Good morning, everybody. I'm Chris Schott at JP Morgan. It's my pleasure to be hosting a fireside chat this morning with the Organon management team. From the company, we have CEO Kevin Ali, as well as CFO Matt Walsh. Kevin and Matt, happy new year and, thanks for joining us this morning. Thank you. I thought maybe to kick things off, the company just completed its first full-year as a standalone company. At a high level, I'd love just to hear your thoughts of kind of what's gone well, and maybe what are the surprises as you've stood up the company and operated as an independent entity here. Well, good morning, Chris, and good to be here. Yeah, I think from a high level, what I can say very briefly is the fact that we've been incredibly happy with the performance of our first full-year out. We set out to do a few things at the beginning of this journey. First of all, folks didn't really recognize that the Established Brands business, which is 60% of our overall business, there was an assumption that it would continue to decline. What we've been able to do, what the team has been able to do, I'm fiercely proud of what they've been able to do, is actually stabilize that business. In this first year, in 2022, we actually saw growth in that, in that franchise. Secondly, we said we were going to grow our strategic pillars by double digit. We grew biosimilars by double-digit rate, and we grew our women's health franchise, including fertility, and of course, NEXPLANON, our key product, by double digit. That was actually in the midst of, you know, the traditional things that one has to do in spinning a company out with all the TSAs and all the... Mm-hmm. All the, you know, nuts and bolts of that. I'm incredibly proud of what the team has done, and I think that we're well on the way. Of course, now, just last week, we announced our eighth deal. We've done eight deals in literally 18 months. We're very serious about ramping up essentially our pipeline, both in terms of early stage, mid-stage, and as well commercialized assets. We're really excited about our pipeline that we've built in a very short period of time. We're really thrilled. I think that you mentioned what was unexpected, I guess. Yeah. Yeah. I think what was unexpected is I was probably a bit naive to think that, you know, you could build Rome in a day. Okay. Realizing it does take time, and you do have to be patient, and we're only a year and a half into it, but we've met every commitment we set in terms of our guidance. Every quarter, we've actually met our guidance and exceeded in many instances, and, we're really on track. Great. Great. Sure. I know you've talked about becoming a leader in the women's health space. I guess it's one question I get from investors is why women's health? Yeah. Why do you think the company can succeed in this vertical when seems like others have maybe struggled a bit to get the type of traction they want here? Well, you know, they say that timing is everything. I tell you right now, if it was five or 10 years ago, I probably wouldn't have decided to go in the direction of women's health. So much of what we do in this industry is contingent upon what's available in the R&D space. Okay. Over the last five to 10 years, there's been some really interesting developments, a lot of grass, green, shoots kind of popping up all over the place. Not only in the U.S., but in Europe, which we've done a number of deals, as well as the Asia Pacific region. There's been more emphasis put on the R&D area. Secondly, there's no other company in the world today that actually focuses on being a women's health leader. Being in that space, we're actually kind of, we're magnetizing it. A lot of the folks that are working around the world on some early stage, mid stage, and late stage assets are coming to us now because we've kind of stimulated, we've kind of catalyzed the whole area of women's health. The timing is right. I mean, societally, the timing is right. The focus of the fact that, the R&D efforts around women's health have been woefully underfunded. Mm-hmm. I mean, I don't wanna go into the statistics of it in terms of what you see in terms of what's being approved year by year. Really a lot of need, a huge amount of gaps, a great amount of opportunity for us to kinda step into that space and take a leadership role. If I think about where others have struggled, was it the lack of pipeline? Was that you think the Or is it just more that it wasn't as focused and it was kind of disparate assets? You know, I think I'll look at it this way. If you're a large company, a large pharma company, which many of us came, as all of you know, as a spin-out from Merck. If you're a large company, a $300 million- $400 million- $600 million peak revenue business is not gonna get you out of bed, really. For a $6.5 billion business... Mm-hmm. A number of $300 million-$400 million assets start to become very material and actually can become transformative for us. Mm-hmm. Those assets. If you're a large company, the reason that they weren't really enthusiastic 'cause they didn't see the multi-billion dollar opportunities, and everybody, of course, started to migrate towards where currently they're migrating. Sure. Sure. In terms of oncology, orphan, and other CNS and other areas. That's one aspect. The second aspect, if you're a small company, you probably didn't have what we have, which is a base of business like the Established Brands business and the biosimilar business that sheds off a lot of cash. I mean, you know, our free cash flow every year provides us an opportunity to do meaningful business development. As I've said, we've done eight deals. We can be an aggregator of these assets. Finally, because there's not a rush from large pharma to get in there, valuations are reasonable. We can actually start to do more in that space. As a result of that, I would say if you're a small company, you don't have our global footprint. We're just like big pharma. We're in 60 markets across the world. You may not have essentially other parts of the business that can fund that journey. If you're a large cap pharma, you're not really interested in a $400 million or $500 million business. That's a kind of a nice niche that we've been able to build for ourselves. Great. I think you mentioned double-digit growth in 2022. I guess we think about the women's health business for 2023. Do you think the portfolio is positioned for another year of double-digit growth? As, as part of that, is it coming from the core assets, or do we start to think about BD being or some of the recently acquired and in-licensed products being a bigger contributor? I'll answer that, Chris, in two ways. First is that double-digit growth has been essentially what we've been experiencing with our women's health franchise. Specifically, if I split it out between our fertility franchise, which we consider a double-digit growth, therapeutic area for years to come, because just the need is so incredibly great, and there's not a lot of companies in that space. It's just us and two other companies that are really kind of dominate, or rather 85% share of that space. If I look at our biggest product, NEXPLANON, we're on track to be a billion-dollar product in 2025 for NEXPLANON. We've got essentially patent protection until 2027, with the opportunity to stretch it out to 2029, 2030 with a lifecycle management opportunity we're pursuing right now, which we feel is highly likely of actually giving us an opportunity to stretch it that far. Mm-hmm. This will be a billion-dollar franchise. It's our first billion-dollar franchise, with good runway in terms of patent protection. What I would say is, yeah, we're going to be seeing consistently strong growth momentum from our women's health franchise. Now, that's organically. The inorganic acquisitions that we've made, the JADA System, which is doing exceptionally well. We'll start reporting out on the performance of JADA this year in 2023. Okay. We're gonna be launching XACIATO, which is our partnership with Daré for bacterial vaginosis. That's gonna be a nice little addition. Maybe not in 2023, but in 2024 and 2025, you'll start to see more contribution. Of course, our earlier stage assets are really starting to be very nice. Our Forendo acquisition, which gave us an opportunity for a new mechanism of action in endometriosis, OG-6219. OG-6219 has actually started phase II, first patient in in October of last year. We expect to report out our data probably in the 2024 timeframe for our phase II data. This is a completely new mechanism of action, has tremendous growth opportunities. That comes to the market in the 2028, 2029 timeframe, it's going to be a major contributor for our future. Growth is really going to be there. What I would consistently say to you, Chris, is our baseline business of Established Brands will continue to be a stable business. Nobody thought we could do that. Yeah. Yeah. Now it's stabilized. It's actually growing this year. Our two growth momentums of biosimilars, which we've added more to that franchise, as well as women's health, will continue to grow double-digit. Women's health NEXPLANON will be a billion-dollar product in 2025. Overall, when you start to feather in all of these BD activities we're doing. Mm-hmm. We're signaling low to mid-single digit growth. Actually, it's more mid-single digit growth right now that we see kind of coming up in the years to come. Start to feather all that stuff in, you start to see the opportunities exist to start to really accelerate growth. Yeah. Great. Thanks for that. You mentioned biosimilar is kind of their growth pillar here. Just talk about how, I guess, strategic that franchise is to Organon? 'Cause I feel like the strategy now, you've got a number of partnerships. At some point, does it make sense to more vertically integrate? You know, how core is this to the business? Just help us a little bit on that. Well, we started out Organon as being essentially a value-added partner, a commercial partner, access partner, pricing partner, government affairs partner, regulatory partner to a number of developers. Our first relationship really was transferred over from Merck, which is a Samsung relationship that gave us five assets. Subsequent to that, in the last year, we actually did a deal with Henlius, a very well-known biotech company that does biosimilars in China that has done international work already for a biosimilar Prolia and Perjeta. Mm-hmm. Basically an option to do a deal with them for Yervoy. We're starting to expand, obviously, in different areas. It's very strategic. I can tell you why. If you're vertically integrated, you may miss the most important point, which is that in order to participate and compete and succeed in biosimilars, you've got to be first, second, or third. You've got to be in that first tranche of launches. If you miss that window. Mm. It gets to be much more difficult to succeed in the biosimilar space. By being a value-added partner, we can pick who we want to partner up with based on our due diligence to better understand where they're launching. Are they gonna be in the first tranche or not? Mm-hmm. That's first. Secondly, I really don't know what the biosimilar business is gonna be in the next decade. After you get the IOs, after the KEYTRUDA and OPDIVO and all the others start to see the biosimilars introductions, what happens beyond that? That's why I'd say it's a really good strategy for contribution to growth now. Mm-hmm. On a return on invested capital is very good because we don't invest a lot of expenses on it. For the future, we'll have to see. By that time, we hope, and we feel very confident that our, the introductions that we have with our women's health business will take us continuing, going forward. The strategy kind of maximizes your optionality. Exactly. Yeah. Exactly. I know we've had a lot of conversation at this conference around biosimilar HUMIRA. Yes. Yes. Kind of this big opportunity. Would love to hear your thoughts about how you see this market developing as we go through 2023 and beyond? Any meeting would not be complete without a question on HUMIRA biosimilar. Yeah, we're actually in the first tranche with our Samsung partners. In the first tranche of launches, we'll be launching next summer, this summer, actually. Mm-hmm. With a few others. When you look at the U.S. market, you've got to basically say, you know, this is a pharmacy benefit product. What's going on with the PBMs? Essentially, as I meet with PBMs, what I understand from their point of view is put rebate structure or put pricing aside for a moment. Mm-hmm. Just talk to us about what are your needs. A, do you have high concentration citrate-free? By the way, do you have low concentration doses? Well, we do. Check that box. Mm-hmm. B, is this the first country you're launching your biosimilar or have you actually had real-world evidence so that we know it's safe and tolerable in other populations we've used? Check, 'cause we've actually launched it in Canada and in Australia, and Samsung, through their partnership with Biogen, has launched it in Europe. We've got plenty of safety data. Three, do you have a manufacturing network that can satisfy whatever demand we throw at you? Because it could be huge volumes you're talking about. Samsung happens to be one of the largest, if not the largest total manufacturer in the world for biologics, so check that box off. Four, what's your pen device like? We like to use the word frictionless. Is it easy? Is it elegant? Samsung has got a long heritage in device, manufacturing, and so it's a fantastic device as well. Finally, where are you in terms of interchangeability? When is that indication coming? As you start to check off all the boxes and you realize many of the other competitors may check two or three, but not all of them, you start to realize that you're very strong, in a strong position to do one very important thing. Most PBMs will have one, two, three maximum biosimilars on formulary. Mm-hmm. The originator. In 2023, in the second half of 2023, when you're gonna see a lot of launches, you need to be one of those two or three. When the dust settles in 2024, you'll be able to see, okay, who's gonna win this race. Mm-hmm. We're in a good position. Can I ask just when I think about 2023, it does seem like AbbVie has locked up quite a bit of formulary access that's at effectively parity to a biosimilar. Should we think about this being an interesting commercial market this year, or is it more 2024 and beyond the sales opportunity? I would guess it'll be more in 2024 and beyond. Okay. I think this year most PBMs will go to parity. Mm-hmm. If you're a physician, If you got parity, which means you can pick whatever you want, they'll go with their, you know, their knee-jerk reaction, which is HUMIRA. Going forward, as things start to change in the marketplace, and I can tell you, when I meet with PBMs, they want biosimilars to succeed. Mm-hmm. They don't wanna see a future where originators essentially evergreen the field. Yes. Yeah, yeah. In terms of continuing to do that. Yeah. You know, if you're talking about a $20 billion. This is the largest LOE in the history of the pharma industry. A $20 billion net revenue in the U.S., going from $20 billion to, say, $4 billion or $3 billion, right? Mm-hmm. It starts to become less interesting probably. Mm-hmm. For the originator because you're getting a lot of pressure on that price. 2023, I think, will be a slow ramp-up year with really focus on formulary inclusion. 2024 and 2025 will open up. With those initial formulary kind of decisions, do you expect those end up being fairly sticky? If you're kinda there at the start, it's kind of almost like your business to lose going forward when the volume comes around? Could we see there's more changes as we go forward? That's a great question. I think it depends on two things. One is it depends on the PBM's appetite to re-educate physicians. Mm-hmm. On how to use the pen device and what to look for, and all the things associated with that biosimilar. Secondly, what it depends on, what kind of discounts are provided in the early stage... Mm-hmm. Is a PBM going to shift for one or 2 percentage points? Mm-hmm. Probably not. Yeah. If they're comfortable, they'll settle in in terms of when, you know, you're meeting their criteria in terms of the kind of discounts that you're getting. Maybe the final question on this, I think you've mentioned that market compression over time. Just thoughts in general of where, you know, pricing or, you know, what kind of TAM are we ultimately kind of pursuing here for the industry? For HUMIRA? For the biosimilar, yeah. Like we all know the branded sales, but what's the, you know, kind of feel like the biosimilar opportunity going to be? I think by My view, and this is just an N of one, I think by 2025, 2026, you might range anywhere between 80% and 90% discounts. Okay. Potentially. Just given all the players involved. Yeah. I think that's just the natural course of events. Yeah. Okay, perfect. Maybe going over to the Established Brands division. I think as you kind of talked about earlier, I think you were originally talking about this as a business that could erode over time. Looking at 2022, obviously a lot better performance there. Could you talk about just what's driven the strength in that business so far and maybe what we can expect in 2023 from the franchise? Well, I wish I could give you, on the Established Brands business, which is again 60% of our base of our business. I wish I could give you some nuggets to say, if you do these three things- Mm-hmm. You have these kind of global products, you'll succeed with Established Brands, where others have not. Yeah. Most of the others have actually continued to decline. What I can tell you is the following: We don't have in our portfolio of Established Brands any commoditized generics, these are the originals. Mm-hmm. These are the original products like SINGULAIR or others, you know, like Proscar or Arcoxia and others. These are the original products that have gone off patent. Mm-hmm. In many countries outside of the U.S., that would be China, parts of the emerging markets, of course, Southern Europe, they still have a tremendous kind of value for patients. It ranges from completely out of pocket, like for example, what's starting to emerge now in China, all the way to kind of higher co-pays in Southern Europe. Mm-hmm. People will go for it. Now, the second point is, you really have to have an incredibly entrepreneurial group in each country, because I can tell you across the world, in all the subsidiaries we have, in the 60 countries we actively participate in, no one country is like the other in terms of the contribution of the portfolio. Mm-hmm. That tells you that folks are looking under every stone to drive this business. Again, as I said, I'm fiercely proud of what they've been able to do. We took a business that was in double-digit decline, and now it's single-digit growth year-to-date. Mm-hmm. Through Q3. When I signal to the investment community that the long-term aspect, and people were kind of shaking their heads, long-term forecast for this part of the business. It's important because this throws off a lot of cash that we can reinvest. It provides oxygen, so that we can reinvest in women's health and some biosimilar business, is that it'll be a stable business. One year we might grow by 5%, one year we might decline by two, next year we might be zero, the next year we might be one. Put a line through it. Put a regression line through it and you see, oh, that's a flat business. Yeah. Once you establish that that's a stable business that throws off good margin business, throws off a lot of cash, then you can start to say, "Okay, now I can start to look at other... their growth aspirations." Because they don't have this leaky bucket that's driving everything down. It's anchoring their business. I think so far what I understand from investors and a number of other analysts, I think they're starting to believe that this is a stable business. Somehow something's going on different at Organon where they've been able to do this. Yeah. Absolutely. I guess in that context, I mean, this, the growth we've seen year- to- date, it does seem directionally the business is trending in a, at a good place. Should we think of there being anything that was, you know, particularly strong this year that might be harder to replicate next year? Yeah. There was a couple of one-time benefits, tailwinds. In Japan, they had a number of generics that were withdrawn because of quality issues. The Japanese regulatory authorities are very conservative, I don't know, some of them may not come back, some of them may. Mm-hmm. That tailwind will decrease, but it still might... little bit of it might be there. We had a delay of an inhaled product for DULERA in the U.S. Generic didn't show up, so essentially we had the benefit of that. Mm-hmm. We had a couple of other kind of one-time benefits that helped us. VPP, which is essentially the volume-based procurement process in China, that's their way of kind of rationalizing price and moving forward in the public sector, didn't happen the round that we thought when it's supposed to happen. It just happened around October 7 of last year. Now we're starting to get back into kind of the normal routine of things. Going forward, what I can tell you is it's a flattish business. Okay. Okay, great. You mentioned China. I know it's an important geography for this business. Can you just talk about what COVID shutdowns have meant to that kind of, I guess, region or country? As we think about reopening, is that a tailwind for? I think it will be. Okay. I can tell you that, Chris, that over the years, where other competitors have had these huge products, the Lipitor of the world, you know, $1 billion product franchises in China, they got just massacred. Yeah. Where essentially, we're very diversified. There's no single product in China that represents more than 15% of our business. Okay. Each round, I think we're up to round seven now, we finished in the rounds of VPP, we've had something happen. Currently 50% of our business has gone through. By the end of this year, in 2023, 75% of our products will have gone through. In the meantime, in 2017, actually, we started, at that time when I was at Merck, we started kind of a retail business unit. Mm-hmm. 'Cause what we saw that there was, you know, things happening in the retail sector, activity happening. Now the retail sector represents 50% of our business, growing double digit. That's been able to offset- Mm-hmm. Many of these kind of hits that we've had from volume-based procurement. Through 2023, we'll still face some downfall, but not in a single year have we ever declined in China. Mm. Once we pass through 2023 and we start to go to 2024, Oops. We'll have gone through most of the kind of the leaky bucket of sorts. Mm-hmm. We'll move on to really more solid growth. Okay. Perfect. You mentioned, you know, VPP, some impact this year. Can you just help quantify what products and the, maybe the si-? Yeah. Scale of those that are hitting this year? In round seven, at the end of last year, essentially one of our largest products, which is a cardiovascular lipid-lowering product, is ZETIA, might actually got into the round seven. Mm-hmm. We're starting to face that. We'll lap that next year in November. Mm-hmm. Round eight and round 10 potentially could take place. Round eight will definitely take place in 10. you know, we're talking about essentially three products or so, maybe four, that actually go through that process. That's what tells me that by the end of this year, 75% of our portfolio will have gone through. It becomes it no longer becomes 50% of our business. Yeah. Yeah. It starts to shrink and starts to have an impact for us. Yeah. The other retail business, which includes the e-commerce side, will start to grow. Okay. That will overtake, and then. You're in the growth trajectory. Maybe the last question on this division. Yeah. Is established pro-brands an area that we can think about business development? Would that be something that makes sense for Organon? Yeah, absolutely. I mean, I wouldn't say we're interested in a portfolio of declining products. Okay. That's somebody else's problem. You wanna do this all alone. No. I'd rather go after a single kind of base hit. Okay. Yeah. Where I see a product maybe that's gone through the LOE effect, that has kind of stabilized, that we can start to throw into and kind of bolt into our business and then start to grow. I start to potentially look at areas that are, you know, derm, pain. There are other areas that are not necessarily as affected by the LOE events, throughout the world. Yeah. If it makes sense, if it's accretive in the near term. I'll give you an example. We brought back, I would call them the Established Brands of the women's health sector. Okay. Bayer had, for whatever reason, had some of our contraception, combined oral contraception products in the Asia Pacific region, specifically in China, Vietnam, and other countries. We brought that back. We actually paid them to bring it back, actually. Mm-hmm. We're already manufacturing it, but that's almost accretive in the year, in year one. Okay. It's growing incredibly nicely. That's the kind of thing that we. Easy to kind of tuck in. Yeah. Exactly, yeah. Maybe shifting to the P&L. Yeah. T alked about the need to make investments in both R&D and SG&A to generate this growth over time. How do we think about the investment that's, you know, the impact those investments are gonna have on the P&L as we think about 2023? Yeah. I can take that one. Let's take a step back, for a moment. When Merck prepared Organon for spin, they sized the cost structure really to accommodate the portfolio of products that we're launching. Mm-hmm. There was no placeholder or consideration given for how Organon would grow. You know, Merck figured, well, okay, they have their own management team, their own board, they'll figure that out. We have been pretty clear since even the communications right before the spin, that we would be reinvesting our profits to create a pipeline of opportunities to grow revenue. That would show up in two places on the P&L. It would show up on the R&D line, obviously, as we would be putting in place a portfolio of new product candidates. You'd also see it on the SG&A line for commercial expenses for these products that would launch if we were buying things in that were currently marketed products or imminently accretive. That we've been steadily moving in that direction since the spin. Of course, the big investor question is well, what does the next quarter look like? What does the next year look like? Is there a minimum point that we can think of before things start to turn around? Mm-hmm. It is a question that we get a lot. In advance of providing formal guidance for 2023, which we'll do in mid-February when we release earnings, we decided to soft guide towards the latter part of 2022 to start to get people grounded. We had told folks that if you looked at the second half EBITDA margin, that would be implied by our third quarter actuals and our fourth quarter guide, that would be a good directional indication for where margins would be headed for 2023. That's still the case, so there's no new information today, Chris. As we finalize our budget for the year and look at where FX rates are headed, that information's still good. That's, that I think adequately reflects what we see as the needed reinvestment to make sure that we can deliver that low to mid-single digit revenue growth, not just out to 2025, but even well beyond that. Can I just quick question those margins? Is that included in-process R&D? I know some companies are guiding with pulling that out. That's a very good question. Yeah. You know, across our industry, for those of you that aren't familiar, Chris is pointing out that, as you bring in new opportunities, there are upfronts, there are milestone payments. These are lumpy type outflows. They're more related to almost business development or M&A type cash flows than they are real R&D expense. It's always been sort of a gray area. The SEC has mandated that we include these payments in whatever adjusted income reporting that we do. When we gave that soft guide- Mm-hmm. There was about $25 million of that kind of milestone. Okay. Type included for deals that we've already completed. Sure. That number in 2022 actuals is about $107 million. So people can compare. Okay, great. I think I asked you this last year in a similar setting. Can we think about 2023 being something that's starting to approach, I would say trough, but that it's starting to get to a point where your cost base is at an appropriate level to kind of support the business going forward? Yeah. The answer I'll give there, Chris, is it reflects all the scenario. Mm-hmm. Y ou know, scenarios that we're running on what the future could hold for the eight deals we've already done. It does feel like we are starting to get towards a trough there. Okay. Obviously as the top line starts to grow over time, we can maybe think about. Yeah. yeah, you know, there's always the question of, well, if we're gonna be hitting the trough, then where do you think normalized m argins for the business would be? You know, that will depend heavily, on the commercial success of the eight deals that we're pursuing and whatever new ones we'll layer on in 2023 and beyond. It's hard to make a commentary on that. Mm-hmm. C hris, right now. Okay. Then maybe last one, just on FX. I know that was a huge swing factor given the exposure of portfolio, just any strategies of just to, you know, either hedge the business out or kind of dampen some of this volatility that we're seeing from currency? Yeah. you know, one of your first questions was what was unexpected or what was a surprise. From my chair, we've got 70% of our revenues, denominated ex-USD, but we report in U.S. dollars. We spend, and it's great, everything's going well operationally, but we've had really the strongest U.S. dollar in the last 20 to 30 years. Unexpected. The really the strong revenue growth that we've been seeing in local currency, investors have not been able to see. Mm-hmm. Kevin alluded to, you know, we've had solid mid-single digit growth in the Established Brands business. Investors have gotten to see none of it, because 90% of that particular part of our company is ex-U.S. revenue. We always get the question, "Well, why not hedge?" The answer to that is we do some hedging. I would call our hedging activities, we have a balance sheet hedging program. We hedge known exposures where we've got large trade receivables or payables, we've got dollars going out on CapEx spend or large intercompany flows. Those are all hedged to de-risk those. We do not at the moment do anticipatory hedging of our P&L. This is largely a financial reporting issue. We're actually pretty well naturally hedged on a cash basis. All of our manufacturing's outside the United States. Half of our employees are outside the United States. That provides a natural, you know, natural hedge. This is more of a financial reporting issue. Mm-hmm. Than an economic issue. We haven't found, we just don't believe it's in shareholders' best interest to be addressing a short-term financial reporting issue by putting cash out to hedge, revenue. Ultimately, you're not gonna outrun spot rates. They're going to catch up with you. You know, we've taken the position that, let's just take, you know, take our medicine as it comes. It's easier to explain to investors than trying to explain actuals plus a hedging overlay. Sure. Now I think that the dollar, the pendulum is starting to swing back. We'll actually have some of the reverse issue in 2023, hopefully. I'll, you know. Good problem to have. I'll be having to explain why we've had higher numbers and reported than we've been seeing in local currency. Okay. Maybe one kind of last cash flow question? I know you've talked about some one-timers in the business. Yeah. As we went through 2022. How do we think about kind of normalized cash flow and cash conversion for Organon as you kind of move past some of these... Yeah. Events? Yeah. Let's start with the divot, right? It's a great place to start to answer that question. When we launched, we're launching into a spec pharma space, which is very heterogeneous, and there are not a lot of comps out there for Organon. Yeah. The thought was let's put a nice attractive dividend on the company and that'll provide a baseline for the valuation. At the time, the dividend was sized to be low 20% of free cash flow. Mm-hmm. Before any one-time items related to the spin. Yeah. Yeah. Yeah. Yeah. That math is still good math. Okay. That would say that this business should be generating nicely north of $1 billion of free cash flow before. When we say one-time items, in our case, it's really separation. Yeah. Related spending. We're still doing that. Most of that will be done by June of this year, but for the global ERP implementation that we're doing, which will dribble into 2024. Okay. That, you know, investors should be expecting that this business can generate north of $1 billion of free cash every year. That really our thinking hasn't really changed since the time of the spin. Okay, great. Great. Can I start on the capital deployment front? I know we talked about the different divisions and we have some smaller acquisitions you've done. What is the, I guess, capacity and appetite to look at larger, maybe more transformational deals? What kind of conceptually, what would you want to be looking for in a larger transaction? Yeah. as I answer that question, we'll talk about. Okay. Which doesn't necessarily imply intent. Okay. Okay? When we, when we were creating the capital structure, we could have lobbied for an investment-grade rating. We wanted the BB rating because it gave us more flexibility to do exactly what you're talking about if the situation ever presented itself for us to do a larger, more transformative deal, and without, you know, without endangering the rating. The conversation that we had with the rating agencies at the time was within the rating that you have, we could see leverage going up into the mid-4s with a trajectory that it could get down below four within a two-year timeframe. That wouldn't. If you were to expend capital that way, it wouldn't necessarily endanger the rating. Okay. Our rating is very important to us. We've got roughly $9 billion of market value of debt out there. It's something that we obviously pay a lot of attention to. Mm-hmm. So that's the ability. People can back into how large of a deal we could do. As far as intent goes, we, the business is doing everything we thought it would. We're not feeling the pressure to do a large deal. That said, if every now and again, that, you know, you will have an opportunity to really accelerate your the achievement of your strategic goals with a, you know, significant inorganic transaction. We're well aware that those possibilities are out there, and we're, you know, we'd certainly do them if the conditions were right. We've had a lot of success with the smaller deals so far. Easier to digest. We can get them done at good pace, and we can execute well on those. That's been going great. Okay. Isn't that saying that? Is the success you're having with those smaller deals and stabilizing things like Established Brands, does that make a larger transaction less interesting for you? I know certainly the right large deal you'll always look at, I guess has just the framework that you're even looking at BD changed a bit now that you have a bit more experience with the business? I can address that a little bit. Mm-hmm. No. Okay. I think. The right deal is there, you'll take it. Yeah, if the right deal is there, and I'm kind of the, of the two of us, I'm the sharper. Okay. He's the one who says, "No, don't think about that." No. I mean, we are always on the lookout... Okay. For strengthening our position, specifically in women's health. Mm-hmm. If we can accelerate that timeline. In terms of being a global leader, we're almost there. Essentially accelerate it, take a stand on it. Sure. We'll look at it. But it's not distinctly only women's health. I mean, if there are other things out there, Remember, women's health are two different areas. One is essentially those conditions unique to women, and the other is kind of disproportionately impacting women. Mm-hmm. That kind of opens everything up. Sure. Yeah, we're always in the mode. Okay. Sounds good. Maybe one last question. Higher interest rate environment. Can you maybe just talk about, A, what that means for your existing debt, and then on this business development, kind of question, does that change the way you turn your appetite if there was a larger deal to take on more leverage? Great question, Chris. We are in our debt stack, we have a fixed floating mix of 60% fixed, 40% floating. If you include cash, about 65% fixed. There's really no concerns that we have from an operating perspective about operating leverage or the increase in interest expense that we'll see as a result of rates going up. It's not really an operational issue. What it has done is it has raised the bar on M&A that on the M&A analysis and decision-making that we do. For deals that bring near-term growth, whether it's currently marketed products or imminently- Mm-hmm. Marketable products, we're still gonna run after those just as hard. Where we see it starting to impact is the decisions that we might make for early-stage deals. Those deals are effectively riskier now. Mm-hmm. Because of the near-term benefits and 100% probability of, debt reduction. Sure. That's kinda how we think about it. Okay. Very helpful. I think we're just about out of time. Really appreciate the comments today. Good. And look forward to the updates as the year goes along. Thank you. Thank you. Thanks, Chris.