Novartis AG (NOVN) Earnings Call Transcript & Summary

Welcome to the JPMorgan Healthcare Conference. I'm Richard Vosser, European pharma analyst with JPMorgan, and it's my great pleasure to host Vas Narasimhan, the CEO of Novartis, in this session. Before I hand over to Vas for his presentation, I just remind people to post their questions on the section of the website, and then I'll ask them for you once Vas has finished his presentation. With that, welcome, Vas, over to you.

Thank you, Richard, and it's great to be here with everyone today, and thank you for joining my session. If we could get the slides up. Terrific. So what I'd like to go over with you today is an update on the Novartis strategy, our growth story, our efforts to reimagine medicine to improve human health all around the world. Now if you go to the first slide on the next slide, when we think about the story we present to investors, we think there's 5 critical elements that are worthwhile for investors to consider as they look at us as an investment opportunity. First and foremost, we have a clear strategy as a focused medicines company trying to leverage technology to bring amazing medicines to patients. Second, an attractive growth profile, we're confident in the 4% plus sales CAGR we can deliver out to '26 and our aspiration to be above peer median yard, a strong mid- and late-stage portfolio with over 20 assets we believe have over $1 billion of peak sales potential; a leadership position in multiple platform technology, which we believe will shape human health for decades to come; and a balanced approach to capital allocation, where we continue to invest in our business in sustainable ways while also returning capital to shareholders. Now going to the next slide and turning to our strategy. Our strategy is something we continue to nuance and refine as we continue to grow over the years. We remain a focused medicines company. We've been taking actions to get there. We're powered by technology leadership, and we want to be a leader in the long run in global access and data science. We continue to divide up our strategy on where to play, where we reflect on geographies, technologies and therapeutic areas we want to be a part of. Our focus on how to win, including culture, which we believe ultimately drives long-term performance, a focus on data science and operational excellence. And this all leads to our aspiration to be a top 3 innovator, a high 30s IM margin business with an attractive return on invested capital, consistent growth and a leader in ESG topics, particularly material ESG topics for a health care leader like Novartis. Now moving to the next slide. When you look at the last 4 years, we've delivered consistent top line growth with margin expansion and continue to take actions to deliver on the strategy I just outlined. If you look at the transition of the company, we now have fully focused the company as a medicines company. And over the last 6 months, we announced our strategic review of Sandoz with a goal to maximize shareholder value as well as position Sandoz as a long-term leader in generics. We announced the sale of the Roche stake in a single bilateral transaction, which generated an attractive IRR as well as the announcement of a share buyback. And when you look at our operational performance, we've delivered over the last 4 years 7% sales growth, 14% core operating income growth and a significant margin expansion and innovative medicines, demonstrating that, that Innovative Medicines core is delivering on its value proposition. Our pipeline is delivering over time to enable us to grow consistently over the decade to come. And moving to the next slide. As also mentioned, we remain disciplined in our capital focus and our capital allocation. We balance investing in the business where we've invested 19% to 20% of our IM sales consistently over time into R&D, with flexibility to increase that as needed when pipeline opportunities materialize. Value-creating bolt-ons, we've done about 10 deals over the period of the last few years with a mean size of about $2 billion. And on the side of returning capital to shareholders, a growing annual dividend in Swiss francs that's consistently grown now over 24 years and as mentioned in recent announcement of a share buyback of up to $15 billion. Now moving to the next slide. As part of our strategy, we also have developed strong -- a strong focus on key therapeutic areas, technology platforms and geographic diversification. From a pipeline of therapeutic area standpoint we think of ourselves as focused on 5 key therapeutic areas: cardiovascular disease, immunology, neuroscience, oncology, solid tumors and hematology with opportunistic approaches in ophthalmology and respiratory. And you can see some of the statistics of our in-house pipeline 5 key technology platforms that we're investing in for the long term, and I'll come back to that later in the presentation. And importantly, a diversified geographic exposure where we're balanced between the U.S., Europe and emerging markets in China. We have low exposure to U.S. drug pricing reforms and believe we're well positioned regardless of how those reforms may or may not materialize. We are the #1 pharmaceutical company in Europe. And in China, our sales are on track to double by 2024. We believe that geographic diversification, again, in the long run, will enable attractive returns to our shareholders. And moving to the next slide. Off this strong base, which I've outlined over the course of this presentation, we're committed to driving consistent growth, 4% growth, as I mentioned, in 2020 to 2026 and an aspiration in '26 to '30 and 2030 and beyond to be above peer median to build a portfolio, to build the pipeline, to do the deals necessary to enable us to achieve that goal. And moving to the next slide and turning to the first period of those growth phases, and I'll take each one of these growth phases in turn, starting with 2020 to 2026. Turning to the next slide. When you look at the profile of the company from 2020 to 2026, we are in a position right now where we believe we have the in-market growth drivers to enable us to overcome what we estimate as roughly $9 billion in patent exposure we have in this 5-year period. Adding to that, our probabilized innovative medicines pipeline gives us the opportunity to deliver that 4% growth as a company overall with the potential for additional upside if we're able to hold the Entresto LoE for a longer period of time or deliver additional pipeline or deals that could enable us to grow even faster. Now moving to the next slide, Slide 10. Six in-market growth drivers are going to be the key to this outlook over this coming period. With Cosentyx, we have outlined a peak sales potential of over $7 billion. We're annualizing to over $5 billion already. We have a solid growth rate, really driven by global expansion as well as indication expansions for this brand. With Entresto, a peak sales potential of over $5 billion, very strong sales growth at the moment in the U.S. as well as in China and really globally across the indication set for Entresto. An LoE as well that could be as early as 2025, but with multiple patents now that hold all the way out as long as 2036. And we'll see how that unfolds as we continue to defend our IP position on this brand. With Zolgensma, the leading gene therapy in the world today, multibillion-dollar sales potential, very solid growth seen as we continue the geographic expansion for this brand. With Kisqali, with now 3 positive OS studies, we're seeing an acceleration of Kisqali's performance and are excited to advance the adjuvant study, which hopefully will build another growth driver to this brand, enabling it to be a multibillion-dollar medicine. With Kesimpta, multibillion-dollar potential. We're rapidly increasing our NBRx in the U.S. and continuing the global expansion. And then lastly, Leqvio, which has recently been approved in the U.S. and is now starting to enter the critical launch phase over the coming few years. We will go a little bit deeper on Leqvio on the next slide. The U.S. launch is now underway for this, we think, very exciting medicine. We've demonstrated with Leqvio the ability to reduce LDL in a sustainable way with 2 doses per year. We received a broad label. We have a go-to-market bottle. It's really thinking about the clinical barriers and enabling physicians and patients to access the medicine in an accelerated way. We have our field teams out and deployed. We have our various digital assets up and are working very quickly now to start to get the medicine rolled out. We have a robust network of our alternative injection clinics. We rolled out a value-based price for the medicine. So we think all of the elements are in place for a launch now this year that -- which will build over time and eventually get us to the potential multibillion-dollar peak sales for this medicine, not only in the U.S. but also around the world. And in addition to Leqvio, we have 2 other exciting launches underway or nearly underway in the U.S. on the next slide. The first is Asciminib. Asciminib is our STAMP inhibitor, which is launched now in third line CML. It is an exciting medicine, a novel mechanism of action to give these patients the opportunity to achieve higher efficacy, but also with a much better safety profile. And our goal is to eventually move this into the first-line therapy, where we've already started now and are enrolling a first-line trial versus Gleevec or investigator choice TKI to try to move this medicine into the first line into a very significant market and give these patients a much-needed, hopefully, better solution with an even better safety profile for long-term use. Also with our radioligand therapy platform, we'll be hopefully getting the approval in the first half of the year in the U.S. of Lu-PSMA-617 for the treatment of prostate metastatic -- castrate-resistant prostate cancer. This is an exciting opportunity because it's the first step in a multiyear journey to move this medicine across lines of prostate cancer, which we believe will enable this medicine to become a lynchpin of therapy for prostate cancer patients in all lines of therapy. Now moving to the next slide. Now turning to our growth story beyond 2026 and giving you -- hopefully giving you a little bit of a deeper understanding of the pipeline at Novartis. When you go to the next slide and you think about the pipeline at the company, we're really focusing even more deeply now on not only unmet needs, but trying to ensure we're targeting our efforts, our resources on the most high-value assets we can find. Now when you look at scale, we've always had the scale, I think, that's pretty unique in the industry amongst almost all of our peers: 70 NMEs in the pipeline, 65 Phase III registration projects, over 100 Phase I and II projects. That's led to 23 breakthrough therapy designations and a high proportion of assets which are first-in-class. But from a value standpoint, we've been trying to climb the value road to become a company that generates assets and not only would we lead in approvals, but also in the value per approval. That's led us to focus much more on expanding early across multiple indications, pruning lower-value assets, transitioning assets much more quickly into the pipeline and into the late-stage pipeline, particularly in oncology. And at the same time, out-licensing assets that don't meet these thresholds. So when you go to the next slide and you look at the pipeline today, we try to visualize the key assets in the pipeline, both in terms of the evidence that we have on the medicine potentially ultimately achieving a started product profile as well as the full sales potential of the medicine. And as you can see in this chart, we have over 20 assets that we believe have potential $1 billion-plus opportunity for us as a company, a range of assets covering a number of therapeutic areas, a large proportion that are in submission or in Phase III. And we'll continue to evolve this chart as the pipeline matures. Now going to the next slide, you can see that we are delivering data sets that support this pipeline and support the belief we have that this pipeline can generate the growth. Multiple data readouts in the last few months. Some of the ones I'd like to highlight are Cosentyx and hidradenitis. Cosentyx, we believe, has a significant sales potential as we continue to expand it over more and more therapeutic lines. Here in hidradenitis suppurativa, a large indication, we met Phase III endpoints for both the SUNSHINE and SUNRISE study that I'm moving forward to a filing. With remibrutinib, we believe we have a best-in-class BTK inhibitor, which balances excellent efficacy with high selectivity delivering an outstanding safety profile. We're taking that forward in CSU and multiple sclerosis. With ianalumab, up on the upper right-hand side of the slide, we delivered exciting data in Sjogren's some of the most compelling data at least we have seen in Sjogren's disease and are now advancing this medicine across a range of autoimmune indications with YTB and PHE, our rapid CAR therapy platform. We announced data at the recent ASH meeting demonstrating excellent efficacy for this medicine, which we believe really enables us to leapfrog and to get to a place which we can scale cell therapy at much lower cost of goods and hopefully reach even a broader set of patient populations. And then lastly, we also brought in, through an option deal with BeiGene, an anti-TIGIT, which I'll talk about more in a moment. So moving to the next slide and thinking about how we complement this portfolio through licensing, we continue to look for attractive opportunities to bring breakthrough assets with significant potential in key areas of unmet need. First, we announced the proposed acquisition of Gyroscope, a private company that has developed a onetime gene therapy for the treatment of geographic atrophy. It targets CFI. And in the data sets we saw, we were very compelled by the possibility of a onetime treatment for both genetically predisposed as well as wild-type patients with geographic atrophy. And we're excited to see the data continue to come forward with Phase I/II and Phase II readouts coming over the next 2 years. And then as mentioned, we signed an option deal with BeiGene, which enables us to have the option to bring into the pipeline in combination with Tislelizumab, which we also partnered with BeiGene, an anti-TIGIT molecule in non-small cell lung cancer, also potentially in a range of other solid tumors. Now moving to the next slide. We also announced this morning an exciting update on our partnership with Molecular Partners for a DARPin inhibitor called ensovibep targeting COVID-19. Now ensovibep is a DARPin which is an anchoring repeat protein, which enables us to target the spike protein in 3 separate locations with a relatively long half-life. The 3 individual DARPin domains are unique and enable us to have high potency across all variants that we've tested in vitro thus far. A single IV infusion of this medicine within 7 days of symptom onset led to a 78% reduction in hospitalization and ER visits, faster recovery in patients and primary endpoint was set for viral load reduction. The lowest dose was effective, which enables us to hopefully increase the supply of this medicine and perhaps eventually move to subcutaneous dosing. Manufacturing is based on bacterial fermentation, which enables very rapid scale up. And you can see here on the bottom right-hand side that regardless of strain tested thus far, the medicine remains highly potent. And you can see here with Omicron as well a high level of potency. So we're excited now to execute our option on this and take this medicine into Phase III and engage in discussions with regulatory authorities and contracting bodies to see if this medicine would hopefully contribute to controlling the global pandemic. And moving to the next slide. Taking a longer view of the future, we continue to believe that the biopharmaceutical industry is shifting rapidly to new platforms. And the winner, in the long run, is going to be those companies that accumulate know-how, manufacturing capabilities, scientific capability to win in these new areas. When you look at Novartis' portfolio, we expect to move from 75% all the way to over 50% of our medicines in biologics and new platform technologies. This enables us also to have the possibility to extend the life cycle of these medicines. Many of these medicines are highly complex and hopefully not as exposed to the typical LoE treadmill that the industry has had to contend with for many decades. Now moving to the next slide, a little bit on how we think about this. When you look at how we decide on which platforms we are selecting, we have a set of principles that we look at, including areas like applicability, differentiation, scalability and competitive advantage. This has led us to the 5 major platforms that you see here, but we're always looking, of course, to adjust. And then we apply these technology platforms across the therapeutic areas that we're in today as well as taking a mind to ensuring we have adequate scale in each of these therapeutic areas -- in each of these, sorry, technology platforms. Now moving to the next slide. You can see that in each of these areas, we are either working towards or already have a commercial asset. Importantly, examples like Zolgensma, Lutathera or Leqvio. And we also have a large number of projects now emerging out of late research or in the clinic with expected next filings in each of these areas coming over the next 3 years. So we've not only developed the ability to bring these medicines to market and commercially and with manufacturing, but also now we're building the pipeline behind them to deliver consistent medicines into these technology platforms over time. So taken together, when you look at the next slide, we think we have what it takes to be the long-term leader. A combination of manufacturing scale. And on this diagram, you can see the number of manufacturing sites that we have in cell therapy, gene therapy, radioligand therapy or small interfering RNAs, where we expect to be the largest producer of small interfering RNAs in the coming years. The commercial experience, the development and regulatory experience and now 70 projects in the clinic, taken together, giving us the ability to lead in the long run in these technology areas and hopefully be a partner of choice for outstanding biotechs that are working in these fields. So turning to the last slide. I want to thank you again for your time and just reiterate what I started with a clear strategy, an attractive growth profile, a strong mid- to late-stage portfolio, ability to have platform leadership over time, balanced capital allocation. And maybe the final thing I'd say is outstanding talent and a winning culture that's dedicated to the ideas of inspired, curious and an unbossed company that we believe can really bring the best of people to finding medicines for the planet. So thank you very much for your time, and I look forward to taking your questions and also speaking with Richard.

Thanks, Vas. I remind everyone that we can take questions online and I'll ask your question for you. We do have actually a first question online, so I'll ask that first of all. So it's on ianalumab, which I can't say yet, which is for Sjogren's, obviously. Can you comment on the safety profile? Some people argue that BAFF may not be the ideal target to pursue, is the question.

Yes. When we have had experience with the anti-BAFF receptor now for many years, very well characterized the safety profile that we saw in our Sjogren's Phase II we thought was very competitive and in line with expectations. And we continue to see that in other indications that we're taking the medicine forward in. So we're looking forward over the course of this year to providing more data on ianalumab and additional indications in immunology as well as hematology and hopefully demonstrating the importance of being able to target B cells directly, but also through the anti-BAFF receptor.

Perfect. We have a second question, which is on the Molecular Partners agreement. So it's -- can you elaborate on the auction agreement with a molecular -- do you think the data presented so far that would be enough to file in Europe? And also a final question, so many parts, are you looking at any other anti-COVID strategies or developing them in-house?

So first on the data package, we find the data package to be, of course, early. It's a Phase II study, but also very compelling in that it was very consistent across viral load reduction, reduction in time to recovery as well as a reduction in hospitalization and mortality. So with the caveat that it is a smaller study, a study of 400 -- roughly 450 patients, we think, very compelling data. So we do plan to take it forward to emergency use authorization application with the FDA. And of course, we'll need to have further discussions with the other agencies, including EMA. And we'll also take it forward into a pivotal Phase III clinical trial. Now with respect to additional internal activity, we do have an effort ongoing for a PAM protease inhibitor targeting the Mpro of the SARS CoV-2 virus. But also on -- given the main protease inhibitor is very conserved across corona viruses, we believe this has the opportunity to hopefully be applicable to future corona viruses if they were to emerge. That is currently moving through our late research. And we hope to get it into the clinic sometime this year, probably in the second half of this year.

Maybe I'll just ask one follow-up on [indiscernible]. Just you mentioned going forward into subcutaneous, how -- because that could be quite good for dosing, of course, and make it easy to dose. How should we think about that pivot to -- from IV to subcutaneous, how long could that take?

Yes, absolutely. So with the 75-milligram dose being the dose we plan to take forward, pending discussions with regulators, we would be able to -- we believe, to move this into subcutaneous dosing. Initially, the launch would be in IV. This is a medicine that can be given in the first 7 days of symptomatic COVID, a single IV infusion, which takes about 60 minutes to complete. I would expect the subcu to then be a life cycle management. Difficult to say exactly, but certainly within next year, we would expect to be able to bring a subcu forward and we'll certainly work to do that more quickly.

Perfect. We have lots of questions. So next question, a couple on Sandoz and the strategic review. And I suppose one person is asking for progress. They're calling it a spin-off. One person is asking how the strategic review will differ from previous attempts to sell off parts of the business to Aurobindo.

Okay. So first, no decision has been taken on Sandoz. We continue to evaluate the options. It's important to note, because Sandoz is so integrated with into Novartis, the strategic review allows us to first work out exactly the scope of so-called Sandoz that would potentially be separated, carve-out financials and that would enable us to do the full assessment. All options are on the table from, of course, retaining the business to spinning, to spinning it out with a partner, private equity, and of course, all the flavors in between. So all things that are currently being evaluated and certainly no decisions have been taken. I think with respect to Aurobindo, I suppose the question is, would we break up the business is what I think the question is really asking, and again, we, of course, look at all options. I think the key is for -- in my mind, in our mind, is can we find a structure that creates value for our shareholders and enable Sandoz to be a highly successful business as a stand-alone entity, if we were to decide to go in that direction. If you look at the Alcon example, I mean I think Alcon was an example where we were able to find that in an appropriate way, create a very successful stand-alone eye care device business that's now, I think, doing very well for patients and for shareholders.

Maybe while we're talking about sort of strategic positioning. At the R&D Day, there was a long discussion about capital allocation and value-creating bolt-ons. You've since done a very nice large share buyback with the -- with some of the Roche proceeds. Just how are you thinking about that value-creating bolt-ons now in the context of what we've seen since the R&D Day?

Yes, I think there's no change, Richard, in the sense that we continue to look for value-creating bolt-ons that are in that size that we've traditionally thought of evaluating bolt-ons in. That's typically in the $10 billion and lower range. It could be a bit more, it could be a bit less. But we're looking for opportunities to either bolster the pipeline or deepen our technology footprint and then those are the assets that we look at. I think what's been interesting is, since that time, of course, we've been able to do a very nice private deal with the potential acquisition of Gyroscope to give us an ophthalmology gene therapy, an option deal with BeiGene to bring in, to our minds, the second in terms of potential order of entry anti-TIGIT in the immuno-oncology space. We've just announced today the optioning in on an anti-COVID medicine. So there's clearly the opportunity to build a very strong pipeline without reverting to doing very large -- larger deals. So we're always going to look, I think, at both of those options and see where the most value creation lies.

Perfect. There are a couple of questions here on radioligand therapy. And those questions are really sort of looking -- at first of all, one is your strategy beyond radioligand therapy and Dex asking about antibody drug conjugates and thinking about that side of things. But another linked question is, how is the establishment of a commercial presence going around radioligand therapy, how difficult have you found it, how difficult -- I suppose they're referring to Lu-PSMA as well. How you see that for the future?

Yes, absolutely. So first, on antibody drug conjugates, we have in-house antibody drug conjugates that have been developed within our research labs, targeting various cancers and continue to be taken forward. I think like many in the field, we struggled with toxicities in our own internal antibody drug conjugate efforts. Of course, there have been others that have been successful with TROP2 and HER2 to their credit, but we continue to have our own in-house programs as well, which we'll continue to pursue. We are extremely excited about the radioligand therapy opportunity. I think with Lutathera we have the opportunity, we believe, still over time to build a significant medicine in neuroendocrine tumors. With Lu-PSMA, we have a sustained and significant effort in the U.S. and in Europe to launch this medicine with a mind to not just the metastatic population, but then hopefully moving into earlier lines. PSMA gives us -- Lu-PSMA gives us some exciting opportunities and that the infusion time is much less, burden on centers is much less, but also because it adds a second medicine now to -- within this category of drugs. It increases the interest amongst clinics hospitals to start to build the ability to provide these medicines. And so we hope that will then lay us the groundwork, which then in the future, we are targeting radioligand therapies into a range of solid tumors, alternative targets in the clinic right now, a drug called integrin. We have a FAPI, we have a [indiscernible] and so all of these now are in the clinic. And of course, if we can get more hits, this will enable us to even build out this portfolio where we believe we have a unique supply chain and a unique commercial capability.

One another question is on one of the other launches, which is like probably a key launch. The question is Leqvio, given that the permanent J code is not expected until later this year, the U.K. launch is unclear. What will the revenue contribution this person is asking, what will the revenue contribution be in '22? And when will you get a sense of how that launch curve is going to look, I suppose, globally?

Yes. I think we're not going to comment on sales forecast. What I would say is that it's going to take time, given the complexity of the launch and the scale of what we're trying to do for this to build over time. So I think over the course of this year, we'll be putting a lot of the building blocks in place. But this is not the year where we expect the significant sales to come, but rather to put the building blocks in place, which will enable this brand to become a multibillion-dollar brand and one we believe that can be one of the most significant brands that Novartis has. Now in terms of the U.S. launch, right now, we have a temporary J code in place. We do have the ability to launch the medicine. 50% to 55% of patients do not have any sort of blocked co-pay prior authorization, so it creates an attractive opportunity. The big effort right now is enabling cardiologist clinics to be able to provide a Part B medicine, also to enable alternative infusion centers to be fully set up. But I feel good about all of the foundational elements being in place, whether that's patient assistance program supporting clinics to get set up, patient activation, physician activation. And this will take time, like many cardiovascular launches do. But I think when you look at Novartis, Diovan, Entresto, Lotrel, we have a history of being able to make cardiovascular medicines into significant medicines. And I think that will be the case over time with this one.

And maybe just in addition, the other PCSK9 players have struggled to sort of get through the payer -- maybe I'll say, force field, I don't know. But what's different this time in terms of -- is it just the buyer bill or the other things you can try and get -- do differently to the others to get uptake, because the class is great.

I think first is taking a patient perspective. When you look from a patient's perspective, if you have to take a regular injection for an asymptomatic medicine and it also creates a certain cost burden for you as a patient, this is a heavy hurdle for a patient. So I think it's always worthwhile to start with the patient. These are patients who have had a prior cardiovascular event who have to visit their physician regularly, in any case, given the fact they've had a prior cardiovascular event. If in going to that physician, they can receive a 30-second or 15-second injection of a medicine subcu that enables their cholesterol to be reduced 50% or more twice a year, this is very attractive from a patient standpoint. I mean I think if you look at the total pill burden of the multiple pills, patients would have to take injections, they have to take -- this is a dramatic reduction. So it starts from the patient. Then from a physician standpoint, physicians ultimately want to get their patients to goal on LDL because they know this is one of the most modifiable risk factors that there is for cardiovascular disease. And knowing that they can have some control over that by providing the medicine in the clinic knowing that it was taken provides a benefit. From a system standpoint, cardiovascular disease is the principal cost for health care systems repeat hospitalizations. Again, if the system knows patients are taking the medicine, getting their cholesterol done to system benefits. So we believe the incentives here are lined up across physicians, patients and the system. We have a medicine that can provide, again, with twice a year in an outstanding profile, it's the right setup to hopefully have something significant happen for the leading cause of death and disability in the world. So we think it's something we can hopefully over time really succeed with.

Perfect. Another question on Cosentyx, obviously, a major brand. What's your -- the question is, what's your strategy to maintain Cosentyx' position as the first biologic for PSA?

When you look at Cosentyx, it's all about the track record for this brand. And you, Richard, you and I have talked about it many times, there have been many threats to Cosentyx. And Cosentyx has consistently stood the test and it is now annualizing to be a $5 billion-plus brand. In PSA, I think there's a lot of confidence that Cosentyx can treat both the skin manifestations and the joint manifestations of PSA. It's really, I think, an outstanding safety profile and physicians are very comfortable with it. When you look at our shares, that's reflected in both PSA and AS. So really, for Cosentyx now, it's getting into new indications, new presentations, new formulations for us to expand the reach of this medicine. But we feel good about its position in rheumatology today.

Perfect. I've got a question on ESG from an investor saying -- you said at your beginning, your aspiration is to be an ESG leader. They rather say, sort of how do you plan to avoid they're saying corruption allegations in the future. But I would just maybe broaden it to be just that ESG leader.

Yes. When you look at the progress we've made, I'm optimistic that we're on the right track. There's always much more work to do. And then being a large multinational that operates in over 100 countries, we will always face challenges. And we'll have to do our best to keep reminding our people that our ethics, doing the right thing, ensuring that we live at the highest standard is what ultimately for a company that's been around for over 100 years is what matters. And we do that work and, of course, take all of the actions needed. But when I look at Sustainalytics, where we're ranked in the top in the industry; MSCI, where we've recovered now and are really now back in the league of the tops in the industry, multiple benchmarks now we're finding grading Novartis either at the top or amongst the leaders in our industry and in some cases, across industries. So I think we're on the right track. But we will have setbacks, of course, and we'll just have to deal with them whenever they come.

Very clear. Two final questions, I think, from investors. One is about your Mpro inhibitor, maybe a little early. But when in fact, looking to initiate its first human study, when is the IND? It could be a little early, but...

Yes. I think it might be early to predict. We have a lead identified. And we're, of course, doing the work needed to hopefully get towards an IND. And as soon as given the importance for the long term for the planet, if you were able to come up with a protease inhibitor that would be effective against coronavirus we'll, of course, let everyone know when we get there.

Perfect. And then I think probably maybe the final question, predicted time lines for Piqray to expand its utility into PROS. The question is how does Novartis balance the revenue from oncology with this rare disease?

Yes. So first, if you see the images of the patients who are treated -- the children who are treated by Piqray for PROS, it's extraordinary. I mean this is an on-target medicine that gives children their lives back. So clearly, we are committed to bringing the medicine forward for patients and these children. We do believe we have a commercial approach in the U.S. which will enable us to price the medicine appropriately for a rare, ultrarare disease like Piqray while maintaining our pricing for breast cancer. And so we think we have a way to navigate it in the U.S. already. And we're well advanced now in terms of our discussions with FDA to hopefully get the medicine approved. And then in Europe, we have some more work to do, of course, to figure out how best to navigate that. But I'm optimistic we'll do it. And I'm also optimistic that if we can do it that, of course, the patient community will certainly benefit from having this medicine available.

Perfect. Vas, it's been a pleasure, as always. Thank you very much for a great discussion. I hope everyone has a good day at the conference.