ALK-Abelló A/S (ALKB) Earnings Call Transcript & Summary

Dear shareholders, welcome to our Annual General Meeting of ALK. Thank you to everyone who has taken the time to attend today both physically, and those of you who follow our live webcast. The Articles of Association stipulate that the Board appoints the Chairman of the AGM, and we have again appointed attorney-at-law Niels Kornerup, and I give the floor to Niels.

Thank you very much for appointing me Chairman of the AGM. I hope we'll have a good AGM and a good debate. My first job is to ensure that the AGM has been correctly convened according to points 54 and 55 of the Articles of Association, the convening notice has to be sent out to all registered shareholders who have asked for it and also on the website, no more than 5 weeks, no less than 3 weeks before the date. And the notice was sent out on the 27th of February. Also on the 27th of February, a company announcement was launched. The agenda and the complete proposals have been presented, so has the annual report for '22 and mandatory documents. They have also been available both at the company office and on the website since the 27th of February. This complies with the Danish company law and the Articles of Association. So if there are no objections, I conclude that the AGM has been correctly convened and is competent for the transaction of business. So I will add that to the minutes. Just before we entered the room, 68 persons are present and 39 of them are shareholders and 29 persons are guests. And just before we started, 86.87% of the votes are represented with the deduction of treasury shares and 76.06% of the share capital is represented. The Board has received some proxies and postal votes, making up 99% of the represented votes and 99.4% of the represented share capital. Not everyone will vote for the proposals, but there is a general support for the proposals. And the final numbers will appear from the minutes. As mentioned at earlier AGMs, we also have to comply with the Danish company at a para-101 Item 5, which says that there has to be a complete statement of all votes at an AGM, even if there is no doubt about the result. As previously, I would suggest that we deviate from that complete statement. And I hope that I have the support of the AGM for that, and it seems to be the case. And thank you for that. One practical comment is that those of you who want to take the floor, I ask you to make yourselves known to me by showing your access card on your mobile phone, and then I'll call you to the restroom, where you will be speaking from. And as I said, I hope this will give us a good AGM. The agenda has been sent out. And hopefully, it's also on the slides behind me, we start with item 1 report on the activities of the company to approval of annual report and resolution to discharge the Board three resolution on the allocation of profits for adoption of the remuneration report for 2022, 5 adoption of the remuneration to the Board of Directors, 6 election of the Chairman of the Board, 7 election of the Vice Chair of the Board of Directors, 8 election of other members of the Board of Directors and then 9 appointment or election of auditor. Item 6 is proposals from the Board of Directors. There are 4 proposals. 10A is about renewed authority to the Board to purchase treasury shares. 10B is removal of Article 43 Articles of Association about the shareholders' register. 10C update of the remuneration policy, and 10D, authorization to the Chair of the AGM and then 11 any other business. And with that, we'll start the agenda. And as per usual, here at ALK, we'll cover the first 4 items on the agenda in one go. And we'll also have the debate about those 4 points under -- as one item. So now we will start with: 1, report; 2, annual report and discharge; 3, the allocation of profits; and 4, the remuneration report. And with that, I give the floor to the Chairman of the Board of Directors, Mr. Anders Hedegaard. Go ahead, Mr. Chairman.

Thank you for the floor. It's a great pleasure to report on the result for 2022 for ALK because 2022 was a good and prosperous year for ALK. We delivered our best financial results to date, and we made progress with the strategy, including the strategic initiatives aimed at securing ALK's growth in the longer term. We achieved 13% organic growth in local currencies, 15% in Danish krone, bringing revenue up to DKK 4.5 billion, with growth in all sales, regions and in all product groups. We achieved a 33% growth in earnings before depreciation and amortization, that is the EBITDA. Operating income increased to DKK 708 million, driven by sales growth, improved margins and efficiencies. That represents an increase in primary operating income, EBIT to DKK 470 million, which gives us an EBIT margin of 10%. It was our fourth year in a row with strong top and bottom line growth, and we can allow ourselves to feel proud of that, given the events the world has gone through, including a pandemic and the war. And last year, with its increasing macroeconomic challenges, also confirmed for us that our business model and market positions are robust. We've come a long way in the last year, and that is down to our capable management and employees. Without them, there would be no ALK and no prospect of further improvement in the results either. So I would like to say a big thank you to everyone in ALK for the commitment and determination they have shown in 2022. Their efforts helped to ensure that another 300,000 patients around the world received treatment with the ALK's products. Now we estimate that around 2.4 million people were diagnosed or treated with ALK's products over the last year. That's a lot of people. But we are also very aware that we are just scratching the surface. The potential is huge. And that is what we need to focus on. We were established to help millions of allergy sufferers to lead a better life, and we will focus every day of the year on helping even more people and in an even better way. Last year, we saw broad-based growth across all sales regions, 9% growth in Europe, 12% in North America and 39% in what we call international markets. This growth was mainly driven by tablets, SCIT and the adrenaline auto-injector, Jext. In many countries, the tablet portfolio is a well-established treatment concept, which is transforming the way in which allergies are treated. And there are still good long-term growth prospects for the tablets in both existing and new markets. The next growth push is expected in connection with the tablet launch in China and further pediatric approvals of our tablets. As I said, ALK's growth in Europe was 9% per year. even though the very large German market slowed down last year after a mild pollen season. That saw some disruption in the market, and it had a negative effect on ALK's total sales in Germany, which is our single biggest market. But it's important to underscore that we managed to continue to gain market share and increased our total share of the market in Germany to around 35%. We expect to go on developing our market position in Germany, and we expect the market to grow again in the second half of 2023. In North America, we saw growth in all product groups. We still struggled with low growth in tablet sales in the U.S.A., whereas the tablet sales in neighboring Canada are still rising and are now so high that we've just established a separate sales and marketing organization in Canada, and I will get back to the U.S. in a moment. In international markets, sales rose by 39%, driven by increasing deliveries to the 2 largest markets in the region, Japan and China. This growth was achieved even though COVID was still affecting sales in both markets. We have a focus on North America and China. It's no secret that for a number of years, we've been trying to break through the tablets in the U.S., but we've been met with resistance from many allergists. This is because it's more cost effective for them to treat patients with the cocktail injections that they earn a lot of money on mixing themselves. That gives them a good deal of business. That is why we have adapted our approach to the market in the U.S. last year. We will be switching more and more resources to the development of new sales channels, to give us access to the millions of patients who will benefit the most from treatment with allergy immunotherapy. One of these channels is pediatricians. In the first instance, we will direct our efforts at a small group of pediatricians who often perform allergy tests and regularly issue prescriptions for symptomatic products. We will continue to work with allergists in those parts of the U.S. where they have bought into the tablets. And although it's taking longer than expected, we are firmly convinced that we will succeed with the tablets throughout North America. Another large market where we are growing is China, which is well on the way to becoming the biggest in the world for the treatment of house dust mite allergy. Last month in China, we received the good news that the authorities have accepted for review our application registration for our tablet for house dust mite allergy, ACARIZAX. This is a major step forward in our efforts to offer new evidence-based treatment options for some of the 100 million or more Chinese people who suffer from house dust mite allergy. We are making targeted investments in China. We now have 135 employees servicing 600 hospitals and sales of our existing AIT product, Alutard, are growing well. With a possible launch of ACARIZAX in 2024 or '25, we will be even better placed. Another initiative in China is the partnership with Grand Pharma to register and launch ALK's adrenaline auto-injector Jext, which will be the first on the Chinese mainland. We are convinced that China will make a significant contribution to our long-term growth ambitions. In the future, our focus will be on children and adolescents. ALK has the potential to help many more allergy sufferers than we do today, especially children. The number of children with uncontrolled respiratory allergies is increasing fast, so children are a strategic focus area for ALK. Fortunately, there is a growing acceptance among medical professionals that early intervention and control are vital if we are to halt the progression of these allergies to asthma and other conditions. Our 2 crucial Phase III trials in children will address precisely this need, and both are expected to conclude in 2023. These are the MT-12 trial for the house dust mite tablet in Europe and North America, and the TT-06 trial with the tree tablet in Europe and Canada. Subject to approval, of course, the 2 tablets could be marketed with pediatric indications in Europe and North America in 2024 or '25. The approval of these 2 tablets will be an important milestone in our efforts to ensure that all respiratory tablets are approved for children and adolescents, as well as adults. The commercial potential is good and full pediatric coverage will significantly extend our markets. More than 10 million children around the world are thought to suffer from uncontrolled respiratory allergies, and parents who suffer in silence when it comes to their own allergies are fortunately much more proactive in seeking treatment when it comes to their children and making sure their children get the treatment they need. So we expect a higher compliance when it comes to children. In general, we want to mobilize people with allergy. And here, digital activities have remained a key priority. It's been a key strategic project in ALK. And in 2022, we saw further progress with our klarify universe. This is a universe that is about mobilizing people with allergy digitally and give ALK and our immunotherapy greater exposure. This is a universe that covers websites, personal apps and other digital tools. This offers patients a shorter and easier journey to treatment with allergy immunotherapy. Last year, more than 700,000 users found a doctor with the aid of our digital tools. And the doctors entered more than 1 million records of their symptoms. In 2022, we launched the klarify universe in Switzerland, Austria, the Czech Republic, Slovakia and the Netherlands. Now we have a presence in 11 countries, all in all, as Norway just came on board. With the help of the data captured in this digital universe, we get a better understanding of what makes people with allergies do something about their condition. And that enables us to improve our dialogue with the medical staff. Digital engagement with patients and practitioners is a big competitive advantage, and we will continue to expand the klarify universe in 2023. Our strategic focus area, New Horizons, encompasses initiatives launched to support our long-term growth. The first area covers 2 parallel development projects for next-generation adrenaline auto-injectors. The 2 development projects are still moving towards a planned registration application in the U.S. We have also made a good start on the Phase I trial of our tablet for peanut allergy, the first step in the development of new mainstream treatments for potentially life-threatening food allergies. However, recruitment of adult patients for the trial has taken longer than expected, but we are working to minimize the delays and still expect to see the first data from parts of the study in 2023. It is important to emphasize that the many growth initiatives that we are engaged in: Children, China, food allergies, adrenaline and so on, are all designed to provide for robust, high growth towards 2025, but particularly after 2025. And thereby, we expect all of this to lead to a much larger and stronger ALK. This year, we expect revenue growth of 7% to 11% in local currencies, primarily driven by tablets and the injection-based SCIT products. The growth would have been 8% to 12% if we could ignore the temporary rebate increase that was imposed on us and every other pharmaceutical company in Germany. From 2023, the prime indicator of our financial guidance has been changed to EBIT, the primary operating result. We are doing this to align the guidance with ALK's long-term goals. And we expect to achieve an EBIT margin of 13% to 15% compared to 10% in 2022, which equates to a percentage growth of 25% to 45%. That's a significant improvement in spite of continued inflation and changes in the product mix, and also the effect of compulsory rebate increase in Germany. So in other words, even though there are negative impacts, we are seeing significant increases in our bottom line. In 2023, there will be slightly lower R&D costs around DKK 600 million as the major studies come to an end and increased sales and marketing costs to support growth initiatives, but costs will rise more slowly than sales. With this expected progression, we are following our long-term plan and moving towards our goal of an EBIT margin of around 25% in 2025. As in other countries, 2022 was a year where we moved on our ESG agenda. We have a responsibility to provide a sustainable place of work for our employees and a sustainable planet for future generations. We take this responsibility seriously. We have recently published our sustainability report for 2022, which covers all our current focus areas and priorities. We have great focus on climate. And therefore, in 2022, we decided to join the International Climate Organization, the science-based targets initiative, which aims to help businesses to determine how quickly they can reduce CO2 emissions and how much they need to reduce them to comply with the Paris Agreement. The agreement sets a target to limit global warming to no more than 1.5 degrees Celsius. In 2022, we carried out an in-depth analysis to validate data and carbon reduction initiatives in the so-called Scopes 1, 2 and 3. Scope 1 and 2 covers our own direct emissions, while Scope 3 are the indirect emissions from our suppliers and others. In '22, we saw a decline in Scope 1 and 2 emissions as we took steps to reduce energy consumption and promote the use of renewable energy. Emissions from Scope 1 and 2 and parts of Scope 3 fell by 41% compared to 2019, which is our baseline year. Biodiversity is the next big ESG issue. ALK has a special role to play in this area as we produce biological medicines, and our source materials originate from nature. That gives us a greater responsibility in biodiversity. So we work to make a real difference. In 2022, we harvested the first organic cultivated birch pollen in the U.S., and we will now investigate whether this organic production method can be implemented elsewhere. It is also increasingly important to have a strategy for anticipating and averting climate risks as the threats of drafts and flooding can affect the cultivation of allogenic source materials. That is why we are now spreading our crops across multiple locations and maintaining stocks of all these crops. Diversity and inclusion is also something that takes up space on our agenda. Our Board of Directors consists of 7 members elected by the AGM and 3 elected by the employees. Two of the AGM elected members are women, representing 29% of the Board, and women make up 40% of the entire Board, including members elected by the employees. Three members of the ones elected by the general meeting have non-Danish nationality. We believe that diversity and inclusion at all levels produce better business results. And that's why we have incorporated these principles in a number of key processes such as talent development, succession planning, mentoring schemes, sponsorship programs and regular assessments of any pay gaps and so on. It's important every day and not just when giving fine speeches. In 2022, we took a further step towards our goal of increasing gender representation at Vice President and Senior Director level. 34% of the managers of these levels are women, which is up from 29% in 2021. At the next management levels, the balance is 53% women and 47% men, so well in line with the target of 50-50 representation. In 2018, we introduced a temporary suspension of dividends, and the Board revisits that dividend policy each year to determine when we can resume dividend payments. We also did that last year. So the dividend stop also includes 2022. It's a question of timely action and the resumption of dividend payments depends on continued progress and growth. Until we start paying dividends again, it's the share price rises that provide a return to ALK's shareholders. Increases in the share price have been generating shareholder value for many years. But in 2022, the ALK share fell by around 40%, which is, of course, not satisfactory. Along with many other expectation driven growth shares, ALK was hit hard by the falling prices that beset the exchanges last year after the Russian invasion of Ukraine and other events. That meant a share price decline, which was exacerbated by skepticism regarding our ability to maintain high growth in tablet sales. Since the new year, the share price has recovered slightly. And in the long run, we are still well placed. From December 2017 when we launched the new strategy and until the end of 2022, share price increases gave shareholders an average annual return of 21%. Now a few words on corporate governance and remuneration. The Board of Directors held 8 meetings last year compared to 7 the year before. The meeting in June, July was a 2-day strategy seminar with the Board of Management, where we followed up on our strategic developments in the short and long term. Apart from the meetings of the Board of Directors, the Audit Committee met 4 times, the Remuneration and Nomination Committee also met 4 times, and the Scientific Committee met 3 times. There have also been monthly meetings between the Chair and Vice Chair and the Board of Management. As usual, we have conducted a self-evaluation of the Board of Directors assisted by an external facilitator. The evaluation showed that the key areas identified previously have been satisfactorily followed up on, because we identify focus areas every year and we made progress compared to the year before. The Board of Directors is judged to have the necessary competencies. Meetings and processes are effective and our meetings are characterized by an open constructive and solution-focused dialogue, internally in the Board and with the Board of Management. We always try to improve cooperation while focusing on ALK's long-term development, including that we have talked a lot about expansion in the U.S. You can read more about our self-evaluation and the corporate governance report on our website. There, you can also find our renew of the guidelines from the Corporate Governance Committee. As was the case last year, ALK complies with all the 40 guidelines from the committee on corporate governance. On the website, you can also see the remuneration report with a detailed description of the remuneration to the Board of Directors and the Board of Management. The remuneration to the Board of Directors is determined at the AGM and consists of a fixed fee, which the Board proposes remains unchanged for 2023. These for the Board of Management are determined by the Board of Directors based on the company remuneration policy and consists of [ fix ] salary, pension, the usual benefits, short-term cash bonuses and long-term incentive or programs in the form of performance shares and share options. Last year, the total remuneration to the Board of Management increased by 3% to DKK 38 million. That there was a small rise in the fixed salaries for the 4 directors but a modest fall in the short-term cash bonus. That's because the Board of Directors had set a number of very ambitious targets that the Board of Management had to deliver on in order to earn their bonus. They delivered on most of it, but not all of it. I would like to say a few words about the remuneration policy as we are proposing to change it. That's because some shareholders have asked for greater transparency, especially about our incentive programs. We would like to ensure remuneration and conditions that are in accordance with current practice and at the same time, creating a reasonable balance between transparency and confidentiality. In that connection, we have proposed some changes to the policy. The changes have been made following advice from external experts and are primarily proposed to make our incentive programs more market conform. We propose to simply match the market. There are a number of updates under Item 10C in the convening notice, and I'll just mention a few of these. We propose to introduce a clawback clause, which means ALK will have the right to claw back remuneration, which has been granted on an incorrect basis. We also proposed to introduce a shareholding requirement for the members of the Board of Management. This means that the Board of Management will be required under special conditions to hold shares in ALK. We'll also produce introducing a cap on long-term incentive remuneration programs. This was just to mention a few of the points under 10C. In my report, I also want to mention changes in the Board of Management. Three weeks ago, Henrik Jacobi stepped down as Executive Vice President for Research and Development, after 23 years of service to ALK and the treatment of allergies. Henrik asked to retire, and he has truly helped to revolutionize the global treatment of respiratory allergies and allergic asthma, and he has brought ALK into the forefront in the area of food allergies. Now he's ready for a change of pace and more time with his family. Let's see if we have time for both. Of course, we respect his decision, and we are pleased to be able to make a smooth transition and succession, because we will still be able to draw on his experience as an adviser to our Scientific Committee. On behalf of the Board of Directors, I want to thank you, Henrik. And we are very happy to know you will still have a connection to ALK. At the end of May, our CFO, Soren Jelert, will also step down. He has played a major role in the transformation of ALK and it speaks volumes to his professionalism that since he handed in his notice in November, and he has been just as dedicated as before now. He still responds quickly to e-mails. He still delivers, there's no doubt he's still fully committed. So even though it will be a while before you step down, Soren, I want to thank you very much and wish you all the best. I would also like to welcome 2 members of the Board of Management. First of all, welcome to Henriette Mersebach who joined us on March 1 as Executive Vice President for Research and Development. Henriette has a deep scientific insight and extensive experience of clinical development. She comes from the position of Corporate Project Vice President at Novo Nordisk where she ran a number of projects for both early and late-stage development with rare diseases, diabetes and obesity. We are sure that Henriette will be a very strong player in the future of ALK's research and development and developing our pipeline. A very warm welcome to you, Henriette. Also a big welcome to Claus Steensen Sølje, who will be taking up the post of CFO as of June 1. Claus brings more than 20 years of experience from Novo Nordisk. He is currently Senior Vice President with responsibility for finance, procurement, IT and supply chain and international operations, which covers all of Novo's activities outside North America. A strong financial expertise and commercial understanding makes Claus an ideal candidate for the wide-ranging CFO role here at ALK, and I'm sure he will really help us grow. So welcome to Claus. We look forward to you taking up your position in June. Of course, it's very positive that we are so strong here in ALK and that we have such a clear growth that we are able to now recruit from the top shelf, and that's really one of the very important parameters in our trust in our growth journey. This year ALK turns 100 years. I'm sure some of you have noticed the logo, which we are presenting today. We try very hard to show that ALK is a company that has existed for many years, and that we intend to stay for many years to come. Since 1923 when pharmacist Peter Barfod and Dr. Kaj Baagøe registered the first pharmaceutically manufactured allergen extracts, ALK has been a pioneer in the development and production of allergy medicines and not least standardization. We are still pioneers. We are constantly aiming to create new and improved treatment options for people who suffer from allergies. We've been doing it for this -- for 100 years. And now we are ready to take on the next 100 years. The actual centenary is on June 9, where we will have a big reception for employees and external stakeholders and then the evening will have a party for the employees, where we will celebrate our birthday. But we will also celebrate the jubilee throughout the year. We've been here for a long time, and we intend to stay. Congratulations to ALK on the centenary. Now of course, I ask the AGM to approve the annual report and the allocation of profits and that you grant discharge to the Board of Directors and Board of Management. And I thank you very much for your attention.

Thank you very much to the chair for the report on the activities in the past year and the presentation of the annual report and the resolution of allocation of profits. Before I start the debate, I can tell you that the annual report has been signed by the Board of Directors and the Board of Management, and that there is an unqualified report from the company auditor. If you want to make sure that is the case, I refer to Pages 50 to 54 in the annual report. As mentioned, the Board proposes that no dividend be paid out for the financial year 2022 on the basis of the accounts of the parent company. With those words, I would like to ask whether anyone wishes to take the floor? That does not seem to be the case. You've all had a chance to make yourselves known if you want to participate in a debate. Then I can conclude that the debate is now finished, and I conclude as well that the annual report and the report has -- the annual report has been adopted, and the report on the activities has been taken note of, and that you adopt the resolution on the allocation of profits and the resolution to discharge the Board of Directors and Board of Management, and this will appear from the minutes. That brings me to Item 5 of the agenda today, which is the adoption of the remuneration to the Board of Directors for the present year. Here, the Board of Directors proposes that the fees remain unchanged so that the members of the Board of Directors are given a fixed fee of DKK 350,000 for the ordinary members, that the Vice Chair shall receive DKK 700,000 that is twice the base fee, the Chair of the Board shall receive 3x that amount, which is DKK 1,050,000. As it appears from the convening notice, the Board of Directors also proposes that the supplementary fees to the Board members who are members of the Remuneration and Nomination Committee and the Scientific Committee shall remain unchanged at DKK 100,000. The Chair of the Remuneration and Nomination and the Scientific Committee shall, unchanged, received DKK 150,000. The Board proposes that the supplementary fees to the members of the Audit Committee remain unchanged at DKK 125,000 that the supplementary fee to the Chair of the Audit Committee shall remain unchanged at DKK 187,500. So these fees are all unchanged compared to last year. Does anyone wish to comment? That does not seem to be the case. Then I can conclude that the general meeting has approved the proposal of the Board of Directors. Thank you very much. That leads me to the election items on the agenda. First of all, we need to elect the Chair of the Board of Directors. Here, the Board of Directors proposes reelection of the Chair, Anders Hedegaard. You can find a subscription of his competencies and managerial positions in the convening notice. Are there any alternative candidates? That does not seem to be the case. In that case, I can conclude that Anders Hedegaard has been reelected for another year. Congratulations. That leads us to Item 7, which is the election of Vice Chair of the Board of Directors. Here, the Board of Directors proposes reelection of the Vice Chair, Lene Skole. Likewise, you can read about Lene Skole's competencies and managerial posts in the convening notice. And just like before, I need to ask whether there are any other alternative candidates for the position of Vice Chair? That is not the case, and that means that Lene Skole has been reelected as Vice Chair of the Board of Directors. Congratulations. That leads me to agenda item 8, which is the election of other members of the Board of Directors. And I pass the floor to the Chairman of the Board, who will motivate the proposal for reelection of board members.

Thank you, and thank you for reelecting me Chairman of the Board. According to the Articles of Association, all members of the Board of Directors are elected every year at the AGM. You have already kindly reelected me and our Vice Chair. In addition, we propose reelection of Gitte Aabo, Lars Holmqvist, Alan Main and Bertil Lindmark. We also propose a new member, Jesper Hoiland, who I will introduce shortly. All the candidates are also introduced in the attachment to the invitation. Before I introduce Jesper Hoiland, I would like to say a few words to Jakob Riis, who is stepping down from the Board today of his own volition. Jakob has been a member of the Board of Directors of ALK since 2013 and has also chaired the Audit Committee in recent years. After 10 years on the Board, Jakob feels that he has truly earned his laurels. And on behalf of the Board and ALK, I would like to say you a great thank you, Jakob, for your committed and constructive contribution over the years. Thank you very much, Jakob. As I've mentioned a few times, we propose that Jesper Hoiland be elected to the Board of Directors. Jesper has substantial management and commercial experience from 35 years with global pharmaceutical companies. Most recently, he has been global Chief Commercial Officer at Ascentis Pharma and President and CEO of Radius Health. And before that, he worked for many years for Novo Nordisk, including as Executive Vice President and Head of Novo Nordisk's extensive activities in North America. Jesper is Danish, born in 1960 and is currently strategic adviser to pharmaceutical companies. He was previously on the Board of Directors for Leo Pharma, NNIT and Astion Pharma, and he's now a Director of the NASDAQ listed U.S. company Concert Pharmaceuticals. We recommend Jesper on the strength of his strong experience from the pharmaceutical industry. We particularly stress his unique expertise in establishing and expanding commercial activities in North America, including product launches. We have been keen to strengthen the Board's capabilities in that area because North America remains a strategic focus area for ALK. Jes, maybe I could just ask you to stand up so everyone can see you. Welcome, Jesper. We look forward to working with you. If Jesper is elected, he will be another independent member of the Board of Directors, which means that 5 of the members elected by the general meeting will be independent. Two members are not independent in the corporate governance since as linked to our main shareholder, the Lundbeck Foundation. We have just had the election of the employee-elected members of the Board of Directors. It took place the 8th of March and applies for the next 4 years. For employee-elected members have been elected, 3 of whom are reelected and 1 is new. The 3 elected members are Project Director, Katja Barnkob, Q&A Manager, [ Nanna Rassov Carlson ] and the Maintenance Support, Johan Smedsrud. The newly elected member is Project Director, Lisa [indiscernible]. Congratulations to all 4 of you. And I would like to ask Lisa to stand as the only newly elected member. Congratulations to all of you. The employee-elected members are a very important part of the Board of Directors, and they do magnificent work which I would like to acknowledge here at the general meeting. With that, I recommend Gitte Aabo, Lars Holmqvist, Alan Main and Bertil Lindmark for reelection, and Jesper Hoiland for election. We believe that the proposed candidates have the managerial, financial, pharmaceutical and production-related competencies required to ensure that the Board can serve the interest of ALK and the shareholders in the future.

Thank you to the Chairman of the Board for this motivation of the proposals for elections to the Board. Are there any other candidates? That does not seem to be the case. That means that Gitte Aabo, Lars Holmqvist, Bertil Lindmark and Alan Main have been reelected and that Jesper Hoiland has been elected. Congratulations to all of you and good luck in the future. You may applaud. That leads me to Item 9, which is the appointment of auditor. The Board proposes reelection of PwC. And pursuant to the audit regulation, I can say that this proposal is based on a recommendation from the Audit Committee, which has not been influenced by third parties and has not been driven by any agreement with a third party that could restrict the choice of the general meeting to certain auditors. Are there any other candidates for company auditor? That is not the case. And that means the PwC have been reelected. That leads me to Item 10, which covers proposals from the Board of Directors. And as I mentioned, to begin with, we have 4 proposals today. The first proposal is Item 10A, which is a renewed authority to the Board of Directors to purchase treasury shares. The current authorization to acquire treasury shares expires on the 12th of March, 2024, and thus possibly before the date of the next Annual General Meeting. The proposal implies that the Board of Directors be authorized for the period until and including 22 March, 2028 to amount the company to acquire treasury B shares at a nominal value of up to DKK 11,141,196 that is equivalent to 10% of the share capital. The share -- treasury shares held by the company may not exceed 10% of the share capital, and the price may not deviate by more than 10% of the official quoted price on NASDAQ on the date of acquisition. And this authorization should be valid until the 22nd of March, 2028. With those words, I would like to ask if there are any comments or questions in regard to this item on the agenda. That is not the case. I take that to mean that the general meeting has adopted this proposal. Thank you very much. Our next item is Item 10B, which is a removal of Article 43 in the Articles of Association regarding the shareholders' register. It is proposed to delete Article 43, so that the company is free to choose its keeper of the shareholders' register. I refer to the convening notice, where you can see the full text of the proposal. This is an amendment of the Articles of Association. Therefore, we need 2/3 majority of the votes cast and the share capital. Does anyone wish to speak under this item? That does not seem to be the case. And I can, therefore, conclude that the general meeting has adopted this proposal. That leads us to item 10C, which is the proposal from the Board of Directors to update the remuneration policy. I here refer to the description of the Chairman of the Board of these changes to the remuneration policy that he mentioned in his report, and I can also refer you to the convening notice, where you can see a detailed list of these updates and changes. The remuneration policy has been available on the company website, and it's been published since the convening notice was issued. So you had a chance to look more closely at the proposed amendments. Does anyone wish to speak under this item on the agenda? That does not seem to be the case. Can I take that to mean then that the general meeting has adopted the proposal of the Board? I can and I will make sure that, that appears from the minutes. That leads me to the final proposal, which is an authorization to the Chair of the meeting. That means that the general meeting authorizes the Chair of the meeting, that is me, to make such changes and supplements to the resolutions adopted at the general meetings as may be required by the Danish Business Authority. Are there any comments to this very exciting proposal? That does not seem to be the case, and I can conclude that this proposal has also been adopted by the general meetings. That means that the agenda for today has been exhausted and all we have left is Item 11, any other business. Anything goes under this item. The only thing you cannot do is to put forward any proposals that we should have received ahead of time. There is one speaker who wishes to take the floor, please approach the rostrum, sir. John [indiscernible], and speaking on your behalf. The floor is yours, sir. Well, you used to represent the Danish Shareholders Association didn't you?

That is correct. But today, I just represent myself. I have a couple of comments. First of all, thank you very much for a thorough report. And for the good progress the company has made, will growth in revenue, better EBIT growth in markets in Europe, North America and other international markets. And that made me think about the connection between a company that seems to be moving in the right direction, increases revenue, profits, growth in the market, reaching more and more patients. And then the fact that the share price has dropped by 40%. And I noticed that the Chairman referred to geopolitical turmoil. But if you look at the pharmaceutical industry as a whole, in the same period of time, we have seen companies who, in spite of international tensions are growing with higher share prices, et cetera. I don't know whether the Chairman can maybe say a bit more about this discrepancy between a company developing well, but having a share price that has dropped. Thank you.

Thank you, Mr. John [indiscernible] That was one question for the Chairman of the Board.

As I said in my report, the share price drop of 40% was not satisfactory. There's no doubt about that. We are not happy with that situation. And you're quite right, ALK in 2022 declined more than the market. But there were 2 factors that came into play: One was external; and the other one was that there was a decline in our skepticism in us being able to maintain our growth. There was also a lower season in Germany and the German market pulled us down a bit. And those 2 factors together caused this effect, I think. But that's the end of my analysis. I cannot control the share price, and I can't really think of any other factors. But that's the way we saw the market: One, the general decline; and the one, whether skepticism as to whether we could maintain our tablet growth. It did move in the right direction recently. And in the long term, we truly believe in growth on the ALK, and we believe that the German market will also come back. And -- but of course, we need to show that. And -- but the fact is also we are taking market shares. I'm not trying to run away from the responsibility. But the fact is then we'll just have to gain more market shares. That's our job in ALK, that there's a sort of one-to-one correlation between performance and the share price. I'm a bit doubtful about that one.

Thank you to the Chairman of the Board for that reply. Does anybody else want the floor under any other business? Now is your last chance. But nobody asks for the floor. So we have exhausted today's agenda, and I thank you for a good AGM. And all I have to do is to lay down my gavel, so to speak. And with that, I give the floor back to the Chairman of the Board of Directors.

On behalf of the Board of Directors, I would like to thank you for your attendance today. I also noted the big round of applause when we elected our colleagues for the -- when we elected the members of the Board. There was not such an applause when you elected the Chair and Vice Chair, but I will not put more into that. But thank you to our shareholders for showing interest in the company. I'm glad that we can meet again after COVID and have this dialogue together. And therefore, we would like to offer you a refreshment after the meeting where the Board of Directors and Board of Management will also be present before we go home. So thank you for today look after yourselves, and we look forward to seeing you again next year. Thank you.