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I'm going all right besties I think that was another epic discussion people love the
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interviews I could hear him talk for hours absolutely we crush your questions admit it we are giving people ground
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truth data to underwrite your own opinion what you guys think that was fun pal Dave Ricks welcome to the Allin
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interview great to be here yeah we had dinner together a couple of months ago and I've been in touch and obviously I'm
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really excited to talk to you uh today about the work you're doing at Eli ly so just for the audience Dave is the CEO of
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Eli ly which is the world's most valuable pharmaceutical company and the leader in the glp1 uh drug Market which
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some analysts have said could grow to as much as 150 billion in annual revenue over the next 10 years really kind of an
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extraordinary story and Dave you became CEO of Lily in January 2017 when Lily had a market cap of just $70 billion
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following a year of 20 billion in revenue and three and a half in operating income and today Lily's Market
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Cap is an astounding $878 billion and the company's projected to do 46 billion in revenue and 15 billion in operating
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income this year and few companies in history I'd say have seen such an extraordinary rise in Revenue profit
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market value at this scale maybe Nvidia recently which I'd say is the only company that kind of beat your
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performance in recent years but I don't know of any that are not founder Le maybe SAA running Microsoft
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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 Lily
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The Chronic health problem of obesity and diabetes gp1s and what's happening in that market what those uh products do
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and The Business of Eli Lily so thanks so much for being here da yeah excited to be here I'm a big fan of the Pod so
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I'm I'm excited to be on that's great um sorry you don't get uh harassed by the other three today it's just me uh so
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this is a an extended science corner for all the Nerds at home that wanted it with a a deep dive on on an amazing
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business so we'll start off by talking about the the The Chronic Health epidemic of obesity according to this
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CDC 74% of Americans are now overweight or clinically obese your statistics might be different this condition is
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driving what is arguably the largest Health epidemic in human history obesity and all the associated diseases like
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type 2 diabetes have so many negative Health implications for our populations and this is dramatically
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over the past 50 years is becoming a global problem so let me pull up a couple of images we can use as we have
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this conversation here Dave and will dialogue about this but obviously what humans eat what we consume has changed
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dramatically particularly here in the US we've seen the American diet a shift to
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a much more kind of caloric lower nutrient density diet over the last 50 years the average daily calorie consumed
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by Americans since 1961 has driven up from 2800 to about 3600 and you know that sounds like a small number but when
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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
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that shows how the availability of calories and the consumption of calories in a population significantly correlates
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with the rate of obesity in that particular country and the United States obviously has the
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largest caloric supply of any developed nation and also has the highest percentage of people that are overweight
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or obese and I would argue that many of the improvements that we've seen in agricultural technology and many of the
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systems um in in food that have made calories cheaper have resulted in this kind of surplus problem that has led to
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an obesity epidemic and just looking at the US rates over the last 20 25 years you know we see today as I mentioned
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before 75% of people overweight or obese and in this particular slide we're showing 35% of obese and
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severe obese to today 51% of Americans are either obese or severely obese really
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extraordinary and this is not just in the US as the calorie supplies increased around the world we see obesity rates
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climbing in every developed Nation from Brazil to Mexico and now even recently in India and so this is becoming a
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global problem and I think you know Dave maybe you could talk a little bit about
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the scale of the problem I think you've highlighted a lot of this in your investor presentations and and this is
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one of your slides that you've used so maybe you can kind of share how you guys forecast the Obesity epidemic and and
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the effect it's having worldwide yeah that's a great backgrounder to get us kicked off you
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know one thing just pointing out on the data you showed some people notice a difference in the caloric intake numbers
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versus the um kind of the macronutrient micronutrient story you go back yeah so like the the severe obesity particular
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kicking up here on the next slide there um yeah kicking up almost doubling right
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in the last 20 years whereas caloric intake certainly isn't moving at that same rate so you know I think as we
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think about the problem of course um excess calories versus expenditure is a key part but so is probably the ultr
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processed food story which you didn't have data on there but is you know I think in the US we're now eating
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two-thirds of our calories in our country are ultr processed yeah and that compares to like 35% in Europe so that's
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got to be part of this equation as well but no matter the cause like if you go to that first slide I had we now see
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about a billion people on the planet with clinical obesity or overweight and as you're pointing out probably that's
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um going to grow a lot more in the developed or developing world than the developed world there's a function of
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wealth accumulation and um Surplus uh food abundance basically that will drive this
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India I think is 11% of the population's obese but projected to go as much as 30%
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in the next 20 years so on that population base that alone would would add almost half a billion people um to
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this this chart yeah so your projection is obesity worldwide will affect about a
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billion people by 2030 is that right yeah that's right yeah yeah and the problem with obesity is that it has an
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effect on many of uh the the systems of the human body maybe you can highlight kind of how obesity uh you know causes
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many of The Chronic health conditions and ailments that simply weren't around maybe hundred years ago but are
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certainly becoming far more frequent today yeah absolutely I mean the first order effect of course is on your
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metabolic processes in here you like like cardiovascular disease how we process lipids and other energy sources
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that leads to cardiovascular disease and its um other Associated risk like stroke
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um I mean there's a pretty new disease here called under the liver disease which is what's used to be called Nash
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is now confusingly called Mash but it's the same disease it's fatty liver disease and 30 years ago like clinically
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you couldn't really find this in the adult population and now it's one of the most common conditions obese people
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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
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important we have redundancy and except the liver so when your liver goes south it's a bad news story for human health
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transplant is is the only escape from that um we've got some used to be a that used to be a disease limited to severe
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alcoholism right exactly and and this the Nash word is actually starts with non-alcoholic yeah fatty liver so but
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now there's much more um obesity-driven fatty liver than any other cause as pointing out but it results in
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transplant and terrible uh outcomes long term so so much of the the health problems The Chronic health issues that
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we deal with as a modern society are probably rooted many of them are rooted in the Obesity epidemic yeah so 230
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diseases have have been connected and you have these these ones that are more like directly because of the caloric
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imbalance and fat accumulation and then you have these ones in blue are sort of like derivative like obstructive sleep
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apnea that's like 14 million Americans have cpat machines and why because there's so much um fat accumulation
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around your respiratory system you you wake yourself up at night to breathe and gird of course that's you
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know reflux Etc so these are like more the second order effect and then interestingly you've got the mood
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anxiety pieces here there's an interesting study done by epic you know they're the big health record company
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yeah which is retrospective and not tightly controlled but it showed people on gop1 drugs incron had remarkably
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lower rates of new clinical depression diagnosis which is an interesting thing as well so a lot of lot of
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impact like type two diabetes itself which is an inability for the body to respond with an appropriate amount of
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insulin when there's glucose in the blood itself has a number of follow-on effects obviously diabetes as as many
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know um has become own a chronic Health epidemic it can cause nephropathy so damage to the
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kidneys which has a significant effect on our ability to regulate protein in our body diabetic retinopathy
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hemorrhaging in the eyes uh that ultimately can lead to to blindness so having too much blood sugar and not
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having an ability to produce enough insulin to bring down the blood sugar level can can lead to all these chronic
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health effects which have obious yeah those are the microvascular ones there's the I mean the the risk of
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heart attack if you have type two diabetes is four times people who don't have diabetes yeah so you also have the
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macrovascular events stroke heart attack okay so the treatment for diabetes used
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to be insulin right and insulin and if I remember the history of Eli Lily correctly Eli Lily was the first
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American company uh to produce insulin which was done with initially processing I believe pigs or cows uh to
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to to to get the insulin both yeah yeah it's an interesting story so we were the
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first company period um there's a Danish company Novo who's our competitor in this space we can come back to that
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because it's not a coincidence that I remember the history of of the relationship it's a really
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interesting history between the two companies but kind of intertwined yeah but we we had a like our head of science
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uh met with Toronto this researchers up there who discovered the mo the mechanism of insulin but they couldn't
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make get into a medicine we produced the process that made it available at scale
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which as you're pointing out was derived from like a lot of the you know the history of our industry was like taking
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things in nature and refining them into medicine and that was the case with insulin we took something in nature the
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pancreases of slaughtered meat animals really cows and pigs and essentially refined out of that the protein which is
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insulin and that was the case until 1981 where we had partnered with Genentech to
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do another first which is create the first biotechnology product on planet Earth which was human insulin made in a
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in a bacterial cell yeah so in in that case that was the first Rec combinant biologic product right it was pudding
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the genetic the genetic code from human DNA that codes for human insulin into an
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ecoli bacteria then you put that ecoli bacteria in a giant vat and just like we ferment wine we put sugar in and it
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started to make insulin and that's how we make insulin around the world today is through that recent process right
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yeah that's right still and that was the first DNA based product made and it solved a problem because we were
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actually we had we had per the Obesity discussion Rising type two diabetes rates it used to be type 1 diabetes
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which is the childhood form that's really autoimmune disease um was most of the diabetes that needed insulin but as
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this uh you know abundancy grew and people got heavier we saw earlier and earlier onset type 2 diabetes which is
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the adult form right and we we worried we're going to run out of animals to slaughtered animal pancreases to refine
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so it wasn't just a cool science thing it was actually solving a pretty big public health problem which was the risk
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of scarcity of insulin yeah yeah and so look I mean biotech to the to the rescue
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and we'll talk more about biologic drugs and all the other things that that have
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been addressed with recombinant systems meaning we put DNA in microbes and get those microbes to make a protein for us
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and obviously there's been a lot of advancements in that space it's probably worth you know hundreds of billions of
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dollars today but um let's let's fast forward to what happened after insulin it sounds like in the history of
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of research into diabetes and understanding some of these underlying mechanisms uh there was this discovery
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of glp1 at one point and let me try and explain it and you tell me if I get it right but okay
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glp1 it sounds like is a protein that is expressed by L cells these are little cells in the small intestine of a human
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so when we eat food those cells recognize that there's food in the intestines and they pump out a protein
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called gp1 and that protein goes into the bloodstream and flows all over our body and turns on and off different
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parts of different cells telling them hey there's food in the in the intestines so tells your brain don't be
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hungry but it also has other effects like secreting insulin getting cells to make insulin and as a result glp1 is
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what's called a hormone it's a regulator of all these different cells to do things when our intestines are full of
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food is that an accurate way of kind of describing what a glp what the glp1 protein is yeah that was perfect I would
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just step back one step though and say there's a broad there's like a super family of these things and this going to
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come up later in the when we talk about the drugs which we call incron and this was derived from a even earlier on your
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chart here in the 70s they observed that if you give someone nutrients intervenous meaning it bypasses the GI
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system that you have a higher spike in glucose than if you give it via the GI track so that's a curiosity right which
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is why is that the GI track was doing something and they call that the inchron effect and later we found out that
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there's a whole family a super family really of these hormones signaling tools that are telling your body when you're
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fed to do different things that makes a lot of sense because to survive as humans feeding is like one of the top
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three essential processes next to breathing and other things and so there's a lot of redundancy but also uh
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different hormones for different chores and gop1 was the first one that was made
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into a drug and so in 1987 it was discovered that gp1 actually stimulates insulin production insulin
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secretion and and then it was isolated and um ultimately I mean maybe you can tell us
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the history I think there was a story about Nova Nordisk and noo having some um some role and some of the early work
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with glp1 versus Lily and and tell us a little bit about the history and like what took so long for gp1s to go from
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hey it stimulates insulin secretion in 1987 to kind of getting these first drugs on market for gp1 yeah it's a
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great question both companies played around with this me ISM right after that paper was published in '87 and as I said
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back to the insulin story it's not really an accident because we were two companies very focused on making
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peptides and and diabetes right so this was a good thing to chase but gop1 in its native form is not peptides are a
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small molecule small protein right just just smaller protein yeah less amino acids in a chain um which is what we
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call gop1 really it's smaller than a protein it's a hormone but but also called a peptide but we when you give it
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in its native form as a medicine it has a halflife of like minutes so you'd have
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to have continuous infusion in your life to use gp1s in the human form as it was
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designed and of course we have plenty we can make it ourselves um inside our bodies but if you give it exogenously or
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from outside that you need a drug that lasts longer than a few minutes so you know both companies set to work on that
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problem it was actually Lily that launched the first gp1 drug called exenatide which was this strange Story
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another sidebar of a company discovered that in the saliva of a hila monster so this is the
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the desert yeah in their saliva is a is basically a mimic of the go human gop1 it's close but not identical and the
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amino acid change that it had made for its purposes in saliva actually uh prolonged its action in man to be more
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like six or seven hours so this made for twice a day injection and it was it allowed us to lower blood sugar in
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people with diabetes and it was super successful it also we noticed as happens in drug development that you lost a
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little bit of weight with this and we know in type two diabetes that was good in the background Nova was working on
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their own once a day version and they engineered it versus found it in nature then Lily uh made a once a week form
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called Doula glutide which is now marketed as trulicity and then Nova made a weekly one which is called OIC which
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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
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from daily to weekly we were able to dose higher and this is one of these situations where the glucose effect
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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
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side effects of these drugs which are nausea and diarrhea they're unpleasant are kind of a what we call a peak to
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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
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we really reduce those symptoms so it was really novo's Insight that we could push up the dose of semaglutide that
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allowed the Obesity kind of threshold to be pushed and then of course we followed
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that with our latest one tepati which is known as mararo that's actually two hormones together yeah well so so let me
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just um take a step back I just for folks that are listening to really understand this so all proteins are made
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from a chain like a beaded necklace of amino acids being stuck together and when they're put together that chain
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kind of collapses into a a molecule structure a protein structure and that protein has some function because it's
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got shapes and curves on it and it can do things in the body it can bind to things and they can do activities with
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different cells but you don't necessarily need to use that exact chain of amino acids to get part of that
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protein to bind somewhere else in the body you can use things that look like that protein and that's really the
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effort in all of these what are called glp1 agonists which are different than glp1 itself they're different molecules
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they're different proteins but they combined and have the same sort of activity so so there's this discovery
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process this research process as I understand it to to develop and identify new proteins that can have a similar or
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perhaps even a more beneficial effect than gp1s in the body is that is that kindir yeah that's right and I think you
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know this story itself is going from like finding the native human hormone and then we found this accidentally this
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one in nature that was what we call an analog to it so it had a similar function but with a different kinetics
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different absorption rate and then Novo actually uh engineered that in L glutide
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so they designed that in and ever since then we've been Engineering in different
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changes in those amino acids those beads to drive different types of function the latest one being this sort of dual
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acting one we have now which like both ends think of a chain with both ends with active Warhead versus just one in
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right so over time in 1986 we kind of realized hey gp1s stimulate insulin secretion so this is super interesting
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and all this research begins but since then there have been a lot of studies on how gp1s maybe are regulating
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and affecting other organs in the human body and you know I've got this chart up
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here that shows the effect of gp1 um and gp1 analoges on the brain on the heart on the pancreas on the liver
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there are all these kind of interesting follow-on effects the human body is so difficult to kind of map everything but
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there's some intricate relationship and cross-regulatory process that happens between all of these different systems
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of the human body so maybe you can talk about the evolution in our understanding
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on how gp1s and gp1 analoges maybe are affecting other organs in the body not just turning off hunger and not just
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making more insulin yeah so of course it's doing those two things but as you're pointing
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out you know the hormone is basically a messenger right so as as you said earlier it's telling your body you're
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fed and with that um because nutrient absorption is like a survival Instinct and um we're pre-selected for that we're
00:21:52
good at then processing that signal and acting differently so that includes um you see like heart rate going up and um
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lipid levels dropping uh in your cardiovascular system and that's because you're responding to that food the new
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nutrients entered into into into your body liver is a key part of metabolism so there's tons of cross signaling into
00:22:12
the into the liver um and the pancreas is the source of insulin amongst other metabolic regulatory hormones so so what
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we don't even fully understand yet though David which is interesting is is that there are primary effects of gop1
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certainly we can reproduce like in a in a a test tube or a cell system but then there's a whole Myriad of other probably
00:22:33
secondary effects because there might be intermediate signals we don't even know
00:22:37
about yet in this whole metabolic process so some of the ones listed here I don't think have been proven as Direct
00:22:43
effects many of the brain ones for instance but uh clearly happen when you overstimulate gop1 or give it
00:22:50
exogenously as a medicine and uh mostly in our nutrient Rich environment we covered earlier these tend to be good
00:22:58
things because you're tamping down hunger and you're improving absorption of the
00:23:03
nutrients you already have yeah so now the topic to jure is hey we could use gp1s not just for the indication of
00:23:10
obesity and diabetes but perhaps for other health indications and maybe going after other issues that people are
00:23:19
having problems with yeah I think I think there two big stories one is that the other is that it turns out gop1
00:23:25
isn't the only hormone that matters and you're going to I mean we already have tepati which is a whole another hormone
00:23:31
called Gip glucagon insulinotropic peptide which is a complicated name but has more of a bias toward fat release
00:23:39
and basically allowing your fat cells to burn energy earlier in the starvation cycle so as you're hungry kind of
00:23:47
unleashing fat energy versus just squeezing it out of our muscles um which is what your body does naturally as kind
00:23:55
of a survival Instinct and then we've combined that into tepati next next up is there's amaline based drugs that's
00:24:00
another gut hormone uh and glucagon another one so we we've got triple acting and all kinds of different ones
00:24:08
coming and that's a big part of the Innovation story I think we'll figure out through time which ones are best for
00:24:14
what maintenance is a big issue in this class inducing more rapid weight loss in
00:24:19
people who are super obese you know if you have a BMI 50 and you take tepati our drug and you lose on average 23% of
00:24:26
your body weight you're still obese right so we we need more potency for those people but there's many people
00:24:32
have a BMI of 31 and heart risk they can get their BMI to normal on tpde or semaglutide but how do they keep it
00:24:39
there more easily versus a weekly injection so that's another problem being solved the second thing which
00:24:45
you're touching on is all the indications to go after and as I mentioned earlier there's more than 200
00:24:51
diseases that are tagged to obesity do they all cause are they all caused by obesity we don't know that yet they're
00:24:59
correlated but so far um in our studies this category medicine's undefeated we've never had an unsuccessful study in
00:25:07
measuring an outcome in a chronic disease and that's probably because we stacked the ones that were most possible
00:25:12
first or most confident in um but we're working down that list currently Lily has 105 studies going with tepati in
00:25:20
these other diseases wow so this is a massive massive undertaking you know a clinical trial like that takes a 100 or
00:25:28
200 million doll each so you can do the math it's a it's a huge bet that we can convert weight loss into sustained
00:25:35
health benefit in chronic disease yeah so that's I mean I'm doing the math that's 10 to 20 billion dollars you're
00:25:40
spending on clinical trials for and I understand sleep apnea maybe Alzheimer's chronic kidney disease sounds like lots
00:25:48
of different indications where you go after a patient population you try perhaps one of these combo therapies
00:25:56
these new combo therapies that you have Y and yeah right and then you see what the
00:26:02
results are and if it works yeah a doctor can prescribe it right yeah yeah exactly so there's one we just
00:26:08
read out which we'll end up submitting which is um there's a lot of people you and we all may know them in our life who
00:26:13
say oh I was told I have pre-diabetes what is that that's you know otherwise healthy middle-age adults who are
00:26:20
overweight right and what happens diabetes like a lot of diseases it's not a binary function it's a continuous
00:26:26
function you you begin to have resistance to your own insulin because of the stress being put on your fat
00:26:33
cells essentially from overeating and of course reducing obesity might help that
00:26:39
and that's been tried without drugs with you know diet and exercise and it works
00:26:43
so we replicated that we those results and we just read that study out with mjara which showed that three years on
00:26:49
our drug 94% fewer new diagnosis of outright diabetes so that's a huge national health problem and if we can
00:26:56
treat diabetes uh or obesity early in the life we could potentially reduce diabetes Downstream so all there's many
00:27:04
examples of these but we're going for dozens and dozens of these kinds of use cases for the technology so when that
00:27:10
gets approved when you go through your clinical trial you get a positive indication on the the the readout a
00:27:16
doctor can then prescribe that particular drug for that that condition and and then what insurance covers it I
00:27:24
mean just help us understand kind of how how payment happens in this and you know ultimately and we'll talk a
00:27:30
little bit about pricing in a second yeah I mean so that now we move from Clinical experiment and science to the
00:27:38
messy part of Health Care so you know in America um I think we have a a strong bias to reimburse things that are kind
00:27:48
of obvious and when things are new it's harder what we see today with whether it
00:27:54
be Lily's products in this category or noos is really broad acceptance of by insurance and Healthcare practitioners
00:28:03
in treating outright diseases like diabetes type two diabetes and probably like these cardiovascular conditions
00:28:09
we're studying I think they'll be adopted quickly and reimbursed quickly but that's when you already have the
00:28:14
disease of course the real promise here is to prevent those diseases but in almost every case in this country we
00:28:20
don't really pay for prevention right so um people who are obese and don't have those conditions if you're say on
00:28:26
Medicare currently the rule of the federal government is they won't pay for these medications you have to get
00:28:32
diabetes before you can get the drug which sounds pretty stupid and I think it is but you know the evidence
00:28:40
needs needs to build our job is to invest in that evidence base I just spoke about so that we can show time and
00:28:46
time again that all these chronic illnesses can be abated slowed or even eliminated and in some cases even
00:28:53
reversed um if we can get people to lose a dramatic amount of weight safely which
00:28:57
is what the drugs do that's you know in the process of sort of getting that idea
00:29:03
adopted why why is that um controversial because if I'm an actuary underwriting the long-term cost of a patient or an
00:29:11
individual in a in a in a program in insurance program I'm GNA look at that patient I'm like or that person I'm
00:29:16
gonna say hey if they stay overweight there's going to be four diseases they're going to get over the next 30
00:29:21
years and I'm gonna have to pay for that but if we can get them to lose the weight I'm going to save all this money
00:29:26
shouldn't I want I have a financial incentive an economic incentive to to change that what's what's the
00:29:32
controversy there yeah I think you know that's in process I was actually in a big you know um investor of mind's
00:29:39
office a few weeks back and they said oh the last company in here was a reinsurance company and they're changing
00:29:44
their Actuarial tables yeah for people who have are on these drugs which you know I was like wow you know you're
00:29:51
making a difference when when that's happening but it hasn't trickled through the system I think there's a lot of
00:29:56
still stigma associated with obesity frankly like social stigma and patients report to us a lot of doctors won't even
00:30:03
use these drugs because they're they think it's a it's a product of laziness um and you know why people become obese
00:30:11
we don't really understand completely yet why one person would and one person wouldn't what we do know is once you
00:30:16
become overweight or obese losing that weight as an adult is really difficult some studies show like less than 5% of
00:30:24
people can reach a healthy body weight on diet and exercise once obese so that's a very ineffective standard of
00:30:31
care so today if I want to get tepati for a weight loss which I think you guys called Zep bound right yeah so um can I
00:30:41
go to my my health insurance company and have them pay forward or am I paying out
00:30:45
of pocket depends on who you work for Dave so um right now about 50% of the employer sponsored insurance plans cover
00:30:54
it Lily covers it for we we cover the Nova ones too um because we think obesity is a disease those skew toward
00:31:02
you know companies with money basically um you know I think health benefits are part part of just attracting and
00:31:09
retaining employees so smaller businesses businesses with lower margins like retailers Etc really don't cover
00:31:17
these meds yet I think in five years we'll look back and we'll say that was crazy um once the evidence base is built
00:31:23
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
00:31:30
pocket and we've got some work to do to help them you know if you're the rule of
00:31:35
the land in the US is if your insurance uh if you're in the federal benefit um you can't even
00:31:41
accept uh savings cards from the manufacturer but for those that have have a commercial benefit like if you
00:31:47
work at an employer large employer like a retailer that doesn't cover it we can actually buy down your out of pocket
00:31:53
cost and we do that and so did I hear correctly that you guys are doing a directed consumer model as well is that
00:31:59
right yeah yeah yeah so to get at this very problem of both stigma and cost you know back um in January we launched what
00:32:08
we call Lily direct so people can go to their doctor or use our tella Health platform we have a bunch of Partners who
00:32:15
will see you as a physician and their obesity specialist and they'll send the prescription to Lily and we'll fulfill
00:32:21
it directly via male DTC this solves two problems one is people can go to a place
00:32:26
where they're not stigmatized for being over and two they always get it at the same price and it's the lowest price
00:32:31
available to them there's a lot of confusion in retail pharmacy about what people should pay and there's some
00:32:36
pharmacies marking these drugs up because of the supply issues is it a thousand bucks a month is that right for
00:32:43
um t for list price list price we have a a savings card program that's about $600
00:32:50
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
00:32:57
we can get into the supply issues here maybe in this discussion too and that's um
00:33:03
399 basically and 550 for those two doses so almost you know 60% off still a lot so what about the criticism and the
00:33:13
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
00:33:20
going from a chronically ill population to a chronically drug dependent population how do we address that
00:33:27
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
00:33:34
incentive for Lily to always be you know hoping that more people need the drug more frequently because that's how you
00:33:40
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
00:33:45
to be on it forever yeah yeah well I mean our mission is to is not what you said our mission is to solve human
00:33:52
health problems and ideally that would be here where people could have a course of therapy and then not have to take
00:33:58
medicine the the physiology of gop1 and Gip right now that's not how it works right if if you don't have them on board
00:34:07
your body res restores itself to its previous position we yeah there is a theory that if you sustain low body
00:34:15
weight for long enough you can kind of reset your thermostat in a way and your body will stop trying to defend what it
00:34:23
perceives as a starvation state which is you you're not carrying as much weight as you nor normally would but you know
00:34:29
we haven't had these drugs around long enough to prove that out we also know that some people um lose weight and then
00:34:36
do change everything about their life to sustain that body weight and go off successfully that's not uncommon but
00:34:42
it's not the most um probable outcome for most so for now we need to take the drugs longterm but we are working on
00:34:50
drugs in our pipeline that do uh seek to reset uh the metabolic switch and using
00:34:57
like the Y is a mechanism it's a brain mechanism that's thought that maybe you could have a treatment course lose
00:35:02
weight and then reset um your your self sort of that thermostat if you will of what your body's supposed to weigh um
00:35:11
we're working on this problem but understanding is like your base metabolism drops so the number of
00:35:17
calories per day that your body is burning to live goes down so if you stop taking the drug and the hunger switch
00:35:24
gets slightly turned back on even if you eat a healthy normally number of calories per day 1500 2, 2500 you start
00:35:31
to gain weight again because your metabolism has declined but what I've heard from a lot of friends um I don't
00:35:37
want to call everyone a biohacker but it definitely seems to be in kind of the people that like to mess around and try
00:35:42
new things uh crowd is to kind of go on and off so people are trying lower doses
00:35:48
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
00:35:52
maintain a healthy weight without needing to be kind of um on the the typical regular Cadence of the drug is
00:35:58
that something you guys are seeing more frequently is that the steady state do you think over
00:36:03
time we definitely see that in in in the clinic and in in in practice by people and you know back to the cost of course
00:36:11
people want to spend less money and if that works for them you know there certainly um and it's under do Dr
00:36:16
supervision we have no problem with that we need to do more studies in the space
00:36:20
um you know what you have one drug on here or not on here which is coming and it may be the most important drug
00:36:26
because of the scale uh ability which is it's called ororon it's a it's a chemical drug so here not an
00:36:32
amino acid but a organic chemistry that mimics that mimics the activating uh part of the peptide um and so it's a
00:36:42
it's an oral gop1 um in our hands it's about as good as as highd do semaglutide and w're we're doing phase three right
00:36:51
now um so that will'll start to read out next year the benefit of this is one it's oral so it's a little easier to
00:36:57
take you don't have to refrigerate you don't have to worry about the injection you know some people don't like to
00:37:01
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
00:37:09
now are complicated to scale and that's why there's been shortages you know we have approvals in more than 40 countries
00:37:15
we haven't even launched in that's not a normal thing for for a company that wants to Max you can't make enough
00:37:20
product we can't make enough right and because we want to satisfy the markets we've already launched in so or for
00:37:26
apron which is this phase three project is super key in that um we could both Supply you know people who could get
00:37:34
away with just the worn hormone drug glp1 and we're studying it as a maintenance option as well which makes
00:37:41
kind of sense to go through the injection lose more weight and then keep it off with something uh a little easier
00:37:47
to take what's your sense on how this is going to affect the food industry so a lot of analysts have talked about hey
00:37:53
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
00:37:59
high resistance starch fiber product that we're now selling and having a lot of success selling as a complement to
00:38:04
glp1 so you're you're on a gp1 or GP drug you take this product and it kind of can help you during that period of
00:38:12
time and it's a new category that seems to be growing a lot of companies are launching around this similar concept
00:38:17
now do you think this is changing the food industry in the United States and in the west and ultimately around the
00:38:22
world and I don't know if you talk talk do you talk to CEOs of food companies do
00:38:26
they call you you doing to our business like yeah I've got I've got a couple on my board even but so you know I I I
00:38:35
think there are um certainly displacing effects of this this category and I think it's great news overall first is
00:38:42
the health things we talked about so people will need you know uh less diabetes products for sure they'll need
00:38:48
less other medicines we're do even doing study in like OA pain in the knee because a lot of knee Replacements are
00:38:55
in obese people and they get get painful early in life uh knee pain and we hope to show you can prolong that so that's a
00:39:03
sort of a knock on effect and then of course food would be the next one you think about I think you might know about
00:39:08
the study but last year Walmart did the sort of what's in the cart study for people on OIC or Monaro and it showed
00:39:14
they were buying about a third less calories so that's a lot but that's consistent with how the drugs work but
00:39:20
interestingly also few were salty snack foods yes they buying more fruits and vegetables shopping at the edge of the
00:39:26
store versus the center so that's happening probably because we only have 10 or 11 million Americans on these
00:39:33
drugs it's not happening in an economic scale that's really changing food companies um bottom lines but you know
00:39:41
enterprising companies like the one you mentioned you know protein shake companies there's a lot of things
00:39:46
happening I went to a a Quick Serve restaurant it was in California a few weeks back and they actually had a like
00:39:52
a gop1 side menu that's what it was called yeah exactly on these drugs use these uh so you know it is it's having a
00:40:00
big social uh footprint yeah well I mean here's your stock price so Eli LLY stock
00:40:07
I think may outperform I don't know it's probably pretty close I with Nvidia it's
00:40:12
it's an an extraordinary stratospheric rise and then just to look at how the business operates today so you have this
00:40:19
portfolio of products that you're developing but in the last quarter um you did 11 billion in Revenue
00:40:28
and generated um 3 billion net profit I think it's 3.7 of of operating profit one of the the the key criticisms um and
00:40:37
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
00:40:45
associated with your success so you guys are operating a business that is having
00:40:49
an extraordinary impact on people's lives but you're also making an incredible amount of money and in this
00:40:54
environment today that may be more challenging to deal with than it ever has been certain Senators that we shall
00:41:03
not name would look at this and say hey you're making an 81% gross margin selling these products to sick people
00:41:09
how can you justify that so maybe talk a little bit about how you deal with the political environment in the US around
00:41:16
the world as you are successful and are projected to Triple the business over the next couple of years here yeah well
00:41:23
it's it's obviously a top of list issue for me every day maybe a couple things there Dave so I mean first of all this
00:41:29
is a very long investment cycle business um as we talked about earlier like we launched the first gp1 drug in the world
00:41:35
in 2005 and since that time we've been working for you know this kind of performance because we took risk against
00:41:43
that idea right and refined it and worked that problem and that it you know I think that time scale is hard for
00:41:49
people to think about but also you know the dollar scale of the R&D this year we'll spend over 11 billion dollars on
00:41:56
R&D which is a meaningful uh it's like a nation state scale like that's more than
00:42:01
the country of Germany um so we we're pushing forward new medicines based on the revenue of today's medicines and
00:42:10
that virtuous cycle is sometimes just hard to articulate but when you get it right you can have a big societal impact
00:42:15
so that's the first thing secondly you know I think the pressure is a privilege in a way it means we made something
00:42:21
useful enough that a lot of people needed and want it and now our job is to work with you know the Healthcare System
00:42:27
to sustainably adopt it and we do see that as our responsibility to work with you know politicians if that's who we
00:42:34
work with or um health plans or employers to find a way to get this medicine which we think is amazing to
00:42:41
eptide to so many people um and do it in a way that's sustainable now hopefully we've created enough value that the
00:42:49
certainly the the people are getting the drug or benefiting that the health plans
00:42:53
are actually lowering costs in the long term even that there may be an increase in short term and that we make a
00:42:59
reasonable profit for our shareholders and sustain R&D for the future so I think that's what's happening here I
00:43:05
think this week actually Nova nordis our competitor was hauled before Congress to
00:43:09
talk about this issue there's a lot of other dysfunctions in the US system that we could talk about in terms of how
00:43:15
inefficient healthc care is I mean here is a medicine that could augment 100 200
00:43:22
adult diseases in a meaningful way it's expensive yes probably net pricing uh for us you know is going to be something
00:43:30
like three $4,000 a year in the steady state per person but I think we'll create more value than that we'll save
00:43:37
the system more money than that per year per user that's what we should be aiming
00:43:41
for I think what's interesting about it is the the the pro the biologic products
00:43:46
are the the molecules are advancing and they're advancing in a in a a pretty kind of steady
00:43:53
way the issue I think with insulin and and there's obviously been a lot of legislation and Regulatory and political
00:44:01
scrutiny around insulin pricing is it's the same molecule and the price has just
00:44:07
gone up right this is this is the old kind of pharmaceutical companies or bad story is they've got a product that they
00:44:13
make for 10 cents and then they sell it for 10 bucks then someone says let's charge 100 they're like okay let's
00:44:17
charge 100 and so it's classified as price gouging in this particular Market you guys are certainly making a healthy
00:44:24
Market but the products are also advancing there's new combination therapies coming out and uh the oral
00:44:30
therapy so there's a lot of investment in improving the overall landscape of what's possible yeah let me address that
00:44:36
because I I took over in early 17 as you mentioned and like that the insulin pricing Scandal which Novo and Lily were
00:44:42
also Center of right was um hot and heavy and I so I took a lot of personal lessons from that but you know every day
00:44:52
since that we had reduced the price of insulin even though you know we have this weird system in the US where a lot
00:44:59
of our two-thirds of actually our gross price goes to pbms and insurance company
00:45:05
so right of the gross price that's often quoted the net for us is about a third of that and in insulin it was even more
00:45:13
where does that money go well it's used often to cross- subsidize other things in healthcare so we have to unwind that
00:45:19
system if we really want to value innovation and then the other thing which is in this chart is and I
00:45:24
mentioned is some of that revenue from insulin we Ed to invest in the next generation of therapy whether it be
00:45:29
insulins which we're still investing in new insulins or gop1 drugs which of course we did um and that is hard to
00:45:36
articulate in the moment but it actually produces good economic and social value
00:45:40
later yeah here though we we took those lessons we launched at a 20% discount to
00:45:45
Nova's product even though we have better efficacy data and we've only cut the price since then and I think um we
00:45:51
see a kind of a generational opportunity for the company to both be have the best
00:45:57
product so efficacy and quality but also mass production and that requires a pricing strategy consistent with that
00:46:04
well you've also invested a lot in manufacturing in the United States right didn't you just do like A5 billion doll
00:46:09
investment in Indiana to build new facilities um yeah we're building the largest API site in the history of the
00:46:14
United States in Indiana yeah so it's h so I mean that's got to feel good to the
00:46:18
politicians too that this isn't like yeah uh optimizing for cost but there's also infrastructure being built so I've
00:46:25
got a lot of numbers on forast breakdown of product I think like what's interesting is just I don't know if
00:46:30
these numbers seem right but the analysts are projecting that you're 20126 operating income numbers could
00:46:37
grow to $32 billion I mean it's just such an incredible rise and that obviously is the the pipeline of
00:46:43
indications the pipeline of combo therapies new modalities and that's up from 7 billion
00:46:51
last year I believe right so a 4X in 3 years at the scale of operating income is really
00:46:57
incredible I hope they're right yeah Ian good for you hard on this I heard that there was like internal forecasts that I
00:47:07
won't reveal my source uh and all the forecasts got kind of blown out like the forecasts were too conservative in terms
00:47:15
of where you guys are at with tepati so um I wouldn't be surprised if you did so
00:47:20
if we look look at the breakdown of Lily's portfolio of Revenue today uh it's very obvious that what we've just
00:47:28
been talking about the gp1 Gip drugs are the vast majority of the portfolio and expect it to be the vast contributor of
00:47:36
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
00:47:43
portfolio of other opportunities to address disease and how you're investing there and how you know when you've got
00:47:49
such a blockbuster like this and you've got a runaway train and you can't keep up with demand how do you dedicate
00:47:54
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
00:48:00
focus on other things that are also very important yeah I think I mean that's a key thing we spend a lot of time with
00:48:07
our board on you know on the one hand um I think there's a lot of business books
00:48:12
you could read that say well double down on your winners right and just keep going but unlike other Industries you
00:48:17
know D we don't really have a franchise value at the end of the patent life right there when when drugs go off
00:48:24
patent you have to actually have a better drug that competes with almost free yeah and that's probably possible
00:48:31
one or two times here we're talking about monjaro trulicity our last or gop1 only
00:48:37
and semaglutide gop1 only will go generic and we think we have enough differentiation to keep growing through
00:48:42
that but at some point that story runs out right and so on a time scale of decades you need other lines in the
00:48:50
water um in a lot of ways this is like an options business you know we we we have to lay down bets across variety of
00:48:57
things they have to be you know real unmet medical needs that you can get paid if you have a solution for but also
00:49:04
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
00:49:11
at the same time here we have to execute like nobody else against this enormous kind of not not even generational maybe
00:49:18
longer opportunity to build the company affect human health and return Capital to shareholders at the same time we l
00:49:26
has been around 148 years um I think we have an obligation to our newest employee just joined to have a business
00:49:33
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
00:49:39
investing pretty broadly in cancer and Immunology maybe in brain disease is the most important area we can invest more
00:49:46
in um because I think that's actually becoming more tractable and is about 40% of global suffering is some form of a
00:49:54
brain or or um Neuroscience dis disease and we have a lot of expertise there so a little bit of balance and a lot of
00:50:01
focus simultaneously and we divide our organization so that we have four Business Leaders and one of them is this
00:50:09
franchise we were just talking about weight loss and cardiometabolic health three others have other agendas and
00:50:15
their job is to compete and win that way I'm proud that actually in Q2 Q2 are non
00:50:20
incron our non tepati uh business grew 17% on a pretty big base so a healthy business as well more on the scale of a
00:50:29
regular Pharma company not the super sized thing we become what are what science are you excited about I don't
00:50:35
know if you're a big science nerd um as much but yeah like yeah so the inchron products are um you know uh it's peptide
00:50:43
manufacturing but obviously there's uh cell therapies so programming cells to go into the body and do things there's
00:50:49
Gene therapies where we have all sorts of mechanisms for altering gene expression and making you know prent
00:50:56
changes in in in human cells and um and then there's all this interesting stuff in that that I'm super fascinated by and
00:51:05
excited by like yamanaka factors these factors that can have a profound effect on the epigenome uh which can ultimately
00:51:12
change how how cells behave and radically affect the process of Aging or what we consider to be aging what else
00:51:19
are you excited about what's exciting in the portfolio and how do you invest internally versus do m&a versus venture
00:51:25
to kind of access those in you know areas yeah well let me talk about the science and I'll get to the investment
00:51:30
strategy but we've talked about diseases here but you know we think about our our
00:51:35
role is like having a pallet of ways to make medicines which are basically you know new molecular matter against uh a
00:51:43
set of diseases we know something about that's sort of when those things converge we do well so what's in the
00:51:48
pallet I think that's been expanding rapidly lately and I think this whole new field of genetic medicine which you
00:51:55
talked about um like xvivo gene therapy where you edit cells and they go do things like cares or uh Gene edits
00:52:03
themselves or Gene inserts which are exciting you know we had a um medicine where we announced results this year
00:52:10
that is focused on inner ear diseases of deafness basically congenital deafness disorders that are
00:52:18
monogenic um and we we've treated patients that have gone from like six eight years of life no hearing at all to
00:52:23
now hearing I mean this is it is LA like when you see it but the you know I think
00:52:29
the thing that excites me is when you can do amazing things at massive scale so those two techniques car and gene
00:52:35
therapy it's hard to think of like super scaled millions of people benefiting one
00:52:41
new family of medicines I'm excited about the so-called sna this is where we can knock down
00:52:47
proteins that are aberant or causing problems and do it pretty safely and surgically um and do it very
00:52:55
infrequently so like we have a project in phase three right now that knocks down the production of something called
00:53:02
LP little a which is a lipoprotein particle that's probably thought to be about 25% of the remnant reasons why we
00:53:09
still have cardiovascular disease and there's no medicine for it today this is promises to be a once a year dose and so
00:53:18
you take this once a year and it's catalytic in sales and it works and just keeps knocking down this protein so if
00:53:23
that translates into outcomes I think that makes for a big very scalable business we could treat millions or a
00:53:29
billion people with a medicine like that and have a big big effect so we're playing around with that toolbox um
00:53:36
extensively these days so scale has to scale matters right and then well that's our Str I think that's what a Lily's for
00:53:43
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
00:53:50
we we have focused maybe more than anyone else on a lot of small deals that starts with our corpor Venture group so
00:53:57
we have one of the most scaled corporate Venture operations in all of corporate America hundreds and hundreds of bets
00:54:04
that are small in size usually we go with you know with GPS as an LP and invest in small biotechs pre pre uh
00:54:12
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
00:54:18
board or a seat at the table so that when things start to turn we can move early um we do a lot of m&a last year
00:54:26
sorry you're both you're both an LP in Venture funds and you write checks direct is that right yeah both ways yeah
00:54:33
okay okay we also have a interesting project we're growing I'm qu called catalyze 360 and here the idea is beyond
00:54:40
money what else can we do to help incubate small companies and so we have both space but also a service layer
00:54:47
we're offering sometimes in a Cost Plus way or sometimes for Downstream royalties where you know we're a big
00:54:53
capable company when you're building a new company like you've been doing in in um a like sometimes you need something
00:54:59
that's a pain in the ass to go build you have to either buy a consultant or hire
00:55:02
one person and you only need them for a few few months so here we're stepping in
00:55:07
and say well we'll give you that consult if you need to interpret a talkx result
00:55:10
like you can just call Lily's experts so we're like a service layer to cultivate
00:55:15
kind of this ecosystem around us and then we do m&a we buy companies last year about two dozen which was the most
00:55:22
of any Pharma company but actually with some of the least Capital deployed so we're making um I think we spent three
00:55:28
billion dollars on 24 companies so we're making lots of small bets right and I think that is interesting because the
00:55:35
longer we have uh residents you know sort of uh in a partnership or we own something we can add more value it also
00:55:43
allows us to trade in front of the drisking event when things get drisk in our sector there's a huge inflection in
00:55:50
value yeah and so you're basically paying the last shareholders not yourself um we think we can bet better
00:55:56
than the market on what those the probability of something converting to to a success is and if we're right about
00:56:03
that we'll we'll be better off buying early yeah well so as a lot is changing at the company and you're you're at the
00:56:10
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
00:56:16
about leadership and culture I've uh uh someone that works with me at ohal uh her name's uh Megan she worked at at
00:56:24
Lily for years and so we had a long chat about this interview a few days ago and
00:56:27
she talked to me about how great the culture is and 10,000 people on campus in Indianapolis and it feels like a
00:56:32
college campus there's a track and field there's a bar on campus all these sort of things that make it a great place to
00:56:38
work and she was really torn by the way in making a choice to go back to Lily or
00:56:41
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
00:56:48
of think about culture keeping people uh aligned motivated keep the performance culture strong as you're kind of trying
00:56:54
to execute at this extraordinary skill scale yeah exceptional question I mean that's of the things I worry about
00:57:01
longterm this is one of them how do we keep what's so good about how we operate yeah I mean the background of the
00:57:06
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
00:57:12
exceptions in Corporate America where the third generation didn't totally screw it up actually they made it quite
00:57:17
quite a bit quite a bit better um and because of that I think there's a lot of loyalty and social cohesion in the
00:57:25
company as you mentioned like we like coming to work and being together it's a friendly place but also scientifically
00:57:31
super rigorous um and that's a that's often not two things that fly well together so I think it's got a a lot of
00:57:38
exceptional attributes when I started though I think in my kind of view of like when you're running a big ship like
00:57:43
this probably changing the culture is like beyond your your capability but what you can do is like exent turn up
00:57:51
the things that are good and turn down the things that are less good and we've been cultivating that so like one thing
00:57:56
that was less good but is now really clicking for us is sort of like use our scale or enterprise-wide capability as a
00:58:04
as a benefit not a not a a detractor so many companies get big and get bureaucratic and terrible like I mean
00:58:11
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 Lily
00:58:17
first it's everyone's job to get the patient healthy now let's talk about our departments as a derivative of that not
00:58:24
the main goal and somehow those things get flipped around in big companies and people focus on how they look or who's
00:58:30
which Department's best and none of that matters and we have to emphasize that another thing I've really focused on is
00:58:36
speed at scale and we measure that rigorously that's more of an engineering thing I mean we really track things very
00:58:43
carefully on speed and we've moved the drug development timeline which the industry is about nine years from first
00:58:50
human dose to FDA approval and when I started ours was about 11 and now we're 6.1 so how did you how did you how did
00:58:58
you incentivize that how did you reward that and create the model for individuals to contribute to that goal
00:59:04
yeah kind of one big idea and then a thousand little things the big idea is like this ratchet mindset that every
00:59:10
time we beat a timeline that becomes the new norm and so we like just re Benchmark
00:59:16
internally and when we were at 11 and every was as at nine everyone wants to jump to be okay let's be industry
00:59:22
average but that's actually quite hard in a big company so we just said okay if it we have a submission document to get
00:59:28
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
00:59:34
doing that routinely inside of two weeks so we've basically taken 80% of the time
00:59:39
out but that came in lots of little bites but overarching everyone who works in development knows it's about time to
00:59:45
patient that's the that's the big idea solve for that so yeah that's you know those are some of the kind of culture
00:59:53
Dynamics we we deal with and of course we want to attract new people we've expanded dramatically on the coast our
00:59:58
science operations like if you go you know South San Francisco is now a pretty big campus for us we just built a huge
01:00:04
building in seport Boston that'll hold 500 genetic scientists so for some domains we need to go where the people
01:00:11
are um and be more of a kind of a Mothership of satellites versus having everyone here in Indianapolis and do you
01:00:18
and I know we got to wrap in a minute but and do you worry about AI there's a lot of startups with very smart people
01:00:23
that have built uh llms and other models that are now trying to apply those learnings and develop new systems for
01:00:30
discovery of molecules that will have some particular action and doing it all in silico rather than searching through
01:00:37
the domain space of molecules that we're either synthesizing or discovering in nature and is that a partnership for you
01:00:43
at Lily because you guys can operate at scale and manufacture and distribute and
01:00:47
Market or is that a disruptive force that could really damage the the 20- year out kind of horizon for Lily's
01:00:54
business how much do you really think or worry about this oh we spent a lot of time on this you
01:00:59
know of course we have our own efforts um pretty significant AI efforts internally and a lot of Partnerships
01:01:05
including with you know open Ai and Microsoft Amazon Etc um all basically all the the large scale players Google
01:01:14
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
01:01:20
last year five billion with a B went into new venture-backed tech bios you you know that's what they like to call
01:01:27
themselves and that money is coming not So Much from the traditional bio VC world but from the tech world s people
01:01:35
got a lot more lot more to Splash around right that's right but a lot of those I
01:01:39
think if you look at their their pitch decks they're really saying oh we're gonna invent we're going to run the
01:01:44
whole process in silico and I I think that's really naive actually and what I think will end up in
01:01:53
the medium term being very valuable is more the tool Builder approach like we can take a process like adme so that's
01:01:59
where you're trying to optimize chemical properties of a drug like we're talking
01:02:03
about gop1 so it's not twice a day it's once a week and there I think by chunking problems smaller the machines
01:02:10
can really help a lot more we have more data on some specific acute use cases and um we can have a tighter Loop
01:02:17
between the experiment in the on the bench and the data process behind the the model learning the idea that you're
01:02:25
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
01:02:30
next Prozac I don't know I I think we're a long way from that day yeah but we we're paying attention to all of it yeah
01:02:36
so wet lab and Clinic integration is critical it's not all going to be in silico there's going to
01:02:41
be a good chunk of the time yeah it's a co-pilot model where the machine can do predictions probably now where we see
01:02:47
the most value is eliminating bad ideas that humans don't see but in hindsight look obvious so like because it can
01:02:54
integrate a lot of multi Source data and say the probability of this working based on prior experiments is like 2%
01:03:01
yeah and there's human factors where scientists like they their last idea the most but also we have trouble seeing
01:03:07
across all this fi domains of data machines are good at that that that can add value immediately awesome well are
01:03:13
you glad you took the job seven and a half years ago and uh what are you most happy about and what's the biggest
01:03:18
disappointment last uh last question here as we wrap up yeah of course I mean what an honor to the company like this
01:03:26
at this moment um we all need to get better all the time I mean I I find myself disappointed
01:03:31
mostly by but not being prepared not thinking in advance of of things but you know it's um when you miss we become a
01:03:39
kind of a yeah that looks obvious in hindsight which we all have it's a complicated business you know I should
01:03:45
give myself Grace on it but it happens more often than I would hope and I I think that staying humble about that is
01:03:52
like one of the most important things that successful CEOs can do I mean you always have to learn and you always have
01:03:57
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
01:04:03
become more of a cultural icon that's cool but it's also a big responsibility because like you said with the Lily
01:04:10
direct and you know being more of a consumer household name people expect a lot more of us and we've got to change
01:04:17
from being just like a Midwestern quiet medicine company to something a lot more
01:04:22
and we're not there yet we have to we have to get better so yeah more to do no great well thanks so much for taking the
01:04:29
time to chat with me today Dave it's been an honor and a pleasure and I wish you the best of luck with Lily congrats
01:04:35
on on all the success thanks a lot we'll have to have have you come out to our lab sometime I will yeah no I'm uh next
01:04:41
time I'm in the midwest I will certainly kick you up on that I'd love to come visit be awesome
01:04:47
[Music] awesome I'm going all in