Hello from sunny Helsinki, and welcome to Orion's Q2 2025 earnings conference call and webcast. My name is Tuukka Hirvonen, and I am the Head of Investor Relations here at Orion. In a few moments, our CEO and President, Liisa Hurme, will present the results and key events from the past quarter, followed by the opportunity to ask questions from Liisa and also from our CFO, René Lindell, who is here today also. We will start taking questions first from the conference call lines, and then afterwards we will turn to the webcast. So you all have the opportunity to type in your questions using the chat function of the webcast. Kindly state your name and the organization you are representing before asking your question. Also to be noted that recording of this webcast will be available on Orion's website later this afternoon. Also to our Finnish-speaking viewers, information that also a. Finnish interview of the CEO, Liisa Hurme, will also be available on Orion's website later this afternoon. Without any further delays, I'd like to draw your attention to this familiar disclaimer or safe harbor statement before letting Liisa take over. Liisa, please. Thank you, Tuukka. And welcome on my behalf as well. I start with saying that all Orion's divisions continued very good performance during the first quarter this year. But before I go to numbers, let's look at some highlights from the second quarter. FDA gave approval, and CHMP recommended for approval in EU darolutamide in combination with ADT, androgen deprivation therapy, or the use of darolutamide and ADT in patients with metastatic hormone-sensitive prostate cancer. Our partner, MSD, has shared information that they have expanded the opevesostat program to women's cancers. Also we shared information in our Capital Markets Day that our first, Orion's first biologics, will enter clinical stage during the next 12- 24 months. We've also broadened our research pipeline by exercising an option with the company called Glykos to use their antibody drug conjugates, next generation ADCs, for development of products for cancer. Also, we've made an agreement with a company called Shilpa for recombinant albumin, and with the company called Criceto for oral mucosal apomorphine for treatments of Parkinson's disease patients. We've also updated the potential of the Easyhaler portfolio to be exceeding EUR 300 million in annual sales. Now, first, let's start with the Q2. Our net sales grew 27% and totaled to EUR 416.5 million. Operating profit grew 59% with an operating profit margin of 25%. Operating cash flow per share increased almost 200% to 0.57 eurocents per share. I will come back to that later on. When we look at the net sales development in different divisions, it's very self-evident and clear that the biggest growth comes from innovative medicines and from Nubeqa sales and royalties from Nubeqa sales and also product deliveries to Bayer. However, all the other major divisions are also performing well. We see here branded products with EUR 9.4 million growth. Generics growing EUR 8.5 million, and animal health EUR 6.9 million. Fermion was slightly lower sales than in the previous year's quarter two, mainly due to the some capacity constraints. Then looking at the operating profit, pretty much the same message here. Royalties contributing to almost EUR 46 million and increase in sales volumes, EUR 30.1 million. Change in prices, cost of goods and product mix, we can see - EUR 14.5 million. This comes, of course, mainly from the Simdax and Dexdor, which are losing where the prices are still decreasing due to the generic competition. I would like to draw your attention to the fixed cost, which is EUR 22 million. This is all planned. We have clearly stated that we are investing more in our research and development and sales and marketing. So this is all according to our plans. Now I move on to the first half of 2025. Again, more than 20% growth in net sales, ending up to EUR 771 million, 100 millions, and then operating profit growing almost 50%, ending up to EUR 182.5 million. Operating cash flow here, when we look at the first half of the year, is more leveled out compared to the second quarter and ends up with EUR 1.12 per share. Now I move on to different divisions. Here you can clearly see the innovative medicines. We have slightly changed the way we show the data here on slides, so we can see the second quarter, always the quarterly results, and then a year to date. So here we can see the first half of the year. So the growth, both on a quarterly level and on a half-year level, is around 80%. On the right side picture with several columns showing the quarterly sales or the quarterly royalties we are receiving from Bayer and also the product deliveries, product sales to Bayer. We see clearly the back-end loaded dynamics of year of Nubeqa to Orion. Already we see again at all-time high product sales to Bayer. Branded products keep on going with a steady more than 10% growth. Growth in quarter two compared to the previous year's quarter two was healthy 13%, and even during the first half year, more than 10%. The driver of growth here is clearly Easyhaler portfolio, and within that portfolio, budesonide/formoterol combination product. CNS sales here in a lighter blue is growing due to the repatriation of Stalevo rights in Japan. But also there are some new minor products that we are launching, or smaller products that we are launching across Europe currently to our CNS platform. The latest in licensing agreement, as I already mentioned, was for APORON, a novel apomorphine oral mucosal spray, which treats the off episodes of Parkinson's patients. A very good way to quickly get a treatment to a very difficult situation. Women's health keeps on growing. It's the smallest segment within branded products with the highest growth percentage. Generics and consumer health is really doing good work. We do know that generics market usually grows, or the average growth is from 4%-6%. If you look at the second quarter numbers here, the growth was 6.7% compared to the last year's second quarter. When we look at the first half of the year, we are almost growing 4%. This is a result of hard work, both with new launches. We have had several new launches across Nordics and Eastern Europe, but also we've been able to provide and service our customers. So we've been able to take a bit of an advantage when other companies haven't had the products available in our regions. Animal health keeps up the good work, growing almost 23%. But here we, of course, need to remember that the comparison year was very, very tough for animal health. So this is kind of gearing up towards the normal animal health performance. Here again, growth comes from all segments, from livestock, from companion animals, and many, many different geographies. This is especially, I'm happy to show this top 10 list if I compare to how it looked like a year ago. Almost all products are on par, and most of them are growing. Of course, Nubeqa as the first one, Easyhaler, entacapone products, animal health sedatives, Divina series actually growing second fastest after the Nubeqa. Burana more or less on par, and Simdax and Dexdor fighting against the generics and thus decreasing. Also, what we can see here is that the major divisions, innovative medicines and generics and consumer health, are getting more and more balanced. Their share of total sales of Orion is approximately 30% for both of them. Then for branded products, it's 20%. Now, on our clinical development pipeline. We showed this slide first time at the Capital Markets Day in May. You can see that we've added two new projects that we are not carrying out by ourselves. One is DASL- HiCaP for darolutamide. Bayer is totally responsible for this study for neoadjuvant prostate cancer. But Orion has an option to jump into the study, if you could put it that way. Then also, of course, receive royalties as a result of this. We have levosimendan, oral levosimendan. Our partner Tenax is developing that. CYPIDES is still ongoing. We've had some questions regarding this phase II study, but it's really a study where we are completing the phase study and are responsible for that. This study was initially the one that was used the data from this study to design OMAHA1 and OMAHA2a. But it is so that pharmaceutical companies are obliged to carry on studies as long as patients need the drug. All other studies are proceeding as planned. Of course, then I forgot to mention the expansion that I actually talked about in the beginning, expansion of opevesostat program to women's cancers in phase II. Now to a very different topic, sustainability. We are very happy that Science Based Targets initiative or based on the Science Based Targets initiative. Our near-term emission reduction targets are in line with the latest science. We have a twofold strategy here. One is that we are committed to decrease our scope 1 and 2 emissions by 70% by 2030 by 70%, using 2023 as a base year. The other commitment is a different one. There we commit that 78% of our suppliers, which is a huge number actually of suppliers around the globe, are committing to the Science Based Targets initiative by 2029. So how can we do this? Well, first of all, we have a very, very good track record. Now, you can't really see the history except from the year 2023, which is a base year here, that we reduced already 21% of emissions during one year to 24. Now there really is a very concrete plan how we will reach that minus 70% by 2030. The biggest source, and you can see here the darker blue. Bulk. The lowest bulk here is really production of steam in our factories. Those processes we are going to be electricity. We are going to use electricity there. We've used already or done already a lot of work changing to gas and biogas and trying to reduce emissions as much as possible on that part. Of course, other big part is the district heat, is just heating your factories and your offices. There we are. We've done also a lot of work changing from the to a local heating centers where we use the energy from our factories in our campuses. But there is still a lot to do to change to greener choices in the remaining parts. Of course, the residual part comes from the traffic and cars and car fleet where we step by step are moving to electric cars and other forms from diesel or benzine cars. We updated our outlook on July 9th. You can see here the numbers, the updated numbers, no change to those in this session. We say that we will reach net sales of EUR 1.630 billion from EUR 1.630 billion to EUR 1.730 billion. For operating profit from EUR 400 million to EUR 500 million. Here are some upcoming events. Next time when we will be reporting quarter three, it will be October 28th. Then in February, we will report our financial statement. I think I'm all done with this presentation. I guess it's time that René and Tuukka will join me here. Yes, thank you, Liisa, for the presentation and remarks. As stated in the beginning of the webcast, we will first take questions from the conference call line. So at this point, I would like to hand over to the operator. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Sami Sarkamies from Danske Bank Markets. Please go ahead. Hi, I have four questions. We'll take these one by one. Starting from the new guidance, you're still maintaining EUR 100 million wide ranges even though you have de-risked the first half of the year. What are some of the main uncertainties you're faced with in the second half of the year? Will you take it? Yeah, I can take that one. So I think that's similar as earlier in the range on Nubeqa, of course, with these kind of numbers and volumes and growth rates, there is a range of uncertainty in where we land up in the end of the year. As we know, Q4 is the highest when it comes to the royalty percentage on Nubeqa. Also, as we've been seeing, the tablet deliveries have been growing quarter by quarter. Where we then land up at, really at the last months can have quite a big effect on net sales and also on EBIT. And of course, the R&D OpEX is another one where we do know which projects we have ongoing and what are the costs for those. However, the timing of those can impact quite a lot on which calendar year then basically the costs will be recorded. Is it this year or next year? That adds another significant variation. And that's why the range is kept as wide as it has been. There is really no space to narrow it down at this point of time. Okay, then I would actually like to continue on R&D costs. If we look at the Q2 cost level, is that a good proxy of the current run rate or should we assume a material step up during the second half of the year? I think in the first half of the year, the R&D spend has been a little bit lower than what we had expected. It's also quite typical that it takes some time for the year to build up the cost base. And as projects move forward, we are expecting to have a bit higher R&D expense in the H2 than H1. I mean, not a significant step up as you phrased it, but yes, if the projects move forward, then according to our plan, they should be slightly higher cost. Okay, thanks. Then I have a question to Liisa. What are the main challenges of Orion and what are the CEO priorities at the moment? Well, CEO priorities are very, very clear. It's really filling our clinical pipeline. We are pushing and pulling our development projects forward, actually, which brings to the previous question of R&D spend this year that the programs are there, but it's difficult to say exact timing. That's clearly one of the most important things for the CEO currently. And of course, then the other one is seeing that Nubeqa is succeeding together with Bayer. Nubeqa is a very, very important product for us. It's a very important product for our partner. That joint collaboration is another priority for us. And then, of course, the rest of the business divisions, which happily are also performing extremely well currently. I think really working to talk is the third priority that we do benefit from the wide portfolio that we have and the different business segments. Proceeding at the same path as we've done this far. Okay, thanks. And then finally, related to U.S. pharma tariffs. This is a bit speculative, but I mean even 200% tariffs have been proposed. I mean, if we assume a lower level, let's say 50% or even 100%, how could those impact Nubeqa franchise and to which extent could you mitigate the impacts if that were to happen? Yeah, thanks. Maybe I continue even from the previous question. You also asked about the challenges, not only about the priorities. Well, you already mentioned the U.S. market. There are several challenges and changes that are talked about regarding U.S. market tariffs is one thing. I think there we need to wait and see. Of course, we are not only waiting, but we are also preparing different types of scenarios. So does our partner do. So I think everybody is prepared that something probably happens, but we don't think that that would have any material impact to this year, so for the second half of this year. So we don't think that that is a challenge or tailwind for this year, by no means. On a broader picture then regarding tariffs, we haven't seen any put in force for pharmaceuticals yet. So let's see what happens. If such would come in force, we would, of course, bear our share based on our agreement with Bayer. So it would have an effect to us. But I think it's really a wait and see strategy for most of the pharma companies at the moment. No material effect for the rest of the year. However, you asked that what are the major challenges for this year. Of course, we and René can continue U.S. dollar euro ratio is one of the things that we follow very carefully. Where that would go. Otherwise, generally the situation in the world that you know there are a lot of things happening and we need to follow carefully other negotiations and initiatives for the pricing both in U.S. and Europe. Act accordingly. Maybe René, do you want to say something about the U.S. and the tariffs? Yeah, I think for this year we're pretty much already on a factored in kind of the current situation into our outlook and see it quite unlikely that there would be major impacts. However, of course, in the long term, if the dollar weakens, that starts, of course, to have an impact on the business as we are growing in U.S.A through Nubeqa. Yeah, maybe a follow-up. You previously said that you don't have any plans to establish production capacity in the U.S. Could it look different if the tariffs were really high like 100%, 200%? Is there like a point where you actually need to reconsider that stance? Well, I think I can only answer as I answered to you earlier that we need to look at the situation at that moment. Right now, we don't have any intentions to set up manufacturing capacity in the U.S. As the pharma sector has clearly informed and communicated, setting up any new manufacturing capacity would take four to five years. So for any company, that's a huge undertaking to be done. Okay, thanks. I don't have any further questions. The next question comes from Shan Hama from Jefferies. Please go ahead. Hi, thank you so much for taking my questions. I'll take them one at a time as well, if that's okay. Just following on some of the tariff impacts. Irrespective of what's actually tariffed, is it a 50/50 share with Bayer or is it sort of more of a skew to one company versus the other? I mean, we're not going into the details of that contract, but basically tariffs is something that is taken off typically from the net sales and then you move on from there. Of course, it has an impact on us as well. Exactly. We share it according to our current. But of course, we have a certain royalty percentage and of course, you can think about how that flows down. Yes. Between the companies. Understood. Thank you. Just in terms of the underlying market dynamics for Nubeqa, what has Bayer communicated there? And then also how much has the ARANOTE approval, do you think, contributed to that performance of Nubeqa this quarter? Well. Indeed, ARANOTE approval was very good news for us and also CHMP recommendation. We'll see then how much, and it's definitely Bayer's task to communicate what would be the potential of a specific study or indication to the full potential of Nubeqa. But let's remind us all that t he message has been very clear that to reach the EUR 3 billion yearly sales, peak sales, all the ongoing studies, including ARANOTE, needs to be successful. I think the best way to put it is that ARANOTE's success or approval makes it more p robable to reach that EUR 3 billion. Understood. Thank you so much. Does that also include the new adjuvant prostate cancer? Would that have to succeed as well? Could you repeat the question, please? Yeah, of course. Does the new adjuvant prostate cancer study have to succeed as well to reach that EUR 3 billion? Yes, indeed. As I said, all the studies will have to be successful. Understood. Just one more, please, on opevesostat. If we do get RPFS in 2026. What's the bar to be here? Based on its mechanism, how is opevesostat competitive? Thank you. Now I didn't quite get the question. Could you, Shan, repeat also this question, please? Yeah, of course. I was saying if we do get RPFS data in 2026 for opevesostat, what's the bar to be? Based on its mechanism, how is opevesostat competitive? Thank you. Well, I can start from the mechanism of opevesostat that, of course, when you shut down the whole steroid p roduction. Including also other steroids than testosterone. The mechanism is very, very unique. It should actually really, really prohibit the growth of the tumor. There is no other drug that would do that. I think that clearly, clearly distinguishes it from other products at the market. Coming or the products that would be coming to the market. Okay, thank you. The next question comes from Anssi Raussi from SEB. Please go ahead. Yes, hi all, it's Ansi from SEB. A couple of questions left. The first one is a bit of a clarifying question regarding Nubeqa's R&D pipeline. As you said, you have not yet jumped into this early stage study, but you have an option to do so. But what kind of financial impact this would have for you? Like, would you have to pay something retrospectively or how should we think about this? Yes, indeed. We haven't, of course, shared the details of Bayer-Orion agreement, but the option works like that, that you have different time points when you can opt in and pay a share of the study costs. But we haven't yet made the decision at which stage we would do that. I guess you can't disclose the ballpark here. No. What kind of amount we would be talking about, yeah. No. Okay, that's clear. Maybe one more question regarding your guidance upgrade. Can you tell us what was the latest data point you received from Bayer or what kind of assumptions you received from them? Anything to comment on this? I mean, we always discuss with Bayer on a continuous basis, of course, how the sales are going. What volumes need to be, tablets need to be delivered, and how the year is looking. Of course, we used the latest data that we had at that point on both companies and made a new projection. Of course, the first half year was also very good for Nubeqa. I think everything was pointing into a very good direction. We made a recalculation of the full year. Also with other businesses, not just Nubeqa for the second half. Yeah, I understand. Maybe lastly about your expenses and the cost base. Admin expenses increased quite significantly. What was the driver here? Something one-off type expenses or natural increase? Yeah, I mean, of course, there's always a small kind of expense increase every year. There's wage inflation across the board. But however, there's also some fluctuation regarding the equity incentives, which are dependent a lot on the share price. A lot of that fluctuation is actually related to the share price fluctuation or the growth of the share price during the last few quarters. Okay, so can we assume that this is the level in Q3 as well, or is it too early to say? Well, I mean, if nothing strange happens, of course, there are fluctuations that can happen, but I mean, nothing major, I think. But of course, you never know. Okay, thank you. That's all from me. As a reminder, if you wish to ask a question, please dial pound five on your telephone keypad. The next question comes from Iiris Theman from DNB Carnegie. Please go ahead. Hi, I have still a couple of questions, and I'll take these one by one. Firstly, regarding your R&D pipeline for the remainder of this year and 2026, so what news could materialize? Well, regarding 2026. First of all. We are expecting the phase one to finalize for the ODM-202. Towards the end, either by the end of this year or early next year, which would then mean that we would be able to start the phase II next year in 2026. Approximately the same applies for the ODM-105, that we are expecting to see the data by the end of the year or in the change of the years of 2025 and 2026, which would again allow us to start the next phase next year. And then regarding news, as I stated in the beginning, we have said that within the next 12- 24 months, we would be bringing new biologics into our clinical pipeline. Those are definitely news regarding the pipeline. But for the existing products right now there, I think those are the key ones. Except— Yeah, well, actually, we have one projected compound with Tenax, and their current level phase three trial is due to read out based on clinical trials next summer. However, as we have stated earlier, and also Tenax has said that there needs to be another phase three before filing that compound, and they are expecting to start that second phase three towards the end of this year. That's also expected news flow from the pipeline. Okay. And you don't expect any news on opevesostat to materialize next year? Well, as we have stated earlier, if you look at clinicaltrials.gov, you can see that the readout estimates are 2028 and 2030. We have also reminded that there are two primary endpoints, out of which the other one will be reached probably earlier than 2028 and 2030. And now, just recently, during the quarter, in connection with ASCO, MSD actually said weekly that they have three compounds, out of which opevesostat is one, from which they expect some readouts over the course of the next a round year or so. That's basically the latest update from our partner regarding these OMAHA trials. Okay, thanks. And regarding 105, so are you still expecting to find a partner for phase III? Yes. Okay, and then on Parkinson's phase, it performed well. Were there any timing factors involved, or is this. Kind of good proxy for the remainder. Of the year? Yeah, that's a good question since for many, many years we always talked about timing issues. And regarding the deliveries to our partners. But at this time, we don't see anything like that at the moment. This is really a good performance of that product, speeded up by the Japanese sales, Orion-owned Japanese sales now. Okay, and then. The same question applies to animal health. What's driving phase in this segment and what l ong-term growth rate that you or can you give us? Any kind of long-term growth t hat could be kind of sustainable for this business? Yes. That's a very good question. As I said, this year's growth rate of 20% or something like that is not quite normal. It's really getting back to the normal, so to speak, after the previous years. Then again, what would be expected running rate or growth rate there? I think animal health market grows like 4%-6% on a yearly basis globally. So you could talk about low single-digit numbers on a broad perspective. Okay, and then regarding the generic business. You mentioned that peers experienced supply challenges. So which products can you comment on? Are there or in this business any drivers that could sustain above average growth over or above the, you mentioned the average growth that it has been about 4%-6%? So could that be sustainable in the short term? Yes. I did indeed mention that. There are stockouts, and that's a general information that there are a lot of stockouts, unfortunately, for generic products in all European countries. I wouldn't name any specific products. We have such a wide portfolio, more than 300 products. So it's here and there in this country or that country where we've been able to then pick up the market. So it really comes from the several products. Of course, similarly, there might sometimes be stockout for our products. So it's a very, very dynamic market for anybody who works there. The winner is the one who can deliver, especially for the bigger products. As we see it currently, this kind of a growth of, say, low single-digit growth looks quite probable. I don't know if René is saying something else, but I hope not. No, I mean, it's a competitive market. So I mean, it's a dynamic market. We're very happy how generics has been able to do now, I think, for the second year in a row, go at a very nice pace. Very good. Yeah, basically, the growth needs to be made every day. If you think about our key markets, the Nordic countries and the tender rounds in Finland, we have four times a year in Sweden, every month in Denmark, every second week. So that basically means that we need to keep on running all the time to make that growth happen. Okay, but is basically the average growth of 4%-6% sustainable in your view? It would be mid-single digit growth rather than low. Thank you for correcting me. Maybe that's the right expression, that it's a mid-digit, not a low single digit. Okay, thanks. Finally, regarding your peer extend this patent expiry in the coming years. What is the expected timeline for this in your view? Do you think that it could have a negative impact on the market sales? I'm not going to comment on our competitors. Loss of exclusivity when or how it could happen. I think those are always tricky situations for anybody. But to our understanding, Bayer, and this is of course good to ask from Bayer, they have calculated in their projections. Also, they have included this generalization of Nubeqa. Okay, thank you. That's all. There are no more questions at this time, so I hand the conference back to the speakers. Thank you, Operator. We have a few questions coming from the webcast, and please do take the opportunity and type in your question if you have any. Now it's a good opportunity to do so. Just wanted to remind about the comments regarding the EUR 3 billion excess estimate made by Bayer. That was back in 2022, and the comments we are referring to were made by Bayer then in 2022. Just as a reminder, no new news flow from that front in that sense. But then to the questions from the webcast, we have a couple of here from Matti Kaurala from OP. The first one actually was about the Nubeqa studies, and we covered that already, so we can step on to the next one. The next one is, how do you see geographical sales expansion of generics and branded products proceeding? What timeline we could expect for current roadmap? Could we see another case Japan in the near future? Well, that's a very good question. Regarding generics and branded products, our generics division has a clear strategy to expand from the Nordic countries and Eastern Europe to the big five in Europe, not with the pure generics, but rather with the value-added generic products. Value-adding meaning, for example, in hospital, a product that needs to be stored at a refrigerator, but you could provide a product that could be stored at room temperature or a product that is readily already diluted, so it saves time from the nurses or it provides some other advantages. I think one good example of this is the recombinant albumin license agreement that we signed with Shilpa a few months ago. That will definitely, that's one of the major products that will be driving the expansion of generics to big five countries in Europe. There are other products as well, but we haven't reported they don't have the same potential as the single products that the portfolio is forming all the time. I can here say that we are expecting to launch first of those products, hopefully in 2027, and then build on that portfolio as we go onwards. I'm not sure if I can call it case Japan because we are already in Europe, but for generics, it's definitely a new step to the big market. Then when we look at the branded products, the big question is actually Japan, that we are and are trying to build up a portfolio around Stalevo there, as we are doing also in Europe. We are currently more or less trying to support the countries and build the portfolios in the new countries like Japan, and then expanding generics to big five. All right, thank you, Liisa. Then we have one additional question from the webcast. This is related to our R&D pipeline and specifically to ODM-105. The question is, what is Orion's current or updated strategy for developing new pain treatments? Does ODM-105 still play a role in this strategy due to its analgesic properties? Again, a very, very good question due to the analgesic properties. It is a part of that portfolio, clearly, because pain and sleep are related. Either people can't sleep because of the pain or other way around. That could provide also help on that front. However, currently we do see with that product that it would be aimed for general practitioners more, for general practitioners in the U.S. That's why we would need to have a partner. Regarding our pain portfolio in general, we do have new molecules in development in our research pipeline. We are currently building that portfolio as well. But it takes a few more years before we will see those entering our clinical pipeline. All right, thank you, Liisa, for the answer. Now we have exhausted also the webcast questions. We could once more turn to the teleconference lines and ask from the operator whether there are any follow-ups. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers. All right, thank you. Then we have exhausted all the questions. Thank you all for joining us this Friday, Summer Friday afternoon. Thanks for your attention. Good questions. Next time we will be reporting, like Liisa said, in the end of October. For the time being, everybody enjoy the summer and see you next time.