John C. Lechleiter - Chairman, President & Chief Executive Officer Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co. Derica W. Rice - Chief Financial Officer & EVP-Global Services Susan Mahony - Senior Vice President & President, Lilly Oncology David A. Ricks - President-Bio Medicines & Senior Vice President Enrique A. Conterno - Senior Vice President & President, Lilly Diabetes Jan M. Lundberg - Executive Vice President, Science and Technology Alfonso G. Zulueta - Senior Vice President & President-Emerging Markets Jeffrey N. Simmons - Senior Vice President and President, Elanco Animal Health

Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC Jami Rubin - Goldman Sachs & Co. Christopher Schott - JPMorgan Securities LLC Charles Anthony Butler - Guggenheim Securities LLC Stephen M. Scala - Cowen & Co. LLC Mark J. Schoenebaum - Evercore ISI Andrew S. Baum - Citigroup Global Markets Ltd. Gregg Gilbert - Deutsche Bank Securities, Inc. Marc Goodman - UBS Securities LLC Seamus Fernandez - Leerink Partners LLC Colin N. Bristow - Bank of America Merrill Lynch David R. Risinger - Morgan Stanley & Co. LLC Vamil K. Divan - Credit Suisse Securities (USA) LLC (Broker) Alex Arfaei - BMO Capital Markets (United States) Richard J. Purkiss - Piper Jaffray Ltd. Geoffrey Meacham - Barclays Capital, Inc. Damien Conover - Morningstar Research

Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter 2015 earnings conference 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 our host, Dr. John Lechleiter. Please go ahead. John C. Lechleiter - Chairman, President & Chief Executive Officer: Good morning, everybody, and thanks for joining us for Eli Lilly and Company's fourth quarter 2015 earnings call. I'm John Lechleiter, Lilly's Chairman, President, and CEO. Joining me here on the call today are: Derica Rice, our Chief Financial Officer; Dr. Jan Lundberg, President of Lilly Research Laboratories; 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 Lilly's IR team. During this conference 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's not intended to be promotional and is not sufficient for prescribing decisions. So let me begin by recapping key events since our last earnings call in October. On the commercial front, we have received approval for and launched Portrazza in combination with gemcitabine and cisplatin in the United States for first-line squamous non-small-cell lung cancer. On the regulatory front, just last week, along with Incyte, we…

Thank you. We have a question from the line of Tim Anderson with Bernstein. Please go ahead. Timothy Minton Anderson - Sanford C. Bernstein & Co. LLC: Thank you, a couple of pipeline questions. On abemaciclib, on slide 19 you mention the Phase 2 single-arm readout underneath this category of Phase 3 readouts on the slide. I think that's the MONARCH 1 trial, Phase 2 single-arm, not likely to be a registration trial. But can you tell us how important those findings are in your opinion towards informing the future outlook for that product and how we should think about those results? And then second question on your BACE inhibitor for Alzheimer's, still on track to make a go decision in Q2? And would it be safe to assume that a go decision is more likely than a no-go decision, or is it really still very much up in the air? Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Tim, thank you for the questions and thanks for limiting them to two. I appreciate that. So, Sue, if you'd like to take the question on abemaciclib, and then, Dave, on the BACE inhibitor, please. Sue? Susan Mahony - Senior Vice President & President, Lilly Oncology: Yes, Tim, thanks for the question. With regards to the MONARCH 1 trial, which as you say is the single-arm, single-agent abemaciclib study, we should get the data on that mid this year, final data with some interim data earlier. As you know, we've also got the two Phase 3 studies, the MONARCH 2 and MONARCH 3 as well that are in combinations, and we should get that data next year with potential interims this year. We do believe that the single-agent data is an important part. It's not the…

Thank you. We have a question from the line of Jami Rubin with Goldman Sachs. Please go ahead. Jami Rubin - Goldman Sachs & Co.: Thank you. I'm going to make this two questions. On Jardiance sales, which I believe also included Glyxambi, sales were $15 million this quarter, actually I think a step down from the previous quarter, $60 million for the year. I'm just surprised that we haven't seen – certainly I would have expected to see some sequential improvement just given all the positive publicity. And while I understand that the label does not yet include the data from EMPA-REG, I'm just wondering what you guys are seeing out there. Are physicians looking at EMPA-REG as a class effect? Could it be that the SGLT-2 is facing class action lawsuits related to side effects? If you could, just talk about what's going on there because I'm surprised that we haven't seen a bigger pickup. And then just secondly, in terms of the label that you expect to get from the FDA, what are the scenarios that you see? What is a base case scenario? What is the best case scenario? And what do you think we need to see to drive numbers to reach consensus numbers by 2020? Thanks very much. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thank you, Jami. Enrique, those are right up your alley. Enrique A. Conterno - Senior Vice President & President, Lilly Diabetes: Very good. So, Jami, you are absolutely right. Our U.S. Jardiance revenue is not consistent with the sequential TRx growth that we're basically observing for the overall franchise, with just basically 30%. I had mentioned that before we disclosed the top line results for EMPA-REG OUTCOME. The franchise was capturing about 15%…

Thank you. We have a question from the line of Chris Schott with JPMorgan. Please go ahead.

Great, thanks for the questions, just two here. First, maybe a question for John, just updated thoughts on the M&A landscape. I guess specifically, do you see this market volatility as creating some opportunities for Lilly to get more aggressive and look at some assets? And just what's the focus when we think about business development? My second question was on the BACE inhibitors. And just elaborate a little bit more about how you think about the tradeoff of I guess time to market versus the level of BACE inhibition and dosing when you look at prioritizing the Astra BACE versus the internal low-dose BACE that you have as well. Thanks very much. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Chris. Thank you for the questions. John, you for the M&A. And then, Dave, do you want to take the BACE question, please? John? John C. Lechleiter - Chairman, President & Chief Executive Officer: Chris, I think the current volatility and generally lower valuations in the biotech sector doesn't change our basic strategy. We continue to look for small to midsized opportunities that complement the therapeutic areas that we're already in that we know well, so I don't think that has changed. We're certainly not interested in any large-scale M&A. At the same time, there's no question that valuations are more attractive today. There are some different dynamics going on. As you know, biotech is not biotech. There's big biotech. There's medium size, and there's nascent or smaller. And so we're looking across that whole spectrum. And if opportunity presents itself based on attractive valuation and what we think would represent good value for the company, we have the wherewithal to move on that. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Dave, on the BACE? David A. Ricks - President-Bio Medicines & Senior Vice President: Yeah, so I think your question is how are we thinking about the two programs and decision-making. I think you were there on December 8, Chris, and we spoke about the theoretical differences in the projects. We do know that the AZ BACE and the Lilly BACE that's in the clinic have different chemistry. We really like this target because it's rare to find a genetic validation like this in any disease, let alone Alzheimer's, which has so much unmet need. And so we're investing in two different ways to get there. At the end of the day, the decision-making, though, is going to have to be based on empirical data, because the theoretical differences need to play out in man. So we're collecting those data. A part of that is the AMARANTH Phase 2 program we're running now and the Phase 1 effort on our own BACE. And we'll have to see the data before we make a final determination. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, thank you, Dave. Val, next caller, please.

And we have a question from the line of Tony Butler with Guggenheim Securities. Please go ahead.

Yes, thanks very much, two questions again on Jardiance. J&J made comments about changes in the ADA guidelines to include the class. And I know you've spoken in the past about changes in guidelines as I guess it relates to medical treatment guidelines overall. So I wondered if you could separate the two and how meaningful one may be over the other. And then separately on the nephrology data that we will get more readouts later, is that package included in the CV outcomes data set, or would it be potentially something that is added after regulatory action on the CV outcomes data set for EMPA-REG? Thanks very much. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Tony. Thanks for the questions. Enrique, so the two questions will be on the ADA guidelines, are there guidelines for Jardiance, and the second one is if the nephrology data that we alluded to that was presented in 2015 was part of the submission of the EMPA-REG OUTCOME data. Enrique A. Conterno - Senior Vice President & President, Lilly Diabetes: So let me start with your second question first. Clearly as part of our submission, we really focused on the CV outcomes. We will be disclosing the outcomes that we saw when it comes to renal outcomes in the very near future. There is a publication that we're targeting. We think that the results are also very impressive, so we look forward for the possibilities that that may give us when it comes to the future. As far as guidelines, and I really cannot comment on other companies' statements. But what I can basically say is that we today do not see any significant changes in the treatment guidelines for Type 2 diabetes coming from any of the major societies or associations, whether it's ADA or EASD. Clearly, the AACE [American Association of Clinical Endocrinologists] issued new guidelines, but they really did not fully incorporate the EMPA-REG OUTCOME data as they were looking at those guidelines – and this package of those – some of those guidelines in early January. I am pretty confident that the different societies will have a thorough review of the different treatment guidelines. And I expect, as I have mentioned before, that that will happen once we basically have a label change in the U.S. market or in Europe. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Thanks, Enrique. Val, next caller, please.

And we have a question from the line of Steve Scala with Cowen. Please go ahead. Stephen M. Scala - Cowen & Co. LLC: Thank you. I have two questions. First, Novartis said yesterday that when comparing Cosentyx to ixekizumab, ixekizumab has higher rates of immunogenicity, more injection site reactions, and only one or two indications upon approval versus their three. I'm just wondering what Lilly's rebuttal to Novartis would be. And then secondly, Novartis also said yesterday that its Phase 3 study of ribociclib is quite likely to stop early based on modeling the company has done versus palbociclib. I imagine Lilly has done similar modeling. So I'm wondering, is Lilly willing to say that there's a good chance that MONARCH 1 stops in the first half of this year when you take the interim look? Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Steve, thanks for the questions. Dave, if you'll take the first one, please, on some of the Novartis comments around Cosentyx and ixekizumab; and then, Sue, on the ribociclib question. David A. Ricks - President-Bio Medicines & Senior Vice President: Sure. As you know, we're in the final stages of regulatory review on ixekizumab and preparing for launch later this year. I'm not surprised to hear what they said on their call, Steve, but I think we can only say for certain that the third one might be true. Clearly, we will launch with psoriasis first. And we're pursuing psoriatic arthritis, as was mentioned on this call, as well as ankylosing spondylitis. Those indications will come later. That said, I think there's really no direct comparisons between the molecules on immunogenicity. And if you study this issue, you'd learn that the assay cut points, which are proprietary to each…

Thank you. We have a question from the line of Mark Schoenebaum with Evercore ISI. Please go ahead.

Hey, guys. Thanks for taking the question. I was just wondering. if Donald Trump is elected, would that impact your long-term margin guidance, Derica? That's not a serious question. But I've enjoyed John's comments about biotech valuations. And Chris already got your thoughts on that, John, but I've also enjoyed following your comments over time on the drug pricing debate. I think on the last call, you said that the industry was preparing to begin to defend itself, and I'd just be curious to know if that effort has happened yet and how you see this playing out. What do you think will actually happen over the next call it two to four years, if anything? And then more of a housekeeping question; on Forteo, I'd love to know what your longer-term outlook on Forteo is given the dynamics in that market, assuming Amgen's sclerostin antibody launches in a year or so and the Radius's PTH-based analog launches. Should we be thinking about this as a declining asset, or are you confident you can hang on to it? And is this still an area of strategic interest for Lilly, or is this something that's more secondary? Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Mark. Thanks for the questions. So, John, on to you about the industry's actions on the pricing front and how you see this playing out in the next few years. And then, Dave, if you'd like to take the question on Forteo, please. John? John C. Lechleiter - Chairman, President & Chief Executive Officer: Okay, Mark. Thanks for your question. I think yes, M&A from within our major trade organizations, so this would be pharma and bio, there have been, certainly since the last time we discussed this, I…

Thanks, John. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Dave? David A. Ricks - President-Bio Medicines & Senior Vice President: Sure. Mark, thanks for the question on Forteo, not one we always get here, but Forteo has been a great product for the company. We launched it more than 13 years ago. We're still growing this product really in every geography in the world. Notably in Asia now, we're in double-digit growth in both emerging markets and Japan, and in performance terms 5% last quarter. As we look ahead, I would say three things. First, this is a disease that has tremendous under-treatment. So today in the U.S., if you have a fracture, an osteoporotic fracture, less than one in ten women receive an anabolic therapy, which is really a problem. So there's a lot of room for new voices and new mechanisms to improve treatment for severe osteoporosis. I think sclerostins as a target is a great target. We have our own asset in the space, although moved back to Phase 1 as we look for an acceptable commercial formulation. Risk/benefit has to be borne out in the larger trials, and we'll look forward to seeing that from the competitive program. But I think there's room for more than one mechanism to build bone in people who suffer from severe osteoporosis, and frankly the patients probably need choices. That all said, as we think about our midterm, Mark, it's important to note that, as I'm sure you've already researched, the IP on Forteo in the U.S. and in other major markets really begins to expire at the end of this decade. So although we would expect continued good performance through the end of the decade, around 2019 – 2020 we would expect to see some form of biosimilar or generic competition, depending on the geography we're talking about.

Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: You're welcome. Val, could we have the next caller, please?

Thank you. We have a question from Andrew Baum with Citi. Please go ahead.

Thank you, a couple of questions, please. So first to Sue, you indicated that you would like to discuss if positive the Phase 2 abemaciclib data. What confuses me is how the FDA could grant accelerated approval given this trial excludes patients who have had prior exposure to palbo [palbociclib]. Perhaps you can help me understand that. And then second for Enrique, a trial of Jardiance in non-diabetic heart failure patients, should we expect Lilly to initiate such a trial this year? And when is the earliest you could expect that data within that indication? Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Andrew. Thanks for the questions. First, Sue, if you would, and then we'll go to Enrique for the Jardiance question. Susan Mahony - Senior Vice President & President, Lilly Oncology: Yes. Clearly, we first we need to get the data, and then we need to decide whether we go to the FDA with regards to that data. As usual, the trial was agreed with the FDA previously. And although we have seen an uptake on palbo, not all patients are getting palbo. And a lot of these patients are actually pretreated with several different agents. I think it's five to seven or five-plus. So I think it's important that it's a specific group of patients where there really is a high unmet need. And if we see good data in that patient group, we feel good that not only would it show single-agent activity and we confirm the Phase 1 data where we saw robust single-agent activity, but it also would meet a very important need for these patients. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thanks, Sue. Enrique? Enrique A. Conterno - Senior Vice President & President, Lilly Diabetes: Clearly, the data for empagliflozin when it comes to heart failure from the EMPA-REG OUTCOME study was very impressive. There's not much that I can share now other than just to say that you can imagine that we are actively exploring and thinking about this very important opportunity for the brand. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thank you, Enrique. Val, could we have the next caller, please?

We have a question from the line of Gregg Gilbert with Deutsche Bank. Please go ahead.

Thank you. First on CGRP, can you give us some more color on the trial design and the patient population and timeline? And then can you also provide some more detail on what you will explore with the Keytruda and abema [abemaciclib] program? And if you can't give us specifics, can you at least talk about where the scientific rationale is most compelling and when we might get some tangible evidence that you're barking up the right tree or not with that combination? Thanks. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Gregg. Thanks for the questions. Dave, do you want to talk about CGRP? Jan, feel free to chime in if you'd like as well. And then we'll have maybe Sue take a shot at the second question on the Keytruda-abemaciclib trial. David A. Ricks - President-Bio Medicines & Senior Vice President: Great. Thanks, Gregg. We've initiated now the Phase 3 program for the acute and the chronic migraine – episodic and chronic migraine patients. This is really not two diseases; it's one disease. There's a cut point in the way these get classified in terms of frequency of headache. I think that's similar to what other people are doing. It's important you note we actually are carrying two doses into the Phase 3 program because we think optimizing efficacy and dosing convenience in a preventative setting like this will be critical. We like our chances in doing that but want to make sure we have the optimal dose frequency and concentration to get the maximal efficacy. Those studies are enrolling now, and we expect data before the end of 2017. These are not long studies to study this condition. The only other reminder I'd throw out there is we do also have a cluster headache program, which is both episodic and chronic cluster, and that is also enrolling. We do expect data in the chronic cluster setting this year, as was indicated by Derica on the key events slide. And that will be the first Phase 3 information we have on CGRP. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thanks, Dave. Anything you wanted to add, Jan?

No. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Okay. Sue? Susan Mahony - Senior Vice President & President, Lilly Oncology: As you know, we are doing a number of studies looking at combinations across our internal pipeline of marketed products with immuno-oncology agents. We believe that combination therapies are going to be important, specifically in three areas, in cell signaling, in the micro environment, and also in I-O. If we're looking at the abema study, that's Phase 1 data. Clearly, we're looking at early safety data and potentially efficacy, but mainly early safety data, with looking at the I-O agents for immune clearing of cells. And abema induces senescence, whether the combination of those would have a beneficial effect.

(57:33)? Susan Mahony - Senior Vice President & President, Lilly Oncology: It's across tumors. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: And we had the press release that went out last year in December that Dave had talked about. It would be likely to progress to Phase 2; that that would be in patients with metastatic breast cancer or non-small-cell lung cancer. In terms of timing, enrollment begins early 2016. So certainly, I don't think you'd be expecting to see data this year. That would be into the future, and we'll have a better feel for that as we see how enrollment accrues in the trial.

Thanks. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Sure. Val, next caller, please.

We have a question from the line of Marc Goodman with UBS. Please go ahead.

Good morning. First, can you give us any more color on the three products that achieved the Phase 2 milestones? And then second, just two products, one, Alimta weakness and Humalog strength in the quarter. Can you give us some color on that? Thanks. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Marc. Thanks for the questions. Jan, if you'd like to talk through the Phase 2 entrants, and then Sue to talk about Alimta in the U.S., and Enrique, Humalog, please. Jan?

Okay. So let us start with the IL-23 monoclonal antibody for ulcerative colitis. The whole area of IL-17/IL-23 pathways clearly has strong interest for Lilly with our ixekizumab data in psoriasis and psoriatic arthritis. And we believe that IL-23 specifically then could be very useful in inflammatory bowel disease based on human genetic data and also some competitor molecule data that are emerging. So we see these as very complementary to our IL-17 activities. The BMP-6 antibody in anemia is a new target. Actually, the name is bone morphogenetic protein 6. And it's really an evolving area in our strategy to look at how can we influence and treat diabetic complications, and in this particular case then the anemia in patients with diabetic kidney disease in the advanced stage. This anemia is iron restricted and hepcidin related, and it's very common in dialysis patients. And the goal here is to potentially replace or reduce the need then for erythropoiesis-stimulating agents, which you know have some concerns with CV side effects. We have seen some promising data in Phase 1 on the iron sequestration and are now looking then for effects on hemoglobin. The third one is an oral agent, and that is p70S6/AKT, which is tested in some cancer indications, a cell-signaling inhibitor. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, thank you. Sue, on Alimta in the U.S.? Susan Mahony - Senior Vice President & President, Lilly Oncology: Yes, we did see some competitive pressure on Alimta in Q4. As we mentioned before, Alimta is standard of care in the non-squamous setting. And with the new agents that are launching, particularly in the second-line setting, clearly we've got two immuno-oncology agents now. We've got Cyramza. We've also got the EGFR third-generation TKIs. And we…

Thank you. We have a question from the line of Seamus Fernandez with Leerink. Please go ahead.

Thanks very much, just a couple of quick questions for Sue. Sue, can you just give us a reference point for what would be a potential comparator to the abemaciclib MONARCH 1 study data? So as I look at it, maybe eribulin might fit into that mix, but I think it will be helpful to know what the baseline performance of other agents is in this patient population. And then separately, can you just update us on timing for your TGF antibody and when perhaps we might see data for that combination? We're starting to hear a little bit of interest building for that program. Thanks. Susan Mahony - Senior Vice President & President, Lilly Oncology: Yeah, sure. With regards to – let me take the second one first. With regards to the TGF beta, we have a number of studies ongoing in Phase 2 as well as combination studies with I-O agents, and we should be seeing data on those probably this year and next year. With regards to abemaciclib, again, from a single-agent activity, if you want to look at a comparator, you probably should be looking around eribulin. I think the key thing around that as well is to look at the other single-agent activity across the other CDKs. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Thank you, Sue. Val, if we can go to the next caller, please.

Yeah. We have a question from Colin Bristow with Bank of America. Please go ahead.

Hey, good morning and thanks for taking the questions. So a couple of quick ones. On baricitinib, when do you expect to make and communicate the Phase 3 progression decisions for the diabetic nephropathy indication? And what's your current thinking on the potential there? And then a follow-up on ixekizumab, with the upcoming potential approval, can you comment on where you are in terms of launch preparations and give us some color on your expectations for launch performance in 2016? Thanks. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Thanks for the questions. Dave? David A. Ricks - President-Bio Medicines & Senior Vice President: Sure, yes. As you know, we have a number of interesting Phase 2 initiatives to explore future indications for baricitinib. I would say there's a high priority for the company to work through those and make lifecycle decisions this year on baricitinib. Diabetic nephropathy is one of them. The data look strong, as presented last year at the American Diabetes Association, but I would point out two things that I think are things weighing on our minds. One is the way in which these studies are conducted under the current regulatory guidance is not the simplest path to market. The studies can be long. Patient selection can be difficult, and recruitment rates historically in the industry are very low for these studies, or slow, I should say. And we need to then balance what looks like strong clinical data against other opportunities we have right now with the molecule in psoriasis. We have data in – we're studying in atopic dermatitis. We're looking at several other more immunology indications, so to be determined. I would expect, Colin, through the year, we'll exit the year with lots of clarity on the path to Phase 3 for baricitinib NILEX or line extensions. Ixekizumab, I think we're in great shape. We're anticipating approval in the world's major markets, Japan, U.S., and Europe, in this calendar year. We are prepared to rapidly or immediately after approval commercialize the product. We think we've got a great value proposition for payers. We've got a compelling efficacy for patients, and the KOLs I talked to are highly interested in the class and in ixekizumab. And we see actually the class leader doing extremely well I think relative to our expectations. I think it bodes very well for ixekizumab. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thank you, Dave.

Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Thanks, Colin. Val, if we can have the next caller, please?

We have a question from the line of David Risinger with Morgan Stanley. Please go ahead. David R. Risinger - Morgan Stanley & Co. LLC: Yes, thanks very much. I have two questions. First, with respect to biosimilar Lantus, could you just discuss the pricing and the adoption ramp that you expect ex-U.S.? Basically, how aggressively are you competing with that to enhance your diabetes franchise commercially? And then second, with respect to the sclerostin, could you please discuss the bone-building risks in the skull that some experts have highlighted as risks to watch and your views on them? Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Dave. Thank you for the questions. So, Enrique, if you could handle the question for ex-U.S. biosimilar Lantus. And then, Jan, if you'd like to talk about the sclerostin risk that was mentioned. Enrique? Enrique A. Conterno - Senior Vice President & President, Lilly Diabetes: Sure. So we don't share our future expectations for our products or forecasts, but we do know what some of the pricing is in the different markets. They're public, at least the listed prices. In general, we see our biosimilar, Basaglar, our biosimilar for Lantus, Basaglar, is 10% to 20% below Lantus. It's difficult to say because there are sometimes rebates that are given that are not public, what the exact price difference might be. But what I can share is that we're pleased with our performance. Each country has its own dynamics. And we basically need to see how this all is going to unfold. We expect this is going to be an important product for us and clearly complements our overall diabetes portfolio. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thank you, Enrique. Jan?

Yeah. Well, as you know, sclerostin is actually a target that has some human validation. And yes, there is a very large and heavy skull that people have then if they have a sclerostin mutation then from start of life. In the treatment setting, clearly the ambitions are to treat the patients that haven't really had these genetic defects. So the likelihood of similar issues I think are clearly much smaller. And you have to watch though for potential changes in foramina carrying then important nerves and arteries and so on to the head, and also potentially middle ear bones which could potentially change hearing. But what we have seen in our studies with our sclerostin antibody has not involved changes then in skull bones and so on that has had any clinical impact. Clearly, we need more long-term data to see is there a risk or not. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thank you, Jan. Val, next caller, please. David R. Risinger - Morgan Stanley & Co. LLC: Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: You're very welcome, David.

Thank you. We have a question from the line of Vamil Divan with Credit Suisse. Please go ahead. Vamil K. Divan - Credit Suisse Securities (USA) LLC (Broker): Great, thanks so much. Maybe if I could just touch on two areas that haven't really come up in the Q&A yet. One is emerging markets and the other one Animal Health. So emerging markets, just curious for your updated thoughts there. You had 1% constant currency growth, I believe, this quarter. Just how do you see the potential for the markets overall? And has your desire or your intention to invest in these markets changed in any way given some of the volatility we've seen over the last several months? And on Animal Health, I think it was a 5% decline at constant currency this quarter, just maybe a little more color. You mentioned I think it was more on the ex-U.S. products, but maybe a little more color on what exactly drove that. And are you still comfortable with the guidance you provided back in December of seeing greater organic growth as we move through this year and getting above the industry growth levels starting next year? Thanks. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Vamil. Thank you for the questions. Chito, to you for the emerging markets question. And then, Jeff, we'll have you obviously talk about the Animal Health dynamics. Chito? Alfonso G. Zulueta - Senior Vice President & President-Emerging Markets: Sure. First on the economies for the emerging markets, there aren't many, as everybody knows, bright spots starting last year, except perhaps from Mexico given its proximity to the U.S. And as the economies go, so does the healthcare sector in many of the markets. So we've had a very, very…

Yes. Vamil, relative to the Animal Health business, yes, the majority of the decline came from international markets. It also was isolated to companion animals, very consistent with our last few quarters. We've seen this from increased competition with new entries in the companion animal parasiticide market as well as some distractions as we're still integrating in a couple key European markets. So those were the key drivers. I would note, though, that our U.S. companion animal business grew in the quarter. This was due to launch of a couple key new innovations, Osurnia for otitis in dogs as well as Interceptor Plus for heartworm. So as we look at returning to growth, we've said clearly in Boston at our investor conference in December, we do anticipate to return to growth in 2016 before the impact of FX. We do see some of the continuation of these trends from 2015 in the first half of 2016, and we'll return to growth at industry levels in the second half. I would note that when including the impact of FX, which will be more significant to Elanco, we anticipate 2016 revenues will be roughly flat versus 2015. I think key drivers that I want to note that will return us to growth and give us a lot of confidence in our long-term future is the successful launch of new innovations. As we noted, we have seven significant innovations that will launch this year and into 2017. We're starting to see the impact of those already, with three approvals and launches already. And then I think the other is our key growth engines, areas such as key emerging geographies, companion animal therapeutics, vaccines, enzymes, et cetera. So those will be the drivers to our launch. And then I think lastly, I'll just say that our excitement on the Novartis deal continues. We do see at a minimum the $300 million, not $200 million, but we changed our guidance there to $300 million of savings. And we saw this with our margins in Q4 go up to 19% from starting the year at 15%. And we see that moving to low to mid-20% EBIT by the end of 2016. So this gives us a lot of confidence about the strategic elements of Novartis that are really playing out in the market. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thanks, Jeff. Thanks, Vamil. Val, if we can, go to the next caller, please.

Thank you. We have a question from Alex Arfaei with BMO Capital Markets. Please go ahead.

Good morning, folks. Thank you for taking the questions. First on the recent arrangement with Roche Diagnostics for the commercial beta amyloid test in Alzheimer's disease, I'm curious about the timing. What led you to form this partnership now? And the second question is on Cyramza. It was below expectations, particularly in the U.S. I'm wondering if that's a function of PD-1 competition in lung cancer. Or is something going on in gastric cancer? Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Alex, thanks for the questions. Jan and Dave, if you'd like to respond to the Roche deal that was announced and timing for that and our interest in that; and then Sue, the Cyramza question, please. David A. Ricks - President-Bio Medicines & Senior Vice President: Sure. I'll start on the Roche. Jan, you can jump in. Yesterday we announced a collaboration with Roche Diagnostics, which allows the two of us to see a way for that technology to get to the marketplace. This is a methodology that runs on the Roche standard diagnostic kit, which is pretty well established around the world to measure a beta in CSF of patients in a standardized way. As we outlined at our Alzheimer's day on December 8, if we move to the mode of saying if sola [solanezumab] is successful, we do see a number of challenges in early adoption and in treatment of patients. One of them will be the detection of amyloid positivity. And although PET scanning is available in some countries, it's not widely available in others. And so in order to enable patients to have easy and the most convenient access to detect whether they have amyloid positivity, this is one step of many we're taking or have taken to…

Thank you. We have a question from Richard Purkiss with Piper Jaffray. Please go ahead.

Thanks. I had a question for Enrique. If you could, just speak to the overall level of discounting in the U.S. diabetes space going into 2016. And then a strategic question for John. Would you change your view on separating Elanco from Lilly if the EXPEDITION-3 study reads out positively? I guess I'm just thinking that there might be different investment return opportunities at that point between Elanco and Lilly's pharma business. Thanks. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Richard, thank you for the questions. Enrique, for you the question on diabetes discount as we're heading into 2016, and, John, for the Elanco question. Enrique? Enrique A. Conterno - Senior Vice President & President, Lilly Diabetes: Yes, first, I think the best way to frame this is we really try to ensure that we have appropriate access for our products in the different formularies. The strength in our portfolio, the strength of our brands is really helping us because our payers do want to include products that are basically becoming more relevant for customers that have good outcomes. And we do have a portfolio of brands that I think is very strong and, in fact, is gaining share across every class, across every region, so a very strong performance. That allows us to basically have maybe a bit more leverage than in the past when it comes to thinking about the type of discount that we basically provide. I cannot talk about the specific discounts. But what I can basically say is that we see our pricing basically stable to slightly up in most product categories. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thanks, Enrique. John? John C. Lechleiter - Chairman, President & Chief Executive Officer: Richard, I can't speculate on a hypothetical situation like the one you raised. I think you can assume that we're working hard across our entire Alzheimer's portfolio with sola in the lead. We're eagerly anticipating that data in the fourth quarter. And I think this year we'll really complete the lion's share of the integration of Novartis Animal Health within Elanco. Getting Elanco back to growth, getting us position to take full advantage of our number three global player size is going be our top priority. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thanks, John. Thanks, Richard. Val, next caller please?

Thank you. We have a question from Geoff Meacham with Barclays. Please go ahead.

Good morning, guys. Thanks for taking the question. I've got one on sola. So Biogen mentioned yesterday some Phase 3 enrollment challenges with the number of centers with PET scans and identifying prodromal patients. So obviously, you know the first step is to have a positive Phase 3 for EXPEDITION. But what commercial investments do you think really need be made to accelerate patient identification to help build the market for more active therapies in Alzheimer's? And then a second question on baricitinib, clearly you guys are – the BEAM study is part of the NDA. But down the road, how do you guys look at the value of running another head-to-head study to make a stronger claim? Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great, Geoff. Thank you for the questions. Dave, those are both yours. David A. Ricks - President-Bio Medicines & Senior Vice President: Okay, great. On solanezumab, as we were speaking about earlier with the diagnostic test, there's no doubt that Alzheimer's is a prevalent condition with horrible outcomes, and we need disease-modifying agents. But again, as we pointed out in our December talk, the market isn't set up to really treat en masse people with disease-modifying therapies. One barrier you're pointing out here, which is available PET scanning. Now I think Lilly is in a bit of a unique position here, and I think we've demonstrated that pretty clearly in the Phase 3 enrollment world. We feel we're best in class in the ability to identify patients, put them through PET scanning centers, and get them in our studies. EXPEDITION-3 is the most recent example. We enrolled 2,000 people in 20 months. But enrollment in a study is small by comparison to getting market acceptance of a drug.…

Got you, okay. Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: I also believe, Geoff, that some of the criticism – we had taken this into account as we designed the program for baricitinib on some other trials, particularly when they were comparing to Humira, is that they were not run on background methotrexate. We did run this study with Humira on background methotrexate to give it its best shot of performing well. We think it performed as expected, and we're very pleased with the robust result. We saw baricitinib routinely providing better relief for the signs and symptoms of RA. So we believe this is a very robust finding.

Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Val, can we go to the next caller, please?

Yes, our last question will come from the line of Damien Conover with Morningstar. Please go ahead.

Thanks for taking the question. I know we're coming up at the end of the call here, so I'll make it pretty quick. I just wanted to ask a question regarding one of the more likely U.S. pricing reform debates coming up with dual-eligibles. I know in the past you talked about the impact being similar to potentially the Affordable Care Act reform. But I was wondering if you could characterize Lilly's maybe extra exposure given the insulin franchise, where pricing is particularly different in the Medicaid versus Medicare patient populations. And then I guess a bigger question regarding the pharma's defense against what might be a more likely potential reform coming up over the next couple years. Thank you. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Damien, thanks for the questions. John, would you like to take those? John C. Lechleiter - Chairman, President & Chief Executive Officer: I think what I can say I think in terms of exposure, we're significantly less exposed than we were when we had the big neuroscience psychiatric medical business here. I'm talking about Cymbalta and Zyprexa. Clearly, we have some exposure, not nearly what it was, but I think the number you're talking about in terms of the aggregate impact to my knowledge is still correct in terms of approximating the impact to the industry of the fee and the other measures that's a part of the Affordable Care Act of 2010. And so I think you can assume that on our policy agenda this is at the top of the list. And we believe that it's bad policy and ultimately for the people affected would be bad medicine. And we continue to build arguments and to maintain – attempt to maintain support for this not to happen. Philip L. Johnson - Vice President, Investor Relations, Eli Lilly & Co.: Great. Thanks, John. That does take us to the end of the call. We do appreciate all of you listening in or listening to the replay. Your interest in Eli Lilly & Company is very much appreciated. 2015 was an outstanding year for the company both in terms of the strong financial performance as well as substantial pipeline movement and progress that we registered during the year. We believe 2016 is shaping up to be an exciting year and an important one for implementation of our innovation-based strategy. We look forward to keeping you appraised of our progress over the course of the year, and we hope you have a great day.

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