Ipsen Sa S/Adr

Good day and thank you for standing by. Welcome to IPSEN's conference call and webcast on full year 2025 results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please, the advice of today's conference is being recorded. I will now like to hand the conference over to your speaker today, David Lowe, Ibsen CEO. Please go ahead.

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 2025, and on the future opportunities and platforms for growth. Please turn to slide two. Please take note of our forward-looking statements, which outline the routine risks and uncertainties contained within this presentation. Also, all of my comments on growth will be based on constant exchange rates. Please turn to slide three. I'm going to take you through the presentation of our latest business update, followed by our CFO, Aymeric Le Chatelier, who will take you through the financials, and finally, I will provide an R&D update. At the end of the presentation, we will open the Q&A session. Let's begin by looking at today's highlights. Please turn to slide four. Turn to slide five. Today's headlines illustrate how we are continuing to deliver strong and sustainable growth. In 2025, total sales grew double digits by 10.9%. a performance driven mostly by the strong performance of our portfolio, excluding somatolin, which grew by 14.2% over the year. Regarding margin, we delivered a core operating margin of 35.2% of total sales. Turning to regulatory highlights, this year was marked by the MR regulatory submission of tovorafenib for pediatric low-grade glioma in the first quarter, EU approval of carbometrics in neuroendocrine tumors in July, and importantly, by the announcement of the first data for our first-in-class differentiated long-acting molecule IPN10200 in September. Looking ahead, 2026 promises to be another exciting year for our pipeline with five key milestones, which includes three pivotal readouts in addition to the highly anticipated full data presentation of the Phase 2 data for IPN 10200 in first aesthetics indication glabella lines at an upcoming medical meeting. Lastly, we are expecting another year of double-digit sales growth for 2026, supported by accelerated performance across the entire portfolio and a better outlook for somatilin given the production challenges faced by generic competition. Emmerich will provide more details in his section. Please turn to slide six. Our full-year sales delivered a solid 10.9% growth and 7.5% in Q4, fueled by all three therapeutic areas with an improvement of performance for neuroscience and rare disease this year compared to last year. The portfolio excluding somatolin grew at 14.2% this year and by 19.6% in Q4. Oncology performed well with sales growth of 4.1%, but were down in the last quarter due to a decline in somatolin sales versus a very high baseline in 2024. Rare disease performed very well with sales doubling this year. Neuroscience with Dysport continues to deliver high single-digit growth I'll now turn to ecology for more detail. Please turn to slide seven. Starting with the methylene, sales were up by 4.3% for the full year. Both Europe and the U.S. continued to benefit from shortages of generic land realty and we saw a strong performance in the rest of the world. As we have previously communicated, we are aware of recent updates on the potential challenges with regards to the manufacturing and availability of generic land realty in several markets, And this is factored in our guidance. Carbametic cells were up by 5.1% with solid performance in Europe, driven by renal cell carcinoma growth and boosted by the neuroendocrine tumor launch, despite increased competition in the rest of the world. Decafeptil cells were up by 2.7% as we experienced volume growth in Europe and China, despite continuous competition and some pricing pressure in some countries. Only by sales grew by 6.2% with expansion of use in the US driven by the first line metastatic pancreatic adenocarcinoma indication. We expect sales to continue to grow modestly, but it's knowledge that we are now unlikely to reach 500 million euro in peak sales. Now let's turn to rare disease. Let's go to slide eight. On rare disease, BuildA continues to perform well with annual sales of 180 million euro, growing by 36.3%. Growth was driven by both PFIC and Allergy Syndrome indications in the US. Additionally, we saw a strong double-digit growth in both Europe and in rest of world. Q4 self-growth was impacted by ongoing competitive challenges in the PFIC indication and we expect to see the positive effect of the new pediatric field force we put recently in place in the coming months in the U.S. iCorvo continues to track very well with annual sales of 184 million euros with growth coming from all regions. Let me go into a bit more detail on the next slide. Please turn to slide nine. As you can see, we have demonstrated strong quarter-on-quarter growth since the launch just over a year and a half ago. In the U.S., we have seen a significant number of Ocaliva patients switching to I-Corvo on top of a growing PPAR market. We believe that the new data published at ASLD this year has further strengthened I-Corvo's profile as a drug with both long-term efficacy and safety, including improvements in pruritus, fatigue, and fibrosis. In Europe, we're continuing the launch across many countries, We're also very pleased with how well the launches are progressing, capturing new patients and contributing to expand the market. Moving to neuroscience, please turn to slide 10. These sports delivered another year of solid performance with sales growth of 9.7% for the full year. In aesthetics, sales grew by 13.7%, driven by continued strong sales in most territories, including the US and rest of the world, and by strong performance from our partner, Galderma, who continued to gain market share in key countries and a solid growth in our Ipsen territories. On the therapeutic side, this point grew by 4.2%, driven by strong growth in the US and Europe. Reported sales were, however, down in the rest of the world, impacted by adverse phasing of orders in Brazil. That concludes the review of sales. I'll now hand over to Emmerich, who will provide you more details on our full-year financials. Please turn to slide 11.

Thank you, David, and hello to everybody. I will now take you through more details of our 2025 financial performance and our guidance for 2026. Please turn to slide 12. We delivered another set of strong financial results this year across sales, profitability, and cash flow. First, our total sales, which exceeded €3.6 billion, grew by 10.9% at Coastal ExxonJoy. Our core operating income grew by 16.7% to €1.3 billion, in line with our free cash flow, increasing by 29% to reach €1 billion. Given this strong performance and our solid balance sheet with no debt, we had €3.2 billion of firepower available for external innovations. Let's take now a closer look at those financials in the next slide. Please turn to slide 30. Starting with the P&L to core operating income. I would like to highlight that we implemented this year a slight reclassification of our distribution expenses. These costs have been moved from SG&A to cost of sales and therefore now impact our gross margin. This change brings our reporting in line with common practices of most of our industry peers you have all the details in the appendix of that presentation. Now, if we look at the figures, the growth in total sales of 10.9% at constant exchange rates translated into 8.1% at current rates, given the adverse currency movements. Growth margin increased by 2.1 points, driven by the higher level of other revenue, by 18 million, mainly due to commercial and regulatory milestones received from ex-US partners for Onivide and some other products, and the growth in royalties received primarily from this port partner. SG&A costs increased by only 6.9%, with the ratio to sales at 31.6%, improving by 0.3 points, reflecting an increased investment to support the launches, especially iCurvo and Bilvey, and the impact of our ongoing efficiency program. R&D costs increased by 9.8% to reach 20.5% of total sales, driven mainly by increased investment to support the development, mainly in neuroscience and early stage oncology assets. As a consequence, our co-operating income increased by 16.7% with a co-operating margin standing at 35.2%, increasing by 2.6 points. Please turn to slide 14. Turning to IFRS Consolidated Net Profit. This year, we recognize impairment losses for about 350 million before tax, mainly driven by, first, TASVERY, for which we no longer expect to achieve the 500 million pixels given the recent competitive developments. Secondly, by FIDRESERTIB, following the negative readout in December 2025 of the Pivotal Phase 2 trial. And thirdly, by the discontinuation of some of our early stage assets. Despite those impairments, IFRS operating income and consolidated net profit increased by 26% and 28% respectively. Please turn to slide 15. Finally, on cash flow. We continue to generate strong free cash flows this year and maintain a solid balance sheet with a cash position of more than 500 million at the end of December. Free cash flow increased by 29% to 1 billion, driven by EBITDA growth, sound management of capital expenditures and working capital. Net investments included the acquisition of InCheck Therapeutics for about 350 million and some regulatory and commercial milestones. As a consequence, with a net cash position of exactly 560 million euros at the end of December, and based on the maximum of two times net debt to EBITDA, we had an available firepower of 3.2 billion for external innovation at the end of 2025. Let's now move to 2026 guidance. Please turn to slide 16. For this year, we anticipate another year of double-digit sales growth with a high level of profitability. For total sales, we expect growth of more than 13% at constant exchange rates. This year, we also anticipate adverse impact of around 2% from currency based on the January exchange rate. This guidance on sales is assuming an accelerated sales growth of the portfolio, excluding somatulin. This will be driven by iCurvo, Bilve, D-Sport, but also Cavometics, as well as a continued growth from somatulin. Given the recent challenges with regard to the manufacturing and availability of generic lauriotides, we assume limited generic supply in 2026, with a potential entrant only in the second half of this year. On profitability now, we anticipate a co-operating margin greater than 35% of total sales. We will continue to leverage our top line growth with moderate increase in HG&A and R&D ratio to stay around 20% of sales. However, currency rate and a lower level of other revenue will have an adverse impact on our margin in 2026. Regarding our midterm outlook, we are highly confident to exceed our total sales average growth of at least 7% per year for the period 23 to 27, and our 2027 core operating margin greater than 32% given the higher than expected somatine in sales due to continued generic laurieotide challenges and the stronger performance of our broader portfolio across our three therapeutic areas. With that, I will now hand over to David. Please turn to slide 17.

Thank you, Aymeric. I will now provide an update on our R&D efforts. Please turn to slide 18. We have another exciting year for our pipeline. We have seen strong expansion in oncology with four active phase one programs evaluating promising new modalities in solid tumors and the addition of IPM6340 formerly known as ICT01, which came through the acquisition of IMCHEC. In rare disease, following the positive phase 2 trial, we have opened a phase 3 program evaluating elafibonar in primary sclerosing cholangitis, which I will share more on in a moment. In neuroscience, our broad programs continue to advance across both this board and our long-acting molecule IPN10200, with new phase three programs expected to open in H1. Please turn to slide 19. In oncology, a growing focus of our pipeline is on precisely modulating the immune system through multiple synergistic routes. I would like to highlight a couple of new molecules entering phase one. Our antibody drug conjugate, IPN6300, targets a novel tumor antigen known to be expressed on multiple solid tumor types, and we are pleased to confirm first patients have been dosed in this trial. We also have our T-cell activator, IPN01203, a potential first-in-class asset that selectively activates V-beta-6 T-cells through TCR and IL-15R pathways. Please turn to slide 20. Moving to rare disease and primary sclerosing cholangitis, or PSC, an area with no approved treatment options and the majority of patients requiring a liver transplant. Following the promising phase two data, we're excited to announce a phase three study, LSCOPE, which will be the only global study in PSC looking at the long-term clinical outcomes as primary objectives. Telescope will evaluate the efficacy and safety of elafibinor 120 milligrams versus placebo in patients with PSC based on time to first occurrence of clinical outcome events and multiple secondary endpoints. Please turn to slide 21. Turning to neuroscience following the announcement of our phase two first proof of concept in Glabell Alliance in September 25th, We are on track to open two global phase three trials for IPN 10-200 in Label Alliance. Both trials will evaluate the efficacy and safety of IPN 10-200 at week four and 24, with key secondary endpoints, including patient satisfaction scores and onset of action. Please turn to slide 22. We remain diligent in our external innovation efforts and announce strong additions to the oncology pipeline as we close 25. We are delighted that the lead program, IPN 6340, from our acquisition of Inject Therapeutics, was awarded U.S. FDA Breakthrough Therapy designation in January, recognizing investigational therapies with evidence of a substantial clinical improvement. A global licensing with sincere timing outside of greater China brings another antibody drug conjugate into our pipeline, which is expected to enter phase one soon. Finally, reinforcing the strength of our ongoing partnership, we added further two research programs with Iricor, evaluating MAP-K related inhibition. Please turn to slide 23. As you can see, we have several milestones to look forward to over the coming years. Firstly, we await the EU regulatory decision for atoporafenib in the first half. In the second half, we see many phase three unblindings for Bilvey in biliary atresia, iCorvo for PBC patients with an ALP of between 1 and 1.67, and Dysport in migraine, and also for the phase two data for IPN 10200, in forehead lines and lateral cancer lines. Then, as we look to next year, we have more proof of concept readouts for our long-acting neuromodulator, IPM10200, in the therapeutics indication, as well as phase 3 on blindings for cesaveric and tocorophenib. With that, please turn to slide 24. We continue on our strong momentum and remain firmly on track to achieve our ambitions. I'd like to leave you with two key messages. First, we delivered strong 25 results with double-digit sales and profit growth fueled by the performance of our existing portfolio and launches. This consistent growth reflects our focus on execution and our ability to deliver across both commercial and medical fronts. We will further strengthen our R&D investments and grow our internal pipeline while investing to support our current and future commercial launches. Secondly, the outlook to 2026 is strong, with double-digit sales growth guidance, multiple regulatory and clinical milestones to come, and significant firepower to pursue external innovation. We look forward to another year of accelerated growth as we continue on our transformation. Turn to slide 25. This concludes our presentation, and we will now take your questions. Operator, over to you.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To answer your question, please press star 1 1 again. We will now take our first question. From the line of Charles Pittman King from Barclays, please go ahead.

Hi guys, Charles from Barclays. Two questions from me, please. Firstly, just on your guidance, I think it's quite noteworthy that, you know, your guidance in FY26 is significantly ahead of that midterm growth outlook. So firstly, just is it fair to say your guidance philosophy is less conservative this year? And given the double-digit growth in FY25 and guided for 26, just wondering kind of why you're not looking to readdress and raise that mid-term target into 27. Then just secondly, on the kind of aesthetics and neurotox business, Can you just confirm – in the first release, you talk about product mix dynamics seen in the U.S. Given this is a single product, I'm just wondering kind of what these are, if you could provide a little bit more clarity. And then just beyond that, I know you're unlikely to comment, but just if you're able to give us any further thoughts on the potential partnership discussions you're having with Ipsen 10200 within the aesthetics integration, that would be great. Thank you.

Okay. Thank you, Charles. I will let Emmerich answer on your guidance questions.

Yes, so thanks for the questions and maybe I will... I will clarify. I think that our guidance is today our best estimates regarding first somatulin on one side, for which we are still expecting potentially some generics to be able to be on the market in the second half of the year. So I will say we are pretty balanced, and I think we have also a great ambition to continue a very strong growth of the portfolio ex-somatulin, where we expect to be able to accelerate the growth, and we deliver 14 this year. Regarding the mid-term target, as you remember, the mid-term target was to exceed 7% annual growth. and to exceed 32% margin by 2027. So I think the message today is very clear that we are highly confident we're going to do better than this number, but this is still going to be exceeding, and I don't think we want to provide too guidance for too consequential year. So we are clearly highly confident to 2027, and we'll provide guidance for 2027 when it's going to be time in a year time. The product mix, maybe I can just answer the product mix and let you answer. So I think the product mix is more related to the product and sample of these both in aesthetics. As you know, we're providing our partner with both product and sample, and the economics are slightly different. That explains what we qualify as a product mix in our communication.

And on your third question on, you know, on our long-acting neurotoxin, as you know, in January 26, the Arbitral Tribunal of the International Chamber of Commerce issued a final decision in favor of Ipsen, dismissing the claims brought by Gilderma in connection with Ipsen's termination of the R&D agreement. And so, the tribunal confirmed also Ipsen's full rights to its clinical stage toxin programs in the aesthetics field, including therefore the IPM 10200 that you were alluding to. So basically, we continue to assess all options, and we can't give you more information at this point, but we're going to come back as soon as, you know, we have made progress on this. Next question, please. Thank you very much.

Thank you. We will now take the next question from the line of Xiang Deng from UBS. Please go ahead.

Hi, thank you very much. It's Tian from UBS. Two questions, please. So, both on iCurvo. So, just wondering, the first question is just wondering, you know, iCurvo previously, you know, you guided for 500 million peak sales. But, of course, now the drug is doing really, really well. So, I was just wondering... You know, would you say now your pixel guidance there is very conservative? And, you know, if you could maybe give us some colors on what assumptions did you have when you set the guidance and what has changed since then? So that's the first question. And the second one is also on Acrobo. Actually, just wondering about the patent or exclusivity situation. So my understanding is that the compound patent has already expired in the U.S., right now is protected by also exclusivity on PBC. So just wondering, given now you are also running, you already started the phase three in PSC, so just wondering how should we think about the exclusivity slash, you know, patent protection on this one, please? Oh, sorry, can I just quickly clarify? Did I hear that right? You mentioned also mentioning you are expecting potential generics to come back in second half this year, so is that conservative as well? Have I heard that right? Thank you.

Okay. Thank you, Xian. So, on iQurvo, the 500 million peak sales guidance. So, yeah, we are very pleased with the performance, I have to say. We are going to observe how this goes. And especially also, we have the ELSPIRE trial, which is going to read out in the middle of this year. And then subsequently, once we have seen that, you know, we're going to look at potentially looking at changing the guidance if required. For now, we say it's above 500 million, but I have to say we're extremely pleased with what we're seeing and with the performance that we have in the U.S. and ex-U.S. On the exclusivity question, we have awesome drug protection until 31. There are additional patents which exist as well. Just to help you also on PSC, on that question, because PSC, and I think you're alluding to this, might report shortly before that date of the 31 that you have given. You need to keep in mind that, first, we have gotten orphan drug designation for PSC, so there is a separate protection for PSC. It's a different dose. It's 120 milligrams, not 80. So that's already very different. There will be a different tablet as well. It's a different packaging, et cetera. So we think this is gonna confer quite a good protection, and this is why we have given a go to that trial besides being excited about the data, obviously. And then on your third question regarding somatilin, you know, H2, it's hard always to exactly know what's happening with these generic companies. What I can say is, and we have said that in the past, and I think it becomes very obvious, it's a very difficult product to produce because the gel is very viscous. It shouldn't be too viscous. It shouldn't be too liquid. So it's hard to produce. You have also seen that There have been FDA 483s and OAIs on some of our competitors. So I think for the moment, it is reasonable to say that we're anticipating generics, you know, entering NH2. Thank you. Next question.

Thank you. We will now take the next question. From the line of Simon Baker from Rothschild and Co in Redburn, please go ahead.

Thank you for taking my questions. Three, if I may, please. Just going back to Sir Matuline, you've indicated that at best there will be some generics later in this year. But I'm looking at this from a slightly different perspective. Where does this leave you in terms of long-term contracting with your customers? Because It's all fine and dandy to have a generic available at a significant discount, but if the manufacturer can't deliver and can't manufacture it, it's rather academic for the customer and creates a lot of inconvenience. So does this really open up the possibility for tying in your customers through long-term contracting where you alone in the market can guarantee quality and supply? Any thoughts on that would be very helpful. And then just a couple of quick ones. You gave us the patient incidence of PSC in the States. I just wondered if you could give us a little bit more detail and pointers on how big you think this opportunity is. Some have suggested this is a billion-dollar opportunity, and as you say, there are no existing treatments, so any thoughts there would be helpful. And then finally on our CURVO, if you could just give us an update on the the sort of commercial dynamic show of voice in that category because your competitor there is rather preoccupied with launching another product in another category. I just wanted to see if there's been any change to marketing intensity by competitors in that space. Thanks so much.

Thank you, Simon. On semantolin, you know, we, of course, do contracting with several of the customers, especially in the U.S., of course. That's a current practice, I would say. And this has in the past already helped, you know, to mitigate somewhat the penetration of the generics. So I would say we have done this already before, and you have seen the effect of it. So it all comes down, I would say, can they actually deliver or not, and in what kind of quantities. On your second question, to give you a feeling on PSC, PSC is about the same market opportunity as PBC. And why do I say this? In PBC, it's a second line indication that we and Gilead are having currently. And so we're talking roughly, you know, 30,000 patients in the above 1.67 and about 20,000 in the below 1.67. and then in PSC, you have 40,000 patients, prevalent patients. And so that means that today, all these prevalent patients, they have no solution in PSC, and we're actually going to be first line, contrary to PBC, where we are second line. So basically, that explains why the market opportunity is about equal as the whole PBC pool. So for us, quite an exciting opportunity, I would say. And then, on your third question, the dynamic share of voice. So, for the moment, we don't see a change on Gilead's presence. They are heavily present, I would say, so as we are, right? So, I think we perform very well, and we are very pleased with the performance that we are seeing. Thank you. Thanks so much.

Thank you. We will now take the next question. From the line of Richard Vosser from JP Morgan, please go ahead.

Thanks for taking my questions. A few, please. Just returning to somatoline, I wonder if you could just talk about price and volume thoughts in 26. Clearly, lack of generics means potentially you could raise price. So if you could talk about that and how that might impact also on 27. And for 27 on 26, On somatoline, you talked about, you know, exceeding the margins. Just any thoughts of the extent of generic competition of somatoline you might be thinking in 27 would also be helpful. Second question, just on Encuerva as well, just thinking about the growth, which has been stellar, what bolus do you think you've got from Ocaliva and how that might feed into growth expectations for the second half of 26th? And then finally on business development, M&A, you know, you've highlighted the 3.2 billion firepower. And I think previously you've highlighted, you know, thinking about strengthening the oncology business. But maybe you could give us an idea of latest thoughts around business development and what you're looking for and how that might impact R&D spend going forward. Thanks very much.

Yeah, thank you, Richard. So on the volume, I'll let Eric answer.

Yeah, so Richard, on somatoline, I'm not going to be able to provide you all the detail of our assumption, but clearly the lack of competition will allow us to regain volume, both in Europe and in the U.S. I think that's the trend, on top of a very dynamic market that we see for NET, where it's still a market that is going into 4% to 5% per year, with very strong positions for L'Oréal. On the price side, I think there are opportunities, probably more in the US, and David was talking about the prior questions regarding the contracting. As you know, there are significant rebates which have been negotiated in the US. We have also passed a price increase at the beginning of the year. I would say the situation is more complicated. In many countries, it's probably difficult to change the pricing, and there may be some markets where we have tenders, and we are still assessing that opportunity. The second part of your question was regarding the margin in 2027. So, as I said, I'm not going to provide guidance for 2027. As you know, we are very confident to exceed the outlook. Now, the shape of 2027 will depend at what pace the generic are going to be able to make it, how many generic are going to be able to make it, if any, in the second half of this year and in 2027. And that could have an impact on the level of profitability. But we are very confident that in any case, we will be exceeding, to some extent, the 32% target that we gave.

Then on your third question regarding agro-growth and the bolus of Ocaliba. So, what you have seen in terms of sales acceleration from September to December is really that delta in terms of the acceleration came from the Ocaliba switches. We think the Ocaliba switches are mostly done. So, we are on a higher level, and that higher level should carry forward, of course, into 2026, because we are seeing still new patients, which are new to second line, coming onto iQuervo. So, we're very pleased with that, and this is why we are very confident on iQuervo, and we observe a very strong dynamic. Merchants and acquisitions, so as you pointed out, we have a bit more than 3.2 billion of firepower. We intend to use this if we see the right opportunities. As I stated before at JP Morgan, we are looking at oncology late-stage opportunities. that we want to bring on board. And then, of course, in our guidance, as you remember, we already include the preclinical and early clinical in that guidance and in the margin. So, you will also see us use part of this firepower for some of the earlier deals. Thank you, operator. Next question.

We will now take the next question. From the line of Victor Floch from BNP Paribas, please go ahead.

Thanks so much for taking my question, Victor Floch, BNP Paribas. A couple of questions on IPM 10200. So, I mean, I think it's fair to say that the optimal target profile for that one differs quite a lot between aesthetics and therapeutic use, and not everyone comes to direction of action. So, now that you have the full face-to-data enhanced, I was just wondering whether you can discuss whether IPM 10200 delivered an optimal profile, keeping its commercial potential intact in both opportunities. And then I understand that you don't really want to discuss your option, but I mean, just to understand what would be like a tipping point when it comes to either go with a partner or either go with yourself? Is it just about like economics and whether that you want to protect at least the kind of economics you have on this part with that one? And finally, on M&A, I was just wondering whether you can discuss whether you would be open to potentially stretch your firepower and your balance sheets beyond two times EBITDA if the right opportunity arises. Thanks so much.

Perhaps, Victor, on your first question, can you just clarify why you are saying that the optimal target profile would be different? That's not something that we would subscribe to.

Okay, I mean, I think it's, I mean, what we understand in the past is that for ascetic cues, in physician, we're pretty happy with the six-month duration of dosing, even though at the same time for therapeutic cues, I think we're all looking for the longer duration as possible. So maybe you don't agree with that, but so, yeah, I was just wondering whether you could discuss the target profile you've seen with the APNs and so on.

Yeah, first, I would like to bring this back to data, right? When you look at none or mild in aesthetics at six months, most of the bond A's have actually shown, and you can go and look at the labels of these different drugs, most of them are between 20% and 30%. And so here what we have said is we have seen a majority of patients achieving non or mild, and so that data is going to be presented. So in that sense, you know, while many companies are saying, well, some patients are satisfied or they see still some effect and et cetera, I would just bring this back to, you know, the endpoints of non or mild because that's usually what is being measured in the clinical trials. So in that sense, with that statement, I think the profile that we want to see in aesthetics and therapeutics is actually the same. You want to see a very rapid onset of action. You want to see a good one-month efficacy, and you want to see a prolonged duration. This is important not just in aesthetics, but also in therapeutics, obviously, for example, in spasticity, migraine, or cervical dystonia. where it can also help alleviate the healthcare system utilization because patients need to get less often to the doctor. So I don't know if that answers your question.

Definitely, thank you.

Thank you. Then on your second, as I said, we are looking at all options. We're not going to comment on this right now. And then on your third questions on, you know, the use of our firepower, I'll let Emrik comment on the stretching the firepower.

Yeah, so, Victor, just to clarify, we are today operating clearly on the maximum debt of two times EBITDA, which is fully aligned with our investment-grade rating. This gives us a 3.2 billion euro firepower on top of our very strong free cash flow, 1 billion this year with a very – ambitious guidance that we have, this one billion should even increase in 2026. So we don't see any reasons for using more than the two times EBITDA. Having said that, the board has always said that they will consider if there were to be a unique opportunity and ability to slightly stretch that, but this is not today our priority.

Okay. Thank you, operator.

Thank you. We will now take the next question from the line of Lucy Codrington from Jefferies. Please go ahead.

Hi. Thank you for taking my questions. Only a few left. Just, I was wondering if you could go into a bit more detail in terms of your expectations for this sport this year, both in terms of aesthetics and therapeutics. And with that, any potential impact that you might expect as the World Fitness launches continue and then any update on what the aesthetics environment is like in the U.S. and other markets at the moment. Secondly, on somatuline, when you talked about the guide, you said growth. I know it's somewhat dependent on the entry of generics, but should we be expecting growth on the numbers reported in 2025? or still some decline? And then, finally, any milestones that we should be factoring in for this year? Thank you.

Thank you, Lucy. On this board, we are expecting good high single-digit growth in both markets, aesthetics and therapeutics. We do not anticipate any impact from rail feeders because it's a different market. You know, there is a market segment, which is open for liquids. I would say the majority of the market is on great constitution because many of the physicians actually like to dilute to their liking. We have seen this with the Ellucian's launch as well. So we don't really foresee any cannibalization. It's quite the contrary. I think both are going to drive growth. Then on aesthetics in the US, the market has slowed down a little bit, but our particle Lerma is performing very, very well, gaining market share. So we are very pleased with that performance. On the methylene, yes, we do anticipate growth versus 2025 because of what Emmerich just said before is you have of course, the volume gain of the generics not being there, but you also have some potential pricing upside. So there is this kind of double effect, if you want, versus the baseline of 25.

And then I wasn't quite sure I understood your milestone question. I think I get the question on milestone. I think this is related to other revenue, which, as I said during the presentation, have increased significantly in 2025. or other revenue are made of both royalties that we receive from partners and some milestones. Some of the milestones are non-recurring. That's why we were indicating that our margin in 2026 is going to be slightly impacted by a slightly lower level of milestones and other level of other revenue, while we still continue to have a strong dynamic on the royalty side, which is directly linked to the high single-digit expected growth for this port with our partner.

Thank you, Lucy. I think we have no more questions. So this wraps up our 2025 conference. Thank you for your attendance. Back to you, operator.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.