00:00 Speaker A
Eli Lilly, meanwhile, is rocketing higher here. According, it’s up about 15% in today’s trade. Uh, walk us through that news, what you made of it, what you were telling clients.
00:15 Courtney
Absolutely. So, today, uh, we received the results of the first phase three from Eli Lilly for a small molecule in the obesity space. Um, in many ways, the the results that we saw were exactly what Lily had been guiding to. Lily had been suggesting that what we would see with this data was similar to the injectables in terms of weight loss, in terms of HBA1C control for the diabetes population, and in terms of adverse events. However, it seems from the investor community that there was a little bit of nervousness that you would have to give up on some of that, uh, efficacy, some of that weight loss to be able to get the right tolerability. However, what we’ve seen is you can get both in this pill, and that’s a really exciting time for Eli Lilly.
02:00 Speaker A
And how important is this different administration? You know, most folks have, uh, gotten used to the injectables in the GLP1 space. And now we’re we’re moving to a, uh, you know, an oral medication. Uh, what’s the risk for many of those other producers of the first line of GLP1s that are already on the market?
02:35 Courtney
Yeah, great question. So I think there is some risk here, uh, as we think about Semaglutide, which is Novo Nordisk’s products. And the reason that there’s some risk is because the results that we saw from Orfoglipron were largely in line on efficacy and adverse events with that product. Eli Lilly’s injectable, which is the Terzepatide molecule, Zetbanda or Mounjaro, the brands that we know, um, that drug still performs better than what we were able to see with the oral. And so it is still that the best-in-class in-market product right now. Um, as we think about what this can do for the market, what’s really exciting here is while only perhaps 20% of patient populations are needle-phobic, what we do believe is there are a large group of patients. We know that there’s, uh, huge numbers of people, uh, kind of 55 million or more within the US that could be taking these products and that are not choosing yet to engage with this market. That perhaps some of those are already curious about the anti-obesity market, but have not yet been willing to engage and start injecting themselves when they’ve never injected themselves with the product before. However, perhaps in the past they’ve taken a painkiller or something else orally, and so that feels like less of a hurdle to get over. The second thing that’s really exciting about an oral kind of being introduced into this market is the manufacturing capacity. This oral specifically is a small molecule. That means it is much easier to manufacture on a mass market basis compared to the peptides that we have in the injectables and even the peptides that we have for some of the other oral small orals in the pipeline. Um, so as we think about this particular product, we’re also going to see lots more availability in the market, which has been a limiting factor in the US in the past and in many countries still today. So as we think about the potential expansion to the market, we see the oral is playing a really exciting role, both here within the US, but also externally in terms of enabling supply and, uh, opening the funnel to patients who perhaps haven’t been willing yet to start injecting themselves.
06:00 Anjalee
Courtney, Anjalee here. I wonder also about the margin on this, because to your point, it’s going to be easier to to manufacture. Lily has said that they don’t anticipate being in shortage. We’ve also seen a drop off of other competitors in the recent past. So it seems like Lily really has an opportunity to capture the market and remain a leader in this space. What does it look like for the revenue part of it for the for this product?
06:36 Courtney
Yeah, this is this is a really exciting time. So while this was just the data today, the first lot of data, we’re going to see more phase three data read out over the coming months. First, we’ll get some more obesity data and the true obese population compared to the diabetic population we saw today, and then we’ll move forward to getting subsequent diabetes and then maintenance data kind of subsequent to that. Um, right now, we’re looking at a molecule like this could play a role as up to 20 or 25% of the overall market in the long term. And when you’re thinking about this overall market potentially being in the 100 or 150 billion dollar range, that’s a really compelling opportunity. Um, so we do think that this is very exciting from a top line perspective, but as you mentioned, kind of there’s also a benefit for a product like this because you have small molecule manufacturing being more efficient, and particularly when you get to scale, it becomes increasingly efficient. Um, some small molecule margins can be kind of in the low percents, uh, kind of single digit percents compared to biologics that tend to be closer to 20%. So this is a very exciting time, and we anticipate seeing a lot of that revenue flowing to through to the bottom line of these companies.