Eli Lilly and Company (NYSE:LLY) 5th Annual Evercore ISI HealthCONx Conference 2022 Conference Call November 30, 2022 12:10 PM ET
Company Participants
Jacob Van Naarden – Executive Vice President and Chief Executive Officer, Loxo@Lilly
David Hyman – Chief Medical Officer, Loxo@Lilly
Joe Fletcher – SVP, IR
Conference Call Participants
Umer Raffat – Evercore ISI
Umer Raffat
Excellent. Thank you, guys for joining us. It’s a pleasure to have Eli Lilly management join us. There’s a lot to talk about, but before we do, let me turn it over to Jake to kick things off.
Jacob Van Naarden
Sure. I’m Jake Van Naarden and I lead the oncology unit here at Lilly. And thanks to the Evercore ISI team for having us today. And maybe David, you can just introduce yourself briefly as well.
David Hyman
David Hyman, Medical Oncologist by training and Chief Medical Officer for Oncology here at Loxo Lilly.
Question-and-Answer Session
Q – Umer Raffat
Excellent. Excellent. Excellent. Well, just to orient everybody, so the purpose and the focus of today’s conversation, and obviously Eli Lilly presents at various conference venues, the purpose of today’s discussion was supposed to be on Mounjaro only. No. It’s only oncology. So, in case you’re not hearing the word Mounjaro, we will get to it. And I know, we can speak to Joe on some of the stuff towards the end, but the focus is oncology. So, don’t be surprised if there’s a lot of questions on CDK4/6 or BTK, et cetera. But actually without me biasing the discussion, Jake, where do you think, what are the top three things you’re spending most amount of your time on?
Jacob Van Naarden
You alluded to two of them, I think, so I’ll get to those two first, and then there’s a third I’ll talk about. But look, I think, the key drivers of the near term business are really Verzenio, particularly in early breast cancer. Really excited to share the updated data cut at the San Antonio meeting next week. And then, the — hopefully initial launch of pertibrutinib next year, the BTK inhibitor, and of course, that’s the beginning of what we hope to be a meaningful long journey for that differentiated medicine. The first of a bunch more data to come from pertibrutinib.
The third piece that you didn’t mention, which I’ll highlight is just, we — those are two, obviously we’re, obviously Verzenio is an approved medicine proto. We hope to be approved soon. It’s really the next wave of innovation to come out of the pipeline that we’re looking to, and happy to talk about some of those projects here. But that that’s sort of the third leg of the stool is the currently clinical pipeline as well as what’s the come out of our discovery labs.
Umer Raffat
Okay. So — and I want to come back to that, because I think there’s always some question marks on which of the programs would you sort of flag and emphasize in that third basket. But we’ll come back to that. Let’s maybe kick things off on Verzenio side. Jake, the launch progress, if you could speak to that, but also perhaps could you speak to the sources of patients, like the types of patients that are contributing to that?
Jacob Van Naarden
Yeah. Look, the launch in EBC, which is, we’ve been had it now for about a year, has gone really well, in many ways surpass our own expectations. I think, you’re seeing that in sort of market growth of the CDK4/6 class, which, of course, is not really market growth, it’s just new indication that, as of right now, only Verzenio has, that’s where all of the quote market growth of the class is coming from. So, we’re seeing really nice uptake.
I think, frankly, based on the strong data and in some ways the data we’re presenting next week at San Antonio are almost as important as even the initial success of the study because follow up is just so important here. And so — and I’ll come back to that in a second, but I think the data are really important for this high risk population that needs intensification of therapy. And the physician community has reacted to that appropriately. Now, while I say that has — does every physician we interact with know about the monarchE data and have integrated into their practice? No, they haven’t. And so, of course, that’s future opportunity for growth. It’s not great for patients because there are patients today who need this. And so, we got to keep at it and make sure that that physicians remain aware of the data. And over time, we hope to expand the indication as well beyond the Ki-67 high labeled population that we’re currently marketing to. I think the data that we’re presenting next week will hopefully give a glimpse of the potential for that to happen. But of course, that’s subject to FDA conversations.
To your — sorry — I was going to answer your quick source of patients questions.
Umer Raffat
Please.
Jacob Van Naarden
Which is just to say we don’t really know. We hear about some — we hear about physicians prescribing in a strictly Ki-67 high population. We hear about physicians prescribing in other populations or even their own definitions of what high risk even is. I think, we, of course, know what we think high risk is as defined by the study parameters, but there are physicians who’ve been doing this a long time. We sort of feel like they know what a high risk patient looks like and maybe it’s slightly different. Of course, we market to the labeled indication. We market to the Ki-67 high with the clinical pathologic features as defined by monarchy, but we hear about doctors who are sort of using different heuristics, but we have no idea of like breakdowns.
Umer Raffat
Okay. And you don’t have visibility into the number of patients or the percent of patients that are Ki-67 lows, for example?
Jacob Van Naarden
Currently on therapy?
Umer Raffat
On Verzenio, yes.
Jacob Van Naarden
No idea.
Umer Raffat
Got it. Okay. Generally, when some of these patients initiated, do you guys get access to their mutation panel?
Jacob Van Naarden
To their mutation panel, like the …
Umer Raffat
Or in general — yes.
Jacob Van Naarden
No. I mean, you have to bear in mind, we don’t even have a great insight into — in any given Verzenio NBRx, let’s say, is it even adjuvant or metastatic? We have to use business rules with IQVIA data just to try and sort of figure that out by proxy of other things, like you can look at what other therapies they’ve had or when their diagnosis that was, whether or not they’ve had an aromatase inhibitor already or not like things like — so are — the analytics around this are not great.
Umer Raffat
Got it.
Jacob Van Naarden
So, we utilize these business rules to try and figure it out, but we even know internally that they’re not always — they’re not like perfectly accurate.
Umer Raffat
So, I know you mentioned it a couple of times today at San Antonio next week, I actually haven’t looked at the abstract deck, which I will right after this. But I’m assuming it’s basically along the lines of OS, especially in Ki-67 lows. And the background here, obviously being that you had a favorable PFS benefit, fairly consistent between highs versus Ki-67 highs versus lows previously. But for whatever reason, OS look very different between those two populations, but OS maturity was very low. Is that a fair way to characterize?
Jacob Van Naarden
Dave, why don’t you take this and you can sort of talk about the data that’s coming, as well as I think, reframe the sort of historical piece. But it’s worth bearing in my number. The abstract that’s currently online contains really the bulk of the like meaningful data. You’ll see curves and stuff like that at the presentation. But with the data are, for the most part, already out there, if I ergo the abstract. But Dave, why don’t you provide more color?
David Hyman
Yeah. I mean, I think the place to start is that there are two key efficacy metrics, putting aside overall survival, which is critically important. I’m going to get to in a minute, that adjuvant breast cancer studies read out. One is called invasive disease free survival. And then the other one is distant relapse free survival, or DRFS. Both of those are critical endpoints in adjuvant breast cancer studies, really the distinction being that things account for distance relapse free survival are incurable recurrences. So, the reason I’m emphasizing that is that is what — when we speak to physicians, they understand to be very reliable predictors of survival in breast cancer because unfortunately, when you recur with distant metastasis disease, you’re incurable. We know that to be the case. And we know that the majority of those patients will unfortunately ultimately die of their disease.
Overall survival in adjuvant breast cancer is a many, many year concept. Like if you look at the history of adjuvant programs, these are like five, 10-year follow-up type questions. So, I think where the FDA has been not — we’re at about physical significance, we’re talking about trends. The FDA wanted to see a trend. They were very public about this in their — during their review process on the monarchE data initially. We had alpha-controlled subgroup in the Ki-67 where we had already seen a trend. And the reason for that Ki-67 high patients who also have high risk clinical pathologic features represent a sliver of the very high risk patients who recur the fastest and therefore, who we see the most maturity of data, including overall survival. So, I think a little bit more in the framing of your question was that we saw something like really bad lows, it really was…
Umer Raffat
But wasn’t it a 1.3 hazard ration OS, again, very immature, but wasn’t that the case?
David Hyman
The — In the overall survival — sorry — in the ITT population …
Umer Raffat
No. On the lows.
David Hyman
Yeah. We never presented data in the Cohort 1 and Ki-67 low. We never presented a hazard ratio in that subgroup as such. So, I’m not sure exactly what number you’re quoting, but we’ve never reported Cohort 1 Ki-67 low patients, their OS hazard ratio. That’s an undefined subgroup of the study.
Umer Raffat
Got it. No, I think — so again, I wasn’t privy to the detail the FDA discussion. The way I had sort of processed it was PFS, very good. On OS, the Ki-67 highs were around 0.7 or 0.76, I think, was the number, and the ITT, OS was above 1. So the assumption was Ki-67 lows were well above 1, which is presumably why FDA held back the initial approval. And that’s why I was curious, has that OS now trended below 1 in this updated data?
David Hyman
Yeah. So I can answer that directly. In the abstract, you’ll see that the hazard ratio for the ITT population is now less than 1. It’s about 0.92. We’ll show all the different segments. It’s very consistent in the population with worse prognosis, you see a stronger PFS OS trend because there are just more events in that subset. So, I think the issue of kind of rolling out harm associated with our product. I think we’re comfortably beyond. But taking affirmative claims of improvement of overall survival is a long range …
Umer Raffat
Right. So, I guess, said differently, and this maybe ties back to what Jake was saying, too, do you guys feel comfortable you can get Ki-67 low approval, let’s say, if your hazard ratio of 1 in these lows?
Jacob Van Naarden
Well, again, that’s just — we’re not really talking about a Ki-67 low approval. We’re talking about ideally an approval in the ITT population of the study, right? So, a high risk clinical pathologic feature approval, which is what the study enrolled at large. And that’s where the trend on overall survival, I think, is important as evidenced by the data, which are in the abstract, and you’ll see the curves. We’re in those regulatory discussions now. So, I don’t have a lot to say about the sort of ENA. It’s not really up to us. But that is what FDA said they wanted to see both to us privately, as well as even publicly at San Antonio last year from the podium. So, I think we’ve delivered that, and now it’s up to them to decide how they want to handle it.
I do want to just take a moment and say that I think the San Antonio update really does have two components to it that serve slightly different purposes, right? The overall survival analysis, as we’ve been talking about, is largely a regulatory framework, because I don’t think physicians, as David pointed out, expect to see anything on that end point for a very long time. What excites — and don’t get me wrong. The overall survival trend is exciting to us for what it might mean for the regulatory dynamic of the label and what we can market to for patients.
The — but I think the sort of bigger picture story out of the data are actually what we’re observing with longer follow-up on IDFS and DRFS. And the reason I say that is that, in the adjuvant setting, and you guys know this, but in the adjuvant setting, follow-up is critically important, especially extended follow-up. In many ways, more important than any other disease setting because patients finished the therapy and the whole idea is to see whether or not the treatment effect to the extent there is one, persists or even extends beyond the treatment duration itself. And so, now we have a median follow-up of three and a half years. We have four-year landmark data for those two endpoints where we’re seeing the absolute treatment effect actually deepen over time. Well beyond the two-year Verzenio treatment duration. So, it’s just further evidence strengthening how important this treatment intensification regimen is for these high risk patients, who, by the way, on endocrine therapy alone do not have good outcomes.
Umer Raffat
Got it. Jake, I have to ask — and this is more a high level and more a communication question than anything else. And Joe, just predates you in your new role. I feel like when some of the early data on Verzenio came out from — starting from the press release, and there was a lot of excitement. But then there was a lot of investor confusion last fall around the cadence in which Lilly went about publishing the data. The first paper followed up by, I think, a supplement or a follow-up within two weeks later, which had a more important OS data in there and the OS and the Ki-67 lows wasn’t broken out, and then the FDA questions that came up and then the approval in a subset of the population. And a lot of investors ask, I’ve never ever seen Lilly go through this type of iterative publication process where there’s like these things getting posted two weeks later online and we didn’t even know. Usually like one clear publication announced that. And there were questions raised almost on transparency over the process last fall, I remember. So, I’d be curious how you guys thought about that.
Jacob Van Naarden
Yeah. I don’t — I mean, first of all, the first publication by the way, was two years ago.
Umer Raffat
Yeah. Two years ago, that’s right.
Jacob Van Naarden
There was an original paper in JCO. And it’s worth mentioning, we’ve now published every cut we’ve conducted. So, the initial cut was published in JCO, we published the next cut in Annals of Oncology. And in the context of doing that — bear in mind, the drug had been approved, right, and it was approved in a smaller population. We were getting a lot of questions about that. And we knew that the focus was on overall survival, we, and frankly, the investigators on the study never really viewed the overall survival trends as clinically all that important because they’re so immature. But that’s okay. FDA thought they were important, and FDA — that’s their prerogative. And so, we thought it was just responsible to make those data available in a compliant format, and we did so by publishing them in the same journal in which the primary paper was published shortly thereafter. That was really a compliant public dissemination way of answering medical information questions we were getting fairly routinely.
David Hyman
Yeah. Sorry, Jake, go ahead.
Jacob Van Naarden
No, I was going to say, so now here’s the next cut we’ll present it at San Antonio, and don’t be surprised to see another manuscript because that’s the same pattern.
Umer Raffat
Yeah. I think the question is more around the two-week later follow-up on the initial publication that came out.
David Hyman
Umer, it’s just worth mentioning that like it’s pretty atypical to publish immature overall survival data, like that is actually against typical publication or about withholding data. So actually, like your frame is kind of like was the withholding. It’s actually exactly the opposite. We published which was a standard analysis, which is we disclosed all the mature analyses and all the preplanned analyses when there were questions about how the FDA arrived at their label, we felt compelled to answer those and go really above and beyond typical disclosure requirements to publish the immature overall survival, not only hazard ratios, but the curves themselves in a peer reviewed manus form. So, I just — I don’t — and by the way, this is all post-approval. I actually — I think, really, this is an example of us being kind of radical disclosure and being responsive to customer questions versus the opposite.
Umer Raffat
Got it.
Jacob Van Naarden
We didn’t want to be in a position where we were making disclosure of these data sort of behind the scene. So that was the whole reason we did that. It was like Dave said, sort of the opposite of what you were saying actually.
Umer Raffat
Okay. As a base case going forward, is it your base case that you guys will be the only CDK4/6 in this early stage setting? Or is it just very hard to say that given the Pfizer data.
Jacob Van Naarden
Well, we know where Pfizer stands. But I think, obviously, the pending readout is Novartis’ NATALEE study. I’ll just say, we fully expect to see a top line success press release next week from them based on what we know about the structure of their trial, the interim analysis, statistical design. They’ve been very public about a lot of this. So.
Umer Raffat
I guess, Jake, why do you suppose Pfizer couldn’t in high risk Penelope get there, but maybe Novartis can? In my mind, I thought maybe it’s continuous dosing, maybe that’s what drives it. But I couldn’t really rationalize why one is active.
Jacob Van Naarden
Well, we’ve now seen a cluster of data from these three medicines that suggest a difference with [indiscernible] actually, right? I mean, between adjuvant study success on primary endpoint or lack thereof and overall survival differences in first-line metastatic, like Ribo and Abema have different data sets. Obviously, we have our adjuvant win, Ribo hasn’t yet read out. But based on what we’ve seen so far in the design of that study, it would be pretty surprising if we don’t see a successful top line press release from them next week. That’s what we’re expecting. Now, of course, as I mentioned earlier, with follow-up and treatment effect post treatment discontinuation being like the key metric here and their treatment duration being three years, it is going to be a long time before they have a data set that sort of has the contours of what we have.
David Hyman
To put it more discretely, like what physicians care about is this period of fixed duration treatment going to fundamentally reduce the number of patients that recur long-term and really bend these curves. We’re in a fortunate position of being able to answer that question, and we have the update at San Antonio, which as Jake alluded to, that’s really, in my mind, the most important contribution of that presentation. We’ve spoken a lot about OS, but it’s actually the IDFS and DRFS data that actually physicians really care about and how that benefit actually increases over time despite multiple years of discontinuation. I mean, I — Novartis is going to be — it’s going to take them years after a positive readout to be able to speak to that.
Jacob Van Naarden
Longer than that because the treatment duration itself is a year longer.
Umer Raffat
Yeah. Got it. As I look at sort of the most tangible volume increases across Lilly’s portfolio, so I’m talking the entire company. I think it’s Mounjaro followed by Verzenio. And I feel like Lilly is reasonably comfortable and market is reasonably comfortable on the opportunity and where the expectations are at. Jake, would you say the same on where the market expectations are at on Verzenio as well?
Jacob Van Naarden
I think in breast cancer, I think that’s probably right.
Umer Raffat
And that assumes NATALEE.
Jacob Van Naarden
Yeah. I don’t know where Wall Street is to be perfectly honest on NATALEE. I know where we are, I just told you, right? We don’t expect to be the only player in CDK4/6 adjuvant forever. I mean — and again, like be pretty surprised if we end this calendar year without Novartis press release declaring success. If that happens — or I should say, if we do end the year without that press release, that’s a different conversation.
Umer Raffat
But you’re comfortable even with that with your base?
Jacob Van Naarden
We have such a demonstrative data set with a two-year regimen. It’s going to be — it’s going to take them a long time to, I think, have the set of convincing data that we have right now. And even then, they have to convince people to use the drug for three years instead of two. So, yeah, I feel pretty good about our positioning there.
And then the other thing I would just say, I don’t really feel like people have calibrated to the prostate cancer opportunity. And I understand that like there’s like no data in the public domain. So, there’s like very little to sink your teeth into. But we’re running an event driven study with CYCLONE 2 that we expect to readout towards the end of next year. That’s a registrational Phase III study. And I think that the opportunity for Verzenio in prostate cancer is fairly straightforward, but we have to prove it.
Umer Raffat
Yeah. But Jake, so maybe that was actually what I was going to ask you on prostate. There were six arms in that Phase II, which prompted the IDMC review. And I was just confused and I was looking at that like, if I was an IDMC, I don’t know what the stat hierarchy was communicated to.
Jacob Van Naarden
Let’s us help you demystify that. Dave, why don’t you take this?
David Hyman
Yeah. Sure. So, CYCLONE 2 is a pretty innovative clinical trial. It’s actually a seamless Phase I, II and III studies. So, the six arms you’re referring to was actually — most of that was in the dose finding portion of the study, where there was a contemporaneous control arm, but there was multiple doses of abemaciclib explored. Then there was a dose chosen that was carried forward into the Phase II. And then what the IDMC looked at when they recommended that we expand the program to Phase III enrollment was abemaciclib plus abiraterone at the recommended Phase II dose versus abiraterone alone looking at radiographic PFS, rPFS. So, it was actually just a two-arm comparison with the extra arms, we’re really just dose finding experiments.
Jacob Van Naarden
And rear-view mirror ideas at the time of that IDMC look.
David Hyman
So, it’s actually pretty simple. This is just a — it was basically an abiraterone plus …
Umer Raffat
It’s an abiraterone versus Abby. And the Phase II that they looked at the prompt …
David Hyman
That’s it. Yeah.
Jacob Van Naarden
But it’s important to note that, that Phase II portion carries into the Phase III ultimate readout. That’s the beauty of having done it this way. So.
Umer Raffat
These two portion carries from — okay.
Jacob Van Naarden
Does that make sense? So, all the patients and events carry into the ultimate Phase III unblinding that we expect to happen towards the end of next year. And so by virtue — now we don’t know what the hazard ratio was at that Phase II look, but we know where the boundary was. And so, it actually teaches you something about the likelihood of the overall study working because all those patients and events count. Does that make sense?
Umer Raffat
You guys set these boundaries at 0.8 or 0.7, typically?
Jacob Van Naarden
We haven’t said publicly, but a pretty aggressive boundary.
Umer Raffat
Okay. But it’s not the major, minimum boundary. Okay.
Jacob Van Naarden
No. I wouldn’t classify it.
David Hyman
So, I think it’s really the opposite, which is like if you’re going to increase your investment in this, you want it to be a high probability success as dictated by a large anticipated effect side. So, the boundary setting in these types of experiments tend to be aggressive. They’re not based around minimal effect size. They’re based around what you want to see when the product actually reads out to be clinically relevant.
Umer Raffat
Got it. Okay. Makes sense. And then there was one other confusion I had on this, and so thank you for clarifying that. The other confusion I had on this was wasn’t the Phase II and hormone — Phase III is hormone sensitive, I think, and Phase I wasn’t. Can you clarify that part also?
David Hyman
Yeah. Sure. So CYCLONE 2 is our — the study we’ve just been discussing, which has graduated from a Phase II to a Phase III of about 350 patients in the comparison. That is in castrate-resistant prostate cancer.
Umer Raffat
Exactly.
David Hyman
We also launched a second Phase III study called CYCLONE 3, which is in hormone-sensitive prostate cancer.
Umer Raffat
I see. Okay.
David Hyman
We’re investing aggressively and heavily in prostate cancer given kind of where we think we’re positioned.
Umer Raffat
I see. I see. I see. Okay. These are not — okay. For whatever reason I thought, in the end, we’re merging II and III. Okay. Got it. So the derisked part is CRPC, hormone-sensitive we’ll see.
Jacob Van Naarden
Yeah. Although, I think biologically, we view them both as derisked. I mean, in some way. And I say that, of course, with the irony that we haven’t seen the data. So, it’s a weird thing to say derisked, of course, when you haven’t seen the data. But again, I trust and I hope that there were no quirks that led to the IDMC’s judgment call to expand it. And let’s be honest, it is in line with what we’ve now observed with CDK4/6 inhibition in breast cancer, right, adding the mechanism on top of hormonal therapy in a disease setting in which hormonal therapy works. So, it does stand a reason and the study design in hormone-sensitive is almost identical to the study design and caster resistant. It’s abipretnisone plus/minus.
David Hyman
This is really conceptually identical to the breast cancer space. The initial CDK4/6 experiments were in the second line endocrine therapy, patients that have already manifested resistance to initial endocrine therapy, and then the next set of studies was in endocrine therapy naive patients. So, you could just — you could take that exact analog to prostate cancer with patients who experienced progression on androgen deprivation therapy versus those that haven’t.
Umer Raffat
Got it. IP at 29? Or do you see — do you envision extensions with these new indications also?
Jacob Van Naarden
The new indication shouldn’t provide any extensions, no.
Umer Raffat
So, it’s 29.
Jacob Van Naarden
Are you asking me to confirm that?
Umer Raffat
Yeah.
Jacob Van Naarden
Well, there’s the statutory thing, and then we’ll get a [indiscernible] extension by virtue of…
Umer Raffat
Okay. All right. Cool. Okay. Mike, I’m really sorry. Was there anything on Verzenio you wanted to step in on before we move on?
Unidentified Analyst
Yeah. I mean, just kind of a basic question. So, if CYCLONE 2 hits at the end of next year, is it fair to say that you guys will file and not need to wait until CYCLONE 3?
Jacob Van Naarden
CYCLONE 2 is its own standalone registrational Phase III study. And again, at the end of next year, I just want to say, it’s an event driven study, right? So that’s our best guess based on where we — you do these event reforecasting every once in a while, but it could be sooner, it could slip into 2024 or like that, who knows? We have to see how the events roll in over the course of next year.
Umer Raffat
Okay. Excellent. Maybe let’s switch to BTK. I know we’ve talked about this in the past. And there’s regulatory time lines coming. There’s more data coming as well. But maybe for folks that are sort of — that haven’t spent much time on this, could you just remind them the scale of opportunity differences between MCL and CLL and the PDUFA coming up as which one?
Jacob Van Naarden
Yeah. So, the PDUFA date that’s coming up in early 2023 is in relapsed mantle cell lymphoma, particularly in patients who have been pretreated with covalent BTK inhibitor. This is a patient population that’s fairly small, but whose outcomes are unbelievably bad. Survival measuring like six months. And so, we have single agent activity in this population that is clinically meaningful for these patients. You’ve seen some of that. You’ll see updated data with more follow-up coming up at ASH. Some of those data have already been made public in the context of the abstract submissions that are publicly available. I’m sure you know, there’s a history of BTK inhibitors being initially approved in mantle cell lymphoma because of the poor natural history of that disease, and eventually get broadening their labeling to CLL. We anticipate a similar fact pattern happening here. Of course, financially the bigger opportunity is CLL.
The positioning of pirtobrutinib, though is markedly different from the BTK inhibitors that have come before it. In part because it’s literally is a different kind of BTK inhibitor, and in part because that difference in mechanism has resulted in differentiated clinical data that I think tell physicians where to sort of best use the drug. And so the three existing BTK inhibitors are all covalent inhibitors, ibrutinib, acalabrutinib and obazanubrutinib, they have slight differences between them. I think they’re largely battling for treatment-naive CLL patients. That’s the marketing battle those three companies are engaged in.
Pirtobrutinib is a reversible BTK inhibitor, and the — what that has proven to mean clinically is that in patients that have failed one or more of the covalent drugs, pirto can induce new long-lasting responses, and that is different because those drugs don’t do that when used and sequenced after each other. And so in a forward-looking way where BTK inhibitors or the covalent BTK inhibitors are increasingly first line standard-of-care in CLL, certainly in the United States, when those patients relapse on those drugs, and for the most part, they all do eventually, the treatment options are not great. I mean, you basically can reach back for chemo immunotherapy, which doctors and patients don’t really like. You can reach for venetoclax based regimen, which is tricky and comes with a lot of complexity or you can do a clinical trial or you can look to cellular therapy or you can go to a pediatric kinase inhibitor. And so we have — we’re bringing forward a medicine that has a high degree of activity in that patient population. It looks very well tolerated.
And so I think we’re hearing a lot from the physician community that they like the idea of utilizing pirtobrutinib as an extension of BTK therapy prior to having to reach for one of these other classes of therapies. And of course, we’re running a series of randomized trials that give them the flexibility to use the drug in these various settings.
Umer Raffat
Jake, what’s the best data set on BTK reinduction in CLL?
Jacob Van Naarden
What do you mean pirto responses –?
Umer Raffat
No, other than pirto, like a BTK followed by BTK. Has that been done?
Jacob Van Naarden
That’s a great question. So, outside of the idea of intolerance, no one else other than us has asked this question. In fact …
David Hyman
But I think it’s important …
Jacob Van Naarden
It’s a great point. You make it, Dave, yeah.
David Hyman
I think it’s important. There’s two points here. It’s not that they just haven’t gotten around to asking because the opportunity is so small. It’s because it doesn’t work. Just anecdotally, we know that it doesn’t work. So, I just want to emphasize what we’re seeing with pirtobrutinib, which is near universal recapture of response, for example, in patients with CLL, response rates of 70%, formal response rates of 70%-plus in BTK pretreated patients, it’s not just the fact that we have to study it there, but the fact that it is actually unique clinical profile.
I think the other point is like there’s a bigger question, Umer, which is like what is the largest data set of BTK pretreated CLL patients ever generated? And to our knowledge, that’s actually the brewing data set that we’ve generated with pirtobrutinib. And not only have those patients had prior BTK inhibitors, so many of them have had prior BCL2 venetoclax, chemo immunotherapy. I mean, this is a true prevalent population of relapsed/refractory CLL modern era.
Umer Raffat
Got it.
David Hyman
Yeah.
Umer Raffat
So, the prior BTK Phase III, is it fair to assume that would be your first trial coming up in Phase III setting?
David Hyman
Yeah. That’s right.
Umer Raffat
And what would be your expectation — I forget the name of the trial. But what would be your expectation on the comparator arm or the control arm in that trial? Mid-teens, months?
David Hyman
Yeah. I think it gets what I said before is like we have no idea because there’s really no prospective data that’s ever been generated in a randomized fashion post-BTK. But — so, it’s total speculation. But just anecdotally, we hear from physicians actually is that in the post-BTK setting, everything works way less well. And so, we actually think there are fairly abysmal outcomes post-BTK. And actually, it gets to a broader point which is that like I think most people are used to thinking of CLL as kind of like an indolent disease that you die with rather than of. And I think certainly, that’s been the regulatory framework around this disease.
But we’ve heard from, like leaders is in the CLL, that if you had a BTK and especially a BCL2 inhibitor, your outcome is actually sometimes worse than a newly diagnosed acute leukemia. So the patient population that we’re treating in bruin is actually an incredibly advanced and sick population. And there’s actually a lot of these patients out there because these targeted therapies have now been around for a long time, and they’re unfortunately, is growing unmet need for this patient population.
Umer Raffat
Got it. But for modeling purposes, for powering purposes, you guys did teens, mid-teens in that range for that trial?
David Hyman
Yeah. We’re not going to talk about this exact statistical powering of our study, or like the exact.
Umer Raffat
Okay. Jake is doing this. So, I’ll take mid-teens.
David Hyman
I wouldn’t make that assumption. I think he was nodding that we had prediscussed that we weren’t going to answer the question.
Umer Raffat
Got it. Okay. Got it. Okay. All right. And Afib, how — that remains very important from a differentiation perspective. For whatever reason, I can’t seem to recall where you guys were tracking and growing like — I didn’t really see that broken out much. Are you guys in more in the single digit rate? Could that also be a differentiation?
David Hyman
Well, again, I just want to just go back to the first principles here for a second. Like, no doubt atrial fibrillation is an important adverse event in the BTK inhibitor class. And I think the reason that you’ve seen so much focus on at atrial fibrillation as a differentiator is because by and large, these drugs don’t have differentiated efficacy. So, in a world in which you’re basically making a binary prescribing choice and you know you’re not going to sequence these drugs, you have to look at the entirety of what’s differentiating about them, and atrial fibrillation has been VAE that appears to be differentiated between ibrutinib and the other covalent BTK inhibitors. We think we have a great Afib rate. You’ll see that in — at ASH, but that is not the core value proposition of the drug. The core value proposition of the drug is to reinitiate BTK inhibition all the efficacy and convenience therein with no regrets on safety in patients that experienced the covalent BTK inhibitors.
Jacob Van Naarden
Yeah. I’ll just say more broadly. I think I think what we’re seeing from pirtobrutinib is a safety experience that is on par with the best covalent inhibitor, take or pick of [indiscernible] in that respect, with an efficacy proposition that is completely different.
Umer Raffat
Got it. Okay. Got it. Excellent.
David Hyman
No regret safety, but different efficacy.
Umer Raffat
Got it.
Jacob Van Naarden
And again, and while that may be tantalizing to then think about the drug and forward integrate and think, oh, well, then pirto is going to compete in first line, and that may be true down the road. That’s not where the drug most fits in today. And we think the drug has a really meaningful opportunity for patients and for the business in, essentially second line post BTK CLL, which historically hasn’t been viewed as a big opportunity, but that’s largely because the duration of therapy has been bad because the drugs haven’t been good. And so if first line duration has historically been four to five years, let’s call it, and we can deliver close to two years in second line with like no real in-class competition that’s a pretty good opportunity for us.
Umer Raffat
Got it. Jake, maybe just very briefly, I want to switch to Mounjaro. KRAS, your thoughts on that class. I feel like a lot of expectations have come in. It’s not even clear what the PD-1 combo looks like. But PI3K, I feel like that might be something more interesting based on some of the early data, but I’d be curious how you prioritize them in your head.
Jacob Van Naarden
Dave, do you want to just take both quickly?
David Hyman
Yeah. Well, I guess, to the prioritization, like — we’re in a fortunate position, we don’t have to prioritize them. We can do both with equal enthusiasm if they deserve it. I think the KRAS is very clear. For these drugs to be meaningful, they need to be safely combined with PD-1 inhibitors in first line. There’s no drug that in clinical development now that has demonstrated reaching that bar. We, ourselves, are working on reaching a bar internally now. When we feel we’ve reached it, we’ll have more to say publicly. But I think that is far in this class.
In terms of pi3 kinase inhibitors, these are the pan inhibitor opalisib and drugs like it or narrow therapeutic index drugs. They’re very difficult to tolerate clinically, and therefore, not that meaningful. What we’re trying to do with our Loxo 783 program is to deliver a complete coverage of the [indiscernible] with no inhibition of the wild type. So, the bar set for ourselves is total target average no hyperglycemia. It’s really that simple. And then the safety should follow therein, and then that opens up opportunities for the drug. We’re very early days in our Phase I clinical trial there. So that’s the bar we set for ourselves in the discovery arena for that drug, and that’s what we’re looking at clinically now. So more to come on that when we know you’ll know.
Umer Raffat
Excellent. Joe, there’s — I know we had to say that towards the end because the focus of this discussion was supposed to be oncology specifically. So, for those of you listening and if you thought there was too many questions on BTK or Verzenio, it was for a reason. But I did want to ask you, on Mounjaro, a couple of things. Number one, can you speak to what you guys are saying on the cadence of a bridge program coming down, but also the gross net changes because it was as high as closer to the 90% mark on the most recent report.
Joe Fletcher
Yeah. Thanks Umer. So, on the gross-to-net cadence and how that will kind of evolve as we go into this year and next year, it’s understandably a topic of high interest, both I think externally and internally. And while I won’t share any kind of specific details in terms of our forecasted gross to net rate from Mounjaro and how that’s going to evolve specifically, we do think it’s going to improve in 2023. Now it’s a unique situation because there’s multiple dynamics going on, including the savings program that you alluded to. So, on the one hand, we expect access to improve and then a typical launch as access improves. You actually see gross to net rebates go up because you start with the commercial insurers and then you move to kind of more highly rebated segments.
With the countervailing force that we’re going to have is kind of a decrease in the savings program, and that’s going to be driven both by the fact that coverage will expand. And so patients that might be on the savings program now will move to having Mounjaro covered. And then also, the savings programs themselves are finite. So they have an end date. And for non-covered patients that end data is mid-2023, so June 30. And for covered patients, it’s the end of 2023. And so you — many way on top of this, of course, the negotiations themselves with the payers, we don’t get into specifics around, of course, what we’re paying in terms of rebates on a product-by-product basis. But there’s very multi-factorial. And I don’t think there’s going to be a single step change, but I do think you’re going to see it improving over time as we go through 2023.
Umer Raffat
What’s that ratio in non-covered versus covered? Is it 50-50?
Joe Fletcher
The non-covered versus covered, I don’t know if we’ve specified. I actually can’t recall off on top of my head.
Umer Raffat
And at the outset of the launch, Joe, is it fair to assume that if Trulicity was doing 250,000 TRx a week, presumably the pen making capacity was perhaps 2x that or in that range?
Joe Fletcher
Well, we don’t specify what our capacity is. And to date, our manufacturing operation is performed, I would say, superbly. And I think we may have mentioned before that the actual output in incretin devices so far this year has exceeded our internal plan. But we know that we need to increase that capacity and we’re doing it in multiple ways. And so one of the ways, of course, is bringing online the RTP site in North Carolina next year. But we’re also doing it within the confines of our existing kind of infrastructure and making that more efficient and producing more pens from that. And then we’re also leveraging more external manufacturing partners to help with that. But it’s going to be a substantial expansion by the end of next year. We stated that that’s going to be about double versus where we are now. And then we also have the additional site in Concord, which we just broke ground this year. And so, we’ll probably see a substantial expansion around the 2025 time period.
Umer Raffat
Joe, I thought it was just Indianapolis? Pens in Indianapolis plus North Carolina when it starts to come on at some point next year. I wasn’t aware there’s an external partner for pens also. Is that the case?
Joe Fletcher
We leverage some external partners as well. We don’t get into the specifics. But yes, as part of the broader supply chain, there are external parties …
Umer Raffat
Broader supply — pens specifically.
Joe Fletcher
Yeah. We don’t specify in terms of which part specifically, but I’m speaking a bit more generally in terms of broader capacity increases. The real capacity increase though is going to be internal because most of it is internal.
Umer Raffat
Got it. But there’s no — like if the TRx continues to, let’s say, climb up north of 200,000 for Mounjaro, there’s no threshold or a ceiling coming up in the next few weeks, whereby it can’t go above that for pen manufacturing reasons?
Joe Fletcher
Well, again, we don’t specify that. There’s some natural threshold beyond which we couldn’t meet capacity in the near-term, but we’re meeting capacity right now. That said, we’ve stated before, it’s not like we’re generating pens and letting them and having them pile up in our warehouse, they’re moving very quickly into the market because that’s where the demand trends have been.
Umer Raffat
Got it. Mike, anything on Mounjaro you want to touch up on? You’re muted.
Unidentified Analyst
Real quick, just how should we think about the cannibalization with Trulicity? I think, back on your 3Q call, you said less than 10% of Trulicity switches are going to Mounjaro. But as we think in couple of years beyond now, how will possible erosion of Trulicity affect gross margin since Trulicity is arguably a more expensive product than Mounjaro. So, any thoughts there.
Joe Fletcher
Yeah. I’m not sure on the last point about Trulicity being more expensive. I think that’s probably more of a near-term phenomenon. But yeah, there hasn’t been a lot of switching from Trulicity on to Mounjaro. You said it’s about 10% according to our data. And frankly, I’d say Trulicity has probably performed a bit better than we would have expected. Unfortunately, diabetes is a progressive disease. And so at some point, patients do tend to progress. Our strategy right now has not been an active switch strategy in the market in terms of our promotion of Mounjaro. But I think as Mounjaro continues its uptake, and especially as hopefully we have further indications down the road, we’ll see. It’s hard to comment specifically on whether we’ll see that cannibalization increase. But I do think we’ll see Trulicity peaking at some point and Mounjaro overrunning it.
Umer Raffat
And Joe, have you guys said anything on — so presumably, because you ran additional — you waited for additional data to generate for the — on the obesity side, there might be — and there’s a new — there might be a new brand name coming on the obesity side that’s sort of the market expectation now? But have you guys said anything on whether you intend to have two completely different price points like Novo did?
Joe Fletcher
No and it’s not — yeah, I’m smiling not because we’re trying to give anything away at all just because the question has come up a lot, and we’ve been fairly tight lipped on this that. We’re not going to speak to pricing strategy until the time comes for that approval. And we’re keeping our options open in terms of brands one versus two.
Umer Raffat
Okay. Excellent.
Unidentified Analyst
And Joe, I’m sorry, I was going to say, just to clarify, just from a pure COGS perspective, I said Trulicity was more expensive because it’s got that IgG background, and therefore, a biologic versus [indiscernible]. It’s only a peptide and non-biologics. From a pure COGS perspective, is Trulicity more expensive in that sense?
Joe Fletcher
Yeah. I misunderstood. I thought you were talking about price.
Unidentified Analyst
I’m sorry about that.
Joe Fletcher
And yeah, in terms of the individual COGS, they are very different manufacturing processes, but we don’t specify or speak to product specific COGS. Sorry, Mike.
Unidentified Analyst
Got it. No problem.
End of Q&A
Umer Raffat
Outstanding. Well, thank you guys for joining us. That was really helpful. Really appreciate you making time.
Jacob Van Naarden
Thanks for having us.
David Hyman
Thanks.
Umer Raffat
Thank you, guys. Appreciate all the color.
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