Ladies and gentlemen, welcome to the Lundbeck nine months 2026 results conference call. I am Matilda, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Charl van Zyl, President and CEO. Please go ahead.
Welcome to our Q3 earnings call. Of course, it is my pleasure to present to you our strong third quarter, and I am also joined by my leadership team today to provide you with more insights around our full-year guidance. I think many of you were with us three years ago when we launched our focused innovator strategy, and today's results again confirm that we are on a very strong path of our strategic intent as a focused innovator. If we can go to the next slide, please. So, of course, today we are discussing forward-looking statements that could be subject to change. To the next slide. Before I go to the third quarter results, I think it is an important moment to step back at this very significant stage of completing our first three years of our focused innovator strategy.
It is a moment to reflect on what we have achieved before we enter into our scale phase. Of course, as you remember, there were three pillars: growth, funding, and innovation. I want to make a few comments on growth, first of all. We have certainly outperformed on what we said three years ago. We have extended our growth horizon through very purposeful investment in Vyepti and Rexulti and created some durable pillars for more long and mid-term growth. From that perspective, we again see our results today confirming that strong position we have created for ourselves through growth. The second important element has been innovation, which is on the right-hand side of the slide. Three years ago, we had a very different pipeline, a pipeline now that is more sustainable as we look at our current situation, five to six mid- to late-stage opportunities.
Of course, many of these opportunities, Tarek will discuss more later, but these are important opportunities that really give answers to the long-term growth of Lundbeck. Part of our journey over the last three years has been to ensure that we fund these aspects, fund our growth, fund our innovation by being very purposeful around capital reallocation. We have transformed our commercial model. We have modified partnerships in our commercial model, and we have also made clear moves around manufacturing optimization. But it allowed us, of course, to deleverage fast, to build our preparation for neuro- rare strategic moves, increase the pipeline investment, and of course, making sure we invest adequately in the growth of Rexulti and Vyepti. Again, these are clear proof points that we are in a very strong position. We have fundamentally transformed the company while performing.
We have a strong balance sheet and a strong platform to enter into the next phase of the company, which is the scale phase. Now, if I can turn to the next slide, which is really the nine-month results. Again, as I started the call, very strong performance and strong sense of execution against our strategic priorities. This is what we have proven quarter over quarter as we have presented these results to you in the past. First of all, on growth, again, strategic brands, where we have invested, we are growing very strongly. Vyepti as well as Rexulti, strong growth engines that have outperformed and continue to provide growth for us as we go into the next phase.
We have also made clear moves on our commercial model to transform for the future, but also prepare the model for a stronger partnership approach in some of our markets across the world. On the innovation side, we have clearly made strong progress, five to six mid- to late-stage assets. In the late stage, we have bexicaserin that is near in terms of reading its phase III results in the fourth quarter. bocunebart is expected to start its phase III also in this quarter. Then as we go to the early mid-stage, we have additional opportunities there, but Tarek will speak to our Parkinson's D1/D2 agonist. We have asedebart in our neurohormonal space, and we also have a very exciting opportunity in orexin that is emerging in the early phase of the pipeline.
Fundamentally, we have remained very true to what we said we would do three years ago by ensuring we have strong allocation of capital to where we can grow or where we can invest more in the pipeline. That has allowed us to strengthen the balance sheet and position us very much so for the next phase of the company. Based on everything we know now and certainly what we have seen through the first half of the year and into the third quarter, we are therefore very confident in raising our guidance on revenue to 11%-12% and adjusted EBITDA at 15%-19% based on strong fundamentals of the underlying business. To tell you more about that, I would like to, of course, hand now the floor to Tom Gibbs, who needs no introduction, and provide us an update on the business as it stands for today.
Thank you, Tom.
Great. Thank you, Charl , and hello, everyone. Overall, we are pleased with the progress we are making related to our commercial performance, and that is particularly true on Vyepti. Vyepti continued to deliver strong growth through the first nine months of 2026, supported by robust underlying demand in both U.S. and Europe and international operations. Global revenue reached DKK 4.533 billion, growing at 45% at constant exchange rates. In the U.S., revenue grew 46% at constant exchange rates. In the U.S., Vyepti remains the fastest-growing brand in the anti-CGRP market, with Vyepti demand growing 39.3% versus 15.6% for the market. This sustained outperformance is being driven primarily by new patient starts, together with strong conversion rates and best-in-class patient persistency. We continue to see very strong returns from the investments we have made across the marketing mix, including our expanded sales force and direct-to-consumer activities.
We are increasingly using advanced analytics and AI to help us allocate those investments in a disciplined way that is data-driven. In Europe and international operations, Vyepti grew 41% at constant exchange rates, continuing to outgrow the anti-CGRP market across key markets and gaining more than 2 percentage points of market share year over year. France and Spain, in particular, continue to lead the way with market shares of 72% and 13%, respectively, and double-digit volume growth across both of these markets. Importantly, we have also reached another milestone in our geographic expansion. Vyepti has now received marketing approval in Japan, with launch planned by the end of 2026. This represents an important step as we continue to broaden the global reach of Vyepti. Overall, the underlying fundamentals of Vyepti remain strong, and we continue to see significant opportunity to drive further growth. Next slide, please.
Let us now turn our focus to Rexulti. Rexulti continues to demonstrate resilient growth across indications. Global revenue reached DKK 5.1 billion in the first nine months, an increase of 13% at constant exchange rates. In the U.S., TRX demand grew 15.1% year-to-date through August 2026. Importantly, AADAD remains the main growth driver, with TRX demand up 29% year-to-date versus prior year. MDD continues to contribute as an important pillar as well, with TRX growing 13.7% year-to-date through August 2026, demonstrating strong underlying fundamentals for the brand. The 65+ segment is now 37% of total Rexulti TRXs, and that segment continues to expand. This reflects the deeper penetration into an undertreated patient population and gives us confidence in the long-term growth potential of AADAD.
Rexulti demand has been resilient and tracking to plan despite an increasingly competitive market, and the precision execution across the marketing mix continues to drive growth, including our expanded primary care sales team, which we believe will continue to reinforce our long-term growth. In Europe and international operations, Rexulti also continued to perform well, growing 18% at constant exchange rates, supported by continued momentum across key markets. Next slide, please, and over to you, Tarek.
Thank you, Tom, and hello, everyone. I believe this is my first full quarterly earnings call as Head of R&D, and I am pleased to report that the pipeline is in strong shape, tracking closely to our milestones. Let me walk you through the key developments. Next slide, please. Overall, the pipeline remains on track, with Q3 delivering several important milestones as we prepare for the launches and value inflection points that will support our scale phase. Let's start with eptinezumab. Following the South Korea approval in May, you have heard from Tom that Vyepti has now also received marketing approval in Japan for migraine prevention, with launch planned this month. This marks the culmination of a multi-year journey and opens an important new chapter for Lundbeck and for patients with migraine in Japan.
Together with our regulatory reviews progressing also in China, this creates a meaningful additional opportunity for the asset and for patients across Asia. We have also received positive data from the phase IV THRIVE open-label study, confirming efficacy in patients with a prior inadequate response to anti-CGRP preventive treatment. This further strengthens Vyepti's evidence base and support its earlier use in the treatment pathway. Let's turn to bexicaserin. We are on track for DEEp OCEAN headline results by the end of the quarter, with DEEp SEA results expected in Q1 2027. This is a pivotal moment for the company. These are two complementary trials covering different DEE patient populations, with the overall picture from the program coming together over the coming month. I am also pleased to report that we have aligned with the FDA on a plan to develop twice-a-day BID dosing regimen as a post-approval label update.
This is an important step that reflects the strength of our ongoing dialogue with the regulators. In a few minutes, I will share a little more detail on the mechanism of action and why we believe bexicaserin is so well-suited to the broad DEE indication space. Before that, let me discuss or turn it to amlenetug and multiple system atrophy. Our phase III study, MASCOT, is the largest interventional trial ever conducted in MSA. We presented baseline data at the Movement Disorders Conference in September in Seoul, and we remain on track for pivotal headline results in Q3 2027. Amlenetug has the potential to be first in class in a disorder with high unmet need and no approved disease-modifying therapy. The phase II AMULET open-label extension also continues, with patients now on treatment for up to five years.
Given the typical progression of this devastating disease, it is remarkable that patients continue to attend regular clinic visits after such a long period of time. Now let's turn to asedebart, our anti-ACTH antibody. We have achieved or received orphan drug designations from both the FDA and the European Commission in endogenous Cushing's syndrome. Importantly, enrollment is now complete in the phase II BalanCeD trial in Cushing's disease. These are meaningful milestones that further strengthen our position in neuroendocrinology and give us confidence in the path toward pivotal development. On our asset Lu AF28996, our D1/D2 agonist in Parkinson's disease, phase I-B data were presented at the Movement Disorders same conference, and the phase II trial there too is now enrolling. Finally, our regulatory designations. At the close of Q3, we hold 11 orphan drug designations, three fast-track designations, and two breakthrough therapy designations across the portfolio.
This brings us to 16 special regulatory designations in total, up from 14 at the half year, reflecting the continued recognition of the differentiated nature of our programs. Next slide, please. I want to spend a moment on bexicaserin's mechanism of action, because it is central to understanding why we believe this asset has such broad potential across the DEE indication space. As you perhaps know, DEEs are Developmental and Epileptic Encephalopathies, are a heterogeneous group of conditions with over 1,000 genes identified that can give rise to monogenic DEE. The underlying etiologies are extraordinarily diverse, some driven predominantly by disruption of inhibitory neurons, others by excitatory pathways, and many by both. The biological diversity is precisely why so many patients remain inadequately treated and why the history of DEE drug development has been so difficult.
Treatments that work through a single mechanism or a single neuronal pathway simply cannot reach across the full spectrum. Bexicaserin, as a highly selective 5-HT2C agonist, works differently. By binding the 5-HT2C receptor, it reduces excitatory or excitation through both inhibitory interneurons, where they're expressed, and excitatory pyramidal neurons, where they're also expressed simultaneously. What that means in practice is that regardless of where in the inhibitory-excitatory spectrum a patient's DEE biology sits, bexicaserin has the potential to reduce hyperexcitability and thereby reduce seizure burden. This is what gives us confidence that bexicaserin can address the full breadth of the DEE indication across Dravet syndrome, across Lennox-Gastaut syndrome, and the broader range of other DEEs for which no approved therapies currently exist. The phase II PACIFIC study showed up to 59.3% sustained seizure reduction at 12 month in the open-label extension.
The FDA has recognized the potential here with breakthrough therapy designation. Next slide, please. Let me now turn to the mid-stage programs, where the clinical signals we are seeing give us real confidence in the franchise potential ahead. Starting with bocunebart, our anti-PACAP antibody in migraine prevention. The phase II-B PROCEED data showed a 5.9-day reduction in monthly migraine days versus baseline, a clinically meaningful effect in chronic migraine patients with history of failure in prior preventive treatment. The PACAP mechanism is distinct from CGRP, which means that bocunebart is not competing with Vyepti. It is complementary to it. Together, they have the potential to form a migraine franchise that can address a broader spectrum of patient needs.
We are on track to enter phase III by the end of this year, as Charl mentioned, and I would encourage you to join our capital market event on December 8th, where we will go into considerably more depth on bocunebart and the migraine franchise as a whole. Now on asedebart, our anti-ACTH antibody in neuroendocrinology, seven out of eight Cushing's disease patients achieved urinary free cortisol, UFC, normalization during IV titration in the phase I/II study, and that eighth patient later achieved normalization. This is a remarkable signal of activity in a disease that today has very limited treatment options. We have now completed enrollment in the BalanCeD phase II trial. We hold orphan drug designation from both the FDA and the European Commission, and we are preparing for pivotal development. We believe asedebart has the potential to anchor a neuroendocrinology franchise.
Now on our D1/D2 agonist in advanced Parkinson's disease, phase I-B data presented at MDS showed 3.6 hours of additional good on time at week six. I repeat, 3.6 hours, with off time reduced by 2.3 hours. For patients living with advanced Parkinson's, that degree of motor control improvement is genuinely meaningful. As mentioned earlier, the DARE2 phase II study is now enrolling, and we see this as the second significant step in building out our movement disorders ambition. At the end of the day, this is what building a pipeline for the scale phase is about, creating platforms with the potential to sustain growth for years to come. Next slide, please. Now let me close with the full pipeline view. Stepping back, as Charl mentioned, we entered the focus phase with an ambition to build five to six mid-to-late-stage assets, and we have delivered on that.
What we have built is first-class, first in class, and first class, clinically differentiated and increasingly validated by the regulators who have granted us 16 special designations across the portfolio. We have near-term catalysts, but also a wave of further value inflection points building behind them. One other example is our orexin program, where we are now in patient studies targeting disorders of wakefulness, where we see meaningful unmet need. More detail will follow as the data develop in this particular program. With that, I will hand it over now to Joerg for the financial results.
Thank you, Tarek, and it's an absolute pleasure to have you on board. As we close out the focus phase of our strategy, the financial story is actually a simple one. We said we would free up capital, strengthen the balance sheet, and build the funding capacity to invest in the next phase of growth and innovation, and that is exactly and precisely what we have done. Let me now take you through the nine- month financial performance. Next slide, please. Revenue reached DKK 20.2 billion, up 13% at constant exchange rates, with underlying growth of 11% at constant exchange rates. This reflects continued strong commercial momentum led by Vyepti and Rexulti, with additional contribution from inventory buildup and phasing dynamics in our partner markets. Our partner markets had a strong first half due to inventory build and phased shipments, which were softened as expected in Q3.
The underlying partner net sales and sellout performance remained stable and overall stronger than expected for this year. The adjusted gross margin was 86.6%, reflecting the impact of commission costs associated with the partner markets, as well as unfavorable product and geographic mix. Sales and distribution costs increased by 1%. The savings from the new commercial model have been reinvested into growth opportunities in the U.S. and launch preparations for Vyepti in Asia. Administrative expenses reached DKK 1.1 billion, corresponding to a slight increase of 3% in line with expectations. R&D costs increased according to plan by 19%, reaching DKK 4.1 billion, and is driven by the progression of our phase III programs that Tarek just mentioned for bexicaserin and amlenetug, and a maturing mid-stage pipeline.
Other operating expenses reached DKK 302 million, primarily reflecting a one-off restructuring provision in Q1 and an impairment related to the divestment of our production site in Italy in Q3 of this year. Adjusted EBITDA grew 19%, primarily driven by the strong performance of Vyepti and Rexulti, as well as the gross profit impact from the one-time inventory buildup supporting the transition to our partner model. This was partially offset by a higher cost of sales and continued investments in R&D. Next slide, please. EBIT increased 13% to DKK 5.4 billion, driven by a higher gross profit from strong sales, including the one-time impact from the inventory buildup, as well as a lower sales and distribution cost ratio. This was partially offset by increased investments in R&D and admin expenses. Net financials were an expense of DKK 119 million, benefiting from favorable currency movements and lower interest costs following continued deleveraging.
Our effective tax rate was 23%, impacted by an impairment loss related to the divestment of our production site in Italy. Net profit increased by 30% to DKK 4.1 billion, and adjusted net profit grew 25% to DKK 5.4 billion. This translates into adjusted EPS growth of 25%, consistent with the underlying performance of the business. Overall profitability development reflects both strong execution and a disciplined approach to capital allocation. Next slide, please. Cash flow from operating activities was mainly driven by higher EBIT performance, reaching DKK 5 billion, partially offset by higher working capital outflows and tax payments. Cash flow from investing activities was an outflow of DKK 453 million, mainly reflecting investments in property, plant, and equipment. Cash flow from financing activity was an outflow of DKK 4.3 billion, reflecting net loan repayments related to our revolving credit facility and also higher dividend payments.
Net debt reduced to DKK 5.1 billion, reflecting strong cash generation and a continued progress and path on deleveraging following the Longboard acquisition. Overall, our financial position remains strong, providing flexibility to continue both investing in growth and innovation. Next slide, please. Our strong nine- month performance and the greater visibility gained during Q3 support raising our full-year guidance. We now expect revenue growth of 11%-12% and adjusted EBITDA growth of 15%-19%, both at constant exchange rates. At the half year, we were already performing well, but uncertainty remained around the sustainability of demand, generic competition, and partner market shipments. During Q3, Vyepti continued to outperform our expectations. Partner markets performed better than expected. The increase in adjusted EBITDA guidance is primarily driven by higher gross profit from stronger revenue, partially offset by a lower gross margin and greater certainty around the exact R&D spending levels.
Turning to our financial modeling assumptions, let me highlight the changes since our last quarterly earnings update. Reported adjusted EBITDA growth is now expected to be around 9 percentage points below constant exchange rates compared with eight previously. Adjusted gross margin is expected at 86%-87%, and R&D costs at DKK 5.6 billion-DKK 5.7 billion, and depreciation and amortization at around DKK 1.9 billion. The effective tax rate is now expected at 21%-24%, and all other assumptions remain unchanged. Overall, the nine- month performance and the additional visibility gained during Q3 gives us confidence in our revised guidance and positions us well for the remainder of this year. With that, I will hand back to Charl.
Yep. Thank you, Joerg. Let me make a few conclusion remarks and also a few points as key takeaways. If we can go to the next slide, again, want to remind you where I started the call today, because three years ago, we had a clear reset of our strategy with very deliberate choices that we wanted to implement to change the trajectory of Lundbeck. Across all those dimensions, we have truly delivered, as we've said, against growth, against innovation, and against also clear funding allocation to support the long-term success of the strategy. We are now at that doorstep of what we call scale, which is the next phase.
It is not a new strategy, but it's really a next chapter of the company, where we really want to not only build size, but also depth of what we have achieved already in the first phase, which is the focus phase. We want to expand our position in severe preventative migraine with our global launches, of course, of Vyepti in Asia, but also the advancement of bocunebart into phase III, as well as building from the pipeline our rare disease operating model that will fuel growth in the future. We continue to expand the pipeline with many of the focus elements now around maturing the five to six mid to late-stage assets, but also exciting new research projects that will follow that to build a constant stream of innovation for the long-term success.
Of course, we remain vigilant and disciplined around how we deploy our capital for the best value creation inside the company through growth or innovation to expand and prepare the company for the long-term success. So when we enter this next chapter, we are stronger commercially, we are stronger financially, we have a stronger pipeline, and a stronger platform to be ready to enter this next scale phase of the company. Before I open for questions, I want to also go to the next slide and give an important reminder for you, because I'm sure there are many questions on the growth and potential of the migraine franchise. So this is a date that you don't want to miss. It's the 8th of December between 2:00 PM and 4:00 P.M. CET.
We will have a capital markets event where we will spend more dedicated time with you on the potential of Vyepti, but also be willing to answer your questions on bocunebart and how we see these two build a compelling position for us in severe preventative migraine. With that, I will now pause and open the floor for questions.
We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Alex Moore from Bank of America. Please go ahead.
Hi there. Thanks for taking my questions. First one on R&D. Beyond contribution from higher revenue, how much of the EBITDA guide upgrade reflects phasing of R&D spend in 2026, given the slightly lower gross margin outlook? Additionally, the full-year guide for R&D has been lowered about DKK 200 million from the top end. Given the comment to phasing, should we anticipate this additional spend to come in the first half of next year? Then just to go on Vyepti, if I may. Firstly, on the plan to add twice-daily dosing to the label post-approval, can you talk to how much of a competitive advantage it is moving from three times to twice-daily dosing, and how soon we could expect this update to come with the initial launch?
Then separately, on the headline release expected end of the fourth quarter, can you comment to what information we should expect in that headline release? Will initial disclosure solely focus on whether the study met the primary endpoint or not, or should we also anticipate some numerical data on key endpoints? Thank you.
Thank you, Alex. I think your first question was really around the translation of the upgrade into EBITDA, and I think the question was around R&D spend and any expenses that we see in the fourth quarter. Maybe, Joerg, you can answer that?
I am happy to answer the first one. Coming back to the guidance, I think the adjusted EBITDA increase is primarily driven by higher revenue and gross profit and the lower R&D range. This does not constitute a saving. This is purely a timing-related effect. When you ask whether you will see these expenses in next year, then I would confirm this.
Thank you, Joerg. Tarek, the question around BID and bexicaserin, and the headline results, what we could expect.
Yes, absolutely. We start with the BID, and this was also arranged and coordinated with the agency. This will start post-approval. Up towards approval, we are going with three times a day, but we are switching to BID. We have the option to switch in coordination with the agency. That will come after approval, within a year or so, without giving a specific date. When it comes to the advantage of this, that presents a significant advantage, especially for a pediatric patient population. Imagine a day at school, avoiding that middle-of-the-day dose will go a long way. We listen to our patients. We are patient-centric in our approach, and we believe this will make a difference indeed. When it comes to the data that we will disclose at the headline result, it is very hard to speculate.
What we can say for sure is we will disclose the primary endpoint, and then we will be as open as possible in disclosing the full impact. What we will try to look at in our headline result is whether there is a broad effect across the patient population, the heterogeneous DEE population. That is what we are really after. Is it clinically meaningful? This is the type of information you will see in our release, without getting too specific on it.
Thank you, Tarek.
The next question comes from the line of Shan Hama from Jefferies. Please go ahead.
Hi there. Thank you so much for taking my questions. I have three, if I may. Firstly, when you look at how Vyepti is prescribed in the treatment, the migraine treatment paradigm, which line of therapy are you seeing the highest volume of uptake, and then where is the highest growth opportunity? Secondly, on bocunebart, what exactly is left to do between now and starting the phase III? Is there anything that could potentially push the start into 2027? Thirdly, if I may, as M&A, of course, or BD&L continues to be a very important topic for Lundbeck, could you remind us of your firepower and whether you are focusing on companies with late-stage/de-risk commercial assets? Thanks so much.
Thank you, Shan. Tom, do you want to talk about Vyepti—
Sure.
—uptake pools of source of business?
Yes. Thank you for the question, Shan. The strategy behind Vyepti has really been to move Vyepti further up the treatment paradigm. We had really established market leadership, if you look at the later lines, but we see the true growth happening moving from fourth or fifth line to second and third line. Over the course of the last year, what we've seen is the largest growth is coming from movement into second and third line. The reason that's important is if you look at what a market share point is worth in second line versus fourth and fifth line, it's worth 4.2x that volume. So, being able to move up the treatment paradigm gives us access to a greater number of patients, and that's why we see a lot of growth in front of us for Vyepti.
Now, back to bocunebart and readiness for the phase III. If I may say, we believe we are in a position of strength here with regard to starting that phase III. Our interaction with the agencies have been very productive, and we've reached a path forward to initiate the phase III. Pending unexpected surprises, we're poised to have phase III initiation this quarter. So that's the plan, and we don't plan any more interaction with the agency prior to the start of phase III.
Thank you. Thank you, Tarek. Shan, let me address your question on M&A. For us, as we've always said, M&A is part of our strategy, is part of how we bolster the company through internal and external innovation, and we continue to look at the environment where it makes sense for us to strengthen the company through that lens. So, we look at ideally additional innovation pools that will strengthen the pipeline, but of course, also open to opportunities that might bring additional revenue when we need it. As we have disclosed in the past, our firepower is in this range of EUR 2 billion-EUR 3 billion.
Thank you.
We now have a question from the line of Kirsty Ross-Stewart from BNP Paribas. Please go ahead.
Hi. Thanks for taking my questions. Just on the partner markets, could you help us a little bit on dynamics going forward with demand being consistently better than you've expected? Can you be confident now that this demand level is sustainable going forwards? Are you able to give us an indication of what proportion of sales are coming from partner markets now and how much those sales are exceeding the 7%-9% growth level you expected going into the year? Also, just on the upcoming Vyepti launch in Asia, could you just give us some color on how you're thinking about the launch trajectory and overall revenue opportunity here?
I think given the ex-U.S. sales are already annualizing over $100 million, that kind of $300 million that's implied in your guidance for ex-U.S. market seems quite conservative given we've got all of the Asian launches ahead of us. Just interested how you're thinking about that given the progress in the U.S. If I could have a very quick clarification on the migraine event in December. You've been very open about providing mid-term targets in the near future. Just wanted to check if that's the forum at which you'll be providing them at, or is that to come later in 2027? Thank you.
Yep. Thank you, Kirsty. Let me just make one or two comments, and then Joerg can add on the partner markets. But certainly, we are essentially one year old, a little bit less even, in terms of our partner market model. We've gained a lot of learnings this year also in starting to understand the underlying trends of the in-market sales, which give us confidence that we see the partnership working. Can we today confirm that it will be our biggest growth engine? Not yet, but this is to be determined. I think, Joerg, I don't know if you want to add anything more to that, but confidence around the relationship, the model, and where we are seeing the trends going.
No, happy to add to it. I think you asked a little bit about what are the variables we are dealing with. Of course, you are talking about different replenishment schedules and also different partner stock balancing methods, and also, in principle, a forecasting process that is fundamentally new, as well as the ordering process. There is, of course, a very, you can say, country-specific product mix and also a bit of a different LOE profile. When we monitor these markets, we not only look at our net sales, we very much focus on basically the net sales and the sell-out data from the partner. What we have seen so far is that basically, we are tracking very well and better than our expectations, but it is a little bit too early to give an indication for next year.
If you would have compared this versus our previous guidance, before we partnered these countries where we said, "Listen, it is a very attractive business, but it is basically a declining business of around 5%," I think then we are confident that we are better than this going forward.
Perfect. Thank you, Joerg. I would just make a few comments on Vyepti Asia. Of course, we are at the point of launching now. Typically, in a launch like this, the first six to eight months are important to see the trend. It is a bit early to call what the peak sales could be of the Asian launches. Of course, we see a lot of unmet need, high demand in the market. I think more to come on that. Certainly, as we get to the 8th of December , our intention is to share with you more what we believe could be a new peak sales for Vyepti and also a deeper insight into bocunebart.
I think on the last question you had regarding mid-term financial targets, that is going to be more towards Q1 and our full-year earnings.
Thank you, Joerg.
The next question comes from the line of Marc Goodman from Leerink Partners. Please go ahead.
Good morning. This is [Val] on for Marc Goodman. My question is on the bexicaserin dosing. You mentioned the BID dosing could be added. I am just curious about the patient that would already be taking the TID. Would they eventually transition to the BID? Do you expect most of the population to eventually move on to a BID dosing? Would patients need to undergo some kind of titration schedule to move to that BID? I guess beyond convenience, how important is that long-term opportunity, and what are some of the biggest remaining risks for the launch in DEE? I guess a follow-up question to that actually would be on the DEEp OCEAN versus DEEp SEA trial. How much will the DEEp OCEAN results inform your expectations for DEEp SEA?
Given those studies overlap in drugs, population, et cetera, I am kind of curious about your view on how their specific efficacy and safety finding would change your confidence in the Dravet program. Thank you.
Yeah. So maybe before you go to the DEE review in the sense of other treatments here, I think on bexicaserin, I would just say that we have experience with patients already in the PACIFIC open-label study, which shows a very high adherence to treatment. We do not believe TID is a huge hurdle, but I think we, as Tarek said, we listen to the patient and the customer, and of course, over time, introducing twice daily will be more convenient, but it is today not seen as a hurdle in terms of uptake. The most important is efficacy, and that we will see when we get the headline results.
Absolutely, if I might add. So the trial is going with the TID, and that is going to be the basis of the approval. Post-approval, we will conduct a few PK bridging that would give us the option to go BID. So that is the extent of it. Then maybe the second question was around the kind of interdependencies between DEEp OCEAN and DEEp SEA, if I understand it well. Is that the question? Yes, absolutely. At the end of the day, we need the totality of the package to have a broad label for DEE, Dravet, Lennox-Gastaut, and other DEEs. They are all under the overarching umbrella. We are very pleased with the tolerability in both studies, and they are both inching toward the end. So on the one hand, yes, we need them both.
On the other hand, we are not seeing anything that make us worry one way or another regarding some of the scenarios you mentioned.
Thank you, Tarek.
We now have a question from the line of Charles Pitman-King from Barclays. Please go ahead.
Hi, guys. Charles Pitman-King from Barclays. Thanks very much for taking my questions. Firstly, just on Rexulti, I am just wondering if you can give us a few more thoughts around how you see this growth through the next couple of years as you are repositioning for the growth in your pipeline assets. Just thinking about IRA impact in 2028, given the 37% of brand is now in the 65+ market. Also maybe just on the MDD growth looking to have slowed in the face of increasing competition, just how are you thinking about AADAD offsetting that? I know that you have not given us the proportion of sales which AADAD this time, if you can give us an update on that.
Then maybe secondly on bexicaserin, just wondering if you can. Obviously, you have targeted $1.5 billion, $2 billion peak sales for bexicaserin, but there is also a potential competitor coming down the track from Praxis, which has targeted a higher peak sales opportunity. How do you think about this potential competitive dynamic? Maybe if you could just give us a few thoughts on the expected launch plan for Bexi, assuming label success. Is it expected to be a slow launch, or do you see a significant unmet need that this could actually be quite a quick off the ground? Thanks so much.
Thank you. Thank you, Charles. Maybe just before we go to Rexulti, I think just on bexicaserin, I will also ask you, Tarek, just to comment a little bit on how you see the landscape. As we see it today, we will not comment on peak sales of competitors, but I think you can position a little bit what we see in terms of the competitive space there. From a launch perspective, we will complete our filing, of course, if all goes well with headline results in the first half of next year, and that would be an important step towards launching in 2028. But I think more to come there once we are closer to that milestone. For Rexulti, Tom, do you want to comment on how you see competition, IRA, and the midterm?
Sure. Overall, as I stated, I think Rexulti has demonstrated very good resilience and solid performance within an increasingly competitive market. We remain very confident in Rexulti's differentiated clinical profile and our focused discipline execution across both indications, AADAD and MDD. We do see AADAD as the primary growth driver for Rexulti through LOE, and we expect it to be supported by continued strong growth in MDD. If we look at the competitive landscape, in MDD particularly, we think the competitor impact are within the trends. As we look at MDD TRX demand growth of 13.7%, we expect that growth to continue to sustain itself into 2027 and 2028. As it relates to the IRA impact, we will find out at the end of the month what the pricing will be.
We've completed price negotiations and waiting to hear back from the agency.
Perfect. Thank you. Tarek, if you can talk about bexicaserin mode of action and how we see competition in that space.
Absolutely. If we look at the overall DEE landscape, the unmet need remain very high. A key inflection point in this space to address that unmet need is getting the broad DEE label and then having a mechanism that has the potential to work across that heterogeneous patient population. There are over 1,000 different mutation. That's what sets apart, we believe, bexicaserin and its mechanism of action going straight at hyperexcitability, regardless the etiology of the particular DEE. That we believe is strength that's going to give us a competitive edge without making concrete comments about the competition. That's where we believe the strength of our approach is.
Thank you, Tarek.
Thank you. If I can just briefly follow up. Are you able to provide a split of AAD and MDD within Rexulti for the quarter? I know you provided it previously.
Between MDD and AADAD in terms of a—
If we look at it, TRX by indication, we have to realize that antipsychotics are used very broadly. So if we look at AADAD is 26%, MDD is 34%, schizophrenia 7.8%, which are the approved indications, and then there's a bucket of all others that take care of the rest of that percentage.
Thank you so much.
As a reminder, if you wish to register for a question, please press star and one on your telephone. We now have a question from the line of Xian Deng from UBS. Please go ahead.
Hi. Thank you for taking the questions. Two, please, both for Tarek. Just wondering, on the upcoming DEEp OCEAN trial, and I really appreciate the slide on the mechanism. Just wondering, what do you think is the best way to think about the heterogeneity of the trials, of the patients? Do you think there might be certain type of seizures or locations of seizures that bexicaserin might work better than others? That's the first question. The second one is, just wondering, how should we think about the placebo arm performance? Generally, how much uncertainty of the price does the epilepsy trial, in terms of the placebo arm performance, has historically had? Just wondering, what could you share about the things in your protocol, patient enrollment criteria that you can try to control this, please? Thank you.
Yeah, absolutely. Thanks, Xian. We'll start maybe with the first part of your question, the heterogeneity of DEE, and that's, we believe, what you said is absolutely true, and there are multiple etiologies. Some could be sodium channelopathy, other types of mutation. There are some structural. It could be at the kind of downstream event that happened or developmental or structural problems. Everything can lead to different types of seizures. But where we see with a mechanism like 5-HT2C agonism, we see effect across these different etiologies. We are encouraged looking at our preclinical data, looking at the PACIFIC results. We are encouraged to see that efficacy going a broad breadth of the patient population in spite of its heterogeneity.
At the end of the day, what's driving us here is efficacy, and that's going to carry the day, that efficacy, and that's going to be what we look for first in that DEEp OCEAN. But keep an eye on heterogeneity of the trial. We went to length to make sure that the 367-patient strong trial in DEEp OCEAN, one of the largest of its kind, if not the largest in DEE, it was conducted with that in mind to have a representative specimen of what DEE in real life looks like. Having efficacy there is, we believe, both the strength to provide solution to patient, but the competitive edge of our approach. Now, to your second question around placebo, I think the PACIFIC trial, although small in number of patient, gives us an indication as the margin of that placebo, which can vary. You're right.
We see something as low as 5% all the way to 20%. That depends. That cannot be predicted. Just look at the other trials. As long as the reduction in seizures that we see in the drug arm is significant, at the end of the day, the comparison to placebo should still give us a meaningful efficacy, which we've seen in the PACIFIC. Hopefully, we can replicate in the DEEp OCEAN.
Thank you very much.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Charl van Zyl for any closing remarks.
Yep. Thank you again for joining the call today. I just want to leave you with a message of really strong delivery across all the dimensions of our strategy, across growth, across innovation, and across the funding of how we invest in the future of the company. Again, great progress to see where we are, and look forward to engaging with you at our Capital Markets event or certainly early in the new year. Thank you again.