Good day, and thank you for standing by. Welcome to the Ipsen Q1 2022 sales announcement call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to the speaker today, David Loew, CEO of Ipsen. Please go ahead. Thank you. Good afternoon and good morning, everybody. I'm delighted to welcome you to our Q1 sales update. As you just heard, I'm David Loew, Chief Executive of Ipsen, and it's great to have the opportunity to run through our first quarter sales performance with you. Please note that our presentation is available on ipsen.com. Please turn to slide two. This is our safe harbor statement, which outlines the routine risks and uncertainties contained within this presentation. Also, any commentary on growth you'll hear today will be based on constant exchange rates. Please turn to slide three. After the presentation, I'll be joined for the question-and-answer session by our CFO, Aymeric Le Chatelier. Please turn to slide four. Here is the agenda for today's call. I will start our presentation with an overview of the first quarter before recapping on our full year guidance. After concluding our presentation, we'll be happy to take your questions. Please turn to slide five. The headlines today focus on our sales performance that continues to progress in line with our strategy for growth. Total specialty care sales in the quarter increased by 9.6% to EUR 688 million. This was in line with where we thought we would be at this stage of the year, as we expect further launches of generic lanreotide in other countries in the European Union in 2022, as well as increased competition to Somatuline in the United States this year. Based on this, we are confirming our full-year guidance today. Turning to the pipeline, we continue to anticipate a refiling for palovarotene in the United States in the first half of this year, as well as getting out of clock stop with the EMA based on the additional data analysis. We're also looking forward to 2 phase 3 oncology data readouts in the second half. A key development in the quarter was the conflict in Ukraine. Our focus has been on the safety and care of our colleagues and to providing essential support and access to our medicines for patients. To confirm, Ipsen specialty care sales last year in Russia and Ukraine were less than 3% of total specialty care sales. Finally, we remain on track to close the transaction to divest our consumer healthcare business by the end of Q3. Please turn to slide 6. Turning to our sales summary, Somatuline delivered a robust performance in the quarter, with sales broadly flat at EUR 286 million. In North America, sales fell by 6.9% with good demand growth, supported by continued market share gains, outweighed by adverse pricing that was mainly a result of unfavorable movements in the channel mix. There were also some one-off adverse changes in wholesale buyer buying patterns. We have included with our guidance for the year the assumption of increased competition to Somatuline in the U.S. In Europe, effects from the launch of generic lanreotide in Germany and the Nordics limited sales growth to 0.4%. There were solid performances elsewhere in Europe with further market share gains. We do expect additional launches of generic lanreotide in other countries in the European Union this year, including France, Spain, and the Netherlands in the coming weeks. Sales in the rest of the world grew by 39.3%, though this was partly driven by favorable shipment phasing from sales to our partner in Japan. There were strong performances in other markets, such as Mexico and South Korea. Please turn to slide 7. Decapeptyl's 19% sales growth in the quarter was driven by continued market share gains in Europe, including in France and Italy. The strong volume growth in China included favorable inventories related to the COVID lockdown measures enacted in the period. Cabometyx, up by 18.5%, continues to be a key contributor to our growth. Strong volumes across most geographies were driven by sales in second-line renal cell carcinoma. There was also the increased contribution from the launch of the cabo-nivo combination in Germany, which is progressing. We look forward to further reimbursement and launches of the combination in a number of other major European countries later this year. Onivyde sales grew by around 41% in the quarter, partially reflecting improved diagnosis rates, though these still remain below the pre-pandemic baseline. Higher sales to our ex-US partner, including favorable shipment phasing, also benefited the overall number. We also delivered good growth outside of oncology. Neuroscience sales increased by around 15% with a strong performance in aesthetics seen in all key Ipsen and Galderma markets. Our therapeutics business also performed very well as we continue to focus on what are significant unmet medical needs. We remain confident in the sustainability of this quarter's growth given the attractive long-term fundamentals in the neurotoxin market. Please turn to slide 8. Turning to the pipeline, there have been no material changes since we announced our 2021 results in February. We continue to look forward to the imminent approval of Cabometyx for differentiated thyroid cancer and Dysport in NDO, as well as phase 3 data readouts in the second half of this year, namely for Onivyde in second-line small cell lung cancer and the cabo-atezo combo in second-line non-small cell lung cancer. Next year, we anticipate further phase 3 data readouts, again including Onivyde in first-line pancreatic cancer and cabo-atezo combo in prostate cancer, plus phase 3 data for elafibranor in primary biliary cholangitis. Please turn to slide 9. We have confirmed our full year 2022 guidance today, which excludes any contribution from the consumer healthcare division. Firstly, we anticipate total sales growth greater than 2% at constant exchange rates. Secondly, we expect a core operating margin greater than 35% of total sales. As I mentioned earlier, we do expect further launches of generic lanreotide in other countries in the European Union, as well as increased competition in the U.S. We also expect to see the ongoing global return to normal healthcare systems. Please turn to slide 10. To conclude, we have again delivered a strong quarter of growth. This was in line with our expectations and flat somatostatin sales, partially driven by one-offs, were more than compensated by double-digit growth from our other key medicines. The regulatory pathway for palovarotene remains unchanged, and we continue to look forward to phase 3 data readouts in the second half of this year. We are fully committed to our external innovation strategy with the replenishment of our pipeline set to continue. Lastly, our full year 2022 guidance is unchanged with our growth platform of key medicines supporting top line growth this year while we maintain a strong core operating margin. Please turn to slide 11. Thank you for listening to our presentation. We now have time for questions, and I will be joined, as I said, by Aymeric Le Chatelier, our CFO. Operator, over to you. Thank you. For any questions, please press star one on your telephone keypad and wait for your name to be announced. We will now take our first question from the line of Elisabeth Wilton from Credit Suisse. Please ask your question. Hi. Thank you very much for taking my questions. Elisabeth Wilton, Credit Suisse. I've got two, please. Firstly, you disclosed this morning your position in Ukraine and Russia, that you're continuing to supply products to patients. I understand Russia is one of the few markets where Ipsen sells Dysport for aesthetic indications. I'm wondering if you can justify selling the aesthetic Dysport in Russia given the current environment. Secondly, perhaps you can update us on your latest competitive intelligence insights for the Advanz European launches for the somatostatin generic. Specifically, I'm curious if Advanz launches in France, how much of a mandatory price cut would you assume for somatostatin, and how much of your European somatostatin sales today are in France? Thank you. Okay. Hi, Liz. Thanks for the question. Regarding, you know, our sales into Ukraine and Russia, I mean, we basically follow what the whole industry is doing. We are selling our medicines in Ukraine and in Russia. Regarding your very specific question on Dysport aesthetics, we sell Dysport in spasticity and in aesthetics, and so we will continue to deliver to the market. According to our information, all neurotoxins are available in aesthetics and in spasticity. Regarding your competitive intelligence on Advanz and the somatostatin update, as you know, normally when a generic enters, there is a mandatory price cut by regulation of 60%. However, in France. However, in special cases that rebate can be less, and what has been published, so this is public information, is that they had a reduction of 40%, not 60%, as a price cut. We do not provide the mix of country by country in the total sales, but as you can imagine, France is obviously a major market, in among the EU five. France is, you know, a big market like Germany, for example. Thank you. Your next question comes from the line of Emily Field from Barclays. Please ask your question. Hi. Thanks for taking the question. I guess maybe just a question on sort of the decision to maintain guidance in light of the, you know, very strong performance this quarter, you know, particularly from Onivyde and Decapeptyl. You know, one thing we've been kind of getting asked today is sort of in, you know, was there any deterioration in expectations for either somatostatin or Cabometyx, or perhaps could this just be erring on the side of conservatism, you know, given the beat versus consensus being roughly in line with the guidance? You know, just on the somatostatin, generic market development in the U.S., do you have any color on sort of what the current pricing discount is from the 505(b)(2) entry? Thank you. On your first question, I mean, as we have said before and we continue to say that we have to expect further somatostatin launches of generics in other countries in Europe. As I said, we expect that they're gonna launch in France, Spain, Netherlands, potentially Italy. Our guidance has to be seen in light of that. You also have to remember that Q1 was kind of the easiest comparative versus last year, because we had strong growth last year also in Q2, Q3, and Q4, more than what we had in Q1. It needs to be seen in the frame of this. I mean, we have to observe now how much Advanz is gonna be able to really ship the volumes. So far, despite having the price in France, they have not shipped major quantities. Regarding your generic pricing discount in the U.S., it's really too early to say, because Cipla has not had larger volumes in Q1. We have heard them announce that they are shipping now larger volumes in April. Remains to be seen how big the volumes are gonna be and what their pricing strategy is exactly gonna be. Thank you. Your next question comes on the line of Charles Pitman from Redburn. Please ask your question. Hi, Charles Pitman from Redburn. Thank you very much. I have two questions as well, please. Maybe just on Onivyde. Obviously it's been a strong report today, linked to the kind of fundamental rebound diagnosis rates. I was wondering if you'd give some color on to what degree those diagnosis rates have rebounded to pre-COVID levels and to what degree we can extrapolate today's strong report. And then just secondly, thank you very much for providing the quarterly regional sales breakdown for drugs. I was just wondering if you would be able to provide this for the historic quarters last year so that we can fully appreciate this into our models going forward. Thank you. On your first question, we have indeed seen a recovery of the diagnosis rate. We are not totally back to normal yet. We're still about minus 15%, but it has definitely improved, and especially on pancreatic cancer, this is a very important point because as you know, pancreatic cancer is unfortunately a very fast progressing cancer. You see relatively rapidly an impact if people do not get diagnosed, because then when they appear in first line, often they are already too sick to actually receive the treatments that they should be. Since we are indicated in second line, they need to first get their first line, go through that, and then go to second line. What you can anticipate is that Onivyde is gradually gonna recover in the U.S. from that COVID impact from the past because we're gonna see now more patients getting diagnosed again and being put on first line, which then ultimately, in a couple of months, is gonna positively impact on the second line sales. In terms of quarterly breakdowns, we're not gonna provide this for 2021. I understand that it might facilitate your modeling, but you know, for reasons that we discussed internally, we are not gonna provide the breakdown of 2021. You're gonna get these figures in the future. Thank you. Your next question on the line of Michael Leuchten from UBS. Please ask your question. Thank you very much. David, if I could just go back to your commentary around volume for generic Somatuline. I was wondering if you could comment on what happens if the volume flow from the generic does not come through, and I would like you to focus on two regions if you could. Firstly, the Nordics, where there is tender business. My understanding is that you may have conceded some of these tenders. If the volume cannot be supplied, that automatically don't come back to you as a source of business. Equally for the U.S., where I'm assuming the wholesaler buying patterns are partly influenced by them expecting some sort of a delivery of volume from a generic. If that doesn't arrive, how quickly would you then assume that would come back to you as a sort of business? Is that the next quarter? Is it gonna take a few months, or is it gonna take longer? My last question, your decision of putting a manufacturing plant or expansion into France, given the pricing headwinds you're facing on Somatuline, is there a way of mitigating a pricing headwind that way, where you basically commit to a market longer term, or is it an independent decision? Thank you. Yeah. Thanks for your question, Michael. Regarding volumes, obviously, if Advanz, for whatever reason, would not be able to, you know, bring enough volumes to the Nordics, then, they would come back, to us, and they will come back, very quickly. So far, we see them being able to deliver to the Nordics, but we have to keep in mind that the Nordics are not very large in terms of volume in comparison to the rest of Europe. We will have to observe what's gonna happen in the rest of Europe when larger markets like France, for example, need to be delivered, where we have not seen them really deliver big volumes yet. The second point on wholesaler and the impact of this inventory effect. I think it's typically what you see when a producer is announcing that they are gonna come with a 505(b)(2), as a reminder, it's not a generic, but if there is an announcement that they are gonna start delivering, typically the wholesaler will dial back their inventory levels. Obviously, if they, for whatever reason, would not be able to deliver enough, wholesaler would have to consider, you know, how much stock they would wanna kind of take up again and, you know. We have seen them, for example, at the end of last year, they were buying in. I think it was the right decision for them because we saw still good volume sales and market share gains in Q1 this year. I think that was a good decision. We have to see now how Cipla is gonna be able to deliver the volumes that they have said they are gonna deliver. Regarding manufacturing plant in France, I mean, remember that we have one the biggest site of manufacturing in Signes, which is relatively large and have been refurbished a couple of years ago. We wanted to bring more volume. That's why we have brought some Onivyde manufacturing into that site from our site in Cambridge. The ex-US sales are being furnished from this French site. Obviously France is, and has and Macron has announced that is taking into account you know also what your industrial strategy is in the setting of prices. That can be contemplated when it comes to pricing in France. That was a measure of, you know, of the President that has been announced at the end of last year. Yes, there is a double positive effect, I would say. There is this relief, but there is also the site that we have already historically, where we wanna bring more activity towards it. Thank you. Your next question comes from the line of Richard Vosser from JP Morgan. Please ask your question. Hi. Thanks for taking my questions. Firstly, just going back to Somatuline and the wholesale stocking in the U.S. Should we think about that being sort of a EUR 10 million amount? Just some color there would be useful and maybe also color on Decapeptyl stocking in China. With that similar amount and would we expect that to, you know, the volume to go down as well in the second quarter? How are you thinking about the lockdowns there? Then just finally, just on Cabometyx, just maybe a little bit more color in terms of how the rollout in Germany is going in terms of the first-line combo opportunity. Just some more color there would be useful. Thank you very much. Yeah. Thanks, Richard. For Somatuline U.S. inventory, you know, typically what you have is several days of inventory, and they have taken a couple of days back, so we are not giving the quantification. You know, there were, as I said, in the presentation, two dynamics, right? One was an impact of the inventory lowering, which is something which is normal that distributors typically do. The other one was the channel mix with the 340B continuing to increase and where you have to give larger discounts. But that's an industry effect that all producers see. Regarding Decapeptyl China, please keep in mind, China is representing about 20% of our global sales. There were continued good market share gains from most of the European markets and also from many Asian markets. The inventory effect in China needs to be seen in the light of this. You know, it's representing only 20% of our global sales. We are not giving the total amounts, but what we can see is that there was, of course, with the lockdown now in Shanghai and also somewhat with Beijing, there was a bit of inventory increase because distributors were concerned that you know, COVID is gonna make distribution more difficult. You know, it's not. These are not very big fluctuations, right? Then on the cabo-nivo rollout in Germany, it's progressing. It's a little bit slower than what we have anticipated because, of course, on the COVID wave, which was quite strong now at the end of the year and at the beginning of this year in Germany, and where hospitals gave very limited access to field force. We anticipate that this is gonna normalize, and we're also gonna look forward to now the launches in several other European markets. Thanks very much. Your next question comes on the line of Richard Parkes from BNP Paribas. Please ask your question. Hi. Thanks very much for taking my questions. First one is just on business development. I wondered what impact if you're seeing sort of biotech markets weakening, and I just wonder how that's impacting your business development activities. Are you seeing companies keener to partner, and do you see more attractive opportunities for acquisitions in terms of valuations out in the market? Then secondly, just on the CABO, just wondered whether you were able to give us any share data in the first line in Germany. I know you said it slowed a bit, but you gave a number with the full year. Is that still consistent with that, or have you seen any improvements? Just thirdly, another sort of clarification. The U.S. inventory levels of Somatuline, are you able to quantify where you are currently versus historic levels in terms of sort of days held within inventory? Thank you. Thank you, Richard. On your first question on BD, yes, there is indeed a pretty significant correction in the biotech market. That opens up possibilities, obviously, that we are looking at. We need to keep in mind that though, you know, some biotech which have very, very strong fundamentals, they have not taken such a big hit. Other ones have taken a larger hit. You know, we remain disciplined in analyzing very precisely what is it that we can get if we wanna enter or dabble into an acquisition or into a licensing deal. Yes, the short answer is yes, there is an opportunity. On cabo-atezo data, we will provide you more once we have the details about ASCO in the future and once we see also more launches in Europe. In terms of the U.S. inventory on Somatuline, I mean, we're not giving, you know, the amount of days, but it's pretty standard. It's like industry standard inventory levels. It's simply what you see when a 505(b)(2) or a generic comes in. It's like this. You see, you know, whatever, like a 40% reduction in the inventory levels. Thank you. Your next question comes on the line of Thibault Boutherin from Morgan Stanley. Please ask your question. Hello. Hi. Thank you for taking my questions. Just a few on Somatuline. Could you come back on your comments on pricing pressure, and explain, you know, in a bit more details by which channel the pricing is deteriorating? Because, you know, as you mentioned, Cipla has taken very limited market share in Q1. Is it a question where you had to give more rebates, you know, because a competitor is entering, so kind of, you know, what is behind the pricing pressure in Q1? Also, if you could give a little bit more details on your channel mix comments. I think you mentioned 340B, but just explain this because obviously I think it's the first time we are talking about channel mix regarding Somatuline. Then just related to all of this, trying to understand if, you know, if you expect more pricing pressure in the US, you know, in the rest of the year, if it was kind of a Q1 story and the rest of the year is more, you know, a volume story from there. Thank you. Yeah. Thanks a lot, Thibault. On the pricing pressure, there was, of course, some volume shipped by Cipla in Q1, but as you say, it has not been majority. It's really the inventory that we talked about, plus the continued increase of the 340B channel. As you know, this is an industry phenomenon, and the 340B is, you know, roughly a bit more than a third of the whole channel mix. The discounts that the industry by law or regulation has to give is very substantial. That segment keeps up creeping up. This combined with the slowdown of the market growth in SSAs, because of COVID, obviously has led to this situation where you have seen for the first time a slight decrease in the U.S. sales combined with this inventory effect. The inventory effect should not, you know, carry forward. What we will anticipate in the future is, you know, there might be some impact on price in the U.S. because it depends on what the strategy is gonna be, of Cipla, but also potentially some volume effect. Understood. Thank you. Once again, for any questions, please press star one on your telephone keypad. Your next question from the line of Jean-Jacques Le Fur from Bryan, Garnier & Co. Please ask your question. Thank you for taking my question. Just one left. It's on Decapeptyl in Europe. Sales growth was quite solid with plus 11%. Do you think this could continue for the rest of the year? I know you don't want to give any prospect for 2023, but what could be the growth trajectory for Decapeptyl on the longer term in Europe, having seen this very solid growth this quarter during Q1. Thank you. Yeah. Hi, Jean-Jacques. Decapeptyl growth is based on, I would say, two things. One is the market share gain that we see in Europe. We have seen Takeda kind of dialing back somewhat worldwide their activities, which is good for us. We anticipate that Decapeptyl will remain a growth driver worldwide. Not just for Europe, worldwide. In that sense, there is a second effect, which is, you know, with the arrival of new drugs and hormonal agents being the backbone, you might see longer time to progression and therefore longer use also for hormonal agents. There's potentially a double effect, market share gain and longer treatment durations. We need to still look at this in more detail. Thank you. Once again, for any questions, please press star one on your telephone. Next question comes on the line of Shan Hama. Please ask your question. Hi. Thank you. 2 if I may please. The first one, just wondering if you can update us on the ongoing arbitration relative to QM-1114, kind of any progress on that, on that relative to your partners, Galderma, and if you can just provide any timelines from a filing perspective there. That's question number 1. Question number 2, relative to the 340B kind of comments you're making, David. As kind of a couple of your peers, especially kind of Novo and Lilly, have decided to be perhaps more aggressive from a 340B perspective, just wondering if that's something Ipsen would consider doing, or do you think that's not the road Ipsen would go down on? Thank you. Yeah. Thank you, Shan Hama. On the arbitration on QM, you know, the arbitration is gonna start probably after the summer, so there are no comments that we can make right now without the arbitrators have been determined and so the two companies are delivering documents, et cetera. So that process should start probably by summer or end of summer, and then it you know, typically takes a year or more. In terms of timing of filing, that's a question that you need to ask Galderma because they are gonna file. Then on your question on the 340B, would we take more aggressive stance? Actually, the stance that Novo and Lilly have taken is in the retail segment, not in the hospital segment. We are in the hospital segment. It's not comparable, and nobody in the hospital segment has taken this aggressive stance according to what I know. Thank you. Darius, if I could just follow up on that commentary regarding QM-1114. If the expectation is that the arbitration lasted kind of for about a year or so, should we interpret that as saying the planned filing for QM-1114 is consequently post the arbitration? Because I believe the disconnect between the two is on the filing strategy itself, or should we anticipate the filing could happen concurrently while the arbitration is still going on? Just confused a bit on that. Yeah. As you know, we have the arbitration is around the filing strategy. I can't elaborate on the details on what it is. As you know, arbitrations can take 12 months, 18 months, but most of arbitrations are actually settled not in the arbitration, but are actually settled before. You know, we have to see how this is gonna pan out. Thank you. Your next question is on the line of Richard Parkes from BNP Paribas. Please ask your question. Hi. Thanks for taking my follow-up. It's just about the competitive outlook for Decapeptyl. I know there's potential, some new treatments coming to market, including Camcevi and or relugolix in Europe, and I think Recordati have talked about a new Eligard device. Just wondering how that competitive environment impacts your expectations for Decapeptyl growth going forward. Then secondly, on Somatuline, it might be just way too early. In the non-tender markets, are you seeing kind of any trends in terms of where you're losing share? Is it just in new patients, or is there any switching happening out there? Thanks. Perhaps I start with Somatuline on the tender markets. Basically, you know, when you have tender markets, it's really affecting new and established patients. For example, Denmark has switched all the patients to the generic version, and in Norway it's also to a large majority switches. We hear feedback that some of the physicians are not very happy with that, so remains to be seen what happens there. Typically when it's really good, very different than, for example, Germany. Regard- Yeah. My question was more about the non-tender markets, 'cause I realize that happens in the tender markets. What are you seeing in the non-tender markets in Germany, or is it just too early? Yeah, that's exactly what I wanted to say. Okay. In Germany, in fact it's a very different setting. There you see it's really very partially on new patients. We don't see large switching there. You know, you have heard me say the market share that Advanz has taken in Germany is really very minimal with 2%-3% of market share that they have taken. It's a very different model in Germany. On Decapeptyl, you asked a question on Camcevi. The six-month formulation received positive opinion from the CHMP in March 2022. Approval is anticipated in May 2022. Yes, it's gonna obviously increase somewhat the competition. Remains to be seen, you know, how open physicians are to new drugs there. On relugolix, they had the positive CHMP opinion in February 2022. The full approval is expected now, actually end of April, and we don't know yet who is actually gonna commercialize this. Pfizer has declined the option and, you know, we have actually looked at this as well at one point, like, a couple of years back to actually license it or not or take it on, and we have decided not to do so. Because, you know, elderly men which are affected by prostate cancer, they sometimes forget to take a dose. The problem is when you forget to take a dose, in fact, your testosterone level comes back very rapidly, and that's not a good thing. The feedback that we have from the key opinion leaders, and it seems to be correct when we look at what has happened in the US, the feedback was that they rather do a you know, a 3 or 6 monthly injection, and then they know what is in is in and, the patient doesn't need to think about it. Then, on Eligard, we know of course that Recordati is anticipating a new device in H2 2022. And we know also that Recordati is doing some investments there. Yes, there is gonna be somewhat of an increased competition on the horizon, so we have to calculate with that. Yet we believe that Decapeptyl has some big strengths, and we anticipate that this product is gonna remain a strong growth platform for us in the future. Thank you. That's our last question of today, operator. Thank you very much, everybody, for listening. This concludes today's conference call. Thank you for participating. You may now disconnect.