H. Lundbeck A/S (HLUNB) Earnings Call Transcript & Summary

Welcome to the Lundbeck Financial statements for the first 6 months of 2021. [Operator Instructions] Today, I am pleased to present Deborah Dunsire, President and CEO; Anders Götzsche, Executive Chief Vice President and CFO; and Johan Luthman, Executive Vice President of Research and Development. Speakers, please begin.

Operator, welcome, everybody, to our first half financial results. Thanks for joining us today. With me, I have Anders Götzsche, our CFO; Johan Luthman, Head of R&D; Jacob Tolstrup, Head of Commercial Operations; and joining us by phone from Chicago, Peter Anastasiou, our Head of North America. Next slide, please. You can see our forward-looking statements, and you've seen them before, so we'll move right on to Slide 3. Thank you. We're very proud of robust financial results for the first half of 2021 in spite of significant impact from our LOE of Northera. The strategic brands have good momentum being up 13% in local currency, reaching DKK 4.4 billion. Vyepti has had strong momentum, reaching DKK 177 million and is fully in line with our growth expectations. International markets in Europe have been strong performers with growth of 6% and 3%, respectively. Northera has been a challenge more so than we had anticipated with a stronger decline of 60% in the first half. Nonetheless, we've delivered a very solid EBIT -- core EBIT margin of 26.1% and made good progress on deleveraging. Anders is going to go through our updated guidance with you in a few slides from now. Next slide, please. So the strategic brands are really the revenue drivers for the company and have returned to double-digit growth in the second quarter of 2021. In total, they grew 13% in local currency, and all of them are expected to have continued double-digit growth as we go into the second half of 2021. As I've said, we're getting strong performance across regions, but Europe and international markets have been delivering strongly. We know that the pandemic is still out there and growth does -- was impacted in the first half and is still somewhat impacted. We're still seeing a bit of a diagnosis gap, not having patients and physicians fully back to pre-COVID levels of interaction. But we are making progress in the world opening up. And right now, our core levels are also increasing. So we're getting back towards normal. We're still not quite there around the world, but definitely in the second quarter made strong progress versus first quarter. Next slide, please. Vyepti has continued to show very strong momentum in vial growth, as I said, reaching DKK 177 million in the first half, and we're on track to achieve our expectations for this brand based on the fact that it really is delivering for patients who receive it. We've also got good market access with over 235 million individuals in the U.S. having access to Vyepti when their physicians feel it's the right product for them. We've been accelerating the launch with really focusing on the strength of Vyepti's powerful profile and setting up an excellent prescribing experience for physicians. We reach out to physicians who are migraine treaters regardless of whether they have infusion capability because we've made good progress in establishing a network of sites, alternative sites of infusion where patients can go close to home. And we've also started to work with some home infusion. So making it easier and easier for patients to get access to Vyepti. We're looking forward to the global rollout of this brand, ramping up starting in the third quarter of this year, and Johan will cover that in a bit more detail. Next slide, please. We've had also a robust performance across the other 3 strategic brands. Looking at Brintellix/Trintellix, we've had growth of 12% in local currency, 18% in Q2. Japan has been a bright spot with its -- into its second year of launch, achieving 4.1% market share, and that's growing very nicely. Just a reminder, we look forward to sustained growth over the next 6 to 8 years because these strategic brands are well protected in their intellectual property. Trintellix patents are issued last until March of 2032, the composition of matter expiring in December 26. With Rexulti, we've seen good growth, 13% up in local currency in Q2, returning to that double-digit growth. It also has a long lifespan to continue growing with patents issued out to 2032, composition of matter expiring in 2029. Abilify Maintena, the long-acting injectables have strengthened. Their market growth has resumed. And Abilify Maintena grew 5% in local currency having been resilient through the pandemic and up 11% in Q2. The 1-month formulation has had some patents issued, the Orange Book listing goes up until March 2034, and the formulation patent expires in the rest of the world in 2024. You know that we're going to be bringing a 2-month formulation of Abilify Maintena forward, and that has patent protection to the mid-30s, giving us the opportunity to really extend this franchise out into the future. Next slide, please. All 3 regions of the world had very strong progress with respect to our strategic brands. And we're glad to be emerging from the pandemic. Of course, there is uncertainty out there with some of the new waves that we're seeing. But in general, all regions are progressing back to much more normal interactions. North America is, of course, impacted significantly by the loss of Northera was our third largest brand, an extremely successful brand built by a very strong commercial organization. In North America, the strategic brands are up 12% in local currency and now make up 69% of sales, and we're seeing Vyepti really start to contribute to growth. International markets have had strong growth in the strategic brands. Japan has been a strong contributor. China is growing by 7% in the first half even in spite of Ebixa being included in the volume-based procurement. Europe has also grown well with the strategic brands up 10% in local currency, making up 62% of sales now, and they're showing robust growth across most markets, driven by demand because, of course, price is not an option. Price increase is not an option in Europe. Next slide, please. Over to you, Anders, to take us through the financials.

Thank you very much. A couple of financial highlights. In spite of a really strong performance by the strategic brands growing 19% in Q2. We have a decline in revenue, reported revenue, and that is a couple of things impacting. Of course, the Northera decline is the main reason, but also the depreciation of FX is actually hampering the revenue growth. The gross margin and the core gross margin is pretty much in line with last year. So we are keeping up a good traction there. SG&A down some DKK 200 million, and that is due to lower sales and marketing activities or level of activities and deep down due to that we, last year, had the foliglurax write-off. So that's the main reason for the decline in R&D cost. We are extremely happy with the solid performance in earnings, close to DKK 1.5 billion in the first half and an EBIT margin of 18%. We are, as a management team, really proud of that. Core EBIT and core margin also delivering a strong performance in the first half, actually creating a solid foundation for the financial guidance that we are coming to in a minute. When we go to the next slide, you can also see from the quarterly release that the cash flow is solid, and that also means that we will end the year at a net debt level around DKK 3.5 billion. That is our best guess now. And net debt to EBITDA is expected to stay around -- unchanged from 2020 around a ratio of 1. Next page, please. We have tried to make a slide to actually explain the moving parts in the first half and also in the second half to hopefully, that will help adding up the numbers for the full year guidance. And what you can see here is that the first half has, as I said before, mainly the decline in revenue is mainly driven by the loss of exclusivity for Northera and then the FX partly absorbed by the hedging. And as Deborah alluded to, we are down 60% for Northera and that will accelerate in the second half. Now we believe that we'll see a decline of more than 80%, adding up to a total decline for the year of 75%. It's also super important to highlight that we believe that the revenue line -- the revenue will actually accelerate. We will see more growth in the second half if you exclude the impact from Northera and then the FX hedging will be more muted due to that we are more on par with the last year's FX numbers, but then the hedging is flipping the other way around. So we hope that this will explain a bit about how we expect the second half to actually perform. Next slide, please. So that turns into the guidance. And based on mainly 2 factors, we have reduced the upper end of our revenue guidance with DKK 300 million, and that is purely due to contract manufacturing and Northera because the strategic brands and Vyepti is delivering exactly as we have expected. It's -- we have seen a strong performance, and we are on track to deliver what we said in the beginning of the year. Due to the fact that we have seen a lower level of activities from a promotion point of view, then we have also been able to compensate by cost savings, and therefore, we have increased the lower end of our guidance for EBITDA, core EBIT and EBIT with DKK 200 million, also expecting a bit better financial performance for the year. You should expect financial expenses to be some DKK 350 million, of which approximately DKK 200 million has cash flow impact. The rest is mainly unrealized FX positions. So with that, I would like to hand over to Johan to start going through the strong momentum for Vyepti.

Thanks, Anders. Please turn to next slide. Let me start with Vyepti. We have progressed very well with its global expansion. And approval in Australia was obtained in early June, leading to 4 approvals so far. The rollout of regulatory submissions continue at a rapid pace and Vyepti is currently under regulatory view for market authorization with 14 health authorities within Europe, South America, Asia and the Middle East. The EMA review is progressing according to plan. We have also a substantial clinical program ongoing for Vyepti, both within the existing indication of migraine prevention and further expansion of data on its effectiveness on medication overuse headache as well as indication expansion into cluster headache. All clinical trials on Vyepti are advancing well currently. The DELIVER trial, a Phase IIIb study that evaluates the effects of Vyepti for the prevention in migraine of patients with prior unsuccessful preventive treatments has completed recruitment, and we are looking forward to the results in the second half of the year. Additionally, we have initiated a pivotal global program supporting major filings in Asia with the so-called SUNLIGHT study, that is a China-centric study and the SUNRISE study that is a Japan-centric study. Both trials are up and running and are actually currently enrolling well. Finally, on Vyepti, I want to state that we broadly presented on the program at the Annual Scientific Meeting for American Headache Society in June with 10 posters. And recently, we also have published a RELIEF study in the prestigious Journal of the American Medical Association, JAMA. As you may recall, the RELIEF study demonstrated a very fast and powerful onset of action of Vyepti. Next slide, please. Recently, we received the headline data from the proof-of-concept study on brexpiprazole in borderline personality disorder. I'd like to remind you that this 12-week randomized double-blind placebo-controlled study assessed flexible doses 2- to 3-milligram of brexpiprazole as monotherapy in other subjects with borderline personality disorder. On the primary efficacy endpoint, predefined as the 10-week time point readout on the Zanarini Rating Scale for borderline personality disorder, the brexpiprazole arm did not show statistically significant separation from placebo unchanged from baseline. However, we saw improvements greater than placebo on the Zanarini scale at other time points in the study. The observed safety and tolerability of brexpiprazole in borderline personality disorder patients were consistent with the safety and tolerability we have observed for brexpiprazole-treated patients in other indications. Regarding the 2 other LCM programs we are running on brexpiprazole, the Agitation Alzheimer's disease study is on track to report headline results mid-2022. However, our ongoing posttraumatic stress disorder trials are in a major way impacted by the pandemic, making recruitment very challenging, and it's not possible for me to provide a time line for the program at this time point. We progressed very well. We're broadening the early-stage proof-of-concept pipeline. The Phase I portfolio has been expanded with new entrants, so novel mechanism and molecules are being evaluated in humans with gathering experimental medicine studies faster. For example, we have now 3 differentiated MAGLipase inhibitor molecules introduced into humans, with the lead molecule going into a broad inset of exploratory patient core studies. We also are progressing selected assets into proof-of-concept Phase II studies. Next slide, please. The one I'd like to highlight here is Lu AF82422. During next half of the year, we recommenced a Phase II study using our anti -- alpha-synuclein antibody in patients with Multiple System Atrophy, MSA for short. MSA is a rare neurodegenerative disorder affecting autonomic processes, including blood pressure, breathing, bladder function as well as controller motor functions. This makes MSA sharing many features with Parkinson's disease, such as slow movement, rigid muscles and poor balance. The condition progresses rapidly and eventually leads to death. Apart from symptomatic medications for motor function, improvements of lifestyle changes, et cetera, there is really no treatment that can delay the progression of this devastating disease. We see a substantial potential for 422 in MSA. It's designed to break the core of the pathophysiology by binding to the alpha-synuclein seeds that spread the disease throughout the brain. Overall, the clinical program for 422 will be highly innovative with early readouts of the treatment effect on neurodegenerative processes using combined biomarkers and clinical outcome measures for decisive decision-making followed by an adaptive Bayesian statistics-driven larger pivotal part. Next slide, please. I also like to mention some impactful collaborations we have recently established to further feed innovation in research. In the new strategic collaboration with the Wyss Institute for biologically inspired engineering at Harvard University, Lundbeck will explore effective approaches to deliver drugs across the blood-brain barrier. The main goals of the initiative will be to identify transporter target proteins that facilitate to deliver our future therapeutics such as antibodies into the brain. We have also very recently entered into a new strategic collaboration with a U.S.-based company, Rgenta Therapeutics to discover small molecules targeting RNA regulation and splicing of disease-causing genes. The strategic R&D collaboration with Rgenta critically expands our research platforms by enabling us to pursue RNA processing targets linked to rare neurology indications that were previously considered undruggable. With that, I would like to leave over to Deborah.

Thanks, Johan. As we look forward into the future, our long-term ambition is to be #1 in brain health. And that's going to require us to continue to build our pipeline internally, as Johan has described, but also externally, and that's something that Lundbeck has been doing in the past and been very good at executing upon. When we think about how we'll develop that pipeline, our future focus is in the targeted indications, niche neurology, niche psychiatry and rare disease neurology. With the purpose of making sure that we have a focus on specialist indications of high unmet need, where we can have a focused commercial footprint and where we have tractable biomarker-driven development programs, as Johan has outlined with our ASmAb. So we'll continue to build our internal pipeline focused in 4 clusters of promising biologies where we can bring forward new transformative medicines, and we'll continue to look for the right assets externally to bring in to supplement our pipeline and portfolio. Looking at later stage opportunities, we'll be looking at assets that can leverage our infrastructure. We've been extremely successful with multiple projects that Lundbeck has brought in from the outside. Northera is one of those. And so we'll look to leverage the commercial infrastructure and invigorate growth through potentially near-term accretive transactions and then build the earlier-stage pipeline assets with novel technologies to accelerate innovation like building alliances and partnerships as we have with Rgenta. Next slide, please. We've got very good growth visibility from these strong growing strategic brands over the next 6 to 8 years with no major loss of exclusivities on the horizon. And our goal is, today, as it has always been, to deliver long-term sustainable profitable growth. In the short to midterm, our goal is to deliver -- continue to deliver midterm mid-single-digit revenue growth over the next 6 to 8 years and restore the EBIT margin to the 25% by 2024 that we spoke about when we did the acquisition of Alder BioPharmaceuticals. That would imply a core EBIT margin exceeding 30%, and we are committed to keeping our dividend policy of 30% to 60% payout of the net result. Lundbeck has been successful over many years, delivering a compound annual growth in those mid-single-digit range, building on internal assets such as Cipralex, Lexapro, Trintellix and building very strong assets using external development like Rexulti and Abilify Maintena in our partnerships or building strength from the acquisition of Chelsea Therapeutics with Northera or Onfi, Sabril, and Xenazine from Ovation. As we go into the longer term, we retain that goal of continuous profitable growth and work to build a pipeline that delivers a steady flow of transformative medicines, both from our internal and external innovation. Next slide, please. So the must wins in the second half of 2021 is continuing to build those strategic brands, drive that double-digit growth that we've seen in the second quarter forward as the world continues to open up post pandemic, continue to build the successful launch of Vyepti accelerating in the U.S. and getting those next markets up and running, strengthening our mid- and late-stage pipeline as we bring forward assets into Phase II from our internal pipeline and seek to supplement through business development, continue to accelerate our digital transformation and building towards that sustainable profitable growth as we deliver over time the premier neuroscience pipeline to take us towards our goal of being #1 in brain health. With that, I'd like to thank you for attending today, and we open the floor to questions.

[Operator Instructions] And our first question comes from the line of Wimal Kapadia of Bernstein.

So can I first just ask about the sequential growth of '21 versus 2022 for the major growth drivers, so in particular, Trintellix and Rexulti, Rexulti seem to be impacted by COVID. So just curious if the right assumption is some acceleration in growth in 2022 versus the growth we are seeing this year? I know you talk about double-digit growth. What I'm really asking is will we see an acceleration in that growth next year for these 2 key brands? And then my second question is just on the pipeline. So could you provide a little bit more color on the Phase I data for 09222 the PACAP inhibitor, and maybe give us some context on the Phase II trial design, which we plan to start later this year. I'm just curious if a combination of Vyepti will be part of the trial? And then...

Yes, I thought you were saying something else, Wimal. So Anders will take the first part of the question on Rexulti, Trintellix growth to '22. Although I'd remind you, we're not giving you any guidance for 2022 right now. And Johan, perhaps you can start with the pipeline question on PACAP.

Yes. So I start with the pipeline question then. Yes. So we have -- we are really steadily building up our Phase 1 assets, and we have a couple of assets now that are ready to go into Phase II. One I mentioned now, the MSA. The other one is PACAP. We are just finishing up some studies, and we are looking forward to talk about that very soon. But we have the package ready more or less to progress also with proof-of-concept study with that asset. The primary interest is, of course, migraine. That's where the biology is strongest. In terms of the design, was that a question about aSyn mAb?

Is there a combination with Vyepti considered in that?

Combination with Vyepti. Yes. I mean, it's way too early to say how this will pan out. PACAP is a new mechanism of action. A broader mechanism of action than CGRP in some degree and more interesting. It goes into more symptomatic functions, parasymptomatic -- parasympathetic nervous system effects and also inflammatory processes. So it could have a broader potential. But obviously, we are considering how it may work in combination with CGRP antagonist.

Yes. But our first Phase II proof-of-concept would not be a combination study.

So I think the first thing that we need to be successful with is, of course, to continue the double-digit growth for the second half of 2021. And then, of course, we have the ambition to continue to deliver double-digit growth. But as the brands are going -- are continuing to grow, of course, there will be -- it will be at some point, will be challenging to keep up with that pace. But definitely, when we look into '22, we have the ambition for the totality of the 3 brands, Brintellix -- for the 2 brands you asked Rexulti and Brintellix to deliver double-digit growth. That is definitely our ambition.

Our next question comes from the line of James Gordon at JPMorgan.

James Gordon, JPMorgan. First question was just about SG&A and where we are because I know the release talked about lower sales and marketing as a result of COVID-19, and then the presentation also says '21 less impacted by COVID-19 savings. So not asking for guidance for '22, but just how much benefit do you think you actually are going to have on SG&A for 2021 that we need to bear in mind, when we're trying to forecast 2022? That's the first question, please. Second question was on biopsy. So the trajectory looks like it's continuing, but it's sort of the same line, and that hasn't really been an inflection yet. Do you still think the product could do something like or could do more than DKK 0.5 billion guidance this year? Or does that now look like a bit of a stretch? And third and final question. So on Slide 17, you lay out a 6- to 8-year aim of the company, so the mid-single-digit top line growth and the margin expansion. Just to clarify, is that something you think you can do even if Rexulti Alzheimer’s agitation is unsuccessful and ex any acquisitions? Or does that already bake in something perhaps on agitation being successful and/or getting an M&A at least?

Okay. So starting with the SG&A, Anders will take that one.

Yes. So the guidance we have made with the SG&A and what we have said is that SG&A this year will be approximately between 41% and 44% of revenue. That is what we anticipate. And that leads into an SG&A level comparable with last year. Then when you go into '22, what will be added in '22 is definitely that then Vyepti is being launched in more territories, and therefore, the spending for supporting Vyepti will increase too. How much it will increase, we don't expect it to increase significantly, but there will be an increase. And that is what you should expect. And then when it comes to asking about growth from 6 to 8 years, of course, it goes without saying that 6 to 7 years down the road, we strongly believe in double-digit growth when it comes to year 8. Then we are getting more challenged. But we also, as you can see, we have patents that are actually protecting the business longer, and we believe there's an opportunity to actually be a bit more ambitious also on the longer end or in the 8 years' time frame. So we believe, based on our internal pipeline and based on our existing brands, there is an opportunity to actually create that. We also know after Trintellix, we will, of course, be a bit more challenged, but we still look into growing the business after that.

Yes. And I think to your question on Vyepti, we're very pleased with how it's performing. It has continued to grow. It's on track to achieve our expectations. We look forward to the opening up, continued opening up. Q2 opened up a bit more than it had in Q1 with respect to the pandemic. But we have seen patients able to come in and chronic migraine is so impactful and the need for prevention is great. So patients and physicians did work out during 2020, how to do that safely. So as things open up, we anticipate the continued growth of Vyepti, and it is on track with our expectations.

Maybe if I could just -- and if you can maybe just to clarify on what was my third question. It was not about the growth outlook beyond that year, it was more the growth outlook sort of going up to the 6- to 8-year period, whether this is guidance that you could do irrespective of what happens for the upcoming Rexulti Alzheimer's agitation readout?

We anticipate that we'd be able to deliver that mid-single-digit growth irrespective of the Rexulti Alzheimer's agitation readout. And as Anders mentioned, it is considering our strategic brands, the portfolio that we have in our hands. Of course, we will look to accelerate and build in business development, but we can't forecast that in right now.

Our next question comes from the line of Jo Walton at Crédit Suisse.

Three questions, please. I wonder if you can tell us a little bit more about the dynamics of Vyepti in the U.S.? Are you seeing -- or what proportion of patients are coming back for repeat prescriptions versus new patients? So just giving us some sense of the degree of satisfaction that a patient has when they get on the product. If you can tell us a little bit more -- you talk about infusion centers. If you think about what the gating item is to stop getting more prescriptions from doctors, is it -- is lack of a nearby infusion center, the key pushback? Or is it the fact that there isn't any free product to give away that there might be if it was one of the non-infused products. So just a little bit more on that pushback? Trintellix, you talk about the patent situation there and you highlight the 2032 patents. There is a court case ongoing isn't there? And you've settled with a number of players. So is it reasonable for us to assume that the patent really would go out that far? Or given that you settled, we should think about a realistic time being shorter than that? And my final question would just be on the margin. So going from a midpoint, your core margin this year is going to be about 21%, but you're telling us that it will be exceeding 30% by 2024. Can you just tell us which is the area where you could see the biggest change? Is there any chance that the gross margin will be substantially different? I suspect that your R&D won't be that different because you've got lots of great ideas of things to do. So that's suggesting to us a very meaningful reduction in SG&A. So just checking that you think you can deliver all of the sales and have a meaningful reduction in SG&A for the whole of 2024.

Great. So we'll start with the dynamics of Vyepti in the U.S. and infusion centers, and I'm going to ask Peter Anastasiou to take that. Peter?

Yes. Thanks, Jo, for the question. You had a few questions in there that I'll try to address. With regard to new and repeat, we certainly are seeing a combination of both. In fact, all of our metrics keep going up, the number of new patients, the repeat customers, the repeat use in terms of patients coming back for a second, third infusion, this is consistent with our expectations. So we are seeing that be on track with what we thought it would be. But we're also seeing the expansion of more prescribers and the depth of that prescribing by those clinicians. And the reason the infusion centers have been important is because at first, at the early days of launch, our focus was on clinicians that have high volumes of migraine patients certainly, but also have the infusion capabilities. Now because we have such a robust network of infusion centers and as Deborah mentioned, we're beginning to get some traction with in-home infusion that we can really focus in on the customers that have the highest degree of volume of migraine patients irrespective of their ability to do infusion because they can refer to a local infusion center and then, of course, do all the care and follow-up for those patients. So that's been a big enabler for the growth, and we expect that to continue. And we're constantly optimizing the support we provide for our customers within compliant means and, of course, support for patients and continuing to work on, as we mentioned before, broadening the in-home infusion to make it as convenient for the patients as possible. In terms of pushback you had asked, the main thing that holds back Vyepti is what holds back any new product and that is familiarity. It certainly takes quite a few visits for some clinicians who are maybe slower adopters to really understand the clinical profile, the value that Vyepti brings. And that's not unique to Vyepti, that's true of any new product launch. And certainly, that process has been delayed a bit because of the pandemic impact, particularly last year. But we're really getting some good traction on driving that efficacy message. It's being well received and clinicians are, for sure, seeing that with our patients and their practice. That's the feedback we get. So hopefully, that addresses your questions.

And then to comment on the Trintellix patent, we've got these patents listed for the compounds, and we believe that they're valid and enforceable, and we'll together with our partner, Takeda, support those the -- that -- the validity of those patents as we go through. We have settled certain cases. And what we built in we don't give guidance on because we believe that the patents are valid and enforceable. So you'd have to make your choice on that. We've kind of given you the bookends of the compound patent and the out years. We do expect a decision coming up in this quarter at least. Knowing that there have been COVID delays before with the courts, so -- but we would expect something potentially this quarter.

What is actually creating the expansion in the core margin? It goes without saying delivering growth in the revenue line is a big contribution. You should expect that the gross profit margin will stay around this between 78% and 80%. That is how we anticipated with the existing product mix. You will see a slight increase in our SG&A line due to that we are making the global rollout of Vyepti. And then we have a couple of years now where we have elevated levels of R&D investment due to the Vyepti trials. And then, of course, you would see a reduction again in the cost line there. So you will see a more -- a bigger impact on the -- from the gross profit than you would see the growing cost base. So that is a reason for the margin expansion.

Our next question comes from the line of Michael Novod at Nordea Markets.

A few questions. So also to the slide regarding the patents on Abilify Maintena, it also seems that you have sort of increased your conviction in growth for that -- sustained growth for that product. So how do you envision the trends for Abilify Maintena in the coming, let's say, 5 years? Is that just sort of a steady grower and then adding on or replacing with the 2-month formulation? And then secondly, to IO, we've seen a lot of companies do better in international operations and Lundbeck too. So maybe you could sort of go into your sort of investment structure in IO. Are you sort of also investing into this strong growth that you may envision also in IO and also adding to that it's not only the U.S. that is in focus but also international operations and Jacob's area there? And then lastly, maybe Johan could elaborate a bit on the next steps regarding borderline personality disorder and potential FDA dialogue. Is this something that you would go to the FDA with and discuss? Or should we just consider this to be sort of over and out for BPD?

Thanks, Michael, for the question. Starting with Abilify Maintena, we do see this being a continued grower sort of slow and steady. And I think the new patents that were listed recently in the Orange Book go out to 2034 in the U.S., right, they don't influence the rest of the world. And so again, we believe the patents are valid and enforceable. So we'd anticipate bringing the 2 months, which is also -- has patent coverage to the middle of the 30s and being able to work to transition from the 1 month to the 2 months, given it's more convenient for patients. So the 2 monthly, I think, gives us some good opportunities for the brand to continue that steady growth into the years ahead. With respect to international operations, I'll hand it over to Jacob.

Yes, thanks. I can give you a few comments on that. So if we look at our global infrastructure today, I think it's fair to say that we are a global company that is covering all important markets within our field. That also means that we do not plan to sort of increase our investments into the existing infrastructure, except for Vyepti, of course, that we are launching. So you'll see investments going into Vyepti. But for the other brands, we do not foresee an increased spending level going forward on that.

And then borderline.

Yes. So first, I remind you that although we have a lot of very good data on brexpiprazole in many indications. This indication, we did not have any prior data. But the biology and the involvement of dopamine and serotonin made us do this proof-of-concept study. The data, we picked is signal for the main readout at a certain time point, 10 weeks in the trial. We did see signals across, but it's a little mixed data, which you often get from a proof-of-concept study. So we need to sit down and look at this data in its totality. We also need to get some follow-up data. Patients are coming back for follow-up visits. So it's too early to say exactly how we're going to handle this data. It's not a clear-cut proof of concept, but it's not a clear cut in either way, negative or positive. We have to work also with our alliance partner, Otsuka, to determine the next steps. It may be an interaction with FDA. It may be publishing the data. It may be some other considerations for the program.

Our next question comes from the line of Carsten Lønborg of SEB.

Yes. First question is regarding Vyepti marketing. As you say, Peter, this is a matter of being known in the market. And I was wondering how much will you -- or Lundbeck be willing to commit in terms of marketing spend for Vyepti? We have seen some quite explosive launches of the 2 tablets in the market by Biohaven and AbbVie. And the market is now at more than USD 0.5 billion on a quarterly basis. You have around 3% of it. So it's a cramped market, and it seems that you will need to make a rather significant step-up in terms of marketing costs. So any sort of color on that would be great. And then secondly, on VBP in China, the impact we are seeing on Ebixa here these quarters, is this what is in the plans for now? Or do you know about the more coming up, maybe not this year, but next year, what's your view on that?