Organon & Co. (OGN) Earnings Call Transcript & Summary

Good morning, everyone. This is Navann Ty at Citi. I cover biopharma, including Organon. And today, I have the pleasure of having with me Kevin Ali, who is the CEO of Organon and Matthew Walsh, the CFO of Organon and really appreciate that with your first conference as a stand-alone company. So thank you very much for doing that with us.

Pleasure.

If I may start the Q&A. Outside with business development because this is a theme that always comes back in investors conversation. Maybe if you could go through possible business development indications or areas. And I'm interested to know if fertility would be a focus. Would you consider conditions that are unique to women health or other condition impacting women and whether you're considering oncology as well?

Yes. So very good questions. What I can say is the following is as we've really stated a number of times, the focus is on expanding our women's health portfolio. We do have a very solid business in reproductive health with our contraception business, which is really an interesting great business, especially in the U.S. where we have NEXPLANON with pad protection until 2027 with the extension possibility to take it. Fertility is another really nice business that is also growing for us. These are businesses, I think that you have to keep in mind that keeps them in common is the fact that it was really deprioritize and suboptimized under the Merck hands. But now we're really starting to really see the benefits of focus. Although we've only been at it for 3 months, we see a response and the opportunities ahead with fertility as well as with contraception. Still, the near-term focus will be continuing to strengthen our portfolio by bringing assets, more assets in reproductive health. But we're very interested also in really addressing some of the significant unmet needs that exist today across the world for women's health in areas that really have had very little attention, very little innovation. We took 2 decisions already that we've already announced. Just in our 3 months of birth since ringing the bell at the New York Stock Exchange, and that is our acquisition of Olivia Health with Jada to address the significant unmet needs in postpartum hemorrhage and abnormal bleeding, which a lot of innovation hasn't existed in the space. And so to that end, we were really agnostic of whether it's a device or whether it's a hybrid device with drug-eluting device or whether it's a therapeutic, as long as it really was an innovation in solving some of these unmet needs. Postpartum hemorrhage is a major issue with nearly 1 woman dying somewhere in the world every 4 minutes from postpartum hemorrhage, but also the morbidity associated with abnormal bleeding as well, forget about the fact that all of these women are dying but also those that are ending up in the ICU or ultimately other complications that come from childbirth. We just felt that this was a great area for us to invest in acquiring this company with its elegant solution. Our second business development activity was just a month ago, where we in-licensed an asset from ObsEva for preterm labor they had just finished some Phase II trials in Europe, but now we're actually looking to make a global program for this preterm labor asset because again, I mean, we addressed postpartum hemorrhage, which is one of the leading, if not the leading reasons for women dying in childbirth, and now we're addressing what many OBGYNs considers the holy grail of the whole area, which is to address preterm labor. There's really no innovations in the space. This is a unique new mechanism of action with ObsEva. And we're going to take this and run with it in terms of really developing this asset out. So we're -- 2 areas of significant unmet needs. Now my vision for the future is to really be a global leader in women's health by going after areas like menopausal symptoms, endometriosis, PCOS, preeclampsia and a number of different areas that really look very interesting from a research and development perspective because there's some really interesting assets in the space. Not to mention many others, not only in therapeutics but devices. So we have a lot to do before we even have to think about conditions that disproportionately affect women. We're just going after conditions that uniquely and strictly affect women with just some of the ones that I've listed out there. So there's plenty of areas for us to address.

And we know -- I think we discussed that available targets are mostly small to midsize. So what is your sweet spot in terms of size for revenues? And would you consider a larger or commercial stage assets?

So I would say this. I consider all assets. Now having said that, the first deal we did is a commercialized product in the U.S. with FDA approval. We're quickly trying to expand it and put it into our regulatory funnel to get it across the world. And the unique thing about devices as opposed to therapeutics you can usually work faster to get those assets -- those devices in market. So we're working quickly on that front. But the other thing I'll say is, anywhere between a $250 million to $450 million asset in peak revenue doesn't necessarily create huge parties in big pharma. And so for us, though, it's a material and a significant addition. And so a couple of those assets would really make a difference in terms of our long-range operating forecasting plans. And so we're going after that neighborhood, anywhere between peak revenues of $250 million to $400 million, but we also are very open-minded. We have a very productive and fast-growing biosimilar business. We're looking at that as well. We also have a very large, well-established, established brands business. We're looking for bolt-ons in that space as well. But there's quite a few things that we can do and Matt as a CFO has business development reporting into him. There's nearly 27 people in that space, very highly professional people who are ongoing, really kind of scouring and looking at and really sensing in terms of where -- what other type of deals that we can do. But we've got good cash flow every year that will allow us to make some meaningful business development over time.

And just following up on that, I believe your long-term leverage target is 3.5x, but you could go to low to mid-4s for an opportunistic acquisition or acquisitions. I realized were right looking at up to $1 billion debt funding and more with equity funding for one or several acquisitions.

Yes. So in terms -- so while we have no stated goal in terms of the deals that are of the right size for us. We do have some limitations on how large of a deal we can look at and not that you're touching on with this question. So between our operating cash flow and availability on the balance sheet within our BB Ba2 (sic) [ Ba2/BB rating ]. And we do have the ability to look at deals of some substantial size. And when we think about how do you preserve that rating if you see a highly strategic deal that we -- that management and the Board really wants to pursue. In conversations that we've had with the rating agencies, they could for a highly strategic deal, very promising risk-adjusted returns, we could, on a temporary basis, lever up to the low to mid-4s, provided we're communicating and can demonstrate that we can get that leverage back down under mid-4 within, let's say, about 24 months. So we've got good flexibility within the rating, which is one of the reasons why at launch, we selected that BB Ba2 rating versus trying to go for something investment grade is because it would give us the flexibility in our business development program to potentially go after some larger deals if we saw something that was highly strategic and had great value creation possibilities.

Understood and it makes much sense on the ratings. And I also note that you have flexibility in your credit lines. Then investors often mention to targets of Myovant and AbbVie Women Health. And I realize you can't probably comment directly, but can you speak about the theoretical fit or no fit with those potential targets?

Well, I think we'd like to stay away from talking about individual M&A targets. I think those are some substantial assets in the women's health space. We are committed, and we think there's great value creation capabilities. We've got great ability to grow within this space, whether it's organically or through M&A. And we will be looking at every opportunity to achieve that strategic objective. I think that's what I'd be comfortable saying on that point.

Sure. That's fair. And Kevin, you mentioned that the business development is 27 people reporting to Matt? How has the team evolved since the Merck days? Has it been was 27 people working that business development?

Merck has a large group of people. But I think for the size of Organon, where the structure of Organon for the focus of what we're trying to do is to really strengthen our women's health portfolio. We have plenty of really high-talented folks and Matt's business development organization that are really looking to add things in a very different perspective. I'm not sure that I can comment on whether Merck would have done an Alydia deal or not. But I can tell you that we are being very entrepreneurial in the way that we're looking at things and because of the fact that we're trying to do the maximum that we can within the space of women's health. And I think that there's plenty of assets out there and they're really led by a very solid business development leader and Daniel Karp, who comes to us from Biogen and Pfizer. And he has years of experience and has really developed a solid group around it.

The only thing I would add to what Kevin is saying is in addition to the business development people that report directly to me, within our R&D function, we have scientific subject matter experts that are heavily involved with us in evaluating targets. And it's been a pleasure for me as someone who didn't come in from Merck, it has been a pleasure for me to get to know these people and work with them. They are very experienced and very good at what they do. So the overall capability that we have around business development, from search and evaluation, target identification all the way through transaction execution is really good, and we're launching with capabilities that there's no holes that we need to fill. We can hit the ground running on our ability to successfully execute deals that we think, as I said, on a risk-adjusted basis, look like they can be value-creating for us.

Okay. Biosimilars, if I can switch to biosimilars. Could you maybe expand on your biosimilar strategy going forward? And I'll have some follow-up questions.

Sure. So biosimilars is a business that I actually brought into Merck nearly 9 years ago, I think it's been now with Samsung. And I truly believe that, that wasn't the home for that business because of the focus of Merck right now on their own biologics like KEYTRUDA and others. But it is a home within Organon because we can truly give it the attention and the focus that it deserves. I have long term, almost a decade experience with the Samsung people, with the management and team. We've got a very good relationship. We don't have an exclusive contract, meaning that they can, of course, add new partners and we can add new partners, but we actually have a very good working relationship, which gives us an honest access to future assets that they're working on as well as us having a continuous dialogue with other developers in the space because there are a number of developers in the space because you can imagine over the next decade, you're going to have nearly $200 billion of originators coming off patent. And what you see right now is a geographically different levels of acceptance of biosimilarity. I mean, in Europe, it's been very pro biosimilars for the last nearly I would say, almost 5 to 7 years that I've seen it in terms of the kind of acceptance of biosimilars. U.S. is starting to really move in that direction quickly based on the fact that these are tremendous assets that can provide significant reduction in overall spend -- health care spend. And I think it's being noticed on the hill in D.C. And so I truly believe that the future for the U.S. market, of which a proof point will be in the Humira off-patent or rather what happens with Humira biosimilars in the 2023 time frame will be a proof point to the fact that this is going to be a fast-growing market. And you know when the U.S. decides that this is something that they want to do, they get very efficient about it. And so I think over time, you'll see much more biosimilar acceptance and much greater market growth. And we're in a good position with the largest biosimilar, next biosimilar coming off or rather biologics coming off patent, which is Humira, but there are many others, but it takes time. I mean, in terms of the time to develop, market, manufacture, get on market and regulatory, it takes time. So you need to make those deals well in advance in order to be able to have access to those assets because you truly do need to be first or second or third to market. Being late to market is not a big advantage in this space.

I think you answered my question on the -- we could see further -- we see further collaborations with Samsung and other partners.

Absolutely. Absolutely. We're ongoing discussions with Samsung as we speak for other assets. We also have ongoing discussions with other developers in the space and they're good discussions. They've got -- we're very enthused by the future in terms of what we can do on commercially that is in partnership.

And just on HADLIMA biosimilar HUMIRA. I think you commented that the high-dose citric free and timing of entry matters more than interchangeability. Is that still your -- or Samsung view? And is that specific to Humira?

Well, it's always nice to have everything you could ever want under the tree in terms of all the wishes. But I think in the end of the day, as you start to prioritize, what's most important to payers and PBMs, especially because this is a pharmacy-dispensed product, when you start to prioritize the importance that they're looking for, they are looking for a -- as a biosimilar, how different are you versus the originator because they have to convince their physicians in their system, their network that this is truly a biosimilar. And so Humira today, as we speak, the majority of those sales in the U.S. are high dose, citrate-free. And so that's what we have. We have a high-dose citrate-free version of Humira called HADLIMA, which we feel will do very well for us in the 2023 time frame as we launch.

And assuming you're second to market this side trip 3, what range of market shares that you expect? And will we see a high concentration interchangeable to have a larger piece of the market?

So I believe that we'll be solid. We'll be solid players in the space because we know the U.S. market well. We've got a great team of people here who know exactly what to do. They're already engaged in discussions with potential PBMs that in terms of our upcoming launch of headline in 2023. It's not too early to get started on those discussions, of course. And in terms of share, well, look, I mean there are plenty of players that are going to come to the market. Even after us within months, they're probably going to be a few assets coming to market and launching. So it's hard to kind of tell you right now how it's going to shake out. But one thing I do believe will happen is that I think that price will probably erode pretty quickly as it starts to get very competitive because PBMs are going to try to squeeze out as much price as they can, but they're ultimately going to say we're only going to need really 2 or 3 products on formulary in order to be able to start to say people can get comfortable because each one -- each competitor has to have their own applicator, a unique applicator that they're going to come to market with. So you have to train people on those applicators in order to make sure that you get good wide acceptance. So having said that, I think 2 things will happen. I think there will be fast price erosion, not small molecule level like, but definitely faster than people potentially would anticipate. And I think there'll be a lot of jockeying back and forth. But I do believe we'll have a solid position.

And so Teva and Alvotech just announced some positive top line results for the switching study for the potential interchangeability approval. Was it in line with your expectations?

I wish I could tell you that I don't really -- I didn't really have any expectations in terms of what Teva and Alvotech are doing with their biosimilar Humira. What I can tell you is in discussions with various payers, they have clearly stated that citrate-free high-dose form is what we're looking for. Of course, it's nice to have an interchangeability as well. But those are the 2 things that we're really looking for. And then ultimately, after that, it's really who's first, who's second, who's third to market, what kind of pricing is going to take place ultimately in the negotiations as they unfold. And that's how I believe the market is going to be defined.

And for the other or the existing biosimilars, do you continue to see some competitive pressure in Europe? And what shall we expect for the rest of the year and maybe next year in terms of competitive trends or others?

The nature of the business in Europe is that it's a declining pricing market because that's just the nature of biosimilars. The market is there, you have more competitors coming on. They put more pressure on price and ultimately, things happen with the single-payer markets in Europe. So it is a very competitive market, but we have a very good position with our oncology entity. Our oncology biosimilars with Samsung because the anti-TNF part is actually handled by Biogen in Europe. And what we can say is this is that we've got a good position with our Herceptin biosimilar. And we've got a good position with our Avastin biosimilar. And ONTRUZANT is our Heptio. And we also have an Avastin biosimilar as I mentioned earlier, that we've got a really solid position in the key markets to really win in those products. Germany, as you can well imagine, #1 market in Europe. And then France and then ultimately, Spain and others are really important. We've got a good organization, and we've got good traction with our ONTRUZANT business.

Maybe a last one on biosimilars. What do you think of the recent HHS proposal that was released just recently?

Yes. I just got access to that. It's still very early in the game, in terms of what's happening. But I do recall when I -- when looking over that announcement at Communique, there was relatively positive overall intent by HHS to understand and to accept the value of biosimilars. There have been studies that have shown that if biosimilars are fully embraced as they are in Europe or the U.S.. In the U.S., they could potentially see savings of up to $100 billion over the next coming decades. So I think there is a certain recognition that biosimilars do have a place, a position, and that, that is kind of a moving target as we speak now. But it's very early in the game. And so a lot more needs to happen and much more needs to be known before I can kind of come up with a specific kind of answer to that question.

And then to the subject of free cash flow and dividends. I'll start with just nitty gritty ones. So for the rest of the year, can we expect the increase in accounts payable to be partially offset by increased inventory in H2? Is that the right way to look at it?

Well, as part of the separation from Merck in terms of how everything would be executed, we've been communicating that there is a working capital build process. We didn't launch with all the working capital that the business on a steady-state basis would need. And so there's -- in our estimation, there'd be about a $500 million working capital build between what our opening balance sheet was as of June 3rd, and what -- where we would ultimately need to be at steady state. So we're in the process of building that working capital right now. And I'm talking about cash cycle working capital. So we're in the process of doing just that now. And so I would say that we're on track in our assumption and estimate of that number is improving out as we're rolling into our first few months on a stand-alone basis.

And then in 2022 and beyond, if I may ask, can we reasonably assume around $1.5 billion annual free cash flows at the right ballpark?

So obviously, we're not going to be providing any guidance today, but I can direct people to some easy math. We -- it was important we felt, in the launch of the company given there's not many comparables for Organon, that we allow shareholders to share in the good, solid cash flow of the business with a pretty attractive dividend out of the gate. And the good news about that from a management perspective, from Kevin and my perspective, in terms of how we run the company is we could set that dividend at a low 20s percentage of free cash flow. And still have plenty of resources available to pursue organic reinvestment in the business as well as the business development program. But let's get back to the dividend. So low 20s percentage of free cash flow. And when we set the dividend that we announced in the Q2 earnings call of $0.28, we were setting that, excluding any consideration of onetime cost of separation. So people can back into what we think the sort of run rate free cash flow generation of the business is, and it's in the ballpark that you've just mentioned.

That's very helpful. In terms of free cash flow yield, I think Organon has one of the highest in the sector. Would you say that Organon is natural solid free cash flow generator. Do you have -- or do you have internal cash focused programs?

Well, so out of the gate, we're launching with a business that does generate a significant amount of free cash flow beyond our reinvestment needs. So that gives us the ability to pursue with vigor a business development program that can -- whose goal would be to sustain revenue growth, not just in the planning period, 2021 through 2025, but beyond and for the foreseeable future. So that is the -- that is a core benefit that we're launching with, out of the gate. We expect to see that continue because the -- among other reasons, but because the established brands business is such a good business for us right now. And it is a tail products business, right? So this is a mature collection of off-patent products, but the brands really matter outside the United States. And I think one of the things that Kevin and I constantly have to remind people of when they're looking at our historical results, is that those are really weighted down by loss of exclusivity events in the portfolio, most of which are behind us now. And so we're looking at an established brands portfolio that has a very modest, very modest low single-digit rate of erosion to it. What should say, to your point of your original question, that this is a good free cash flow business now. And on the strength of the established brands will be a very good free cash flow business in the future and will enable us to fund the growth programs, whether they're organic or external in women's health and biosimilars, where these are end markets that have great growth prospects.

And just a quick one on -- to follow up on dividends. The low 20s of free cash flow, is that a firm and long-term commitment? Is there a scope to increase?

Well, so it's an algorithm that works very well right now. And so we'll be -- the thought is that we would be sticking to that algorithm. And as the business grows, that would help define what the rate of dividend growth would be on that formula.

Switching to next one on your core product. The earnings call -- I know the earnings call was just less than a month ago, but -- and I think there's some headroom in the guidance, but do you have updated thoughts on COVID and the variance impact on NEXPLANON?

Well, it does. COVID does impact all related, what I would call physician-administered procedures. So that would essentially include an NEXPLANON or would include an IUDs and so on and so forth. But we're feeling really good because we've really taken on a number of initiatives as of late, our direct-to-consumer advertisements, both in television as well as on social media across multiple channels. The fact that we are starting to reengage in a very innovative way in terms of the -- what we call our clinical training program because that essentially you need to have training in order to be able to have gotten the permission to essentially apply or insert a NEXPLANON or take it out as well. And so that's starting to move very -- in a very, very fast manner. Also, our reps, as you can well imagine, with those clinics closing down or being very restrictive, we're not able to really see in person our physicians. And now they're starting to be able to come back into the clinic, be able to talk to our physicians, remind them. All those 3 things, plus many other commercial programs we have begun that we believe will start to really stimulate the market and to get back. But clearly, COVID and the Delta variant is something that is affecting everyone that actually needs to go and see physicians because wellness visits are down significantly versus prepandemic rates, but they're starting to creep back in. And hopefully, as things start to calm down and people start to get more vaccination penetration -- vaccine penetration, then you'll start to see more of those wellness visits take place because wellness visits are not only, of course, for contraception, but therefore a range of check-ins with the OB/GYN community for women across the board. But we have initiated a number of new programs right now, as we speak, that we believe will help to stimulate NEXPLANON continuing on.

And in more longer term, so I have the following stats that around 14% of U.S. female contraceptive users use IUDs, so the intrauterine devices and around 4% used implants. What do you think the long-term market share targets of implants will look like post-COVID cost growing in long term?

Well, what I can tell you is pre-COVID implants were outgrowing the IUDs, significantly next but on very robust double-digit growth. And I think what I can say is this, that there have been -- look, it's all about choice. And right now, offering NEXPLANON and getting more and more people to understand that NEXPLANON is here for women to have choice in terms of whether they choose to have an IUD or whether they choose to have an implant, our focus is not really against IUDs. Our focus is really about those women who really want more efficacy and convenience versus daily pills. So that is the big share of women currently that are being dissatisfied with the daily pill administration and more kind of leaning to what's more convenient, what's more efficacious for the long term. And I can tell you right now in a number of studies, that NEXPLANON or rather raw technology is far more efficacious than pills are in terms of preventing unintended pregnancies, far more. And I think it is obviously very convenient because it's an implant for a 3-year term. And of course, it's reversible as soon as you want to take it out if you decide to want to start your family. So there's a lot of benefits to it, and we think that over time, we'll start to get our fair share.

So I want to ask what you use in your marketing and education efforts to increase awareness. So it will be against the sale of efficacy, convenience the fact that it's reversible. And would you mention the cost as well? The -- I think there's some misconception about the cost versus other...

Well, what I will say is that the benefit here is that NEXPLANON in the United States is covered zero co-pay under the Affordable Care Act. And so cost shouldn't be a major hurdle in the United States. But outside of the United States, we have a strategy of what we call responsible pricing, which means we've just recently got reimbursement in Brazil, reimbursement by government authorities in Brazil for certain patient subsets as well as in Canada, which we recently got regulatory approval as well as reimbursement. But I will say this, that a majority of the business that we have in NEXPLANON, both in the U.S. and outside the U.S. comes where we get reimbursement, government reimbursement or insurance reimbursement in terms of single-payer markets. And that's where almost all of our business is coming from. It rarely comes from kind of out-of-the-pocket cash pay business. That's not necessarily a business that NEXPLANON is essentially akin to. And that's why we're working so hard to put efforts and focus by our managing directors across the world to gain reimbursement and access for NEXPLANON to a variety of communities across the world.

That's great. And then maybe another integrated question on Q3. IQVIA had a higher implied unit price of Nexton up versus June. Does [ Asan ] correct you and so you see such price increase to continue?

Well, we do increase price every year in the U.S. But typically, again, in a very responsible manner, usually around inflationary rate. It's nothing -- it's in the single-digit range, even mid-single-digit range. And so what you'll see is just some price increases that have been taken year-by-year, but these are not significant astounding price increases that take place.

And on fertility, so you mentioned the recent various government action to address lower fertility. And there are also some ongoing diversity initiatives, fertility benefits at U.S. large corporates. How would that directly impact organ and foresting for instance?

Well, each market in the U.S. as well as each market outside of the U.S. is -- has nuanced differences. I mean, obviously, in single-payer markets, we see more of an opportunity, say, for example, in Northern Europe and Europe itself, where we have, for example, as I mentioned in our earnings call, we just recently had France reimbursed for same sex couples as well as egg freezing. And in the U.S., as you just mentioned, there's more and more companies that are providing fertility benefits as part of their ongoing support of their employees. And so there is that happening. And so we truly believe that over the near to medium term, long term, fertility will grow very nicely. You have China with issues in regards to fertility rates. They're doing what they can to expand from 2-child policy to the 3-child policy now as well as we think in time, there will be more opportunities for reimbursement, not yet, but hopefully, in time, that will be the case. And we've got 2 countries that don't have a new product that we have that we have in parts of other parts of the world, Elanda. That's our once-weekly follicular stimulating hormone, which I think is very timely because the entire donor and egg freezing market is starting to really grow very fast. These are women that don't have necessarily fertility issues, but they have a choice in terms of when they want to have a child, or when they want to start a family. And that's where essentially egg freezing comes in. Now having a once-weekly injection versus once daily, that convenience I think, really works for women who are in the egg freezing or egg donor category or segment that we'll be able to address in the 2025 time frame in the U.S. and China as we start to launch along in those 2 key markets.

And do you think business development in those areas would help? Or do you think your current fertility portfolio is enough to benefit from those long-term supportive teams?

Two answers to that. I think we've got a healthy portfolio that just has been deprioritized under Merck, and now we will give it great priority and focus and investment. But we're always looking to expand both in -- I mean there's some interesting device work that's going on in the fertility space. And there's some interesting new therapeutic investments in terms of R&D that's taking place in that space. So we are very keen to continue to invest in the fertility space. We think it is a small -- relatively small segment, but it is a growing segment with not a lot of competition in terms of the competitive pressures. There's 3 companies that essentially control about 85% share in the overall market worldwide. And it has been so for the last decade or so, and I think it will continue to be the case going forward.

So we have a few minutes left. Just wanted to ask maybe, Matt, about the data points since the Q2 results if you have better visibility on the guidance, whether the COVID headroom or scenarios you have in guidance and what to look out for Q3 without getting into guidance as a first stand-alone company?

Well, we affirmed our full year guidance in the Q2 earnings call. That remains our guidance for the year. Everything that's happened since the call hasn't been very long. But all the variables and such are continuing to point in ways that are meeting our expectations. We'll have to see, of course, what we're looking carefully at, in the remainder of the year is what the -- what any ongoing impact from COVID might be. So certainly, we've got our eyes on that. But we did contemplate continued COVID impact, and we communicated that in the earnings call. We did contemplate continued COVID impact as we affirm the guidance. So I would say it's really steady as she goes in terms of how the business is performing relative to the last guidance affirmation that we gave.

And do you have any update on the pricing reforms in China, LOE impact, anything new since the recent earnings call?

Nothing new. You're talking about the volume-based procurement?

Yes.

Yes. No, nothing new. We're working through it. And we're moving our business over to the retail channel. We've been doing that since 2017. We're more obviously focused on that now. And we have good plans for China going forward. They're starting to work on their fertility business is growing really nicely in China for our group, which really wasn't invested in before. And that is not a volume-based procurement sector. So that is not necessarily a part of that. So we don't have that kind of threat looming over us there, but we're making good headway in China.

And maybe if I can squeeze the last one. I was just curious about the Board diversity, which is unusual. Has it ever come up in your discussion in terms of ESG theme with investors?

Yes. It's starting to come up more and more often now as they recognize that we have the most diverse Board of any Fortune 500 company, the S&P 500. And it is an advantage for sure. I mean we have an incredibly diverse Board, not only 70% female, but also half of the Board members either have been born or live outside of the United States. And given that 80% of our business is outside the U.S., we have also a very internationalized Board as well. And from an ESG perspective, we're putting our plans together, but it clearly helps us to have such an incredibly diverse Board of Directors and will clearly be an asset for us going forward.

I think we'll end up on that. And so thank you so much for the discussion and the interaction today. Good luck with your -- the rest of your meetings and you have a packed schedule. So thanks again, and...

All the best. Thank you.

All the best.

Thank you very much.