Phil Johnson – VP of IR Derica Rice - CFO, EVP of Global Services Jan Lundberg - President of Lilly Research Laboratories Ilissa Rassner - Director, IR Travis Coy - Director, IR

Mark Schoenebaum - ISI Group Bruce Badner - Sanford Bernstein Jay Olson - Goldman Sachs Chris Schott - JPMorgan Vamil Divan - Credit Suisse Tony Butler - Barclays Gregg Gilbert - Bank of America Marc Goodman - UBS Damien Conover - Morningstar Alex Arfaei - BMO Capital Markets John Boris - SunTrust

Ladies and gentlemen, thank you for standing by and welcome to Eli Lilly & Company. Q3 earnings call. At this time, all participants are in a listen-only mode. Later we will conduct a questions-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Phil Johnson, Vice President of Investor Relations. Please go ahead, sir.

Good morning. Thank you for joining us for Eli Lilly & Company's third quarter 2013 earnings conference call. I am Phil Johnson, Vice President of Investor Relations. Joining me today are Derica Rice, our Chief Financial Officer, Dr. Jan Lundberg, our President of Lilly Research Laboratories and Ilissa Rassner and Travis Coy from the Investor Relations 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 three and those outlined in our latest forms 10-K and 10-Q filed with the Securities and Exchange Commission. 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. Q3 marked another quarter of strong operational execution, both in terms of financial results and pipeline advancements. Solid topline revenue growth and expense controls produced a 41% increase in non-GAAP earnings per share. And in the last eight months, we have completed eight U.S., European and Japanese regulatory submission for four potential new medicines. Empagliflozinm, our insulin glargine product in collaboration with Boehringer Ingelheim, dulaglutide and ramucirumab. In the coming quarters, our financial results will reflect the U.S. patent expirations for Cymbalta and Evista. We are ready for this challenging financial period and remain well positioned to invest in R&D, recapitalize our asset base and gauge an optimistic business development and return substantial cash to shareholders by paying our dividend at least at this current level in 2014 and beyond and by repurchasing shares under our recently authorized $5 billion program. In 2014, we will also see more Phase 3 data readouts and could have additional regulatory submissions as well as multiple product launches. This is an exciting time and we remain focused on continued execution of our innovation based strategy to bring value patients, physicians payers and shareholders. Before covering our financial results, let's review events that have taken place since our last earnings call. We had a number of clinical data readouts, including positive readouts for SQUIRE, a Phase 3 study investigating necitumumab as first-line treatment for squamous non-small cell lung cancer and for RAINBOW, a Phase 3 study of ramucirumab as combination therapy in patients with advanced gastric cancer. In both studies, we saw increased overall survival. Also for ramucirumab, the Phase 3 RA study in first-line breast cancer failed to meet its primary endpoint of increased progression free survival. We also made substantial progress on the regulatory front as we completed the rolling DLA submission in the U.S. for ramucirumab as a single agent for advanced gastric cancer and completed the E.U. submission for the same indication. As you saw this morning, we are pleased with the FDA granted Priority Review designation. We also submitted dulaglutide for Type II diabetes in both, the U.S. and Europe and along with Boehringer Ingelheim, submitted empagliflozin for Type II diabetes in Japan. Disappointingly, we received the final decision for the centers for Medicare and Medicaid services that provide coverage with evidence development for the use of beta-amyloid Positron Emission tomography imaging agents, including our approved product Amyvid. We believe this decision is a significant setback for patients and for the Alzheimer's disease community. Finally, Lilly's board of directors authorized a new 5 billion share repurchase program, which the company intends to complete over a multi-year period. (Audit Start 4:15)Now let's turn to discuss our financial performance. First, I will provide comments about our GAAP results and then Travis will discuss a few non-GAAP measures, which we believe provide insights into the underlying trends in our business. Turning to Slide 6, you will see that just as it did in Q2, worldwide revenue increased 6% driven by growth in key products, including Cymbalta, Alimta, Cialis, Tradjenta, Humalog, Strattera, Humulin, and Animal Health. Gross margin as a percent of revenue was 79.2%, an increase of 130 basis points over Q3, last year. The increase in gross margin percent was driven by higher prices and lower manufacturing costs partially offset by a smaller benefit from the effect of foreign exchange on international inventories sold. Total GAAP operating expense, the sum of R&D, SG&A and other special charges, decreased 4%. This decrease was driven by a 6% decline in SG&A expenses and by a $53 million asset impairment charge in last year's quarter with no similar charges this quarter. The decline in SG&A expense was driven by ongoing cost containment efforts, including the previously announced changes to our U.S. sales and marketing activities related to the upcoming loss of exclusivity for Cymbalta and Evista. R&D expense increased 3% this quarter, driven by higher early-stage research expenses. The growth in revenue, increase in gross margin percent, and decrease in total operating expense combined to produce a 42% increase in operating income. You may recall that in Q3 last year, we recognized $788 million of income related to early payment of Amylin's financial obligations related to exenatide. We had no such income this year, and other income and deductions with a net deduction of $31 million in the quarter. Our GAAP tax rate decreased by 8.7 percentage points due to the taxes payable in the third quarter of 2012 on the payment received from Amylin, and to a lesser extent the reinstatement of R&D tax credit in the U.S. effective January 1, 2013. As a result, our Q3 GAAP net income declined 9%, while the decline in GAAP earnings per share was slightly less at 6%, reflecting the benefit of our share repurchases late last year and early this year. Travis?

Thanks, Phil. Let's move on to non-GAAP measures provided on Slide 7. This quarter, there were no reconciling items, so our GAAP and non-GAAP results are the same. Last year, however, we did have the two items Phil mentioned earlier that were excluded from our non-GAAP results; $788 million of income related to exenatide and a $53 million asset impairment charge. Also our non-GAAP tax rate decreased 1.6 percentage points due primarily to the reinstatement of the R&D tax credit. As a result, our non-GAAP net income and EPS growth were substantially higher than the corresponding GAAP numbers at 35% and 41% respectively. Slide eight provides the same information on a year-to-date basis, while slide nine provides a reconciliation between reported and non-GAAP EPS. Additional details about our reported earnings are available in today's earnings press release. As you can see on slide 10, total revenue increased 6% in Q3, driven by a favorable price impact of 5% and a 3% increase in volume, partially offset by a negative foreign exchange impact of 2%. U.S. pharma revenue increased 11%, driven by price as volume was essentially flat. In Australia, Canada and Europe, or ACE, revenue grew 5% driven by volume increases across multiple products, including Alimta, Cialis, Cymbalta, Forteo and Humalog. The positive effect of FX offset the negative price effect. Once again, Japan revenue was significantly impacted by the weakening of the yen. For the quarter, FX reduced our Japan revenue by 21%. On a constant currency basis, Japan revenue grew 9% with an 11% increase in volume, partially offset by a 2% price decline. Volume growth was primarily driven by Forteo, Strattera, Tradjenta, and Evista. As for emerging markets, which is no longer embedded in rest of the world, revenue declined 1% this quarter with FX contributing negative 4%, price negative 2% and volume a positive 5% led by Alimta, Cialis, Forteo, Humalog, and Tradjenta. Within emerging markets, revenue growth in China moderated, but continued at a double-digit pace up 11% driven by 10% volume growth. Elanco Animal Health grew 11% this quarter, also driven by volume including a benefit from the U.S. withdrawal of a competitor's food animal product. Both U.S. and o U.S. animal health grew 11% supported by food animal growth of 10% and companion animal growth of 13%. Slide 11 shows the effect of changes in foreign exchange rates on our 2013 results. For both Q3 and year-to-date, FX has had a modest negative effect on revenue growth. In terms of cost of goods sold, this year we have seen a smaller benefit from the FX effect on international inventories sold. As a result, foreign exchange has had a substantial effect on growth in operating income and earnings per share. Next, I will provide a brief pipeline update before turning the call over to Derica. Slide 12 shows our pipeline as of October 16. Changes since our last earnings call are highlighted with green arrows showing progression and red arrows showing attrition. As Phil mentioned earlier, we recently submitted dulaglutide and ramucirumab in both the U.S. and EU. In addition, we formally terminated development of our Phase II base inhibitor. In phase I, three molecules began testing and three others were terminated. Now I will turn the call over to Derica to cover some of the remaining key events for 2013, our financial guidance and some closing comments before we open the call for Q&A. Derica?

Thanks, Travis. Today, I will began my remarks with slide 13, a slide we have used for the last three years to help you chart our progress, primarily on our number one priority, which has been advancing our pipeline. As you can see, there many more green checkmarks than red, and we are pleased with the progress that we have made this year. Starting mid-last year, we entered an intense period of Phase III data readouts that extends into 2014. So far, we have seen positive Phase III results for five assets, ramucirumab, necitumumab, dulaglutide and empagliflozin, and our insulin glargine product. And we’ve completed regulatory submissions for four of these assets, with the fifth necitumumab slated for 2014. Before the end of the year, we have internal data readouts on a number of Phase III trials for edivoxetine as well that initial Phase III data for our novel basal insulin with a topline press release for edivoxetine likely between late this year and early next year and for our novel basal insulin later in 2014. In August, we had the District Court hearing in the Alimta method-of-use patent litigation. We are pleased with the arguments that were presented and anticipate a ruling to be handed down in the first half of next year. Finally, later this quarter on December 11 to be exact, we will lose the U.S. Patent protection for Cymbalta. We are proud of the benefit this product has brought to patients, and we are prepared to successfully traverse the financial challenge posed by its patent expiration. Now, as we discussed in the past, due to the patent expiration in the fourth quarter, we expect to see a reduction in wholesaler purchases, and we will take a substantial reserve for the expected future product return. I will provide a bit more color on this in just a moment. Now let's turn to our updated 2013 financial guidance. As you can see on Slide 14, most of our line item guidance remains unchanged. We have revised two line items. First, we have raised the bottom end of our EPS guidance by $0.05. This brings our full year non-GAAP EPS guidance range to $4.10 to $4.15 per share. Second, we are now forecasting capital expenditures to be approximately $1 billion. Now some of you have already commented this morning on the fact that we did not raise the top end of our full year EPS guidance range despite beating Q3 EPS consensus by $0.07, and you’ve correctly observed that. To make the math work, this means that consensus EPS for Q4 needs to come down by roughly $0.07. It appears that the difference between our expectations compared to the Street for the split of EPS across Q3 and Q4 [falls] (ph) down to the expected sales erosion for U.S. Cymbalta.(Audit End) Let's dig into this a little bit deeper. U.S. Cymbalta sales by quarter, this year have been $1.1 billion, $1.2 billion and $1.1 billion for the first three quarters of this year. For Q4, the street average is just under $800 million, which represents two full months of sales at the recent run rate. Our expectation is that U.S. Cymbalta sales will come in well below current consensus. First, we expect minimal wholesaler repurchases after the patent expires on December 11. Second, we expect minimal wholesaler purchases in the first two to three weeks leading up to the patent expiration as wholesalers work down their existing inventories to post-patent expirations levels. As we have called out in the past, in Q4 we will also take a substantial reserve for expected future returns and we said this reserve will on the hundreds of millions of dollars. As a result, we anticipate that U.S. Cymbalta sales in Q4 will be closer to $500 million or half our recent quarterly run rate as opposed to the nearly $800 million that is reflected in sell side consensus. Moving to slide 15, you will see a reconciliation between reported and non-GAAP EPS for 2013 and the associated growth rates from these numbers to our 2013 guidance. In closing, Q3 marks another quarter with solid financial performance. Through top line revenue growth and continued cost containment efforts, we delivered 41% non-GAAP earnings per share growth. Going forward, we will continue to focus on the three strategic priorities that have guided our efforts thus far advancing our pipeline, driving strong performance of our marketed brands in key growth areas and increasing productivity and reducing our cost structure. These strategic priorities will also allow us to return substantial cash to shareholders by paying our dividend at least at this current level 2014 and beyond and by repurchasing shares under our recently authorized $5 billion program. We remain committed to our innovation strategy and believe it will drive growth and expand margins post 2014. The progress we have made to-date positions us well to meet the challenges ahead. In 2014, we will begin the launch of our next wave of innovation and we will continue to generate and disseminate important data that will help investors and analysts better gauge our longer term growth potential. We look forward to keeping you updated on our progress. This concludes our prepared remarks and we will now take your questions. Lola, first caller please?

(Audit Start 17:15)(Operator Instructions). First we will go to line of Mark Schoenebaum with ISI Group. Mark Schoenebaum - ISI Group: Hi guys, thank you very, very much for taking my questions. I really appreciate it. Thanks for all the clarity on the call. I had a couple of, if I may, pipeline questions. The first is on necitumumab, do you -- I realize that we haven't seen all the data that you have, do you guys expect necitumumab to become the new standard of care in frontline squamous or would you characterize it differently than that? And number two, also on cancer, when would you expect we would see, and if this is in the slide, I apologize for missing it, when would you expect to present additional data on your CDK 4/6 inhibitor additional clinical data? And then, the final question was, can you update us on the timelines for the dulaglutide versus Victoza trial and maybe Enrique can educate us on the commercial implications of results from that trial. Thank you

Great Mark. Thank you for you questions. Jan, maybe you want to start off with the first two related to pipeline. and Ilissa, you can help with that one, and then actually, we don't have Enrique on the call today. No problem. I look to Ilissa to provide an update on the AWARD-6 trial and we will go from there.

Yes, and let me start with necitumumab. As you know this indication of squamous non-small cell lung cancer has very few treatment options currently. So, we are looking forward to our discussions with the regulators after we have submitted, and then I think we will see the final outcome there. In relation to CDK 4/6, we are very encouraged with the data we have seen with our molecule and we believe we have a very competitive agent that allows continuous dosing and it's also penetrating the blood-brain barrier which could be important for a number of tumor indications, and we have expansion cohorts in both lung and breast and we anticipate those data will be communicated next year.

Thanks, Mark. It's Ilissa. For dulaglutide, the AWARD-6 trial versus Victoza 1.8 milligrams, we expect that trial to readout in early 2014, and we would expect that at some point in 2014, we would hopefully be able to present detailed data. In terms of commercial expectations, we actually think that this is an important trial to help achieve optimal pricing and access. If we can achieve the primary endpoint of non-inferiority, it will be really important in that regard.

Great, and then also on the clinical trial results for the SQUIRE trial of necitumumab in first-line squamous non-small cell lung cancer, we would expect that to be presented at the medical meeting during 2014. It's too early to provide a specific venue, but you can probably guess some of the likely culprits for lung cancer trials that we would be shooting for. So look forward to that data presentation during the course of next year. Lola, look if we could have a next caller please?

Certainly, and next we will go to the line of Tim Anderson with Sanford Bernstein. Bruce Badner - Sanford Bernstein: Hi, this is Bruce Badner, in for Tim Anderson with two questions. So on the Animal Health landscape, is it your sense that there are meaningful business development opportunities in this area in terms of businesses you can bolt-on to your existing business? Then from my second question. I know Effient is not a mega brand for you, but it is a steadily growing franchise that’s selling around $0.5 billion a year now. Is there anything to fear from AstraZeneca's Brilinta or are you seeing any impact as they try to push their own product harder? Thank you.

Great. Thank you for the questions. Derica, if you would like to take the question on Animal Health business development, and then Travis you want to take the second question on Effient, please. All right, thanks. Derica?

In regards to Animal Health, we continue to be very encouraged and excited about our Elanco Animal Health business in the third quarter, we actually grew revenue 11%, of which 10 percentage points of that was in the food animal segment, and we had about 13 percentage points of growth in the companion animal segment. If you’ve followed Lilly historically, we have been probably more inquisitive in the animal health space than we have been on the human pharma side, and we continue to see business development as an opportunity to further leverage our organic growth. And as you saw or may recall that when Jeff Simmons, the President of our Elanco Animal Health business presented at our Investor Day on October 3 about a third of - or 30% of the growth over the last five years has been from acquisitions and about two-thirds has been through organic growth and pipeline, so we will continue to be assertive in the area of looking for external opportunities to bolster that business.

Bruce, this is Phil. I will go ahead and take your second question, so on Effient, we have actually not seen a significant impact from the launch of Brilinta, particularly here in the U.S. We did see an impact last year and into this year from the launch of generic clopidogrel that seems to have stabilized, and the weekly TRx are pretty stable on that 27,000 mark and have been now for a few months. We do look forward to driving growth in the product by focusing on areas where we have had particularly strong data, for example in those patients that have STEMI or those patients with NSTEMI that also have diabetes as well where we believe we have a pretty strong value proposition. Next caller please?

Certainly, and it come from the line of Jami Rubin with Goldman Sachs. Jay Olson - Goldman Sachs: Hi. It's Jay Olson on behalf of Jami Rubin. Thanks for taking the question. Could you help us understand the impressive growth in Tradjenta in the third quarter, and could you provide some color on the sorts of patients such as new to market versus switching from other DPP-4s. Also, can you describe some of the key DPP-4 market dynamics such as how long patients typically remain on DPP-4 therapy before adding therapies or switching to other therapies? Finally, could you comment on the pricing and whether or not you see pricing power in the DPP-4 market? Thank you.

Jay, thank you for the questions. I’ll have Ilissa start with your questions and I will go ahead and complement her answer. Ilissa?

Yes. We have been very pleased with the growth that we have seen in Tradjenta. We, as you probably know, have increased our access over time. In the commercial space, we are in the mid-60 percentage points in terms of access, about half of that in terms of Part D. We continue to lead Onglyza in new patient volume and share making us the second choice in the DPP-4 space, and as Enrique had pointed out in October 3, if you are looking at endocrinologists which are a leading indicator of primary care physicians and you are looking at this as a monotherapy, 40% of new-to brand-scripts are going to Tradjenta, so we see a lot of momentum there.

I think the one question Jay we may have to get back to you on, which we don't have the data for here is the question you had on the length of time that people stay on a DPP-4 before switching to others and then the question you asked about sort of where the patients are coming from in terms of switch that data that we can get from our diabetes team, but we don't have here with us, so we will get back to you on those two sub-questions.(Audit End)

Next question please?

It will come from the line of Chris Schott with JPMorgan. Chris Schott - JPMorgan: Great. Thanks. Just first on Elanco. How sustainable is the acceleration in the growth we are seeing here from competitor withdrawal? Then second, just coming back on Elanco, the consolidation of the space, do you think consolidation of larger animal health companies is possible for an antitrust perspective? Apologies, I have a cold here. My voice is not doing so well. Then the final question, repo in light of the current stock price, how much of a priority is that $5 billion program? Thanks very much.

Thanks, Chris for the questions. Derica, do you want a start? Then if necessary, I can.

In regards to Elanco, the good news is that the majority of the 11 percentage points of growth is coming from our organic business. We do know that, of that 10 percentage point growth on the food animal side, a piece of that is from the benefit of one of the competitive product Zilmax being removed from the market or withdrawn from the market here in the U.S, but it is probably about half of that growth. We believe that we can continue to sustain good robust growth in the Animal Health segment and part of that is also going to be by bolstered by the fact that when you look at just numbers of that group's pipeline, that they will be launching new products across their portfolio as well. In regards to Chris, your question about consolidation, it's hard to speculate on what the other larger players are thinking, but clearly if you are in that upper half of the industry, the animal health space, then and you are contemplating consolidation, the anti-trust rules and all that is going to come into play because you will see overlap of portfolios and there is, I guess for those few to pursue that route, there are a number of different ways to try to deal our content with that including divesture of certain product lines. But that probably will be the biggest hurdle. In regards to the $5 billion share repurchase program that we announced, we believe we can do this along with sustaining our dividend at least at this current level in 2014 and beyond. We had not commenced the program as of yet but we hope to start it sometime soon. And obviously as we look to initiate that, then one of the factors as to when and how much will be kind of where the stock price is trading at that time.

Chris, one other thing on the stock repurchase program, when we got some questions after the announcement, some had observed, and correctly so, that the last repurchase program that we authorized was $1.5 billion. It was completed very quickly between late last year and Q1 of this year. And we had indicated and continue to indicate that this particular program would be one that we would do over multiple years. Lola, could we have our next caller please.

Certainly, it will come from the line of Vamil Divan with Credit Suisse. Vamil Divan - Credit Suisse: Yes, thanks for taking the questions. My first one is back on the diabetes side. If you could just maybe talk a little bit about Humalog and the pricing dynamics there? We are seeing pretty big list price increases but the net selling price looks like it is lower for the quarter. So any color there will be helpful?

Great, then I will go ahead and take your question. So in the U.S., there are a number of factors that lead this quarter for the negative net effective selling price change that we outlined in the press release. There are three main factors there. One is, that we do continue to see the effect of some of the changes that took place in access for 2013. We compare back to 2012. So some of the competitive and payer dynamic. Second, we have seen greater utilization of a number of Lilly products including Humalog in Medicare Part D increasing the amounts that we are reserving essentially for donut hole exposure as well as in the managed Medicaid book of business, leading to higher overall or average level of rebates and discounts. Then there were, in the quarter, some dynamics that are more one-time related to accounting adjustments as we look both at what happened in last year's Q3 and adjustments made in this year's Q3 based on new information that came in that really were adjustment not specifically related to the quarter itself. We do expect, as we go forward you are going to see a little bit different dynamic in Q4 than you are likely to see during 2014. We will see an impact from some pretty significant adjustments that were made in Q4 of 2012 that will make the price dynamics look significantly different and more positive in Q4 of '13. Again that's not going to reflect any kind of change in the underlying actual prices or discounts that we have in 2013. It is something that is going be driven by our prior period comparison and then do keep in mind that going forward, we will likely see the impact both in terms of volume and price for the Express Scripts' decision to put NovoLog off their formula essentially and put Humalog into preferred position for 2014 in their more high controlled national formulary that a portion of their clients do subscribe to. So again, we continue to see very robust volume growth in this category and we are very pleased to have very stable share and good robust volume growth as the market continues to grow. We project that trend to continue in the future. Vamil Divan - Credit Suisse: Okay, thanks, and then one more if I could, just on emerging markets and appreciate the color you gave on the call regarding the different push and the pulls leverage. How should we just think about maybe longer term the percent of growth there? 3%, I guess in the constant currency rate was a little bit less than we would have thought for this quarter. How should we think about maybe fourth quarter or looking in to next year?

Sure, there was a little bit of an impact obviously from a slowdown in growth while we still posted double-digit growth in China of 11%. That was somewhat below some of the prior quarters. As Jan talked about in our October 3 meeting, his expectation would be for high single-digit growth on average, going forward. This is an area where we do tend to see a little bit more variability in the quarterly growth rates. So we wouldn't advise you to go ahead, maybe look at averaging that over a couple of quarters to get a feel for the true underlying dynamics and not be swayed, frankly on a positive upside or on the downside if you see a quarter that has significantly higher or lower growth. So the high single-digit is a realistic growth rate going forward for our business. Given the amount of innovation that we will also have to bring to these markets going forward, we are very comfortable with that kind of a growth expectation for our emerging markets business. Vamil Divan - Credit Suisse: Okay. Thank you.

Lola, next caller please?

Certainly. From Tony Butler at Barclays. Tony Butler - Barclays: Thanks very much, Derica. It's been fairly impressive when you look at the SG&A line, how much you have been able to draw down overall expenses, so I could push you a little bit, are you satisfied with that numbers as you enter '14 moreover given that you will, well, let's assume you will have at least two launches in '14, may be more, and relative to the pushes and pulls on that SG&A line I would love you to comment. Thanks very much.

Sure, Tony. We are pleased with our performance, but we are never satisfied with our performance. We believe that we can always look to improve and get better. As we think about 2014, as you heard me say at our Investor Meeting here in Indianapolis on October 3, even in 2014 you will see that our SG&A spend will decline even further in '14 versus where have you seen here this year. Then also in addition to that, you will begin to see that our R&D spend will decline as well as we have completed many of the current Phase 3 studies come to completion as well as our pipeline continues to mature. I think, we will have a even better operating expense profile in '14 even though we will be going through the period of declining revenues.

We will go to the line of Gregg Gilbert with Bank of America. Gregg Gilbert - Bank of America: Thanks. A couple of oncology questions. First on ram in gastric, I realize the second potential indication will be filed separately, but in reality I think docs will probably want to use ram in combo or at least have the option, so my question is are you trying to get the combo results published as soon as possible to enable Compendia listing for the self paid reimbursement in both indications versus having to wait for the second. My other question is on necitumumab. When you put out the top line release a couple months ago, you indicated you would file obviously this is a more definitive statements in saying you would meet with regulators in light of the stoppage of [INSPIRE]. Can you offer some context around your confidence in the benefit risk in the squamous setting? I guess, we could assume the thromboembolic events were much less common in INSPIRE or is it simply that there a fewer treatment options in the screen, so any context around your confidence on that you have already decide to file on neci would be helpful. Thanks.

Thanks for the questions. Gregg, I will take the first and have Ilissa take the second, so for the combination therapy data second-line gastric with ram. Clearly, this was very positive data. We are very pleased to see this with a second study now in second-line gastric cancer. We are very interested to get this data out sooner rather than later for the scientific community to understand the potential benefits as well as the potential side effects of this molecule. There are some venues that we would obviously be targeting that would be great for gastric cancer, so we would expect a disclosure in the first half of next year. Obviously, it would be great if it would be earlier in the year at an appropriate venue, but we will need to stay tuned on that as we have additional details, we will keep you guys appraised. Ilissa?

Yes. For necitumumab, Gregg, as you did point, we said that we anticipate filing before the end of 2014, and the timing there is related to some manufacturing validation work that needs to done that's pretty typical with biologics when we sometimes season changes in the manufacturing process. In terms of the benefit risk, I think this is one where obviously we didn't share the actual data just the top line, but you need to look at the molecule holistically at the benefit risk profile. We have said that from a risk perspective with thrombolic events that it is consistent with other EGFR molecules, however, we saw efficacy with necitumumab as we pointed out in our press release and taking it together. I think it has a favorable benefit risk profile to move forward.

Thanks, Ilissa. Lola, next caller please?

Certainly. It will come from the line of Marc Goodman with UBS. Marc Goodman - UBS: Yes. Derica, you just mentioned a better operating profile in 2014 to 2013, I was curious are you saying that you think the operating margin is going to be higher even though the top line is under pressure? Then second question is just on Alimta. Can you remind us how much of the OUS sales are Japan and how it's doing in Japan ex-currency is really what I am trying to figure out. Thanks.

Hi, Marc. This is Derica. Let me just clarify, when I was talking about the profile meaning for Tony's question. Our operating expenses will be lower in '14 than 2013, so, that's what I meant by an improved profile. We believe we can achieve that through some of the measures I talked about previously such as some of the trials on R&D side that we are in Phase 3 today, we will have completed. And as those begin to conclude that will bring, lessen the pressure on our R&D spend. On the commercial side, you will be seeing as we lose the patent for Cymbalta, you know that we have already restructured our sales force in the U.S. reducing it by 30% for which we get a partial effect this year. We will get a full year effect next year. And then, in addition to that, you will also see the removal of the DTC advertising as well. So those are all things that will lessen the pressure on our SG&A and R&D spend allowing us to bring it down even further than in '14 versus 2013.

And Marc, on Alimta, before I give the response on that, I might want to direct you and other callers to the fact that we have gone ahead and supplemented our workbook with additional information based on some of your requests over the last few quarters or years in some cases. So hopefully you will find this information helpful as we go forward. One of the things that you will find in addition to the sales breakdown by product that we have been providing that was U.S., international leading up to worldwide, we have provided subsequent tabs that break out international into ACE, Japan and emerging markets. So that data will show, for example, that we have $76.5 million of sales of Alimta in Japan in Q3. That is down pretty significantly relative to the prior year's quarter due to two factors. One is, obviously, rate where we are down about 21% year-on-year. Then also we had a pretty significant price reduction that was instituted in Japan given the significant success we had commercially to trigger that 25% price reduction. So we continue to see very good uptake of the product and use of the product in Japan and we are very pleased with the performance that we have had. One other things that we did add to the workbook on that note is constant currency exchange rate growth as well, both for products on the international side as well as worldwide and hopefully again that helps respond to some of the requests that you have made over time. Lola, next caller, please.

Certainly, it will come from the line of Damien Conover with Morningstar. Damien Conover - Morningstar: Hi, thanks for taking the question. Just a follow-up on the diabetes pricing environment. What we are seeing with a lot of your older products is very strong pricing power. So maybe if you could comment just more on the longer-term pricing power of your insulins and what might be different about this market in context of the PBM's and just insulin in general that might not allow you to have that strong pricing power or in fact whether or not there is better pricing power there over the longer term? Thank you.

Damien, thank you for the question.

Sure, Damien this is Derica. I think when we look at the pricing environment for insulins in the U.S., okay, our position is, we still believe that there should be an element of choice, as it relates the formulary access. We do not believe single source formulary is the right decision, both for physicians and for payers. However, we have seen a dynamic over the recent years as it relates to some of the managed care organizations, PBMs where they have chosen to go to single source and in that environment it absolutely makes the pricing much more competitive and usually you find yourself in a higher rebate environment. And so that's one of the dynamics that is somewhat subduing the net effective selling price impact in insulins versus what you have seen at some of the other therapeutic area categories.

On the insulins going forward as well, Damien, this insulin basal or the basal insulin lispro or novel basal insulin to the extent we are able to show differentiation above and beyond, just reduction in nocturnal hypoglycemia, for example, we built to the kinds of additional benefits that helps to position you more favorably with regards to these types of decisions. The fewer those benefits are in the minds of payers, it's probably more difficult it is to go ahead and maintain the patient choice and access that we think is most appropriate. So again we look forward to some of the trials that we will read out starting late this year and the next year for that particular product and are hopeful that in the basal space, as we enter that, that can provide some additional not only revenue for us but also some additional benefit for patients and payers that will be recognized in terms of access and pricing.

So innovation and value are going to be the key determinants, Damien. Damien Conover - Morningstar: Great, thank you.

Lola, next caller, please.

And we will go to Alex Arfaei with BMO Capital Markets. Alex Arfaei - BMO Capital Markets: Good morning. A follow-up on the animal health business. If you could please provide more color on the strength of the x U.S. business with some of the drivers there. Derica, I am not sure if I got your response earlier when you were talking about the competitive issues with Zilmax. Is that something that you think is sustainable? Is that the benefit that you are seeing there? How should we think about that advantage going forward? Thank you.

Sure. Let me start with your second question. In regards to Zilmax, I mean, it's hard for us to comment in terms of sustainability of that. That's all dependent upon how the situation plays out with Merck and their product and obviously, we are not privy to their discussions with the regulatory agency in that regard and so that's probably going to be a better question for them. In regards to our o U.S. business, if you look our o U.S. Food Animal business growth was around 9% and our companion animal sales grew around 23% to give you some idea of our performance o U.S. Those two combined, you really gave us pretty robust growth outside of the U.S. and we continue to see significant growth opportunities going forward, so other than the food animal slowdown that we saw earlier in the year, which we are beginning to see as Jeff has said a little bit of a bounce back, we feel very encouraged about the future prospect of this business segment for us.

Damien, a little more color on the o U.S. companion animal growth there. We have recently launched Trifexis o U.S., so that has been driving some of the growth and obviously we have experienced very good success of that product in the U.S., so we look forward to globally expanding that product.

Next caller please, Nova?

Certainly, it will come from the line John Boris with SunTrust. John Boris - SunTrust: Thanks for taking the question and congratulations on the quarter. On ramucirumab, can you just articulate what your strategy is at least in Asia and Japan, in particular for filling ramucirumab? Secondly, on the R&D front. On your Sclerostin development program, can we possibly get an update there and when there might any data readouts and when that product might enter Phase 3? Then just a follow up on China, seems as though with the dynamic on volume growth being somewhat flattish in August and into September, can you give some comment on how that might be potentially impacting your business in the Chinese market? Thanks.

All right. John, thank you for the questions, so we will have Derica take the China question. Then either Jan or Travis will help us with ramucirumab Asia filling question as well as the update on Sclerostin. Derica, do you want to start off with that China question?

John, we saw really two dynamics playing out in China at the moment. One is just the overall slowdown in economic growth in China, okay? The second factor has been growth related to the impact of some of the current compliance discussions that are going on in the China marketplace here in the late second and third quarter. We believe that obviously the economic underlying growth is going to be more of a constant matter to deal with. I think the question on the table is for some of these compliance matters that has impacted the growth dynamic in China, when we will begin to see the bounce back and kind of return more kind of a normalcy, so to speak. For us, we saw good growth in the quarter of 11% in China. It was below what we have seen in some of the prior quarters and prior years, but still in that strong double-digit range.

Jan?

Yes. In relation to Sclerostin, so we are very encouraged by the Phase 2 data that we have here in a very large, actually patient population area and still an unmet medical need and as you know Sclerostin is a unique bone building agent and the with marked BMD increases in the spine and also some similar effect in the hip and we are in final discussions with the regulators on actually how we will form our Phase 3 program.

Okay. Ilissa?

In regards to ramucirumab and Japan, we are actually currently evaluating our options for regulatory filings outside of the U.S. and Europe, but we don't have any specifics to share at this time. I will remind you that the REGARD trial had fewer Asian patients than the RAINBOW combo trial and we haven't been specific on the number of the RAINBOW. We will be presenting that data in the future, but it does contain a larger percentage of patients in Asia.

Thanks, Ilissa. Lola, next caller, please.

And no one else is in queue with a question. I would like to turn it back to Mr. Johnson for any closing remarks.

Okay, great. We thank you very much to those of you on the line listening for your interest in Eli Lilly and Company. We had a very successful Q3, both in the financial front as well as on advancing our pipeline and as always we will keep you appraised of our progress in the future. I would also point your attention to January 7, which is sort of the next time we will have one of these calls and that will when we issue first time guidance for 2014. Once again, thank you for listening and participating. Have a great day.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and using AT&T Executive TeleConference. You may now disconnect.