Half Year 2024 Ipsen SA Earnings Call
Hello and welcome to Ipsen's conference call and webcast on H1 2024 results. I'll now hand you over to David Lowe, Ipsen's CEO .
Operator: Thank you, operator. Good afternoon or good morning, everyone.
David Lowe: Thank you operator good afternoon or good morning everyone I'm delighted to welcome you to our latest results call as you just heard I'm David Lowe chief executive officer of Ipsen and it's a pleasure to take you through our performance in the first half of the year
David Lowe: I'm delighted to welcome you to our latest results call. As you just heard, I'm David Lowe, Chief Executive Officer of Ipsen, and it's a pleasure to take you through our performance in the first half of the year. Please note that our presentation is available on ipsen.com. Before we begin, here is our Safe Harvest Statement, which outlines the routine risks and uncertainties contained within this presentation. Also, any commentary on growth you'll hear today will be based on constant exchange rates unless stated otherwise.
David Lowe: Please note that our presentation is available on ipsen.com. Please turn to slide 2.
David Lowe: Before we begin, here is our Safe Harvest Statement, which outlines the routine risks and uncertainties contained within this presentation. Also, any commentary on growth you'll hear today will be based on constant exchange rates, unless stated otherwise. Please turn to slide 3.
David Lowe: Please turn to slide three. I'm joined today by Christelle Huguet, head of our research and development, who will provide an R&D update, while our CFO, Emerick Le Chatelier, will take you through the financials. We'll then be happy to take your questions.
Speaker Change: I'm joined today by Christelle Huguet, head of our research and development, who will provide an R&D update while our CFO , Emerick Le Chatelier, will take you through the financials. We'll then be happy to take your questions. Please turn to slide four.
David Lowe: Please turn to slide 4. I want to begin with our business update, please turn to slide 5. Today's headlines illustrate real delivery and progress so far this year, starting with a strong financial performance. Total sales grew by 9.5% in the first half, accompanied by a core operating margin of 32.4%. We also generated free cash flow of €394 million.
Speaker Change: I want to begin with our business update. Please turn to slide 5.
Speaker Change: Today's headlines illustrate real delivery and progress so far this year.
Speaker Change: Starting with a strong financial performance, total sales grew by 9.5% in the first half accompanied by a core operating margin of 32.4%. We also generated free cash flow of €394 million.
David Lowe: Regulatory success came in the form of the FDA approvals of Onivide in first-line pancreatic cancer and Iquebo in second-line PBC, respectively. We also anticipate published opinions from the CHMP tomorrow in respect of both I-Corvo and Odedixibus, the latter in Allergial Syndrome. Finally, we made good progress with our pipeline and external innovation strategy. Today, we in-license ex-use rights to a late-stage asset, Soborafenib, in Pediatric Oncology. We also executed four early stage transactions across oncology and neuroscience, while we expanded our collaboration and license agreement for the development of chromatics in advanced neuroendocrine tumors. Please turn to slide six.
Speaker Change: Regulatory success came in the form of the FDA approvals of Onivide in first-line pancreatic cancer and IQERBO in second-line PBC, respectively.
Speaker Change: We also anticipate published opinions from the CHMP tomorrow in respect of both I-Corvo and Odevixibut, the latter in Alajil Syndrome.
Speaker Change: Finally, we made good progress with our pipeline and external innovation strategy. Today, we in-license ex-use rights to a late-stage asset, Soborafenib, in pediatric oncology.
Speaker Change: We also executed four early-stage transactions across oncology and neuroscience while we expanded our collaboration and license agreement for the development of chromatics in advanced neuroendocrine tumors. Please turn to slide 6.
David Lowe: Turning to more details of RSL's performance, the growth of 9.5% in H1 was mainly driven by the performance of Cobometics and Discord, as well as the contributions from BuildA and Oniva. Somatolin's sales decline was limited to 1%, as we benefited from generic land-realty shortages in several countries in Europe. In North America, somatolin sales fell by 6.3%, with solid volume growth outweighed by adverse U.S. pricing.
Speaker Change: Turning to more details of RSL's performance, the growth of 9.5% in H1 was mainly driven by the performance of Cobametics and Discord, as well as the contributions from BuildA and Onibyte.
Speaker Change: Somatolin's sales decline was limited to 1% as we benefited from generic land-realtype shortages in several countries in Europe . In North America, somatolin sales fell by 6.3% with solid volume growth outweighed by adverse US pricing.
David Lowe: We anticipate a sharp decline from somatolin in the U.S. in the second half based on increased generic management. These first sales were up by 12% with continued growth in the therapeutics and aesthetics markets, partially offset by adverse phasing in the second quarter. Carbamatic cells grew by 17%, though decadential cell growth was temporarily limited to one.
Speaker Change: We anticipate a sharp decline from somatolin in the U.S. in the second half based on increased generic penetration.
Speaker Change: These first sales were up by 12% with continued growth in the therapeutic and aesthetics markets, partially offset by adverse phasing in the second quarter.
Speaker Change: Carbamatic cells grew by 17 percent, though decadentive cells growth was temporarily limited to 1 percent.
David Lowe: The launch in Firstline contributed to the 25% growth in Onibike sales, while Bill Bates delivered an excellent second quarter and is now annualizing at over $100 million. I will now provide more details of our main launches this year. Please turn to slide 7.
Speaker Change: The launch in Firstline contributed to the 25% growth in Onivite sales, while BillBase delivered an excellent second quarter and is now annualizing at over $100 million. I will now provide more details of our main launches this year. Please turn to slide 7.
David Lowe: Onivite is on track to become a standard of care in the U.S. for first-line pancreatic cancer. Although it will take time to change long-term prescribing habits, we're clearly excited about the significant potential of Onivite over time. 80% of relevant physicians can prescribe Onivide in first line, while 90% of payers live half-active. We're seeing updates in use in first line, and this is illustrated by a 17% increase in post-approval weekly demand. We're also delighted with the performance in the major centers, as demonstrated by 34% demand growth in the top 10 accounts.
Speaker Change: Onivite is on track to become a standard of care in the U.S. in first-line pancreatic cancer. Although it will take time to change long-term prescribing habits, we're clearly about the significant potential of Onivite over time.
Speaker Change: 80% of relevant physicians can prescribe Onivide in first line, while 90% of payers live have access.
Speaker Change: We're seeing updates in use in first line, and this is illustrated by a 17% increase in post-approval weekly demand. We're also delighted with the performance in the major centers, as demonstrated by 34% demand growth in the top 10 accounts.
David Lowe: Now let's turn to the launch of iCorbo. Please turn to slide A. IQIRU is having an encouraging early start, and I'm delighted that patients will very quickly have access to our new innovative option to treat their PBC. Following last month's Pidufa, Agrobo became the first and only approved PPAR to come to market to treat PBC. The approval was based on ELIPIF Phase III trial data that showed a rapid and sustained response lowering ALP and the level of bilirubin.
Speaker Change: Now let's turn to the launch of iCorbo. Please turn to slide 8.
Speaker Change: IQERU is having an encouraging early start and I'm delighted that patients very quickly had access to our new innovative option to treat their PBC.
Speaker Change: Following last month's P. lupha, Agrovo became the first and only approved PPAR to come to market to treat PBC.
Speaker Change: The approval was based on the ELIPIF Phase III trial data that showed a rapid and sustained response, lowering ALP and the level of bilirubin.
David Lowe: The unmet need just in the uncontrolled population is extensive, with only a minority of eligible patients receiving a second line treatment today. The launch is fully on track. Patients were covered and on treatment within the first week of launch, and we already recorded some sales in June.
Speaker Change: The unmet need, just in the uncontrolled population, is extensive, with only a minority of eligible patients receiving a second-line treatment today.
Speaker Change: The launch is fully on track. Patients were covered and on treatment within the first week of launch and we already recorded some sales in June .
David Lowe: Feedback from physicians has been very good. 50% of health care providers surveyed one week post-launch were likely to prescribe IQorvo, while there were early positive coverage determinations from commercial and government payer segments. I look forward to providing a further update on launch at our Q3 results. Please turn to slide 9.
Speaker Change: Feedback from physicians has been very good. 50% of healthcare providers surveyed one week post-launch were likely to prescribe IQorvo while there were early positive coverage determinations from commercial and government payer segments.
Speaker Change: I look forward to providing a further update on the launch at our Q3 results. Please turn to slide 9.
David Lowe: Turning to our pipeline, as at the end of June, we have a nice mix of trials across the therapy areas and phases of clinical development. We also anticipate some of our preclinical assets entering phase one in the coming months. I will now pick out some highlights from the pipeline. In oncology, we have the opportunity with chromatics in advanced neuroendocrine tumors, and we anticipate filing a new course. In rare occasions, we look forward to the published CHMP opinions tomorrow in respect of I. corvo and Dr. Wikziba.
Speaker Change: Turning to our pipeline, as at the end of June , we have a nice mix of trials across the therapy areas and phases of clinical development. We also anticipate some of our preclinical assets entering phase one in the coming months.
Speaker Change: I will now pick out some highlights from the pipeline. In oncology, we have the opportunity with chromatics in advance neuroendocrine tumors, and we anticipate filing a new course.
Speaker Change: In rarities, we look forward to the published CHMP opinions tomorrow in respect of I. corvo and Dr. Diksiba. While in neuroscience, we're progressing nicely with dosing in the long-acting neurotoxin trials in aesthetics and therapeutics.
David Lowe: While in neuroscience, we're progressing nicely with dosing in the long-acting neurotoxin trials in aesthetics and therapy. When we next present this chart in October, it will also include Toborafilip, the exciting pediatric oncology asset in license today. Please turn to slide 10.
Speaker Change: When we next present this chart in October , it will also include Toborafilip, the exciting pediatric oncology asset in license today. Please turn to slide 10.
David Lowe: Toborafenib is an attractive addition to the pipeline, and this deal perfectly aligns with our strategy. This acid is already approved in the US as a second-line treatment of the most common childhood brain tumor, pediatric low-grade glioma. We have obtained rights outside the United States.
Speaker Change: Soborafenib is an attractive addition to the pipeline and this deal perfectly aligns with our strategy.
Speaker Change: This acid is already approved in the U.S. as a second-line treatment of the most common childhood brain tumor, pediatric low-grade glioma. We have obtained the rights outside the United States.
Christelle Huguet: Christelle will take you through the trial details in a moment, both in the second and first line, and I want to highlight several aspects here. Firstly, there is a high degree of unmet medical needs with a limited number of options for patients. In the top five European markets, there is a significant level of incidence and prevalence, yet there is no clear standard of care in second line. The trial data were also compelling, with toporafinib the only targeted therapy to show efficacy in the broad era-altered population. We plan to file next year, so it will then slot well into our expanding portfolio alongside our widening range of oncology methods. With that, I'll now hand over to Christelle. Please turn to slide 11.
Speaker Change: Christelle will take you through the trial details in a moment, both in second and first line, and I want to highlight several aspects here. Firstly, there is a high degree of unmet medical needs with a limited number of options for patients.
Christelle: In the top five European markets, there is a significant level of incidence and prevalence, yet there is no clear standard of care in second line.
Christelle: The trial data were also compelling, with tovorafinib, the only targeted therapy to show efficacy in the broad era altered population.
Baratheon: We plan to file next year, so Baratheon will then slot well into our expanding portfolio alongside our widening range of oncology methods. With that, I'll now hand over to Christelle. Please turn to slide 11.
Christelle Huguet: Thank you, David, and hello everyone. I'm delighted to provide you with an update on Ipsen's R&D program. Please turn to slide 13. I want to start by reminding you of our focus on innovation, which is guided by science first and unmet medical needs. We have seen that the best innovation takes place in the academic and biotech ecosystem, where deep biology and pathway understanding is built through years of research. That's exactly why we have a successful external innovation model.
Christelle: Thank you, David, and hello, everyone. I'm delighted to provide you with an update on Ipsen's R&D program.
Speaker Change: Please turn to slide 13.
Christelle: I want to start by reminding you of our focus strategy on innovation, which is guided by science first and unmet medical need.
Christelle: We have seen that the best innovation takes place in the academic and biotech ecosystem where deep biology and pathway understanding is built through years of research. That's exactly why we have a successful external innovation model.
Christelle Huguet: What we do best at Ipsen is make a medicine out of a molecule, from pharmaceutical development to the commercialized medicine, all the way to strong life cycle opportunities. And through our clinical know-how and deep regulatory expertise, we designed the most effective clinical and registry path to demonstrate and bring the value of a potential new therapy to patients with unmet medical needs. We do this right across oncology, rare diseases, and neuroscience. Let's look at this approach in action. Turn to slide 13, please.
Christelle: What we do best at Ipsen is making a medicine out of a molecule, from the pharmaceutical development to the commercialized medicine, all the way to strong life cycle opportunities.
Christelle: And through our clinical know-how and deep regulatory expertise, we designed the most effective clinical and registry path to demonstrate and bring the value of a potential new therapy to patients with unmet medical needs.
Christelle: We do this right across oncology, rare disease and neuroscience.
Christelle: Let's look at this approach in action. Turn to slide 13 please.
Christelle Huguet: In the first half of this year, we made strong additions to our preclinical oncology pipeline with both T-cell engages and antibody drug conjugates. Bispecifics are antibodies that have been engineered to target two separate molecules that can be circulating or present on the surface of cells. T cell engagements target specific T cell markers on one hand and often use the other hand of the molecule to activate the T cell. With the Marengo STAR platform, we can target a specific subset, a V-beta subset of T cells, thus limiting wide immune system activation and also precisely activate that specific V-beta subset to kill solid tumors. The TriStar platform operates in the same manner, though it has three hands; hence TriSpecific.
Christelle: In the first half of this year, we made strong additions to our preclinical oncology pipeline with both T-cell engages and antibody drug conjugates.
Christelle: Bispecifics are antibodies that have been engineered to target two separate molecules that can be circulating or present on the surface of cells.
Christelle: T-cell engages targets specific T-cell markers on one hand and often use the other hand of the molecule to activate the T-cell.
Christelle: With the Marengo Star platform, we can target a specific subset, a V-beta subset of T-cells
Christelle: thus limiting wide immune system activation, and also precisely activate that specific vBeta subject to kill solid tumor cells.
Christelle: The TriStar platform operates in the same manner, though it has three hands, hence tri-specific.
Christelle Huguet: It recognizes a specific T cell subset, it activates that subset, and it recognizes cold tumors that normally escape the immune system, bringing the T cell to kill the tumor cell. Last April, we successfully selected the first clinical candidate from our ongoing collaboration with the Marengo Star platform that focused on hot tumors. We then added a second program in collaboration with Marengo using their novel TriStar platform where we re-evaluate the potential of selective T-cell engagements to reactivate and mobilize a targeted T-cell subset to boost anti-tumor activity in cold tumors.
Christelle: It recognizes a specific T-cell subset, it activates that subset, and it recognizes called tumors that normally escape the immune system, bringing the T-cell to kill the tumor cell.
Christelle: Last April , we successfully selected the first clinical candidate from our ongoing collaboration with the Marengo Star platform that focused on heart tumors.
Christelle: We then added a second program in collaboration with Marengo using their novel Tristar platform where we evaluate the potential of selective T cell engagers to reactivate
Christelle: mobilize a target T cell subset to boost anti-tumor activity in cold tumors.
Christelle Huguet: Ipsen also secured two antibody drug conjugate assets this year with potential for solid tumors. However, the majority of ADCs have been directed at liquid tumors in large indications of hematology. We have been evaluating the ADC landscape for some time, and in staying true to our strategy, we have selected platforms that offer highly selective targeting to niche, biomarker-driven, and difficult-to-treat tumor types. IPN 60 to 90 targets ROR1, and IPN6300 targets a novel tumor antigen.
Speaker Change: Ipsen also secured two antibody drug conjugate assets this year with potential in solid tumors. The majority of ADCs have been directed at liquid tumors in large indications of hematology.
Christelle: We have been evaluating the ADC landscape for some time, and in staying true to our strategy, we have selected platforms that offer highly selective targeting to niche, biomarker-driven, and difficult-to-treat tumor types.
Speaker Change: IPN60290 targets raw R1 and IPN6300 targets a novel tumor antigen. We look forward to completing the final stages of the preclinical development for both programs to then move them into phase one.
Christelle Huguet: We look forward to completing the final stages of the preclinical development for both programs and then moving them into phase one. Please turn to slide 14. Earlier this month, we announced the expansion of our collaboration with Xelaxis to include cabometics in advanced pancreatic neuroendocrine and advanced extra pancreatic neuroendocrine tumors. This decision was based on the positive outcome from the cabinet phase three trial that is led by the Alliance for Clinical Trials in Oncology and sponsored by the National Cancer Institute.
Christelle: Please turn to slide 14.
Christelle: Earlier this month, we announced the expansion of our collaboration with Xelaxis to include chabromatics in advanced pancreatic neuroendocrine and advanced extra pancreatic neuroendocrine tumors.
Christelle: This decision was based on a positive outcome from the Cabinet Phase III trial that is led by the Alliance for Clinical Trials in Oncology and sponsored by the National Cancer Institute.
Christelle Huguet: An independent data and safety monitoring board recommended stopping enrollment, unblinding the study, and allowing crossover from placebo to chabromytic due to early efficacy demonstrated at an interim analysis in both the trials cohort with clinically meaningful improvements in progression-free survival, which amounted to 11.4 months in pancreatic net versus three months for placebo, and 8.3 months in extra pancreatic net versus 3.2 months for placebo. We have now engaged with regulatory agencies and will submit a request on the basis of this data. Please turn to slide 15.
Christelle: An independent Data and Safety Monitoring Board recommended to stop enrollment, unblind the study, and allow crossover from placebo to chabrometics due to the early efficacy of the drug.
Speaker Change: demonstrated at an interim analysis in both of the trials cohort with clinically meaningful improvements in progression-free survival which amounted to 11.4 months
Speaker Change: in pancreatic net versus three months for placebo, and 8.3 months in extra pancreatic net versus 3.2 months for placebo. We have now engaged with regulatory agencies and will submit on the basis of this data.
Christelle Huguet: Looking now at the newest addition to our late-stage pipeline, Tovorazineb is an oral, once-weekly, type 2 pan-RAF inhibitor approved with orphan drug designation under accelerated approval by the FDA in April. The Pivotal Phase 2 Firefly 1 trial delivered strong data with a best overall response rate of 51% as evaluated by an independent radiology review committee using the RAP-NO LGG criteria, specifically designed for pediatric low- We are focusing on regulatory submissions outside of the US now that the deal is signed. We also await the results of the Phase 3 Firefly 2 trial, evaluating tovorafenib as a monotherapy for newly diagnosed children and young adults with rough-outted low-grade glioma requiring first-line systemic therapy. Please turn to slide 16.
Speaker Change: Please turn to slide 15.
Speaker Change: Looking now at the newest addition to our late-stage pipeline, Tovorazinib is an oral once-weekly type 2 pan-RAF inhibitor approved with orphan drug designation under accelerated approval by the FDA in April .
Speaker Change: The Pivotal Phase II Firefly1 trial delivered strong data, with a best overall response rate of 51 percent.
Speaker Change: as evaluated by an independent radiology review committee.
Speaker Change: using the RAP-NU.
Speaker Change: LGG criteria, specifically designed for pediatric low-grade glioma. We are focusing on regulatory submissions outside of the U.S. now that the deal is signed. We also await the results of the Phase 3 Flyer Flight 2 trial.
Speaker Change: Evaluating tovorathinib as a monotherapy for newly diagnosed children and young adults with rough-outed low-grade glioma requiring first-line systemic therapy.
Christelle Huguet: Now turning to a rare liver disease, we continue to explore the full potential of iCervo to ensure every eligible patient can benefit from this important new treatment. I want to draw your attention to Elspire, a Phase III randomized parallel group, double-blind, placebo-controlled global multi-center study enrolling PBC patients with ALP levels between 1 and 1.65, the upper limit of normal. In this population, which is typically classified as having an adequate response to standard of care UCDA, there remains a negative outcome of death or liver transplantation at 10 years comparable to patients with higher ALP levels.
Speaker Change: Please turn to slide 16.
Speaker Change: Now, turning to a rare liver disease, we continue to explore the full potential of iCurvo to ensure every eligible patient can benefit from this important new treatment.
Speaker Change: I want to draw your attention to Elspia.
Speaker Change: A phase 3 randomized parallel group, double-blind, placebo-controlled global multi-center study enrolling PBC patients with ALP levels between 1 and 1.65, the upper limit of normal.
Speaker Change: In this population, which is typically classified as having an adequate response to standard-of-care UCDA, there remains a negative outcome of death or liver transplant at 10 years, comparable to patients with higher ALP levels.
Christelle Huguet: Therefore, the goal for patients with PBC is to shift towards ALP normalization. Alspire data is expected in 2026, and the trial is part of Ipsen's strong set of clinical programs in rare liver diseases, listed here on the right. Please turn to slide 17.
Speaker Change: Therefore, the goal for patients with PBC is to shift towards ALP normalization.
Speaker Change: ELSPIRE data expected in 2026 and the trial is part of Ipsen's strong set of clinical programs in rare liver diseases listed here on the right.
Christelle Huguet: And let's conclude with a summary of the major upcoming milestones. We expect regulatory decisions for I-Turvo and OxyVexibat in the EU soon. Next year, we look forward to a potential EU decision for carbametics in advanced neuroendocrine tumors, as well as physical trial data for our Arc2 inhibitor feed research in FOP. Finally, in 2026, a number of phase three trials are expected to read out, including bilbain-binary atresia, discord in both chronic and episodic migraines, as well as the combination of sesveric and R2 With this update...
Speaker Change: Please turn to slide 17.
Speaker Change: And let's conclude with a summary of the major forthcoming milestones. We expect regulatory decisions for I-Turvo and Ocdavixibat in the EU soon. Next year, we look forward to a potential EU decision for carbometics in advanced neuroendocrine tumors.
Speaker Change: as well as physical trial data for our Arc2 inhibitor feed research in FOP.
Speaker Change: Finally, in 2026 a number of phase 3 trials are expected to read out, including Bilbao and Billeri atresia.
Speaker Change: This caught in both chronic and epizootic migraines, as well as the combination of tesveric and R2 in second-line follicular lymphoma.
Speaker Change: With this update, I'll hand you over to Emmerich now. Please turn to slide 18.
Emerick Le Chatelier: Thanks Christelle and hello everyone. I will now take you through the details of our financial performance in the first half of this year as well as our upgraded guidance for 2020. Please turn to slide 19. We delivered another set of strong financial results in the first half across sales, co-operating income, and cash flow. Our total sales, over 1.6 billion, grew by 9.5% at the consort exchange rate. Our core operating income grew by 2.8% to €538 million, while our free cash flow increased by 5.9% to €394 million.
Emmerich: Thanks Christelle and hello everyone. I will now take you through the details of our financial performance in the first half of this year, as well as our upgraded guidance for 2024.
Emmerich: Please turn to slide 19.
Emmerich: We delivered another set of strong financial results in the first half across sales, co-operating income and cash flow. Our total sales, over 1.6 billion, grew by 9.5% at consortium exchange rates.
Emmerich: Our core operating income grew by 2.8% to €538 million, while our free cash flow increased by 5.9% to €394 million.
Emerick Le Chatelier: Given our high level of APDA and this solid cash flow generation, we keep a very strong balance sheet with no debt and have at the end of June $2 billion of firepower available for external innovation. Let's go now into the detail of those financials in the following slides. Please turn to slide 20. Starting with the core P&L, the growth in total sales of 9.5% at constant exchange rates translated into 8% at current rates given the adverse currency movements from emerging markets. Gross margin decreased as planned by 1.6 points, driven by an unfavorable sales mix and a higher level of royalties paid.
Emmerich: Given our high level of APDA and this solid cash flow generation, we keep a very strong balance sheet with no debt and have at the end of June 2 billion of firepower available for external innovation.
Emmerich: Let's go now in the detail of those financials in the following slides. Please turn to slide 20.
Emerick Le Chatelier: R&D costs increased by 11% to reach 19.5% of total sales, driven mainly by the continuous investment in our pipeline, including iCurve studies and Dysport migrant programs. SG&A costs increased only by 4%, with the ratio to sales at 34.6%, improving by 1%. It reflects our commercial investment to support the launches but also the impact of our efficiency programs, including the synergies post-Aldereo and Epizyme acquisitions. As a consequence, as you can see, our co-operating income increased by 2.6%, with the co-operating margin standing at 32.4%, declining by 1.6%. Please turn to slide 21.
Emmerich: Starting with the core P&L, the growth in total sales of 9.5% at constant exchange rates translated into 8% at current rates given the adverse currency movements from emerging markets.
Emmerich: Gross margin decreased as planned by 1.6 points driven by an unfavorable sales mix and the higher level of royalties paid.
Emmerich: R&D costs increased by 11% to reach 19.5% of total sales, driven mainly by the continuous investment in our pipeline, including iCurve studies and D-SPORT migrant programs.
Emmerich: SG&A cost increased only by 4%, with the ratio to sales at 34.6%, improving by 1% points.
Emmerich: It reflects our commercial investment to support the launches, but also the impact of our efficiency programs, including the synergies post-Aldereo and Epizyme acquisitions.
Emmerich: As a consequence, as you can see, our co-operating income increased by 2.6%, with the co-operating margin standing at 32.4%, declining by 1.6 points.
Emerick Le Chatelier: Turning to consolidated net profit, I wanted to highlight several movements. Firstly, the amortization of intangible assets increased by 36% to €123 million, mainly related to Bilvey, and so on. Restructuring and other operating expenses amounted to 97 million euros, a decline of 22% reflecting integration costs last year related to the acquisition of Bilvey. As a consequence, and with lower financial and tax expenses, IFRS Please turn to slide 22.
Emmerich: Please turn to slide 21.
Emmerich: Turning to Consolidated Net Profit, I wanted to highlight several movements.
Emmerich: Firstly, the amortization of intangible assets increased by 36% to €123 million, mainly related to Bilvey and Sornos.
Emmerich: Restructuring and other operating expenses amounted to 97 million euros, a decline of 22% reflecting integration costs last year related to the acquisition of Albiret.
Emmerich: And as a consequence, and with lower financial and tax expenses, IFRS consolidated profit increased by 19% to 232 million euros.
Emerick Le Chatelier: Finally, on cash flow, we continue to generate strong free cash flow in the first half of the year and have a healthy balance sheet with no debt at the end of June. ABDA grew by 2.6%, very close to the co-operative increase. Free cash flow increased even more by 5.9% to 394 million euros. Net investment in the first ad included the payment of the Univide milestone, following the FDA approval of the first line indication, as well as the upfront payment related to the Acceler innovation transaction, including Citron and Skywalk.
Emmerich: Please turn to slide 22.
Emmerich: Finally, on cash flow, we continue to generate strong free cash flow in the first half of the year and have a healthy balance sheet with no debt at the end of June .
Emmerich: EBDA grew by 2.6%, very close to the co-operating income increase.
Emmerich: Free cash flow increased even more by 5.9% to 394 million euros
Emmerich: Net investment in the first ad included the payment of the Univide milestone following the FDA approval of the first line indication as well as the upfront payment related to the external innovation transaction including Citroën and Skywalk.
Emerick Le Chatelier: With almost no debt at the end of June and based on 2x EBITDA, we now have an available firepower for external innovation of more than 2 billion euros. I would like now to conclude my financial section with our guidance for 2024. Please turn to slide 23. Based on the solid momentum and the strong performance of this first HAL, we are very pleased to upgrade our Full Year Guide. As you can see, we now expect total sales to grow by more than 7% at constant exchange rates, as compared to our previous guidance of growth above 50%.
Emmerich: With almost no debt at the end of June and based on two times EBITDA, we have now an available firepower for external innovation above 2 billion euros.
Emmerich: I would like now to conclude my financial section with our guidance for 2024. Please turn to slide 23.
Emmerich: Based on the solid momentum and the strong performance of this first half, we are very pleased to upgrade our Fourier guidance.
Speaker Change: As you can see, we now expect total sales to grow by more than 7% at constant exchange rate as compared to our previous guidance of growth above 6%.
Emerick Le Chatelier: This assumes an accelerated erosion of somatulins based on increased generic competition, notably in the U.S., and also a higher contribution from all landscapes, including univines and high-curve roads. For core operating margin, we now anticipate a level of more than 30% of total sales. It assumes a lower anticipated profitability in the second half of the year as a result of our continuous investment in our launches and in our pipeline, but also a higher seasonality of costs in H2 versus H1, and a lower level of milestone univesities in H2 versus H1. With all of that, I will now hand over to David for the conclusion. Please turn to slide 24.
Speaker Change: This assumes an accelerated erosion of stomatulins, based on an increased generic competition, notably in the US, and also a higher contribution for all landscapes, including onivines and iCurvo.
Speaker Change: On core operating margin, we anticipate now a level of more than 30% of total sales.
Speaker Change: He assumes a lower than expected profitability in the second half of the year as a result of continued investment.
Speaker Change: for our launches and in our pipeline, but also a higher seasonality of costs in H2 versus H1, and a lower level of milestone on-device in H2 versus H1.
David Lowe: Thanks, Emmerich. Please turn to slide 25. To conclude, there are four key messages to take away from the results today that illustrate the delivery on our ambition. Firstly, we achieved another strong combination of total sales growth, core operating margin, and cash generation. We're making good progress on the pipeline, including regulatory success and the addition of a number of promising assets, and our launches of Univide and iCorvo are on track. Finally, our commercial and pipeline performance is being driven by continual improvements in our execution, centered on our focus on patients. Please turn to slide 26. Thank you for listening to our presentation. Christelle, Emmerich, and I now have the time for your questions. Operator, over to you. Thank you.
Speaker Change: With all of that, I will now hand back to David for the conclusion. Please turn to slide 24.
David Lowe: Thanks, Emerick. Please turn to slide 25.
David Lowe: To conclude, there are four key messages to take away from the results today that illustrate the delivery on our ambition. Firstly, we achieved another strong combination of total sales growth, core operating margin and cash generation.
David Lowe: We're making good progress on the pipeline, including regulatory success and the addition of a number of promising assets.
David Lowe: And our launches of Univite and iCorvo are on track. Finally, our commercial and pipeline performance is being driven by continual improvements in our execution, centered on our focus on patience. Please turn to slide 26.
Speaker Change: Thanks for listening to our presentation. Christelle, Emmerich, and I now have the time for your questions. Operator, over to you.
Operator: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now take your first question. One moment, please. And your first question comes from the line of John Priestner from J.P. Morgan. Please go ahead.
Speaker Change: Thank you. To ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again.
Speaker Change: We will now take your first question.
Speaker Change: One moment, please.
Speaker Change: And your first question comes from the line of John Priestner from JP Morgan, please go ahead.
John Priestner: Hi, John Priestmas and J.P. Morgan. Thank you for taking my questions.
David Lowe: So two, if I may. The first is on somatulene. So in the first half, we saw somatulene erosion of only about 1%. So can you help us understand how that might develop in the second half? What some of the push and pulls are around that, and how much somatulene erosion is baked into the 2024 guidance? It seems like there would have to be quite a big drop off to even reach a kind of double digit decline in 2024 at this stage.
Speaker Change: Hi, John Priestman from J.P. Morgan. Thank you for taking my questions. So, two if I may.
John Priestman: The first is on somatulene. So in the first half we saw somatulene erosion of only about 1%, so can you help us understand how that might develop in the second half? What some of the push and pulls are around that?
Speaker Change: how much somatolin erosion is baked into the 2024 guidance. It seems like there would have to be quite a big drop-off to even reach a kind of double-digit decline in 2024 at this stage.
David Lowe: And then the second question would be on Akirvo. So there is potential that the current standard of care in second line PBC oculibum might be removed from the market following a negative EUCHMP recommendation. And I believe there's also a US FDA approval expectation before mid-October. So how are you really thinking about this opportunity and how it might impact Akirvo uptake? And is this at all factored into your 2024 guidance? Thank you. Thank you.
Speaker Change: And then the second question would be on Akiva.
Speaker Change: So there is potential that the current standard of care in second-line PBC oculibum might be removed from the market following a negative EU CHMP recommendation and I believe there's also a US FDA ad column expected before mid-October.
Speaker Change: So, how are you really thinking about this opportunity and how it might impact the Akiba uptake? And is this at all factored into your 2024 guidance? Thank you.
David Lowe: Thank you, John. So on your first question about the somatolin erosion for the second half, you're right. We have, as we have said already at the beginning of the year, advised that we assume an acceleration of the erosion given the appearance of the generic. So it has indeed been put into our guidance.
Speaker Change: Thank you, John . So on your first question on the somatolin erosion for the second half, you're right. We have, as we have said already at the beginning of the year,
Speaker Change: guided that we assume an acceleration of the erosion given the appearance of the generic. So it has been indeed put into our guidance. Now the push and pull of course are going to be
David Lowe: Now, the push and pull, of course, are going to be, you know, how much the supply is going to recover. So it's hard for us to tell that, but we have assumed that the supply is going to recover in Europe and that we will see a stronger erosion in the second half of this year, also in the United States. Regarding your second question on IQERVO, the alkaliva removal, we will really have to see what happens exactly.
Speaker Change: you know, how much is the supply going to recover. So it's hard for us to tell that, but we have assumed that the supply is going to recover in Europe and that we will see a stronger erosion in the second half of this year also in the United States.
Speaker Change: Regarding your second question on IKORWO,
David Lowe: In Europe, you know, it's not clear if they are going to put in place a compassionate use program or not for the patients that have been on alkaliva and what is going to happen with the U.S. outcome. Something similar might happen there, like in Europe. So we have, in any case, already an assumption of IQERVO cannibalizing alkaliva, even without the withdrawal. If the withdrawal is not going to be supported by compassionate use and if it's going to happen also in the United States, there is indeed a potential outcome. So it's going to perhaps accelerate this penetration curve a bit more for patients who are on Ocaliva right now.
Speaker Change: The Eucalyptus removal, we will really have to see what happens exactly. In Europe , you know, it's not clear if they are going to put in place a compassionate use program or not for the patients that have been on Eucalyptus and what is going to happen with the U.S. outcome. Something similar might happen there, like in Europe .
Speaker Change: So, we have, in any case, already an assumption of IQervo cannibalizing Ocaliva even without the withdrawal. If the withdrawal is not going to be supported by a compassionate use, and if it's going to happen also in the United States, there is indeed a potential upside.
Speaker Change: So it's going to perhaps then accelerate this penetration curve a bit more on patients who are on Ocaliva right now.
Speaker Change: Next question.
Operator: Your next question comes from the line of Lucy Codrington from Jeffreys. Please go ahead.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Lucy Codrington from Jeffreys, please go ahead.
Lucy Codrington: Hi there, thank you for taking my questions. Correct me if I'm wrong, but fashion aesthetics seem a little weak in the US during the second quarter. I wonder if there's anything specific behind this, and just more generally, if you're seeing any sign of a slowdown in the injectable aesthetics market, given some of the commentary we've had from consumer names over the kind of broader beauty market. Secondly, I believe you previously mentioned that Bilvay can be a bit lumpy due to weight-based dosing.
Lucy Codrington: Hi there, thank you for taking my questions.
Lucy Codrington: Correct me if I'm wrong, but disport aesthetics seems a little weak in the U.S. during the second quarter. I wonder if there's anything specific behind this and just more generally if you're seeing any sign of a slowdown in the injectable aesthetics market given some of the commentary we've had from consumer names.
Speaker Change: over the kind of broader beauty market.
Speaker Change: Secondly, I believe you previously mentioned that Bilvay can be a bit lumpy due to weight-based dosing. Is there anything to suggest that we shouldn't consider the 2Q trend as a good guide going forward?
Lucy Codrington: Is there anything to suggest that we shouldn't consider the 2Q trend as a good guide going forward? Um, and then finally, maybe it's still a bit early to say, but I wonder if you could give us an indication of your confidence in your Sohanos Peak sales, given what you're seeing to date regarding, I believe, a preference for physicians to try Sohanos in clinical trials rather than necessarily using Sohanos Sohanos, thank you.
Speaker Change: and then finally just
Speaker Change: Probably maybe still a bit early to say but
Speaker Change: I wonder if you could give us an indication of your confidence in your Sohones Peak sales given what you're seeing to date.
Speaker Change: regarding, I believe, a preference for physicians to try for clinical trials rather than necessarily using Thanos. Thank you.
David Lowe: Thank you, Lucy. On this part, the market in the U.S. is a little bit softer, but you also need to keep in mind that we're selling to go to Burma and that there is some shipment phasing. So I will have Emerick elaborate a bit more on the shipment phasing on this part.
Speaker Change: Thank you, Lucy. On this board aesthetics, the marketing in the U.S. is a little bit softer, but you also need to keep in mind that we're selling to Gold Burma and that there are some shipments phasing. So I will have Emre elaborate a bit more on the shipments phasing on this board.
Emerick Le Chatelier: Yes, so thank you David. Maybe to make sure the numbers on this board, especially if you look at them quarter by quarter, you may have a big impact given the phasing between supply and retail, between the sell-in and the sell-out. Specifically, and we see that, especially on the European performance this year, specifically in the U.S., if you look at the numbers, the numbers are very good and very strong.
Emory: Yes, so thank you David. So maybe to make sure the numbers on this board, especially if you look them on quarter by quarter, you may have a big impact given the phasing between the supply and the retail, between the selling and the sell-out.
Speaker Change: specifically and we see that especially on the European performance this year.
Speaker Change: Specifically in the U.S., if you look at our numbers, our numbers are very good and very strong. We benefited in Q1 on some of the lower inventory in Q4 of last year.
Emerick Le Chatelier: We benefited in Q1 from some of the lower inventory in Q4 of last year. So, as a consequence, by definition, Q2 was slightly lower. But overall, if you look at the performance of the first half, we have a very strong performance of 36% growth. So clearly, and I think it's better to listen to Gadama. My understanding is that they are delivering very strong performance in line with what we see in market demand.
Speaker Change: So, as a consequence, by definition, the Q2 was slightly lower, but overall if you look at the performance of the first half, we have a very strong performance at 36% growth.
Speaker Change: So clearly, and I think it's better to listen to Guilderma, my understanding is they are delivering very strong performance in line with what we see in the in-market demand.
Emerick Le Chatelier: We see the U.S. market not maybe at the same level of growth that it used to be, but still a very strong market share uptake from Gadama. And we're confident that this is going to continue going into the second half of the year. On your second question...
Speaker Change: With the U.S. market not maybe at the same level of growth as it used to be, but still a very strong March share uptake from Galderma, and we're confident that this is going to continue going into the second half of the year.
David Lowe: On your second question, Lucy, about Billoway and the Q1 and the Q2 trend that we have seen, it is correct that sometimes, for example, in PFIC, if you have a batch of more adult patients, the sales can go up a bit more, and then they can be a bit less. But overall, mid-long term, we absolutely assume continued good growth, which is going to come from a further expansion of the penetration in PFIC but also in Alagile. The CHMP opinion, by the way, is coming tomorrow, so we will see what that decision says, but we are optimistic. And then we're also expanding in more markets where we're going to launch, so we will see strong continued Billoway growth.
Lucy Codrington: On your second question, Lucy, on Billoway and the Q1 and the Q2 trend that we have seen,
Speaker Change: It is correct that sometimes, for example, in Pfig, if you have a batch of more adult patients, the sales can go up a bit more and then it can be a bit less, but overall, you know, mid-long term, we absolutely assume continued nice growth.
Speaker Change: which is going to come from a further expansion of the penetration in Psig, but also in Alagile and
Speaker Change: The CHMP opinion, by the way, for the VIXI bot
Speaker Change: is coming tomorrow, so we will see what that decision says, but we are optimistic. And then we're also expanding still in more markets where we're going to launch, so we will see a strong continued build-a-growth.
David Lowe: Regarding your question on Sohonos, it is correct that there are currently four trials ongoing. So several, many patients get actually included in those trials, including, by the way, FITRESERTIV that Christelle talked about that we're going to have the readout next year. So it's too early to say what's going to happen to peak sales because, you know, once the trials come to an end, then we will see what happens with the different drugs. But clearly, we see FOP as a nice opportunity and, you know, we are also excited to see the results soon on FITRESERTIV.
Speaker Change: Regarding your question on seronos, it is correct that there are currently four trials ongoing. So several, many of the patients get actually included in those trials, including, by the way, FITRESERTIV that Christelle talked about, that we're going to have the readout next year. So it's too early to say what's going to happen to the peak sales because, you know, once these trials come to an end, then we will see what happens with the different drugs. But clearly, we see FOP as a nice opportunity. And, you know, we are also excited to see the results then soon on FITRESERTIV.
Operator: Your next question comes from the line of Xian Deng from UBS. Please go ahead.
Speaker Change: Next question.
Speaker Change: Thank you. Your next question comes from the line of Xian Deng from UBS. Please go ahead.
Xian Deng: Hi, thank you for taking my question. So, two, please, if I may, both on elefibonor. So, the first one is just wondering if there's any color that you could give us in terms of the pair discussion you're having on elefibonor. I'm just wondering, do you have any sort of assumptions about possibly pair preference for elefibonor versus solazepam once that's approved? So that's the 1st question. 2nd, and 1 is, I mean, fully understand.
Speaker Change: Hi, thank you for taking my question. So, two please, if I may, both on alopecinol.
Speaker Change: So the first one is just wondering if there's any color that you could give us in terms of pair discussion
Speaker Change: you're having a webinar. I'm just wondering, do you have any sort of assumptions of
Speaker Change: possibly pay a preference for alofibrinol versus salazepam once that's approved, so that's the first question.
Speaker Change: Second one is
Speaker Change: I mean, fully understand you probably can't comment on your expectation for the latter part label given the upcoming
David Lowe: You probably can't comment on your expectation for the latter part of the label, given the upcoming. But just wondering if you could comment on whether your expectation for select as far as for elefibonor would change, you know, whether thalassopra has pruritus on the label or not. So, is there any sort of scenario regarding the thalassopra label that would significantly change your expectation for alafilinol? Thank you so much. Thank you so much.
Speaker Change: in Kadufa. But just wondering if you could comment on whether your expectations for Ella Fevernall would change.
Speaker Change: you know, whether thalassopra has pruritus on the label or not. So, is there any sort of scenarios regarding thalassopra label that would significantly change your expectation for alofibrinol? Thank you so much.
David Lowe: Thank you, Jan. On your first question about acquiring and payer discussions, so there is currently absolutely no discussion about any preference status. We do not currently see any problems with reimbursement. So we get patients reimbursed.
Speaker Change: Thank you Jan. On your first question on acquirable and payer discussion, so there is currently absolutely no discussion on any preference status. We do not see currently any problems on reimbursement, so we get patients reimbursed.
David Lowe: It's not an issue. We would expect that, you know, once Zelda Delphi is launched, that there might be some of those discussions happening. But it's not totally obvious because, for example, in Bilbao, we have not experienced that either. Yet, of course, there are different political formulations, etc. So we have to see what's going to happen there. We do assume in our assumptions that there will be some, you know, payer discussion, which is going to start as our basis.
Speaker Change: It's not an issue. We would expect that, you know, once Zelda Delphi would launch, that there might be some of those discussions happening. But it's not totally obvious, because, for example, on Bill Bay, we have not experienced that neither. Yet, of course, there are different political formulations, etc. So we have to see what's going to happen there. We do assume in our assumptions that there will be some, you know, payer discussion that we're just going to start as our base assumption.
David Lowe: On the celladelphar label, you really have to ask Gilead. What I can say is that what we have assumed in our guidance is indeed that they potentially would get the pruritus label. So that's baked in already into our guidance. Next question.
Speaker Change: On the Celladelphar label, you really have to ask Gilead what I can say, what we have assumed in our guidance is indeed that they potentially would get the pruritus label. So that's baked in already into our guidance.
Operator: Your next question comes from a line by Manos Mastorakis from Deutsche Bank. Please go ahead.
Speaker Change: Next question.
Speaker Change: Thank you. Your next question comes from a line of Manos Mastorakis from Deutsche Bank. Please go ahead.
Manos Mastorakis: Hello, thank you. So, this is Manos Mastourakis from Deutsche Bank. I have two, please.
Manos Mastorakis: Hello, thank you. So, one of my colleagues is from Deutsche Bank. I have two, please. So, one on El Fibrino.
David Lowe: So, one on El Elfiburno. What is the benchmark you see for Elspire, and how do you see the opportunity there in general? But also in light of the earlier question that was posed on the evolving, so see, US and EU and potential withdrawal of Calibre, kind of impacting the landscape, and a follow-up question on... M&A. I guess you've done a series of deals, and those are mostly licensing deals. It would be great to understand and get a temperature check on our M&A strategy moving forward.
Manos Mastorakis: What is the benchmark you see for Elspire and how do you see the opportunity there in general?
Speaker Change: But also, in light of the earlier question that was posed on the evolving U.S. and EU and potential withdrawal of Kaliba, how do you see a readout on Ospire?
Speaker Change: kind of impacting the landscape. And a follow-up question is on...
Speaker Change: M&A. I guess you've done a series of deals and those are mostly licensing deals and will be great to understand and get a temperature check on M&A strategy forward.
David Lowe: Thank you, Manas. You were a little bit difficult to hear because there was a lot of background noise.
Speaker Change: Okay, thank you man, you were a little bit difficult to hear there was a lot of background noise. I hope I got this right
David Lowe: I hope I got this right. I think your first question related to iCurvo and the Elspire and the opportunity there. So, Elspire is focusing on patients who are between 1 and 1.67. So, it's a less advanced patient population than what we have in the current registration trial. There are about 20,000 patients in the pool in the US, out of which 9,000, and those are the patient populations we are addressing with Elspire, have a, you know, an IQ level between 1 and 1.67, but in addition, they also must have symptoms. So, for example, they have scratching, or they don't feel fatigue, etc.
Speaker Change: Um...
Speaker Change: I think your first question related to iCurvo and the Elspire and the opportunity there.
Speaker Change: So, ELSPIRE is focusing on patients which are between 1 and 1.67, so it's a less-progressed patient population than what we have in the current registration trial.
Speaker Change: There are about 20,000 patients in the pool in the U.S., out of which 9,000, and those are the patient populations we are addressing with Elspire.
Speaker Change: have an up level between 1 and 1.67, but in addition also must have symptoms. So for example, they have scratching or they don't feel fatigue, etc.
David Lowe: So, the Elspire trial is really tapping into these 9,000. Regarding what is already included in our guidance, we have modeled a modest spontaneous uptake with the current data in that population already, but as I said, it's modest. So, if that trial pans out positive in 2026, then we would assume that we will see an accelerated penetration in this pool. On your second question, what I understood was something about Okhaliva and what's going to happen.
Speaker Change: So the L-SPIRE trial is really tapping into these 9,000. Regarding what is included already into our guidance, we have modeled...
Speaker Change: a modest spontaneous uptake with the current data in that population already. But as I said, it's modest. So if that trial pans out positive in 2026, then we would assume that we will see an accelerated penetration in this pool.
Speaker Change: On your second question, what I understood was something on Okhaliva and what's going to happen. I think we have already had that question from John , from J.P. Morgan. If there is an upside, if Okhaliva would be removed.
David Lowe: I think we have already had that question from John, from J.P. Morgan. If there is an upside if Okhaliva is removed, the answer was that yes, we assume there is already some penetration in that rule for Okhaliva, but, of course, if it gets totally removed, that there is no compassionate use, then clearly there would be an upside. On our third question, on M&A strategy, our M&A strategy hasn't really changed. I mean, we screen on a continuous path, and we are looking at opportunities that fit our strategy that we have laid out in the capital markets today and where we can justify the value because we want to be disciplined in the acquisitions that we are doing. Next question, operator.
Speaker Change: The answer was that, yes, we assume already some penetration in that Gulabokaliba, but if, of course, if it gets totally removed, that there is no compassionate use, then, clearly, there would be an upside.
Speaker Change: On our third question on the M&A strategy, our M&A strategy hasn't really changed. I mean we are screening on a continuous, you know, path.
Speaker Change: and we are looking at opportunities which fit our strategy that we have laid out in the Capital Markets Day and where we can justify the value because we want to be disciplined in the acquisitions that we are doing.
Speaker Change: Next question, operator.
Operator: Your next question comes from the line by Florence Cespedes from Bernstein. Please go ahead.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Florence Cespedes from Bernstein. Please go ahead.
Florence Cespedes: Good afternoon. Thank you very much for taking the time to answer my questions.
Florence Cespedes: Good afternoon. Thank you very much for taking my questions.
David Lowe: Two, please. First, regarding the guidance for the year, the upgraded guidance after a very strong first half, so we definitely understand that in the second half, there will be pressure on products and on costs. I was just wondering if you could give us some comments on how you see the new guidance? Is it cautiously optimistic, or what could bring you to a stronger second half than expected? Comments on this front would be great. And second question, could you give us an update on the Pantan dispute in this one? If there is anything new, it would be great to know. Thank you.
Florence Cespedes: Two, please. First, regarding the guidance for the year, the upgraded guidance after a very strong first half, so we definitely understand the second half, there will be pressure on several products and on costs.
Speaker Change: I was just wondering if you could give us some comments on how do you see the new guidance? Is it cautiously optimistic or what could bring you to a kind of a stronger second half than expected?
Speaker Change: If some comments on this front would be great. And second question on Omivide, could you give us an update on the Pantan dispute on this one? If there is anything new it would be great to know. Thank you.
Emerick Le Chatelier: Thank you, Florent. I will hand over to Emmerich on your first question regarding guidance.
Speaker Change: Thank you, Florent. I will hand over to Emre on your first question regarding the guidance.
Emerick Le Chatelier: Thank you for the question. I will maybe remind you what I said during the presentation. I think we are quite comfortable about this guidance, as always when we state an upgraded guidance. We think that, yes, the top line, we see a lower growth in H2. As David said, this is going to be mainly related to the somatoline rate of erosion, where we expect that the stock in Europe will resume. This is our assumption.
Emre: Yeah, so thank you for the question and I will maybe
Emre: remind what I said during the presentation. I think we are quite comfortable about this guidance.
Emre: as always when we state an upgraded guidance.
Emre: We think that, yes, the top line, we see a lower growth in H2. As David said, this is going to be mainly related to somatoline rate of erosion, where we expect that the stock-out in Europe ...
David Lowe: will resume. This is our assumption. There is still possibility that it will go for longer.
Emerick Le Chatelier: There is still the possibility that it will go for longer. We're also assuming that there will be further penetration of the generic in the US, which has been announced, as you say, at the end of May. And we think that starting in Q3, this is going to accelerate towards double digits as compared to the flat performance in the first half. And we think that there will be, on the other side, increased contribution from all the launches and a continued good performance of the other products.
Speaker Change: We're also assuming that there will be a further penetration of the generic in the U.S., which has been...
Speaker Change: announced that it's the end of May and we think that starting in Q3...
Speaker Change: This is going to accelerate towards double digits as compared to the flat of the first half.
Emerick Le Chatelier: On the margin side, as I said, this will also be a lower margin in H2, which is quite customary at Ipsen where we see less sales given the months of August and December, but also a little bit more cost given the activity that we always see in the second half of the year. On top of that, we're going to continue to invest to support the launches, especially H2 is going to be very important for IQVO with the expected approval from Gilead of the competitor product.
Speaker Change: And we think that there will be, on the other side, increased contribution from all the launch and a continued good performance of the other products.
Speaker Change: On the margin side, as I said, this will be also a lower margin in H2, which is quite customary at Ipsen where we see
Speaker Change: less sales given the month of August and December but also a little bit more cost given the activity that we always see in the second half of the year. On top of that we're going to continue to invest to support the launches.
Speaker Change: especially H2 is going to be very important for IQervo with the expected approval from Gilead of the competitor products.
Emerick Le Chatelier: And on top of that, we have some one-off impacts, one of them being the phasing of the milestone we received from Servier, which benefited the first half, and we don't anticipate any in the second half of the year. That's really the underlying assumption where we see great confidence in being able to deliver on that guidance.
Speaker Change: And on top of that, we have some one-off impacts, one of them being the phasing of the milestone we received from Servier, which has benefited the first half, and we don't anticipate any in the second half of the year.
Speaker Change: That's really the underlying assumption, where we see great confidence in being able to deliver on that guidance.
David Lowe: On your second question, Florent, on uninvited patent use, you're actually probably not going to hear about that patent for a pretty long time because these things take a very long time to pan out and, you know, we have to submit documents, etc., which we all did. We're very confident about it, that we have stable patents, so, you know, that's all I can say at this moment about the next question. Thank you very much.
Speaker Change: On your second question, Florent, on univite patent use, you're actually most probably not going to hear for a pretty long time on the patent, because these things take a very long time to pan out and, you know, we have to submit documents, etc., which we all did. We're very confident on it, that we have stable patents. So, you know, that's all I can say at this moment. Thank you.
Operator: you. Your next question comes from the line of Alistair Campbell from the Royal Bank of Canada. Please go ahead.
Speaker Change: Operator next question. Thank you very much
Speaker Change: Thank you. Your next question comes from the line of Alistair Campbell from Royal Bank of Canada. Please go ahead.
Alistair Campbell: Brilliant. Thanks, and thanks for taking my questions this afternoon. Just a couple, please, on tovarachinib, if I may.
Alistair Campbell: Brilliant, thanks and thanks for taking my questions this afternoon.
David Lowe: It's not a molecule I'm afraid I'm familiar with. But just first of all, can I ask your sense of confidence that the FireFly 1 dataset should be good enough to secure approval with the European regulator? And then maybe just thinking about sales potential. I mean, if I use the agenda price in the U.S., look at the response rate and duration of responses, and sort of anchor it into that 700 incident cases per annum population you talk about.
Alistair Campbell: Just a couple, please, on Tovarafin, if I may. It's not a molecule I'm afraid I'm familiar with. But just first of all, can I ask just your sense of confidence that the Firefly-1 dataset should be good enough to secure approval with the European regulator? And then maybe just thinking about sales potential, if I use the agenda price.
Speaker Change: in the U.S. Look at the response rate and duration of responses and sort of anchor into that 700 incident cases per annum population you talk about. That sort of drops out of the sort of sales figure for the E5.
David Lowe: That sort of drops out of the sort of sales figure for the E5 of around about 150 million euros. I just wonder if that's a reasonable anchoring point to think about in terms of the sales potential for the product or whether you'd like to do substantially better than that. Thank you.
Speaker Change: of around about 150 million euros. I just wonder if that's a reasonable anchoring point to think about in terms of the sales potential for the product or whether you'd like to do substantially better than that. Thank you.
David Lowe: Yes, thank you. On Tevorafinib, yes, we believe that the data that they have is strong and looks convincing. If not, we would not have done the deal. There is some CMC work that still needs to be done for the European filing. They want to, because that's really focused on the US filing. So we're going to work together very closely to try to generate the CMC data as quickly as possible and then file it sometime next year.
Speaker Change: Yes, we believe that the data that they have is strong and looks convincing.
Speaker Change: If not, we would not have done the deal. There is some CMC work that still needs to be done for the European filing. They want to, because that's really focused on the U.S. filing, so...
Speaker Change: We're going to work together very closely to try to generate the DMC data as quickly as possible.
David Lowe: We're certainly going to come back to you to give you more guidance on when exactly that could be. So the information is going to come fairly soon once we have started that work. In terms of the sales potential, the 700 incidents and 2000 prevalence relate to the big 5EU market, so we are assuming a couple of hundred million. So probably your sales figure for the 5EU is probably somewhere there, but we're not guiding officially.
Speaker Change: and then files sometime next year. We're certainly going to come back to you to give you more guidance when exactly that could be.
Speaker Change: The information is going to come fairly soon once we have started that work.
Speaker Change: In terms of the sales potential, the 700 incidents and 2,000 prevalence relate to the big 5 EU markets.
Speaker Change: So we are assuming a couple of hundred million, so probably your sales figure for the 5U is probably somewhere there.
Operator: Yeah, great. Thank you. Thank you, Eliezer. Operator, next question. Thank you. As a reminder, if you would like to ask a question, please press star 1 and 1. We will now take the next question. And your question comes from the line of Emily Tedbury from City. Please go ahead.
Speaker Change: But we're not guiding officially on this one.
Speaker Change: Yeah, great. Thank you
Speaker Change: Thank you, Eliezer. I'll provide your next question.
Speaker Change: Thank you. As a reminder, if you would like to ask a question please press star 1 and 1.
Speaker Change: We will now take the next question and your question comes from the line of Emily Tedbury from City, please go ahead.
Emily Tedbury: Oh, hi there. Thanks for taking the time to answer my questions. I just wanted to ask a high-level question. Thinking about your three commercial divisions, the new U.S. commercial launches you're focusing on, as well as constantly screening for business development opportunities to enhance the pipeline, just a sort of broad question about where do you spend your time and what is the focus internally? That's the first one. The second question is about Bill Vey versus Liv Marley.
Emily Tedbury: Oh hi there, thanks for taking my questions. I just wanted to ask a high-level one.
Emily Tedbury: Thinking about your three commercial divisions,
Emily Tedbury: The new U.S. commercial launches you're focusing on, as well as constantly screening for business development opportunities to enhance the pipeline.
Speaker Change: Just a sort of broad question about where do you spend your time and where is the focus on internally?
Speaker Change: That's the first one. Second question is on Bilvey versus Liv Marley. What are you hearing from the physician community in terms of different ages on labels for Alazil and Pfit respectively?
David Lowe: Are you hearing from the physician community in terms of different ages on labels for Alajil and PFIT respectively? Are there advantages or disadvantages associated with these in the different indications, or do you feel like you broadly share the market? And then just a quick one on Dysport; are you concerned at all about Dysport growth being impacted in the medium term by Galderma's potential approval of their liquid neuromodulator QM214, which is a more profitable product for them, and therefore they may be incentivized to switch patients in the mid to long term? Thank you very much.
Speaker Change: Are there advantages or disadvantages associated here?
Speaker Change: in the different indications or do you feel like you bought your share of the market?
Speaker Change #100: And then just a quick one on Dysport. Are you concerned at all about Dysport growth being impacted in the medium term by Galderma's potential approval of their liquid neuromodulator QM2114, which is a more profitable product for them and therefore they may be incentivized to switch patients in the mid to long term? Thank you very much.
David Lowe: Thank you, Emilie. So on the first question about where the focus is, I guess you mean my focus or perhaps my management team's focus. I will start with my focus. I have to focus, of course, on all three of them in a midsize company, right? Because we have said we have four strategic pillars and we want to really execute on the in-market drugs we have and on our launches. So I have a strong focus on this.
Speaker Change #101: Thank you, Emilie. So, on the first question on where is the focus, I guess you mean my focus or perhaps my management team's focus. I will start with my focus.
Speaker Change #101: I have to focus, of course, in a mid-sized company.
Speaker Change #101: on all three of them, right? Because we have said, we have four strategic pillars.
Speaker Change #101: And we want to really execute on the in-market drugs we have and on our launches. So I have a strong focus on this. But equally, of course, I'm also going to make sure that we can continue to expand the pipeline and to do more acquisitions.
David Lowe: But equally, of course, I'm also going to make sure that we can continue to expand the pipeline and do more acquisitions. So this is, with the scope that we have at Ipsen, feasible. Of course, we then have in the executive leadership team very qualified people who are going to, you know, be fully dedicated, like Mari, for example, for the international market or K-Rock for the US or Christelle, of course, for external innovation but also the pipeline.
Speaker Change #102: So this is with the scope that we have at Ipsen it's feasible. Of course we then have in the executive leadership team very qualified people who are gonna you know be fully dedicated like Marie for example for the international markets or K-Rock or the US or Christelle.
Speaker Change #102: Of course for external innovation, but also the pipeline. So we have a very very strong Management team and I have to say It is only with them that we were able to actually deliver these strong results that we have seen in the past years
David Lowe: So we have a very, very strong management team, and I have to say it is only with them that we were able to actually deliver these strong results that we have seen in the past years. On your second question regarding Bill Bay and Liv Marley and the age on the label. So it's, of course, in the U.S. Liv Marley got a label which is five years and above.
Speaker Change #103: On your second question regarding Bill Bay and Liv Marley and the age in the label.
Speaker Change #103: So it's, of course, in the U.S. Lamarly got a label which is five years and above. So clearly for us scientists, that's an advantage.
David Lowe: So clearly, for us scientists, that's an advantage. We have an However, on the allergy syndrome, we have a label of 12 months, and above, they have six months. So that's a slight disadvantage but I would not exaggerate this because you know many babies are being diagnosed as of 12 months and over. In Europe, it's fairly similar, in fact, so there's not really a big disadvantage. I would say where the real disadvantage is coming for us is in the clinical form, because babies, toddlers, and adults can either take a capsule, they can take the granulate, which you can, for example, for a smaller baby, put in chocolate sauce or in applesauce, and you can also dissolve the granulate in a liquid, for example, in milk. So we do have all three options, and this is really what convinced us to go On this part growth, I mean the two parts have a different profile, right?
Speaker Change #103: We have, however, on the Allergy Isle syndrome, we have a label of 12 months and above, they have six months.
Speaker Change #103: So that's a slight disadvantage, but I would not over-exaggerate this because, you know, many babies are being diagnosed as of 12 months and over.
Speaker Change #103: In Europe , it's fairly similar. In fact, there's not really a big disadvantage. I would say where the real disadvantage is coming for us is
Speaker Change #103: A. On the clinical form, because
Speaker Change #103: babies, toddlers, and adults, they can either take a capsule, they can take the granulate which you can, for example, for a smaller baby, put in chocolate sauce or in apple sauce.
Speaker Change #103: you can also dissolve it, the granulate, in a liquid, for example in milk. So we do have all three options and this is really what convinced us to go for Bilbao and acquire Alpereo.
David Lowe: So this part is in pulver, and QM is in a liquid. So, you know, we know that many physicians have a preference for pulver because they want to reconstitute it and administer it exactly as they want in terms of aesthetics. We also have to see in QM if really having it in liquid is such a big advantage. We have seen that Ellucian, which is a liquid that Calderma has already taken from us in Europe, gained some market share but not massive.
Speaker Change #104: On the Discord growth, I mean the two products have a different profile, right? So Discord is in powder and QM is in a liquid.
Speaker Change #104: So, you know, we know that many physicians have a preference for Bulborb because they want to reconstitute it and administer exactly as they want in aesthetics.
Speaker Change #104: We also have to see then in QM if that is really
Speaker Change #104: Having it in liquid is such a big advantage. We have seen that Ellucian, which is a liquid which Calderma has already from us in Europe
David Lowe: So, you know, it has been baked into our guidance. And I think that's our last question, operator. So with that, we're wrapping up the call. Thank you very much for attending, everybody, and hopefully, you have a nice break.
Speaker Change #104: gained some market share, but not massive. So, you know, it has been baked into our guidance so far.
Speaker Change #105: And I think that's our last question, Operator, so with this, we're wrapping up the call. Thank you very much for attending, everybody, and hopefully have a nice break. Bye-bye.
Operator: Thank you. This concludes today's conference call. Thanks for participating. You may now disconnect.
Speaker Change #106: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change #107: Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen
Speaker Change #107: [inaudible]
Speaker Change #108: Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen Ipsen