Bernstein: Eli Lilly's CSO Reveals the Next Frontier — Incretins for the Brain, Alzheimer's Prevention Blood Tests, and a Once-in-a-Lifetime Heart Drug
Bernstein 42nd Annual Strategic Decisions Conference, May 28, 2026 — Daniel Skovronsky, Chief Scientific Officer and Chief Product Officer, sits down with analyst Courtney Breen
The Obesity Market Is Still at 1% Penetration — That Is the Opportunity and the Problem
Eli Lilly's Chief Scientific Officer Daniel Skovronsky offered a striking reality check on the obesity franchise that investors may be underestimating in both directions. Despite Mounjaro and Zepbound becoming household names and driving Lilly toward a $1 trillion market cap, Skovronsky was blunt about how early the company actually is. "Even here in the United States where utilization is the highest, utilization rates of incretins to treat obesity are less than 10%," he said. Factor in that the U.S. represents roughly 10% of the global obesity burden, and Skovronsky's conclusion is sobering: "We're something like 1% of obesity penetration today." The implication for the long-term revenue opportunity is enormous, but so is the execution challenge ahead.
The barriers, in Skovronsky's telling, are not primarily scientific. Cost and access are real, and he noted deals with the government and payers announced the same day as the conference. But he also pointed to a softer obstacle that rarely gets discussed on earnings calls: perception. "People don't want an injection, not because the needle is painful — it's actually not painful for most people — but because it seems like they're sick if they're taking an injection." That framing shapes why Lilly views its newly launched oral GLP-1, orforglipron, branded Foundayo, as structurally critical rather than merely additive.
Foundayo: Lilly's Bet on a Foundational Daily Oral for Primary Care
Skovronsky was unusually direct about the strategic ambition for Foundayo, calling it "foundational globally" and explaining that the name itself — foundational daily oral — telegraphs the intent. The pitch to primary care physicians is designed to be comprehensive: the drug lowers weight, blood sugar, blood pressure, triglycerides, and LDL cholesterol in a single, restriction-free pill taken any time of day. "Here you have in a single easy-to-use pill kind of an improvement in all of the main health parameters that we care about in the primary care setting," he said.
Lilly has already submitted Foundayo for approval in more countries simultaneously than it has for any drug in its history, and Skovronsky expects those approvals to begin rolling in later this year and into early 2026. The manufacturing angle matters too: as a conventional small molecule, it requires no refrigeration or biotech production infrastructure, giving Lilly the supply scalability that repeatedly hamstrung the injectable franchise in its early years.
The Brain Is Where Incretin Biology Gets Genuinely Surprising
Perhaps the most intellectually striking portion of the conversation concerned where Skovronsky sees incretin biology going beyond metabolic disease. His argument is rooted in mechanism: the primary pharmacology of GLP-1 and GIP drugs is not in the pancreas, as originally believed, but in the brain. "The main pharmacology is through regulation of brain pathways involved in food and food craving," he said, and those same pathways are "hijacked by drugs of addiction" and implicated in psychiatric illness.
Lilly now has programs underway testing incretins in addiction, depression, and schizophrenia. Separately, the company has identified a profound anti-inflammatory signal from these drugs. In Phase III trials for psoriasis and psoriatic arthritis, patients' autoimmune conditions improved before they lost any weight — suggesting a direct immunological effect independent of fat loss. Trials in inflammatory bowel disease and asthma are ongoing. "I think we're going to see incretin biology play out, not just for metabolic disease, but also for brain health and also for immune health," Skovronsky said. Lilly has developed customized molecules tuned specifically for these neurological and immune applications, which suggests these are not opportunistic label expansions but deliberate next-generation bets.
The Most Underappreciated Pipeline Asset: Alzheimer's Prevention
Skovronsky identified Alzheimer's disease prevention as one of the most underappreciated opportunities in Lilly's pipeline. The company already has donanemab approved for treatment, but the bigger bet is two drugs now in Phase III trials designed to prevent Alzheimer's symptoms from ever appearing in cognitively normal people over 50. The selection mechanism is a proprietary blood test for p-Tau217, which Lilly developed itself and which can detect Alzheimer's pathology in the brain before any symptoms emerge.
Patients with a positive test receive a fixed-duration treatment, and Lilly's hypothesis is that this intervention will reduce the probability of ever developing symptoms. The first Phase III readout is expected next year. Skovronsky's vision is of a world where annual Alzheimer's screening sits alongside cholesterol and blood pressure checks as a standard part of preventive care. He was appropriately cautious — "it may not work" — but if it does, the commercial implications for Lilly would be difficult to overstate.
A Once-in-a-Lifetime Heart Drug and the Lp(a) Opportunity
Skovronsky highlighted Lp(a) as "probably the second most important risk factor for heart disease after LDL cholesterol" and noted the critical distinction from conventional cardiovascular risk factors: "Unlike cholesterol, your diet doesn't matter, your exercise doesn't matter. You are born with either high risk of high levels of Lp(a) or low levels." Fifteen percent of people carry elevated levels and face elevated heart attack risk with no current lifestyle remedy. Lilly has two drugs in large Phase III trials targeting this population.
The longer-range cardiovascular bet is PCSK9 gene editing. Skovronsky described recently disclosed data showing that a single dose of a gene-editing drug can provide what appears to be a lifetime of protection against high cholesterol and likely against heart attacks. "The science looks good," he said. He was candid that societal acceptance and reimbursement frameworks for a once-in-a-lifetime therapy remain unsolved, but characterized that as Lilly's job to figure out rather than a scientific obstacle.
Three Vaccine Acquisitions and a Thesis About Chronic Disease Prevention
Lilly announced three vaccine acquisitions this week totaling just under $4 billion — a move that caught many observers off guard given it is not an area of historical focus. Skovronsky framed the logic around what he described as breaking science linking acute viral infections to chronic disease decades later. The first target is Epstein-Barr Virus, which research has now established as a necessary precondition for multiple sclerosis. "If you don't have EBV infection, you probably won't have multiple sclerosis," he said, noting that no one else appears to be on a credible path to an EBV vaccine.
The second is a next-generation shingles vaccine. Existing data shows shingles vaccination protects against stroke and, more surprisingly, against dementia years or decades later. The vaccine Lilly is acquiring demonstrated equivalent protection to the current market leader in a head-to-head trial but with substantially fewer side effects — the primary reason current uptake is lower than it should be. The third acquisition addresses Staph aureus, the leading cause of post-surgical hospital infections, via a pre-operative immunization approach. Skovronsky was explicit that Lilly is not trying to compete with established vaccine players on their current turf: "We want to invest where they're not investing for the next generation of important pathogens."
On AI: Powerful for Drug Discovery, Not the Magic Bullet Some Expect
Skovronsky gave an unusually grounded and skeptical take on artificial intelligence for a senior executive at a company actively investing in the technology. His core argument is that clinical development timelines are set by biology, not data processing. "You can't do a 3.5-year Alzheimer's prevention study in 3 weeks because you have AI. It still takes the same amount of time." The hype around AI eliminating drug development cycles, in his view, will not materialize.
Where AI does matter, according to Skovronsky, is drug discovery — specifically in helping chemists and protein engineers design better molecules and in unlocking previously undruggable targets. The competitive moat Lilly is building here rests on proprietary biological and chemical data. "When we use models that haven't been trained on a lot of real data, they don't perform very well, and they don't perform differently than each other," he said. Lilly is accelerating data generation through internal experimentation, partnerships in which outside companies contribute data in exchange for model access, and custom data factories being built with NVIDIA to produce experimental training data at scale. The company's persistence in narrow therapeutic areas compounds this advantage: AI models trained specifically within a disease domain outperform general-purpose models, so Lilly's decades of focus in diabetes, oncology, and neuroscience translate directly into a harder-to-replicate data asset.
Genetic Medicines: The Programmable Drug Platform Investors Are Not Pricing In
Skovronsky made one of his most structurally important arguments around genetic medicines, framing them as the next inevitable platform shift in the same way recombinant proteins were in the 1980s. The key insight he offered is programmability. "With synthetic chemistry, every molecule is like a work of art that chemists have to create. But with these, you can take a drug for one disease and just change the genetic code of it and have a drug for another disease if you solved all of the other problems."
He illustrated this with Lilly's work on hereditary hearing loss, where the company has developed a gene therapy that restores hearing in children born deaf due to a missing gene. The commercial opportunity in rare hereditary deafness is limited, and Skovronsky said so directly. But the platform learnings — delivery to inner ear cells, expression, manufacturing — transfer to the next genetic cause of hearing loss, and then the next, and eventually to age-related hearing loss, which he noted affects roughly half the population over time and for which, to his knowledge, no one else is currently developing a genetic medicine treatment.
BD Discipline: Why Lilly Avoids Big Commercial-Stage Deals
On business development, Skovronsky articulated a philosophy that diverges significantly from several large-cap pharma peers. Lilly prioritizes early-stage deals based primarily on the quality of the science and the team rather than NPV models, which he dismissed as unreliable for individual assets. "If you look at forecasted sales versus actual sales — there's no correlation. None of us, analysts and internal companies, are good at forecasting individual drugs in a way that correlates with reality."
The preference is for platforms and teams that compound returns over time rather than single late-stage assets where Lilly would need to have a differentiated commercial hypothesis to justify outbidding the market. On large acquisitions, he acknowledged Lilly is not capital-constrained but was candid: "I haven't seen" a commercial-stage asset where Lilly has a clear differentiated sales thesis, so those deals haven't happened. On China, Skovronsky acknowledged rapidly improving innovation quality and is spending more time evaluating Chinese assets, noting that the lower cost and faster pace of development enables an empirical approach — testing multiple candidates in humans simultaneously — that U.S. economics do not support. Diligence is more intensive in new areas, and Lilly has at times built internal scientific teams a year or more before executing a deal to ensure it has genuine evaluative expertise.
The Siren Song and the Long Game
Skovronsky closed with a direct warning about the strategic mistakes that destroy large pharmaceutical companies, and it read as much as internal discipline as external communication. The trap, in his framing, is success itself: a mega-blockbuster creates incentives to protect it, stop cannibalizing it, and starve everything else of funding. He was explicit that Lilly has already pushed R&D spending beyond tirzepatide even though, by his own admission, "every incremental dollar spent on tirzepatide will have the best return in the next couple of years." The goal is a sustained growth trajectory unprecedented in the industry's history, and he believes the company has the pipeline breadth to achieve it — provided it continues to invest against its own current winners rather than defending them.