Q3 2024 Novartis AG Earnings Call
The End
Speaker Change: Good morning and good afternoon and welcome to the Nevada's Q3 Twin students for results released conference call in live webcast.
Speaker Change: Please note that during the presentation, all participants will be in a listen-only mode and the comments is being recorded after the presentation that there'll be an opportunity to ask questions by pressing star one and one at any time during the conference. Please limit yourself to one question I'm returned to the Q for any follow-up.
Speaker Change: Recording of the conference call including the Q&A session will be available on our website shortly after the call ends.
Speaker Change: with that I would like to hand over to my Sloan Simpson, Harry Investigation. Please go ahead madam.
Sloan Simpson: Thank you so much. Good morning and good afternoon everyone. Thank you for joining our Q3 2024 earnings call.
Sloan Simpson: The information presented today contains forward-looking statements that have all known and unknown risks, uncertainties and other factors.
Sloan Simpson: These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements.
Sloan Simpson: For a description of some of these factors, please refer to the company's form 20F and at most recent quarterly results on form 6K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission.
Sloan Simpson: and with that I will hand across to that. Thank you Sloan and thanks everyone for joining today's webcast. So we'll dive right in. I've Harry Kirsch on the line with me as well as always.
Speaker Change: So moving to slide four, you saw this morning the Nevada delivered strong operational performance in quarter three really continuing now What's been two years of very strong operating performance for the company?
Speaker Change: Sales Food 10% cooperating income was up 20% in constant currencies. In the quarter, our core margin went all the way up now to 40.1%.
Speaker Change: and we also had an important innovation highlights which we'll talk about a bit more over the course of the call. Kiskali is at the A.A. approval and C.H.M.P. positive opinion in a hormone receptor positive virtue negative stage 2 and 3 early breath cancer. Our Fab Halta accelerated approval and IGA in a property.
Speaker Change: So Victor had its filing accepted for the PSMA IV population and metacetic castrate resistant prostate cancer. And then we're expect the semblance approval in the coming weeks. We received FDA Priority Review for first line, CML.
Speaker Change: And lastly and importantly we had our third guidance raise for the year growing at a raising both our top and bottom line guidance and Harry will go through that in more detail.
Speaker Change: So moving to slide five, a quarter three growth, again reflected strong performance across our key growth drivers. You see, 34% currency growth, which we expect to continue and help drive our 5% guide out to 2028.
Speaker Change: and also enable us to continue that strong margin expansion that you've seen and let's go through each one of these brands in more detail.
Speaker Change: So moving to slide six, entrust those sales continued to climb as they have now for multiple years, increasing 26% in the quarter or three. It's a tenth year now of continued momentum on this brand, which I think really shows our ability to create large and lasting cardiovascular medicines.
Speaker Change: 25% CRX growth, 20% NBRX growth, 500,000 CRX is per month.
Speaker Change: XUS RG26%
Speaker Change: So we're confident in the growth up to the LAW, we have strong guidelines, positions in the US, in the EU. We continue to see very strong performance and hypertension in China in Japan. We don't expect an LAW in Japan until 2031 at the earliest and we continue to see protection for our business in China.
Speaker Change: For forecasting purposes, we maintain our guidance at the LWE for intrusso in the United States for mid 2025 and in the EU regularatory data protection would expire in November of 2022.
Speaker Change: So moving to slide seven, has to send to exclude 28% and this was primarily driven by the strong performance we've had in our new launches in HS and in the I.D. formulation.
Speaker Change: You can see 28% growth overall that driven my very strong performance in the United States of 38% outside the US, 16% in constant currencies.
Speaker Change: We remain the number one IEL17 in the US dynamic market and we're the leading originator biologic now in the EU and in China.
Speaker Change: In HS, we've achieved dynamic market leadership with over 60% India or X-Share in Germany, where 50%.
Speaker Change: and we've increasingly secured reimbursement in our key market. So we see the opportunity to continue to grow dynamically in HS. We think we have an outstanding data profile, even versus the incoming competitors. And we also see an opportunity for a market that's going to continue to expand.
Speaker Change: a market that's probably 3 billion plus today but has a potential to be a 5 billion plus market over time or even larger depending on how patients continue to see their physicians.
Speaker Change: On the IV, we have accelerated adoption in the US with over 1,250 accounts now ordering that's a 52% aggross. I think we'll continue to see more sales delivery in IV now that we have the permanent JCO, but that of course will take time and we look forward to delivering that.
Speaker Change: We have two important LCM opportunities that will lead out in 2025 in Pauli Myoz, a Rheumatica, as well as in Giantsall, Arderitis, both sizable indications that could give us even further opportunity to well exceed $7 billion peak sales forecast.
Speaker Change: and the movie The Five 8.
Speaker Change: A consensus that continues to see strong women globally and it's a unique profile of this medicine provides for patients and physicians. So 28% growth, but when you strip out the one-time RD adjustment that we had from a European market last year, our sales growth was 56% in constant currencies.
Speaker Change: We now have over 100,000 patients treated worldwide, either naive or first switch.
Speaker Change: The US or gross, the TRIX volume growth was 38% per prior year, gaining 3.7% share. XUS, we had strong underlying growth, excluding the one-time already a test been from last year.
Speaker Change: We also presented some important new data at Actrums in the Alicia Oestral 90% of first-line custom specifications.
Speaker Change: had no disability progression in the penance and independent of relax at mutual absorptivity of the six years. And we had an additional study that demonstrated known new active lesions 12 months after switching from an anti-CD20IV therapy.
Speaker Change: Superwoman Confidence in the continued momentum on this brand, we're annualizing now well above $3 billion and have the opportunity I think to a well exceed our $4 billion peak sales guidance today.
Speaker Change: To our knowledge, there are no kismta bias simulars currently in clinical development, which should give us the long run looking forward for this medicine.
Speaker Change: and moving to flight 9.
Speaker Change: Kastali continued to cement its leadership in metastatic breast cancer and launched importantly in early breast cancer, as I mentioned. We're perhaps most importantly, we achieved a category one in CCI and guideline recommendation for the full Kastali population.
Speaker Change: Overall growth in the quarter was 43% U.S. is up 50% it's really gaining widespread adoption or in Brewerx share at 48%. We're now a second in T.R.Ex share overall we have over 7,000 patients now at the physicians now actively prescribing Kisgali and I think reflecting our strong guidelines position.
Speaker Change: Outside of the US, 36% constant currency growth has preferred CDK-46 inhibitor in the class. Releading, I've a leading share of 43% in those international markets, who are the fastest growing CDK-46 in Europe.
Speaker Change: Now as I mentioned, the FDA approved Kisqali with a broad label, fully in line with the Natalie population. The HMP has issued a positive opinion and we're looking forward to your P&P commission approval to allow us to launch in Europe.
Speaker Change: the Kiskali, we go back to by the slide 9. The category one guideline recommendation for the full study population, I believe, gives us the opportunity now to really fully realize that potential of this medicine, including a node negative patient.
Speaker Change: In the early, early feedback we're getting from the market is very strong. The early scripts we're seeing show a very strong trend and we look forward to now building upon that as we get brought access for this medicine, we will expect access in the early breast cancer setting in the range of 90%.
Speaker Change: which is what we have for Kuzgali in the Metastatic setting.
Speaker Change: The moving slide 10 as a reminder, Tiskali showed a really strong deepening benefit in the update that we showed at Esmo when you look at the graph on the left across the intention to treat population as well as stage 2 and stage 3 patients as well as a note negative disease.
Speaker Change: and a really strong warrior IDFS absolute benefit.
Speaker Change: Benefit that's consistent, consistent, also across secondary and points we have a trend of improved OAS which we expect to continue to deepen over time.
Speaker Change: No new safety signals were identified. So overall we think we now have really the perfect positioning that we would want for Cascade to succeed in the long run. As a reminder, the early breast cancer indication doubles the number of patients that are eligible for Cascade versus the Metacetic Indication.
Speaker Change: and we estimate it is a three time larger population than is currently labeled for the competitor product in the class in early breast cancer.
Speaker Change: and moving to Florida, Lavin.
Speaker Change: To a victim continued, will we urge characterised a steady performance in the post-taxing setting. Our focus at the moment is really laying the foundation for the PSMA 4 launch in 2025, which would triple the number of patients eligible for a flu victims.
Speaker Change: We saw 50% growth in the quarter when you adjust for the one-time price adjustment in Europe, our sales growth, we were 36%. Just to provide more contact that was...
Speaker Change: True Volume Girls that we had in earlier quarters, as is always the case in certain European markets or prices together just at over time. So that was the reason for the uplift you saw in Europe. Overall we would expect quarter four to be broadly in line with quarter three excluding the RD and Justment.
Speaker Change: and I think for us now it's really about preparing the market for a fluvisto of its PSMA4 opportunity.
Speaker Change: Our US field force is now expanded, we've launched a DTC to drive ACT and patient awareness. We now have 500 and 30 treatment sites in the US which we feel like cover the key geographic areas we will continue to expand that over time quite significantly. We feel comfortable that we have capacity not fully support the Plovic Dope KSMA 4 launch and we'll spend deeper into the community setting step by step.
Speaker Change: Our XUS launch is progressing well with good pricing reimbursement discussions. And so we feel very good about where we are prepared for that launch next year.
Speaker Change: Now in terms of new indications and geographies the PSMA 4-Pawn was accepted by FDA for preparing a 4-alange in the first part for the half of the 2025.
Speaker Change: In China, both the post-taxate and in Japan, the pre and post-taxing submissions have happened. We're in the midst of building a manufacturing facility in both of those markets as we expect them to be sizable opportunities. The PSMA edition and PSMA DC studies are progressing according to plans.
Speaker Change: and we have also begun construction of two additional facilities in the U.S. to support our expanding RLC portfolio, which now includes multiple additional programs that have entered the clinic, including at the such as the B7H3, Actinium RLC, as well as a her two RLC and a full-aid RLC, all of which now either have first patient first, or will soon have first patient first, giving us a broad portfolio that we need now prepare for.
Speaker Change: Marine is by 12.
Speaker Change: Now let's see how continued its strong growth trend with accelerating adoption outside of the U.S. and we're very pleased by both the solid U.S. performance but that acceleration we're seeing in our international market.
Speaker Change: We have continued growth that's outpacing the overall advanced lipid lowering market, 4,600 facilities have a border like theo which is substantial increased for a prior year.
Speaker Change: We see demand increasing across all channels and I say our target strategy in the U.S. to really focus on patients and physicians that are treated in the post-events setting where there's a high propensity to add an additional lipid lowering therapy has worked really well.
Speaker Change: Now, outside of the US, we're reimbursed in 39 countries commercially available in 73 and as I said, we're seeing steady and strong uptake, particularly in markets, such as Japan, where we recently launch and our launch is well exceeding our expectations.
Speaker Change: Now adding to the overall leccio body of evidence we did read out the V mono trial which demonstrated superiority as leccio monotherapy in both placebo and the zidimai versus placebo and zidimai bin al-dlc reduction. And we are looking over time to think about how we can further expand leccio into the monotherapy or frontline indication depending on the geography.
Speaker Change: So moving to 513
Speaker Change: Assembly, 272% in quarter three, as you know, it has really become a preferred option for third line DML.
Speaker Change: It's the market leader in NBRX and T-Rx across geographies with 26% T-Rx share growth.
Speaker Change: I was driven by 18% quarter of a quarter demand outside of the US we see a very strong sales trajectory for the product with total market share and growing for scriber based. And that's critical for us to continue to build a strong base and third line.
Speaker Change: because as we approach the first line launch, the physicians get more and more comfortable with the overall profile of Samir Shah.
Speaker Change: So as I mentioned, we have FDA priority review. We do expect the approval in the coming weeks. We're fully prepared for launch. We're also fully prepared to obtain rapid market access to really ensure a rapid launch in the U.S.
Speaker Change: and eventually around the world. And outside of the U.S. Tri-Land Japan's submissions have now been completed and we're also on track for a European submission in 2025. The moving to flood-14.
Speaker Change: So, Paul said it's early days, but we were pleased by the performance in Ken H. Ultra Rare Disease, not a lot of cycling with these patients. So, it will seem time to build this brand, but at the only monotherapy or a monotherapy to provide extra vacular and introvasular
Speaker Change: Control. We're seeing strong launch performance overall. We see a high compliance and continuation rate on the medicine.
Speaker Change: We have over 70% coverage to label
Speaker Change: We have NBR Action now of over 30% and outside of the US as well we're seeing solid early signs of success with good patient activation with over 1,000 ACPs now reach in the first three months post launch We're seeing utilization across naive and switch patients
Speaker Change: We also have beaten launches in Japan, UK, and we were granted early access as well in France. So taking together early days, but stuff by staff, this is an important building block as we build some policy across multiple indications to be over $3 billion plus medicine.
Speaker Change: over time.
Speaker Change: The movement decides 15. In addition, Favals have received the accelerated approval in the U.S. as the first and only compliment inhibitor in IGN of property. That was based on the positive interim results of the applause phase 3 study. The study is continuing to the confirmatory endpoint of EGFR 24 months. We expect a completion date in 2025. We see very positive ACP feedback on the efficacy and safety and understanding of the role of the compliment pathway. The study is...
Speaker Change: We also see important early sides from the utilization standpoint over 1000 ACPs are now ram certified and we're leveraging our portfolio to ensure that we have broad and quick access for this medicine.
Speaker Change: and Prats both most importantly.
Speaker Change: We're seeing patients with a positioning of this medicine as for patients with persistent prognuria and glomerular inflammation as really getting traction in the marketplace. And that's enabling us to maintain the price of propulsive consistent with the PNH syndication.
Speaker Change: which will also be important for the subsequent indications that we have for a pop-up, including C3G and if we go to the next slide, like 16.
Speaker Change: We release results over the weekend of the 12 months of peer-seed regi data at ASN. On the left-hand side, you see the sustained, your pro-cephronuria reduction.
Speaker Change: over 12 months, and that was replicated in the placebo arm after switched to attack the pan.
Speaker Change: of very positive and something the regulators had asked us for. But importantly, as well, we're seeing stabilization of the EASYFR Sloan versus the historic Sloan decline, and that's been maintained now for 12 months. So we're seeing on the important outcome measure as well, very positive data.
Speaker Change: So we have ongoing health authority reviews in the EU and other countries and we expect to make this submission now in the US before the end of the year.
Speaker Change: So moving to slide 17, overall we had good progress on our innovation milestones. We did suffer a few setbacks with XXB. We will terminate this program. We saw safety signal in heart failure and overall the hypertension blood pressure reduction we saw on top of standard of care. It was not sufficient to meet the TPP. We think we need to achieve for this medicine.
Speaker Change: So we'll be stepping back and focusing on our SIRNAs for hypertension, as well as other assets we have in our cardiovascular portfolio. So with that, let me hand it over to Harry.
Harry Kirsch: Thank you for your time. Good morning and good afternoon everyone. I will now talk you through our financials for the third quarter and the first nine months, which will be a very strong.
Harry Kirsch: As always, my comments refer to continuing operations and growth rates and constant counties unless otherwise noted.
Speaker Change: Long flight North 19.
Speaker Change: It's a pleasure to present results like those that we have on slide 19. I think you will hopefully agree with that. Quarter three, net sales for 10% cooperating in Cumboss, up 20%. Our co-match, this father, really mentioned 40.1%.
Speaker Change: which reflects a 340 basis point of proof in the world's prior year.
Speaker Change: Co-IPS was $2.6, also up 20% and 3 cash though was basically $6 billion. The highest we have ever achieved in any one quarter.
Speaker Change: For 9 months, net sales through 11% and core operating income was also up to 20%.
Speaker Change: when the core bio-increased, so 39.4% the first nine months demonstrating continued good or very good progress towards achieving our midterm bio-gen guidance of 40% plus by 2027.
Speaker Change: Khor EPS was 5th of July, 3 up 21% and the free cash flow in the first 9 months for 15% to 12.6 billion.
Speaker Change: Now on to the next slide please, our continued strong business momentum together with operating efficiencies.
Speaker Change: Despite the many launches we are fully funding and of course the R&D pipeline allowed us to once again race our full year guidance on both top and bottom line which you will see your flight 20.
Speaker Change: We now expect sales to grow low double digits from high single to low double digits previously and we expect core operating income to grow the high teens from mid to high teens previously.
Speaker Change: Embedded in our guidance is the key assumption that there will be no to sickness, to a master or entrust to US generic entries in 2024.
Speaker Change: and we also exposes a bit so that you can start with the modeling for next year and we are making a assumption that these generic entries in US will happen in the middle of 2025 for forecasting purposes.
Speaker Change: and to complete our full year guides is always the other two components.
Speaker Change: from a cooper up inked down to Berley Cori. F. Please note that the expect core net financial expenses to be around 0.7 billion for the full year. And our core tax rate continues to be around 16.2%.
Speaker Change: Moving to Slides 21.
Speaker Change: We remain committed to our shareholder for the capital and occasion strategy to invest in the business, whilst also returning its factor to shareholder returns.
Speaker Change: In the first nine months, we executed multiple balls on M&A and BDNLDs, particularly to strengthen our T platform, our regional pipeline and AI capabilities. In addition to having invested, of course, no internal R&D engine.
Speaker Change: In terms of returning capital shareholders, we paid our growing and your dividend of the Persia and Swiss rank.
Speaker Change: This time 7.6 billion dollars in March of this year and we also continued our 15 billion share by a back which has approximately 8 billion left to be executed by the end of 2025.
Speaker Change: Now on to my final slide already.
Speaker Change: Where we have outlined details regarding expected currency impacts.
Speaker Change: In quarter three, FX7, myad, negative 1% point impacts on that say it's a negative 3% point on cooperating income, of course, driven by one, by the last rating, but also of course on the bottom line due to our Swiss Frank cost base.
Speaker Change: If late October reads words, reveals the remainder of 2024, we would expect a full-year currency impact to be around 1% negative on that sales.
Speaker Change: and negative 3 to 4 percentage points on core operating income.
Speaker Change: As we already stopped for look forward to 2025 again to inform your modeling assumptions.
Speaker Change: We expect a negative 1% point impact on that said
Speaker Change: and negative 2% of points on core operating income. Again, if Collins is staying for next year, where they are right now, of course, as we all know, Collins is moving every minute.
Speaker Change: and so we were given the hard to predict this from outside of the company. Each month in the middle of the month we were going to give you an update which is posted on the website. So you always have that element of the forecast as well.
Speaker Change: and there's a thank you for your interest of course and back to you lot.
Sloan Simpson: Great, thank you, Harry. So moving to slide 24, in summary, we see continued strong business momentum in the quarter and I think the number speak for themselves, the 10 in the 20% growth. We raised our full year 2020 for guidance for the third time just showing the underlying momentum we're seeing across our growth drivers and you launches.
Sloan Simpson: We continue to deliver on our pipeline building off of 10-thase three redouts and positive-phase three redouts with indication expansions of Kiskalis of Halsa in the submission of Puzbikto PSMA4 and we're well on track to achieve our midterm dive into 5% sales growth of 23 to 28 and 40% plus form operating in Camargen by 2027.
Sloan Simpson: So, hello to my last slide. We also wanted to just slide for all of you. We will have meet Novartis management on November 20th in 21st in London.
Sloan Simpson: will be a great opportunity for our investors to meet our leadership teams across the company with a focus on our TA leaders in R&D.
Sloan Simpson: We'll also be able to provide an update on our 23 and 28 midterm guidance as well as a 24 to 29 sales guidance as well and then lastly we'll also provide an update on the peak sales outlooks for many of our brands which can seem to have really strong momentum
Sloan Simpson: So with that operator we can open the lines for questions.
Speaker Change: Thank you. So ask a question, you and his past star one, and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again.
Speaker Change: We will now go to your fast question.
Speaker Change: And your first question comes from the line of Richard Fasor from JP Morgan, please go ahead.
Richard Fasor: Hi, thanks for taking my question. It's a question on the impact of coverage gap reform on the business in 2025 and particularly thinking about the impact on consentics and interest rate. If you get it, give us any colour on how that's panning out, that would be great. Thanks very much.
Richard Fasor: Thanks for tuning in. I also want to add. We should have one question. Thank you for hearing. Do that already, Richard, but one question for person and we'll cycle through the list as many times as we can.
Speaker Change: So in terms of the coverage gap reform, there's going to be pushes and pulls, which will have to understand better over the course of 2025. On the positive side, we'll see how demand generation increase with the 20% out of pocket cap, especially depending on how many patients line up for the smoothing you could see that those impacts.
Speaker Change: Happening relatively early in the year, but that's something we will have to see how it ultimately plays out on the positive side. In terms of headwinds, certainly our cost sharing within the system will go up, and that's something we'll have to manage.
Speaker Change: But on the flip side, our patient support programs also should be adjusted down given the number of patients who would qualify. I would not have no longer qualified given the adjustments given the IRA being in place.
Speaker Change: So, in that net, we see this as neutral, to slightly negative, but that's already factored in subguidance that we've given for the long run, so that's already in the 5% out to 28. So, in a matured impact on how we look at the business and I think we're going to learn more over the course of the year.
Speaker Change: Thanks for your research. Next question operator.
Speaker Change: Thank you. Your next question comes from the line of Emily Field from Barkley's Please Go ahead.
Emily Field: Hi, thanks for taking my question on us on unpredictable. I'll just want you to expect some of these new promotional efforts to have an impact on political patient growth in the U.S. and the vision population, or should we more expect cells to really start to grow again once PSMA4 has launched, I believe earlier in the area you said that that launch would be an infection in cells, so any color you can provide would be helpful. Thank you.
Speaker Change: Yes, thanks Emily. So we know in terms of the timelines for those investments, we started the DTC in September. We got the full field force out really in the August September timeframe. So usually takes six months before you see any impact for those expansions in investments.
Speaker Change: So I think for us right now, we want to maintain the division population. We always got a division to be about a 2 billion peak sales globally. So in the US we're already analyzing in that kind of 1.2 to 1.4 range.
Speaker Change: We expect as we bring China, Japan and other markets on board, we can reach that 2 billion overtime, but the real inflection for this medicine is the tripling of the patient population with CSMA4, and then a further large addition of additional patients with the HSDCPSMA addition studies.
Speaker Change: So we've got to make sure that we have adequate capacity, which we feel pretty good about in terms of bed capacity. A lot of our work now is getting the referral systems in place to ensure that community oncology understand how they can refer when to refer to be able to get to the victim and get those patients also in back to community oncology. Also making sure that large academic centers are prepared for what we expect will be a surge of patients.
Speaker Change: on the approval of PSMA4. So all of that work is very much in focus, but I wouldn't expect the significant inflection point before we get PSMA4 fully launched.
Speaker Change: Next question operator.
Speaker Change: Thank you. Your next question comes from the line of far festivities from Bernstein. Please go ahead.
Speaker Change: Good afternoon, thank you very much for taking my question. Quick one on 2025, I know it's really days and you want.
Speaker Change: Providing EGATES, but could you remind us?
Speaker Change: which are the main tailwinds and headwinds for next year and how you see this challenging year given the generic expected to be launched mid-2012 file. Thank you.
Speaker Change: Yes, thanks, Florence. Obviously we don't provide guidance until January, but I can say we're confident, we'll grow top and bottom line and we'll provide more color on that, obviously, in January. We think about the tailwind that we have, it's clearly the new indications and launches. We've already seen Constantinople continuing to have.
Speaker Change: Strong Performance in HF and NIV. We of course have not a Kiskali early breast cancer with a broad label and a broad NCCN. Guideline, we're in the early days of the attack of the attack of Penn Launch both in PMH.
Speaker Change: and I again expect to accelerate over the course of next year.
Speaker Change: Importantly, the Semblis first line launch in CML will continue to allow us to expand that drug hopefully substantially. And then of course, Kasimta, you've seen, as already on a just a steady, strong pace.
Speaker Change: and Kisgalian metastatic breast cancer also in a really strong faith. And then, in trust, though, outside of the U.S. also with continued strong performance.
Speaker Change: I think the biggest headwinds we're going to have as we noted is the Lowees that we've built with currently forecast for forecasting purposes.
Speaker Change: for mid of next year on Sysigno Pramakta and in Tresso. Of course it depends on how those ultimate all-the-virus litigations go and whether products are approved, et cetera, but that's our current forecasting guidance on those medicines.
Speaker Change: But beyond that we see continued opportunities for strong margin performance, strong free cash flow performance.
Speaker Change: We feel very good with where the business is. So I think we can navigate that and as we said all along, we factor those patents in those Lowees into that 5% plus guidance out to 28.
Speaker Change: So it's well captured in our long term guidance and we'll navigate it and continue to grow the company strongly.
Speaker Change: Next question operator. Thank you very much. Thank you for it. Thank you. Your next question comes from the line of Simon Baker from Red Burned Atlantic. Please go ahead.
Simon Baker: Thank you for taking my question. One on Cassentics and NHS if I may. You've seen a very, very fast adoption.
Simon Baker: in HS, which is testament to the superior to the consentics over previous treatment options.
Simon Baker: but they were quite a few behind.
Simon Baker: Kusentics coming into HSA. So I just wanted to give you good updates on your thoughts on the competitive dynamics there. How long do you expect that pre-eminence of Kusentics to persist bearing in mind what is coming behind over the next 12 to 18 months? Thanks a lot.
Speaker Change: Yeah, I mean, look, we, Simon, thanks for the question. We continued to expect cosmetics to be over a billion dollars plus in HS and
Speaker Change: The reasons we have that conviction as you noted as well, there's a tremendous support for this insectic amongst dermatologists. We're very comfortable using this medicine.
Speaker Change: given the long period of time.
Speaker Change: that it's been on the market and successfully used. But the other thing is I think there's confusion in the market in terms of the comparison of Kocentics to the IEL17AFs and psoriasis versus what at least we see in HS.
Speaker Change: Importantly in HS, when you look at the HIS CR50, you have pretty comparable results of cross-trial comparisons are always of course challenging to prepare some population, so you have to be taken with appropriate caution.
Speaker Change: But very similar and then when you look at fliers in our study, you get 60% of patients free of fliers.
Speaker Change: and in pain we showed a meaningful reduction of 50% for these patients in pain. I would encourage the...
Speaker Change: The Investor Bay to look at that data versus the competitor entry. And I think that would enable us to have really a strong clinical positioning. On top of the strong account positioning and long history that we have.
Speaker Change: So then really the focus is in a growing market with additional patients who hopefully will come in. Can we continue to maintain a strong share position given that data given our access position?
Speaker Change: which is why we think, you know, because HS will be a very substantial opportunity for the medicine, but I think that distinction between psoriasis and HS data is absolutely crucial for everyone to understand.
Speaker Change: Thanks for watching.
Speaker Change: Thank you. Your next question, come from the line of Graham Perry, Bank of America, please go ahead.
Graham Perry: Great thanks for question on Pervic flows so the flat fourth quarter guide implies no growth at QS as well as in the U.S. So I understand U.S. sent us a pretty fully penetrated in the vision population but why no growth.
Speaker Change: XUS and on PSMA4 just want to why he didn't use a Part 2 voucher or attempt to celebrate the review there in any way. Thank you. Yes, thanks, Ram. So on Plum Victor, so I think XUS right now, we do continue to see, you know.
Speaker Change: Gross Generation, but of course with the pricing dynamics as we continue to work to secure the final pricing. We don't expect that to translate yet into revenues and then I think China and Japan will be absolutely critical to really get the XUS going. In Europe we're primarily focused in Germany and France and we have ongoing negotiations.
Speaker Change: and those markets regarding...
Speaker Change: and the pricing situation.
Speaker Change: So I think that's why we want to be realistic and say in addition to that dynamic we also have the holiday period in the US. We know from prior years that for Pluvicto Thanksgiving and the Christmas holidays, it's not a time that patients want to initiate therapy because post-posts doce, they can't be around families, we're on children, at least that's a current guideline. Whether biologically sensible or not.
Speaker Change: and the relevant, that's the current guidance. So that leads to a few weeks that we lose in quarter four always. So taking all of that together, we think it's reasonably and prudent to provide a guidance that will be in line that of the adjustment.
Speaker Change: Now in terms of Puewekto Piesamee 4, we chose not to use a priori review about it, surely because we had discussions with the FDA, the FDA, the view was given that we'll provide 100% OS during the review period.
Speaker Change: They wanted flexibility for the timing to review that data.
Speaker Change: Now, hopefully given that data continues to trend positive that assuming that holds and that we have a very compelling package. We hope that we can get an approval on a faster timeline than the typical fidu for timelines. But in consultation with the FDA, that was their request since we didn't use the voucher.
Speaker Change: Next question operator.
Speaker Change: Thank you. Your next question comes from the line of Matthew Western UBS. Please go ahead.
Speaker Change: yeah
Matthew Western: Thank you very much. My questions about payer dynamics in 2025 as well.
Matthew Western: and Vasant, just aware that you have a very strong position in immunology and commercial pBMs have lost the significant amount of rebates from the humira over the course of this year.
Matthew Western: I wonder whether we should expect a particularly strong and dynamic rebate environment at the beginning of 2025 and we should be prepared for that as we look at the forecast in the next year.
Speaker Change: If I can cheekly sneak a second, it's just can you remind us actually when do you anticipate Kisgarli XUS patent expiry?
Speaker Change: Thank you Matthew, super on Cassantix.
Speaker Change: and the overall immunology dynamic. We've completed largely our pair negotiations and we really pleased with the broad access we've been able.
Speaker Change: to maintain for for the centics.
Speaker Change: and I would say what we do see, increased, revets, it's modest.
Speaker Change: and not substantial. So we've been able to keep that as a single digit increase overall across the portfolio.
Speaker Change: So we shouldn't expect, well, of course, that is a headwind.
Speaker Change: We do expect overall the opportunities in HS and IV alongside the opportunities that we have.
Speaker Change: with additional launches. As well as the overall momentum we have globally, we could send six to continue to grow in the double digit range. So that's our current expectations for Cassante.
Speaker Change: Now, in terms of Kisgali, L-O-E, it is August 2032 as our current estimate.
Speaker Change: in Europe.
Speaker Change: Thank you very much.
Speaker Change: and the next question operator. Thank you. Your next question comes from a line of James Kigli from Goldman Sachs. Please go ahead.
James Kigli: Great, thank you for the question, go quick on on.
James Kigli: on Zola. So, Russia seems to be strong uptake in the US for the food allergy indication. It doesn't have our plan to use data from the outmatch trial to potentially far from the indication.
James Kigli: and then a vast hysterical reason and what would we think about the potential opportunity here of the state of the business consumer in the living room and in this indication as well. So did that be a potential clear on for you and so let in XUS markets. Thank you.
Speaker Change: Yes, James, I'd have to come back to you. I don't actually know off the top of my head on what our plans are on Zollar for XUS Foodology. Obviously in the US, we have our existing contractual obligations with
Speaker Change: Rose Jenin Tech.
Speaker Change: In general, my first instinct to say if food allergy XUS is challenging given the overall pair of dynamics particularly in Europe, but let us come back to you because I don't want to make that a definitive statement without knowing.
James Kigli: for sure.
James Kigli: We do continue to develop Remi Brutinabeth and the oral option in food allergy and we're going to see how that data pans out because we think the option of giving patients the twice-day oral therapy for food allergy could be quite attractive. So that development program is continuing on track.
Speaker Change: Next question, I'm breathing.
Speaker Change: Thank you. Your next question comes from the line of Peter Welford from Daffrey's Please Go ahead.
Peter Welford: Hello, my question is on the broader cardiovascular portfolio now at Navartis, particularly focusing on the pipeline and obviously we're aware of Pelacasin, which I would defeat you because of firm, we still expecting the phase 3 read out there next year, but obviously following the news on XXB, when you now look at the late stage cardiovascular portfolio outside of Nephrology, I guess, how do you now think about the need perhaps in the latest bolster of that or are you comfortable given the long life that we see so we'd let fear ahead, despite the loss of interest in the US. So you will basically build the cardiovascular pipeline largely internally through the early stage phase 1 pre-clinical programs that you have.
Peter Welford: Thank you.
Speaker Change: Yes, thanks Peter. So obviously disappointing with XXB, but overall we still confident.
Speaker Change: Given where we see electiveos continued expansion and the adjustments we've made to the field force we think were right sides for electiveos.
Speaker Change: Pelacarson on track, it's a Vendriven so we'll have to continue to track the events but we currently currently guide to a 2025 read-outs.
Speaker Change: and then behind that right now we're really focused on accelerating our SIR and A portfolio. Those SIR and A could either be as mono indications or in combination with like BOS that we're exploring the range and we have a couple in phase two or one it's even a bit later than that. So we'll be providing updates on those over time, but certainly SIR and A in high retention SIR and A is again, SMG CoA, which could be then used in combination or independent of like BOS. As well as other earlier phase one SIR and A's are all advancing. So we continue to want to build out a broad SIR and a portfolio and then also look as appropriate for combinations with like BOS.
Speaker Change: The other elements, two elements of our story, I think, on cardiovascular one is a portfolio of agents. Iner Rizmia, High Risk, very high risk, but we're relatively on our own iner Rizmia. So if you agents now in phase one or proof of concept studies, so we'll certainly see how those.
Speaker Change: Well, those ultimately play out and then we have obviously as all companies do a broad preclinical portfolio but including preclinical efforts on novel targets in obesity as well as in other areas of cardiovascular risk reduction particularly around nephrology.
Speaker Change: and the other as well. So obviously we'll always look externally but there's no urgency to plug any gaps at this point.
Speaker Change: Next question, operator.
Speaker Change: Thank you. Your next question comes from the line of Etta Daru from BMO Capital Markets. Please go ahead.
Speaker Change: Okay.
Etta Daru: Great, thanks for taking the question. I had a question on Pella Carson's readout next year for LP little a and apologies if you've commented on this in the past Just curious. There's literature on the impact of LP little a on GLP one levels, but
Etta Daru: Curious as to the reverse, and I guess given the increasing use of GLP-1s broadly, just curious if GLP-1 use matters in this study, and if so, how you're accounting for its use in the trial. Thank you.
Speaker Change: Yeah, absolutely. So I think GLP-1s are noted to have, I think, modest reductions of LP-a. I mean, the focus of this study is on patients that are much higher on the range of LP-a, so the top quartile and the top decile, which we believe you need to have pretty substantial knockdown, 70-90% of the LP-a levels.
Speaker Change: 90% plus ideally that would then enable you to have you know the hopeful hope for at least the genetically validated efficacy benefit.
Speaker Change: So, we don't believe, you know, GLP-1s alone or PCSK-9s alone, PCSK-9s also knocked on LP a little A, are going to be sufficient for this patient population that is at a very high risk.
Speaker Change: of cardiovascular events due to their LTa levels. In terms of background therapy, I don't know offhand how many patients were on a GLT-1 at baseline, but with all of these...
Speaker Change: trials, we always have, of course, patients who are on standard of care for their various comorbidities. And then, of course, we would do subgroup analyses based on, you know, the various patient populations.
Speaker Change: Those would not be powered, of course, and would be post-hoc, but as always we generate those force plots to demonstrate how different patient groups responded to the medicine. So that's what I would expect would happen in this case.
Speaker Change: Thank you. Next question, operator.
Speaker Change: Thank you. Your next question comes from the line of Kerry Holford from Birmingham. Please go ahead.
Kerry Holford: Thank you for taking my question. Just going back to the theme of M&A...
Kerry Holford: Given your strong balance sheet and a growing pattern of expiry burden, just interested to hear you talk about your appetite for more M&A in future here. I wonder if you can comment specifically on your degree of interest in obesity, you referenced it.
Kerry Holford: to send back with regard to your early stage internal pipeline, but interest in potentially bolstering that externally.
Speaker Change: And tied to this, I think, somewhat disappointing that we should see an impairment so soon after the morphosis tear closure.
Speaker Change: So, my question then is how can investors gain confidence in your future M&A choices?
Speaker Change: Any comment for you about that? Thank you.
Speaker Change: Swiss francs, ongoing share buyback with adequate capacity to continue share buybacks as deemed appropriate. And then we've, you know, we've been very active in the deal front, really in the sub $1 billion asset space. Most of these don't hit the radar, but we've built out, I think, a pretty, and we'll outline this in a bit more detail and meet the management.
Speaker Change: but a really broad range of assets across our key therapeutic areas as well as key technology areas to fill either mechanism of action gaps or technology gaps which we think are critical for us to...
Speaker Change: succeed in those four core TAs or in our three key technology platforms, a great example being the various fields we've done in RLT including Mariana Oncology.
Speaker Change: to build out a strong actinium profile, or even the deal we announced, I think, yesterday with Monterosa Therapeutics, which gives us a strong opportunity within the world of molecular glues for immunology. I think to regard your specific question on obesity, no change. We think GLP-1
Speaker Change: GIP, et cetera, are well-served by the current incumbents, and we expect a flood of companies from China and elsewhere to attempt to enter these spaces, and so we don't see an opportunity to really build a differentiated profile, especially given what will likely be a very intense payer rebate environment in the U.S., as well as genericization of first-line GLP or older GLP-1 agents over the coming years.
Speaker Change: So we don't think that's a game to play in as a fast follower, late follower, rather focus on novel assets.
Speaker Change: And I think overall, when we look at our, I mean, our M&A track record, we've done it very carefully and we systematically look at it. We see our overall success rate in line with the overall sector. There are companies that are worse than us, there are a few that are a little bit better than us.
Speaker Change: But, of course, if you look at the GSK oncology acquisitions, if you look at Cosimta, if you look at building out a strong RLT portfolio, I expect that with Avexis ultimately showing the positive impact of our intrafecal readout later this year or early next year in the 2 to 18-year-old patients, well, that will also be a strong, strong payback. So we'll obviously, whenever you do clinical stage deals like we did with Colabrasiv, you will have updated clinical data. I think that's normal in this business.
Speaker Change: I would expect sophisticated investors not to read too much into one-offs but rather look at the overall portfolio of how a company does and executes M&A.
Speaker Change: Next question, operator.
Speaker Change: Thank you. Your next question comes from the line of Seamus Fernandes from Google I'm Security. Please go ahead.
Seamus Fernandes: Thanks so much for the question. So really just the one question to follow up on business development and areas of interest.
Seamus Fernandes: The dynamics and immunology are obviously heating up, accelerating across by specifics, long-acting assets.
Seamus Fernandes: and overall, you know, asset development.
Seamus Fernandes: I wanted to just ask, I guess, a bit of a blended question, not two, but what the effort with Generate is really seeking to execute. And if
Seamus Fernandes: there's an awareness or when we might...
Seamus Fernandes: have the targets potentially disclosed in that collaboration. And, you know, how you're thinking about immunology writ large from a BD perspective, simply because we know that GenerAid is also doing quite a bit there along those lines. Thanks.
Speaker Change: Thanks, Seamus. I'll divide my commentary into first AI and then separately into specific immunology. So with Novartis, our primary collaboration is with Isomorphic Labs, where we partner with the Nobel Prize winning team.
Speaker Change: team there to really work on novel targets to generate hits and leads that we can take then further into development. So that's a collaboration that's ongoing for small molecules and potentially could expand over time into other areas of drug development.
Speaker Change: So that's the focus of the GenerateBio collaboration. And then we're gonna learn and see how it goes as we continue to use AI to hopefully speed up our research and early development process.
Speaker Change: we could expand into additional targets with both of those collaborations over time. But I think it's early days and I think we need to see the results of those efforts, the first efforts, and then of course progress step by step.
Speaker Change: I think more broadly in immunology in-house on top of Remy Brudnib and VAY, both of which will have readouts over the course of 2025-2026, which would allow us to, I think, build two more very substantial medicines.
Speaker Change: to continue to build off of the success of Cosentyx. We have a number of bispecifics and trispecific programs that are in phase 1, phase 2. And then, of course, we have YTB now in either phase 1 or phase 2 development for immune reset. That's our rapid CAR T therapy. I think now enrolling in six or seven indications, continuing to look to expand across immunology as well as in neuroscience indications.
Speaker Change: And so I think our BD and M&A efforts are either to bolster the areas I just mentioned by specifics or cell therapies, or to look at novel targets like Monterosa that we recently have done.
Speaker Change: Thank you for joining us.
Speaker Change: Those are the things I think we're broadly looking at, but I would say we do believe you need to move now into more specialty immunology.
Speaker Change: more targeted immunology going into the mass market with a number of biosimilars coming out at the end of the decade and High rebate pressure. You need to really find places where you can have a differentiated offering in the United States, particularly given that pair dynamic
Speaker Change: Next question.
Speaker Change: Thank you. Your next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.
Speaker Change: Thank you for watching!
Rajesh Kumar: Hi, good afternoon. Thanks for taking my question. On capital allocation,
Rajesh Kumar: Can you help us understand, you know, how you think between your choice of doing deals versus buying back shares?
Speaker Change: share price of multiples would, doing a deal, would become the only
Rajesh Kumar: Good use of capital. Your share price has been quite strong, if we leave today aside, but if we look at the earnings momentum, etc., at what point would you stop share buybacks and deploy more capital towards deal making?
Speaker Change: Thanks, Rajesh. I'll give that to Harry. Harry?
Harry Kirsch: Yeah, thank you. Thank you, Rajesh. I mean, it's of course a question that has never had an absolute answer, right? Obviously, we believe that our share price has much more potential.
Harry Kirsch: If I just look at our five-year growth rate outlook, even consensus is not there yet at 5%. Slowly creeping up every few months. Now I think consensus just makes it to 4%.
Harry Kirsch: Of course, we keep that dynamically. In terms of balance sheet and cash flow,
Harry Kirsch: We call it firepower so nicely, right? But anyway, we have such a nice capacity that we have the situation, we can do all M&A, bolt-on deals that we come up with. And by the way, it's not so easy to come up with good ones, right? Given the premiums one has to pay and the high conviction we have to have to have a great deal for our shareholders, also in terms of returns.
Harry Kirsch: But we can do both. We can do bold on M&A, our net debt is even below one time.
Harry Kirsch: EBTR at the moment with $16 billion. EBTR is higher, $18-19 billion and growing. So we have that luxury situation. On the one hand, we keep doing, I would say, continuous good share buyback at an attractive level.
Harry Kirsch: As you may know, Switzerland has an interesting situation, I think it's unique in the world, that we can only do over time, right, roughly 10 billion a year max.
Harry Kirsch: and on the other hand do all the bolts on M&A to continue to further strengthen our 40A pipelines.
Harry Kirsch: And again, obviously we believe that our share price has...
Harry Kirsch: significant upside potential and that's why we continue to do both for the foreseeable future. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Your next question comes from the line of Steve Scala from TD Cowan. Please go ahead.
Steve Scala: Thank you very much. No generics of Entresto and Promacta were already assumed in the 2024 guidance.
Speaker Change: So Tasigna is the only update.
Steve Scala: What amount of the guidance raised is attributable to no generics of Tassigna? And it sounds like the extension to 2025 for all three is due to litigation for Tassigna and Pramakta in addition to Entresto and not slower generic progress.
Steve Scala: and or settlement, is that correct? Thank you.
Steve Scala: Thank you.
Speaker Change: Yes, Steve, I can take the second part and I'll give it to Harry on the contribution of Sigma to the overperformance on
Speaker Change: Overall, I mean, we're not going to comment on specific legal cases, but I think it's a combination of our litigation, our settlements, and our kind of competitive intelligence as to where various players are and their approvals that gives us the...
Speaker Change: You know our current forecasting estimate of middle of next year, but that's not a definitive date It's really going to depend on a number of factors as you know we have
Speaker Change: Three litigations ongoing with respect to Entresto, with respect to the approval with FDA, the combination patent where we're appealing the decision and the first instance hearings on the co-crystal patents.
Speaker Change: So that's all unfolding. And then Promacta and Tessigna is not something we've disclosed, but we continue to estimate a mid-2025 and we'll see how the actual market develops. Harry, in terms of the Tessigna contribution?
Harry Kirsch: Yeah, thank you. Yes, Steve still has some contribution. I mean, you know, also on the Q2 call I mentioned that
Harry Kirsch: If there's no generic entry, likely we will be at the higher end of our guidance. And that's what has happened now, right? So we don't expect any generic, or if there's still, we have a bit of SAFLAR, there's a small entry in US, but it's only in one account, 10% of business. So that's very little in terms of impact model this year.
Harry Kirsch: for Sandor Start and LAR. We also had some close to
Harry Kirsch: prior year favorability at one-timers. But overall, if you look at our business, our model at the moment is like we have a 14%
Harry Kirsch: 14% volume growth.
Harry Kirsch: Then we have two points of generic impact and one point of negative pricing, adding up to the 11%.
Harry Kirsch: a year-to-date sales growth, right? And that's the model we go into operationally, into Q4, as well into next year. And then what is expected to happen is a generic component goes a bit up, and then a bit of pricing, not too much, but also partly or fully offset by some volume impacts in the US.
Harry Kirsch: So overall, some slight contribution to getting to the higher end.
Harry Kirsch: But overall, what we just see at the moment is a fantastic, continued, very good business momentum.
Harry Kirsch: and the only dynamic next year is really when are these generic impacts happening. But the underlying growth of the portfolio is really excellent. And that's why we are also very confident in our 5% plus CAGR for 2023-2028.
Speaker Change: Great, thank you Harry. I think we have a few more questions, so Operator will continue down the line.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please go ahead.
Emmanuel Papadakis: I'm trying my luck and squeezing one and a half. The half is a follow-on on palabrasib just to understand what has changed versus...
Speaker Change: As Harry noted, you were high conviction at the time of...
Speaker Change: completing that transaction and the the one is on Kisgali if I may next year looks like it's going to be a particularly important offset some of the potential headwinds you may face could you just talk about the realism of consensus or conservatism of consensus expectations of four billion
Speaker Change: Is it realistic to expect you to add another billion dollar of sales? And are you expecting a gradual increase in pay-as-a-prescription adoption or some inflection post-NCCM etc.? Thank you.
Speaker Change: Yeah, thanks, Amelia. On collaborative, it's nothing new. I think the data was presented in ESMO and in other settings. This is a medicine that had an safety imbalance that we think has to get fully resolved prior to being able to use the data for any kind of filing.
Speaker Change: We need to follow these patients longer to see how the two arms perform.
Speaker Change: There is a there is an indication that OS is going in a positive direction. However Early, we need to I think see this Unfold I think for a longer period of time and also determine what additional trials will be Required given that safety signal to have a positive benefit risk. So that's
Speaker Change: what we're monitoring and will continue to monitor these things I think happened in clinical development that
Speaker Change: safety signals emerge and then you have to deal with them so that's
Speaker Change: I think normal course of business in our industry.
Speaker Change: With respect to Kisgali, I don't think we're prepared here to give additional peak sales guidance, but we will update our peak sales guidance for Kisgali given, at MISA management. I think it's pretty clear you can all annualize right now the metastatic indication.
Speaker Change: and where that's heading.
Speaker Change: So that already, I think, is really strong momentum in that area. And then now that we have the broad label, including those negative patients,
Speaker Change: as well as
Speaker Change: The NCCN guidelines and no negative patients, as well as a positive overall label at CHMP. I think we clearly are very optimistic for the overall size of this medicine and we'll provide that update at needs management.
Speaker Change: I think one more, two, three more. Next question, operator.
Speaker Change: Thank you. Your next question comes from Richard Foster from J.P. Morgan. Please go ahead.
Richard Foster: Hi, thanks for taking my follow-up. Just one on Cosimta, just a competitor is rolling out their subcutaneous formulation, just...
Richard Foster: thoughts on how that's impacting, are you seeing any impact at the moment? Thanks very much.
Speaker Change: Yeah, thanks, Richard. So we haven't seen, in our experience, impacts to date. We see steady overall share, slightly increased NBRX share. Our focus right now is to capture more of the growth of the B-cell class, as it's been our real focus, as the B-cell class continues to grow 60% plus to hopefully greater and greater proportions of first-line, first-switch for MS patients.
Speaker Change: Most of the impact that we hear about is primarily to the competitor product within the
Speaker Change: within the IV class of these medicines, I think given the fact that there is required for a healthcare professional that you need
Speaker Change: the various pre-treatments and post-dose monitoring, and then you have a pump involved with the Sub-Q administration. It's not viewed as comparable to the experience of having cosympta, which takes
Speaker Change: minutes to inject and is relatively straightforward at-home administration for patients.
Speaker Change: So we haven't seen that impact date that said we have to be really diligent and our teams are fully prepared to continue to argue for the value proposition
Speaker Change: I think outside of the U.S. we really don't see the impact. I think there we feel fairly confident that given the structure of those ex-U.S. markets, there is a preference for when you can get patients out of the medical home using Cosimta.
Speaker Change: So I think that allowed us to continue to have strong momentum outside the United States as well.
Speaker Change: Next question, operator.
Speaker Change: Thank you. Your next question comes from the line of Graham Parry, Bank of America. Please go ahead.
Graham Parry: It's just on the Kisgali patent challenge from MSN, just thoughts on timelines of ruling from the Delaware court on that, and if MSN was actually successful in invalidating the patents, just your expected timelines.
Graham Parry: for resolution of an appeal, and just to correct me if I'm wrong, but are you sort of past the stage of settlement here, or could that still be an option? Thanks.
Speaker Change: Thank you. Thank you.
Speaker Change: Yes, so no updates, ruling could come at any point, so we'll continue to monitor that. We are prepared to immediately follow the necessary injunctions and appeals, and that process can take, as you know, some period of time. In addition,
Speaker Change: the, yeah, I think the...
Speaker Change: of course the approval has to also happen so there's a number of things here as well and we think we have some important elements as well to highlight with respect to that and so I think
Speaker Change: I think we're in a good place, but we'll have to see how the ruling happens. Difficult to say, I mean, I think...
Speaker Change: Without knowing exactly how the courts would time the various appeal hearings, we would say 26 and beyond, but I think we'd have to see with the timing of the ruling and the appeals and the hearings to provide more granularity on that.
Speaker Change: Thank you.
Speaker Change: Next question, operator.
Speaker Change: Thank you. We will now take our final question for today and the final question comes from the line of Matthew Weston from UBS. Please go ahead.
Matthew Weston: Thank you Vas. It's a question about politics and SIRNA. So clearly SIRNA as a mode of action is very important to Novartis. I believe you're very active in the legislation to try and get...
Matthew Weston: an amendment to IRA to extend the life from 9 years to 13 years in terms of government pricing action. Can you give us any update as to where that legislation is, please?
Speaker Change: Yeah absolutely Matthew, so I'll take the opportunity given that nice broad question and thank you Matthew for your third question today.
Speaker Change: to provide, I think, a broader perspective as well. So first on the IRA, which of course is a top priority for the industry.
Speaker Change: There's a broader desire to, and I think important for public health and of course pipelines and oncology, neuroscience, cardiovascular disease, indication expansion, to get the 9 to 13
Speaker Change: small molecule versus large molecule aberration corrected, and there is legislation tabled currently in Congress to try to get that broad correction to happen. I believe now there's bipartisan support in the House for that broad correction.
Speaker Change: Alongside that, there's a number of limited fixes that are being proposed by various actors
Speaker Change: One of those is the Mini Act, which targets correcting for genetically targeted therapies such as siRNAs, ASOs, etc., and trying to get their definition more in line with what was done in 21st century cures.
Speaker Change: That also has bipartisan support in the Senate and the House, and a relatively low pay-for. So that's also out there as well. Actually, a minimal pay-for, I should say.
Speaker Change: So, I think now it's much more moving through the election period, moving through, obviously, the establishment of a new session.
Speaker Change: And then trying to get those bills, whichever combination of the various bills that are out there, there's also efforts to correct the rare disease, multiple indication, single indication situation, similar definition, etc.
Speaker Change: and finding a right context to get those bills put in place, as well as trying to get the broad fix overall for IRAs. So I think all of those efforts are ongoing.
Speaker Change: In a completely separate track are the various litigations that are ongoing to repeal the IRA. We have one, other companies have them, the industry overall has one.
Speaker Change: So, we'll see how that also plays out. I think it will be, you know, in the two to three year period, we get more understanding of all of those various pieces.
Speaker Change: We continue to, of course, push for PBM reform in as broad way as we can, and then also to get, hopefully, a more sensible 340B environment, which is, I think, a significant issue for the overall industry, starting with transparency of who are the patients and what are the centers getting this money and how is it used for. Those are, I think, the three big priorities for us as a company and overall for the industry from a legislative standpoint as we move to a new Congress and a new president.
Speaker Change: So thank you all very, very much. I really appreciate all the great questions and interest. I hope we'll see all of you at Meet the Management in London. And in the meantime, wishing you all a very nice autumn. Take care.
Speaker Change: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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