Recordati Industria Chimica e Farmaceutica S.p.A.

Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the Recordati 2020 First Half Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Marianne Taschke, investor relations, and corporate communication of Recordati. Please go ahead, madam.

Good afternoon or good morning to everybody, and thank you for attending the Recordati conference call. Andrea Recordati, our CEO, and Luigi Lacorte, CFO, will be presenting our first half 2020 results. For a better understanding of his presentation, please access the set of slides available on our website, www.recordati.com, under the Investors section and Presentations tab. At the end of the presentation, we will answer any questions you may have. Please go ahead, Andrea.

Good afternoon, ladies and gentlemen. So, as Marianne just anticipated, we're here to discuss the first half 2020 results. So, I ask you to please move to slide two of the presentation, which carries that title. So, despite the first half having been impacted by the COVID-19 epidemiological emergency, net revenues have increased, and both operating income and net income grow significantly, now in line with expectations thanks to the positive contribution of new products and the reduction of expenses. As you can see, revenues are up by 2.3% and include 32.8 million euros of revenues from the sales of Signifor and the initial sales of Exorita. EBITDA is 311.1 million or 40.9% of sales, growing on the previous year by 11.4%. Net income grew by 13% and adjusted net income at 225.6 million grew by 16.8%. and is now 29.7% of sales. Net revenues in the second quarter was impacted by expected stocking, as we've mentioned at the end of the Q1 call. And furthermore, this quarter saw an intensification of the impact of the COVID-19 pandemic in all geographical areas in which the group operates, leading to weak demand, which particularly involved non-chronic therapies in our specialty and primary care portfolio. Although pharmaceutical operations were allowed to continue in order to ensure the availability of drugs for the population, the restrictions implemented by the local authorities inevitably affected our markets, mainly due to, for example, fewer visits to doctors, since our sales forces obviously were not on the field, and obviously diagnostic procedures carried out by doctors, and lower patient traffic in pharmacies. Lower consumption of OTT lifestyle products, such as vitamins and supplements, a reduction of clinic and hospital procedures, as well as a lower incidence of mild infectious disease resulting from the diminished circulation interaction between people. However, the impact on net revenue was more than offset by a favorable product mix and a reduction in operating costs, leading to continued double-digit growth in EBITDA and adjusted net income, with further improvement in margins. Net debt at the end of June is $922.4 million, compared to the net debt of $902.7 million at the 31st of December 2019, reflecting strong cash generation of around $189 million, before milestones of net share repurchases and dividend saving. We are very pleased with the strong revenue contribution from Signifor and Signifolar, and are also very encouraged to stay the lead by the early signs on the stories of launch in the US and France. With the clinical benefits now being also confirmed by the link for study with the potential peak year sales forecast of 300 to 350 million euros for the product in the current indication, with the current indication, and in our current geographical footprint. So moving to slide three, to give you a bit more color on our, on the Signifor and the Isuris. So the commercialization of Signifor and Signifolar is on track. The marketing authorization was transferred in March in the U.S. and Japan in May. In the U.S. and Japan, sorry, and in May in the EU. Novartis transferred the distribution of the products to reproductive most major EU markets during June and July, with the transfer of distribution in smaller CE markets taking place during Q3 and Q4. We have new patient acquisitions in the U.S. across all approved indications, and the first half 2020 growth of in-market sales is estimated to be about 10% versus the previous year. Moving on to Isturiza, the launch sequence was successfully initiated in the U.S. and part of the EU, despite the many challenges posed by the COVID-19 pandemic. We are pleased with the early performance of Isturiza in the U.S. and EU, as it's trending in line with our expectations. The first commercial shipment in the U.S. took place on May the 15th, and we have strong support from top U.S. KOLs, patient organizations, and an effective market access strategy. Regarding Europe, we launched in France in early June, Germany in mid-July, just a few weeks ago, and in Italy, we expect our first patients under early access any day now. This encouraging early patient uptake is thanks to new patient acquisitions and the transition of patients from our early access programs. We're estimating our 2020 net revenues to be about 10 million euros, and this is made coming from the U.S. In addition, we are very pleased that the Phase III LIG4 trial met its primary endpoints in Christian disease, confirming the strong clinical prophylaxis tourism. We also submitted to the NDA in Japan in March, and we are targeting to launch sometime in the second half of 2021 in this market. Finally, we expected Teresa to achieve a leading market share with peak year sales estimated, as I mentioned before, between 300 to 350 million euros and potential further upside from the expansion of indications to pushing syndrome in the U.S. and through our geo-expansion strategy in new territories. As announced in the Q1 results call, the plan is to give further color on the potential for recovery going forward at the presentation of a new three-year plan in early 2021. So, I think we can now move to the presentation on slide four, which comments our corporate product, and I will pass it to Luigi to take it through to the presentation. Thank you very much.