Eli Lilly's CEO Presents at Goldman Sachs Healthcare Conference (Transcript)

Seeking Alpha

Eli Lilly & Co. (LLY)

Goldman Sachs 34th Annual Global Healthcare Conference Call

June 12, 2013 13:40 ET

Executives

Dave Ricks - Senior Vice President and President, Lilly Bio-Medicines

Analysts

Presentation

Operator

Good morning everyone. We’re going to start our next session with Eli Lilly and I’m delighted to host this session with Dave Ricks who is the Business Unit Leader of Lilly’s Bio-Medicine’s Group which includes neuroscience, cardiovascular, urology, osteoporosis, and other immune commercialization in the U.S., Japan, and Europe. Basically, he is responsible for everything; but oncology, diabetes, and emerging markets. First, I have to read the disclosure. We are required to make certain disclosures in public appearances about Goldman Sachs’ relationships with companies that we discuss. The disclosures relate to investment banking relationship, compensation received, or 1% or more ownership. I’m prepared to read disclosures for any issuer now or at the end of this call if anyone would like me to. However, these disclosures are available in our most recent reports available to you as clients on our firm portal. So, with that, Dave, tell us what do you do at Lilly and how is the executive committee senior structure organized given all the various businesses and geographies?

Dave Ricks

In 2009, you may recall we restructured the company around this business unit idea moving from a purely functional setup to where we’re now, which is we took the five business areas of interest and created business units around them, but with the principle of not duplicating, and so that’s sort of, I will explain that, vis-à-vis my role in a minute, and then you have corporate G&A functions and R&D manufacturing separate, the five areas of interest, we’re are Elanco Animal Health, which is always a quasi business unit but I think we have -- Jeff Simmons runs that, and that’s reporting to John Lechleiter ; Diabetes is run by Enrique Conterno , which from a P&L perspective includes Phase III development for diabetes and then marketed products in the U.S., Japan, Europe, Australia, and Canada. Same for oncology, except their R&D spend goes back to Phase I; and then for biomedicines we have that same structure, Japan, U.S. Europe, Australia, and Canada for marketed products but all other therapeutic areas of interest. And then finally, we took the emerging markets, and that's a purely commercial unit. There is no development and responsibility there, and they manage all the other markets other than Australia, Canada, and Europe.

Unidentified Analyst

So you run biomedicines and you also make R&D decisions about products that move into Phase III?

Dave Ricks

That’s right, so starting in Phase III that’s in my P&L, we make they go/no go decisions on Phase III entry, and of course have the launch and commercialization accountability based on those cases.

Unidentified Analyst

And I also failed to mention that you are a member of the executive committee and responsible for Lilly’s pricing reimbursement and access function which is obviously very important. So, among all the many things that you have worked on, I know you have been instrumental in restructuring that Lilly did in Europe and what is happening in the U.S. this year. I think before we talk about the current portfolio in the pipeline, Dave if you can give us a sense for what’s happening with the expense structure. We’re the Year YZ, Zyprexa and Cymbalta is basically -- it's upon us, right, which will have a very big impact on your division. What’s happening on the expense side?

Dave Ricks

Right. So as we go through YZ, we sought to really work three separate accesses; accelerate the pipeline, grow revenue of things that weren’t expiring; and then manage infrastructure and cost. So, on that last point, we have taken some clear actions in the last two years in my group. My group is essentially where the YZ effect is happening because Zyprexa and Cymbalta are products we manage. We can’t offset all of that IBT, but of course we need to rationalize the infrastructure both to the post Zyprexa/Cymbalta world, but also prepare ourselves for the future state we face and where we can’t find other efficiencies. Last year in Europe, we moved from a busier structure where we had built a European business 40 years ago, country by country to a much more regionalized approach, some functions pan European and then many clustering around the larger markets. In this way, we take out a fair amount of management and other supporting infrastructure throughout Europe in European growth context which is currently shrinking. As an industry, we’re growing modestly there, as it kind of makes sense to set us up for the future. In the U.S., we recently announced for Q1 call changes in the U.S. sales force primarily. This was rationalized again post Cymbalta, recognizing Cymbalta was a much larger product in the U.S. than other geographies, broadly promoted, multiple primary care sales people, and those changes are happening as we speak, but by mid-Q3 we will be complete and then set this up to have a differential cost structure for U.S. business exiting 2013 after Cymbalta.

Unidentified Analyst

So I think, the (inaudible) that the company’s goal is to improve its operating margins by 1000 basis points post the 2014 period?

Dave Ricks

Right.

Unidentified Analyst

So, just help us to think about, is that coming from actual absolute cuts or is the improvement coming from revenue acceleration or is it a combination, how much is coming from the top-line versus expense cuts?

Dave Ricks

Yeah, I think there are three different effects there; of course, revenue growth is the primary objective. This is not a business where we want to create value solely driven by cost although we need to manage our infrastructure, and coming out of ’14 we need to grow our revenue based on the new products. That’s uncertain, but that’s a key ingredient in getting the 10% improvement from where we were.

Second, we need to manage our infrastructure through this period in an absolute sense, and we’re -- we get to do some things working for us, one is we had a very significant amount of infrastructure behind Cymbalta in particular, I think we have commented to the street that that wasn’t necessarily the case with Zyprexa. We had kind of wintered that down through the final four years of its life, but I think you will see absolute expense reductions particularly in the U.S. year-over-year 13-14 that are reasonably material.

Unidentified Analyst

G&A expense is actually going down.

Dave Ricks

Yes, certainly related to Cymbalta, there are some targeted investments in launching the diabetes products, that is redistribution, but you'll see reductions there; and that’s kind of a one-time event based on that product. Additionally, as we look forward and look at the revenue streams, they are much more specialty oriented, certainly in my group in oncology, and so we don’t really need to go back to that kind of cost structure. As we look ahead, we see much more targeted selling and commercialization efforts, and that’s a permanent effect that will help us get to that 1000 basis points you talk about.

Unidentified Analyst

So, let’s talk about the future, and the company has expressed aspirations to grow post 2014, what are the areas of your business where you visibility into those growth drivers?

Dave Ricks

Yes, so we have marketed products today and our focus in our group is really to accelerate growth of the things which are already approved in the market. Chief amongst those are everything in Japan, which we manage and you may recall, we have a patent expiration delay from the rest of the world particularly on products like Zyprexa and Cymbalta. We just launched Forteo, and that’s becoming an important and pretty large scale part of our organization. So, that’s the top priority for growth. The objective would be to be launching the new portfolio simultaneous to the U.S. and Europe. So, from my prioritization , that’s the second half of this decade, but they will never really have the dip in patent expires in Japan the way we have in U.S. and Europe.

In the U.S. and Europe, the focus is on Cialis, which will be our largest product after Cymbalta, Forteo, Effient, Strattera to some degree, and then some other targeted opportunities like Axiron , and these are all approved drugs, they are on formularies and we can drive growth and are in fact driving nearly double-digit growth on that cluster of products through the 14’-15’ window. And then beyond that, we need to complete our studies for the biomedicines group. This year’s focus is just wrapping up enrollment on potentially more than half of our late stage portfolio, so that we can start to get data read outs into 14’, potentially submissions in 14’ and 15’ and launching beyond that. So, it's really an operational focus on pipeline delivery. We don’t have the data, but we have to get the studies done and that’s our priority.

Unidentified Analyst

So of the currently marketed drugs I think it’s -- Forteo sells over $1 billion in sales, it's a blockbuster in its own, right, and it also seems to have a long tail. Remind us what is the IP situation, and is Forteo considered a biologic by the FDA? Is this the product that’s going to have a long tail or will there be competition at some point?

Dave Ricks

Good questions on Forteo, bit of a sleeper, it is a drug for severe osteoporosis, it's the only drug in the marketplace that can build new bone, it's anabolic. We don’t see competition right now with that mechanism from innovators, and we also don't see competition from biosimilars, and so we have unique position in the market and as severe osteoporosis grows, which it is, it’s the elderly populations in Western markets and Japan,. We’re seeing good growth pretty late 10 years post launch, the Japan launch recently helped that as well.

The U.S. patent situation is we have two Orange Book linked patents that are in late ‘18 early ‘19 set to expire, so sometime in ‘19 as you may know, this is registered through [seeder] (ph) as a drug, but it is a biologic. So, it's -- I don’t have a clear answer for you in terms of how the FDA will treat a non-innovative form of parathyroid hormone in terms of whether that’s an ANDA or it's some other -- to be defined by a similar pathway. I think long-term, we do expect competition and that’s why we continue to invest in research projects like (inaudible) and others to replace that revenue through better and better …

Unidentified Analyst

How do you model it for your planning purposes to assume it's an erosion curve after …?

Dave Ricks

Just for the U.S., 2019 is our assumption, although I think the Lilly assumption on biosimilars is changing through time because we really haven't seen true biosimilars, I think what we do see in human growth hormone and insulin is they are basically novel products that compete, and that’s I think a reasonable assumption for investors at this point.

Unidentified Analyst

Recently announced exciting data for Forteo in male osteoporosis, is this a meaningful opportunity, is there something that you’re going to pursue and will this be a growth driver for the franchise?

Dave Ricks

Yes so we’re indicated in males , this was, this steroid induced or glucocorticoid-induced osteoporosis in males, people have life time exposure to steroids and that weakens their bones, but it is true that we’re indicated already in males and one out of five new diagnoses are males with severe osteoporosis, and it's really ineffective, but I think males are living longer than we know historically a lot of the science is around female osteoporosis.

So, it's a meaningful segment 20%, we are already indicated, this is the helpful data to support the value proposition for the brand over the next 5-10 years. Not 20% of our sales, but 20% of the new diagnosis.

Unidentified Analyst

I see and then looking out the next two years, what’s the --?

Dave Ricks

We would expect that grow as aging male population, and it's important to note fractures in males are -- there is more hip fractures and they are more severe, the downstream health consequences are more significant. So, it's a good target population for us, but it won't be the predominant source of business.

Unidentified Analyst

The other marketed drug Effient, I think it's had sort of mix success in the marketplace. I would be interested in how you would characterize it and I guess the question is the trilogy trial didn’t work, and I’m just wondering if there is a fallout from that and what impact do you see from generic Plavix, and really what I want to get to is is how big can this productget?.

Dave Ricks

Well, so Effient has an interesting history from the FDA review, and them I think early launch in the U.S. at that time I stepped into the U.S., we had just launched it and it was really under our expectations, and we have done well over the last three years by focusing on where the value proposition is strongest, which is in STEMI and NSTEMI diabetes patients, and here out of the TIMI 38 study, there is more than a 30% relative risk reduction to clopidogrel and now in hospitals across the U.S., Europe, and other markets, I think you will find increasingly Effient as the standard of care in those populations. Ticagrelor is a new threat. They are putting a lot of effort behind that drug even though it's substantially smaller than Effient, and so I think there is more competition in that NSTEMI and UA space with Ticagrelor, that’s one pressure, although I think our data is pretty clear and I’m not aware that they have broken out there, their STEMI and NSTEMI diabetes data the way we have, so we have a good story there. Since clopidogrel went generic last June, we did see a dramatic increase in post hospital switching, so retail pharmacy switching, someone gets the medicine when they had a PCI procedure, two, three months, they fill it and then they are convinced by their pharmas so as to go to something cheaper.

This you basically see with all branded drugs when a major generic event occurs we need to try to mitigate that because these patients are losing the benefit of clopidogrel when they make that change and as we know there are some populations who don’t respond to clopidogrel or inadequate responders. So there are pressure in head winds but I remind you that the brand is hitting large multi-100 million dollar range, I think we reported sales over 100 million in Q1 and although growth had planned in the U.S. we still we’re pretty robust OUS more than 20% and our mission is to restore growth.

We think there is an opportunity to capture north of 50% of the STEMI and NSTEMI diabetes market in U.S. and other major markets and we’re not there yet so this share growth.

Unidentified Analyst

So did that get you to a $1 billion franchise or is it, it's all sort of a moderately sized?

Dave Ricks

Yeah it's in the neighborhood but not north but not substantially north of that and remember we have a patent in the U.S. it's just four years away.

Unidentified Analyst

I didn’t know that, what year is it?

Dave Ricks

The last line patent is in 2017.

Unidentified Analyst

I see okay. I want to segue way to your pipeline because I think that’s where the exciting story is for Lilly and under your tool there are a number of really key assets that keep investors care a lot about. Before we talk about that I’m just curious about your high level views on capital allocation with respect to R&D. Lilly pipeline success it's not just Lilly, this is not just a Lilly issue it's an industry issue, pipeline success over the past five years or so has been mixed obviously and my question for you is just on a high level basis do you think the company has been too aggressive moving assets from Phase II to Phase III not been just been enough and asking the right questions before cutting them off.

Dave Ricks

Well I think it's a fair assessment for the industry and frankly for Lilly although I would say lately we have been encouraged by the (inaudible) that we see and we will see, we have pipeline events almost every quarter from on and into ’15 so we don’t know the quality is best that’s the uncertain nature of our business. We seek to have a balance between what I would call high risk high return projects and a healthy mix of projects which tend to be more certain in their outlook, diabetes is a good place to have but there are other therapeutic areas where one can do that. I think looking back we can improve, I think that’s fair. I think the whole industry should have that question on their mind so how do we raise the bar on new entries because that’s all we can effect is the next thing, am I watching in biomed we got two Phase III projects one I would call high risk, high return and (inaudible) so this is a CTP inhibitor that there is questions about whether that mechanism can affect cardiovascular disease.

Unidentified Analyst

No we haven't had any real data to show that these might work.

Dave Ricks

That’s right. I think CTP inhibitors we have had failures right but with that particular program I think there are reasons to believe that it could make a difference, we have the (inaudible) a safe drug that can elevate HDL and inhibit CTP fully completed studies and in the (inaudible) studies there is a nice analysis of when you get HDL high enough you can get cholesterol efflux out of the plex but below a certain level you don’t get it and most of the niacin studies they are been done well below of that level, additionally there is a pretty pronounced LDL effect and the way you power the study I think based on LDL alone we should be able to see risk reduction effects, so we will see on that but it is high risk, high reward obviously we could be push a second in potentially a very large category. Another one we started which I think is lower risk is (inaudible) is this our Jacqueline 2 inhibitor it's obviously working against target that’s been validated by an approved drug, we had a very robust Phase II program in terms of both size but also validating the end points we’re actually just using in the Phase III program so it's a really a validation process and Phase III versus the proving scientific hypothesis. So those are you know example of the kind of mix we want to have going forward and then looking at the cost to the potential return making sure we’re targeting that since the substantial markets with good pricing latitude which I think hope those will help.

Unidentified Analyst

So speaking of high risk so (inaudible) went from been the talk of the street last year to almost near silence this year, can you update us on what’s going on with the program. I know you have said publically that you’re going to start another Phase III trial in mild-patients. What kind of color can you give us around that, what that trial looks like and another question too is just what did you learn from Expedition One, Expedition Two, those were expensive trials so are interesting signals. So how do you use those learning towards the next clinical trial?

Dave Ricks

Yeah good question. So we have been its glad that we have been in business. Since October when we read out that initial data we have been working hard to get through regulatory council and figure out our path forward. We are determined we need to conduct a confirmatory Phase III study. This will follow the signals we saw in the pooled mild data from Expedition One and Two so expect to see mild study. We will also be incorporating what we believe I think from that which is that importantly we think the drug Effient the study design should include patients who have a confirm presence amyloid plaque and we know from (inaudible) and from solar studies particularly in mild patients and the rate of accurate clinical diagnosis without their confirmation it has at least the 20% error rate and so we need to include patients who have plaque because there is good evidence that without plaque you don’t decay on placebo so you’re amplifying the placebo effect and that’s logically targeting drug which targets amyloid we should confirm its presence.

Unidentified Analyst

Your other trials Expedition One and Two include patients?

Dave Ricks

No it's volunteer and so we had a subset of patients whether be it CSF or amyloid scans or touch scans that have different presence and through that we’re able to confirm our belief that this is important characteristic in the study. The key thing is powering and I think there is something that we didn’t talk enough about last fall but looking only at the mild even in the pool when the individual studies the effect size which we saw there was what we predicted when we set up the study but the sample size was 30% - 40% less because we included moderate patients in the design. So we’re underpowered in both Expedition One and Two to show the plan the effect size independent as amyloid plaque issue in this two studies, when you pool them you see that powering improve and that’s where we showed statistical significance. So the last thing is we will include fully powered study in that mild-population. In addition to that Jamie I think it's interesting to note that in our HPAC consortium with (inaudible) studies dominantly inherited Alzheimer’s population, people of a genetic predisposition I have the disease early and the A4 study which is also an HPAC study where so this now will be used to treat patients who have amyloid plaque but not yet signs of dementia truly an A symptomatic study.

Those will take some time to read out enroll et cetera but I think it's again scientific belief in the mechanism and the medicine, this may be one of the best shots to make advance in this disease.

Unidentified Analyst

Help us to think about the timeline here. My understanding is that the other trials took about 22 months terminal patients, were the requirement to find patients with amyloid plaques in their brain will that add to the timeline? How do you screen for those patients?

Dave Ricks

We could expect a higher screen failure rate, we know from the (inaudible) data was 30 something percent didn’t have plaque, ours was in the 20% in the mild-population. So there will be some screen failure rate, on the other side we have a drug which has a very strong signal from these Phase III studies proved concept if you will and fair amount of energy in the community to finally access where some of those that are connected difference in Alzheimer’s so that’s working for us but there will be a higher screen failure rate. I would say it's not reasonable to think about timelines for enrollment that we looked at in Expedition One and Two which was 22-23.

Unidentified Analyst

And I think you’re starting this trial in after the third quarter?

Dave Ricks

We said by the end of the third quarter we will have it started.

Unidentified Analyst

So you will start recruitment at the end of the third quarter and then it will take about two years roughly to recruit patients and then the trials could be about 18 months?

Dave Ricks

We haven't announced the design but you know I think we saw, you need at least a year to measure the effect on.

Unidentified Analyst

Right so we’re talking 2017-2018 in terms of timeline.

Dave Ricks

Right that’s how the math works, our job is try to speed that up as best we can and the best opportunities is on the regulatory reduce cycle certainly it looks and on that recruitment timeline which you could imagine well that could be shorter, we just haven't done that ourselves and as you highlight there is a screen failure issue.

Unidentified Analyst

You think you can still be the first market with a disease modifier? I mean I know that Roche has a trial there, other companies, Merck has base inhibitor that will be entering Phase III soon.

Dave Ricks

Yes is the answer. We’re planning on being first.

Unidentified Analyst

Okay. Let’s talk about osteoporosis drug which I think is a need opportunity and one reason why I think it's a need opportunity is Solara (ph) has done so well. There really aren’t many assets in that category, I’m going to bundle them in Ixekizumab so tell us about that clinical program from Ixekizumab and how will it be differentiated in the market? Are you seeking to develop a (inaudible) working find holes and install it (ph).

Dave Ricks

Right. So Ixekizumab is an IL-17 antibody that targets the (inaudible) not the receptor and there are other IL-17s in development as well. We published Phase II, a pretty big Phase II program and we’re in journal last March and had investor congratulate (ph) us at that time. This is extremely promising signal from Phase II because we’re able to show pasi 90 and pasi 100 rates that are substantially above anti-TNF therapy and what Solara has shown so just doing a numerical comparisons. So there is a lot of promise that this more specific mechanism might be implicated in psoriasis and these drugs can make a substantial difference. We’re talking about total skin clearance response rate in the high 30s, low 40s in that Phase II program which is more than two times what we see with anti-TNFs.

We’re doing three studies, a placebo study and then two heavy head comparisons against (inaudible) which is the leading prescribed TNF in that category. These are big programs and they are enrolling as we speak. We’re conducting in that dose that is slightly higher than our Phase II because we do not see immunologic or cardiovascular side effects at the rate. We expect in that Phase II high dose, so pushing up a little bit to try to even seek better total stain (ph) clearance and it remains to been seen whether we can replicate that signal but if we do I think the promise is you can move the goal post for moderate psoriasis pretty substantially from 75% clearance and to put that in perspective the average person with moderate to severe has equivalent of five palms of plaque in the body. So 75% clearance is significant but that still leaves a palm and half and so it's lot of skin surface area affected. Additionally there is other health effects of psoriasis although cardiovascular risk et cetera we’re suppressing the disease may have done benefits.

Unidentified Analyst

So what is the timeline of the Phase III trials?

Dave Ricks

Yeah so we will finish enrollment pretty soon, they will read out I think, we will get the data sometime in ’14 maybe top-line at that point and then publication late ’14 or early ’15 submission in that window and approval in ’15 or ’16.

Unidentified Analyst

And what other indications are you seeking?

Dave Ricks

So we have a initiated a Phase I Phase III study psoriatic arthritis and a supported study for exposure in ankylosing spondylitis although we’re not seeking that indication there is some confusion about that, sometimes it's supporting the psoriatic arthritis.

Unidentified Analyst

Good some overlap with the Jak inhibitors, (inaudible) for psoriasis. I’ve imagined you might be looking at psoriasis from – how do you see the differences in efficacy between the two mechanisms?

Dave Ricks

Well I think based on the Pfizer data and our expectation for our own set, we expect less efficacy. We haven't seen anything like IL-17s from any other mechanism but it's an all therapy and there could be convenient factor or maybe for moderate patients or mild to moderate, it might be an appropriate option. I think the key issue with the Jak’s include their own is it appears you need a dose to higher level than our aid to get that skin penetration and of course then you wonder about the side effect profile. So for all those reasons we believe IL-17 will be the next big class in psoriasis and we do see them quite differential Humulin (inaudible).

Question-and-Answer Session

Unidentified Analyst

Other questions in the audience. Any questions in the audience? Okay I’m going to ask you we have about five minutes we got really big opportunity (inaudible) and I guess my first question to you is just thoughts on the early March trajectory results in, I’m disappointed it's not launching as quickly as I thought it would despite what I thought it was pretty close to a best in class label this early on in its life cycle. So what do you think is going on and what are you learning from these experiences?

Dave Ricks

Yeah I did mention the EMA outcome as well which is interesting. Well I think it's been slower than most people thought that’s what prescribers tell me that’s what we read from the brochure. I think the couple of things, one I don’t think the labels is as good as it can be, I think we’re shooting for something better than that with baricitinib particularly in absence of structural outcome data is kind of table stakes in severe RA and you need to have that, they are been positioned after TNF therapy based on that.

Unidentified Analyst

Even in the indication it's…

Dave Ricks

Yeah it could be second line but I don’t think you’re seeing that right now so that market is a bit smaller than the second line market because you have to wait for TNF failure which is some small percentage of the total TNF market.

Unidentified Analyst

But why do you think physicians are waiting and what are they waiting for as it is indicated for second line.

Dave Ricks

Yeah in part market access but also just a safety profile to bear out. So new mechanism it's immunosuppressant’s, I think many want to see what happens, it might be worth trying in a later stage disease patient but do you want to use this earlier I think that’s still but I feel bad all they are facing and for us I think it's normal for a new drug in this kind of class. I think we watch that carefully, if the safety data bears out for (inaudible) that’s probably fine for us right I think they are going to build an extreme space with Jak mechanism that may build confidence when we arrive. The thing that we need to do, we do have a dosing advantage once a data versus twice but really we need to differentiate numerically I think in efficacy in the various setting, we’re studying this medicine and early disease in pre- DMARD therapy we’re studying it in DMARD IR and then head to head against (inaudible) in that post-methotrexate setting and then also in TNF IR.

So across these studies I think those middle two as you said that stopped right before TNFs is the sweet spot for this class and we need to see the data bear out but if it's more positive and what (inaudible) is been able to demonstrate or that Humira demonstrate so I think that’s a big upside for us.

Unidentified Analyst

And what are your thoughts of what’s going on Europe? How you continue to? Why are you going?

Dave Ricks

Safety story, of course they have access to data we don’t have but it is interesting to see you know see Europe had a much slower ramp up on TNFs to begin with, they have a lot of restrictions on prescribing use to hospital with monitoring and so forth so I think their posture on these kinds of classes have been more conservative than U.S. and maybe that’s what’s bearing out.

Unidentified Analyst

Has that changed for your fund strategic in Europe? What has happened to Pfizer?

Dave Ricks

No I think we’re set up to file Europe simultaneously U.S.

Unidentified Analyst

I wanted, we don’t have much time but I did want to touch up on Evacetrapib, again sort of back to this question about making decisions about moving assets from Phase II to Phase III, these are expensive programs, the company’s goal is to improve operating margins through bringing R&D spend, bringing down SG&A spend. I don’t remember what Pfizer spend on torcetrapib but it was a big, it may have been close to a $1 billion. Can you talk about the plan, I’m kind of surprised that we haven't heard about a partnership something that you’re exploring and really why is the pedal to the metal on this one to the other three programs has failed and the third program you know it's still out there and still very risky.

Dave Ricks

Yes. No it's a high risk program and I think it's of high reward. There are reasons why we proceeded as I mentioned the HDL, the magnitude of HDL affect which to get the cholesterol efflux I think was important for us. The fact that (inaudible) was a partial failure but a partial inhibitor much more mild LDL or no LDL effect and much more mild HDL effect and then the fact that we can power the study really based on that LDL effect and there is upside beyond that if there is HDL. That’s said it is a big program but not perhaps as, not the most expensive one in my portfolio.

Unidentified Analyst

But is it not expensive?

Dave Ricks

Well we don’t disclose that but I will just put it into perspective, it is that but it's not the biggest that we have made and we have what we think is probably the best behaving drug that the class has seen why not try that.

Unidentified Analyst

How is this different from anacetrapib?

Dave Ricks

Well I think we will have to see because they have never been compared but we know anacetrapib has a food effect which is pretty important in this class. We have managed to formulate the drug so you don’t need to take it with fats whereas anacetrapib you do and it's a little counter-intuitive for cardiovascular patients and so we think that’s an advantage real advantage in a primary care office. Coupled with you know the data that’s been disclosed about their, that hangs around for a while and it always raises questions about long term safety. We will have to see. I mean that’s much drug we will get from them, but we have a drug that fits in the (inaudible) and behaves quite well. On the partnering question my perspective is we should always evaluate partnering most Phase III programs have high risk are expensive and it's a way to market test value but it's also a way to share risk and cost.

Unidentified Analyst

I mean given you have gone this far down in the development process. You’re now in Phase III so you have extended the partnership with probably a less likely opportunity at this point?

Dave Ricks

I wouldn’t assume that. We continually look at this and if the right economics are there I feel free to partner any asset, our portfolio with exception solo maybe.

Unidentified Analyst

Lastly the timing on Evacetrapib?

Dave Ricks

Evacetrapib, we will give an update more thorough update later in the year. It's in January (ph) but the enrollment is strong and I think it speaks to the market demand. People are interested in the mechanism and we’re seeing good enrollment of studies so it may be coming in.

Unidentified Analyst

Okay great. Thank you very much.

Dave Ricks

Thank you for your time. Thanks.

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