Good afternoon, and welcome to the Novartis Q2 2026 results release conference call and live webcast. Please note that during the presentation, all participants will be in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions by pressing star one and one at any time during the conference. Please limit yourself to one question and return to the queue for any follow-ups. A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. With that, I would like to hand over to Mr. Nigel Trotman, Head of Business Planning, Analysis and Digital Finance. Please go ahead, sir. Thank you, Sharon. Good morning and good afternoon, welcome everyone to our Q2 2026 conference call. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission. Before we get started, as a reminder, please kindly limit yourselves to one question at a time and we will cycle through the queue as needed. With that, I will hand over to Vas. Thank you, Nigel. Thanks everyone for joining today's conference call. Moving to slide four. As you saw in the results we released earlier today, Novartis delivered strong performance across our priority brands and launches while advancing the pipeline, allowing us to return to growth in the second quarter. The business grew 1% in constant currencies in USD, we had flat core operating income at $5.9 billion. Mukul will go through the numbers in more detail later on in the call, we are reaffirming our full year guidance for 2026. We also had some important pipeline highlights, which I will talk about more during the course of the conference call, including updated KISQALI OS data, the del-brax biomarker data in FSHD, as well as some other regulatory milestones we were able to deliver over the course of the quarter. Moving to slide five. Our growth drivers continued a strong trajectory in quarter two. They were up 36% in constant currencies. Some of the highlights include strong performance from KISQALI, Cosentyx, Scemblix, solid performance from Pluvicto, and strong performance as well from Leqvio. Overall taken together, these growth drivers are performing strongly. We believe that gives us momentum going into the second half of the year as we now move beyond the Entresto patent expiry and set us up well to deliver on our midterm growth guidance. Moving to slide six. KISQALI was up 43% in constant currencies on the quarter. We outpaced the CDK4/6 market. We had strong performance in the U.S. and outside the U.S. In the U.S., we were up 39%, reaching over $1 billion in sales for the first time. We continued our metastatic breast cancer leadership with an increasing share in first line. We also sustained our early breast cancer, NBRX and TRX leadership with 58% of new patients now from our exclusive N0 and N1 nodal populations. We also continue to grow our total prescriber base up 16%, and we see future growth continuing to be driven by these exclusive KISQALI early breast cancer segments. Outside of the U.S., we were up 49% with continued metastatic leadership. Our growth was accelerating in our EBC launches. We are now approved in 76 countries and reimbursed in 42. As you can see in the chart in case study in Germany, we have reached 79% EBC NBRX share. We are having similar performance in other key markets. Overall, we are pleased with the trajectory for KISQALI and remain confident in our $10 billion peak sales goal. Moving to slide seven. We are announcing today also updated six-year follow-up data, demonstrating that KISQALI showed clinically meaningful OS in that broadest at-risk EBC population. That data will be presented at an upcoming congress. This is the six-year pre-specified landmark data for IDFS as well as for OS. The IDFS benefit continues over time and continues to strengthen the case for use in the broadest at-risk EBC population. Safety remained consistent with the known profile of KISQALI. We believe this data underscores the value of dual inhibition with KISQALI and endocrine therapies across all subgroups. We will look forward to providing the full details of this data, as I mentioned, at an upcoming medical congress. Moving to slide eight. Kesimpta had another strong quarter up 32%, continuing to increase its share across our key markets. In the U.S., we were up 32% in quarter two, increasing our TRX share in both B-cell and MS markets. Importantly, we are growing our NBRX share ahead of our competitors in the first line and first switch segments, which are our targets by segments for this medicine. Outside of the U.S., also very good performance. We are seeing strong growth in Europe, as well as sustained NBRX growth in our top international markets. We see a continued opportunity in these international markets given that two-thirds of patients remain treated with older therapies, not on B-cell therapies. This is a clear opportunity for expansion over time. We also continue to progress our next generation evidence and continue the life cycle management for Kesimpta. Our ongoing phase III with a once every two month dose Kesimpta for maintenance dosing is on track for a 2027 readout. Moving to slide nine, Pluvicto grew 43%, and this is driven primarily by our PSMA-positive population and the pre-taxane mCRPC. We also see now acceleration outside of the U.S. In the U.S., pre-taxane is now driving over 70% of new patients. We continue to focus on use after the first ARPI. This is our largest segment, and we believe we now will have the opportunity to drive further growth given that the NCCN guidelines have been updated to remove routine use of a second ARPI in this setting. We continue to expand our sites, over 880 sites now providing Pluvicto, and a lot of our focus now is getting additional depth in those sites, especially as we prepare now for the HSPC launch. Outside of the U.S., strong growth, 83% growth in new patients with accelerating adoption in Europe and launch momentum in Japan and China. The number of sites now that are providing RLT outside of the U.S. is over 650. This sets us up well as well for our future RLT pipeline, where we're excited to continue to progress beyond Pluvicto and Lutathera, hopefully into additional cancer types in the coming years. The next wave of growth for Pluvicto will be the expected approval in quarter three in HSPC. This will increase the eligible patient pool by 75%, give us a strong foundation for further growth. Two-thirds of the patients in the PSMA-addition population are with healthcare providers that currently use Pluvicto today or with established referral patterns, so we think we have a strong base for rapid adoption. We continue to progress the pipeline. We presented promising launch results for our Actinium PSMA in mCRPC. This medicine is now being studied in the post-Pluvicto setting, in the post-chemo setting, and as well in the first-line mCRPC setting in combination with ARPI. An opportunity here to life-cycle manage Pluvicto for the longer term. Moving to slide 10, Leqvio had a strong quarter, growing 59%, driven by strong demand we saw across the globe. In the U.S., we were up 55% in quarter two. We outpaced the advanced lipid-lowering market. This was driven by monthly TRX growth of 49%, demonstrating Leqvio's differentiated profile, strong persistency. The demand is being driven with increasing depth in the priority health systems that we're targeting. The most important segment for us remains the Medicare Part B segment, where we see 23.3% share. That's up 3.6% year to date, we see an opportunity for continued expansion. I think even with orals launching, our opportunity remains for driving strong growth in the segment that wants infrequently administered, physician-administered medicines for lipid lowering in the United States, we see this as an attractive and growing segment that supports our peak sales potential in the U.S. and beyond. Outside of the U.S., NRDL inclusion is unlocking significant demand. You saw that in quarter one and continues in quarter two. Our market share has doubled now versus the pre-NRDL share we were previously seeing. We also see sustained growth in Europe and Japan. Overall, pleased with our performance. We keep generating additional data for Leqvio. Three world studies demonstrated that inclisiran Leqvio improves adherence and persistence compared to other advanced lipid-lowering therapies. We also have the V-CHALLENGE head-to-head study of inclisiran versus bempedoic acid to prevent MACE. Lastly, we're on track as well for our two outcome studies to read out in 2027 for Leqvio. Moving to slide 11, Scemblix had a very strong quarter, 89% constant currency growth driven by both U.S. and ex-U.S. performance. In the U.S., we had 93% growth in the quarter. This is driven by sustained leadership across all lines. Importantly, we now expect to reach first-line NBRX leadership share in the second half of the year. You can see steady improvements in that first-line NBRX share. Outside of the U.S., we're primarily still driven by the third line and beyond performance with 75% NBRX share across our key markets. Importantly for future growth, we're seeing early line adoption now starting to pick up. We are now approved in 65 countries outside of the U.S. In Japan, we've already reached first-line NBRX leadership, as you can see in the lower chart. In Germany, our early NBRX first-line share is already up to 15%. We're very excited for the trajectory of Scemblix and to continue to be a growth driver long into the future. With Cosentyx, we had a solid quarter, 10% constant currency growth, in part driven by some one-timers with still strong underlying growth. When you look at in the U.S., we were up 16%. You can see that NHS, we're steady in our NBRX share in the high 40s, and we expect that to continue. We see steady demand growth in HS and IV. Underlying growth in the U.S. is around the mid-single digits as we've guided to in the past. Outside of the U.S., continued solid growth in Europe. We do see additional challenges in China with more competition, but we're able to manage that to maintain the overall global performance of the brand. We're excited by the phase III REPLENISH-PMR polymyalgia rheumatica data, which we recently published and presented at EULAR. It showed very strong data with sustained remission at 52 weeks that was twice as high in patients treated with Cosentyx versus placebo. We're anticipating FDA approval for that indication in the second half and remain on track for the $8 billion peak sales guidance that we've previously provided. Moving to slide 13, Rhapsido continues its strong launch trajectory with phase III CIndU data now available to support our broader potential in urticaria. First starting with the CSU launch, we see continued solid U.S. uptake, over 4,000 prescribers, over 10,000 patients treated. 60% of those patients are treated in the first-line setting. We see steady expansion in our patient access. We have two of the three major PBMs now covering remibrutinib, Rhapsido, with PA to label. In the second half, we expect steady expansion in that access with an effective bridge and sample program in place. We don't expect an inflection per se. We think this will be steady expansion. We want to ensure that we're disciplined in how we approach getting reimbursement given the multiple indications we hope to secure for remibrutinib over time. Outside of the U.S., we see good traction in China. Launches are ongoing across Europe and the Middle East, and we'll see further expansion in the second half post the EMEA, Japan, and Swiss approvals. Importantly, in chronic inducible urticaria, we presented our REMIND data supporting remibrutinib as the first targeted therapy for chronic inducible urticaria. We had early and broad efficacy with onset as early as week two in the two additional largest subtypes, consistent 12-week responses versus placebo. We're on track for the FDA approval in SD, which is the most common CIndU subtype, two-thirds of CIndU patients. We'll have global filings across all three subtypes later this year. As a reminder, we estimate in the U.S. there's about 100,000 CIndU patients that are uncontrolled with antihistamines with no other treatment options. This is a significant expansion in the population that can be helped by Rhapsido. Turning to slide 14, we also presented some updated data on ianalumab showing the favorable ESSDAI benefits of the medicine in longer-term follow-up, and we remain on track for a U.S. launch in Sjögren's disease in the second half. You can see on the left-hand side of this chart in our pooled NEPTUNUS data, you can see the consistent benefits in ESSDAI, statistically significant versus the placebo arm across both studies when pooled, demonstrating the benefits we see with the medicine. We presented a 108-week long-term extension data, which showed that we can maintain the benefits of ianalumab over time, and it also was supported by clinically meaningful improvements for the placebo crossover group when crossing over onto the active arm. Throughout all of these long-term follow-ups, we see a favorable safety profile, no increase in adverse events. This supports ianalumab's multi-blockbuster potential. We're on track for the ITP first-line readout in the second half of 2026, the SLE and lupus nephritis phase III readouts in 2027, and the systemic sclerosis phase II readout as well in 2027. Turning to slide 15, I wanted to provide an update on two of the acquired programs from Avidity. First was del-zota. We achieved our first FDA submission for the therapeutic use of an antibody oligo conjugate. That FDA submission is for accelerated approval in the DMD 44, exon 44 skipping, using dystrophin as a surrogate biomarker. We previously received FDA breakthrough therapy designation for this. The submission package is based on the outstanding data that we had in the EXPLORE44 study as well as long-term follow-up. We expect the first launch here in the first half of 2027 with the ongoing phase III studies ongoing. We have multiple follow-on programs now targeting additional exons that we'll be bringing forward as well. We're quite excited to leverage this technology to take on DMD across multiple subtypes. With respect to the del-brax data, we read out in the quarter as well that the phase I/II study at the target dose that we are taking into phase III studies met its primary and key secondary biomarker endpoints. As a reminder, this is a study that looked at KHDC1L and creatine kinase reductions in the plasma. KHDC1L is a protein that's downstream and believed to be regulated by DUX4 being the gene that's impacted in FSHD. Having these plasma biomarkers indicates that we have strong target engagement and muscle damage reduction as indicated by the statistically significant creatine kinase reductions that we saw. Our base case remains a submission in 2028, but based on the data that we've seen in the biomarkers and ongoing work we're currently conducting to hopefully correlate the biomarkers to DUX4 as well as clinical improvements in these patients, we plan to engage FDA and other regulatory authorities in the coming months. We'll ultimately provide an update if those regulatory authorities support our ability to file this medicine based on this data. Moving to slide 16. We're on track for a busy second half. We already had four readouts in the first half. In the second half, we expect with pelacarsen, remibrutinib, and del-desiran readouts in the coming months, before the end of the year readouts for ianalumab, Rhapsido, and HS, as well as additional readouts for phase II programs, QCZ484, as well as VHB937 in ALS. Exciting, I think second half coming up. Solid first half of the year and looking forward to continued progress in the months ahead. With that, I'll hand it over to Mukul. Thank you very much, Vas, and good morning, good afternoon, everyone on the call. I will now share more details on the financials for the second quarter. As a reminder, my comments as always refer to growth rates in constant currencies, unless otherwise noted. Turning to slide 18. In the second quarter, net sales grew 1% to $14.4 billion, while core operating income was flat at $5.9 billion. This is as our sales growth drivers and continued productivity offset the impact of the significant generic erosion that we saw in the first half of this year. The strong performance of priority brands supported a return to net sales growth in quarter two faster than we initially expected. The second quarter core operating income margin was at 41.2% of net sales. This was a decline of 70 basis points versus previous year, mainly due to the incremental Avidity cost, with a lower gross margin being offset by productivity gains. It's worth noting that Q2 is generally a stronger margin quarter when we look at the phasing across the whole year. Free cash flow for the second quarter was at $5.6 billion, which is in line with expectations. Worth to note that Q2 results were also positively impacted by some one-time phasing items, which will reverse in the second half. Together, these items positively impacted net sales by approximately one percentage point and core operating income by about five percentage points. For the first half of the year, net sales declined 2%, core operating income declined 7%, and the core operating margin declined 2.3 percentage points to 39.4%. Free cash flow for the first half of the year stood at $8.9 billion. Turning to slide 19. We remain committed to our shareholder-friendly capital allocation strategy that has served us well as a company, balancing disciplined growth investments in the business with meaningful capital distribution. In Q2, we continued to execute multiple bolt-on M&A and BD transactions, including the completion of the Pikavation and Excellergy acquisitions. At the same time, we continued to invest in our internal R&D pipeline. On capital distribution during the first half of this year, we paid out $9.1 billion in dividends and repurchased $2.1 billion of shares under the current up to $10 billion share buyback program. There is still $5.6 billion to be executed in this program, and we target to complete the program by end of 2027, as previously indicated. Slide 20, please. With this, we are reaffirming our full-year 2026 guidance. We continue to expect net sales to grow low single digits and core operating income to decline low single digits for the full year. For the full year 2026, we also continue to expect core net financial results to be around $1.7 billion and core tax rate to be around 16.5%, both in line with our guidance from beginning of the year. Moving to slide 21. As I shared previously, H1 net sales declined 2%, with the strong momentum of growth drivers delivering performance at the upper end of sales guidance from the start of the year. Turning to H2, we continue to expect net sales to grow mid-single digits as we move beyond the impact of U.S. generic erosion. However, it's worth pointing out that there will be a notable difference in the sales growth rates between the two quarters, Q3 and Q4. This is because we still have about $800 million of U.S. Entresto in the sales in previous year quarter three base. We expect H2 core operating income to grow mid to high single digits with continued investment in our growth drivers as well as our R&D pipeline. Slide 22. Finally, if exchange rates remain at mid-July levels, we expect a positive one percentage point impact on full-year net sales and a positive one percentage point impact on core operating income. As a reminder, we publish updated FX estimates monthly on our website. That concludes my remarks. I will hand it back to Vas. Terrific. Thanks, Mukul. In closing, we delivered our first half performance at the upper end of guidance, with Q2 returning to sales growth. We remain on track to deliver our full-year guidance. We're progressing our indications for Rhapsido, ianalumab, both potential multi-blockbuster assets. We're focused on our second half pivotal readouts that remain on track that would allow us to raise our mid to long-term growth outlook. With that, we'll open it up to questions. Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. Please limit yourself to one question and return to the queue for any follow-ups. To withdraw your question, please press star one and one again. We will now take the first question. Your first question today comes from the line of Peter Verdult from BNP Paribas. Please go ahead. Thanks. Peter Verdult, BNP Paribas. Realize there's not much incremental you can say re upcoming phase III readouts, and I heard your comments on del-brax. With that in mind, can we focus on the accelerated approval potential for votoplam in Huntington's? I know phase III planning underway, but do you have any visibility or ballpark timelines you can give us for when FDA might make a decision, and whether you can file early on the phase II data generated thus far? Thank you. Yeah, thanks, Peter. We're planning, in the process of engaging with the FDA on that phase II data. I think at this point, our base case remains that we would need to do the phase III study as designed. No change on that expectation. I don't have a specific timeline. I would expect it to happen in the second half to provide more clarity. I would also note that we continue to follow these phase II patients for a longer duration as well, which could provide us additional data. We do note the FDA's recent decisions or recent guidances from some of other therapies that could be available for Huntington's disease, which certainly, I think, shows the FDA's openness if the data ultimately is compelling. We certainly want to have that engagement, but I wouldn't change our base case at this point that a phase III study would be required. Thank you. Thank you. Our next question comes from the line of Sachin Jain from Bank of America. Please go ahead. Hi there. Thanks for taking my question. I'm going to ask a question that probably hyped, given there's a lot of focus, and it's a kind of catchall question. Given the change from your communication in and out of ianalumab Sjögren's on clinically meaningful, just wondering whether you've decided internally how you define clinically meaningful for three reads investors most focus on, so Pella, remi MS, DM1. Maybe just give you a catch. Is it fair to think that any statistically significant benefit is clinically meaningful in your eyes for different reasons for each asset, and any changes in level of confidence on each? Thanks a lot, Vas. Yeah, thanks, Sachin. No change from previous comments. We don't know anything else that I can provide on any of the three. I think in terms of how we will read them out, I think we always focus on the primary endpoint and statistical significance, and reaching the goal and the primary endpoint in the study. That will guide how we communicate and then as appropriate, additional secondary endpoints, as well if appropriate to comment on them. I think for pelacarsen, as we've guided in the past, we've powered the study for the kind of 13%-15% CVRR benefit, and certainly are hopeful to see that level or higher. If we can see higher, obviously we'd prefer that, but I think that's how we think about it. In MS, we'll certainly be looking at not only the ARR reduction, but also the impact on disability. Clearly on DM1, in addition to vHOT, also want to see some of the secondary endpoints and how they perform as well. I think that the reality is we have to be thoughtful because we want to be able to preserve the ability to present this data at high profile congresses in the future. We'll navigate that best we can, making sure investors have clarity on what we believe the path forward is, but still preserving that ability to present the data as well. Can I just take one follow on, Vas? You have commented in that answer to the powering of pella. I do not think you have ever given us any color on how remibrutinib MS or DM1 are powered. I do not think we have for either of those. I think for MS, you all know well how studies that are head-to-head against Aubagio have been powered in the past. I think you have that as background, I do not think there is more that I could provide there. I think on DM1, primary endpoint is vHOT, and then we have the various secondary endpoints that we have been discussing with the agency. I do not think we could provide any further clarity on that one at the moment. Thank you. Thank you. Your next question comes from the line of Florent Cespedes from ODDO BHF. Please go ahead. Good afternoon. Thank you very much for taking my question. Florent Cespedes from ODDO BHF. A quick one for Mukul. Maybe Mukul, could you give us a little bit more color about the one-off events which impacted the Q2 top line and operating profit margin? Some color on that point would be great. Thank you. Thank you very much, Florent, for the question. The one-time phasing that I mentioned. We have a one percentage point impact on top line. This is primarily inventory-related changes that we saw across the whole world. This would simply move from Q2 to Q3 from an inventory perspective. On the cost side, on the R&D phasing side, we have a couple of clinical trial-related costs that have essentially were planned for Q2 and now will move to Q3. If we put both of them together, on the top line it's an impact of 1%, and on the bottom line, the cumulative impact of the top line over-delivery added or compounded by the cost phasing leads to a 5% impact on the core operating income. It's very clear. Thanks, Mukul. Thank you. Your next question comes from the line of Colin White from UBS. Please go ahead. Hi, Colin White from UBS here. Thanks for taking my question. Just to go back to remibrutinib and MS. Please could you recap specifically what gives you confidence that remibrutinib can improve upon the annualized relapse rate of about 0.1 Aubagio has achieved in recent RMS studies? Well, I think for us, as you know, we don't have phase II data. We're basing this based on other BTK inhibitors performance in similar studies. We continue to monitor blinded rates for safety and relapse rates, and I think taken together, that gives us confidence that the study is performing as expected, in terms of the differences between the active and the control arm. Not more we can say at this point until we ultimately read out the trial. I think for us, clearly with remibrutinib, in addition to looking at annualized relapse rate and MRI performance, how it performs in disability progression will be important to understand, is remibrutinib something that would be used in a setting post the B-cell antibodies, or could it be used in a setting in line or ahead of the B-cell antibodies? This will all be data-driven. Obviously, once we see that data, we'll be able to provide better guidance on that use. That's probably about as much as we can provide at this point. Thank you. Thank you. Your next question comes from the line of Richard Vosser from JP Morgan. Please go ahead. Hi. Thanks for taking my question. Just another question on pelacarsen. We've seen some other cardiovascular trials recently suffer from high levels of drop-ins of existing therapies. Wondering how you've controlled for that in the HORIZON trial. Just thinking about it in relation to, I suppose, PCSK9s, but also for GLP-1s and SGLT2s, given the 25% of patients that are diabetics. How should we think about that level of use and potentially the impact on any benefits of pelacarsen? Thanks so much. Yeah, thanks, Richard. It is important to know we study pelacarsen on top of optimized background lipid-lowering therapy. Our current estimate is that the number of patients who were on incretin-based therapies in the study is less than 10%. We estimate it to be around 6%. We don't believe that if there was any effect from those medicines in the setting, that we wouldn't expect that to impact the results here. When we look at it overall, it's more or less as we planned in terms of background therapy. We don't think that will be a major swing factor, at least based on what we can see so far. Thank you. Okay. Yeah, go ahead, Richard. It was just on PCSK9s, just one quick follow-up. Was that controlled as well? I know it was 11% at the start, but does that creep up during the trial? Anything you can say? I think with respect to PCSK9s, I believe they've also been in line with what we saw earlier in the study, but we could follow up with the details. I know the GLP-1 data for sure, but I don't recall that the PCSK9s are a source of concern either. Brilliant. Thank you very much, Vas. Thank you. Your next question comes from the line of Michael Leuchten from Jefferies. Please go ahead. Thank you. Question for Mukul, please. The guidance for mid to high single-digit core EBIT growth in the second half seems to imply more cost control, especially taking into consideration the Avidity R&D phasing that you just mentioned. Can you talk about the P&L dynamics? Where are you containing costs, and is that something that we need to take into consideration as we think about 2027, or is that sort of tucking in expenses that will not recur? Thank you. Yeah. Thanks, Michael, for the question. I think from a P&L dynamics perspective, two things I'd say is H1 to H2, we always have from a profitability perspective, from a spend perspective, H2 being a higher spend half. For example, Q2, our profitability finished with 41.2% operating margin, and we know that Q2 is typically the most profitable quarter, so to say. That part of the dynamic will remain going into this year as well. In terms of where we are working from a productivity perspective, things have been pretty consistent from beginning of the year. Beginning of the year, we said we'll continue our productivity measures when it comes to our manufacturing operations. Operations has done very well. Gross margin would be pressured as the portfolio shift, but productivity should help us keep gross margins more or less to where second half last year was on gross margin. On R&D, we will continue to invest what the pipeline needs. This would mean incremental investments this year on the back of Avidity, but also a couple of other assets that we took on, including Tourmaline, Regulus, and Amplyx last year. SG&A, as a percentage of sales, is a place where we believe we as a company can do more productive efforts, specifically focused on third-party spend, which is upwards of $10 billion for the company. That is what we continue to do. We look at Q2, we actually see while quarter-over-quarter gross margin has been a negative, but SG&A, as a percentage of sales, has actually been a positive, negating that gross margin impact. From a prognosis perspective, that is something that we will continue towards the second half of the year. Thank you. Thank you. Your next question comes from the line of James Quigley from Goldman Sachs. Please go ahead. Great. Thank you for my questions. I've got one on deals and M&A. I think, Vas, your quote on Bloomberg is you'd consider larger deals again. This is a bit of a transition in sort of commentary over the years. A few years back, it was no big deals, then it was focused on bolt-ons, then we had Avidity, which is later stage and a bit larger. What's changed either internally at Novartis or externally that's driven openness to larger deals? What could a bigger deal look like in terms of strategic fit, given your therapeutic areas and technology set? Thank you. Yeah, thanks, James. I don't know what exactly Bloomberg wrote, but I can say there's no change in our M&A strategy. We've been, I think, disciplined and consistent that we focus on steady deals in the kind of sub-$2 billion range, which with the upfront in that range, often lower. Then selectively do larger deals in the range of things like Avidity when there is a compelling asset that fits with either our platform strategy or our TA strategy, or both. Avidity fit both. No change at all in our M&A strategy. We don't need to do anything larger than that. We have full confidence in our internal portfolio and pipeline and our R&D engine. Yet we know we need to constantly supplement that engine with additional external innovation. You can expect just a continuation of what you've seen over the recent years. Great. Thank you. Thank you. Your next question comes from the line of Simon Baker from Rothschild & Co. Please go ahead. Thank you for taking my question. One on the pipeline, if I may please. I wonder if you could just update us on your thoughts on the confidence and potential for abelacimab. I see that it is still showing as a 2027 readout milestone in the slide deck. Clinical trials is now showing a late December 2027 primary completion. Is that still a 2027 out event or is the potential for slippage into 2028? Thanks so much. Yeah, thanks, Simon. We remain excited about abelacimab. As a reminder, this is a monthly monoclonal antibody that has shown outstanding, I think, overall pharmacokinetics, pharmacodynamics on very well-behaved antibody on factor XI. We have seen with competitor data that factor XI appears to deliver on the promise of very strong anticoagulation without increased bleeding risk, which is what the genetics would indicate for us. We have the study ongoing in patients who are ineligible for NOACs. We have upsized that study given the event rates that we saw, so you can also see that at clinicaltrials.gov. We are on track for a readout before the end of the year. That is a readout at 75% of events, just to be clear, and then the study would continue if it is not successful at that point, or that does not meet the stopping criteria at that point to finish the number of events in 2028. We evaluate now or are in the process of beginning additional studies in secondary stroke prevention as well as assessing other indications as well. Excited about that opportunity. Think it could be a significant asset if the trials ultimately readout positive. Great. Thanks so much. Thank you. Your next question comes from the line of Thibault Boutherin from Morgan Stanley. Please go ahead. Yep. Thank you. Just a question on Itvisma. Now that you have launched the drug and we start to see the sales coming in, do you have any more visibility on what you expect to be the shape of the bolus of sales from this therapy over the next few years? If you have any indication on when you expect the sales to peak, is it next year? Is it 2028? On the magnitude, I think in the past, Novartis was talking about multi-billion dollar for this asset. Just if you could comment on your confidence on the peak sales. Yeah. Yeah. Thanks, Thibault. No change. I'd say, as you know, just got the European Commission approval. I think in general with gene therapy, as we learned with Zolgensma, it does take some time to get the reimbursement. Once we get the reimbursement, we see a relatively rapid ramp on the product. I would say over the three-year period is where we would expect to see the ramp on Itvisma as we get additional countries online. It's also worth noting as with Zolgensma, we expect ex-U.S. to be larger than the U.S. Same dynamics we saw with Zolgensma. All on track, but it is important to note this first year will be mostly focused on securing reimbursement. From a peak sales potential, also no change. With Zolgensma, we expect the continued steady state in this blockbuster billion-dollar-plus territory, and we expect Itvisma to have a kind of $2 billion range so that the overall package of these two medicines have a $3 billion potential. Thank you. Thank you. Your next question comes from the line of Steve Scala from TD Cowen. Please go ahead. Thank you so much. Vas, you called out Cosentyx in non-U.S. markets as a growth opportunity. Kesimpta had leadership in nine out of 10 markets in Q4 and Q1, and eight out of 10 markets in Q2. One difference appears to have been China. I'm curious what happened with Kesimpta in China in Q2. Thank you. Yes, Steve. No change in China that we're aware of. We did drop off in Italy, actually, from nine out of 10 to eight out of 10. I'd say in general, Kesimpta does very well in Asia. It's a market leader in Japan, but it is worth noting that multiple sclerosis levels in Asia are significantly lower than what we see in other parts of the world. The overall sales potential is lower. I would say overall, we continue to see significant opportunity outside of the U.S., just simply because these cell therapies have just not adequately penetrated the market outside of the U.S. For all B-cell therapies, there's just an opportunity to get more patients on the best possible medicine. I don't have the details on the Italy shift, but I imagine it's just market share dynamics in a country that we have, of course, other competitors. Thank you. Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead. Thanks for the question. Vas, I guess the question on our side is, just given the substantial valuation increases that we've seen across biotech in the last year, how should we be thinking about the business development opportunities as you see going forward? You talked about the BD focus really being no change, but certainly one change in that mix has been valuation. Just trying to get a better sense of how you're thinking about that and the kind of risk that Novartis needs to take going forward. Then just a quick question that I wanted to ask on the pelacarsen side of things. It's a composite endpoint, and my recollection was we saw a muted benefit, or maybe not muted, but a teens benefit with SGLT2s, but an outsized benefit in the heart failure population on cardiovascular death. How might that kind of an outcome play out? Or do you see that as a potential outcome for pelacarsen as the data reads out in the second half of this year? Thanks. Yeah. Thanks, Seamus. I think on valuation, look, when I reflect over nine years, I would say that the price of assets that don't have or have minimal clinical data has gone up quite dramatically. You see now ourselves and our peers doing upfronts that are over $1 billion for assets that have limited or no clinical data, which is, I think, if you look at the long arc of the sector, a significant shift. Which I think just means you have to have higher levels of conviction in the science and differentiated. Something that you believe is unique and differentiated. In our case, the three deals we did this year, with Pikavation, we believe that there is an opportunity to address more of the pan-mutant kind of approach in PI3 kinase-driven breast cancer with Excellergy to tackle with, hopefully, a much higher efficacy than historical IgE therapies, given the ability to target IgE in a fundamentally different way. In the case of Myricx, a novel payload that hopefully has the NMTi payload, it has a cleaner profile than the topoisomerase payloads. I think you have to have some sort of differentiated conviction, just given that the price levels are climbing. That said, you have to be able to access external innovation to grow companies of our size. We have to just keep looking for that right balance of breakthrough science and then finding the right balance from a valuation standpoint. Your point on pelacarsen is well taken. There is an element here of the MACE endpoint versus CV death. Lp is associated with high rates of sudden cardiac death, particularly in younger patients. Very difficult, of course, for us to say without having locked the database and seen the data to know exactly, but there is at least the potential for CV death to be an important component, at least theoretically, given the profile of Lp. It's something we'll have to look carefully at and how that drives versus other elements of the endpoint. Next question. Thank you. Your next question comes from the line of Kerry Holford from Berenberg. Please go ahead. Thank you very much. Question from me on KISQALI, just on the IP, the extension that you've been granted related to pediatric exclusivity. Can you confirm now that that composition of matter expiry is May 2032? In the context of your earlier settlements with generic players, is that when we should now be assuming generic market entry? Yeah. Thanks for the question. Our guidance is a second half 2031, Q3 2031 guidance for LOE for KISQALI with the pediatric exclusivity, that's inclusive of the settlements that we have with generic manufacturers. Thank you. Just as well, quick note as well, we double-checked. In China for Cosentyx, we have 70% market share and are market leader as well. Next question, operator? Thank you. Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please go ahead. Thank you for taking the question. Maybe I'll take one on ianalumab and Sjögren's, given we must be relatively late in the regulatory review process. Could you perhaps just give us an update on how that's proceeding? Is everything on track? Then on commercial readiness, some sense of expectations for magnitude of initial access, breadth of willingness to prescribe, et cetera, could you just give us a sense in those parameters? Should we be looking at something like classic immunology launch like Cosentyx? Or are there other things, other analogs, we should perhaps bear in mind? Thank you. Yeah, thanks, Emmanuel. Again, as far as we know, no advisory committee plan for ianalumab. We've had the mid-cycle review meetings, so we're continuing to provide FDA all the information they're requesting. All on track from that point for a Q3 approval. I think from a market uptake standpoint, our current expectation, given that there's no approved therapy in Sjögren's, we should get relatively broad access with all the caveats that this does take time to get the environment opened up. Then we think that physicians, given that the drug has a clean safety profile, will err on the side of trialing the drug in patients and ultimately seeing how patients respond. This is a very heterogeneous patient population. Even the ESSDAI endpoint is covering a broad range of domains. We do see in our own data sets there are patients who are super responders and patients who respond less well. I think I'm going to see in the marketplace for patients who respond, they'll stay on medicine and other patients will cycle off. I think the key thing here is we have a clean safety profile, which lowers the bar for physicians to at least give patients the option, given the nature of disease. These are often young female patients in working age who obviously want better control of their symptoms and their disease. We're optimistic on that front as well. We continue to guide that standalone in Sjögren's, we should reach a multi-billion dollar potential. As I mentioned in my opening comments, ianalumab has a number of other indications that we're also pursuing, both in hematology and in immunology. Thank you. Thank you. Your next question comes from the line of Graham Parry from Citigroup. Please go ahead. Great. Thanks for taking my questions. On pelacarsen, a quick follow-up, actually, just you clarified the 13%-15% is what the trial is minimally powered to detect. I think you said it was just what it was powered for, but I think the design paper says it's 20% on all comers. Would you view that 13%-15% as a clinically meaningful result? That was a follow-up. On remibrutinib MS, could you just comment on your confidence in achieving disability progression that was taught to the brain penetration of the molecule and action at the microglia, compared to remibrutinib, which actually didn't show that with statistical significance in its phase III. Thank you. Thanks, Graham. You are correct, 13%-15% would mean a win. It's powered for 20% for the patients who are 70 mg in DL and above or 25% for the 90 mg DL and above. I think we would say in the mid-teens is clinically meaningful given that these patients have no other option, and that this is an independent risk factor. Yeah, we'll ultimately see what the data shows. With respect to remibrutinib and MS, I think everything indicates to us that the trial is being conducted and the data that we're seeing that from an ARR standpoint, that we're on track versus what we would have expected in the data set. As you know, with disability progression, we have no way to know. I think it's very difficult for me to handicap that. We saw the data with fenebrutinib. We do believe that our molecule is more potent on the target and more selective. We're hopeful that that leads to the improvements in disability progression that would bring us in line with the antibody-based B-cell therapies. There's no way for us to assess that in any sort of objective way at this point until the study reads out. Thank you. Thank you. Your next question comes from the line of Rajesh Kumar from HSBC. Please go ahead. One question for Mukul. Thanks for clarifying what sort of cost cut is flowing forward. Just if we are thinking through the P&L on margins, the gross margin level we have now sort of captures most of the interest or negative impact. Should we sort of expect this to be the level from which you can build based on when you get growth from younger products in the portfolio while you get the profit growth through SG&A management and R&D phasing obviously growth in second half. Just in terms of gross margin trough point, should we be thinking about now or later in the year? Yeah. Thanks for the question, Rajesh. I think gross margin, we already said we had this discussion beginning of the year, I think it's the point on the gross margin where we are now is a good point to take from modeling for the future. What we already said is, end of last year, Q3, Q4 of last year, if you take an average of that should be the gross margin point that we take. Worth saying is that gross margin would never be flat. It depends on the profit mix that we have from a quarter-on-quarter perspective. As we move the portfolio forward, there are pushes and pulls that we have in our portfolio. We've got a great drug if comes to life like remibrutinib, a small molecule. We don't have any royalties versus some of our other portfolio where the gross margins would be more stretched. I think from a modeling perspective, I would take the year-to-date gross margin as a good indicator of what's to expect for year to go. Thank you very much. Thank you. As a reminder, if you wish to ask a question, please press star one and one on your telephone and wait for your name to be announced. Please limit yourself to one question and return to the queue for any follow-ups. We will now go to the next question. The next question comes from the line of Florent Cespedes from ODDO BHF. Please go ahead. Good afternoon. Thank you very much for taking my follow-up question. A question on the cardio business. Assuming positive results from pelacarsen later this year and positive Leqvio outcome trials next year, will you have to use either new sales force or will you use an existing sales force to be the one on Leqvio, beyond Leqvio? Some color also on the budget going forward. Will you have to invest massively in marketing to promote the new exciting clinical results? Thank you. Thanks, Florent. I think at the moment, we would expect that for pelacarsen, that we would be able to leverage the existing global Leqvio field force that we have. Of course, usual adjustments that we might need to make. I think the overall, any investments that would be required for the pelacarsen launch, particularly around disease awareness to get additional patients tested for Lp(a) levels, is all factored into the guidance that we've been given on margin progression. I think as we've noted in the past, it will take time to drive up these biomarker testing rates. We're hopeful that with a drug that has an attractive efficacy that will motivate physicians to test and ultimately patients to get on therapy. I think for elsewhere in the cardiovascular portfolio, obviously with abelacimab, as well as the phase III program we'll be running with our anti-IL-6 recently acquired medicine as well, those might require additional field force investments. We'll of course provide any guidance on that once we get those phase III results and have a better read on those. Those obviously go to different physician segments, both for anticoagulation and in the case of the anti-IL-6, pacibekitug, would be for physicians who are treating in the more acute coronary setting. Good. Thank you very much, Vas. Thank you. Your next question comes from the line of Colin White from UBS. Please go ahead. Hi, Colin White from UBS. Thanks for taking my question. Just on the stocking in the quarter, we understand the 1% of sales beat was from stocking. Cosentyx explained some of this, but not all of it. Are you able to provide any color on what other drugs may have experienced stocking? Mukul. Yeah. Colin, this was no particular brand I would call out on stocking. I think this was across the board. It was not just in one single geography, but multiple geographies. I would not attribute this to a specific drug, the stoc king. Yeah. Maybe just to provide a little bit of color as well. This was related to the implementation of our new SAP system, where it is often the case when we roll that out in multiple geographies, we do have to shift stocking levels for the cut over to the new SAP system. That is the driver and the reason why it is not associated with one brand, per se. Thanks. Thank you. Your next question comes from the line of Michael Leuchten from Jefferies. Please go ahead. Thank you for the follow-up. Vas, interested in your Scemblix comment about the second half aiming for NBRX leadership in the U.S. Is that just natural progression of the dynamics that we are seeing, or is there a pivot point that would inflect that further? Thanks, Michael. I think, yes, it's just the momentum we're seeing. I also think that now we've gotten very strong access position for the brand. I think that stronger access position as it flows through. One of the things with CML is because it is a rare disease and there's a limited number of newly diagnosed patients in a given year, it just takes time. Any of the smaller fluctuations that you see quarter on quarter is driven by very few patients. All indications we're seeing is that given the very strong safety profile that physicians are seeing with the drug and obviously the known efficacy profile, there's just a lot of momentum now. That gives us confidence that we'll get to that market leadership position in the U.S. I'll flag again, I mentioned in my opening comments that we're really just at the beginning now of moving from third line to first-line ex-U.S. I think one of the things that's been a positive trend as well, there are multiple generic medicines available in that first-line setting. There seems to be a strong demand from physicians, but also payers are accepting the fact that Scemblix has demonstrated that it is a superior medicine in that frontline setting and more openness to give us the reimbursement we would expect for such a medicine. Thank you. Your next question comes from the line of James Quigley from Goldman Sachs. Please go ahead. Hello. Thank you for taking a follow-up. I think earlier this year, Lutathera generics were cleared to launch by the courts in Delaware. I think a small impact overall on the sales perspective. How should we think about potential launches for future generic RLTs? We don't have any experience here, obviously, when thinking about generic impacts for RLTs and Novartis clearly has a number of competitive advantages. How are you thinking the markets could react, or how could this play out if and when we see generic RLTs launching? Thank you. Thanks, James. As far as we know, neither of the two companies has received an FDA approval. One is a 505(b)(2) and one is a generic. We continue to believe there needs to be a high threshold used by regulators to ensure that the same dose of radiation is being delivered to the tumor versus the originator brand that we have. That being said, we do believe that given our extensive network of supply and our ability to deliver on time in full to physicians across the globe, but also across the U.S., we've mitigated impact from a generic launch, even with a lower price being brought into the market. We think that RLT will behave very differently than either small molecule and potentially biosimilars just for biologics, just given the logistical complexity and as well the expectation that physicians have that the medicine is delivered on time each time, given the nature of the logistics for the office. We feel confident that from that said, we continue to work to keep bringing better medicines, not only with the case of PSMA and prostate cancer, but we also have follow-on efforts as well, for GRPR, and really trying to improve the treatment for neuroendocrine tumors as well, follow-ons for Lutathera. Stay tuned on that front as well. Great. Thank you. Thank you. Your next question comes from the line of Urban Fritsche from ZKB. Please go ahead. Yes. Thanks a lot for taking my question. A question on Leqvio in China. Maybe if you could share some details on how the momentum is developing and what would be needed to really have upside to your current guidance of, I guess, it's $1 billion in China. Thank you, Urban, for the question. With Leqvio, we initially saw very strong uptake in launch, in the private self-pay segment, which I think really indicates there's a high demand for the medicine in the secondary prevention, but impo rtantly as well in the primary prevention setting as well from a self-pay standpoint. I think what we've seen is very strong performance now once we had the NRDL listing. We see that both in the hospital segment and in the traditional segments as well, very strong performance. I think seeing that continued steady growth should get us to it being our largest medicine potentially that we've ever delivered in China. Entresto gives us a very strong benchmark in China, but we think Leqvio has the potential as well. I think really it depends now on the dynamics on the growth as we try to continue to expand into additional hospitals, into additional regions. I would say as well, we look now to also bring additional siRNAs into the China market rapidly. We think there's an opportunity in cardiovascular hypertension and CVR risk reduction for our follow-on siRNAs in China, where there seems to be a high demand for infrequently administered therapies with very clean safety profiles. I think that gives us a bigger opportunity in China in the longer term for that cardiovascular siRNA portfolio. Thank you. Thank you. Your next question comes from the line of Steve Scala from TD Cowen. Please go ahead. Thank you for the follow-up. Were there any surprises in the label or the pricing of the oral PCSK9 inhibitor recently approved that alter Novartis's view of the commercial potential for Leqvio? Vas is a very skilled and experienced drug developer. Any thoughts on how limiting the fasting ultimately will be? Thank you. Thanks, Steve. I think no surprises other than the reference to the PCSK9 outcomes trials. I think we're trying to just understand that given that usually we don't get to refer to somebody else's outcome studies. I think with respect to the other than that, nothing that changes our view. I mean, look, our belief is that there's a significant segment of the market, and this is a huge market, the number of patients who are not at goal for lipid lowering to reach their lipid targets is significant in the U.S. As we talk about here, a 70 million-patient segment overall, a significant portion of these patients who are not at goal. I think the opportunity for the PCSK9s, for these advanced lipid-lowering therapies, is significant. We see that there's ongoing demand for patients who want infrequently administered therapies and physicians who want to provide the therapy, as well in a physician-administered setting. I think the fact that we are not participating in the gross-to-net battle that will ensue between the monoclonal antibodies and the orals and actually are in a segment that's insulated from that, I think gives us a strong position in the longer run for our goals of a $4 billion-$5 billion-plus product. Now, with respect to the food effect, I think it remains to be seen. I think clearly an 8-hour fast plus the 30, I think it's a 30-minute or so post-fast, in this particular drug. I think we'll have to see because obviously patients can find ways to manage that. I would say there are other competitors coming that, as far as we understand, may not have the food effect. Given that, I think we just have to focus on our segment and focus on the patients that we can reach in that Part B buy and bill setting in the U.S. I do want to pitch again, outside of the U.S., particularly in Asia, we see very strong uptake for siRNAs. We think that it's a very country-by-country situation as to what kind of profile people are looking for in the medicines. At least in Asia and Middle East, we see a high demand for siRNAs that gives us a lot of confidence. Thank you. Thank you. Your next question comes from the line of Sachin Jain from Bank of America. Please go ahead. Hi, thanks for the follow-up. I just had one on FSHD. In your introductory comments, you referenced ongoing analysis looking at correlating CIndU for outcomes and that you would use that for the conversation with the regulator. I guess two linked questions. One, will you comment about data when you have it? B, what conversations have you had with the regulator around using that analysis to try and accelerate the biomarker driven file? Yes, Sachin, we have the previous interactions that Avidity had with FDA on what would be required in this phase I-B/II study to enable filing. We are very clear on what the FDA is looking for. If you think about it, the way the FDA thin ks about this is we know the DUX4 is impacted in this disease, how is circulating KHDC1L correlating with DUX4? How is that relating to creatine kinase? How is all of this relating ultimately to muscle function as best as we can determine in the patient set that we have? We have that data. We are analyzing the biopsy data that we have as well, from the patients in the trial, and then putting that all together to take it to the FDA. What I can say is the data that we've seen thus far gives us, we believe we have reason to have the discussion with the FDA and to make the case. We can't guarantee that we will win the case, I think we have what we think is worthy of a case that should be made to the FDA for an accelerated filing. Once we have that meeting, we'll provide further guidance. Very clear. Thank you. Thank you. We will now take our final question for today, the final question comes from the line of Peter Verdult from BNP Paribas. Please go ahead. Yeah, thanks for the follow-up. Quick one to end for Mukul Mehta, just on Rhapsido. The IQVIA trends look great, and I heard your comments, Vas Narasimhan, earlier about don't expect an inflection, but can you help us at all, giving us a ballpark split between what is bridge versus paid prescriptions right now? Just any ballpark numbers would be helpful. Thank you. Mukul? Or is it just me? Well, I can take that, Peter. I was directing it to Mukul, but on Rhapsido, yeah, we're not providing any detailed guidance on the bridging program. What I would say is it's in line with what we've historically seen in terms of getting patients over to paid scripts. I think now for Rhapsido, it's real ly just a story of step by step continuing to drive up the access environment. I mean, we see strong demand, very strong demand in the dermatology segment. We're working on building stronger demand as well in the allergy segment. In general, once physicians start using the medicine and they get the feedback from the patients that they're seeing disease improvement within hours and certainly within a week, that gives a very compelling case to continued use. We're trying to stay really disciplined on the gross to nets here. We just believe that if we play the long run out here, remibrutinib has the potential to be used in a broad range of indications, as you all well know. Any points we give now, we won't be able to get back in the future. We're just being very thoughtful. I think the access will improve sequentially over the course of this year, that will ultimately set us up, I think, for a strong 2027 and then a strong longer-term outlook for remibrutinib in the future. Thank you. Thank you. I will now hand the call back to you, Vas. Absolutely. I just wanted to come back to Richard Vosser's question. We can confirm that the PCSK9 use was just modestly increased versus the 11% from the baseline population. Not a significant factor we expect in the studies. Thanks for that question, Richard. Thanks, everyone, for joining today's conference call. We'll look forward to keeping you up to speed as we have the readouts over the coming months. Of course, catching up with you in various settings in the meantime, and we look forward to a strong second half and wish you all a great summer break as well. Thank you. Thank you. This concludes today's conference call. Thanks for participating. You may now disconnect.