Hikma Pharmaceuticals PLC

So good morning everyone and welcome to Hikma's 2026 interim results meeting with our CEO Said Darwazah and Acting CFO Areb KURDI and we also have Susan Ringdal and myself Guy Featherstone, Investor Relations. Before we start, I would like to remind you that any forward-looking statements or projections made by Hikma during this call are made in good faith, based on information currently available, and are subject to risks and uncertainties that may cause actual results to differ materially from those projected. For further information, please see the Principal Risks and Uncertainties section in Hikma's latest annual report. And with that, I'll hand over to Saeed for opening remarks before we head to Q&A.

Thank you so much. So just quickly a few things to say. Obviously, so the results, sales are up. I think what's very exciting is that EBIT and EBITDA are up by almost 8%. EPS is up by 5%. And when we met last time, we said we had like four targets this year. One is to stabilize the business. And so we're talking about the injectable business. The other two businesses were doing well. and I think this has been achieved. We talked about making the company more agile, quicker decision making and we have taken tons of decisions and now the way the company is structured I think very much supports this quick decision making. It supports the senior management of the team to take quick decisions and to take quick actions and reactions where they are needed. We said we will invest for the future. We have done a lot of investment in people, I think is most important, in talent and people. We have done investment in equipment. And of course, R&D spend, as you can see, is up. So we are really setting up the company for the future. So we hope that, again, we feel extremely comfortable to reiterate fully your guidance. As we have seen, MENA has done extremely well, exemplary good. I've always told you this company has three engines to drive it, and I always said that even when one of the divisions or one of the engines is facing some headwinds, the others can make it up and move it faster. So MENA is doing extremely well, and obviously we have big ambitions for the MENA to continue. Injectables, as you see, as we said, we have stabilized the business. And Rx is delivering very good margins compared to where it was just a few years ago. So these are like the background. Again, I think we should always remember this is a company that's been driven, that has three businesses. And if you look at historically, we've always had one of the businesses And if you look at the CAGR of the last 10 years and of course the first six half of this year, we see that every year there has been growth both in sales and in profitability. I think CAGR for the last 10 years was 8% for sales and 6 or 5% for profitability. We hope to start driving the injectable business next year to start growing the profitability top line and bottom line there as we continue to move the other divisions forward. So with that Areb is here with me also and we are ready to take your questions.

James Gordon from Barclays and thanks for taking the two questions.

The first question was on the branded business. So in terms of phasing, so you had a strong H1 both on the top line and the margin. And I think for the full year, you said you'll be at the better end on the top line. But how much of the H1 strength was this one-off factor or the phasing factor and also how much of the costs? So what would H1 look like on a clean basis? How much more cautious do we need to be about H2? That would be the first question, please. And then the second question was generics. I think although you've reiterated the guidance overall, I think the margin before was around 20% and it's now approaching 20%. So what, if anything, has changed there? And is that a big difference or just a minor difference, please?

In terms of sales, James, this is the normal trend that we see every year. There is a trend in tender business. So there was many tender businesses delivered in the first half in terms of sales. Also, we've seen some good demand, especially at the beginning of the war. Some governments started to stock up, although we see this has normalized at the end of H1. But also importantly, we had many sales and marketing events and expenses that were either Intentionally postponed due to the situation or we had to postpone them because you know there was limitations on the travel etc. So we will see those events happening in the second half.

Are you able to quantify those? Are you able to say broadly how significant those are if we're trying to do like a clean model for H2?

So I would say H1 would be 55% weighted in terms of sales and more weighted towards EBIT in the second half.

Obviously, we're also taking consideration that things haven't settled down yet, and there's a lot of uncertainty in the region, which historically has been helpful to Hikma, but it's always wise to be careful about the plan for the second half. The RX division, we said that we We would push the margins to where they are now. Sodium Xerbate has done very, very well. We have seen a little more competition for generic adware. But we also, as we've said before, we do have big plans for CMO. We see CMO business picking up there. So any kind of headwinds that, let's say, Sodium Xerbate will face will be picked up by their CMO business.

Hello, Zainab from JP Morgan. Thanks for taking the questions. First question is on Tizervan. If you could provide us maybe a bit more color on how that's performing relative to your expectations. I think you said that 80% of Anchor Ready customers have now switched or partially switched on to Tizervan. So how does that compare versus your expectations at the start of this year? And what underpins your confidence in an acceleration in the second half of this year for Tizervan and into 2027? That's the first question. Second question is on RX launches. I think you've had quite a strong launch so far with Topentadol. So more broadly, are there any other launches that we should be excited about in the next 12 to 18 months? And what's the latest on epinephrine nasal spray filing?

Okay, so for Tarzavan, it takes a long time for the formularies of the different buying groups to take it on. And even after they say we will, it takes some time for the different hospitals to start stocking and using it. So we have been seeing a pickup month by month, and we feel very comfortable that for the second half of this year that we will continue seeing this increase month by month. I think the last three months of this year should be very indicative to give us a full idea of how it will be doing next year. Many of the hospital groups that we were trying to get them to take the product have taken it, so we will be seeing the benefit of that. The second question was...

The Pentadol is going very well. I mean, we're authorized generic on that, and it's just been a good launch. But I think more broadly the question was around... Launches, the launch environment, and then actually that then probably goes into EPI, nasal.

For the EPI, we have, I mean, the submission has been done. We're waiting for, obviously, for the FDA to accept the submission, and that would give us a clear idea when we get the approval. In the meantime, we have approved the plan for the product. Obviously, it needs approval. Major investment in promotion and hiring people and so on. So we will start, we will begin this as soon as the FDA accepts the submission.

John, I'm a bittersweet.

Hi, good morning. Zhang Wen from Citi. So I have two questions, please. The first one is, in terms of the US injectables business outside Taisvan, could you give some comments on how the rest of the business has been trending? And especially, what are you seeing in terms of momentum carrying into the second half of the year? And my second question is, looking at your full year guidance, which you have reiterated, clearly first half performance has been very good, not only branded, but also The margins that you have got in injectables and RX despite all the increased investment, etc. So what would you want to see to be able to increase the guidance one year? Thank you.

As we said, a lot of work has been put into stabilizing the business and hiring people across all levels. Actually, it's not just senior people, but across all levels, including operators for the plants, bringing in the equipment, making sure the bottlenecks are taken care of. We've invested heavily in supply chain, both internally and we brought in external consultants to help us. And we are seeing that we have now, as we say, safety stocks. We haven't had safety stocks for a long time. These are very important because they give us the ability to react to the market when there's a need, when there's a shortage, and obviously it's much more profitable selling those. So we have started building up the safety stock. And I believe that all these measures that we are taking, increasing the number of units that we are manufacturing, we've always had an issue of supplying the market. This hasn't been the issue of demand. So now I think we have much better supply For the market. In terms of R&D expenditure for the injectable business, there is a huge increase there. We have a big team in Croatia, and we have been giving that team everything they need in terms of personnel, in terms of equipment, or whatever they need, trying to expedite things, move them as fast as possible for the submissions. I don't know how many submissions, but if we've given out any numbers. but we will be seeing an acceleration of submissions there and clearly those submissions will be driving business 28 and further so we're very optimistic about the future of the injectable business veterans

Hi, Patricia from Barenburg. Thank you for taking my questions. I had a couple on the kind of CMO business. You noted that you expect CMO revenues to pick up in H2 for injectables. Could you just clarify what level of visibility you have on this? And then on the Hikma Rx segment, the CMO side, you've obviously got your target out there for 20% CMO revenue contribution by 2030 for the segment. Could you give an update on where you're tracking relative to that and what level of visibility you have? And then just a quick one on cost inflation. You know, do you absorb the impact of the cost impact in H1? What cost impact do you expect from inflation in H2? And I'm looking further out. Thank you.

In terms of inflation, we've been able to absorb all the inflation that we faced so far. The team has been doing really great in navigating all the cost increases, and this is evident by the margins that we have. And we believe we will be able to continue to absorb the inflation in the second half. In terms of the CMO RX, we're trending well. We're doing good in terms of the plan. And we will start commercializing next year for the CMO.

In terms of the target that we set, we still feel comfortable that we can achieve 20% of the RX revenue from CMO by 2030. So we have won, as we've talked about, some of the contracts that we've won. But we continue to talk to new partners, sign new agreements. So we are gradually building that business.

There is a lot of, again, there's a lot of demand. We're talking to many companies about that. There has been some serious investment in the Columbus plant and serious expansion that is coming on board and as that comes we will be able to take care of more of that business so we still are very optimistic. That's actually the only thing that we still haven't done from all what we said is hire a top CMO commercial guy. We still very much are looking for that. We hope to have that filled before the end of the year.

In terms of the confidence in injectable CMO in the second half, It will be similar to last year. Last year we had indicated that the CMO would come largely in the second half. That's really down to the timing of when we decide to fulfill those orders. And so we will see that come in the second half. We have good visibility. But as we had said at the beginning of the year, the CMO will be slightly lower this year than it was last year. So nothing has changed.

We're going to go to Victor and then Christian.

Great, thank you very much for taking my question. So maybe two questions on my end. One on potential US tariffs and one on mid-term targets. So on potential US tariffs, so you were quite keen to highlight your continued ambition to invest into your US capacity a few weeks ago. So we're just wondering whether you've spoken with the U.S. administration since then. One of your competitors, Endo, has been arguing yesterday that this tariff represented actually an opportunity for them, even though they don't have local capacity in the U.S. So just interesting to get your take on that. Does it change anything in your strategy? And if you have any feedback from the U.S. administration, it would be wonderful. We'd be nice. And a second one on meet them targets. So looks like the business is doing well and you should, it looks pretty much in track to deliver the guidance of this year, but we still like meet them targets. So I was just wondering, what do you still need to see before being able to set up new meet them targets? Is it about capacity, business trends, or like, you know, help us understand the key moving past there. Thank you very much.

We all take the tariffs, and Arab, you can take the midterm guidance. I mean, on tariffs, we are one of the largest domestic manufacturers for generics in the U.S. So we feel that we are in a very strong position. We have invested a lot over the years in our U.S. manufacturing and we continue to invest in U.S. manufacturing. So we feel that we have a strong position. We have very good relationships with legislators in the U.S. We are in Washington very often and we believe very strongly in building strong domestic manufacturing in the U.S. So we do think that we are well positioned there. and the majority of the products that we sell in the U.S. are made in the U.S.

I mean, RX is almost 100% made, 90% in the U.S. And for injectables, we have, obviously, we are increasing capacity in Cherry Hill and we said in 28, the Bedford plant will come out, which is purely injectable also, so increase the capacity. But we think about it seriously. I don't think there is any country in the world that taxes imported pharmaceuticals. It's something that we've heard a lot, but we haven't seen. I really doubt that we will see it. This is my personal opinion.

As Said and Susan said, we have the foundation in the U.S. We invested in the U.S. We're committed to invest in the U.S. There is really no change to our strategy. We are already committed. Plus, maybe, Said, you can mention a few words about our commitment to Ohio also.

Yes, we have met with the development agencies in Ohio State. I was there a few months ago, and I met with the governor of Ohio. They are very pleased with the amount of investment that we are making both in manufacturing and R&D. We have committed that we will continue the expansion there. We received $50 million of incentives from the state of Ohio. That will be something like $5 million every year to up to $50 million. So this is the first time we do this kind of, let's say, PR and working with the states. But I believe that Hikma, because it has such a big made-in-the-USA footprint, we have been invited, actually, to Washington. We have been invited to the White House. I think we work with the committees there regarding pharmaceuticals made in the USA. So our profile has really... There has been significantly, let's say, more emphasis on that. Actually, I joke, I was the first Jordanian to be allowed to have the global entry. I was given the global entry visa to the U.S. And the ex-secretary of, what was her name? The one that, of security, Homeland Security. She actually came to Jordan personally to give me the big thing in Jordan. It's a way to show that Hikma's profile has been really much more now important than before. And obviously also the very important news we had was the case Sam is here with us, the Ameren case, where rarely have you seen all the Supreme Court vote in the same way. So that was also a big win for us and a big win also was good for our reputation, but it was a big win obviously for the whole generic industry.

In terms of the mid-term guidance, we want to focus on current year, we want to deliver on the current year, and we want to keep investing in the R&D and fixing the foundation in terms of our commercial capabilities, so no change in this aspect.

Again, the drivers for growth, it's very simple. We always say it's not rocket science. Having the manufacturing machine being well established and having well balanced lines, and we have worked very, very hard on that. We have given the supply chain. We said last year we had 90 million of products, slow-moving inventory, which we don't want to repeat at all. If we just do the normal, 40 million of those would have been profits. So we want to make sure we don't have a repetition of that. So supply chain, as I said, we have been working internally and externally on improving that, and we see big improvement, and that will be very helpful. Having the safety stocks will be very helpful. And R&D, we are putting a lot of emphasis, a lot of effort there, both in terms of bringing in the right number of scientists and the right qualified scientists, which we have done. I believe we are... Very well there. Again, we will be seeing how fast the submissions will be accepted. All these things will be indicators of when and how fast the business will start growing fast again. And finally, is acquisitions. I think we have to be a bit more aggressive in acquisitions. In Europe, I think there are a lot of opportunities for company acquisitions. The U.S. is still very difficult, but in Europe there is a lot of opportunity for company acquisitions. And in the USA, we should be more focused on product acquisitions, especially for the specialty part of the business, the promotion. We have invested significantly in the promotion team. And, you know, Tyre Zivan is just the first of those products that are ready to use. We want to also enhance that with other products. So these three things together will be the engines of growth. That's for the U.S. and the injectables. And the MENA, we always underestimate the MENA. The team is doing simply superb there. I keep meeting people everywhere and wherever I go in the MENA, I say, oh, we're using this product of Hikma, it's amazing. We're using that product. They have been launching products in almost every category. And in oncology, we have become the number one oncology in the MENA, both in terms of the products we manufacture and the products that we are licensing. And so the profile of the company there is really fantastic. And the MENA itself is growing very fast. Do you have any information on how fast the MENA is growing? The MENA is growing very fast. Saudi Arabia is growing very fast. Algeria is growing very fast. Egypt is growing very fast. So we are very well positioned to capitalize on that and to continue to grow the MENA. The RX, as we said before, we believe the engine for growth obviously will be R&D like epinephrine and products like that. But also the CMOs, as we said, will be a major part of that position.

Got it, Chris. And then we're going to go to the line before we take the second question.

Thanks. Yeah, Christian Lenny with Stifel. The first one would be, as you come back to an earlier question around guidance, so to understand the weighting here. So you talked about on the revenue side, 2% to 4% full year. You were at 4% for this half. You talked about it being slightly second half weighted. and similarly on operating profit. You did 405 million in the first half. You talk about it being broadly equal weighted across the year. But yeah, you've maintained your guidance at the two to four on the top line and you've maintained your 720 to 770. So what is it that... I think we've been very clear that

Investment will continue. A lot of investment will continue. R&D investment in the second half will be higher. Promotion investment in the MENA will be higher. We still have, as I said, a few more high-profile people that we need to add to the business. We feel that all these things will, you know, that we need to do this and they will sort of weigh down. I think, again, the business is doing well. Things are moving in the right direction. And that's why we feel very strong to reiterate the guidance. And as I said before, we also feel very strong that the injectable engine will start to grow starting next year, we hope significantly.

And then the follow-up would be sort of touch on capital allocation, particularly, so 503B, you talked about divesting that. Last time we spoke, I think, it sounded like there was quite a bit of interest. There was some sort of tangible thing. Any update on that process? And then as it relates to what you just said around opportunities that may be in Europe, what sort of things might be incremental to your business in Europe, just so we have an idea of what sort of things you're looking at in Europe?

Yeah. In the past, we were only looking at increasing the... Let me again talk a little bit about more Europe. So we have manufacturing in Portugal. And that's where we have been really investing the most, expanding continuously. Then we have manufacturing in Italy and Germany, which somehow we haven't been really investing in because we were always thinking that eventually we will be closing those down and moving things over. The reality is we are finding out that both those sites are extremely important for Hikma. We had the full European team come visit us a little while ago. We sat with them for about a week and they're extremely excited. They feel that there's A lot more that we can do just by expanding manufacturing capacity, by expanding our footprint. So we have taken decisions to go ahead and expand as fast as we can in Germany and Italy, update the equipment. Some of the equipment is a bit older, so updating the equipment, expanding there. And we feel that that by itself will help us grow significantly. We've also now said for the BD team and the MA team, don't just look for injectors. Let's look for, you know, could be ophthalmics, could be ointment, could be some other things that we can add to expand. Because we feel Europe would be easier, you know, you will not have the U.S. in Europe. It's less there. So we believe that we, and because we don't have other products, so it's easier to do these things. And as I said, in the US it will be probably more of product acquisitions. But also there are opportunities for doing things like animal health or palm mix or whatever also in the USA. So Europe expansion will be a big driver of that. The demand is there. The profitability has been much, much better than we expected before. We see a lot of countries there adopt that it's not just prices that we want to look at. We look at prices. We look at quality. We look at history of delivery. All these things are coming into play. And as I said, we are now the fourth largest company in injectables, and that's why we feel emboldened that maybe we should be not just injectables in Europe, but to go into other opportunities there.

To add to Said's point, we are also expanding in different markets as well. So we're expanding in France and Spain. Those are still new opportunities, but they have really good growth opportunities. 503B. When we started, we believed this was a good strategic fit. But we realized that this was a distraction for the rest of the team. And it was really a small contributor. Actually, it was loss-making so far. So we thought we want really the injectables team to focus. This was part of the priorities that Said had to review at the beginning of the year and look into what improvements we can make to the injectables process as a whole.

The compounding in the U.S., you really have to... Two providers, you have the smaller pharmacies and we have seen actually the FDA has given them more authority to compound the peptides now and so on. Then you have the bigger companies. When we first started the regulations were Much less, or at least the FDA had not been very involved in regulating that market. But since we started, not just, I mean, it just happened, the timing, they have become much more active, and the FDA is still trying to figure out how they're regulating. So you have seen a lot of warning letters go out. You have seen a lot of... We figured that we would need to invest a lot of money. It would be very distracting. We thought we'd be better off concentrating on the businesses that we have, especially since we know that by investing more in our manufacturing capacities and bringing in, obviously, that bed for plant will be very important. So that's why we sort of said, let's give it up.

And in terms of execution, it's according to the plan. We are unwinding the business and it's up for sale and we see good interest as well in terms of selling the business to other parties.

We're just going to go to the line now. I think we have at least one question there. So I'll hand over to the operator and then we can come back to the room.

Thank you. To ask a question on the phone line, please signal by pressing star 1 on your telephone keypad. will pause for a moment to assemble the queue. We have a question from the line of Kane Slutskin from Deutsche. Your line is open.

Good morning, guys. To be honest, most has been answered, but just a quick follow-up on the injectable second half ramp. I'm just wondering how much of that is dependent on sort of Tigerland conversion versus sort of improvement in the broader underlying injectables business. And then just on the CMO side, you know, how's that pipeline of sort of Potential opportunities changed over the last maybe six months, particularly given growing interest in US manufacturing capacity. Thanks.

So again, as we said, there's been a lot of hospital buying groups adopting the product, taking it on instead of the older product. There was still a significant amount of supply of the ready-to-use Vanco that obviously we had to, the hospitals had to use. And that's why we say we feel, first of all, we see the ramp-up is going up now month by month. But we are much more optimistic that towards the last quarter of this year, we will be seeing some big strides as the new hospitals, the new buying groups that have been converted will start using the Tizer vans. So again, I think by October, November, we will have a much clearer idea of how fast and how big the product will be. But we obviously are extremely optimistic We have invested significantly in the marketing and sales team there. I think a year ago we were talking about three or four people. Now we're probably talking about over a dozen people working there. We have brought in a new head of marketing and promotion, head of commercial for that team. So we've done a lot to make things go in the right direction, and obviously we feel very comfortable that we will achieve that. In terms of CMO, again, we have CMO for the two businesses, for the sterile and for the RX. The RX, we said that there's a lot of... There are a lot of demands. Actually, for both businesses, there's a lot of demands. So it's really a question of our capacity and how fast we can be able to take in those. But we do have, I think, significant CMO for the injectables scheduled for the second half of this year.

Thank you. Your next question comes from the line of Myles Dixon from Peel Hunt. Your line is open.

Good morning, thank you. Sorry to labour the point and return to the guidance and the second half waiting, but there is a clear statement that says revenue and operating profit are weighted to the second half in the release, but I'm hearing, certainly I thought I heard, Said, about the second half additional cost in R&D. What is it that I'm missing about not even moving to the upper end of guidance on core operating profit for the full year? Thank you.

I think it's best to take it segment by segment, to be honest. For the Rx segment, we feel very comfortable that we should see a broadly similar performance In H2 versus H1, the branded is what we've said, even if you go to the top end of the range for branded, that does mean that it is, you know, much lower in terms of revenue and operating profit in the second half of the year. And then that's offset by the increase in revenue and operating profit in the injectables. So on balance, it is, you know, it is... You know, it's going to be for the group, I guess, a slightly lower second half if you, you know, primarily because of the branded business and the very strong weighting of operating profit for branded in H1 versus H2.

Also, let's bear in mind on the MENA and injected, on MENA and branded, you know, The situation in MENA is unstable and there's a war going on there. So we prefer to be cautious as well on our projections throughout the H2. Understood. Thank you.

As a reminder, if you wish to ask a question on the phones, please press star one. There are no further questions on the conference line. I want to hand back over to the Hikma team. James?

Thanks, James from Barclays. Maybe just to follow on to your comment there, which would be I noted the comment about being cautious on H2 because of the situation in the MENA region. But so far, it sounds like at least for Hikma's business, it hasn't actually been a bad thing because actually there's been some extra sales and less spending. So what is it that could be bad for Hikma's business as a result of this situation in the second half?

We said that there was a lot of, you know, usually when there is uncertainty, there's a lot of stockpiling. So stockpiling means that it will take time for it to be used. So the stockpiling has been made, so clearly that kind of sales will not happen in the second half, and then you need to reduce the, you know, use the stockpile. So that... There's always the issue of currency stability. There's always the issue of supply chain disruption. It's, you know, again, it's... Uncertain, really, uncertainty. Uncertainty, you know, it's tough to plan.

Tough to plan for that. But we've been in this region for decades, and I think we're really well positioned compared to all our competitors to capture any opportunities. And we've seen this in H1. I think the big issue is the stockpiling. Governments were buying a lot of... Plus, bear in mind that we're going to also spend more in H2 for the future growth as well. So that's the balance.

Thank you. Can you quantify the stockpiling a bit so that we can try and model that properly?

As I said in the beginning, we saw a stockpiling at the beginning of the war in Q1, but we saw this normalized towards the end of H1. So I wouldn't really put so much weight on the stockpiling, but our tender business is always H1 weighted, and the historical trend of our sales are always H1 weighted.

Good, I mean, we could do better, of course. Obviously, we would like to do better.

Thank you. Sam from Citi, and I have maybe two follow-up questions. One is a small follow-up point on the compounding business. Is there a timeline that you could communicate to us as to when this process you're looking to wrap up? And in relation to that, I think previously the guidance for other was to break even, and now with the compounding business being unwound... Are we looking at better than break even for the year? So that's the first question. And then the second question is, in terms of buyback, you've made significant progress. Would you rule out further buyback this year or do you need any further board authorization if you want to continue for a new program? Thank you.

The buyback is almost finished. I think there's very little, probably $20 million or something like that left. 230 million have been, so the buyback is almost done. I think so far we've acquired about 11 million shares in the buyback.

Yeah. So it's almost done.

So I think for this year, that's that. Obviously, the issue of the buyback every two years, there is a revision. We take a look at that and see, but we'll take that when it comes. The compounding, we are in discussions for somebody to take it over. It should be fairly soon.

It should be soon. We've classified this as held for sale in the financials, which means, you know, it should be, we expect it to be sold within 12 months, but we expect this to be much sooner.

Keep in mind, we've never, I mean, it was always put along the others, and when it came to sales, it wasn't put under anything else.

On the others, you're right, I think we will slightly, you know, we'll make, but I wouldn't allocate so much profit, but we'll make profit in the other segments.

Thank you. Chris Richardson from Jefferies. Just a quick one again on the branded margin. As you mentioned, there is quite a material fall off in the second half. And even though there was a similar H1 weighting at the top line in 2025, the margin stayed relatively sort of even. How should we think about sort of mid-teens as an exit rate into 2027 if financial sort of S&M or sales and marketing expenses are staying relatively consistent H2 versus H1? How is that fall off happening and how should we think about it progressing into the midterm?

Margins for the branded, as we continue to adopt more advanced products, the margins are better, but keep in mind that most of those products are under-licensed, and so you have to split. So I think the margins we've achieved this year, we are at, what, almost 30. They're quite high, and it would be, I mean, clearly we would like them to stay there. Do I think there's a scope for improving? I don't think so, because as I said, the more products that you license, the margins there will be around that. But the business is growing, and it's growing very nicely. So I believe that for the next few years, it will continue to outperform and will continue to do extremely well.

So a mid to high single digit top line growth rate with mid 20s margin for that business is sustainable.

Zain Abram, JP Morgan. Thanks for taking the follow ups. First follow up is just on price erosion. Just if you could comment on what level of price erosion you saw in the injectables business and in the RX business in the first half and how we should expect that to develop going forward.

For the injectables, I think it was relatively... I think the FDA is being a lot tougher. They are really ramping up their inspections and they are sort of enforcing new regulations and new requirements that is forcing everybody to be level-headed when it comes to pricing. So we haven't seen significant price erosion. I think for us it's a question of ramping up our production capabilities. As I said, the demand is there. And we really, for the last few months, we really missed out on the opportunities, the shortages and so on, because we didn't have. So by doing that, the safety stocks will help us tremendously because they open opportunity. And it will open up the opportunity for us to do more CMOs. Again, there is a lot of demand to CMO in the United States, obviously, but also in Portugal there is demand. So by increasing capacity, it will help us. For the Rx, the oral part of the Rx, I think everybody's suffering. There is still erosion.

It's probably mid-single digits, which is what we usually expect.

Our cells are becoming more and more inhalation, and so on, which are suffering much less than the solid dosage.

Makes sense. And then the other question was a follow up on CMO. So you've said that CRX, I think there's going to be quite a significant contribution next year from the contract that you have, which sounds like it's ramping up well. But how should we think about injectable CMO next year, given that you had the headwind from losing one of the big contracts at the end of last year, and now you have that capacity available, and you mentioned the strong demand. Could we see you potentially backfill some of that capacity as early as next year, or it might take a bit longer, depending on tech transfer times?

I think we'll be seeing some increase in CMO next year, but obviously the major increase will come when we have the Bedford plant operation, which will be in 28. Thank you.

One last question. Yeah, go for it.

Christian with Steve thanks for the follow up maybe just check in on that large RxCMO contract in terms of the status of that product if you can say and also a bit more sense for The things are on track. We have done a lot of work in terms of the preparation in 2026 and

As a result, we've generated good service revenues for that contract and that meant that we, as expected, we're seeing a step up from 2025 in terms of the contribution from that contract. We do expect that in 2027 we'll have a full year of commercial production from that contract. So, yeah, I would say it's going well.

I'd like to come to the others. Again, sorry to your question, Jiang. We expect, we guided towards a break-even and we still expect it to break-even. The 503B was really a small contributor to it. Okay, thank you very much. Thank you.

Thank you, everybody.