Q1 2025 Novartis AG Earnings Call
[music].
Okay.
Good morning and good afternoon and welcome to the Novartis Q1 2025 results release conference call and live webcast
Thank you Scott and thanks, everyone for joining today's conference call. If we can move forward.
Slide four novartis delivered double digit sales growth in the quarter really strong start to the year, we had robust margin expansion.
That all supported an upgrade to our full year 2025 guidance with charitable go through it in more detail sales were up 15% core operating income up 27%. Our core margin reached 42, 1% up 400 basis points and we also had important innovation highlights in the quarter some of which I'll go through in detail.
So Victor Ben Rasia also achieved approval.
And they're relevant indications we had.
Global submission for Remy brute nib, and CSU and our <unk> 101, IC gene therapy for patients with SMA older than two years of age had a positive readout in.
In process now of filing that globally.
So taken together, a very strong start to the year and going into a little bit more detail starting on slide five.
We had strong growth momentum from all of our priority brands in the quarter and I think that really demonstrates the replacement power, which gives us confidence in our midterm guide of 5% plus and also our confidence that we have the levers that we need to continue to grow into the 2030, you can see strong growth of 32% constant currency excluding interest.
The portfolio was up 38% and I wanted to go through this.
On each of these key brands some of the key highlights so moving to slide six.
So because they only grew 56% in constant currency and that reflects our positioning globally rough flex our positioning as the preferred CDK <unk> inhibitor in both metastatic and early breast cancer.
You can see that the growth was strong both outside of the United States in the U S. I'll go through that in a bit more detail in a moment in a central panel you can see that our total brand MBR Act now is market, leading trending very strongly really powered by the early breast cancer launch, which is leading to strong performance both in early breast cancer.
Or and in metastatic breast cancer.
Now turning to each region in the U S. We were up 87% in the quarter, we have leading share metastatic <unk> now at 48% and Thats also not tied for Trs leadership really demonstrating now those <unk> are impacting our Trs growth.
Early breast cancer, or <unk> grew 65% and we reached 60%.
<unk> sure.
What's important to note here is 56% of that volume. We estimate is from the population that's exclusive to the <unk> label.
Now outside of the U S. We're still the early stages of the early breast cancer launch, we were up 24% in constant currency, where the metastatic breast cancer leader in 10 of our top countries with 46% share our <unk> share.
At 35% CRM share and our early breast cancer indication now approved in the EU plus nine other countries.
No I think you all know we have a strong guideline support with category, one and CCN guideline and we have also achieved very strong guidelines as well with asthma. So overall really pleased with the performance of <unk> Ghali as it continues to grow towards our peak sales guidance of $8 billion plus.
Now moving to slide seven.
<unk> grew 43% in constant currency outpacing both the b cell and EMS market. Our overall sales were robust both in the U S and ex U S market in the U S, 41% Trs growth outpacing the b cell numbers market as I mentioned in the U S outside of the U S.
We have leading <unk> share in eight out of 10 major markets really reflecting the ease of use of the medicine. We continue to generate further long term data to support the profile of Qsymia to seven year data was presented at AAN, which reinforced the benefit risk profile of medicine and as a reminder, we continue to believe the profile.
With convenient at home self administration makes it the preferred medicine for patients who don't want to have IV administration at a doctor's office. So I think that really positions us well outside the U S and in the large segment inside the U S where there continues to be robust growth of b cell therapies, which we plan to participate in.
Now moving to slide eight.
So Victor grew 21% in quarter, one and most importantly for US we laid the foundation to continue to lay the foundation for our pre Taxane launch with the PSA may four population when you look at some of the dynamics for two Victor.
With the post Taxane setting we have now leading <unk> share in the first line vision populations setting so post taxane at 40%.
I think really demonstrates that we are getting strongly established in this post pack named population now and when you look at some of the momentum we're seeing we're seeing that we are gaining traction in the community setting with 4000, Crx's, that's 11% up versus prior year.
You also see overall, I'd say encouraging signs that more and more community practices wanted to take the odd radio ligand therapy.
Inside of the U S. We see continuous growth driven primarily by European markets, which are increasingly adopting our LTE and also with improved pricing that we're seeing in key markets.
And now with the expansion over 20 plus countries, but most importantly for this brand we had the March FDA approval of the PSM four population to pre taxing population as a reminder, flu victim double the median PFS and had a very.
A favorable safety profile versus the daily oral RPI the final OS analysis.
For the medicine when unadjusted for crossover was <unk> 91, but importantly crossover adjusted was <unk> 59, and that's been very well received in the community and we already have a end CCN guidelines support for the use of pubic dough.
We're also continuing to advance our <unk> lifecycle management efforts. The SMA addition, readout is on track for the second half of 2025 and as a reminder, the P. Estimated this incidence is similar to that we see in the pre taxing setting so move to slide nine just a little bit more on our preparations.
For the <unk> for launch in the U S. We have a strong foundation in place 620 sites open large population now that we've expanded into a prefilled syringe that's been.
Tabling broad adoption is now nationally launch.
50% of peer SMA for patients are treated by Hcp's, who have already prescribed in the vision population and we're also continuing to increase and have increased our promotional spend we've doubled our field force and are maintaining a very robust direct to consumer advertising campaign now in terms of the launch dynamics, we expect to see it.
Take about four to seven weeks of lead time for new patients to be treated for them to get the necessary scan as well as the necessary laboratory test to be able to receive the medicine. We expect initial uptake to be driven by depth in our established accounts and the vision setting and also we expect to over time expand our breath.
The community and urology settings.
And as I mentioned, we also have the favorable end CCN guidelines I think set up well this will really be a second half story and really in the next few months, we want to ensure we start to build the momentum that will allow this brand now to breakthrough passed the $2 billion Mark and then.
Forward to the $4 billion plus guidance that we've given now moving to slide 10.
Let Theo grew 72% in the quarter on track to achieve blockbuster status. We have this steady March upwards. So we're very pleased with we're seeing solid growth both in the U S and ex U S. We see a steady climb in monthly Crs is 70% up versus prior year and thats growth across all of the key channels.
We're targeting we're also seeing increasing depth in the priority systems that we're trying to establish the medicine and that's up 51% versus prior year. We've also evolved our field operating model to better serve physicians and systems that would like to use <unk> to manage their patients to goal for cholesterol lowering outs.
In the U S. We're seeing robust growth across our key markets, 74% growth I would want to highlight the solid pricing and access we've secured in Japan as well as well as the continued to out of pocket expansion, we're seeing in China, which I think bodes well for the future of this medicine in Asia. We know there is a significant runway ahead of us only about two.
Percent of secondary prevention patients receive any advanced lipid lowering therapy and there is increasing guideline recommendations that recommend these patients receive advanced lipid lowering therapy, so a big market opportunity and step by step we're on track to fully realize the potential of this medicine.
Moving to slide 11.
Now assemblers.
Establishes itself as a leader in the third line plus setting and now our focus has switched to really establishing the medicine in earlier lines given our recent approvals now in the third line setting we are up at 54% <unk> share were three times higher than the next competitor, reflecting the excellent profile.
Assembly outside of the U S and key markets, 68% in Japan, and 47% in Germany for MB Rx share at an overall share of 47%. So I think it really well positioned now in the third line setting. So our focus has shifted to driving our performance in our airlines, we see continued momentum in the U S.
We have a very strong start building off the NCC and guidelines for a category one preferred recommendation, we have 54% of commercial lives covered now to label, we're seeing expanding prescriber dropped 16% versus prior quarter and a strong uptake in second line, where we have already achieved 40% share.
Sure and steady progress as well in first line, where we have 10% <unk> share and as a reminder, we are of course working again generic imatinib.
Generic second generation TKS, but we feel confident that step by step we will continue to be able to take significant share from those medicines are early line approvals are on track globally. We have already approval in 10 countries and our submission is now completed in Europe.
So moving to slide 12, and turning to Concentrix Concentrix grew 18% on the quarter. It was driven by both our launches in Hs and IV, but also importantly, very good performance in our core indications in the U S. We saw it's driving demand growth, 29% more than offsetting the expected impact of the part D.
Redesign.
<unk> volume is outperforming the market in our core indications, 15% versus the market in psoriasis, 12%.
Pablo our properties and we also continue to <unk> leadership in Hs at 53% even in the face of a new competitor entry.
Now when you look at the IV formulation, we have 1900 accounts using the medicine, that's a 13% growth I think it's still early stages for the IV launch, but we're confident that step by step now that we have the relevant reimbursement and support in place that the IV launch can also accelerate over the years to come.
Outside the U S. We delivered 15% volume growth mainly in the core indications, where they're leading originator biologic now in Europe, and China and we've also achieved now Hs reimbursement across our key markets. So taken together. We're confident in continued growth. We are on track to get the phase III readouts in both GCI.
<unk> and <unk> and we will also well prepared to launch of those indications when and if approved.
Now moving to slide 13.
And now turning to Entresto, which continues to have strong performance at 22% growth you can see here on the quarter, reaching over $2 2 billion in global sales. We expect continued growth in the U S up until LOE and we continue to guide to a mid 2025, low, but we can get into that and more.
Detail on the call.
But in terms of outside the U S. We have a very strong guidelines position, we have balanced geographic sales with 50% of our sales outside of the U S. We expect RDP protection in Europe through November 2026, and also of course, we'll continue to pursue other avenues to fully protect the medicine in Europe at June 2030 in Japan.
And with possible additional protections as well and I would say that the hypertension indication is performing extremely well in China, and Japan and the possibility for that to drive our growth towards through the end of the decade is something we'll continue to remain focused on that.
Now moving to slide 14, I did want to say a word about our renal portfolio. As you know we've been building out a strong renal portfolio around the globe. We have the ongoing launch now a fab Tulsa and the recent approval of band Raffia. When you look at Fab Tulsa are again, we've already seen 100% volume growth and 60% increase in right.
<unk> versus the prior quarter I think that reflects the excitement around the impact of medicine could have for these patients we have over 90% of patients remaining on treatment out at five months, we have 68% commercial coverage to label and in <unk>. While we are only improved in March we already see positive signs over 2000 physicians.
Our rems certified and Thats applicable across both indications now van Raphael was approved by FDA in April once a day non steroidal oral treatment what's exciting about this medicine is.
From an efficacy standpoint can be seamlessly added on to existing rasp inhibitors that a patient maybe beyond without any discontinuation needed. But also importantly, there was no rems for the label auto toxicity or pregnancy. So a nice clean label as well, which was the business case for this medicine. So we really have now a stake.
Effective oral medicines will be given for the management at the endothelium and the kidney with this medicine. So overall, we're driving strong synergies across the portfolio and our aspiration will be to continue to build out the strength of our renal pipeline to really ensure we can establish ourselves as a long term leader and moving to slide 15.
<unk>.
I did want to say a word about the <unk> 101 gene therapy readout that we had in the quarter. So looking at the left hand part of the slide you can see the primary endpoint was achieved in patients two to 18 years of age, but I wanted to focus in on the patients five years to 18 years of age, particularly given that <unk> has.
Been in the market for some period of time, the treatment effect versus placebo or 245 is really a very strong and I think differentiating versus the competition and positions us well, we believe to get both hopefully the approval and ultimately payor support for the use of this onetime therapy in patients.
Five years to 18 years of age.
So we're excited about this year in <unk> study is the overall favorable safety profile <unk> been able to deliver with the medicine.
And as I mentioned, we're on track for global regulatory submissions over the course of the first half of 2025.
So moving to the next slide also from a clinical data standpoint, we did have long term data on Remy brewed nib and CSU, which we think further separate our supports the differentiated profile of the medicine strong efficacy was maintained out to 52 week, even as the placebo group cross over onto active 25 milligram.
You can see that we had meaningful improvements in symptom control across all measures, but I think really importantly that symptom control starts as early as week, one and a highly symptomatic disease, where it is.
Can lead to disruption the quality of life and quality of sleep patients want something that will hopefully impact their disease.
Soon after initiating therapy.
Also had a very favorable safety profile in the dataset, including balanced LST is I can say that.
In our mid cycle review, we did not receive any questions from FDA with respect.
Deliver deliver profile of the medicine, So I think in CSU.
Speaker Change: <unk> well for the profile of Remy Bruton. It we continue to achieve our key milestones we had the new England Journal of Medicine publication, we've completed submissions now in the U S EU and China, We've initiated a head to head study versus <unk> with the readout expected in 2027, where we will focus very much on the speed of onset of.
Speaker Change: <unk> of Remy brute nib, and we continue to advance our full range of indications our phase III in chronic inducible urticaria is ongoing and targeted for 2026 submission. We've initiated our phase III study. We also have phase Iia studies ongoing for food allergy with a readout expected in the second half of this year.
Speaker Change: And as you all know at a higher dose. We also are looking at in neuroscience at relapsing MFS as well as myasthenia gravis. So the next milestone for us will be an FDA decision on CSU in the second half of the year.
Speaker Change: Moving to slide 17 taken altogether are on track for our innovation milestones.
Speaker Change: For the year I will continue to keep you updated as we continue to get readout, but importantly as well.
Speaker Change: The progress on our early and mid stage pipeline, which we believe will generate the replacement power to enable us to grow strongly into the next decade, so with that I'll hand, it over to Eric.
Eric: Thank you Vas good morning, good afternoon, everybody.
Speaker Change: I'll now talk you through our financials for the first quarter, which reflect a very strong start to the year as always my comments refer to growth rates in constant currencies unless otherwise noted so starting on page number 19, net sales grew 15% in quarter, one versus prior year and core operating income.
Speaker Change: 27%, our core margin was 42%, reflecting a 400 basis points improvement driven by the excellent sales growth and good cost management.
Speaker Change: Earnings per share was $2 28 up 31% and free cash flow was $3 4 billion.
Speaker Change: Now just to note gross to net favorability mainly in the U S added about 2% points to growth in quarter. One from gross to net is true ups based on invoices related to prior quarters in 2024, so the underlying growth in quarter, one was still very strong.
Speaker Change: 13%.
Speaker Change: On the next slide.
Speaker Change: Just to focus short focus on free cash flow, which was up 66% in U S dollars and this is of course, a continued area of focus for us.
Speaker Change: Very strong ability to turn excellent cooperating income growth into great free cash flow provides of course ample capacity to reinvest in the business pursue bolt on deals and return capital to shareholders.
Speaker Change: Growing dividends and share buybacks.
Speaker Change: Speaking of capital location next slide please yes, we remain committed to our shareholder friendly capital allocation strategy, which optimizes both investing in the business under the churning tabular shareholders. So we continue to invest in R&D and Capex and pursue of course also value creator.
Speaker Change: Bolt on M&A and BD deals.
Speaker Change: For example, we recently announced a five year 23 billion of investment into our U S based manufacturing and R&D footprint and we also closed the acquisition of <unk> Therapeutics in April.
Speaker Change: In terms of returning capital to shareholders, we paid $7 8 billion in dividends in March and April of this year and continue to our up to 15 billion share buyback in quarter, one which has approximately $2 7 billion left to be executed over the next months.
Speaker Change: Moving to slide 22.
Speaker Change: So our continued strong business momentum combined with the gross to net favorability mainland U S allowed us to raise our full year guidance to the upper end of the prior provided range for both top and bottom line. So we now expect sales to grow high single digits up from mid to high single digit.
Speaker Change: And we expect core operating income to grow low double digits up from high single to low double digits.
Speaker Change: Better than our guidance is the continued financial planning assumption that Signup hallmark.
Speaker Change: So wood.
Speaker Change: <unk> generic entries occurring mid of this year and to complete our full year guidance. Please note that we continue to expect core net financial expenses to be around 1 billion and our core tax rate to be in the range of 16% to 16, 5%. So no change versus what we said at the end of January.
Speaker Change: Now to my final slide already we have outlined details regarding the expected currency impact.
Speaker Change: If late April rates would prevail for the remainder of 2025, we would expect a full year currency impact to be neutral on net sales.
Speaker Change: And negative two percentage points on core operating income as a reminder, we provide an estimated impact on exchange of exchange rates on our results of the multi page on our website, which I hope is useful to you, especially in times of a bit more volatility lately, so with that spectrum.
Speaker Change: So in conclusion on slide 25 strong start to the year with double digit sales growth robust core margin expansion strong core operating income growth strong free cash flow generation.
Speaker Change: Given that strong start we've upgraded our guidance for the full year I think importantly significant pipeline progress in quarter. One we had three new approvals in the span of three weeks that we believe can generate important growth for the company and we remain confident even with the uncertainties of the geopolitical environment and achieving our mid to long.
Speaker Change: Term growth outlook as we've outlined previously so with that I think we can open the volume question.
Speaker Change: Thank you as a reminder to ask a question you will need to press star one on your telephone and wait.
Speaker Change: Your name to be announced to withdraw your question. Please press star one one.
Speaker Change: We will take our first question.
Speaker Change: Your first question comes from the line of Simon Baker from Redburn.
Speaker Change: Please go ahead your line is open.
Speaker Change: Thank you for taking my questions two if I may please.
Speaker Change: Firstly on the issue of tariffs.
Speaker Change: Most of you.
Speaker Change: Payers have.
Speaker Change: Let the quarterly presentation. This time.
Speaker Change: And the impact on the.
Speaker Change: <unk>.
Speaker Change: Coloration between where trucks are made where that's held.
Speaker Change: You chose not to so I'm just wondering if you could if you could give us some thoughts on the tariff exposure as you see it now and related to that given just a few weeks since it was published I Wonder if you could give us.
Speaker Change: Some feedback on your lesser with Port Hudson to the ft.
Speaker Change: And then secondly on.
Speaker Change: Finally on the gross to net.
Speaker Change: Most of the impact of two percentage points.
Speaker Change: Could you give us any more color on precisely where that was disproportionately landing I'm, assuming it wasn't equally distributed across the portfolio a little bit of color on the drug level will be very helpful. Thanks, So much.
Speaker Change: Thank you Simon so first on tariffs I think as Harry noted and we noted earlier today as well our guidance fully accounts for any potential tariffs that we've modeled scenarios that we expect this year and in the medium term guidance and we've taken I think appropriate actions.
Speaker Change: With inventory levels and in terms of managing our supply chain to enable us to feel comfortable we can manage it this year and in the medium term as you also saw with our $23 billion investment our goal in the coming years is to have 100% of our key U S products fully produced and in the U S and we're on track to do that so we think it's <unk>.
Speaker Change: Manageable and not something that we need to highlight with respect to our financial outlook. Hence we don't place a lot of emphasis on it because it's something we've been working on since January and we feel good about where we are now with respect to the later on.
Speaker Change: On EU route properly rewarding innovation and we believe there is an opportunity right now given the deliberations at the European Commission.
Speaker Change: On how to maintain a competitive environment for the biopharmaceutical industry to hopefully.
Speaker Change: Make the commission consider doing something more proactive to ensure that we have a better environment in Europe clearly prices in Europe have continued to decline no longer reflecting the innovation that we deliver the combination of capping market growth penalizing you indeed.
Speaker Change: <unk>.
Speaker Change: Low prices at launch has really led to 30% of medicines not being launched in Europe or being delayed in Europe that number will only grow over time, so as an industry. I think this is something we're taking up we put forward three.
Speaker Change: On how we could potentially address the situation maybe other ideas as well and we're hopeful that the European Commission will take it up and we'll stay determined to educate policymakers at the country level and at the commission level to really address the situation now with respect to gross to necessary.
Simon Baker: Thank you thanks, Simon for the question.
Simon Baker: Obviously, we continue to monitor as you know this is Q2 invoice, we get six to nine months late sometimes.
Simon Baker: We try to always be at the midpoint.
Simon Baker: Based on latest information, we get and again, we got a bit lower Medicaid utilization.
Simon Baker: More favorable channel mix.
Simon Baker: This prior period adjustment.
Simon Baker: <unk> mentioned.
Simon Baker: Two points of impact but of course also hasnt informs us about future.
Simon Baker: No.
Simon Baker: When we come to the upgrades.
Simon Baker: Not only to prior period costs.
Simon Baker: It's also better revenue deduction outlook for a year to go if you will for the future as well as continued very good.
Simon Baker: Plant performance and I think just currently many see fantastic performance. There now in terms of its really across many brands. So I don't want to call out one brands, it's not destroying.
Simon Baker: Growth rates very much it's in this range of.
Simon Baker: 1% to 4% something like that.
Simon Baker: So it is not worth mentioning a single product it's quite broad based.
Speaker Change: Thank you Simon and then just as a reminder.
Simon Baker: <unk>.
Speaker Change: Colleagues on the call could limit yourself to one question. Thank you very much next question operator.
Simon Baker: Thank you.
Simon Baker: Take the next question.
Speaker Change: Your next question comes from the line of Graham Parry from Bank of America. Please go ahead. Your line is open.
Graham Parry: Great. Thanks for taking my question just following up on tariffs.
Speaker Change: Say.
Speaker Change: Your guidance and your midterm guidance focuses on revenue and margin. Obviously novartis is one of the companies that has a lower global tax rates because of the booking profits in Switzerland. It looks like from your reports and accounts to 16, 5% and Thats, obviously quite a long way below U S. Corporate <unk>, so when you're talking about.
Speaker Change: Factoring in the since your guidance is that all say factoring in the potential for any actions on transfer pricing.
Speaker Change: Our IP patent boxes, et cetera, which should impact on tax rates as well. Thank you.
Graham.
Graham Parry: So we feel very confident in our tax rates and our tax planning and our transfer pricing.
Speaker Change: All of that.
Speaker Change: Robust from that standpoint, we are at the moment in the 60%, 65%. This already includes pillar 215% minimum.
Speaker Change: And for example, Switzerland.
Speaker Change: So all of that.
Speaker Change: It is very robust and of course, we don't want to talk about others, but overall all of this is also OECD conform so from that standpoint.
Speaker Change: I believe that our tax rate.
Will it be in the range of 16% to 7% as a core tax rate.
Speaker Change: I think Graham of course, we don't know we're monitoring the situation. If the government were to U S. Government were to take more extreme actions, which of course have to reevaluate, but based on everything we are hearing we believe we can manage the policies that have been put forward, thus far and so I feel confident in the position we have.
Speaker Change: Next question operator.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of and Manuel.
Speaker Change: Deutsche Bank. Please go ahead your line is open.
Speaker Change: Thank you very much for taking my question, maybe a question on.
Speaker Change: Just firstly a clarification I think you mentioned earlier.
Speaker Change: $4 billion.
Speaker Change: Peak sales ambition, but if I recall correctly last year provide us with a 5 billion numbers I just wanted to confirm if that changed.
Speaker Change: That was just a typo.
Speaker Change: And then just talk to us a little bit about the confidence on the HTC.
Speaker Change: Okay SMA for inflection is that.
Speaker Change: Really based on competency.
Speaker Change: Turns in this community referrals bottleneck, because it actually expanding the number of sites will be full of administering therapy. If you could talk a little bit more kind of that that would be extremely helpful. Thank you.
Speaker Change: Thank you and my apologies it is still $5 billion plus I misspoke.
Speaker Change: So with respect to Victor on the dynamics.
Speaker Change: We're seeing I think within the academic centers.
Speaker Change: Large integrated health centers that already are well set up we expect to see rapid uptake in these accounts. These are accounts that are familiar with the medicine they have capacity.
Speaker Change: They do need to staff up, but we believe that that's within their reach and those are the accounts, where we expect to see initial rapid uptake of the medicine and that will drive I think the second half performance I think to reach the full potential within the SMA population in the <unk> edition population, we're going to have to continue to expand not only the number.
Speaker Change: Of centers, but getting many of those centers.
Speaker Change: Increase the volume of patients that they're seeing so we would estimate of the centers that we've gotten set up about half of those centers are using flu victim.
Speaker Change: At.
Speaker Change: Target rate in terms of the number of patients are actually able theyre actually processing through their clinic and the remaining 300, we need to get up we need to get up to a higher level of utilization and then we also need to expand the number of sites that's going to be some combination of getting comfort with.
Speaker Change: Use of the medicine, hence we rollout the Prefilled syringe.
Speaker Change: Use with the referral networks and adequate capacity as well for the imaging, which we're working through as well we have reorganized our field force to enable easier referrals, but also to hopefully better align with where imaging capacity is and I think that'll be really important.
Speaker Change: As well and then of course, continuing to promote the medicine to patients and physicians. So they understand strong data set that we have I mentioned, the unadjusted OS and the adjusted OS both which I think have given confidence to experts that the medicine has the opportunity to have a significant impact on these patients. So each one of those activities is ongoing.
Speaker Change: I think this is important for us not only obviously because of flu victim, but also given the broader radio ligand therapy portfolio that we're developing we're now entering the clinic with multiple rlcs in rapid succession.
Speaker Change: Targets such as <unk>.
Speaker Change: Fiberglass activation protein.
Speaker Change: Targets like her to be <unk> III DLL three all of these targets now entering the clinic and for that those medicines to be successful, we know we need to build out this community capacity and hence.
Speaker Change: Big focus for the company to figure this out.
Speaker Change: Very helpful. Thank you next question operator.
Speaker Change: Thank you your next.
Speaker Change: Next question comes from the line of fluent Seth, but that's from Bernstein. Please go ahead. Your line is open.
Seth: Good afternoon. Thank you very much for taking my question just a quick follow up on victory.
Seth: In the U S. When you said that 50% of the of the centers are not choosing to whether it's tight.
Seth: Okay great.
Seth: Is it what's the main pushback from these centers.
Seth: Just.
Seth: Need more convenient prefilled syringe.
Seth: Would help other.
Speaker Change: Alright, great color on this front would be helpful. Thank you.
Speaker Change: Yes, I think it's a combination of things I think one is of course once you have a patient treated to ensure you have adequate reimbursement and then see the process ultimately ultimately work I think second.
Speaker Change: <unk> to educate on the staffing needs to be ahead of the curve in order to get patients treated and then I think the referral networks and making sure. The referral networks are operative. So that patients are referred to locations where <unk> is available I think these are all surmountable challenges I think we've already made tremendous progress.
Speaker Change: Regress each six month period in terms of expanding the reach of the medicine and I remember a few quarters ago. We were at 100 or 150 centers that providing the medicine and now were at multiples higher than that so I think we're getting there step by step and of course for each account. It is a puzzle that we need to solve with <unk>.
Speaker Change: That out geographically, we're rewarding our field force.
Speaker Change: Maps to that mapping and then we just have to I think stay consistent.
Speaker Change: A corollary as you think about how long it took chemotherapy.
Speaker Change: Long ago to ultimately roll out, but we know these things take time, but once you establish into the standard of care they stick.
Speaker Change: And thats the mindset, we're taking consistent investment over time to make it stick given the portfolio that we have that we're bringing forward.
Speaker Change: Next question operator, thank you very much very clear.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Pizza <unk> from BNP Paribas Exane. Please.
Speaker Change: Please go ahead your line is open.
Speaker Change: Yes, Thanks, Pete Thanks, Andy just one question for you guys on Allomap and.
Speaker Change: <unk>.
Speaker Change: The feedback from the docs is positive.
Speaker Change: There are no.
Speaker Change: Systemic treatment options to offer patients. It just seems from the feedback we're getting that replicating that phase two data that you presented earlier will be enough.
Speaker Change: To get the community excited so I just wanted to check in on your latest thoughts ahead of that readout and how youre seeing the commercial opportunity. If we were to compare it to something like <unk> and IHS.
Speaker Change: C share grinchy, none of them being that sort of similar size or even bigger.
Speaker Change: Yes, I think we see it now being a very significant medicine, if successful I think.
Speaker Change: Clearly with Shoguns, having no approved systemic therapies and given the size of the patient population. There is an opportunity here to create a significant medicine, we haven't guided to specific numbers, yet, but I think certainly multi.
Speaker Change: A multibillion dollar potential medicines is what we would expect in just the showrooms indication.
Speaker Change: But I think it goes without saying that.
Speaker Change: This will be a challenge with respect to one when you look at this disease is a heterogeneous disease, hence the endpoint here. The <unk> endpoint is a challenging endpoint we've done everything we can in the design of the study to ensure that we control for placebo effects that we power appropriately.
Speaker Change: Appropriate statistical analysis hierarchy that we've included FDA requested patient reported outcomes, which I think will also be important for physicians. We've done all of the steps needed to really give ourselves the best chance.
Speaker Change: And I think also it's going to be important to have an impact not only on composites.
Speaker Change: Points like appetite, but also very specific areas that patients care about saliva production.
Speaker Change: <unk>.
Speaker Change: Et cetera, So I think each one of these elements of the story has to ultimately tied together.
Speaker Change: And then I think the opportunity then it's significant given that we're targeting patients here with systemic manifestations of the disease. So patients that clearly are having this impact their daily lives and if we can demonstrate that.
Speaker Change: We moved the needle for patient patient quality of life, we would expect a very significant medicine. So we're excited about the readout hopefully we can replicate what we saw in phase two b, but we're fully also acknowledged that this is.
Speaker Change: Our high risk study that we have to deliver on.
Speaker Change: Thank you next question operator.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Richard Vasa from J P. Morgan. Please go ahead. Your line is open.
Richard Vasa: Hi, Thanks for taking my question a question on <unk>. Please.
Speaker Change: Grace prescriptions is very stunning but revenue growth is a bit below that so just just wondering whether you're having to rebate more heavily to generate first time volume or we could see an uptick later on this year in terms of assembly smart towards the prescriptions. Thanks very much.
Speaker Change: Yes, we've looked into this a bit and I think one of the things we are.
Speaker Change: We're seeing is when you look at the IQ via dataset versus what our internal datasets would would show our internal datasets, which is 73% and Trs growth assembly versus prior year.
Speaker Change: Ties to the 75% net sales growth so very much in line, we know <unk> is showing a higher number.
Speaker Change: This might have to do with the nature of our rare disease product, that's not flowing fully through only the pharmacy, but also through our specialty distribution change. So I think that's the key difference that has more to do with channel than anything underlying the performance I think most important for US is that we're seeing strong growth in the second line at <unk>.
Speaker Change: First line indications, we have the reimbursement in place we have the CCN guidelines and now we think the growth should accelerate in the first and second line and we think this medicine as you know has a very significant potential that we plan to fully realize.
Thank you Richard next question operator.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of James quickly from Goldman Sachs. Please go ahead. Your line is open.
James Quickly: Great. Thanks for taking my question I have a question on Pelican competitiveness sale last month.
Speaker Change: That phase II data demonstrated 94% reduction in the highest dose with 190 day administration interval phase III clearly come off the horizon, we need to see that to really sort of see where are they.
Speaker Change: We will move pits with basic emerging for competitors with longer dosing intervals. How does this impact your view on the competitive competitiveness and we will launch strategy for kind of causing.
Speaker Change: Assuming positive horizon data.
Speaker Change: And does this increase the need to accelerate development of your own six monthly or longer acting LP little a option okay.
Speaker Change: Yeah. Thanks, Jim So certainly we are watching the competitive landscape, but our core focus right now is to deliver on the phase III trial, and then accelerate towards the launch and hopefully establish ourselves as a first in class therapy and building the on a global cardiovascular presence with the monthly dosing really get a broad base of patients on.
Speaker Change: On therapy, I mean, we acknowledge the fact that it could be.
Speaker Change: Competitors coming down the line with quarterly dosing and we will see what the clinical data ultimately shows for that Medicine, and then six monthly dosing as you mentioned later in the decade, but we feel confident that pellet person can have a very significant outlook with its current profile I would note as well when we look at the recently published studies.
Speaker Change: <unk>.
Speaker Change: The investigators published on the baseline characteristics of.
Speaker Change: The Horizon study you see a situation where the median level of LP Little a was around 100 108, we had 80% of patients above 90.
Speaker Change: So I think that shows that we've enrolled a high risk patient population in the study, which hopefully gives confidence that if the modeled.
Speaker Change: Performance of the drug ultimately in the modeled impact of El Cubo layer reduction ultimately bears out that we have a good chance to win on the study when it fully reads out.
Speaker Change: I would say as well we do have multiple efforts ongoing to get to less frequently dose <unk> or aso's those could be as far out as.
Speaker Change: Out to one year is certainly the goal we're trying to get to annual dosing. So we will have the opportunity to establish ourselves.
Speaker Change: In the market with a month monthly dose therapy, and then lifecycle managed into a much less much less frequently dose medicine.
Speaker Change: That will be looking to hopefully bring to market at the end of the decade or the early part of the 2000 <unk>.
Speaker Change: Thank you next question operator.
Speaker Change: Your next question comes from the line of T. Bill Baldwin from Morgan Stanley. Please go ahead. Your line is open.
Speaker Change: Thank you very much I just have a question on the new phase III study.
Speaker Change: We spent some time in human.
Speaker Change: Extending injection interval.
Speaker Change: It takes growing high aldose Hmong ICSC.
Speaker Change: It's quite late in the lifecycle of the drug so I'm just trying to understand the goal here and could it be something potentially helping with IP durations.
Speaker Change: Yeah. Thanks, Steve.
Ed: This is Ed.
Ed: For us increasing the dosing interval of Tirasemtiv before.
Ed: At the end of the lifecycle of the Medicine I think when we look now at the competitiveness of <unk> given the situation with competitors not fully.
Ed: <unk> their goals I think we have an opportunity to continue to extend this franchise longer. So we're looking at infrequent dosing. We also have other internal efforts ongoing because we believe that since it can be a mainstay of b cell therapy for an extended period of time given that it's convenient at home dosing, which is I think convenient for patients around the <unk>.
Ed: We continue to pursue RBC K inhibitor, Remy brewed number as well.
Ed: But we of course are cognizant of the fact that we do have.
Ed: <unk> studies that have not shown an impact on RMS to date from competitor products.
We would characterize that.
Ed: So a high risk opportunity, but given the overall competitive landscape, we want to ensure now that we've fully lifecycle because simply we currently don't believe we would face biosimilars in the United States until the early part of the 2000 <unk>. So we believe there's time to develop these alternative formulations.
Ed: Next question operator.
Ed: Thank you.
Speaker Change: Next question comes from the line of Matthew Weston from UBS. Please go ahead. Your line is open.
Speaker Change: Thank you. It's a question for Harry please hurry in the full Q slide deck earlier. This year. There was a very prominent slide on the first half second half dynamics in the year, especially around profitability.
Speaker Change: Its absence in todays slides is that because you're expecting less of a sharp contrast in first half second half now you've seen the launch of <unk> and continued growth of <unk>.
Speaker Change: Or is it just that you decided not to include it today.
Speaker Change: We just wanted to see if youll notice no kidding, but thank you Matthew so obviously.
Speaker Change: The one time effect of the gross to net for prior periods that.
Speaker Change: Reflected in the current quarter.
Speaker Change: And then there are a couple of other effects that will give us further confidence and contribute to the overall full year.
Speaker Change: Great.
Speaker Change: One is that with this should be also better gross to net going forward. Your adjusted our assumptions. We always learn every quarter of course, we are fully modeled in an accrued for Medicare part D redesign, which you already see part of Q1 and the other contributor.
Speaker Change: Is of course very good growth performance overall.
Speaker Change: So.
Speaker Change: Clearly.
Speaker Change: And therefore, I see you bought half one being.
Speaker Change: Better than what your outlook, but also half tool.
Speaker Change: Hum.
Speaker Change: You mentioned low to mid single digit we now would see the half two to be in the mid single digit range. Given these two improvements of more favorable across from that ongoing as well as better than expected performance on some brands. So hope that answers your question, but.
Speaker Change: We can happily.
Speaker Change: Slide back.
Speaker Change: Very helpful and then we continue.
Speaker Change: To see if our mid year assumption proves to be Genericize brands in the U S. As a financial planning assumption plays out or if you would have updates for you but of course, a momentary with no LIBOR form you therefore for the time being.
Speaker Change: <unk> recommends that.
Speaker Change: Continues to be the financial planning assumption for everybody.
Speaker Change: Thanks, Larry Thanks, Matt next question operator.
Speaker Change: Kim.
Speaker Change: Your next question comes from the line of Kerry Holford from <unk>. Please go ahead. Your line is open.
Kerry Holford: Thank you for taking my question.
Speaker Change: Thank you.
Speaker Change: Please.
Speaker Change: On track Q&A.
Speaker Change: Yes.
Speaker Change: And can you see the potential to file.
Speaker Change: Karen.
Speaker Change: And from that data related or should be the case study is likely to be declining.
Speaker Change: Yeah. Thanks, Gary as you know vote. A plan is currently being the phase III study is being conducted by PTC. So we do expect to readout in the first half of this year and I think when we see the data we'll have a better sense of it.
Speaker Change: If on top of Muni mutant Huntington protein reduction, we also see improvement in clinical endpoints, which would be I think needed for us to be able to file with the FDA. So I think based on the data.
Speaker Change: We will work with our partners at PTC to determine what's the right approach whether to file off of that's ACB or to move forward to conduct a pivotal phase III study. So stay tuned I think we will obviously know more once we have a look at the data and of course, we are staying.
Speaker Change: Breath of the evolving kind of mindset within FDA and certainly what other competitors are doing as well so.
Speaker Change: We'll see how the data unfolds.
Speaker Change: Next question operator.
Speaker Change: Thanks Kim.
Speaker Change: Your next question comes from the line of seamless Christopher Fernandez from Guggenheim. Please go ahead. Your line is open.
Christopher Fernandez: Hi, Thanks for taking the question so really just wanted to ask about.
Speaker Change: Value, creating bolt ons and areas of focus for BD in particular, if you see opportunities for lifecycle management.
Speaker Change: <unk> BD around your hypertension, and heart failure portfolio, particularly given the upcoming loss of Entresto in the U S but the.
Speaker Change: Our robust.
Speaker Change: Opportunity for Entresto in overseas markets. Thanks, so much.
Speaker Change: Yeah. Thanks, Seamus so nothing specific to say I mean, we feel very good about our cardiovascular pipeline overall, we have of course entresto, let theo.
Pellet cars and we have our entire renal portfolio. We recently did the <unk> acquisition.
Speaker Change: To get back.
Speaker Change: Our motto the monoclonal antibody.
Speaker Change: Sure.
Speaker Change: Anticoagulation into the portfolio, we have a broad range of Si Rnas targeting.
Speaker Change: Pastoral lowering targeting LP little a lowering targeting hypertension lowering in house as well. So all of those programs are proceeding and also an antiarrhythmic portfolio. So I think we of course are looking across the board the opportunities out from a bolt on standpoint, but no particular focus on cardiovascular medicines at this time.
Speaker Change: Next question operator.
Speaker Change: Thank you. Your next question comes from the line of Steve Scala from TD Securities. Please go ahead. Your line is open.
Steve Scala: Thank you so much novartis has among the fewest manufacturing plants in the U S. In the industry, but did announce the $23 billion program to expand the U S footprint.
Speaker Change: <unk> is how much of that 23 billion build out to the footprint will be complete in 2000 by 2028, it seems that such a profound pivot could be a less than ideal decision. If the views in the U S. We're different in four years.
Speaker Change: If instead it was an inevitable pivot regardless of the U S. President then why Didnt it start sooner.
Speaker Change: And related to this you said novartis can manage plans put forward in the U S. So far does that include most favored nation legislation. Thank you.
Steve Scala: Thanks, Steve So on on one I think we would acknowledge.
Steve Scala: We could have done this earlier I mean, this was a strategic decision to say that U S is our most important single market.
Steve Scala: It grew.
Steve Scala: <unk> growth and revenue standpoint.
Steve Scala: And we wanted to be in a position to be able to produce all of our key medicines and 10 in the U S and so I think we.
Steve Scala: Youre right, we should have recognized it sooner, but now we have recognized and I think independent of who's President it's prudent for us to be able to have our supply chain stable inside the United States. We do have a number of medicines already fully produced in the U S. LNG.
Steve Scala: <unk>.
Steve Scala: Our gene therapies to Victor.
Steve Scala: And then in the other.
Steve Scala: Relevant therapies, we believe within this period of time, we can get the necessary manufacturing plants up and running.
Steve Scala: Given our footprint that we already have in certain locations to manage this but it was a strategic decision independent.
Steve Scala: President <unk>.
Steve Scala: Sure that we have that capacity inside the United States.
Steve Scala: Now in terms of most most favorite nation of course, I think if this policy, which I think will be devastating to the industry was ultimately put forward and any kind of meaningful way. It would cause I think all companies have to re look at their long term medium to long term outlook. It goes without it goes without saying.
Steve Scala: But I think it's really important.
Steve Scala: We keep advocating that the United States should not import European price controls and the European.
Steve Scala: Anti innovation or challenging innovation environment into the United States I don't think that will serve patients well serve health care system as well.
Steve Scala: <unk> technology ecosystem, well, that's certainly what we're advocating for rather the focus should be to correct.
Steve Scala: The imbalances that have occurred in Europe over the last decades, and hopefully get a better environment in Europe is more competitive with the United States.
Speaker Change: Next question operator.
Speaker Change: Thank you. Your next question comes from the line of Graham Parry from Bank of America. Please go ahead. Your line is open.
Graham Parry: Great. Thanks for taking my follow up and.
Speaker Change: Excuse me.
Speaker Change: One is just on <unk> meditation just wanted it when you get the PFS primary endpoint mean, roughly what proportion of overall survival events, you think you'd have and whether that will be sufficient to filing just giving you need more or less data on <unk> four.
Speaker Change: Actually just wanted to follow up on Harry's comment on interests I think Ken because I think your question on the wise. This morning, saying expecting generic contrasts day in July how are you still have a face that as a modeling assumption say could we still see some flex in that is that potential for a non one eight patent ruling or settlement.
Speaker Change: That they could see this set bumped into 2026 and the scenarios that you see.
Speaker Change: Yes.
Graham Parry: Thanks, Graham So first on to Victor <unk> addition.
Graham Parry: So at the time of the Rps output difficult to say exactly but we would expect OS in the range. The OS events in the range of 40% to 60% something in that range overall.
Graham Parry: And I think our view is that we would maintain the study blind and then with a small group review the data set with FDA to ensure that the FDA felt like the OS is.
Graham Parry: Sufficient at that point in time, assuming the study is positive for us to take it forward.
Graham Parry: Informa, it's not the case and we will maintain the study blind so as not to.
Graham Parry: Advertently change the rate of crossover in this study. So that's the approach. We're currently taking on the SMA addition, now with respect to Entresto. There are multiple cases ongoing. So we have two generic filers. So we have not settled with.
Graham Parry: We do have the ongoing patent litigation.
<unk>.
Graham Parry: The amorphous complex patent, which is pending we have the ongoing pad trade dress.
Graham Parry: Litigation as well with MSN via the ongoing litigation with the FDA on whether the approvals are valid to all of these litigations are ongoing and at any point in time any of those litigations could shift our perspective on the mid 2025 low.
Graham Parry: But I think until we hear from any of those cases, the most prudent course for US is to maintain a mid 20 fives.
Graham Parry: And if it changes of course will immediately update the markets.
Graham Parry: And then update our outlook accordingly.
Graham Parry: Okay.
Graham Parry: That's based on litigation outcome as the pace of settlement that you're referring to potential for it to me.
Graham Parry: It could be litigation outcome or settlement all of the above are things we're working on.
Graham Parry: Okay. Thank you.
Speaker Change: Next question operator.
Speaker Change: Thank you. Your next question comes from the line of James quickly from Goldman Sachs. Please go ahead. Your line is open.
Speaker Change: And then just quick follow up for me given that European pricing has mentioned and we mentioned a couple of times.
Speaker Change: How what is the politicians' view on this is it seen as a problem or.
Speaker Change: Do you have some support from some European politicians about addressing the innovation in balance that you see between Europe and the U S.
Speaker Change: Have any negotiations or discussions started.
Speaker Change: Are we still at a standing start and hence the reason for your letter.
Thank you.
Speaker Change: Yeah. Thanks, James There is a letter from Sps to the European Commission, which I think has been published publicly.
Speaker Change: It's been published publicly which I think outlines.
Speaker Change: Some of the topics, but not the specific recommendations that Paul and I put forward in the in the FC but I think that was a response to a request from the European Commission to understand how the innovation environment in Europe can ensure that they retain their leading biotechnology sector biotechnology manufacturing biotech biopharmaceutical.
Speaker Change: Nicole R&D I think a lot of the focus right now is in streamlining regulations, which are welcome streamlining and improving regulatory data protection also welcome strengthening overall support for the biotech ecosystem metric capital et cetera, all welcome as well.
Speaker Change: But I think we as an industry at least some of the CEO search wrong. We believe that this also should be an opportunity to rethink the overall approach to valuing innovation.
Speaker Change: The European Commission and the European community.
Speaker Change: And I think that's what we're trying to focus on I can't really comment on whether or not those that is being viewed.
Speaker Change: Something that will be taken up by the commission that's not something they have communicated back to us, but it's certainly something we're advocating for both at the commission level and with individual countries around Europe as well.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Next question. Thank you. Your next question comes from the line of people both from from Morgan Stanley. Please go ahead. Your line is open.
Speaker Change: Thank you.
Speaker Change: Ill pass on as I mentioned.
Speaker Change: Litigation Louise.
Speaker Change: Doug manufacturer.
Speaker Change: I apologize I think I've read that tower.
Speaker Change: Just if you could help us on that side.
Speaker Change: Nick.
Speaker Change: It would look like in terms of that.
Speaker Change: Type of discounts.
Speaker Change: Any changes.
Speaker Change: Genetic makeup could face in terms of translation Super changes just kind of things.
Speaker Change: Yes, so first I think on generics and our LTE. This is not something where there is we believe an adequate or clear regulatory standards. So.
Speaker Change: Well, one one topic as does any proposed generic infringe on our IP, which is what the litigation is referring to separate from that we have filed citizens petitions and continue to advocate with regulators around the world to clarify what is expected of a radio ligand therapy and that it should absolutely.
Speaker Change: Be held to the standard of ensuring patients.
Speaker Change: In the tumor.
Speaker Change: Is receiving equivalent dose of radiation.
Speaker Change: To ensure efficacy.
Speaker Change: Procreate safety so.
Speaker Change: So thats all I think also ongoing and then the third question is the supply chain.
Speaker Change: A potential generic manufacturer produce the medicine in a way that doesn't also infringe on our patents in terms of production and know how in terms of production, but also in a way that reliably provide these medicines to patients given that you have a four day three to five day window, depending on the medicine to actually get it to <unk>.
Speaker Change: <unk> as we've learned it's absolutely critical to be on time in full and Novartis right. Now is 99, 9% on time in full for a radio ligand therapy business and that's the standard I think physicians expected that any generic company would also have to meet so I think those are the three levels of the ongoing discussion I think it will take.
Years to resolve but it will be important because these standards will ultimately be what defines the sector in the longer run.
Speaker Change: Next question operator.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Matthew Weston from UBS. Please go ahead. Your line is open.
Speaker Change: Thank you I would love to go back to Grahams question on tax Harry on the Astra call. Pascal was prepared to say that he believes Astra pays a fair amount of tax in the U S relative to the sales booked in the U S and the total tax paid by the company.
Graham Parry: Theres been a lot of discussion in the past as to how Novartis pays tax in the U S. Some of it before your time, so I'd just be interested if youre comfortable saying the same thing from a novartis perspective.
Thank you Matthew here of course, we pay in every jurisdiction, we do business, our fair and appropriate amount of taxes and by the way. We don't have any offshore balance sheet structure. So from that standpoint, we are very confident in our tax planning.
Graham Parry: It's very robust.
Graham Parry: Perfect. Many thanks, indeed, thanks, Matthew next question operator.
Graham Parry: Thank you.
Speaker Change: Your next question comes from the line of Graham Parry from Bank of America. Please go ahead. Your line is open.
Graham Parry: Okay. Thanks last one I promise and so I just wanted to follow up that she has on the yen.
Speaker Change: To qualify the company he said at bats, and then been devastating to the initiatives that he has implemented but when you when you say devastating and you're talking about MFN being in pace across both government and commercial setting or do you see that Justin and position the crossing in Medicare and Medicaid.
Graham Parry: Hi.
Graham Parry: We'd actually have that level of impact <unk>.
Graham Parry: Application. Thank you yeah, absolutely look of course, the Devil's in the details with these things I think MSN preview.
Graham Parry: Previous as previously can see it is limited to part B drugs for Novartis highly manageable if it's.
Graham Parry: MSN.
Graham Parry: In Medicare part B and part D, but we no longer have to pay rebates and a number of other discounts disappear manageable if its Medicare part B part D with the spillover into Medicaid the spill over into 340 b pricing in all of the other problems definitely painful if it spills.
Graham Parry: We're into the private market devastating so.
Graham Parry: All of this of course.
Graham Parry: It's something to look at here I speak about the industry I think broadly as well.
Graham Parry: Of course for Novartis, given our relative exposure to the U S and relative exposure to Medicare policy ultimately were to come into place. We are well positioned relatively speaking, but that still doesn't mean that we would in any way we want that to happen given obviously given the damage it would do to our ability to invest in R&D invest in manufacturing.
Graham Parry: Invest in our future pipeline of medicines for patients around the globe. It would definitely have a significant impact, but certainly it depends on the details of what ultimately is conceived.
Graham Parry: Thank you.
Graham Parry: Next question operator.
Speaker Change: Thank you. Your next question comes from the line of Florent Cespedes from Bernstein. Please go ahead. Your line is open.
Florent Cespedes: Good afternoon. Thank you very much for taking my question.
Speaker Change: Big picture question.
Speaker Change: Yes.
Speaker Change: Could we have your thoughts about the difference in exclusivity between small molecule and.
Speaker Change: Large molecules in nine years versus 13 years do you see.
Speaker Change: Let's see.
<unk> <unk> or more favorable trend on this front any color would be great. Thank you.
Speaker Change: I think it was very promising.
Speaker Change: I think a good sign that in the President's executive order that there was support for moving as a small molecule nine years to 13 years and it's something the industry has made our top priority from a legislative standpoint, we have.
Speaker Change: The pay for us to enable this to happen. So it's our absolute focus in any reconciliation bill that's taken forward.
Speaker Change: The correction of 9% and 13 as part of that reconciliation Bill and I think we have a good bipartisan support both in the house and Senate to make that happen.
Speaker Change: I think we know that with respect to these kinds of build it really comes down to the very final legislation language on the last day. So we can never be sure, but I think all.
Speaker Change: All signs are positive that we have an opportunity to get the six which would really I think enable us to sustain small molecule drug innovation into the future. So I'm hopeful I'm hopeful at this point that we could make something happen I think while on that I think we continue to also advocate of course on <unk> reform.
Speaker Change: There was a good build nearly passed in December and we continue to hope that that can happen and then we continue to advocate for the fixing the 340 <unk> system.
Speaker Change: Well that may not happen legislatively, but we continue to pursue all avenues to ensure that there's no abuse of the 340 <unk> system. There wasn't important a report put out by the Senate Health Committee I think that highlights the problems in the current system.
Speaker Change: Hopefully step by step we get to a place where that that program is also put into proper context of actually helping patients and clinics and low income communities and disadvantaged rural communities get the support they need without the abuse that we're seeing around the country. So those would be the three I think big legislative priorities for the <unk>.
Speaker Change: Three and four for Novartis.
Speaker Change: Great. Thank you very much.
Speaker Change: We have one more question maybe.
Speaker Change: Maybe once again, if you wish to ask a question. Please press star one.
Speaker Change: One on your telephone.
Speaker Change: No.
Speaker Change: Alright, very good. Thank you all very much. Thank you for joining today's call and we'll look forward to keeping you up to speed on all happening at Novartis and we wish you a great day.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
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