seems like the insurance, commercial insurance, has been relatively stable year over year. So This seems to be the way to grow it. And employers are worried about, you know, their costs long-term and everything. So we'd love to understand what are the steps to convince employers to buy into the Employer Connect program and the mechanics of it. Thank you.
Mike Mason: Thanks, Mohit. Ilya, do you want to make a few comments about Employer Connect and the progress and focus?
Ilya Yuffa: Sure. Thanks, Mohit. Yeah, listen, as you mentioned, the overall commercial access has been pretty steady around 50% and one of the key aspects that we're excited about is having a employer connect platform where we work with a number of third parties to actually go out and talk to different employers about the value of covering obesity care but there are several things that are a little bit different with our employer connect program one is a transparent price that is known and to all of the employers, and providing the flexibility and design around the employer-employee contribution towards obesity coverage. And so we do think that this is a positive element to increase the number of employers to opting in. Obviously, the selling cycle and the timeline for making decisions for 26 has already passed. So while we are currently having positive conversations and positive feedback from employers around this new platform that will most likely have a gradual impact in the back half of 26 and most likely incremental opt-ins for 27. And then as part of that, obviously there's more data on real-world evidence and also components of where employers do cover what are the benefits to their employees employees overall, both in their health and productivity over time. And as that data comes out, that will only reinforce the positive decision to provide coverage for obesity care.
Mike Mason: Great. Thank you. Next question, please, Paul.
Operator: The next question will be from Terrence Flynn from Morgan Stanley. Terrence, your line is live.
Terrence Flynn: Great. Congrats on all the progress. I had a question broadly. You talked to the portfolio that you're going to be, you currently have, but you're also rolling out across the Ingridton area. And so as you think about the evolution, I guess, of the DTC channel, what are some of the things you're considering to kind of leverage Lilly's scale in that channel? And then also anything that you think will help there from a commercial side in terms of driving additional coverage in terms of having scale across the portfolio? Thank you.
Mike Mason: Thanks for the question, Terrence. We'll go to Dave to talk a bit about the portfolio strategy and leveraging DTC.
David A. Ricks: Sure. And Ilya and Patrick can jump in here. I think you're pointing out something that has evolved and been developing part of the story here for our growth, which is consumers wanting to take charge of their own health and activate the digital platforms to control weight and obesity. I think this is here to stay, and it's a big part of our business now and probably something we need to continue to invest in. We're doing just that, so you should expect continuous improvement in that experience for consumers in the U.S., and then expansion nationally with the current offerings. I would also say, you know, this notion as we move into other kinds of medicines that could be more preventative could be quite a useful platform to reach more people. We all know that the financing of the current healthcare system is a struggle everywhere. And with, you know, all the noise around PAs and other barriers to care people need, people want to take it in their own hands. And I think, of course, we need to do that within the confines of the regulations and law, but there's a lot of room for improvement for consumers and It's a great outlet potentially for us. So let me ask Ilya or Patrick to add to that if they have anything to add on Lilly Direct and our offerings.
Ilya Yuffa: Yeah, sure. Just maybe a few key components of what we've seen on Lilly Direct. Even with Zetbound, you've seen that currently around 55% of new patient starts are coming through self-pay for most of which is coming through Lilly Direct or telehealth players, which is a component of reducing some of the frictions in place. And even early in our launch of Foundeo with limited promotion, we're seeing that that reduced friction level and understanding direct to the consumer is an important lever. About 45% of our volume for Foundeo early on is coming through Lilly Direct. And so we continue to look at ways to improve on the experience for both providers and for consumers in the way they get their and enter their journey for disease, and obviously it plays a significant role for obesity currently.
Patrick Parmenter: Similarly outside of U.S., I referred earlier to us being at a very high market share in most of the markets already, and patient activation is going to drive most of the coming growth. And we have seen that the markets are responding to patient activation efforts, although it's a slower ramp, but that's going to be key, taking into account the low penetration of incretins outside of U.S.
Mike Mason: Thank you. Let's move to the next question, please.
Operator: The next question will be from Umair Rafat from Evercore. Umair, your line is live.
Umair Rafat: Hi, guys. Thanks for taking my question. I thought I'll spend a quick second on Zeb Bound's commercial dynamics in U.S. And really what I'm trying to understand is, for example, 1Q, 7 million TRX and 4.1 billion sales for Zeb Bound in U.S., meaning it's about $580 per prescription. And even if you adjust for some of the one-timer adjustments, it's still about $550 per RX, whereas we understand the cash-pay prices to be about $450 or so, and we know prices, too. I guess what explains that delta? Or maybe IMS is just not capturing some of your online channels. Thank you.
Mike Mason: Great. Thanks, Umar. Lucas will talk a bit about pricing dynamics in the U.S.
Lucas Johnson: Yeah, Umar, thank you for your question. And quick math, your math is pretty spot-on, by the way. So... Just to highlight, yes, and even normalizing by these period adjustments. First of all, again, going back to the initial question on pricing, if you carve out what we agreed on MFN side as well back in November, and then the NRDL access, Prices have been relatively stable quarter on quarter. I think it's going back to what we discussed last time about maintaining that price discipline. We continue to see that happening while we continue to grow significantly on the volume side as well. And yes, again, going back to your analysis on the pricing, yes, you have the Lily Direct prices that, as you know, we have adjusted down starting in December. And those prices have been very stable on that front as well. And then the rest, basically, by difference, you get into the commercial business, mainly that that's the different portion that it gets to that net 550 that you highlighted.
David A. Ricks: Maybe just one add. I think that isn't widely appreciated. There is a reasonable amount of medical exception and OSA usage that moves across channels at close to an undiscounted price. So I think that's probably the piece of your math, Umar, that you might want to take a look at.
Mike Mason: Great. Good add. Thanks, Dave. Next question, please. We'll try to get through a couple more if we can.
Operator: The next question will be from Courtney Breen from Bernstein. Courtney, your line is live.
Courtney Breen: Hi, guys. Thanks so much for taking the question today. I know there's been a huge amount of focus on kind of the first few weeks of Foundeo and specifically kind of the launch strategy and activation of the different channels. Perhaps, Ken, it would be helpful if you could talk through how does this compare to kind of a traditional primary care launch? What things are you accelerating? what things are you holding back and for what reasons, particularly in the context of the fact that you've got extreme amounts of inventory pre-prepared for the launch of this product.
Mike Mason: Okay. Thanks, Courtney. Ilya, do you want to make a few more comments about the Foundeo launch vis-a-vis primary care?
Ilya Yuffa: Sure. Yeah, maybe just probably the three elements I discussed earlier are probably the same for all of our primary care launches, where you need to grow the prescriber base and understanding of the profile of the medicine and that's what we're doing here with foundeo building out access and quite frankly this is actually getting access very early in launch both on the commercial side having two of the three being activated in the next couple of weeks and getting part d which is usually usually lags in july is a faster ramp on access and so we're excited about that aspect The piece that is probably on the primary care side an important element that many have noted is around DTC. And we activated from day one in the first week a number of both digital, social media, and out-of-home advertising on the brand itself. But it does take time to build out consumer awareness. understanding and awareness of the brand. The current sentiment, if you follow the total number of impressions and what consumers are saying about the profile foundale, is resonating. So both the efficacy as well as the overall profile on not having food or water restrictions. And so that element is positive. Now, obviously, having full DTC launch, we're still activating that probably earlier than normal because there is familiarity around GLP-1. But we do want to take a moment and be disciplined in the approach of making sure that physicians actually understand what Vandeo is before activating fully. But overall, This is following an accelerated path in primary care. And if I compare, we've had the opportunity to launch many brands within primary care, with Trilicity, with Valjaro, ZetBound, Jardians, all of which have gone towards leadership in those categories in a competitive space. We feel pretty good about all of the actions we're taking, the three key factors, and the pace at which we are activating all three components.
David A. Ricks: Just to reiterate one thing, which we said earlier, but just so it's not lost, the three major products that are used in obesity in the United States are all line extensions. So the molecule was on the market before, and in some cases, the brand name was used before. So consumer awareness, which is the brand name, and the molecule itself, which is the physician part, We're starting from a much lower baseline. We've got to build that. But we're hugely confident we'll be able to build it. We've launched many, many primary care drugs that are new successfully. And then the final thing I'll say is related to your inventory. I mean, that really speaks to the international rollout. That's why we keep mentioning there's 40 different countries under review. And we expect that to happen also in one of the most accelerated cadences, perhaps in the history of the industry. So expect launches as we exit this year into next year. in quite scaled markets, and we know from what we're seeing on this call with Monjaro and International, there's a huge opportunity for Foundeo around the world.
Mike Mason: Great. Thanks, Dave. We'll do one last quick question, and then we'll go to the close.
Operator: Final question today will be from Dave Reisinger from Lyric.
spk13: Dave, your line is live. Dave, are you there? Yes. Thanks, Harry. Yes, sorry. Can you hear me okay now? Yes. Sorry about that.
Dave Reisinger: Thanks for taking the question. So, Dave, I was hoping that you could just frame your vision for employer coverage in the United States. So in the US pharmaceutical business, employer coverage is most important for drugs, particularly drugs that treat various medical conditions beyond cosmetic. And so I understand that you have the employer direct initiative, but I'm just trying to get my head around what you think will happen with regular employer insurance coverage in coming years versus coverage that will involve greater cost sharing by participants that engage with Lilly Direct for consumers to pay more out of pocket than they are paying today under regular employer coverage. Thanks very much.
David A. Ricks: Okay, thanks, Dave, for the question. Obviously an important factor, and we do think, just as a policy matter, that obesity and overweight medications should be broadly covered. I think a big step in this journey is actually the July 1 Medicare, there's often spillover benefits into commercial from there. And I think setting a standard that people in America should expect if they've paid into their insurance program or their employer has, that it will cover their health needs. That said, I think the likely path from here to, you know, what I think will ultimately begin to look like other chronic medication markets like diabetes and hypertension, I think we will get there with this category. But it won't be a straight line. It won't be a kind of everything we want on day one. Why? Because the economics you're mentioning, it's a very broad disease. Seventy percent of adults have overweight or obesity and are potential candidates for these medications. And it's the last thing in. And we know that despite the fact that it could be one of the most valuable health care interventions available, it's the last one we see. So it's easier to say no to. But, you know, we do see progress there. As Lily said, Employer Direct is all about creating new options to get to yes with employers, alternate pathways. We'll continue to publish data, as I'm sure Novo Nordisk will, that demonstrate that pretty much all of these drugs in this category have had profound effects and are probably cost-effective at their current prices. And, of course, prices have been trending down. So we'll continue to make progress. I should also say we have a number of new indications coming and Per Umar's question earlier, that actually is a pretty good unlock for us when we get indirectly indicated populations with acute comorbid disease. So all those things will pull together, and in some future year, we'll look back and say, you know, we got there. But it's going to be, you know, more incremental progress quarter on quarter, and we'll keep updating the street with what to expect as we issue our guidance. Thanks a lot. Dave, do you want to do comments to close? I will. So, again, I appreciate everyone dialing in today on our call and your interest in Eli Lilly and Company. We hope you'll join us later this year. We're announcing a Lilly Investment Community Update Day. This will be on Monday, December 7th, and details on location and exact timing are to follow. Please follow up with the IR team if you have any questions that we didn't address today, and hope you have a great day. Thanks.
Operator: Thank you, and ladies and gentlemen, this does conclude our conference for today. This conference will be made available for replay beginning at 1 p.m. today, running through June 4th at midnight. You may access the replay system at any time by dialing 800-332-6854 and entering the access code 662964. International dialers can call 973-528-0005. Again, those numbers are 800-332-6854 and 973-528-0005 with the access code 662964. Thank you for your participation. You may now disconnect your lines.
