Q2 2020 Novo Nordisk A/S Earnings Call (London-Based Investors)

[music].

Hello, and welcome to the Q2, Twentytwenty Novo Nordisk, Yes earnings presentation.

Operator: Hello and welcome to the Q2 2020 Novo Nordisk AS earnings presentation. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session.

Throughout the call all participants will be in listen only mode and that's what's the will be a question and answer session.

Today, I'm pleased to present loss through the year insulin.

Unknown Speaker: Today I'm pleased to represent Lars Frugold Jorgensen. Please go ahead with your message. Thank you very much. And I would start out by thanking Bank of America for organizing our virtual roadshow in London. This quarter, hopefully, we can soon get together face to face, but we're pleased we have this opportunity during these difficult times. So, if we look at the slides, we will quickly go through what we presented yesterday, assuming that maybe not all, but many of you participated in the conference call yesterday, but we'll just quickly recap the slides. First of all, I have to remind you that we'll be making forward-looking statements and that those might not turn out to actually materialize, so be aware of that. Looking at our strategic aspirations for 2020, we're very pleased with the progress we made for the first six months. For the purposes of sustainability, we have launched a new social responsibility to defeat diabetes.

Please go ahead with you meeting.

Thank you very much and I would like to start out by thanking bank of America for organizing our virtual roadshow in London.

This quarter or hopefully we can soon get together or face to face, but we're pleased to have this opportunity.

During this difficult times.

So if we.

Look at the sites we were quickly go through what we presented yesterday assuming that.

Maybe not all but many of you have participated in the conference call yesterday, but we'll just quickly recap this lights.

Firstly I have to remind you that we'll be making forward looking statements.

And that that might not have turned out to actually materialize itself so be aware of that.

Looking at our strategic aspirations for Twentytwenty, we're very pleased with the progress we've made for the first six months.

If you look at purpose of substrates within ability, we have launched a new social responsibility to feet that btis. We participated in the industry is entering my co pay assistance initiative and we also were pleased with.

Unknown Speaker: We participated in the industry's antimicrobial resistance initiative, and we're also very pleased with a quite impressive 39% reduction in CO2 emissions this first half year compared to 2019. Mass will get into innovation and therapeutic focus later on, but a very, very strong second quarter, both in terms of product approvals but also new flow from our obesity pipeline, NASH, and we've also made what we believe is a quite interesting acquisition and exposure to, a potential first and best-in-class opportunity in Carlisle. In terms of commercial execution, we have continued expanding our value market leadership position in diabetes. We have also continued to see solid growth in our biopharmaceutical business. And then, of course, we've seen an impact on new scripts in this COVID-19 period. In terms of financials, we have maintained our top line guidance, and with the lower cost spent, we're now able to lift the bottom of our operating profit range to $220. Very solid cash flow for the first half.

Quite impressive 39% reduction in Q2 emissions. This first half year compared to a 2019.

A mess, we'll get into through innovation after beauty Pocos later on but a very strong.

Second quarter, both in terms of product approvals, but also new flow from.

I will be to pipeline Ness, and we've also made to what we believe is quite interesting acquisition and exposure to.

A potential first and best in class Truncheon covenants.

In terms of commercial execution, we have continued to expanding our value market leadership position in diabetes. We have also continued to see solid growth of all biopharm business.

And then of course, we have seen a and impact on your scripts.

In the in this cobot 19 at period in terms of financials, we have maintained our topline guidance and with.

The.

Lower cost spent we're now able to lift the bottom of operating profit range two to five very solid cash flow for the first half year.

Unknown Speaker: If you take a bit deeper dive into the COVID-19 pandemic, we're very pleased that we have managed to keep all manufacturing sites operational throughout the whole pandemic so far, and we are supplying the patients with the life-saving medicine they need. R&D has been impacted in the sense that it's harder to recruit new patients, but we are lucky in the sense that we have been able to keep all our late-stage programs running as they were fully recruited, and we do not see any major delay in our overall clinical trial program, and gradually, recruitment is normalized. If you look at commercial activities, we have all our reps in the field in the U.S., around 60% in international operations, but they are all somewhat limited in face-to-face interactions with doctors.

If you take a bit deeper dive into the cobot 19 pandemic, we've ever pleased that we have managed to keep all manufacturing sites operational throughout the whole pandemic, so far and we're supplying the patients with lifesaving midstream Miss in the needs.

R&D has been impacted in the sense that it's hard to recruit new patients, but we look in the sense that we have been able to keep all our late stage programs running as they will fully recruiters.

And we do not see any major.

Hey delayed in now all clinical trial program and correctly recruitment is normalizing.

If you look at the commission activities, we have for all our reps in the field in the us around 60% in international operations, but they are or limited somewhat in the face to face in Texas with doctors, but we see an encouraging trend where regrettably getting back to normal operations and that is actually reflected on.

Unknown Speaker: But we see an encouraging trend where we're gradually getting back to normal. And that is actually reflected on the next slide, where you can see that we had a 30 to 40 percent reduction in new scripts when you look across our therapy areas, and we have seen half of that coming back. So we now see that we have a growing trend in new scripts, and some say 15 to 20 percent below where we were pre-COVID. So we are encouraged that gradually during the second half we can normalize the flow of sales growth of 7%, driven by very solid sales growth in international operations where all reporting areas contributed double-digit growth, very strong. Group, Peter Welford, Simon Baker, Emmanuel Papadakis, Eric Berrigaud, Benjamin Yeoh, Stockpile where we grew 14% and we then had more of a flat growth in the second quarter where we saw a gradual reversal of the stocks and then an impact on reduced patient flow that overall means that our underlying growth is close to what we are reporting here. Now, I'll hand over to Camilla. Thank you, Lars.

The next slide where you can see that.

We had 30% to 40% reduction in new scripts, when you look across our therapy areas and we have seen say half of that coming back. So we now see that we have a at growing.

Trenton, New scripts, and we are some say, 15% to 20% below where pre Colby. So we are encouraged that.

Gradually during second half, we can normalize the flow of business.

Sales growth offer a 7% was driven by a very solid sales growth in international operations, where all reporting areas contributed with double digit growth very strong.

Growth both from the incidence and the engine for one.

Newest growth was was driven by the hour did one business and when you look at it.

Youre.

Aware that in first quarter, we had a significant stockpiling where grew 14% and we haven't had more of a federal fracked growth in second quarter of where we saw aggressive reversing off the of the stocks and.

Then an impact on reduced patient flow that all means that our underlying growth is close to what we are reporting here of 7%.

With that I'll hand over to a two camilla.

Hi, Thank you laugh and.

Unknown Speaker: And on this slide, you see the sales growth driven by GLP-1 primarily, but then also a growth of 9% in obesity. In insulin, we have globally a minus 3% growth, but very distinct, differently dynamics in IO where we grow 10% and minus 23% in North America. BioPharma growth is 6%, primarily driven by norethropin.

And this legacy sales growth at driven by GLP, one primarily but then also at growth of 9% in obesity insulin behalf.

Globally, minus 3% growth, but they're very distinct and differently.

Dynamics in I O Veeco, 10% and nice 23 in North America.

Hi, Tom growth, a 6% primarily driven by nearly children all of based leads to an increase in global diabetes value market share by if your 0.8%, but also an increase in insulin volume market share and all and an increase in GLP one market share.

Unknown Speaker: All of this leads to an increase in the global diabetes value market share by 0.8% but also an increase in the insulin volume market share and an increase in GLP-1 market share. If you go to the next slide, you see here the increase in the GLP-1 market share now reaching 58.3% in NBRX and 49.2% in total Scripps. You see a continued increase in TRX for SEMPIC, and the rebalances are now at 11% NBRX and 2.8% in TRX. So an overall expansion of our TLP-1 market. On the next slide, you see the dynamics of I.O.

If you go to the next slide you see here the.

Increase into GLP, one market, yet now reaching 58.3% in MPLX ended at 49.2% in total scripts you see a continued increase in Trx semtech and everything else is now at 11% MPLX and 2.8% in a key out.

So an overall expansion of our GLP one market share.

On the next slide you see it dynamics in I O, where we have an increase in there.

Unknown Speaker: where we have an increase in share of growth in the total diabetes market now above our total diabetes market share. And on the right-hand side, you see the growth coming from all of the regions in I.O., all growing double-digits, as you've shown here. You also see the potential for GLP-1 which is made up of various dynamics in EMEA versus other regions like China, where GLP-1 still holds great potential. On the next slide, you see obesity sales and market share. You will notice that in the last quarter, there was a lower growth of 9% compared to what we normally reported.

She outgrowth in total diabetes market now above our total diabetes market share and on the right hand side, you see the AD growth coming from all of the regions in I O. All growing double digit hit you shown here you also see the potential for GLP one wheaties.

Making up is it for various dynamics in EMEA versus the other regions like China, where.

GLP one is still holds great potential.

On the next slide you see obesity sales.

And your market share.

You will notice that ended in the last quarter. There is at lower growth of 9% compared to what the abnormally reported this is impacted by fewer patients initiations as west as shown by last that were at an all time low in April but now have the weekend factory around index 85.

We still market leaders.

And the value of 61% globally, and but our efforts as you know really focused not on market share, but on expanding the market.

Unknown Speaker: This is impacted by fewer patient initiations, as just shown by Lars, that were at an all-time low in April but have now regained back to around index 85. We are still market leaders at a value of 61% globally, but our efforts, as you know, are really focused not on market share but on expanding the market. And then on the next slide, you see our biopharm performance growing 6% primarily driven by Natritropin, our growth hormone product, and then the launches of new hemophilia products that are making up for the losses in NOVA7. And all in all, that amounts to a 6% growth. Now, over to Matt about the R&D performance. Thank you very much, Camilla.

And then on the next slide you see our biopharm performance growing 6%, primarily driven by Norditropin Alkyls hormone product and then in the launches of the New Hampshire feeder products that are making off for the losses in over seven and all in all that amounts to a 6% growth.

And now over to Matt about their R&D portfolio.

Thank you very much Camilla from the next slide where we address the force. The process you can actually conclude based on step one and three that you achieved a 16 to or 17% to 18% weight loss, regardless of whether or not you use intensify behavioral therapy 'cause the trials the similar but one is within one is.

Is without Indentified therapy, and the achievements are the same so semaglutide overrules, apparently at least the need for dietary intervention importantly step for addresses the same issue that you get 17% to 18% weight loss, albeit you needed as a chronic therapy I.E. you have to adhere to therapy not surprise.

Matt: From the next slide, where we address the four-step trials, you can actually conclude, based on step one and three, that you achieve a 16 to or 17 to 18% weight loss regardless of whether or not you use intensified behavioral therapy because the trials are similar, but one is with and one is without intensified therapy, and the achievements are the same. So semaglutide overrules, apparently, at least the need for dietary intervention. Importantly, step four addresses the same issue that you get 17 to 18% weight loss, albeit you need it as a chronic therapy, i.e., you have to adhere to therapy, not surprisingly, over a chronic period, and that is a valuable element to address in the marketplace, where the stay time has been very short for today's anti-obesity medication.

During the over chronic period and that is a valuable element to address in the marketplace, where the state Tom has been very short for two days and GPC medications step to really shows that we have a nice double digit weight loss also in the type two diabetic setting.

On the next slide we are addressing the combination product between Semaglutide and the ambling once weekly human analog 833.

Both on the left hand side in the phase two monotherapy dose range finding trial, where we can see that after only 26 weeks, we achieve a wrap around 11% await cost for the highest dose and importantly on the right hand panel you can see that when you combine the two in the phase one be combination study you actually managed to squeeze.

Got a 17% weight loss after only 20 weeks that is saying weight loss assume alone could do in 68 weeks showing more or less activity of the two medicinal products, which is also what we had hoped for based on the animal studies, yet the side effect will still be millisent of that observed for Semaglutide 2.4 milligram monotherapy.

Dome and then on the last slide this is a bit of update for the rest of the year on the clinical side we are.

Happy to a later on.

Announced the fees to be results from city. They can map the first in class.

I'll six antibody for cardiovascular disease protection, but also the phase two deal yet combo studies with the effects, our compound and easy I compounds, respectively in combination with Semaglutide 2.4, and towards the end of the not to say at the end of the year. The sustained for program will also report.

Matt: Step 2 really shows that we have a nice WDG weight loss also in the type 2 diabetic setting. On the next slide, we are addressing the combination product between semaglutide and the amylin once-weekly human analog 833, both on the left-hand side in the Phase II monotherapy dose range finding trial, where we can see that after only 26 weeks, we achieve around 11% weight loss at the highest dose. And importantly, on the right-hand panel, you can see that when you combine the two in the Phase Ib combination study, you actually manage to squeeze out a 17% weight loss after only 20 weeks. That is the same weight loss as Sim alone could do in 68 weeks, showing more or less additivity of the two medicines, which is also what we had hoped for based on the animal studies. Yet, the side effect was still reminiscent of that observed for semaglutide 2.4 milligram monotherapy alone.

In terms of initiation, we have two clinical initiations, that's worthy of mentioning one is in phase. One. These are both influence that is the glucose since has been study we will put into phase one clinical trials. During the course of this quarter and instant I could take the first in class once weekly insulin will enter into phase three trials during the course of B.

Fourth quarter and finally on the regulatory side, we are waiting regulatory decisions on the once weekly so my past time for HD and obviously, we will submit seem a 2.44 PCB new drug application in the United States around the turn of the year would that over to constant for the financial.

Thank you Miss.

So a our financials for the first six months shows a local currency sales growth of 7% and an operating profit growth of 8%.

Around one percentage point positive impact from him from currencies.

In terms of our hedging than that we have indoor hitting our sale at 1.7 billion. The this year compared to 2.3 last year.

With in consequence leads to an increase in diluted earnings per share in the first six months of.

14%.

The cost impact.

We have seen.

Matt: And then on the last slide, there's a little bit of an update for the rest of the year. On the clinical side, we are happy to later announce the Phase IIb results from Citivecimab, the first-in-class IL-6 antibody for cardiovascular disease protection, but also the Phase II Gilead combo studies with the FXR compound and ACCI compounds, respectively, in combination with semaglutide 2.4. And towards the end of the year, not to say at the end of the year, the SustainForti program will also report. In terms of initiation, we have two clinical initiations that are worthy of mentioning. One is in Phase I.

The parts of currency impact we've seen in for six months of this year, it's mainly driven by a 3% increase in the average say us dollar to Danish kroner.

However, when we look ahead for for the full year, then as a consequence of the U.S. dollar the depreciating to the tune of 8% since our Q1 guidance.

Then we do see a negative.

It solution in the U.S. dollar so.

One percentage point or so lower average us dollar for Twentytwenty compare to 2019 and then in the Button chart you see the inclusion in terms of fair emerging market currencies, our site currencies, where we see some significant drops.

Be that the Argentinean peso other proceeded in Harare or the Turkish lira.

[noise] all in all that leads to a financial outlook for the year as loss was talking to before of unchanged the local currency topline of 3% to 6% growth.

Matt: These are both insulins. That is, the glucose-sensitive insulin we will put into Phase I clinical trials during the course of this quarter. And insulin Igodec, the first-in-class once-weekly insulin, will enter into Phase III trials during the course of the fourth quarter. And finally, on the regulatory side, we are awaiting regulatory decisions on the once-weekly somapositan for ADHD. And obviously, we will submit Sema 2.4 for obesity, the new drug application, in the United States around the turn of the year. With that, over to Carsten for the final.

Got a negative currency impact going from a cost of 1% to now 2% lower reported sales growth.

2% negative impact on the reported sales growth operating profit we narrowed the range.

From the bottom so we raised floor.

From 1% to 2%.

And the again conscious.

Expected to negatively impact our operating profit growth by three percentage points.

The flip side so that is.

That.

Yeah, our hedging losses are reduced by 1.3 billion compared to our latest guidance to now 1.2 billion.

Tax rate unchanged and to and free cash flow reduced at the rates is reduced by 3 billion as a consequence of their covidien transaction that just close to.

Carsten: Thank you, Matt. So our financials for the first six months show a local currency sales growth of 7% and an operating profit growth of 8%, with around 1% point positive impact from currency. In terms of our hedging, we have a lower hedging loss of 1.7 billion this year, compared to 2.3 billion last year, which, in consequence, leads to an increase in diluted earnings per share in the first six months of 14%. The positive currency impact we've seen in the first six months of this year is mainly driven by a 3% increase in the average US dollar to Danish kroner. However, when we look ahead for the full year, then as a consequence of the US dollar, or other currencies where we see some significant drops, be that the Argentinian peso or the Brazilian Herares or the Turkish Lira.

We could go so.

Where we have paid an upfront of 5 billion DKK would that O'toole us. Thanks.

[music].

Identical.

I think with.

So.

Sure.

We're very pleased with colleagues.

Business.

So we're very pleased with where we are as a company.

The strong execution in the first half year solid news flow on the on innovation and we feel confident with our guidance for the year.

And with that are like to go to the accumulation.

Thank you.

If you do wish to ask a question. Please press zero one on your telephone keypad.

If you wish to withdraw your question you may do so by pressing zero two to cancel.

Our first question comes from the line of Sachin Jain of Bank of America. Please go ahead.

Hi, it's actually saying it is taking my questions.

He said just to make such firstly on iras likes we touched on it yesterday, but looking at 12% in war nights, where maybe you could dig into that middle will detail as to what's the key driver that some specific products territories successful commercial strategy and he's in the sustainability of that into next year.

The second question, it's demands on some datasets, Sweden competition in the back half, yeah, I'm, especially on Semi-height, they should be should see.

Carsten: All in all, that leads to a financial outlook for the year, as Lars was talking about before, of unchanged local currency top line of 3 to 6 percent growth, but a negative currency impact going from a positive 1 percent to now 2 percent lower reported sales growth on a 2 percent negative impact on reported sales growth. Operating profit We narrowed the range from the bottom, so we raised the floor from 1 to 2 percent. And again, currencies are expected to negatively impact our operating profit growth by 3% at this point. The flip side to that is that our hedging losses are reduced by 1.3 billion compared to our latest guidance of now 1.2 billion, tax rate unchanged, and free cash flow reduced by 3 billion as a consequence of the COVID transaction that just closed a week ago or so where we paid an upfront of 5 billion. With that, over to you, Lars.

He commented on a benign safety profile I just wanted to check whether that was based on discontinuation rate low income Appleton eight does show you want or the actual adverse event profile are also being similar the regions of the question is when I see you're seeing the question at the 88 cool you refer to diarrhea rates being high single digit.

On a weekly basis, which I'm guessing could add up to a large came across Len study and that's why I'm missing something and then the second question was relates to amortize appetite I mean, historically with him. He's managed Gee I tops to extend the penetration is there anything you're aware can I get it perspective, the suggest that's not possible as a very long.

Interesting 16 weeks really using in phase three Nike.

Thank you.

And the thank you for hosting us.

First on Io, you're right, we see very strong momentum in our international operations business.

Growing or of around 2012% and again.

Though the stockpiling and and the low patient flow of similar nature. So so we see a strong.

Lars: So we're very pleased with where we are as a company. Strong execution in the first half year, solid news flow on innovation, and we feel confident with our guidance for the year.

Underlying growth.

When you look at it it's really fueled by both our instrument business.

Growing by by 10% and it's a fewer by our tier one business growing by.

Operator: Thank you. If you do wish to ask a question, please press 01 on your telephone keypad. If you wish to withdraw your question, you may do so by pressing 02 to cancel.

37% and all the biopharmas growing by 10% so we see a.

Business cycle NSS operations, where we are launching a number of new products we have.

Sachin Jain: And our first question comes from the line of Sachin Jain of Bank of America. Please go ahead. Hi, it's Hanson Jones here. Hanson, for my questions, two sets, if I may. Firstly, on Iova, if we touched on it yesterday but we're looking at 12% in 1H, I wonder if you could dig into that in a little bit more detail as to what's the key driver of that in terms of specific products and territories. The second question is for Mads on some datasets from your own competition I just wanted to check whether that was based on discontinuation rates being low and comparable to low-dose GLU1, or the actual adverse profile also being similar. The reason for the question is that when I asked you a similar question at the ADA call, you referred to diary rates being high single-digits on a weekly basis, which I'm guessing could add up to a large number across the length of the study unless I'm missing something And then the second question was related to Zepatide.

It's a bit our our models to one way or we ask the individual Joe managers to make sure that they beat competition.

And and give them flexibility to use our portfolio of products because we have a very broad portfolio of both the no implant products, obviously, but also a genuine so it's really important that you you have a market fit strategy, where you're close to the underlying say preferences in individual markets and then we are.

Yes people on or not meeting internal no notice it budgets, but taking market share beating competition.

And then you can say the demographics is also a talking in favor of Io because we have a an underlying demographics. That's also more favorable than you can say in a in North America. So it's the demographics. It's a it's a it's the product launches.

And doing that well across more than 90 markets creates a very solid momentum.

And we guided at our Catchmarks they have for this a 6% to 10%. So we feel comfortable with where we are in terms of that.

Mess.

The thing we're actually a couple of questions to you starting with a similar high dose.

Yes, well touching the sustained four to 2.0 milligram Semaglutide type two diabetes trial or other pick one with around or more than a thousand patients will report or at the end of this year and the importance of mentioned is that we know that the benign tolerability profile of Semaglutide has panned out in a way that we act.

Unknown Speaker: Historically, with a Zempic, you've managed GI TOPS through extended titration. Is there anything you're aware of from a GIT perspective that suggests that's not possible with a very long titration, I think 16 weeks that they'll be using in Phase 3? Thank you, and thank you for hosting us.

You have a very nice N easy tight ration scheduled for this trial in that we're actually able to go directly from todays simply dose of one Mick directly to the to meet the target those in that trial without further titration. The reason why I am optimistic about the safety profile offer some appetite and tolerability profile.

Some appetite 2.0 is that we have lots of data as you are of course aware from tobacco type boosting the step program, but also in the in the Nash program plus in the combination programs with the three three molecule and what we're seeing is a it'd be 90 adverse event profile. So that when I look at at nausea.

Unknown Speaker: First on IO, you're right; we see a very strong momentum in our international operations business growing by around 12%. And again, the stockpileing and the lower patient flow are of a similar nature, so we see strong underlying growth. When you look at it, it's really fueled by both our insulin business growing by 10%, and it's fueled by our GLP-1 business growing by 37%, and also BioPharm growing by 10%. So we see a business cycle in international relations where we are launching a number of new products. We have changed our model a bit to one where we ask the individual general managers to make sure that they beat competition and give them flexibility to use our portfolio products because we have a very broad portfolio of both the infant products, obviously, but also GF1, so it's really important that you have a market fit strategy where you get close to the underlying preferences in the individual market. And then we assess people on not meeting internal non-OECD budgets but taking market And then you can say the demographics are also talking in favor of IO because we have an underlying demographic that's also more favorable than you can say in North America.

There will be no weeks, where more than one in five patients typically report nausea for instance in in the step one trial and diarrhea wise, we are down in the in the single digit ranges and discontinuation rate I actually the lowest that we've ever seen in the large scale of BT programs like that like the one we witness here. So so we have no reason to believe.

Why this is going forward should not provide increased a if you can see compared to simply one point, though with a more or less maintained Gi tolerability profile with respect to set it to separate side. It's it's not really prudent for me to comment you should more addressed the questions to our colleagues at Eli Lilly I.

I do note. However of course that the receptor distribution for the GLP, one receptors and the GRP receptors is somewhat different in that there are quite a few colonic G.I.P. receptors and whether they will undergo tech flex is to watch any diarrhea, genic effect or not and over what timeframe I have nukhul. So we would have to see the tightrail.

Data from the year surpassed study once we get there so that will of course be interesting.

And we'll look at the bottom and off your guidance for on the top line on on the operating profit side, you will essentially get to negative yield over your growth Walport top doors. So I'm just wondering if candles.

Matt: So it's demographics, it's the product launch, and doing that well across more than 90 markets creates very solid momentum. And we guide it at our Calcium Markets Day by this six to 10%, so we feel comfortable with where we are in terms of, I think there were actually a couple of questions for you, starting with semi-high dose. Yes, well, touching.

And obviously, how much of Colgate based conservatism baked at the bottom end of the oranges and its patient flow wants to get back to normal as at the end of all the was quick Qs you had originally planned all Ben do the automatic you think about the guide and being in the upper half of the ranges.

First we bought them off that's question number one.

Question number two months cannot be now seeing you do treaty year canine you've got an ideal sake, you want a pause here, we kind of it seems like that is concentrated at sport to been kind of the toward auto fourth leg or potential growth for noble on the CBD.

Matt: The Sustane 40 2.0 milligram semaglutide type 2 diabetes trial, a rather big one with around or more than 1000 patients will report at the end of this year. And important to mention is that we know that the benign tolerability profile of semaglutide has panned out in a way that we actually have a very nice and easy titration schedule for this trial in that we're actually able to go directly from today's osembic dose of one mg directly to the 2 mg target dose in that trial without further titration. The reason why I am optimistic about the safety profile of semaglutide and tolerability profile of semaglutide 2.0 is that we have lots of data as you are of course aware from semaglutide both in the STEP program but also in the NASH program plus in the combination programs with the AM833 molecule and what we are seeing is a benign GI adverse event profile so that when I look at nausea there will be no weeks where more than one in five patients typically report nausea for instance in the STEP1 trial and diarrhea wise we are down in the single digit ranges and discontinuation rates are actually the lowest that we've ever seen in a large-scale OBG program like the one we witness here.

Kidney disease side, just wondering if that is oh, there is a single asset that you can kind of ties all of us to get the or are you thinking of doors as individual assets and as a collection of those what called them. That's great, but the you don't need a single asset to be the men cream of the franchise going forward.

Okay.

Great. Thank you carry off a for this question that there and then clearly the current environment, where we're in a has more uncertainty then we would normally expect at this point of time in the year.

The way we've been doing our modeling in in terms of the balance of year, because that's of course, all who some something we've been looking at the.

Basically boils down to anything.

Basically passed onto Qubits it because as last was talking to a initially so our first half year performances. There at the stocking is largely offset by by the reduced a new patient starts in the first half year. So we have underlying very very solid momentum in our business and you see that in in our ship from store so.

So so the reason offer.

Of the somewhat low a growth rate in the second half if if if I take those points a basketball is down to one destocking. So so we still have 1.5 billion in a patient level inventory says that we expect two to two destock. So so if what.

Matt: So we have no reason to believe why Sustane 40 should not provide increased efficacy compared to Osembic 1.0 with a more or less maintained GI tolerability profile. With respect to sepatite, it's not really prudent for me to comment. You should address the questions more to our colleagues at Eli Lilly. I do note, however, that the receptor distribution for the GFP1 receptors and the GIP receptors is somewhat different in that there are quite a few colonic GIP receptors and whether they will undergo tachyphylaxis towards any diureogenic effect or not and over what time frame I have no clue. So we will have to see the titration data from the SURPASS study once we get there, so that'll, of course, be interesting. Thank you, Sachin.

Percentage, you put on that but that would be a drag to say to the tune up a couple of send this point if if if we look at the at that for the balance of the year.

And the and then on there on the patient initiations are the embrace impact said well you see you see a second quarter, where we have flat sales antenna. If destocking is a couple of cents point to enter then we around to add the four or 5% Mark on on the pace in adjacent end to end.

Mifid.

Procedures.

That I would say that's that's why we're coming from and to were somewhat the halfway back in terms of the trough offer of the impact.

But of course, that's an area under the craft. So so the patients we had expected start in the second quarter.

We don't have those patients say in in Q3 in Q4. So so so we would have new patients to stockpile, but we still lack.

That set of patients from a from second quarter. So that's that's kind of mathematically you know just a in internal bus and then the question is said and the new starts so.

Everything and coming down to it. We believe this is say this is the most realistic I think.

Keyur Parekh: Next set of questions, please. Our next questions come from the line of Keyur Parekh of Goldman Sachs. Please go ahead. Good afternoon.

He's talking is uncertain part of course, if if patients are not destocking there to the same extent and then we get closer to a to the high end of the range and there and if they destock as we anticipate then where more kind of in the send up rains and then were more talking about a resurgence.

Karsten: Thanks for taking my questions. Two, please, if I may. One for Karsten and one for Matt.

Matt: Karsten, if we look at what you delivered in the first half of the year and we look at the bottom end of your guidance, both on the top line and on the operating profit side, you would essentially get to negative year-over-year growth for both of those. So I'm just wondering, kind of, obviously, how much COVID-based conservatism is baked into the bottom end of your ranges? And if patient flow was to get back to normal as at the end of or towards the pre-Q as you had originally planned for, then do we automatically think about guidance being in the upper half of the ranges as opposed to the bottom half? That's question number one. Question number two, Matt, we're now seeing you do PCSK9, you've got an IL-6, you've got an A4C3, kind of. It seems like there is a concentrated effort to build kind of a third or a fourth leg of potential future growth for Novo on kind of the CV, kidney disease side. So just wondering if there is a single asset that you think kind of ties all of this together, or are you thinking of those as individual assets, and if a collection of those works out, then that's great, but you don't need a single asset to be the mainframe of the franchise going forward.

Of course 19 in second half that would take us to tools to the bottom end of of the range.

Thank you Carson comments mess on Pcsknine abuses, three and and how we look for that.

Yes, I think youre the two elements have proven to notice towards becoming much more of a cardiometabolic company. One is the fact that that spearheaded by audio to one franchise in particular, some ecotype, but also lyreco side.

We have witnessed that the pipe Tropic action of GLP, one has provided us with so many cardiometabolic benefits, whether it's on the Cadeka system. The mace benefits, whether it's on on deliver whether it's on on adipose tissue or obedient on and that in its own right has given us expertise in developing drugs within the cardiovascular too.

I mean as you can see from from the way we've executed our four different cardiovascular outcome trial. When that said, we started mapping if semi could reduce amazed with by 26% in diabetes. What are the remaining 74% well that's what we called the residual risk and that's on top of Stephens ITSM stop on top of guilt. One so there's still a huge residual risk bearing.

In mind that 70% of type two diabetics die from cardiovascular disease. So we mapped out what we needed to do in order to become a a cardiovascular player with a more holistic approach to this beyond a GLP one and the residual risk is composed of some limited elements, where a pie we know that LDL cholesterol and triglycerides are the most important and they.

I addressed by our Pcsknine peptide and he NT APC Threed antibody, respectively, LTL and the tricks respectively. But then we also know that from the cancer study and from human genetics that the immune system any particular, the inflammatory part of the immune system is highly involved in in their plaque aggravation and rupture and.

Karsten: Thank you. Great, thank you Kyra for this question. And clearly, the current environment we're in has more uncertainty than we would normally expect at this point in the year. The way we've been doing our modeling in terms of the balance of the year, because that's, of course, also something we've been looking at, basically boils down to, and I think, basically boils down to COVID, because, as Lars was talking about initially, so our first half-year performance there, the stocking So we have an underlying very, very solid momentum in our business, and you see that in our market share performance also.

With that in the most genetically validated a cytokine that emerged from the analysis what was <unk> six and that coincided with the cancer study showing that the effect of the talking either one is related predominantly while six lowering as we know from some analysis that have been done and that led us to pick up this unique opportunity could media that is the only.

Safe apparently safe way of looking at very low levels of drug concentration six a into circulation. So so that is our approach to bringing and also we need strategically to bring a cardiovascular product to market that is not a diabetes product, we believe body pure play cardio product.

Around or just after the turn offer this decade in order for us to come a serious player and justified investments and that some of the the thinking behind the quality acquisition.

Thank you Matt. Thank you clear next set of questions. Please.

Our next questions come from the line of women coupled there have been screen. Please go ahead.

Great. Thank very much taking my questions I'm not quite at the best thing, but it's not always seen some of the small data some more data from the small molecule GLP one.

Karsten: So the reason for the somewhat lower growth rate in the second half, if I take those points, basically boils down to one: destocking. So we still have 1.5 billion in patient-level inventories that we expect to destock. So what percentage you put on that, but that would be a drag, say, to the tune of a couple of percentage points if we look at that for the balance of the year, and then on patient initiations or the empirics impact, well, you see, you see a second quarter where we have flat sales, and if de-stocking is a couple of cents a point, and then we're around the four, And we're somewhat halfway back in terms of the trough of the impact. But, of course, there's an area under the curve.

Yeah, I got bodes changed at all on the potential for small molecule GLP ones in diabetes or you still pretty confident that peptides that away forward I mean tied to that just any color on next steps for your next generation or oral GLP, one when could the product realistically be on the market I know what else is just launched but just on long term comments.

We'll be really helpful. And then secondly cannot wise, taking until 21 and Clinton some long, but I think its second our 21 before you start the Amlan semi combination phase three trials in in the obesity is it because the device is it because you're looking to reformulate any comments will be will be great. Thanks very much.

Thank you remote mess.

Yes. So we made it is absolutely true that the Pfizer data that we're putting it on they are twice daily small molecule compound at 88.

Provide evidence that it appears to be possible, probably due to a direct autos Derek mechanism of action contrary to what believe everyone has had including myself seems to be a possible. However, we can also see from the data as you are aware as the rest of us all that even if they do make a sustained release preparation and they do me.

Karsten: So the patients we had expected to start in the second quarter, we don't have those patients in Q3 and Q4. So we'll have new patients to start, but we still lack that set of patients from the second quarter. That's kind of mathematically, you know, just in the numbers.

More subtle titration they they have the G.I. issues that were witnessed in the publication or presentation. Yet we are we Ah clearly the opinion that there is potentially a weyforth puts more acute your 20 minutes I do not necessarily believe they will have the full array spectrum of activities as as the needed peptide.

All the modified peptide semaglutide, but we will see that as time goes by for US. It's important to continue innovating and we actually believe that the next generation, which is your next question of rebel says or oral Semaglutide is something that we will bring out there as fast as possible it hinges upon our ability to.

Karsten: And then the question is, the new starts. So, everything coming down to it, we believe this is the most realistic. I think de-stocking is uncertain, but of course, if patients are not de-stocking to the same extent, then we get closer to the high end of the range. And if they de-stock as we anticipate, then we're more kind of in the center range. And then we're more talking about a resurgence of COVID-19 in the second half that would take us to the bottom end of the range. Thank you, Karsten.

Either deliver a you can see higher activity I could increase by visibility or at the same dose.

And all you can see a tepid versions that are even more affordable, but but predominantly we'd like to move the same way as we've done for who simply.

Towards increased if you could see that goes without saying both on a glycaemic control body weight and whatever we may decide to do in that field.

With respect to the the Amlin eight we and say Matt Phase three yeah. It is true that.

Matt: Comments, Mads, on PCSK9, POC3, and how we look at that? Yeah, I think the two elements have driven Novo Nordisk towards becoming much more of a cardiometabolic company. One is the fact that, spearheaded by our GLP-1 franchise, in particular semaglutide, but also lyaraglutide, we have witnessed that the pleiotropic action of GLP-1 has provided us with so many cardiometabolic benefits, whether it's for the cardiovascular system, the MACE benefits, whether it's for the liver, whether it's for adipose tissue or obesity, and so on. And that When that is said, we started mapping if semaglutide could reduce MACE risk by 26% in diabetes, what is the remaining 74%? That's what we call the residual risk, and that's on top of statins. It's on top of GLP-1.

There is work to do because once you know what is the dose of the M- three three yet that you want to partner up with some appetite only at that point in time, which is the around now wish or soon then you can start doing all the formulation work during the relevant at multiple dose pharmacokinetics studies that are needed and make.

Sure that you have the right formulation and truck delivery system approach to page three or what I can promise shoes that that when we entered into faced we are in the second half of next year as you correctly state that will actually be in a way that no patient or Dr will be able to.

See as any different from a standard injector with a single or an easy shot into the soccer teams compartment.

Great. Thanks, Yes, thank you everyone.

Thank you.

Next set of questions. Please onyx questions come from the line up Michael Leuchten All VBS. Please go ahead.

Oh, thanks, very much and two questions one understand that see the implied in our cost him.

I think thats something that yesterday was a little bit Miss that the ramp up in patients into the second half will have an impact would you be able to quantify how much rose the lack of dnbi actually NBS decline in the second quarters going to impact the second half a number of automobiles.

To put the pizza to public together and then that's going back to your commentary around the I might be just now looking at the cars and looking into one party antibody formula perhaps is that so when I look at the one point you know them curve is that the one effectively that's that that looks like us to want to go forward or will you have to do some modeling work here that you had to do.

Matt: So there's still a huge residual risk, bearing in mind that 70% of type 2 diabetics die from cardiovascular disease. So we mapped out what we needed to do in order to become a cardiovascular player with a more holistic approach to this beyond GLP-1. And the residual risk is composed of some lipid elements whereby we know that LDL cholesterol and triglycerides are the most important, and they are addressed by our PCSK9 peptide and the anti-ApoC3 antibody, respectively, LDL and Trix. But then we also know from cancer studies and from human genetics that the immune system, and in particular the inflammatory part of the immune system, is highly involved in plaque aggrav And to that end, the most genetically validated cytokine that emerged from the analysis was IL-6, and that coincided with a cancer study showing that the effect of blocking IL-1 is related predominantly to IL-6 lowering, as we know from some analysis that has been done.

Lets them a before you went into into phase three thank you.

Yeah, Michael There is this a when we're doing the modeling and.

I think the best starting point to explain the care for to in into the second half is a is to look at.

The impact in our Q2 growth rate so as the tied out the if we were flat and today, we had a couple of points from Destocking and then to the tune for 5% from biopharm and to and patient Jason. So if you call Biopharma farm out by.

<unk> percentage point of so then we have three to four percentage point of impact in in the third quarter linked to a new patient initiations Antech do bear in mind that that impact is a mix of.

A reduction in new patients so call. It lets say that as last year old on his graph, let's say that new patients were down by two tuna fish 25 cents and MPLX to cheer axis is 10% then perhaps you can explain a.

A couple of sent on on that accounts, but the but so already there we see the impact in Q2 of continuing scripts.

To get to the 3% to 4% so if you call it the.

2%, a plus and then then you'll have to add in one 1% or so on the continuing scripts and that's basically the effect that that that we then see in the carry forward. So wanted to present a impact on on the continuing scripts that will carry forward both in Q3 in Q4.

Matt: And that led us to pick up this unique opportunity, Covidia, that is the only safe, apparently safe, way of lowering at very low levels the drug concentration IL-6 in the circulation. So that is our approach to bringing, and also we need to strategically bring a cardiovascular product to market that is not a diabetes product, we believe, but a pure-play cardio product around or just after the turn of this decade in order for us to become a serious player and justify the investments. And that's some of the thinking behind the Covidia acquisition. Thank you, Max. Thank you, Keyur. Next set of questions, please. Our next questions come from the line of Wimalka Padia of Burnley. Please go ahead.

Okay, Yes.

On the dose selection for phase three for mm three as a partner for Cemig and.

Michael I have to remind you that in the phase one B study that you have on Youre right hand panel to bear in mind that it's a 20 weeks study, but up until week 16, all patients only received.

1.2 milligram. So the 2.4 milligram dose that gives you slightly more bang for the puck is actually only administer for four weeks. So you know before we jump to the conclusion that 1.2 can do the job our famco mathematical modeling has to tell us what does this.

Kind of fall week, a difference what would that translate into over a 68 for instance, we period.

There might be from a bank for the PUC perspective more to be had a 2.4 or in principle. Even 4.5 that is a cohort that has not reported yet as you're probably aware, but it all has to ultimately speaking in the context of us wanting a very well tolerated product. So these are things that will get back to you as soon as we've made a dose selection.

Unknown Speaker: Great. Thank you very much for taking the time to answer my questions. Now that we've seen some of the small data, some more data from the small molecule GLP-1 at ADA this year, have your thoughts changed at all on the potential for small molecule GLP-1s in diabetes? Or are you still pretty confident that peptides are the way forward? And tied to that, just any color or next steps for your next generation or GLP-1? When could the product realistically be on the market? I know Rival is just launched, but just some long-term comments will be really helpful. And then, secondly, can I ask why it's taking until 21, and correct me if I'm wrong, but I think it's the second half of 21 before you start the amylin-semacombination phase 3 trials in obesity. Is it because of the device?

Thank you Michael for those questions and next set of questions. Please.

Our next questions come from the line all Mark Purcell of Morgan Stanley. Please go ahead.

Yes. Thank you very much it's not the cell Morgan Stanley.

Three quick ones first one the net price about both its in the United States.

I think last year, you said by the middle of the we maybe able to other kind of gets to where it's it's heading but it appears like that but it's probably talked about 11 simple I take the net positive 30%, but that doesn't pick up the same point below so I wondered if you can help us understand what they thought that the net price reduction ballpark.

Secondly in terms of just housekeeping note to try to know, it's a positive impact or some 10 countries in Q2 and even in spend about that impact from the timing of shipments it cost and I wondered if you could just help us understand roughly those amounts that we can I can help us once by the model in the quarter is yet to come this year.

And I lost the.

Number questions on it so yes, it's called the North American Great. It's what's your 21 is that still expected to be in a in a flat to low single digit range, let's see all basis, well see helped us yesterday I'm thinking about the impact to finished in parts of your it's an important thing a 3% despite try but it's your next year and that could be interchangeable.

Unknown Speaker: Is it because you're looking to reformulate? Any comments will be great. Yeah, it is absolutely true that the Pfizer data that were presented on their twice daily small molecule compound at ADA provide evidence that it appears to be possible, probably due to a direct autosteric mechanism of action, contrary to what belief everyone has had, including myself, seems to be possible. But predominantly, we would like to move in the same way as we've done for the Olympics, i.e. Toward increased efficacy. That goes without saying, both on glycemic control, body weight, and whatever we may decide to do in that field. With respect to amylin 833 and semaphase 3, yeah, it is true that there is work to do. Because once you know what the dose of amylin 833 that you want to partner up with semaglutide, only at that point in time, which is around now-ish or soon, then you can start doing all the formulation work, doing the relevant multiple dose pharmacokinetic studies that are needed, and make sure that you have the right formulation and drug delivery system approach to phase 3.

Good afternoon. Since you asked lets turn I'm not aware of any other important swing factors beyond the organic like people business, which has been very open so could you sort of help us.

It's still the case given that consensus is expecting it to double digit North American see all sounds great in 2021. Thank you.

Thank you Mark I can start on rebuilt the pricing we when you when you launched a breakthrough innovation like this are you spent the first time on really making sure that the precision is clearly understood based on the clinical differentiation. So all the medical work and that leads into the contracting and.

We're very pleased with the level of access we have achieved and also the the pricing.

And I I cannot go into a talking about what the net prices, but it's a price as determined by the quality of the product and we're pleased with that price point.

Cotton on on order Tropin, and then Twentytwenty one north American.

Growth perspective, yeah.

Yeah. Thanks, Mark so so on a on Anoro tropin Anda and human insulin the youre perfectly correct, where we've seen some I say reasonably unusual growth rates for for those two products.

So so if we take a human insulin first the where we've seen a couple of quarters of 10% growth, which as you alluded to is is mainly driven by timing of affair tenders and shipments in I O. The if you look at historically than the then for human insulin we've seen a.

I would say a flattish development, the or quite a number quarter. So so the fundamental and level for human insulin is it's more flattish.

And there and they actually for for for growth hormone also at 18% growth in the first half and that basically to two factors.

Two discretionary affect us a going into that one factor is a it's a compares a supply shortage that has helped our business in certain geographies, including in Japan, and the and then we've had a inventory movement the especially in.

Unknown Speaker: What I can promise you is that when we enter into phase 3 in the second half of next year, as you correctly state, that will actually be in a way that no patient or doctor will be able to see as any different from a standard injector with a single or easy shot into the subcutaneous compartment. Great. Thank you so much.

First quarter in U.S., so so I'd say our growth hormone business in terms of when you look at the fundamental market with a.

I said low single digit.

Global volume growth in in that markets and they call. It the 33, 34% markets here.

We would see fundamentally a I'd say low positive growth for no tropin and compare to the underlying at but then we've been good at capturing a come compared to business as I spoke to and then we have the supply chain movements.

Unknown Speaker: Thank you. Next set of questions, please. Thanks very much.

Unknown Speaker: Two questions. One, just going back to the implied second half, Karsten, I think that's something that yesterday was a little bit missed, that the ramp of new patients into the second half would have an impact. Would you be able to quantify how much growth, the lack of the NBI, so the NBI decline in the second quarter is going to impact growth, and then Matt's going back to your commentary around the AMA 3C data just now, looking at the curves, looking at the 1.2 and 2.4 milligrams. So when I look at the 1.2 milligram curve, is that the one effectively that looks like that's the one to go Michael, it is when we do the modeling, and I think the best starting point to explain the carry forward into the second half is to look at the impact on our Q2 growth rate.

In terms of off of 20 to 21.

And the outlook for off for the U.S. or for North America, then it will recall that at CMT, We said, 70% a conversion and the end to set. The this are similar to two a growth level four foot 2020, and 20 to 21.

And now we've seen a and other factors play out over the last 10 months and what we're looking at is 1% growth rate for for the first half year.

Including impacted both from affordability programs and toner tool in the first half.

And then.

Which will not be that with the same extent, we expect to entrench one on the other handset. Then then we have the U.S. unemployment.

With an endless 3% so that means it's not the full 3% you'll see in 21, because some of it will phase in over the remainder of of Twentytwenty.

And then you put on top of that's a very positive just one dynamics and the launch of a for Belarus, and then of course.

Still continued drag on the insulin business. So we're not guiding on a specific range into 2000 switch one, but there, but I think you'll have a pretty good building block space based on this has to do the modeling.

Thank you bye.

Thank you Hello next questions come from the line all the Camille batch of Barclays. Please go ahead.

Hi, there thanks for taking my questions from L. Cox from bucket just two questions for me. So firstly on filter that come up so covidien acquisition that so where do you see just a molecule itself sort of fitting into the current treatment paradigm football's chronic renal disease I can you talk further about the current treatment options available to patients that are in the second is there any insight.

Unknown Speaker: So as a start out, if we were flat, and we had a couple of points from de-stocking, and then to the tune of 4-5% from biofarm and patient initiations. So if you call biofarm out by a percentage point or so, then we have a 3-4% point of impact in the third quarter linked to new patient initiations. And do bear in mind that that impact is a mix of a reduction in new patients. So let's say, as Lars showed on his graph, that new patients were down by the tune of 25%, and NBRX to TRX is 10%. Then perhaps you can explain a couple of percent on that account.

Some anything on the old PK PD or safety observations from your early stage mandates hemophilia study when would you expect data readout and what the next steps for that program be to basically one thank you.

Okay right on silty.

First of all it the colleagues at Covidien Therapeutics has done a really marvelous job in terms of defining the population. They have a design phase twob trial fall in that it is atherosclerotic cardiovascular disease in patients who have some element of chronic kidney disease, many of whom have diabetes, but many of whom do not have diabetes. So it is a.

Two cardio product and at what has happened here is they they basically increased the level of information 'cause chronic kidney disease is followed by significant systemic inflammation in the body also driven as we can see by I had a six and that means that they targeted the population that is expected to respond clearly papers be to this kind of into.

Unknown Speaker: So already there, we see the impact in Q2 of continuing scripts to get to 3-4%. So if you call it 2% plus, and then you'll have to add in 1% or so on the continuing scripts, and that's basically the effect that we then see in the carry forward. So a 1-2% impact on the continuing scripts that will carry forward both in Q3 and Q4, and on the dose selection for phase 3 for AM833 as a partner for SEMA. Michael, I have to remind you that in the phase 1B study that you have on your right-hand panel, do bear in mind that it's a 20-week study, but up until week 16, all patients only received 1.2 mg. So the 2.4 mg dose that gives you slightly more bang for the buck is actually only administered for four weeks.

I mentioned, then and it is of course eight a. first in class in that it doesn't block that six receptor with older downstream side effects that could entail because other cytokine members of the family will seem to be at that precept. The it rather leave the recip alone and we had low doses is able to soak up the circulating our six like and and thereby.

Dampened inflammation, hopefully in what looks to be very safe way. So it fits into the Grand scheme of cardiovascular protection as being the first unless you believe C met isn't anti inflammatory then it is indeed, the first and inflammatory mechanism to hit the market and reduced cardiovascular disease, and if I look at cardiovascular residual risk in people with the scheme.

This season and the other cbds.

Atherosclerotic problems, then inflammation is probably at least half of the residual risk. So this is a very significant element to treat and it fits in nicely as we discussed earlier during this call with Semaglutide, but also our deploring agent. So that's actually very nice on the my mate well we are of course Hilton.

Unknown Speaker: So, you know, before we jump to the conclusion that 1.2 can do the job, our pharmacomathematical modeling has to tell us what this kind of four-week difference would translate into over a 68, for instance, week period. There might be, from a bang for the buck perspective, more to be had at 2.4 or, in principle, even at 4.5.

A little bit by.

By the German clinic that was running the trial, having to undergo locked down for putting cobot 90, but it they managed to do the first cohort before the locked down and now they opt to boost beat down there, which is really nice. So so we have early PK PD modeling and he just looking let me just put it this way encouraging.

And yes. It is the intention to move into phase three once we have done first a single ascending dose followed by multiple ascending dose phase one.

Which will then be followed by Ricky pie face three so that's the intention.

Unknown Speaker: That is a cohort that has not reported yet, as you're probably aware, but it all has to also be seen in the context of us wanting a very well-tolerated product. So these are things that we'll get back to you as soon as we have made a dose selection. Michael, for those questions and the next set of questions, please. Our next questions come from the line of Mark Purcell of Morgan Stanley. Please go ahead. Yes, thank you very much. It's Mark Purcell from Morgan Stanley. Three quick ones.

Thank you very much.

Thank you. Our next question comes from the line or Joe Wilson of Credit Suisse. Please go ahead.

Thank you one general in a couple of quick R&D ones on the general one I just wondered if we could explore a bit more this 3% negative impact from unemployment.

You'll thinking off if they.

Do you think people will he was on commercial insurance now end up with no insurance and therefore proportionate people just won't get treated or do you expect people to leave from commercial insurance to Medicaid or Medicare insurance and just for exactly the same prescription youre just going to get less revenues. So.

Same volume lower pricing.

Just to explore that a bit more and we really appreciate you, giving way sort of view because like you want it very few companies that have done that.

Mark Purcell: First of all, the net price of Ribalta in the United States. I think last year you said by the middle of the year, we may be able to have a kind of guess of where it's heading. But it appears like the list price was about 11% below Ozempic.

My second question beyond just on R&D I'm only amylin convey product do you need to get the amylin product approved as a monotherapy from a contribution of component.

Point of view and then one area, we haven't heard anything about it all came in a today is not.

Just wanting to ask Matt what makes them feel confident that you can shows an improvement in fibrosis here, if you count I would that be initiate approvability.

Unknown Speaker: The net price appears to be 30% below Ozempic at the same point of the launch, so I wondered if you could help us understand roughly if that's the net price reduction ballpark. Obviously, you helped us yesterday in terms of thinking about the impact or potential impact of US unemployment being a three percentage point drag this year and next year. And that could be interchangeable by similar incidents in the US next year.

Yeah, Thanks, Joe and and I appreciate your feedback on a on 3%.

Impact the needless to say an estimate like that is surrounded by by quite a.

A big uncertainty so a human sense in simple terms, we see unemployment going from a 4% in January two now around 11%. So so clearly million South American say, we'll move from being employed to being unemployed and handset loose as the employer sponsored the.

Plants.

Okay, then how we estimated the impact or is it.

Unknown Speaker: I'm not aware of any other important swing factors beyond the organic growth of your business, which has been very positive. So could you sort of help us if that's still the case, given the consensus is expecting double-digit North American CR sales growth in 2021. Thank you. Mark, I can start on rebels with net pricing.

I can give you are building blocks to it. So first of all we look at the demographics are off a of the population being exposed to you know with a social driven by you know different sectors and geographies and the et cetera.

Then the then we'll look at the at their prior health insurance.

Are there on employer sponsored health plans are.

On the exchanges or what are they on.

Then a then we look at number of dependence and and then finally, we look at a in where do they go and clearly some will go to Medicaid.

Unknown Speaker: When you when you launch a breakthrough innovation like this, you spend the first time really making sure that the positioning is clearly understood based on clinical differentiation. So all the medical work, and that leads into the contract, and we are very pleased with the level of access we have achieved and also the pricing, and I cannot go into talking about what the net price is, but it's a price that's determined by the quality of the product, and we're pleased with that price. Karsten on Nordic Troping and then 2021 North American Growth Perspective Thanks, Mark.

And some will have temporarily Cobra insurance or some some will go to being uninsured some will move to becoming to the exchanges and some will go to our patient assistance programs or are the cash based programs. So.

It's it's so many different assumptions with so high uncertainty that at this point it would be meaningless to to give more hot data than that and what we've already given.

Thank you Carson mess on a on emblem combo with a monotherapy a pool is needed and then on Nash fibrosis.

So so thank you Joe I'm on the Ambling combo. It is absolutely true that when you Havent agent that has significant funk logical activity then the ft and other guidances. The odd that you need to have exposure and show safety and efficacy interface to be a situation.

Unknown Speaker: So on nortrofen and human insulin, you're perfectly correct. We've seen some, I'd say, reasonably unusual growth rates for those two products. So if we take human insulin first, where we've seen a couple of quarters of 10% growth, which, as you allude to, is mainly driven by the timing of tenders and shipments in I.O. But if you look at it historically, then for human insulin, we've seen, I would say, a flattish development over quite a number of quarters. So the fundamental level for human insulin is more flattish.

With that entity.

There are.

Certain rules about how many patients have to be exposed for how long and that is easy to do either ineffective Loreal design, we have talked a truck be and drug April speed and then if drug is the am eminent component. Then you just a need to make sure that that of the study is big enough long enough to.

To satisfy regulators it doesn't mean to say that you have to launch the monotherapy component alone, but but you do need absolute as you correctly state exposure interface resetting and since we saw double digit weight loss, we cannot argue that there's no activity with this agent. So so that is the base case proficiency.

Unknown Speaker: And actually, for growth hormone, also at 18% growth in the first half, there are basically two factors, two discretionary factors going into that. One factor is a competitive supply shortage that has helped our business in certain geographies, including in Japan. And then we've had an inventory movement, especially in the first quarter in the U.S. So I'd say our growth hormone business, in terms of when you look at the fundamental market with a, I'd say, low single-digit global volume growth in that market, and they call it 33%, 34% market share, we would see fundamentally a low positive growth for northropin compared to the underlying. But then we've been good at capturing competitive business, as I spoke to, and then we have the supply chain movement. In terms of 2021, and the outlook for the US or for North America,

In terms of Semaglutide in Nash, well actually we deployed a a multitude offer actually an array of assessments are also to assess the fibrosis and when we look at.

Hyper scan elastography, we actually saw fibrosis improvements when we look at the itself, which is a fibrosis score using p. Threeone P type, one and hyaluronic acid in a very a sophisticated formula. We also saw fibrosis production when you look into the pipes as.

We did not see a improvement in those who reduce their their fibrosis score without Nash resolution changes.

But what we did see was a significant reduction in the progression of fibrosis, such that in the placebo arm wanting five patients would either progress from it to two or three or a three to cirrhosis and that number instead of 25. It was only wanting 20 in the Semaglutide Nash arm. So I have to say do we have a multitude of lines up.

Evidence that suggests that we actually halting disease progression and a that should work fine with the regulators, but part of course, we are discussing this with the regulators as you can imagine.

And can I just ask a very briefly as a follow up given that the first thing you do with an aspiration is to try and make them, let's wait and given the GLP is a great way to do that what proportion of Nash patients patients do you think outlet.

Unknown Speaker: Then I do recall at CMD we said 70% conversion and said this 0 to 2 growth level for 2020 and 2021. Now we've seen a number of factors play out over the last 10 months, and what we're looking at is a 1% growth rate for the first half of the year, including impact both from affordability programs and donor tolls in the first half, which will not be there to the same extent we expect in 2021. On the other hand, we have the U.S. unemployment rate at an annualized 3%.

Well take a GLP already at some point in that treatment.

Unfortunately, the way too many because youre absolutely correct that they should be taking a weight loss, making like a GLP one but today if you take the U.S. despite the very nice.

Talks we are having about deal to one I think today in diabetes. It's like 688, 8% were up to now it's going well, 8% up the public let me, 92% are not being treated with the deal to on Indian rupees default for Saxenda.

Unknown Speaker: So that means it's not the full 3% you'll see in 2021 because some of it will phase in over the remainder of 2020. And then you add on top of that very positive GLP-1 dynamics and a launch of rebalances and then, of course, still a continued drag on the insulin business. So we're not guiding on a specific range into 2021, but I think you have pretty good building blocks based on this to do the modeling. Thank you both.

I mean, the numbers below 1% of the obese population who's taking six in the so so.

It should not be like this but it is so there's a lot of patients to go for and of course, you can see Nash in the context over beachy off diabetes et cetera.

Thank you.

Thank you Joe next question. Please Oh next questions come from the line of Peters adult of Citigroup. Please go ahead.

Thanks, Pete Verdult Citi. Please.

Please Matt.

Last night <unk> opening remarks about a clinical trial program being well timelines being maintained during cobiz just drilling down specifically, so and the select see what studies anything you can say about enrollment rates event rate timelines or would be helpful.

Unknown Attendee: Thank you. Our next questions come from the line of Jamil Baksh of Barclays. Please go ahead. Hi there. Thanks for taking my question. Jamil Baksh from Barclays.

Secondly, on Nash I mean like no one Tonight there was a good.

Unknown Speaker: Just two questions for me. Firstly, on delta-vecumab, your Corvidia acquisition there. So where do you see just that molecule itself sort of fitting into the current treatment paradigm for advanced chronic renal disease? And could you talk further about the current treatment options available to patients there? And then secondly, can you share any insights from anything on your PK, PD, or safety observations from your early stage MIM-8 haemophilia study? When would you expect data to read out, and what is the next step for that program to face 3.1? Thank you. Okay, right? On CILTI.

Thomas Mystery Nash, Google is combo study coming up with the caveat assets, where the monotherapy data for the effects are actually see when pretty promising. So how helpful know what can you frame your expectations or level excitement.

Coming combo data and then lastly for the commit a rule or or Mike.

The line it too early to ask you about Tresiba in China basically obviously.

You have not yet get on the front foot and promote your new products such as the them pick rebel sister seem just over the first at the recent products that you'd be able to launch in China I realize kind of it is I'd, rather big disrupting a factor but is it too early to ask you how that launch is progressing in China.

Matt: First of all, the colleagues at Covidia Therapeutics have done a really marvelous job in terms of defining the population they have designed the Phase 2b trial for, in that it is atherosclerotic cardiovascular disease in patients who have some element of chronic kidney disease, many of whom have diabetes, but many of whom do not have diabetes. So it is a true cardio product. And what has happened here is that they've basically increased the level of inflammation because chronic kidney disease is followed by significant systemic inflammation in the body, also driven, as we can see, by IL-6. And that means that they've targeted a population that is expected to respond clearly favorably to this kind of intervention. And it is, of course, a first-in-class in that it doesn't block the IL-6 receptor with all the downstream side effects that could entail because other cytokine members of the family will signal via that receptor. It rather leaves the receptor alone and is only at low doses able to soak up the circulating IL-6 ligand and thereby dampen inflammation, hopefully, in what looks to be a very safe way.

Thank you.

Yes first.

On the things trial.

Yes, well well so what does happen Pete is that we as I might have explained previously have been ahead on the recruitment curves for instance for select but also spot on for personal and while the code 900 situation has to some extent post the recruitment for a period, where back up and running noticed full speed bump, but clearly up.

50% recruitment rate. So so we are we are doing well and expecting that those Mika trials, we will have recruit more less by by year end and in terms of event rate. The best Guesstimate I can give you of course, it's early days. So I don't have the exact numbers they might be a bit volatile in the early parts of a a long term study is that.

Looking into sustained leader and pioneer six trials or outcome studies or the event rates were three and half to 4% or in the diabetic is CBD population. So this is the same population so consider that a reasonable number and then you can do your own mats on your cool off mace events overtime I know you can do.

And then that's of course, the Nash, Gilliat, where where the HCC and the Pixar compounds were not so promising in the Standalone phase two studies from Gilliat, but but we do believe that that CMS at so much more that it will be interesting to see that these complementary modes of action might will come in handy together, we will develop some.

Matt: So it fits into the grand scheme of cardiovascular protection as being the first, unless you believe SEMA is an anti-inflammatory, then it is indeed the first anti-inflammatory mechanism to hit the market and reduce cardiovascular disease. And if I look at the residual cardiovascular risk in people with ischemic heart disease and other CVDs or atherosclerotic problems, then inflammation is probably at least half of the residual risk. So this is a very significant element to treat, and it fits in nicely, as we discussed earlier during this call, with semaglutide and also a lipid-lowering agent. So that's actually very nice. On My Mate, well, we are, of course, held back a little bit by the German clinic that was running the trial, having to undergo lockdown for a period during COVID-19, but they managed to do the first cohort before the lockdown, and now they're up to full speed. Down there, which is really nice.

Appetite Nash, even without these agents, but if they offer something more pinches the effects on the fibrosis component, we will see that could of course be interesting. So we'll get back to with the with data later on and where we followed closely but there's no data.

Thank you Miss I can really what can we tell about tresiba performance in China.

Yeah. Thanks, a lot so aehr test, even China as you said it had been being passed that since the last year and after that and we need to work on the hospital listings, which is also in progress now and they're doing well so tresiba in China in the last year on M.A.T.S. gain there, it's your 0.9% markets, yet and he's going to the tune of then.

Oh, 17%, so so it's going really well and he said it I'm fine for us into the basin segment of course, why we traditionally have not had their high market share, but mopping their dominant in the Phoenix segment.

Thank you thank you Pete.

Next set of questions. Please.

Matt: So we have early PK-PD modeling, and it is looking, let me just put it this way, encouraging, and yes, it is the intention to move into phase three once we have done first a single ascending dose followed by a multiple ascending dose phase one, which will then be followed directly by phase three, so that's the intention. Thank you very much. Thank you. Our next question comes from the line of Jo Walton of Credit Suisse. Please go ahead.

Our next questions come from the line all Peter system of Handelsbanken. Please go ahead.

Great. Thanks for taking my question is most pronounced I have two left here one is on the P. strategy, how commercial side looking sort of back this sort of the.

Mm one of the most successful drugs, albeit only short list was a phenfen and that was basically you know commute consumer driven products also in light of the times back then but nevertheless.

Is it also that kind of strategy that you sort of could be looking for four full a same as you know what sort of bridge until you have the next generation of compounds on the market I eat perhaps pursuing more consumer driven strategy and in that regard.

Jo Walton: Thank you. One general and a couple of quick R&D ones. On the general one, I just wondered if we could explore a bit more this 3% negative impact from unemployment that you're thinking of. Is this, you think people who are on commercial insurance now, end up with no insurance, and therefore, a proportion of people just won't get treated? Or do you expect people to move from commercial insurance to Medicaid or Medicare insurance? And just for exactly the same prescription, you're just going to get less revenue. So the same volume, lower price.

Should we look at obesity potentially your most ambitious and also most expensive launch second question is on the strategy for your Biopharm business. You have now been talking for two years about acquisition for Didnt Biopharm, you announced it and acquisition within Metropolitan metabolism. CV, you know when the stock market really didnt see men.

Are you surprised about that in fact, the stock market seem to appreciate it that way forward so in that respect.

Do you still intend to.

Waste Oh, sorry, not we spent resources on biopharm and what is the overall strategic view of the biopharm business from now on thank you.

Unknown Speaker: So just to explore that a bit more, we really appreciate you giving this sort of view because you're one of very few companies that have done that. My second question is beyond just R&D. On the amylin combo product, do you need to get the amylin product approved as a monotherapy from the contribution of components point of view? And then one area we haven't heard anything about in our Q&A today is NASH. Just wanting to ask Mads, what makes him feel confident that you can show some improvement in fibrosis here? If you can't, would that be an issue for approval?

Thank you Peter Camilla first on obese strategy.

Yeah, So way, it's clear that there will be city right now at 80 thing in many parts of the worst in out of pocket and but that improvements in this space. So when we are preparing for some actually tied to PC launch of they'll be preparing for both reinvest markets, but also for out of pocket segments, and we do see some development in a recognizing piece.

Yes. It is season, we are working on infrastructure elements of that suggest this latest yesterday, we saw the Canadian and physician organization recognizing obesity as a disease, we see new tenants Bundestag looking at and also doing the same and then we have seen also in <unk> well straight after standard that they now established at.

Matt: Yeah, thanks, Joe. And I appreciate your feedback on the 3% impact. Needless to say, an estimate like that is surrounded by quite a lot of uncertainty. So, in simple terms, we see unemployment going from 4% in January to now around 11%. So clearly, millions of Americans will move from being employed to being unemployed and hence lose their employer-sponsored health plans. Then how do we estimate the impact? I can give you the building blocks for it. So first of all, we look at the demographics of the population being exposed to them, which is also driven by, you know, different sectors and geographies and et cetera.

Instead of a code for expensing and cost related to BTT, which was not even at that they fall and finally in Switzerland. We've also seen every investment of Saxenda. So when we will be preparing for female P.T., we won't be looking at after paying for both segments out of pocket and reinvest.

Thank you for Mueller and then in terms of our Biopharm strategy. Our goal is to get all by fund by fund business back to growth, which we have managed to do by focusing more on the assets we have.

And then obviously to sustain growth we also need to have a pipeline that can.

Karsten: Then we look at their prior health insurance, you know, are they on employer-sponsored health plans or on the exchanges, or what. Then we look at the number of dependents and then, finally, we look at where they go and, clearly, some will go to Medicaid, some will have temporary COBRA insurance, some will go to being uninsured, some will move to become enrolled in the exchanges, and some will go to our patient assistance programs or other cash-based programs. So there are so many different assumptions with such high uncertainty that at this point, it would be meaningless to give more hard data than what we've already given. Thank you, Karsten.

Drive for new launches et cetera. So our strategy here is to both build no. It is to build a strong pipeline and we do that by leveraging our in house capabilities. We have a number of technology platforms. We believe that can also be leveraged against our biopharm.

She's universe, we are looking into that and then we are like we are in diabetes obesity, qataris cruces et cetera, and looking for extra messes that can complement that but our goal is not to acquire our goal is to build a strong pipeline and we're not going for for anything but something that has very strong.

Profile and can can can get us to a leading leading product. So it's it's a it's quality owe a volume so we will stay disciplined.

In our acquisition strategy and a in a in the recent acquisition. We found something we think was quite attractive it happened to not being biopharm, but it could as what has been biopharm had the quality.

Matt: Mass on amylin combo whether monotherapy approval is needed and then on NASH and fib, Yeah, so so thank you, Joe. On the amylin combo, it is absolutely true that when you have an agent that has significant pharmacological activity, then the FDA and other guidances are that you need to have exposure and show safety and efficacy interface three situation with that entity, There are certain rules about how many patients have to be exposed for how long, and that is easy to do either in a factorial design where you have drug A, drug B, and drug A plus B, and then if drug A is the amylin component, then you just need to make sure that that arm of the study is big enough and long enough to satisfy regulators.

Of science in that space in there.

So with that we'd like to sorry can I just collect one thing I think I managed to foreign Pete's question on China, which you see that you think rose 17% close at of course made channels to just to make sure I don't know misunderstanding shepherdess.

So that that thank you for for taking time to listen to US. We appreciate that very much and we hope that in the near future. We can actually meet again a face to face until then please stay safe and have a fantastic weekend when you get to it. Thank you very much.

The snack concludes cool. Thank you for attending participants you may disconnect your lines.

[music].

E.

And.

[noise] [noise] Oh.

Matt: It doesn't mean to say that you have to launch the monotherapy component alone, but you do need, as you correctly state, exposure in a phase 3 setting, and since we saw double-digit weight loss, we cannot argue that there's no activity with this agent. So that is the base case for phase 3. In terms of semaglutide in NASH, well, actually, we deployed a multitude of actually an array of assessments to also assess fibrosis, and when we looked at FibroScan elastography, we actually saw fibrosis improvements. When we looked at the ELF, which is a fibrosis score using P3NP, TMP1, and hyaluronic acid in a very sophisticated formula, we also saw fibrosis reduction.

[music].

And.

[noise].

Mm.

Mm.

Matt: We did not see an improvement in those who reduced their fibrosis score without natural solution changes, but what we did see was a significant reduction in the progression of fibrosis, such that in the placebo arm, one in five patients would either progress from F2 to F3 or F3 to cirrhosis. And instead of one in five, it was only one in 20 in the semaglutide Nash arm. So I have to say, Joe, we have a multitude of lines of evidence that suggests that we're actually halting disease progression. And that should work fine with the regulators.

[music].

Matt: But, of course, we are discussing this with the regulators, as you can imagine. And can I just ask very briefly as a follow-up, given that the first thing you do with a NASH patient is to try and make them lose weight, and given that a GLP is a great way to do that, what proportion of NASH patients do you think out there don't take a GLP already at some point in their treatment? Unfortunately, way too many, because you're absolutely correct that they should be taking a weight loss agent like GLP-1. But today, if you take the US, despite the very nice talks we're having about GLP-1, I think today in diabetes, it's like six, eight, eight, 8%. We're up to now, it's going well, 8% of the population. That means 92% are not being treated with GLP-1. And in obesity for SACSENDA, I mean, the number is below 1% of the obese population who are taking SACSENDA. So it should not be like this, but it is.

Unknown Speaker: So there are a lot of patients to go for. And of course, you can see NASH in the context of obesity, of diabetes. It's Thank you. Thank you, Joe.

Unknown Speaker: Next questions, please. Our next questions come from the line of Peter Verdult of Citigroup. Please go ahead.

Peter Verdult: Thanks, Peter, I'll see a few, please, Matt. Lars made some opening remarks about clinical trial programs. Covid, just drilling down specifically, the soul, say about enrollment. Event Rate Timelines would be helpful. Secondly, on Nash, I mean, I think no one denies there is a promise.

Unknown Speaker: , Peter Welford, Simon Baker, Emmanuel Papadakis, Eric Berrigaud, Benjamin Yeoh, Rajesh Kumar, upcoming combo day, and then lastly for Camilla or Mike, is on the line. Is it too early to ask you about placebo in China? You know you haven't been able to, but Novels is perceived as probably the first of the recent products.

Unknown Speaker: [inaudible] Well, what has happened, Pete, is that we, as I might have explained previously, have been ahead on the recruitment curves, for instance, for SELECT but also spot on for SOL. And while the COVID-19 situation has, to some extent, paused recruitment for a period, we're back up and running, not at full speed, but clearly above 50% recruitment rate. So we are doing well and expecting that those mega-trials will have recruits more or less by year end. And in terms of event rates, the best estimate I can give you, because it's early days, so I don't have the exact numbers, they might be a bit volatile in the early parts of a long-term study, is that looking into SUSTAIN, LEADER, and PIONEER 6 trials, or outcome studies, the event rates were 3.5% to 4% in the diabetic ASCVD population.

[music].

Matt: So this is the same population. So consider that a reasonable number, and then you can do your own math on the accrual of MACE events over time. I know you can do that.

Matt: And then there's, of course, NASH-Gilead, where the ACC and the FXR compounds were not so promising in the standalone Phase II studies from Gilead. But we do believe that SEMA adds so much more that it will be interesting to see whether these complementary modes of action might well come in handy together. We will develop semaglutide NASH even without these agents, but if they offer something more, for instance, the FXR on the fibrosis component, we will see. That could, of course, be interesting.

Matt: So we'll get back to you with data later on, and we'll follow it closely, but there's no data yet. Thank you very much. And Camilla, what can we tell about SIPA's performance in China? Yeah, thanks a lot.

Camilla: So Traceeba in China, as you said, has been reimbursed as of the last year. And after that, we need to work on the hospital listings, which is also in progress now and doing well. So Traceeba in China in the last year on MAT has gained 0.9% market share and is growing to the tune of 17%.

Camilla: So, it's going really well and is a starting point for us into the basic segment, of course, where we traditionally have not had a high market share but have been very dominant in the premium segment. Thank you. Thank you, Pete.

Unknown Speaker: Next set of questions, please. Our next questions come from the line of Peter Sester of Handelsbanken. Please go ahead. Great, thanks for taking my questions. Most have been asked, but I have two left here.

Peter Verdult: One is the BCC strategy, on the commercial side. Looking sort of back, one of the most successful drugs, albeit only short-lived, was Fen-Phen, and that was basically a consumer-driven product, also in light of the times back then. But nevertheless, is it also that kind of strategy that you sort of would be looking for, for SEMA, in order to sort of bridge until you have the next generation of compounds on the market, i.e., perhaps pursuing a more consumer-driven strategy? And in that regard, should we look at obesity as potentially your most ambitious and also your most expensive launch? The second question is about the strategy for your biofarm business. You have now been talking for two years about acquisitions within biofarm. You announced an acquisition within Metabolism CV, and the stock market really didn't seem very surprised about that. In fact, the stock market seemed to appreciate that way forward. So in that respect, do you still intend to...

[music].

Unknown Speaker: Spend resources on biofarm and what is the overall strategic view of the biofarm business from now on. Thank you. Peter, Camilla, first on our obesity strategy. Yeah, so it's clear that with obesity right now, it is in many parts of the world still out of pocket. But there are improvements in this space.

Camilla: So when we are preparing for somatotide obesity loans, we will be preparing for both reimbursed markets but also for out of pocket segments. We do see some developments in recognizing obesity as a disease, and we are working on the infrastructure elements of that. So just as late as yesterday, we saw the Canadian Physicians Organization recognizing obesity as a disease. We've seen the German Bundestag looking into doing the same. And then we have seen in Australia, for example, that they have now established a sort of a code for expensing costs related to obesity, which was not even there before. And finally, in Switzerland, we've also seen a reimbursement of sex centers.

Unknown Speaker: So when we are preparing for semi-obesity, we will be looking at preparing for both segments out of pocket and reimbursed. Thank you, Camilla. And then, in terms of our biopharmaceutical strategy, our overall goal is to get our biopharmaceutical business back to growth, which we have managed to do by focusing more on the assets we have. And then, obviously, to sustain growth, we also need to have a pipeline that can drive new launches, etc. So our strategy here is to both build a strong pipeline and do that by leveraging our in-house capabilities. We have a number of technology platforms, we believe, that can also be leveraged against our biopharm disease universe. We are looking into that.

Unknown Speaker: And then we are like, we are in diabetes, obesity, cardiovascular disease, etc., looking for external assets that can complement that. But our goal is not to acquire; our goal is to build a strong pipeline, and we are not going for anything but something that has a very strong profile and can get us to a leading product. So it is quality over volume, and we will stay disciplined in our acquisition strategy. And in the recent acquisition, we found something we think was quite attractive. It happened to not be in biopharm, but it could as well have been in biopharm had the quality of science in that space been there.

Mm.

[music].

Unknown Speaker: So with that, we'd like to, sorry. Can I just correct one thing? I think I mentioned before on Pete's question on China, which receiver to say growth, 17% growth, of course, men's share of growth, so just to make sure there were no misunderstandings.

Unknown Speaker: Thank you for taking the time to listen to us. We appreciate that very much, and we hope that in the near future, we can actually meet again face-to-face. Until then, please stay safe and have a fantastic weekend when you get to it.

Operator: Thank you very much. This now concludes our call. Thank you for attending. Participants, you may disconnect your line. ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? [inaudible] Thank you for watching! ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ???