Cosmo N.V. (COPN) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Cosmo's Half Year Results 2024 Webcast Presentation. I'm Hazel Winchester, Head of Investor Relations at Cosmo, and it's a privilege to open today's session. In a few moments, you will hear from Giovanni Di Napoli, our CEO, whom we call Gio; and Niall Donnelly, our CFO. Both will provide a comprehensive overview of our financial performance for the first half of the year, discuss key operational highlights and outline the strategic initiatives that have driven our progress. Additionally, they will share our outlook for the remainder of the year. Thank you for joining us today. I will now hand over to Gio, who will kick off our presentation.

Thank you, Hazel. Good afternoon, everyone. Thank you for joining us today for Cosmo Pharmaceuticals 2024 half year earnings call. My name is Giovanni Di Napoli, and I am honored to speak with you as the new CEO of this remarkable company. First, I want to extend my gratitude to our Board of Directors, shareholders and the entire Cosmo team for their warm welcome and trust. I also acknowledge the significant contribution of my predecessor, Alessandro Della Cha, for his dedicated leadership. For those who don't know me, I bring over 20 years of experience in the health care industry, spanning commercial, R&D and strategic global leadership roles. My passion for innovation, patient care and operational excellence aligns closely with Cosmo missions and values, making this transition deeply fulfilling. In my initial weeks, I have focused on 3 key areas. Team engagement, I have prioritized meetings with our dedicated teams across various functions and geographies gaining valuable insights into our operational strengths and areas of improvements. Strategic review, thoroughly reviewing our strategic initiatives and R&D pipeline, I was impressed by the innovative projects addressing large market opportunities and unmet clinical needs. Last but not least, stakeholders' engagement. I engage with health care professionals, partners, investors and analysts to gather feedback, reinforcing our strong market position and stakeholder trust. Moving forward, my focus will be on building upon our strengths, driving innovation and delivering sustainable value to our shareholders and transformative solutions to patients. We will foster in Cosmo a culture of collaboration, agility and excellence, which is essential for our long-term success. I'm super excited about the future of Cosmo Pharmaceuticals and confident in our ability to achieve our strategic goals. Thank you for your continued support. I look forward to working closely with all of you as we embark on this new journey together. Now let's proceed with our earnings presentation and detailed financial performance for the first half of the 2024. Today, I want to focus on 3 main themes that highlight our current success and future potential. Number one, our robust financial position. We have built a solid financial foundation, which give us the strength and flexibility to invest in future opportunities and navigate any challenges that may arise. Number 2, key growth drivers. Beyond our steady growth in the established portfolio, we have identified 2 key growth drivers. These are markets where we see tremendous opportunities to capture and expand our presence, driving significant value. Number 3, promising pipeline. Looking ahead, our pipeline is brimming with potential. We are confident in our progress towards bringing new innovative products into large markets with significant clinical unmet needs. In essence, our story is one of a strong financial foundation, exciting growth drivers and a future filled with promising innovations. So let me start with the first theme, our robust financial position. I will talk about our top line growth, strong cash position without any debt, with a profitable business with increasing dividends for our shareholders. Let me start with some highlights for our first half this year. Last December, we announced the strengthening of our partnership with Medtronic. And the deal after all the regulatory approval became effective as of February 2024. This deal is not only financially important to Cosmo, but shows the commitment to GI Genius and to our Cosmo AI team from Medtronic, the largest medtech player. Winlevi continues to grow, not only in terms of prescription in the U.S., but also globally, thanks to a thoughtful and execution-oriented globalization plan we implemented last year. Our core portfolio, GI drugs and CDMO continues to show growth and make important contribution to our top and bottom lines. Let me give you more details about what I just mentioned. But before diving into the numbers, I want to clarify how we will represent our business. As we move forward, we will categorize our progress and achievements within 4 primary business units: Health Tech, Dermatology, Gastroenterology and CDMO. These 4 business units are not just a part of our company. They are the core, the essence of our operations. They will be the key areas through which we measure and report our success, reflecting our strategic direction and focus. Health Tech is at the forefront of our technological innovation, driving advancement with products like GI Genius. Dermatology showcases Winlevi's impressive global expansion, transforming patient care worldwide. Gastroenterology stands strong with consistent growth through strategic partnership and increased royalties. Finally, CDMO represent the backbone of our manufacturing excellence, serving both our needs and those of our partners. Now let's look at the impressive growth rates compared to the same period last year in 2023. It's exciting to see growth across the board. CDMO grew nearly double digits, driven by an increase in orders from existing customers. Dermatology achieved a remarkable 58.5% growth due to a continued worldwide expansion of Winlevi. We expect this trend to continue as we secure further approvals. Gastroenterology saw a 4.3% increase propelled by both an increase in royalties and the supply of products to our partners. Health Tech experienced an extraordinary 15-fold increase, bolstered by receiving the first $100 million from Medtronic related to the expansion of our AI partnership and the growing installed base of GI Genius. We also anticipate receiving an additional $100 million from Medtronic this year, linked to new services and the delivery of additional AI products and features. Now let me hand over to our CFO, Niall Donnelly, who will provide more detailed insights into our financial performance for the first half of the year. Please, Niall.

Thank you, Gio. In the first half of 2024, revenue was EUR 136.2 million compared to EUR 43.7 million last year. Health Tech revenue increased from EUR 6.4 million last year to EUR 97.5 million due to the upfront $100 million received from Medtronic related to the expansion of our AI partnership. At the same time, the GI Genius installed base continued to grow. We expect to receive a further $100 million from Medtronic this year linked to new services and the delivery of additional AI products and features. Dermatology revenue increased by 58.5% from EUR 4.6 million to EUR 7.4 million driven by the continued expansion of Winlevi. We expect continued growth as new approvals are received. Gastroenterology royalty and manufacturing revenue increased by 4.3% to EUR 21.4 million related to increases in net sales and increased product shipments. CDMO revenue increased by 9.3% to EUR 8.9 million as a result of an increase in orders from our existing customers. Net expenses in the first half were EUR 49.2 million compared to EUR 36.5 million in the same period last year. Expenses related to raw materials and consumables increased by 7% to EUR 9.2 million as a result of an increase in product shipments. Personnel expenses increased to EUR 19.9 million compared to EUR 12.2 million last year. The increase relates to higher short-term incentive payments linked to the financial performance and expanded R&D head count and additional staff costs related to higher production activity. Outsourced preclinical and clinical trial costs increased to EUR 2.3 million from EUR 1.5 million last year as a result of our increased trial activities. Other operating expenses increased by EUR 3.1 million to EUR 10.8 million, mainly due to an increase in contingent consideration provisions linked to our new agreement with Medtronic and an increase in production-related costs. Operating profit was EUR 87 million compared to EUR 7.1 million last year. Net cash flow from operations was EUR 99.2 million. We have no debt and our cash position was EUR 133.4 million at the end of June. We paid a dividend of EUR 2 per share in July. These are very strong financial results, and we are in a very solid financial position. Thank you. I will now hand back to Gio.

Let's now talk about our growth drivers, GI Genius and Winlevi. But before I dive deep into these 2 products, I thought to share with you my first reflections about Cosmo after 2 months with the company. As I begin my journey with Cosmo Pharmaceuticals, I'm deeply impressed by the incredible talent and unique skills of our team. Over the past few weeks, I've explored our operations and found them truly inspiring. Our team's expertise has created a diverse and attractive portfolio in the life science market, driven by 4 main revenue stream. CDMO showcasing our commitment to quality and efficiency in contract manufacturing. Gastroenterology, GI drugs, our organically developed products address critical health needs with innovative solutions. Derma products. These products highlight our ability to meet evolving dermatological demands. AI business, this segment developed through strategic investment reflects our dedication to advanced technologies. What does this mean for our future and for our shareholders? Well, beyond financial success, Cosmo Pharmaceuticals holds a unique position in the life science market, with capabilities rarely found in one single company. Here are a few highlights. Drug development. Our R&D efforts drive organic growth in GI and Derma products fueled by curiosity and scientific rigor. For instance, Winlevi is a new effective drug brought to market after decades of non-innovation. State-of-the-art manufacturing. Our advanced facilities ensure high-quality production. We make over 800 million tablets annually at our Lainate plant. Pioneering AI team, leading in real-time AI applications, we paved the way in medtech for the use of real-time AI with GI Genius. Clinical and scientific excellence. Our teams is able to conduct robust trials globally, ensuring safe and effective products backed by scientific evidence. We successfully completed several clinical trial from Phase I to Phase III, including 5 sponsored pivotal trials. This is remarkable. Comprehensive regulatory expertise. Our regulatory team excels in navigating complex pharma, medtech and AI regulations. As an example, we were the first company to receive FDA and CE approval for real-time AI applications. Last but not least, commitment to quality and compliance. Our quality and compliance teams prioritize patient safety, maintaining the highest standards. This foundation of excellence positions us strongly for the future. We have all the elements in place to continue our journey of growth and innovation. So in the coming months, I will assess our strategy, defining our next steps and focus area to ensure we remain industry leaders. Let's now talk about our 2 growth drivers. Let me start by saying that between GI Genius and Winlevi, we have already touched the lives of about 4 million patients worldwide. We feel very proud of this number, especially because those 2 technologies were entirely developed in-house and are now perceived to be best-in-class in colon cancer detection and acne treatment. This is another remarkable point of reflection for all of us at Cosmo. We are making a positive impact on people's lives. And this number will grow further, I promise. Let me start with GI Genius. I'm proud to announce the strengthening of our relationship with NVIDIA, market leader in AI. Given our technology, GI Genius and talented team, NVIDIA gave us OEM status, an exclusive recognition that NVIDIA gives to its [ thought ] partners. To give you a perspective on this, there are only 14 companies listed as OEM partners with competencies in artificial intelligence. Among those, we are the only one with a medical device featuring AI in the market. This is a testament to our globally unique capability of transforming AI technology into products for physicians and patients. This OEM status is a game changer for us. It grants us exclusive access to NVIDIA development and technology team, allowing us to stay ahead of the curve with early previews and adoptions of their new technologies. It also paves the way for crucial cooperation in identifying opportunities for our AI Access program, the marketplace of AI. This recognition not only brings us more focus from the leadership team, but also position us as a key player in the AI industry. Here in this slide, you can see that this partnership is already in motion. You can see Kimberly Powell, the NVIDIA General Manager of the Healthcare business, who visited us in Cosmo last month. She left amazed by the technology and talents we have in house, not only in the Health Tech business unit, but also in our Gastroenterology franchise. We still have plenty of opportunities to leverage our AI skills and systems across the entire company. Significant progress on the GI Genius pipeline. We have received FDA approval for our ColonPRO application, which is another step forward from our prior software version. We have further improved polyp detection, reduced false positive almost to 0 and brought to market the first post-procedural highlights function, which will give our customers essential metrics about their performance during colonoscopy. Together with ColonPRO, we also received FDA clearance for our own Genius operating system. This is another important milestone as this allows third-party applications to be run into GI Genius. And I will talk more about this in my next slide. Last but not least, we submitted the new Genius module 300 to the FDA, and we expect to receive clearance very soon. This new module has embedded the latest NVIDIA technology, which is called IGX, that allows a standardized approach to applications development and therefore, put us in a great position to become the AI marketplace in endoscopy. Let me double down now on the AI marketplace, which we called AI Access. But before I show the pipeline, I want to make sure it's clear why we are super excited about the real-time endoscopy market. Here in this chart, you can see the total number of procedures using real-time diagnostic or therapeutic video, which are about 225 million. And those are split between lower GI, think about colonoscopy, upper GI, think about the esophagus and stomach. And the others, which includes liver and pancreas, think about EUS or ERCP. Let me now show you what we are doing one by one. Let's start with the lower GI procedure. Right now, we have one application in the lower GI, which is the market leader, ColonPRO, our own application. Over the past 12 months, we have meticulously evaluated the [ 54 ] third-party applications. Our selection process in partnership with Medtronic is driven by technical analysis and market opportunity and has led us to choose 4 applications with very important market potential. These applications are focused on 3 areas within the upper GI and one application in the EUS/ERCP area. Those 4 applications will come from either a third-party or a co-development with Cosmo from an academic institution. I can't disclose more for confidential and competitive reasons. On top of this, I want to highlight the pre and post procedure reporting that the endoscopist or the nurse must do before and after every procedure. There are a total of 225 million procedures to report, and this is the fifth application. We are working on it organically in Cosmo, and it's the one above the automated reporting system. This is why we are super excited about the opportunity with AI medtech and through the partnership with Medtronic. Before I move to Winlevi, I want to show you the amazing investment Medtronic is making in the U.S. market through a direct-to-consumer campaign. As you can see from this slide, Medtronic is creating awareness about the importance of screening colonoscopies. The goal is to drive patients to centers equipped with GI Genius. These campaigns are being conducted across social media, local radio and TV. Additionally, I'd like to emphasize a notable article published on the VA, Veterans Affair website. This article highlights the use of artificial intelligence in over 100 VA health care hospitals. To date, more than 40,000 colonoscopies have been performed with the aid of GI Genius. The implementation of GI Genius in VA hospitals is a very important advancement. It ensures that veterans in the U.S. receive the best possible care, utilizing cutting-edge technology to improve screening accuracy and early detection of colorectal issues. This enhance the quality of care and demonstrates the commitment from Medtronic and Cosmo to supporting those who have served. Let's now talk about our second growth driver. I want to highlight the remarkable potential of Winlevi, a standout product in treating acne vulgaris. Winlevi's unique mechanism of action sets it apart in the dermatology market, offering unparalleled safety and efficacy. You can see here that an independent review and meta analysis recently compared the efficacy and safety data of various mono and poly therapies for acne vulgaris. The results were compelling. Winlevi emerged as the most effective single treatment based on the Investigator Global Assessment, IGA, treatment success rate. This is the FDA primary endpoint for acne vulgaris. Not only did Winlevi excel in efficacy, but it also demonstrated an impressive safety profile. Among all treatments evaluated, it had the lowest discontinuation rate due to adverse events. This dual achievement underscores Winlevi's position as the highly effective and safe option for patients driven by its unique mechanism of action. Now for investors, these findings highlight Winlevi's potential for substantial market penetration and growth. It's proven efficacy and safety are key differentiators that position it favorably in the competitive landscape. Winlevi's success will drive significant value for our shareholders as we continue to innovate and lead in the dermatological treatments. Like Medtronic is doing for GI Genius, Sun Pharmaceutical is making remarkable commercial strides with Winlevi. They have recently launched a series of engaging episodes available on YouTube, featuring Dr. Pimple Popper, a renowned dermatologist in the U.S. Dr. Pimple Popper, whose real name is Dr. Sandra Lee, is a board-certified dermatologist and a social media sensation known for her informative, entertaining content on skin care. In this Winlevi series, Dr. Pimple Popper delves into the clinical benefits of Winlevi, providing expert insights on its efficacy in treating acne. Her episodes highlight the science behind Winlevi, patient success stories and practical demonstration of its use. This collaboration not only educates the audience but also builds trust in Winlevi through Dr. Lee's credible and popular platform. We are making progress on our globalization plan for Winlevi. As you know, we are approved in 3 countries now, U.S., Canada and Australia. And we submitted in EU and 14 additional countries, which includes U.K., Brazil and India. Let me close the section about Winlevi with an important update on the EMA submission. We discussed this in our last Investor Day, and I want to reaffirm our steadfast commitment to getting EMA approval by the end of this calendar year. With the EMA submission, I also want to point out that this is the first time for Cosmo to be a marketing authorization holder, which in a nutshell, means that this will give us the flexibility in picking and choosing the right partner in each of the European country. Very exciting. So we talked about our strong financial position and our 2 growth drivers. Let's now talk about our exciting pipeline. Before I delve into our pipeline update, I want to introduce a new approach we will be using moving forward to discuss our organic investments. We will focus on the disease we are targeting. We won't include our internal code names anymore. This approach is important because it underscores the specific markets and diseases we are addressing. As I mentioned at the beginning of this presentation, our goal is to develop drugs and products for large markets with high growth potential and significant clinical unmet needs. Let me walk you through some of the exciting areas we are targeting. Androgenetic Alopecia, this condition affects 2 billion males worldwide, not only impacts self-esteem, but also has broader psychological effects. Our development efforts aim to address this pervasive issue with innovative solutions. Distal Ulcerative Colitis, affecting approximately about 3.5 million patients worldwide. This condition causes significant discomfort and challenges for those affected. Our work in this area aims to bring relief and improve quality of life to these patients. Bile Acid Diarrhoea, another condition with a large unmet need, this is -- impact about 95 million patients worldwide. This condition can severely disrupt daily life. And our goal is to develop effective treatments that can offer important relief to those suffering from it. Oncology. Our oncology program focused on treatment that can impact patients with pancreatic, prostate and breast cancer. And our solution can potentially be used in combination with existing therapies. Patients in need are more than 4 million. AI-Augmented Endoscopy, as I previously demonstrated, the number of endoscopy procedures is vast, and we estimate this market to be significant, 225 million procedures. Our AI technology aims to revolutionize real-time endoscopy procedures, enhancing accuracy and outcomes and ultimately improving patient care. By focusing on these specific conditions and markets, we are not only positioning ourselves for growth, but also committing to addressing significant health challenges. Each of these areas represent a unique opportunity to make a meaningful impact on patients' lives. And I'm incredibly excited about the potential we hold. Now let me show you our progress in each of these projects. Androgenetic Alopecia, we are very close to complete enrollment in our Phase III study. Distal Ulcerative Colitis, we have already 13 active centers and a few patients enrolled. Bile Acid Diarrhoea, we are starting now our Phase II trial and aim to enroll first patient by the end of this calendar year. Solid tumors, we are now enrolling in the 6 cohort with a daily dose of 1.3 grams and 6 more patients need to be enrolled. AI-Augmented Endoscopy. We talked about these 5 applications. And you can see from this graph where they stand in terms of their development. As we look ahead to the second half of the year, I want to share our key priorities that will drive our continued growth and success. These initiatives are critical to our mission of advancing health care and delivering value to our shareholders. Number one, we will advance R&D for GI Genius, continue executing the research and development strategy for this technology and its applications. We keep globalizing Winlevi, intensify efforts to expand Winlevi's global reach and secure EMA approval. Bile Acid Diarrhoea Phase II trial. We aim to enroll the first patient in the Phase II trial for Bile Acid Diarrhoea. Number 4, we are targeted to receive FDA clearance for the GI Genius 300 model. Number 5, Phase III Androgenetic Alopecia trial. We are aiming to complete patient enrollment for the Phase III. Number 6, maintain our focus on ESG with detailed plans and progress updates forthcoming. I also want to reaffirm financial guidance for both revenue and operating profit for the full year. These priorities reflects our commitment to innovation, global expansion and sustainability while ensuring we deliver on our financial targets. As we conclude today's presentation, I'd like to recap the key themes we have discussed. First, our strong financial position. We have demonstrated robust financial health with solid revenue growth, healthy margins and a strategic focus on cost management. This strong foundation ensures we are well positioned to invest in future opportunities. Second, our fantastic growth drivers. We have highlighted the impact of GI Genius and Winlevi, which are transforming patient care and driving market growth. Investments by Medtronic and Sun in DTC campaign, along with our strategic partnership with NVIDIA underscore our commitment to innovation and market expansion. Lastly, our exciting pipeline. Our ongoing investment in research and development is paving the way for groundbreaking advancements. With a pipeline rich in promising new products and technologies, we are poised to continue delivering value to our stakeholders and improving patients' outcomes. Our solid financial position, dynamic growth drivers and innovative pipeline set the stage for sustained success. Thank you all for your attention and continued support. We look forward to achieving even more significant milestone together in the future. Thank you.

[Operator Instructions] Our first question comes from the line of Kerry Holford with Berenberg.

Kerry Holford from Berenberg. A few, please on GI Genius. GI Genius, interested in the new launches, ColonPRO, the new operating system and indeed the module 300. So when can we expect -- when should we expect this to start to influence your revenue with regard to that product? And how should we think about the pricing strategy and the payment structure for these new applications from the perspective of Cosmo? So can you help us understand how that may evolve with regard to timing and magnitude? Second question I have on Breezula. You've talked today about recruitment going well. Can we assume that we should still be on track for Phase III readout for that product in this -- into next year? And then lastly, on the outlook. We have the reaffirmed guidance today for this year. I didn't see any mention of 2025, where I believe previously, you have provided a revenue guidance range of EUR 240 million to EUR 260 million. So I'm just intrigued to see whether that outlook still [ stand as of ] today.

Thank you so much, Kerry. Appreciate all the questions. I'll start with the GI Genius first. So the Genius 300 approval should come in the next few months. I would say a month and month and a half from now, we should receive approval. Then you have to think about we will start mass production for the device. And Medtronic is planning to launch this new technology beginning of next year. So with that said, I also show very clearly today, I hope the number of applications we have been working on with either third parties company, institution and also organically. And I hope also was clear the development phase into it, we are right now. And we have a couple of applications very close into the regulatory approval and depends on the type of application, the price is going to be different, right? Think about what type of solution you bring to market, what clinical unmet need you're going to try to solve or help, the price is going to be different. The good news here, though, is that those applications can be uploaded on the current hardware already. So think about all the Genius subscribers across the globe that will be able in seconds to start using that application and subscribe to that new applications as well. So this is the SaMD, Software as a Medical Device business model that we really love because it can be scaled very fast. So I hope I answered your first question. And then moving to Breezula, no changes. So we expect to see results in the first half of next year. The team is working very hard on closing the enrollment. So more to come in the next few months from our side. And regarding your question about the guidance for FY '25. I really wanted to focus my first earnings call on the company, on the current outlook and also in the next 6 months. So I still have lots to go through in the next few weeks. As I said in my last slide, I will spend more time also with my team thinking about and planning for new strategies. So I actually don't want to talk about this in this call, and we'll come back to this in November, December.

Understood. Very clear.

Our next question from the telephone comes from the line of Yi Chen, H.C. Wainwright.

My first question is regarding the expected payment from Medtronic. Do you expect it to receive in the current quarter or fourth quarter of this year?

Yes. So we expect to actually -- so we are working on additional services, products and features on products and applications. So we expect to receive the second payment by the end of the calendar year. I can't tell you which month, but our goal is to close this calendar year with that payment done. And we are confirming that this will happen in this calendar year.

And when do you expect to receive a regulatory decision in Europe for Winlevi?

Yes. So same -- we also confirm what we said in March in the Investor Day. EMA approval should be by the end of this calendar year as well. So the team is working really hard, and we have a few deadlines over the next few weeks, which we believe we can meet. And if things goes like we want and we plan, we should receive approval by the end of December.

Got it. Got it. And when and how do you expect to select a replacement commercial partner for Aemcolo in the United States?

Yes. Actually, that's a great question. We are working on it. And I think it's too early for me to share the direction we want to take. But I have to say that since we took the license back from RedHill, I have perceived already an interest, and we had already a couple of meetings. So expect to hear more in the next few months. We're going to make this right. We believe there is an opportunity here, and we want to select the right partner with the right skills for this drug. So we are working on it.

Got it. And lastly, maybe you have covered it before. But lastly, what are the key competitive advantages of GI Genius module 300?

Yes. It's actually the only computing edge platform that will be approved in endoscopy in the U.S. With that said, the power of the technology in terms of flexibility and also ability of receiving multiple algorithms, AI, at the same time, it's what makes this very different. And with that said, also, this will give us the ability of developing faster -- [Technical Difficulty].

Ladies and gentlemen, we lost connection with the moderators. The conference will resume shortly. Ladies and gentlemen, please hold the line. We lost connection with the moderators. The conference will resume shortly.

Hello?

The conference may resume now. Please go ahead.

Okay. Sorry, we got disconnected. Yes, I was sharing the computing edge power of GI Genius module 300. I said in my presentation that also we embedded in this hardware also the IGX NVIDIA platform, which allows third-party developers to use the same approach to develop applications, which make us uniquely positioned also to use developers across the globe. As I said also, we actually have received more than 50 applications for new ideas, new applications to be uploaded in GI Genius.

The next question from the telephone comes from the line of Peter Welford, Jefferies.

I think I've got 3 left. Firstly, just returning to the strategy. Just curious that you've talked a lot about the 4 key business units and sort of how you view those. But just curious with regards to the strategy in terms of Cosmo's intention in these, insofar as is your vision still for the company to focus on sort of building these new technologies, these new applications, these new trials, but not going then into the commercial side of things and still partnering with companies? Or I guess, do you envisage Cosmo potentially moving beyond that, perhaps also becoming a company with commercial vision itself? Secondly, just with regards to the asset in solid tumors. I mean I appreciate there's potential for this perhaps in some GI tumors, but it seems a little bit of a stretch, I guess. Curious how that solid tumor asset fits within the framework you've presented. And perhaps more broadly, is future R&D going to be very much directed towards Gastroenterology and Dermatology or how should we think about the sort of direction of Cosmo's future pipeline as you develop those forward? And then just finally on Winlevi, looking at the prescription data in the U.S., it looks as though prescriptions have been relatively flat over the last sort of 12 months to 18 months. Curious, I guess, what you think is impeding because obviously, there's a lot of good profile, good data and sort of uniqueness about the product. What do you think is the major barrier that's faced by Sun? And any comments as well as whether Sun is managing to improve the net price they're managing to achieve for Winlevi given obviously the pretty extensive discounting there is in the U.S. acne market?

Thank you, Peter. So I'll start with the first question. So yes, you're right. I think what we wanted to do with this first presentation to you is to show Cosmo in a different way and really focus on the growth of those 4 different franchises. And thinking about strategy, this allow us to be even more flexible. And when I say that means that now we have opportunities in derma, in gastro, in CDMO and also in AI. And you will see in the next near future, what does it mean? So I will lay out the strategy over the next couple of months. So we actually are going to have an off-site over the next few days with my team to talk about this. But I do believe this clarity on the revenue and the businesses, it's already a big step forward in terms of visibility for you. Regarding the commercial. So with that said, right now, again, it's too early to say, but we are open. We are open to opportunities. We will analyze all of those one by one in depth to understand what is the best option for Cosmo to succeed with high profits versus the opportunity as well. So we stay open. That's the bottom line that I want to share with you. For the solid tumor, I hear you, and I think what we want to do is to find a partner for that drug that can take this through the next couple of phase of studies because we know it's going to be for us mission impossible. So we have another few milestones that we have to achieve. And we believe we can then find a good partner that can take this to the next steps. R&D right now is what you have seen. I think is a lot. I think it's already a great pipeline, which excites me a lot. Reason being is because those are really large markets with unmet need and what we are developing also is really unique in terms of solutions for those patients. Same story also for AI. I think those 5 applications will be something very unique also in the endoscopy space. The Winlevi story, actually, it's a little bit more about what type of patients Winlevi is looking for. So -- and that's what they've been doing over the last few months. They are partnering with a company called PhilRx, which basically, it's helping those patients to find a better price and covered by the insurance, which also will increase the net that you were talking about. So with that said, we believe this strategy will have an initial challenge that we went through over the last few months, but with a long-term outcome that is what we want. So you get patients who actually are going to be even reordering the [ cream ] because they get paid and also they get better price, which also Sun will get higher price and Cosmo also will get higher royalties. So I think the story of what they're building together with PhilRx and also the DTC, I showed, together in the long-term is what we need to have in the U.S.

We have no more questions from the telephone. We move to the written questions. We have a set of questions from Mr. Martial Descoutures from ODDO BHF. He has 2 questions. The first one is, could you come back on the Health Tech sales, please? [ If you restate ] of the Medtronic milestone, we could see that the GI Genius revenues seem to be inferior to the expectations. Could you help us to understand the split in H1 and to manage the revenue trend in H2, please? And then second question is maybe a general question. On your first month as the CEO of Cosmo, could you give us a first feeling on the points that you would like to develop or to leverage in the company, and that's your capital allocation policy in the next years?

Good. So let me start with your first question. I think I want to answer by saying that we should be, again, focusing on those 4 businesses that I mentioned in my presentation. Health Tech is one of those 4. And these 4 businesses have actually unique opportunity because we have a very diversified opportunity to gain revenue out of these businesses. As you know, sometimes there are milestones, sometimes there's upfront payment, royalties and also manufacturing cost -- revenue, sorry. So with that said, the Medtronic deal is in place since February, and we received the first payment. So this actually has to be considered part of what we do at Cosmo, developing our technology in GI Genius. And if you compare with last year, you can't really compare because last year also, Medtronic ordered many hardware because they had high demand to fulfill. That has been fulfilled with new subscribers in the market, which actually generate royalties that actually Cosmo gain. So that's why the business is in a very good shape, growing. As you know, we can share the number of units in the market for confidentiality. Medtronic also doesn't do it. But I can tell that this is an area where there is growth, and growth is coming from different ways. The second question, can you go back to the second question? The second question was I think -- yes, here you go. Okay. The guidance, I think I answered about the guidance for 2025. I think I wanted to focus this call, this meeting on 2024 first half and also the second half. And then the capital allocation, I think it's another great question. I think we are focusing on maximizing shareholders' value here. We want to have a balanced approach, which means the strategy has to be, for sure, with opportunistic investments, which the company did and very well in the past, but also to pay dividends. And we are committing also to look outside if there is any opportunity for the company. But at the same time also, we want to make sure we can use this investment for top line growth and also for continuous investment in R&D and development. As you have seen, we have a strong pipeline, and we believe that's an area where we can even invest further. So it's a balanced approach, I would call it. So we ensure that we are not only investing in the future growth, but also we are maximizing shareholders' return in the short and midterm.

The next question comes from [ Dejan Radivojevic ] from [ Vontobel ]. When do you expect the approval of the FDA for the NVIDIA IGX next-generation GI Genius?

Yes. I think I answered this question earlier. So we expect these approvals to come in the next couple of months, a month and month and a half.

The next question comes from [indiscernible]. When can Breezula enter the market? Will it be possible to create brands with the solution inside?

So we are waiting for sure to get the Phase III trial results, and then we want to assess this opportunity very well. So I can't comment on this other than -- it will be a great asset for Cosmo. So we will make this right with many different consideration.

The next question comes from [indiscernible]. Do you follow your share price? Just wondering that since the news are better and better, the stock price isn't able to grow again. Do you have any ideas how to improve the value of our share?

Yes, by working very hard and making progress on top line growth, bottom line, and I think we are doing this as a team. I actually -- I think that's the way as a team to react. We don't look at the stock price every day. We want to make this right in the company. We have a huge value as organization with what we do and what we are building. And I think this is going to be our answer.

The next question comes from [ Oliver Tovet ]. He is a private investor. Thank you for the great presentation. What will be the dividend strategy for 2024 and 2025? What will be the next deal with Medtronic in 2025? Will it be the same like in 2024?

Oliver, I will share more about the dividend strategy as a part of the Cosmo strategy for 2025. So I need a little bit more of time. The deal with Medtronic means that we are developing applications as a share. So we want to be effective with timing with what we do and also meaningful in terms of what we are building. I think we are in a great place there. And so more to come as soon as we get approvals and we can share news, you will see what we have been working on.

Our next question comes from [indiscernible], again, a private investor. Is Medtronic going to absorb Cosmo?

Not a plan, not a plan. No.

Our next question comes from [indiscernible]. I have 2 questions. What is the installed base of GI Genius? Lumeblue sales are at 0. What can you say about the development of this product?

I can't share the information about the installed base of GI Genius. As I said before, we have a confidentiality and we don't share this as Medtronic also doesn't share this. I can tell you that the installed base is growing. Customers are super active with the use of the technology. I think I can share the fact that we have a very high retention rate. So customers who have started to use the device 3 years, 4 years ago, they still are using the device. So it's above benchmark in terms of retention. So super happy there. And for Lumeblue, we got approval in China just recently a month and month and a half ago. So the drug will be launched in China in September. So we actually are excited. We will have part of my team also attending to a big conference in China to launch the drug in September. So that's really a focus for us right now for Lumeblue.

And our last written question comes from Brian Walchli, swisspartners. With the additional $100 million milestone payments expected from Medtronic, is there scope for a further increase in dividend in 2025?

Yes. I think I answered this question already. So the dividend strategy will be shared more into the fall. So I think I need a bit more of time on this.

Thank you. These were all the questions. Back to you for any closing remarks, gentlemen.

Well, I want to thank you all for your attendance and was a very engaging Q&A session, which I appreciate. I'm looking forward to the next 6 months with our 6 priorities and report back to you with our advancement as we move the company into another very important growth phase. Thank you so much. Wish you a great evening and afternoon, everyone.