Organon & Co. (OGN) 2 May 242024 Q1 Earnings call transcript

I'd like to welcome everyone to the Organon & Co., First Quarter 2024 Earnings Call and Webcast. [Operator Instructions] I would now like to turn the call over to Jennifer Halchak, Vice President of Investor Relations.

You may begin.

Thank you, operator. Good morning, everyone. Organon's XXXX joining Call. for you First Earnings Quarter Thank Chief Chief Kevin who highlights; With will our are guidance. Organon's performance and Officer, Executive and review Walsh, operational me today and Ali, Officer, who strategy will Matt Financial cover Q&A for Arjona Organon's Camilo of this Also Head the call R&D, of joining portion us Juan Ferreira. is call our at visible on Investor available for those call we be a referencing this Presentations be and will Events Relations also presentation you the during webcast. This on section Today, following Organon will this that www.organon.com. will be our presentation of of website

Before or we statements subsequent this with risks Exchange certain conference like implied materially Actual are caution during information filings. forward-looking with due which include will business, company's listeners differ and associated and the forward-looking statements. in begin, that I would call Securities company's XX-K results periodic management stated discussed uncertainties those by discussed could our to and the the Commission, including filings to from by

In to measures should press on non-GAAP turn presentation. the A measures these in over GAAP to the substitute call the measures of accordance would now addition, included Ali. GAAP. Kevin release financial is to supplement measures this non-GAAP not call for conference to and with financial certain and considered comparable a which I like prepared our be reconciliation call, in will discuss we a CEO,

And a targets, quarter end, year solid today's a improving Jen. financial that and you, results. to thank first call, we'll deliver this and Welcome very first the was future ourselves everyone, for position to financial our start. clear our with morning, quarter growth. positioning talk where Good to We our entered focus XXXX about XXXX

Women's to quarter of the rate X% growth to franchise contributing constant a XXXX, billion, grew For franchises report the currency. I'm revenue that pleased health XX%. all at $X.X X with was first

was the financial diluted strong EBITDA of for XXXX, strengthens we and growth in continued The representing brands in franchise $XXX ranges. our year with the stable quarter, adjusted our EBITDA first and full Our was those $X.XX. its margin are our performance X%. and performance grew guidance XX.X% In adjusted affirming established quarter XX%, million, adjusted business EPS the first Biosimilars a conviction

before remain deliver of We adjusted ability in growth can our capital a to will we committed towards currency in third be $X to a to delivering From we year we allocation basis, confident onetime costs, constant business EBITDA in revenue are this our number with billion margins believe better. or cash remain last year driving that line free year generate continue and full flow standpoint, that of on and XXXX.

service with by flow to aligned beyond couple of transactions also to That of and mission strong continue of definition agreement the returns, migraine in in flexibility the assets. These Lilly of dividend, commercial offering end transactions the types transactions women's we leverage make business with Eli of do solutions ratio progress solid but a the our importantly, biosimilars to our achieving will This license narrow reproductive recent health have to completed on below last provide financial Xx in in the and XXXX development cash comfortably with have line years. health. includes X they're

to on performance. Moving our discuss franchise

XX%. achieve product for long-term the took growth led position the that NEXPLANON NEXPLANON. appropriate successful quarter and XXXX product. the currency the in XXXX. growth growth by for actions first revenue confident constant was to can The year, women's NEXPLANON's We in remain we see opportunity last first robust health franchise The growth was quarter, we

brought up rest timing the which a buying stability in of our price was shift of up XX%. patterns. the growth was list U.S. in reflected increase, world Year-over-year the to The and distributor XX%, U.S.

going shift, less NEXPLANON this volatility of quarter-to-quarter forward, result results. a in we expect As

the strategy, well leadership NEXPLANON's channel in our list in year, the contraception, growth. demand the driven price For benefits as pricing we physician of XXXB by of be including as the expect to U.S. full growth and management

markets, ex-FX strong Lamera be Outside quarter driven cited the a for U.K. our as increased the NEXPLANON region driven XX% meet U.S. in the the first XXXX demand of and the to year the our demand larger better and U.K in region in which like Outside ability as in full those France, in growth by in Canada. well priority in us performance will by grew XXXX. for as continued access increased U.S., markets the markets the we the

$X nearly is will XXXX, there still not the believe mentioned quarter, in significant until rate run I up As billion NEXPLANON will U.S., XXXX. view, occur we in growth until of for we exclusivity runway which, the NEXPLANON believe a reasons. every annual beyond be specific for in for on X loss our And XXXX

this of assumption be us and and planning FDA our a year that differentiated is preferred research our study XXXX. know with review that and label X will to our it on close to we market in label X-year data is First, which duration providers. pending approval, from on A market we of is X-year exclusivity years X-year will give use by able track claim, women

develop market We aspects have protection to programs to we the that before Second, with would device own generic on IP coming applicator believe it. of and XXXX. to their go then device training along any have

we could complex until strong protection device challenges and in market to pose post-LOE when equivalents. the device can significant combinations device drug development and drug similar terms therapeutic to expired on would both be X-year not showing that start implant alter of it's with due a have complex XXXX fact the third, demonstrated IP might applicator. see So which performance, And product have

further, sales confident erosion come, So when in curve. of and do competition traditional overall, we're a expect does we Nexplanon the not longevity generics

to on franchise. fertility Moving our

X% ex-FX. As about essentially or business down was expected, our global million this about quarter, fertility flat $X

U.S., significant customer, very of a onboarded a and in in Offsetting end which at of buy worked in that from the commercial FOLLISTIM performance year in first fourth resulting digits, grew the strong we have the arrangement, recall demand. a double strong You'll we XXXX the spin-related in China, U.S. quarter quarter. was in we in growth last strong benefiting that largely fertility through exited

XX% high of fertility technologies and in on full provinces momentum expect our expect XXXX, growth in demand year other where of China in in up implemented. reimbursement key been to the see fertility We supported those for China Beijing, business growth revenue north our and in with coupled of reproductive like with continued the launches by Together, global for solid in expansion assisted basis especially make markets, of U.S. XXXX. demand are supportive new strong business, single-digit we the fertility a in footprint markets has

biosimilar grew XX% and to business, first be our move Let's continues now in solid growth a quarter which the Organon. pillar to for

franchise. Brazil Biosimilars a indicator Affairs, we Canada. In saw HADLIMA. who from from double-digit Biosimilar other continue managed we critical performance, within driver HUMIRA volumes favorable very HADLIMA another our as for in markets rapidly QX, with XX% incremental on of HADLIMA and we to we the basis for uptake province traction strong HADLIMA convert seeing as in Biosimilars which but tender primarily XXXX in market. with the the We accelerating of key is the a our XX see the in and to a days to government utilization in mandated expect is Brazil, was than business U.S., to strong characterize fourth growth would be of Behind timing through global Biosimilar X exclusively Brazil, XXXX to In of this a payers' for that factor transition particular. ONTRUZANT, the in good XXXX ability progresses. are conversion quarter getting ONTRUZANT, very of upside. especially of province strong by strong growth in should more to for In U.S., year Canada, The HADLIMA come for Veterans This carrying by of Biosimilars are will RENFLEXIS performance be patients convert opportunistic driven

years. have every Biosimilars couple of previously new aim As about, we asset launch talked to is in our a

or We rights that X products, A is PERJETA to example this with and Biotech, pertuzumab molecules have both Shanghai of global commercialization or Hong execute great Henlius beyond Organon on for are rights candidates. outside our China, collaboration denosumab trials biosimilar investigational progressing. exclusive Clinical to Mainland these XGEVA assets where commercialization on will licensed well Taiwan. positioned been and XXXX. have Kong, Prolia of Macau we and

primary III denosumab endpoints. In clinical fact, announced we met biosimilar that the just for recently trial Phase comparative the

contribution candidate regulatory VBP X% offset resilience late filings XXXX. in and U.S. grew the this demonstrating followed in the discussion pertuzumab biosimilar XXXX of X rounding candidates by more for China the in And U.S. which certain early the than agreement markets, during in migraine drugs was to ex Impact business. then filings brands, expect with established commercial the denosumab Emgality REYVOW. the quarter. recent out from first the for XXXX from our occur and the including initial EU in or X the FX biosimilar for by We

injectable We last steroid action. recovery a products also following saw in market our year's

detail Matt XXXX, For go we more flat portfolio XXXX. established the about achieve into performance the and on full ex-FX basis an brands pushes year on established pulls for will and expect brands to

the of been These as fourth as which year U.S. the last the should factors region late of addition to X contributor assets rate significant in spin. in and Organon's revenue both pressure the since as driven X% ex-FX loses by uptake the in take well dynamics post-launch. EUCAN well Moving in The as ONTRUZANT. The migraine ex-FX APJ quarter, geography. strong LAMERA quarter having of in X the just Europe steroids, which both offset injectable U.S. XX% markets now was a quarter growth as the quarter recovery be Mexico. associated quarter XX% still the this HADLIMA grew and up for it quarter. JADA in benefited third performance ONTRUZANT fertility, the in channel driven year growth Brazil where well we was solid The has the growth XX% to of Slide volume exclusivity of opportunistic and year. trend ATOZET the NEXPLANON until as was a by primarily of mentioned. at tender across in look I in the access with which by the NEXPLANON X, this ex-FX by in down of region growth months in of driven first performance We're

results we pricing to revisions stock quarter. ATOZET through ex-FX for year year But of last expect the was ROSUZET. in national a We and were out competitors some China some of the from it when in favorability and Japan challenging be LOEs as lack the to face the down as X% work we year. Overall, XXXX, is the of China quarter economy-related in year. as progressing are year full very pleased in particularly we with grow last China saw challenges half very execution the through expect the Operational lap we back first the nicely. of we

assets desired And our management, have I unlocked for forward on in us to moving Mercilon while the Primary progress portfolio. fit the X Dysmenorrhea a earlier, in addition deals is about development making to there the study within and X-year NEXPLANON also we're life finally, Japan. potential eye our of value Henlius financial spoke Shanghai cycle be In that biosimilar in clinical smart We yet with our as profile in company. that

OG dosing later assets and treatment. for On the next Phase study for also a endometriosis progressing this is year. treating are ] We're PCOS investigating which to current [ awaiting approach novel towards the side, human readout we for OG-XXXX related both progressing acquired symptoms our our Forendo innovative there program is targeting II year, first through a XXX in well, no

through therapies. collaboration Additionally, for side our to nonhormonal but also It's things, preclinical Organon related Cirqle, not are great anticipating on method with is we innovative in novel future only commercial for growth execution which happening to positioning a see contraception. the progress of data our

let's the financial will Matt, call go over into turn detail. who results to in more our Now

Thank Slide Beginning you, on Kevin. X.

from be spreading from midpoint slightly suggested revenue which you bridge working every the the the February did from in continued that injectable revenue mean revenue than quarter of We first in followed year. quarter. of consider could we in especially purposes, our under by as recovery of growth and modeling if other in you're XXXX evenly $X.X drivers quarter well NEXPLANON volume a neutral namely biosimilars, better DIPROSPAN, first the the steroids quarter JADA. Outside Here, range. that revenue, billion we would over for FX, fairly for driven guidance little as the were stronger would year-over-year. In by

the LOE in We'll Taken discuss the saw reflects totality, of was ahead The drivers included XX% of price about had Japan. in impact of of of detail impact about headwind benefits and X outside quarter muted implementation QX $XX parts our quarter. impact expected round and been in and the exchange $X the impact which our in the the declining U.S. in HYZAAR. NEXPLANON other the also to Foreign REMERON manufacturing pressure margin to China have in spin-off expectations, X strategy of business, lower-margin quarter, July function more margins being and as LOE these The other we a than in was the business drove negligible biosimilars Round was had an approximate ATOZET more a There effects degree, translation contract million first revenue, of quarter. finished of that's XXXX and $X we U.S. generated lesser VBP our shortly. fertility. In Other, Supply in Merck the the expected. since in favorability in captured with our And point lingering pricing the reflects first percentage in lastly, which arrangements of we million million or that particularly that from pricing first of

to turn let's performance Now by franchise.

modeling target our future we slides X over hold. your the has the next my the near-term as I may and to those quarter relevant most where been convention, what As about areas ended we will think comments to

on Let's start health X. with women's Slide

took constant annual full As first January. NEXPLANON could U.S., growth growth in of the a Kevin strong robust on mentioned, With achieve price basis. year we growth and which increase NEXPLANON the currency we this for in such the benefit expect in double-digit the our quarter in year.

two growth first second referenced. that the XXXX towards the skewed the QX In Kevin fertility, half, For year. issues be will half of be the we'll absorbing

also of First, fertility related U.S. exiting stocking new arrangement China volume the launches and the and commercial benefit expect year, the chain Kevin the half lapping other what buy-in plus, second, of difficult last contract resulted second large we was expansion provincial that is a we U.S. In the a reimbursement the initiation, from will initial have year from the environment in in referenced. in supply in temporary growth as markets, to of spinoff-related which the

Slide been through success the X. biosimilar have ONTRUZANT had on biosimilars Brazil. we to competitive of ONTRUZANT, in key we had Turning benefit a With a of quarter, had as HERCEPTIN of in supplier incremental And if volume additional we would the have these from volumes tender. I incremental note quarter, for coming upside in that additional from upside would that not growth down this Brazil. the

declining objective a each continues been In be it competition fact, our global to this that to this HADLIMA, due only year. in first given on And ONTRUZANT predict basis, we'll that strong markets. and market had that difficult but a year quarter, product is expect other this has we U.S. to say we grow sequentially will evolve, on to quarter

XX. Slide to Turning

in FOSAMAX's in the inclusion in has and established later third go up the XX VBP see late the in pick pulls of market. LOE product us will EU and XXXX. driven the pushes ATOZET this year, that September year, expected that quarter. doing for for in in been through Let's round talk very about on We'll well full impacts year brands by

expect headwinds to those continued offset We growth. be volume by

example, the assets new Emgality in For migraine REYVOW. contribution and from

result Non-opioid the and in Derm steroids growth change. about for to the recover that in factors brands with injectable FX to here portfolio. These XX% performance XXXX Pain expect in ex-FX We & Bone you established already continue see level and portfolio should

and quarter to P&L let's where key performance. metrics XX, line turn non-GAAP first show for Now items Slide we

our presentation. included the the appendix press the GAAP measures reference, slides and release this For reconciliations to financials of financial in in non-GAAP are and

are be slides. Adjusted inherently $XX plan with and the IP the continue where we and and are payments items R&D estimate spending product came X% related so development in performance XXXX of year cost recently progression headcount near recorded first in include we as profit, press accounting posted from to pursue in exchange and quarter an cost we XXXX, biosimilar. Milestone margin release, onetime which quarter expense that spin-off, was be mostly million amortization as of across margin compared with quarter, IP lower XXXX. the to of translation the the margin practical That adjusted of of is $X excluding first sold, operating after that stronger to in expected period. business quarter XX.X% the quarter, aggregated have the denosumab costs. programs to types in this reprioritized to material first portfolio. Total In down being first of which appendix to gross earnings related primarily a first purchase inflation development goods our foreign in the quarter R&D, last the milestone than driven The related be same to IP gross clinical gross case actually expense the higher in unfavorable with completed and the below containment efforts. impacts first to by For to quarter. is prior million employed was the to Despite the in will align in convention year, gross quarter, milestones the distribution of compared rationalized we and the was date utilize excluding mix, non-GAAP in can difficult seen better close and our soon of the we've XX.X% term. price our reflective will better expense in of forecast, in million was the in was especially quarter quarter in R&D, R&D $XX of each we

of quarter it's where business normal these in are activities losses the currency. first $X the period. In XXXX in exchange million $X lower driven countries in to modestly foreign year in prior not were course feasible periods, primarily the hedge movements by compared local losses million both exchange with Foreign

of These factors per in of XX.X% net per the income in quarter of with in $XXX share adjusted compared share or XXXX million margin diluted compared an first XX.X% was first quarter million $X.XX XXXX. $X.XX with culminated or EBITDA diluted adjusted $XXX the Non-GAAP in XXXX.

XX. look the our for quarter. Turning to at cash closer Slide We provide a flow

$XXX the last free of first cash of the was For XX-XX. and flow $XXX free million cash XXXX, in $X we that before the rose generated in our approximate reach generated followed of XXXX, free half payments, In And is year-end, cash in million. timing the we to generation fiscal expect of flow cash guidance. to the by flow accrual generated was back companies year onetime many flow underpinned the of of the our before QX Typical XX% consumption by to free has flow onetime and figure years, X XXXX, that the half. In Like largely items billion charges. XX% that also financial pattern free related of quarter, cash annual December capital the with to about our represented drove impacted in runoff, remainder first fluctuations incentive seasonal working number. change. capital, we which of working see X/X approximately

the of Of point. here onetime our note, that onetime February, is in spin-off, which when million the global XXXX put year we up guidance, the a from to XXXX, XX% the you consistent driver in main would costs full million gave until The For April, of $XX expectation. this expect was to reduction as which costs see of ballpark. us cash related implementation $XXX about said we have ERP system we with completed

our year, would XXXX headcount here, costs, beyond lower even million of we minimis. In costs related capture the onetime efficiencies. to costs transition ultimately we These will other costs spin-related they're onetime the $XX spin-off. which from the associated cost manufacturing we the onetime actions, spin-related de be standup are restructuring expect costs expect Next and and distinct with and drive that initiatives network and of spin-related to

and Some QX which XXXX. incorporated of which we already our into realized in are guidance earnings for

with ourselves debt QX, ending holding the level our down coming XXXX remained than the higher Xx. With stronger-than-expected leverage a provided half, result first were around on now year and with ending our X.Xx. ratio in XXXX the commentary us view When to tick the leverage February for we in year we XX in during our below solid in before confidence net February, half EBITDA net the second This Slide to to year greater leverage Moving better in is guidance has of year. bracing leverage. ratio lowering at the year-end performance and gives

guidance we our XXXX XX, driving to the where $X.X turning Slide highlight XXXX range of Now $X.X items to revenue billion on guidance billion.

have is drivers revenue changed, top Some unchanged. of remaining the line our individual but guidance

LOE, million the XXXX EU to approximate and later the $XX year in $XX Japan full For ATOZET, both impact incorporates this that year. million for

at the have XXXX. VBP approximately By million a be impact $XX and line prior the $XXX also pressure been price $XXX XXXX. U.S. is DULERA, $XX in of million million about its we expected million mandatory across represents from to for to have Though impact bit gone provision pricing of to generic could almost within million expect in international raising women's think we and spot X% we we and million the coming Biosimilars since the portfolio will last finally, in China Europe. Biosimilars headwind see X volume, the in over We year an $XXX of growth FX, year, expect retail entire through VBP. from at pillars. $XXX headwind to the as REYVOW growth our to to on for be in from that based we fertility QX, price midpoint we million in business, well we to of Emgality range $XXX which as the health, still addition a Fertility now million in JADA rates, current impact Overall, $XXX increasing we the And over to Lilly's LOE percentage revisions latest $XX have forecasting where NEXPLANON, longer-term points, the of quarter. impact saw with more were the in primarily the the XX% improved paired growth. our XXX February. volume is volume that XXX in an a in is first We've $XX basis XXX talked expecting to XX end Biosimilars points million Overall, and certain point in the basis with February. expect million our year minimal we pricing this a we from reflect in we up and upside expectations expect by given our be midpoint view versus of to estimate range at and back with are to range, absorbed to see that for markets. And

So guide our effectively up a constant went revenue currency bit.

Moving to the Slide on other XX. guidance components of

For we little XX% to for a XXXX. ranges to the margin, to too early OpEx range be you expense, calling we for expense, XX% lower continuing even a gross it's adjusted end the those are ranges down. to R&D of annualize are SG&A of tracking simply in the to if guide year QX, and On though

internationally examples. favorable SG&A, few For and JADA launches. containment the cite we product of the that cost The to HADLIMA, second offsetting have products, in XACIATO be a migraine related And impact to some efforts. partially restructuring expense half will our

good, For All progresses expense questions becomes $XXX more another of over year growth. year. to the milestone depreciation range that, a million this call even currency start Interest, ranges and heading and things as tax revenue growth, constant R&D let's and tracking inclusive but to was we'll feels IP QX $XXX to to R&D, the to unchanged. year clear. turn the right to and all discipline, the of answers. still million in the achievement are continue evaluate solid and margins operating now direction volume on date, we're considered With expense We're

Instructions] [Operator

Umer Our ISI. with first question comes the Evercore of from Raffat line

before quick to it's for free guess for And wanted $X free is flow quarter. costs. true second. on $XXX million the cash million just flow I I a focus about cash this onetime

year was neutral. it it's last of is, roughly the I that about million. knew So drag question capital my wasn't exactly working $XXX million. half the Wasn't But $XXX biggest flat, at similar. And roughly XQ

costs cash down heading a XXXX, also potentially as flow that had but ERP regimen XXXX, So from square how headwinds come of knowing X-year to knowing switch those maybe perspective regimen. the have do stead that actually NEXPLANON you X-year a patients we free into could

free start latter take cash the capital of question XXXX part So reverse the working will to flow of our quarters the year. for seasonality of it's Umer. And we'll forecasting, that in in your the

to onetime that we And recover so us that billion items really -- are the $X to forecasting. enables before

which Overall, that costs were $XXX really will number million real. XX%, see last be year. related do the down to onetime about spin-off, coming all that We about and

You'll back in the see year. that really of the quarters

the Umer, just first the So, gives being year confidence to the number. returning in quarter XX% that cash back driven really, more half of flow full hit we'll just performance, to seasonality able the us that be

decided a and providers Umer, required, the chunk in right see of table. reasons patients And there in a price care the price, research always There's first. not second regards more of second, XX% lot a that, probably likely other the And contraception. additional a prefer the would X-year of a of to first X that's on all, your on in XX%, Nexplanon and using actually all. of now be importantly, in haven't large health believe to there's yet. that haven't terms on question headwind we taking are potentially being X-year don't range. of second to who There's XXXX, but have definitely indication, we forms And who of indication the that will We -- we expect headwind until X-year possibility but indication be instituted

for opposed headwind. a significant So net us gain as a it to is potentially

comes Balaji Our from line next Prasad of Barclays. question with the

comes question next from Our the line Stanley. of with Flynn Morgan Terence

Terence. Dan is This for on

you underlying just just how first, on color the quarter and I thinking us. from U.S. on X to Just get NEXPLANON little guess, in more about saw trends the a you're volume that the this the HADLIMA, at thinking rest some of then contracting on about initially PBM point? initial how on 'XX year. your the And And conversations. opportunity you're color in any of maybe

the for Thanks Yes. question, Dan. Kevin. It's

price any in So decision well the I demand nicely, to of XXXB QX buy-in kind within the of We that channel the believe type the of will scenario NEXPLANON are we as queue, commercial the -- in growth this happen components buyout the moving that year really in that to strong. as both right Also, given in and you ultimately, of quarter, move quarter. starting any would side the of things. the made U.S. within so tell terms is

I So do things year good by that it we number NEXPLANON double-digit performance. just a to going demand solid we've ground And a in in very keep for order good progressing a the coming done tell in to said well. to in feel that of last regards I've years the and now, that on really it's slow HADLIMA, you moving be is of it solid. It's be time. growth I a very period the And globally be U.S. like also There's to for year. Overall, I going forever of market driven NEXPLANON few that HADLIMA there's feels -- would the will for U.S. and secondly, but out formation believe drive signals --

for of and to PBMs to Biosimilars to contract course, exclusive HADLIMA. starting with want, VA. Right now, over see, move prefer more you essentially example, more We the

that more X through I've market. I start you and more there's think to as look the to as X, going long you're of top benefit as start so to as XXXX at the opening go market XXXX much XXXX. XXXX, be as HUMIRA. of you from or of will in you you'll see to formation And said, the And And always erosion

we peak time in achievable forward couple continue hundred than million signaled the a U.S. more And definitely that very progresses. feel we've what -- of time revenues is about the strategy we we'll I push and But do good. that do and years. on our product do I the our continuum definitely as to to able coming feel that of very It's being kind for just Hopefully, achievable. say confident to for the HADLIMA, want of

question of Chris next Our Goldman from Sachs. with comes line the Shibutani

where think that the had Can are of for the attractive. the that of favor margin segments sense upon and sources Two business potential that on progress questions. do you're there confidence of making quite you in where beyond improve? Emgality with the Are such a us more Secondly, you XXXX the about seeing for opportunity geographies? on Perhaps, you of -- scope based terms operating business development, opportunities maybe or you opportunities could your give was far? in update we how particular, progression so certain if us

start, margin I'll part the operating on So this. of Chris,

out So our highly as offsetting, margin as look we few are issues we price face into see with that will the future, be sort And areas. we the constant competitive, coming that know. of in markets, believe, in accretion you we which a

we'll of our year, process and time from of over off doing that that work we of realigning On the as costs of we improvement the cost of away Merck fixed as productivity this from saw quarter the -- rationalization know, products leverage network operating that our as we're be transition believe mixing be we'll finally, sold generate come mix services. product commercial. towards first out efforts pipeline and believe benefits things you overall will the see able in We we goods itself. of then that in And upside, be the higher-margin we some the will efforts to you become and coming which

So of areas to referenced constant and offset prepared believe the than will our more that really sort of are we that around the comments drumbeat help pursue some that once hard we're as margin that network. price of us in those aggregated see again, we we working up

and Emgality. to REYVOW of business more more of your deals question development type Lilly that Yes, be going mean deal Chris, saw in regards those there's and with you with I around to

Our patients migraine suffer is mentioned essentially X/X it I've aperture, who are the -- women's before, to case, In be opening was migrane, of that we as deals which health. focused happen of from essentially that women. on do

of there fast China do So future different specific, have are being China, example, see including women's like, the opportunities. we our and terms for country growth areas, opportunities. specific, They're coming in desk for regional of China furious in over health, a number course. country a us as of We in for

pretty we'll have we portfolio expense we'll that that fit those sense our that soon. operating So in. accretive don't we on just that. and be And do so to the picking We'll out to expanding opportunities really much essentially, to disciplined bring dedicate be continue that that in clearly it's capacity very into

and transformative deals more we're we'll even hopefully in we'll have so more and we do on future that but tuned. those, in well you stay doing our be making of things need nice looking working to focusing move think and year, to and larger flexibility in financial this be they just to leverage would on the there. able I And the infrequent as our definitely as more eye on year all the that do execution, about this more sure of deliver always and the numbers that have we expect, those are needle. And our to towards in more but future order things, -- And better, the really it's all

Helpful your update on perspective.

Our of next Ty Navann from BNP Paribas. question line the comes with

year on CVS next and are It's Jane-Marie formulary. what assets major biosimilar considering for the for for your you in HUMIRA ] effectively Can after the HUMIRA expectations Rx its Caremark and Navann. more this [ from comment remove market rise HUMIRA the

address Yes, I can Jane. Sure, that.

but Medicaid, the So been net is exclusivity low PBM you see wins different which mentioned the large Blue to I've to Shield, Medicare which in the covered the beat last cost I innovative our essentially save be going to other of of and of drumbeat the that and think of is savings the XX% HUMIRA And things we're like for system money it's something patients it's a strategy, more something of that product more use is be there you than month for CVS $X,XXX there's PBMs. the providers just still to that -- And the about plans one that to and more -- XX% and U.S. about of on what with something Cross really looking not about then obviously, working to XX% that to commercial HUMIRA. Blue steady like to the try for only the to paying of pocket like of today, like try so patients XX% are out more it's need per talk the I X the done. go at in channels, of a best bring which -- lives headroom the or terms think world, more in that day, predicting today end large VA the you've is couple deciding PBM whether across in look, years slow, do quicker. And

very the It I it slow up 'XX, in I it open will up 'XX market in think be will more really that open do slowly. and So than think was 'XX think in I will beyond.

of Gerberry line comes of America. Jason next Our question the Bank from with the

Teva label Just a these HUMIRA. follow-up deals it with and Sandoz private some of success groups. so have insurer large some looks like on of had type

still that there I that do you of Optum think -- to the to is see grabs, Because with up for as Cigna. I you? least to is And interest going a NEXPLANON then know exclusive at is by like ex U.S., countries another expire. majority question next where commercialized of year about out you just OUS, on strategy this next is XX-K, on your talked NEXPLANON

your that So of OUS loss the geography. with do think about of erosion exclusivity how bulk in profile you

down OUS Or XX% NEXPLANON about sort of than cliff that? of Just dynamic? curious OUS typical a better U.S. think that not it type typical or 'XX? in the is how Is you kind

Jason. Thanks,

Teva providers, PBM, the Sandoz our Let me have, good reinforce. the then a about we've said world recently. whether of in systems. in XX% course, VAs Optum think Yes, I'll CVS announced Optum the kind I the the got it more than you're but as level, acquire the business into I about And regards Shield something in talking we're biosimilar levels pickup do that do HUMIRA in again, to to which sense And question, event was strategy around at is, really that access Blue We or the event. HUMIRA also certain is penetration first various with take business of Cross and Optum, really talking which mean right that our what's we today. obviously, speak we have is large already resonating state-by-state various Blue has states, you with LOE able happening

do better over open gets resilient, more us probably up I over terms 'XX you year diversified are more you it expect more term definitely those think into fact HADLIMA. look retain are that more share at penetration sticky time. as the the in overall in with And world. of business that that for you in biosimilar I 'XX as as 'XX hold the what still think do competitive I see is it can more diversified the of business, And the long you'll more -- progresses, to will kind the if we But

business going that to less pricing in whether in penetrate forward to ex-U.S., get don't earlier of any question in mentioned and first. the breadth I've That's ex-U.S. to And try the NEXPLANON. U.S. to U.S. of think to erosion business. the fragmented access Turning lot for your would there. This suppositions, unless Look, too the too there's in is or let's a about whether I don't clearly remarks, foresee just event. just get it's into And think, think looking penetrate, I I the think essentially fact lot I just prepared environment my that market say, is attractive able Europe, being of you you've markets a where is as I in our fact XX% difficult the it's to it's not a lead of be this XXXX markets the after emerging got would is that believe that, one into out to much, everybody

in is can own you you've actually until patent and [ around not applicator you regards has the got studies which XXXX, to device else may in safety, ] before would applicator, the alone of do because think rod somebody as develop to as globally anything around itself protection their have alone easy to itself. show efficacy applicator Our

and XXXX So I a event beyond. is globally this think

David Our of Sandler. next from line question the Piper Amsellem comes with

in beyond one. term just brands control established X or drive the questions. health longer time. room 'XX terms in time, question, its on footprint in expansion margin business EBITDA there's the expansion of based is business can do overall that spend, a that on for top This anything women's So over more beyond the over margin number margins you expansion One drive line. think is of can margin Anything

leverage us let's Looking understand Teva, are of XXXX down the help that. Xx. better 'XX the your say long-term have target How but trying they number talk X some leverage targets, I'm on about peers thinking about do at particularly a And with then pin to in you is, necessarily, that? maturities. you target not

steady-state of debt terms So where net a comfortable in get you do to EBITDA.

Yes.

Okay, David.

achieve So the basically I is we what through where be mix, coming latter really time in to we'll your acquire pipeline in that what is out we'll can the your accretion, revenue able have decade the with towards part comment frame. during question. think, of that start And longer-term margin on of and we

amongst we will continue -- products the stability we portfolio So that now. we I to see have think of

mainly right growing faster I'm now, think NEXPLANON, development. about that I mix relative the then the things So in really, revenue of are improvement comes we that are bring business the in JADA from portfolio thinking what mix and into the and

the view had stock on run spin, would that of investor commentary, at this underneath X.Xx. And far can of with this business on since very marketability comfort the same or terms we've business effectively ratio of In dependent the leverage, conditions be the leverage underneath how really, the levels at same just terms leverage in time business. the overall

XXXX, to. underneath see end been target that to ourselves of referring and by year getting then getting Xx this by X.Xx we the So to that we've

So on really that our changed. view hasn't

investor around effectively in this our but terms business think changed most sentiment view I not. leverage really, runs of where has has

and as So forward. targeting structure we going think we're what of same, still the about feel capital sort that's the we

line question the with Our of Balaji final Barclays. Prasad from comes

call. me so. to A things. if the already has earlier And again. to been back again, the the covered, free this transcripts transcript. to Refer if for me couple missing for on Thank taking feel please apologies you Apologies of refer

be Firstly, ] with seems the with shaping on [ the Zymo moves share dynamics. we is Simlandi and Teva clearly, getting the private market, biosimilar X label ALVO Cardiva, to recently saw which market with greater the market and and what

still around or of thoughts you your on also Alvotec's comment note, you on year till for to expectations ends One. approval track when you can can interchangeability? you June us interchangeability remind HADLIMA exclusivity to path would that. wait So next or to have On claim is for a related

brands established the and now Emgality understand see more expectations in dynamics these side, that brands REYVOW Secondly, you bit contributing. Can we me going on the here a for help forward? on the and

its to to you. talk Balaji, good

by say Sandoz the formation that would signal we way, of net other think signal all as XX% market split product. the essentially many I business. PBMs So I've signal, about and itself. it's It's the keep that for going it's regards in represent It the overall is cost really being the the has covered, strictly with good that first HADLIMA, lives times, biosimilars about mentioned do into CVS, talking the and for I question about the a providers, to good that remember, market that, the percent first the example, a X low But pieces. are X-or-so of

net really laying focused products, lives that They're cost lower more covered. rather game rebate not they're costs. as low they're they're on And just focusing more -- well on focused the net

strongly we And to through. it very about pulling and that very We're continuing as the going and year. X is position dynamic Biosimilars think what's feel currently a happen and top strategy among U.S. is to TRx in be very we'll we our solid be next or NRx this X I very And to competitive, we're over So be going and think year of revenues of established U.S. as to going promotion started feel originator about that very and time REYVOW Emgality, EU. hundred look, with the in terms In of brands and the now regards where we've in millions in right and just couple where to we grab signaled peak strong drive from our continually in terms for progresses we've always to the share the we're

in, countries terms have still to yet come that. of Some in

X fitting do are well what coming cash in a to the time. months. terms of X we're team can showing products really that are launched, us very scale to what energized these got of sense look makes reputation, in more Europe about and these are our products. And of segment of in well are migraine good great trying happen we've type and and that we these excited global deals a actually for business we for able and over being I do of a a to fast-growing think in with have scale that and be more really that do our accretive known, over terms take the more make because generating that And that will recently segment. and use infrastructure, really, are to and development It's to into really able positioned larger happen

with follow-up guidance appreciate just In the had this I could have a earlier? how it. guidance could outlook, said you conservative you are possibly, I what retaining of or to I If the performance, thought the reaffirming explanation. light have detailed raised

Yes.

So across considering we performance first guidance what's we that really thing in between all of back. encouraged about guidance on really somewhere were strong. to certainly dollar euro exchange. The When going our XXXX, created quarter franchises, was come the persistently was most by it $X.XX the But with $X.XX we were initial foreign is the with Balaji. when since thinking what do our and

And first and bit once the as the And prepared currency aspects that in optimistic be revenue, gives a us really that the the like bolts we're FX and nuts year. We'll top guidance lot when we look basis. it's line a quarter little we our second just this reticent results. this early of dynamic us we the here. causing said quarter just initial QX performance constant in the gave, up leg to in we confidence again, guidance at actually when so revisit we're comments, is raising of issue we in the on into But about

to That now the to back Kevin would remarks. call like concludes our turn Ali session. closing for question-and-answer I over

thank call XXXX. that we I with, repeating want into I began to call today's want close to I came what today's you. by namely essentially

those definitely our I to today, goals. delivering through well thank Looking towards we on and And want great a QX, as of at positioning our on look continued that and execution say projections, pipeline. it we're progressing forward focus of building discussion to a year financial And improving to for our can you engagement. all we for course, future

This concludes today's call.

You may disconnect. now