Sandoz Group Ag S/Adr

Good morning, ladies and gentlemen, and welcome to the Sandos call today. I will now pass on to Craig Marks, Head of Investor Relations, for his opening remarks.

Thank you, and welcome to the Sandos H1 2025 results call. Earlier today, we published a results announcement and an accompanying presentation on our website, which will follow today. You can find these documents at sandos.com.invest. Joining me today are Richard Senor, Chief Executive Officer, and Remco Steenbergen, Chief Financial Officer. Please turn to slide two. Our results announcements, presentation, and discussion include forward-looking statements. Please see our disclaimer here. Please turn to slide three. Richard will begin today's presentation with a summary of the highlights in the first half of the year. followed by an update on the business. Renko will cover the financial performance, as well as our full year guidance. Following a wrap-up of the presentation, we'll be happy to take your questions. With that, I'll now hand over to Richard. Please turn to slide four.

Thank you, Greg, and hello, everybody. It's a pleasure to welcome you all to today's call, and I'm looking forward to taking you through the strong progress we're making as well as the significant opportunities that lie ahead for Sando. Please turn to slide five. I'm pleased to provide an update on our strong performance in the first half and the continued execution of our long-term strategy. We delivered 4% sales growth, which on an underlying basis amounted to 6%. The performance included accelerated sales growth in the second quarter, a period when 30% of our net sales came from buyer similars. Our core EBITDA margin in H1 expanded by 2.5 percentage points, reaching 20%, reflecting an improving sales mix and operating leverage. On the pipeline, we executed all launches successfully, including YOS Chibonsi and Peace Chiba in the US, and the Peace Chiba auto injector in Europe. We have had additional exciting launches planned for the second half of the year, further strengthening our portfolio and our long-term growth potential. Also, we announced the expansion of our manufacturing capabilities in Slovenia, reinforcing our commitment to reliable, high-quality supply for our global markets. You have also seen the recent news of our planned acquisition of JustEvaTech Biologics' in-house development and manufacturing capabilities in Toulouse, France. With these bold steps, we're building a leading global end-to-end biosimilars platform, from development through to manufacturing and commercialisation, to fully capture the significant growth opportunities in the biosimilars space. Looking ahead, we remain confident in our mid-term outlook and pleased to confirm our full-year guidance, namely, with single-digit net sales growth at constant currencies and a core EBITDA margin of around 21%. Now, let's move to more details of the business performance, starting with slide 6. Looking firstly at our biosimilar launches, we rolled out PISCHIVA in the US this year. This was an important moment for millions of patients living with chronic autoimmune diseases. and reinforces our commitment to broad access to treatment options for patients, while helping to build a more sustainable healthcare system in the U.S. Furthermore, I'm pleased that we launched the Pestiva auto-injector in Europe. This was the first ustekinumab biosimilar in Europe commercially available in an auto-injector. The device supports a more comfortable self-administration experience, with accurate automatic dose dosing and less frequent injection pain, offering the potential for improved adherence to patient treatment plans. I was also very excited about the launches of YS and Juvonti in the U.S. in June. These were the first and only interchangeable denosumab biosimilars in the U.S., providing new affordable treatment options for over 10 million patients suffering from conditions such as osteoporosis, and cancer-related clinical events. In the second half, we look forward to contributions from several other exciting biosimilar launchers, such as Denosumab, Leflibicept in Europe, and we also have continued ambition to launch Ritonazolizumab in the US by the end of the year. Now, let's see dive into the performance of PSEVA on slide 7. This important new medicine continues to make strong progress in the first half following the European launch in 2024. It has now been launched in 24 markets and we have achieved a leading position in Europe. The auto-injector launch marked another important milestone as we strengthened our leadership in the immunology biosimilar space and reaffirmed our commitment to pioneering access across Europe's evolving healthcare landscape. We're also pleased with the recent PCIVA launch in the US, which included private label. We look forward to updating you on the progress of this in the future as we move beyond the immediate launch phase. Now, please turn to slide eight. Turning to Hymeros, our global market share has been cemented by the ongoing progress of biosimilar penetration, which has now reached over 60%. It is important to note that These dates exclude private labels, which means actual usage may be even higher. We're seeing very strong momentum in Europe, accompanied by growth in international markets. And in the U.S., Sandor is leading the biosimilar space, driven by both private label Hymeros and our own label Adlunaman. We also benefit from having the broadest pair coverage in the U.S., a key advantage in such a competitive market. Together, these trends position Hymeros as a cornerstone of our biosimilar portfolio. Now please turn to slide 9. Let me now turn to Tyruco, our biosimilar natalizumab, which continues to demonstrate encouraging momentum. Since we started rolling out Tyruco across Europe, this important medication has been growing consistently, achieving a 20% market share. both tender authorities and health care professionals alike appreciate a more affordable option in the multiple sclerosis space. Looking ahead, we have additional launches planned across Europe in the second half of the year, which we expect will further strengthen our position. As I said earlier, we continue to have the ambition of launching Tyroop in the US before the end of this year. Now, please turn to slide 10. Finally, After almost 20 years since it was launched, we again delivered double-digit growth from the probe, which continues to speak to the sustainability of biosimilars. The performance underlined our continued market leadership, driven by a particularly strong ongoing performance in the international region. Equally important, we have benefited from being a reliable supply partner, ensuring where we can consistently meet strong and growing demand. With a 35% global market share, Omnidrope continues to lead in the treatment of growth hormone-related disorders, and it remains a core pillar of our Biosimilar portfolio. Please turn to slide 11. Moving now to our Python, we announced during the period a collaboration license agreement with Henleus, strengthening our position in oncology and underlining our purpose of pioneering access to patients. As the global leaders in generic and biosimilar medicines, we are committed to innovation and dedicating to broadening access to more affordable biologics for patients globally by finding the right balance between leveraging internal capabilities and collaborations and partnerships. This agreement, providing access to the Illumina app, strengthens our leadership position in oncology even further. Now, please turn to slide 12. Today, we have an industry leading by a similar pipeline of 27 assets, covering around $200 billion of originated sales. Through a combination of in-house development and partnerships, we've been able to significantly increase the size of our pipeline over recent years. We plan to further increase it. We're also encouraged by the recent movements towards regulatory streamlining, such as the recent use on our development of Pembroke Loose Lab, ocrelizumab, and nivolizumab biosimilis. These dynamics have the potential to accelerate approval times and reduce complexity, ultimately benefiting patients and healthcare systems alike. At the same time, we continue to identify and pursue additional opportunities that will strengthen and expand our pipeline. Please turn to slide 13. This pipeline of 27 biosympathies is industry-leading, both in the number of assets and the portfolio coverage of the addressable market value. It includes five near-term launches and assets in clinical development, five assets in regulatory review, eight in technical development, and we have nine additional assets in early development, targeting around $56 billion of originator sales. This is an incredibly exciting pipeline, and we won't stand still. We aim to increase the number of assets even more, supported by the opportunities presented by regulatory streamlining and our growing in-house development capabilities. Now, let's turn to slide 14. Biosimilars is the fastest growing segment of our pipeline, as the needs of patients and healthcare systems for these critical medicines continues to grow rapidly. And the global leader in the field we are investing to meet rapidly growing patient demand. We are proud to significantly expand our biosimilar manufacturing capacity in Europe as Slovenia's largest direct foreign investor. This is another major step that will position Sandoz uniquely to capitalize on the unprecedented biosimilars market opportunity over the next decade. We've talked before about our state-of-the-art development center in Ljubljana and in Ljubljana, our high-tech drug substance production center. Last month, we also announced the start of the construction of a new state-of-the-art biosimilar production center for sterile product manufacturing in Britain. I'm delighted by our progress in Slovenia as we build internal capacity and drive biosimilar development. Of course, this was all complemented by our announcement from last week. Please turn to slide 15. The news of the proposed acquisition of Just Editech Biologics' in-house development and the manufacturing capabilities in Toulouse, France, marks a significant leap in our biosimilar future. The acquisition, totaling around $300 million, would seamlessly align with our strategic objective of capitalizing on the biosimilar market opportunity. Just Evotech Biologics has been a key strategic partner for Sandoz since 2023. The proposed acquisition would complement previously announced investments in Sandoz biosimilar manufacturing and development sites and would be fully in line with our strategy to reinforce in-house biosimilar capabilities whilst at the same time create additional strategic flexibility. Following its successful completion, the site will be used to develop and manufacture our biosimilars. Just EvoTech's fully automated and high-throughput technology platform will help us move faster, scale smarter, and maintain high quality while keeping costs under control. And I look forward to updating you on the progress of this proposed acquisition. Now, let's turn to slide 16. Turning to our generics business, it continues to be a cornerstone of our company, with over 180 launches across markets in the first half of this year, from around about 90 different medicines. For example, our generic ferric carboxymaltose is the first to market launch in Europe, and we target over $500 million of originator sales. Generics, at around 70% of our sales, ensures continuous scale in the market, with limited capital deployment and generation of significant cash flows. In the first half, our generic performance benefited from volume growth that partly reflected recent launches such as Packlet Axle. Looking ahead, our second half program as ambitious as we expect more than three individual market launches over the full year. Over the longer term, we continue to have an ambitious generics pipeline with more than 400 assets targeting around $220 billion of originator sales over the next decade. And with that, I'll hand over to Renko. Please move to slide 17.