Orion Corp New B Shs

Good afternoon and welcome to Orion's Q1 2026 results webcast and conference call. My name is Tuukka Hirvman and I'm the head of IR here at Orion. In a few moments, we will kick off with a presentation by our CEO, Liisa Hurme, after which you will have the possibility to ask questions either from Liisa or from our CFO, Rene Lindell. We will be first taking the questions through the conference call lines, and after that we will turn on to the webcast chat function. So you may also type in your questions using the chat function of this webcast. And to our Finnish-speaking viewers, this event is held in English, but afterwards, later this afternoon, you will find a Finnish interview of Orion CEO Liisa Hurme on Orion's website. And just before letting Liisa to step in, just a reminder about this disclaimer regarding forward-looking statements. With these words, I'd like to hand over to Liisa.

Thank you, Tuukka, and good afternoon on my behalf as well, and welcome to Listen Orion Q1 2026 results. Some highlights from this Q1. All our businesses performed solid, in a solid way, and very well, I would say so. And we also have good news regarding our clinical pipeline. We've been granted, ODM 212 has been granted for fund-raising designation in mesothelioma by FDA, now in April. And we've also started a new Phase 1b-2 study called Eat Coke, which is a basket trial evaluating ODM212 in combination with standard of care treatments in patients with selective advanced solid tumors. And I will talk more about that later on. Also, we have strengthened our executive team. We have appointed Mr. Barclay Vincent as an executive vice president to lead innovative medicines division, and as a member of my executive team as of April 8th. So let's look at the financials. Net sales, a healthy growth of almost 18% compared to the previous year's quarter one. Also operating profit growth, 47%, which brought us to operating profit margin of 27.5%. and earnings per share increased 47%. Looking at net sales in more detail, Innovative Medicines drove the net sales growth with royalties and tablet sales. But as I already mentioned, all the divisions are performing well, of course, in relation to the size of the division. Randy Burke's growth was 5.2 million, Generics 1.1 million, and Animal Health 1.1 million, and even Fermion external sales grew 1.8 million, ending up to 480 million euros of net sales during Q1. And the operating profit consists, of course, The royalties here in the column 3 close to 41 million euros and change in sales volume of 21 million euros. We of course see some effect on decreasing prices as we usually see. The biggest product suffering of this are of course index and dexter but there are other generics as well. This comprises or comprises of 9.3 million euros. That also includes effects and changes in cost of goods. No major milestones received in Q1. And then we also see increase in our fixed costs. And thus our operating profit was close to 150 million euros during Q1. Now to innovative medicines. The division growth was close to 54%. And here we can see the Nubeka royalties and doublet sales of 145, close to 145 million euros. Some other business of 5.4 million, which is usually sales of services to our partners, resulting 150%. million euros of net sales. And as we remember from the previous years, we start with the lower royalty rate from there in the beginning of the year. So the royalties are tiered during the financial year. And we see into one clearly lower income of Nubeka compared to the last quarter. of previous year, but clearly a higher revenue, Nubeca revenue compared to the previous year's quarter was. And royalties were 95 million euros and tablet sales to their 50 million euros. Branded products close to 7% growth compared to previous year with 82.2 million euros EasyHealer continues to drive growth in this division, especially budesonide formaterol, as the recent changes in treatment guidelines from last year favor the use of combination products over the mono products. And we've been able to really increase our sales according to this new guideline. And the good growth momentum in women's health. therapy area continues with the HRC products. Generics and consumer health, 1.4% growth. It's, according to market growth, maybe slightly below that, but this is only one quarter, and we all know that this is really a very wide portfolio in many different geographies, so this is a very good achievement for the first quarter. and animal health 3.3% growth. Of course, again, a very wide portfolio, both for companion animals and livestock, and a global portfolio, and the growth comes from all of the different geographies in both segments, or both units. When we look at the top 10 products, of course, we see the Nubeka, as we discussed, driving the growth, Easyhaler, 7% growth. Entacapon, slightly minus compared to the previous year's quarter one, but this is mainly, again, a timing issue of deliveries to different regions and different partners. Same goes with the dexamethoran and the animal health PDA portfolio, number four here, which grows almost 11%. It presents And that is again a result of deliveries leaving during year one. And as I mentioned, women's health continues with growth trajectory with almost 15% growth. At Burana, slightly decreasing, almost 6%. That's also a kind of more of a timing issue and depends on the season. But then we see Three of our generics, Trexan, Ketiapine, and Foreston, which have a very, very healthy growth. This is partly due to the previously mentioned timing of deliveries to our partners, but also showing that, for example, Trexan is a golden standard treatment globally used both in cancer and autoimmune diseases and holds a solid position in our top 10 products. And FINDUX, as I already mentioned, facing a heavy generic competition in Europe. Now, Innovative Medicines during the quarter one comprised 36% of our net sales and generic 32% and branded products 20%. Animal Health and Fermion together were 11%, 12% of our net. Our clinical development pipeline has now, or the list is now a bit longer, with the new combination study for ODM212. But I'll go through the list to remind us what we have now going on. So the two first ones are studies on Nubeqa, the Duffel-Hiccup, or the Nea212s of darolutamide in prostate cancer, ARPSTEP, for the biochemically reoccurring prostate cancer. Omaha 3 and 4 are studies for metastatic castrate-resistant prostate cancer with opethesostats molecule that Orion has developed and then outlicensed to MSD. Then a bit of an odd A product on this list, which is otherwise oncology products or molecules, is Levocimendan. It's an old classic from Orion's portfolio, the same molecule as we have in Symdax, and that's developed for pulmonary hypertension. And there are two phase three studies ongoing with that by our partner, Tenax. Then two phase two studies, again, with Opevesostat, for women's cancers, like breast, endometrial, and ovarian cancer, MSD by MSD. And this is, of course, to test whether this mechanism of action would also work for hormonal cancers in women. CYPIDES is still ongoing. That was the phase two study that was used when the phase three studies with Opebesostat started, so the results of that study. were used for planning of that, those phase 3s. T-DEF is a monotherapy study, a phase 2 study for ODM212, for malignant pleural mesothelioma, and also for epithelioid hemangioma endothelioma. These are two very rare cancers, solid tumors, And we think that this molecule, based on its mechanism of action, should have a direct anti-tumor activity to these cancer types. And the new addition did co, co referring to combinations. The indications here, the cancers are mesothelioma, non-small cell lung cancer, and pancreatic cancer. We are combining ODM212 with some known drugs that are used for these specific cancers, and we use the other kind of mechanism of bead inhibition, which would fight for the drug resistance or prevent the drug resistance that patients usually show to these currently used treatments. Sustainability. As another topic, some key figures of Orion's sustainability programs. We've been able to decrease our greenhouse gas emissions by 13%, and this is scope one and two, so it doesn't include the scope three. Our injury rate is 4.9, and there is clearly room to improve there. For this year, we have very... ambitious targets for LTIF. And then two things regarding more of a kind of code of conduct or how we operate within our own company and with our suppliers. This has to do with the code of conduct. In Orion, 98% of our employees have carried out or done the training for code of conduct. Also, we do this code of conduct training and agreement with our suppliers and 96% of our suppliers are also adhered to code of conduct, our third party code of conduct practices. We have specified our outlook for this year. We gave our outlook in January, and now after Q1, when fourth of the year has already passed, we are a bit more wiser, and we are able to increase the lower limit of our range by 50 million, both on net sales and operating profit. So the net sales range was 1.9 to 2.1 billion euros, in the original outlook and now it's from 1.95 billion to 2.1 billion. And same with the operating profit which was previously 550 million to 750 million and now it's from 600 million euros to 750 million. And here are some upcoming events for this year and I think at this point I thank you for your attention, and I think it's time for questions.

Yes, thank you, Liisa, for the presentation and setup for today. And now let's turn on to the questions. We will first start with questions on the conference call line, so at this point I would like to hand over to the operator.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Alex Moore from Bank of America. Please go ahead.

Hi there. Thanks for taking my questions. Two for me, both on Rebecca. So you previously mentioned that quarterly royalty reporting can be impacted by last month's estimates and some reconciliation effects. I was just wondering for Q1, Was there any particular conservatism or phasing assumptions baked into your sales estimate for March? And then separately, can you give me a high-level color on whether the reconciliation sales in December was meaningfully positive or negative in terms of impact on your reported royalty for the quarter? And then secondly, based on your current assumptions for your sales run rate and tiered royalty rate, Do you see consensual expectations of around 50% growth in the back sales this year as achievable?

Thank you.

Yeah, maybe I can take that one. So I'll start first with basically December numbers. So we always try, if possible, to close the year with the actual reports, and that we managed to do last year. So there was no reconciliation or overflow from 25 to 26. actually uh as we said the last month of of uh of the quarters uh within the year are based on estimates that we then have and and that uh and the latest data we have and then we'll be updating the in the second quarter and then we will look discuss that of course in in q2 but we are not giving uh details between the in between months of of how how then you becca uh at roles and actuals go And then, yes, we are very happy, of course, that Bayer is also optimistic on the full view of Nubeca, and so are we. And, of course, we do our own scenarios and try to make a balanced outlook for the year that includes various scenarios. Other than that, not commenting on Bayer's estimates.

The next question comes from Sami Sarkamis from Jansky Bank Markets. Please go ahead.

Hi. I have two questions. Starting from the guidance upgrade, I think you mentioned that you were just wiser after Q1. Can you specify, was the upgrade just based on Q1 performance, or have you also upgraded assumptions related to the rest of the year?

Yeah, maybe I can comment on that. So as Lisa said, of course, we have one quarter behind us, and that was solid across the businesses. And also, I think, Jubeka performing very nicely in the numbers and in the markets. So I think it's a general – I think if we look at really the – the lower boundary, we also see that the probability for that old outlook lower limit starts to be quite low and, you know, made sense to raise that lower limit to a bit higher. And when it comes to other aspects, Some also effect from the fact that we have a little bit more information in the USA that is for pharma for this year that the impact would be earlier for October quarter. And as that information came through, that also reduces a little bit of the downside risk, although being said, it is still something which is uncertain as it's still not in place and will be tested then end of the year what the impact will be, if any, at that point of time.

Okay. And then my second question would be related to new backup product deliveries. These grew only 30% in Q1. I think they were also a bit small in Q4. So should we just assume that inventories at Bayer have become lower in the last couple of quarters? and these product deliveries will pick up at some point in time during the rest of the year.

Well, I think the public deliveries from Orion to Bayer is not a very good, I would say, not a very good lead indicator for how Nubeca sales would develop or how the inventories, the supply chain is really, really long. if you think the global supply chain. So I would advise not to look at that tablet number or tablet save. We ship according to buyer's forecast. Of course, here for the shipments, there is the same factor than for any other shipments that sometimes they leave on a certain last day of a certain month or then first day of the next month. So But there might also be big differences depending on when the shipments leave Orion. So that's not a very good and reliable indicator for prognosing inventory or future sales.

Perhaps I can continue here a little bit. We do expect for the full year that we will have higher tablet deliveries than what we had in Q1. So, it wasn't yet, I think, representative of the average level.

No, no. This is exactly what I mean.

Okay. And then, actually, I have one more question regarding the new combination study for ODM212. Can you tell a bit more about the study? How many Patients will be recruited. When are you expecting readouts? And then it would be interesting to hear what is currently the market for the drugs that you will be combining ODM 2.2 with.

Well, I think I'll start with the studies. These are not huge studies. I don't have the exact number of patients unless my colleagues here have that. But let's remember that both of these indications, even though they are big ones, so we are now carrying out phase 1B slash 2. So we are even first trying different dosing with some of the combined drugs. And for the results and readouts, I would be on the safe side to say that we can expect those during 28. And the markets for the drugs that we are combining, I'm not going to share here the market details of those drugs, but those Alistead, the ones that we combine with Alistead in the press release currently. Okay.

Okay, so assuming sort of positive readout in 28, you probably still need to do additional studies for these patients?

Yes.

And maybe on the market potential, think about the drugs that you are combining with, I mean, all these blockbuster products.

Oh, yes. Indeed, some of them are.

They are, but then again, one needs to remember that their indication may be wider than the one we are targeting with this combination. So we have listed the active ingredients in the press release we announced earlier this morning. So with that, you can definitely find out the brand names for these products. But again, please bear in mind that their indication may be wider than the one we are targeting with these trials.

Okay. Thank you. I don't have any further questions.

The next question comes from Madi Karola from Op Corporate Bank. Please go ahead.

Hi. Thank you for getting the question. First, I'm going to think about loyalty rates. So what we should think about during this Q1 is it comparable to what we saw last year, best order, or is it higher as now the the shares of those grew from the Q1 last year.

Apologies Matti, the line was a bit bad right now. There's somewhat echo. Would you please repeat your question?

All right, hopefully it's better now. Yeah, I was asking about the royalty rate during the Q1. So is it at the same level than last year or Is it higher now as the NUTECA share has grew from last year?

I don't think we comment on the royalty rates in that perspective as to where the tier breakpoints are. So you'll have to probably wait for that calculation to be done a bit later during the year.

that's a great assumption each and every year when we are growing faster compared to previous year we will be reaching the higher tiers earlier than last year so in that sense in q1 also probably the average is somewhat higher than last year all right maybe then another question regarding the conservative marketing course as they they've been increasing so could you roughly say how much there is like the

actual costs and how much are the end royalties? These are kind of causing the cost growth.

Yeah, of course, end royalties are playing a role in their part, but also we have added Salesforce also to support, especially branded products in some European countries. So you will see both effects there visible at, of course, with Jubeka, growing quite a lot from last year's Q1, then of course those would be also visible in the sense of marketing.

Okay. Then one more question regarding the R&D pipeline. So as you did say that there is this one kind of the study which is not covering oncology. So I think it was last year exactly when you were putting this TEMAX study in your pipeline and Could you remind us what was the reason to add that study back then to your pipeline? Why it was not there prior to a year ago?

Yeah, that's a very good question, and thank you for asking so that we can remind. I think that was the time when DENACS started the phase three program for pulmonary hypertension. They had been working with Levocimentum for a while, doing some complementary studies, but that was exactly the time when they were able to start the first study, and then eventually later on last year they started the next study or the second study for pulmonary hypertension. So there is no other reason for that.

Okay, no further questions.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Anzi Rossi from SEB. Please go ahead.

Hi, Olli. Yes, it comes from SEB. One question from me regarding Nubeka. So when you think about this early stage indication for Nubeka, What would be a reasonable timeline to expect that you would jump in, which would of course trigger this expense for you? Because I have understood that Bayer is fully responsible for the development for now.

Indeed. This relates to the National HICAP study and the readout for this study if I remember correctly, is 28.

Estimated in 28.

Yeah, estimated in 28, and I think that the latest point for us to jump in and use our opt-in would be when we see the results of the study.

Okay, that's clear. Thank you. Nothing else from me.

The next question comes from Iris Temin from D&D Carnegie. Please go ahead.

Hi, I have just one question. So what pipeline use do you expect in the next 12 to 18 months?

Thanks. Well, I'll start with our ambition to start phase one study, at least one phase one study with our biologics during this year by the end of 26. And then If you ask for the next 12 months, of course, then we move to 27. And there I hope to see another biologic entering clinical stage. So I think those are the major initiations of new projects. And then regarding the results, no major results that we would be expecting this year.

With the exception of the level trial, phase three trial by DENUX in Q3 this year.

This year. Yes. Thank you, Tuukka. But then in 27, the ARA step will be, there will be a readout for ARA step in 27. Then again, what else did we have in 27?

Current estimate for the women's trials with Oferesostat. Current estimate is in the end of 27. We'll see how that pans out. And also for our first ODM212 phase two. So with the mono trial, current estimate is also in the end of 27. But it may, you know, move either direction depending on recruitment rates and so forth.

Okay, and anything about OPEV-SOSAT, ODM208 for prostate cancer?

The readout for both of the studies is 28.

Yeah, the estimated final readout is in sub-28 for both of these trials.

Okay, thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thank you, operator. Then we'll turn to the webcast questions. So, again, you still have the opportunity to type in your questions by using the webcast chat. If you wish, we have here one question coming from Sean Hama from Jefferies. So, Sean is interested to hear that could we please provide an update on OPEB's start timing and if we could still see interim data this year following Merck's comments in 25 ASCO, so last year.

Well, I think I can only repeat what we said a minute ago, that the readouts for both of the studies are estimated to happen in 28. And regarding any interim results or interim analysis, I don't have information on that. So that should be asked from MSD.

Exactly. Thank you, Lisa. So we have no further questions either from the webcast, and I think that we don't either have any follow-ups on the conference call lines. So I think it's time to wrap up on some closing words, if we wish, Lisa.

Yes. I thank you for your attention and very good questions. And, of course, I hope that you will be attending our upcoming events this year and have a nice rest of the day. Thank you.