SPEAKER_00: All right, besties. I think that was another epic discussion. People love the interviewers.

SPEAKER_03: I could hear them talk for hours. Absolutely. We crushed your questions in a minute. We are giving people ground truth data to underwrite your own opinion. What did you guys say? That

SPEAKER_05: was fun. That was great. I'm going all in. Dave Ricks, welcome to the all in interview.

SPEAKER_07: Great to be here. Yeah, we had dinner together a couple of months ago and have been in touch, and obviously I'm really excited to talk to you today about the work you're doing at Eli Lilly. So just for the audience, Dave is the CEO of Eli Lilly, which is the world's most valuable pharmaceutical company and the leader in the GLP one drug market, which some analysts have said could grow to as much as 150 billion in annual revenue over the next 10 years. Really kind of an extraordinary story. And Dave, you became CEO of Lilly in January, 2017, when Lilly had a market cap of just $70 billion, following a year of $22 billion in revenue and three and a half in operating income. And today, Lilly's market cap is an astounding $878 billion. And the company's projected to do $46 billion in revenue and $15 billion in operating income this year. And few companies in history, I'd say, have seen such an extraordinary rise in revenue, profit, market value at this scale. Maybe NVIDIA recently, which I'd say is the only company that kind of beat your performance in recent years. But I don't know of any that are not founder led, maybe Satya running Microsoft, but it took him a little bit longer. And so today, I'm really excited to talk to you about the work you're doing at Lilly, the chronic health problem of obesity and diabetes, GLP ones, and what's happening in that market, what those products do, and the business of Eli Lilly. So thanks so much for being here, Dave.

SPEAKER_13: Yeah, excited to be here. I'm a big fan of the pod, so I'm excited to be on.

SPEAKER_07: That's great. Sorry, you don't get harassed by the other three today. It's just me. So this is an extended science corner for all the nerds at home that wanted it with a deep dive on an amazing business. So we'll start off by talking about the chronic health epidemic of obesity. According to the CDC, 74% of Americans are now overweight or clinically obese. Your statistics might be different. This condition is driving what is arguably the largest health epidemic in human history, obesity, and all the associated diseases like type 2 diabetes have so many negative health implications for our populations. And this has risen dramatically over the past 50 years as becoming a global problem. So let me pull up a couple of images we can use as we have this conversation here, Dave, and we'll dialogue about this. But obviously, what humans eat, what we consume has changed dramatically, particularly here in the US, we've seen the American diet, a shift to a much more kind of caloric, lower nutrient density diet over the last 50 years, the average daily calorie consumed by Americans since 1961 has driven up from 2800 to about 3600. And you know, that sounds like a small number. But when you add it up over 365 days a year, it leads to a pretty dramatic increase in, in obesity rates. This is a great chart that shows how the availability of calories and the consumption of calories in a population significantly correlates with the rate of obesity in that particular country. And the United States obviously has the largest caloric supply of any developed nation, and also has the highest percentage of people that are overweight or obese. And I would argue that many of the improvements that we've seen in agricultural technology and many of the systems in in food that have made calories cheaper, have resulted in this kind of surplus problem that has led to an obesity epidemic. And just looking at the US rates over the last 20-25 years, you know, we see today, as I mentioned before, 75% of people overweight or obese. And in this particular slide, we're showing 35% of obese and severe obese to today, 51% of Americans are either obese or severely obese, really extraordinary. And this is not just in the US as the calorie supplies increased around the world. We see obesity rates climbing in every developed nation, from Brazil to Mexico, and now even recently in India. And so this is becoming a global problem. And I think, you know, Dave, maybe you could talk a little bit about the scale of the problem. I think you've highlighted a lot of this in your investor presentations, and this is one of your slides that you've used. So maybe you can kind of share how you guys forecast the obesity epidemic and, and the effect it's having worldwide.

SPEAKER_16: Yeah, that's great background, or as you guys kicked off, you know, one thing just pointing out on the data

SPEAKER_17: you showed, some people notice a difference in the caloric intake numbers versus the kind of the macronutrient, micronutrient story, you go back. Yeah. So like the, the severe obesity in particular, kicking up, you know, in the next slide there, um, yeah, kicking up almost doubling right in the last 20 years, whereas caloric intake certainly isn't moving at that same rate. So, you know, I think as we think about the problem, of course, um, excess calories versus expenditure is a key part, but so is probably the ultra processed food story, which you didn't have data on there, but it is, you know, I think in the U S we're now eating two thirds of our calories in our country are ultra processed. Yeah. And that compares to like 35% in Europe. So that's gotta be part of this equation as well,

SPEAKER_20: but no matter the cause, like if you go to that first slide I had, we now see about a billion people

SPEAKER_17: on the planet with clinical obesity or overweight. And as you're pointing out, probably that's, um, going to grow a lot more in the developed or developing world than the developed world.

SPEAKER_20: There's a function of wealth accumulation and, um, surplus, uh, food, uh, abundance basically that will drive this. India, I think is 11% of the population's obese, but projected to go as much as 30% in the next 20 years. So on that population base, that alone would, would add almost half a

SPEAKER_07: billion people, um, to this, this chart. Yeah. So your projection is obesity worldwide will affect about a billion people by 2030. Is that right? Yeah, that's right. Yeah. Yeah. And the problem with obesity is that it has an effect on many of, uh, the, the, the systems of the human body. Maybe you can highlight kind of how obesity, uh, you know, causes many of the chronic health conditions and ailments that simply weren't around maybe a hundred years ago, but are certainly becoming far more frequent today. Yeah, absolutely. I mean, the first order

SPEAKER_17: effect of course is on your metabolic processes in here, you like, like cardiovascular disease,

SPEAKER_20: how we process lipids and other energy sources that leads to cardiovascular disease and it's, um, other associated risks like stroke. Um, I, I mean, there's a pretty new disease here called under the liver disease, which is what used to be called NASH is now confusingly called MASH, but it's the same disease. It's fatty liver disease. And 30 years ago, like clinically you couldn't really find this in the adult population. And now it's one of the most common conditions, uh, obese people suffer from, and it ends up in fibrosis of the liver. And as you know, like we have a lot of every organ that's important, we have redundancy and accept the liver. So when your liver goes south, it's a bad news story,

SPEAKER_27: uh, for human health transplant is, is the only escape from that. Um, and we've got some new data

SPEAKER_29: on our drug. That used to be a, that used to be a disease limited to severe alcoholism, right?

SPEAKER_17: Exactly. And, and that's the NASH word is actually starts with non-alcoholic fatty liver. So, but now there's much more, um, obesity driven fatty liver than any other cause, uh, as you're pointing out,

SPEAKER_32: but it results in transplant and terrible outcomes long-term.

SPEAKER_07: So, so much of the, the health problems, the chronic health issues that we deal with as a modern society are probably rooted. Many of them are rooted in the obesity epidemic.

SPEAKER_17: Yeah. So 230 diseases have, have been connected and you have these pro, these ones that are more like directly because of the caloric imbalance and fat accumulation. And then you have these, the ones in blue are sort of like derivative, like obstructive sleep apnea. That's like 14 million Americans have CPAP machines. And why? Because there's so much, um, fat accumulation

SPEAKER_20: around your respiratory system. You, you wake yourself up at night to breathe.

SPEAKER_17: And GERD of course, that's, you know, reflux, et cetera. So these are like more of the second order effect. And then interestingly, you've got the mood anxiety pieces here. And there's an interesting study done by Epic, you know, they're the big health record company, which is retrospective and not tightly controlled, but it showed people on GLP one drugs, incretins had remarkably lower rates of new clinical depression diagnoses, which is an interesting thing as well. So a lot of, a lot

SPEAKER_07: of impact, uh, if you control obesity. Yeah. And then obviously like type two diabetes itself, which is an inability for the body to respond with an appropriate amount of insulin when there's glucose in the blood itself has a number of follow-on effects. Obviously diabetes, as many know, um, has become on its own, a chronic health epidemic. Uh, it can cause nephropathy, uh, so damage to the kidneys, which has a significant effect on our ability to regulate protein in our body, diabetic retinopathy, hemorrhaging in the eyes, uh, that ultimately can lead to blindness. So having too much blood sugar and not having an ability to produce enough insulin to bring down the blood sugar level can, can lead to all these chronic health effects, which is terrible for

SPEAKER_17: you. Yeah. And those are the micro vascular ones. There's the, I mean, the, the risk of heart attack, if you have type two diabetes is four times people who don't have diabetes. Yeah. So you also have the

SPEAKER_13: macro vascular, uh, events, stroke, heart attack. Okay. So the treatment for diabetes used to be

SPEAKER_07: insulin, right? And insulin, uh, and if I remember the history of Eli Lilly correctly, uh, Eli Lilly was the first American company, uh, to produce insulin, which was done with initially processing, I believe pigs or cows, uh, to, to, to, to get the insulin. Yeah. Yeah. Yeah. It's

SPEAKER_45: an interesting story. So we were the first company period. Um, there's a Danish company,

SPEAKER_20: Novo, who's our competitor in this space. We can come back to that because it's not a coincidence

SPEAKER_28: that I remember the history of the relationship. It's a really interesting history between the two

SPEAKER_17: companies, but yeah. Kind of intertwined. Yeah. But we, we had a, like our head of science, uh, met with Toronto, this researcher up there who discovered the mo, the mechanism of insulin, but they couldn't make it into a medicine. We produced the process that made it available at scale, which as you're pointing out was derived from like a lot of the, you know, the history of our industry was like taking things in nature and refining them into medicine. And that was the case with insulin. We took something in nature, the pancreases of slaughtered, uh, meat animals, uh, really cows and pigs, and essentially refined out of that, the protein, which is insulin. And that was the case until 1981, where, uh, we had partnered with Genentech to do another first, which is create the first biotechnology product on planet earth, which was human insulin made in a, in a bacterial cell.

SPEAKER_07: Yeah. So in, in that case, that was the first recombinant biologic product, right? It was putting the genetic, the genetic code from human DNA that codes for human insulin into an E. coli bacteria. And then you put that E. coli bacteria in a giant vat. And just like we ferment wine, we put sugar in and it started to make insulin. And that's how we make insulin around the world

SPEAKER_17: today is through that recombinant process, right? Yeah. That's right. Still. And that was the first DNA based product, uh, made. And it solved the problem because we were actually, we had, we had, per the obesity discussion, rising type two diabetes rates. It used to be type one diabetes, which is the childhood form. That's really an autoimmune disease, um, was most of the diabetes that needed insulin. But as this, uh, you know, abundancy grew and people got heavier, we saw earlier and earlier onset type two diabetes, which is the adult form. And we, we were worried we were going to run out of animals to slaughtered animal pancreases to refine.

SPEAKER_20: So it wasn't just a cool science thing. It was actually solving a pretty big public health problem, which was the risk of scarcity of insulin. Yeah. Yeah. And so look, I mean, biotech to the,

SPEAKER_07: to the rescue, and we'll talk more about biologic drugs and all the other things that, that have been addressed with recombinant systems, uh, meaning we put DNA in microbes and get those microbes to make a protein for us. And obviously there's been a lot of advancements in that space. It's probably worth, you know, hundreds of billions of dollars today, but, um, let's, let's fast forward to what happened after insulin. It sounds like in the history of, of research into diabetes and understanding some of these underlying mechanisms, uh, there was this discovery of GLP one at one point. And let me try and explain it and you tell me if I get it right, but GLP one, it sounds like is a protein that is expressed by L cells. These are little cells in the small intestine of a human. So when we eat food, those cells recognize that there's food in the intestines and they pump out a protein called GLP one. And that protein goes into the bloodstream and flows all over our body and turns on and off different parts of different cells, telling them, Hey, there's food in the, in the intestines. So tells your brain, don't be hungry, but it also has other effects like secreting insulin, getting cells to make insulin. And as a result, GLP one is what's called a hormone. It's a regulator of all these different cells to do things when our intestines are full of food. Is that an accurate way of kind of describing what a GLP, what the GLP one protein is? Yeah, that was perfect. I would just step

SPEAKER_17: back one step though and say, there's a broad, there's like a super family of these things. And this isn't going to come up later in the, when you're talking about the drugs, which we call incretins. And this was derived from a, even earlier on your chart here in the seventies, they observed that if you give someone nutrients intravenously, meaning it bypasses the GI system, that you have a higher spike in glucose than if you give it via the GI tract. So that's a curiosity, right? Which is why is that the GI tract was doing something and they call that the incretin effect. And later we found out that there's a whole family, a super family really of these hormones signaling tools that are telling your body when you're fed to do different things. That makes a lot of sense because to survive as humans, feeding is like one of the top three essential processes next to breathing and other things. And so there's a lot of redundancy, but also different hormones for different chores. And GLP one was

SPEAKER_07: the first one that was made into a drug. And so in 1987, it was discovered that GLP one actually stimulates insulin production, insulin secretion, and, and then it was isolated. And, um, ultimately, I mean, maybe you can tell us the history. I think there was a story about Nova Nordisk and Novo having some, um, some role in some of the early work with GLP one versus Lily and, and tell us a little bit about the history on like what took so long for GLP ones to go from, Hey, it stimulates insulin secretion in 1987 to kind of getting these first drugs on market for GLP ones.

SPEAKER_17: Yeah. It's a great question. Both companies played around with this mechanism right after that paper was published in 87. And as I've said, back to the insulin story, it's not really an accident because we were two companies very focused on making peptides and diabetes, right? So this was a good thing to chase,

SPEAKER_61: but GLP one in its native form is not. I'm sorry, peptides are a small molecule,

SPEAKER_60: a small protein, right? Just, just smaller protein. Yeah. Less amino acids in a chain,

SPEAKER_17: which is what we call GLP one. Really it's smaller than a protein. It's a hormone, but, but also called a peptide. But we, when you give it in its native form as a medicine, it has a half life of like minutes. So you'd have to have continuous infusion in your life to use GLP ones in the human form as it was designed. And of course we have plenty, we can make it ourselves, um, inside our bodies, but if you give it exogenously or from outside that you need a drug that lasts longer than a few minutes. So, you know, both companies set to work on that problem. It was actually Lilly that launched the first GLP one drug called Exendatide, which was a strange story. Another sidebar of a company discovered that in the saliva of a Gila monster. So this is the, the lizard that lives in the desert. And their saliva is a, is basically a mimic of the human GLP one. It's close, but not identical. And the, the amino acid change that it had made for its purposes in saliva actually, uh, prolonged its action in man to be more like six or seven hours. So this made for a twice a day injection. And it was, it allowed us to lower blood sugar in people with diabetes and it was super successful. It also, we noticed as happens in drug development, that you lost a little bit of weight with this. And we know in type two diabetes, that was good. In the background, Nova was working on their own once a day version and they engineered it versus found it in nature. Then Lilly, uh, made a once a week form called Dula Glutide, which is now marketed as Trulicity. And then Nova made a weekly one, which is called Ozempic, which we all know the name of now. And actually, you know, in kind of, uh, not to nerd out too much on drug kinetics, but by going from daily to weekly, we were able to dose higher. And this is one of these situations where the glucose effect occurs at a lower dose than the weight loss effect. And we couldn't do that with a daily or twice a day drug because the side effects of these drugs, which are nausea and diarrhea, they're unpleasant are kind of a, what we call a peak to trough effect. So you experience them when there's a big change in the drug in your body, but when it's steady state, you, we really reduce those symptoms. So it was really, uh, Novo's insight that we could push up the dose of semaglutide that allowed the obesity kind of threshold to be pushed. And then of course,

SPEAKER_20: we followed that with our latest one, terzepatide, which is known as Manjaro. That's actually two

SPEAKER_07: hormones together. Yeah. Well, so, so let me just, um, take a step back just for folks that are listening to really understand this. So all proteins are made from a chain, like a beaded necklace of amino acids being stuck together. And when they're put together, that chain kind of collapses into a molecule structure, a protein structure, and that protein has some function, because it's got shapes and curves on it, and it can do things in the body, you can bind to things, and they can do activities with different cells. But you don't necessarily need to use that exact chain of amino acids to get part of that protein to bind somewhere else in the body. You can use things that look like that protein, and that's really the effort in all of these, what are called GLP-1 agonists, which are different than GLP-1 itself. They're different molecules, they're different proteins, but they can bind and have the same sort of activity. So, so there's this discovery process, this research process, as I understand it, to, to develop and identify new proteins that can have a similar or perhaps even a more beneficial effect than GLP-1s in the body. Is that, is that kind of fair?

SPEAKER_45: Yeah, that's right. And I think, you know, this story itself is going from like finding the native

SPEAKER_17: human hormone, and then we found this accidentally, this one in nature that was what we call analog to it. So it had a similar function, but with a different kinetics, different absorption rate. And then Novo actually engineered that in liraglutide. So they designed that in. And ever since then, we've been engineering in different changes in those amino acids, those beads to drive different types of function. The latest one being this sort of dual acting one we have now, which like both ends,

SPEAKER_32: think of a chain with both ends with the active warhead versus just one end.

SPEAKER_07: Right. So over time in 1986, we kind of realized, hey, GLP-1s stimulate insulin secretion. So this is super interesting and all this research begins. But since then, there have been a lot of studies on how GLP-1s maybe are regulating and affecting other organs in the human body. And, you know, I've got this chart up here that shows the effect of GLP-1 and GLP-1 analogs on the brain, on the heart, on the pancreas, on the liver, there are all these kind of interesting follow-on effects. The human body is so difficult to kind of map everything, but there's some intricate relationship and cross regulatory process that happens between all of these different systems of the human body. So maybe you can talk about the evolution in our understanding on how GLP-1s and GLP-1 analogs maybe are affecting

SPEAKER_11: other organs in the body, not just turning off hunger and not just making more insulin.

SPEAKER_45: Yeah. So of course it's doing those two things, but as you're pointing out,

SPEAKER_17: you know, the hormone is basically a messenger, right? So as, as you said earlier, it's telling your body you're fed. And with that, um, because nutrient absorption is like a survival instinct and we're preselected for that, we're good at then processing that signal and acting differently. So that includes, um, you see like heart rate going up and, um, lipid levels dropping, uh, in your cardiovascular system. And that's because you're responding to that food, that new nutrients entered into, into, into your body. Liver is a key part of metabolism. So there's tons of cross signaling into the, into the liver. Um, and the pancreas is the source of insulin amongst other metabolic regulatory hormones. So, so what we don't even fully understand yet though, David, which is interesting is, is that there are primary effects of GLP-1. Certainly we can reproduce like in a, in a, uh, test tube or a cell system, but then there's a whole myriad of other probably secondary effects because there might be intermediate signals. We don't even know about yet in this whole metabolic process. So some of the ones listed here, I don't think have been proven as direct effects. Many of the brain ones, for instance, but, uh, clearly happen when you over stimulate GLP-1 or give it exogenously as a medicine. And, uh, mostly in our nutrient rich environment, we covered earlier, these tend to be good things because you're tamping down hunger and you're

SPEAKER_77: improving absorption of the nutrients you already have.

SPEAKER_07: Yeah. So now the topic du jour is, Hey, we could use GLP-1s not just for the indication of obesity and diabetes, but perhaps for other health indications and maybe going after other issues

SPEAKER_11: that people, uh, are having problems with. Yeah. I think, I think there's two big stories.

SPEAKER_17: One is that the other is that it turns out GLP-1 isn't the only hormone that matters. And you're going to, I mean, we already have trisepatide, which is a whole nother hormone called GIP, uh, glucagon insulin, a tropic peptide, which is a complicated name, but has more of a bias toward fat release and basically allowing your fat cells to burn energy earlier in the starvation cycle. So as you're hungry, kind of unleashing fat energy versus just squeezing it out of our muscles, um, which is what your body does naturally as kind of a survival instinct. And then we've combined that in trisepatide next up is there's amylin based drugs. That's another gut hormone, uh, and glucagon, another one. So we, we've got a triple acting and all kinds of different ones coming. And that's a big part of the innovation story. I think we'll figure out through time, which ones are best for what maintenance is a big issue in this class inducing more rapid weight loss in people who are super obese. You know, if you have a BMI of 50 and you take trisepatide, our drug, and you lose on average 23% of your body weight, you're still obese, right? So we, we need more potency for those people, but there's many people who have a BMI of 31 and heart risk, they can get their BMI to normal on trisepatide or semaglutide, but how do they keep it there more easily versus a weekly injection? So that's another problem being solved, right? The second thing, which you're touching on is all the indications to go after. And as I mentioned earlier, there's more than 200 diseases that are tagged to obesity. Do they all cause, are they all caused by obesity? We don't know that yet. They're correlated, but so far in our studies, this category of medicine's undefeated. We've never had an unsuccessful study in measuring an outcome in a chronic disease.

SPEAKER_20: And that's probably because we stacked the ones that were most possible first or most confident in, but we're working down that list. Currently, Lily has 105 studies going with trisepatide in these other diseases. So this is a massive, massive undertaking, you know, a clinical trial like that takes a hundred or $200 million each. So you can do the math. It's a, it's a huge bet that we can convert weight loss into sustained health benefit in chronic disease.

SPEAKER_07: Yeah. So that's, I mean, I'm doing the math. That's 10 to $20 billion you're spending on clinical trials for, and I understand sleep apnea, maybe Alzheimer's, chronic kidney disease, sounds like lots of different indications where you go after a patient population, you try perhaps one of these combo therapies, these new combo therapies that you have. Yeah. And then you, Manjaro.

SPEAKER_28: Yeah. Right. And then you see what the results are and if it works. Yeah. So there's one that a doctor can prescribe it. Right. Yeah.

SPEAKER_17: Yeah, exactly. So there's one we just read out, which we'll end up submitting, which is, there's a lot of people you, and we all may know them in our life who say, Oh, I was told I pre-diabetes. Yeah. What is that? That's, you know, otherwise healthy, middle-aged adults who are overweight. Right. And what happens, diabetes, like a lot of diseases, it's not a binary function. It's a continuous function. Right. You, you begin to have resistance to your own insulin because of the stress being put on your fat cells, essentially from overeating. And of course, reducing obesity might help that. And that's been tried without drugs with, you know, diet and exercise and it works. So we replicated that, those results. And we just read that study out with Manjaro, which showed that three years on our drug, 94% fewer new diagnosis of outright diabetes. So that's a huge national health problem. And if we can treat diabetes or obesity early in the life, we could potentially reduce diabetes downstream.

SPEAKER_20: So all, there's many examples of these, but we're going for dozens and dozens of these kinds of

SPEAKER_07: use cases for the technology. So when that gets approved, when you go through your clinical trial, you get a positive indication on the readout, a doctor can then prescribe that particular drug for that, that condition. And, and then what insurance covers it. I mean, just help us understand kind of how, how payment happens in this and, you know, ultimately, and we'll talk a little bit

SPEAKER_13: about pricing in a second. Yeah. I mean, so now we move from a clinical experiment and science

SPEAKER_17: to the messy part of healthcare. So, you know, in America, I think we have a strong bias to reimburse things that are kind of obvious. And when things are new, it's harder. What we see today with whether it be Lily's products in this category or Novo's is really broad acceptance of by insurance and healthcare practitioners in treating outright diseases like diabetes, type two diabetes, and probably like these cardiovascular conditions we're studying. I think they'll be adopted quickly and reimbursed quickly, but that's when you already have the disease. Of course, the real promise here is to prevent those diseases. But in almost every case in this country, we don't really pay for prevention, right? So people who are obese and don't have those conditions. If you're say on Medicare, currently the rule of the federal government is they won't pay for these medications. You have to get diabetes before you can get the drug, which sounds pretty stupid. And I think it is, but the evidence needs to build. Our job is to invest in that evidence base I just spoke about so that we can show time and time again that all these chronic illnesses can be abated, slowed, or even eliminated. And in some cases, even reversed, if we can get people to lose a dramatic amount of weight safely, which is what these drugs do. That's in the process of sort of

SPEAKER_22: getting that idea adopted. But why is that controversial? Because if I'm an actuary

SPEAKER_07: underwriting the long-term cost of a patient over an individual in a program, an insurance program, I'm going to look at that patient, or that person, I'm going to say, hey, if they stay overweight, there's going to be four diseases they're going to get over the next 30 years, and I'm going to have to pay for that. But if we can get them to lose the weight, I'm going to save all this money. Shouldn't I have a financial incentive, an economic incentive to change that? What's the controversy there?

SPEAKER_17: Yeah, I think that's in process. I was actually in a big investor of mine's office a few weeks back, and they said, oh, the last company in here was a reinsurance company, and they're changing their actuarial tables for people who are on these drugs, which I was like, wow, you know you're making a difference when that's happening. But it hasn't trickled through the system. I think there's a lot of still stigma associated with obesity, frankly, like social stigma. And patients report to us, a lot of doctors won't even use these drugs because they think it's a product of laziness. And why people become obese, we don't really understand completely yet, why one person would and one person wouldn't. What we do know is once you become overweight or obese, losing that weight as an adult is really difficult. Some studies show like less than 5% of people can reach a healthy body weight on diet and exercise once they're obese. So that's a very ineffective standard of care.

SPEAKER_07: So today, if I want to get transepidide for weight loss, which I think you guys call Zepbound, right? Yeah. So can I go to my health insurance company and have them pay forward or am I paying out

SPEAKER_13: of pocket? Depends on who you work for, Dave. So right now about 50% of the employer-sponsored

SPEAKER_17: insurance plans cover it. Lilly covers it. We cover the NOVA ones too, because we think obesity is a disease. Those skew toward companies with money, basically. I think health benefits are part of just attracting and retaining employees. So smaller businesses, businesses with lower margins like retailers, et cetera, really don't cover these meds yet. I think in five years, we'll look back and we'll say that was crazy. Once the evidence base is built up and there's more adoption and less stigma, but right now that's the current state. So a lot of people do pay out of pocket and we've got some work to do to help them. The rule of the land in the US is if your insurance, if you're in the federal benefit, you can't even accept savings cards from the manufacturer. But for those that have a commercial benefit, like if you work at an employer, a large employer, like a retailer that doesn't cover it, we can actually buy down your out-of-pocket costs and we do that.

SPEAKER_74: And so did I hear correctly that you guys are doing a direct-to-consumer model as well? Is that right?

SPEAKER_17: Yeah. Yeah. Yeah. So to get at this very problem of both stigma and cost, back in January, we launched what we call Lilly Direct. So people can go to their doctor or use our telehealth platform. We have a bunch of partners who will see you as a physician and they're obesity specialists, and they'll send the prescription to Lilly and we'll fulfill it directly via mail, DTC. This solves two problems. One is people can go to a place where they're not stigmatized for being overweight and two, they always get it at the same price and it's the lowest price available to them. There's a lot of confusion in retail pharmacy about what people should pay. And there's some

SPEAKER_81: pharmacies marking these drugs up because of the supply issues.

SPEAKER_58: Is it a thousand bucks a month? Is that right? For, um, cause that's the type of result? List price. List price. List price. Uh-huh.

SPEAKER_17: We have a, a savings card program that's about $600 per month. And then we also just launched in the lowest two doses, uh, a vial form, which is a little easier for us to make. We can get into the

SPEAKER_20: supply issues here, uh, maybe in this discussion too. And that's, um, $399, uh, basically and $550 for those two doses. So almost, you know, 60% off.

SPEAKER_07: It's still a lot. So what about the criticism and the research that has shown that if you go off of one of these drugs, the weight comes back. And as a result, we're kind of going from a chronically ill population to a chronically drug dependent population. How do we address that concern? And, you know, what is the change that's needed over time for that not to be the case? Isn't there an economic incentive for Lilly to always be, you know, hoping that more people need the drug more frequently because that's how you guys make money. And, you know, how do we kind of talk about that change that's, that's coming and, and whether you need to be on it forever?

SPEAKER_17: Yeah. Yeah. Well, I mean, our mission is to, is not what you said. Our mission is to solve human health problems. And ideally that would be here where people could have a course of therapy and then not have to take medicine. The, the physiology of GOP one and GIP right now, that's not how it works, right? If, if you don't have them on board, your body res, restores itself to its previous position. We, there is a theory that if you sustain low body weight for long enough, you can kind of reset your thermostat in a way and your body

SPEAKER_20: will stop trying to defend what it perceives as a starvation state, which is you, you're not carrying

SPEAKER_17: as much weight as you normally would. But, you know, we haven't had these drugs around long enough to prove that out. We also know that some people, um, lose weight and then do change everything about their life to sustain that body weight and go off successfully. That's not uncommon, but it's not the most, um, probable outcome for most. So for now we need to take the drugs long-term, but we are working on drugs in our pipeline that do, uh, seek to reset, uh, the metabolic switch and using like the PYY as a mechanism. It's a brain mechanism that's thought that maybe you could have a treatment course, lose weight and then reset, um, your, your self, uh, sort of that thermostat, if you will, of what your body's supposed to weigh. Um, we're working on this problem, but right now it's-

SPEAKER_07: Cause my understanding is like your base metabolism drops. So the number of calories per day that your body is burning to live goes down. So if you stop taking the drug and the hunger switch gets slightly turned back on, even if you eat a healthy, normally healthy number of calories per day, 1500, 2000, 2500, you start to gain weight again because your metabolism has declined. But what I've heard from a lot of friends, um, I don't want to call everyone a biohacker, but it definitely seems to be in kind of the people that like to mess around and try new things, uh, crowd is to kind of go on and off. So people are trying lower doses. They're, they're trying the drug for a period of time. They do it once a month, once a week, and then they kind of maintain a healthy weight without needing to be kind of, um, on the typical regular cadence of the drug. Is that something you guys are seeing more frequently? Is that the steady state? Do you think over time?

SPEAKER_17: We definitely see that in, in, uh, in the clinic and in, in, in practice by people and, you know, back to the cost, of course, people want to spend less money. And if that works for them, you know, there's certainly, um, and it's under doctor, doctor supervision, we have no problem with that. We need to do more studies in the space of, you know, what you have one drug on here, uh, or not on here, which is coming. And it may be the most important drug because of the scale, uh, um, ability, which is, it's called orforglupron. It's a, it's a chemical drug. So here, not an amino acid, but, uh, organic chemistry that mimics, that mimics the activating, uh, part of the peptide. Um, and so it's, uh, it's an oral GLP one, um, in our hands, it it's about as good as, as high dose semaglutide. And, um, we, we're, we're doing phase three right now. Um, so that will start to read out next year. The benefit of this is one it's oral. So it's a little easier to take, you don't have to refrigerate, you don't have to worry about the injection. You know, some people don't like to inject, but the real thing is this is a, this is a product for the masses because the systems we make these, these drugs in now are complicated to scale. And that's why there's been shortages. You know, we have approvals in more than 40 countries we haven't even launched in. That's not a normal thing for, for a company that wants to maximize. You can't make enough product. We can't make enough. Right. And because we want to satisfy the markets we've already launched in. So, or forglupron, which is this phase three project is super key in that, um, we could both, supply, you know, people who could get away with just the one hormone drug, GLP one,

SPEAKER_20: and we're studying it as a maintenance option as well, which makes kind of sense to go through the injection, lose more weight, and then keep it off with something, uh, a little easier to take.

SPEAKER_07: What's your sense on how this is going to affect the food industry? So a lot of analysts have talked about, Hey, food companies are going to get damaged by this. I'm going to, I'm an investor in a company called super gut and we have a high resistance starch fiber product that we're now selling and having a lot of success selling as a compliment to GLP one. So you're, you're on a GLP one or GIP drug. You take this product and it kind of can help you during that period of time. And it's a new category that seems to be growing. A lot of companies are launching around this similar concept. Now, do you think this is changing the food industry in the United States and in the West and ultimately around the world? And I don't know if you talk, you talk, do you talk to CEOs of food companies? Do they call you

SPEAKER_13: and like, what are you doing to our business? Like, yeah, I've got, I've got a couple on my board even, but, but so, you know, I, I think there are, um, certainly displacing effects of this,

SPEAKER_17: this category. And I think it's great news overall. First is the health things we talked about. So people will need, you know, uh, less diabetes products for sure. They'll need less other medicines. We're doing, even doing study in like OA pain in the knee, because a lot of knee replacements are in obese people and they get painful early in life, uh, knee pain. And we hope to show you can prolong that. So that's a sort of a knock on effect. And then of course food to be the next one you think about, I think you might know about the study, but last year, Walmart did this sort of what's in the cart study for people in Ozempic or Manjaro. And it showed they were buying about a third less calories. So that's a lot, but that's consistent with how the drugs work. But interesting also, fewer salty snack foods. They're buying more fruits and vegetables, shopping at the edge of the store versus the center. So that's happening probably because we only have 10 or 11 million Americans on these drugs. It's not happening in an economic scale. That's really changing food companies, um, bottom lines, but you know, enterprising companies like the one you mentioned, you know, protein shake companies. There's a lot of things happening. I went to a quick serve restaurant.

SPEAKER_13: It was in California a few weeks back and they actually had a, like a GLP one side menu.

SPEAKER_17: That's what it was called. Yeah, exactly. It was like, if you're on these drugs, use these. Uh, so, you know, it is, it's having a big social, uh, footprint.

SPEAKER_22: Yeah. Well, I mean, here's your stock price. So Eli Lilly stock, I think may outperform.

SPEAKER_07: I don't know. It's probably pretty close. Uh, I, it was Nvidia. It's, it's an, uh, an extraordinary stratospheric rise. And then just to look at how the business operates today. So you have this portfolio of products that you're developing, but in the last quarter, um, you did, uh, 11 billion in revenue and generated, um, 3 billion net profit. I think it's 3.7 of, of operating profit. One of the, the, the, the key criticisms, um, and this is one of the things I wanted to get into was how do you address and how do you deal with the political heat associated with your success? So you guys are operating a business that is having an extraordinary impact on people's lives, but you're also making an incredible amount of money. And in this environment today, that may be more challenging to deal with than it ever has been certain senators that we shall not name would look at this and say, Hey, you're making an 81% gross margin selling these products to sick people. How can you justify that? So maybe talk a little bit about how you deal with the political environment in the U S around the world, as you are successful and are projected to triple the business over the next couple of years here. Yeah. Well, it's, it's obviously a top

SPEAKER_30: of list issue for me every day, maybe a couple of things there, Dave. So, I mean, first of all,

SPEAKER_17: this is a very long investment cycle business. Um, as we talked about earlier, like we launched the first GOP one drug in the world in 2005. And since that time we've been working for, you know, this kind of performance because we took risk against that idea, right. And refined it and worked that problem. And that it, you know, I think that time scale is hard for people to think about, but also, you know, the dollar scale of the R and D this year, we'll spend over $11 billion on R and D, which is a meaningful, uh, it's like a nation state scale. Like it's more than the country of Germany. Um, so we we're pushing forward new medicines based on the revenue of today's medicines. And that virtuous cycle is sometimes just hard to articulate, but when you get it right, you can have a big societal impact. So that's the first thing. Secondly, you know, I think the pressure is a privilege in a way it means we made something useful enough that a lot of people need it and want it. And now our job is to work with, you know, the healthcare system to sustainably adopt it. And we do see that as our responsibility to work with, you know, politicians, if that's who we work with or, um, health plans or employers to find a way to get this medicine, which we think is amazing. There's appetite to so many people, um, and do it in a way that's sustainable. Now, hopefully we've created enough value that the, certainly the, the people who are getting the drug or benefiting that the health plans are actually lowering costs in the longterm, even that there may be an increase in the short-term and that we make a reasonable profit for our shareholders and sustain R and D for the future. So I think that's, what's happening here. I think this week, actually, Novo Nordisk our competitor was hauled before Congress to talk about this issue. Um, there's a lot of other dysfunctions in the U S system that we could talk about in terms of how inefficient healthcare is. I mean, here's a medicine that could augment 100, 200 adult diseases in a meaningful way. It's expensive. Yes. Probably net pricing, uh, for us, you know, is going to be something like three, $4,000 a year in the steady state per person. But I think we'll create more value than that. We'll

SPEAKER_103: save the system more money than that per year per user. Um, that's what we should be aiming for.

SPEAKER_07: I think what's interesting about it is the, the, the pro the, the biologic products are, the, the, the, the molecules are advancing and they're advancing in a, in a, a pretty kind of steady way. The issue I think with insulin, and there's obviously been a lot of legislation and regulatory and political scrutiny around insulin pricing is it's the same molecule and the price has just gone up, right? This is, this is the old kind of pharmaceutical companies or bad story is they've got a product that they make for 10 cents and then they sell it for 10 bucks. Then someone says, let's charge a hundred. They're like, okay, let's charge a hundred. And so it's classified as price gouging in this particular market. You guys are certainly making a healthy market, but the products are also advancing. There's new combination therapies coming out and, uh, the oral therapy. So there's a lot of investment in improving the overall landscape of what's possible.

SPEAKER_61: Yeah. Let me address that. And because I, I took over in early 17, as you mentioned,

SPEAKER_17: and like that, the insulin pricing scandal, which Novo and Lily were also center of, right? Yeah. It was, um, hot and heavy. And I, so I took a lot of personal lessons from that, but you know, every day since that we had reduced the price of insulin, even though, you know, we have this weird system in the U S where a lot of our two thirds of actually our gross price goes to PBMs and insurance companies. So of the gross price that's often quoted, the net for us is about a third of that. And insulin, it was even more, where does that money go? Well, it's used often to cross subsidize other things in healthcare. So we have to unwind that system if we really want to value innovation. And then the other thing, which is in this chart is, and I mentioned is some of that revenue from insulin we use to invest in the next generation of therapy, whether it be insulins, which we're still investing in new insulins or GLP one drugs, which of course we did. Um, and that is hard to articulate in the moment, but it actually produces good economic and social value later. Yeah. Here though, we, we took those lessons. We launched at a 20% discount to Nova's product, even though we have better efficacy data and we've only cut the price since then. And I think, we see a kind of a generational opportunity for the company to both be, have the best product. So efficacy and quality, but also mass production. And that requires a pricing strategy consistent with that.

SPEAKER_07: Well, you've also invested a lot in manufacturing in the United States, right? Didn't you just do like a $5 billion investment in Indiana to build new facilities? Yeah. We're building the largest API

SPEAKER_27: site in the history of the United States in Indiana. Yeah. So, yeah. So that's, I mean,

SPEAKER_07: that's got to feel good to the politicians too, that this isn't like, uh, optimizing for costs, but there's also infrastructure being built. So I've got a lot of numbers on forecast breakdown of product. I think like, what's interesting is just, I don't know if these numbers seem right, but the analysts are projecting that your 2026 operating income numbers could grow to $32 billion. I mean, it's just such an incredible rise. And that obviously is the, the pipeline of indications, the pipeline of combo therapies, new modalities, and that's up from 7 billion last year,

SPEAKER_11: I believe. Right. So a 4X in three years at the scale of operating income, it's really incredible.

SPEAKER_07: I hope they're right. Yeah. I mean, look, good, good for you. I heard that there was like internal forecasts that I won't reveal my source. Uh, and all the forecasts got kind of blown out, like the, the forecast were too conservative, uh, in terms of where you guys are at with transepatide. So, um, I wouldn't be surprised if you did. So if we look, look at the breakdown of Lilly's portfolio of revenue today, uh, it's very obvious that what we've just been talking about, the GLP one GIP drugs are the vast majority of the portfolio and expect it to be the vast contributor of growth in the years ahead. But maybe you can tell me a little bit, tell us a little bit about how you think about the portfolio of other opportunities to address disease and how you're investing there and how, you know, when you've got such a blockbuster like this and you've got a runaway train and you can't keep up with demand, how do you dedicate resources to the rest of the portfolio? And how do you think about that as a CEO, as a leader in getting your team to focus

SPEAKER_13: on other things that are also very important? Yeah. Yeah. I think, I mean, that's the key thing we'd spend a lot of time with our board on, you know, on the one hand, um, I think there's a lot of

SPEAKER_17: business books you could read that say, well, double down on your winners, right. And just keep going. But unlike other industries, you know, David, we don't really have a franchise value at the end of the patent life, right? There, when, when drugs go off patent, you have to actually have a better drug that competes with almost free. Yeah. And that's probably possible one or two times here, we're talking about Monjaro, Trulicity, our last, our GLP-1 only and semaglutide GLP-1 only will go generic. And we think we have enough differentiation to keep growing through that. But at some point that story runs out, right? And so on a timescale of decades, you need other lines in the water. In a lot of ways, this is like an options business. You know, we, we, we have to lay down bets across a variety of things. They have to be, you know, real unmet medical needs that you can get paid if you have a solution for, but also, you know, the technology bet, is it going to work and how to attack that. So my mindset is we have to walk and chew gum at the same time here. We have to execute like nobody else against this enormous kind of not, not even generational, maybe longer opportunity to build a company, affect human health and return capital to shareholders. At the same time, we literally has been around 148 years. I think we have an obligation to our newest employee who just joined to have a business by the time they get to a senior level. And we certainly have a role in the world at changing human health. So we are investing pretty broadly in cancer and immunology, maybe in brain disease is the most important area we can invest more in. Because I think that's actually becoming more tractable and is about 40% of global suffering is some form of a brain or neuroscience disease. And we have a lot of expertise there. So we have a little bit of balance and a lot of focus simultaneously. And we divide our organization so that we have four business leaders. And one of them is this franchise we were just talking about, weight loss and cardiometabolic health. Three others have other agendas and their job is to compete and win that way. I'm proud that actually in Q2, our non-Incretin, our non-terzepatide business grew 17% on a pretty big base. So that's a healthy business as well,

SPEAKER_20: more on the scale of a regular pharma company, not the supersized thing we've become.

SPEAKER_07: What science are you excited about? I don't know if you're a big science nerd as much, but you have like, so the Incretin products are, you know, it's peptide manufacturing, but obviously there's cell therapies. So programming cells to go into the body and do things. There's gene therapies where we have all sorts of mechanisms for altering gene expression and making, you know, permanent changes in human cells. And then there's all this interesting stuff that I'm super fascinated by and excited by and like Yamanaka factors, these factors that can have a profound effect on the epigenome, which can ultimately change how cells behave and radically affect the process of aging or what we consider to be aging. What else are you excited about? What's exciting in the portfolio?

SPEAKER_11: And how do you invest internally versus do M and A versus venture to kind of access those interesting,

SPEAKER_17: you know, areas? Yeah. Well, let me talk about science and I'll get to the investment strategy, but we've talked about diseases here, but you know, we think about our, our role is like having a palette of ways to make medicines, which are basically, you know, new molecular matter against a set of diseases. We know something about that's sort of when those things converge, we do well. So what's in the palette? I think that's been expanding rapidly lately. And I think this whole new field of genetic medicine, which you talked about, like ex vivo gene therapy, where you edit cells and they go do things like CAR T's or gene edits themselves or gene inserts, which are exciting. You know, we had a medicine where we announced results this year that is focused on inner ear diseases of deafness, basically congenital deafness disorders that are monogenic. And we, we've treated patients that have gone from like six, eight years of life, no hearing at all to now hearing. I mean, this is, it is Lazarus like when you see it, but the, you know, I think the thing that excites me is when you can do amazing things at massive scale. So those two techniques, CAR T and gene therapy, it's hard to think of like super scaled millions of people benefiting. One new family of medicines I'm excited about are the so-called siRNA. This is where we can knock down proteins that are aberrant or causing problems and do it pretty safely and surgically, um, and do it very infrequently. So like we have a project in phase three right now that knocks down the production of something called LP little a, which is a lipoprotein particle. That's probably thought to be about 25% of the remnant reasons why we still have cardiovascular disease and there's no medicine for it today. This is promises to be a once a year dose. And so you take this once a year and it's catalytic in sales and it works and just keeps knocking down this protein. So if that translates into outcomes, I think that makes for a very scalable business. We could treat millions or a billion people with a medicine like that and have a big, big effect. So we're playing around with that toolbox, um, extensively these days.

SPEAKER_148: So scale has some scale matters, right? And then that, well, that's our strategy. I think

SPEAKER_17: that's what Lily's for, right? Is to make things that aren't boutique, but things that are everywhere. So, you know, how do we do this? I mean, we, we, we have focused maybe more than anyone else on a lot of small deals that starts with our corporate venture groups. So we have one of the most scaled corporate venture operations and all of corporate America, hundreds and hundreds of bets that are small in size. Usually we go in with, you know, with GPs as an LP and invest in small biotechs pre, pre, uh, public. And there we don't have to be so right. Mostly we're trying to learn and follow science and have a seat at the board or a seat at the table so that when things start to turn,

SPEAKER_13: we can move early. Um, we do a lot of M and a last year. So sorry. So sorry. You're both an,

SPEAKER_28: you're both an LP in venture funds and you write checks direct. Is that right? Yeah. Both ways. Yeah.

SPEAKER_17: Okay. Yeah. Okay. We also have a interesting project we're growing. I'm quite called catalyze 360. And here are the ideas beyond money. What else can we do to help incubate small companies? And so we have both space, but also a service layer we're offering sometimes in a cost plus way, or sometimes we're downstream royalties where, you know, we're a big capable company. When you're building a new company, like you've been doing in, in, um, ag, like sometimes you need something that's a pain in the ass to go build. You have to either buy a consultant or hire one person and you only need them for a few, few months. So here we're stepping in and say, well, we'll give you that consult. If you need to interpret a tox result, like you can just call Lily's experts. So we're like a service layer to cultivate kind of this ecosystem around us. And then we do M and a, we buy companies last year, about two dozen, which was the most of any pharma company, but actually with some of the least capital deployed. So we're making, um, I think we spent $3 billion on 24 companies. So we're making lots of small bets. Right. And I think that is interesting because the longer we have, uh, residents, you know, sort of, uh, in a partnership or we own something, we can add more value. It also allows us to trade in front of the de-risking event. When things get de-risk in our sector, there's a huge inflection in value. Yeah. And so you're basically paying the last shareholders, not yourself. Um, we think we can bet better than the market on what those, the probability of something converting to, to a success is. And if we're right about that, we'll, we'll be better off buying early.

SPEAKER_07: Yeah. Well, so as a lot is changing at the company and you're, you're at the scale you're at and growing as fast as you are. How do you think about, and this was an important one. I wanted to talk about leadership and culture. I've, uh, uh, someone that works with me at Ohalo. Uh, her name's, uh, Megan, she worked at, at Lilly for years. And so we had a long chat about this interview a few days ago, and she talked to me about how great the culture is and 10,000 people on campus in Indianapolis. And it feels like a college campus. There's a track and field. There's a bar on campus, all these sorts of things that make it a great place to work. And she was really torn by the way, and making a choice to go back to Lilly or joining me. So I apologize that we, that we took her, but, um, uh, but, uh, um, maybe tell me a little bit about how you kind of think about culture, keeping people, uh, aligned, motivated, keep the

SPEAKER_11: performance culture strong as you're kind of trying to execute at this extraordinary scale.

SPEAKER_17: Yeah. Exceptional question. I mean, that's of the things I worry about long-term. This is one of them. How do we keep what's so good about how we operate? Yeah. I mean, the background of the company is important. It's an old company, right? And it was family run for a hundred years. Like it was one of the few exceptions in corporate America where the third generation didn't totally screw it up. Actually they made it quite a bit, quite a bit better. Um, and because of that, I think there's a lot of loyalty and social cohesion in a company, as you mentioned, like we'd like coming to work and being together. It's a friendly place, but also scientifically super rigorous. Um, and that's, uh, that's often not two things that fly well together. So I think it's gotten a lot of exceptional attributes. When I started though, I think in my kind of view of like, when you're running a big ship like this, probably changing the culture is like beyond your, your capability, but what you can do is like extend, turn up the things that are good and turn down the things that are less good. And we've been cultivating that. So like one thing that was less good, but is now really clicking for us is sort of like use our scale or enterprise wide capability as a, as a benefit, not a, not a detractor. So many companies get big and get bureaucratic and terrible. Like, I mean, they just can't get out of their own way. Totally. And we really lean into, okay, it's everyone's job to solve for Lilly first. It's everyone's job to get the patient healthy. Now let's talk about our departments as a derivative of that, not the main goal. And somehow those things get flipped around in big companies and people focus on how they look or who's, which department's best. And none of that matters. And we have to emphasize that. Another thing I've really focused on is speed at scale. And we measure that rigorously. That's more of an engineering thing. I mean, we really track things very carefully on speed and we've moved the drug development timeline, which the industry is about nine years from first human dose to FDA approval. And when I started, ours was about 11 and now we're 6.1.

SPEAKER_07: How did you incentivize that? How did you reward that and create the model for individuals to contribute to that goal? Yeah.

SPEAKER_17: Kind of one big idea and then a thousand little things. The big idea is like this ratchet mindset that every time we beat a timeline, that becomes the new norm. And so we just re-benchmark internally. And when we were at 11 and everyone was at nine, everyone wants to jump to be, okay, let's be industry average, but that's actually quite hard in a big company. So we just said, okay, we have a submission document to get in. And it used to be our standard was 120 days from when you had the data to when you send it to the FDA. We're now doing that routinely inside of two weeks. Yeah. So we've basically taken 80% of the time out, but that came in lots of little bites. But overarching, everyone who works in development knows it's about time to patient. That's the big idea, solve for that. So yeah, those are some of the kind of culture dynamics we deal with. And of course, we want to attract new people. We've expanded dramatically on the coast, our science operations. Like if you go, South San Francisco is now a pretty big campus for us. We just built a huge building in Seaport, Boston, that'll hold 500 genetic scientists. So for some domains, we need to go where the people

SPEAKER_20: are and be more of a kind of a mothership with satellites versus having everyone here in Indianapolis.

SPEAKER_07: And I know we got to wrap in a minute, but do you worry about AI? There's a lot of startups with very smart people that have built LLMs and other models that are now trying to apply those learnings and develop new systems for discovery of molecules that will have some particular action and doing it all in silico rather than searching through the domain space of molecules that we're either synthesizing or we're discovering in nature. And is that a partnership for you at Lilly because you guys can operate at scale and manufacture and distribute and market? Or is that a disruptive force that could really damage the 20 year out kind of horizon for Lilly's business? How much do you

SPEAKER_17: really think or worry about this? Oh, we spent a lot of time on this. You know, of course, we have our own efforts, pretty significant AI efforts internally, and a lot of partnerships, including with, you know, open AI and Microsoft, Amazon, et cetera. All basically all the large scale players, Google isomorphic. So we have to pay a lot of attention to it. Here's what I noticed so far is there's a lot of money. I think last year, 5 billion with a B went into new venture backed tech bios, you know, that's what they like to call themselves. And that money is coming not so much from the traditional bio VC world, but from the tech world, which is- Software people. Got a lot more, a lot more to splash around, right? That's right. But a lot of those, I think, if you look at their pitch decks, they're really saying, oh, we're going to invent, we're going to run the whole process in silico. And I think that's really naive actually. And what I think will end up in the medium term being very valuable is more of the tool builder approach. Like we can take a process like ADME. So that's where you're trying to optimize chemical properties of a drug. Like we're talking about GLP once. So it's not twice a day, it's once a week. And there, I think by chunking problems smaller, the machines can really help a lot more. We have more data on some specific acute use cases and we can have a tighter loop between the experiment on the bench and the data process behind the model learning. The idea that you're going to throw on, you know, turn a switch on a computer and it's going to think about something and invent, you know, the next Prozac. I don't know. I think we're a long way from that day.

SPEAKER_32: But we're paying attention to all of it. Yeah. So wet lab and clinic integration is

SPEAKER_07: critical. It's not all going to be in silico. There's going to be a good chunk of the time.

SPEAKER_13: Yeah. It's a co-pilot model where the machine can do predictions. Probably now where we see the most

SPEAKER_17: value is eliminating bad ideas that humans don't see, but in hindsight look obvious. So like, because you can integrate a lot of multi-source data and say the probability of this working based on prior experiments is like 2%. And there's human factors where scientists like their, their last idea the most, but also we have trouble seeing across all this

SPEAKER_32: domains of data. Machines are good at that. That, that can add value immediately.

SPEAKER_07: Awesome. Well, are you glad you took the job seven and a half years ago or what are you most happy about? And what's the biggest disappointment? Last, last question here as we wrap up.

SPEAKER_17: Yeah, of course. I mean, what an honor to lead a company like this at this moment. We all need to get better all the time. I mean, I, I find myself disappointed mostly by, by not being prepared, not thinking in advance of, of things, but you know, it's, um, we become a kind of a, yeah, that looks obvious in hindsight, which we all have. It's a complicated business. You know, I should give myself grace on it, but it happens more often than I would hope. And I, I think that staying humble about that is like one of the most important things that successful CEOs can do. I mean, you always have to learn and you always have to learn from your own mistakes. That's something we talk about a lot here. I, you know, I think it's, it's cool that we've become more of a cultural icon. That's cool, but it's also a big responsibility because like you said, with the Lilly direct and, you know, being more of a consumer household name, people expect a lot more of us and we've got to change from being just like a Midwestern quiet medicine company to something a lot more. And we're not there yet.

SPEAKER_32: We have to, we have to get better. So yeah. Yeah. More to do. No, great. Well,

SPEAKER_07: thanks so much for taking the time to chat with me today, Dave. It's been an honor and a pleasure, and I wish you the best of luck with Lilly. Congrats on, on all the success.

SPEAKER_17: Thanks a lot. We'll have to have you come out to our lab sometime.

SPEAKER_07: I will. Yeah, no, I'm, uh, next time I'm in the Midwest, I will certainly take you up on that. I'd love to come visit. It'd be awesome. Awesome.