Orion Oyj (ORNBV) Earnings Call Transcript & Summary

Good afternoon, and welcome to Orion's Virtual Capital Markets Day. My name is Tuukka Hirvonen, and I'm the Head of IR here at Orion. And it is my great pleasure to act as your host for this afternoon. Today, we have diverse agenda with altogether 5 presentations and 2 discussions or interviews, so to say, which all will fall under 2 main themes we have for the event. There will be 2 scheduled breaks, the first approximately at 2:15 and the other one approximately at 3:35 p.m. Finnish Time. After each break, we will hold a Q&A session when we will be answering the questions. You can send us through the question form you should see on the bottom of your screen in this webcast. And please note, you may send us questions at any time during this webcast, and then we will do our best to answer or address as many questions as possible within the time frame allocated for the Q&As. And here, you can see also on the screen the agenda for today. Then I would like to draw your attention to this disclaimer, which we will be showing in front of every presentation, but not really through there. But the audience should be aware that today's presentations include forward-looking statements, which involve or are subject to risks and uncertainties. The actual results may, however, due to various reasons, differ even substantially from any of those stated in any forward-looking statements. However, Orion assumes no obligation to update or revise any information presented here today. And now having that mandatory part taken care of, it's really time to kick off our event with the first speaker, President and CEO, Timo Lappalainen. Once again, welcome on board, and I hope you will enjoy the afternoon with us.

Thank you, Tuukka. It is, of course, a great pleasure to come to your offices, your living rooms or wherever you may reside during these challenging times and discuss about the Orion's future, how we are planning to go there. I will not repeat the disclaimer. I'd just note that we have a disclaimer also here at this page. And I'll jump right into our growth target. As we've communicated over the past couple of years, we have an overarching target to reach EUR 1.5 billion in sales by 2025. Of course, what we also said, it's not going to be a straight line, it's going to be a back-ended -- back-end loaded as we've communicated, and it will have bumps and also tailwind. Some of the positives that we expect that will provide us a tailwind as we are then moving to our goal is, of course, Nubeqa as one of those great examples, a great innovation by Orion R&D developed to Phase II by Orion. And today, globally being further developed and partnered with Bayer. And today, also, Orion is part of that commercialization, and we'll discuss that later on also during this afternoon. Easyhaler, our dry powder inhaler technology, which already has proven its robustness in terms of the technology, also the value in the marketplace, as we have 6 available Easyhaler products in the market and the sales are topping EUR 100 million. We continue to plow ahead in organic growth in all of our units, all the operations. And of course, we have Stalevo, our Parkinson's disease franchise that we initiated the commercialization already a long time ago, but we've taken even more of that business today. The recent approaches that we've taken also in Southeast Asia on the top of the earlier ones in taking the business over from our long-term partner in Europe have demonstrated that business is a very robust one. We have our own sales operations on the ground in Europe and today also in Southeast Asia. All businesses, they carry risk, and we know that the inherent risk in our line of business in pharmaceuticals is certainly in development. And we got -- unfortunately, we had to take a bite of that with our last year's results of our ALS program, which unfortunately did not meet the expectations. Of course, this was a disappointment to the patients, caregivers, to the societies and, of course, to the company itself. In biosimilars, we are taking a breath now because what we've learned is -- and as I guess we all assumed that the biosimilars, especially the ones that are used in hospital setting, those are subject to the normal dynamics that we see in hospital business. As the patents run out, we will see a very steep decline in pricing environment there. And now we are building up that portfolio that will take a couple of years, but we'll be back in business in that. Last year, we've announced that we lost an important distribution arrangement in our Animal Health Scandinavian business. Luckily, one can say that the effect on bottom line is proportionately much less than in terms of the sales. Then our injectable products. Those are today subject to generic competition. And with regard to our sedative agent, Dexdor, we've already seen that there's quite a lot of generic competition. And Simdax is yet to be seeing that. And here, we have -- on the right-hand panel, we have the -- we've broken down now the sales development when taking into account milestones, which are an integral part of our business and then the underlying sales there, which are the mostly product sales related. So here you can see that the milestones, those are an important element of the business model that Orion has. Now the areas where we are focusing, of course, in pharmaceuticals, it is the quality and safety. Those are the top priorities and we will never jeopardize. Those are the cornerstones of everything we do. In Orion, we have a very strong corporate culture. And I think one of the phenomenas of that is that when we look at the tenures of people who've joined the company, be that anywhere in the globe, people tend to stay with the company. And that, of course, then develops the culture by itself. And working together is one very important part of that. Of course, continuing work on productivity, having the flexibility to reallocate resources, should there be a business reason or should something opportunities present themselves or if there's something that doesn't warrant any more resources, we have that flexibility. We are in a business, which is product-driven, so competitive product portfolio. We have to take care of that, and there are various means how we do that. Partnerships, those are our bread and butter, have been for decades. I mean, that is something that we do all the time. Be that for profit, large organizations, much larger than Orion; be that for profit, smaller organization, not-for-profit organization, academia or individual advisers that help us to carry out the business and develop our operations further. And as I said, the target, the EUR 1.5 billion, that's an important target for the entire organization. But we appreciate that getting there, we need to show that the work that we do, be that services, be that our products, those are beneficial to our customer, be that patients or be that buying organization or reimbursement agencies. Of course, Orion is known for its profitability. We are a shareholder-friendly company and also take into account allocation of capital, returning capital to shareholders in the form of dividends. It all starts, of course, that we must be able to continue to provide new, innovative, cost-effective products and treatments to patients. So both innovative as well as cost effective, and I think the business model that Orion has, which has the both legs, the innovative part, working on something that nobody else has done before, yet also appreciating that no society can afford only new innovations. We have great products as well out there which have proven their utility to the patients and under the generic competition, they have become cost-effective products. And we are part of that story as well. And today, we are all talking about the sustainability. That's been on Orion's agenda for years. We continue to publish our corporate responsibility report also always around the early May, late April, as we did this year as well. And I'd recommend everybody, who are interested in Orion's way of thinking of the data that we provide on the sustainability, please look at the report. There, we are basically [indiscernible] where, and you'll find the interesting data there. So it all starts on the assets that we have in hand. And of course, the existing portfolio there, the work is to maximize the value of that. Nubeqa is an important part of that, so is Easyhaler. But we should not remember our largest business, which is Specialty Products, that means generic prescription products as well as OTC products, including nonmedicine products. We've also announced last year that we've expanded our operations in Southeast Asia, starting out with 3 countries. And I'm sure that will not be the end of it. We also have a strong balance sheet, and our CFO, Jari Karlson, will discuss that. We have the opportunity, and we are putting resources in evaluating, monitoring opportunities to grow also inorganically. Be that licensing, be that product or company acquisitions. And of course, at the end of the day, it is creating value in the -- for the shareholders and building the competitiveness in the long term. That means that we need to move our early research pipeline to the clinical development and, of course, at the end of the day, to regulatory approval. And we have a great example of that, ODM-208, 209 family. We've also initiated certain activities in developing niche generics to complement our portfolio. And we have a large program how we will increase the productivity what we call future 2025, that includes a major IT investment commitment as well. And of course, it all starts with people. So we need to have the competencies in-house and also have the partnerships with external resources, advisers and so forth that we can do all this. And the geographical expansion is part of that game. So when we look at the pharma industry, this is one of the largest industrial businesses that they are in this planet, roughly $1.5 trillion expected to be in a couple of years' time. And we all know that the U.S. is a major part of that pie, and Europe is our home market. And of course, we know that very well. Also I appreciate the opportunities in emerging markets, which are the fastest-growing markets as we move forward. Now Orion's sustainability agenda. It all starts, of course, with the patient safety and ensuring the reliable supply of medicines, medications. And we know that in the past 18 months, that is not a trivial issue, but we managed very well to do that. And it starts with our responsibility with Orionees, our colleagues, because only by having our colleagues safe and sound, we can have then the operations up and running. And we can be very proud what we've achieved so far. We are also very conscious that we are at the end of the day, in chemical industry. And we have to take care and carry our responsibility for environment and that's what we've been doing. We continue to invest in that, finding novel solutions, in some cases, how we can do our task there. And of course, the transparency and providing and having the high business ethics is part of pharma. With these opening remarks, it is my pleasure to welcome you all to the Virtual Capital Markets Day 2021.

The first main theme of our event is creating growth towards the 2025 target and beyond. Next on, you will hear thoughts from Satu Ahomäki, who is the Senior Vice President of Orion's commercial operations, which includes also the Proprietary Products business.

Good afternoon. It's my great pleasure to give insight into commercial operations. And as Tuukka said, commercial operations is responsible for sales of human pharmaceuticals, both Specialty Products and Proprietary Products and also Proprietary Products business is part of the commercial operations. This is the disclaimer. I would like to start by setting the scene and going through some figures from last year. So Proprietary Products sales were EUR 420 million and showed growth by 3.5% compared to 2019. These are split with 3 different sub-businesses and oncology and critical care creates almost half of the sales last year. Oncology and critical care was also the fastest growing business. And the driver was Nubeqa. On the right-hand side, you can see the key brands of the Proprietary Products, and the sales compared to the 2019. So Nubeqa was really growing fast as it should be since we are in early stages of the launch. It was first launched in August 2019 in the U.S. and then in Europe, May 2020. Easyhaler also showed solid 2-digit growth, and we are very proud of that franchise. Stalevo and Comtan were pretty much in part compared to 2019. In Simdax, there was a decline compared to the previous year and that was due to some price erosion in few countries and then also this pandemic had an impact to Simdax sales since some operations were postponed during these pandemia. Dexdor, also some decline compared to previous year. However, not as significant as maybe we thought since, as you know, Dexdor is used for COVID-19 patients in the intensive care units, and that boosted the sale. In strategy period, it is -- dynamic growth is expected from Proprietary Products business. And there -- with Stalevo, we see that the growth will be relatively steady during the coming 5 years. In Simdax and Dexdor, there will be decline due to this tightening competition and price erosion. But the clear growth drivers will be Nubeqa and Easyhaler. This is the Proprietary Products strategy in the nutshell. So our vision is really to contribute to this cooperation level intermediate target to achieve EUR 1.5 billion sales in 2025. And that -- therefore, we have identified 4 strategic objectives, how to do that. Firstly, our aim is to maximize the value of the current portfolio. We still think that there's lots of untapped potential in Easyhaler. And definitely, Nubeqa is still in early days of the launch. And we are ready to fight for market shares of Simdax and Dexdor. Secondly, we prepare for successful commercialization of new products. So would they come from -- through our own R&D like Easyhaler tiotropium or other in-licensed molecules. So we will build our capabilities to deliver according to expectations. Thirdly, broadening this product portfolio, that's really the key in the future success. So there are different ways of doing that so -- through R&D, mergers and acquisitions or in-licensing. And preferably, we are looking for opportunities, which are synergistic to our current operations. Last but not least, we are looking for expanding our operations. We have been more than 100 years in Finland, many decades in the Europe and CIS. So now we have looked outside and going to Southeast Asia. And also since U.S. being the one -- the biggest single pharma market in the world, so definitely we look to opportunities how to go there and when is the right time to do that. This is our commercial footprint. So as said, we have been for decades in Europe already, and now the Southeast Asia, Thailand, Malaysia and Singapore are the newest operations established last year. So why Southeast Asia? So the rationale behind there was really to maximize our current portfolio. So this agreement with our long-term partner, Novartis, indeed, in Asia, except in Japan, and it was a perfect time for us to repatriate those Stalevo and Comtan products. And also, we had some generic product, which we also repatriated. So the sales started last August, and everything has gone according to our plans. So we can say that we have been successful in that sense. And of course, this then creates a platform for us to commercialize also in the future, all proprietary and SPP products in the future. Although this is a significant step for Orion to step outside Europe to Asia, but of course, these revenues, they are not material when considering the Orion cooperation top line. But definitely, it will also create us a platform, and we are looking for new opportunities in Asia Pacific. Easyhaler offers the largest range of medication in same inhaler for treatment of asthma and COPD. Here is a snapshot of the asthma market, which is significant. So in EU4 and U.K., the value of that market is USD 2.6 billion and is expected to grow by 40% till 2029. And what is noteworthy that those segments where Orion is present, like inhaled corticosteroids and then LABA/ICS, this will be significant segments also in the future. Similarly, COPD market is about a similar size than the asthma market, and there is also 24% growth expected. And same way, the segment's Orion is present are -- of significance also in the future. This COVID-19 pandemic has impacted pharma in many ways. Based on the data, there is really negative impact to pharma sales evolutions in all channels, meaning retail, consumer and hospital. Also, the whole promotional volume is down since face-to-face meetings between the sales reps and the customers are not allowed in maturity of the countries. Also, it seems that asthma and COPD patients, they have not visited doctor appointments and pharmacies as frequently as they used to do. So all that has meant really a decline for the market. And here is the picture of the starting months of the year. And it indicates that the whole dry powder inhaler market was down during the first 2 months of the year by 18%. However, it seems based on the same data or sources that Orion portfolio was down only 12%. Digitalization is one of the increasing trends in the pharma industry. Therefore, Orion started to invest in digital communication platforms and digital tools already some years ago. Based on the data, these digital tools, they can improve the treatment adherence. And that is a huge challenge in asthma and COPD patients. So this Connected Easyhaler was developed in partnership with Propeller Health, and it is Bluetooth-enabled add-on Easyhaler-specific sensor, and it records the patient's use of the Orion device. So this could give very helpful information and help patients to manage their disease better since they get reminders and alerts regarding their treatment status. And also for the healthcare professionals, they are able to monitor the treatment status better. All that could lead to improved treatment adherence, it's better -- could provide better clinical output, and there will be less cost for society. Sustainability is the second increase in trend in pharma industry. And there is millions of patients, asthma patients, who need to use inhalers to treat their disease. And inhalers, there are dry powder inhalers like Easyhaler and metered-dose inhalers, like aerosols. And development and manufacturing those inhalers naturally cause some emissions. So Orion made a choice already almost 40 years ago to develop propellent-free dry powder inhalers. So in 2020, we first time published carbon footprint assessment. And the carbon footprint for one Easyhaler device is 0.58 kilogram in average. And that is 10 to 37x less than for the metered-dose inhaler. And we can say that Easyhaler is the world's first carbon-neutral inhaler. This carbon neutrality is achieved by minimizing CO2 emissions across the entire supply chain and also throughout our product life cycle. The remaining emissions are offset through various projects that protect the lungs of the world, like forest in the Amazon and in the U.K. Then I move on to Nubeqa, which is the main growth driver for Proprietary Products and the whole company as well. As mentioned earlier, we are in the co-promotion arrangement in Europe with Bayer in 16 countries and Germany started last year and 9 other countries have followed after that. The collaboration has gone very well with Bayer, and the feedback from these healthcare professionals has been also very good. Here, you see the bars indicating the Orion's Nubeqa sales. So you see the increasing trend there. Orion's income are tiered royalties from Bayer, which will be about 20%, including product sales to Bayer. Initially, the royalty will be slightly lower and, as sales increase, royalties may increase slightly. This prostate cancer market is also very big. So last year, it was USD 12 billion, and it is expected to grow to USD 28 billion by 2028. The maturity of this market, the sales is generated by new-generation antiandrogens just like our Nubeqa. And in this pie, you can see the market data from last year, after third quarter. And there, the Nubeqa global market share was 1%. It is noteworthy that Nubeqa is approved only in one indication, that is the non-metastatic castration-resistant prostate cancer. However, there are other studies ongoing by Bayer and we will hear about the results of those studies in coming years. As mentioned several times, we are looking for growth, and then it means that we need to expand our portfolio. And we are actively looking for those product opportunities to -- both for neurological disorders, but also for oncology. There are several ways how we do it. We have multiple evaluations ongoing through in-licensing arrangement. Also, our R&D is, of course, doing good job there. And then we also try to have a customer-centric approach and through various ideas, challenges to really identify the customer needs on the market. And this is how we develop our portfolio. This gives also a snapshot to what we are exactly looking for, what are our areas of interest in in-licensing. So we would very much welcome all projects and compounds in all development stages, which could support our neurological disorders and oncology platforms. And there, we are interested in both European but also global rights. But maybe even higher interest, we have products, which are already in late clinical stages or ready to be commercialized. And there, we are looking for opportunities, which we could target to customers like neurologists, psychiatrists, oncologists, urologists and pulmonologists. Then last but not least, there is also very interesting area of rare diseases. There are more than 300 million people who are suffering from different kind of rare diseases. And it's a very interesting and growing business area. And that's why also we are looking for those opportunities there, especially linked to neurology and oncology. And I would like to summarize my presentation with this slide by saying that Proprietary Products business continues to contribute to the Orion growth targets. I have 3 take-home messages for you. Nubeqa and Easyhaler are definitely our growth drivers. We continue building our capabilities and new sales territories. And there is a strong push for portfolio development. Thank you.

Thank you, Satu, for the update. And now it is my great pleasure to welcome Niclas Lindstedt here on the stage with me. Welcome, Niclas. So you are heading Orion's Animal Health business and have done that for over a decade by now. So quite a time. So could you give us a brief introduction to the audience about yourself and your career at Orion?

Well, first of all, thank you, Tuukka, for having me here today. And actually, I'm actually a long-time Orionee well. So I started off my career in Orion actually at Fermion in 2003 as business development and moved on with marketing and sales and there and at that time also, I did my MBA. And in 2009, 2010, there was time to do something different, and I started off as the Head of Animal Health. And what happened? I enjoyed myself and stayed here for a long time.

Did you have any previous experience from Animal Health?

Well, unless you count 2 dogs and guinea pigs and different kinds of mammals at home. But otherwise than that, no, not really.

All is counting that, lot more than I have experienced from the animals. So talking about the business of Animal Health. Last year, unfortunately, you lost a major distribution agreement in Scandinavia or it was not continued. How big setback was that? And what kind of impact this decision has had on your team?

Well, I could start off by saying it's never a good thing to be in the red on the first slide on the presentation today. So from that point of view, of course, it has a huge impact on the top line for the whole -- especially for Animal Health business. And if you think about our end results of EUR 89 million yesterday, and we're talking about roughly EUR 30 million. So of course, from that, it's a new set. But on the other hand, I would say that it actually reshuffled the cards, which means that we have now opportunities to do things, which we had not possibilities to do earlier.

So what are your plans going forward in Scandinavia?

Yes. It's actually interesting because in the past, of course, when you had a full portfolio from a specific principle, you actually had to work according to the agreement of that, and we're not allowed to do that many different things with other people. So what we've done now is pretty much we focused on specific areas, segments like pain, sedation, anesthesia, behavior mentioning a couple and really sort of filling up portfolios in that and actually work now with in-licensing opportunities with our companies for those markets. So -- and that was not really possible earlier. So of course, that's a new possibility. The second new different thing, I would say, is that in the past, also because the portfolio was so wide that we had to have people in different segments around the markets, in the different markets. Now we can actually sort of have more common sort of set of rules for the whole Scandinavian region. So when we talk about companion animals or specific segments, we can basically have people working between the countries even more than before.

So has there been some changes in the organization or the structure of the business?

Well, unfortunately, yes. And that's, of course, understandable because you're losing a huge chunk of what you have to sell. The good thing is to say is that those changes were made in -- of course, everybody knew the reasons, but also it was done in a good understanding with the employees. And personally, I hope everybody still feels very sort of satisfied with the results, but just thinking that we used to be around 30 people there, now we're less than 20. So it's a major change really.

Understood. So that growth is one of our main themes today. And of course, you have now lost business, but like you said, the cards are reshuffled, starting from the plain table, so to say. So in addition to these in-licensed products you are looking for, Scandinavia, what are the growth drivers for your business unit going forward?

Well, the good thing is, of course, we haven't been sort of waiting for something to happen, but we're working in the background before because, of course, any project, first of all, changing anything in this industry or in this business from one year to another, it's very -- nobody is waiting for you to actually have a problem. So what you have to do is you have to adjust that over time. And what we've done over the years is, of course, having a very strong portfolio of R&D products. Most of those products are also, of course, developed for the global market. But of course, we will sell those in Scandinavia. But at the same time, we find that it's a good value trading asset, which we can talk to partners about and discussing that around that. Of course, the second thing, which we are clearly always -- and today, we're in 11 countries, we're looking, of course, is there any expansion on the geographic front, which will actually support the growth from us as well. But then again, this is a chicken and an egg discussion. Do you have enough products? And how profitable can it be from the first day? And how do you want to do it? So I think that there is no stopping in the dynamic. I mean, we've been growing for 10 years. Let's be -- so we've done here, and I was laughing because I always said that we're going to reach EUR 100 million, and we would have reached this year unless -- and now, of course, I have some work left to do to actually get there. So now what we're really trying to do is make sure that these new products coming out from the pipeline are being maximized throughout the world.

What are the new products that are coming or have recently come out?

Okay. Well, I guess the official one today when CBM gave a positive opinion on the Bonqat which is the pregabalin for actually for cats. And the funny thing is when people ask me, what's this product for and I ask what's the biggest problem with the cat at the veterinarian, and they look at me and ask, what do you mean? And I said, well, the problem is you don't get the cat to the vet because, first of all, they're not really used to going to the vet. And second of all, you have to catch them and put them in a tranq and help them there. Bonqat is actually all about that, that you can help the vet to get the cat to the vet, so -- and the owner in that sense. So that's actually one of the products, which now is official. The second one, we actually -- I know there was a presentation yesterday at BSAVA in Britain about some clinical studies which we've done on an Orion-owned molecule. And the indication, of course, it's also in the behavior segment.

Okay. That's interesting. Now can we talk about money?

Sure.

So how do you think, how big opportunities these new product and I guess that Clevor is also quite recently launched products. How big opportunities these are for Orion Animal Health?

Well, let's put it this way. Usually, you have to remember, and put that in proportions. When you talk about the blockbuster in human health, you talk about EUR 1 billion. And when you talk about the blockbuster in animal health, you talk about EUR 100 million. Unfortunately, these are not blockbusters. But these are really interesting opportunities to actually sort of build more products on, which is unique, and they also bring something different to the vet and to the owner, so they can actually make a better bond with the cat or the dog in that way. So I would say, in a sense, they're not substantial maybe to the Orion's big targets, but I hope to get away from the red in the first slide.

And I guess we won't be able to get the full potential since we are not commercially present around the globe?

Of course. And always -- we have to always remember that many of biggest or the most advanced animal health market still in the world is still the U.S. So a good example is Clevor and Clevor and Dogs Buddy, which we now launched through a partner in the U.S. and been in the market almost for a little bit more than a month. And the success, which we feel, and I'm sure that the partner also feels with those products are much better than we actually thought. And the reason for that is many different reasons. But one of the major reasons is that Clevor, which is an eyedrops to induce emesis in dogs when dogs eat what they shouldn't do is actually unique on the market in the U.S. because there is no similar products available at the moment. And that sort of have also taken everybody by storm and actually brought some really nice sales and bottom line to Animal Health this beginning of the year. The second thing which we also did was, of course, we launched the first service, which is the Dogs Buddy service, which we really designed for the U.S. market because that's the place where there is clear sort of need for those kinds of services, which is actually an online service for the veterinarian to look into if there's a dog who has eaten something which is poisonous, what's the clinical signs, what's the treatment and which way it goes. So I'm excited to see how it goes by the end of the year.

Good luck on that. You talked about partners. Can you shed us any light on the topic? How many partners you have? Maybe if you can name some of the most significant ones?

Well, of course, if I don't mention anybody, nobody feels outside. So maybe I'll turn it around and say that actually, if you look at the Animal Health market and you look at the big companies, the 4 big ones, of course, their -- really their main strategy today is to be present in all the different markets and be there with their own organization. So of course, for us, that means that our partnerships with smaller and medium-sized companies are actually extending. So from the beginning of having one big partner would be one big sort of chunk for a specific geographic area. We are working more with smaller product or portfolio sort of arrangement with smaller partners. With smaller partners, I mean bigger than us.

Good addition. Good addition. Going back to the growth theme. Timo mentioned in his opening remarks that also inorganic growth is an option and opportunity for Orion. How do you see it from Animal Health perspective. Are [indiscernible] an option?

Well, I -- this is one of the reasons -- one of the times where I always have to say that it's very good to be in a corporate because if a deal comes up where basically it makes sense with the C and an S for the whole corporate and the whole group, they, of course, will look at it. But of course, I have to remember that I always compete with all the other businesses as well. So it has to be -- make sense for the whole group. So that's their decision. But that means also that, of course, we're looking if there would be an opportunity for us.

Yes. Then we could touch a little bit on the unfortunate COVID pandemic going around the globe. And we have been discussing that topic a lot in our quarterly reports and, of course, from -- mostly from the human pharma perspective, everybody knows all the challenges in the logistics chains and then some of the peak demands for certain products. But from the Animal Health business side, what can you tell? How has the COVID-19 impacted your area?

I would say, it's really country dependent. But first of all, I would say it's been -- or second, I would say that the time which the owner has spent now with the pet at home has actually made them see a lot more concerns maybe with the pet, which they had not because they've been working from distance. So what we have understood, especially in certain markets, is that there has been a lot more spending at the veterinarian. And also what we've seen it because people are not spending that much money on being outside in the restaurant or traveling, also the spend has gone in some proportion to the pets. So all in all, I would assume that the whole veterinarian industry, except for the beginning of the year, had a very good year. And what we did specifically in Animal Health, we did that -- we actually took the responsible -- we gave the responsibility to the local organizations which means that I would not sit in Espoo and talk to a guy to -- talk to somebody in Poland and tell him what to do. But actually, he would take the responsibility for the operations in Poland really actively to see when can we visit the customers, how can we visit the customers. And of course, I must say that it's been a change from being the on-the-road salespeople to the digital salespeople. And for some people, it's been very helpful. And for other people, it's not been that easy. But really taking the local approach to that and, to that note, I would say that the results for last year also showed that all the local organizations actually managed to grow, which is, well, actually the second year in a row. So it's a really positive sort of spin on that.

And as far as I'm concerned or have understood that also going to this virtual world from face-to-face meetings taking place all over the world, you have actually been able to get more audiences to different kind of sales events, et cetera. So can you tell us something about that?

No, absolutely. Making a launch during this is very difficult because, of course, in our mind, we were planning, how would you do the visits and how would you do these things, but we actually made a lot of -- and we were fortunate enough to launch Clevor, for example, in Scandinavia during that time last year. And from a usual sort of webcast, which we would have 20 to 30 to 40 people, you had 900. And of course, that sort of changed the whole dynamic on everything and how much effort you put behind that. So from that point of view, we really looked at it from a long-term perspective that how can we sort of even utilize this more. So it's been a really good run.

As a final question, how do you see things going forward when, hopefully, at some point, this pandemic relieves and you know the world opens up again?

Well, I can tell you that there is a lot of partners out there, who wants to have a sit down with one -- I mean, we've been spending a lot of time on the camera behind because -- of course, because of the change last year. There was a lot of changes, and we had to sort of start building things. And of course, it's easy when you know the people around the world, but I think that somehow we need to get back to actually talking face-to-face because even though business is great, but you need to have a full understanding of the operations and how people work and how they actually feel and do. So I think it's going to be a relief for everybody at that time when something is lifted.

Thank you, Niclas. Always a pleasure to have a chat with you.

Thank you, Tuukka.

In terms of net sales, Orion's Specialty Products business units is currently the biggest one in the group. Coming up next, Virve Laitinen's update on that business.

Thank you very much, Tuukka, for the introduction, and great to be here today. I will, in my presentation, briefly present Specialty Product business. I will share our insight for the market development, specifically with the generics. And then in addition to that, I will share our strategic target and strategic actions and how we are supporting Orion's growth path. Specialty Products business is really a partner for the Nordic healthcare as being a #1 company in Finland and being top 5 generic company in Scandinavia. We also have a strong position in focus segments in Eastern Europe and CIS, specifically in Poland and Russia. We also have our products in global presence through partners. In this business, you need to have a competitive product portfolio offering. We have that, but we also have a very strong product portfolio renewal agenda. In this business, you really need to have compliance, service level and cost efficiency in place. And we have a strong compliance background, we have a very competitive service level and, in addition to that, our business model is very competitive. We have integrated own production operations. In addition to that, we have a very strong network for the partnerships and suppliers. And also in this business, it's extremely important that you improve your operations every day to be competitive. So the continuous improvement culture is really in DNA when you are running this business and operations. Specialty Products business is Orion's bedrock. As you can see, we have a very strong track record developing our net sales step-by-step during our history. 2018, there was a drop because we had system changes in our key markets. But I see that now during the last years, we have managed to improve our operations and our portfolio. And we with our strategic plans are back into a positive trend of the net sales development. Our sales 2020 was EUR 498 million and 75% is coming from the generic drugs and 25% is coming from self-care products. From the geographical point of view, we are a very strong player in Nordic markets. In Finland, 56% and in Scandinavia, 16%; the rest of the Europe is 14%; and also the rest of the world with the same amount. 2020 was exceptional year, specifically with the operations point of view. In the beginning of the year, we knew that there is going to be decline of the biosimilars sales because we lost some tenders. We had a EUR 20 million hit there. And we also knew that there is a price erosion continues in our key market areas. But when we had in quarter 1, pandemic situation and COVID situations, our supplies were very well into markets, and we managed to handle the increased demands. That increased demand leveled off during the year. So the end results having a 3% growth from 2020 -- from 2019 was very good. And if you look at the trend in long term, in a way, if you think that 2019 was a normal year, it's great to see that we have a very solid business in Finland in spite of price erosions. And we have managed to grow significantly our small molecule generic business in Scandinavia, and all other regions are also showing positive trends. Competitive product portfolio enables us for the business growth. You can see here our biggest brands. We have the basis for the portfolio coming from old brands and legacy brands. We also have offer for biosimilar products. And in addition to that, we have in our top 10 list several self-care products. The self-care product business in Finland was more than EUR 100 million during 2020. And we have several strong local brands and also a very customer-driven portfolio development in place. In a big picture, many of these products are in Orion's top 10 list and, in a way, it's great to see that we have several products in our portfolio. And this is really a risk balanced portfolio. And really, the key competence here is really the complexity management in the product portfolio and also in the operations. Generic markets offer sustainable growth opportunities. If you look at the trends in general in generic markets, it's -- we see that there is all the time increasing demand for the cost-effective treatments. We see that there is a next phase of -- next wave of patent of products coming to the markets. Those offer significant growth opportunities in near term. And in addition to that, we see specifically that biosimilars are entering to the market very heavily. Of course, in generic business, you also have to understand that there are those challenges for the price pressures and of course, always challenges with the global supply chains. In a big picture, global generic markets are about 30% from the whole pharma markets. The growth has been 5%, and it will continue according to estimates at the same level. In Europe, we have even higher growth opportunities there. Specifically, we still have opportunities to improve the generic penetration rate. European biosimilar markets, so 23.5% growth opportunities. And of course, Asia is also very promising. Here in this presentation, we also show the figures for the Nordic markets. It's clear we also support these figures, but our estimations for the market growth are little bit more moderate. We see that there is a growth opportunity from 3% to 5%. And the key difference here comes, of course, compared to the external figures, the price level estimations what we have done, but great opportunities to grow here. If we go to the Nordic generic market specifically, I'd like to highlight here the data, which shows that the generic pricing in Scandinavia still remains among the lowest in the Europe. And we have understood that, and it's extremely important that you have competitive operations there. And we see that this price erosion continues. There has been -- during the pandemic period, there has been some temporary price increases. But we don't see that those will continue. And we don't also see that there is a very big major system changes in midterm. Products availability is extremely important. And it looks like that, of course, these challenges will continue in this Nordic market area also. If you look at the tendering practices, it's -- there has been a lot of development activities in that area, so-called on off tenders with very demanding short lead times, delivery times and with penalties, with nonsupply situations are very challenging in long term. So hopefully, in this market, we will find solution that the products availability and pricing is optimal level. We have a very solid position in the Nordics. In Finland, we are clear market leader in pharmaceutical markets. Totally, the Finnish markets are around $2.9 billion markets. And our estimation is that and our facts are that 25% market share is for the reference price products in Orion, and we also have same kind of -- same level of market share in -- with the self-care products. And in average, our development with the value and with the volume has been better than in market in general. We also have a strong position in Scandinavian generic markets. And there, our position varies depending on the year and depending of the success of biosimilars. But we are -- we have improved our operations and performance really through better portfolio, product portfolio management and through successful launches. So this is a growing market, and we still have opportunities to grow there. Specialty Products business has had an important role already in the history for the company. And nowadays, we have even more important role to also have a growth strategy in place. And our strategic target is to become the leading generic pharmaceutical company in the Nordics and also optimize our assets globally. We have 4 strategic objectives. The first one is to maximize value of our current portfolio. The second one is to establish generic growth platform in Europe and Asia. The third strategic objective for us is to develop our product portfolio through in-licensing, generic development and asset acquisitions. And the fourth strategic objective is to develop our strategic partnerships through the value -- throughout the value chain. And I will give now some concrete examples how -- what we have already done and what kind of plans we have with the generic growth platform building in Europe and Asia and also some concrete examples with the product portfolio development. Like already discussed, we see that the generic business opportunities in Europe and Asia also offers opportunities for midsized pharma companies. In Europe, we already have a very good commercial presence, and we have a history there and experience there, and we know the markets. And in fact, we already now have some Specialty Products business products in the market. But we have now started to work with our current portfolio, and we see that we have growth opportunities. And at the moment, we are in the process to prepare tender-based product portfolio for the key markets of the Europe. And that work is ongoing and up and running. As a tool, we also have in-licensing, and we see that there could be a niche opportunities through in-licensing and also M&A opportunities are our -- in our toolbox. With the in-licensing opportunities throughout Europe and also with M&A opportunities, we always like to see the synergies in Orion level with Proprietary Products business and with Specialty Products business. And it's extremely important that we find those synergies. And we also have that kind of businesses with inorganic growth, where we have strong opportunities for growth. Then Specialty Products business is also implementing Orion's Asia strategy. We also maximize the value of current Orion's generic product portfolios. We have already now done changes and variations for the -- almost for 25 products and totally 5 new product filings have been done for the Asia for the new markets, which we have repatriated. And actually, we have been already into Asia through the partner sales models a long time. So the stronger commercial presence in Asia enables also Orion's Specialty Products business to maximize the value and growth opportunities. Then some examples from the portfolio development point of view. We have a wide product -- wide and competitive product portfolio already now available. And actually, we have almost 25 global dossiers already available for the global sales. And at the moment, we are doing a lot of activities to make it more profitable and improve our product portfolio. We have concentrated a lot of the supply security so that we have alternative suppliers, alternative sources available for our top brands. Then we have also a lot of operational excellence activities in place to improve our cost of goods. We have several programs ongoing in our laboratories and also in our production. But we are not only developing internally our portfolio, we also have several development activities with our key partners. Then in our toolbox, we have also in-licensing opportunity. So we have a strong history bringing new products through in-licensing to Nordic territory. And during the last 5 years, we have yearly basis launched from 30 to 40 new products to the markets. Now we have little bit, in a way, upgraded our minimum requirements for the business. And our strategic target now is really to have 20 new products to be launched as of day 1 or priority class. So that's a very good tool and way to increase and improve our product portfolio. In addition to that, we have a niche generic development activity started. So we are building a development pipeline for that area. At the moment, we are running 5 projects, and our strategic target is to have 5 projects every year to be started. And we have several strengths in this area. We have a very good R&D support for this. We have a very good knowledge there. We have experience to do also R&D joint development work models. And in addition to that, we have good experience for industrialization and operations point of view to product these products. And of course, we already know the European and global markets and have good registration knowledge to take the markets to the registration phase and, of course, after that, to the commercialization phase. So these are the steps towards the more -- to develop our product portfolio. To summarize, my key messages here. Specialty Products business is a bedrock for Orion's business portfolio. We have a strong position and good performance in Nordic. We know the markets, and we have -- that's a very good basis to take a wider approach for the geographical expansions. We have a strong agenda for product portfolio development. We are entering to Asia and Europe and, all the time, we are improving our operations to be competitive in generic business. These are our steps towards the contribution from Specialty Products business to Orion's growth. Thank you.

Thank you, Virve. So we are halfway there. And now it's time to take some breath and have a short 10-minute break. By the way, during Virve's presentation, if you heard some rumbling noises, that's because of there's construction work ongoing nearby, and they are doing some explosives. So no worries. But hopefully, that didn't disturb you too much. And luckily, we are a bit ahead of our schedule, which is okay because then we can allocate a little bit more time to Q&A session, which will start right after this following 10-minute break. So stay tuned, we'll be right back. [Break]

Welcome back. I see you have been very active with your questions. So we'll jump right into the first one.

So here's a question from [indiscernible] Rouse. How do you see Stalevo, Comtan and Comtess to develop their sales in the coming years? How long this boost will last which you are seeing when you are selling these drugs now by yourselves, not through partners?

I would say that the sales in coming years will be relatively stable since we can change the dynamics of the market. There are competition and prices are already eroded. But of course, in countries where we now sell ourselves, so it gives us a better margin, and we can also invest to them.

Then the next one from Sami Sarkamies. Inorganic growth seems to be higher on the agenda. Can you elaborate on its role when thinking of the 2025 targets? How material contribution should one assume from in-licensing and M&A when thinking of 2025 targets? And to that, we have also another question, which is asking that are we looking for one single big one or multiple midsized contracts with, for example, in-licensing? I guess, Timo, you will take it.

Yes. I can dive into that. And I'm sure Jari, our CFO, will continue to discuss this matter in his presentation. But what we've indicated several times earlier is that the target of EUR 1.5 billion that we've set for ourselves, it is a challenging target. There's no question about that. But we have 4 years, 4.5 years to work on that, and we feel very confident on that. But of course, having then in-licensed opportunities, product portfolios or potentially even M&A in terms of acquiring an organization would give us headroom in that. And of course, the way it's difficult to say how the opportunities present themselves. But at this stage, the way we are allocating the capital of the company is that should there be an M&A opportunity, and I'll start with that. Of course, it's unlikely that we would enter into a transformation type of transaction. We'd rather, I think, given the history of the company and the very strong culture of the company, we'd prefer to do smaller acquisitions or portfolio acquisitions that we could easier integrate in our current operations. Then in terms of the licensing, we are looking through the entire spectrum of the licensing in early stage, which would be part of our R&D activities, or be those later stage that are closer to the marketplace, those then would be, obviously, to the commercial side. And also, those, the way opportunities present themselves, we respect, of course, that given the size of the funds available on the capital, it probably makes sense for us to look for smaller opportunities where we could then contribute and make those opportunities and investments then really to fly. That would be our contribution into those.

Thanks, Timo. There's a follow-up from Iiris Theman, who's asking that how much your sales target of EUR 1.5 billion requires acquisition-driven sales? And then another one, you haven't specified peak sales for Nubeqa. Do you think that Nubeqa's peak sales could be higher than what your largest drug Parkinson's recently was in the history about EUR 270 million?

Yes. I think we should remember that licensing, especially in terms of the Specialty Products and Animal Health, that's bread and butter. That's what we do all the time. And as Virve in her presentation presented, that is one very important element in our growth story. And we do these deals all the time. But I guess what the question is to the end of Proprietary Products and would there be a significant transaction that will be required as a binary event. And as I mentioned, we feel comfortable, yet, of course, challenging one, the target that we set for ourselves. Are we able to then complement our own organic growth with a transaction that would be material, that would be great. We'd welcome that if that makes a good investment case. But as of -- in our drawing boards, that's not something that we say that is a mandatory, but would give us certainly more leeway and headroom. Then in terms of the Nubeqa, here, we -- as we have, and we continue to speak the partner line here, so anything related to the Nubeqa sales target, we'd advise you to take a contact with Bayer, who are in the front line of the patient and, of course, with the sales. We can only echo the -- what they -- what Bayer has said, the opportunity presents itself in excess of EUR 1 billion, and our share of that is that what we've indicated earlier, roughly 20%, and it's a little bit sliding scale in that.

Thanks, Timo. Then going back to Satu. There's a question from Jo Walton about our Southeast Asia operations. So how many people do you now have on the ground in Southeast Asia? And which other countries you look to invest in? And should we think so -- the analysts think of this geographic expansion as a dilutive to Orion margins?

So in Southeast Asia, in those 3 countries, our portfolios are still quite limited. So we mainly talk about Comtan and Stalevo and then couple of other smaller products. So therefore, currently, our team is about 20 persons. But of course, then we are ready to expand while the portfolios grow. About this dilution of the margins, that's on the contrary. So now when we have our own -- we book the sales, and we don't have the partners in between. So then actually, our earnings are better than before.

Thanks, Satu. Then we have a question related to Animal Health. So this goes to Niclas. There's a question asking that, could you repeat what was the change in the Scandinavian organization, the headcount probably after this latest?

Okay. The change pretty much was that we focused on finding a solution for the model which we want to sort of go forward with. So we looked -- at most, we had around 30 people in Scandinavia, but working in different segments in different markets. And then by the end of the year, we actually -- we are around 20 people in specific segments in all the markets. So that was really a concentration of manpower and having the right people in the right places.

Thanks, Niclas. And Virve, I haven't forgotten you. There's a direct question to you. So this comes from [Julius Rapeli.] He's asking in Specialty Products, you mentioned the target of aiming in-licensing of around 20 new products per year. Julius wanted to know how has the development in regards of in-licensing been historically?

Yes. So like already discussed, in-licensing has been in our toolbox for a long time, and it's really as part of the normal business. So we have year-by-year successfully been in-licensing products and taking them to effective launch process and commercialization. So in a way, we have the processes, good network in place and practices in place.

Thanks. And there are several questions related to biosimilars because we were showing on our slides that we have had recent headwinds from those, but then going forward, we again see opportunities in the biosimilars. So could you give some or shed some light on what to expect in the coming years?

Yes. Like I already discussed, we have, at the moment, 3 biosimilars. We're offering those for the Nordic markets. One -- 3 for Finland and 2 for Scandinavia. So we know the markets well, and we are experienced of the dynamics of biosimilar markets. And we have several partner discussions ongoing. And like I already said, there is huge growth opportunities. Several of the molecules are coming off patent, and it's a great opportunity. And hopefully, we can, during this year, give additional informations concerning that product portfolio development.

Then the last one by now to you, Virve. You referred on your presentation to a 7% growth estimate for the European generics market. So the question from Sami Sarkamies is that what level of growth do you see realistic for the Specialty Products business?

Of course, 7% is a very good like working hypothesis. Of course, everything is very much dependent on how well we manage the portfolio development and how successful we are with the registration and commercialization and what kind of price levels and structure of the portfolio we will manage to get. So that's good working hypothesis, but let's see how we succeed with that.

Okay. Virve, since you are obviously on fire, still one more for you this time. What kind of pricing pressure you see in the generics products? And are there any regulatory changes taking place, for example, in pricing, which could affect Orion's profitability?

Yes. We don't see that there are any major changes for the pricing systems and structures, specifically in the Nordic markets. Our experience is that the price erosion with reference products is around 5% per year. So we estimate that will be in a way the level at least in midterm. So no major changes. From our point of view, we don't expect.

Thanks. Then turning back to Timo. This is more a strategic one from Jo Walton. So is Animal Health still a strategic business for the group?

Well, absolutely. I think what we've communicated over the years is that Animal Health, it has clear synergic effects from both R&D where whatever compound we come up with, we always look for utility of that compound, both in the human side as well as in animal health side. And I think some of these compounds have found their ways either first to animal health side or, in some cases, only to animal health side. So that makes us to squeeze the lemon dry. And then, of course, the entire operational part of that. That's the same. GMP is the same, whether that's a human product or the animal health product. Of course, then the customer interface is different. That clearly is so on certain regulatory aspects as well. But we feel very comfortable of having Animal Health in our portfolio. We think it's a very nice growing business that provides opportunities. There's a lot of value that we can create by expanding the operations. I think we have a great track record also in our R&D and also attracting world class partners. So absolutely, that's an integral part of our business.

Thanks, Timo. Then turning back to Satu. This is a bit puzzling question. I'm not quite sure where the question refers to, but let's try. On the Easyhaler, Orion has not been able to achieve presented market growth rates with Easyhaler franchise in the recent years. Can you elaborate on why this has not been the case? And why do you think it could be different going forward? And can you confirm that Connected Easyhaler is compatible with the existing inhalers as an add-on? And how do you expect this addition to benefit our sales in the future? Quite many questions you can ask.

You got to remind me about the last one. So starting about the market. So I don't know where this person who asked this question is coming from and what data is he looking at. But based on the IQVIA data, so the last year, the asthma market in Europe, it grew by 4%, and our growth was 10%. So I would say that Easyhaler is growing faster than the market. Of course, the start of this year has been challenging, but so it has been to everybody else as well. So -- and we still have many months to go. So I'm confident.

Thanks, Satu. Good answer. Then we still have time for one question, and I will send this to Timo because this is fairly interesting. Please, can you elaborate on the Future 2025 project on productivity, which was highlighted in your slides?

Yes. This is a program where we are seeking a major transformation, how we do our internal processes; in some cases, how we interface also our partners. The backbone of this will be an information system change. But it's not only that, and it's far beyond that. I think anybody who has taken part of a major information systems change, be that SAP, be that Oracle or other systems, know that, that program also presents other opportunities. And in our specific case, we have a great leadership for that program, very experienced one. But we are especially now focusing not on the technical side of that. But we put a lot of resources, thinking and -- on actually capturing the entire value, how we will run our businesses, be that in the shop floor, be that HR or be that our supply chain logistics of that. So there will be multiple interfaces that will affect how we will do business and run our internal processes more efficiently, also providing -- utilizing, of course, the today's information technology to relieve work of our colleagues to more value adding, where that makes sense, where that is possible. And this is -- as the word or the nametag already says, this is a multiyear program. So it's not a conversion of IT system only. This is -- of course, provides certain tools for that, but it's much more than that. And that's why we are focusing, especially on these new processes that will be enabled partly by the new IT systems. And we think this is an important element in making Orion productive also to the second half of this decade and years to come.

Thank you, Timo. But now we need to move forward. For the information to the audience, we have here a couple of R&D questions, and we will revert to those in the next Q&A session after the presentation from our R&D Head of Outi Vaarala. So you haven't been forgotten. We will address those questions in the next Q&A session. And now it's time to move forward to our next theme and the first speaker of the second half of our event.

Good afternoon, and welcome back to the presentations. So over the next few, 10, 20 minutes, I will discuss a little bit Orion financial targets and the growth and how these 2 topics relate to each other. So putting a little bit more around the topics which are -- were discussed during the Q&A session. Just as a reminder, so these are Orion financial objectives which have been in place already for quite a while: growing net sales, keeping balance sheet strong, maintaining good profitability and distributing healthy dividends. All the last couple of years, the focus has been on this EUR 1.5 billion growth target, which is a little bit or more specification on growing net sales more rapidly than the market in general. So it's putting it in more clear picture. But of course, we need to hear, remember that this is only one of the targets. So financial targets are all important, and we need to grow the right balance. So even though focus in the discussion has been very much on this EUR 1.5 million (sic) [ EUR 1.5 billion ], I think it's good to remember that this is not a stand-alone target. So looking at a little bit back to the history of how have we been performing in the path related to these targets. So it's clear that on the balance sheet side and the dividends, we clearly have been meeting the targets for many, many years to the history. Also, the operating profit, most of the time, we actually have been above this 25% level. But where we have been struggling a little bit is on the growth side. So the net sales has been relatively flat for many reasons over the last 5 years. And that's one of the reasons why growth has been so much on the table in our discussion for the last few years. But why is growth important? I just said that it's only one of the targets. But in many ways, like the previous slide demonstrated, that has been the part of the targets where we have had more challenges than any other ones. And also, one can claim that the growth is actually the target which is driving many of the other ones as well. It's clear that if the company doesn't grow over the time, it will be very difficult to maintain healthy margins and good profitability. It's also, I guess, quite clear that if you have larger scale of operations, it helps in many ways. So growth creates growth. So we have more to share the fixed costs. We can also invest more on the growth initiatives, whether that's R&D, whether that's M&A. And of course, it also allows us to take more financial risk when we have a larger scale of operations. And then, of course, last, but definitely not least, this is a knowledge-based business. So even though investment fixed assets are important, ultimately, the question is about the people. And being a growth company definitely helps us in attracting and retaining the best talent, which then helps us grow also in longer term. So growth is very important, not only because of the growth but because it allows us to invest in the future growth, whether that's R&D and anything else. And as a consequence also, in long term, the profits and dividend should grow. And because of that, we believe that we can create shareholder value. So growth is one of the big drivers, and that's why it's a very important topic to discuss. Then, of course, an obvious question especially for a CFO is that how do you then find the funds to really support the growth. Traditionally, Orion has been mainly growing through organic ways but, of course, also, organic growth requires funding. One obvious way is, of course, to find the right balance between the bottom line and the cost structures, especially in Orion, where, for example, R&D is not capitalized. So we are booking through our profit and loss statement all the investments in our R&D over the years, which means that if we are investing more in R&D, then, of course, we will have lower net profit and, as a consequence, also somewhat lower capability to pay dividends. So it's an investment for the long-term growth. Partnering has been one of the ways Orion has been funding growth. Of course, it's not only a question of funding. The partnering has many other aspects, which one needs to remember. It brings us, of course, risk sharing, it brings us knowledge and it also brings us commercialization capabilities in those geographies where Orion is not present. But there is also downside. We all know that Orion gets roughly 20% royalty on the Nubeqa sales, which is, of course, much more smaller number than 100% of sales, which you are enjoying if you are not working with partners. So it's a balancing act but definitely a way to fund growth. We, of course, can divest existing assets like we did 3 years ago when Orion Diagnostica was divested. We have also been looking a little bit of other ways of finding especially R&D funding. But because of the IFRS rules, it's been very difficult to find ways where this kind of funding would be anything else than fairly expensive bank loan. And then, of course, finally, it's also part of funding growth is that we allocate our resources right. So these are used for the organic growth. But of course, if we are then talking about larger onetime events, we need also additional funding like bank loans and then, recently, a new tool in our toolbox. After the AGM this year, we also have a possibility to issue new shares and generate new equity that way. So how much capacity do we have for these activities? I guess it's fair to remember as a basis that the amount, of course, is, to some extent, dependent on what type of assets we are looking at. Are we looking at assets which start immediately generating cash, start immediately creating new funds which can be used further? Or are we talking about assets which will still require additional funding before they become cash generating? Also, another thing especially related to this equity ratio target is that we need to know this is a long-term target. It's quite natural that there will be points when we will show different numbers. For example, during any given year, our equity ratio is temporarily significantly lower after we have paid out the dividends. And also in midterm, if we think of acquiring assets that first require some further investments, then, of course, we will need to see that the equity ratio is not limiting us making good investments. But then when we are talking about euros, because of our debt-free balance sheet, we -- or as any day today could raise EUR 300 million to EUR 400 million of debt without sacrificing the equity ratio target. But now with this new toolbox, having the right to issue up to 14 million new B shares, we can talk about a number which is more than 1 billion. So in addition to the current debt capacity and the actual equity, it, of course, means that when we have more equity, we can also increase the amount of loans we can range or bonds. So we have quite a lot of possibilities today compared to what we have been using in the past for these type of events. Of course, when one starts to think about how much does that mean, Orion's current valuation is roughly 5x sales. So using that as an example, this EUR 1.2 billion would translate into EUR 250 million of top line. And assuming a little bit lower ratios, we are talking about as large numbers as EUR 300 million to EUR 400 million of net sales, which could be achievable with this type of funding. But of course, keeping into mind that we also have these other financial targets. So what type of targets are we then discussing about? This is a little bit more in generic terms. Satu and Virve already discussed a little bit this topic, and it was also discussed in the interviews and Q&A. But I guess it's fair to say that we are looking at inorganic growth opportunities in all of our businesses, maybe somewhat less in case of Fermion. But when we are talking about proprietary business, specialty products business and animal health, we want all of those businesses to grow. And all of them are areas where we are considering M&A transactions in addition to the organic growth. And this is important because the fact is that Orion has, especially over the past couple of years, spent quite a lot of effort and screening a lot of opportunities for inorganic growth. Like you all have seen, none of those have yet materialized, which only demonstrates how hard it is to find targets which really are synergistic enough with our operations. And if we wanted to limit even further our scope of inorganic transactions, it would be even more difficult ever to find targets which really would materialize. So I think it's important that we are looking broad enough but, at the same time, maintaining a very good financial discipline. I think that's very, very key because growth is only one of the targets. I mean we don't want to generate a lot of growth without no profit at all. So growth is not the only goal here. And that needs to be kept in mind also in the case of mergers and acquisitions. And one specific example there is that since our financial targets include operating profit target and dividend target, it means that any sizable acquisition typically brings also relatively sizable amortization effect, which means that if we were only to look at EBITDA measurement, it would be easier to find a target which meet our financial criteria. But when we also need to be able to find targets which are synergistic enough and which have high enough EBITDA to start with and still, after the amortization, generate enough of actual profits, that's where this becomes really, really challenging. So what are we looking at? What type of assets? So of course, we definitely -- in order to support our 2025 growth goal, we want to see assets which generate business already today, so both sales, both cash flow and profits. But we are also looking at, especially on the proprietary side, more late-stage development assets, which means assets that are relatively close to commercialization, which means that these types of an assets also can contribute our growth in the coming few years but which are not yet doing that. And then finally, it's clear that we would like to see a little bit broader clinical pipeline in our R&D. And that's why we also are looking at assets that are still under development. But when we are thinking about the capital allocation, I think it's clear that the assets today generating order and sales and cash flow probably are the ones where we can afford to put most money. And then in the early-stage development assets, that will be less. This ratio becomes, of course, slightly different if you then take into account the impact of time and also the impact of money we still need to invest in making these assets all the way to the market. But in talking about the initial investments, the assets which are today already generating sales probably are the part where we can spend more money than on the other ones. And then finally, to kind of summarize the discussion about the relationship between growth and the financial targets. So growth is definitely very important. And Orion has been aiming at growth for -- of course, also in the past. We have been investing a lot of money on R&D over the years and continue to do so. We also have been gradually over the last decade, 10, 15 years, expanding our geographical reach. I mean if you want to go 15, 20 years back, Orion was basically in the Nordics and a little bit in some countries in Northern Europe. Today, we are practically everywhere in Europe and, from the beginning of this year, also have taken first steps in Asia. So it's -- and we have also been developing all of our businesses. Of course, in animal health, we now have this temporary scaling back because of the loss distribution rights in Nordics. But in-licensing and M&A definitely is something we all have been looking at more as a tool for growth over the last few years. And of course, we, all the time, even though growth is important, need to remember that the compliance service level cost structures are essential also for growth. And if we succeed in doing that, we see that the operating profit target is quite achievable. But like I said earlier, there is definitely a challenge to this target in the M&A-related amortization because quite a large part -- of course, part of the acquisition cost is always allocated to goodwill. But there -- also there, you need to be able to do the calculations every year to demonstrate that the value allocated to goodwill still is valued. So M&A is more challenging maybe than organic growth from this financial target point of view. Equity ratio, yes, 50%. But like I said earlier, it's a long-term one. But maintaining that, of course, requires good discipline in managing working capital and managing our investments and also good profitability. But M&A, if we take a lot of debt in without raising new equity temporarily, that might have an impact which takes us very close to that 50% or maybe, temporarily, even a little bit lower because we want to continue distributing also good dividends. Dividends, of course, are very much this level of dividends required that profitability stays in healthy level. But knowing that sometimes growth requires a little bit temporary investments, we also have a little bit of a buffer. So even if in some years, the operating profit would be lower than the dividends we have been distributing over the last few years, we still have some buffer left, for example, from the divestment on Orion Diagnostica for years back. So we are confident that meeting this target is also quite doable even in case we invest money for growth. So financial targets all are important. But we see that in order to, in the long term, be able to meet the other 3 targets, we also need to find ways to grow the company. Without growth, meeting the other targets also is almost impossible, at least in mid- to long term. Thank you.

Thank you, Jari. And now it's time to move on from the figures and financials to the exciting and inspiring world of science. Next, Outi Vaarala will guide you through the latest developments at Orion's research and development.

Good afternoon, everybody. It's a great pleasure for me to be here with you today and share some news and updates from our R&D. I have been in charge of Orion R&D now for -- exactly for 1 year time. And you can believe we have done a lot. And it is a pleasure for me to tell you about this journey of R&D renewal we have done together, and that journey continues for sure. Renewal is never ready actually. My disclosure is -- disclaimer is here. And then I -- before I go to the R&D, I will talk something -- I would tell something about myself because I'm new in the company. I joined Orion 2 years ago as VP of Oncology Research. And before that, I was working as VP Research in AstraZeneca Sweden and U.S. And actually, I was triggered by pharma industry when I was working in the European Medical Agency (sic) [ European Medicines Agency ] as a permanent external expert. Before that, I was working in the academia as Professor of Immunology, and I made the change to pharma in 2014. And by training, I am medic. And now to more important things. R&D renewal is my first part of the talk. And then we will go to research focus areas. And finally, I will present clinical pipeline to you, some exciting clinical projects we have in our portfolio. Let's start with the renewal of Orion R&D. So naturally, you can appreciate that when I was nominated as a head of R&D, my first remit was to build a balanced pipeline, strong research pipeline and strong research projects to feed continuously our clinical portfolio. And actually, the starting of the renewal was time-wise or timely, very well motivated and established. We had a strong history and success story, very recent success story in cancer drug discovery. You remember our darolutamide, which is now a very good effective treatment for prostate cancer. Orion has also a history of success in drug discovery in Parkinson's disease area. And I need to mention that our ALS Phase III program, which we conducted in rare disease area, shows the ability of Orion to conduct really smart clinical programs. Orion has also done very smart investments during the past years. And it is a fantastic opportunity for us to use large molecule-based programs nowadays. We have also invested in digital medicine and AI. And it's not a small thing that when I now steer the renewal of R&D, I can work in a company with a solid financial basis. Winning in drug discovery has 2 major factors to achieve. And one is success rate of the projects, and the other one is speed of the projects. And there are a lot of analysis done in pharma industry, showing clearly that to be successful in these 2 factors, you need to build science and data-driven organization. The focus is important to find, but the basis of everything is research and science. So this is the basis of our -- that means that we are guided by the patient's disease. So in practice, we recognize different disease subtypes. We dissect the disease drivers of these subtypes. We develop targeted drugs to the mechanisms regulating the disease drivers. And finally, we identified the target patients for our treatment. And this is the way how we want to work. And I have here, as an example, prostate cancer, one of the major indication important for us. And here, you can see and you will hear that we have developed darolutamide. We have discovered darolutamide at Orion to treat the patients with nonmetastatic castrate-resistant prostate cancer. And we are now exploring other indications for darolutamide. And finally, we have an interesting molecule in our clinical portfolio targeting the patients with still unmet need, namely the patients with metastatic castrate-resistant prostate cancer. So we follow the patient's journey. Here, I have listed some key changes we have done together here at Orion R&D. The first one is the story of -- the importance of science and research. So we have strengthened our research departments and created actually new -- 3 new research departments to drive target identification and validation, to be strong in target confidence. We have also allocated resources according to our prioritization. So we have prioritized our projects, again, based on the principles I mentioned. And then we have reallocated our resources accordingly. We are going -- we have simply decided that we will do focused clinical trials on biomarker-selected patients. This is our remit. And then we have also created a dedicated team to support our in-licensing and partnering activities in the field of early projects and also late-phase projects, clinical projects. Already, you heard from Virve that we are participating in generics development. We have a team dedicated to ideation and formulation. And we do generics development, important business area for us. And finally, we have created a new team working in the field of microbiome research in animal health, and I will tell more about that later. And now we will move on to our research focus areas. Here, you can see the 3 new research departments I already mentioned: neurological disorders; research department, focusing in disease drivers related to pain, neurodegenerative proteinopathy and genetic disorders, rare genetic disorders in neurological disease area. Oncology research is doing -- or exploring immuno-oncology area, cancer genomics and signaling area. And we have a team working with antibody drug conjugates. The third department is discovery sciences, and they explore new therapies for us. And we have the animal health microbiome laboratory there. And they are also responsible for discovery technologies. And here, you can see that we have decided to focus on certain shared disease drivers and mechanisms shared between all these 3 different indication areas. So we work with ion channels as targets. We also study the mechanisms of lysosomal clearance and other mechanisms related to protein homeostasis. And these same mechanisms working in these, we focus on these 3 areas. In oncology research, we have also focused in our research on the disease drivers. We have a team working with DNA repair mechanisms; CAR T-cell therapy, we call it FiCAR T-cell therapy in collaboration with our discovery new therapies team. And then we have an external collaborator, Finnish Red Cross Blood Service here. In the neurological disorders research, you saw a lot of collaborators. So we strengthened our muscles in research and drug discovery by working with important collaborators. And then as I mentioned in Discovery Sciences, we are working with new therapies. And we have selected cell and gene therapy as an area. And then I will show more about that in the next figure. The point here is that we have our own CAR, chimeric antigen receptor construct. And with this construct, we explore the opportunities for CAR T-cell therapy in solid tumors area. And I already mentioned that Finnish Red Cross is here, a very important collaborator for us. This is an exciting area for Orion. And we are investing a lot of resources for this area. And this is now our R&D research pipeline as it is at the moment. You see here that we rely on small molecule-based projects. This is our strength. We have good knowledge and capabilities in that area. But we also have here new modalities. And you can appreciate that during the following 12 months, according to our plans, we will have 3 new clinical projects in our clinical portfolio. So I'm very happy about this progress. And I can tell you that our research departments are really busy and they are doing fantastic, high-quality drug discovery. Clinical pipeline. And here, first, we have the projects that are related to our old friend, darolutamide. These are clinical studies or trials in Phase III stage and led by Bayer, our partner. Here, again, we follow the patient's journey. We want to expand darolutamide to the indications that are new for this molecule. And these are the patients with metastatic, hormone-sensitive prostate cancer. In the earlier studies, we have learned that it makes a difference whether the patient with prostate cancer is treated with docetaxel chemotherapy or not. And this is the reason why we have here 2 different clinical trials ongoing: One, with the patients who have darolutamide and ADT with docetaxel chemotherapy. And the other one includes patients without chemotherapy. Primary endpoints are slightly different, as you can see. And here, we are waiting eagerly for the results. And we will have the results for the first study by the end of this year. Then we move on to our own new molecules, ODM-208 and 209, discovered again at Orion R&D. And these molecules are targeting CYP11A enzyme. We started to develop these molecules in order to treat those patients with metastatic, castration-resistant prostate cancer who are not responding to darolutamide and who have a clear-cut clinical need for a new treatment. And now I will share some new data related to the molecule ODM-208, and this data is from the Phase I study. And here, you can see, on the left side, the structure of our molecule. It is first-in-class oral molecule to inhibit synthesis of all steroid hormones and precursors that could mediate androgen receptor signaling and tumor growth in the patients with prostate cancer who have become resistant to the standard hormonal treatment. We have also an upside here, potential indications beyond prostate cancer, certain subtypes of breast cancer and endometrial uterus cancer. And here, you can see that our molecule, ODM-208, actually reduced serum steroid levels below the detection level in the patients treated with this molecule in Phase I on the left side. And on the right side, on the right panel, you can see that we have in that Phase I study responders. And they show PSA decrease, which suggests efficacy in the clinics for us. Again, we follow the patient's journey. We want to select the best compound for the patients with metastatic castrate-resistant prostate cancer. And that's the reason why we do now 2 clinical studies, CYPIDES and STESIDES. And here, we evaluate these molecules based on safety data and efficacy data, what you can get as surrogate markers for efficacy in Phase II and Phase I study. And we will do the decision selection of the best compound for the pivotal study by the end of this year. And finally, I will move to another area. From cancer and oncology, I will go to respiratory diseases. And I will tell you about our clinical projects in the field of inhalation and respiratory diseases. We have 2 clinical development projects. And the first one is tiotropium Easyhaler product that we are developing at the moment. And the second product is indacaterol-glycopyrronium. So we are expanding now our Easyhaler portfolio to the patients with COPD, who have the need of tiotropium and indacaterol-glycopyrronium for their treatment. This is the way we have taken with the Easyhaler platform. And then in the end, I would like to tell a few words about our animal health area. You can see in the upper figure there that during the past 4 years, we have had increasing numbers of market authorization coming. It's fantastic to see that. We have also a new molecule discovered in Orion R&D, which we have developed to alleviate anxiety in dogs. And this molecule is now in the registration phase. And then I have talked here about the microbiome research, and this is an important area for Orion. And actually, we have a long history in this area. More than 30 years ago, we developed a product called Broilact for the prevention of salmonella infection in chicken, and we will build on this. And we will -- as I told you, we have a research team working in order to develop new products for dogs, cats and swine and microbiome-based treatments. And why I want to tell this to you? Because I think that Orion has been here a forerunner when it comes to microbiome therapies. And as for the whole area of animal health, we can see a lot of synergy between human drug discovery and animal drug discovery, as Timo already mentioned. So here, we have, in the future, also an opportunity when we see the place for us to go for human diseases. But at the moment, I want to make it clear, the focus is in animal health when it comes to microbiome therapies. I hope that I have given you a good overview of the activities we have now in the R&D. We have done a lot of changes to support strong research and build strong research pipeline. You saw -- and I must say that I am surprised how quickly this has gone forward and what kind of progress we have seen and how quickly we actually see that we can translate these research programs to clinical programs during the following years. And I'm very happy to answer to your questions in the following Q&A. And on my behalf, I thank now for the attention.

Thank you, Outi, for the very insightful presentation. Now I have the pleasure to welcome Liisa Hurme here on the couch to discuss some of the global operations and Fermion issues, as Liisa is heading our Global Operations and also she's chairing the Board of Directors of Fermion.

Thank you, Tuukka. It's a pleasure to be here.

Great. I wouldn't assume anything less.

Sure.

Let's start with the kind of general and simple question. You are heading the Orion's global operations, but what do we exactly mean with global operations? Could you give our audience a brief introduction?

Sure. Well, global operations in Orion consists of our own manufacturing, sites, which we have 4 in Finland. We manufacture tablets, capsules.

Sorry, I went to get the switcher because dear audience, we also have some supporting slides within these interviews, so my apologies. But here, you can see the slide. And Liisa, please go ahead.

Okay. So we manufacture tablets, capsules, hormone gels, injections and of course, inhalators like Easyhalers. Also, we have an operation called external -- externally sourced operations. And there, we source drug products from different companies around the globe. We have more than 200 manufacturing sites that we manage through that organization. And then, of course, Fermion, which is a company of its own and has 2 sites in Finland, in Hanko and Oulu, and manufactures API to global markets and, of course, for Orion proprietary products and some of our generic products. To support these main processes, we have offices in Mumbai, India and Shanghai, mainly procurement, IM, packaging technology, items like that. And on a corporation level, we are also responsible for procurement, both direct and indirect. And we have the normal technical operations to support our manufacturing and facility management and all that.

Well, that's quite a network and a bunch of people you are handling and leaning with your team. Then I must refer to the news we announced yesterday about our Kuopio. So Orion is now investigating the possible sales of the pharmaceutical manufacturing plant in Kuopio. Can you, Liisa, tell us why we are exploring this option? And what would be the financial impact of a possible transaction? So one is to remember that this is not a done deal yet.

Yes. Of course, as part of our operation strategy, we try to reflect Orion's strategy all the time, and think what's the best possible footprint for us, taking into account the future investments and where the growth is generated. And now we decided that we'll evaluate how the Kuopio site could be benefited in another company's hands. And when you ask what would be the impact? Well, it's very early on in this process. So it's difficult to give any definitive euros at this point. But when you put it in the big picture, we are altogether 1,600 employees in operations, 1,800, if we take the quality management. And in Kuopio, there are 50 people working. So I think this kind of puts it in the big picture, but it's not material to Orion.

Definitely. Yes. So from the slide here, we can see that all of our own manufacturing sites are here in Finland, but then we are utilizing an exhausting network of external suppliers. And even though we are producing here in Finland, we do not get all the raw materials. So could you explain us then from where do we in-source and get our raw materials and maybe also some of the ready-made products?

Sure. Well, this is the map. This is the world as I see it, if we can put it that way. Although we are very self-sufficient regarding our drug production and even API production. This is how it looks like. And not only for Orion, I think this is a familiar map for any pharma company, especially on the generic drugs. Because these days, 80% of the APIs and the starting materials and intermediates for the APIs are manufactured in China. So currently, the western world is very much dependent on the role of China as a provider of these materials. And in addition to that, 40% of the generic drugs to Western Hemisphere are manufactured in India. So I think the whole flow of materials on this globe is, kind of the hotspot is in Asia and, all of the rest, we are trying to cope with that one. And it's a lot to manage, but I think we are managing very well.

In today's world with the COVID pandemia, we have read the news about supply chains and logistics chains suffering from the situation. So how challenging has the past 1.5 years been to you and your team?

It's been a challenging time. I can admit that. Luckily, we've known this world for many years, and we've been managing our risks and building contingency plans all the time for our major products, whether to generic or proprietary. So we have alternative suppliers for many of the chemicals, and we try to find different spots geographically even different spots to source from. So all in all, if I look at the year with pandemia, it proves that we've done something right. Of course, the beginning was very heavy when we started to realize how it is. And also there, it was very helpful to have our team in Shanghai and Mumbai because we heard the news very early on that let's try to prepare. And of course, we did some inventory and build the stock and so on, very early on in 2020 to be able to manage this.

And I guess that you still are on kind of an alert mode to monitor and react if there's need to do so.

You are so right. We were kind of hopeful in autumn and talking about the post-COVID era, but we've understood that there is no such, especially on the global front because it goes and comes on around the globe, and you need to know where it is active.

Sure. Then a couple of words on Fermion since you are the Board -- Chair of the Board of Directors of Fermian. And as we know and the audience knows that the strategic role of Fermion in the Orion Group is to manufacture, develop all the APIs to the proprietary products we have in place. But of course, then on top of that, we have also third-party sales. And when I think of that, our factories or manufacturing sites, they are located in Finland, and it seems that the biggest competition is maybe in the lower cost countries. So how is Fermian able to compete? What is the advantage you may have? Or how do you do that?

Yes. We manufacture for Orion, but also, as you said, for the global markets, I think you can name almost any pharma company. Big or small or medium size, so we deliver to those. And well, this is an industry which depends a lot on the volumes. You need to have a very good developed smooth process for manufacturing and large volumes. And I think Fermian, in its years, has been able to develop a very good business regarding that for some classics like methotrexate, azathioprine in buspirone. We have great, big volumes, and our prices are very competitive. And actually, the biggest market for us is United States, and the fastest-growing is India. So I think that kind of proves the point that you were making that we are competitive. But we've also invested heavily during past years. So we've invested to be able to manufacture these high potent APIs as a contract manufacturer and also for our own purposes, and that needs a specific kind of environment for manufacturing. And we've invested to a new plant in Hongkong on Hanko site to be able to manufacture that type of molecules.

Sure. You mentioned high potency APIs, that's not maybe clear to all of our viewers. So could you explain shortly what is meant by high potency active pharmaceutical ingredient?

Well, yes, high potent molecule is a molecule that can produce its effect, whether it's a healing or a relieving effect on very small doses, with less side effects when the dose is small. But that also means that when you manufacture such a molecule in your chemical process or put it in a tablet, the employees are very much exposed to that potent molecule. So even very small amounts can be harmful for the employees. So the whole manufacturing environment needs to be contained. We have isolators, [indiscernible], everything is pressurized, so that it can be safely manufactured.

Thanks. This is a good bridge to our next theme, which is actually sustainability because sustainability issues, they are becoming more and more important all the time. And in pharma, of course, for us, the most important thing is always the patient safety. That's the basis for everything. But since you are leading the manufacturing of Orion's sites, from that perspective, what are the most important sustainability issues for Orion's global operations?

I could name 3 areas. While one of those is clearly environment. And our main focus is on the carbon neutrality and energy efficacy. We've been able to decrease our carbon dioxide emissions, almost by 60% during the past 5 years. We set the target at that time in 2016 to minus 75%. So we are ahead of our schedule, which is great. We got so encouraged on that, that we, as a company defined that we will try to achieve carbon neutrality by 2030, and we have very concrete plans to go forward. And I have no doubt about it that it's doable. And of course, to this end, to this carbon neutrality, if I mentioned some things that we are doing: one is that as we use a lot of heat and steam to get the right conditions for the processes, it's very -- traditionally say heavy oil fuels are used to that all. And now we are trying to find the renewable energy sources like biogas. We have a readiness to connect to solar power in our Hanko plant. We use [ flush theme ], we recycle the [ flush theme ] and not giving it out to the CEO to the environment. So I think we are on a very good path here on the carbon neutrality. Then the other thing that I see there is the waste order. And Fermion is the guilty one there, chemical processes. They produce a lot of residues that might be harmful for the nature, and we evaporate and incinerate a lot of those. Nothing goes out to the nature. But we are also investigating different ways to do it, to get rid of those at the site with new technologies. And I think it really, what it boils down is that you should use less so the other thing is green chemistry that when you develop new molecules, you already start in the beginning to think how you could produce as less as chemicals as possible. And then solvents are the biggest material that we use. So that's also something that we regenerate and recycle as much as we can.

It sounds like you have been doing quite a lot over the past years. And then again, you still have a lot to do if I understand correctly.

Yes.

So busy times ahead also in this front for you and your team. Thank you very much, Liisa, for joining me to this discussion, and we'll continue soon with the Q&A. So our time is almost up here. We now have 5 minute break, after which we will then have the second Q&A session, where we will be, again, addressing your questions. So don't go far away, we'll be right back. [Break]

And welcome back to join us for the second Q&A session we have. Again, you've been active with the questions. So let's start immediately with the first ones we had on hold from the previous ones. This one goes to Outi. When do you expect Phase III results for the ARASENS study?

So we are expecting Phase III results by the end of this year for ARASENS study.

If I may continue here a little bit. Of course, this is all this domain. But just a reminder for everyone that ARASENS is an event, it's an event-driven trial. So it's a little bit different than typically, you'd have the patients recruited, and they are giving us exposure to the agent and then the comparator for a certain period and then that's much easier than to estimate this time when the study will have been completed and you have the headline readout whereas the ARASENS is an event-driven trial and the events that are being looked at are deaths. So as one can appreciate, the best statistical analysis that were put into this as we are then looking for the -- or waiting for the last events those are beyond our -- everybody's control when that -- those will take place. That's why the certain vagueness in this when the study will be completed and when there will be a readout of the data.

Thanks, Timo. And you may continue with the other question we had from the previous session, it's related to the specialty products. Maybe partly to the R&D and partly to the portfolio itself. Are there any products in the pipeline, which can potentially be out-licensed to regions outside of the Nordics where we are present currently?

Well, absolutely. I mean, that's bread and butter of our Specialty Products business in a similar fashion as we license in products in continuous phases, and there were numbers mentioned like 20 a year, which means more than 1 a month, so that we do all the time as well. And we've done that over the years. Partly, of course, that's also that will provide a certain backbone for our geographical footprint expansion. So that's part of that. We have also our products already as we speak, in the U.S. markets and other regions in Europe and of course, outside European part. And anything now that we develop, obviously, we'd have the -- do the regulatory part and work and commercialize those in the regions where it makes sense for us and elsewhere, we would be more than happy to and will be licensing out those assets. Absolutely.

Thanks, Timo. The next one goes to Jari. This is on [indiscernible]. So inorganic growth funded with new equity was added to the toolbox recently with 10% share issue authorization from the AGM. So why did Orion go for this 10% if you are not planning any major acquisitions, but have a preference for smaller deals instead?

Well, there, I guess, are 2 aspects to this question. First, the 10% is actually a relatively standard tool, many of the listed company here in Finland have. And then the second one, of course, is that if we think of the amount, I mean, in my presentation, we discussed that we have up to EUR 1 billion, maybe a little bit more. Even if we are not talking about major deals, but if we want to do a few slightly smaller deals with the valuations we are talking about in this industry, you actually don't do too many deals with that amount of money. We are talking about maybe EUR 300 million, EUR 400 million totally, if all the money is used, if we can identify the targets. But that means over the next several years, maybe 3, 4 smaller deals. So even with that additional availability of funding, it doesn't mean that we can afford to do any real major deals. But even a number of smaller deals would actually end up using quite a lot of money. But like I said, time will show whether we find enough suitable targets to utilize the money because first, of course, we will start with the debt funding and only if that is used, then we go to the next level.

Then continuing with you, Jari, there are a couple of questions on the dividends. I try to combine them here. So on the dividends, you mentioned about plans for more upfront spending, which can potentially impact dividends. In that context, what do you think about the consensus expectations for dividend growth going forward? Are they too aggressive? And the other question from this was around that we iterated again, the EUR 1.3 floor target for the dividend. But over the past few years, we have been paying clearly more. So again, the same question, should we rise the floor? Or will the dividends go down or what does the future look like for the dividends?

Well, I guess the floor is what is stated and like our dividend policy suggests, the Board considers every year the right balance between the available funding and the need for investment. And so far, partly due to the fact that we raised some additional funding and equity from the divestment of Orion Diagnostica, we have quite easily been able to continue with the [ 1 50 ], but the decision is made separately every year by the Board of Directors, what they propose for the AGM. But at least in the past several years, even though in some years, our earnings per share have been lower than the dividends, the Board has continued to use [ 1 50 ]. But at least [ 1 30 ] is our financial target which we have stated. And at this stage, we don't really see any reason to change the target. But the decision is made every year separately based on the situation. But of course, one needs to remember that in long term, it's impossible to pay dividends, which are more than profits. And that's why, of course, generating and growing the profits in longer-term is essential for meeting that financial target which -- where the other side, in addition to his [ 1 30 ] is that we aim at growing the dividends in long run.

Then maybe one more to you, Jari, about divestments. On assets that can potentially be divested, which would these areas be, please?

I guess, if we had them, we might have already done it, I guess, anything is for sale if the balance is correctly, I mean, I guess that's always in the life. But at this stage, the preference is definitely for growing the company, not divesting something which then would make the growth target even more challenging. Of course, we need to always consider and evaluate our portfolio to see if there are other and better opportunities. But at this stage, we don't really have anything under planning. At this stage, the focus is more on growing all of the businesses we have in hand.

Thanks, Jari. Then the next question goes to Outi. This is about the CAR-T project. And the question is what does the Finnish Red Cross bring to the project? And another one is that, is this a patient-specific or an off-the-shelf approach?

Yes. I'm very happy to answer this question. So if we think about Finnish Red Cross, they are very experienced with blood cell products when it comes to manufacturing these kind of products and delivering blood cell-based products. In addition to that role in this collaboration, Finnish Red Cross does very high-quality and good research actually. And this project is a true collaboration between Orion R&D and Finnish Red Cross. So we work together when it comes to the early research, and later, as I already told, the role of Finnish Red Cross is very obvious. And this is traditional CAR-T cell project in that way, that our first goal here is to deliver a product where we modify the patient's immune cells to target tumor cells. And this is patient-specific product. But of course, if we are successful and we are successful, so then we will move on, and we may also think other options. But this project that I'm talking about, it is a patient-specific product.

Then I have another one for you, Outi. This is referring to the slide where you showed the research pipeline of Orion currently. And the viewer asked that should I interpret the slide in a way that in the next 12 months, Orion is bringing 3 new molecules to the clinic.

I was referring to the plan that we will have 3 new candidates in the following 12-month period. And it means that we will bring these projects to our clinical pipeline during this time gradually. And usually, it takes around 1 year from candidate to the start of the clinical Phase I study. That's the median estimation.

That's clear, Outi, now. Then we have maybe more strategic questions about the ODM-208 and 9, I guess maybe Timo will take this question. So how far would Orion want to take ODM-208 and 209 before bringing in a global partner? Could you complete Phase II study and would you want to try to go further by your own?

That's a excellent question. And there is no simple answer here. Firstly, of course, it depends on the target patient population that these -- or the compound would address, would that be a very narrow specified target patient pool based on biomarkers or other mechanisms that we could differentiate the patients who would be most likely to benefit from this treatment. The narrower it is the closer it becomes to resemble a rare disease program. So that's one. And of course, the narrower it is, the more likely we are to take that further and then to enjoy and carry the risk and then hopefully, later down the road, enjoy also the fruits of that. Now the second part of that answer is that any company's situation at any given moment is dynamic. And we have to see what is the current status of our own pipeline at that time? What are the pipeline opportunities in there? What are the opportunities in the commercial side? Or in some of our other businesses. So where would we want to invest? So I think this is the interplay that we had to see in terms of the capital allocation, that's one, but especially in terms of the human resources because doing anything of these will take a significant portion of our resources. But today, the plan is that we are moving full speed ahead. And we are -- one has to remember with 208, we are in Phase II. So the next step would be Phase III. And obviously, we are gearing up for planning for that Phase III. And then it depends also what are the decisions that we'd be taking vis-ã -vis the world's largest market, which is the U.S. So those go a little bit hand-in-hand.

Then a follow-up regarding 208 and 209. Outi mentioned in her presentation that we will be doing the selection around the year-end or whenever these first programs are ready with which molecule we will take further on. So does this mean that Orion is not advancing with both of them.

Well, we have not done that decision, and I talk about the decision of the molecule that we will bring to the patients with prostate cancer indication I mentioned. And then I also talk about the upside options that we have for the molecule or the platform for the molecules, like subtypes of breast cancer and endometrial cancer. So we can also explore that option for the other molecule then.

That's a good clarification. Then one more follow-up to the research pipeline slide. So there's a question that are we able to provide any further information on the programs or on their schedules at this time?

So at this time, this is the information that we can give, and we hope that we can update about these programs very soon. But at the moment, unfortunately, I'm not able to give more information. So...

Understood. Liisa, we need to congratulate each other because we obviously exhausted all the questions. Unfortunately, I don't have here any that would be specifically directly to you. And at this point, we have also well, one more coming here. So I guess this will be the last one before we need to move forward. So you've highlighted a theoretical limit of EUR 1.2 billion firepower for deals. From what we can see, the market is becoming more competitive with private equity-backed vehicles and other companies looking for the same type of targets. Two questions; a, is it reasonable to assume you might have to pay more than you would like to successfully get deals over the line; and b, what do you plan to do differently than historically as from memory, Orion has done partnerships, but not acquisitions for like more than 15 years?

Well, I guess, like I stated in my presentation, we also want to keep the good financial discipline. So if we cannot make deals with the valuations that generate value for our shareholders, we, of course, will not then execute those type of deals. And if somebody else is then willing to pay that much, then we cannot really help, then we need to concentrate on something else. And I guess I mean times have -- are changing. At some point, we really believed strongly that the organic way will generate so much growth for us that we don't even need to look at anything beyond the traditional in-licensing. Now we have realized that there are so much, which we cannot do ourselves, that looking at outside opportunity definitely needs to be part of the playbook. So that may be the difference. And we definitely have resourced the M&A more than we did in the past. So that's definitely a difference plus then also like the decision at the AGM showed that we have clearly made a decision that in case the good targets can be found, we are willing to proceed, and we have the financial ways of doing that.

Thanks, Jari. Now our time is almost up, so it's time for Timo's closing remarks.

Okay. So here we go for the closing remarks. We trust that we've addressed quite a few questions that you send online and also some of the broader issues that we've been -- you have raised over the course of -- ever since we held the latest CMD, which is a while ago. And of course, this gave also [ you ] the exposure to the -- our executive management board, with the exception of Olli Huotari, who is not here present today. But with that, we discussed the opportunities that will present themselves through the geographical expansion. Of course, our home turf today is Europe. We are already in Asia. We have a commercial footprint there. It's not a big step yet, but we've initiated that. We've been in India with our colleagues in Mumbai office for period of long time. Also, we have a small office in Shanghai, which is an integral part of our global operations. Of course, the question is then the U.S. And of course, as there will be in the future products that will present themselves also as opportunities for the world's largest market, we will consider that. But as of today, we have no concrete plans to enter there. And also, we discussed a lot about people, competencies, business, knowledge business, it's knowledge business across the value chain, starting from sourcing all the way through global operations, very unique skills needed there, of course, to commercializing products, not to talk about the R&D. But luckily, we don't have to do this all by ourselves. We have great partners. We have great colleagues also outside the Orion hemisphere. So all of this will compound our brain power that we can master then to successfully meet our goals. And as we have said, when we look at the opportunities that present themselves, of course, we discussed a lot of the Nubeqa today. We discussed the organic growth that is in the cards for all units, geographical expansion opportunities and, of course, the inorganic opportunities, which are the cherry on the top of a cake then. And also, of course, the new trials, which we believe will drive the expanding the use of darolutamide mostly RSNs, which is reporting shortly and then the ARANOTE, which was kicked off this year. In our pipeline, the tiotropium, which will be the 7th Easyhaler product will be an important part of this. And of course, there are some unknown still, including, of course, the outcome of these trials, outcome of the development and the regulatory environment. But as we've very clearly communicated in our understanding and the knowledge that we have, there is nothing cooking at this stage that would be immaterial. Future will tell. And then, of course, there are some of the downside risks as well. The Simdax, Dexdor, the product exclusivity, that's a known fact already. So we know there are competition in the Dexdor space. We expect that there will be multiple generic competition also in the Simdax space. And then we have the Stalevo franchise, which as Satu discussed, is very likely to be a fairly stable as we move forward. Of course, the loss of distribution agreement in animal health that calibrated our platform or the foothold where we start the growth story again. And then I want to remind everybody that as we -- when we set out this goal for 2025, already at that point, we told that this is not going to be a linear growth curve. It will be back-end loaded. And that we knew at that time, however, we want to be very expressly clear on that. So that is how we view the future as we move forward. With these words, it's been our pleasure to have you all to listen to the presentations. Thank you so much for your active questions. And as we move forward, of course, our Investor Relations are happy then, more than happy to address any queries you may have.

Thank you, Timo. So that's all folks. Thank you for joining us today. We hope that you have enjoyed this afternoon and found it interesting. Now stay safe and see you again, and bye for now.