Earnings Call: Q1 2021

May 4, 2021

Yes. Thank you so much, and welcome to Sobeys Q1 conference. We had an exciting period for the company. And before going into the presentation, a quick reminder of the forward looking statement as per usual. I'm joined today by Henrik Stenqvist, CFO of the company and Ravi Rau, the Head of R and D. Q1 is a quarter that deserves a second look, and I come back to this in a moment. However, first, I want to draw your attention to what we have achieved during the 1st 3 months. Substantial growth in our launch business, particular with doctor led, we more than tripled in Q1 versus last year. We stayed competitive in our hemophilia business and showed significant patient growth versus Q1 last year. We had strong earnings in the quarter and we delivered against our objectives in R and D. Now we will address why Q1 The results deserve a second look. The stats are known to you. Top line growth was minus 21 at to rate at minus 20 minus 13 at constant currency. This effect has flown to throughout the P and L and EBITDA growth was negative minus 32. However, allow me to familiarize you with the underlying drivers of our business, not to justify, but to clarify why our confidence to grow this business by end of year at constant currency has been increasing despite those results. 1st, let's go to the next slide. When you look at the currency effect in Swedish krona, we have a minus 9%. And given the distribution of our revenues, primarily euro and U. S. Dominated U. S. Dollar dominated regions. This is more related to it's an artifact as opposed to signifying our underlying business performance. When you look at the so called one time effects, where we had significant stocking effects last year at the same time due to COVID and beginning of the COVID crisis. And we had also a retroactive price adjustment for Elocta in Germany. So this led to one time effects that are not affecting our business moving forward. And thirdly, we are facing transitory COVID related effects that can be attributed to our hemophilia products, primarily consumption per capita and synergies due to the low virology. Regarding both products, both product areas, we have now obtained signals suggesting, let's say, a pathway of torovac's normalization. Before providing you further explanations, a quick perspective on hematology by quarter. Essentially, The growth of Doctylate was not enough to propel the entire franchise for growth. And let us go straight into the Locter numbers. Let's say, as many questions will probably arise towards this item. So when you look at at the area of one time items. These are, as mentioned earlier, related to retroactive price reductions for the last quarter of 2020. And this destocking effects as mentioned in the earlier part of the presentation related to, let's say, stockings, let's say, that we had at the same time of last year and let's say, some destockings that we are facing this year. So we believe that these are transitory effects. Let's say that sorry, these are one time effects that will not affect our business moving forward. Now when we can when we go to the transitory effects. This is the consumption per capita. And when you think about the consumption per capita, We believe that this is an area that we can improve over time. And let's say, and we have positive signals from the comparison of Q1 2021 versus Q4, where we improved our consumption per capita over 2%, even though in this chart, on comparing Q4, Q1 versus Q1 last year, we have a minus 12% effect. Regarding Alprodix, Let's say, we continue growing the business, if you take away the one time effect for stocking in Q1. Similarly to Elocta, We will continue focusing on reclaiming the lost consumption per capita. Now let's move to Doctor. Led. You need to evaluate the average of Q4 results and Q1 to measure the progress in view of some of the stocking effects. We are reassured by the accelerated penetration in the U. S, early launch KPIs from Germany and demand signals from China. Overall, this is a very positive evolution and we look forward to the Q2 results. Next slide. In immunology, you need to look at our business more on a 4 quarter rolling basis in order to balance the seasonality of synergies. In Q1, we were materially affected by the low royalty to the tune of SEK300 million covered under these transitory COVID related items. However, as we said, RSV is not gone. And epidemic levels were recorded by CDC in 3 states in April, supporting our expectations for H2. Next slide. Gummy Fund's quarterly Performance is still affected by weighted difference of patients. However, Let's say, 47% growth at constant currency versus last year It's a very positive outcome for us, and I'm very optimistic with regard to the future evolution of Gamifant. Next slide. Tineret is still going strong. And as you can see, and I'm gratified by the strategic progress that we are making, plus 20% at constant currency growth is a very strong outcome. But even more important is improvement that we have made. We got the approval in Russia, but foremost impressive are the impressive results of save more to mention here as a significant step forward. An improvement of overall clinical outcomes by 64% in hospitalized patients with COVID-nineteen pneumonia is a very meaningful improvement. This notion is underscored by the fact that in April, approximately 6,000 patients per day were hospitalized in Europe, and this includes the UK. And approximately half of them would qualify for the treatment with Kineret according to the certification of Save More. This gives you a sense what difference Kineret could make for patients. Ravi will share with you now on how he looks at the data from a clinician's perspective and he will provide a general update on R and D as well. Ravi? Thank you, Gita. Before I get into this study, I just want to highlight the progress we've made in R and D in Q1, supporting our strategic goals of growing our business, delivering the pipeline and geographic expansion. So I'll talk in a little bit more detail about the Save More results, which we announced yesterday. A reminder that KINRET was also approved in Russia for the treatment of cats and Doxelep was recently approved in Europe for ITP. On the BIV program in hemophilia, The pediatric study is well underway with a great deal of excitement amongst investigators, and that comes on the back of completing enrollment in the adult study. And then finally, last week, you will have seen the announcements about nocedimab and the MELODY Phase 3 trial, which met its primary endpoint of the reduction of RSV infections in younger children. Next slide please. So let me spend a bit of time now talking about the SAID MORE study and the positive results from this investigator sponsored study that was led by Professor Jamarellos Borbolis from the Hellenic Institute for sepsis in Athens, which demonstrated that early targeted treatments of anakinra improved the outcome in COVID patients, as Guido just mentioned. So this trial was of anakinra versus placebo, but on a background of standard of care. And that includes remdesivir, dexamethasone and anticoagulants. And this was in hospitalized patients with COVID-nineteen pneumonia, but in patients not on assisted ventilation. They may have been having oxygen, but they weren't on mechanical resisted ventilation. And these patients were defined to have poor prognosis as demonstrated by an elevation in plasma super, which is a biomarker that's been associated with immune and inflammatory activation and poor prognosis, not just in COVID, but in other diseases. And so this patient population very much represents the type of patient going into hospital in Europe or North America or in Japan. And despite recent advances in treatments, such as the ones I mentioned earlier, as well as vaccination, It's clear there's still a very high unmet need in COVID-nineteen. And I should point out that we've been in ongoing dialogue in collaboration with to JAMAELOS with the emergency task force of the European Medicines Agency and we'll be continuing that dialogue on the back of these results. Moving on to the next slide, please. So let me give you some key highlights from the study. The 6 0 6 patients who were randomized across 40 sites in Greece and Italy. And I'd like to thank those patients and the physicians and healthcare professionals looking after them. 60% of the patients we screened were positive for CPARS. So we screened just over 1,000 patients. And 60% being positive, it's similar to real world data that we're getting from other parts of Europe. So let me explain the endpoints in this study, which was at day 28, and it was a WHO validated clinical progression score, which actually has 11 domains. But for simplicity, they can be narrowed down to Five domains, which I've shown in the table on the left hand side. And the outcomes range from uninfected and discharged from through to mild disease, moderate disease, severe disease and death. In the middle are the numbers or the percentage of patients in each group who fell into these categories at day 28. I should point out that this was a randomization in a 2:one fashion. So there are 200 patients approximately in the standard of care plus placebo group and 400 patients in the standard of care at Anakinra Group. There are several things to observe in this schematic. The first is that the new standard of care works well. Patients did progress to ambulatory disease, but there were still significant numbers of patients with moderate disease, severe disease and death. So the effect of Anakinra on top of standard of care shows fewer number of patients with severe respiratory disease, fewer numbers of patients who died and a much higher number of patients who are able to go home virus free by day 28. Now overall, the odds ratio was 0.36 and was highly significant. We'll put more simply, a patient receiving anakinra on top of standard of care with nearly 3 times more likely to improve their clinical outcome by day 28. So As mentioned, let's put those data into some sort of clinical context. And we're using European CDC data on the right, which shows that 175,000 patients were hospitalized in Europe during the month of April. And we know from other data sets that similar numbers are still being hospitalized in the United States. Recall about half of these will have a positive or elevated superpower. So the data would support that these patients would be spending less time in hospital and leaving virus free, thus easing the burden on the healthcare system for other patients. At the other end of the spectrum, there are still many patients being admitted to intensive care and 25,000 patients were admitted in Europe during the month of April to the best of our data. Obviously, intensive care admissions and mechanical ventilation represent a huge burden on the healthcare system. And we've seen even recently the pressure on intensive care beds and even on the supply of oxygen. And what you can see is that with Anakinra, far fewer patients are going to require mechanical ventilation or will progress to severe respiratory disease than if they just received standard of care. So I think in total, these data demonstrate that Anakinra represents a potential major impact on the treatment of this disease. So I'll next slide, please. I'll finish this by showing the extent of our late stage portfolio. We continue to execute on the medicines shown here, as I mentioned earlier. And the next big event for us, other than hopefully registration of Anakinra The COVID is the U. S. Approval of pegzilacopalan in PNH followed by European approval later on this year. So I'll stop there and hand over to Henrik. Thank you, Robbie, And good afternoon, everyone. Let's go to the financial summary for Q1. Revenues in the quarter, as we heard, were impacted by the pandemic and subject to tough comparisons with Q1 2020, when COVID resulted in stocking, particularly of our hemophilia products. The revenue number for the quarter SEK 3,661,000,000 corresponding to the decline of 13% at CER, and this was driven mainly by Okta and synergies. Moving on to gross margin of 80% in Q1 compared to 78% in previous year. We have, on the one hand, a negative impact on our gross margin from the mandatory price reductions in Germany for Elocta And more so in Q1 because of part of the reduction just above SEK 90,000,000 was applied retroactively from 2020. But on the other hand, we also have other positive effects that improve our gross margin. And this includes various product mix and Counter mix effects and improvement in the cost of goods and also seize royalty obligation And reduced distribution costs. So we continue to trend positively. But remember that in the next two quarters, Q2 and Q3, We have seasonally weaker quarters because of the very limited sales of synergies, and this will normally bring gross margin down from the levels in Q1. EBITDA reached close to SEK 1,500,000,000 for the quarter corresponding to a margin of 41%. Lower than last year's 47%, but still a very profitable quarter. Operating expenses were just slightly above those of last year, despite the increased scope of our business in terms of geographic reach and R and D pipeline. And I will come back to OpEx on the next slide. Operating cash flow in Q1 amounted to SEK 1,700,000,000 benefiting from a reduction in working capital as planned, given the seasonal strength of cash flow in Q1. And as a result, net debt at the end of the quarter amounted to 12 point SEK 7,000,000,000, about SEK 1,000,000,000 below the number in the quarter before and corresponding to a net debt to EBITDA of about 2.2x, which is similar to the level in Q4. Next slide, please. Add some flavor to the OpEx evolution, starting with SG and A. As you can see, SG and A Spend in Q1 was relatively similar to previous quarters, of course, somewhat held back by the COVID restrictions that we've in several of our markets during this quarter. Although cost control is high on our agenda, We foresee SG and A to gradually increase during the rest of the year as we come into the launch phase of Doxelift in Europe, which started with Germany already in Q2. And furthermore, we come closer to the potential approval of exat and co plan in PNH in Europe and will ramp up pre launch and launch activities. We will continue to invest in our international expansion, not at least the commercial infrastructure. For example, in Russia, where Elocta recently got reimbursement. And finally, we do plan for less COVID restrictions during the rest of the year, which will facilitate good activity level in our markets. Next slide, please. Let's now look at the OpEx from an R and D perspective as well. We can see that the Q1 R and D spend is in line with what we've guided for, 13% to 15% of revenue. And as we can see, it's mainly the programs related to the new additions to our pipeline, Pexatico plan and Cell 212, which are driving the higher spend in R and D compared to previous quarters. And we expect this to continue to be the case as these programs progress and that our R and D spend remains in the range of 13% to 15% of revenue. And with that, I say thank you. Back to you, Guido. Thank you, Henrik. When we go to the financial outlook, basically, It's too early for us now to change this. And we have obviously shared this with you at the last earnings call, $14,000,000,000 to $15,000,000,000 and 30% to 35%. But having if you're thinking about it on the next slide, how we set up what is our sense already after the Q1. If anything, We think that there is an increasing confidence with our team and myself to grow the company at constant currency. And first of all, we believe that we have significant traction with our launch of growth products. And we have also when you discern the one time effects and the transitory effects and granted we have to still work on mitigating those transitory effects over the period of the year. There's a significant opportunity, again, to mitigate some of the effects that we have seen in Q1, notwithstanding the fact that the one time effects will not affect us moving forward. Secondly, this and this is what I alluded to earlier, there are positive signals that we already that we can overcome these transitory effects. We see that we have improved the consumption per capita of eloxtar Q1 versus Q4 by 2.4%. And we have seen that now virology in the month of April. According to CDC, it's improving, pricing is increasing as such in the various states in the United States that makes us optimistic with regard to the outlook of the next season. Certainly, as Ravi, I think impressively has demonstrated, we are delivering in R and D, whether it is in terms of regulatory affairs, getting products registered, but also in terms of delivery in our trials. And frankly, we think that there's a material opportunity to do well for patients with regard to Kineret. And on the back top of this, that should do well. We should do well also for the company. So if anything, we are more optimistic as we go into the the next phase of the company, but we stay cautiously optimistic. And I think on this note, we would like to, So let's say open the floor for questions. Then reenter the queue to ask your remaining questions. Our first question comes from the line of Eun Yang from Jefferies. Please go ahead. Your line is open. Thank you. I have a couple of questions. For Kymri and COVID-nineteen, You used this soluble Urokinase plasminogen activator receptor test. So how widely is this Has been utilized currently? And what percent of COVID infected patients would be Positive for this test? Yes. I mean before Ravi explains this in more detail, I mean, we have done an assessment that obviously this test can be run on the predominantly available diagnostic machines. So you would have in the case of Europe, I mean, this is high level estimates from the team around 70 and coverage of the clinics. But the question is also here, how convincing will be the data for physicians when they are confronted to make a decision when the trade off is actually, let's say, margin off, but maybe Ravi, you want to comment on this. Yes. I mean, I think we look at 2par as a poor prognostic marker. There are other poor prognostic markers as well, which have been well documented. And I think the treatment decision for the physician is if I've got a patient who has poor prognosis based on a number of factors, including potentially a supar test, what's my treatment choice that I would make. As well as being available on Existing machines, the CPAR test can be done in a near patient device. And the company that Factors that have obviously been working on different ways of testing Supa. We think that what this does is change the paradigm. It's earlier treatment and you're targeting poor prognosis patients. I think That's the critical thing. We're not talking about patients on intensive care, and we're not talking about treating everyone who comes through the door. We're talking about making medical decision. And this really is a sort of proof of concept to that idea that poor prognosis treatment with KINRA is the right thing to do. That's helpful. So with this positive data, Do you expect Kinare use to increase prior to any kind of emergency The use authorization. And then how soon do you think you could get this approved for Emergency use. Thank you. Yes. I mean, basically, I'll start with the first part of your question and then Ravi will talk about the approval process. I mean, as you know that and we have reported, Kineret is already used in COVID related indications as we speak today. Clearly, for those who are willing to spend a bit of time and we can reach the and disseminate the information. They will have to make individual decisions. And when we spoke to some physicians who are extremely excited about this data, and as It will definitely not do any harm to the product evolution, that we can safely say to what degree It will instill growth prior to any regulatory approval. It's difficult to assess, but I think there will be we will see some uptake and but this is very important news for patients and who are in need and who want to have a poor prognosis or at least want to improve their prognosis. Ravi, you want Maybe comment on the regulatory pathway. Yes. So we've had a well, Professor Jamaross and ourselves have had a productive dialogue so far with emergency task force at the EMA and that will continue. We've had inquiries from a couple of other agencies for the data. We will obviously continue those dialogues. We have had not a commitment Yes, for a timeline from any of those agencies. But we would hope to start submitting this data Within the next several weeks once we pulled it all together, we're showing you top line results. We now have the full sets of tables, listings and figures that we need for a full dossier. But our intent is to submit this really within a few weeks' time. And depending on the agency, the review process will depend On which agency and what data requirements they have. We know that this process can go fast. And I think we believe, Professor Jamar Velas believes and other people who we've spoken to believe this data is pretty compelling. Thank you. Thank Thank you. Our next question comes from the line of Erik Holzgard from Carnegie. Please go ahead. Your line is open. Hi. Thanks a lot for taking my questions. Hi, there. Just on consumption and And the Locto sales, how should we think about this in the coming quarters? Could you talk a little bit about some of this, I guess, early trends that You might have spotted in sort of markets such as the UK that has opened up earlier than other European markets Due to lower incidence of COVID. So any sort of comments on that? And should we expect sort of normal pre COVID levels of consumption in the second half of the year, that's my first question. Then I have a follow-up. Sure. I mean, when you look at the data that we have reported in this slide deck, minus 12% Q1 versus Q1 last year. And when basically, when you take into consideration that we had granted in the early signal, but still an important signal of 2.4% improvement versus Q4. You can see that some of The work we are doing with the association is bearing some fruits. Now we are not commenting on the different countries, but what we and see is that in the moment, things are relaxing and people are more prone to have an active life. That definitely stimulates the discussion with physicians and so patient associations to work then on a more normalized administration of the drug. And so this is what we can see. I think it would be not correct for me now to comment on the individual countries, but as a trend. That is true. So what we will see is and that's obviously what is the speed now of this recovery. We frankly, that's everybody's guess. But We think based on the data point we have obtained that we will at least improve, let's say, take back a significant portion of this decline now over the next I would think in the next half a year. We would see a significant improvement versus where we are today. Is this normal levels? I think normal is in today's world a big world. I think I would not go so far, but at least we will see a substantial improvement. We should see a substantial improvement where we are in terms of consumption based on the work that we are performing in conjunction with the respective associations and physicians. Thank you. And then my second question relates to BIVV001. I know it's a bit early, I guess, to talk about pricing, but just wanted to get your sense get the sense on your confidence level in getting Pay year support in Europe for premium pricing on a unit basis in Europe versus Elocta? Or do you see a risk that BIVV001 will be an opportunity for payers to save costs on less frequent use? Yes. Thank you. I think based on the payer research that we have conducted and let's say, no insights, We think that BIVV001 will be welcomed to the market. Whether It will, on a net price basis, improve our pricing on a cost per therapy. I'm not totally sure. And many also new entries into this market have not on a net basis, even if they had on a nominal basis an increase, maybe not necessarily have improved this. So I think This will be an important addition. This is our base assumption. If there is an opportunity for price increase On a cost per therapy basis, we will have a look at this. But our base assumption is that we will have the cost of per treatment in line with existing therapy. Okay. Thank you. Yes. Thank you. Our next question comes from the line of Christopher Udi from SEB. Please go ahead. Your line is open. Yes. Hi there. And thanks very much for clarifying on the products. Very helpful. I do have a few questions, But I'll start with one because it's got a few parts, I'm afraid. But so looking at consensus for Sobe, I'm always struck by the Enormous spreads. In my view, well, that really means that we on the sell side as a group are failing to understand the equity story. But and I guess it stands Reason that if we are, the market is too and the upshot of that is that when everything's been going well for a while, of course, the market tends to factor in the upper end of the ranges. But on the And once there have been a string of misses, the market starts to assume the bottom end. And I think the other thing here is When consensus deviates too far above actuals across too many areas of the business, we get into Undesirable equity narrative of death by a 1,000 cuts. So if you'll humor me by diving into the latest consensus There are a few products where I see sort of wide major spreads and a risk of big estimate cuts for 2022 to 2023. The aim of my question is to ask for your help to narrow the chasm a little by providing some clarity at this point on some of the basic assumptions underlying Yes. And so there are 4 major parts here. So the first is around pricing in hemophilia. So the Pricing pressure, if I understand it, it's so far that the price cut was in Germany. But since Germany is usually the highest, we We usually see then other countries following suit. So should we expect that going forward that other countries will also cut? And then the second one is on DOPTELET, where I'm way above consensus for 2022 because I assume you'd offered a discount For the 1st 2 years to get on formularies, excuse me, and that these discounts would then expire after a couple of years, bringing your net sales per patient In line with competitors. But now it seems Novartis are saying that it has no plans to extend its IP on ltrombopag, so meaning it would expire, guess in 2023. So what do you expect to happen to DOPTELET net sales per patient in the U. S. Over the next couple of years as this event sort of materializes? Then in the 3rd instance, I see consensus has gamma front increasing steadily through 2023, but I feel to see an inflection point until The RHLH launch in 2024, I mean, you've said you're fully penetrated in the U. S. In primary. You had left behind the European market for Hi, Mary. And it seems that you may get an approval in China, but the odds of reimbursement, a national reimbursement coming in within Year or 2 are probably well below 50%. And given that Gamifant is the 3rd most expensive drug in the world or so, it seems unlikely that it will be affordable Without national reimbursement. So is there something I'm missing on Gamifant? And then the very final element is the margin for 2021 where consensus had relatively high OpEx for Q1, but it seems to me that with all the trials and commercial buildup not starting sort of simultaneously at the start of the year, that this should ramp up gradually over the So I mean, do those assumptions hold water? Thank you and I apologize for the length of the question. Yes, indeed, we normally we ask everybody for 2 questions. And yes, and you have given me a few more. This or maybe what we do is we set up a separate call with you to provide to shed more light on this. But let me come back to some of the things that you said. Basically, with regard to DOPTELET, I think the what we can see, let's say, is that We have got on, let's say, on an important formulary recently, and that is benefiting us. And you will see that we will have we are on an actually very nice trajectory and that we are broadening now the product quite substantially. And I mean, it's Q1. I mean, give us a little bit more time. And I think you will share our optimism as regard to the product because We see some very strong signals also actually from our partner with Fozun. And we will have an impact in the European market and starting with Germany, obviously. And so I hear you that 2023, Novartis doesn't want to prolong its patent, but then they have a new formulation. Yes, I mean, I cannot speak for Novartis, to be honest. I'm worried about Doctor. Lent, but we will focused in claiming our turf with what we believe is a superior product. And we want to take a fair price fair share. And with regard to the price of Elocta, There the good news is that the German price, as you rightfully suggested, was at the higher end. So what we can do, what we can affirmatively say is that there is not the need for a reference price adjustment now across countries. Yes. So that basically will not now trigger necessarily other price reduction anywhere. To what degree now, people are enthusiastic to do price cuts elsewhere. You never know, yes, but we don't see it right now. I mean, I can only report, and I don't want to speculate what else could be there around the corner, but prices in other countries on a net basis were already, let's say, clearly in the range. So it is not I would see this as a correction. It's obviously a sharp correction, yes. And maybe regarding your other questions, we defer this to the next either the next round, if we are not next round or we otherwise have another meeting. It's not that I would want to avoid them. So maybe the next question then, operator, and we come Back to you, Christopher. Thank you. Our next question comes from the line of Peter Sestel from Handelsbanken. It's Peter from Hans Van Dencken. Thank you for taking my question. First of all, to Christopher, ACB, I mean, if you can't understand consensus, I mean, we are welcome. We will be glad to take him over at Headless Banking for Couple of hours and learn how to use Excel and do some modeling. But apart from that, my cockiness might come to complete now because I also have some stuff that I really don't Stan, I'd like to ask you to that, please. So firstly, on respect to the one off stocking In fact, in Q1 2020, I have in my notes noted that it was to the tune of 140 to 150, But I can see that combined for a lot of our production now amounts to SEK260,000,000. Is there anything I mean, are my notes wrong or because I believe that was sort of the figure you gave last year. So just to get A grip on that one and then I have a couple of questions later. Peter, your notes are okay, But what we factored in also is the reduction in inventory that we have this year. So it's not only the increase in 2020, it is also the reduction in this year. So that's why it's more than 200, yes? Yes. So we got a little bit the worst of both sides as a one timer this year. All right. Just to get that straight. And then I would like to jump Something as boring as costs. I note that your SG and A costs are lower incrementally by roughly 100,000,000 Clearly, some of the dynamics is likely savings due to COVID-nineteen. But what I would like to understand here is sort of the exact dynamics behind this increase And how we should look at this going into the rest of the remaining quarters for 2021, please? Thank you. Now, Peter, we are not going to guide any further on exact amounts per quarter. But what I said was that we obviously in Q1 are a bit held back due to COVID. But it's also the activity level that will increase in the remaining quarters. And We mentioned, for example, Doxolet in Europe, where the launch starts now in early in Q2. So there isn't that much impact in Q1. And then further markets will Gradually as normally is the case in Europe. And then we have pexotacoplan. But exact numbers per quarter, We aren't skipping, but you can expect higher levels than you saw in Q1. Right. Just one final then. The one off with respect to royalty adjustment that was included in COGS, could you please quantify that? Thank you. Yes, dollars 3,000,000 Okay, not that much. Okay, perfect. Thank you very much. Thank you. Thank you, Peter. Our next question comes from the line of Victor Sundberg from ABG Sundal Collier. Please go ahead. Your line is open. Yes. Hi, and thank you for taking my questions. The first one on Elocta. So if you look at prescription data, it seems like Elocta is going down in France, but Hemlibra is accelerating in that market. Is there any insight you can share if patients are switching from Elocta to Hemlibra? And maybe in general also, Where are you seeing most of these patient gains that you showed in the graphics before, given that some peripheral markets have a price That's a bit less than, say, in France or Germany, etcetera. I guess I'm looking at some more details on the patient loss and gains from last year and what impact competition had on This since it was not broken out in that graphic. Thank you. Yes. And thank you. I mean, yes, and let's say The market share evolution when you look at the French IMS data or IQVIA data, They look a little bit there's an amplified effect in this because they also typically include I mean, I'm not sure which data you're currently looking at, but they include also, obviously, the inhibitor patients where they have made significant progress. When you look at our own situation, it's correct that we have a couple of patients that we are losing in a quarter to HEMLIBRA and we are gaining less in France and we are losing, whilst we are significantly growing patients in markets like Germany, in Italy in Central Eastern Europe. So we and that basically is offsetting and overcompensating actually some of the losses. So we take a bit of pride because you understand that IQVIA data in Europe are not very detailed when it comes to certain markets. They are more accurate in France than in others. But we take in account, to be honest, of our market share situation by account, by hospital or clinic. So we have a very detailed perspective on because it is so important and essential to our business. Okay. Thank you. And Another question on synergies also. I'm not sure how to think about it and if Good. The near 7 update is necessarily a good thing for you with a price point. Yes, let's say that, that is $500 to $600 because SunTrust Got it for a very low price point there. And you having a smaller piece of the U. S. Market compared to what you have now with Synagis. I mean, on my numbers, you need to expand the number of patients by many, many times in order to offset that impact. So could you just comment on how you view the market impact Of potential nircevimab approval? I think you need to look at 2 scenarios and because it's a multiple effect. So first of all, you have Synagis that obviously is higher price. And the question and the data regarding the head to head comparison versus synergies have not been published yet. And I recommend you to have a look at the Phase 2 data of nivizumab, and you look at some of the signals that you may see there and whether you believe that some of those signals are the right signals for 29 week 3 gestation babies, yeah. Because the question is, do you want to take a chance for that basically 1% of baby population, who is very fragile. And you have on the other hand, Yes, it's less convenient, but you have a safety database in over 1,000,000 patients. We have got evidence. So that's one. So we don't believe that Synagis is just disappearing. This is our baseline scenario. Secondly, if my understanding is correct, and this is anyway how the trials are set up of nirizumab. The target is here not just our 1% of the babies, but RSV is not a privilege only of preterm babies, but is actually available in all babies. So when you do the math, and there are 4,000,000 of those in the U. S, so you do multiply 4,000,000 times $600,000 That's a lot of money, yes, I mean that you can calculate. And we are basically having access to 50% of the earnings out of this profit pool. So to be honest, I'm supremely confident and comfortable that if and I'm obviously sums up and I'm very hopeful, let's say, for positive outcome data of nivuzumab because I hope, let's say, and I think this is going to be good for us. So I mean, so that's really I mean, it's I'm oversimplifying the math just to make it simple and then you can making assumption on market share, but you know that this is a very significant product, hence deserves to be one of Some of these global priorities, yes, I think everybody can understand. And and we are very happy to be a partner in this regard. Okay. Thank you very much. Thank you. Thank you. Our next question comes from the line of Rosie Turner from Barclays. Please go ahead. Your line is open. Hi, good afternoon. Thank you very much for taking my questions. I will try and stick to the 2. So firstly, just going back to Kineret, I just wondered if you could give any more detail on where existing sales are And in which kind of patient population? So is it predominantly going in that moderate to severe population at the moment? Or Is it a kind of broader array of COVID-nineteen patients? And then secondly, on Pexa Tacopalan, how do you actually see that playing out in terms of the label? So are you expecting that to come after Kind of the virus, are you expecting it after kind of broader C5 failures? And do you expect the same label To come through from the U. S. And EU. Thanks very much. Thank you. I mean, maybe I'll start and then towards with regard to pexitoclonal later. Ravi should comment also. When you think about Kineret, right now, We have very limited data on we know roughly what the COVID impact is, but we cannot tell you exactly where it's used. Based on previous publications, you would assume it's more used it's less used in the ICU setting than it is used in the pre ICU setting. But to be honest, I don't want to speculate here, let's say, because we don't have an audit in this regard. With regard to pexetacoplan, We have submitted towards AIMA based on the Pigasus data. Hence, we are expecting second line, let's say, treatment and approval. And that basically is absolutely fine with us because We think that the patient population is large enough for us to make a significant difference. Raul, you want to comment on this? Yes. On that last point, I mean, the precise wording in the label, we're negotiating with the EMA right now. So it probably would be Difficult to comment until we've got final labeling. As Guido says, our View of the unmet need is very much in patients who will have failed Soliris for different reasons and there's mechanistic and clinical differentiation of pexadacoplan in that group of patients based on the Pega system. Yes, very clear. I mean, I guess there's still some possibility that you could get first line on the label or is that Kind of not one of the topics of discussion or are you not able to say? I mean, what I will say is, I think, whilst we're so far into the review, I'm also anxious about commenting on the labor language because we've got to negotiate it. So I'm sort of ducking the question. So I hope you understand why. Yes, completely. Okay. Thank you very much. Thank you. Thank you. Our next Question comes from the line of Christopher Udi from SEB. Please go ahead. Your line is open. Yes. Hi, back to you. Yes, so I guess coming back to my question would be on Gamifant. So where is the at what point can we start to expect that the addressable market becomes bigger than it is now basically? Yes, I mean, basically, I mean, the first of all, we have the main first inflection point is hopefully the approval in China, let's say that we expect end of this year. And then obviously, you have to get reimbursement. We understand that we will in order to be on the national list, we will have to find, let's say, in a price point that is acceptable for the Chinese authorities, and We will wait for the discussions that we will have in this regard. And the second, obviously, reflection point is going to be the approval of on the strength of the rheumatoid HLH trial, let's say, that is underway. And we hope that we can recruit patients fast to then get an approval in during the course of next year and then obviously make an impact. So that's really where our mind is. So till then, this is more of an incremental improvement. We are basically on the strength of being more efficient in primary patients and obviously finding patients that have a genotype precondition as such should be should fall under the wider parameter of primary HLH. Okay, terrific. Thank you very much for that. Appreciate it. Thank you. Thank you. Our next Question comes from the line of Peter Stestad from Handelsbanken. Please go ahead. Yes. Thanks for taking my follow-up question. Just had 2 very With respect to the development in royalty income from the U. S, up by 1% in CER, could you At cost and flavor, whether you received any sort of info from Sanofiprojections about whether They see flat sales or flat development over I mean, whether the decline has bottomed out in the U. S, just And secondly, just a brief update on Kineret's IP as it stands right now. Thank you. I mean, Peter, before Henrik comments, just very briefly. I mean, we obviously cannot comment on Sanofi's development. I mean, that basically is a privilege of Sanofi. But what I think you need to recognize this that there are 2 effects in the revenue development. One effect is how the business performs in the U. S, but the other significant effect given that from my understanding, Sanofi is probably one of the most diversified company geographically. It's obviously the effect They have China on stream and they have formidable force in other countries. So there will be some balancing effects. But we typically don't comment on Sanofi's performance. Henrik, if any no, I think Henrik also agrees that we should not to go there. Okay. Thank you. There are no further questions at this time. Please go ahead, speakers. Yes, I think thank you so much for your interest. These are obviously exciting times in many regards. Apologies that we had this time a little bit more explanations than we typically would have, but we felt it was important given the performance and the results. But as you can see, we are on we feel quite good about our business and really look forward to sharing our results with you in the forthcoming future and also then some of the progress that we have made to them. Thank you so much for your interest. Wish everybody a great week.