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Tuukka Hirvonen: Okay. [Foreign Language] Good afternoon, and welcome to Orion's earnings conference call and webcast for the financial period of January-September 2025. My name is Tuukka Hirvonen. I'm the Head of Investor Relations here at Orion. In a few moments, we will start with the presentation by our CEO and President, Mrs. Liisa Hurme, after which then we will have a Q&A session where you can post questions both to Liisa and also to our CFO, Rene Lindell. [Operator Instructions] And just before I let Liisa to take the stage, I'd like to draw your attention to this disclaimer regarding forward-looking statements. But with that, it's my pleasure to hand over to Liisa. Liisa?
Liisa Hurme: Thank you, Tuukka, and welcome to Orion Q3 webcast on my behalf as well. Here are some highlights from quarter 3 2025. Nubeqa received approval from European Commission for use of darolutamide and ADT, androgen deprivation therapy in patients with metastatic hormone-sensitive prostate cancer. Nubeqa also reached all-time high royalties and product deliveries to Bayer during Q3. Generics and Consumer Health business had a strong quarter, supported by good availability of products in our major markets and very successful new launches. Unfortunately, ODM-105, tasipimidine Phase II trial for insomnia didn't reach its efficacy target, and we decided to discontinue the development of that program. And Q3 financials are here. And before I go deeper into the financials, it is good to remember that the comparative period Q3 2024 was an exceptional quarter. We received EUR 130 million worth of milestones last year's Q3. There was a EUR 70 million sales milestone from Bayer related to Nubeqa and EUR 60 million milestone related to the MSD agreement on opevesostat. So these are quite difficult to compare to each other. And now as I go along, I will talk about the base business. So the business without the milestones. The base business growth was 24% from quarter 3 '24 to this year's quarter 3, totaling to EUR 423 million. The operating profit growth was even stronger, 68%, up to EUR 121 million. And our cash flow grew 15% and was being very solid. Of course, last year's -- during last year's Q3, the milestones were booked, but yet not paid. So they were not yet cash in our bank. And when we look closer, the net sales bridge, we can see the kind of a net effect of the difference between the quarters here regarding the milestones in Innovative Medicines column, which is EUR 59 million, but underlying net sales increased by EUR 71 million. So I think the growth, as I earlier said, of Nubeqa product sales and royalties was very strong, but it didn't fully compensate the previous year's milestones. We can also see here that all other divisions positively developed positively, strongest being Generics and Consumer Health, but also Branded Products and Animal Health showed positive development. And Fermion was more or less on par. And here on the operating profit bridge, we can see the full -- kind of a full effect of the last year's milestones, EUR 130 million, but also the positives on the change in sales volume and change in prices and cost of goods and product mix of almost EUR 20 million. And then the royalties of EUR 50 million. We can also see that our fixed cost increased as well, but this is all planned. It's mainly R&D and sales and marketing costs here. Now let's take a view for the first 9 months from January to September. Again, a very nice 22% growth during the first 9 months and 7.8% growth even though we would compare to the previous year's quarter 3, including the milestones. And the first 3 months ended up with EUR 1.2 billion of net sales. Regarding operating profit, EUR 57 million -- 57% growth and slight decrease if we compare to the numbers, including milestones in previous year. And again, a very positive development on cash flow during the first 9 months. Now to Innovative Medicines. This is a bit different picture than you've used to see. There is the shaded area, which tries to tell you the comparison between the quarters, including everything else, but the milestones from the previous year. And 71% of growth is very healthy for Innovative Medicines and also almost 75% growth during the first 9 months. And on the right side here, you can see this all-time high royalties plus product deliveries ending up to EUR 166 million. And I always remind looking at this picture, the very, how would I say, year is very late ended loaded -- back-ended loaded -- back-end loaded for Nubeqa, as you can see here, when you look at the '24 from the first quarter to the last quarter, but here as well. But I would like to remind that in comparison to '24, we already reached the higher royalty rate in the previous quarter with Nubeqa. So we are not going to see a similar shift and change in the royalty rate as we saw last year between the Q3 and Q4. Branded Products growth during Q3 was somewhat slow. It was 3%. And this slowliness in the growth is mainly due to timing of deliveries to our Stalevo partners. And that will be fixed during the rest of the year. So it's kind of a temporary change here. And the growth for the first 9 months is a healthy 9%. And in Easyhaler portfolio, budesonide-formoterol combination product was the clear driver for the growth. And then on the CNS portfolio, Stalevo Japan contributed to growth in Branded Products. And as I say, Generics and Consumer Health quarter 3 was very, very strong. 5.4% growth is extremely good for any generic business, but especially here when we remember that Simdax and Dexdor are included in this business, and they are constantly sliding down facing the generic competition. So we are able to compensate that decrease, but -- and at the same time, increase and grow our sales. And the reason for good quarter is really the good availability of the products in our Nordic countries. The service level is the thing in the Generic business. You need to have the products at the time of the tender where they should be, and you would need to be able to deliver also for all the different countries in the specific timings of tenders or pricing processes. And also, we had a good launch, for example, for Apixaban in Finland. Animal Health continued the good growth trend, although here, we see a bit of a similar slowdown as with Branded Products, and that partly has to do with deliveries as well. But when we look at the first 9 months, it's a very strong 2-digit number growth. And our top 10 product list is as it has been. Nubeqa, there as a flagship with 83% or 84% growth. Easyhaler product portfolio growth was close to 8% and entacapone products grew close to 5%, mainly due to the Japan sales. And our HRT product, Divina, performed very well here on the row 5, growing almost 23%, continuing the strong growth from earlier this year and some oldies like Trexan even 10% -- close to 10% growth and Quetiapine products, 10% growth. And currently, our business divisions are very healthy. The balance between business divisions is very healthy, approximately 30% for Innovative Medicines and Generics and close to 20% for Branded Products. Now Orion's key clinical development pipeline has clearly become oncology focused as we decided to discontinue the ODM-105 project for treatment of insomnia. We have also removed ARANOTE from this list as it's approved both in U.S. and EU. So we now have the DASL-HiCaP study on this list. and then the 2 OMAHA studies with opevesostat that MSD is responsible for. It's good to mention here for these 2 opevesostat studies that their design or primary endpoints have changed since we last presented this so that for the OMAHA3, which is for the later line patients, the primary endpoint is now overall survival. So the progression-free survival has been demoted and overall survival is the primary endpoint. Also, there are changes for the frontline patients study 004, so that the progression-free survival is now a primary endpoint for this study. And these are changes that our partner, MSD, has done, and it looks in all possible ways very logical. Then we have Tenax levosimendan study for pulmonary hypertension proceeding in Phase III. They are planning to start also another Phase III study by the end of this year, another global study for this indication. And then we have another study for opevesostat for metastatic castrate-resistant prostate cancer and 3 studies ongoing, Phase II studies ongoing for several or 3 different hormonal cancers, women's hormonal cancers, breast, endometrial and ovarian cancer. And still, we continue the CYPIDES, which was the Phase II study that formed the basis for those 2 opevesostat 3 and 4 studies for prostate cancer. And our TEAD inhibitor, ODM-212 for solid tumors is proceeding well in Phase I, and we are preparing to start the Phase II program on the first half of next year. Then a few words on the sustainability this time about decarbonization targets. We have set an ambitious target to reduce absolute Scope 1 and 2 greenhouse gas emissions by 70% by the year 2030, and also have 78% of our suppliers, meaning Scope 3 emissions covered by our targets. Then how do we do this? I think for the Scope 1 and 2, we have very concrete actions ongoing. The steam production is one of the most energy-consuming phase in the chemical industry, especially in the API industry. And we are changing the energy source for steam production in all of our facilities -- manufacturing facilities. In Turku, we are electrifying the steam production. In Oulu, we are changing to biofuels from the fossil fuels. And also, we will start an electrifying project in Espoo. So very, very concrete examples here, and we have even done a lot of concrete actions and projects before this, for example, in our Hanko plant. And in the supplier management, we are targeting to our highest emitting suppliers who are not yet aligned with SBT. And here, we try to offer support and practices and technical expertise with our suppliers. And we have specified our outlook today. Our operating outlook for operating profit, we have narrowed from EUR 410 million to EUR 490 million. So nothing drastic. We've been able to narrow it as the year has -- 10 months have already passed. There are 2 months left, and we have a much clearer view on how the year will pan out. And for the net sales, our outlook is from EUR 1.640 billion to EUR 1.720 billion. And here, you can see the upcoming events for next year. And I thank you on my behalf, and welcome Rene here with me to answer your questions.
Tuukka Hirvonen: Thank you, Liisa, for the presentation. As we said in the beginning, we will first take questions from the conference call lines, and then we will turn to the questions you can type in through the chat function in the webcast. But at this point, I would like to hand over to the operator with the conference call.
Operator: [Operator Instructions] The next question comes from Sami Sarkamies from Danske Bank Markets.
Sami Sarkamies: I have 4 questions. We'll take this one by one. Firstly, starting from the guidance. Can you elaborate on what is driving the small revisions to the lower and upper ends of the guidance ranges? Is this about third quarter actuals? Or have you also updated your forecast for the fourth quarter?
Liisa Hurme: Well, of course, the first thing is, as I mentioned, that we know now how the first, say, 10 months have passed, and there are only 2 months left. But there are, of course, uncertainties for the latter part of the year. Nubeqa is a big moving factor in this, also R&D costs. And the tariffs are not that big of a matter here. We do think that they wouldn't have any effect to this year '25. But there are still uncertainties for the rest of the year. So still, we have this range, but there are less uncertainties, and that's why we were able to narrow the range.
Sami Sarkamies: Okay. Then moving on to growth momentum at Branded Products and Animal Health. Third quarter growth rates are clearly weaker than we saw in the second quarter. How would you explain that? And what is your expectation regarding Q4?
Liisa Hurme: Well, yes, you are very correct that the Branded Products and Animal Health showed a slower growth than previously this year. And it's mainly due to some delays in our deliveries to partners. We have both Animal Health. Animal Health is actually working closely with. We have some very big partners that we are working with. So there might be a 1-day or 2-day delay for the deliveries, and it has an effect clearly even on the quarter if there are big deliveries going on. Same goes with Branded Products. We deliver still to our Stalevo partners across the world. And it's the same thing. I think we've experienced this earlier years as well that sometimes it just happens that we are not able to ship during the quarter that we had planned. But this should be -- we should be able to sort this out by the end of the year during the Q4.
Sami Sarkamies: Okay. Then moving on. The third question is on ODM-208. You mentioned that Merck has been changing primary endpoints for the OMAHA studies. When was this change made?
Liisa Hurme: This change became public, I think, a month ago, 3 weeks ago, maybe.
Tuukka Hirvonen: It was a few weeks ago. In early October, they changed the protocols. It was visible in the ClinicalTrials.gov. So nothing material because we didn't come out with at that point. But of course, something that is very interesting for all of you. So we wanted to highlight it here.
Sami Sarkamies: Okay. And then finally, regarding the R&D pipeline, thinking of next year, can you give a bit more color on when you're expecting Phase I readout for ODM-212? And when would you expect to initiate the first Phase II study for that molecule? And then secondly, at CMD, you talked about 3 biological preclinical programs moving into Phase I during next year. Just wanted to check if these projects are still live as you are currently guiding for at least one new program during next year.
Liisa Hurme: Yes. I'll start with ODM-212. The Phase I is almost completed. We are looking at the results, and we are basing our Phase II planning on those results. And of course, we will report the results in some forthcoming scientific meeting. Those are usually on embargo until we release them for the scientific audience. And regarding the Phase II program, it's currently under plans. We have filed IND for that and hope to be starting by hopefully mid-'26. And what was -- then there was one more question.
Tuukka Hirvonen: About the biologics status.
Liisa Hurme: Biologics. Indeed, yes, we told that we have 3 biologics close to advancing to clinical pipeline. And we think that we will be able to proceed with at least one of them to the Phase I next year.
Operator: [Operator Instructions] The next question comes from Shan Hama from Jefferies.
Shan Hama: Three from me. Also happy to take them one by one. So firstly, could you perhaps give us some, I guess, guide as to the impact on your OpEx from the ODM-105 failure? I mean I know you weren't planning to take it to late-stage development yourselves. So I assume it's not significant, but perhaps any guidance on the provisions set aside there would be helpful.
Rene Lindell: Yes, maybe I can take that one. So of course, ODM-105, it was -- we got the results and in such a way, you could say the project was completed. So for this year's perspective, not a big impact in terms of how we expect this year's R&D expenses to be going as it was in our plans and it was completed. Then of course, for next year, you can obviously think that there is a change in how the budget is allocated. 105 million, of course, is not moving forward. There are some tail costs for next year that we'll be taking in this year. But overall, we see it as being quite neutral for this year in compared to whatever we save and whatever provisions we take for costs that would have occurred next year.
Shan Hama: All right. And secondly, I mean, you're able to specify your guidance on this increasing visibility on the performance of the businesses. I assume the visibility on the milestone should also be better. Could you perhaps speak a bit on your expectations for this and whether that visibility has shifted slightly from last quarter?
Liisa Hurme: Well, as we have stated, we think that we will receive the milestone next year, '26, but it is possible that we receive that milestone already '25. But it's still not possible to state that as a fact that we get it this year. So we remain where we have been to this date that it's possible this year, but we are -- in our plans, it's next year.
Shan Hama: Understood. And then finally, given the delay that you mentioned in the deliveries in Branded Products and Animal Health, is it fair to expect a slight boost to 4Q, assuming those deliveries are made as well as the normal business expected in 4Q? Or is it more of a pull-through dynamic?
Liisa Hurme: Now I didn't quite get the question. Is it...
Tuukka Hirvonen: It's about the timing of shipments in Branded Products and Animal Health since we now saw some headwinds. Will there be a boost in Q4 now that...
Liisa Hurme: No, I think it's just -- it's according to plan that we get them out here. So it's not boosting the Q4.
Operator: The next question comes from [ Matty Carola ] from OP Corporate Bank.
Unknown Analyst: It is [ Matty Carola ]. I ask 2 Nubeqa related questions. First, regarding the U.S. situation and the pricing. I know you are not willing to say a lot about it, but maybe could you a little bit say about the political atmosphere. Do you or your partner get the pressure to lower the price? Or what's your kind of look right now if you look on another side of the Atlantic?
Liisa Hurme: Well, I think that's a good question regarding the U.S. business environment. However, I think a question whether our partner gets pressured or needs to change price, I think it's fair to say that, that needs to be asked from Bayer. It's not my place to comment that matter. But in general, there are a lot of things happening in U.S. regarding the pricing, the most favored nation initiative and also, of course, the tariffs. So we follow the situation carefully.
Unknown Analyst: All right. Then the second one, you received the latest permits in the U.S. during the summer and also in Europe regarding the latest indication. Have you seen kind of significant volume change or kind of any change about the sales during the Q3 if we speak about the kind of adoption rates or any other kind of sales indication, which is visible after you got the final sales permits?
Liisa Hurme: Well, we don't -- of course, we see that the volumes are increasing. That's a very positive thing. But we don't have a kind of a step change if you're referring to that with the new indication. It's more of a linear growth. So it's very positive. I'm sure ARANOTE has a positive effect as it can be used also without docetaxel. But to have a kind of a step change or big growth there, such we don't see exactly.
Operator: [Operator Instructions] The next question comes from Anssi Raussi from SEB.
Anssi Raussi: One question from me, and it's just to double check something you said during the presentation about Nubeqa royalties in Q4 compared to Q3. So I understood that we shouldn't expect similar growth as we saw last year, but anything else to add or comment on Q4 royalty rate? Maybe I didn't catch up everything you said in that comment.
Liisa Hurme: Very good that you asked. I was trying to explain that last year, the royalty rate changed between Q3 and Q4. So...
Tuukka Hirvonen: During Q4.
Liisa Hurme: During -- yes, not exactly between, but during Q4. So it had an impact so that the Q4 was clearly higher in Nubeqa sales or royalties to us. But this year, we already reached that royalty rate during Q3. So even though the royalties will be -- or the sales will be growing, so there will be a kind of a double effect of sales growing and royalties -- royalty percentage increasing during quarter 2. So that's the difference. I don't know if I explained it well or if my colleague wants to explain it even better.
Anssi Raussi: Got it. And so is your royalty rate hit the cap during Q3? Was it at the end of the quarter? Or was the average rate already capped and will be similar in Q4? Or is it like the run rate at the end of Q3?
Tuukka Hirvonen: We reached the cap during Q3, not going to specifics at which point of time. But like Liisa said, kind of the message is that one should not expect similar step-up as you saw last year between Q3 and Q4 because in Q4 last year, we got the step-up coming from the royalty rate increase, but now that won't be happening between Q3 and Q4. So that was kind of the message that we expect the growth to continue, but similar kind of step-up as you saw last year, one should not expect.
Operator: There are no more questions at this time.
Tuukka Hirvonen: All right. Thank you, operator. Then we turn on to the chat questions. We have a couple here. You still have time to type in more if you have anything on your mind. Let's start with one. This is actually already covered, but just to let you know that [ Aro ] is asking, is it still realistic to think that the EUR 180 million Nubeqa milestone would come already this year? And actually, you, Liisa, already addressed that question. So that's covered. Then we are having one coming from Iiris Theman from DNB Carnegie. Regarding Nubeqa, have you received any feedback from Bayer how ARANOTE sales have developed? What are Bayer's comments?
Liisa Hurme: I think not specific comments on ARANOTE . I think we are more or less following the all sales development. And as I said, it's linearly growing. So there, we haven't really seen any step-up due to ARANOTE. And let's remember that there might have been already off-label use with Nubeqa for this patient segment. So it might be that -- it might not be that dramatic, and that's what we've been trying to tell all along while we've been waiting for the ARANOTE approval.
Tuukka Hirvonen: All right. Thank you, Liisa. We have no further questions in the chat, but I got a message. Well, actually, now Iiris has a follow-up here. So why administration costs were lower year-on-year? And what should we expect for Q4?
Rene Lindell: Yes, There are typically quite many line items there, and some of those are -- can be just shifting from quarter-to-quarter. There can be also some definition changes, what is considered admin and what is considered in the other line items. There are quite minor changes in terms of the overall admin expenses. There's nothing big changing the normal inflation, which is across the board. But yes, I wouldn't expect any drastic differences.
Tuukka Hirvonen: All right. Thanks, Rene. Then we have a follow-up from Sami Sarkamies from Danske. So following changed endpoints for ODM-208, so opevesostat, OMAHA trials, do you still foresee an interim readout in '26? Before you answer, of course, we need to point out that we have never estimated or foreseen that there will be a readout.
Liisa Hurme: Interim readout. No, no, no. But I think that's public, the readout for the full year. It's that when...
Tuukka Hirvonen: Yes. Yes, the full readout, yes, but interim readout.
Liisa Hurme: No, no, no. We are not going to comment that or we have never commented that. But the readout from both studies should be in 2028.
Tuukka Hirvonen: Yes, that's correct. Then we have a follow-up from Heikkila. He says that Orion's R&D costs have been increasing clearly. At which point do you expect these increases to show as a growth in terms of net sales? And to which development programs are you focusing the most after Nubeqa?
Liisa Hurme: We clearly focusing the development programs that are in our hands, and that's ODM-212 now and of course, the biologics that are following that. And when can we expect that program to turn into sales? I would say that would be early 2030s.
Tuukka Hirvonen: All right. Thank you, Liisa. Now we have exhausted all the questions from the chat. And also, I got a message that there are no follow-ups in the conference call lines. So it's time for us to wrap up. Thank you for joining us today, and have a great rest of the day and week.
Liisa Hurme: Thank you.