Q3 2021 Teva Pharmaceutical Industries Ltd Earnings Call
Good day, and thank you for standing by welcome to the Teva Pharmaceuticals third quarter 2021 financial results conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be the question and answer session to ask a question. During the session you will need to press star one on your telephone keypad.
Be advised that today's conference is being recorded.
If you look right and so that system over the phone. Please press star Zero I would now like to hand, the conference over to your first speaker today Kevin.
Senior Vice President of Investor.
Investor Relations. Please go ahead.
Thank you and thanks, everyone for joining us today to discuss <unk> third quarter 2021 financial results joining me on todays call. Its course, Schultz <unk>, Chief Executive Officer, Alex <unk> Chief.
Chief Financial Officer, and Dr. <unk> <unk>.
As head of North American commercial.
Hope you've had an opportunity to review our press release, which was issued about an hour ago copy of the release and the slides being presented on this call can be found on our website at www Dot Teva farm Dot Com. Please note that the discussion on today's call include certain non-GAAP measures as defined by the SEC management uses both GAAP financial measures.
And the disclosed non-GAAP financial measures internally to evaluate and manage the company's operations in order to better understand its business. Further management believes the inclusion of non-GAAP financial measures provides meaningful supplementary information and facilitates analysis by investors in evaluating the company's financial performance results of.
<unk> and trends a reconciliation of GAAP to non-GAAP measures is available in our earnings release and in today's presentation. Please note that today's call will run approximately one hour and with that I'll now turn the call over to <unk> Chief Executive Officer of course, Shell's core if you would please thanks, Ken and welcome everyone and thanks for your interest in Japan.
Our Q3 2021 financial highlights.
Let's start focusing on our revenues the revenues came in stable compared to last year, but with a lot of underlying dynamics, which I'll be reviewing in the following slides adjusted EBITDA came in at $1 $2 billion also very stable compared to a year ago.
Diluted EPS came in at 26 non-GAAP diluted EPS came in at 59 sites also very close to last year free cash flow came in strongly at $795 million.
We continue to see reduction in net debt has now been reduced to $21 7 billion.
Today, we also announced a $4 billion of refinancing.
A debt neutral refinancing and issuing sustainability linked bonds, which are linked to environmental kpis and to access Kpis and of course, we believe that by being the leading generic company in the World We had a special.
You can see the ability to support low and middle income countries with essential medicines and we believe it's a very strong commissioned and we're showing with this bond offering.
If we move to the next slide.
Here you can see some of the dynamics on the revenue side.
I will just highlight a few of them. If you look at North America, you can see that North American revenue.
<unk>.
A little bit below what it was a year ago, it's basically driven by the usual suspects you could say which is that copaxone.
Is declining and we have Joey and a state of increasing and I will be commenting on the increase of Adobe and are stable in the coming slides if you look at.
Europe and you can see that Europe is up compared to a year ago. We have seen some fluctuation as you know in Europe due to the COVID-19 pandemic. So we sold.
Volumes in the first and second quarter of this year, we're seeing volumes starting to pick up again here in the third quarter and we expect volumes to continue to increase in the fourth quarter in the international market is basically more or less unchanged and that really means that the key drivers here.
As I said Copaxone, what Joe stated so let's move to the next slide.
Yes, you can see the development for <unk> in the U S. As you can see we have seen.
Nice strong growth in the last three quarters, but you can also see that there was a COVID-19 related slowdown in the growth and that was really because this patients will go into the psychiatrist or psychiatrist offices were closed during the Lockdowns and therefore, we saw this slowdown that you're seeing in the revenues.
And the first in the second quarter, we are back on a strong growth track now you can see that both dead on the children scripts to the list and you can see it also on the revenue numbers. This is a development that we expect those to continue and of course, we are also focusing very much on patient activation and our DTC campaign to ensure.
Are there more people with tardive dyskinesia can get on therapy, we still estimate that there's around 500000 people who are suffering from tardive dyskinesia in the U S and only a very small fraction of this patient population is currently being treated so we are.
Very optimistic about the future growth.
If we move to the next slides.
And as you know <unk> is launched now in most of the European countries and has been launched in the U S for several years and with regards to <unk>. We see a continued nice development in the U S. In terms of our total scripts growing quarter over quarter and we also see a very nice development on Adobe in Europe.
With volumes growing steadily also quarter after quarter, we had an initial ambition of 25% market share in U S and Europe for Adobe.
The increase that ambition I think one or two quarters ago to a third of the market and we still believe that it's very likely that we can reach a third of the market and thats basically due to the very superior long acting profile of the drug which means that it can be dose both monthly and quarterly and the very good safety.
A profile that we have so strong development with Adobe also as you'll note in the total sales numbers, we hit a milestone in Japan, which is very positive because thats related to the actual launch.
Joey in Japan, and that means that in the coming quarters, we will have revenues from North America, Europe, and Japan in the agility numbers. So.
Let's move on to the next slide.
Here, we're showing you our specialty and Biosimilars.
Pipeline product pipeline.
Very happy with it.
I won't go through it all that would take too long, but let me just mention two interesting projects. One is risperidone LTI long exiting risperidone, which has been accepted by FDA. Our file has been accepted for review we hope to have it approved next year. This is a major new benefits for people.
Suffering from schizophrenia in the form of a subcutaneous injectable long acting risperidone. So we look forward to bringing that to the market to the benefit of people suffering from schizophrenia. We also have a new interesting license arrangement is.
As shown here in phase one <unk> 138, and if we move to the next slide.
And I'll just tell you a little bit about that we have.
The license agreement with <unk>, a German company.
In.
Regarding two compounds that are in the development for treatment of MSA in Parkinson's disease.
And we're very excited about this as you know we have a long history in Parkinsons, we think these.
Projects are very good.
Interesting.
Hopefully long term if they turn out to work then they could also have the potential in treatment of Alzheimer's. So that's a really exciting addition to our portfolio.
Yes.
Let's move to the next slide as you know we have a long term target for operating margin of 28%.
Joining a restructuring with the loss of Copaxone.
Targets.
Trading margin decline then we turned around.
<unk>.
In 2019, and now we are growing the margin.
And of course, we saw.
We're growing we're growing the margin.
And then we turned around.
<unk> patients.
<unk> 2019, and now we are growing the mark.
<unk>.
Eight.
<unk> reported that we were growing we are growing the margin.
Seven five.
Rotations.
So committed.
<unk>.
At the targets at the end of 2023.
Yes.
2008.
8% midpoint of our guidance is 27, five and we are still committed to the target at the end of 2023.
Very close to check the four years since I joined <unk> and I'm very happy to report that in those four years, we've reduced.
<unk>.
Very close to check the four years since I joined.
Dollars.
Perhaps you report and in those four years, we have reduced the debt.
And interest rates in those four years old scale.
So in 2000 13 billion.
It seemed like those 2016 17 billion.
<unk> paid $4 billion in interest rate in those four years altogether.
Because as you can see on next slide.
Close to a <unk> 17 billion.
<unk> changed long term financial targets.
Want to take the net debt to EBITDA, So three times.
<unk> in the 'twenty three.
<unk> had our unchanged long term financial targets.
Strong above 80%.
Net debt to EBITDA pre time.
Marketing associate before.
<unk> to be at 58%, so that we generate the cash needed.
<unk>.
<unk>.
Basically keep on reducing.
Income margin as I said before.
<unk> to be at 28%, so that we generate the cash.
Sure.
<unk> needed.
Yes.
Just to basically keep on reducing.
So.
And we have committed.
Sure.
<unk> will use the cash flow for debt reduction and we have no plans.
I will begin my review of the third quarter of 2021 financial result.
<unk>.
On slide 14.
Okay.
<unk>.
Thank you for and good morning, and afternoon to everyone. I'll begin my review of <unk> third quarter 2021 financial result.
880.
No.
10 million.
Starting with our GAAP performance.
Our 3% in local currency.
<unk> of 2021 3.811 billion.
This was mainly due.
Of 2% or 3% in local currency.
Mainly due to copaxone generic product.
2020.
Offset by higher revenues from generics and OTC products.
Okay.
Europe segment.
Thank.
Avi analyst.
<unk> patent and generic products.
It could be affected.
By higher revenues from generics and OTC.
On market and customer stocking and purchasing pattern.
Revenue continued to be affected.
For the year comparison.
That.
19 pandemic.
On June three.
And.
<unk> included generic product sales in Japan totaling 62 million.
On a year comparison.
Yes.
I would like to.
For the full year.
2020.
No.
<unk> included the generic product sales in Japan.
These products are divested in February.
$240 million for the full year.
With a manufacturing site in Japan.
<unk> previously communicated.
Brian exchange rate movements during the third quarter of 2021.
21.
One effect.
With our manufacturing site in <unk>.
By $42 million compared with third quarter of 2020.
Author of 2021.
Operating income was $623 million in Q3 2021.
One.
Sure.
The third quarter of 2020.
The three 2020.
Quoting income was $623 million in Q3 2021.
<unk>.
One two or not.
Our net loss.
Yes.
One 3 billion.
2020.
2020.
<unk> income.
Turning to slide <unk>.
In Q3, 2021 compared to a net loss.
Non-GAAP adjustments.
Q3 2020.
21 were 360 million.
<unk>.
Versus approximately $5 billion in Q3 2020.
The GAAP adjust.
<unk>.
Operating loss.
<unk> do you want.
Net loss in Q3 2020.
One approximately 5 billion.
Sorry.
<unk>.
Intangible asset impairment.
<unk> operating loss.
Related to our North America reporting.
We're mainly due to a goodwill impairment charge.
Non-GAAP earnings per share.
This impairment.
2021.
And through our North American reporting.
One with the largest win.
Unit.
Yes.
And non-GAAP earnings per share.
Totaling 199 million.
Sure Alright adjusted to exclude this.
Cost of goods.
Amortization.
Now moving to slide 16.
<unk> eligible assets totaling 199 million.
<unk> and GAAP performance.
Which is included in cost of goods sold.
And finally, I'll review the third quarter revenue.
The slide.
Approximately $3 9 million.
It's part of a review of our non-GAAP performance.
Look on the margin.
<unk> core and I've already reviewed the third quarter revenues.
And GAAP.
<unk> totaled approximately $3 nine.
Our gross profit margin.
And look at the margin.
<unk>, 6% compared to $52.
So non-GAAP.
In Q3 2020.
Our gross profit margin improved.
GAAP gross profit margin.
<unk>.
For the third quarter and year to date.
And in Q.
<unk> driven.
2020.
Stability due to our ongoing efforts to optimize our.
<unk> profit margin.
Our.
For the third quarter and year to.
But as a result.
Date.
That changed.
<unk> profitability due to our ongoing efforts to optimize.
<unk>.
Our cost of goods.
Of our federal and Adobe.
Cell generic products, resulting.
The first.
No.
<unk>.
And in our profitability from <unk>.
North America segment and higher cell.
<unk> margin was 26, 8%.
The lower sales.
8%.
And nor profitability from Andrew.
That was driven by higher gross margin.
<unk> was 26, 8%.
We ended the quarter with a non-GAAP earnings per share.
<unk>.
59.
Driven by higher gross profit.
Through 2020, mostly due.
<unk> ended the quarter with a non-GAAP earnings per share.
Due to our spend based on slide 17.
In Q3 2020.
<unk> see that our quarterly spend base decline.
<unk>.
By approximately 108 million.
Based on slide 17.
Net of FX.
We see that our quarterly spend base decline.
<unk> declined by $333 million 540 million.
Net of FX.
Don.
Looking at the year to date comparison.
'twenty, one and according to our current estimation.
Cell.
We believe our spend based food coming.
Approximately 12 billion for 'twenty one.
The 2021 and according to our current estimation.
On slide 18.
<unk> been basically will come in at approximately $12 billion for 2021.
Q1 was 700.
<unk> 95.
One.
The cash flow on slide 18.
No rebound, we saw in Q2 and Q1.
In the third quarter of 2021 was 700.
One 9 million.
<unk>.
Pending the sequential rebound we saw in Q.
Please.
In Q1.
Guidance.
One is <unk>.
$625 million and 69 million.
Apple in July and are reaffirming to date.
Our 2021.
Date is expected to be in the range.
One.
<unk> two <unk>.
Yes.
We reaffirmed in April and July.
Yes.
Life and are reaffirming today.
At the end of 2021.
<unk> cash flow is expected to be in the range.
One of our working capital.
<unk> 3 billion.
Ill focus on inventory improvements.
So to pick up through the end of 2020.
<unk>.
One is we keep driving optimization of our working capital with a high focus on inventory.
The launch of 4 billion offering.
<unk> slide 19 I'd.
I'd like to talk about our debt manager.
To be used for refinance existing debt.
<unk> the launch of 4 billion offering.
Net.
Also announced today.
The proceeds of which we are.
So really net neutral transaction.
Our existing.
Teva has been very clear persistent.
<unk> also announced today.
That's the strategy, which includes commitments deleverage.
Actions and as you know.
On this commitment to reduce our net debt.
But its long term financial strategy.
Four years.
<unk> commitment to deleverage.
Our operations director.
Rich, it's meant and reduced our net debt by more than 12 billion during the last four.
The efforts to refinance.
<unk> generated.
Our head of significant maturities.
Did.
As we did in Q1 2018.
Today announcements reflect our proactive efforts to refinance.
Ahead of significant maturities.
The profile.
In Q1 2018.
Our operational performance.
Dean.
We continue to focus.
<unk> production.
Our business objective long term financial targets.
<unk> peers with our core operational performance.
Today, it represents our first ever sustainability.
<unk> business objective and long term financial targets.
In U S dollar nominated sustainability.
First ever sustainability linked loan.
<unk> has evolved its approach to corporate responsibility.
<unk>.
Physically integrating ESG asset.
Sure.
The core business.
No.
For Teva ESG means advancing.
Our medicine and across our business.
Yes.
I think the footprint of our operations on the planet.
The export ever ESG means advancing.
Ethics and transparency.
Health and across our.
Our system ability linked bond offering.
On the planet.
Ambitious escape.
Janet.
Our contribution.
And transparency.
Through access to medicines in low to middle income countries.
We have set ambitious escape.
Sure.
The measure our.
And.
<unk> metals.
And to the matters regarding absolute yes.
Yes emissions reductions.
Sales expanding regulatory submission.
Yes.
Eric.
Sure.
Between our corporate responsibility commitment.
Absolute greenhouse gas emissions reduction.
Steve will be.
<unk>.
So hope right.
Yes.
Which we will dedicate.
Political mixed.
Most exist.
And then.
As mature expected in the coming years.
<unk> will be used for general corporate purposes, which we will dedicated.
Yes.
Refinancing of existing.
'twenty one.
$121 7 million compared to 22.
Excellent.
At the end of Q2.
At the end of Q3 2021.
Our free cash flow generation.
One.
During the quarter as well as exchange rate.
Q2, 2021.
This upcoming maturities, including.
Our free cash flow generation.
Good.
During the quarter as well as exchange rates.
It continues to decline coming in.
Rates and maturity.
Thanks Juan.
Is $1 2 billion.
One as it continues to make progress.
As to EBITDA continues to decline.
Under three times.
Line for.
Last year.
Sure.
Science for Q3 'twenty one.
And my presentation by <unk>.
Those are 2023 targets to be under three times.
<unk> would you can see here on slide 21.
I'd like to end my presentation by Sachin.
We have continued to be negatively impacted.
<unk>.
The ongoing COVID-19 pandemic.
On slide 20.
<unk> seen it impact.
Feedback on our markets.
One our revenue have continued to be negatively impacted by the ongoing COVID-19 pandemic.
S regions.
We have seen.
And mix of products.
More than us.
King and purchasing pattern.
Pre COVID-19 patents.
In some geographies.
Alright.
And mix of products.
But markets for us.
Others.
The acquaintance physicians.
Pre COVID-19 patents.
And physician.
<unk> been more apparent.
No.
And in the U S market for ourselves.
And that's not us.
And physicians.
And prescribing treatment for that patient population.
Visit our store personnel.
In Asia.
Now 19.
Yes very.
And lets doctors.
<unk>.
Zinc and.
The supply.
<unk>.
Our guidance by 100 million.
Turning from therapy with dyskinesia.
'twenty one.
Yes.
But sales with lighter in Q3.
We are still fleet.
100 million.
We are seeing and expected an acceleration in Q4.
Later in Q3 than we expected.
For the first 850 million.
Seeing an expected an acceleration.
All other.
<unk>.
Of our 2021 outlook.
Our guidance for us.
<unk> hundred 50 million.
60 billion to 64.
For all other.
Net income.
<unk> 2021 outlook.
One 6 billion.
<unk>.
Non-GAAP EBITDA.
For <unk>.
<unk>.
10% to $16 4 billion.
Earnings per share in the range of $2 50.
10 to $4 6 billion.
And our free cash flow.
$4 eight.
<unk> contributed.
Eight 1 billion.
This conclude.
We are in the range of $2 50.
First quarter of 2021.
And our free cash flow.
On the call for questions operator.
No.
Two please.
Several results of the third quarter of 2021.
Participants we will now begin the question and.
Questions.
If you don't mind that if you wish to ask a question. Please press star one.
The telephone keypad.
Pat and Mike for a name to be announced.
Mr.
We will now begin the question and.
Please limit your questions Tim Macphee.
In answer to ask a question.
If you wish.
Please proceed.
Correct.
Correct.
Yes.
Thank you be announced.
One if you wish to cast those real.
Your question.
Correct.
Maximum.
Okay.
At Husky.
If you wish to ask a question. Please press star one.
The first question comes from the line of America flat from Evercore.
Paul.
<unk>.
Please ask your question.
Sure.
Hi, guys. Thanks, so much for taking my questions.
Court have the expectations for the private attorney.
Yeah.
As they have been the holdup for many companies that are.
So much for taking my questions.
Our current expectations Rebased after they got the biggest thing settlement they want.
Since the private attorneys.
From.
<unk> seem to have been the holdup.
It's actually at the negotiating table now are not quiet.
Holdup expectations Rebase.
Quiet.
Base after they got the big money settlement they wanted from.
The commentary.
Are you on that is what I'm hearing.
And are they actually have the negotiating table now or.
<unk> sales are up 15% and yet attract.
Not.
Practically behind versus.
Quick.
<unk> census.
I'm sure you all know instead of what I'm.
<unk> it would have to track at.
Hearing from quarter over quarter sales.
There are.
And yet.
Okay.
Track slightly behind.
I'll try that.
Consensus.
That totally.
So it really means is in the <unk> it would have to track.
<unk>.
At like 50%.
<unk>.
<unk> <unk>.
Q to get to the Guy.
On proceeds.
<unk>.
And then just.
To be stick to.
That's really on.
Two projects so could they also.
Sure.
One of the.
Yes.
The questions I had.
The refinancing upcoming.
Was <unk> bond proceeds supposed to be specific.
Thank you.
I'll take the first one the last question and then.
<unk>.
And the head of North America will take the authentication so with regards to the opioid settlement discussions.
Last question and then.
Discussions with state agencies and with the plaintiff lawyers.
So with regards to the opioid settlement discussions.
And you can say the discussions.
With the state Ags and with the plaintiff lawyers.
Hello.
<unk> partners.
In or change in you could say that discussions.
And yet.
<unk> said it is of course very complex there is a lot of.
Both parties.
And then.
Yes.
The whole opioid complex.
<unk> seen apart from one.
Cell reached a settlement within the next 12 months, we and X dialogue.
State a fraction of the whole opioid conflicts.
<unk> coming to fruition over the next 12 months.
12 months, an extra dialogue.
So question I'll hand that over to.
<unk>.
Thanks.
The question.
At 12 months.
Hello planned for 2021 based on two assumptions widens on psychiatrist returning two offers to diagnose patients and first and the second one is.
So our federal plan for 2021 is based on two assumptions Walgreens on psychiatrist returning two offers to diagnose patients in person and the second one.
Yes.
Based on the effect of the.
Patient starts.
In which we started in may.
Our going into Q4 is significant.
Towards the second half of the year.
<unk> trends.
You have seen in our new patient starts.
Yes.
Thats going out of Q3, and now going into Q4 is a significant.
Those sales.
Patient from the baseline trends.
And with regards to the bonds when Youre right. There is something called Green bonds, which are linked to.
<unk> strong windows.
<unk>.
Purpose of the bond.
And with regards to the bonds.
On the.
There's something called Green bonds, which are linked to.
The effect of your activities.
The purpose of the <unk>.
Doing sustainability linked bonds.
That's really link would say to the.
<unk>.
On mutual impact of your activities.
For sustainable development.
This is what we're doing we're doing sustainability linked bonds.
<unk>.
The world.
It shows the.
You were able to.
<unk>.
Goals for sustainable development.
Two.
We are able to provide.
Shipments were you Hilde.
Essential medicines.
Phil.
<unk>.
Low and middle income countries.
Because we are the leading generic company in the world.
We are also committing.
<unk>.
<unk> improving.
And then just footprint.
Reducing emissions.
Right.
Greenhouse gases. So we think that's a really strong signal.
As I mentioned footprint.
These two areas.
We added unique position.
<unk>.
<unk> improved access to essential medicines.
Sequel.
It was income countries due to our broad portfolio of these products.
We think we are in a unique position.
Has the most of the essential medicines on the adult uhm.
So they can come countries due to our broad portfolio of these products.
I've been proud about this.
<unk>.
And we hope that the bond issuance will be very successful.
Yes.
With that we will of course be reporting on an ongoing basis.
Happy and proud about this.
Setting for ourselves.
Bond issuance will be very successful.
To meet them.
Well of course be reporting on an ongoing base.
Sure.
<unk> been meeting the targets that we're setting for ourselves.
Okay.
Chris.
Committed to them.
He has been.
Pete.
The next from the line of Alex <unk> from Raymond.
Drilling.
James the question.
So the question gentlemen.
Thanks, Good morning, good afternoon questions.
And spend just specifically.
Next from Raymond.
And.
Jamie.
North American generics, maybe just give.
Good afternoon question for.
In terms of.
And then just specifically with respect to trends and.
Sequential.
Erica in generics, maybe just give us some perspective.
Which obviously has been a.
Sure.
<unk>.
The factors behind the.
It's been stable.
The decline in sort of the break below the $900 million, Mark which obviously.
Rich you would call it very product specific is it more just accelerated erosion across the pace. The absence of approved just some color there.
So you can do whether.
Sure.
It's very product specific or is it more just accelerate erosion across the base.
Thinking about the U S generics busy.
<unk>.
Sure.
As a whole.
Just looking at R&D.
And.
Yes to your question in terms of thinking about the U S generics.
The 100 million.
<unk> coal.
The sales.
Looking at R&D spend in the North American segment.
<unk> towards.
I think it's somewhere around 6% to 700 million.
Hello over 8% of sales.
It seems like.
Roughly half of that is probably.
Cumulatively about $1 billion over the last three years and just not generating.
<unk>.
Any real.
Like.
Returns I'm just wondering.
And that would be cumulatively about $1 billion over the last three years and it's just not generating.
Investments in <unk> district.
<unk> return so I'm just wondering.
Thanks for those questions.
Thinking about the need to sort of recalibrate or.
Second.
Or.
<unk> tied to the U S generic.
So following U S generics.
Business questions.
The reminder, North America generics explanation of Canada.
<unk>.
Some of those in the U S generics business.
Alright.
And there are three factors that influence the current sales trends one.
Explanations.
Canada Biosimilars in the U S generics.
Is to be as stable and price erosion scenario.
The current sales trends one.
So by Truvada that tripped up.
As for our portfolio I can say that we have a relatively stable price erosion scenario.
Complex generic.
Influenced by Truvada and <unk>.
Rick.
More generic competition.
Okay.
<unk>.
Remarkable resilience in the complex generic.
Volume consolidation network restructuring that led to a basically a flat volume reduction.
Eric.
Portfolio consolidation.
Volume consolidation and network restructuring that led to a basically a planned volume reduction.
Paul's product launches.
Validation.
<unk>.
So here, we also expect that let's say a stable environment going forward.
Paul.
<unk>.
The number of product launches.
One of the factors that influences the performance.
<unk> also for the industry overall.
FDA approvals.
Question on generic R&D in the generic segment in the U S.
Got for this.
We are fully committed to being leaders worldwide in generics.
Year.
Generic R&D in the generic segment in the U S.
R&D spend.
We are fully committed to being leaders worldwide in generics.
And we.
We are basically aiming at.
Eric.
80%.
Target of what goes off pit, whether it's biologics or cable, saying this is.
Aiming at.
<unk> and <unk> to match that.
<unk>.
The target of what goes off patent, whether it's biologics or chemicals.
Eric.
Is doing our R&D to match that.
The generics.
Net R&D projects.
So we are still committed to the $4 billion.
It's Eric.
Eric's revenue on an average over the coming years.
<unk>.
Yes.
The North American generics and Biosimilar space.
Paula.
Meet that.
Fixed revenue on average over the coming years.
It launches.
Yes.
North American generics and Biosimilar space.
As future price erosion accelerating in our case.
<unk> seen any major launches.
As you've noticed over the last year as we've had.
Just not really due to price erosion accelerating in our case.
Thanks.
It is due to the fact.
As you've noticed over the last year as we've.
Having some losses that are waiting for regulatory approval.
Have we hit that you've seen in loans.
In the coming quarters. So we are very committed to the U S generics segment.
Don't see a structural basis of that.
We are optimistic that we will see them in the coming quarters.
But Greg.
To the U S generic segment.
And we don't see a structural weakening of that.
We think this business and we will keep on doing all the necessary.
The amount of revenue that goes offset.
Thanks for the question. So that's just the next questions.
So.
This is a good business and we will keep on doing all the necessary.
Steve.
So it's to support.
Ben's question.
Thanks for the questions. So let's move to the next questions.
Kind of I want to stay on for a little bit on the seamless that generic.
And as for any golf from.
The increase of Rituximab pulled a lot over the last few months and obviously.
<unk> been spot on.
For you for 2021 over 2020.
Okay.
We don't have another back the mall launch in 2022.
The map with a lot of overlap.
Last few months and obviously.
In terms of price large enough to impact the growth of the overall North America generic line.
<unk> launch in 2022.
Some other.
Rituxan erosion.
Other may launch in 2022 that will offset that erosion.
And as the overall.
It's just tough to see the.
Okay.
That generic.
You talk about some other.
Eric.
2022 can you talk a little bit about.
22 that will offset that erosion otherwise.
And second that Youre being offering.
Reaching that $4 billion in 2022 can you talk a little bit.
Yes, it could be the rate.
So that business.
And interest rates that you will have in 2022 versus 2021, assuming youre able to do refinancing.
Business cell side, roughly what should be the range.
Or where it.
Interest rates that you will have in 2022 versus 2021, assuming youre able to do refinancing.
It's gone.
Projection at this point, but just give us a feel for where it's going.
So 2022.
So it will answer the first one.
He will answer the second.
Generic product launches already lined up.
One.
Same product that we can target.
Don't get approved this year as the U S generics.
Rolling forward into 2022, and these are the complex generics that we talked about earlier this year.
This year in the U S generics business naturally rolling forward into 2022, and these are the complex generics that we talked about earlier.
And where we have three competitors Teva.
Expected product launch in 2022.
The change is the pricing environment.
In a situation, where we have three competitors Teva Pfizer.
And for 2022.
Engine that of course changes the pricing environment.
Too early.
The total finance costs that we're expecting.
<unk> Foundation for 2020.
I would say Ronnie coupon over the 2021.
Two.
The total finance costs than we expected.
Want to ask.
Okay.
I would say Ronnie and coupon over the 2021.
In terms of.
122 accordingly.
And changing.
Two.
Yeah.
So any questions.
The one.
Questions.
Opinion in terms of.
And also David <unk>.
Change.
Please ask.
Ask your question.
Changing.
Thanks for your questions.
<unk>.
Let's move to the next question.
<unk> business development.
Slim from Piper Sandler.
Hello Wake of the modem license agreement I guess the question here.
No.
The cap structure and given.
Yeah.
Thanks.
Liabilities.
The <unk> license agreement I guess the question here.
<unk>.
And then the cap structure and given.
Licensing and acquisitions.
<unk>.
Yeah.
<unk> size and.
What can you do.
February.
Do intend.
Frank has already or commercial stage.
Acquisition.
I can give you there that's number one.
<unk>.
And then just stepping back on Biosimilars.
Our commercial ready or commercial stage assets.
Or is kind of footprint, we'll have over.
So that's number one.
Philosophically.
One on Biosimilars.
Really think erosion is going to look like.
As far as what kind of footprint you'll have over time.
Mike.
Two philosophically.
For generic.
I think pricing erosion is going to look like.
And margins will remain even more robust over time.
Like what we see for complex generics.
Or do you.
<unk>.
Thanks.
That pricing and margins will remain even more robust over time.
<unk>.
Time, saying and what do you think ultimately will.
Our expertise and Knowhow.
Well theres two questions.
In developing our commercial capabilities.
Since then.
Big upfront cash payments.
<unk>.
As you correctly.
As in development and our commercial capabilities.
And then research groups.
It's just a big upfront.
Yes.
Our interest payments.
In total the caching.
<unk>.
And getting a lot of cash now.
A lot of companies and research group.
Now in keeping you could see some upside.
<unk>.
Staying in the project and the sales.
It's getting a lot of cash now.
So it is coming in the form of license fees.
Now you could see some upside.
A strong.
<unk> project in the sales.
Yes, like what we just discussed with no debt.
And in the form of license fees.
Everybody in the form of <unk>.
<unk>.
We haven't really solid CNS.
Okay.
Solid space commercial footprint.
Pattinson Brooks ever in the form of escalate.
They sometimes prefer to pay a big upfront.
<unk> knowledge base and commercial food.
Royalty is.
Correct.
<unk>.
Some of the big pharma guys, they sometimes prefer to pay a pickup.
Lots of expertise.
Front, the rights and very low royalties.
<unk> be paying some royalties.
Yes.
As we can offer the opposite you could see low upfront lots of expertise.
That we're doing.
Yes.
Things that matter for the Biosimilar in licensing that we're doing.
Sure.
If you look at the Al will take a licensing same idea.
In licensing that we're doing.
We take part in commercialization or we do the whole commercialization.
If you look at the Al will take in licensing same idea.
And that is our licensing of course, so we are optimistic that we can keep on doing that.
We do the whole commercialization.
I was going to do any deals where we put a lot of ammonia on the table.
<unk> our licensing to.
<unk> reduction.
So we can keep on doing that.
<unk>.
At least until we reach the.
Any deals where we put a lot of ammonia on the table.
<unk> net debt to EBITDA below three times.
And then it will stay that way at least until we reach the.
Even lower towards two times before.
It's.
We can contemplate.
It's being below three times.
<unk> cash in relationship to.
Really thinking that we should go.
<unk>.
So even lower towards two times before.
And I'll give you my take on it.
In relationship to.
With respect to it.
When it comes to Biosimilars.
I'll give you my take on it in Sweden.
Yes.
At some U S prospectus to.
Those are higher.
Biosimilars are more.
Like you said more like complex generics rather than single Jeanette.
More hurdles the scientific hurdles are higher.
Eric So far.
Since they are like you said more like complex generics rather than single generics.
Our mix between what you could expect from an old fashioned symbols Terry.
Eric's a pricing development.
From a specialty product getting more competition.
Between what you could expect from an old fashioned symbol generic.
<unk> sought out.
Eric we would expect from a specialty product getting more competition.
And they will be dropping in price of small competitors enter.
<unk> will start out.
But as competitors will enter.
The traditional generics.
It's a ratio will be.
<unk> bumping and priced small competitors.
Hi.
Basically this competitors will enter.
So competition.
Ratio will be.
Absolute levels.
Of course, the trend line.
So.
<unk>.
Initial launch.
<unk> will go down as well.
As comp than it is for a normal stable generic.
Labels.
Eric the price erosion is slow.
So in that sense I think you are right.
Yes.
<unk>.
Small Lai complex generics and if we look at some of those.
Yes.
And we can see that.
Hello.
Situations for instance on Epipen as an example of a complex generic.
The generics and if we look at some of those.
Eric.
It is.
<unk>.
A simple.
Epipen is an example of a complex.
<unk>.
Eric duration that is more attractive.
Absolutely.
Chip.
Rig pricing development for Biosimilars.
<unk>.
Just to give you an example, right.
I would like to.
So I think it's absolutely correct.
As summarized in nicely. So we think in categories. When we model our business cases.
Correct pursuant if you would like to add some more detail.
Value creation is the launch so I'll be first second or third or fourth to market.
All of our business cases.
Victor for generating value when you see this.
For creation is the launch sequence, so Amit first second or third or fourth to market.
<unk> is actually the most important factor for generating value and you see this in this difference between the two.
The last I guess already because of the European Biosimilar markets more established in the U S market.
Excess costs at more like a complex generic marker.
It's already in Europe, because the European Biosimilar market is more established in the U S market.
What's exciting is lower and then it trickles down.
<unk> complex generic market.
Coming to the market, but overall, we believe.
<unk> of these drugs are much more significant.
From all the generics.
Market.
New competitors.
Eric statements, where the questions listen which is the next questions.
Yes.
And value of these drugs are much more significant than for normal gene.
Please please ask your question.
Eric Thanks, David for the questions listen let's show the next questions.
Thank you Ron and thanks for the questions. Two from me just a follow up on the Biosimilar front with last week.
Sure.
Interchangeable designation for flooring there sometimes.
Questions. Two for me just a follow up on the Biosimilar front with last week.
And also at the <unk>.
We think our cell test.
No roadblocks that Dan was that anything out of the market.
On the commercial landscape for Humira.
<unk> cash flow guide for 2021.
Neal till deal.
On the <unk> of around $300 million range.
<unk> market.
And just again to 800 million for <unk>.
Kate Guide for 2020.
Samples, which can have.
1000 $300 million range.
Months left for the for the <unk>.
And then just the portfolio are there any material labels, which can have.
Business will handle the first question.
Sure.
With just two months left for the for the.
But I'm sure. He will also comment on this.
Business logic for those two questions <unk> will handle the first question.
Zero biotech with us based on the fact that buyer.
Shortly we will also comment.
Whether the designation.
I think it was about the prospect for Humira Biosimilars based on the fact that.
Yeah.
Got an interchangeability designation.
I launch.
Biosimilars.
<unk>.
So we know of course engine will come first and then we have.
Hello.
The range of competitive lineup for July law.
Debbie.
Launch.
Or the high concentration product.
If the launch sequence here would be the main value driver.
We think that changeability designation to market so in 2023.
The high concentration products.
From Alphatec.
<unk> believes that they will come on time with it.
<unk>.
B designation to market so in 2023.
To be a high concentration of patients. So we should be in a pretty good space.
It wouldn't be interchangeable interchangeable.
<unk>.
With regards to free cash flow you raised the question.
Formulation, so we should be in a pretty good space.
301 million.
Based on.
Secondly, a very simplistic answer to it.
On cash flow.
Ratio question.
And look at our cash flows.
In phase III 300 million.
Who had elements of weight capsules that have a high influx.
If you go back historically and look at our cash flows.
But of course, the quarterly earnings typically have 300 million and uncertainty on them.
<unk>.
The free cash flow.
Just you perceive the quarterly earnings.
<unk>.
The quarterly.
Yes.
Typically have $300 million and uncertainty on them.
This small swings on those.
You had.
Your inventories.
The impact on the cash.
Joyce receivables you have at your accounts payables and so.
Hello.
And just small swings on those.
Negative is maybe the wrong word.
The same way.
Good humans on the working capital.
Right.
So sort of a case of free cash flow. So we had a very low free cash flow.
So you could say negative is maybe the wrong word.
So focus on working capital items.
Good.
Positive free cash flow.
So we had a very low free cash flow.
Overall.
Sure Ellie can give you some more.
So.
Working capital.
Sales of how much are the effects of these.
Items, so that is really the explanation.
Cash.
<unk> overall, but I'm sure we can give you some more.
Hello.
So feel for the details of how much are the effects of.
<unk>.
If I can cancel elements on the actual free cash.
More and more improvements in terms of how we're running our inventory.
So I would say.
<unk>.
Our heavier.
In Q3, we still have more improvement.
Sure.
<unk>, we are running our inventory.
<unk> actually moved according to the mix.
The revenue and the shipment pattern.
Ill.
As well, we still not terrible.
<unk> PR.
And collections that actually move according to them.
Sure.
Okay.
And we still see our.
Let's move to the next questions.
Our 70% on the conversion.
<unk>.
And for the.
Now Bob.
Okay.
Hi, Tiffany.
The question is this move to the next questions.
Hi, good morning, Thanks for taking my question.
I have two follow ups on January.
Hey, Nick.
<unk> opioids.
Lee.
Hi.
If you could.
This does further.
Thanks for taking my question.
<unk>.
I have two follow ups on January.
Matthew will change in market conditions and volumes coming back.
Okay.
<unk>.
Is that fair.
Thanks.
Okay.
Got.
Maybe.
Pardon.
Material change in market conditions and volumes.
Me.
Back in June.
<unk> trials.
Could.
That bill after the Q3 performance.
Sure.
In the third.
<unk>.
<unk>.
Two or more likely in the back.
The New York trial.
Hoffman also connect.
Right.
The maturity.
Yes.
<unk>.
Two or more likely in the back.
Yes, thanks for those questions.
I think it will take the first one.
Uh huh.
I'll take the second one and it will take the third one.
Yes, Thanks, Kevin I think the question was about U S generic volume development that the outlook for the business.
And the second one in Illinois.
Let me answer this a little broader because we lost of course market share from 13 point.
Including development and the outlook for the business.
Up points over the last three years since 2018, but if you annualize the volume.
As of market share from 13.
That was primarily driven by management decisions to support our restructuring.
From 2018, but if you annualize the volume.
So going forward.
Causes for that was primarily driven by management decisions to support or restructuring.
Ring going forward.
Your knowledge.
Sure.
We try to optimize molecule level.
Our customers have moved from basically buying broad portfolio.
<unk> also driven.
Individual molecules.
Volume kept service.
Molly through level.
Let's say.
Going forward, if we want to go for higher volumes in the U S generics business, it's always been.
Thank you.
So.
Sure.
Making our network and operations more efficient.
The forward if we want to go for higher volumes in the U S generics business it always needs to serve.
But it is not a strategic objective for us the most generic business.
Are they also then of course, the capture value because I believe.
The opioid settlement discussions.
New York trial.
In the U S generics.
I'll have an ongoing trial in Europe, a jury trial.
Eric.
Opioid settlement discussions and the New York trial.
Yes.
While it is correct.
Sure.
Greg we have an ongoing trial in New York a jury trial.
And the trial can always be a trigger for a settlement.
But of course.
And sometime in the coming months in the.
A trial can always be a trigger for a settlement.
Actual verdict.
<unk>.
Barry.
Us towards reaching a settlement.
<unk>.
Before FY settlement once we get close.
And with the plaintiffs.
So we are optimistic that we can reach a nationwide settlement.
<unk>.
I'll tell you that it will happen.
The next.
The plaintiffs.
Month realistic that it can happen within the next 12 months.
<unk> scan reach a nationwide settlement.
Specific on.
<unk> will happen.
The next.
Ali is about the bond offering.
Month in the next 12.
As currencies and so.
Months, but I cant be more specific on.
Sure plenty of questions.
<unk>.
That is about the bond offering.
For it to do.
During maturities currencies and so.
You too.
Both euro and USD for the Euro.
So on November.
<unk>.
Yes.
Think of that in terms of the what we're looking for it to.
10 years.
And we're going to look to do both euro and USD for the year.
And Glenn.
Thank you.
We ended coming here.
And seven years 10.
We use our contracted cash flow.
And the way that we see.
No.
We are going to.
<unk> kind of for the new issue.
In the coming years.
The years of 2007.
Our contracted cash flow.
<unk>.
To support our maturities.
Making more modest.
Thats a new issue.
And portfolio maturity to allow us to be able.
Ernie.
Our free cash flow generation.
Tony.
The more modest.
Questions to my next questions.
Our discipline our maturity.
Yes.
Allow.
<unk> can come from line of Nathan Rich from Goldman.
Safi.
Sure.
And thanks for the questions.
The next question.
Good morning.
Thank you.
Two questions first maybe a follow up.
The next bill.
First on the generic pricing in the U.
Good morning.
Generally generic pricing trends haven't changed.
Maybe excluding the dynamics with Meda.
So.
No.
Sounds like.
You mentioned.
Like generic pricing trends haven't changed.
I'll play out in the.
Third quarter.
<unk>.
<unk> dynamics with Meda.
Our fourth quarter.
And as you mentioned.
But it does seem like the <unk>.
Talk about.
Thank.
What you thought in the third quarter.
Bigger than what you typically.
<unk> as we think.
If you could maybe just help us think about.
About the seasonally stronger quarter, but it does seem like the guidance implies a bigger.
Lastly, if you could comment on what.
Bigger fees. So early I don't know if you could maybe just.
Either API or labor costs, and how that factored into your outlook.
Help us and then just lastly, if you could comment on what.
<unk>.
Similar to take the first one.
<unk>, either API or labor cost and how that's factored into your outlook.
Okay. Thank you for the question of coffee.
Outlook I think similar to take the first one.
U S generics and for our portfolio.
Once more.
So what we've seen is we've seen also had a number of sudden dwarf what they reported yesterday.
List pricing.
Portfolio.
So we don't see the same trend in our portfolio because the different.
What they reported yesterday on the U S pricing.
Okay.
Florida in particular, but the major factor in the fall.
We don't because we have to defer.
This year.
Okay.
The third quarter, we added ones.
And then.
Once pricing environment this effect of course.
As the major factor.
It is paying off.
In the two quarters of this year.
Fiber for us.
Here, we had it.
<unk> ability to price.
This effect of course.
Rice of complex generics.
<unk> is a leveling.
Our explorer resilience in the market.
The driver for.
However, we observe in terms of pricing a while back that was one piece.
Tier suppliers.
Us or.
And instruments.
Ian.
Basically because.
But what we observe in terms of pricing environment and in fact that was one is the stability of suppliers.
<unk>.
Veterinary management.
In the second one.
Is.
Inventory.
Generics coming into segments, where we already have <unk>.
The FDA approval.
That's one element the second one.
The trends.
The rates for new generics coming into segments, where we already have generic so it's basically FDA driven.
In this state with pricing requirements.
The trends so for that reason going forward, we actually calculate our business.
U S C.
Change in revenue.
<unk> third quarter to fourth quarter.
Yes.
Sure.
Yes.
Thanks for the question.
On the.
<unk> actually in the mainstream areas.
From third quarter fourth.
Portfolio, which as we mentioned.
Thanks for the question.
Instead of him to accelerate.
And actually in the mainstream areas.
One of the dynamics.
In our generics.
And June until including.
Yes.
And as Len mentioned that depend on the Biosimilar.
To the clinics.
In our generics.
Which is.
The region.
<unk>.
From an international.
And then mentioned that the Biosimilar.
The increase from Q3.
In between and the other two rigs.
So.
And international.
The pattern that we've seen I think the last 10 years.
The increase from Q3 to Q.
Yes, Matt.
And.
Good.
As you said yourself.
The reason for stronger demand.
That we've seen I think the last 10.
This of course effect that you have.
Yes.
Speculative buying by wholesalers because.
One of the reasons for stronger demand in the fourth quarter historically.
That's been the petition in the U S market.
If you'll just buying by wholesalers because you have price increases typically.
Inventory buildup.
Yeah.
For the face, which we both sinful.
In the U S marketplace. So that also.
One more part of your.
Also of course the holiday.
The input costs.
<unk> for the holidays, which we've also seen for.
Yes, so I'll comment on that.
And was there one more parts of your question.
Thats sort of industries.
Input costs, if you could just comment on what.
We are affected by input costs such.
<unk> bin.
I'll comment on.
Sure.
So we've seen a lot of industries reporting.
Two eight.
<unk> dramatically affected by input costs, such as energy raw materials transportation and so.
Sure.
Related to.
So see that but to a.
<unk>.
A lesser extent simply given the fact.
Of course.
That's for.
<unk>.
Okay.
<unk> puts are related to you would say.
Cost of labor, which is relatively stable of course.
The expectation is also.
<unk>.
Real estate.
She is a relatively small piece of our total cost base.
Dramatic.
Increase in transportation costs.
<unk> see that we will.
Depreciation is also a relatively small piece.
The inflation effect on.
We havent seen anything dramatic.
Have you seen.
Nick.
Be that we will going forward.
<unk> discussing that.
With a new economies.
On.
So.
That remains to be seen it's really too early to predict.
If we get into more.
<unk> seen that.
Were there any economies you pick so.
So for instance in the U S OTC.
And of course, its important if we get into more.
And U S.
More free environment.
Okay two price.
And Eric portfolio for instance, in the U S are all OTC portfolio.
So thanks for those questions Nathan.
So okay two price flexibility.
Civil.
Increased prices on all of these products.
Question two more people so let's have the next.
Let's move on to the next I think it might be the last several.
One bank go from there.
Okay.
Okay.
Does Ashford my answer.
Excellent.
On clicking.
The next comes from the line of Jason <unk> from Bank of America.
Non opioid.
Okay.
So can you talk about the leasing Louisiana.
The Ashland MA on for Jason.
My second.
A question.
Yes.
<unk> one on opioids.
<unk>.
Litigation, So can you talk about.
For the pain to that.
Uh huh.
Cross.
Okay.
I would imagine.
Second <unk> and.
Hey, David in terms of.
Thanks.
Happens with the rest.
So if you have any visibility into that process.
And the second question is the recipe.
David in terms of.
So.
With the rest of the states.
Division.
So could you just repeat the last question how much.
Second what does for spirit on NII provides.
Thanks <unk>.
How much of a benefit that the subcutaneous formulations.
How much.
Sure.
Spirit.
Yes.
Yes, how much you'll still benefit.
Cutaneous melikian delayed here.
With regard to the opioids and the settlement in Louisiana.
<unk> done that in the market.
This settlement.
Yes.
It is basic.
Although these.
What we are offering and seeking to reach.
Yeah.
Each is a nationwide.
Of this settlement.
It will be a pro rata.
A mirror of what we are.
Offering and seeking to reach.
Discussing it.
Or is it a nationwide settled.
Each.
Elements and it includes also products of Oxford.
The same way as we are discussing it.
For the nationwide settlement.
Opioids.
Abuse issues.
The box.
<unk>.
Very happy about it your specific question about the subdivisions.
People of.
Since that oldest observations in the state of Louisiana.
We're very happy about it you have a specific question about the subdivisions.
<unk> is negotiating with the state.
<unk> for the subdivisions in the state over to Shannon.
I think we haven't reached yet.
<unk>.
Negotiating it.
With the state.
Just I include.
This will be the case.
Assumption.
<unk> is a deadline I think we haven't reached yet where are we.
<unk> team worldwide settlement that we are discussing.
Just talk divisions are included.
And third because otherwise.
Okay assumption.
Thanks.
<unk> case.
Going.
<unk> for the nation wide settlement that we are discussing.
Kelly.
So observations in there because otherwise.
The other long acting injectables that exist in the marketplace.
To risperidone.
Spirit on LTI.
Placement of explanation.
Hi.
Sure.
The other long acting injectables that exist in the marketplace.
<unk> medication.
I'll need to give you just a little bit of explanation. So.
<unk> will take daily.
So.
Some tablets because you.
Important that you stay on your medication.
So.
And then all of sudden.
The only change daily checklist.
You get a really bad relapse and gets icon.
It's a little confused you feel very well.
Nick.
Right.
<unk>.
Got.
Okay.
Very important.
Apps at a really bad relapsed and gets psychotic.
<unk>.
<unk> it.
Is very harmful for your brain and Youre cognizant functions.
Particularly given.
<unk> very important.
Inter muscular injections.
<unk>.
From a depot effect.
Two products were invented.
Six fictions.
Hi, Peter.
Given.
Right.
<unk> injection.
Yes.
<unk> kind of a depot.
And you need to get it into the market tissue.
Fixed quite painful.
Barry.
Angel.
The nice thing.
<unk> to undergo but it's very effective.
Secures.
The hostel tissue.
Switching to <unk>.
Issue that this is not a very.
Month of hour.
<unk>.
So on the go but its very effective of course, because it secures.
Okay.
For instance for.
Very very low level of pain.
Our product.
A needle.
So because it's subcutaneous.
Efficient.
So it's a small volume.
<unk> benefited.
Very very low level of pain.
<unk>.
Severity.
That's one.
It's easy to do the injection.
Once every six.
<unk>.
Excellent.
If it is three clinical trials.
Phase III data.
<unk> monthly and.
It is.
Every second month.
Convenient.
If you can see.
Very very strong phase III clinical data.
Last question.
The benefits you get the strong efficacy, but in a nicer more convenient.
<unk> <unk> from BMO capital please.
Wait for those questions Ash and now to the last question.
Good morning.
<unk>.
First for.
Question comes from the line.
Sure.
<unk> <unk> from BMO.
<unk> market.
Yes.
Correct.
With customer stocking and purchasing pattern.
Okay.
Should that normalize will that happen.
Firstly, the COVID-19.
<unk>.
And we're still confident.
Yes.
<unk> thousand.
<unk> be a trough.
Yes.
<unk>.
Okay.
The revenue or EBITDA.
Normalized for that happening.
We should be thinking about that.
But in concert.
Now as you are.
It should be a trough.
The second question.
For EBIT.
Toby launching.
And just what's.
We should be thinking about that.
The opportunity would be go.
<unk>.
What could the contribution.
Rob.
Houston.
The second question.
Some have been signed.
There will be launched.
In Japan.
No.
And what community there.
Well.
Sure.
<unk>.
Okay, so you'd be going.
Going into.
Okay.
To the.
Houston.
Some of it.
Yes.
In China.
The.
Outside the U.
Ed.
<unk>.
How much will ex U S market.
I think I'll I'll.
I'll take the first one can comment also on.
<unk>.
On it.
Take the second one.
I'll do it.
All high level, because there's a lot of details to the COVID-19 impacts of course.
I'll take the second.
At high level.
One Stuart.
Overall high level, because there's a lot of details to the COVID-19 impacts of.
So if we have a patient 40 of products.
Of course, they were spending with us over the long now that we have to go all the way back.
<unk> first quarter of 2020.
You'll remember that we have a patient hoarding of product.
In the second quarter, 2020, which took volume style.
<unk> quarter of 2020.
The effect of.
Destocking patient levels.
Whereas in Europe.
Second quarter, 2020, which took volumes.
2020.
The effect.
Optimistic when we made the guidance.
In Europe.
<unk> 21.
Europe in fourth quarter.
One explanation is coming on.
<unk> 2020.
<unk>.
And we were optimistic when we made the guidance.
<unk>.
For 2020.
In Q2 of this year.
One explanation is coming on.
Oh no.
And in.
Go that fast.
<unk>.
We did see initial normalization.
<unk>.
Yes.
The U S.
Yes.
No.
Yes.
No didn't go that fast.
Yes.
We did see the initial normalization of scripts.
We thought we would have had normal.
<unk>.
<unk> prescription business of prescriptions and so on.
At that point in time of course, we were below.
Okay.
So expecting to be because we thought we would have had normal.
All of this stuff happening both in Europe and U S.
<unk>.
<unk> been able to infections and so on.
We didn't get.
So our volumes because Q4.
And it's always stuff happening both in Europe and U S.
It's to psychiatry.
So.
As a psychologist staying open.
We just showed you before.
Luke.
For a state of scripts.
Luke.
<unk>.
This is two psychiatrists.
Okay.
As a psychologist staying open and so.
Moving up.
So those numbers are subdued.
Some have been more or less.
<unk> in the third quarter they start to move up that's why you see.
Hope that European volume side already.
Also in Europe, the lockdowns have been more or less.
Florida.
European volume coming up.
<unk>.
But we would hope that European volumes started picking up already.
Okay.
For the second quarter, and then accelerated in the FERC in the fourth quarter.
Seems to believe that because we are not seeing any.
The third quarter.
Sure.
Expecting in our guidance.
Sure.
<unk> tenure.
We are aligned there.
Because we are not seeing any.
Yes.
Any flaw bounce in Europe.
Yes.
Europe seeing any new lockdowns in the U S.
So we think we aligned there.
Actually back to where they ought to be.
Inflation.
Yes, I would say.
<unk> normalization of the market.
2019 levels.
Our script levels actually back to where they ought to be.
A growth in let's say European totals.
<unk>.
Volume.
2019 levels.
Low single digit growth.
<unk>.
We haven't caught up with that.
<unk>.
Ed.
Low single digit growth in 2020.
<unk> volume.
But we're sort of back to where we were at 90.
<unk> digit.
Okay.
Psychiatrist after this.
Growth low single digit growth in 2020.
So in Q1, we were below Q2.
In Q3, with just getting close to where it used to be.
Well.
2019.
Below in Q1, we were below in Q2.
Our into the fourth quarter.
To close to where it used to be.
<unk>.
So to speak and 19 before Covid.
Offices.
Once we get now into the fourth quarter.
This slowdown.
So it started.
Details, but but really.
Such as the office.
This year it is normalizing.
Yes.
I would think we would next year in Q1.
So a lot of details, but but really it has affected us this year it is normalizing.
<unk>.
<unk> explanation drive.
<unk> here in Q1.
<unk> see a relatively low level.
One.
To be a cases.
Hospitals.
And we continue to see a strong destination dry.
<unk> you should see a relatively low level.
Thank you.
In hospitals.
I would say the only risk factor IC is the cough and cold portfolio.
For U S. Generics also for European OTC business because 2020.
<unk> would say the only risk factor is the cough and cold portfolio.
For U S generics, but also for European OTC business because in 2020.
<unk> should happen for normalized also next.
Due to the social distancing.
Here.
Then on Adobe, Japan, and Australia, China.
<unk> should happen on normalized also next.
Adobe.
And we will be growing.
At year end in Australia, China.
We think it has great potential as a big market for this Japan.
And we will be growing for prevention of migraine.
Okay.
I think it has great potential there its a big market for this in Japan.
But you get the approval.
<unk>.
And in China, the way products penetrates.
So with the pricing you don't have pricing.
Negotiations like that had already so that's easy.
Great.
<unk>, which is set by the government. So you don't have a lot.
Our hospitalist.
With the pricing you don't have pricing negotiations like that you had already.
Thank.
Yes.
To work through all the hospitals.
Both hospitalist.
Yes.
And in China.
Start to take off and gradually build up so when it comes to the fourth quarter of this year.
To get the product on there.
Sales in China.
Start to take off and gradually build up so when it comes to the fourth quarter of this year.
And the numbers will be accelerating over the.
The next 10 years.
Here.
The marginal they will not have a major impact.
Yes, it's a good launch.
Some markets we are happy about the develop.
Launch about the products.
We will be accelerating over the next 10 years, so it's a steady buildup.
<unk> questions I think with that we will end the call.
And we are very happy about the products.
<unk>.
Reaching more major markets.
I would like to.
Gary Thanks for the questions I think with that we will end the call over to the operator.
Joining us for the call today.
Yes.
As always we're happy to take any questions yet today tomorrow and in the coming weeks take care and be well.
Yes.
As for the call today as always we're happy to take any questions yet today tomorrow and in the coming weeks take care and be.
Yes.
Well.
Today.
Yeah.
<unk> 2006.
2021.
This does conclude.
One kind of mode.
We will cover today.
Chris will be available for replay.
Great.
Zero.
Tom today.
Paul.
From November 20.
Zero nine.
Thank you.
9000.
There are multiple.
Eight.
Thanks, Steve.
Sure.
Please go ahead.
<unk>.
Okay.
Yes.
Thanks.
So.
Thanks.
For <unk>.
<unk>.
Okay.
Zero nine.
Yes.
Nine.
Okay.
Kevin.
Thank you.
097.
Thank.
Okay.
Thank you Ken.
With excess.
Heaven Nobody game.
Zero.
Four.
Okay.
Four.
Great.
Kevin will participate.
Sweet.
Please disconnect.
Nine five with access code.
Thanks.
Kevin Thanks, Kevin.
You for participating.
Connect.
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