Novo Nordisk A/S (NOVOB) Earnings Call Transcript & Summary

Actually, it's Pete Verdult from Citi. So welcome, everyone. On behalf of Citi, delighted to have Karsten Knudsen, Group CFO; and Martin Lange, Head of R&D; plus various members of the Novo [ Nordisk ] team in London for the Q1 roadshow. You all know the drill, short presentation and then straight into Q&A. A bit of housekeeping. There are microphones on each of the tables, which are on currently. So if you can all have your phones on silent and try and eat quietly and cluster less, that'll be fantastic. So without further ado, Karsten Knudsen. Thank you.

Thanks, Pete, and thanks for the invitation and you're hosting our Novo Nordisk Q1 roadshow in the London lunch meeting in conjunction with Q1. We're bringing fantastic set of numbers. So it's great to be in London and see you all and also for the ones being available online. So as Pete said, a few slides and then over to Q&A. And I'm sure we'll have some questions about the future and how the things are going to pan out. So -- and as you know, the future has a tendency to play out differently compared to what we expect based on today's knowledge. So that's the usual cautionary statement in terms of forward-looking commentary. When we look at our strategic aspirations, and you've all seen them before, this is how we hold ourselves accountable, especially you, in terms of our strategy execution as a company. And not going through all the details but just saying when we look at Purpose and Sustainability, ESG, if you will, we are progressing very nicely both in terms of our patient reach, our CO2 emissions as well as being a sustainable employer and the diversity targets we've set out there. [ Pipeline margin ], we'll get back to but very good progress across these areas. I think this is a very exciting year for Novo Nordisk in terms of readouts on a number of very exciting trials. And then as to commercial execution, then we continue to be the global leader in diabetes with a global diabetes value market share of 32% now, growing by 1.7% over the last year. We are more than doubling our obesity franchise, of course, driven by the relaunch of Wegovy, mainly in the U.S. And then finally, our rare disease business is down 16%. We, unfortunately, had some very unfortunate production challenges on our rare endocrine side, which pulled down sales growth on rare disease. And all of that yields a top line growth for the quarter of 25% and operating profit of 28% and corresponding capital allocation to shareholders while we still continue to invest in our business CapEx, et cetera. Going through our commercial performance for the quarter. I think what is really worth noting is a step-up in sales growth in North America, 41%, really being a key driver of the Novo business growth in the quarter, the 25%. I do note that we had some wholesale inventory fluctuation in the quarter, amplifying the North American and hence group results. However, when we look at the full year, I think we're still operating in the 20s in terms of top line growth. IO continuing to deliver double-digit growth driven by the different geographies. And one note on China being down 5% in the quarter, the good part about the 5% is, first of all, that this is the last quarter with impact from VBP on the growth rates. So now we'll have annualized it when we get into Q2. And secondly, when you look at our Chinese business results, then of course, we have been moving our resources towards Ozempic and Ryzodeg our growth opportunities in the market and showing very strong growth there. And hence, you should expect us coming back to growth already from the second quarter and almost in China. As to therapies, the 25% growth is really being driven by GLP-1 in diabetes, now constituting around 50% of group sales, so really delivering strong growth at 50% both IO and North America. [indiscernible] 11%, that's VBP, China and it's U.S. pricing. And I think remarkable to note now GLP-1 in diabetes is profit to double the size of insulins in diabetes. So GLP-1 accounting 50% of group sales where insulins account 25% of sales in the quarter. [indiscernible], again, that [indiscernible] we'll come back to and rare disease down 16% linked to the Norditropin manufacturing challenges. Talking about Wegovy, we brought this slide just to show the acceleration in group sales. Only a few years back, we were talking about incremental net sales year-on-year with, call it, DKK 1 billion or DKK 1.5 billion, and then we look at how we're stepping up now. So really a dramatic step-up. We're aiming to the TRx trajectory you see in the middle of the slide. So in round terms, when you look at added TRx on a year-to-date basis of Wegovy across doses in total, then incremental weekly added TRx [ is 6,000 ]. And as a consequence, we have had to adjust the number of new patients being able to start on Wegovy. So we're reducing the initiation doses, the lower dose strengths, because we're simply scaling a biologic-based platform to a very, very significant level of sales growth. So you should expect perhaps not imminently but in the coming months, you should expect a step-down in terms of new patient starts as a consequence. And we do this to be responsible and have a sustainable beat business. So we're not creating a bigger pull in demand than what we can sustainably supply and patients type trading through those strings. And as a consequence, we are also pursuing a gradual rollout ex U.S. We would be very eager to launch in many, many markets. We have accrual, and we know the demand is there. But of course, we need to balance it with the supplies available. Sorry about that. So let's hand it over to Martin Lange, our Head of Development, to go through the greatest [indiscernible].

Thanks very much, Karsten. I think you talk about high doses of alternate both the space of diabetes and business. We talk about the need to show equivalence from an efficacy perspective, from a safety perspective but also from an exposure perspective as compared to [indiscernible] 2.2 milligram in diabetes, but also compared to 2.4 milligram in Wegovy. We now read out the diabetes results. We're still waiting for the obesity results. Those will come within the next couple of months. But just looking at the diabetes results, we're obviously super happy. Trial was a [ 3-arm ] trial designed to compare 14 milligrams of [indiscernible] basically semaglutide to 25 and 50 milligrams, achieving basically all design outcomes in terms of or when it comes to tons as compared to 14 milligrams for both 25 and 50 milligrams and also a differential between 25 and 50 milligrams and the equivalent data set in [indiscernible]. At the same time, we see both weight loss and [indiscernible] control comparable to that of 2 milligrams of Ozempic. So really achieving the data that we wanted to achieve. This both will obviously go for diabetes, but also data that we put the same one we still have not seen. I think it's also important to call out that given the supply chain esters -- or rather the high demand that we've seen in other areas of the semaglutide franchises, we have to consider how we roll that out, thinking the broader supply and demand balance. And we will also have [ to ] when we have the best later to do the same consideration. Broadly speaking, as Karsten alluded to 2023, first of all, has been but will also be in the next couple of months in terms of. We have Phase II or III poses ongoing in all of our paras, and we are excited to see the fruit of those investments. So maybe in the diabetes space obviously calling out into done a global regulatory space in U.S. and Europe and China. Securing that offset will be made available to patients for diabetes, and hopefully, not-too-distant future in both of them. Also, I think important to call out, we saw really is from a very strong efficacy in basal only treatment spirit that of both bele and glasses, very good safety profile. And in the basal-bolus treatment clarity on efficacy parity on safety profile. And then obviously, convenience in our case is to have 313 days of injection in the basal only [indiscernible]. So really an attractive offering in type 2 diabetes. In type 1 diabetes, we did see more hypoglycemia. We still have a full diabetes filing, so both type 1 and type 2 diabetes part of the business profile, but we do expect more dialogue with the regulators on [indiscernible]. And just as a reminder, from a value perspective, type 1 diabetes is 7%, type 2 diabetes is 93%. So obviously, a big potential opt in this space. I'll talk about the timing cost results, but maybe just calling out something that has caused a good deal of interest. We have reported on 2 studies and Phase II studies with fixed-dose combination with semaglutide and GLP analog and then a mono component co-agonist GLP-1/GLP co-agonist. For the first one, we compared to semaglutide and the GLPs analog. And with some interest, we saw no impact of adding CIP through semaglutide on weight loss and most effect when adding GLP-1 analog semaglutide on plasma. Several different sort of interpretation of that, and you can maybe go into detail if you're interested [indiscernible]. But we did see a good and strong effective profile of the co-agonist in Phase I. We probably imagine that since we have also announced that so, we also saw some efficacy that financial. And therefore, we will progress the most promising of the 2 in the states of, obviously, diabetes, but potentially also it. [indiscernible] I have to call out SELECT that's going to be incredibly exciting. We are in the process of closing down the SELECT [indiscernible]. You heard us talk to them. We will have the regard around the mid of this year. We are now more mature in terms of how we assess that. So we're not looking towards July, August, maybe closer to August. So June sort of not so much in gain anymore. And as you will recall, all of this degraded in nature of the fund. So we now get number we get to announce to start closing down and still conducting the remaining events during the first half. Then maybe also talk about all and [indiscernible] just very briefly, it's going to be incredibly exciting to see that with a very strong follow-on to Cagrisema. Similar profile basically times to both the amylin and GLP-1 receptors but in a unimolecular format to a core. We've obviously announced some flexibility, and we can have that either as an oral offering or is on, which is obviously [indiscernible]. In the rare disease space, you probably noticed the approval of concizumab in Canada and that almost at the same time, a complete response letter in the U.S. for concizumab, not related to the drug but most with the companion diagnostics that has to follow the drug so we can monitor consistently every patient. They requested more data, and we are working with them to drive these. Sogroya was approved for both [indiscernible], which is obviously press declining in once-daily -- sorry, once-weekly setting. And then maybe other sales chronic disease is just calling out through first human doses in heart failure and in Parkinson's disease for our cell-based therapies. And with that, back to you, Karsten.

Thank you, Martin. And now we are on the final stretch in terms of slide before Q&A, so you better warm up. So we released our guidance for the year linked to the second CMO coming online here almost 4 weeks ago. So now we're guiding a top line growth of between 24% and 30%, I'm just repeating, between 24% and 30% constant exchange rate sales growth. Really, really amazing growth, if you ask me. That translates into 28% to 34% operating profit growth, so getting a levels given the attitude of the sales growth. And then, yes, we have currencies going against us this year linked to the weakening U.S. dollar to euro and some of the tight currencies or emerging market currencies. No changes to tax rate and free cash flow outcome linked to the growth of the business, so between DKK 66 billion and DKK 74 billion despite the fact that we're investing DKK 25 billion in CapEx this year to expand manufacturing capacity. And with this cash flow, we have been able to increase our share buyback program this year from DKK 28 billion to DKK 30 billion. So that covers the outlook, and these are our strategic aspirations. And now we're ready to move into Q&A. And the host was the fastest. So we will start with Peter Verdult even though [indiscernible] to get going. So Pete, first question for you.

Look, I'm sure we're going to discuss supply and SELECT and revenue seen late stream the meeting. So maybe we can start off on regulation, and I'll repeat the question I asked last week on pricing. So just on regulation, not in front of the Congress tomorrow. Any thoughts there? And also on the [indiscernible], I mean you've talked about it over the years. Are you hearing anything in Washington about move towards getting Medicare reimbursement in obesity? So that's the regulation question. And on pricing, I mean, [indiscernible] Wegovy, different brands, different doses, different price points to get it. Mounjaro, same brand, same doses. Are we really going to see this separate price point between diabetes and obesity? Or are we -- are you expecting a rapid -- or should we say, narrowing or price erosion on GLP-1 obesity pricing?

Yes. Thanks, Pete, and thank you for restraining shop to 2 questions. I think after last week's conference call, perhaps we get a better process of fair limiting all of us to 2 questions. And then we do move full rounds, if possible. So on regulations, yes, Lars will attempt the centering the Senate hearing tomorrow, together with the Lilly and Sanofi's CEOs, it's around insulin pricing. And I think rarely you see a lot of regulation coming out of Senate hearings directly, right? So I think it will be a hearing on insulin pricing, and it's something that I know Lars is looking very much forward to discussing. And we provided a lot of transparency on our U.S. insulin pricing in our annual report, and you've seen our insulin price going down consistently for now [ most full ] years in terms of -- especially our net pricing. So that's that part on regulation. Tria, still TBD, so really no news there. Of course, we are encouraging as much as we can that it should be needed to reimburse the treatment for seniors in the U.S. And at the same time, we do know that more and more states have decided to cover the COVID for the Medicaid population in the States, so making it even more confounding why -- who should be covered for seniors. But that's a political decision that then, of course, we'll have to accept and live with them. The opportunity is decisive enough on its own merits. As to the single-brand versus dual-brand-type strategy, I think it -- ultimately, it's more to Lily to answer about that commercial strategy is -- we've noted the EU approval of -- on tirzepatide, whereas in the U.S., it is still TBD in terms of the leading commercial approach, whether it's a single- or dual-brand approach. I would say, from our perspective, of course, the synergies running with one brand, but there are also benefits in terms of dual brand in terms of how to manage and navigate the market. I think most recently evidenced in terms of the COVID starter doses and so on. So I think, actually, given the nature of the [indiscernible] market, I think there are clear benefits of running with a dual-brand strategy seen from a normal perspective. But of course, our competitors are free to make up their minds and decisions accordingly. Thanks, Pete. And we go to Michael.

Michael Leuchten from UBS. Two questions, Karsten. One, despite the inventory in Q1, the value of the volume both for Ozempic and Wegovy sort of very different factory compared to Q4 and Q3. Just wondering how you -- what it could speak to channel mix. Is there anything in there that would be normal? And then just going back to supply. As we think about the MTS being restricted, the way that ramps through the year, the moment that becomes really relevant is when your new plan should come online and you now have the new CDMO online already. So why restrict the new starter doses now as you go into that incremental supply come?

Yes. Thanks for those questions, Mike. And I'd say, as to value volume in the U.S. on Ozempic and Wegovy then I'd say, Wegovy is rather clean. So nothing is very special there. I think one note worth making is linked to my prior comment on increasing Medicaid access, so having some channel mix impact on pricing. But on a very positive background because it's more than [ 5 million ] incrementalize we have from the Medicaid segment of [indiscernible]. So that's conscious decisions where we have been out negotiating with the state Medicaid agencies for this access. So that's Wegovy and for Ozempic volume value, let's say always be careful about overinterpreting on quarterly volume value because it doesn't take that big swing factors in terms of wholesaler inventory movements and so on, so throw the calculation off. So to boil it down in all simplicity, what we're seeing this year is similar to what we've seen in the past few years, so call it 10%, 15% net price decline linked to rebate enhancements and channel mix movements. So apart from that, there are some plus/minuses on inventory, and ROA is going the opposite way. But if you peel that away, no change compared to prior years. Then to the question about limiting the starter doses, this is really about safeguarding continuity of care for patients and allowing patients to step up through the doses and be able to deliver the right treatment experience for patients. We had assessed multiple options on how to manage the market linked to the very significant uptake in demand. So this is something we do while we scale at full speed supply chain-wise. So this is -- there are no real triggers linked to supply chain. This is just full speed on scaling, and then we adjust how can we put it in market uptake cost so we have a sustainable business gain, so to say. Yes. Then I'm a little bit down if I take this table first, because here, we have mics and then we can move around for the mic. So if I go this way, Richard, for you first. Richard Vosser?

Perfect. Just on -- you've clearly got 3 plants this year, and we know that they're being scheduled and you've got 2 online. So how should we think about that next year in terms of additional lines coming on? Is it the same magnitude as this year in terms of 0 to 3? Or what should we think about that? And on the existing lines, how should we think about -- over the years, you've been able to scale capacity. And I think there's a chart from a Capital Markets Day where you -- the unit cost goes through the floor. How can you increase capacity at the existing lines as well? And then second question just on icodec. When the follow-up came through, the data seems to lose statistical significance. So how do the regulators view that?

Yes. Thank you, Richard. Yes, you're correct. And just [indiscernible] the Wegovy single dose device supply chain in terms of filling: one, a smaller internal line; one CMO line up and running already from the beginning of the year; one CMO line up and running as per April this year, that was linked to our pre-release of full year outlook; and then the third CMO line coming online at the end of this year. So -- and then we have additional lines that we're contracting for in the years to come. And in magnitude, I would say the lines are broadly of the same size, so just for you to size how much we're stepping up. So when we exit this year, our capacity will be almost around [ factor 3 ] compared to when we exited 2 in terms of building capacity. So a very significant ramp up, and we'll continue to lay on additional lines in the years to come. I don't want to continue this about when is the next line, when is the next line. Just to say, expect the continued runway in terms of adding line capacity. And then a reminder that for Wegovy ex U.S., we also have our existing manufacturing platforms with [indiscernible] and FlexTouch to utilize for ex U.S. Wegovy rollout. So we have a 2-string approach to supply chain-wise. Then Martin, on icodec?

Absolutely. So I think it or to the call talk about almost close ONWARD 1, which obviously was one of our pivotal studies in the space. We did a 26-week extension. That's for regulatory reasons. We do that to secure top exposure and taste on this. So the primary focus of the extension part. And when you do that in open-label studies, you lose a little bit of [indiscernible]. We know that regulators know that our assumption is that from an efficacy perspective, also given that we now see the same results in ONWARDS 1, 2, 4 and 5, we would expect [ of 3 ] but we would expect that, that sort of superiority that we've demonstrated in 4 studies will be reflected. But I also think that the extension data will be affected by the statement that this was a safe focus expansion for.

Thank you, Martin. And I think we'll move to Simon and then back to you.

Simon Baker from Redburn. Two, please. Firstly, on capacity, but not the capacity of what else talking about. Understandably, we're focused on fill and finish for Wegovy. But can you share with us where you are in terms of oral capacity given the data you've seen with 50 mg, assuming some point that could be? And then the second one, Slide 5, you talk about broad commercial coverage. I just wonder if you could give us a little bit more detail about how things have changed for 2023.

So oral supply, as you know, some 5 years back or so, we initiated a major expansion project in place on North Carolina, where we're producing semaglutide API. That factory is ramping up as we speak. So that's a significant step up in terms of sema API for -- especially for on the oral side. And then on top of that, we're currently in the process of constructing additional API facility in [ Kalundborg ]. And that will come online a few years down the road. So that's kind of the capacity scaling. And that's also why, given the viability of all, then we -- apart from CapEx, we're also looking at upgraded formulation solutions for the oil products because that will reduce the capacity stream supply chain-wise. And then we have the portfolio playing so exactly to what patient populations and in what disease areas and in what dose strengths are we deploying our all products. And before we finally conclude on that, we would like to wait and see both ways as 1, but also as 4. And then we'll make portfolio decisions where we take the right choices between the capacity available and the clinical benefits and commercial attractiveness of the products. And so that's your first question, Simon. And the second one, in terms of broad access for Wegovy. So I assume that -- farmer Slide 5, but I assume it's under the Wegovy side. So that means that for formulary actions, we are around the 8% mark, but it's employed out in. So we have more than 40 million lives covered in the U.S., 40 million people with obesity covered. So in terms of runway and opportunity with 40 million covered and currently, the run rate for Wegovy is, call it, 200,000 per week or a little bit more than that. So 0.5 million patients on Wegovy, plus/minus, as we speak. So still a very, very significant runway. And do note we are continuing to build access as we speak.

Just to be clear, you said 40 million, that's commercial or commercial plus federal?

Commercial plus Medicaid.

So in total, more than 40 million.

I'm not sure I go here and then -- yes?

[ Tony Male ] from Morgan Stanley. So again to hear your thoughts on the positioning of high-dose injectable sema. So the step-up trial of the 7.2 mg, is that complete around the same time as REDEFINE one, which is obviously expected to produce a superior result? So is it before a future high-dose sema combination as sort of an insurance policy in case CagriSema doesn't work or as a backup in case of manufacturing issues for the more complicated products?

I think it's obviously a very natural sort of potential lifetime extension also of CagriSema and the expansion of that opportunity. But it's also to -- while we still have a decade expire an opportunity to maximize value of semaglutide. And as we're having those data, should they be successful, we will have a step-up as compared to current doses of semaglutide probably be on a everything is that's currently out there. And then we'll have CagriSema, that would be a further step up to that. So our model is to bring 7.2 milligram in [indiscernible] around the [ 10% ] weight loss in CagriSema [indiscernible]. And having those opportunities also kicking into what Karsten was saying, not only having sort of resin, but also maybe from country-to-country opportunities to work with our portfolio is a really good place. So it's not to be considered as backup but actually maximizing semaglutide. That goes without saying that we see a new and that does [ increase ], we would also take that into semaglutide.

Yes. On a maximum level of weight loss, I mean, do you think there will be a maximum level that's safe and delight in the market eventually and that the debate will then shift to sort of consistency and quality? And sort of what level do you see that maximum at, I guess?

I don't want to speculate into maximum level. Right now, we are at semaglutide at around 25%. That's the both sales and benefit. And if you consider a patient with a BMI above 40, 25% weight loss will still lead you in this realm, and that basically means that potentially even higher weight losses. Maybe we can achieve that oat. Maybe we need to have something else. I think to your point, already now thinking about the rate of weight loss and maybe also the quality of weight loss becomes important. And this is why we have to accept safe weight loss. 25% or 30% weight loss for patients. But there will be a good proportion of patients, I think around 20% that had above the [indiscernible]. That's a substantial proportion of patients that may be more than 25% or 30%. We just have secured that [indiscernible] weight.

Peter, Jefferies. Two questions. So first one, just coming back again to the supply, sorry, just to understand this [indiscernible]. So should I might is the original Belgium facility right here, is that still operating sort of churning the same amount it was before? Is copromotes actually dwindling, if you like, not that going on here? Because we've obviously all read about a lot of problems that are going on there at the moment. And it just sounds a bit -- I guess, is it really at the moment, double what you had only 3 months ago? Or is the problem is we shouldn't be thinking about just double the at the moment, and there's a bit of a lag before it comes in and equally on the ex U.S. So I should understand in terms of given it's a kind pentane existing silicon, given the delayed ex-U.S. launches, is that constraint on sema that we're seeing here the actual APR because put fill finish shouldn't impact the ex U.S. Wegovy rollout? And then just some I mean...

That's too many. So I count 2 already.

At as simple.

I hope to get back to you in the next round. So on Wegovy and the limitation of the low-dose strengths, that's purely a reflection of the very aggressive demand uptick. It's not because of problems in manufacturing. So just to put that out. A lot of concerns are out there if this is reflected in about some of the recent clarifications from Catalent, and no, that's not the case. This is simply a question of demand outpacing supply. So our supply plans are intact for the year, just to be very clear about that. As to ex U.S., Wegovy launches and the gradual approach, the gradual approach is a function of that Wegovy is sharing API with Ozempic, filling with Ozempic, Saxenda insulins, assembly with the same and packing also. So we have Wegovy on the FlexTrust platform is sharing a lot of capacities with other products. And as you've seen, for instance, on Ozempic, then we have drug shortage notifications in many markets ex U.S. So adding more pressure on to that entire supply platform is, of course, something that we do not do like, unless we have smart ways to do so. So I wouldn't want to get into individual bottlenecks and so on because we have a supply chain, which fits together and it's the whole supply chain we're lifting. So we are increasing our capacity across the supply chain from API to paving. Yes. Then we move to -- I think we'll move to the tech for microphones. But you've been very patient in her back. You can move to that microphone then.

Emily Field from Barclays. One, how interlinked is a successful outcome with SELECT and movement forward of the Treat and Prevent Obesity Act? We get asked that a lot. Like is that something that could help move things through Congress? And then secondly, while you're limiting supply of the starting dose that will go in the U.S., will you be scaling back promotional efforts as well? And then just any commentary you could provide on the compounding pharmacies out in the market. We get asked a lot, given the lack of FDA oversight on the production there, how -- if that could be a risk to the story overall.

I'm sorry, Emily. I count 3 again. But I'm getting really good at the supply moment. So you supplied -- or demanded 3 questions and I'll supply 2. So we're practicing supply demand in this context also. So SELECT versus trial, unfortunately, science meeting politics, I think -- I would love to say yes, there is a [indiscernible]. In reality, no, it's not. So it would be another piece to the body of evidence why it's a good idea. I think it's already a good idea right now. And of course, we'll -- upon, knock on wood, a successful SELECT, we'll use that evidence as we use SELECT in other payer negotiations. Because SELECT will, of course, assuming the official play favorably into the quality and health economic assessments and hence, overarching payout discussions and negotiations. As to commercial tactics on Wegovy in the U.S., there vis-à-vis reducing on the starter doses, then I would say, given the current situation, we're not going all in on all our commercial tactics. But of course, at the same time, we're building a new therapy area or value therapy area. And in the context, it's important that we inform and educate around the appropriate use and the benefits of obesity treatment with Wegovy. So don't expect radio silence, but also do know that we would have another gear in the gearbox at the appropriate point in time. Then we move to back table here.

Richard Parkes from BNP Paribas Exane. So a couple of questions. Firstly, I know this is partly asked on the call, but in terms of commercial plan coverage going into next year is something we're not going to go and notice the success you've had with Wegovy. So what risk is that you start to see plans looking to put in place restrictions to the eligibility criteria or treatment duration? Is there anything you see as being a risk good commercial coverage into next year? And then I'll come back with the second one, if that's all right.

Sure. Absolutely. Then I only have to remember one. So first of all, market access in the U.S. on Wegovy is slightly different compared to some other disease categories in the sense that we have brought formulary coverage in commercial in the U.S. for Wegovy. And from there, it's very much an employer opt-in. So it's employers electing that they want to cover antigen medications. So it's a slightly different mechanism. Could we see influence opting out when they see the cost associated with the obesity coverage? Yes. But at the same time, I think we are not at the end of the road in terms of building access with other employers and state Medicaid, et cetera. So that's something we navigate as we move forward. And at the same time, with some of the additional clinical data reading out, now we just discussed SELECT, of course, the stronger the evidence we can generate both from our clinical trials but also from just real-world evidence about the benefits of anti-obesity treatment, of course, a stronger position we would be in. So it's something where we will navigate over time. And I'd say right now, with the current supply-demand situation, it's not our primary concern in the near term going into next year. But of course, something we look carefully at.

And then second question is on margins are asked on the call. But you're obviously seeing more of a margin improvement this year than you'd originally anticipated. It was ramp up R&D as quickly. And I think you sort of mentioned it might be possibility of business development. There might be some step changes in terms of R&D. So how -- can you just talk about how you sort of going to think about balancing that and what's the priority be going forward? Would you commit to maintaining margins at current levels? Or would you be willing to absorb some contraction for attractive acquisitions?