Q4 2024 Ipsen SA Earnings Call
Okay.
Speaker Change: Hello, and welcome to Emerson's conference call and webcast on full year 2020 full results I'll now hand, you over to David Lowe absence C E O.
Speaker Change: Thank you operator, and Hello, everyone I'm delighted to welcome you to our presentation. This afternoon, which can also be found on dot com.
Speaker Change: Want to use the time, we have together to focus on the progress delivered in 2024, and the future opportunities and platforms for growth. Please turn to slide two.
Speaker Change: Please take note of our forward looking statement, which outlines the routine risks and uncertainties contained within this presentation also any of my commentary on growth will be based on constant exchange rates. Please turn to slide three.
Speaker Change: I'm going to take you through a brief presentation of our performance followed by our CFO and molecular shattered.
Speaker Change: We'll provide you an update on the financials and our head of research and development Crystal U K, who will focus on the progress and the key milestones of our pipeline.
Speaker Change: At the end of the presentation, all three of us will be participating participating.
Speaker Change: Participating in the question and answer session.
Speaker Change: Let's begin by looking at today's highlights please turn to slide four.
Speaker Change: I start focusing on the business. Please turn to slide five today's headlines illustrates how we are continuing to produce sustainable growth in 'twenty 'twenty. Four total sales grew by nine 9%. A result that is driven by the strong performance of our extra maslin portfolio, which grew by 12, 2%.
Speaker Change: Over the year.
We also delivered a core operating margin of 32, 6% since.
Speaker Change: Since the beginning of the year, we have made strong progress with our pipeline, including a positive FDA decision for <unk> in first line pancreatic ductal adenocarcinoma in February U S approval of <unk> Korba in June followed by the Ema's approval in September along with K <unk>.
Speaker Change: In the European Union in <unk> syndrome.
Speaker Change: Looking ahead 2025 promises to be another exciting year for our pipeline with four key milestones, including anticipated approval of couple of ethics in neuroendocrine tumors in the EU and the EU regulatory filing October actually both in H one.
Speaker Change: In <unk> 2025, we anticipate a pivotal trial readout of Fitbit started Pete and Excitingly. Our first proof of concept data for our long acting neurotoxin or land in aesthetics.
Speaker Change: Chris will cover those in more detail.
Speaker Change: Lastly, our 2025 guidance includes total sales growth greater than 5% at constant exchange rates and the core operating margin greater than 30% and Rick will provide more details in his section please turn to slide six.
Speaker Change: Looking at our sales performance oncology has performed well this year, reflecting the growth of <unk> and ongoing <unk> launch.
Speaker Change: <unk> continues to standout driven by the sustained success of building out the first time contribution of <unk>.
Speaker Change: Neuroscience, comprising this burch delivered strong and consistent growth.
Now turn to oncology for more detail, please turn to slide seven.
Speaker Change: Starting with some excellent sales were up by five 6% for the full year, both Europe and the U S have experienced shortages of generic landlord outside allowing us to see uplift in both Q4 and full year.
Speaker Change: <unk> sales were up 13, 3% for the full year with increased volumes in both first and second line renal cell carcinoma across all geographies.
Speaker Change: <unk> sales were down by one 1% as we experienced increased competition and pricing pressure in Europe, and China, We anticipate that the capital will go back to growth in 2025.
Speaker Change: So it's very sales rose by 24% despite the highly competitive environment in third line indication in Follicular lymphoma, and supported by share gains in epithelial sarcoma.
Speaker Change: <unk> sales grew 23, 7% for full year and were driven by the U S that I will detail in the next slide please turn to slide eight.
Speaker Change: Zooming in on the only REIT in the United States, where we continue to progress with our launch in first line metastatic pancreatic carcinoma sales increased by 19, 9% for the full year and we continue seeing a steady climb of monthly sales. In addition, we achieved <unk>.
Speaker Change: 32% growth in the top 25 accounts for the full year. However, it is important to note that change in prescribers behavior in this challenging indication is taking time.
Speaker Change: Our key priorities for 2025 remains expanding utilization from academic centers and community practices as we continue our efforts to educate health care providers.
Speaker Change: We're also generating additional data and have recently presented new result at ESMO Gi showing improved overall survival of first line only buy it and that police phase III versus real world for a paradox in the U S.
Speaker Change: Let's now turn to rare disease on slide nine.
Speaker Change: Bill pay continues to grow nicely with annual sales of $136 million in the <unk> indication growth has been driven by strong global demand and our market leadership in the U S. We continued seeing uptake in Alger I'll syndrome first of all <unk> sales continued to struggle due to loss of patients for clinical trials.
Speaker Change: The label this quarter, we had to make a decision to adjust our peak sales expectation, which Anne Marie will discuss in more detail.
Speaker Change: Turning to our Corvo sales reached $22 million with a continued uptake in the U S. Following first line approval in June and positive early momentum in Europe.
Speaker Change: Zoom in on the launch on slide 10.
Speaker Change: The launch continues with good momentum and in line with our expectations in the U S. We see a significant increase of monthly demand and over 85% of prior authorizations being approved for patients we.
Speaker Change: We see our prescribed a prescriber base continued to expand in a growing second line market with the majority of our korver patients being second line.
Speaker Change: But also some switches we also presented new data at <unk> last year, showing the long term benefits of microbial across biochemical efficacy fibrosis symptoms and safety, notably the data also showed an improvement in fatigue, which impacts over 80% of patients with PBC, which we think.
Speaker Change: Will be important data moving forward.
Speaker Change: In Europe, we launched <unk> in Germany, and Austria and are already seeing strong patient uptake.
Speaker Change: In the UK, we had simultaneous NHRA and nice approvals in October.
Speaker Change: <unk> is extremely rare given U S patients at UK patients immediately access to <unk>.
Speaker Change: Lastly, we have also initiated reimbursement processes across several additional European countries in rest of the world markets.
Moving to neuroscience, let's turn to slide 11.
Speaker Change: This part delivered another year of solid performance with sales growth of nine 2% for the full year.
Speaker Change: Anesthetics sales grew by eight 3% driven by continued expansion in most territories and market share gains in key countries, such as the U S and Brazil. Despite some softening of the U S market.
Speaker Change: Rypien markets remained resilient delivering solid growth however, fourth quarter sales were impacted by adverse shipment phasing in the middle East and North America, while performance in other regions remained strong.
On the therapeutic side sales increased by 10, 4% this year with robust robust momentum in the U S and Latin America.
Speaker Change: Market share gains and specifically played a key role in driving growth across most markets. We look forward to another year of growth in 2025 for the sports that concludes the sales review I'll now hand over to Emmerich, Please turn to slide 12.
Thank you Devin.
Emmerich: I will now take you through more detail for 2020 financial performance or guidance for 2025, and lastly sustainability progress.
Speaker Change: Please turn to slide 13.
Speaker Change: We delivered another set of very strong financial result, this year of course sales and.
Speaker Change: On cash flow.
Speaker Change: Total sales exceeded $3 4 billion growing by $9 nine.
Speaker Change: At Casas accelerate us presented in detail.
Speaker Change: <unk> operating income grew by 10, 8% to $1 1 billion, while our free cash flow increased by almost 9% to seven seven.
Speaker Change: 774 million.
Speaker Change: With us we have a strong balance sheet no debt and we have $2 3 billion of firepower available for external innovation based on two times EBITDA.
Speaker Change: Let's take a closer look at those financial in the next slides please turn to slide 14.
Speaker Change: Starting with the P&L.
Speaker Change: In total sales of nine 9% at coastal excellent rates consolidated into eight 7% at current rates given adverse currency movements.
Speaker Change: Many emerging markets.
Speaker Change: Gross margin decrease was limited to 0.6 percentage points due to a one off payment in 2023 Bcf from our ex U S partner for <unk>.
Speaker Change: R&D cost increased by 10, 9% and exited 20% of sales for the first time, a 22% driven mainly by the continuous investment in our internal pipeline.
Speaker Change: The three therapeutic areas.
Speaker Change: External innovation.
Speaker Change: SG&A cost increased only by three 3%.
Speaker Change: Issue to sales at 34, 4%.
Moving by two two percentage points. This reflects our commercial investment to support the launches, especially in the U S. But also the positive impact of our efficiency program.
Speaker Change: Operating income increased by 10, 8% with a co operating margin at 32, 6% improving by 0.6 percentage points. Please.
Speaker Change: Please turn to slide 15.
Speaker Change: Turning now to the full P&L net income this quarter, we recognized an impairment loss of $281 million before tax.
Speaker Change: Totally related to Sohu, those as David said, which is due to lower than anticipated patient uptake and the device sales.
Speaker Change: Worth, noting that we no longer expect so who knows to exceed the 100 million pixels.
Speaker Change: As a consequence of that impairment.
Speaker Change: Income and consolidated net profit.
Speaker Change: Significantly versus 2023.
Speaker Change: At the same times of our core EPS continued.
Speaker Change: To go double digit at 12, 3% in line with core operating income increase of seven 8%.
Speaker Change: The dividend for 2020 to be paid next week will increase from one point to Europe, our ship to one for yoga shape as proposed by the board.
Speaker Change: Please turn to slide 16.
Speaker Change: Finally on cash flow, we continued to generate strong free cash flow this year.
Speaker Change: <unk> balance sheet with a cash position of $160 million at the end of December.
Speaker Change: Cash flow increased by eight 9% to 774 million.
Speaker Change: Driven by EBITDA growth in language cooperating income and sound management of working capital and Capex.
Speaker Change: Net investment, including payments related to the external innovation collection. So a total of more than 300 million.
Speaker Change: Including five preclinical transaction and the licensing agreement with <unk> pharmaceutical together with a milestone paid to Merrimack and exited fees for <unk> and commodities for around $400 million.
Speaker Change: Partially offset by the proceeds from the sale of the priority of your future and the disposal of <unk>.
Speaker Change: With a net cash position of $160 million at the end of December on based on the for maximum two times net debt to EBITDA. We are now available for your per well of $2 3 billion.
Speaker Change: External innovation.
Speaker Change: Let's now move to 2025 guidance, please turn to slide 17.
Speaker Change: In 2025, we expect a neutral year of sales growth. Despite participated so mezzanine generic erosion.
Speaker Change: For total sales, we expect growth of more than 5% at Costar to fix those rates. This year. We also anticipate the February bill impact of around 1% from currency.
Speaker Change: Just to get to those is based on an accelerated growth of our portfolio. Excluding some ethylene driven by the full year impact of the launches of <unk> and believe it.
Speaker Change: We assume that <unk> will face increased competition, primarily with generics in the U S and in Europe, including a policy, but its supply from the current generic in the U S and in Europe. During the first half of this year and the launch of an additional generic in Europe and in the U S likely.
Speaker Change: Second half of the year.
Speaker Change: On profitability, we expect to co operating margin greater than 30% of total sales, including additional R&D expenses from potential early and mid stage external innovation opportunities.
Speaker Change: We'll continue to generic efficiency in our cost base to invest into ongoing launches in the U S and in Europe to grow our pipeline and also to prepare for potential future launches.
Speaker Change: Please turn to slide 18.
Speaker Change: Finally, let's look at our <unk> sustainability commitments in 2024, we made additional progress in our environment wasn't that towards our 2019 sustainability goals, achieving a 45% reduction in scope, one and two keynotes guest emission and a 25% reduction.
Speaker Change: <unk>.
Speaker Change: We also reached 99% of the electricity used across all our sites coming from renewable energy sources.
Speaker Change: Turning to the people component of our ESG strategy, we target gender balance within our global leadership team, which we have achieved with women hopefully looking more than 55% of our leadership team.
Speaker Change: We are also pleased to share some recognition of our effort by key rating agencies <unk> achieved its highest score in the S&P global ranking placing ipsen is a top decile of the pharmaceutical sector.
Speaker Change: Nicky.
Speaker Change: <unk> further improved to 22, eight and MSCI rating maintain the level.
Mr.: With that I will now hand over now to Mr. Please turn to slide 19.
Speaker Change: Thank you Anne Marie and good morning, and good afternoon.
Speaker Change: I would start by reminding you that incident.
Speaker Change: <unk> research and development engine for preclinical research to clinical and late stage development, including expert pharmaceutical development and regulatory submission.
Speaker Change: Thus, we are well equipped to support a sustainable pipeline, please turn to slide <unk>.
Speaker Change: Here, you can see our well balanced portfolio that continues to grow across the three therapeutic areas in phases of clinical development.
Speaker Change: IPM, 11, 94, which targets the map kinase pathway.
Speaker Change: And fifth dose escalation following an <unk> filing in 2024.
Speaker Change: We expect another phase, where we're starting 2025 as well as new AMD finding as we continue to execute on our preclinical strategy.
Speaker Change: Both our oncology and rare disease pipeline with a number of ongoing phase II phase III trials with upcoming data Readouts that will highlight later.
Speaker Change: Now to focus on the neuroscience portfolio.
Speaker Change: <unk> research in Euro toxin, we continued to advance our phase III program for this fall in chronic and episodic migraine.
Speaker Change: We have further expanded our long acting neurotoxin program with patients now dosed in the <unk> study in migraine. In addition to our ongoing phase two in aesthetics and.
Speaker Change: TCT indications, which I would like to share more.
Speaker Change: Please turn to slide 21.
Starting with our latest innovation in the field.
Speaker Change: Acting neurotoxin AEP.
Speaker Change: This is a fully recombinant toxin.
Speaker Change: Specifically engineered to bind to the receptor is used by the petroleum toxin b.
Speaker Change: And then the 30 active like cadence the particulars I'm talking eight as illustrated in the image shown on this slide.
Speaker Change: This construct.
Speaker Change: Both an increased receptor affinity and rapid sell internalization.
And leverage is higher risk could be density.
Speaker Change: <unk> sales, we have demonstrated a longer duration of action of our land.
Speaker Change: The current pad two currently purified available.
Speaker Change: In preclinical studies.
Speaker Change: We have also shown that the law.
Speaker Change: <unk> Ingenius properties resulted in less tissue strategy, taking hold models.
Speaker Change: Indicative of the potential for a better therapeutic index for patients.
Speaker Change: We believe Atlanta has the potential to deliver better outcomes for patients with an increased duration of action leading to a potential reduction in injection frequencies.
Speaker Change: And a potential funds turn at a rate of <unk>.
Speaker Change: <unk> mentioned, we continue to expand our clinical development of <unk>.
Speaker Change: With the addition of Marin team evaluating patients in both chronic and episodic migraine.
Speaker Change: Finally, the Atlantic study is advancing well and we expect proof of concept for land to take in the second half of this year.
Speaker Change: Please move to slide 22.
Turning now to our quality and our late stage portfolio with <unk>.
Speaker Change: <unk> pediatric low grade glioma, where there's a significant unmet medical need with no standard of care in second line.
Speaker Change: Silver rocket nib.
Speaker Change: Typically target to take it.
Speaker Change: Form of rock in the map kinase pathway.
Speaker Change: <unk> team has built strong expertise in this pathway.
Speaker Change: With Ikea and 11 94 in phase one and all of the assets in this pathway in preclinical development.
Speaker Change: <unk> low grade Gliomas are the most common in the central nervous system in children and adolescents accounting for about <unk> <unk>.
Speaker Change: All humans.
Speaker Change: While mainly patients with PLT survive into adulthood.
Speaker Change: Basic severely reduced quality of lines.
Speaker Change: We expect to file in Europe in the first half of 2005 based on the pivotal phase two study Firefly one.
Speaker Change: Global Phase III firefight to study remains ongoing and we expect this program to be fully repaid recruited in the second half of in the first half of slide 26 evaluating <unk> in first line setting.
Speaker Change: Please move to slide 23.
Speaker Change: Simply maintain our internal research in 2024 alone we added six new partnerships in oncology and neuroscience.
Speaker Change: The main focus was on expanding our early stage pipeline and applying our translational expertise to shape their clinical development.
Speaker Change: <unk> added some exciting new modalities with Switzerland, foreseen highly selective antibody drug conjugates with high drug antibody ratio.
Speaker Change: And within Marine go and buy <unk> platform T cell engaged.
Speaker Change: And getting these things can specific T cell subsets finally, not forgetting one late stage asset <unk> that we just reviewed.
Speaker Change: I look forward to providing updates on these programs as they progress through development.
Speaker Change: This leads me to turn to our upcoming milestone piece move to slide 24.
Speaker Change: Here, we show key data Readouts and regulatory events for the next two years.
Speaker Change: In the first half of 2025 in oncology, we're expecting a decision from the European authorities on Cabo mistakes in pancreatic and extra pancreatic neuroendocrine tumors.
Speaker Change: And we are submitting to raffi, maybe in Europe for relapsed refractory pediatric low grade glioma based on the pivotal phase two Firefly. One study result that gain the net accelerated approval last year.
Speaker Change: Later this year in Red we have the readout of Falcon, our Registrational phase III study with <unk> in Cyprus dysplasia or specific progressive way, we hope to bring an important new treatment option to adults and children over the age of five leaving with these.
Speaker Change: Emulate debilitating ultra rambo disorder.
Speaker Change: In Euro science, and import and trade out is the land take proof of concept for our land AEP in aesthetic indication.
Speaker Change: 2026 will be a very busy year as well for the pipeline with several anticipated phase III data readouts across all three therapeutic area and that includes Barrick.
Speaker Change: And bill rate as well as migraine trial reads out for this pool.
I will now hand back to David to conclude the presentation. Please turn to slide 25.
David Lowe: Thank you Chris I will now move to the conclusion, please turn to slide 26.
David Lowe: We show a strong momentum and are delivering on our 2027 objective and I want to leave you with three key messages first we're showing a continued topline growth based on our strong portfolio and delivered solid 2020 for our results.
David Lowe: We aim to continue delivering excellence in execution across commercial and medical domain. This is key to grow our increasingly diversified balanced and expanding business.
David Lowe: We are also advancing our research and development pipeline at high momentum with multiple upcoming milestones, including several potential regulatory approvals this year and key data readouts as well as the completion of six pivotal trials by the end of 2026.
David Lowe: We also continue relentless and diligent evaluation of external innovation opportunities to further strengthen our portfolio and have the firepower to do so with that please turn to slide 27.
David Lowe: This concludes our presentation and.
Speaker Change: T cell Emmerich and myself will now take your questions operator over to you now.
Speaker Change: If you would like to ask a question you will need to press star one and one on your telephone and wait for your name to be announced.
Speaker Change: Your question. Please press star one again.
Speaker Change: Thank you, we'll now take our first question.
Speaker Change: This is from the line of Sean Zhang from UBS. Please go ahead.
Sean Zhang: Hi, Thank you for taking my questions.
Speaker Change: So it's.
Speaker Change: Yes, if I may just ask a broad question also imagining please.
Speaker Change: Falling off a color on what do you think about the generic entry just wondering could you actually build on built on top of that to give us a color on what you expect in terms of the cadence of erosion pattern in 2025. Please.
Speaker Change: And then kind of a second question related to that just wondering if you could give us some color on what have you seen so far in Europe as well as U S. In terms of in terms of generics competition. Please thank you very much.
Speaker Change: Thank you Jan.
Speaker Change: On some ethylene as you have seen two since about August.
Speaker Change: Cipla and advanced wind in two significant shortage is they are trying to correct that because it comes from the same supplier, which is <unk>. The company based in Greece, which is by the way also producing that generic Oxford type.
Speaker Change: Our assumption is that the cabins of erosion is going to accelerate somewhat.
Speaker Change: In comparison to historic levels, because we also anticipate that some pharma might be entering the market probably around.
Speaker Change: This year they have received the approval in the decentralized procedure in Europe in October but have not launched yet so.
Speaker Change: See what's happening there.
Speaker Change: And then on Europe and U S. I think on your second question I think it links to my first remark what's happening in.
Speaker Change: In the past and so this is our current assumption, but we have to say, it's relatively hard to have real visibility here. So our assumption and this is why we have guided as we have guided is that we're going to see a somewhat increased competition in a somewhat accelerated erosion for the future.
Speaker Change: Thank you next question.
Speaker Change: Thank you.
Speaker Change: I will now move to the next question.
John: This is from John <unk> from Jpmorgan. Please go ahead.
Hi, Joe JP Morgan. Thank you very much for taking my questions.
Just two if I may so the 2025 core operating profit margin guidance.
30% implies at least the two and a half percentage point contraction versus what you reported for the HDD results.
John: Can you maybe help us understand the drivers behind this margin contraction in and in particular, maybe what lines are growing ahead of sales in terms of the costs.
John: And maybe how we should be thinking about that in terms of the margin phasing. So page 125, because it takes 225.
John: And then just on the second question on <unk>.
John: How should we really be thinking about the shipment phasing and that you saw in Q4.
John: Was that just a pull forward of shipments into Q3, which you report is quite strong or should we expect it to be a catch up in Q1 25 mm.
John: And has there been any catch up so far this quarter.
John: Those four shipments thank you.
John: Thank you John I'll, let emmerich answer those two questions.
Emmerich: Yes. So thank you Jon for the question. So your first question regarding the margin and maybe before getting into the us by US overall reminding why we see that the margin is going to be lower this year as compared to.
John: 2024.
John: As you've seen on our top line guidance. The first driver is clearly we see much more erosion from so much lean in 2025 and the sink David provided some detail just on the previous questions and as you know some mezzanine will have a direct impact to or profitability on top of that we're going to continue to invest.
John: The cost base in R&D, our guidance includes potential early to mid stage transaction that we envisage to complete in 2025 and this is including in our guidance as we did last year on the SG&A will continue to manage our cost base, but we want to make sure that we invest.
John: Both to support the ongoing launches, especially in the U S. But also in Europe, but also that we are preparing for the future launches.
John: The medicines.
John: Positive in the in the coming two years and you've seen completed that theres quite a number of exciting milestones regarding each one to each two yes, you should anticipate that the margin will be as it has always historically, Iowa.
John: One.
John: Because there is.
John: Kevin month of costs, which are always.
John: Lower in each one on top of that Ultra deal. We do will have more impact in R&D towards its two and very importantly, because of the cadence of generic impacting so much lean where we will have a much higher baseline in etch, we clearly impact the profitability. So we should expect that <unk> will have a lower margin.
John: Having said that we should benefit also of the increasing contribution of the launch for <unk>, So mezzanine products to maintain a good level of flexibility.
John: So that's your first question on the second question regarding disposals.
John: Just wanted to remind you that there is always a.
John: Difference between especially I think your question is really focus on the aesthetic.
John: Well, we are the 10% decline in Q4.
John: The therapeutic sets up quite well balanced quarter by quarter. So I think the inventory of shipment impact is mainly on the fatigue and is primarily related to get them up.
John: Remember historically, we always have a lot of mutation between with our ex factory sales and the in market demand from getting them up.
John: I think we had a very strong Q3 vessels get them.
John: Q4 <unk>.
John: We published a quarter later on this was the same since the beginning of the year. So you should be prepared for that type of future.
John: Your question on those the underlying demand remained very strong.
John: I think David you are talking about some <unk>.
John: <unk> in the U S market, which is a limited impact so we continue to be.
John: I'm very confident in the ability for this book in a strategic and school partner and also directly for <unk> to continue with the hope of scores in 2025.
John: Great. Thank you.
John: Thank you your next question.
John: Thank you.
John: The next question.
John: The next question is from the line of Simon Baker from Redburn.
Speaker Change: Please go ahead.
Speaker Change: Thank you for taking my questions two for me please firstly on <unk>.
Speaker Change: Which was a strong performance in the quarter I Wonder if you could just give us some color on how the launch is going in terms of what the typical patient.
Speaker Change: Prescribed but looks like albeit early stage and how the competitive dynamics are evolving into cash, but given that gilead.
Speaker Change: <unk> has launched as well and then secondly on avoiding.
Speaker Change: In first line.
Speaker Change: Pancreatic.
Speaker Change: So wondering kind of where.
Speaker Change: Market share stands at the moment and also how big the community setting opportunities that you alluded to in the slides. Thanks so much.
Speaker Change: Thank you Simon.
So on <unk>.
Speaker Change: Our launch is going according to our expectations.
Speaker Change: See in terms of patient profile that the large majority is coming from the Novo second line patients of course also some switches are happening now from a cleaver.
Speaker Change: So you have seen the FDA tightening of the label in terms of the prescribers, we see very good feedback from our prescriber base.
Oh of course now Gilead is also in the market.
Speaker Change: It's a competitor than not to be underestimated, but I mean, we have been successful also in other settings, where we have had large companies being established there.
Speaker Change: So we will have to see over the next quarters.
Speaker Change: In fact increased our field force size now as of January and I.
Speaker Change: We're also very pleased to have reported that the S. L. D. The data on fatigue, which is affecting 80% of patients with PBC and I think that's an important data point going forward.
Speaker Change: To your second question on the performance of <unk>. So we see 32% of the large academic centers now using <unk>.
Speaker Change: And we see continued growth of course, it's going to take time. The sales increase that we're seeing is basically exclusively coming from the first line setting in terms of the academic versus community size. It's about 50 50 in terms of patient flow.
Simon Baker: Alright. Thank you Simon next question.
Speaker Change: Thank you.
Speaker Change: Next question is from the line of session Jain from Bank of America. Please go ahead.
Jain: So I have several questions. So I guess, just some interesting stuff.
Speaker Change: If I may so firstly on the margin.
Speaker Change: That's very touching 13, sorry, we cannot hear you come across completely scrambled.
Speaker Change: It's not any better <unk> better yeah. Thank you apologies for that so just to follow on question. So on the margin commentary is the <unk> margin.
Speaker Change: Proxy for how we should think about 26 I understand that <unk> is typically lower in the R&D commentary, but it will be the first half, but we see the full financial impact so any color on how do we think about that going forward.
Speaker Change: And then secondly, just to follow on to that curve. Obviously, the launch is going well, but any commentary around electric the consensus forecast for 'twenty five and 'twenty six thank you.
Speaker Change: Okay. So margin in America, you want to take that yes. So sachin. Thank you for the follow up questions I'm not going to give the guidance by by us.
Speaker Change: Since your number is very low so we are not anticipating that clearly there will be some phasing of costs and this will depend on how many deals we're going to do when during the year, but remember that we are expecting also and this is maybe some of your second question about the <unk> of the other product thats going to contribute more and more.
Speaker Change: Quarter by quarter, and the baseline, especially for Cubo is pretty critical.
Speaker Change: We anticipate that there will be a difference of margin between the two but the signal IP is going to be still.
Speaker Change: A good level of margin remember that the guidance is to be above 30%. So we're not saying it will be at 30%.
Speaker Change: And remember that.
Speaker Change: Mid term outlook for margin is really to be at least 32% by 2027. So we're critical system that we're going to be able to overcome the erosion of so mezzanine that we see accelerating this year and which will continue to accelerate in the coming years.
Speaker Change: Regarding your second question as such in an equivalent the consensus comment, 25% and 46.
Speaker Change: As you know, we're not commenting on that consensus figures, what I can say is that we see a growing market.
Speaker Change: Anticipate that the market is going to expand further because there is also trials ongoing in the below 167 segments. So we are not changing our peak guidance that we have given for the drug but I really cant comment on the consensus figures because.
Speaker Change: We haven't ever done this and we're not going to do it.
Speaker Change: Thank you next question.
Speaker Change: Thank you.
Speaker Change: Our next question.
Speaker Change: This is from the line of <unk> <unk> from Bernstein. Please go ahead.
Speaker Change: Good afternoon. Thank you very much for taking my questions two quick ones. Please.
Speaker Change: First a follow up question on this or if you could give us a little bit more color on the sub segments.
Speaker Change: Where maybe you see some opportunities on.
Speaker Change: On some other segments. If there is any challenges and how you believe you will boost this.
Speaker Change: Business with the long acting products currently under development with trial readout. This year. This is my first question.
Speaker Change: My question is more about M&A.
Speaker Change: Does that make sense.
Speaker Change: EMEA.
Net debt.
Speaker Change: Great significant firepower could you maybe give us more color on how you see some opportunities and if you see more opportunities. These days because you have our guidance or the R&D costs for the rest of the eurobond offering some of them.
Speaker Change: Actual acquisitions. Thank you.
Speaker Change: On your first question regarding this sport and the opportunities in which segments of the long acting neurotoxin as you might have seen on our slides at crystal presented on the long acting neurotoxin, we are developing the long acting in the aesthetic segments.
Speaker Change: Also in the therapeutic segments and we have started the phase II trials already and upper limb spasticity as well as in migraine, but we can take obviously that drug into many many other indications where in the past, perhaps we have them under exploited with the sports we're catching up on.
Speaker Change: The migraine part but.
Speaker Change: The long acting can really open up also many other indications that we are actively screening right now.
Speaker Change: So clearly the profile of the drug is to have a truly longer acting neurotoxin.
Speaker Change: We have tried like auto companies to change the formulations, but what we have seen in the preclinical step doesn't really do the trick to significantly push the duration of action. So this is why we have done this recombinant <unk> engineered offline in a and b because they are more risk.
Speaker Change: <unk> on the neurons also on bonds DSO the integration into the neurons is happening better than what we have seen on the early data so far but we are waiting for the park is that indeed, we are getting a very different profile. So we're pleased with that and we think this could if it works well and we have to wait for the data but.
Speaker Change: If it works well and it's confirmed they could open up really significantly a market because patients experience is going to be totally different because they have to get much less injections and for the health care sites. It's also advantageous because actually the patient needs to go back.
Speaker Change: Much less frequently to see the physicians. So that's an opportunity on M&A I will hand over to Emmerich.
Emmerich: I mean M&A.
Speaker Change: First.
Speaker Change: As you see we have a firepower of $2 $3 billion today, we are not including in our guidance anything related to late stage doesn't mean that we.
Speaker Change: We're not interesting to two deals both early Mead and also later stage you've seen what we did in 2024 and I think that we are looking at the same type of opportunity continue on early meat, which are included in our guidance, but also be able to take any opportunity in the later stage or <unk>.
Speaker Change: Sure assets and using the majority of the type of work for this type of transactions.
Speaker Change: Thank you operator next question.
Speaker Change: Thanks Jay.
Speaker Change: Next question is from the line of Sean <unk> from Jefferies. Please go ahead.
Speaker Change: Okay. Thank you just two for me please.
Speaker Change: So we have pretty negative commentary can you get closer to the mic. Please we can hardly hear you yeah.
Speaker Change: Can you hear me, it's a bit better.
Speaker Change: I'm, sorry, I was saying I'd be hard pressed to negative commentary on just wondering plentiful call regarding your static market in the U S. It seems as though.
Speaker Change: And by extension Ipsen has been somewhat immune to this and could you give us some more insight as to why this is and perhaps expectations.
Speaker Change: Patients in the U S market going forward.
Speaker Change: And then secondly, what are your expectations for <unk> growth trajectory this year and how should we be thinking about this.
Speaker Change: Is it the competitive dynamics with <unk>.
Speaker Change: Thank you.
Speaker Change: Sorry can you repeat your second question regarding lift the LC because he jumped from aesthetics market to lift the LCN what was your question on <unk>.
Speaker Change: Yes, sorry.
Speaker Change: What are your expectations for <unk> growth trajectory this year and how should thoughts on path.
Speaker Change: T.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: So on the on your first question.
Speaker Change: Abbvie has commented quite significantly on the softening of the U S market. However.
Speaker Change: We actually think it's.
Speaker Change: Mix the story on the Abbvie performance because what we are observing is a slight softening on the U S market yet our partner in the U S called Derma is gaining market share. So I think there are two different underlying dynamics and its not all of the softening of the.
Speaker Change: U S market in fact.
Speaker Change: Our forecast is that the trajectory of the longer term obvious Eric market is going to continue to grow because there are still many.
Speaker Change: Many customers.
Speaker Change: Customers starting to get into aesthetic treatments.
Speaker Change: So that trend, we believe is going to continue, albeit perhaps not at the exact same speed as it was in the last let's say five years, because there was a bit of a zoom effect if you want.
Speaker Change: But it's going to continue to have attractive growth of course, there are some newcomers into the setting as well, but I think those two dynamics are still making that market very attractive in the long term.
Speaker Change: Then on your question on growth trajectory lift ALC I think that's a question you need to ask to Gilead.
Speaker Change: I can only say we are sticking to the guidance on the peak sales that we have given you in the past.
We are please.
Speaker Change: Pleased with the uptake that we're seeing right now.
Speaker Change: As I said, we are also presenting new data at <unk>. So.
Speaker Change: More to come.
Speaker Change: Operator next question.
Speaker Change: Thank you.
Speaker Change: Next question is from the line of Richard Parkes from BNP Paribas. Please go ahead.
Richard Parkes: Thanks for taking my questions and I apologize if there's some repetition.
Speaker Change: To briefly sum up.
Richard Parkes: Asking something someone has already asked.
Speaker Change: I'm just wondering from the proof of concept study in aesthetics this year visibility yoga.
Richard Parkes: Profile.
Richard Parkes: And how that might inform pivotal studies.
Richard Parkes: You might need to do.
Richard Parkes: And then.
Richard Parkes: And also just remind us of what the situation is with Cal jammer.
Richard Parkes: In terms of the top program on when you might be in a position to make a decision on feature aesthetics plans in terms of.
Richard Parkes: Two development.
Richard Parkes: And then just on the margin discussion.
Richard Parkes: Are you able to give us a view on mix.
Richard Parkes: R&D.
Richard Parkes: I expect to see that as a percentage of <unk> reached 20%. This year I don't know whether you're.
Speaker Change: Inclusion of additional transactions means we should see another step up from that 20% or are you just thinking about.
Richard Parkes: That growing kind of in line with enormous house. Thank you.
Speaker Change: So I will let Chris will answer to your first question on the proof of concept on the land I will take the second one on <unk> and also perhaps.
Speaker Change: Question on the arbitration, what if the linked here and what's going to happen then on Atlanta Anesthetics and then also the third one on the margin in the mid term R&D is going to be answered by emmerich so over to you crystal.
Speaker Change: Thank you David Thank you for the question. So this is a very important readout for us our land AEP recombinant toxin easing proof of concept study what we can expect from these three down is proof of efficacy safety profile and truly.
Speaker Change: Long acting nature that we have already seen in preclinical studies.
Speaker Change: Data.
Speaker Change: Coming later on this year will inform our phase III strategy.
Speaker Change: But we will have for the first time in the clinics the demonstration of the properties, we have in GB and in this land tox.
Speaker Change: <unk>. Thank you for the question.
Richard Parkes: On your second question Richard.
Richard Parkes: Regarding the Cal Derma collaborations and what is the impact then going to be on the long acting neurotoxin in aesthetics.
Richard Parkes: As you know we have given notice to go derma that we're terminating the research and development collaboration.
Richard Parkes: On this.
Richard Parkes: They have a different view and they took us through arbitration that process is ongoing and we believe the arbitration is probably going to rule towards the end of the year. So we can tell you more by that point. So for the moment I can't give more comments as this is ongoing.
Richard Parkes: Hand over to.
Emerich: Emerich regarding the margin and the midterm R&D spend.
Speaker Change: Yes. So regarding your question on the R&D as we said at the capital market day in December of 2020 objective is to be at least 20% of sales in R&D, which mean that yes. This is the beginning of this year you should not expect that tissue to grow very significantly maybe depending on the timing.
Emerich: <unk>.
Emerich: A couple of points maximum this will be a combination of our existing pipeline, but remember that we have quite a number of phase III.
Emerich: Without.
Emerich: Does this show and even more in 2026, so that will reduce our existing pipeline and this will be complemented with auto it's still more.
Emerich: Innovation strategy, adding more early mid stage asset, which will make these investments.
Emerich: Is that part of our commitment to exceed 32% margin by 2000 by 2027.
Richard Parkes: Thank you Richard.
Speaker Change: Just cause.
Because I'll tell you one further question if that's right I'm just wondering if you could discuss the reasons for the softness downgrade and how that impacts your expectations for citrus that's it. Thank you.
Speaker Change: So maybe first I can talk about.
Speaker Change: So who knows impairment and then I will let David answer.
Speaker Change: So maybe on <unk>.
Speaker Change: It is purely that we don't see the expected peak sales you remember, we're talking about $100 million that was a pixel expectation today, Unfortunately, and you've seen the quarterly numbers and so who knows but we are not there most of the patients mostly on clinical trials and the risk benefit of the drug is not proven here in the U S and we are.
Speaker Change: Very limited access outside the U S. So by revising all pixels.
Speaker Change: We have to take this accounting impairment.
Speaker Change: Which explains the $280 million.
Speaker Change: That we book.
Speaker Change: 2024 financial accounts, we're going to continue to be in the MLP market and maybe David you want to elaborate on theory.
David Lowe: Yes, certainly it has a different mechanism of action.
David Lowe: Remember so its had a futility analyses of the premature growth platelet closures have got a pretty restricted label that is not going to be the case on <unk>. So we are waiting for the readout of that trial has included a much younger patients as of D. H O. Five so it is going to have a different profile.
David Lowe: And should not have the let's say the side effects that <unk> has shown so of course now we have to be patient and wait for the data and we're looking forward to the blinding.
Rich: Thank you rich.
David Lowe: Operator next question.
Rich: Thank you.
Speaker Change: Next question is from the line of Laura Hendley from Morgan Stanley. Please go ahead.
Hi, Laura <unk> from Morgan Stanley. Thanks for taking my question.
Speaker Change: A couple one on <unk>. Please.
Speaker Change: Giving you the confidence that this drug will return to growth in 2025 and is this based on trends that you're seeing in that particular region.
Speaker Change: And then one follow up on the long acting neurotoxin. Thank you Frankfurt without details super helpful, but with that proof of concept readout, we're getting in <unk> can we expect to get a clearer indication of deterioration of action for example, six months or nine months and will we get a read on the improved tolerability that you referenced earlier. Thank you.
Speaker Change: Thank you Laura and <unk>, what gives me the confidence is that in fact in 'twenty four we have seen volume growth.
Speaker Change: In both in China and in <unk>.
Speaker Change: Europa.
Speaker Change: So you get from time to time price negotiations that you have to take and so you.
Speaker Change: You will then you should then see again growth for example for Western Europe in China. The dynamic was slightly different we had some Chinese competitors coming in with a one month formulation. We are launching now the three and six months formulation. So changing the dynamics of the market that those competitors don't have.
Speaker Change: Three to six months formulation so.
Speaker Change: We think we can come back to growth over.
Speaker Change: 2025, and also a longer term.
Speaker Change: On land.
Speaker Change: I pass the question to Chris tell regarding the duration of action six or nine months, what will we see from the park and what is also going to be the date that we will have on tolerability.
Speaker Change: Thank you Amrita and thank you for the question. So our proof of concept is designed and powered to measure a longer duration of action. So we will have this readout later on and that includes the six month end point and I'll tell you <unk> you will remember that we have today.
Speaker Change: At higher doses in this proof of concept because we'd already seen signs of really good tolerability.
Speaker Change: We eagerly await the unwinding of that study.
Speaker Change: Should have all the data we need to shape, our phase III development program later on this year and I look forward to sharing that data at a later date.
Speaker Change: Thank you cross sell I think that's our last question and this concludes our conference. Thank you very much for attending and back over to you operator.
Speaker Change: Thank you very much. This concludes today's conference call. Thank you for participating and you may now disconnect.
Speaker Change: Okay.
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