On the back of a global boom in anti-obesity drugs and its blockbuster formulations such as Mounjaro, Eli Lilly has seen its market capitalisation surge five times in six years, and is now the only pharma giant with more than $1 trillion in market cap.
Chairman and CEO David A Ricks told Vikas Dandekar and Sruthijith KK in an interview that the company plans to remain the market leader in the anti-obesity drugs market with the help of innovation. He said the biotech industry in India holds tremendous promise and the company is always exploring possibilities here, in terms of manufacturing and acquisitions.
Also Read: From Jab to Pills: Novo Nordisk, Eli Lilly set to take obesity drug battle to India
Edited excerpts:
After the expiry of the semaglutide patents, while Mounjaro has experienced a lot of value growth, Lilly's market share has eroded in GLP-1. Should we conclude that the Indian market will prioritise cost over efficacy?
No, I think. Because India is not the only market with generics, but in every case, what we've seen is that generics bring in new patients because of the price points. I think we've seen it in India, true in Brazil, and we have the situation in Canada. We see, month by month, growth for Mounjaro continues.
Last year, when you spoke to ET, you spoke about 10 weight-loss drugs being in the pipeline. There's a lot of interest in retatrutide and bimagrumab. Where do they stand in terms of trials, latest results, whether they're likely to arrive in markets?It's a good week to talk about it. We just had a big day for retatrutide (in terms of trial results). We're setting a new benchmark for both weight-loss and other important cardiovascular markers, in both people with diabetes and people without diabetes, but with elevated BMI. We also announced some exciting data today (Thursday) for Foundayo (Eli Lilly's daily oral weight-loss pill). This was the longest study done to date, really looking at cardiovascular safety in people with diabetes. The results are strong.
We had a 53% reduction in cardiovascular mortality. So, 53% less deaths than the standard-of-care for diabetes, which was measured against Lantus, or the commonly used insulin. So, that's encouraging. We announced a test for a new triple-acting medicine we call eloralintide + tirzepatide combination. This combines eloralintide, which is our phase 3 amylin agonist, with tirzepatide, the ingredient in Mounjaro-kind of a triple-acting medicine with two peptides in it but will be co-formulated in one injection. There are several other projects, but the 10 number is a good number.
It suddenly seems like we have entered an era of miracle drugs. Whether it is Alzheimer's drugs that are able to clear amyloid plaques from brain cells, the kind of longevity impact that some of these drugs are having, etc. From your vantage as a pharma veteran, did a steady curve of progress get us here, or has there been an acceleration?
I think there has been an acceleration in innovation in our industry. I think maybe all great inventions appear to be a miracle when they first unfold. For many people, Mounjaro and drugs like this are feeling that way because they've suffered from a condition all their life. The reality is our genetic background pre-programmes us to conserve calories. Our ancestors grew up in starvation.
And so there aren't many mechanisms to cause us to feel full. One of them is GLP-1. Boosting that signal has made a profound difference for many, many people. The tools we're using to discover new breakthroughs have changed in the last 15 years, I think. And we have many more tools, and the way we can wield those instruments to apply those tools has gotten much more precise.
Your company has gone from market cap of under $200 billion to upwards of a trillion dollars in a matter of six years. How does it complicate matters for you in terms of internal dynamics, compensation, incentive structures? How difficult is it to run a company that is undergoing a massive re-rating in the public markets?
Probably less difficult than a company that had a massive re-rating in the other direction. I think there are some challenges, but mostly positive. I mean, the recognition of the company has risen with that. Many, many retail investors have bought our stock because they like the product. I think the role we play, and this is two-sided, in helping shape public policy about healthcare has changed. We're considered the leader in the industry, and we are called upon to advise governments, sometimes to complain about governments, and that gets picked up by the media more.
At the same time, our industry can be a key driver of intellectual property, growth, high-value jobs, reindustrialisation, things that are priorities to the government as well. Often we sit on both sides of a complicated equation, and Lilly's often asked to participate in that. You know, inside the company, of course, we do have stock-based compensation schemes, and I think Lilly employees have done extremely well during this period. This will allow some of our people to retire early, and we are okay with that if that's what they want, but equally there are now more and more people who want to work with us.
There is a lot of talk on AI's ability to revolutionise drug discovery, personalise medicine through genomics and so on. Behind the scenes, have you started seeing the results, or is most of AI's promise still ahead of us?
Most of the promise is ahead of us. I think what we've been able to do, and Lilly's really a leader here-I think we've leaned into AI more than most-is to build tools that can help our scientists predict experiment results.
But this is not like, I think the public thinks, okay, we'll fire up some AI, and we'll enter a question like, "Cure pancreatic cancer." And it will think for a while, and then come back with a molecule that will do this. This is far from the reality today. But what we can do is to say, okay, here's a type of new drug, an antibody, let's say. And we've made a thousand of them for a single target. Which one, given its structure, is likely to cause problems with immune reaction, or it'll be too short-acting?
And, because we've done a lot of experiments to look at different structures and predict this in actual laboratory experiments, the machines can look at all that data and apply the kind of rules of that system and help us stop working on drugs that won't make it. So that creates efficiency and speed. I think what is happening now with technology is it's really enhancing the speed and efficiency of using the normal laboratory tools we use. It isn't giving us new insights, necessarily, to create breakthroughs, but helping the process of discovery go more smoothly and more cheaply.
Tell us about how you look at India as a market, as a potential source for acquisitions, as a potential manufacturing destination, and in other ways?
We have a complex and large presence here. Let's start with the marketplace. As the wealth of the country grows, spending on healthcare rises, and that means our products will do well. Mounjaro has been in the news here, and a big success. We're investing to reach more patients, to partner with physicians and hospitals, to improve care, in particular, in cardiometabolic health. Because of the pipeline we discussed already, we're in a unique position to change the trajectory of disease in India in that space.
We do have manufacturing partnerships, but it's not in the way you think. It's not just a purchase order and a shipment. These are highly embedded processes where we teach and work closely, but sometimes even capitalising companies to supply key inputs for us, or even finished goods. We treat them like part of our core network. Setting up our own operations is a possibility. We have a large research apparatus. We have a group in Bengaluru that focuses on working with the global research apparatus, everything from regulatory submissions around the world, clinical trial data sets, and helping us calculate those, creating publications, and supporting the global scientific undertaking of the company.
You've done a lot of acquisitions recently. Are Indian biotech companies on your radar from that perspective?
I think the innovative biotech ecosystem in India holds tremendous promise.
It's relatively underdeveloped compared to China, which is booming. The US remains great; Europe's in decline. But India has a good opportunity. It has great science, great talent base, a lot of knowhow and a manufacturing base for laboratory sciences. But the funding environment here isn't great.
The venture environment and also the ecosystem, which China really mastered-people do clinical trials, the ecosystem for animal experiments, laboratories… It's not as well developed here.
Your company is growing in volume, but there are concerns on price realisation. As US prices converge with the rest of the world, what is the future of Lilly going to look like?
In our sector, pricing is a concern, in part because the public often bears part of that, either through taxation or direct expense, and it's always hard to sell a product. If it's highly priced, people don't like that. But, research is expensive, and we sell, fund research with our own capital base, and there wouldn't be any Eli Lilly or future drugs if we don't have prices that are above our cost. So that's a reality, and we have to manage that tension.
There have been historic differences between the US and every other developed country, and the Trump administration wants to address that.
We've signed an arrangement to do so. I think we're happier if price points are more similar across countries, kind of by income level. That's our concept: higher-income countries should pay a little more for that research, and for the same product, lower-income countries can pay a little less. This can help expand access in lower-income countries, which is a good thing. We want to get our drugs to as many patients as possible, and at the same time fund the research apparatus.
On my list of concerns, this is not super high. To be honest, we're managing it just fine, and one reality with obesity medications is the lower the prices, the more people we tend to reach.
You just announced the Lilly Change the Course Commitment.
This is an important new pledge from the company. Four out of seven people with obesity live in low- and middle-income countries. And India is one of those countries. Yet, for every five people on an incretin today, four of them live in wealthy countries. So the penetration, use rate, of these breakthrough medicines is really underdeveloped in the poorest countries of the world. And we're pledging to equalise those.
