Excellent. Well, thank you. Thanks for being here, Dan Brennan, from Cowen. Day one of the TD Cowen Healthcare Conference. Really pleased to be joined with me on stage here with Udit Batra, obviously CEO of Waters Corporation. Udit, first of all, welcome.
Thank you, Dan.
We have Casper in the front row as well. Maybe, you know, Udit, you've been in the CEO role coming up on two years, right? Performance has been stellar. Stock's responded accordingly, though, you know, year-to-date, yourselves and others a little more mixed, but certainly 2022 was a great year. Kind of what stood out most in your mind from the results that you posted last year? Can you repeat the outstanding performance this year?
Firstly, thank you, Dan, for having us. I just simply start by saying it is. I get the chance to do all the blah, and it's my colleagues who do the hard work, and their resilience and their competence has been outstanding. I would say three things stand out. First, consistent and outstanding commercial execution. You see this in the results. I mean, 12% growth, almost 8.5%, 9% on a three-year stack basis on the constant currency basis. The margins are flat given such a strong FX headwind as well. Despite the investments we made in our adjacencies, the commercial execution stands out, and it's an outstanding and a consistent execution.
Second, my heart and Waters' heart still beats faster when we see new technology. I mean, this is who we are. It's been an outstanding couple of years for new products across the board. Across LC, across mass spectrometry, in consumables, in software, also new service offerings. It's tremendous, right? It's been really, really fantastic. That's contributed to our top line. It'll contribute even more going forward. Third, I mean, we do what we say. We said we'll first get the house in order from commercial standpoint. We'll recharge innovation, get a fantastic team in place, and then we will start to allocate capital towards targeted M&A that accelerates our strategic ambition, and that's what we've just done with the announced acquisition of Wyatt Technology.
super excited, but I think commercial execution, innovation, and now consistently going towards our strategic direction is what stands out.
Mm-hmm. Obviously repeating that outstanding performance in 2023, that's.
You're only as good as your, as your last quarter, as somebody told me when I took this rollover. Look, it's been a tremendous couple of years of performance. It comes off a high base, as you know. That said, we're not expecting anything to crash. Let me just sort of break it down, right?
Mm-hmm.
From an end market perspective, we're serving pretty resilient end markets, but the unmet needs are very significant, right? Not just in pharma. I mean, pharma, small molecules are still the largest volume in the pharma industry. Biologics, which are now 40-ish % of the pipeline, there we are solving very significant unmet needs. It's a very resilient segment, that's growing high single digits to low double digits. You go into the industrial segment, the constitution of which has completely changed over the last 10 years for us and for many others, but definitely for us, right? In the industrial segment, PFAS testing, a $200 million-$250 million market growing 20%, where we have an exquisitely sensitive instrument that we just launched last year, right?
Finally, in our TA business, where roughly 40% of the business is now again serving more resilient segments like battery testing and electronics testing. The end markets are resilient. Second, in those resilient end markets, it's the same formula. I mean, the commercial execution is tremendous, and we think that's not gonna change. We, the five initiatives that we announced, they're going super well. The instrument replacement cycle is still gonna go on. The service attachment rate, which has increased over 350 basis points in the last two years, we expect it to increase another 100 basis points. E-commerce is gonna increase penetration. Commercially, we think it's gonna be pretty robust. Innovation is contributing and across the different segments.
If you just look at biologics in particular, that's close to 30% of our pharma revenues. There we've introduced four columns, MaxPeak Premier technology, coding technology that is being applied to columns and now to instruments. The BioAccord is gaining traction across the biologics development stream. The last piece is our move towards bringing in new technology into our armamentarium that can serve our customers better. This is why. Really feel good about this end markets, feel good about the execution and now also with the M&A.
Great. We're hosting a panel later today with three different KOLs on the LC-MS part of the market, academic scientist, a pharma customer, and an industry kind of commercial sales executive. What, you know, what would you say would be two or three of the key questions that we should probe them on that are gonna give us insight on your competitive profile and/or the state of the outlook for the market?
Yeah, tell me if you discover something different. I'd be keen. Look, from an academic standpoint, if you're a professor, again, it's a question of needs. What exactly are the different unmet needs you have in your lab that we can satisfy? It's largely focused, in my view, in this case, on the different types of modalities. How are you answering questions for RNA therapeutics? How are you answering questions for cell and gene therapy? How are you answering questions for different types of new interesting biologic therapeutics? If you think about the pharma customer, if they're late-stage development in QA/QC, I mean, you would really not... I would be curious on what is their out of the set of toys that they have for testing biologics, be it monoclonal antibodies, be it AAV, what's working?
Mm-hmm.
What do you expect to use for high volume applications and what do you expect it to be a hobby that you're never gonna buy the second instrument? If you go to these labs, you find that they have enough money to buy everything, and they do. It's the second instrument that matters, it's the third instrument that matters, it's the third consumable that matters. Finally, for service, I mean, we are a very focused service company, right? We believe our service engineers help customers run experiments, not service any random instrument, right? We're very focused on the Waters side. I think this something we'll talk about a bit more in the next couple of months, even at Pittcon. 40% of the errors that occur in QA/QC are human errors.
You can attribute that to somebody putting the wrong vial in a tray or putting the wrong column. Each time you have a deviation, you have to record it in QA/QC, right? My question to the service person would be, how are you helping customers resolve that?
Mm-hmm.
Servicing instruments doesn't help you.
Right.
If the error is purely human and the customer's needed. How are you automating? How are you thinking about solutions that reduce these 40% errors to zero, so you don't have to go to your Boss and say, "Boss, the filing is gonna be delayed because I put the wrong vial instead of the one that needed to be tested." Right? Those would be the questions.
Maybe a question or two on guidance, and then we'll dig into the businesses. In terms of high level, your guidance for this year calls for 5%-6.5% growth. I think some were even hoping for even something greater, but I'm sure you'll always find people who want more. You have tough comps. You grew 12% last year, 16% the year before. The three-year stack, I think as you noted, you know, we calculate, you know, call it 8.5, and even the two-year stack for 2023 implies around 9. With COVID creating these extreme, you know, kind of recovery comps, what's the right way to think about the recent results, and how should we interpret your 2023 guide, reasonable or conservative?
It's the right starting point. I will not let you come up with the right with any sort of adjective that you can label it with, but it's the right starting point. The reason I say that is anytime you start a year, you have a set of upsides and downsides. We always look at uncertainties and say, "Okay, what uncertainties can help us overachieve, right? And where is sort of the floor?" I wouldn't say this is the floor, but this is a reasonable starting point, right? Why is that the case, right? The 5%-6.5%, and you talked about the comps already. Just take instrument growth, right? Just as an example. Classically, instruments grow 3%ish, and there's 50 basis points of pricing in there.
Let's assume we add 100 basis points on top of pricing, right? On instrument pricing, so it's 150 basis points. Then there's 100 basis points of Waters out executing the market. There you have 5%. That's the lower end. The six and a half, well, 55% of our business is consumables. The six and a half is a similar math you could do for our consumables business, right? I think that is a reasonable starting point based on historic averages, despite the fact that we come off such really euphoric growth. The uncertainties that can make you outperform, and if this is largely your question, the uncertainties are China, right?
I mean, I think you would have to be super brave to say, you know, we assume China is gonna come back in Q1 or Q2. I mean, we're watching. As these uncertainties resolve, there is room for upside. Second, we think our commercial execution can do more than 100 basis points if everything goes well. We think our innovation can do more than 100 basis points if everything goes well, right? That is an uncertainty on top as well. Third is traction that we get with the deal, right? We assume sometime in Q2, the close-in sometimes in Q2. If it happens a bit sooner, you get an upside. If the uptake is faster, you get an upside. I mean, that's how we think about our guide.
We set a baseline and we say, "Okay, what are the uncertainties that can take us up?" We are pretty diligent about quantifying them and holding people accountable.
Got it. Got it. Right. The adjacency and the, and the innovation in that base 5, they're really not in there. That's really upside for you. Is that fair?
The commercial execution and innovation are commingled, right?
Mm-hmm.
When we do the replacement, when we look at the replacement cycle, the replacement cycle occurs because we had Arc HPLC as an alternative to the old Alliance.
Mm-hmm.
The replacement from our spec occurs because you have the Xevo TQ Absolute and the Xevo G3 QTof.
Mm-hmm.
A bit commingled.
Mm-hmm.
Not all of innovation momentum is in there, right?
Mm-hmm.
For many of these cases, it's the second year, or even the third year of these products. You have a higher base to go off.
Right. Okay. maybe in terms of backlog, can you give us a little flavor of what it looks like? I think on the 4Q call you said orders were as strong as ever. any color about like the backlog and/or how orders finish a year, and what that means for the 2023 outlook?
Yeah. Look, I think, Dan, your underlying question is instrument growth dramatically going to slow down?
Mm-hmm.
I think you asked it now three different ways. Let me just address it directly. The answer is no. We're not seeing any signal of the instrument growth crashing to a complete negative number. I think that's the fear that people had. You know what? We are growing 16%, 20%. Now it's gonna go, oh, minus 15%. Not at all. Right? We're not seeing any changes in the demand profile. Let me take this in turn, and then I'll explicitly answer your question on backlog at the very end.
Mm-hmm.
It's important to understand the end markets are resilient. The demand we can all read about, we can all understand. The demand for biologics, the demand for better cell therapies and gene therapies, the demand for PFAS, the demand for battery testing, that's 80% of our business. We are coming up with better value propositions than there are, than there exist in the market across the portfolio, and the commercial execution has been great. There is no reason to believe that this, in this resilient end market, you will see a dramatic change in demand, a dramatic change in execution. None of that is gonna happen, especially on the instrument side. To your question on backlog, we drew down the backlog slightly in Q4, but for the full year it was a bit higher than previous years.
We don't want to increase backlog much further because it's actually at an all-time high, and this is what I commented on in the call. Largely because our backlog was at a very low level two and a half years ago. Because the demand has been so high, we've been able to build it to healthy levels, and it's healthy enough now. It'll go plus minus delta X. I wouldn't look too deeply into if it's gone up or gone down one quarter. If it's gone down by $100 million, we'll have a chat.
Mm-hmm.
Right? Short of that, I wouldn't look at small deviations in change in backlog, right?
Mm-hmm.
I think that is an important thing to keep in mind. Now it's at a steady state, and there will be a variation around it, sometimes up, sometimes down. Gone are the days when you were just building, building. Now you're at a point where you're sort of at a steady state. We like it because any more, our customers are coming back and saying, "Hey, why are you not shipping the product?" Right? I think that's a better way of thinking about it. Demand is superb. The backlog will move around a certain standard deviation. Nothing to be thinking more about.
Would you think orders could continue to grow year-over-year, I mean, you know, on the bioproduction space, investors got very nervous because growth got so strong, and then you know, the order rates were off the charts, and now orders are negative, and we're doing two years back comps, three years back comps, Instruments obviously had super robust growth. Like, 'cause, you know, investors are really focused on this order outlook, what's the outlook for orders, call it, you know, in the final period?
Again, fundamental. Look at fundamentals. We had no COVID tailwind to speak of.
Mm-hmm.
Right? We had nothing that was sort of a one-time impact.
Mm-hmm.
We basically had a drop in access due to COVID. That access came back, we are doing well. The rest of it is basically outstanding execution, right? If the market is, and I think we drew this waterfall in one of our discussions. If you look at our overall growth rate on a three-year basis, it's 8.5, 9%. The market used to be 4, 5, 6%. Assume it's growing a little bit faster due to 100 basis points on a three-year basis of pricing, right? Let's say it's instead of six, it's 7% at the high end. Waters still has 200 basis points ahead of the market.
Mm-hmm.
That is directly attributable to commercial execution and no innovation and now traction adjacencies. We don't expect the algorithm to change at all.
Mm-hmm.
Right? The 4%-6% as a baseline growth will definitely slow down because you have a high base that you're coming off, but it's not gonna go to negative.
Mm-hmm.
Right? That's why the 5% to 6.5% that we...
Mm-hmm.
is based on sort of a long-term average and saying the long-term average is not dropping. In that, there's an assumption of better pricing than the past.
You have a nice waterfall chart on the adjacencies. I think it's a $12 billion TAM growing double digits. Just what's the expectation of the contribution over the next, say, like five years for those adjacencies to your organic growth? Can you help us think through. You know, you have nice slides, and you show TAMs and growth rates, but between bioseparations, biocharacterization, LC-MS diagnostics, batteries, and sustainable polymers, which of those, you know, one or two do you think will be the most meaningful?
I mean, to first just give you the answer. Instead of being mid-single digit, now you're mid to high single digit once these start to gain traction.
Mm-hmm.
Right? The case in point, then you rightly said it's another $7 billion in our TAM, and it's growing high single-digit to low double-digit already as a weighted average. Right? You add it, and you get to mid- to high single-digit growth that we would expect in the midterm. We've said this in the past, and we start to see traction. Now, rather than talking about abstractly about the numbers, let's just talk about the specifics. Let's talk about bioanalytical characterization and bioseparations. We said bioanalytical characterization is roughly a $1.8 billion market, growing 10%-12%, if memory serves me right. In that market, roughly $600-$700 is LC UV and LC-MS, and similar size is light scattering. Right? Guess what we just did?
We entered light scattering, right? There's a small portion that's left over of other techniques as well. We think this is an area which is very tangible. In biologics in particular, you see a significant need for characterization. Maybe just sort of digging in a bit deeper...
Mm-hmm.
there is need for raw material characterization. If you think of monoclonal antibody production, you're using cells to produce monoclonal antibodies. Cells work better in certain environments. This is called media. In fact, it's called a fed-batch. You feed certain nutrients to grow the cells.
Mm-hmm.
The cells produce more protein. Guess what? In that mix, there are 200 different components. A small change in any one of those components can result in a dramatic change in productivity of your cell line. Guess what technique helps you analyze it? LC-MS. Right? We're getting LC-MS into raw material characterization. You go further downstream, process development, process characterization, in-process testing. There's LC UV, LC mass spectrometry, and now another technique has entered the fray, light scattering. What UV and mass spectrometry tell you about chemistry, light scattering tells you about physics. UV and mass spectrometry tell you about the structure of the molecule, what amino acids are there in a protein, and mass and light scattering tells you how big it is. Is it aggregated or not? Right? Finally in QA, QC, UV is already present.
We've made significant headway with mass spectrometry. Now light scattering is in fact further ahead of mass spectrometry. In all, just I felt it's easier to sort of double-click on an area rather than give you an abstract answer. The math you can do yourself. Why mid single digits becomes mid single digits to higher digit is just simple arithmetic. Double-clicking tells you why we are so confident. Don't ask me if it's three years or five years or 10 years. I mean, it's gonna take some time for different types of applications, but the opportunity is already here.
Okay. Maybe just kind of digging a little bit on the Waters specifically. We've already hit upon instruments a few times, but when you separate mass spectrometry and LC, I think mass spectrometry's 1/3, roughly LC 2/3. You know, you ended on a really strong note in 2022 with mass spectrometry. I think you said it grew well into the 20s over the course of the whole year. Maybe give us a sense, like where was your mass spectrometry franchise prior to you joining? What was the strategy to regain share? Kinda help us frame the opportunity going forward in mass spectrometry.
Yeah, yeah. I think it's summarized by just one advice I got from an analyst and then later from some investors as well, that you should exit mass spec, especially high-res mass spec, because you guys have been losing share. And several of you in the room, I don't know if one of you also was saying it as well. When you have such significant share, you don't exit, and you don't think about exiting lightly. Thank goodness we didn't, right? We had a whole set of new products coming in, meeting very significant unmet needs across the board. In high resolution mass spec, we introduced the cyclic. It is the only instrument in high-res mass spec that allows you to look at the shape of a molecule in addition to its size.
That allowed us to gain traction, and it's now in the 3rd year since its launch, and now we're gaining a lot of traction, right? The early application work was great, but now we're gaining a lot of traction. In high-res we started gaining traction. For high volume application with tandem quads. We talked about the Xevo TQ Absolute for the PFAS testing area, but also our Xevo G3 QTof. These acronyms you don't need to remember, but all you need to know is that this particular instrument is used for high volume applications, and it is one of the best in the industry. The need that it meets here is that it's on the same software that is going to be used in QA/QC. This particular mass spec is on Waters_connect. Waters_connect is the exact software that is on BioAccord.
When you do an experiment with our Xevo G3 QTof, it can be seamlessly transferred to the BioAccord, which is the leading instrument in QA/QC. Mass spec's revival is on the back of incredible innovation, right? We've just started to get traction with some of the newer platforms, so I'm super excited about it.
Basically, you inherited this R&D engine maybe that was, hadn't really manifested in the commercial sense.
Yes.
You've got the commercial initiatives, the adjacencies, but specifically, are there any kind of, when you think strategically in the mass spectrometry franchise, looking forward for the next few years, like what's going on? Maybe things we haven't heard of today in R&D or like what's the strategy from here?
I think, we have very strong and astute competitors. I've already been blamed by my team for being super transparent about our type, our pipeline, which I think I have to stop doing. All I can say is we are targeting very clear unmet needs.
Mm-hmm.
In just the products that have been launched recently haven't even gained enough penetration. The Xevo G3... Xevo TQ Absolute.
Mm-hmm.
we launched it in environmental testing for PFAS testing, right? No amount, however minute, is minute enough when you think of PFAS. These are called forever chemicals. They are in your system forever and ever. public health authorities and governments are saying, "Look, you've got to get them out of the system." Guess what? Xevo TQ Absolute can detect these at 1 per quadrillion. That is a teaspoon of sugar in an Olympic-sized pool. That's not the requirement today. It's parts per billion. Even if they go to parts per quadrillion, this instrument's ready to do it.
Mm-hmm.
It has not even been launched in the food arena. It has not even made it into drug metabolism, right? You can see there's a long runway ahead of us.
Mm-hmm.
On the software side, we've just started to gain traction with waters_connect as a platform for mass spectrometry and with the BioAccord and now with the Xevo G3 QTof. Our ambition is that it becomes the new platform of choice for LC-MS. You can see early stages of uptake.
Mm-hmm.
I mean, it's only the second year for several of these instruments, so you should see a nice runway ahead of us.
What's specifically baked in for 2023 for mass spectrometry and kinda given the differential price points?
I've given you enough specifics on guidance. I think you should assume that the overall instrument growth rate is around five-ish% and a bit faster for mass spectrometry, a bit slower for LC, but that's about it for now.
Got it. Got it. Okay. I guess I'll stop and I'll see if any... I mean, we've got about 7 minutes left. I still have a bunch of questions left, but I'll look to the audience, see if anyone has any they wanna pose. All right, we'll keep going. Kinda software. You know, the company's always in an enviable spot, you know, with Empower, the gold standard in LC, and you've touched upon waters_connect a few times. How does it, you know, how do investors really conceptualize software and how does it really manifest in terms of whether it be stickiness behind the scenes, an instrument, does it manifest as a revenue line? Just how do we think about software as a value-creating asset, if you will, for investors?
Yeah. I mean, often when you think of the instruments industry, you think of a razor-razor blade model.
Mm-hmm.
Very often people say, "Well, you know, the razor is the instrument and the razor blade are the consumables." That is not entirely correct. The razor is the software in the compliant universe.
Mm-hmm.
The razor blade that is replaced every seven, 10 years, depending on the instrument, is instruments. The razor blade that is replaced even more often are service and consumables. The razor itself is the software. Why do I say that? 80% of the drugs filed with the FDA, just two years ago were on Empower. Empower is by far the preferred compliance software in the industry. Now, the question is, how do you make sure that as you go forward, all biologics also go through Empower? How do you enhance Empower in such a way that you create a bioanalytical ecosystem? With the acquisition of Wyatt, we sort of put the 1st or the 3rd pillar in place. The 1st one was UV, the second is mass spectrometry, now the third one is light scattering. Right?
There's probably two or three others that one puts in, and you create an ecosystem eventually where large molecules are like small molecules, where you use one software. It doesn't matter what instrument you have surrounding it, but that software is used to file the data with the regulators. For us as Waters, the first step was monetizing our position, right? We did a lot of work on that front, and we've been pretty open about it. We sort of started charging people for plugging into Empower because we spend a lot of money keeping it service able. Now it's a question of creating the next generation of value proposition.
We're monetizing our incumbent position and then in parallel starting to create new features, and bringing in new instruments, especially in the biologics area.
We could spend the entire time on Wyatt, but we're just gonna probably have one question here given the interest of time. Well, maybe one or two. The business seems like a great fit. It's been growing 20%. I think your guide of low double digit seems implausibly low, but maybe is there something that was atypically elevated in the Wyatt growth rate? Is there some risk of a shock or slowdown from the deal?
Implausibly low. That's good. I was gonna say it's conservative, that's correct.
Right.
largely because the 20% had no additional idiosyncratic drivers like COVID.
Mm-hmm.
The 20% is clean 20%. Let me sort of give you a bit of context on it. In the 20%, 80% of the volume for Wyatt is in biologics.
Mm-hmm.
The 30 out of the 80, and 30 out of the 80 is viral vectors for cell and gene therapy, and a little bit of LNPs for RNA delivery. 50 is polysaccharides and proteins.
Mm-hmm.
These two areas are growing rapidly. The application for AAV is the one that's expanding dramatically.
Mm-hmm.
Right? So Wyatt has gone from a polymer testing company, a colloids testing company, a materials testing company, dramatically in the last three, four years, to becoming a biologics testing company, right? Yes, there is a bit of conservatism built in the low double-digit, largely because this is a big acquisition that Waters has made after several years, right?
Mm-hmm.
I think that's the simplest answer to the question.
Got it. Okay.
No, no COVID, no idiosyncratic changes.
All right. Okay. maybe on India and China. I mean, India hasn't really come up much in the conversations on some of the recent calls, but I think the group mid-teens in 2022. It's a significant part of your business. I mean, where does it grow in 2023, and kinda what are you most excited about?
India is superb, right? I mean, I was at the APAC sales meeting, Asia Pacific sales meeting just two weeks ago, actually last week in Bangkok, and I met the India country head. I mean, there is still a lot of excitement with the amount of volume that we're seeing on small molecules, right? There's been a lot of repatriation of generics manufacturing into India, and Waters is by far the leader in that space, and we're seeing very significant growth on the LC franchise. What's happened then subsequently with the mass spec business, the penetration of biologics has started to increase in India, and we're seeing the same thing happen in India. India never really fell off in terms of commercial execution, but they're benefiting a lot in terms of new products that are being introduced.
Last, about six months ago, we had 12 of our top customers from India visit the U.S. They went to our Immerse Cambridge lab, to see our, all our new instruments and equipment. There's a lot of excitement. We see significant growth drivers in India going forward.
Mm-hmm. Kinda how do you feel about China for 23? You know, obviously there's a lot of excitement, but still uncertainty. I know you guys were high single digit. Just, you know, what are the error bars around that and kinda what are you hearing on the team's end?
It's not any different than what we said before. I mean, the first thing is, look, people are coming off a very harrowing time, right? You wanna make sure that your colleagues are safe, their families are safe, and people are taking an extra week or 2 weeks for Chinese New Year. By God, please do it, right? Just make sure that you're comfortable and confident that you're coming back into the workspace healthy and safe, right? That's the first priority by far. In terms of China coming back, the drivers are very fundamental, you know? I mean, we're in the area of pharma. We're in the area of, with biologics being a significant driver, contract manufacturing still being a significant driver, local contract manufacturing being a significant driver, PFAS testing, battery and electronics testing.
China is going to come back. Now is it gonna come back super rapidly, which it does usually, or is it gonna come back a bit slower, and we'll see more momentum in the second half of the year? It's anyone's guess. That's one of the uncertainties that we have, in terms of the upside that we see for the balance of the year. I expect, and early indicators are people are coming back. There's a lot of enthusiasm to get back with the customers, ensure that we're gaining traction again. I would wait as more, until more data comes out.
We have a minute or two left. Really high level pharma, just kinda pharma R&D, the tone of discussion points. You know, Agilent mentioned like, you know, budget, kind of decision-making is normalizing. Just, you know, what are you seeing from your big customers and kinda how have you know, just from a high level, you know, what have you contemplated in the guides?
Generally very positive, right? I think it's a paradox right now, right? I mean, you read a whole bunch of things in the newspapers and the economists are saying this and there's a whole bunch of people write about how everything is slowing down and all decision-making is getting pushed into the future. I'm sure our customers are getting affected by that, and they're saying, "You know what? I might not buy something in week one, week two, or in Q1. I'll buy in Q2." We're not seeing anything getting canceled. Not a single order has been canceled. Very few have been delayed, right? We're not seeing anything fundamental change in terms of behavior.
Mm-hmm.
in pharma. The pipelines are the pipelines. I mean, you know, I mean, I spent most of my career in pharma. If you have a good product, you don't want to delay it.
Mm-hmm.
Right? If you have something in late-stage development, you want it to get commercialized ASAP. If something is getting commercialized, every minute that passes by, you're getting closer to the genericization. You don't want to lose any time. I mean, it makes no sense for anyone in any leadership position for pharma to delay anything, right, given where we are. I'm sure people are human beings and they read this and that, and there is a bit of that.
Mm-hmm.
the paradoxical decision-making. We're not seeing anything impact our business that makes us say, "Wow, I mean, this is a complete and dramatic change." You can expect us to be transparent, and I wanna say this quite openly, both on the upside and the downside, right? We believe that we have a certain trajectory that we have said that we will follow. We have talked about predominantly in this discussion about uncertainties on the upside. There can be uncertainties on the downside, and you will not see us surprising people. You will see us coming in and talking about that rather openly. I don't see anything today.
Mm-hmm.
I just wanna be totally open that there's always transparency on both sides, and we spend always more time on the upside, but you've gotta make sure that you that you're transparent on both ends.
Terrific. Well, thank you, Udit, for being here. Thanks, everyone for joining us, and have a good rest of the conference.