H Lundbeck A/S B

So thank you for joining the call today. It's of course my pleasure to be able to report the quarter one, 2024 results. It's been a quarter that has been very active and in a sense positive in its dynamic towards the progress to become a focused innovator in neuroscience. So if we can go to the next slide, please. Just to, again, company disclaimer, the forward-looking statements here are that, of course, what we present today is also subject to change. So if we can go to the next slide. Today I'll be joined by Tom Gibbs and Michaela Fischer-Hansen, who is our new heads of our geographic business. And, of course, you know Johan. and Jörg who will join me today to present to you the first quarter results. So if you can go to the next slide, please. So let's get straight into it and start talking specifically about where we see the first quarter heading and how we see the full year. But before we do that, I want to again mention to you in the context of where we stand at Lundbeck today, and I see clearly our progress very much around performing and transforming as we go forward. So I would like to share with you again where we stand in terms of our strategic path. And if we can go to the next slide, This is something we have shared with you, of course, before, and it's consistent with our previous interactions. But I'm really pleased with the progress we're making towards transforming to become a focused innovator. There are three elements that I would highlight for you today in this path. The first is securing that stable long-term growth for the company. leading with focused innovation in neuroscience, but at the same time being very disciplined around our capital allocation to stay within our sustainable profitability margins that we have communicated to you in the past. And I have to say from where we stand today and with the first quarter that we see here, we are well on our way to build that focused innovative strategy going forward with a very strong growth in our strategic brands, VIEPTI and Rexalti, and we'll talk more about that in a short moment. We are also seeing a really nice evolution of our innovation strategy in the pipeline with anti-pay cap as well as our alpha-synuclein in MSA. And of course, we continue to exercise opportunities in the business development area where we think about a programmatic approach to further build on the innovation strategy going forward. All of this, I would again emphasize to you, is underpinned by a very disciplined approach to our capital allocation to reallocate towards either additional growth opportunities or to where we could see additional innovation opportunities in the company. So then if we really go to the more specific points, which is the next slide, please, around our quarterly results. Again, I'm really pleased to see the progress we're making on first quarter. You see our growth here at 7% and adjusted EBITDA at 33%. But most importantly, I think what we want to highlight here is The assets where we are focusing our investment and effort, the strategic brands are growing at 17%, and I have to call out here VIEPTI at 79%, and you'll also hear later from the team on Rexalti where we see also double-digit growth on a total prescription basis. We've also seen in the first quarter, as well as the continuation of last year, a really nice progress on the pipeline with the approval, of course, of Abilify to monthly injection, also in Europe. So it gives an alternative there to our Abilify long-acting franchise. But secondly, also, we see nice advancement with our anti-pay cap into the next phase, Phase 2b, which is the proceed trial. And of course, a really nice result we saw in the first quarter on our study amulet, which is alpha-synuclein in MSA, where we also have the confidence now to advance to phase three. And you would have seen also in the first quarter that we've made a few changes to our leadership team. This is the team that will continue to perform and transform the company. And we feel very confident with these changes that we are in a strong position now to execute our strategy going forward. So I just want to again highlight to you the main management changes. before we continue. So if we can go to the next slide, please. It is, of course, you know, my pleasure to have this team and work with this team. And you know many of the people here, but there are some new people you'll see today. Of course, you know Tom, who's heading up US, but I would also welcome Nicola Fischer-Hansen, who is heading up our europe and international markets we have also yesterday announced maria alfaita who is heading up our commercial and corporate strategy and who will bring additional elements to the capabilities we need for the long-term future of the company and of course we we have johan who you know well jurg and lars who heads up our product development and supply As I've always said in the past, strong companies are built on the foundation of strong people and it's of course great to have Diane with us who will lead our people and organization going forward. With this team in place with a strong momentum, in the first quarter and the path we've set to become a focused innovator in the future i'm really confident around where we are heading for the remainder of the year with of course a commitment to the full guidance that we've set out for the full year So with that, to go to the next slide, I would like to therefore introduce and hand over to Tom and Michaela to take you further through the performance on the asset level at a geographic level as well. So over to you, Tom.

Great. Thank you, Charles. As Charles mentioned, we delivered strong global commercial performance during first quarter of 2024. And this was headlined by 17 percent growth of strategic brands, which now account for almost 71 percent of overall net revenues. And this growth was led by VIEPTI. Next slide, please. We are very pleased with the performance of VIEPTI. VIEPTI's performance has been fueled by accelerating growth in the U.S. and supported by a continued stream of launches and robust brand adoption in our prioritized ex-U.S. markets. VIEPTI global net revenue for the quarter was $617 million DKK, and this represents, as Charles said, 79% growth year-over-year. Net revenue for VIEPTI in the U.S. was 544 million DKK, representing 69% growth over 2023. Importantly, we are beginning to see meaningful contribution to global sales by ex-U.S. markets, with VIEPTI now available in some 25 markets. These markets are exhibiting strong anti-CGRP market growth, and importantly, VIEPTI continues to gain meaningful market share across all of these markets. I do want to take a moment to focus on the U.S., Over the past year, we have worked very hard to refine our specialty commercial model to support VIEPTI, focusing on four key levers, HCP engagement, and this is both on the sales side as well as the medical side, patient activation, patient experience, and market access. It's these four levers which have made material contributions to accelerating demand by driving depth, and breadth of prescribing, and increasing our momentum in new patient starts as well as patient adherence. Importantly, we continue to hear very positive clinical experiences from physicians and patients regarding VIEPTi, which are reported in the review real-world evidence clinical trial, which was published in the Journal of Headache and Pain this past April. Next slide, please. RIGSULTI continues to perform well, propelled by the continued strong progress of the AADAD launch in the U.S. U.S. TRX growth during the first quarter of 2024 was 15.8% increase over the prior year. Global reported revenue increased 7% versus prior year. The difference between the demand growth and revenue growth is attributable to variance that we saw in channel inventories and to a lesser degree, gross to net in first quarter 2024 versus first quarter 2023. We are pleased with the strong demand growth observed across all of our prioritized markets. The majority of that volume growth is driven in the U.S., particularly in AADAD, with 205% monthly volume growth when we compare January 2024 claims to the pre-launch baseline. The long-term care channel is disproportionately contributing to Rigsalti AADAD growth, with 598 percent monthly volume growth since baseline, and the market share in the long-term care channel has increased more than six-fold. Next slide, please. Rigsalti AADAD volume is becoming increasingly important to the overall Rigsalti growth, and we expect this to continue through 2024 and beyond. AADAD contribution has grown to 12.5% based upon our most recently available data, and we expect AADAD overall contribution to the brand to exceed 20% by year-end. The AADAD launch has also had a positive halo effect on the overall brand performance with non-AADAD monthly claims volume growing at 15.9% from April 2023 to January 2024. Now, in analyzing some of the most recent TRX data, non-AADAD TRX growth has moderated over the past quarter. We attribute this to our MDD direct-to-consumer campaign being off the air from November through the end of February. MDD direct-to-consumer promotion has resumed on February 26, 2004, and we're beginning to see the lift in TRXs towards the end of April as we fully deploy the RIGSALTI marketing mix. And I think of note, the latest NBRX or new-to-business prescription data point of 2,690 is an all-time high. I'll now turn the presentation over to Michaela to discuss performance for other strategic brands. Michaela?

Thank you, Tom, and good afternoon, everyone. I'm Michaela Fischer-Hansen, and I'm very happy to be here now in my second month with Lundbeck. If I can have – I already got the slide. Thank you. If we look at Brintelix or Trintelix performance in Q1, you can here see the revenue performance worldwide, very impressively growing at a double digit at 1.17 billion DKK in Q1-24. Very impressive, I think, considering that the brand has been on the market for more than 10 years. If you zoom in on the numbers, you can see that rest of the world is driving majority of the growth, a growth of 13% to 810 million DKK in Q1. where Europe is growing at 16%, and that's primarily driven by Spain with 26% growth. We see international markets growing at 10%, and that's driven by Japan growing at 23% and China at 12%. We also see a very nice growth in the U.S., up 7% with indications of stabilization. If you look to the graph in the middle, you can see this is MAT volume growth versus the market. And here you can see how we, in many of our key markets, actually outgrow the market significantly. And I specifically want to highlight Japan, Spain, Canada and France, where we see a very strong development in our overall growth versus the market. If I could get the next slide, please. Here we see the Abilify LAI franchise, and also here we see double-digit growth in revenue in the first quarter versus same period last year. We have U.S. delivering 9% of that growth and rest of the world delivering 12%, and we're at 859 million DKK in revenue. This is also a very strong performance for a brand that has also been on the market for over 10 years, and the performance is spread across many markets. I want to highlight here the U.S., Canada, France, and the U.K. I want to emphasize that the franchise here has two brands. We have Abilify Maintainer. That's the one that's been on the market for over 10 years. And then we have Abilify Simtify. That's the U.S. brand name. And Abilify Maintainer, 960 milligram, which is the European brand name. And that's the two-month injection in the franchise. Please note that Abilify Simplify was launched in the US in June of last year, and we recently got approval for the Abilify Maintainer 960 milligram in Europe in March. If you look to the graph in the middle of the slide, you again see MAT volume growth of the franchise versus the market. And again, you can see the very strong growth that we're seeing in many of the countries where we're outgrowing the market. And it's also important to note that we hold market leadership position in a good handful of our key markets. For the U.S., if we look at Q1, and that's, of course, also noting the recent launch of Abilify and Symptify, if you look at Q1 23 versus Q1 24, we actually see the market growth at 1.8%, whereas Abilify franchise for us is growing at 5% in the U.S. So that's basically driven by Abilify and Symptify. When we look to the year for the Abilify franchise, it's really about preparing for the launch of the two-month injection. We're bringing a new option to the market, and Johan will come back to that, which allows patients to have fewer dosages since it's a two-month injection and allows continued symptom control of their schizophrenia. And as mentioned, the U.S. launched the product a little over a year ago, and it's driving roughly 10% of sales and continues to grow. With that, I will hand over to Johan to tell us a bit about the R&D highlights from Q1.

Well, thank you, Michaela. It's great to have you in Lundbeck. Our R&D... Let's move slide. Next slide, please. So our R&D activities started 2024 on a strong note with important regulatory activities and critical progression in the mid-stage innovation pipeline. Charles already touched upon some of them earlier, and I will also come back to provide some more details in coming slides. However, let me just highlight some of what we see the major events. As Michaela already covered, we obtained another approval in Europe for our Abilify long-acting injectable franchise that we have together with Otsuka. So on March 27, the European Commission granted centralized marketing authorization for Abilify maintainer 960 milligram as a once every two month long acting injectable in a ready to use formulation. The decision naturally includes all EU member states as well as associated countries in the European economic area. This product is for maintenance, treatment of schizophrenia and other patients stabilized with aripiprazole, a clinically very important offering for sustainable care of hard-to-treat patients. We are looking forward to gradually roll out the product in Europe as a complement to the already very successful monthly Abilify Maintainer long-acting injectable. Also together with Otsuka, on April 9, we submitted a supplemental new drug application for brexipiprazole to the FDA. for the treatment of post-traumatic stress disorder. Moreover, the data from the program will be presented at scientific conferences. More on that also later. In the new molecular pipeline, we have also had a couple of very important activities that signify steps into late development stage. To start with, our first-in-class antibody 2-2-2 for migraine prevention has initiated its sub-Q development phase with a larger phase 2B trial, the so-called PROCEED trial. The progression of that program is based on a robust positive proof-of-concept trial that we announced and presented at key conferences last year, gaining significant recognition by leading academic clinicians in the headache disorder field. On January 31st this year, it was indeed very nice to be able to announce yet another readout from a proof-of-concept trial with another first-in-class program. This time it was for our alpha-synuclein antibody 422, which showed very encouraging results in the AMOLED trial. This view was substantiated in the reception following presentation of the data at the ADPD conference. As a further validation of the promising data, FDA has granted orphan drug designation for the program We also started a process with FDA on pursuing breakthrough destination. So, more on those programs in the coming slides. So, next slide, please. So, we have now initiated a widening of the anti-PACUP 2-2-2 program based on the foundation of the positive HOPE trial, which utilized IV administration. Using the HOPE data and data from a prior IV to sub-Q comparability PK study, we have been able to build a very strong PK-PD model. This model has enabled the design of a comprehensive trial to evaluate safety and efficacy of 2-2-2 in migraine patients across a range of subcutaneous doses. The now-initiated Phase 2b PROCEED trial will have a primary readout at 12 weeks using every four-week dosing intervals. The design includes a planned interim analysis, H125, Depending on the outcome of the interim analysis, the trial design allows for triggering an integrated option of also testing further IV dosing. Thus, the path forward in development of this novel mechanism action molecule has inbuilt flexibility and maintaining the momentum for determined progression towards further pivotal trials. Furthermore, the design of procedure trial maximizes the likelihood of adding a very interesting expansion of treatment opportunities in migrant prevention. So next slide, please. So now over to 422. So let me first remind you that 422 is an IDD1 antibody that is designed to bind to all major forms of alpha-synuclein, but with a particularly high affinity for oligomers. It has an active FC radium, which increases clearance of alpha-synuclein. We decided to take this mechanism into multiple system atrophy, a fatal neurodegenerative disease characterized by pathological aggregation of alpha-synuclein. a disease that currently has no treatment options. The proof of concept amyloid trial 42 in MSA was initiated at the end of 21. We enrolled very well throughout the trial, and we were therefore able to obtain the readout at the end of January of this year. As we reported previously, the AMLET trial demonstrated very encouraging results of efficacy across variants of the OMSARS clinical outcome measure, and also on secondary clinical outcome measures, as well as biomarker readouts. In the trial, we pioneered a baseline progression statistical approach to identify effects on longitudinal change. As I mentioned before, very soon after readout on March 8th, we were able to secure a late-breaking presentation of the headline results of the trial at the ADPD24 conference in Lisbon. The presentation was very well attended, and it was very good to hear the very positive reception of the data by the scientific community and leading KOLs in the MSA field. The program has before received orphan drug designation in Europe, and Sakagaki assignment in Japan, but we're pleased to receive orphan drug designation by FDA in the end of April, something that requires sufficient evidence of clinical effects. We have also progressed on the path to obtain breakthrough designation, as well as applied for the so-called FDA start pilot program. We have now analyzed the data extensively to be able to outline a design for a phase three program. So the next steps now constitute seeking input on the proposed program from main regulatory agencies in the coming months, with the hope of being able to initiate a phase three program no later than very early next year. Next slide, please. Yeah, in September last year, we concluded the PIVOTER program on Brexpiprazole and PTSD. Based on the outcome of that program, we decided to progress seeking S&DA review by FDA. During pre-submission discussions with the agency, we were encouraged to do some further data analytics, and subsequently we managed to submit the application on April 9. We are now awaiting FDA validation of the submission dossier and formal filing, which is expected to take 60 or 74 days after submission, depending on whether FDA assigns priority or standard review. The program is based on the combination treatment of brexpiprazole and sertraline. Initially, an exploratory report trial was positive for the combination, and based on this, a set of pivoted trials were initiated. The O71 flexible dose trial met its primary endpoint by demonstrating improvements from baseline on the CAHPS5 for patients receiving brexpiprazole 2 to 3 mg per day plus sertraline, versus for those patients receiving sertraline plus placebo. However, this O72 fixed-dose trial missed its primary endpoint. The BREX combination with sertraline was well-tolerated in the program, with safety results consistent with a known safety profile of BREX-B-Prasol from other trials and its general use. The BREX-B-Prasol PTSD program will also be presented to academic community for the first time at the American Society of Clinical Psychopharmacology with an oral presentation very soon, on May 28th, and a couple of poster presentations during the meeting. Next slide, please. So we have already made good progress during the first part of 24 in the R&D pipeline. This is building further on last year's strong deliverables, such as the positive readout in the anti-PAKER program. But as you have seen, we are also soon adding a highly innovative program to late development through the breakthrough results of the AMOLED trial. Important is, however, to see regulatory approvals, such as the European approval of the bimonthly antipsychotic long-acting injectable. And we also received approval in the first quarter in Canada of our pioneering treatment of agitation and Alzheimer's disease with Rexalti. Our innovation program 996 to provide an oral active D1-D2 dual agonist as an add-on treatment in Parkinson's disease started a tailored small patient population study early this year. However, that program is challenged in its enrollment of patients, and our Before predicted phase two proof of concept start will most certainly be delayed. Nevertheless, the coming period will continue to be quite news rich. For example, we have expectations to be able to finish the YFD sunrise trial. The trial has aimed to pave the way for further expansion in Asia, mainly in Japan and China for the product. Finally, I'd like to highlight that we're now progressing with two small exploratory projects. proof of concept trials for our anti-ACTH program, 909, with the ongoing congenital adrenal hyperplasia evaluation and a phase 1B study, and now within shortly also a cushing disease phase 1B study. With that, I'd like to hand over to Jörg.

Thank you, Johan. Very good progress in R&D and an important quarter for our pipeline. Before we go in the financials, please let me summarize the following. We're very pleased with our first quarter performance of 24, which puts us in the position to also reiterate our full year guidance for 2024. Looking at the underlying growth of our adjusted EBITDA clearly demonstrates that the targeted investments for VIEPTI and RICSALTI in the U.S. continue to pay off while also taking key projects in our R&D pipeline forward, driving mid- and long-term innovation for Lundbeck. Next slide, please. Our revenue for the first quarter of 2024 grew 7% at constant exchange rates, driven by the strong performance of our strategic brands, which are up by plus 17%. The adjusted gross margin, which is removing amortization, depreciation, and other adjustments linked to sales, decreased 1.7% when comparing to the first quarter of 2023. The decrease reflects mainly higher sales and a favorable effect from quarterly fluctuations in stock valuation. Sales and distribution costs increased 9% at constant exchange rates, reflecting the continued investments in sales and promotion activities in strategic brands, predominantly, as I said earlier, around Rexalti and Biapti in the U.S., Our expenditures in sales and distribution reached 33.8% of total revenue, increasing 0.6 percentage points versus 2023. Administrative expenses increased 2% at constant exchange rate and reached 259 million, corresponding to 4.9% of total revenues. R&D costs increased by 40% at constant exchange rates. The most relevant development in R&D costs comes from the progression of the Phase II pipeline with initiation of a Phase IIb dose-finding trial for anti-PACAP and a Phase III preparation for our anti-alpha-synuclein antibody. Our expenditures in R&D reached 18% of total revenue, increasing 1.4 percentage points versus 2023, which is in line with our financial guidance. Adjusted EBITDA decreased by 2% at constant exchange rates as a result of a lower adjusted gross margin following a favorable effect from quarterly fluctuations in stock valuation. In addition, the first quarter of 2024 reflects higher R&D costs to support the pipeline in progress and targeted investments in sales and promotion. Adjusted EBITDA margin reached 33 percent, equivalent to a decrease of 3.6 percentage points. If we exclude the effect from the quarterly fluctuations in stock valuation, the underlying growth in adjusted EBITDA was 6 percent at constant exchange rates, constituting an adjusted EBITDA margin decrease of 0.6 percentage points. Next slide, please. Our EBIT grew by 9% at constant exchange rates, reflecting the operating leverage effect of higher revenue and lower product rights amortization, offset by higher operating expenses regarding investments in sales and distribution and R&D costs. Furthermore, EBIT for the first quarter of 2023 was negatively affected by the recognition of a provision for bi-empty inventory obsolescence and the aforementioned quarterly fluctuations in stock valuations. Net financial expenses reached an income of 29 million, equivalent to an increase of 135 percent. The positive development is mainly driven by the favorable developments in interest income due to lower debt and higher interest income on cash and favorable currency impacts. The effective tax rate of 23% is in line with full year expectations. Net profit increased by plus 14% to 1 billion and adjusted net profit and EPS increased by 1% to 1.4 billion and DKK 1.38 respectively and also aligns with underlying performance. Next slide, please. The cash flows from operating activities in Q1 24 represents an inflow of plus 961 million compared to an inflow of 378 million in the first quarter of 23. The operating cash flow is obviously a reflection of the continued solid EBIT performance, further impacted by slightly higher adjustments for non-cash items amounting to 645 million. Changes in working capital amount to 886 million in the first quarter of 24, mainly driven by a lower inventory build-up in Q1-24, mainly due to the completion of the Viapti fixed supply quantity agreement in 23, higher trade receivables, and lower short-term debt in Q1-24, mainly due to a sales milestone paid out in the first quarter of 23. The cash flows from investing activities were an outflow of 94 million driven by capex investments in the first quarter of 24 compared to an outflow of 77 million in the first quarter of 23. The cash flows from financing activities were an outflow of 760 million in the first quarter of 24 compared to an outflow of 945 million in the first quarter of 23, primarily driven by lower debt due to the revolving credit facility being fully repaid in 23. and offset by a higher dividend payment in 24. The first quarter of 24 closed with a net cash position of 0.8 billion compared to a net debt of 2.5 billion in the first quarter of 23, effectively deleveraging the company and bringing us into a very strong financial position for the future. Next slide, please. On February 7th, 24, Lundberg communicated the financial guidance for 24, focusing on revenue performance and adjusted EBITDA at constant exchange rates. The first quarter results of 24 in line with our expectations and lead us to confirm our full year guidance for 24 at the same time. Changes in the soft guidance are related to a projected reduced effect in reported rates, benefiting revenue and bottom line performance. This positive effect is further supported by lower expected financial expenses, but partially offset by higher effects from hedging. With that, I hand over to Shao.

thank you so if we could go to the final slide please and again i want to thank the team for you know supporting the discussion today with you of course it's uh great to have these results strong momentum that we see in the first quarter that leads us to the path that we set out to become a focused innovator and continue to advance innovation in neuroscience and build that long-term future for Lundbeck, specifically addressing the long-term growth and innovation in the company going forward. So with that, I think it's a moment for us to take some questions.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only headsets while asking a question. Anyone who has a question may press star and one at this time. Our first question, It comes from Mark Goodman with Luring. Please go ahead.

Yes, hi. Can you talk about the inventory change that you were mentioning on Rick Salty and any other inventory changes? Usually we see a lot in the first quarter with products in the U.S. And then second, can you give us a little more detail just on Vietti and the number of patients? you know, the persistence of patients who are staying on therapy. So how much are new patients versus, you know, existing patients in the U.S.? That's probably the longest you've got data on. Thank you.

Yeah, thank you, Mark, for that question. I think for the question on inventory, shall I hand that to Tom? And then also, Tom, please comment on the BIEPT underlying patient numbers.

So thank you for the question. As you rightfully stated, as we've looked through 2022 to 2023, end-of-year variance from a channel inventory standpoint. We did see some additional stocking in January of 2023 that we did not see in 2024. We estimate that was about $6.1 million. As it relates to VIEPT, I really want to talk a lot about persistency because one of the things that we're seeing is increasing momentum, certainly on new patient starts, but our persistency, I think, is reflective of the value of this product to patients and and physicians. If we look at our persistency, the most recent data we have, 47% of all patients are on VIEPTI within a 12-month period. This compares to 39% for Botox, 34% for sub-Qs, and 27% for Q-Lipta. Thanks.

Our next question comes from James Gordon with JP Morgan. Please go ahead.

James Gordon, JP Morgan. Thanks for taking the question. The first question is on Repsolty and US performance. So I heard the comment about a slight year-on-year destock. Any other one-off evidence? Because if I look at it, it looks like sales only grew about 6% local currency with the AAD boost you described. And the charts are very useful breaking out the prescription trends the initial AAD approval. But just year-to-date, what have non-AAD prescriptions done? Has there been any significant growth in non-AAD prescriptions in Q1 year-on-year? Or has that actually slowed, maybe because of this ban on marketing, to not really being growing? That's the first question, please. The second question was on business development. I saw a comment on Bloomberg, a media interview, I believe, which said that Bloomberg has a $5-6 billion war chest That seems quite high given the leverage ratio I calculated that would imply. Is that right? Was that a misquote? Is the plan for a string of polls? Or when you've been quoted as saying a deal this year, could you be doing something quite big in that sort of range?

Yeah, thank you, James, for that question. Let's first go to Tom to answer your question on Rex Salty.

Sure. So thank you for... Thank you for the question, James. Unfortunately, I can't give full transparency in terms of what the non-AADAD prescriptions look like through the quarter because, unfortunately, claims data, as you know, are delayed versus TRX data. But I will provide a hypothesis of what I think the claims data look like based upon TRX data. Based upon the momentum that we continue to see with AADAD, and we did see a little bit of a flattening of TRX demand, particularly in the month of March, we do hypothesize that MDD prescriptions had flattened a little bit during the first quarter. Just for reference, MDD represents about 38% of the total brand prescriptions. We attribute that, as we talked about through to the MDD, direct-to-consumer campaign, being dark for a little over four months. We know that DTC is an incredibly important part of the element of our marketing mix, driving over a 2.8 ROI on a year-over-year basis. So that is where we think we had seen a flattening. But what we're very pleased about is that we've turn DTC back on on February 26th. And you normally see about a six to eight week delay in terms of the impact. And we're actually already starting to see the impact in late April, where we saw our TRX demand continue to start moving up again. And the most sensitive measurement, NBRXs, we saw an all-time high with our most recent data point for April 26th.

Thank you, Tom. And James, let me address your question on the business development strategy and the question on firepower. So first of all, I think you would have seen also our strong cash position that is in a sense converted from a negative 2.5 billion last year to now 800 million DKK in the first quarter. So we see the cash generation really strong in the underlying business. The number you quoted of 5 to 6 billion euros is based on how we see this in a midterm view rather than in the actual amount today. But with that view going forward, our strategy remains intact as we've communicated to you in the past that we see rather a string of pearls, a series of deals, that makes sense to complement what we're already doing today, where we play on our strengths, either in the space of neuropsychiatry, neuro-specialty or neuro-rare, and those that we can essentially easily afford and deleverage also in a reasonable way going forward. So I wanted to, again, just confirm our BD strategy being a string of pearls. But thank you for that question.

Our next question comes from Lucy with Jefferies. Please go ahead.

Hi there. Thanks for taking my questions. Just following up on the Rexalti BTC ban, I just do expect, you mentioned the scripts have kind of started to recover already. Do you think you're going to be able to compensate for that kind of shortfall in the first quarter? Or will this just be made up by agitation in Alzheimer's rather than MDD itself. And I guess what's your confidence that you won't get another ban? Is it fairly easy to kind of know what caused the ban in the first place? Secondly, the guidance talks about slight growth for Abilify maintainer in the U.S. What's your expectation ex-U.S. for that product? And then Finally, just on anti-pay cap as being one of the kind of key pipeline programs, and forgive me if this has been covered previously, but do you have any idea why a previous competitive molecule was discontinued in phase two, and do you have any understanding of how your molecule may differ from that competitive program? Thank you.

Thank you, Lucy, for those questions. I think, Tom, if you would mind addressing our view on the impact of DTC and Rexalti as a starting point. Thank you.

Sure. Thank you, Cheryl. As I stated earlier, I think it is important to note that we did see 15.8% TRX demand growth in the first quarter 2024 versus first quarter 2023. So strong double-digit growth. And we do believe that that was mostly accounted for based upon our success with our AADAD launch. We do know that there was an impact for DTC being dark by about four months, but based upon what we're seeing and the sensitivity that we're seeing to turning the DTC back on, we're very confident that we're going to be able to continue to grow DTC. MDD throughout the rest of the year and really continue to accelerate AADAD for the rest of the year. As it relates to our confidence that the DTC campaign, we will not receive another letter. I would say our confidence is incredibly high because what we have rolled out in February 26 and all subsequent campaigns, we have engaged what we call OPDP or the FDA regulations, and they have approved these campaigns.

Thank you, Tom. Michaela, can I ask you to address the question on Abilify ex-US growth?

Yeah, thank you, Lucy, for the question. So we don't really provide growth forecast per product, but I can say that we certainly see growth for the year. Thank you for the question.

Thank you, Michaela. Johan, let's talk about anti-pay cap and our differentiation.

Yeah, thanks for that question, Lucy. We have got it before, but I'm happy to cover it. There are basically two molecules that one should keep in mind from past programs. One is some years back, it's Damgen AMG301. That was an anti-PAK1, a receptor blocker. And I'd like to remind you that PAKUP, to our knowledge, has three active receptors, PAK1, PAK2, and VIP. And that actually did was Masuda Sina, who was the PI on that one, and it had a very robust trial, and it was robustly negative. And our read was that it's not good enough to basically block the receptor. You have to go to the ligand, and that's what we're doing with our antibody. The other one you may have in mind is the Lilly 3451838, which was running a phase two trial. And that is a ligand blocker like our molecules are presumably something quite similar. They stopped early. They stopped early enrollment after quite some time. They tried to run this partially during the pandemic. And it was only a U.S. trial. And I should probably refrain from commenting too much on what we have discussed. speculated what might have gone on, but they stopped early. And what we saw in our trial was that it might be a little harder to enroll subjects in the U.S. than ex-U.S. because people generally go and like the CGRP drugs. So they were kind of self-competing a little bit with the CGRP class pickup. Are we concerned about that? No, we learned quite a bit from our trial with both US and ex-US sites, and we think we can engineer a trial that can progress. But quite frankly, what we understand is that they just stopped because patients were not coming in. Operational reasons. Now, of course, more on the speculative end. Lilly is busy with other things, and maybe this is less for them to be engaged in.

Great. Thanks very much.

Our next question comes from with UBS. Please go ahead.

Hi, it's Kim from UBS. Thank you for taking my questions. Two, please. The first one is for Charles, if I may. So you have quite some changes in management recently. Just wondering if you could maybe elaborate a little bit of, you know, your thinking about strategies going forward behind those changes. I mean, you have already sort of reiterated your BD, you know, sort of strategy still doing string of pros, et cetera, et cetera. So just wondering, you know, where do you hope to make the most change going forward with all the changes in management? So that's the first question. And the second one is for Johan, please. So I have a question on 422, alpha-synuclein. So just wondering, you know, what are your thoughts on translating, you know, the phase two data into a positive phase three trial? And specifically, I was just wondering about your thoughts on the primary endpoint, given that, you know, this indication and probably similar to for other indications is that there might be a difference depending on how you actually measure the primary endpoint. In other words, you know, if you set your primary endpoint to something similar to your Phase II design, you probably have a much higher chance of success versus if you set the primary endpoint to, I don't know, WMSAR's score change at week 72. Yeah, any comments there would be great. Thank you.

thank you for your question uh let me address also from a management team change so of course i'm really pleased with you know what the new members also bring and and complement some of our members in the team that are building a strong foundation and it's really about essentially bringing in some fresh thinking continuing to revitalize how we might think about the future of our innovation strategy but there's also a very clear view behind that which is one where we essentially create a very clear pillars of accountability, of course, with Johan in R&D, but also with Michaela and Tom having very clear geographic accountability for executing on our growth strategy of our assets. But then bringing in Maria really helps us to further elevate our thinking around where is neuroscience going? What is the neuroscience space from a strategic opportunity perspective? but also building for us, in a sense, a view of what other capabilities might we need. How do we think about AI? How do we think about future needs for also our pipeline as we are, in a sense, seeing that pipeline evolve with more global assets to be launched on a global stage? So this is how we think about this team, in a sense, working in a very joined-up way, but being very agile to... to build our innovation strategy for the future. But very happy with this team and where we stand today. So with that, I think, Johan, you want to comment on the question on Assumab?

Yeah, thanks. And thanks, Jan, for the question. I mean, the usual dogma in R&D is that you don't change something you have in phase two that worked to phase three. But there are two elements here to consider. And you have maybe seen some of the data we had as a primary, the total OMSARS. And there's also the modified OMSARS. we had that as a key secondary and the different flavors of the same scale and how you use it fda has their view on this ema their own view so it's sometimes the regulators are not fully aligned what they favor we use the total as the primary this time we could opt to do something else for the phase three because we did look at both and both looked good for our trial. We can design a trial on either. So that's flexibility that I would say is in the realm of not changing too much between phase two and phase three. I think, Hedin, also in your question is more a question about the statistical approach. We used a Bayesian progression model here. and are we going to try to use that also for phase three um yeah we think that is a very very suitable approach for this kind of trials so obviously that will be part of the conversation with regulators moving forward but at the end of the day is our conversation with regulators and how we balance all that inputs that will judge how the final design look will look at look like so we'll come back later on when we really finished it will take some months uh quite frankly, until mid of the fall, until we got the feedback we need.

Thank you very much.

As a reminder, if you wish to read the photo question, you may press star and one. Our next question comes from Manos Masarakis with Deutsche Bank. Please go ahead.

Hello, thank you very much. So the first one is for Nicola and Maria, or both, perhaps. If you could give a little bit of color on sunrise in Asia, peak potential, as well as what do you know about the Asian markets in terms of how an IV product will be taken up? Second question for Johan. You're meeting with the FDA on the MSA. How do you expect to announce the outcome of that meeting and further details on the design for the Phase 3? Finally, a quick one for Jörg. What types of activities have you already started doing for the Phase 2b and the Phase 3 of Paycom and MSA, respectively, that have already started being accounted for in your financials? given that the MSA study has not even started. And sorry to Charles, I don't have a question for you today.

Thank you, Manos. So, Johan, if you could comment on sunrise first in Asia.

Yeah, sunrise in Asia. As you know, we had a package of sun studies. Sunrise is the bigger one. We had the sunlight that probed the... I can't hear. Sorry, I'm on now. So, as you know, we have a package of studies called SUN. We had a sunlight study some years back. That was a small pioneering study. And then we have the SUNRISE study now that is the bigger, more pivotal trial. We learned a lot from sunlight. Populations do differ. And different patients come in to different doctors in different countries. And China in particular was learning for us. Other companies have now concluded activities in both China and Japan. So we are more encouraged that there is a way to find a drug working there. But obviously, there's obvious development risk with any program. IV has not been a problem, quite frankly. Most patients come into hospitals and they can do IV. And I think we probably will see quite a bit of that also in the marketplace because that's how you see care in China. You had also MSA, FDA. Should I take that also? Yeah. Yeah, so that's simple. We will not chat too much what we're discussing with FDA because this is going to be back and forth. You will probably see mostly how this ends up with the announcement of our trial design and the posting on CleanItTrial.gov. There is no point really go back and forth with information when we have fragments of information moving forward. If we get breakthrough designation, that's probably something you will hear about.

Thank you, Johan. And Jörg, do you want to comment on how we see the R&D evolution, I think, is the question around MSA and the investment behind it?

Well, We're currently, as Johan said, basically discussing the design of the phase three. And we're fully aware about the full investment. And I think you've also seen that we feel confident enough not only fully reiterating our guidance for 2024, but also reiterating our midterm guidance. And I think that implies that even accounting for the additional investment of ASIMAP, we feel confident reiterating these targets. Of course, the, let's say, plan for 2024 does not entail a significant part of it, except certain CMC investments already that we have launched.

And then I think the final question was really on the expectations we see for Asia. So, Michaela, if you could answer that, please.

Yeah, Manos, thank you very much for that question. Unfortunately, I'm once again going to disappoint because we don't provide guidance on product and regional level, and certainly not when we don't have an approval yet. But I can tell you we are waiting in anticipation, and also, as Johan was saying, in the trial at least, we haven't seen great barriers with the infusion setup. So more to come on that, I promise.

Thank you very much.

Ladies and gentlemen, this was our last question.

Good. Well, thank you for joining us for the call today. Really appreciate your questions and look forward to seeing you soon. Thank you again.