H Lundbeck A/S B

Ladies and gentlemen, welcome to the Lundbeck Financial Statement for the full year's 2025 conference call. I'm Lorenzo, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference will be recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Charles Van Zyl, President and CEO. Please go ahead.

Good morning, everyone. Welcome to our full year 2025 earnings call. Of course, it's my pleasure to really present to you our outstanding results. It's been, again, another record year for Lundbeck in 2025, and it's really underpinned by very strong fundamentals very much underpinned by our focused innovator strategic path. You'll hear me say a lot about the results, very much in the sense of it's not by chance, but by clear intent that we are delivering these outstanding results. And go to the next slide, please. So of course, our discussions today are containing forward-looking statements, which of course are subject to change. So let's go to the next slide, please. And here I would like to take a moment just to pause and reflect on the last two years of our focused innovative strategy. And there's so much to say about this transformation that Lundbeck has gone through, but I have to say I'm really proud of the progress that we have made. Again, it is not by chance, but by clear strategic intent that we see these very strong results. If you recall, our focus innovative strategy is very much about growth, innovation, and funding. And when I speak about growth, you would have seen over 24, 25, that we've had double-digit growth across our strategic portfolio, which allows us in a way to extend our growth also into 2026. Secondly, when you think about innovation, we made the acquisition of Longboard that bolstered our late-stage pipeline, but we have truly seen a transformation of this pipeline over the last two years. with a position we're in now with five to six mid- to late-stage assets that are really the growth engine of the future of Lundbeck. And it's a pipeline that is characterized by first-in-class or best-in-class molecules. And the third foundation of our strategy is really the funding, the largest capital reallocation that the company has undertaken. And it has allowed us to fund the growth and the pipelines. and keep us in a flexible financial position to continue that journey into 2026. If we go to the next slide, I'd like to focus a little bit more on 2025. And truly, it was an outstanding and a record year for Lundbeck. Again, our intent was to focus on investing in our strategic brands, but also in our pipeline. And on the growth level, we've seen that continuation of the double-digit growth on the strategic brands being at 19% in 2025, underpinned by stellar growth and by up to 59%, and also stellar growth for XLT at 23%. As you recall, we also made very clear moves in 2025 around sharpening our commercial model to focus on 12 key markets and allowing us to work with partners across 27 markets Again, allowing us to focus our efforts on where we can play to win and grow very strongly as we go also into 2026. When you think about the pipeline, keep thinking about the fact that we're building strong diversification of this pipeline, building strong position in NeuroSpecialty and also in NeuroRare. When you think about NeuroSpecialty, of course, VIEPTI, a growth engine in the US and in Europe, but also soon to become a growth engine with the filings that we've done in China, Japan, and Korea, to truly make this a global launch for Lundbeck. You will also, in the first quarter, receive results on our anti-pay cap proceed trial that will further enhance our position in the space of severe preventative migraine. When we think about Nero Rare, we think clearly about Exicastrin, of course, the longboard acquisition that is very much in its Phase III and in execution of the clinical program, and so is Amlenituk in its FAST enrollment, also in MSA. Both of these really high unmet need areas where we can see the opportunity, you know, very strongly in the Phase III results. Then we will talk a bit more today about further elements of the pipeline in the mid-stage, our anti-ACTH. in congenital adrenal hyperplasia as well as Cushing's disease, and you'll hear more about that from the pipeline discussion later today. Fundamentally, the funding that you see is a continuation of the first two years of our focus innovator strategy where we will continue to be disciplined around a capital reallocation in this range of 1.3 to 1.5 billion that we are freeing up to create that flexibility for us to invest in growth and also in innovation. And therefore, we are guiding today very much in a position of strength from 24 to 25, going into 26, with revenue growth of 5% to 8%, and adjusted EBITDA between 4% to 12%, with that spread also taking into account a strategy of investing in the pipeline as we see the triggers unfold in 2026. So with that, let me just introduce the other speakers for today on our agenda, and you'll hear a business update from the team as well as the portfolio updaters and, of course, the financial results in more detail. So with that, it's my pleasure to first of all start with a business update and hand over to Tom Gibbs, our head of the U.S. Thank you, Tom.

Great. Thank you, Charles. As Charles just mentioned, We are pleased with our commercial performance for 2025, which is headlined by a strong growth of VIEPTI and accelerated growth of RIGSULTI. Please turn to the next slide, and I'll first review the performance details for VIEPTI. VIEPTI delivered strong and sustained growth for the full year 2025, and we expect this to continue in 2026. This performance has been powered by continued strong growth in the U.S., and supported by robust adoption of VIEPTI in prioritized ex-U.S. markets, including Canada, Italy, France, Spain, and Germany. VIEPTI global net revenue for 2025 was $4.476 billion DKK, and this represents 59% growth over the same period last year. Net revenue for VIEPTI in the U.S. was $3.908 8 billion DKK, growing 58% over prior year. In the U.S., our focus has been to make purposeful investments in our patient-centric model, supporting VIEPTI through our discipline capital allocation program that Jorg will speak to later. We will continue to make incremental investments in 2026 to elevate the impact of our execution informed by our advanced analytics capability and this includes a Salesforce expansion as well as optimized direct-to-consumer advertising. We expect to sustain market-leading demand growth by driving depth and breadth of prescribing and continued positive momentum in new patient starts supported by high written-to-infusion conversion ratio and best-in-class patient persistency. In Europe and international operations, significant work is being done preparing for the launch of VIEPTI in Asia. And if approved, we see this region as a significant opportunity to drive further growth for VIEPTI. Next slide, please. Now, moving on to RIGSALTI. RIGSALTI continues to perform well and deliver consistent growth propelled by continued strong progress within the AADAD segment in the U.S. Reported revenue was 5.745 billion DKK, increasing 23% for the full year 2025 versus prior year. Importantly, revenue growth in the U.S. was driven by strong underlying TRX demand, delivering 24.2% growth in 2025 compared to 2024. Rexalti AADAD volume is becoming increasingly important to overall Rexalti brand growth, and we expect this to continue through 2026 and beyond. AADAD monthly TRX volume has increased 725% versus pre-indication baseline, and the AADAD contribution to overall Rexalti demand has grown to 24.4%. Importantly, The 65-plus segment now contributes 34.8% or more than one out of every three Regsulti TRX claims based upon the most recently available claims data. The team in the U.S. is continuing to focus on the levers to drive continued growth for Regsulti, informed by our marginal return on investment analyses. As you may recall, we reallocated a portion of our DTC advertising for AADAD to expand our sales footprint, and this is mainly in the primary care segment. The first wave of the expansion of our multi-specialty Salesforce team was deployed during 3Q 2025, and we're encouraged by the early results. The second wave is ongoing, and we expect to be fully deployed during first quarter 2026. Overall, We're pleased with the momentum of Exalti demand exiting 2025, despite an increasingly competitive market and evolving policy landscape. TRX demand in fourth quarter 2025 grew 24.2% versus fourth quarter 2024. Precision execution across the marketing mix, including our expanded sales team and primary care, is expected to reinforce the long-term growth for Exalti and help address increase competition. Nicola, over to you.

Thank you, Tom. Let's turn our head to the Abilify franchise performance where 2025 was another year of solid growth momentum for the franchise, growing at 10% versus last year overall, now at 3.776 billion DKK. If we look at the U.S. first, the Abilify franchise delivered a 9% growth compared to the year before. and that was also resulting in a gain of 1.1 percentage point market share. Importantly, as the U.S. is transitioning from franchise maximization to conversion maximization, Simplify continues to be a key growth driver with an encouraging 22% NBRX weekly conversion rate. If we turn to Europe and international operations, the franchise delivered 10% growth versus last year. This was driven by continued launches of Abilify 960 milligram, which is now launched in a total of 27 markets across Europe and international operations. We continue to see strong conversion rates across our key markets, with several markets surpassing 20%. Across the markets, we also continue to see encouraging conversion rates from other oil and atypicals and LAIs that are outside of our Abilify maintenance franchise. Looking ahead, conversion maximization remains a critical strategic focus. And with regards to generic competition for Abilify 1M in Europe and international operations, we expect to see generics in the market in Q2 of 2026. Next slide, please. If we turn to the 2026 outlook, as Charles said, we're pleased to see that despite the pressures from generics that we expect, the strong performance of our strategic brands reinforces our confidence in updating our 2026 growth outlook, where we're pleased to guide a 5% to 8% revenue growth in constant exchange rates. Let me unpack that for you. In 2026, we expect to see headwinds from increased generic pressures on Abilify Maintenance and Brintelex, the reprioritized resources with the Takeda Agreement in the U.S., as well as emerging competition on Rick Salty. This is outweighed by a continued strong performance of Vietti, Abilify, Simplify, and Rick Salty. 2026 will also reflect in-year commercial adjustments that impact on our reported revenue and growth. As mentioned by Charles, in December 2025, we implemented a sharpened commercial model where we introduced 27 partner-driven markets. These partners will receive a commission fee of 25% to 30% of our revenue, which will reduce our net revenue compared to 2025. In addition, as part of the transition to the partner model, The partners are building up inventory in the markets, which is expected to amount to approximately 500 million DKK positive revenue impact in 26, which would be a one-time effect for this year. When adjusting for the partner model impacts, we're encouraged that our underlying performance is expected to be at 6% to 9% underlying growth, reflecting strong fundamentals as a result of the strategic decisions we have taken in 2024 and 2025. Specifically for our guidance for 26, as stated, we're pleased to guide a 5% to 8% constant exchange rate revenue growth for 2026, which is driven by our continued strong brand execution and our accelerated capital reallocation towards high-value opportunities globally. Jörg will come back to this in his section. With this, I conclude the performance section and hand over to my esteemed colleagues, Maria and Johan, for a portfolio update.

Thank you, Michael and Tom. It's great to see the continued very strong commercial performance throughout the full year 2025. Maria and I will take you through the portfolio update. Overall, during 2023 and 2024, we paved the way for the pipeline to go through critical value inflection points in 2025, with positive data emerging from several early-stage projects. Thus, this means, as you heard from Sean, that we can be confident and say that we will have five to six mid- to late-stage assets in the pipeline by end of 2026 for six to eight indications. So from our perspective, 2025 has been a solid year of execution and progression. We have continued to advance our research pipeline with innovative assets, with highly innovative and strong programs entering into development. I'd like to highlight that we initiated a strategic partnership with Conterra, marking Lundex's first entry into oligonucleotide-based medicines. As I mentioned, maturing the Phase 1 portfolio has triggered several programs to progress towards Phase 2 starts during 2026. At the same time, we have executed well on our late-stage development programs, as well as continue with critical brand support, primarily for VIEPTI. In our stage development, we have made extensive use of focused Phase 1b exploratory proof-of-concept studies, allowing us to generate patient data and progress programs with strong biological and clinical validation. As you have seen in the last two quarters, this has led to data-supporting progression of our D1, D2 agonists, Dynastix and Parkinson's disease, and our CD40 blocker 515 and Porrid eye disease to Phase 2 initiations. Next is our anti-ACTH MAB 909, now with the INA name Assetto Bart. Maria and I will return to Assetto Bart in a few minutes. For late-stage programs, 2025 marked the year executing on our two Phase C programs, Dexacathrin and Amlinitil, with progressing recruitment and continued health authority interactions. In Q4, Dexacathrin was granted breakthrough destination in China for DEA, And I'm limited to receive fast-track destination with the FDA, as well as orphan drug destination in Japan. Also during 2025, we completed enrollment in the Proceed Phase 2b trial. Finally, turning to our strategic brands, for IFT, we have now completed the Asia filings based on the Sun programs in 2025, with submissions in China and Japan in Q4, completing the global rollout of the programs. On VIEP, we also continue to generate strong data on efficacy and effectiveness in severe margins. Overall, this reflects a year of discipline and generally very successful pipeline progression. Next slide, please. Our pipeline progression is underpinned by strong scientific momentum. During 2025, Lundbeck maintained broad engagement across the scientific and medical community with many medical conference attendants and with 114 scientific presentations, and several high-impact publications and peer-reviewed journals. This level of activity is not just about visibility. It enables continuous external dialogue and validation of our science with clinical and academic experts. Importantly, this momentum continues in 2026 with strong presence planned at several medical conferences. Let me showcase some of those. For ADPD here in Copenhagen, we'll present Phase 1 data for our D1, D2 agonist 996, with further data being presented at the MDS meeting. Also at ADPD, we'll present the design of the innovative approach in Damlinitog pivotal program. For AAN, we have four programs presenting data, YFT, including new data from the Infuse Real-World Evidence Study in prior anti-CDRP treatment failures. Fixed the Catherine data from its Phase 2 Pacific trial, And I'm going to take expert input in what would constitute a clinical meaningful effect. Finally, for 2.2, our enter-takeout map will present data from two phase one trials. However, much more importantly for 2.2.2, we will present the procedure to the headline results at the American Headache Society meeting, as well later in June at the European Academy of Neurology. Since Lundbeck in recent period has obtained very encouraging data in new render chronology for the CD4D blocker 515 and Assetto Bart, we will showcase our emerging presence in this space at the end of conference in June. As promised, we will now turn over to speaking more about Assetto Bart. So, Maria.

Thank you. And as Johan just outlined and Charles mentioned in his opening remarks, our pipeline is progressing with increasing clarity, focus, and value inflection. and Acetabard is a strong illustration of that strategy in action. Acetabard represents one of our most differentiated first-in-class programs moving forward with a clear scientific rationale and a well-defined development path. Acetabard is an anti-ACTH monoclonal antibody designed to address the root cause of cortisol and androgen excess. This mechanism directly differentiates it from existing therapies that focus on downstream hormone control rather than disease modification. We are advancing Acetobar in two rare endocrine indications, ACTH-driven Cushing syndrome and congenital adrenal hyperplasia. Together, these indications represent more than 80,000 patients globally currently underserved and share a common prescriber base, enabling efficient development regulatory alignment, and future commercial leverage. Importantly, we have already secured orphan drug designation in CAH in both the US and EU, reinforcing the regulatory attractiveness of the program. From an unmet needs perspective, the rationale is clear. In ACS, patients lack targeted disease-modifying options and are often exposed to complex polypharmacy with significant safety limitations. In CAH, currently approved treatments provide suboptimal disease control and rely on chronic glucocorticoid exposure with well-known long-term risks. Acetobar's differentiated profile positions it to create value across different stakeholders. For patients, it offers the potential for improved tolerability in ACS and superior efficacy in CAH. For payers and reimbursement authorities, Meaningful differentiation on key outcomes supports reduced total cost of care. For healthcare professionals, it enables a simpler, more predictable approach to long-term disease management. For Lundbeck, solidifying our ambition in neuro-rare diseases, supporting long-term pipeline and value growth. In summary, consistent with the pipeline progression Johan described, a set-apart perfectly exemplifies how we are advancing focused, high-impact assets with clear differentiation, regulatory momentum, and significant upside potential. And for a more detailed look into one of these indications, I will hand back to Johan.

Yeah, thank you, Maria. Next slide, please. Yeah. So with that unclear medical need defined by Maria, let me show an example of the strong data we obtained for Acetabart, in this case for congenital adrenal hyperplasia. In CAH, chronic ACTH elevation drives adrenal overstimulation, leading to excess production of androgens and the precursors. Current treatments primarily rely on glucocorticoids, cortisol replacement, which suppresses ACTH indirectly. But as you heard from Maria, often with the cost of long-term overexposure and associated complications. By directly targeting ACTH, Acetabart is designed to intervene upstream in the disease pathway, reducing adrenal overstimulation and downstream hormone excess at its source. This provides a clear, strong, valid rational. 17-hydroxyprogesterone, 17-OHP, is a precursor in the production of cortisol. When cortisol production is hindered by CAH, the body produces excess of 17-OHP in the adrenal glands and gonads, and thus elevated 17-OHP is a diagnostic biomarker for the indication. In an ongoing multi-site open label, a typical dose trial in patients, we could demonstrate effective engagement of the HVTH pathway. As you can see, following a fusion, as I've said about, at 24 hours, there's a 90% to 98% reduction of 17-OHP from baseline. We also looked at androstimidone, or A4, a key marker used to monitor treatment efficacy and disease control. Like 17-OHP, we see a reduction in A4 following acetabart infusion ranging from 65% to 90% compared to baseline. These pharmacodynamic effects provide a strong reason to believe in the potential of acetabart to address core disease drivers in CAH. From a safety perspective, a set-about was well tolerated with no serious or severe adverse events reported. With this data set, we can now conclude the Phase 1b part of the ongoing Phase 2 study and move into the Phase 2 part of the study. Next slide, please. Finally, let me place this in a broader pipeline context. In addition to CAH, we also have data for acetabart in a similar Phase I-II open-label study in Cushing's disease. Cushing is a condition caused by acetase-secreting pituitary adenomas, leading to excess cortisol production by the adrenal glands. We have now very encouraging Phase I-B data to be presented at ENDO, supporting progressing acetabart to Phase II for this indication. Together with our CD4D blocker, 515, and 4-RI disease, and our D1D2 agonist, 996, and Parkinson's disease, we have three assets across four indications progressing towards larger Phase II trials. As mentioned already, 2-2-2 headline results from PRECEDE Phase IIb is near-term catalyst, and if positive, the program holds potential to expand our margin efforts into franchise in addition of a novel mechanism of action product. In conclusion, while progressing our current phase three programs, we are progressing several additional first-in-class and sometimes first-in-indication programs supported by clinically validated biology, building a solid mid- to late-stage pipeline. With this, I'd like to hand over to you.

Thank you, Johan and Marianne. Please allow me a few opening remarks before we turn to our key figures. Over the past two years, we have executed within a very clear financial framework, prioritizing growth behind our strategic brands, accelerating innovation and funding this through disciplined capital reallocation. This focus is clearly reflected in our results. From a growth perspective, we delivered strong double-digit revenue growth in 2024 and 2025, exceeding expectations and underpinned by exceptional performance from Biapti and Vexalti. This has translated into a strong gross profit growth, providing operational leverage, allowing us to both expand margins and step up investments where it matters most. This is why we entered 2026 with confidence and a clear strategic intent. We have strong commercial momentum, a sharpened operating model, and a significantly strengthened mid- to late-stage pipeline, with several key milestones ahead, including pay cap. From a financial standpoint, this supports both our growth outlook and the guidance ranges we have provided with that. I will now turn to the financial performance for 2025 and our guidance for 2026. Next slide, please. Revenue reached $24.6 billion, growing 13% at constant exchange rates, driven by strong momentum across our strategic brands, with 19% predominantly reflecting accelerated growth in Rexalti and Vietti. The adjusted gross margin was 87.5% impacted by a reservation fee related to a manufacturing contract for Amlinitok. Sales and distribution costs decreased slightly by minus 2% to $7.7 billion, reflecting the execution of the focused innovator strategy alongside disciplined resource allocation and capital reallocation. Administrative expenses reached $1.5 billion, corresponding to a slight increase of 4% constant exchange rate in line with expectations. R&D costs increased by 10%, reaching $4.9 billion, mainly driven by the continued progression of our Phase III programs for Bexie, Kasperin, and Amletatuk, and a maturing mid-stage pipeline. The increase was partially offset by the marginal impairment loss recognized in 2014. Other operating expenses reached $969 million, primarily reflecting an impairment loss of a non-strategic production site in Italy, around $600 million, and commercial restructuring costs of around $400 million, related to the transition of 27 markets to a partnership-led model. Adjustability A grew 24%, constant exchange rates mainly driven by the strong performance of our strategic brands, Just the WTA margin expanded to 32%, up 3.2 percentage points, reflecting our strong performance at 25, continued disciplined capital reallocation, more than offsetting the R&D cost increase from the acquisition of longboard pharmaceuticals and the shift to a more mid- and late-stage R&D pipeline. Next slide, please. EBIT rose 59% to $5.3 billion, driven by higher gross profit and lower sales and distribution costs. This performance was partially offset by higher R&D costs and other operating expenses associated with our commercial restructuring and an impairment loss of a non-strategic production site, as earlier mentioned. Net financials reached an expense of $788 million, mainly due to higher interest costs related to the new debt obtained in connection with the acquisition of Longboard. non-favorable currency effects, especially from the US dollars. Our effective tax rate was 28.9% compared to 15.5% in 24. 24 was positively impacted by the reversal of a provision related to the UK tax audit that was closed with no adjustments. The increase in 25 in the effective tax rate to 28.9% is driven by two non-recurring items in Q4. The primary driver was a non-deductible impairment related to the planned divestment of our manufacturing site in Italy, combined with the finalized outcome of a U.S. advanced pricing agreement adjustment that had a larger tax impact than previously expected. Looking ahead, we are guiding an effective tax rate of 20 to 23 percent for 26, reflecting the absence of these one-off items in a more stable tax position following the APA finalization. Net profit increased by 2% to 3.2 billion, and adjusted net profit increased by 5%, reaching 5.2 billion, again reflecting strong performance and capital reallocation, partially offset by higher financial expenses and income expenses. In line with our dividend policy, this proposed to pay out a dividend of 1 crown and 15 euro per share, which is an increase of 21% compared to 24%. The proposed dividend corresponds to approximately 36% of Lundbrecht's net profit and 30% of net profit adjusted for the impairment loss for our manufacturing site in Italy. Next slide, please. Cash flow from operating activities was in line with EBIT performance, reaching 5.5 billion, reflecting strong EBIT growth and a significant working capital improvement. Keep in mind that the change in working capital in 24 was highly impacted by around $2.8 billion of acquisition-related transaction and settlement costs. Cash flow from investing activities was an outflow of $611 million, reflecting the purchase of intangible assets and property, plant, and equipment, whereas 24, again, was highly impacted by the acquisition of longboard assets. Cash flow from financing activities was an outflow of 6 billion, mainly driven by the repayment of the loan facility used for the acquisition of Longboard, partially offset by a 500 million euro bond issued in Q2 to refinance the loan facility. Next slide, please. An essential part of Lundbeck's focused innovator strategy is our capital reallocation program. through which we have taken a number of deliberate decisions to support funding for growth and innovation. During 2025, we increased our level of ambition and continue to operate with a high degree of discipline, maintaining our target of freeing up approximately 1.3 to 1.5 billion by 2027, as communicated last year. Importantly, we have been able to absorb the longboard costs while still expanding margins in 2025. The capital reallocation program is built around several strategic pillars, spanning both value creation and efficiency initiatives. These have been successfully executed across 24 and 25, providing strong financial flexibility and a solid foundation as we enter 2026. One key pillar we acted on in the fourth quarter is our production model optimization. As part of this, we have initiated a plant divestment of a non-core production site in which will further reduce complexity and streamline our manufacturing footprint. In summary, we have more than delivered on the commitments we made two years ago during our capital markets event. We remain firmly on track to achieve our midterm targets. Next slide, please. Let me now turn the focus on the outlook for 2026, where we expect to deliver another year of profitable growth, building on the strong momentum we achieved in 2025. For 2026, we are guiding a revenue of growth of 5% to 8% at constant exchange rates. This guidance is underpinned by continued strong underlying growth across our core portfolio, particularly our key brands, which remain the primary drivers of value creation. As explained by Michaela, there are a couple of one-time effects impacting our 26 revenue. While the sales from the new partner markets are reduced by the partner commission fee, this decline is partially offset by a one-time inventory impact of approximately 500 million in Q1 2026. This impact is specific to 26 and relates to inventory buildup within the partner channel. and is not expected to be a recurring driver of revenue growth. Excluding these one-time effects and restating 25 on a comparable basis, our underlying revenue growth would be in the range of 6% to 9%. Turning to profitability, regarding adjusted EBITDA growth of 4% to 12% at constant exchange rates in 2026, This range is driven by strong gross profit growth, reflecting again continued momentum in Biapti and Rixalti. At the same time, we are increasing investments in R&D to support long-term growth. With several critical clinical trial initiations and readout plans during 26, especially pay cap, our guidance therefore assumes a wider adjusted EBITDA margin range. The wider range still points towards margins within our midterm guidance. And with that, I would like to hand over back to Charles.

Thank you, Jörg, and thank you to the entire executive leadership team for these outstanding results. I will make a few closing remarks on the next slide, please. So you've seen clearly from us, you know, the two-year window of where we've put some of the fundamentals in place that allow us to now extend our growth very clearly into 2026 with very clear priorities. We are extending our growth, as we said, with clear focus on our strategic assets. But fundamentally, you've also seen a transformation in the pipeline that allows us to really bring those five to six mid to late stage assets further into their cycle of development, allowing us to continue in our strategic path of developing them for the long-term success of Lundbeck. So we enter into 2026. really from a position of strength with a very clear strategic path. And as I said, these results are not by chance, but really by clear strategic intent and choices we've made that allow us now to enter 26 in this very strong position. So we want to open it now for your questions, and I'll hand it back to the operator.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their 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 2. Questioner on the phone, I request to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and 1 at this time. The first question comes from Charles Pittman King from Barclays. Please go ahead.

Morning guys, thanks so much for sharing my questions. Two from me please. A first question just on Rick Salty growth dynamics. I was wondering if you could provide a little bit more detail on how you're thinking about the potential impact of the IRA listing Rick Salty from 28 ahead of the 29 LOE and coupled with that just I know it's super early but if you're able to comment at all on the initial impact from J&J's cap lighter on Rick Salty's growth trajectory and I'm just wondering kind of can MVD and schizophrenia keep growing into that 28 kind of erosion timeline now and then just secondly on M&A back in November Lund pursued a potential acquisition of Avidel so just wondering if you provide some thoughts more on the potential commercial opportunity within the narcolepsy space that you saw what the rationale behind your approach was for that asset and just thinking about kind of the future BD and the rise of M&A activity at the end of last year, how you're kind of viewing the market today and what therapeutic areas you're most interested in pursuing. Thank you.

Thank you, Charles. And I just – I will beforehand to Tom to speak more about Rexalti. Just one word to say on Rexalti is that, you know, what you've seen and what we're guiding is very much as expected today. and also planned in our strategic outlook for the brand, but I think Tom can talk more to that, and then I will come back and speak about M&A. Tom.

Okay, so thanks for the question, Charles. Just first off on the IRA, based upon the established role RIGSULTI has as a treatment option for many Medicare patients with MDD, schizophrenia, and AADAD, Rigsalti did meet the criteria for selection of the IRA price setting in 2028. I think it's important to note that this was aligned with our expectations. I think it's also important to note that since approval in 2015, Rigsalti has treated over 1 million patients across all these indications. Lundbeck and Otsuka are committed to ensuring as many patients as possible have access to Rigsalti and will formally enter into the CMS process. Because the negotiation process is just the beginning, it is too early to really comment about our expectations related to the impact of the IRA. But what I will say is that we believe Rizolti is and remains a key growth driver for Lundbeck, and our focus remains on driving growth of this brand. And I think this is evident, as you said, in the fourth quarter. Overall TRX demand growth is And this is in the fourth quarter of 2025, so it's really important as we think about the exit momentum was 24.2% versus the same period last year. That's 16.6% growth in MDD and 63.8% growth in AADAD. So overall demand in fourth quarter 2025 is similar to what we saw throughout the year. As it relates to COPLIDA, I think it's also important to note that there's so much unmet need when we think about mental illness. Additional products is welcome for patients. And, again, it's very early to look at the impact of Coplida, but I think Coplida, from their perspective, is probably doing a pretty good job. But I think it's important for us to understand where their source of business is coming from. If you look at their source of business for MDD, 26% are coming from anxiolytics, 25% from SSRIs and SNRIs, 12% from mood stabilizers, and 10% from generic atypicals. If we look at Rixulti specifically, it's 1.5%. So even within the context of a new competitor, as you can see, Rixulti is still growing strongly within MVD, but most importantly, across the overall franchise.

To talk about M&A, again, I think the example you raised of Abadel is a normal process that we go through in bolstering our innovation. We keep looking externally in our M&A BD strategy in this notion of a string of pearls, like we've spoken before, where we look at opportunities that can either strengthen our positions we have, so we often look at them through the lens of the near or rare space, or near a specialty where we can have synergies with our existing pipeline or our sales organization to build sufficient scale. In the case of the space of sleep disorder, I mean, this is, of course, one of the spaces that we keep looking at. We also have some early programs that we will speak more about later in the year. that would be in this space of steepest order, but it's not the only space that we are looking at. So thank you for your question.

Thanks very much, Fokler.

The next question comes from the line of Xian Deng from UBS. Please go ahead.

Thank you very much. I'm from UBS. Thank you for taking my questions. Also, two, please, from my side. First one, maybe just to follow up on Charles' previous question regarding M&A. So just wondering, you also have, you know, this year moving four of your programs into Phase 2, but in the meantime, You also made the bid for Everdell last November, but then in the end didn't, you know, increase a bit further, so you didn't have the deal in the end. So just wondering if you could maybe help us to reconcile your strategy in terms of R&D, you know, considering both internal and external opportunities, please. So is that kind of, do you mainly look at external for the late stage while developing, prioritizing internal for early stage, or, you know, any color on that, that would be great. So that's the first question. The second one is, So, you know, understanding the underlying trends on TRX, everything looks great. But still, this quarter, you have a 9% miss versus consensus. So, just wondering, is there any stocking patterns that we should be aware of, you know, APS? I wonder if you could quantify that, please. Thank you.

Good. So, let me start with the M&A. So first of all, I think to just emphasize further what I mentioned, it is an ongoing process of how we build a sustainable pipeline. So we look at this through the phases of phase one, two, and three. And of course, how do we create more optionality long term? So we have a full pipeline, which is a great thing. We are investing in that pipeline. But we will not be agnostic to looking at other innovations that are coming from outside If they are more interesting, have more potential than what we have, we will make some of those choices and trade-offs in the pipeline. So from that perspective, yes, we really look across the range, and we feel that it's very much part of how we will build the long-term sustainability of Lundbeck by looking both at the external environment that supplements exactly what we are doing also internally to build a compelling pipeline. Good. Then the second question, we go to Tom.

Thanks for the question, Shannon. I'm glad we can clarify this for you. I said overall, as we talked about TRX demand growth exiting the year was 24.2%. We saw strong growth across both of our key indications. I think some of the mechanics to help close the gap between what was reported for revenue and the underlying demand I think are twofold. One is there's one less shipping day this year, and I think it's important to note that we only ship to the three big wholesalers on Mondays and Tuesdays. So basically when you have one day missing, in one day we'll ship one-third of the orders for the week, and then the second day we'll ship two-thirds of the orders for the week. So I think that's a dynamic that's worth noting. And then secondly, as we look at inventories, We exited the year for inventories at the low end of our normal range, and I think it's those two dynamics that will help bridge the gap for you.

Thank you very much. I was just wondering, the last part, you mentioned the inventory low end of normal range. This is relating to the wholesalers, right, not your inventory?

Yes, it's the wholesalers. We're just quoting the days on hand for wholesalers.

Got it. Thank you very much.

The next question comes from the line of Kirstie Ross-Stewart from BNP Paribas. Please go ahead.

Morning. Thanks, Kirstie Ross-Stewart from BNP. Two questions from me. So on the broad R&D expense range, I understand that pay cap progression is kind of the key swing factor. So can you talk to your thoughts on kind of probability of success here, especially in light of the positive hope data that we've already seen? And outside of that progression decision, Are there any other kind of moving parts that we need to be aware of? You've mentioned the phase two starts, but I think we already knew that they were moving to phase two. So can we assume that those are incorporating into the bottom end of the guidance? And if there's anything else, just inquire, contributing to that broad range. And then a second question on Acetabart, the anti-ACTH. Interested on your perspectives on the phase two data that we saw from Chronetics and CAH in January this year, which showed of good reduction of ACTH production and how you see this asset from a competitive perspective and how your antibody approach is differentiated versus the kinetics molecule atilbinate. Thanks very much.

Just a very quick question before I hand to Johan on the views on PayCap. I mean, overall, from an R&D perspective, Yes, it is one of the important investment triggers. But, of course, you know that we also have Exicastron and Lenitrug in Phase 3. So these are also sizable investments that we are making to complete these studies. And so, you know, from that perspective, we have sort of a healthy pipeline to fund, which is reflected also then in the range of R&D spend that we see. But I think, Johan, you want to make comments on your views of what you think you can say at this point on pay cap? And then maybe on your thoughts on kinetics.

Thanks, Christof. I mean, obviously you'd like to know some, Peter, how we view this. But we'll get the data soon and we'll take a look at it. There are, of course, prior information. And if you believe in priors, there is, of course, the HOPE trial. And then recently in June, I believe, last year, Lilly presented data from there. very early terminated program in 38 patients. That showed also an effect. So there is, of course, overall encouraging data in the field, and now we just need to expand this with a much wider dose finding range, and we'll see what the data will get. So you can draw your own conclusions based on that, basically. Thank you. For kinetics, yeah, we were happy to see that data. It's good validation that the pathway is ready to be addressed and you can see effects. I'd like to remind you that kinetics working with the ACTH receptor blocker, MC, melanocorticoid receptor 2 blocker. So it's at the adrenal gland stage, so it's further down in the biology, which means that you don't cover all the different aspects of the cell. overproduction in the system. So here we have the ability with this mechanism to have a broader symptomatic effect across different adrenal hormones that are hyperactive in this condition. So great data, but we believe it can have even broader effect with this molecule.

Thanks very much.

And going forward, I think what we Again, guided for was the range of 5.5 to 5.9 billion for 26, and that principally encompasses and also the advancement of anti-pay cap and anti-ACPH. I think on the rest of investments, that's always dependent on, you can say, milestone outcomes.

The next question comes from the line of Tobias Berg-Nissen from Danske Bank. Please go ahead.

Yes, hello. I have a question on YFD here. It's been a very solid 25 with accelerating growth here over the last three quarters. I'm just wondering if you can quantify some of the growth drivers here for 26. You have lifted the resistance ratio quite significantly over the last few years. Are you hitting the ceiling here? And also, if you can give some insight into, like, the dosing mix and what you expect here in exit and also perhaps on expected approval and first-time sales timing here for the APEC region, both Japan, China, South Korea. Thank you.

Thank you, Tobias. So, you know, let me ask Tom to comment more on the growth drivers for the U.S., but just to emphasize that this is, of course, a key asset of investment for us. both in U.S. and in Europe, and then we are filed in Asia, and so expect to see more of the sales impact on Vietti in Asia more in 27. But I think, Tom, you want to just talk quickly about how you see, you know, your insights on 25, how it carries forward to 26.

Yeah, so thanks for the question, and as you stated, we're pleased with the progress that we're making on Vietti. As we think about the key drivers for growth, it all starts with new patient starts. That's where our focus is and new patient starts by being able to drive VIEPTI further up the treatment paradigm to be used earlier in treatment and then within that context also to make sure that we're maximizing the rhythm to infusion ratio as part of our patient-centric model. As it relates to the 100 milligrams versus 300 milligrams. For the most part, we saw that allocation between 100 and 300 milligrams pretty stable over the course of 2025. We expect that to continue, but we will also say that the majority of patients are on 300 milligrams because the observation from clinicians is that you see improved efficacy at 300 milligrams for most patients.

Perfect, Tom. Thank you. I'll jump back in the queue.

The next question comes from the line of Alyssa Larius from Learing. Please go ahead.

Hi, everyone. Thank you for taking the question. This is Alyssa. I'm for Mark Goodman. I was wondering if you can give us a little bit more color on how the partnership model is expected to impact total revenue for VIEPT and RixLT. and also related to the one-time inventory build, should we think about the impact of being more front-loaded in the year, or will there be some inventory stocking spread across the quarters as some of the international partners kind of come online? Thank you.

Alyssa, could I just clarify your last question? We didn't quite get a clear line there.

Yeah, so related to the one-time inventory build, is that going to primarily be seen in Q1, or will there be some stocking across the quarters as well?

Very clear. Michaela, do you want to comment on your thoughts on how that's going?

So first of all, with the partnership model, as you know, we have, of course, the provision we need to, or the commission we pay the partners, as I explained. And then we have the one-off effect of inventory, which we expect to be a Q1, and it relates specifically to partners needing to build up safety stock in the market. So it's, you can say, a technicality, so to speak, of them taking over the distribution of our assets or our products in these markets. In terms of our expectations, I think you asked about our expectations for Brick Salty and Bayerty in the partnership markets, and we don't guide specifically at brand level, but generally, of course, our expectation is that the partners will be able to to continue to deliver with the momentum we've seen when we have the business in our own hands. So we expect to see that that will continue.

Okay. Thank you very much.

The next question comes from the line of Alexander Moore from Bank of America. Please go ahead.

Hi, two from me. One on Abilify Montana. Slide eight shows conversion to two monthly continuing to increase in Europe and IA. I just wondered if you could give any color on what your conversion rate assumptions are factored into the full year guidance. And then secondly, just one on pipeline. Slide 36 highlights potential benefit of monitoring requirements . I wondered if you could just give any color on what monitoring is currently included in the phase three deep sea and deep ocean trials.

Thanks. Thank you, Alexander. So Abilify conversion ratio, do you want to start, Nicola, with that?

Yeah, so generally, as I stated, for EIO or Urban International, we see an average of 19%. And, of course, what you have to bear in mind is that we're launching at different times, so not all markets have launched at the same time. And that, of course, also impacts the conversion rate as it progresses. But when we look to 26, we expect this to continue. And as I also mentioned, we expect to see generics in Q2, where we previously expected to see them earlier. So, of course, that also gives us a chance to convert more patients. So we continue to focus on that.

Tom, on your views on the US?

Yes. Well, I think if we look back over the course of the last two years, with Stabilify and Simplify, our focus has really been on franchise maximization, and we've been able to grow our market share over the past year for the franchise 1.1 share points to 24.9. I think as we look into 2026, our focus is really going to be moved from maximizing conversions, and we have seen some good momentum in NBRXs. With the latest week, we saw a 22% conversion ratio, and our expectation is and ambition continues to be to exceed the conversion rate of the other benchmarks in the LAI marketplace.

I think the question from Alexander, Johan, is on DexiCastron Phase 3. What are the endpoints? What are we monitoring?

Yeah, first of all, you know, it's the trial in what we call DE, which is the broad, broad indication here across all developmental properties. We have two trials, as you know, deep sea and deep ocean. What we're monitoring is, of course, how we are progressing with the trials. In terms of progressing with the global rollout, we are doing well. We have now activated all sites across the world. But remember, we started the trial during early 2025, and it's been a gradual rollout of the trials. But in monitoring in terms of blinded data in the trial, we're very careful with that. We have some monitoring of data acquisition, and we know that we get the right kind of populations in at the front door, that we have a good balance between various parts of the spectrum, and we're doing well on that. The little differences in enrollment between the two trials in Dravet syndrome is more challenged, but that is standalone trials. And the balance is good across the whole system. In terms of medical monitoring, we have good views on what's going on so far with the patients. No concerns there, what we've seen so far. And as you know, we are out of the box having to have cardiovascular monitoring with this mechanism. So that is a big benefit for trial sites. but how much I can say, and we're looking forward to try to wrap up the randomization during the year.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Charles Van Zyl for any closing remarks.

Yeah, so thank you again for joining today, and again I want to reiterate the very strong position we are in from the last two years of focused innovator strategy. And we are, of course, very confident as we enter into 26 with another strong year of performance ahead of us. So thank you again for joining today.