Orion Corp New B Shs

Good evening, and welcome to the ORION press conference from January 2023. My name is Tuukka Hirvonen, and I will be answering the investor relations at ORION. For a moment, CEO Liisa Hurme will present the results of the press conference. After that, you have the opportunity to ask questions to both her and Jari Karlsson. The official language of this event is English, but you can also ask questions in Finnish. Good afternoon ladies and gentlemen and welcome to Orion's earnings conference call and webcast for the financial period of January-September 2023. My name is Tuukka Hirmonen and I'm the head of IR here at Orion. We just roughly one and a half hours ago published our interim report for the period and soon CEO Liisa Hurme will go through the main points of the report after which you will have the possibility to ask questions from her or from our CFO Jari Karlsson. We will be first taking questions from the conference call lines, after which then we will turn to the webcast questions. So you all have the possibility to type in questions using the chat box function in the webcast view. Kindly state your name and the organization you are representing before asking your question. And just before I hand over to Liisa, I'd like to draw your attention to this disclaimer regarding forward-looking statements today. But with these words, it's my pleasure to hand over to Liisa.

Thank you, Tuukka. And good afternoon on my behalf as well. And welcome to Orion's Q3 webcast. Let's look at our key matters from the latest quarter. First, maybe a notion when I go through this, because I'm not going to say it after each sentence. We had an exceptional third quarter in 2023, which of course has an effect when we compare the first nine months to the previous nine months. And of course, when we compare the Q3 2023. than the previous one because of the significant signing fee that MSD paid to us in July 2022. I will remember, probably mention it at some point, but do keep that in your mind when we go through the presentation. Well, our development was positive both in terms of net sales and operating profit when we exclude the significant upfront payment from the comparative period. Nubeka continued its very strong growth and related to that, we have recorded a 30 million euros sales milestone from Bayer in Q3. Easy Halo portfolio also developed very nicely with 9% growth. And when we look at the generics and consumer health division burdened by our withdrawal from the Russian market and also Simdaks and Dextro generalization, it performed very well. It's a very resilient business in the Nordics and Eastern Europe. And good news from our development pipeline. We have initiated a new clinical study, phase one for a ODM212 for solid tumors. And then the latest news on our geographic expansion, not on a commercial expansion in this case, but rather on an R&D side, we have also established a new office to form a basis for future possible U.S. operations for medical affairs, regulatory and market access capabilities to build these capabilities in the markets of United States. Then to the numbers. Underlying business performed well and mostly as expected, with minor surprises that were there already in Q2. Net sales decreased 17%, but this is when we look at the numbers including the signing fee from the July 2022. Same goes with the operating profit, minus 54.4, but the comparison period includes the signing fee. Operating profit margin, a similar story there. Cash flow reflects mainly the increased working capital due to the Nubeka. We are manufacturing and we have large inventories, all the different phases of Nubeka value chain. So that is clearly reflected in our working capital. And also a good news is that many of the factors that have had an impact on Orion operating profit during the first half of this year are easing out in the form of that it's easier to compare now towards the end of the year, the latter half of the years. And this net sales bridge describes in more detail what I just said. Still decline in dexmedetomidine and Simdac, but it is getting smaller every quarter. And of course, next year, hopefully, as the base numbers are smaller as well, we won't see even this type of numbers. Nubeka, 67.6 million euros of product sales and royalty, a very nice first nine months. And here is the surprise from this year, which is Entacapone products. I think all the other things we were able to predict, but this was kind of a surprise and mainly caused by the delivery timing to our customers and partners and partly due to the lower pricing in some of the territories on the globe. It's difficult to say how much is derived from which factor, but these are at least the two main things having an effect on intercapone. Russia, as last time described, almost 28 million. Good news, as already stated, the other production services are also growing nicely. Animal health on a positive side together with fermion and milestones in this figure or picture implies to the net impact of milestones. So we have all milestones from last year and this year so this is the the net one and then the exchange rates are mainly derived from the Russian rubble of course there are some other currencies that also have had an effect like Swedish crown and the US dollar but the biggest effect comes from the Russian rubble And then on the operating profit, a pretty similar story. When I want to pay your attention, especially on the number two here, column number two, product sales margin and product mix without exchange rate effect. Here, the biggest chunk of this 62.9 is coming from the prices actually. and some are part of the costs, but the prices play a big role here. And then again that the growth with local currencies was 10.5 million. And here the exchange rate on the column three and again a positive development on the royalties by 60 million and Milestones, again, a net impact on our first nine months. And other operating income and fixed costs, some increase there as well. All in all, a very positive first nine months and especially the third quarter compared to the previous one. An interesting thing on this slide is that Innovative Medicines is growing its share on the Orion net revenue. It's now 19%, close to 20%, and almost as big as the Brandy products. Let's see how the situation is by the end of the year. And respectively, the generics and consumer health share is diminishing as the innovative and especially Nubeka is growing. A lot of red on our top 10 product list. Very natural explanations for most of the products. But of course, first I want to pay attention on Nubeka, more than 100% of growth. Easyhaler, 8.5. A very strong performance there. Simdex. family story and the capone I already described. Then on the row six, dex domitor, domitor, domosedon, antisedon, our animal health sedative portfolio. was actually, I have to admit, another thing that we didn't predict in the beginning of the year, how our partners would behave by their orders. It clearly seems that they have filled in their stocks during the pandemic, and have kind of leveled out their ordering frequency. And we'll see how the next year goes. I personally think it will start to normalize as we start the new calendar year. Divina, this is solely due to the Russia. Divigel was a big product on the Russian market, so that's a hit taking on closing Russian operations. Trexan, a very old molecule, methotrexate, but going strong, a very good treatment for autoimmune diseases, a lot of cancers. And actually, even though there are more and more new biological treatments on both, how would I say, indications or areas, so methotrexate is mostly included and combined to those treatments. So there is a growing demand on these products as well. And biosimilar is a very binary business. Either you win or lose, sometimes even a whole country. And this year has not been that successful. But then some other years might look very, very different. And innovative medicine story continues strong. Nubeca sales more than doubled. Somebody might get a bit depressed on minus 42.5 on the whole division figure, but we all know that it was an exceptional comparison period with the signing fee in July 22. So let's just celebrate Nubeka growth at this stage. Marinus has received an approval in EU for Ganaxalon already in July. We are going through pricing and reimbursement discussions in all the biggest European countries, but it unfortunately takes time and we are planning to launch hopefully in Q1 next year in the first countries. Brandy products catching up clearly. Somebody might remember the percentages from the last quarter. This is accelerating and Easyhaler is the biggest factor here. We deliver all we can manufacture. Everything is going out. Intercapone hopefully catching up also towards the end of the year and Divina suffers due to the Russia. And generics and consumer health, a great story of resilience, I would say. We are able to deliver. We are price competitive in the areas and regions where we operate, both on self-care, which is mainly Finnish regions, and then also on the pure generics. and I discussed the syntax and dextrometamine already. Maybe a few words on Finland. We are at par, since we are the major company in Finland, we are at par on the whole pharmaceutical market, but especially on the reference priced prescription drugs, which is our strongest area. We grew with 8.3% when the whole market went down. A very good performance. Animal Health, new sales from the acquisition from Innovet, growing that business, and Fermion slightly behind, I mean, slightly growing from the previous year, which means that we are able to serve our customers even though we use a lot of capacity for Nubeca or darolutamide manufacturing. Regarding animal health, the sedative business suffers both on the softness on the companion animal market and, of course, the destocking of our partners, as I explained. Same is seen on the livestock market. The inflation really hits also farmers, and they need to think what they pay and how they do their business. It's actually both sides that are a bit soft right now. But of course, on the longer term, we all will eat and the livestock business definitely needs its medication and products. And I'm sure as the markets and inflation will get easier on consumers, the companion animal health market will bounce back. R&D pipeline as before, except that the new cancer molecule has started now recruitment in phase one. One slide and one theme on sustainability that we haven't discussed earlier is biodiversity. It's very important for pharmaceutical industry. We have, of course, impact on that, especially through wastewater, a possibility to have a nasty impact, but we take it very seriously along our supply chain. So we always audit our suppliers, whether for the finished goods or the APIs, that they treat their waste waters as they should be. And we have two different separate drainage systems, one for the manufacturing and one for the whole other water usage. and of course have many different ways to get rid of our wastewater depending on the compounds that we have there. And then the other thing is, of course, how do the drugs, how are expired drugs handled? How do we counsel pharmacies, our customers to take care of the medication that has expired or that they are not in need anymore, that they will have to take them back to the pharmacies so that they are then disposed adequately. And we are all the time still fully and further investigating what would be Orion's footprint here and impact on the biodiversity. We specified our outlook in July and that holds. Our net sales will grow slightly, will be slightly higher, and also our operating profit is estimated to be slightly higher. in 23 compared to the 22 and here it's good to remind about the numbers without the upfront payment from 2022 for the operating profits it's 233 million and for the net sales it's 1.113 billion euros. upcoming events. February is the next exciting moment when we will report the whole year 23. And then we'll have the AGM on March 20th. And of course the rest of the dates for next year you can see on this slide. I thank you on my behalf and it's now time for the questions. I welcome Jari Karlsson on the stage.

If you wish to ask a question, please dial star 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star 5 again on your telephone keypad.

The next question comes from Ansi Rousey from SEB. Please go ahead.

Thanks, Hayul, and thank you, Lisa and Tuukka, for the presentation. I have a couple of questions, and first about your costs. Do you think that there could be anything unusual in your OPEX items in Q4, or just basic seasonality? And on the other hand, was this Q3 as you expected when we entered the quarter. That's the first one.

All right. Well, you got it right. There seems to be always, probably not only in Orion, a seasonality for the Q4. But right now, I don't see any unusual items on the cost side for the Q4. And when we talk about the Q3, yes, as stated, Q3 was proceeding and was as we expected.

Yes, and maybe good to remind that last year in Q3 we booked quite large extraordinary expenses related to the ODM208 deal. And that's one of the reasons why the costs were lower in Q3 this year than last year. So the underlying cost base, nothing really big changes there, but the reported numbers look a little bit different because last year we had that one-time cost burden or extra cost in the numbers.

Okay, clear. Thank you. And the next one about Ganaxolone. So What is the situation with price negotiations and have you got any results already so we could compare the pricing with the prices in the U.S.? ?

Well, it's a long process and we don't have any prices yet. And I sincerely hope that by the beginning of the next year, we would have these negotiations accomplished so that we can get this product to patients who are in need of new treatments.

Okay. And maybe the last one from me is about impact upon so is it fair to assume that we could see some kind of slight rebound next year or is this the level we should expect which we are seeing right now

What a good question. We see prices declining actually globally. Some countries are quite okay. In some places prices decline. But also we see that volumes increase due to the demographics, especially in the Western world. There are more and more patients. If you think from this perspective, it should kind of stabilize at least in the mid and long term.

Okay, I understand. Thank you so much.

The next question comes from Sami Sakamis from Danske Bank. Please go ahead.

Hi, I have two questions.

Starting from the sales for Parkinson's and animal health in the third quarter, I think this continues to surprise on the downside. You've been talking about inventory corrections during the first half year. I think you were expecting a return to a more normal situation during third quarter, which didn't happen. How do you view Q4 next year when it comes to these product areas?

Well, for the animal sedatives especially, I think To be quite honest, I'm looking already to the next year, you know, that it will level out and the market, both the market demand and our partners will start to order the product again. The market demand would also increase. Then regarding the intercapone products, I think I mentioned earlier today that I'm also there looking for already for the next year. There might be some catching up during the last part of this year when we can ship out the deliveries and the partners will start to fill in their stocks. But that's very difficult to estimate what will happen this year with that product family. I mean, the Parkinson's disease drugs. I think I would say that during the next year it should also level out.

Okay. Then secondly, you mentioned plans to establish some sort of presence in the US. What is driving this development? I mean, you haven't done this in the past. It's been talked about every now and then, but is there, for example, something in your pipeline at the moment that is making this move more relevant than in the past?

Yes, we've been talking about US for some time already, and I think that the action that we're taking shows that we are serious about the US. The main driver at the moment is ODM 111, which is furthest in our program. In general, it's very important for any pharmaceutical company, even located in Europe, to understand the older drivers at the US market. And this is now a good moment when we have ODM111 and we can run our own clinical studies in US run by ourselves and start to see how the market works and design the studies according to the needs and according to the market access for that molecule in different indications. So clearly, that's one driver. Then the other one is, in general, to create more understanding in the company on the US market.

Okay. Then maybe one more question regarding ODM 208. We obviously don't know yet how that will move forward. but just curious, you know, you have the right to convert this into a normal licensing agreement between you and Merck. At which point do you think Orion will be making the decision on whether to use the option or not? Is that going to be when you know what will happen next, or is that going to be when you will actually have some let's say, further clinical data out on the molecule?

Well, I think both companies are evaluating the right moment, you know. I don't think there are any critical points or anything I can say about that.

And in the agreement, there are certain timelines defined when the use of option is possible.

Okay, thanks. I don't have any further questions.

The next question comes from Graham Parry from Bofe. Please go ahead.

Hi, thanks for taking my questions. So I'll just start, just go back to you and Tacapone and animal health. Is there any way you can quantify how much you think the inventory unwind impacted Q3 and what's the underlying growth rate you're seeing in Q3 for those products? I know you're sort of talking about a possible return to growth in the in 2024 but just what was the underlying growth rate Q3 if possible?

Well I mean the products have been in the market for 25 to 30 years so of course the underlying business is relatively stable so the impact for this year can be quite well seen when comparing the sedative deliveries to the numbers last year so that much That's how much less we have been delivering to our partners. But the underlying market is, like I said, fairly stable because these are no new products. So there is a fairly established use of these products. And the assumption is that after this change, we will more or less come back to the earlier levels. Of course, taking into account that the fact that they now have these excess inventories means that over the past few years they have ordered a little bit more than they have been selling out. So that might mean that Future level is not maybe exactly how much we delivered over the past few years, but the underlying market has not, as far as we know, changed. Of course, one needs to remember that Zoetis is the one selling in the market, so we don't have that close day-to-day understanding of what happens in the market. But that's our current assumption.

And for animal health?

Yeah, I mean, this was the animal health.

Sorry, apologies, I thought I was going to say that, and tachypone then. Sorry, I thought you were referring to the tachypone products.

Well, the Intercapone, it's a bit of a similar story. It's a very stable market and been that for many, many years. However, we also think that there our partners have during the pandemic, you know, piled out a bit too much stock. So we see that it will level out next year when they need to start to order again. But as I mentioned, it's not only deliveries here. the prices are decreasing in some regions. But at the same time, if you look at any data, also the volumes are increasing. There are more and more elderly people who suffer from this disease. So whether it will bounce totally back, it's difficult to say, but I'm quite sure it will stabilize at some point and be quite a stable business. Not the strongly growing one, but the stable one.

Okay. And then in the generics business, can you just perhaps help us to understand a little bit better what accounts for your outperformance versus the market, particularly the reference priced products? And I think you were saying pricing stable there, which is obviously fairly unusual for generics businesses. So just perhaps help us understand the dynamics of that and how sustainable is that market outperformance in generics?

Yes, our performance has been very good for years in Finland and Scandinavia. For several reasons. One is, of course, having a very good service level from our own manufacturing and also from the sources, the external sources that we get our products from. So we know the markets very well. We know the pricing cycles and also our competitors. If you ask about the dynamics, dynamics are very different in different countries. In Finland, you do your offers four times a year. to get on within the price band. And in Denmark you do your offers every two weeks, in Sweden every month. So it's a tender type of a business where you really compete against the cheapest one. which form the kind of the floor for the reimbursement. But I would say all in all, we have a wide portfolio, which offers also possibilities to take market when somebody else is out of the market or in stock out. So we are quite agile and flexible filling in that type of needs. in our region as well. So it's flexibility, service level and competitive pricing that have provided us this resilience. Pricing in itself in these markets, it's not kind of stable. I think it's decreasing all the time. Finland In Finland, prices of generics have gone down minus 10% per year on average. However, on the positive side, the last cycle, the third one this year, was neutral. So there was no price decrease. So that might indicate something for the future, but that might also be an anomaly in the Finnish market.

Okay, there was that last point I was after. And then on gross margin, if you strip out the Nubeka milestone, it looks as if gross margin would have only been about 52%. I think consensus sort of had a bit of a mix of a milestone or not and was about 57. Is 52x ODM milestones a fair characterization of gross margin and what we should be thinking about into Q4 and 2024?

Well, like we have indicated for many years, the growth margins have been declining, partly due to the generic price decreases, but even more so because of the fact that DEX product family and SIMDAX prices have significantly gone down. And those used to be the high margin products in our portfolio, and that has had a negative impact on our overall overall margins and that continues. But of course, the smaller those products become as a part of our total, the smaller also the impact on the overall margins of the company. But I think the fair assumption is that, especially excluding the impact of Nubeca royalties, the margins on the product sales will continue declining, not probably very rapidly after the big impact from Simdex and Dexdora is over. But still, the prices of generic products are not going to increase. They are going to decrease also in the coming years. And of course, we try to compensate as much as we can with the manufacturing costs. But unfortunately, not everything can be compensated. But on the other hand, of course, the royalties from Nubeca are expected to grow, so that will balance this. And once the royalty stream from Nubeca is large enough, that probably can start having a positive impact on the overall growth margin for the total group level in the coming few years.

And then the last one for me is just on the cadence of Newbeka milestones. Obviously, you had one this year. Is it reasonable to assume a rising rate of milestones every year for the next five to six years, just under the 280 million agreement you've got?

Well, we haven't given out the size of the milestones.

Or how many of them are left. So we will guide them when they are certain enough that we can include them in our guidance, like we did for the 30 million this year.

Got it. So perhaps I'll just more near term, would you expect one in 2024?

We are not giving guidance now for 2024. Let's get back to that then early next year in February.

Okay. Thank you.

The next question comes from Iris the Man from Carnegie. Please go ahead. Hi. Thanks for taking my questions.

I have two questions, please. So firstly, could you provide an update what pipeline use do you expect in the next six to 12 months?

Yes. Well, I think the next big news would be the starting of the Phase 3 for the ODM 208, as our partner MSD has indicated, by the end of this year. And thereafter, ODM111 is the one that you should be looking at, starting out the Phase 2 studies, both for the acute pain and chronic pain. So those are the biggest ones for the next months, I would say the next 12 months.

And then, of course, we are expecting the Phase 3 results from Aranaut. study as well during the first half of next year. So those probably are the ones. And of course, we are all the time aiming at getting something new to the clinical pipeline, but time will show when that will happen.

OK, thanks. And then second question, just related to your kind of expectations for next year. I know that you are not giving any guidance at this point, but I mean, could you talk about kind of potential headwinds or tailwinds that you expect for next year? This year's results have been impacted by very kind of large headwinds, so what are basically your expectations for next year?

Well, I think that that's a nice title to talk about next year regarding headwinds and tailwinds. Yes, headwinds, I think that what Jari was saying about SIMDAX and DEX, that as they get smaller and smaller, they give less headwinds to us. You know, the impact will be smaller as we go along and enter to next year. It's difficult to say about the inflation. It seems to stick where it is. And of course, the new situation in the world might have even negative impact on that one. But however, we think that the headwinds for the prices of materials and energy are also easing out as we go along and enter next year. Anything else that comes to your mind?

Well, I mean, if we think of this year, we have had the Russia impact. We have had the big impact from SIMDAC's DEX door. should not be that, I mean, Russia, of course, nothing next year, really. And then on the other hand, the SIMDAX index, like I said, should have much smaller impact. Also, the ENTACAPO and animal health, they should stabilize next year and even give some positive news. And then, of course, there is Nubeka from the positive side, which, of course, continues to grow. I guess that's That's a summary of, and then lots of other things. Easy hailers hopefully continue growing as well, like they have already done this year.

I think clearly, I would say more tailwinds than headwinds, if we summarize it. And if you listen carefully, so of course anything can happen in the world. I think that we have seen. clearly we have all seen, but jail winds, really Nubeka easy hailer, no Russia comparison anymore, Nubeka pricing is stable, energy, material prices are stabilizing, animal health going to the positive direction. I would summarize like that.

And then, of course, we have the other items which have an impact on the profitability, especially the R&D spending, which is, of course, like always, very dependent on how the pipeline is developing. But with ODM 111 and some of the other molecules, we are in an interesting phase where we really need to make the decisions of how much we are going to invest on those. And they are I mean, of course, spending is having a negative impact on profits, but on the other hand, they, of course, are good news for the long-term future of the company. So those, of course, are some key decisions we need to make in the coming months in the company as well.

Okay, thank you. I didn't have any other questions.

as a reminder if you wish to ask a question please dial star 5 on your telephone keypad the next question comes from ansi rousey from seb please go ahead thanks just a couple of follow-ups the first one about the divina product so now when

The sales in Russia is excluded. Is this product growing ex-Russia or not?

Yes, it is growing ex-Russia. It's actually a very interesting product. HRT is a growing theme in Western Europe, and we see a demand for these products. And now, of course, I think that's actually one of the tailwinds that we forgot to mention, that when Russia, there is no comparison for the Russia next year, so that would be on a positive side.

But of course, putting into perspective, the Divina impact on the overall group numbers is relatively small. Even if the product is growing, it will not have a major impact on our group level numbers.

Yes, thanks. Just wanted to make that sure. And then about, as we have had a lot of discussions about the next year. So I'm just thinking about these OPEX items again, but for the next year. so if we let's say exclude ODM 208 related possible R&D costs what kind of R&D expenses we should expect next year like what kind of projects you have and so on and on the other hand sales and marketing costs as well or expenses as well so anything coming from Ganax alone for example or do you have an organization ready already

Well, I start from your second question regarding Ganaxolon. The indication that will be launched next year is very, very small. There are not a handful, but maybe 10, max 100 patients in Europe. So it doesn't require a lot of resources, and we have those already. So not a major impact on cost, if any. Then regarding the R&D, as Jari said, we have a lot of decisions to be made, but clearly we are preparing to start two phase two studies for the ODM111, and hopefully we'll enter some new molecules into phase one. which indicates that our R&D cost as we have said will grow slightly all the time you know in the mid and long term as we expand our portfolio.

And of course we recently announced the ODM 105 and 212 programs which have just been initiated, so this year still relatively minor cost, but they of course will also, the cost for those programs will be larger than in 2024. So there are plenty of these programs in phase one and phase two. Of course, those are not as expensive as individual studies as phase three studies would be, but when you count that there can be quite many of those, those start to accumulate costs, which will lead to increase in R&D spending, but of course the timing of those programs and how they proceed will then define that how much more we actually end up spending next year. But the assumption is that R&D cost should be higher next year than this year, but how much is still under evaluation, let's put it that way.

Great, thank you. That's all for me.

The next question comes from Victor Sundberg from Nordea. Please go ahead.

Yes.

Hi. Thank you for taking my question, Victor Sundberg at Nordea. I think costs have been a challenge for consensus in general to get right in Orion, looking at this and previous quarters. I mean, in Q2, you had quite high SG&A costs, R&D costs, and now they've dropped. here in Q3. How should you think about this going into Q4? That's usually the quarter when costs are a bit higher across the industry. I just wanted to get a feeling of how we should think about costs here in Q4. Thank you.

Traditionally our Q4 OPEX costs have been higher than in Q3. which is of course to some extent due to the fact that during the summer months when people are on vacation there is a lot of activities which are slowed down and then they are restarted now having an impact on Q4 and then we also seem to see a little bit of phenomenon that many of our external suppliers realized towards the end of the year that they when they start closing their books that okay, there is something still to be invoiced and that we typically see in December. So the expectation is that the cost will be higher in Q4 than they were in Q3 on average of the year. But how much exactly I think they're the big driver is like always is the starting cost for some of the clinical studies we are conducting and those are a little bit difficult to estimate because there are lots of actions which are now taking place either late December or early January and we'll need to see how those costs develop.

Thank you. And continuing on the seasonality theme here, Nubeka also, you usually see a quite large Q4 boast with Q3 revenues being a bit lower. Can you explain the dynamic a bit more here? And is this expected to be present also here in 2023, this seasonality effect of Nubeka?

Well, I guess if we look at, I mean, one always needs to remember the underlying structure of our business, the underlying prescription data, of course, New Pekka is a growing product. There is no big difference and that is driving the royalty income. But then we have this other element, which is then the product sales, which we book when we ship the product to buyer, but which they then deduct. from our royalties the following quarter, and that has definitely caused some fluctuations in some years. And that is something which continues well. And it's probably more a coincidence that it has maybe impacted Q4. But of course, the reality is that as long as the product is growing, it should mean that the basis for the royalties is increasing quarter after quarter after quarter. And that, of course, should happen also this year because buyers are selling more and more all the time of New Beka and that increases also our royalties.

Okay thank you and I also wanted to ask a question about Entacapone. Could you quantify perhaps the price impact versus the stocking impact on that product and do you think this will stabilize you know in the first half more or is this a second half? thing that you think that will stabilize in the second half instead. Thanks.

Maybe that's going a little bit to the details, but I mean, it's actually, I don't even have that number in my head, which way it goes, but I assume that the volume impact is anyway larger than the pricing impact.

Okay. Thank you. And a final question also at the CMD, you talked about the long-term targets being kept and I don't know if I interpreted you correctly but it seems like you said that you want to get familiar in your new role as CEO and perhaps come back to these goals because I think many investors were kind of surprised that margins would not improve more longer term given that you have more and more sales from Niveka, especially royalties as the product grows. Will the company look over this long-term guidance goals near term under your leadership?

That's my question. Sure. Well, there are always expectations when there is a new CEO. However, I've been involved in planning these objectives and thus no need to renew them as soon as I started. And of course, the question that I've been asked many times since I started was that, will this 1.5 billion hold for 2025? And yes, I always say yes. Let's first see that and then we will consider the next kind of a mid and long term financial objectives. Of course, we understand that the situation will be very different as we go along. NUVECA will still continue a strong growth at the same time. We will most probably invest more and more in R&D. We have an opportunity to do that and also to expand geographically, as we've already started to do, also very modestly. But we will look at when the time is right to re-evaluate and announce our new financial objectives.

Okay, thank you. That was all for me. Thank you very much.

As a reminder, if you wish to ask a question, please dial star 5 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thank you, moderator. Actually, you have already exhausted all the questions also from the webcast. So we have no new questions coming through the webcast. So it's time for your final wrap up, Lisa.

Yes. First of all, thank you for your attendance and very good and interesting questions. And to summarize still once more, our Q3 was really strong and as expected. And now we'll see how the rest of the year will span out. Thank you.