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 9 months 2026 sales update call. Earlier today we published our sales update together with the accompanying presentation that we will follow on today's call. You can find these documents at sandoz.com stroke investors. Joining me today are Richard Saynor, Chief Executive Officer, and Remco Steenbergen, Chief Financial Officer. Please turn to slide two. Our sales update announcement presentation and discussion include forward-looking statements. Please see our disclaimer here. Please turn to slide three. Richard will begin with the highlights of our sales performance and an update on the business, including the continued expansion of our pipeline and further enhancements of our biosimilar capabilities. Remco will then take you through our sales performance in more detail, as well as our guidance for 2026. Richard will conclude the presentation before we go to your questions. And with that, I'll hand over to Richard. Please turn to slide four.

Thank you, Craig. And hello, everybody. It is a pleasure to welcome you to today's sales update. Since we spoke to you at our Capital Markets Day last month, we've continued to make good progress across the business. And I'm delighted to say we've continued to strengthen our position as the global leader in affordable medicines, whilst achieving our 20th consecutive quarter of net sales growth. Please turn to slide five. Let's turn first to the key highlights of our progress. We've again expanded our biosimilar pipeline, this time through collaborations with Henleus and MapScience, taking the pipeline to 40 assets, including our first haemophilia biosimilar. We've also made the first GLP-1 shipments to our partner in Brazil, and we achieved GLP-1 regulatory approval in Canada. It's been a very strong year so far in generic filings, while we all have already launched around 270 generic medicines this year. At the same time, we've continued to invest in our future. At the CMD, we introduced our Bio 100 ambition. Since then, we've opened our advanced high-volume drug substance manufacturing center in Lendeberg and announced further investments in Ljubljana in disposable fed-batch technology. Together, these excellent developments will further strengthen our in-house capabilities and support our long-term growth ambitions. Looking at our top-line performance, net sales grew by 5% in the quarter but, at an underlying level, by 7% when excluding the anti-infectives B2B business. It is worth noting that we don't expect to see a material B2B headwind in Q4 or for next year. Biosimilars continue to be our growth engine, delivering another double-digit performance in the period, whilst representing 34% of net sales. We're delighted with the underlying performance of the business. Demand is strong, our launches are performing well, and we recently strengthened our balance sheet, and we're delivering in line with our buyer 100. Today, we have narrowed our 2026 net sales guidance to 5% to 6% and upgraded our core EBITDA margin guidance for the year to 23% to 23.5%. Importantly, today's update to guidance doesn't change our previously communicated outlook to 2028 or our recently announced outlook to 2030. Remco will take you through the full year guidance later. We will enter 2027 with strong momentum as we capture more market share, launch more medicines for more patients around the world and expand our pipeline further and deliver more growth. Now, let's look at the sales performance in more detail, starting with slide six. Quarter three was another period of strong underlying growth for Sandoz, with net sales of $2.9 billion. Once again, buyer similars were the standout performer, growing by 17%. This reflects continued momentum from the established portfolio, as well as the excellent contributions from our recent launches. Excluding the B2B impact, generic sales grew by 2%, in line with our long-term trend. From the regions, North America was the standout in the quarter, with growth of 20%. Please turn to slide seven. I am so pleased to see the progress that we're making in generics. We now have the leading global market share in generics, accompanying our number one position in biosimilars. This is a true milestone for our business. We continue to see strong execution across our portfolio. In GLP-1s, we made our first shipments to our partner in Brazil whilst we achieved regulatory approval for Sandoz Semaglutide in Canada, our generic version of Ozempic. Our pipeline contains more than 300 generics and our disciplined portfolio strategy is focused on the most attractive LOEs, particularly in oral solids and injectables. We are targeting around 70% of generic LOE opportunities by value and we continue to convert our huge pipeline into new medicines. We've launched around 270 medicines alone so far this year. Overall, this demonstrates the continued strength of our generics engine, combining excellent market share progress, disciplined portfolio management and a deep pipeline and consistent launch execution. Challenging conditions in the B2B market for penicillin API sales still remain. We continue to urge the European Commission to investigate alleged dumping and consider anti-dumping duties or tariffs to safeguard European antibiotic supply. We also continue to advocate structural reforms that ensure a level playing field for European producers. Now, let's turn to biosimilars on slide 8. Our industry-leading biosimilar pipeline continues to expand. It includes 6 assets in regulatory review or yet to launch, 7 in clinical development, 14 in technical development and 9 in early development. We also reached another milestone with the recent EU regulatory submission of our pertuzumab biosimilar. As I said at the CMD, building the next generation of biosimilars requires both strong in-house capabilities and selective partnerships. The continued expansion of this pipeline demonstrates how we're combining these two approaches. Another important point is that we're building a broad and diversified pipeline of future opportunities across multiple therapeutic areas. Now, let's look at how some of the biosimilars in our portfolio are performing. Starting with high RIMOS, we continue to see strong performance. Our global by a similar market share has increased now to 23%, supported by broad preferred payer access in the US and continued volume momentum in Europe. Turning to Peace Jiva, we continue to hold the number one position across the European markets. Our biosimilar market share now stands at 25%, while overall biosimilar penetration of the ustekinimav market has increased significantly beyond 50%. Together, these performances demonstrate both the strength of our established biosimilar portfolio and our ability to grow alongside increasing biosimilar adoption. Please turn to slide 10. Moving to Tyruco, our European market share remains stable at 17%. We continue to see opportunities for further geographic expansion, including our recent launch in Saudi Arabia. Omnitrope continues to demonstrate the durability of our established biosimilar portfolio, maintaining a strong global market position with a 36% market share. Its established daily treatment profile remains resilient and a more sustainable U.S. distribution model provides a stronger foundation for future growth opportunities. Now please turn to slide 11. Let's now look at some of our more recent launches. Starting with Wyest and DuBonti, we continue to see very strong commercial momentum in the U.S. Gibonte has already achieved a 56% by a similar share, and Waiost a 49%. The European launch continues to advance, whilst the international rollout is also progressing well, including in Brazil and Australia. Turning to AFCLIR, the European launch is progressing very well, supported by strong execution and favourable competitive dynamics. AFCLIR is now available in 22 European markets with a 73% biosimilar market share and has become an important contributor to our European biosimilar growth. The launch of Enzivu in the US is exactly in line with our expectations, providing an additional opportunity to build on our strong European start. These launches illustrate what we discussed at the CMD, the ability to move successfully from pipeline development into launch execution and global commercial scale. Please turn to slide 12. As we build towards Bio 100, partnerships will be an important complement to our in-house development and manufacturing capabilities. Our collaboration with Henleus includes four initial programs covering numerous assets. Henleus will lead development and manufacturing whilst we will leverage our global commercial reach. Our partnership with Mab Science adds our first Haemophilia biosimilar, Again, MapScience brings development and manufacturing capabilities, while Sandoz holds exclusive global commercialization rights. These partnerships increase the breadth and opportunity of our pipeline, whilst allowing us to concentrate our own resources where we believe they can create the greatest value. Please turn to slide 13. Alongside the expansion of our pipeline, we are building the manufacturing capabilities needed to support the next phase of biosimilar growth. In Lendeva, we have opened our Advanced Biosimilar Drug Substance Manufacturing Centre, adding 120,000 litres of large-scale, fed-batch capacity. In Ljubljana, we're investing in new drug substance facility focused on disposable fed batch technology. This will add 8,000 liters of biologic drug substance capacity by 2029 and give us an additional in-house capability for low to medium volume production, complementing our continuous and high volume technologies. Together, these investments provide greater flexibility and control of our capacity and further strengthen our vertically integrated biosimilar network. This is an important practical element of BIO100. As the portfolio grows, we'll have plenty of capacity to support it. And with that, I will hand over to Remco on slide 14.