Orion Corp New B Shs

Good afternoon and welcome to Orion's Q3 26 conference call and webcast. My name is Tuukka Hirvonen and I am the head of investor relations here at Orion. I'm today here with our CEO Liisa Hurme and CFO Rene Lindell. We will start shortly with Liisa's presentation after which then you will have the possibility to ask questions from the management. We will first take questions from the conference call lines and then afterwards we will turn on to the webcast chat questions. So you may type in your questions utilizing the webcast chat function. Before going through the disclaimer for our Finnish speaking viewers, CEO interview in Finnish will be published later on today on Orion's website regarding the results. And now before letting Liisa start, a quick reminder about the disclaimer and forward-looking statements. And with this, it's my pleasure to hand over to Liisa.

Thank you, Tuukka. And welcome to Orion Q3 2026 webcast. Once again, we have delivered a strong quarter. with improved sales and profitability growth. Nubeca continued to be the growth driver, but also all business units across our Brandy products had a healthy growth. On R&D side, we are proud to tell that we have proceeded with our first biological molecule into phase one. and this is a very important milestone for Orion R&D. Another very important piece of information on R&D side is the interim results of DASL-HICAP study, which demonstrated 58% reduction of the risk of metastasis or death with darolutamide and androgen deprivation therapy and radiotherapy. versus placebo and endocrine deprivation therapy and radiotherapy. And this week, after the quarter, we also on Monday announced changes to Orion's executive team to continue proceeding with our strategy. And now to numbers. Our net sales increased by 28%, totaling to 542 million. And our operating profits had a growth of almost 74% and totaled 210 million. And our earnings per share grew accordingly. And when we look at the net sales, we clearly see that innovative medicines with Nuberca drives our net sales growth. with 113 million here, and Brandy Products, of course, with smaller numbers, but a significant growth to Brandy Products of 7.4 million. And this quarter, Generics had a bit of a tough one, minus 4.6 million, but we have had a very tough comparative period from the last year. Animal Health more or less on par and Fermion excellent deliveries to our customers. On operating profit, even more clearly royalties are driving this with 104 million and maybe the other figure that I would like to point out here are our fixed cost of 22.3 million, which is totally as we expected it to be. We have been selling and executing at the same time our R&D pipeline proceedings, so all our R&D projects are proceeding, thus the higher fixed cost, and they are also partly due to the increased sales and marketing costs. Changes in sales volume, also very positive, 4.9 million, and changes in prices, cost and product mix, 2.6 million. all on a positive side. And now to year-to-date numbers from January to September. A very similar type of numbers, plus 24% growth, totaling to 1,481,000,000 and almost 66% growth of operating profit, a bit over 500 million during the first nine months. and again earnings pressure according to that growth. And now I turn to separate divisions where we can look at the quarter and also the year to date numbers. And here in the dark blue you can see New Pekka royalties and product sales, 280 million in the third quarter and then some other services and sales on the light of blue here and during the first nine months, 662 million. And once again, I would like to point out on the right side from looking from here, you can see how the dynamics go during the year that we always start from the lower level of royalty on the first quarter or the beginning of every year. and it's good to remind here already that we reached the highest royalty rate already in quarter two. So the growth that we are seeing here with Nuberka is an absolute growth of royalties, meaning absolute growth of sales at market. And we have royalties of 222 million and tablet sales of 58 million to bear during the Q3. and a very healthy growth for Brandy products during Q3, almost 11% growth. With a portfolio of Easyhaler products, where Budesonide Formaterol is clearly the growth driver, our CNS portfolio, a growth there as well. This time, not intercaptain growth, but actually growth of some of our new CNS products that we have been talking about Here earlier, for example, for migraine and some additional products for Parkinson's disease patients. And the fastest growth segment was again women's health. And the same trend you can see on the first nine months figures. Generics and Consumer Health had a, as I said already in the beginning, quite rough starting point or competitive period from the last year. So quarter three figures are minus 3.4, but still I think a very healthy business here. And when you then look at year-to-date numbers, I think you can say so far we are on the same level as last year. This is due to the slight decline in the generic prescription drugs. However, the consumer health business is proceeding as it did last year, so no decrease seen there. I'm happy to tell that we have signed a license agreement with the Chinese company Chilu to commercialize IV temporalizumab, which is a biosimilar of Keytruda, across Europe. and the expected launch of this product would be in early 2030s. Animal health, more or less on par during the Q3 compared to the previous year, a little bit lower figures on the year to date numbers. And fermion, Great numbers. I already mentioned this in the beginning. And let's remember this is really external deliveries. And this is mainly coming from the contract manufacturing and actually contract development and manufacturing services for both API and finished dosage forms. So when we record fermions, it includes also contract manufacturing and development for finished drugs. and happy to tell that we are ramping up as we speak the plant three in Hanko. That was the plant where we had the water damage early July and now we are ahead of the schedule and clearly and solidly ramping up that plant and all the other plants are ramped up already after the maintenance break as planned. Top 10 products, I think the same order as the last time, and you can see almost 70% growth for Nubeka, almost 7% growth for Easyhaler, slight decline for Entacapone. This is due to the price pressure almost all over the world. It's a global product, and there are price decreases that we see in different parts of the globe. Volumes, however, keep on growing all the time. and Divina Series, you can see almost 47% growth. And I think this is amazing and it's a really great news for all the women of this world that these treatments are available. And when you looked at the animal health numbers, I think that part of the explanation is here. It's about timing of shippings. They set up these shippings again have been a bit later than we expected. It might be just a one-day difference between a quarter, so here we see a minus number. And I think the main message actually on this slide is that almost half of the Orion's revenues comes from innovator medicines after the first nine months, meaning Nubeca royalties and product sales. and the clinical development pipeline. A double hiccup, interim results were reported by there in ESMO, a very positive result, as I already mentioned. And also we are happy to tell about the new molecule ODN216, That's the first biological molecule, a large molecule, in our pipeline. And we have a study called Bi-CITES going on with this bispecific antibody. And it's targeted to advance solid tumors. But I can't and I'm not going to share any more about certain indications at this stage. Sustainability is an important thing for us. It's not only an item on our agenda that we need to do. We perform every day to keep good care of our value chain, from sourcing the materials, key materials, or starting materials for our intermediates, sourcing our intermediates, sourcing APIs, sourcing drugs from other companies, and distributing and selling the drugs for our customers. All this is very important and you can see that on the four pillars of our sustainability agenda. And of course, how we are seen by the external environment is validating that we are doing well. And I think the recent news is that we got now on the silver leather by EcoBuddies. and of course we continue the good work and aim even higher. And based on good first nine months, very good royalties and good outlook for the rest of the year, we upgraded our financial outlook for this year. So that our net sales range is from 2 billion and 70 million to 2 billion and 140 million. And our range for operating profit is from 730 million to 790 million. And then after the third quarter, as I mentioned early this week, we announced changes in our executive team and in our divisional structures. We have not changed our strategy. On the contrary, our strategy has become a necessity. In the beginning, when we launched the strategy in 23, it was an aspiration for Orion to become a more global company from a European basis. and pharmaceutical company to go out to the world both commercially and building R&D capabilities around the world where they are needed and where they are available. And we have more or less accomplished the first three years. We've strengthened our existence in Europe with all our key brands and we continue to do that. We've established our sales operations in Japan. which actually also serves as a platform for our clinical studies for example for OBM212. So now for the first time we are running our own studies outside Europe. But now we are moving to the next stage of this strategy and that means that we need to sharpen up and focus even more on our strategic assets. And thus we've done some changes in our organization. We have a new role, a commercial executive vice president for international commercial operations. Mr. Hao Pan is leading this organization. He's been member of Orion executive team since early 23, and now he is responsible for all ex-US commercial operations, as all the US operations are reporting and are headed by Berkeley Vincent. And he's also responsible for the innovative medicines. The other change is that Mr. Juhani Kankaanpaa, who's been heading our global operations, which means all our manufacturing sites for finished goods, for APIs, company procurement, supply chains, also now heads our generics and consumer health division. And we also welcome a new member to our Orion executive team, Mr. Henri Salokangas, as an executive vice president for Brandeit Products. And Brandeit Products continues as such, but we've added a hospital business to respiratory women's health and CNS Business. And why do we do this? I think it underlines the fact that we are becoming more global. We focus definitely on our key brands and branded products. We are building our European-wide hospital business. We have the existing products there, Simdocs, Dextor, some biosimilars that we are already selling across Europe. And as I already told we made another new agreement for new biosimilar. We've made several of those and we also have these added value hospital products like recombinant albumin under development by our suppliers. So we are building that business unit under the branded division. Then again, the generics is really about supply, price, and thus it's now combined to our global operations where the bigger picture of that part can be taken care of. And then a very long-term member of Orion Executive Team, Mrs. Satu Ahomäki has decided to leave the company after admirable 34 years of service for Orion Pharma and 19 years in Orion Executive Team. And I take the opportunity here to thank her for all her commitment and work during those years. Her legacy will remain. I think she has worked with all the business divisions and left her finger mark or mark on all the businesses that we do and we will continue her precious work. and here you can see our upcoming events and I thank you for your attention and I think it's time for questions and discussions.

Thank you Liisa for the presentation and like said now it's time for Q&A. As said we will start with the conference call lines but then again you remember that you have opportunity to type in your questions through the webcast chat also. But at this point, I would like to hand over to the conference call operator. Please go ahead with the questions.