Ipsen Sa S/Adr

Hello and welcome to Ibsen's conference call and webcast on full year 2024 results. I'll now hand you over to David Lowe, Ibsen's CEO.

Thank you, operator, and hello, everyone. I'm delighted to welcome you to our presentation this afternoon, which can also be found on Ibsen.com. I want to use the time we have together to focus on the progress Ibsen delivered in 2024 and on the future opportunities and platforms for growth. Please turn to slide two. Please take note of our forward-looking statement, which outlines the routine risks and uncertainties contained within this presentation. Also, any of my commentary on growth will be based on constant exchange rates. Please turn to slide three. I'm going to take you through our brief presentation of our performance, followed by our CFO, Emre Klechatelier, who will provide you an update on the financials, and our Head of Research and Development, Christel Uege, who will focus on the progress and the key milestones of our pipeline. At the end of the presentation, all three of us will be participating in the question and answer session. Let's begin by looking at today's highlights. Please turn to slide four. I start focusing on the business. Please turn to slide five. Today's headlines illustrate how we are continuing to produce sustainable growth. In 2024, total sales grew by 9.9%, a result that is driven by the strong performance of our ex-Somatalin portfolio, which grew by 12.2% over the year. We also delivered a core operating margin of 32.6%. Since the beginning of the year, we have made strong progress with our pipeline, including a positive FDA decision for Onivite in first-line pancreatic ductal adenocarcinoma in February, U.S. approval of iCorva in June, followed by the EMA's approval in September, along with Kaifunda approval in the European Union in Allerger syndrome. Looking ahead, 2025 promises to be another exciting year for our pipeline, with four key milestones including anticipated approval of cabometrics in neuroendocrine tumors in the EU and the EU regulatory filing of tovaracinib, both in H1. In H2 2025, we anticipate a pivotal trial readout of phytocertis in SOP and, excitingly, our first proof of concept data for our long-acting neurotoxin, or LAND, in aesthetics. Crystal will cover those in more detail. Lastly, our 2025 guidance includes total sales growth greater than 5% at constant exchange rates and a core operating margin greater than 30%. Emrik will provide more details in this section. Please turn to slide 6. Looking at our sales performance, Oncology has performed well this year, reflecting the growth of Kabometics and ongoing Onivite launch. Rare disease continues to stand out, driven by the sustained success of Bilvey and the first-time contribution of Aquabol. Neuroscience comprising this bird delivered strong and consistent growth. I'll now turn to oncology for more detail. Please turn to slide seven. Starting with somatolin, sales were up by 5.6% for the full year. Both Europe and the U.S. have experienced shortages of generic lanolatides, allowing us to see uplift in both Q4 and full year. Cobametic sales were up 13.3% for the full year, with increased volumes in both first- and second-line renal cell carcinoma across all geographies. Decapetil sales were down by 1.1% as we experienced increased competition and pricing pressure in Europe and China. We anticipate that decapetil will go back to growth in 2025. Pesveric sales rose by 24% despite the highly competitive environment in third-line indication and follicular lymphoma and supported by share gains in epithelioid sarcoma. Online sales grew 23.7% for four years, and were driven by the US that I will detail in the next slide. Please turn to slide eight. Zooming in on Omivite in the United States, where we continue to progress with our launch in first-line metastatic pancreatic carcinoma. Sales increased by 19.9% for the full year, and we continue seeing a steady climb of monthly sales. In addition, we achieved 32% growth in the top 25 accounts for the full year. However, it is important to note that changing prescriber's behavior in this challenging indication is taking time. Our key priority for 2025 remains expanding utilization from academic centers to community practices as we continue our efforts to educate healthcare providers. We're also generating additional data and have recently presented new results at ASCO-GI showing improved overall survival of first-line onivite in Napoli Phase III versus real world for furinox in the U.S. Let's now turn to rare disease on slide 9. Finway continues to grow nicely with annual sales of 136 million. In the PFIC indication, growth has been driven by strong global demand and our market leadership. In the U.S., we continue seeing uptake in allergen syndrome. For the whole, sales continue to struggle due to loss of patients to clinical trials and the label. This quarter, we had to make a decision to adjust our peak sales expectation, which Emerick will discuss in more detail. Turning to iQurbo, sales reached 22 million with a continued uptake in the US following first-line approval in June and positive early momentum in Europe. Let's zoom in on the launch on slide 10. The launch continues with good momentum and in line with our expectations. In the US, we see a significant increase of monthly demand and over 85% of prior authorizations being approved for patients. We see our prescriber base continue to expand in a growing second-line market, with the majority of iQuervo patients being second-line naive, but also some switches. We also presented new data at ASLD last year, showing the long-term benefits of iQuervo across biochemical efficacy, fibrosis, symptoms, and safety. Notably, the data also showed an improvement in fatigue, which impacts over 80% of patients with PDC, which we think will be important data moving forward. In Europe, we launched iQubo in Germany and Austria and are already seeing strong patient uptake. In the UK, we had simultaneous NHRA and NICE approvals in October, which is extremely rare, given UK patients immediately access to iQubo. Lastly, we have also initiated reimbursement processes across several additional European countries and rest of the world markets. Moving to neuroscience, let's turn to slide 11. This report delivered another year of solid performance with sales growth of 9.2% for the full year. In aesthetics, sales grew by 8.3%, driven by continued expansion in most territories and marketer gains in key countries such as the U.S. and Brazil, despite some softening of the U.S. market. European markets remained resilient, delivering solid growth. However, fourth-quarter sales were impacted by adverse shipment phasing in the Middle East and North America, while performance in other regions remained strong. On the therapeutic side, sales increased by 10.4% this year, with robust momentum in the US and Latin America. Market share gains in specificity played a key role in driving growth across most markets. We look forward to another year of growth in 2025 for this part. That concludes the sales review. I'll now hand over to Emrik. Please turn to slide 12. Thank you, David, and hello, everyone.

I will now take you through more detail for 2024 financial performance, our guidance for 2025, and lastly, our sustainability progress. Please turn to slide 13. We delivered another set of very strong financial results this year across sales, coin and cash flow. Our total sales exceeded 3.4 billion, growing by 9.9% at concentration rate, as presented in detail by David. Our corporate income grew by 10.8% to 1.1 billion, while our free cash flow increased by almost 9% to 774 million euros. With that, we have a strong balance sheet, no debt, and we have 2.3 billion of firepower available for external innovation based on two times EBITDA. Let's take a closer look at those financials in the next slide. Please turn to slide 14. Starting with the core P&L, the growth in total sales of 9.9% at consensus exchange rate, translated into 8.7% at current rates, given adverse currency movements from mainly emerging markets. Gross margin decrease was limited to 0.6 percentage points due to another payment in 2023 received from our ex-US partner for Omivide. R&D costs increased by 10.9% and exceeded 20% of sales for the first time at 20.2%, driven mainly by the continuous investment in our internal pipeline across the three therapeutic areas and through our external innovation. SG&E costs increased only by 3.3%, with the ratio to sales at 34.4%, improving by 2.2 percentage points. This reflects our commercial investment to support the launches, especially in the U.S., but also the positive impact of our efficiency programs. As a result, our co-operating income increased by 10.8%, with a co-operating margin at 32.6%, improving by 0.6 percentage points. Please turn to slide 15. Turning now to the full P&L to net income. This quarter, we recognize an impairment loss of $281 million before tax, almost entirely related to SOHOMOS, as David said, which is due to lower than anticipated patient uptake and revised sales. It's worth noting that we no longer expect SOHOMOS to exceed the 100 million peak sales. As a consequence of that impairment, IFRS operating income and consolidated net profit decreased significantly versus 2023. At the same time, our core EPS continues, however, to grow double-digit at 12.3%, in line with core operating income increase of 10.8%. The dividend for 2024 to be paid next week will increase from €1.2 per share to €1.4 per share, as proposed by the Board. Please turn to slide 16. Finally, on cash flow, we continued to generate strong free cash flow this year and had a very healthy balance sheet with a cash position of 160 million euros at the end of December. Free cash flow increased by 8.9% to 774 million euros, driven by EBITDA, growth in line with cooperative income, and sound management of working capital and capex. Net investment, including payments related to the external innovation transaction, for a total of more than 300 million euros, including five practical transactions and the licensing agreement with Day One Pharmaceutical, together with the milestone paid to Merrimack and Exelixis for Omivide and Camomitix for around 400 million euros, partially offset by the proceeds from the sale of the priority review voucher and the disposal of Increlex. With a net cash position of 160 million at the end of December, and based on a maximum two times net debt to EBITDA, we have now an available firepower of 2.3 billion euros for external innovation. Let's now move to 2025 guidance. Please turn to slide 17. In 2025, we expect a new year of sales growth despite anticipated somatolime generic erosion. For total sales, we expect growth of more than 5% at constant fixed rate. This year, we also anticipate a favorable impact of around 1% from currency. This guidebook is based on an accelerated growth of our portfolio, excluding Somatulin, driven by the further impact of the launches of Alcuro, Omivide, and Bilve. We assume that Somatulin will face an increased competition from low-intensity generics in the U.S. and in Europe, including a progressive resupply from the current generic in the U.S. and in Europe during the first half of this year and the launch of an additional generic in Europe and in the U.S. likely in the second half of the year. For profitability, we expect a cooperative margin greater than 30% of total sales, including additional R&D expenses from potential early and mid-stage external innovation opportunities. We will continue to generate efficiency in our cost base to invest into ongoing launches in the US and in Europe to grow our pipeline and also to prepare for potential future launches. Please turn to slide 18. Finally, let's look at our Epson System Ability commitments. In 2024, we made additional progress in our environment roadmap to allow our 2019 sustainability goals, achieving a 45% reduction in scope 1 and 2 in-house gas emissions and a 25% reduction in scope 3. We also reached 99% of the electricity used across all our sites coming from renewable energy sources. Coming to the people component of our ESG strategy, we target gender balance within our global leadership team, which we have achieved with women representing more than 55% of our leadership team. This year, we are also pleased to share the recognition of our effort by key rating agencies. Ipsen achieved its highest score in the S&P global ranking, placing Ipsen in the top decile of the pharmaceutical sector. Our system analytics risk rating further improved to 22.8, and MSCI rating maintained their level at A. With that, I will now hand over now to Christelle. Please turn to slide 19.