Orion Corp New B Shs

Good afternoon, ladies and gentlemen, and welcome to Orion's earnings conference call and webcast for the financial period of January-March 2025. My name is Tuukka Hirvonen. I'm the head of IR here at Orion. In a few moments, as you know, we will start this event with CEO Liisa Hurme's presentation, after which you will have the possibility to ask questions from her and also from our CFO, Mr. René Lindell. We will be first taking questions through the conference call lines, and then you also have the possibility to send in your questions through the webcast question form. We kindly ask you to present the company or organization you are representing before asking your question. And just before Letting Liisa step in. Just a reminder about the disclaimer regarding forward-looking statements. And with this, it's my pleasure to hand over to Liisa.

Thank you, Tuukka. And good afternoon on my behalf as well. And welcome to Orion Q1 2025 webcast. I'll start with some highlights from our first quarter. I'm happy to tell that all our four businesses created growth, and the fifth one, Fermion, didn't grow, but I will explain a bit about that later on. Also, our geographic expansion and R&D capabilities program is progressing, and we have opened an R&D site in Cambridge. in purpose of strengthening our pharmaceutical development for biologics. Also, there is a new key project in our clinical pipeline. This phase three is on levosimendone for a pulmonary hypertension in certain specific patient segments. And this phase three is carried out by TENAX Therapeutics in United States. On financials, the quarter one was excellent. Net sales grew 15% and our operating profit grew 39%. And also operating profit margin improved from last year's quarter one. Cash flow decreased to some extent, mainly due to timing of royalty payments and some milestone payments between borders. Our net sales bridge looks a bit different than previously. If you remember earlier, we had net sales based on some of our biggest products, and now we have divided our net sales picture based on our divisions. Now it's easier to follow up how each division is doing and which divisions are creating growth. and more or less growth since all four human divisions and animal health is creating all three human divisions and animal health is creating growth. So innovative medicines, 40.4 million in quarter one, brandy products 6.8 and generics 1 million and animal health 3.3 million euros of growth. Firmium, as I already said, was not developing positively, but let's remember that this is only external sales. And then there are some internal translations between other operations in Orion, which are very marginal here, 400 million. But all this ended up 354.6 million of net sales in quarter one. Operating profit bridge is pretty much the same as earlier, but we've made it a bit clearer with our texts. So the first column here, 13.7 million, points to the change in volumes. So this is the euros that the volume increase has created this much growth. Then the second one includes the change that comes from changes of prices, course and product mix. So slight decrease there by 5.6 million. And then the third one is the effect of exchange rate on our gross margin. Fourth one royalties, clearly the biggest contributor here. And the fifth one milestones compared to the last year's first quarter, a bit of minus there. And then other operating income and expenses. And then number seven here on the column seven, you can see the fixed course, which is mainly sales and marketing costs in quarter one. And all this ended up to close to 78 million in operating profit during first quarter. Now I turn to innovative medicines. 70.4 percent growth here which is almost created almost 100 million sales in first quarter so we didn't yet break that 100 million per quarter and here in the right hand side you can see a clear this phenomenon of back-end loaded financial year in innovative medicines. You can see how the year ended in quarter four, 24 with 152 million actually. And now we started with 92 on the first quarter. But you can clearly see that there is a huge growth compared to the quarter one. So no worries if there is a change downwards from the last quarter of the previous year. We've explained this earlier that the royalty rate really gets higher and higher during the year as certain sales in euros are exceeded. Also, you can see here that the tablets that we delivered to Bayer reached at all time high number, 38 million euros. branded products, almost 10% of growth. And here you can also see a different type of a split here. We talk about CNS, not specific products. And we can see that respiratory business is clearly the biggest one here. And CNS business back on a growth track represents 30% of the branded products. And Easyhaler, the whole portfolio grew 8% and the combination of Budesonide and Formotelor continued strong growth with almost 15%. And after a long time, Entacapone, you will see that on the top 10 list, but CNS sales grew 5.7% partly and mainly because of Entacapone sales in Japan, but also because of some minor new products that are in that portfolio. Generics and consumer health, almost 1% of growth, a wonderful achievement in that portfolio. And here, the split geographically is so that Finland is the biggest single geography for generics and consumer health, Scandinavia the second biggest, and then Eastern Europe. And to reach this almost 1% growth, one of the main drivers was actually Scandinavia this time. We were able to supply products that other companies were not able to supply in certain Scandinavian markets, which again shows and proves the excellent service level that we have in our generics business. Animal health, strong, plus 10% of growth. It was a bit lower sales, although slower than last year, but still on a very good level in general in animal health business. And then fermion, as I already mentioned, declined. But let's remember, this is only external sales, and a majority of the capacity is now bound to our internal own products. Top 10 products. There are pluses and minuses. plus 85% for Nubeca, Easyhaler 8%, as I already said, Entacapone products plus 6%, Japan contributing to this growth as should be after repatriation from Novartis. The minus on Dexdometor-Domitor animal health sedatives is mainly due to to timing of shipments to our partners. So no worries there. There's been a lot of fluctuation between the quarters lately. And Divina series, meaning mainly our estradiol gel product, 30% growth. I think that's the, after Nubeka, that's actually our fastest growing product currently. Burana more or less at par with the previous year's first quarter. This is very normal. It's plus or minus 1-2% depending on the Finnish sales. And SIMDAX and DEX portfolios are sliding down due to generic competition. Trexan again, shipments from one quarter to another one. And then a new entrant to this list is really Ketiapiin products from our generic portfolio. It has climbed up to our top 10, mainly because the DEX is going down. And I guess we'll see some of the biggest generics actually entering to this list as Dextor and Simdex are sliding down. But we do sell Ketiapiin in all the Nordic countries. And innovative medicines, almost 30% of the revenues. Branded products, 22%. And generics, 37%. And clinical pipeline. We have here two phase three projects ongoing with Nubeka. very familiar to this audience, Aranaut, which is already in registration phase globally. Arastep in phase three. Then two projects ongoing with Opebesostat, Omaha-1 and Omaha-2, for a different segment or phase of prostate cancer. And then one phase two study ongoing with Opeveso STAT, which is a continuation from the phase two study that we used to design the two phase three studies that we have here about the CYPIDES study. And ODM212, a new mechanism for cancer treatment for solid tumors in phase one. And as I last time told, we are expanding that phase one this year so that we have enough data to choose the right doses for the phase two study. In the TASIPI Medin study, our program, we continue with the Phase 2 this year. We started with the very small Phase 2a and now we are expanding to the full blown Phase 2. Then the new entrant, which we could call TNX-103, as Tenax calls it. This is an oral levosimendan. So the molecule is the same as in the Symdax product, but that's an IV product. This is an oral one, and it's used to the pulmonary hypertension. with patients with heart failure and ejection-rejection fraction of certain magnitude, which in this case means that a normal fraction. But these patients suffer of pulmonary hypertension. And this is rather a long story, why this popped up in our clinical pipeline. And maybe you do have questions regarding to this, but I may shortly and briefly summarize the story. Already more than 10 years ago, we made a deal with a company called Fuchsius at that time, an American company. They wanted to develop oral levocimendan for low cardiac output syndrome. Unfortunately, that study failed. We still continued collaboration with the same people now in the company called Tenax. And they managed and succeeded in getting finance for this program with Levosimendan for the syndication. And this came public in March this year. So this was the right time to bring it also public here in our pipeline, as this is our molecule and partner agreement like we have partner agreements with other companies like Bayer, Merck and also smaller companies. Then to a very different subject, sustainability and highlights from 2024. As many companies in Europe, we reported or had our first CSR&D report, and that was published in March as part of report by the board of directors. This was a huge job and I thank the team for this. I think all the companies have been working a lot to fulfill these European requirements. Pharmaceutical industry is all about patient safety and quality. And in 2024, we conducted 258 audits. Imagine, that means that every week there are approximately five audits. And if you count out, you know, Christmas and Easter and all the other holidays and bank holidays, it means that every week there are many groups of people from Orion visiting other companies, you know, checking how those factories are from the quality perspective. And I think this also tells a lot about our external suppliers, how many of those suppliers we have. Then, of course, environment is another very important aspect. And here we've been able to reduce scope one and scope two emissions by 21% during this 2024. And we have a very ambitious target that is explained in our report. until year 2030. Safety of our colleagues is also very, very important, both in our operations, but in general for all of our colleagues, whether they are working in sales, R&D, operations. And to that purpose, we conduct safety discussions, safety sessions, where we discuss topics in every other management meeting or team meeting. And you can see here that 72% of our line managers held this kind of a safety session with their team every month. Of course, there might be teams that hold those more often and maybe teams that hold them a bit more seldom. Our code of conduct was renewed last year, and here you can see that 94% of Oregonese have had the code of conduct training last year. And of course, our target is 100%. And in most of the functions, it is 100%. But anybody understands that in a big organization, big people are coming in, new people and going out. So there is, of course, some limitations to reach full 100%. But that's definitely our aim, because that's implemented in our starting pack whenever When anybody starts in Orion, they need to do the code of conduct training from here on. Our outlook remains the same for this year, as we've stated in February. So it's from 1,550,000,000 to 1,650,000,000 euros regarding net sales. and 350 million to 450 million regarding operating profit. We will hold Capital Markets Day in Helsinki on 22nd of May. So I warmly welcome all of you to attend our Capital Markets Day. We will share more light and more wider and deeper information on each of our divisions, their product portfolios, current portfolios, their visions and also operations, current operations. And here you can see other upcoming events for the rest of this year. The half-year financial report in mid-July and then finally October first nine months. And at this point, I thank you for your attention and I think it's time for questions. So I welcome our CFO René Lindell on stage and Tuukka will join us as well.

Thank you, Liisa, for the presentation. And as stated in the beginning of the event, that we will first take questions through the conference call line. So at this point, I'd like to hand over to the operator, please.