John C. Lechleiter - Chairman, President & Chief Executive Officer Phil Johnson - Investor Relations, Eli Lilly & Co. Derica W. Rice - Chief Financial Officer & EVP-Global Services David A. Ricks - Senior Vice President and President, Lilly Bio-Medicines Enrique A. Conterno - Senior Vice President and President, Lilly Diabetes Susan Mahony - Senior Vice President and President, Lilly Oncology Jan M. Lundberg - Executive Vice President, Science and Technology

Mark J. Schoenebaum - Evercore ISI Christopher T. Schott - JPMorgan Securities LLC Timothy M. Anderson - Sanford C. Bernstein & Co. LLC Vamil K. Divan - Credit Suisse Securities (USA) LLC (Broker) Gregg Gilbert - Deutsche Bank Securities, Inc. Seamus Fernandez - Leerink Partners LLC Colin N. Bristow - Bank of America Merrill Lynch Steve M. Scala - Cowen & Co. LLC Tony Butler - Guggenheim Securities LLC David R. Risinger - Morgan Stanley & Co. LLC Andrew S. Baum - Citigroup Global Markets Ltd. Marc Goodman - UBS Securities LLC Jeffrey Holford - Jefferies LLC

Ladies and gentlemen, thank you for standing by. Welcome to the Q3 2015 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. I'd now like to turn the conference over to John Lechleiter. Please go ahead. John C. Lechleiter - Chairman, President & Chief Executive Officer: Thank you. Good morning, everyone. Thanks for joining us for Eli Lilly and Company's third quarter 2015 earnings call. I'm John Lechleiter; I'm Lilly's Chairman, President, and CEO. Joining me on today's call are Derica Rice, our Chief Financial Officer; Dr. Jan Lundberg, President of Lilly Research Laboratories; Dr. Sue Mahony, President of Lilly Oncology; Enrique Conterno, President of Lilly Diabetes; Dave Ricks, President of Lilly Bio-Medicines; Chito Zulueta, President of Emerging Markets; Jeff Simmons, President of Elanco Animal Health; and Ilissa Rassner, Brad Robling, and Phil Johnson of the Lilly Investor Relations team. During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on slide 3 and those outlined in our latest forms 10-K and 10-Q filed with the SEC. The information we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions. So let me begin by providing an overview of Lilly's third quarter. Again this quarter, we posted strong non-GAAP financial performance. With our continued focus on expanding margins, we leveraged constant currency revenue growth of 5% into operating income growth of 27%. Year to date, we've leveraged 3% constant currency revenue growth into 16% operating…

We'll begin with the line of Mark Schoenebaum with Evercore ISI. Please go ahead.

Hey, guys, can you hear me? Phil Johnson - Investor Relations, Eli Lilly & Co.: We sure can, Mark.

Thanks so much for letting me having the first question. I really appreciate it. John, I have two questions for you, please, if I may, and I hope you're well. Last quarter you said in the 2Q call that you thought SMID-cap biotech stocks in general were in a bit of a valuation bubble. You have proven to be a better stock analyst than me and my competitors. Now that we're 25% lower than your comments, I'd just love to hear kind of what you think. And of course from a Lilly perspective, are you asking your BD folks to kind of speed up the pace of their calls? Or do you want to let this settle out for a while, or do you want to see it go lower? Number two, I know you're very involved in Washington and what goes on there with the bio and the pharma lobbying groups and industry. I'd love to hear your thoughts on drug pricing but more specifically – obviously, given the Hillary Clinton tweet, the Marco Rubio comments – but more specifically, I'd love to know, when do you think the industry is just going to begin defending itself to the public more aggressively, which is going to cost some money? You know that we're only 10% of overall healthcare spending, and the other 90%, and these other costs, et cetera. When is the industry going to begin to spend the money to try to change the image and teach Americans that it's probably worth it? And I'll leave my questions at that. Thanks, Phil, for calling on me. Phil Johnson - Investor Relations, Eli Lilly & Co.: You're welcome, Mark. John? John C. Lechleiter - Chairman, President & Chief Executive Officer: Okay, Mark. Thanks a lot. I did make the comment about the bubble, I guess, at the last call. Although I think the hit that the industry has taken may have come from sort of another direction, with the noise around pricing. I think there's no question that valuations are lower. Does that change our fundamental posture with respect to business development? It doesn't, I think we've said all along that we're really not interested in sort of large-scale M&A, but we're going to continue to look at opportunities, particularly earlier in development, even at the preclinical stage, to acquire assets or acquire companies as the case may be. We're very excited about the opportunity we have with Locemia, this intranasal glucagon that we announced just a few days ago. I don't know how good of a – I don't think I'd want to change jobs with you right now, though, Mark. I think you do what you do well, and I'll continue to try to do what I do -

I'd take that trade. John C. Lechleiter - Chairman, President & Chief Executive Officer: Okay, good. Now, on drug pricing, I think if you go back through successive presidential campaigns, with some bit of variability, drug pricing sort of tends to rear its head, because I think it's something that politicians have found resonates with voters. Having said that, I think the facts tell a different story. Someone showed me some information the other day – in the second quarter of this year, the net effective price increase for the market basket of medicines in this country rose 0.7%. Well, I mean, that reflects – not necessarily these things that get called out in the media, these individual huge drug price increases. It reflects the fact that many of our medicines are going generic still. I'm talking about the industry here, Lilly's sort of been through its own situation with that. It reflects the deep discount that we're mandated by the government to provide but increasingly must provide to commercial insurers and payers in order to get onto formularies and to be able to compete for the business. I think with respect to telling the story, I think you can expect to see more coming from the industry. I think we've got to be careful and thoughtful here. I don't think there's a way you can spend enough money to sort of all the sudden change people's minds, because so much of the criticism comes in the form of earned media. No one's out there spending money, per se; they're just picking up quotes and amplifying those. We've got a great story to tell. We've got medicines – and if you look at the hepatitis space, if you look at cancer, if you look at diabetes. I mean, huge advances in recent years. Obviously lots of risks, our evacetrapib trial calls that out. At the same time, I've never been as optimistic as I am about the chances we have as an industry to really make a difference for patients. We've got to keep telling the story, reminding people that the medicines as a percentage of total healthcare spend have remained remarkably constant for a long period of time, which suggests that our medicines are helping to hold the line or even reduce other costs in the system that none of us want to incur: hospital stays, being off of work, disability, et cetera. So we're not tone-deaf, Mark, in terms of the criticism that's being leveled at us. At the same time, I think that we've got more work to do here, and I think you can expect to see more. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thank you, John. Linda, if we could, go to the next caller, please.

Yes, next we'll go to the line of Chris Scott with JPMorgan. Please go ahead.

Great, thanks very much for the questions. First one is on expense management. You guys are obviously doing a great job on that front, but just a qualitative question as I look out to 2016. You've had a lot of incremental product flows when we think about next year and to 2017, between Jardiance's expanded label, the IL-17, baricitinib, et cetera. Should we think about 2016 as an investment year for the company where we could see SG&A growth kind of resume here, or do you still have enough flexibility with some of your initiatives to absorb some of these launches in the existing infrastructure? The second question was on baricitinib. Just wanted to get some of your perspective on how you see the superiority data versus Humira playing out in the commercial RA market. I guess is this an area that you think you could take share quickly, or is this going to be a much more gradual story, just given how entrenched some of these TNFs are with the long-term safety, et cetera? Thanks very much. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great, Chris. Thank you for the questions. Derica, we'll go to you for the first question on the expenses and particularly some of the pushes and pulls as we head into 2016, and then, Dave, for your comments on baricitinib. Derica W. Rice - Chief Financial Officer & EVP-Global Services: Good morning, Chris. It's too early to give specific guidance on 2016 as it relates to our expense management. We'll provide that on our January call the first week of 2016. But what I can say is that we expect to be consistent with what we stated all along, which is that we believe we can expand margins throughout the balance of this decade, and that's also including revenue growth. And clearly to expand margins, that means we either – we're growing our top line faster than we're growing our expense base. And what ultimately happens to our expense base, we will share the specifics around that in that first week in 2016. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thanks, Derica, Dave?

Thanks for the question, Chris, on bari. We're very excited now that we have the full set of data in hand. Recall we have four separate Phase 3 programs, which really span the whole spectrum of rheumatoid arthritis, from refractory patients to biologics. Recall that was the first study we read out, and our study has, I think, a unique feature in it's a very real-world assessment. Many patients had failed on two or three or more biologics before entering that study, and still baricitinib showed very strong, robust efficacy. We then read out a study in conventional DMARD refractory patients. Again, baricitinib really helped patients who had been refractory to methotrexate and other conventional DMARDs. We then demonstrated superiority to really the established standard of care for disease modification, which is methotrexate, in the RA-BEGIN study, and most recently a superiority to adalimumab in DMARD-refractory patients, sort of this first-line biologic space. So I think we've gotten what we wanted when we started the program. And, to your question on safety, so far, through clinical trial observations, we're very reassured by the safety profile we see. So we're now onto submission. In terms of what to expect in the market, I think the RA market has some features where one would say this will not be sort of an overweight phenomena of share gain. You mentioned one, which is a natural caution on safety in any new drug where you're suppressing the immune system. We're very confident in the data we've produced on that dimension through our clinical trials, but understandably physicians like to see that play out over time, and I think that's been sort of the normal pattern in this market. As more reassuring safety data from a real-world setting is produced, doctors become more comfortable. It's also a very competitive space. We understand that, and we're prepared to compete in that. On the other hand, baricitinib I think offers a new choice, which is when I'm failing on inexpensive generic conventional DMARDs, rather than step two, a TNF, I have another alternative now, and that alternative appears to be superior to the standard of care in that setting. And there are a number of patients in that situation have not made that step two, anti-TNFs, for all kinds of reasons, and we'll be competing aggressively in that space. And so we like our hand. We obviously will have baricitinib for a while to come. We're stepping into a new market for Lilly; we want to do it right. And my view is I think we'll see good uptake. It won't be some overnight phenomena, but on the other hand, we do expect to make incremental gains as we enter the market. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thank you, Dave. Linda, if we can, go to the next caller, please.

Next we'll go to the line of Tim Anderson with Bernstein. Please go ahead. Timothy M. Anderson - Sanford C. Bernstein & Co. LLC: Thank you. I have three questions. On EMPA-REG OUTCOME, is it possible that those results will actually trigger price competition as J&J tries to hold on to its market-leading formulary positioning with Invokana? And Lilly, like most other sellers of SGLT2s, also sells a DPP-4. What's your messaging to physicians on how they should think about those two different classes of drugs? On Alimta, U.S. performance was down year on year. You mentioned competitive pressures. I'm assuming that is the PD-1s. So is that the trajectory we should think about going forward? And then lastly on evacetrapib, knowing what you do about the data at this point, do you think your drug failed because of the way you ran your particular clinical trial? Or do you think it failed because CETP inhibition is just not a viable mechanism? I realize full results have not yet been presented. Phil Johnson - Investor Relations, Eli Lilly & Co.: Tim, thank you for the questions. So, Enrique, if we can go to you for the first couple of questions on EMPA-REG OUTCOME and messaging around DPP-4 Tradjenta. Sue, to you, then, for the Alimta U.S. dynamics that we're seeing. And then, Dave, on evacetrapib. Jan, also feel free to chime in if you would like, as well. Enrique?

Sure. Tim, thank you for your question. It's difficult, really, to speculate when it comes to price competition. If anything, the EMPA-REG OUTCOME results create differentiation in the marketplace. So, from that perspective, we feel very confident in the value proposition that Jardiance offers today, which is I think very significant. I would point out that the access that we already have with Jardiance for 2016 is indeed very strong. We will have over 85% commercial access and over 55% Part D access. Could those numbers improve a bit with some of these results? It is likely, but as you know that takes time, and there's a process when it comes to formularies. At this point in time, there's no promotion of these data. We are clearly seeing an uptick when it comes to new-to-brand prescriptions. Just to frame, we were, before the top line, when we look at EMPA, including both Jardiance and glyxambi, our new-to-brand share was 15%. That creeped up to 17% by the time at EASD. And now we're at 21%. Probably most relevant is the share shift that we've seen post-EASD with endocrinologies going from 21% to 31% new-to-brand share despite the fact that there's no promotion. As John shared in his prepared remarks, we are planning to have the submission before the end of the year. Now, in terms of our positioning, in terms of promotion, that's something that we do not discuss prior to basically launching our promotion campaign and our messages in this particular case for EMPA. Phil Johnson - Investor Relations, Eli Lilly & Co.: Okay, and any thoughts at all on Tradjenta moving forward now that we have SGLT2 data and how we'll be competing with that drug?

Nothing really changes when it comes to Tradjenta. We have, I think, a unique product that is uniquely differentiated in the DPP-4 class. Tradjenta, I think it's important to note, is the fastest grower in that class. So growth is very, very strong. We are planning no changes at this stage. Phil Johnson - Investor Relations, Eli Lilly & Co.: Sue?

Sure. Tim, with regard to Alimta, we saw a couple of things this quarter. Firstly, we saw a buying pattern where we had a buy-in this time last year that we didn't see this year. And, secondly, we have seen some softening on Alimta in later lines of therapy, in second line and beyond, which we had anticipated. I mean, we just launched Cyramza in the second-line setting, and clearly the I-O agents are also in second line. So we are seeing some softening there and in areas that we're not promoting. Where we are promoting, i.e., the first-line setting and continuation maintenance, we continue to see good usage and continue to believe that we will continue to see good usage in those areas. As you know, we are also doing combination studies with I-O agents. We anticipate getting some data next year on that. So I wouldn't read too much into this quarter's trend. Phil Johnson - Investor Relations, Eli Lilly & Co.: Dave?

Yeah, as relates to evacetrapib, Tim, obviously we're disappointed in the outcome, but I guess your question is did we run the right experiment. And our answer is yes. We sought to test the hypothesis, whether robust CETP inhibition, which dramatically raised HDL and reduced LDL, would lead to a reduction in major cardiovascular events. We ran that experiment, I think, exceedingly well in a population of interest, which was high-risk vascular disease. And after three years of observation, the answer is robust CETP inhibition does not change major cardiovascular events with evacetrapib. We really can't say whether that would apply to other CETP inhibitors, but I think we're pretty confident that the experiment we ran was a good one. And we have a definitive answer, thus the discontinuation of development. Phil Johnson - Investor Relations, Eli Lilly & Co.: One thing – this is Phil – real quick. Because we had a number of questions, as you would imagine, after the announcement that we were stopping the development of evacetrapib. Just to clarify the kinds of robust increases we saw in HDL and decreases in LDL. If you look at the Phase 2 study, you'll notice that we essentially had two main doses, a 100-milligram dose and a 500-milligram dose. It was very clear that the 500-milligram dose produced both greater increases in HDL and greater decreases in LDL than the 100-milligram dose. The 130-milligram dose we took into Phase 3 had been reformulated to be more bioavailable and give effects that would be more potent than the prior formulation. In effect, what we saw from the initial data we've seen in our Phase 3 study would have been as we had expected and talked about in the past, additional HDL raising of roughly 120% plus, 130% kind of numbers and greater than a 30% reduction on top of statins on LDLs. So very robust changes that for whatever reasons and unfortunately did not translate into a reduction in MACE events in this particular trial. So more to come on that likely next year, as Dave mentioned. So, Linda, if we can, go to the next caller, please.

Next we'll go to the line of Vamil Divan with Credit Suisse. Please go ahead. Vamil K. Divan - Credit Suisse Securities (USA) LLC (Broker): Great. Thanks so much for taking the questions. I just had two questions if I could. So one just around the pricing discussion from before, just found it interesting on slide 13 when you break down the pushes and pulls on the revenues. I think this was the first quarter in a few that we've seen the impact on price in the U.S. be negative. And so I was wondering if you maybe just could provide a little bit more color, if I'm correct, on what exactly drove that result relative to the last several quarters. And then second one is just we've received a few questions around – you've got obviously a lot of news, positive and negative, for the pipeline. And you've kind of generally endorsed sort of the margin expansion story you've talked about before. You've given pretty specific comments in the past around the ranges you expect for SG&A and R&D, sort of in that 2018-2019 timeframe in terms of percentage of sales. Can you just talk, I guess – do you still feel comfortable with those numbers you gave before? And maybe more broadly, just how much are you factoring in from drugs that are still in the pipeline in terms of delivering actual revenues in that 2018 – 2019 timeframe as you think about hitting the margin targets that you've outlined before? Thanks. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thank you, Vamil, for the questions. On your first question, this is the first quarter in a while that we had a negative price effect for our U.S. Pharma business. If you do go back to…

Next. we'll go to the line of Gregg Gilbert with Deutsche Bank. Please go ahead.

Thanks. Enrique, going back to diabetes, I'm not asking you to show your future strategic cards here. But what is Lilly doing to help shape the diabetes treatment guidelines post the EMPA results? Perhaps if you could, share what you think a realistic, responsible goal would be for Lilly as a company in terms of how to frame the importance of that outcomes benefit for treating physicians. And then my second question is on the Alzheimer's front. Is Lilly exploring compounds that treat the symptoms of the disease, or are you focused only on disease modification as a goal? A policy question as you approach R&D in that area beyond the later-stage assets. Thanks. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great, Gregg. Thank you for the questions. So, Enrique, on the first question, and, Dave, if you'd like to take the second one.

Sure. Phil Johnson - Investor Relations, Eli Lilly & Co.: Jan, obviously feel free to chime in as well if you'd like. Enrique?

We have the great fortune that we count within our ranks a number of people that have either participated in developing and writing some of these guidelines in the past both in Europe and in the U.S., or people that have actually called for some of those committees. We have to understand that those committees act in an independent manner. For us, I think our role is to ensure that these bodies, whether it's the ADA or others, basically have full access to all of our data. And we believe that data speaks by itself. I think it's very compelling. And when it comes to the overall benefit, we do expect that the data is such that it would trigger some of these reviews. I'm not going to speak later on the outcome of that. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thanks, Enrique, Dave?

We're going to – I'll just give a quick commercial. On December 8 I'll have a chance to talk a lot to talk about our Alzheimer's strategy, Gregg, so you're welcome to join us then. But in brief, we believe Lilly is very well positioned to capitalize on the emerging science in Alzheimer's. That is primarily focused right now on disease-modifying agents but not exclusively. And as you know, we have disease-modifying agents at every stage of development. But we also have important preclinical efforts on symptomatic agents because people, even with the best-case scenario on disease modification, will live with this disease for a long time. They will suffer from the symptoms of Alzheimer's, and we believe there is space there. We have some expertise there, and we'll exploit it. Our main focus is disease modification, but we're interested in agents that could also help patients just live more comfortably or more safely with the disease.

Thank you.

I can add that we have a compound in Phase 1, which it said Parkinson's as the heading, but that's also a potential symptomatic treatment for Alzheimer's disease. And in the preclinical space, we also have some efforts that actually build on Lilly's very long experience in the field of psychiatry. So I think we are well positioned, realizing though that it is an uphill battle to understand exactly what mechanist could work then for novel symptomatic treatments in Alzheimer's, but we are also very much involved in new ideas then to learn how the brain is functioning in psychiatry. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thank you, Jan. Linda, if we can, go to the next caller, please.

Next we'll go to the line of Seamus Fernandez with Leerink. Please go ahead.

Thanks very much for taking the question, so just a couple of quick questions, first off for Enrique. Enrique, can you talk to us a little bit about the importance of Basaglar and the decision to settle on this? Was the settlement specifically applied only to the device, or does it apply more broadly such that other competitors seeking to enter the market would have to go through the same legal process that Lilly would? And then in terms of – again, more of a guidelines follow-up question. As we think about maybe just the guidelines and timing of guidelines around EMPA-REG, can you just update us on which guidelines are the most important? As we've talked to payers and surveyed payers, the feedback that they have provided is that guidelines could be what really changes their willingness to place Jardiance in a preferred position onto formularies. And then just as a final question, the performance of the insulin business particularly looks really challenged internationally. Can you talk in a little bit more detail about that trend and how you see that going forward? Thanks a lot. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great, thanks, Seamus. Enrique, it's all yours.

Very good, let me start with the last question on insulin overall. There is a trend that has not been discussed much. But one of the impacts that we see broadly when we look at the macro diabetes market is that insulin growth has basically slowed down. We see that, of course, for mealtime insulins. We believe that both ACOT2 growth and GLP-1 growth is partly the cause of that. Now having said that, when we look at our own performance, we grew Humalog 6% in the U.S. and also 6% outside of the U.S., different regions with different growth, emerging markets of course much higher than that. When we look at our human insulin, Humulin, we were basically flat. We were at minus 1%. The U.S. did have positive growth, driven by the Humulin U-500. But we did have a decline in emerging markets as a result of no longer participating in the Brazil tender. So all in all, not big changes when it comes to our overall performance, but we do see a slowdown when it comes to the overall insulin market. You asked about Basaglar. Clearly, this is a very important product for us. I'm pleased to report that so far our launches I think are going well. Uptake is very good, maybe slightly ahead of our expectations, whether it's Japan or Slovakia or the Czech Republic, which are the first three markets where we launched the product. When we look at our performance with Basaglar, we look at the entire basal market. We don't only look at Lantus. And in Japan, when we look at the entire basal analog market, we are now at 5.5% two months post-launch. So very pleased in particular with that performance in very important markets. Now clearly, the settlement that we…

Next we'll go to the line of Colin Bristow with Bank of America. Please go ahead.

Thanks for taking the questions, and nice work on the quarter. So, in light of the breakthrough designation received for abemaciclib, could you just talk about the key points of differentiation in the clinical profile of this assets versus palbociclib? And any anticipated timing for the data readouts would helpful. And another question on the Basaglar: Could you just comment on the pricing relative to Lantus in the launch territories? And, acknowledging that it is early, are you seeing any switching from Lantus patients, or is this purely new patient acquisition? And then just lastly on your PCSK9, can you talk about potential points of differentiation versus the competition and when we would expect any updates on Phase 3 progression? Thanks. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great, Colin. Thank you for the questions. So we'll go to Sue for the breakthrough designation question on abemaciclib differentiation versus the other marketed drug in the class and also timing for data readouts. Enrique with what we're seeing in terms of relative pricing to Lantus. And then, Dave and Jan, if you'll provide the answer on the PCSK9, that would be great. Sue?

Yeah, sure. Clearly we're very excited to have our second breakthrough therapy designation now for abemaciclib. This designation was based on the Phase 1b cohort expansion that we presented at San Antonio Breast last year. And this showed single-agent activity, a robust response rate, acceptable safety profile, durability, so we have a Phase 2 study that's ongoing. We hope to replicate that data in that study, and we should hear next year and see data on that and hope to present that data at a scientific meeting next year. We also have, as you're aware, two Phase 3 studies in breast cancer ongoing. Again, we hope to have data readout on those in 2017, although we do have some interims. And we have a lung cancer study specifically in KRAS. With regards to our CDK4 and CDK6 inhibitor, we do we believe we have a potential to have a best-in-class inhibitor. As I said, we have single-agent activity. We are also able to continuously dose this agent, which we believe is important given that the whole point of it is to inhibit the cell's cycle, so you'd want to continuously do that. So we believe that that could be an important differentiator for us. So we look forward to seeing the data and to seeing, as I say, the single-agent data next year and the Phase 3 data readouts after that. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thank you, Sue. Enrique?

So on Abasaglar or Basaglar, in the three countries where we've launched – and I'll briefly just highlight what our share is. When we look at the entire market, in Japan, as I mentioned, we are at 5.5%. In the Czech Republic, at 3%, and in Slovakia it's a small market but I bring it up because we are at 11%. We've also launched in Germany, the UK, Sweden, Poland, so we are really in full launch mode. I think it's fair to say that the dynamics when it comes to pricing, they vary from country to country. In some cases, there is a very formulaic path in terms of what's going to be the pricing that we will receive as a result of launching a biosimiliar. And that determines the pricing. Some cases we have discretion in terms of where we price. It is too early to basically say that – where are these patients coming from. It is likely that in Slovakia, some of these patients are switches, because the reimbursement level in Slovakia was lowered when we launched. And, in this particular case, patients that are on Lantus, my understanding is that they have to the pay the out-of-pocket on some of the difference relative to the Lantus price. We have to see this story evolve, but I think it's fair to say that so far we are pleased with our launch. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great, thank you, Enrique. And, Dave, on the PCSK9?

Yeah, I think we've talked about this on prior calls, so I'll be brief. We have our Phase 2 program complete. We believe there are key elements of differentiation for the molecule, but as we've evaluated our options as a company, we've said we're looking at our strategic options for further development of the product. We haven't completed that review, and so there's no real update on progression or other alternatives at this point. Phil Johnson - Investor Relations, Eli Lilly & Co.: Okay, great. Thank you, Dave.

Yeah, and the addition I can make then is this antibody has a longer durability of the LDL-lowering effect than compared to competitors. Phil Johnson - Investor Relations, Eli Lilly & Co.: Okay, thank you, Jan. Linda, if we can, go to the next caller, please.

Next we'll go to the line of Steve Scala with Cowen. Please go ahead. Steve M. Scala - Cowen & Co. LLC: Thank you. Three questions. When in 2016 are the interim looks for abemaciclib's Phase 3 trials? Maybe you can narrow it down to a half, first half/second half. Secondly, what is going on with peglispro and potential further studies? It seems as though we are on a path toward Lilly dropping the drug, but maybe you can tell us why that is not the case. And then, thirdly, on evacetrapib's ACCELERATE trial, what is the explanation for, in July, the study being deemed not futile, and in October the study stated to have no chance of success? Were the analyses done using different criteria, or did something bad happen in those three months? Thank you. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thanks for the questions, Steve. So we'll start off with you, Sue, for the abemaciclib interim timing question, to you, Enrique, on the peglispro question, and then over to Dave on the evacetrapib question from Steve. So, Sue?

Yeah, Steve, obviously these are all event-driven, so things can change. But as we look at the Phase 2 data, we'd anticipate that we'd get the interim data the first half of the year. And then for the Phase 3, probably the second half of the year. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thank you, Sue. Enrique?

Sure, so just to remind everyone, we had, of course, unprecedented efficacy when it comes to basal insulin peglispro, but we had some risks that we felt needed to be discharged with additional clinical trials prior to us being able to make a submission. What we have shared is that we're engaged in discussion with regulatory authorities, as well as our advisers. Those discussions are ongoing. We've had some of those discussions with both the FDA and EMEA and are still having some of the discussions with our advisers. So it is something that I cannot make a comment on right now. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thanks, Enrique. Dave?

Yeah, as it relates to evacetrapib and the ACCELERATE study and how we're monitoring that and the interim futility, as we said before, the study called for a single interim futility analysis. That was the instructions we gave the independent data monitoring committee. They conducted that analysis in July, and per their charter instructed us to continue the study as planned. We don't know what their analysis or conclusions were in July, other than what they instructed us to do. A few weeks prior to October, first week in October, they informed us they were planning to meet again, and then shortly thereafter they communicated a new recommendation, which was to stop the study for lack of drug effect. We then looked at their analysis, and we agreed with that conclusion. If you're wondering if there was some big surprise between those dates, the data doesn't seem to indicate that. The independent data monitoring committee's job is to monitor the study on behalf of the patients for safety and making sure we're not subjecting people to study burden when it's unnecessary. It was their judgment to continue during those two periods, and we respect their judgment. And they need to keep the company blinded to their analysis, which they did very well in July. So that's really all we know, and as we look at the data now, we agree with their recommendation. So I think the positive thing is we did call for the interim look, and we got to that answer, albeit it a few months after we originally specified it. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thank you, Dave. Linda, if we can, go to the next caller, please?

Next we'll go to the line of Tony Butler with Guggenheim Partners. Please go ahead.

Yes, thanks very much, two brief questions, one again to Sue. It's on ramucirumab, and the question really is around, much like Alimta, what has been the primary focus of sales today? Where are you getting traction? Does it continue to be in gastric? What's occurring in colorectal cancer? And the second question is, silently, Lilly has put together a number of assets outside of TGF-beta in the immuno-oncology space, be it bispecifics, et cetera. I'd be interested if you, perhaps, Jan, could frame the overall strategy for what you think you're going to be doing in this space? Thanks very much. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great, thank you, Tony, for the questions. Sue, we'll start off with you for the first question for sure, if you want to comment on the second as well. And then we'll go over to Jan for additional commentary.

Sure. So, Tony, with regards to the Cyramza launch, as you know, we've now launched in gastric lung and colorectal in the U.S. and in gastric in Europe and in Japan. In the U.S., we're seeing a use actually in all areas, with gastric use in about 40% of patients actually are getting treated now with Cyramza in second-line and beyond. Opportunity we believe is to continue to grow that in the second line, but also we're getting third-line usage, and we want to move that up to the second line. We're seeing about 40% now of the patients that are treated in the U.S. with Cyramza being in lung cancer, in both squamous and in non-squamous. Clearly lung cancer is getting much more competitive in the second-line setting. We're continuing to see use and believe and hear that there is a good place for Cyramza in lung cancer going forward. And we are seeing some usage in colorectal cancer, although that isn't our focus. Our focus is on lung and gastric. We are seeing some uptake in the U.S., though, in colorectal cancer. In Europe, we have launched in what we call the wave one countries, the ones that you get access to, and again in gastric cancer we're getting good feedback and good uptake there. We continue to work through a succession of launches in gastric cancer in Europe. And, in Japan, we launched the end of June and feel very good about the uptake in our first quarter in this market. It is a big opportunity and an unmet need in Japan; there are two to three times the incidence of gastric cancer there versus the U.S. And the feedback there so far is very good. Clearly, we have a succession of other hopeful approvals and launches in both lung and colorectal around the world to look forward to too.

Thank you, Sue.

With regards to I-O, Jan, do you want to comment on...

It's a very exciting area. And I think the situation today is that it can still be improved. I think we have seen the beginning here with the response rates up to 20% or somewhat higher, but many patients don't really respond very well still. But what we are doing in this space is to combine our expertise in cell signaling and microenvironment, together with other companies' PD-1 axis agent. And there are numerous clinical trials ongoing, which actually you don't see on our pipeline chart, but I know Sue and others have been communicated from the oncology business unit. So I think it's very important to see also then other novel agents. How can they interact then with the checkpoint axis? In relation to checkpoints, we're also very interested in our doing then bispecific antibodies, since there are several other checkpoints that haven't been tested yet, and having then the PD-1 as one anchor. And you have seen the recent communication around that. We're also – want to change the microenvironment with the oral agents, and TGF-beta is one of them, which is very interesting. Both potentially as a monotherapy, but also then in combination with PD-1s. We also want to test other microenvironment oral agents, which we have in the preclinical space. And, finally, it's not only important to activate these cells in the tumor, but you need to direct the T cells to the tumor, because if you don't have them there, checkpoint inhibitors are unlikely to respond. So we have new activities as we also have communicated with key partners such as Immunocore to actively direct T cells then to tumor-specific antigens, which I think represents also a new avenue in immuno-oncology treatments. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thank you, Jan. Linda, if we can, go to the next caller, please.

Next we'll go to the line of David Risinger with Morgan Stanley. Please go ahead. David R. Risinger - Morgan Stanley & Co. LLC: Thanks very much. So I have a number of questions. I guess first is on sola, please. So with respect to the DSMB looks at sola, do they assess futility, or is it impossible for the study to be halted early on futility? The second question is with respect to the U.S. price slide, slide 13, I was just hoping that you could explain the few points in a little more detail. First how it's calculated, and then, second, since the negative impact of generics started at the beginning of the year, it wasn't quite clear why the year-to-date pricing is up 3% yet the third quarter pricing is down 4% for the U.S. business. I just didn't understand what the inflection was in the third quarter, when the negative impact from generics started to be felt quarters ago. And then third, with respect to the BACE Phase 3 decision, it seems like you'll be rolling that into Phase 3, but if you could just discuss the variables and timing of that decision, that would be helpful. Thank you. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great, Dave. Thank you for the questions. Dave Ricks, actually since you've got evacetrapib and BACE and also the product that had the dynamic with the shipping to authorized generics, if you want to take the lead on answering all three of them, then we can complement, that would be great.

Okay, so let me start with the sola question. Phil Johnson - Investor Relations, Eli Lilly & Co.: Okay.

Right, that was the first one? And make sure I hit all these, Phil, as we go through it. Phil Johnson - Investor Relations, Eli Lilly & Co.: Yes.

Or David. So on sola, we have a more standard Data Safety Monitoring Board, like we do with many large studies. Their mission is really one of monitoring safety. We have, I think, communicated on prior calls, we have not chosen to go for an option to have an interim look specified by the company. And we would not instruct them to conduct such a review. I will say that Data Safety Monitoring Boards, as we set them up, they are independent. Their mission is to look at study data on behalf of the patients. And it's not unprecedented that they may call us and say, "Well, we think you should stop the study." But we have not asked them to do that, and we're under no obligation to follow their recommendation. Based on our observations from EXPEDITION-1 and EXPEDITION-2, and you would note that it took till about 40 weeks to see a drug effect, and based on the enrollment curve we have for this, we don't see a lot of value in looking at an interim look, because we enrolled the study very rapidly, and most of the benefit will come in the final months if the study behaves like EXPEDITION-1 and EXPEDITION-2. So unfortunately we will be waiting until late next year, the latest part of next year, before we have the answer. And I would expect the study to run until that time. On U.S. pricing, you were correct to point out our year-to-date is 3%. I think that's more indicative of the underlying trend we see, which is list price gains, net of gross-to-net reductions for all the various mandated and commercial reasons. The one-time event in Q3, which Phil tried to answer earlier, was a shipment to our authorized generics partner. It's a large…

Okay, great. Okay. John C. Lechleiter - Chairman, President & Chief Executive Officer: Well done. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thanks, Dave. Linda, if we can, go to the next caller, please.

Next we'll go to the line of Andrew Baum with Citi. Please go ahead.

I have two questions. First, (1:20:50) Phil Johnson - Investor Relations, Eli Lilly & Co.: Hey, Andrew, we're having a hard time hearing you. I'm not sure if you can do anything on your end to improve...

Sorry about that. Is it any better? Phil Johnson - Investor Relations, Eli Lilly & Co.: Yes, it is.

Terrific. Number one, what was the baseline for the LDL within ACCELERATE? Apologies if you already disclosed it. Second, I noted that you recently lost your fairly recently appointed head of immuno-oncology. In terms of replacements and how you're thinking about that, I would be interested. And then finally, do you view our CSF1R monoclonal as competitive with others? In particular, does it block dimerization, and how relevant is that in terms of potential efficacy? Phil Johnson - Investor Relations, Eli Lilly & Co.: Andrew, thank you for the questions. At this point in time we have not disclosed – actually maybe we have, Dave. In the paper that was recently published, did we have the baseline?

The benign paper, I do not believe we did. I think we have commented that the study designed for ACCELERATE to have people come in on a variety of statins that they may have already been on, on the maximum tolerated dose. I'll just qualitatively say that patients who entered the study had LDLs in line with guidelines, and they were really already on best standard-of-care statin. We further reduced LDL, as Phil mentioned, in the mid-30% on top of that. That's quite surprising to us and I'm sure the field, lack of MACE effect. We'll be disclosing more data about ACCELERATE, everything we've learned, and probably more data disclosures after that, sometime in 2016 in a major cardiovascular meeting.

Great, thanks, Dave. And then, Sue, on the question on I-O staffing and then the CSF1R molecule?

Yes, you'll have to remind me on the CSF1R question. With regards to I-O staffing, we actually have a really, really good team of people in New York and in New Jersey who are focused on I-O. Michael Kalos heads our research group there. He came from UPenn. We've also recently brought in some I-O experience in the medical and the development area. And we have in our I-O hub that we announced in New York and New Jersey recently moved one of our very experienced drug developers from Lilly. So we feel very good about the expertise we've got there, and we're going to continue to build that internal expertise as well as through the partnerships. I think we announced over the last year nine different partnerships related to I-O. So our view is that we will use the external expertise and the internal expertise to continue to drive our I-O experience. Phil Johnson - Investor Relations, Eli Lilly & Co.: And then, Andrew, on your question for CSF1R, were you asking whether we're competitive with other agents and if we downregulate something that I did not catch it when you said it.

So my question was whether your monoclonal prevents dimerization of the two receptors, and to what extent is that an important competitive element versus other CSF1Rs in development?

Jan, I don't know if you can comment on that. I can't comment on that. From a timing perspective, we have completed our Phase 1 dose study and now have a dose of CSF1R. We've just announced actually a collaboration with AstraZeneca to do a combination of their PDL1 with our CSF1R. So we think from a timing and from a development perspective, we're as competitive if not more competitive than other companies. The specifics around the dimerization, we're going to have get back to you on, okay?

That's okay. Thank you. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thank you, Andrew. I think we have time for at least one more question, Linda, if you can go to the next caller, please.

Sure. Next we'll go to the line of Marc Goodman with UBS. Please go ahead.

Good morning. I was wondering if you could give us an update on the CGRP program. And I was curious your thoughts about oral therapy given that there was a trade there and a company actually acquired one and is considering moving forward with that. And then if you could, just give us a little bit more detail on the diabetes product that moved in the pipeline there, the URI. Thanks. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thank you for the questions, Marc. So, Dave, if you can, comment on the CGPR update, and then, Dave and/or Jan, on the oral approaches for modifying CGRP as well, and then to Enrique on the diabetes compound.

Sure, yes. We're excited about our CGRP antibody for two different conditions we're studying or plan to study. First for cluster headache, we announced earlier in the year, we've proceeded into Phase 3, and those studies are enrolling as we speak for both chronic and episodic cluster. And then on migraine, we finished our Phase 2b study in the first half of the year, and actually read out the results in June. We saw robust reduction in headache days, et cetera, and we will be proceeding into Phase 3 imminently. We're excited about this program. We think we have a very competitive molecule in a largely underserved space. In terms of the oral products, there has been a long history of researching and attempting to create an oral CGRP inhibitor. That's proved to be difficult, I think, for many of our competitors. We are in the list of people who also have our own program in this area. We don't have anything to say about that today. We observed the trade that happened and of course wish them all the luck in the world. But right now all the data, in terms of what looks like druggable CGRP inhibition, are antibodies. Those are the late-stage projects, and of course we have one of those. Phil Johnson - Investor Relations, Eli Lilly & Co.: Good. Thanks, Dave. Enrique?

You are right that it's listed on the pipeline is the BioChaperone that we licensed from Adocia. So far, I think the program is progressing extremely well. We're very pleased with the results. And as we continue to get results, we'll be sharing them. Phil Johnson - Investor Relations, Eli Lilly & Co.: Great. Thank you, Enrique. Linda, let's try to squeeze in one more question, if we can, before John closes the call for us.

Sure, and there was only one more question, so perfect. It's from the line of Jeff Holford with Jefferies. Please go ahead.

Hi, thanks very much for squeezing me in. I know we're ahead of guidance in January. But previously, you have talked about this gross margin line and how there can be some reversal of the benefit we've had this year if we see FX going forward. So I wonder if, Derica, if you could just give us a little bit of a hint there. If we saw FX rates, the major rates, stay flat going forward into next year, just how we might think about that gross margin into next year, just so we don't get any big surprises early next year. Thank you. Derica W. Rice - Chief Financial Officer & EVP-Global Services: Okay. If you notice, on each of our quarterly calls, we provide the absolute gross margin, but then we also provide a slide in the packet where we illustrate what our gross margin would be without the effect of FX. And if you're trying to get a sense of what the underlying run rate is, our gross margins are really running in that mid-70% range. And so once all of the FX noise is cleared out, which we expect to exhaust that once we move into 2016, you should expect that we're going to be somewhere around that natural run rate of mid-70%.

That's great, thanks very much. Phil Johnson - Investor Relations, Eli Lilly & Co.: Thanks, Derica. And I also like the fact the IR team doesn't have any homework assignments out of the call. So great, we got through the queue this time. John, if you'd like to, close the call for us, please. John C. Lechleiter - Chairman, President & Chief Executive Officer: Okay, thanks Phil. We appreciate everyone's participation in today's call and your continuing interest in our company. We hope you'll take part on your call on November 11 to discuss the baricitinib data that will be presented at ACR, as well as our investor event in Boston on Tuesday, December 8, where we'll discuss in detail our Animal Health business and provide a comprehensive overview of our efforts in Alzheimer's disease. We hope these updates allow you to more fully appreciate the myriad of opportunities before us and why we're bullish on our future. Finally, if you have questions we didn't discuss during today's call, please contact our IR team. They will be standing by. Thank you and have a great day.

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