Earnings Call: Q2 2019

Jul 17, 2019

Ladies and gentlemen, welcome to the Soapy Presentation of the Q2 Results. I will now hand over to Peter Alpers, CEO Henrik Van Twist, CFO and Milan Trafig, Head of R&D. Please go ahead. Yes. Thank you so much. Good morning, everybody. It's really my pleasure to kick off our Q2, the result presentation. Let's go straight to Slide 3. The presenters, as mentioned, forward looking statement, obviously, as per usual. The presenters today are myself, Henrik, CFO and Milan, our Head of R&D. And quite blessed to present some what we believe are strong results. So if you go straight into Page 4. So basically, when you look at it, what are the main pieces and that's the reason why we call it strong performance, sharper focus. We think that we are representing here today very strong quarter results financials as well. And what we also, let's say, show is that we strengthen our organization, particularly in United States, but also in other countries where we have invested into our business. Hence, we don't see the operating leverage at the bottom line as much. And we are building our future in R and D, particularly on this hedge pipeline. And we need to mention in this context our programs with emapalumab, in particular. And we focus also on what matters that means that we sharpen our focus on our core areas in hematology and immunology, hematology out of Sweden, immunology out of Switzerland and that resulted into an alignment of our structure. So when you think about it, bring the results now into context, 38% revenue growth in the quarter is quite strong. And what is gratifying here is that our hemophilia franchise with Eloctal growing at 42 and Alcoleglade's growing at 45, which shows in a good way we see strong patient uptake in hemophilia demonstrating that what we are doing now is our Liberating Life campaign and also the focus behind those products and the clinical work is paying dividends. And when you look at the financials, we have a 25% uplift on the EBITDA. So demonstrating strong financial growth or earning growth, but we are also investing into our future. And we believe that this is what we want us to do to strengthen. So we also believe to come. For us, very gratifying in the immunology field was the uplift of Gamifant. Even though it's early days, but we felt that the SEK205 1,000,000 stake in Q2 demonstrates that we are entering an area with a very high unmet medical need in HLH. And we got very positive feedback from numerous physicians who are using the product now. And very pleased with the uplift of Comifant in Q2. And that increases our confidence around the product and supports our decision to have acquired this product. We have also concluded yes, we have signed a purchase agreement with regard to emapalumab and related assets and we reported on this earlier. You know that we got an organization as part of this transaction and by a quarter of it, it is now the nucleus for our immunology franchise out of Switzerland. And we think that this is an organization that can be leveraged in the future significantly. And we also got an option for 2 immuno oncology assets, which we're also very pleased about. So let's really give you a little bit of flavor. So it's really about today, strong financial performance. It's about building our organization, but it's also building tomorrow. And now to go a little bit more into the meat of the presentation and show you a little bit on the next page what we do by the different business areas. So in hemophilia, as I mentioned, we think that we have a very strong momentum. We see strong penetration in existing markets. We expect that there is obviously there's increased competition out there, but we are convinced by and we are gratified by the products that we have that these are really state of the art products and that Factor treatment is good to stay and remains the standard of care in this area. And we benefit from further internationalization and we got some further first really nice uplift also in Middle East and Europe. So this shows that we believe our growth story has a couple of more legs. We see also with the concept of individualizing and intensifying therapy and with this allowing patients to have a more normal life that this also resonates because it is not about making patients forget about the disease, but it is about improving outcome and allowing patients to live the life that they elect to live. And we feel that Factor replacement plays an important role in this context. And we believe that the Imofexter treatment will remain similar to Pierre and you see later the results that you published at ISTH on BIVV001, we see that what we look at the areas under the curve that you can achieve with those newer treatments, we think that we have not by far reached the end of the life cycle for this treatment and that we will be part of the future in this regard as well. So now we go to the financials. And as you can see, Alprolix is doing extremely well. On a year to date basis, we have 66% growth. Now in the quarter, we had 45% growth is driven by France. In Germany, as depicted here and we have now a nice franchise of countries. And basically for us, the main theme is here to make sure that in Factor IX, it's not just about trucks. It is about the distribution of the product. And Alprolix has demonstrated that in the clinical benefits in the extravascularization. And we were quite gratified to see in our recent publication that was published at ISTH where Alprodix even showed 0 plays unlike other EHLs. And this confirmed our view that Alprolix is really a fantastic product in the victim mine treatment and more patients should benefit from it. Next slide maybe we go to our performance with Elocta. So in Elocta, we had a very strong quarter as well with 42% growth. Also here, no surprise, mainly driven by the main markets in Europe, but also very positively affected in the Middle East. We have now here very nice already distribution by countries in 20 7. And we think that, yes, there is a lot of noise in the hemophilia A market, but people also recognize in daily factors that Factor treatment has an important role to play. Then we go maybe to the next slide and I refer to Milan, who will share with you some exciting data that were recently published at ISTH. Thanks, Guido. So this slide shows some data from the completed single dose study with BIVV001 in patients with hemophilia A. Now BIVV001 has been designed to have a half life that is decoupled from the funvili brand factor mediated half life ceiling. Hereby not only prolonging the half life, but also giving greater exposure and thereby potentially also enabling better protection. So as shown here on the slide, at the clinically relevant dose of 65 units per kilogram, the half life of PIK001 was 43 hours versus 13 hours for traditional recombinant human Factor VIII. And this was associated with Factor VIII levels with PYF-one of 38 percent 17% after 5 7 days, respectively. In addition, as can be seen from the figure, normal Factor VIII levels were obtained in the 1st days after the decision with BIIP-one. So in summary, these data supports that BIVV001 may have the opportunity to bring unprecedented protection and to liberate the lives of people with hemophilia A. If I can have the next slide. So immune tolerance induction is the standard of therapy for eradication of inhibitors and there are experimental data and retrospective clinical data suggesting that there may be immunomodulatory effects and also favorable effects on ITI of Fcfe's Factor therapy. And this slide shows the interim results from a prospective clinical study with Elocta for first time ITI in subjects with severe hemophilia A and high titer inhibitors. And what we saw was that in 6 out of 15 patients, we saw an ITI success after a median of 11.7 weeks, suggesting that eloctem may offer rapid time to tolerization. Now while these data are early and not all patients have completed the study, the time to tolerization compares very favorably to the international ITI study. So we are very encouraged by these interim data, and we look forward to sharing the full data set when it's available. And then back over to you, Guil. Thank you so much. And now it's time to talk about our other leg, main leg, which is immunology. And as you've probably seen, very strong results with all three products. And I'll start with Skynyrid, where we had now demonstrated that we were able to overcome some of the prevalence that we had with the distributor change and now reposition the product for growth. And we fund, obviously, as I already alluded at the beginning, very high unmet medical need and this is propelling our growth in this sector. And we are obviously continuously looking for opportunities to expand this franchise. And we'll report back to you when we have when it's the right time. So maybe we go into the meat of the presentation. Here you can see the step change that we inflicted to our business with the acquisition of Synagis, primarily in Q1 and obviously now the launch of Gamifant. So we are really now restructuring the base of the business on a completely new level. Please take note that obviously Synagis is a very seasonal product as we reported actually the main sales are happening in Q1. But also for us this year particularly Q4 and depending on the virology that will be an onset already in September. But please also take note that we didn't have we only closed the transaction on the 24th January. So we are missing an important part of the January sales in our books. But notwithstanding this, what we can say is that the business is really taking off very nicely. So we had a nice still nice sales of synergies in Q2. But really what is the shining star now emerging is Gummy Fund and a very positive trend outperformed here in Q2, and this is driven by our U. S. Performance but also by the rollout of the StiltonMD indication in Europe. Next slide. So here, basically, you see the inherent in more detail here. So very strong growth in the quarter. I mentioned the U. S. Now which is pulling through. There was a leadership change in the U. S. And really focusing of the team. And overall, very gratifying results. What we basically can see is now that we improved the fill rate, but also new patients now enrolled and we have improved the stickiness of the product by basically working better with this new distributor, specialized distributor, and this is now paying dividends. Next slide. So it's the largest in almost €148,000,000 very strong sales for this off season quarter, affected also by a one off of 81, which is related to a more informed understanding now on what basically is Medicare and Medicare. And hence, we were we felt that it was an indicator to have this one off of AT1, this reversal. But still the virus season lasted longer this year. And this helped us to achieve this result. And I think for you, more importantly, I think you should understand that the product underlying demand is still increasing at 2.5%. And we're obviously working very intensively to improve the product. That was our, let's say, main objective when we did the acquisition that we wanted to show by focusing on this product that we can do a better job and drive growth. And our main focus is obviously reducing the leakage and improve adherence to the protocol. And we think that we are by far not yet we have reached the end of this objective. So we hope that we can do better and prove it in the pudding in particular than in Q4. So with Gamifant, let's say, very strong Q2. And let's say, but it's really it's early days. So we want also to have here more of a measures approach. Let's say, we obviously we can see that there's a very significant uplift. Physicians see a lot of utility for this product. And basically, it's too early for us now to revise our guidance. But obviously, as you can see, we are very positive when it looks to the future of the product. And we are on the right track. In Europe, we had a dialogue with CHMP, and we think based on the normalized approval time lines that we should have an approval more like mid-twenty 20. But this is not obviously in our hands. We will do everything we can to make sure that CHMP can make an informed decision. So this gives you a little bit of a flavor on the product. And now I refer back to Milan, who will show you the clinical trial program, which is very important to us. Thanks, Guido. So this slide gives an overview of the completed ongoing and planned clinical activities with imapalumab. So we have the original pivotal trial in primary HLH, including the extension study, the 4 and 5 as well as the 9 study in primary HLH to accrue more information also on long term outcomes and quality of life. The study in malignancy and nonmalignancy associated HLH in adults is about to be initiated. And finally, we have the secondary HLH study that I'll share more details with you on the next slide. So this slide shows the design and outcomes from the ongoing study in patients with systemic juvenile idiopathic arthritis developing secondary HLA or macrophage activation syndrome. SCIA is part of the juvenile idiopathic arthritis diseases and also has systemic features beyond arthritis such as feline rash. Around 10% of patients with FGIA, secondary HLH or MAS, may develop and this is associated with significant morbidity and mortality. And there is today no treatment available for this secondary HLH mass and patients are typically initially treated with high dose steroids. As we have presented previously, patients with this form of secondary HLAs, they have elevated superior antimal levels, and this was the rationale for initiating the study. And as shown here, we enrolled patients with MAS secondary to SGIA, having failed high dose of steroids. They were treated with an initial dose of imapalumab of 6 milligram per kilogram for 2 weeks, followed by a dose of 3 milligram per kilogram for subsequent 2 weeks. The dose of steroid could be changed during the course of the study. And what we observed in this difficult to treat population with high morbidity and mortality was quite remarkable in our view. We saw a complete response to imiparamab in 6 out of 6 patients, all of whom had failed potential steroid therapy. We saw a rapid increase in CXCL9 demonstrating complete neutralization of interferon gamma. We saw the treatment of response occurring early and also with a clinically meaningful tapering of the steroid dose already from week 1. Finally, imapalumab was well tolerated. There were a few infections. There was one case of CMV reactivation that was considered related and serious, but this was resolved with conventional antiviral therapy with no Secrely. So in summary, we are very encouraged by these interim clinical data, and we plan to share these with the FDA to discuss the potential way forward for this indication. And now I hand it over to Henrik, I believe, for the presentation of the financial results. Thank you, Milan. So let's start with the financial summary on the quarter. Revenues for Q2, as we saw, amounted to SEK 3,163,000,000,000 corresponding to an increase of 38% and 32% at cost of currencies. The year on year growth was driven in almost equal parts by Hemophilia and Immunology. And in terms of organic growth, that is adjusting for synergies, it was 25% for the quarter. Gross margin jumped to 76%, positively impacted by the addition of the high margin product GammaPhant and Images and then the continued positive product mix effect driven by the hemophilia franchise. And then at the same time, the no relative sale from some of the Specialty Care products. EBITDA adjusted for the restructuring charge in Q2 of NOK 157,000,000 reached NOK 1,000,000,000 for the quarter, corresponding to a margin of 38% versus 42% in Q2 'eighteen. The seasonality of synergies here has an impact. The revenue will negatively impact the margin Q2 and Q3, whereas we will see the positive impact on the growth in Q1 and Q4. And finally, the adjusted EPS number was 2.12 minuteus 17% for the quarter, 17% for the quarter, was growing 16% in H1 compared to last year. And furthermore, the operating cash flow was very strong during the quarter of SEK1.275 billion, catching up from the weaker cash flow that we had in Q1. And as a result, net debt amounted to SEK4,400,000,000 at the end of the quarter, which is a decrease of about SEK1,100,000,000 compared to Q1. We go to next slide. On this slide, we have a crosswalk illustrating how we are building our business. We are comparing adjusted EBITDA for Q2 'nineteen with the same period 2018. Again, adjusted EBITDA, meaning excluding restructuring costs. Overall, the adjusted EBITDA of SEK1.93 billion corresponds to an increase of SEK2.42 2,000,000 year on year. First of all, the increase in revenues coming from highly profitable products in hemophilia as well as Gamfant and Synagis has contributed an increase in gross profit of SEK736 1,000,000. However, as we are building business, that means also increasing efforts in SG and A. We've taken over the synergies business and established a commercial infrastructure in the U. S. And we have launched Gamutout in the same U. S. Market. And at the same time, we've increased our investments into hemophilia as we continue to drive that growth. And as a consequence, SG and A increased by SEK377 1,000,000, but we are obviously dealing with a much larger and a growing business. The R and D line increased by SEK 115,000,000, including the restructuring costs, and this relates to the increased activities in our R and D programs with the Avapalumab obviously being the major driver. And we expect to continue to see some increase in spend in both sales and marketing and R and D as we move into Page 2. And finally, I want to bring up the financial impacts of 2 important events this quarter. Next slide. First, we have the intention to discontinue early research and R and D programs outside of core areas. And restructuring costs for the quarter amounted 170 €5,000,000 were of €157,000,000 impacted EBITDA and €18,000,000 related to the impairment of intangible assets. But we expect that this restructuring will release SEK 200,000,000 to SEK 300,000,000 in 2020, giving us the possibility to reinvest in our core areas. And secondly, there is the impact of the agreement to acquire the Palomandel related assets. The consideration for the acquisition is CHF515 1,000,000 of which CHF400 1,000,000 was previously committed in the hemiparatnamab license agreement. Through the acquisition, we gain access to 3 main items, all assets relating to hemiparatnamab, including the in house XTPs, options for the shared financial rights of 2 immuno oncology products and a priority review voucher with the FDA. This acquisition was debt financed and will increase our net debt position to SEK9.3 billion on a pro form a basis as of Q2. Leverage, however, will remain below 2. And as we can comfortably lever up to 3x to 4x EBITDA, And we continue to see very strong cash flow from operations. There is significant additional net capacity for further M and A. And with that, I hand over to Guido again. Thank you so much, Henrik. So then let's go first way to the key messages. So basically, we are committed to the strategic direction as we actually laid out as early as September 2017. Obviously, it's a refinement now that immunology is our 2nd leg. But clearly, we are committed to further drive penetration in hemophilia. We are excited about the opportunities related to BIVV001. And we see a lot of excitement still around our existing franchise and recent data demonstrate that we have fantastic products. When you look at the opportunities in the U. S, we now obviously have a very different setup in the U. S. As you have seen also in the financials. So we're going to be strengthened this organization. But now we have a significant platform in United States, and we are very well positioned obviously in MENA and we have strengthened this position by particularly by the investment into our hemophilia organization. We are also working on our late stage pipeline, and we see a significant opportunity related to emapalumab beyond also HLH, but even within. We're committed to M and A because we want to make sure that we remain also forward looking, a strong growing company in this rare disease space. And they can assume now in this pathway to assume a leadership position in the rare disease context. With regard now to our financials, we come obviously with very strong financials into this first half. And as a consequence, we felt that it was appropriate to uplift guidance from 13 to 13.5. And basically, here the current trend makes us more confident that this is appropriate. And also on the EBITDA, we think that the range that we're going to uplift the range excluding obviously the restructuring cost as explained by Henrik. So this updated outlook really reflects the feedback we get on the product sales in hemophilia, but also from the strong uptake of Hammock Fund in the U. S. And I think now it's time to open the floor for questions as you may arise. Thank you. Thank you. We now have our first question from Ying Yang of So I have two questions. One is on hemophilia and second one is on demi front. So on hemophilia, you mentioned that most growth in the quarter came from major EU markets, but also it was positively impacted by the older patterns in the Middle East. Can you quantify the impact from the Middle East? And comment on whether you expect that older patterns to continue in the second half of this year? Yes. I mean, the Middle East, this is more driven by the way these tenders go. And we have obviously a very strong position in the Middle East particularly on markets like Saudi Arabia and UAE. But when you look at the, let's say, the overall, let's say, performance, let's say, in case of Elocta. Now basically, we have shown now if I just look at the first half, we have give and take €670,000,000,000 growth in absolute terms in SEK. And basically, the effect from the Middle East overall on the half year is a 5% dividend yield effect. So it is not some it's not the main activity. So really, what drives the growth are the primary markets, obviously, in Europe, where we still see strong patient uptake. And then we have some growth now that we see in Central Eastern Europe. And granted this is early days And also, obviously, there the legacy is these are more traditional plasma markets. And there we basically see a gradual shift now towards more modern therapy. Okay. But do you think that Middle East ordering pattern that you saw in the second quarter to continue in the second half of this year? Yes. I mean, basically, there is nothing unusual, let's say, to this because it's just the way these legal setups are in the Middle East. So yes, you will not see it now every month. But on a half a year basis, yes, you should see the business repeating, absolutely. Okay. And then Kevin Fond, the previous strong growth since the launch in the U. S, do you think that the growth is largely driven by oral labor use in primary HLA? Or do you think that it's also coming from off label used in secondary form? I mean, what we see is that there's a strong uplift, obviously, in primary HLA, but you can also see that there is utility of the product in very severe cases in the overall HLH indication and their physicians obviously make decisions. Let's say to basically rescue patients and we respect this. Okay. And the last question on Tiffany Huang. You mentioned that you may with EMA and then now probably expected in mid next year that 6 months push you out from year end to this year. Is that because approval process is more standardized than accelerated as you expected? Mila, you want to comment on the because you have been in close contact with the authorities. Yes. So I think this is just based on the way the clock stock works and our ability to provide questions and answers to these. So that's why we have postponed, you can say, when we expect the approvals from mid-twenty 20. Our next question comes from the line of Richard Park from Bernstein. Please go ahead. Your line is now open. Got a few questions. Firstly, on hemophilia. Can you talk about any geographies in your hemophilia territories where you're seeing access to reimbursement for Hemcebra in the non inhibitors setting has been approved or you're expecting it to be approved indolently and can start to impact in most prospects? So that's just the first question. Yes. Richard, I mean, I think you may want to understand that, yes, we have obviously some visibility on this. But I think this will be a very good question for the earnings call of Roche, I think, which is happening, I think, one of those days. I think then you get a much more profound answer to this. Okay. Awesome. And then second question on the Canifan TMA process. I just wanted to push you a little bit more. It's been a cock stopper, I assume there's either sort of questions or data requests from the TMA as part of that. So I'm just wondering if you could give us some kind of clarity on what issues the EMA has and how confident you are that, that can be addressed based on the current data set? I think before Milan answers, if we wouldn't be confident that we can resolve it, we would not give you a time line, obviously, as is the way we have done. But maybe, Milan, you can give provide some more color. Yes. No, I agree, Jiro. I mean, we based on the visibility we have, we expect an approval by around mid-twenty 20. And this is as far as we can, you can say, discuss today, I think. Okay. No problem. And then finally, I just wondered if you could talk around scenarios for the secondary HLH setting and potential for high because I know you probably can discuss that data with the FDA later this year. What's your kind of pace around best case, worst case filing timelines? Is it possible that you could be able to file based on this clinical studyology and the clinical trials will be required? Thanks for your question. So I would prefer to answer that question once we have discussed with the FDA. Then I think we will be able to provide a bit more specificity around what it would really take. Needless to say, we are encouraged by these emerging sick patients. But I prefer to get back with more specificity once we have discussed with the FDA. Okay, great. Thanks very much. Thank you, Richard. Appreciate it. But you can see that for Gamifant, obviously, in particular, there will be some broader horizon that will open up the new indications. But also, over time, we would like to update you on core trends for new geographies because we think that there's a broader utility of the product. Perfect. Our next question comes from the line of Chris Reouty from line is now open. So regarding Elocta, to start with that, and IPI, Do you plan to apply for approval for ITI? I guess we can just take them 1 by 1. Yes. I mean, obviously, these are interim results of various data. We have another study ongoing for reiterated it. So it may be a little bit premature to talk about before the final readout of the study in what way This way may suffice for publication, but the way the studies were set up was primarily to elucidate the overall knowledge in ITI and the benefit of treatment. But obviously, very gratified to see the relatively fast response to tolerized patients. But Milan, maybe you can talk more about that. No, no, I agree. I think once we have completed the studies, we will evaluate the outcomes. And then based on that, we will take a decision as to whether these rates are merits approaching the regulatory agencies. But as we said, we're quite encouraged by the early interim data, in particular, on time to tolerization. Okay, great. And then so I guess just wondering in terms of obviously very strong results, so there's no signal in the numbers. But have you had any pricing pressure in Sobe territory for hemophilia, particularly, I guess, with respect to Hemophilia preparing to come on the market or something like that? I think any data points that we have learned so far indicates to us that the launch may not affect negatively the price level. That basically is also a question you need to refer to Roche, honestly, on that pricing strategy. But anyway, the data point that we have currently don't suggest is, let's say, the other thing is that, yes, there has been obviously in the normal course of business, there have been negotiations. But the overall demand growth has been strong so that the mix effect, I mean, it's basically it shows still a very positive variance. But we have not seen now a dramatic shift on the price level when you look at it on the business in its entirety, yes. Okay, great. And then so just with Sanagis sort of details, but I mean we have in the past seen negative sales at AstraZeneca. Is this something that we could see in future off season quarters? Do you think I mean, is there a specific reason that sort of thing happened? Yes. No, I mean, basically, this is it. You know that basically the accrual mechanisms, when you sell, you don't know sometimes how much goes into Medicaid and how much goes into the private channel. And then you have to make a certain peg in the ground. I mean, we don't profess that we can predict these things with 100% accuracy. So this is not a sign. This is to a certain degree as a judgment and an art. But we think that we are very much on the board because obviously for us obviously the relative impact of Synagis is much larger than it was with us specifically. So we want to get it right. So what you see now in the Q2 results is really emphasizing that we want to do it right and get it right. And we basically use all the data points that we would able to get our hand off and on and basically do this. So that's the reason we have not seen the negative result. We had a we had what is the advantage of the virology. There's always you will never have a 100 percent prediction on the results. So they continue. And the way this works with MediK, Care, they can come back to you even up to 2 years later. So it's a there's always an opportunity for, let's say, for surprise. But the from our perspective, we just look at the way we think the product is going. We studied it very carefully, let's say, at a detailed level. The data points suggest right now a demand increase of 2.5% of the product. And if we can increase demand and over a period of time, then obviously, the actual sales will follow. And we are let's say, for us, to be honest, yes, finishes the product in the United States and it is the number one product at this point of time for immunology. Maybe at one stage, Gamifant will surpass it. But for now, it is clearly the priority and we think that we should do a good job, let's say, when you look at the later part of the year, obviously, to be proven. And let's say, nothing beats than the proof, but you have to be patient a little bit with us to see the Q4 results. And let's say, we are doing now in the off season, obviously, everything we can to build up the right patient flow. Okay, great. And then the last thing sort of relates to sort of strategy on R and D. D. So notwithstanding the sort of refocusing on hematology and immunology, You stated quite clearly you want to expand the late stage pipeline, okay, fine. But I guess the downside of focusing on only late stage is that there tends to be a lower return on investment, at least assuming in house origination, decent or business development for early stage candidates. So I mean unless you're just trying to sell Sobe off, why sell off Sobe 3 and the rest of the early stage assets assuming you believe in them? Yes. I think the when you think about our pathway, I think strategy is as much about what you do as what you don't do. And here, basically, we said when you read it carefully, let's say, what we tried to say anyway is that we stopped research in our noncore areas. But we didn't say that we stopped research in our core areas, yes? And let's say what we basically and what we know, obviously, the emphasis is clearly on late stage. And when you look at you do a risk adjustment with the bookabilities on an early stage versus a late stage. I'm not sure that your ratios or your return ratios when you risk adjust them will be really much better provided you make smart buys of late stage assets. And so far, we feel that we have been actually reconfirmed by what we are doing. And we see a much bigger opportunities in the now development of emafalumab indications than we saw, to be honest, in the case of the assets that we now want to divest. So what you will see is hopefully that over time, we can articulate clearer that more projects will come our way. But we think that for the company side, we are you need to basically balance it off. And clearly, there's no mandate now to sell the company or to do the short term. And when you look at our financials, how we have investing in the business, then actually no matter what you what the gospel is, you think we are spelling here, just look what we are doing, then you understand what our real strategy is. And our real strategy is that we are investing into the business and we don't deleverage because if you want to get a leverage to P and L obviously we would have a short term ambition, you could arrange this. But we believe in the long term or longitudinal nature of this business. Therefore, we're doing investing into good projects that we think, we think that 3 could be a great project in somebody else's sense. But it leads us into an area that we think because then it's not that you need to build up an entire value chain. And we think that there's more to change for us in the value chains in our core areas, yes? So I mean, I hope I didn't avoid you the question, but let's say, but we think this is a pretty sound strategy. And when you look at some of the most prominent biotech companies in the world, one of them owned by a large big pharma company, you ask yourself how many projects did they bring from the bench to commercialization, Maybe not so many, yes? And let's say, but there are a lot of projects coming because they were interfacing and connecting competently with certain areas. And that's basically we want to get entrenched in our core areas so that we become the partner of choice and then we can bring the scale to those projects and then bring them to the market. So that's really the what is the reasoning behind. Okay. Thanks very much. You're welcome. Our next question comes from the line of Johan Ennus from Pareto Securities. Please go ahead. Your line is now open. Hello? Please go ahead. Your line is now open. Yes, I'm trying. Can you hear me? Yes, we can hear you now. Congratulations. Great quarter. Just a few questions on Gamifant. It seems to be an extraordinary good launch. Q1 was strong. You were partly alluding to some inventory effects as often is the case in the initial launch and Q2 is clearly very solid again. Can you provide us some details what to expect? You're not guiding on particular products, of course, but should we expect very sort of rapid uptake in the initial label? Or is this just a very good start? How should we look at it? I think it's early days for the project. But obviously, the Q2 data are very encouraging. And for me is what is more important is that we've got very strong data points from the physicians who treat patients. Now the reason why we are refraining right now from providing more detailed guidance, I mean, obviously, we normally don't provide product guidance anyway. But you've seen that we're more bullish, obviously, for the second half. And clearly, coming from plays a role in this context. But it's also that you want to have a couple of more data points on the percentages on, so to say, repeat prescriptions. And you have, obviously, now the product is used in numerous centers. You have also a let's say an uptick across centers. But where you see repeat, you see obviously satisfaction with outcome. So the so but that's the reason why we are at this stage. I mean, we want to make sure that we get it right. We think, though, that it's a fantastic product in showing making a significant difference to patient's life in the indication in the broader HCLH indication. And that's the reason why we're actually quite confident. Thank you. And so now, I guess now when you have more experience from the U. S. Market even though of course Q2 is not in season, But in retrospect, Q1, when we're thinking about what's a reasonable baseline for a more typical Q1, If you would have had product for the full quarter, can you give us some more details? It was obvious that you didn't have support from the full Q1, But what's a reasonable baseline? How much more should we base it on for Q1 going forward? Yes, Steve, there were two effects that we tried to and we provided quite a bit of data points at the Capital Market Day where on how to read the performance because there was an inventory effect and there was an effect that basically, let's say, was driven by the later close on the 24s. And obviously, as we also explained, we got a compensation of a lower purchase price that unfortunately didn't find its way into our P and L, but basically meant less cash out for the transaction. So we got a compensatory effect of over $30,000,000 And let's say, so that basically, I think we have to add back to that to the for you as a data point, I think it's, let's say, and maybe what we could do is trying to provide you with the presentation from the Capital Market Day, which is public knowledge. And for you then maybe to do your own adjustments because when you then think this is one offs through and we give you the data point of 2.5% ongoing demand and I give you another data point that obviously we think with what we are doing, we can hopefully do better, yes? And you might be able to compute this. But because also here in the case of Synagis, we don't give guidance on an individual product. But we think that we if you take away these one offs, we will be able to grow the product and basically create a solid foundation for the product and make sure that within the guidelines that have been established 3 years ago, we can basically grow the product by improving adherence and reducing leakage. So no changes as from the Capital Markets then? And finally, you alluded to, should we expect some more some growth then from R and D and S and A in the second half of the year. Could that be a broad indication? What is some growth? Is it 10% more, 5% or 15% more? Henrik, you want to answer that? Yes. So we increased our guidance on revenue. So it's we think it's only natural, but also the OpEx will increase. But this is no major increase. It is slightly higher number for H2 than we expect for H1. Great. Thank We now have our next question from Jon Bergrant from C&P. Please go ahead. Your line is now open. Yes. Hi. Thank you for taking my questions. So I have a quick one for Milan. So if I understood your comment on the CECL1 correctly, I think you said that it has potential to offer not only longer half life but also greater exposure. So could you just elaborate a little bit more to me by greater exposure? Yes. So thanks for the question. So I think if you look at the curve, I think there's a I think historically, there's been a lot of discussion about trough levels in the hemophilia space. What we want to do is we want to move the conversation to talk about the total, if you could say, area under the curve that we are providing of, you can say, hemophilia protection. And that's why when you look at the 65 units per kilogram dose, you can see not only a very good trough level assuming a once weekly dosing algorithm, which is a speculation by now, But what you can also see is we see very, very high exposures in the beginning of the week, supporting, you can say, more protection, a better ability for patients to normalize their lives. And this is, let's say, the conversation that we want to move or the direction of the conversation we want to take. Because it is the area under the curve that you can say provides a better measure of what level of protection you can get. On top of the fact that you also have, you can say, very good peaks that normalizes at least in the beginning of the week, you can say the Factor VIII exposure. And that essentially means that in that period of the week, these patients would be normalized essentially. So we want to move to a short discussion, and we want to move towards the full exposure and describing that because I think we think that's more meaningful clinically. And we also think that, that is connected to our fundamental vision of being able to liberate the lives of people within PVA and V. We have no further questions at this time. I'd like to hand back to our speakers. Yes. Thank you so much for your interest. And I know that this was probably an inconvenient hour for those clients in from the U. S. So we try to do this better next time. And as you know, we expect and pure interest and really very much appreciate it. Look forward to staying in contact with you and keep you tuned. Thank you so much. Appreciate it. Thanks. Thank you. This now concludes our conference call. Thank you all for attending. You may now disconnect.