Organon & Co. (OGN) 6 Aug 242024 Q2 Earnings call transcript

Thank you for standing by. My name is Mandeep, and I'll be your operator today. At this time, I'd like to welcome everyone to the Organon Q2 2024 Earnings Call Webcast. [Operator Instructions]

I would now like to turn the call over to Jennifer Halchak, Head of Investor Relations.

begin. may You

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

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

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

Kevin call to CEO, turn Ali. the to like now over would I our

about our today's to Jen. talk everyone, second we'll and morning, Good you, where Welcome thank quarter results. call,

$X.X at currency. quarter Health grew The constant growth a second X% representing of billion, For X%. XXXX, Women's franchise revenue was the rate

XX%, grew Biosimilars franchise Our and our down Brands X%. was Established franchise

EBITDA million was adjusted million, Adjusted EBITDA which adjusted margin, IPR&D quarter, a $XXX of EPS $X.XX. includes the second $XX representing XX.X% expense. was In diluted

of currency growth. X% the at the to revenue third constant we're We on track first our constant growth deliver revenue solid half and in of have currency, year of had year consecutive

Given we The range year-to-date revenue of midpoint full ex around into represents billion our X% billion. $X.XX rest constant the our revenue year narrowed the currency exchange the XXXX the year, and growth to for guidance view to to full performance of for X.X% $X.XX have year.

was expense EBITDA first incurred milestone includes X adjusted Year-to-date of year. of and margin the XX.X%, IPR&D in million the which months $XX

are IPR&D. without running actions also look timing XX%, year We XX% first operating the Year-to-date the margin and of of taken the to adjusted from benefited you at range to half the of margin full whether impact EBITDA performance our expenses or spend. year contain with it end of high have reflects of EBITDA favorable at we

planned out year investment in to We to of in the expenditures pick expect new SG&A expense the the second NEXPLANON. like medicines related migraine due to products rolling half up and further

to XXXX. cash optionality us dividend, also comfortably make financial will in is debt costs which to development. to provide discretionary #X It gives allocation flow That we're timing, our From $X cash before tracking EBITDA that to onetime holding for capital to we're a XX% commitment Given allocation year-to-date, well our sensible flow repayments flexibility strong priority. to billion of capital full service our and year. pursue margin adjusted to business deliver standpoint, the to spin-related range our free XX% continue

year, action we as of position Women's well performance. was second in grew Health took move strength U.S. by quarter. showing to in in quarter. from ex for contraception our management that strategy, XX%. the a continued the Last the of FX NEXPLANON our demand continued XXXB up which X% In up is pricing the discuss as market, Growth discount strong NEXPLANON's physician including Let's in year-to-date constant growth. to in second benefited currency program We growth in driven U.S., now is NEXPLANON leadership the franchise XXXX, NEXPLANON XX% and

supply U.S., now by access XXXX. to demand increased Outside so grew and driven the which for we and benefited second a also us markets, ex countries NEXPLANON in the capabilities, able cited XX% quarter better FX meet in in are region. we in U-Can priority as expansion demand our the our But we in primarily from the

currency and performance achieve expect year constant the low strength Given growth full can we teens. NEXPLANON in revenue year-to-date,

year primary regulatory best Based its effectiveness mark next beginning to closer submission no us our the for be U.S., the data, contraceptive this puts would EU prepare in and on study X-year also year. new study, to for the $X and and the endpoint, regard NEXPLANON in showing billion signals. we U.K. This With met NEXPLANON to safety are

We pending that the would on approval. believe continue for of X-year put in XXXX, FDA potential us to indication launch a track NEXPLANON U.S.

have That exclusivity years. to very We could X see between device need generic We any a about X-year XXXX, because NEXPLANON's the optimistic the future expanding would to on generic X-year this data market. until with in And our remain launch insertion and would for U.S. XXXX. device potential as brand. different would the prospects important we further, of duration and claim patent mean no have expires an it XXXX means the come that event

women's other Moving on health. to

the seeing second Fertility are business we in FX in the volume quarter. market ex patient U.S., In Global down off. level Our the was X% self-pay

which Our we've by largely had reimbursed been success market, good towards the PBMs, business here. dominated and has is shifting

Falistom on country, is exit fourth that may in of you was of last also operating the that the as the in a to [ customer largest the fact, quarter to weighing In year, last fourth access strong related year quarter had very broad results both model. we that onboarding in well fertility ] secured of buy-in interim PBM we the U.S. of recall the spin-related of as a to large the

technology of province the to province or very optimistic slower-than-expected But reimbursement remain to In of China, this about ART. provinces. other we we're effort going forward, reproductive market, fertility by rollout expand our second expanding initiative assisted using largest a seeing procedures

reimbursement provinces already where seen of have for growth We Beijing. implemented, larger has double-digit strong in the been some example, in

we believe Global in full of gradual market growth that expectations be performance, a half coupled second high good the of of China, initial year weaker half, last compared which in uptake increase. will guide year. the a our implies second to year-to-date be ART from in Still, the Fertility for single-digit performance with China lapping in Given reimbursement coming fertility will flat

from China, with performance international fertility in by the the exit. underpinned IOM and also We reimbursement markets. expansion international a see as ART noise in that expanded expansion strong have U.S. in the growth will We very year for benefit other rebound won't footprint XXXX of continued

in to tender in following now strong launch the grew quarter in year-to-date. of move the XX% year, an The exceptionally the the for July constant timing second by at ONTRUZANT. along which franchise, half Let's currency and U.S. of with first uptake performance last Hadlima was XX% our Biosimilars international continued driven of

year, to the with a Biosimilar For U.S. low regard Hadlima franchise deliver in prescriptions, to expect throughout the pointing prescriber in Hadlima to leading $XX second quarter the growth strong teens quarter sales product. HUMIRA as million the second the biosimilar for full we our were preferences total ex FX.

XX%, for total second the the to quarter, over quarter first the grew Hadlima prescriptions with consistent TRx From launch. [indiscernible]

cost off, strategy strategy to lower we are our having our focused on are improve momentum. who on paying is and is want because net affordability. stakeholders We patient That building and success

the the and Hadlima, concentration The single-dose of was in low presentations. syringe designation Regarding on prefilled interchangeability file formulation status the U.S. the approved for

the other presentations, the of approval as the interchangeability navigate of FDA middle have planned to expect and pending presentations to in continues those as Samsung approval. continue year to next we on

in the year candidate this candidate we regions. And our for denosumab year. exclusive in Organon the licensed commercialization making biosimilar they of side Taiwan Shanghai partner, to Hong in assets have and Henlius U.S. the for China, these will this On EU later in Kong, to pipeline from outside biosimilar filings of other Macau global pertuzumab rights plan file XXXX. already Biotech, and the things, They anticipate Mainland filed later them.

with discussion X% quarter has which Established the FX in Brands, And declined X% out grown then year-to-date. ex rounding and FX ex the second

first with VBP, last following year's Emgality recent off X half than start. the by far, are Also, of year, have products the from $XX agreement led contribution the the Lilly market revisions drugs good migraine a Japan. the million more steroid So to mandatory for price commercialization from Eli injectable in in impacts recovery action the expected LOE certain in and offset

geographic steady products, ERP timing since shipments and on have of in also our April. very to in the focus which Brands to the related of and be diversity compensated shown quarter. different we pulls The Performance in was that to entrepreneurial implementation, portfolio every tend pushes the completed leads for our Established products But spin, unfavorable results. those span

business encompasses like opportunities development the assets. Entrepreneurial migraine focus

continue for assets those and can of launch-ready, complementary the We growth enhance company. look profile overall to our are the of where type to existing transactions, the portfolio

steroids. take unfavorable the Slide and from of we and most RENFLEXIS, than also well X% on solid implementation. phasing in was geography. Moving driven as the NEXPLANON and ONTRUZANT market X U.S. ERP after related injectable both X% benefited region the affected the X now price decline years It X, the to region which of in was the the FX pressure in in a though of of was JADA. up of in and well the look the quarter, as are by channel factors an fertility dynamics as Hadlima the migraine ex U-Can quarter, at offset where by These of The down performance the revenue uptake recovery as by sales performance U.S. most this to assets addition more

the quarter, FX APJ favorable steroids timing was mostly up injectable recovery X% in in due of singular. The region to some and ex the

was market. products through of challenging LAMERA which it significant has as a year Japan associated and growth to in by with NEXPLANON work the Mexico. across been contributor, expect ONTRUZANT strong national ex in since quarter well primarily be X% We for and in Rosuzet growth some volume we the region, and ATOZET second FX a access price the in Organon's driven which The as growth as in that revisions Brazil markets certain face LOEs tender had spin

performance we're driven confident our the down half and ability year consecutive channels. very quarter, our in of with and in first continued deliver but growth second China FX expect adjusted of stronger Overall, fertility revenue currency XXXX to constant the half and higher the be third hospital of year-over-year ex X% the of to year in we year, first, retail the EBITDA. pleased we the the results in feel and the than the by was

flow, on accelerates comes revenue it and EBITDA when which offense play growth executing to delever driving our to and development underpins cash strong ability to business growth.

in critical shareholder ever optimizing our value. is creating cost and So structure implementing efficiency

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

on you, Thank Kevin. Beginning Slide X.

Here, Emgality. $XX X.X% we year-over-year. Combined revenue at volume X%, addition solid addition of areas second stronger is the is the volume of first the strength and of driver bridge The comprised to million, revenue the to which quarter, biggest with growth, the in including rises growth about quarter the mentioned, growth year-to-date for we've NEXPLANON of biosimilars, in in volume due Emgality. bridge about organic growth

lingering LOE the typical of to the second second in $X last exclusivity in in included HYZAAR. first in show loss Japan. was of million began $X year as steps growth, of reflects quarter, and of The round third and were effects impact China X which quarter impact, which the VBP in headwinds all of was bridge, The fairly quarter. the revenue also we light X ATOZET reflects of that REMERON million which in about the the about

impact of particularly pricing business, pricing an The a price second million other There in and approximate parts our in from strategy in quarter in U.S. pretty of pressure muted to Fertility. Biosimilars was also NEXPLANON lesser overall, extent the $X negligible. the benefits expected our

X we a lastly, dollar spin-off In exchange Supply headwind reflects approximate And have foreign strengthening or $XX the points arrangements Other, with contract as relative have . impact an declining to lower-margin here the which revenue, had million Merck translation year. to capture been percentage manufacturing since we of expected. prior which that and

turn Now performance by to let's franchise.

next the to I've past those comments slides most modeling. areas done relevant As quarters, will to over in I target my your X

a growth from Let's for lower a quarter low year. the our lapping single-digit a year on robust NEXPLANON first growth full year very year the Kevin second Slide rate of considering I'll very of realized in for that in imply in sensible, that start in the strong NEXPLANON. X. half detail achieving discussed the growth That fiscal teens this with significant this benefited Women's prior already the is high period. add to buyout of for still expectations mid- rate Health but would

for that a phase and quarter the you since XXXX as was of will onboarding that Fertility, the For fourth exit had operating the fourth your be the you customer related I remind to quarter second the buy-in expectations in we U.S. last interim comparison year model the half, it tough in new PBM the

a quarter. will with stronger globally, quarter Fertility the So quarter compared fourth be third for

in to key regard of assets other within rights revenue has and certain ex that U.S. it's competitors highlights the Mercilon leverage in And be the up Like where NuvaRing generic now in areas we as migraine most With XX% and was Women's Health, business reacquisition assets, of markets, X Marvelon products Health, quarter the term global the worth can lastly, noting continue performance Mercilon our in and capabilities. in this product Women's to significant will development offset the the FX. strong likely Marvelon the near year-to-date to in

on Turning X. Biosimilars to Slide

For adjustment isn't Hadlima, the that QX small evident inventory to we is wholesaler the QX to contract the in million in expect year. support sequentially grow revenue $XX onboarding U.S. of a every of in U.S. What quarter revenues onetime won. we VA this

this price we Excluding ONTRUZANT RENFLEXIS in growth and The in to low QX year moderate be will U.S. in for U.S. the franchise growth the global pressure to a full have growth been be expect our RENFLEXIS biosimilars from the strong good about Hadlima currency that offset to by for has that Hadlima franchise the the XX% year, adjustment, Europe. constant QX. that in offset teens by for would the expected helped referenced driven U.S. Kevin full pressure also Canada particularly should will sequentially in contributor in inventory performance potential

the VBP growth Year-to-date, think was more the we X% that year, X% volume mainly half see like Turning price of year, by and offset driven prominent to drivers. If negligible year-to-date franchise, Slide half impact. impact will we on Established the very drivers about on had the performance, X and Brands In during of across revenue as we're XX. first Brands impact, revenue Established pricing said the minimal in the LOE we earlier. that focused have growth all back and

third, go through revisions Round driven from First, LOE will will will second, in be as from headwind of quarter; in VBP Fosamax the impact the in EU pricing impacts XX the expect in ATOZET Japan September by late the accelerate. expected of be this mandatory China we will LOE to year. fourth impact price more up, And pick as a inclusion more in significant in

this initiated onboarding portfolio in do migraine of half the second We expect quarter continued year which year. in the of strength Brands Established growth the in coming from of volume the the we first products, during

shipments largely of and that related our first ERP our phasing of Those he Additionally, are U-Can, the Brands, contained the spoke about us. performance, half to in impacts put especially when system. performance we have Kevin Established in noted behind our implementation

flat ex full the Established year, continue to For Brands achieve we expect performance FX. to

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

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

of amortization seen which goods onetime spin-off, our sold, cost related are and in to the items from For gross be slide. we profit, excluding purchase appendix accounting can

product foreign In and adjusted of impacts in inflation first XXXX mix, costs. the was to gross margin of related the second and quarter, as gross margin XXXX, second with the in compared Adjusted distribution quarter second higher exchange quarter primarily unfavorable to lower XX% translation was the material quarter XX.X% the of XXXX. with

to further our related million reflection $XX quarter, IPR&D contraception expenses for Excluding with was million containment was $XX biosimilar. on-demand, favorable denosumab with down million the advancement collaboration in spend. the the our in of Shanghai were operating to million also $X our of $XX of X% expense Circle during a timing and second of year-over-year. incurred non-GAAP period, cost efforts expense related is IPR&D nonhormonal This and Of collaboration of Henlius

inherently Milestone same the quarter. continue which after estimate and we of in payments will late include be in initiated be recorded XXXX, each close press to day that as an is to so release. quarter we of are milestones in soon to posted as will forecast, our difficult the IPR&D convention the utilize to practical guidance earnings which

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

XX. business cash cash the will help the XXXX, In With our our ERP to we north the in the significant a or will X million the cash spin-related meaningfully roughly back XX% a half million just onetime half, provide at We we're course, approximately first XXXX fiscal be second instance half, phasing of processes to are cash before system place for year years a figure as in onetime decline single at working and those $XXX part, This finish expect XXXX. completely we in of first of of is around year cash costs, deliver now items declining $XXX half. half relative Turning in to free full And and cash post balanced generation. as flow of half a cycle working our Slide this stabilize our flow year. April, capital, flow on global flow closer more unchanged. expectation billion first we spin-off, of to remains the second flow by cash free $X optimize and which of look full free track between to years. generated our year, timing of free in In majority driven

separate expect manufacturing $XX supply In Next ultimately from they're are costs costs costs, restructuring network initiatives and through other the with onetime will to we and of year, our spin-related million onetime spin-related with here, would cost drive efficiency. be chain and minimis. which costs we actions These of network that distinct Merck, agreements de head optimization. associated optimization count manufacturing supply to the activities exits capture

a remained This we net down. the Slide leverage favorable expectation our our of half see holding at the versus when year-end start level and ratio year, leverage has higher is coming development believed we would with XX, tick is XXXX at the before first X.Xx. in

Given our continue adjusted net see path Xx. achievable to EBITDA leverage ratio with year guidance year, to we below for the a ending an the

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

Kevin second revenue graph of of range activity compared to a version we midpoint. slightly showing quarters in different first half. tightened with We're half As prior our illustrate have mentioned, the the the this to relative the acceleration around driver

for basis revenue to of unchanged nominal to there midpoint currency takeaway only operational on unchanged at of our consistent The the slide this performance view growth. of and a previous our that on remains constant guide remains a is our drivers, at of First to communication. midpoint tweaks all are X.X% a X.X% the minor guide relative guidance revenue growth basis from each netting the ranges

that second respective versus up in objective can is see year-to-date, were half. will the the LOE, and the in pick all price the we the negligible impact show point earlier The this bars we first half, you their made that half in VBP to numbers the second when impacts showing but drivers way expected bifurcate

see that can than second the collective more expect drivers. impact the other half offset growth we of to volume Importantly, you

weighted already LOEs which range LOE, lesser reflects Japan, and EU, $XX in approximate in million late is which extent, in as ATOZET September year, year Japan, be inclusion occur of the XXXX, in to $XX which LOE occur million I million also as is underway in half to the of full $XX expected to still Fosamax will the to the for For impact range [indiscernible] also expected and, ATOZET will million in that a mentioned. $XX later the in be year. in around to XX VBP which back reflect will of

and expected expectations $XX the strategy has on in across The headwind made an end modestly of X pricing approximate down very improves Year-to-date, to revised with business. range our by $XXX million changes of Our mostly from certain million expect international minimize pricing from revisions longer-term range in versus we is we impact across the entire Established pricing line the price percentage price $XXX million. represents work point to the see the from as been with franchise to prior the impact due impact to high take range we've markets. minimal, NEXPLANON's Brands mandatory in along year

Impact price finally, competitive pricing back felt in the Biosimilars in revisions from acutely with associated mandatory dynamics accelerate. also be also price. EU. There price will ATOZET the mandatory Japan the as more will LOE be And and the reductions in half pressure fertility the in

The we've to the to range approximate rate an reflects year. over midpoint. last X% range year, on no narrowed volume growth the volume with million $XXX for to For the million change $XXX

first the primarily the the the of year, to even U.S. as strong well Mercilon stronger, also half expansion at double spin. the be growth expected by and volume as additional that but and is new from geographic benefit since portfolio footprint driven JADA. volume about to Fertility. with Emgality, X%, Marvelon Hadlima, that, assets growth we inflection actually, was the in acquired In half second We'll are markets

in of the slightly using strength $XXX rates, on continued to million. the our U.S. on FX range the impact based from million finally, we spot to dollar recent view upped $XXX And our

components other guidance to on XX. Moving the Slide of now

range, and but full of expense, half really the we've end low timing. for XX% SG&A margin XX% for in $X.X billion year. Year-to-date are tracking For been range XX% barometer our of range just was gross feels on adjusted gross just a middle the and to good therefore, that's right year-to-date, On we pretty our guide like to of a XXXX. to to $X.X margin, second billion continuing

launches, NEXPLANON. in SG&A year product migraine of the investment to second as for pick well the half planned tied to products, in up expect example, spend as the We

we SG&A the expense To with provide expect half half second the second in compared a mid-single year. last non-GAAP digits the the in guidepost, to year of grow of

set of to that was the range $XXX the of $XX For million ex here R&D, the that It's we're IPR&D we raise full at year-to-date. all the worth point, of the $XXX absorb noting midpoint we've able range incurred by the we to Operationally, million EBITDA expense to close beginning did year-to-date IPR&D to within tracking that margin adjusted of million to XX% this our year. IPR&D been range the year. XX% for

of percentage The margin about worth adjusted X $XX million expense was of point year-to-date. EBITDA

As should margin. we about fairly QX QX in regard with revenue to quarterly and you that believe this EBITDA at absolute and similar point think dollars time, be phasing

to running no for a for bit items, below-the-line there's ranges rate Year-to-date, taxes to our we're change non-GAAP favorable interest, For relative tax depreciation. income guide.

Our effective year-to-date. XX% and in XX.X% tax second the rate is was quarter non-GAAP

of ETR conclusion non-GAAP by impacted tax audits. X the was non-U.S. year-to-date XXXX favorably The

point the sum to to million view For debt continue a the period lower refinancing new change year rate of on full offset capitalized for the XXXX, interest is and current as our costs the expensed new financing approximately the accelerated in our of XX.X% expense fees we in didn't May, instruments. XX.X% annual we previously of the $XXX amortization interest for Despite instruments of estimate because range. the good financing substantially by

expense in in on was We're continues direction heading results free quarter. discipline of first another quarter right the the the and solid performance volume that growth, strong flow. cash QX up, margins, Summing posted operating

to tracking consistent expectations year constant revenue the our with currency growth, are We for another of year.

answers. With call and questions that, now to over the turn let's

Umer [Operator with line Instructions] the Raffat comes Our ISI. from question of first Evercore

some week. seen of I'm sure GARDASIL on headlines you've last the

X question, questions that. off of have I of a history one more is I So may. Number if

you directly to Merck, speak different during sold but a your outcome to decision why a if all a Organon made if different? local So partner, was GARDASIL expect you there in China. sell the strategy to a you or products commercial And local time the Could was obviously, would at not? partner had were

when well I care down you XX% procurement as investigations. enforcement as secondly, China stricter rules health in talked the XQ, time the for last year an And remember had deficit you budget about first and in of

would affecting like not -- would demand, doesn't that affect could your dynamic? So It that speak it's to demand? you or that look but

Kevin. is This the question. Thanks for

of start If with of QX. question it me in me narrow your just just put Let last kind down perspective, kind let first. I on

results with were on of based high COVID a impacted rebound. QX QX very Our in a comparator kind 'XX of

Also, But we're that significant drove 'XX. really as so sector, round And through well. we washing QX for positive your year sales see impact in post X example, of some last Fertility. hospital In to the VBP point. Brands. we're Established the seeing strength tailwinds, EVP on

mentioned quarter consecutive sequential For earlier. of the third retail, just I've washing we've But had growth. of we're through number a that those things

we that what second mid-single-digit going What returning would of to growth China. for see the your the again, half is year I I forward, to do point, consider see,

So I tells of me of continuation any don't see we're downdraft. anything there type that ultimately going to that have

shape always -- year, this good we will I -- I've of would Established have the think we're gone XX% I said, finish year. business our in going for business to But through basically Brands VBP. when be the

what we going to a expect year, on China next growth kind have back finally So based different consider I to number of forward of momentum aspects. would solid for

in International have relationship does China. don't I Merck, was first that of to in we partner the segment the Merck charge In yes, necessarily regards question, but for your

exposure. type So of we that have don't

signal that that any don't there local to have way of to kind that's you opportunities. I regards partnerships potentially would in issues we our So the could forecasting affect

buying local, dynamics because not is any the there be know And CDC issue on inventory GARDASIL part either I much. also, Kevin, as would is of not

be which nothing So that? hospital inventory may like there or any drafted I be there getting anything down? wondered, could Is like that

would healthy It's at within I that For us, too always or a consider It's we've not our low. be had. to at too high is inventory level. least, anything basically line what

locally. So would signal terms are inventories of in in to you our I where that's what

as hospital inventory? Got it. channel acquiring the And well, at . correct, the

both. Yes,

Chris of line Schott with the from comes question next Our JPMorgan.

give is Schott. to expect This directionally, for margins you couple guidance how for margins XXXX a good the sense Can able you'll just XXXX over margin of and through you Brown operating on be range the do today of you Chris rest next see just and Or a of Ethan proxy here? the is years? increase progressing us into from

we what the feel little guidance key of Thank rest certainly more showed on expect our good that we're a been margins. . in the see the did XXXX. we continuation in growth the more full little we to we some making sure on signaling on has get about a in bit first soon Yes, operating talk amplitude second And drivers. price the operating the question. the but XX bit of enough yes, things stable see the recognition our we than you But year margins very VBP like fairly to half. volume that for in we too talking we're through when XXXX we It's year, Slide guidance the later about deck, our we've of LOE, and year. half the in as about that

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

you think that the longer-term how I us contracting couple in the you're volumes and on help Hadlima mean Teva's execution do understand just about payer significant talk you thinking drive in tackling me. can number So you about of one. about more how how and contract. That's that better market? particularly a strategy for landscape, your on One, context recent their

philosophically a I the two how just guidance to number term? get it your you expansion? spend. sense change But are there the on you're versus on I mostly are pipeline And is was wanted on about know R&D going how long in thinking for to And the balancing larger you margin visibility stability prioritizing point I overall more the spend when pipeline? [indiscernible] is the R&D. guess or get

experience as of for possible. of patients so at frictionless been Thanks Hadlima can In our to terms net the HUMIRA lowest and product-to-product take comparator cost the get comparison affordability, Hadlima the product between strategy. many David. the It's possibly think question, as to I forward, high-quality the we've regarding going the really in very a first about providing regards clear question always

with is that the segment. we're I around the always that's PBM so net driven. of of right would rest call PBMs, And that getting our market I've made today And what is essentially where signaled low The XX% that, growth. is XX% part cost about now, up of

about are said or out. and X, biosimilars growing can signaled and X always see it's the playing all we'll be you is XX% X and HUMIRA when X done. quarter top that in TRx over quarter We I've for And that

we continue see be where that's that think numbers, seen over as And seeing you good with I going as solid to well. time. forward and to growth, we're essentially want you've our

lot Lilly going more like see Women's out but XXXX, our very able regards start for it have or things and reporting more terms space, be of we R&D, really that next now we our we to asset, activity. pipe pipeline, the we that do There's that's whether long-term hopefully a And in prudent There's think R&D of to are kind see will when which or fact us. dedicate now. is that rather very more be to of down interesting about that are access is year more in in in the field. and that I Health being function which with tuck-in we'll we interest something I very think terms how to exciting. use the of there's prudent very a of whether the And in Phase and excited of journey, the a really a in we're right regards is which to In we've capital these deals right lot coming this got think We're data. regards time we our what it's we deals, what IIa/IIb think we endometriosis future,

the In good a lot what of meantime, we are really we tuck-ins, do consider which hygiene. these,

judicious, us we'll very expenditures continue regards few -- the our be look do very, Lilly do very just profitable very going first and We'll R&D Just to careful we'll terms forward. we'll in what do in That's in deal. to going been really the at of be to we're for months. those,

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

the your for the to able in So first XXXX, on directionally, it just then year. the about type think some keep and EBITDA 'XX being these flat Emgality on just to down ability XXXX either or that about say, 'XX of thinking tailwinds and forward? one cost beyond not but how is to thoughts do guidance, one just of me per deals, structure hold for or we looking going

in And any ability on on private to then matter is thoughts And does -- participate my at on interchangeability label all, at view? high the follow-up in concentrate question side? point on Hadlima your this

over I'll take EBITDA Jason, first, to Yes, last question and discuss it I'll the question. to Matt the hand

right approved performance of that was exclusivity hasn't our question, to and by off as concentration vial regards get matter? mean launch in or high But the currently, the and I it able the presentations. It to mean, granted been our really think next continued essentially hasn't May. was you in to We the to -- feel which was now, interchangeability, And Teva, be Samsung by rather we designation, in growth anything I get that granted pre-fill the indication broader syringe does see with but well. see your to -- time May, the has I single-dose in the So wears on for it period time low -- terms done overall ready growth. there. the that we'll in overall concentration,

continuing see So ongoing any performance. roadblocks type in any I of don't of terms

VA doesn't got the the the example, you're you've sole source business, of asset of interchangeability for We winner there. are single that matter. because the fact and

And a the when terms wears time it question off. over the got of lot interchangeability we'll we've Matt have EBITDA confidence exclusivity that in So in comes period regarding when of I'll forward, going to Hadlima and hand

where XXXX, Brands that talking we Jason, margins significant terms the But be about have hitting going a that's a that years soon portfolio, Established given guidance. Yes, for we in to they of for modest most is outcome see statement holding LOE the relatively obviously, too of which realistic exposure XXXX, in directionally, beyond are very is actually in XXXX.

generally that So Merck. gross substantial. that. ability once away margins improve combined beyond margins we to see the would from operating in on the we to Organon separate which that. we some And all then get product towards hold can XXXX, And fact we've Those through rightsized improving is spin largely of And ability which of as have now the growth in mix start we we leverage. cost see from opportunities products actually with comes top place place business that a to then structure, for that and network do generate put are you more see development the to the through contributes this fairly since the manufacturing you

them. margins So to hold then about and we're pretty grow ability optimistic the

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

us that if the NEXPLANON insight the give plan would on about then thinking how product product? X-year your discontinue of you data. can you're X-year to Congrats conversion. on inputs ramp the the wondering latest and just the And Was pricing be for

Yes, Terence.

We're submission excited So we're the just the that FDA. efficacy efficacy. indication about just clarity, of for the the ready same to X getting and process X-year for now we've indication got of submitting the data, essentially very in for It's is that years product.

discuss when for still at comes. still we that And price, optionality have Obviously, We that. so that. in have time to looking time we're that. the terms of

just a But fact end starts manner robust will us of very is until XXXX. mentioned, beyond, inserter sight to it more very really is device, importantly, unique, the differentiator, this with of to the the of factors a a until possibly it on product has exclusivity because that clear be which our continue line decade I very and give and us in the

only will market approval they'll XXXX. to a device, somebody over in which their moved to to market, by X-year indication XXXX, if the is which to thing So from to be of market that time have easy no X-year come be able to have to come indication perspective, FDA for that they'd and were the with the own whole prior

we're So expanding in think regards I NEXPLANON great portfolio. to future, the in shape that with

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

international Two questions, dynamics. if I could. pricing

are. regions, the to us a over of trends it's sense the get for for Some what

could call if particular. then that And expressed on I there. a had that Umer Japan you seem I dynamics tougher-than-expected in You were earlier. follow out on there little question just to China the believe asked bit some

seen anti-bribery, brought historically your impact saw potential for have question your capacity deals second from about that We a up Is segment that dynamic different product this navigates? And sense business type element with the other quite availability? a We commentary. of the hospitals. business China do transaction enforcement similar and the development. Certainly, Lilly potential been then anticorruption vaccines as the to is has standpoint your What helpful. and

question, for Thanks the Chris.

negotiations in of I QX that the of in any was a China that. us on I take any the of so question let's see far any So in I of forward, through, that We short-lived campaign pricing, remnants through as from VBP washed in think, the issue last so think terms it headwinds that normal landed in we've and this in watching the effect in parts are face parts was we and for storm in some we out sorts. robust and regards products when in see and anticorruption be to don't think, of also regards and of kind comes to in Chinese the place of growth Things of of first that I are more think, essentially this year. to the have beyond we have something of in or fertility that normal I through China the we government, half X went very state pulling growth would in slowdowns. metrics, going XXXX whatever . And second really affected We've going -- what some China, of international Round our hasn't going VBP that consider half But really of And see to passed back the of business, we'll business China the any to mid-single-digit kind year. much I terms to of forward, more portfolio with affairs positive and our kind a in that. was reference -- China

with did the which like to Lilly, very tuck-ins deal. we likes in we're pleased more of regards Lilly And the with finally,

to good But I I really forward, a deals of type we'll would of plenty would and strategy organic think, tuck-in think more able what they and we're more going of nice, very and proved that that's are, just have to to be business going I forward. hygiene, call more start, to doing off be those. continue to going It's it's solid do very -- which to our to essential strategy. of our of capacity those and be part

that, Chris, add and is to actually just the Yes. of reason by relatively payments generally most characterized to is the modest compensation on success-based And based . milestones. able they're do to deals why those upfront we're

session. closing over will Q&A to turn concludes our now That the back remarks. call Kevin I Ali for

and you, for Thank thanks, joining everyone, today. us

through you engagements the we're We encouraged Thank introductory ranges we our about we're in year-to-date, the look are, our investor deliver progress as forward very and ability comments, throughout and the confident confident, I to in here continued very much. my very performance said today, to we've and quarter year. outlined

This concludes call. today's

may You now disconnect.