Sandoz Group Ag S/Adr

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

Thank you and welcome to the Sandoz Q1 2026 sales update. Earlier today we published a media release and an accompanying presentation on our website which will follow on today's call. You can find these documents at sandoz.com stroke investors. Joining me on today's call are Richard Saino, Chief Executive Officer and Remco Steenbergen, Chief Financial Officer. Please turn to slide two. Our sales announcement presentation and discussion include forward-looking statements. Please see our disclaimer here. Please turn to slide three. Richard will begin today's presentation with the highlights of Q1, followed by an update on the business. Remco will give more detail on the net sales performance, as well as guidance for 2026. Following the wrap-up of the presentation, we'll be happy to take your questions. And with that, I will now hand over to Richard. Please turn to slide four. Thank you, Craig.

And hello, everybody. It's a pleasure to welcome you all on the call today. 2026 is a landmark year for Sandoz as we celebrate three milestones that tell the story of affordable medicines. This month, we marked the first of these. 20 years ago, Omnitrope was approved in Europe as the world's first ever biosimilar. With this approval, Sandoz didn't just develop a medicine. We pioneered a new industry and laid the foundation for expanding patient access to vital biologics worldwide. And we continue to build on that strong legacy, drawing on decades of experience that firstly made us the global leader in generics, including life-saving antibiotics, then in biosimilars, whilst remaining focused on sustainable and profitable growth through portfolio expansion and disciplined executions. Please turn to slide five. Turning to our quarter one performance, we delivered sales growth in line with our expectations. And importantly, the fundamentals of our 2026 roadmap are strong. We achieved 3% growth at constant currencies. And when excluding the impact of adverse dynamics in the anti-infected B2B business, sales growth amounted to 5%. Our biosimilar portfolio continued to perform strongly, with net biosimilar sales of 18%, including an exceptional biosimilar growth in international and North America, as well as further double-digit biosimilar growth in Europe. Total North America sales were very strong, with growth of 12%. From a business perspective, we continued to build momentum. We made strong progress on key launches, including Wyest and Gibonte in the US and Europe, as well as Afclare in Europe. Alongside the excellent progress we are making in building our biosimilar hub in Slovenia, we appointed Armin Metzger to focus our biosimilar development, manufacturing, and supply activities under one roof. This will drive faster decision-making, greater vertical integration, and improved launch readiness across the expanding biosimilar pipeline. We also advanced our strategic partnership with Samsung as we strengthened our biosimilar pipeline. And finally, there were a number of positive regulatory decisions in the period, including for Aflivicept in the US. Based on this strong underlying start to the year and the visibility we have across the business, we are confirming our full year guidance today. We continue to expect mid to high single digit net sales growth at constant currencies in 2026, alongside core EBITDA margin expansion of around 100 basis points. Now, let's look at the sales performance in more detail, starting with slide six. Quarter one represented yet another quarter of attracted growth, with biosimilars representing 31% of our total net sales. The underlying performance was strong, with the shift towards biosimilars continuing to increase the quality of our top line. Generic sales declined by 3% due to a number of factors. Firstly, we actively rationalized our portfolio, particularly in the international region, whilst we also continue to reduce the list of our partners that we use. Secondly, there was adverse phasing of sales, again, mainly in international. Thirdly, our European business was impacted by the effect of a mild season on the sales of antibiotics and over-the-counter cough and cold medicines. And finally, There were the adverse dynamics in our anti-infective B2B business, and Remco will take you through these details in a moment. Please turn to slide seven. While biosimilars are the key growth engine for our business, generics remain a strong and essential foundation for sustainable growth, prior to adding stability, scale, and reliable cash generation to support our long-term strategy. Our attractive generics pipeline covers around two-thirds of loss of exclusivity, and is centered on oral solids and injectables. We continue to execute on consistent value-creative launches, and medicines such as Rivaroxaban and Estradiol illustrate how we can convert pipeline assets into tangible market opportunities. I want to reiterate that Europe remains dependent on a handful of global antibiotic suppliers, and we continue to call for a fundamental shift in how Europe thinks about antibiotics, the backbone of modern medicine, especially given that they're a key part of the continent's security infrastructure. Now let's turn to the biosimilar performance in the quarter on slide eight. Firstly, we delivered strong performance from both Hymeros and Peacejiva. Hymeros continues to demonstrate strong growth, especially in Europe, with our global market share increasing, and we continue to see strong expansion in biosimilar participation. We're well positioned to benefit from this trend. Looking at Pischiva, we continue to see rapid and sustained market adoption in Europe. Sandoz's market share has grown quickly, making us the number one Eustachinumab biosimilar across the continent. Importantly, Eustachinumab biosimilar penetration has significantly outpaced historic Adelunumab, Pischiva's sales are predominantly in Europe, with a contribution from North America remaining subdued to date due to the level of competition. Please turn to slide nine. Let me now turn to Tyruco and Omnitrope. Starting with Tyruco, we are very pleased with the continued rate of adoption in Europe and we expect further sales growth. Since launch, our market share has been stable, reflecting the strong clinical and economic value proposition of Tyruco as the only biosimilar approved in Europe for relapsing-remitting multiple sclerosis. The recent launch in the US has been encouraging, with a focus on naive rather than switch patients. We expect additional launches across more markets this year. Omnitrope continues to demonstrate exceptional stability and resilience in a highly competitive category, and we've maintained our leading global market share for this 20-year-old by a similar. Overall, both medicines showcase the strength and diversity of our portfolio. Tyruco as the only alternative to the originator brand, and Omnitrope as a reliable long-standing leader in its class. Please turn to slide 10. Let me now highlight the strong progress that we're already making with Wyost, Jubonti, and Afclare. Starting with Wyost and Jubonti, we've established a robust commercial footprint in the U.S., building a 62% biosimilar share for Jubonti and a 50% share for Wyost. We've secured broad U.S. provider access early on, alongside important wins with key players, enabling rapid uptake. In Europe, the launch has gone very well, rolling out into 27 countries on the first day, and I'm pleased with the early launch progress in Brazil and Australia. Turning to AFCLIR, the European rollout is well underway, with launches completed in 19 markets, supporting improved patient access whilst contributing to a more sustainable healthcare system. Strategically, AFCLIR plays a critical role in expanding our presence in the $15 billion global ophthalmology market for medicines that inhabit the EGF. In the US, we're looking forward to the launch in quarter four. Overall, being first to market with these medicines has given us a powerful head start, and the early update confirms that our strategy is working. We are well positioned to continue to build momentum as access, adoption, and payer coverage expand across the regions. Please turn to slide 11. This slide highlights the depth and quality of Sandoz's industry-leading biosimilar pipeline, which is a cornerstone of our long-term growth strategy. In the near term, we have several assets in regulatory review, and looking further ahead, our clinical development portfolio includes major immunology and oncology assets such as Keytruda, Opdivo, and Ocrevus biosimilars to some of the most widely used biologics today. Finally, we have a significant number of additional assets in early development, and it's important to recognize how powerful the extended partnership with Samsung is. Overall, this pipeline underscores our position as a global biosimilar leader with the scale, capabilities, and focus required to consistently bring high-quality biosimilars to market and to capture a meaningful share of the approximately $320 billion opportunity over the next decade. Please now turn to slide 12. I'm very proud of the agreement that we recently signed with Samsung, reaffirming Sandoz as a leading partner of choice. The agreement will help us further strengthen our biosimilar pipeline ahead of our golden decade and accelerate patient access. Sandoz will commercialize the biosimilar to Intivio, addressing a $6 billion opportunity. Samsung will lead development and manufacturing, while Sandoz will be responsible for regulatory, commercialization, and market access. The agreement also paves the way for collaboration on up to four other biosimilar assets. Strategically, this partnership reinforces our commitment to building a significant share of the global biosimilar LO opportunity, particularly in high-value therapeutic areas. This partnership demonstrates how we leverage targeted collaborations to expand the pipeline efficiently, accelerate access for patients, and enhance long-term value creation whilst maintaining disciplined capital allocation and execution focus. And with that, I hand over to Remco on slide 13.