Orion Oyj (ORNBV) Earnings Call Transcript & Summary

Yes, all of us who have watched the Eurovision Song Contest know that with these words, every good show starts. You are all warmly welcome to Orion's Capital Markets Day 2025. It's so good to see so many of you here in person in Helsinki today. For those of you who don't know me yet, my name is Tuukka Hirvonen, I'm the Head of IR here at Orion. I would also like to welcome all of you who are watching us through the live webcast. Before we move to the agenda, a couple of words about the language options we have in the webcast, especially for the Finnish-speaking audience. We are experimental as it is in the DNA of any innovative pharma company. And today, we are using AI live translation in the webcast. If you wish, you can choose Finnish subtitles from the bottom of the video screen. And there's also option to use English subtitles if that's the case, and you want to use those. Please note that there will be a slight delay in the subtitles. And what's more important, even though the AI translation is pretty good, in my opinion, these days, there still may be some inaccuracies in the translations. And just [ for secure ] reasons, the same in Finnish. [Foreign Language] Then we can move to today's agenda. We have a great set of presentations today as -- with growth as the common theme. We will start with CEO, Liisa Hurme's presentation that focuses on Orion's growth strategy. Then our business division leaders will each discuss what are their divisions' short-term growth drivers and also how they are building growth in mid- and long term. Finally, our CFO, Rene Lindell, talks about capital allocation principles and how our financial objectives provide us a framework within which we then manage our growth journey. There will be a short Q&A after each presentation. The only exception is the first presentation by Liisa. After Liisa's opening, we will move straight to Outi's presentation. But after that, then Liisa will join Outi to the first Q&A session. And at the end of the day, we will have one longer Q&A session where everybody then will be present here on stage. If anyone here in the live audience want to ask a question. Just raise your hand, and one of my colleagues here will then provide you a microphone. So please wait for the microphone before asking your question so that the webcast viewers also hear what you have on your mind. And also, the AI translator hears what you have on your mind. Kindly introduce yourself before asking your question. And our webcast viewers, [Operator Instructions] We will try to address as many as we can during the time frames, we have reserved for Q&A sessions. But unfortunately, we cannot guarantee that every question can be answered within this time frame. But don't worry, we will later on publish on Orion's CMT 2025 website, a document, where we'll then address all the unanswered questions. So don't worry if your question gets no airtime today, it will be addressed later. After the 3 first presentations, a proximity at 2:25 Finnish time, there will be a 20-minute coffee and networking break here in Helsinki, and we will be back at 2:45. And one last thing for all the people here at the venue. Please make sure that your phones are silenced. And finally, as usual, we have this disclaimer regarding forward-looking statements. This applies to all presentations today. But that's all about the practicalities. Once more, on behalf of the whole Orion team, it's my pleasure to welcome you all here in Helsinki and also on the webcast. Hopefully, you will enjoy the day with us. But now let's kick off with the presentations, and the first presenter is our CEO, Liisa.

Good afternoon on my behalf as well. It's great to see all the people here at the venue and also very welcome to everybody online today. I thought that I will not joke here at all, but I got a bit scared when Tuukka say that we are going to use AI today. I thought that you are going to replace me by AI, but not yet, maybe one day. All right. So let's get started. It's good to look at the big picture before we go to more details. So let's remind us the 2024 figures. We reached our EUR 1.5 billion target ahead of our schedule already in 2024. You will remember, we set as a target to be EUR 1.5 billion company in '25, extremely happy about this. Last year, we made EUR 417 million profit which brought us to 27% operating margin. And we used EUR 180 million for our research and development according to our strategy, where we've said that we are going to invest more and more into research and development. We are currently 3,700 people in more than 35 countries. Out of these 3,700, approximately 1,000 is out of Finland. The big figure in Finland is explained, of course, by our production sites of which 6 out of 10 are in Finland and 1,500 people work at those sites. And in addition to our manufacturing sites in Finland, we have two sites outside Finland, one in France and one in Belgium for animal health drugs. Here are our five divisions. I'll go through them one by one. They might be familiar to many of you, but it's good to start from the basics. So Innovative Medicines is probably the main -- most different from the others. It's based on fully developing new chemical entities in Orion own R&D. Nubeqa is the current flagship product for us with that darolutamide molecule, innovated by Orion and developed together with Bayer for global markets, and Bayer and Orion co-markets the product in Europe. Innovative Medicines comprised last year, 28% of our total revenues. Then I changed to our base businesses. Branded Products is a segment where our so-called legacy products are. Those are products that Orion has once developed as new chemical entities, they have faced generic competition. But the brand values have held very well. And most of all, we have long-term customer relationships in respiratory, central nervous system and women's health. And these products we sell by ourselves across Europe and in Asia Pacific. And Branded Products is 20% of our total revenues. Then I would say the real core, the heart, the oldest part of Orion is Generics and Consumer Health. And you can see that already in the number of products, more than 300 products and these products we sell in Nordics and Eastern Europe, and this contributed 37% of our net revenue last year. Animal Health, again, a bit of a different division focused on companion animals and livestock. All products are sold globally. In Animal Health, we do a lot of innovation, but also generic products. It's a smaller one, 9% of our revenues. And I know I get a question of often that why do you have Animal Health? What's the synergy and there are synergies, especially within R&D. During the many decades, we've developed molecules first for animals, then for humans and other way around. And then especially, of course, on the operations, there are lot of synergies. The smallest of our divisions is Fermion, a company that Orion owns and that manufactures APIs and it manufactures APIs for all of our divisions, which makes Orion a very vertically integrated pharma company, which is a great thing these days, looking at the global supply chains. But it also sells active pharmaceutical ingredients to other pharma companies, and this 5% represents that external part of the business. Let's look at the last year sales numbers and EBIT numbers. We clearly have a very strong track record on our financial performance. If you look at the percentages starting from 2022, after a rather stagnated period following Stalevo's patent expiry, we have really geared up. Looking at the underlying business, the growth has been 12.6% in net sales, 7.2% if we calculate the milestones to this net sales. And it's good to remind here that milestones are a very integral part of our business model, as we have partnered molecules like with Bayer, where we develop and market together or we have fully out-licensed some molecules like opevesostat to MSD. So we are getting either milestones related to development or then certain sales milestones. But this creates rather a lot of fluctuation between the years, and we are really focusing on our underlying business and growing that. And on the operating profit, you can see the fluctuation even more. I'm happy to report from the first quarter of this year, almost 15% net revenue growth and almost 40% operating profit growth. So we are clearly on a new growth era. Well, that's about last year and the numbers. Now I move to the strategy. This is the strategy in a nutshell that we launched early last year. And it still holds. We are proceeding with all our strategic plans that my team will today share with you, both on expanding geographically and building both commercial and R&D portfolios. And this picture clearly shows our aspiration to become more global. And also, it shows that all business divisions have an important role in our strategy. And here are the cornerstones for our strategy, building a customer-driven portfolio for all divisions. I'm not going to read it through. But I'm sure my colleagues will share more light on that one. Expanding geographically, and I will come back to that in my next slide and developing growth enablers. And that means building capabilities, both in R&D, in commercialization, further developing in sustainability and also mastering the end-to-end value chain. That's becoming more and more important in the current global situation. And data-driven execution excellence, which is kind of a monstrous word combination, but to make it very, very simple, as an example, we implemented a new ERP system in the beginning of this year. Everybody who works in any industry knows that these type of changes, transformations might be challenging. And we are happy to be here today, and everything works well. Of course, it took 5 years for us to get here. So the program took 5 years, and we did it in a very thorough way. Now to the global aspirations. Of course, that's nothing new. All Orion products have been sold in more than 100 countries during the past decades. So from that perspective, Orion is a very global company, but to have an own commercial or R&D or operations foothold is a very different thing. And we started this already in early 2010s when we expanded to be a fully fledged European company by reacquiring Simdax rights, launching Dexdor, repatriating Stalevo and Easyhaler in European countries. We further expanded in 2020s to Asia Pacific in a similar way with our known products. And the latest additions being commercial operations in Japan and R&D center in U.S. and the latest one from this year R&D center in Cambridge, U.K. In addition to these locations, we have operations in India, in 2 places, Mumbai and Hyderabad and also in Shanghai. The strategy that I started with, it really focuses on building long-term growth in 2030s, even beyond. This is a long-cycle industry, even though there are a lot of things happening every day. And our growing revenues from Nubeqa and all our divisions allow us to invest more into research and development, but also to invest into needed capacity in operations or in R&D. And this way, we can create EBIT growth and increase our dividend. The financial objectives and framework, as Tuukka mentioned, offers us a great tool to balance between these things to increase our profitability and keep our expenditure in certain framework. In a bit more detailed way. What have we then done? As I said, we've been fulfilling our strategic plans. Until today, Nubeqa has been launched first in 2019 for the first indication. Then we got the label expansion with Bayer. We brought 2 new molecules, ODM-105 and 212 into our clinical pipeline. And we have greatly enhanced our research pipeline. And Professor Outi Vaarala will share more detail on that today. And then the geographic expansion. So right now, we are focusing on filling the clinical pipeline, creating the capabilities that we need for the further growth. And of course, to do that, we need new products through in-licensing or even external innovation through in-licensing. Then when we shift the sight to 2028 and beyond there are things to expect. We should have new indication for Nubeqa. There will be readouts of opevesostat Phase III studies, levosimendan in oral form, hopefully gets an MA in United States and our clinical pipeline will be even more robust than it is today. And of course, there is the aspiration, as I have stated, to be able to launch our own innovative products when they are suitable for our size of a company by ourselves. But we wouldn't be able to do all this on the innovative side if we wouldn't be maximizing the value of our core businesses, Branded Products, Generics and Consumer Health and Animal Health. Here are the themes for today, according to my presentations -- presentation, we will talk about the innovation within a few minutes by Outi Vaarala. We will talk about the geographic expansion, which is tightly linked to our portfolio expansion to fill in our commercial portfolio. And of course, acquisitions are also on our agenda. Acquisitions of assets, portfolios or even companies. But they would need to have a very, very clear strategic fit to our plans. So we are all geared up with our very solid financial performance, our base businesses to build on innovation. I thank you for your attendance and there is time for questions then later on.

Thank you, Liisa, for the opening remarks and setting the scene for the next presentations. I can see that there are some eagerly waiting for the Q&A session, but let's still wait for some while. Let's first take Outi to the stage to present the Innovative Medicines and Orion R&D function. Outi, please.

Good afternoon, everybody. It's a great pleasure for me to be here today and present our innovative medicines and R&D update to you. And here, I have some achievements listed and perhaps I can take two important points from here. So we have here the success story of Nubeqa described, our darolutamide that we discovered. So we see here how darolutamide is taking more and more indications in prostate cancer, and that's a fantastic story for us in many ways and also for the patients, shows how absolutely good molecule was discovered by Orion scientists. And also, we have here another molecule discovered by Orion scientists, opevesostat. And we can see that it's also going forward with expanding clinical trials. And the latest one here is the expansion to women's cancer from prostate cancer. It looks like our scientists are really able to discover and make innovations. We are confident about that. This list also shows how important partnering is for us. And we are able to do these kind of partnerships that a partner can really carry the whole potential of our molecule that we have discovered. That's the best possible partnership. And then on the left side, you can see the growth that Nubeqa brings us. With this partnering, we can see this kind of growth in sales, meaning growth of royalties to us, and this gives us this big opportunity to make a transformation that we have already started. We are in the middle of the journey. You know -- you see how many things have happened only during the past few years. And when you are in a transformation at certain point or at a certain level, then after that, things only accelerate. And I believe that moment, we have at the moment. This is a repetition about the expansion of our Nubeqa different indications. I want to remind you that we have still 2 Phase III studies ongoing together with Bayer, ARASTEP and then DASL-HiCaP. And the readout is soon, '27 and '28, for those trials. And then opevesostat, I think that here, the new thing is the expansion, as I mentioned, to women's cancer, to indications like breast cancer, endometrial cancer and ovarian cancer. Even without that, you can see that the development program is comprehensive. We have 2 Phase III studies ongoing there. And then we have a Phase II study also in prostate cancer. And here, MSD is testing combinations of opevesostat in that trial. We are eagerly waiting the readout from these trials particularly, of course, from Phase III trials where we test our -- the efficacy of opevesostat in mutation-positive androgen receptor ligand binding domain mutation positive and negative patients. Both late-line and front-line patients with castration-resistant prostate cancer. And here, you can see the goals that we have for our R&D and IMED. So we want to see 1 or 2 new projects entering to clinical development every year. And if we calculate based on this goal, the future, we have a goal that in the next 10 years period, we would have 5 to 10 new Phase III projects starting. And that's a big transformation in Orion R&D. We hope to see a continuous flow of clinical projects. And for that, we need to do research. We need to guarantee that our research departments are able to deliver enough research projects to our pipeline. And you know more than -- better than anybody else, how attrition is a problem in this field and in our industry. In oncology, we have still immuno-oncology as an important part, cancer genomics and cell signaling and ADCs. In pain, ion channels and neuro-immune interaction. Neuro-immune interaction team is synergistically working with the immuno-oncology team. And the long-term target is that we will commercialize our products in U.S. and hopefully, ourselves -- by ourselves. And this is a serious target for us, and we are preparing for that, and I will tell you later how. Here, you can see the transformation that has happened until now. So we have in Finland our small molecules R&D, which is extremely important for us. You saw that opevesostat and darolutamide studies, which were triggered by the molecules that our scientists were able to discover. So this is the golden core of Orion R&D, and we want to nurture that R&D also in the future. We have around 380 employees altogether in Finland in our R&D. And then we have in U.K., a clinical development team, which is very important for us. We have also in Finland, clinical development team. But to make that dream to happen that we will have also commercial presence in the U.S. where we can have our products in the market, we have now established also commercial office in the U.S. And in addition to that, we have developed or established clinical development team there. We have, at the moment, 7 employees there, but we have the right leaders now in place, and we are ready to expand those teams very soon. And these are the key recruitments that we have done in order to expand the teams with the right leaders. I'm very proud to present here that we have managed to recruit these kind of leaders in the U.S. and in U.K. In the U.S., we have Praveen Aanur as Head of Therapy Area Oncology, Chief Medical Officer. And as you can see, he has a very, very strong scientific background in translational medicine in oncology. And in addition to that, he has been working in pharma companies in the field of drug development and translational medicine. Geula Jaffe is our Chief Commercial Officer, also working in the U.S. And she has a very strong commercial background, also a lot of background in pipeline and portfolio strategy planning. She has been working in many pharma companies, as you can see, and her strong area is oncology. And finally, ahead of our R&D's biologics site in Cambridge, Eugene Zhukovsky is one of the world's leading experts in the field of technology of therapeutic antibody discovery. So with this team, I believe that, as I said, that things can only accelerate. And here, I want to share with you our research pipeline so that you understand where the clinical trials and studies actually originate. There are a few points that I want to raise here. If you look at the pipeline at the moment, we have here half of our research projects in small molecule area and about half in the area of biologics, other modalities. And I also include -- consider also ADCs as biologics. And it's easy for you to understand why we need this center in U.K. Cambridge. We need to have the right leadership, the right scientist and CMC experts to bring these to the clinical phase and do this research together with us. The other point here is related to the thing that we have in the first upper part, 3 research projects or preclinical projects that are moving very fast now into the clinical development pipeline. We have already selected candidate drug, and we are preparing the start of Phase I for those molecules. And this means that in '26, we will have 3 trials that are started in the field of immuno-oncology and in the field of biologics, 2 new things for us. And that's the reason why we want to have right experts to help us and to guarantee that we are successful with these new approaches that we have in our R&D. And if this is in -- here, I want to illustrate the year 2026, when our pipeline -- clinical pipeline looks like this. And I'm very proud of this that our scientists together with our partners, have been able to deliver all this. We have in clinical pipeline, ODM-105, a small molecule, which is an opportunistic project. It's an old Orion's molecule. And here, the indication is insomnia. We have estimated that we have Phase II readout in '26 and then we will see the readout and move on to Phase III. This molecule is alpha 2A receptor agonist. And it is -- we know that this molecule causes sedative effects and now it's important to see whether it works also as insomnia medication and can bring the right efficacy and good safety profile. We have learned from studies with these kind of molecules that this molecule brings refreshing sleep with natural sleep pattern. And that could be important differentiator of this molecule in insomnia. ODM-212 is our TEAD inhibitor. And we dare to say that we believe this could be the best-in-class molecule in this TEAD inhibitor class. And the reason for this is our favorable PK with this molecular -- PK profile with this molecule. And also in our ongoing Phase I studies, we have already seen efficacy signal. We have seen in the patients with Hippo-pathway gene alteration in the tumor, we have seen tumor shrinkage. We are extremely excited. And also safety profile looks very good. It's -- until now, our molecule has been well tolerated. So now we are more confident when we think about our ODM-212 program. And when we think about rare cancer indications, those with Hippo-pathway gene alterations, here we could have the first product, which we could commercialize in the U.S. This molecule has also more broader opportunities. This molecule in our preclinical models also works in different combination therapies. It's a molecule that can prevent the development of resistant mechanisms when we talk about EGFR or KRAS inhibitors, for example. And those studies are, of course, something that we have also in our plans. Here, you can see results with our ODM-212 in mesothelioma xenograft model. And in this model, our molecule is working very nicely and inhibiting tumor growth. But as I told you, we have also some signal of efficacy in our clinical trials in humans. And now I go to the future building blocks that we have for our growth in Innovative Medicines. We will grow, of course, through innovation. It's our mission and our internal R&D has been the major source for the innovations as you see with focus areas in oncology and pain. In addition to that, we are actively searching and scouting for opportunities to in-license development level or phase assets as well as we are looking for commercial assets. This is very important work and it's important from this perspective that we have our commercial -- Chief Commercial Officer in the U.S., and we built also these capabilities in the U.S. to enhance our pipeline and build opportunities for commercial entry with these kind of actions. And all these things that I mentioned, innovation, in-licensing and inorganic growth, all these things are bound to geographic expansion. It's important for us to be exposed to the world -- exposed to the world with the best talents. And we have started that journey now in the U.S. and we will go forward with that mission. And I think that this was my last slide, and now I invite Liisa to join me, and we will have Q&A session now.

Thank you, Outi. Thank you, Liisa. If you want, you may take a seat for a while before we start taking questions here from the audience, I'd like to remind the webcast viewers that [Operator Instructions] So please utilize the opportunity and send us questions. But now we can turn to the audience, and we have first question coming from Anssi. So we've -- can provide microphone to Anssi.

Anssi Raussi from SEB. I'll start with your planned presence in the U.S. and of course, ODM-212 is part of those plans. But what kind of other products you could see taking to the market by yourselves? Or is it all related to ODM-212?

A very good question, and I might start here. Definitely, I think it's a spearhead for U.S. plans, ODM-212. The current indications that Outi already mentioned, are rather small, so they would definitely fit well to our U.S. strategy of a midsized European company. From our own portfolio, then it remains to be seen how ODM-105, you know what would be the exact indication when we see the Phase II results and of course, as we stated, we are all the time looking for other products then if we decide to go there with a certain molecule to complement that and create a portfolio.

Maybe continuing on this, like should we draw any conclusions regarding ODM-212, if it's suitable for you to take to the market by yourselves in the U.S.?

Well, we know the indications that were mentioned, they are small indications, and we know where the patients are treated. So that would be something that would be suitable for Orion's size.

And maybe one more question from me, and of course, we haven't heard CFO's presentation yet, but you mentioned that all the divisions have a license to invest and grow. But what kind of thresholds you have for this growth, maybe in terms of return on capital metrics? And have this threshold changed over the recent years?

Well, I here refer back to our financial objectives, which gives us a very good framework. We are stating there our return of investment target, which is at least 20%. And of course, we've also stating there our equity target and our growing dividends. But I think that within that framework, we are able to invest in all our divisions. Of course, we need to understand that the investments needed for different divisions are very different in their size. So if you would invest into Generics, acquiring products, that's probably a very different size of an investment than acquiring a product for a global Innovative Medicine. So I think there is room to operate within a certain time frame for the benefit of all divisions. And I leave it to our CFO to comment more on if you are aiming for the firepower for any acquisitions.

May I go to the first part of the question. So about 212, when we talk about the small indications, as Liisa referred to in my talk, those are the indications that I was thinking about like entry indications so that -- of course, when we talk about the combinations and indications related to those combinations like KRAS inhibitor combination with TEAD inhibitor, then we are talking about much bigger indications. And always, we consider, of course, the option that we will commercialize ourselves in the first place. But depending on the size of the indication, depending on the development of the whole product portfolio than we do each decision at a time when we have enough data for that. So there are also big indications that are potential indications for ODM-212.

Sami Sarkamies, Danske Bank. I have a couple of questions, starting with Liisa. Just curious, you issued financial targets last year. Could you comment on your progress relative to the target so far? Have there been any sort of material surprises? And do you think you would be in a position to update these targets before they actually expire?

You're talking about this year's outlook or the financial objectives?

The midterm financial targets.

Midterm financial objectives. We are proceeding very nicely according to those objectives currently. And I think that, that says it all. I don't think we currently see any need for updating those.

And then for Outi a couple of questions. First, starting from the R&D cost base. Could you somehow elaborate that what is kind of like the Orion R&D platform cost? What is at the moment? What was it a couple of years ago? And given the decisions you've been making, where could it be a couple of years down the road, kind of the fixed part of R&D cost that is not related to any clinical programs?

Now you remember the figures from last year and this year. And we can see there a significant increase being around 30% in R&D costs. So this has been very important for us, and it's something that is based on our R&D success on the figures that darolutamide is bringing to us. When we have planned to expand our research pipeline, we have calculated the scenarios for our business cases that can arise from this pipeline. We have taken in the calculations attrition also which is something that is the part of this game. And when we see then the increase in the Nubeqa sales and we relate that to the increasing R&D costs, I don't see any problems to fund our R&D programs that we are now raising from our research pipeline. So from the development perspective, we might have a positive problem. If we have really large indications that are suitable for example for our immuno-oncology assets. And then in that kind of positive case, we might need also external funding. But at the moment, this building of R&D pipeline, it's very realistic based on the forecasting that we have. And when our development pipeline is going to expand, R&D costs are going to be increased significantly, of course. But also we hope to see increase -- significant increase in Nubeqa sales.

And maybe to continue, I think also the question was related to fixed cost base. Clinical programs will bring an increase, as Outi say, definitely. And when it comes to the fixed cost base and expanding to different geographic sites and establishing new centers, that of course, increases also our fixed cost base. But again, we are doing very detailed calculations and decisions as we go along and see that it is doable, and we can proceed in a profitable way.

But majority of the costs are external.

Definitely.

And then maybe a couple of more detailed questions on specific programs. ODM-105, are you still looking to partner that program? I think you mentioned plans to take it into Phase III after readout next year.

Yes. When I said that, of course, you may take that to Phase III together with a partner. So we will see when we have a Phase II readout how the molecule is performing. And in this situation, of course, our major interest is to build commercial operations in oncology, as you can guess.

Okay. And then on ODM-212, what would be a realistic time line for initiation of those Phase II programs you've been talking about?

Realistic time line is in 2026. And I would say that it's latest also year for that. So we would be ready with these trials now, yes, very soon.

Okay. And my final question is on Nubeqa. There's this one Phase III program run by Bayer alone. Are you planning to opt in and what could be a time line for that?

Well, yes, sure, there is a possibility to opt in, and we are, of course, following the study, and we'll make a decision as we go along.

[indiscernible] from OP Markets. One question regarding your people strategy, you are now -- you were speaking a lot about the enablers, which is R&D and then also the commercial capabilities, which both are requiring a lot of talent and also for new talent. And typically, when Finnish companies are expanding to foreign new regions, they are hiring very prestige people, talented people, so-called rainmakers. But the problem is that those rainmakers doesn't have any more the capabilities they used to have with these global huge companies. So how are you mitigating this kind of mismatch that has happened, for example, in Nokia or Neste in the past days?

Do you want to take this?

I think you -- you've been doing a lot of hiring lately.

Yes. So of course, the plan is that these hires that we have done now, those leaders in U.S. and U.K., they built those capabilities for their own functions. And we also have capabilities here in Finland, for example, if we think about our recruitment that we did for the CMO role that you saw that a CMO person who is now going to start with us is an expert in the field of oncology. And we have already capabilities. We have shown that we are able to discover and develop small molecules particularly here. So we have capabilities, but we just need to add those capabilities, fill the gaps and in this way, I don't think that this is really a difficult journey actually. I believe that we have, in a way, a good foundation to start with. And then the expansion will happen and will be planned by these leaders that we have hired.

Maybe I can continue with that. I think the new recruitments also have a very wide background, both from the big pharma here and then smaller pharma companies and start-ups. So they are surely also used to work without the huge resources that you are referring to.

And we have one question, at least, from Iiris Theman.

This is Iiris Theman from DNB Carnegie. Regarding opevesostat, so what is the potential addressable market for other opevesostat? And basically, how does expanding its use to treat women's cancers impact that figure?

Maybe I'll start from the potential. It's, of course, MSD who defines the potential for the drug. So I encourage you to ask that question from MSD. And when it comes to women's cancers, Orion is entitled -- I'm just talking about our agreement and all that, and I'll let Outi to continue on the patient population if you want to say a few words, but we are entitled to similar type of royalties on the other indications outside prostate cancer. So that, of course, the new indications will build up the probability of success and future royalties. But maybe you want to say a few words about the women cancer indications.

Of course, in prostate cancer already, the potential is really big, as you can estimate yourself to and then if you think about this women's cancer, in the trial, you can check this also in the ClinicalTrials.gov. The breast cancer cohort in the study, which is one of those cohorts, it's in hormone receptor positive and HER2-negative breast cancer, metastatic breast cancer in whom opevesostat is tested. And the control is other endocrinal treatment. So [ a comparator, ] so in that way, it's a big patient segment, very big patient segment there. When it comes to endometrial cancer and ovarian cancer, there we have much lower patient group that we can believe that the drug could treat. But this breast cancer is a big indication.

And how do you see competition in this field? And basically, are there any competing therapies in development?

You mean now specifically these women's cancer trial?

Yes.

There are a lot of competition in general in oncology area, in breast cancer. We know that the competitive landscape is challenging. On the other hand, opevesostat, the mechanism of action is unique and it's -- it would be a first-in-class molecule to control hormonal activity. And the mechanism of action is to remove all steroid hormones. So it's very different from the present hormonal treatments that we have in breast cancer. So from that perspective, I think that it can really differentiate, and that's important. When it comes to ovarian cancer, endometrial cancer, in oncology, as I said, no area is without competition. But there, I think that it's the same story that this unique mechanism of action may bring something totally new. But of course, the most straightforward indication here is breast cancer.

And final quick question, if I may. So does the licensing deal with Merck include any other molecules than ODM-208 and ODM-209?

Of course, in those patents, the space that is covered is usually larger. But when we think about this kind of drug molecules that are ready to be used in the clinical trials, ODM-208 and 209 are the molecules.

Thank you, Iiris. Any further questions here? We have one question.

Shan from Jefferies. Just firstly, in terms of your plan to establish a commercial footprint in the U.S., particularly on your Innovative Medicines portfolio. So you already have this R&D center, would that sort of confer establishing a manufacturing footprint in the U.S. as well? Or would that more be sort of having CMOs and CDMOs to manufacture products?

A very valid question. No, we are not planning currently any manufacturing operations in U.S. It's now clinical, regulatory and commercial operations in that R&D and commercial hub or center in U.S., but no manufacturing. And we have -- as stated in the beginning, we have a lot of manufacturing sites already in Finland and Europe. So currently, we are relying on those.

Okay. And then just one more quickly. In terms of BD in Innovative Medicines, is there a specific peak sales that you target when you're looking at sort of bringing on a product to your portfolio?

Well, regarding specific big sales targets, of course, that is a bit limited. I'm not going to say any numbers here, but I get back to my comment on that any such molecule would need to be -- the indication would need to be such that it's very specialized or treated in certain hospitals, so big centers so that a midsized European company can also handle. So we are definitely not looking at very, very big blockbuster or drugs that are prescribed by generalists or GPs.

Thank you. It seems that we have exhausted all the questions here in the audience. We have time for one or two online questions, and don't worry on the webcast, we will come back to this latest in final Q&A in the end. But first of all, to Outi maybe, do you have an outlined set of dream number of headcount in the R&D unit for '26-'27? If we now calculate the figures from your slide, the total number once the Cambridge is up and running is roughly 440 people, any aspirations to expand that? Or what's the figure you are thinking?

When we think about year '26, then we can say that 450 perhaps is the number that I can give. And then if we talk about years after that, as you all know, it's certain range that I can only give because everything depends now on the success of our projects in clinical phase. And in '27, we have very many important milestones and readouts. I talked to you about the Phase I studies that are going to be started, '26. During Phase I, we already see safety and efficacy signal usually in oncology. So those years are extremely important for us and determine then the future possible growth.

Thank you, Outi, thank you, Liisa, for this Q&A session. Thank you for the good questions. We'll continue in the next Q&A session. But now it's my pleasure to invite on stage our Executed Vice President, Hao Pan from the Branded Products business division.

Hello. Good afternoon. I would like to start with an overview of Branded Product division, just to give you a little bit more insight into how we organized. In terms of therapy areas, we also mirror our business subunits according to it. So you can see that we have respiratory. That's our biggest part. So if I can borrow our quarter 1 publicized net sales numbers, you can see 60% of our net sales in quarter 1 this year is in respiratory. And then we have CNS. We have long heritage of this. A majority of this is in Parkinson's disease, that's 30% and also, we have women's health. And I know some of you were quite impressed by our number last year in terms of growth. And maybe I can share some light with regards to what we're doing and what we're planning to do. And what we're trying to do is to keep it quite simple and we have to be quite focused. So we will build our portfolio around our legacy brands, our key products. So in respiratory, you have Easyhaler range. And this is the inhaler range products for treatment of COPD and asthma. And this is our most important brand within Branded Products. And you can also see that RYALTRIS, this is a combination nasal spray treatment for seasonal allergy, and we have the distribution rights in Nordic countries. And we are hoping that we will be able to in-license more products like this for treating respiratory conditions. In terms of CNS, it's probably not surprising to all of you to see that most of the brand here is focusing on Parkinson's disease. Our entecapone brands of Stalevo and Comtan were joined by ORIDOPA. This is Orion's brand for levodopa. And we have been launching this during the last 18 months. And because they are launched gradually, so I would still like to say this is still in launch phase and also a new brand name here to some of you probably is called Suvexx, and this is an in-licensed product, and we are branching out slightly to the field of migraine treatment. And this is a combination product for migraine treatment, and it is in launch phase. For women's health, our key product is Divigel. Sandrena is the other brand name in some key countries. So that's why we got Divigel and Sandrena here. Basically, this is a transdermal HRT treatment estrogen in a gel format within sachets. And this is for treatment of menopausal symptoms. Basically, this is a transdermal HRT treatment estrogen in a gel format within sachets. And this is for treatment of menopausal symptoms. And we also have Indivina, which is our oral tablet, continuous combined oral treatment for menopause symptoms. This really leaves me in a very natural way to talk about our divisional strategy. Again, from the very beginning, when this division was set up over 2 years ago, we wanted to keep it simple. And I'm trying to explain to you. In a way, we want to do two things well. First of all, we need to maximize what we have, and we realize these legacy brands still have a lot to give. So we just need to up our game to invest accordingly and to do various things and to make sure that we really can be competitive and keep -- can be valued by our targeted customers and for the patients that we serve. And then the second thing is to utilize the synergy and the platform that we built from these older products, these legacy brands and hopefully, to have new products adding to it so then achieve profitable growth this way. The majority of the things we're doing is through in-licensing, but we also have some own development projects. These are mainly generic development projects, but I'm hoping to show you, especially in Parkinson's disease, some examples and just trying to explain what we are trying to do. As Outi has already talked about in terms of geographical expansion, branded product really serves one geographical expansion purpose here. It's that we consolidate what we have in Europe with customer engagement because we still haven't got any innovative products for us to launch ourselves at this moment. So we do not want to lose insight and experience in terms of engaging with customers. But more importantly, in Asia Pacific, more or less all our products which make significant inroads, our branded products. The latest example is that we established in Japan last year is through repatriation of our Parkinson's brands, the levo and Comtan and also Divigel, our product for treatment of menopausal symptoms. So we play a good important role here. We want to make sure we have the setup; we have the commercial footprint, so we are ready when the time is right to bring innovative medicines to Asia Pacific. One thing I want to highlight here in terms of the growth enabler. In terms of manufacturing and API, this is very critical to our division. And we are very happy. We -- these critical competencies are within Orion's own hand, and we are continuing our investments to make sure we have this. And also, the other thing I want to say is that we need to be continuously to perfect or improve our omnichannel customer engagement. We know we are not the big guy. We cannot simply throw money in terms of commercial footprint. Maybe COVID has not been too bad overall. There is some silver lining in terms of customer engagement with the trend moving towards hybrid calling, online calling, a medium-sized European company like Orion can now really compete with the big guys because simply, I think when you are online, you are quite equal in terms of the share of voice that you will be able to get. So this is something we are really going to do. And above all, everyone in Branded Products is really motivated by two things. We would like to work very hard to realize the Easyhaler portfolio's potential to exceed EUR 300 million in annual sales. I cannot promise you how soon we will reach that. But we really believe if we do things right, this is a realistic goal that we might be realizing this potential. And secondly, we are all very motivated. We want to be in a unique position to be able to offer cost-effective medicine to all stages of Parkinson's disease. And not many companies can say that, and I've got a slide I want to quickly show you. Now the reason I say that Easyhaler will be able to plan new heights is because we believe Easyhaler has the right credentials for continued growth. Here on the left-hand side, you can see this is a snapshot of the growth rate from Orion's own operation countries in 2024 over 2023 after Easyhaler sales. And all the key countries having quite decent numbers, if I may say. And this is not only a reflection of more and more prescribers and patients are really liking the simple device to use. Because with Easyhaler, all you need to do is basically to shake, click and inhale. And that's very easy to learn. And also, we have the same device for six different products. So you could really have choices, and some patients don't need to learn another inhaler, and they can manage in the way of treating asthma. So these are really quite unique for Easyhaler. And then on top of that, our knowledge being the dry powder inhaler technology because we developed Easyhaler ourselves, and our own controlling API and manufacturing ensured that we can compete in terms of continuous supply, we don't have disruption in supply chain, and we can also ensure the quality of our products is great. And this is something we're all very proud of, and we want to make sure that we can leverage this more and more. More importantly, this is the top half of the picture on the right-hand side, external factors. You have all heard about this green initiative. There is a trend, the preference for greener, so-called greener inhalers. Dry power inhalers do have less CO2 emission. And what we are very proud of is that Easyhaler range is officially carbon-neutral certified. And this fits really well with a lot of climate conscious prescribers and also patients. Of course, the drug needs to work. So on the basis [indiscernible] patients clinically, I think this bit of the green credential we have is really working for us. And then on top of that, this is something probably we haven't said too much. We also fit very nicely with the new international and national guidelines for asthma treatment. One example is that GINA, this is Global Initiative for Asthma. And they are recommending MART, this maintenance and reliever management way of asthma in all stages and they specify inhaled corticosteroids with formoterol, they specified this lever specifically because of its unique quality. And this fits very nicely with Bufomix Easyhaler because that is a combination of ICS and formoterol. So we believe that set us apart, and we can compete even better in the future. Now I'm actually very excited to show this slide because every time I show this slide internally, I get really good feedback from my team. And this is something we are all working hard for. We want to expand our Parkinson's offering to all stages of Parkinson's disease. And we know our offerings are cost effective and it's affordable. And you can see that Orion already have products in a lot of these stages, but we are doing in terms of our own development or co-development projects, and we are also in-licensing so that we can say we have more products which will suit individual patient needs. And for the Parkinson's treatment, clinicians to have the choice from. Just a few words about the own development product. We cannot really disclose too much details on this. But just to say they are not new chemical entities. So I just want to make sure that's understood. But what we're trying to do is because every single minute of more on time for Parkinson's disease patients is meaningful to them, it's really helps them with their quality of life. So we are trying to put in different combination of generic compound together or are we trying to see the different route of administration we can do with these generic compounds because we know that will be meaningful to the treatment, and it will be used, and it will be appreciated. Maybe just a few words about the two products that we in-licensed recently and which you are aware of. First of all, we have in-licensed a micro tablet of levodopa in a special dispenser device. And this is for later stage in Parkinson's disease. And to deliver levodopa in this way is to smooth out the unpredictable peak and troughs of all the symptoms. And the current choice for those patients is very much invasive treatment. So this, we believe, could really add value to it. And those invasive treatments tend to be very high priced and quite costly. In the same way, we are very happy to share with you that we have been licensed APORON. APORON is basically -- will be the first oral mucosal spray way of delivering apomorphine. Apomorphine is very well standard rescue medicine for Parkinson's disease. But currently, the only available administration route is through injection or infusion by a pump. And you know when you need rescuing, the ease and convenience plays a big part. And then a few words about women's health. Basically, as I said, it is Divigel and Sandrena which is driving our growth. I will be very happy to tell you that how wonderful we have done to result in our good sales increase. However, I have to say that we have been so far very much simply riding the wave of the transdermal HRT resurgence. Here, you can see the market growth during the last 2 years in Europe, U.S., Asia. So it is really quite nice, especially in English-speaking countries, I think there is a political climate, women simply no longer want to suffer in silence, and they really want to have the rights to treatment and have the way to judge, weighing the risk and benefit of HRT treatment. Transdermal HRT is really preferred because it's perceived or if there is evidence to show that it is slightly safer. So our gel has done extremely well. Maybe just a few words about our gel. I'm not trying to sell this. So I just want to be very careful here. But our gel is coming in a sachet. And the beauty of that is that each dose with one sachet, you know exactly what you're getting. So the accuracy of dosing is important to the patient. This common sense will know that. So that's why it's doing very, very well. So based on that, we are now really reinvesting in some commercial activities in the countries where the transdermal HRT market is recovering very evidently. And we are relaunching those countries. In some countries, we are finding new partners. And so that's one thing we're doing. The other thing maybe more interesting is that we're looking at the range of dosing and presentation, different presentations to trying to cover all stages of menopause. Majority of these work and idea we have explored does center around Divigel, probably more Divigel line extension. I cannot share too much with you, but just want to say that there are initiatives that we are doing. We have very, very experienced experts still in the company who know this field very well. To summarize, we think that our products, we know our brand -- our legacy products, you don't become legacy if it's not too old, in a way. So they are well established. That's the word I would use. But this is actually good for us. The way we choose to focus is because we know -- we have been in this field for more than 30, 35 years, Parkinson's disease, Easyhaler respiratory inhalation, HRT Divigel. And on top of that, because we have the European manufacturing and this really matters to people, and we have the full value chain control from firm in API to our own R&D heritage, all the way through our own sales and marketing operations in over 30 European and Asia Pacific countries, we believe with all of this together, we can serve our customer and patient in a very good way. With that said, I just want to share with you our Branded Product motto, life begins at 30. Any human being would know, 30 is the golden age when you start to go into your prime, and that's what we say within our organization and seems to get good reaction. But thank you very much for your attention.

Thank you so much, Hao, for the inspirational presentation. Now I open the floor for questions to Hao here in Helsinki. So let's start with Anssi again.

Yes. Anssi Raussi from SEB. Just one question regarding Parkinson's disease product family and also Divina series, like what kind of potential we could expect in the coming years in these product families? And looking at these growth rates in targetable market in Divina series, of course, looks impressive, but is that the expected reality in the future as well?

We are sort of not in the tradition of disclosing individual subproduct group in terms of the sales prediction. But we -- of course, we've chosen these fields to focus on. And then we definitely will do our best to make sure we have good results in the future.

But basically, there's no clear reason why Divina series shouldn't follow the basic market growth?

There are always external forces of factors which can be slightly unpredictable. And so I do not want to make that promise. But certainly, we -- internally, we're going to work very hard to try and to achieve.

Thanks, Anssi. Any further questions here from the audience? Sami, please.

Sami Sarkamies, Danske Bank. Regarding your EUR 300 million sales target for Easyhaler franchise, would you need to make additional sales and marketing investments to make it happen? Or is the current platform strong enough?

We know Easyhaler has been the first product that was launched over 30 years ago in Finland. So it was gradually built up. And this is really a beautiful story because it just continues to give. We, as a company, our size, and we know with regards to asthma and COPD, our competitors are really quite big players. So we have always been, in terms of investment side of things, are not really at the same scale, but it works for Orion. So we are not going to change too much from how we have done because we think that works for us. So -- but everything we do is very much looking at the ratio in terms of what we can get and what makes sense, then we will invest accordingly. And Liisa has given me this autonomy. So we certainly -- within my team, we will make sure that we track the growth, and we will invest if needed. For instance, in one particular country or whatever. So it really depends on how the competitive environment changes, how the local treatment guideline goes and things like -- if there are opportunities, then we will invest.

Okay. Then second question on the Parkinson's pieces. It's been rather stable, says around EUR 100 million a year. Do you think this is the case also going forward? Or could you even target growth in this area?

Yes, with entacapone alone, you probably wouldn't believe me if I said we want to grow it because the patent expired more than 10 years ago. And with Parkinson's, the picture shows what we want to do is to add new things to it. So yes, I would like to hope we will have growth. Otherwise, I won't be here to talk about it.

Any more questions here from the audience? We have one from online, but that actually also asks what is the peak sales potential for Precifit, but you already mentioned that our policy is not to provide any individual peak sales potential to these products. And after all, it's still in the development or regulatory phase.

We do have the MA in Finland and reimbursement. So we will launch that...

That process is ongoing elsewhere, yes. We have still time for one or two.

One quick question regarding these geographic expansions. What are the competitive advantages you are delivering with -- when entering into new markets? Because you are kind of a new player trying to get market share from the established players there.

Yes. I think this is very -- in the similar line, you have directed to Outi. This is very tricky because -- maybe I can comment on this because I come from a large pharma, I have been with Orion for a long, long time. But I have to confess, when I first joined Orion, it was not a company which attracted me. It's suited my career development. But the minute I joined the company, I realized actually, the company culture and the way how it works really fits my personal goal and my personal value. And it just worked very well. And I would say in my U.K. colleagues, a lot of us are average -- we are there for a long time. It's not because we have an easy life. It's really to do with the same kind of like-minded people gathering. And last year, I was responsible in recruiting and setting up the Japanese operation. And I have to say, it was not easy. And we interviewed a lot of people, but in the end, we found a really good leader locally with similar kind of -- so maybe we're a bit lucky. And then because of the leader is like-minded, then the team that he or she builds tend to be the same. And so far, I would say that we have been very lucky in that sense that we have good people in almost all four subsidiaries. So really, I know this is -- I don't want to say that this is not difficult, but we think that the match of company value and personal value is the key here.

Thank you, Matti, and thank you, Hao. Once again, we have exhausted the time for this Q&A session. Again, for the webcast viewers, we will come back to the questions you have sent. Thank you for those. And please be active also during the next few presentations. But now it's time to have a short 20-minute coffee and networking break here in Helsinki. So we will be back online, 2:45 Finnish time. So see you soon. Thanks. [Break]

Welcome back from the break. It was so nice to see and hear all the buzz here in Helsinki, so lively discussions. Hopefully, all are refreshed now and hopefully also all of you at home or office, wherever you're watching the webcast, you've had the chance to grab a cup of coffee or something. Now it's time to continue with our interesting presentations, and it's my pleasure to invite to the stage our Executive Vice President of Generics and Consumer Health, Mrs. Satu Ahomäki.

Good afternoon, everybody. So it's my great pleasure to tell you about the Generics and Consumer Health business division. Liisa already in her opening speech talked about the characteristics of this business. So broad portfolio, focus countries are Nordic and Eastern European countries. I might add one more thing there. So 75% of the sales is coming from Generics, and the rest from Consumer Health. So if you have been following -- if you have been following us in recent years, you might feel a little bit disappointed about the negative trend of the topline. But there are three obvious reasons for that. First of all, Russia, then Dexdor and Simdax. So in '22 Orion made the decision to exit from Russia for various reasons. And it actually -- it was quite a long process, and it was solid than first quarter of '23, when we managed to sell our remaining stock there in Russia. Dexdor patent expired in 2019, and Simdax couple of years later. They both have been many years in Orion's top 10 best-selling product list. So when patents expired, naturally, the competition followed, and prices go down and this -- that's why the sales are decreasing. However, if you look this picture here, you can see that the foundational portfolio, it is actually doing quite well. So in -- from '22 to '24, the CAGR being almost 5% and last year was really excellent. So we grew almost by 6%. So there are a couple of reasons behind that success, if you will. So active in-licensing, so we have been managed to grow in our portfolio and have constant flow of new launches every year. Also, we have very strong market inside in those countries we are present. So that will, of course, help us to interact with the customers, but also lead to successful pricing strategies. That was about the past. Then I'm going to talk about the future. And this picture here illustrates our strategic road map. This business division vision is to really deliver profitable growth also in the future with focused portfolio, enhanced customer engagement and versatile commercial channels. On your left-hand side, you can see the focus areas. We have chosen four of them, and of course, its growth generation is the most important one. We do understand that although our key market, Finland, we are #1 in Finland, we need to maintain that business and even defend our market shares there and also in other focus countries. However, in order to increase the business outside Finland and I talk about the big five countries in Europe, so then we need to transform our portfolio. So the current portfolio, what we are having in Finland is not something that we can copy paste to Germany, for instance. There is -- some of the products are old products with old regulatory dossiers. We can't expand the regulatory approvals anymore to other countries or they might be in-licensed products. We don't have -- we have only restricted territory. Or otherwise, the cost level structures or something like that we can't really be competitive in other countries. So therefore, we need the transformation. So here are the key actions under those strategic focus areas we are committed to. So when we talk about the growth generation, so we are continuing to accelerate this new product flow through in-licensing, but also through own development. We also want to pilot new things to find our new -- our path forward. So we are piloting new sales channels in Consumer Health. Currently, in all countries, we are only in pharmacy channel. Then the portfolio management is very important. And as I explained, our current portfolio is not particularly suitable for all the other countries in Europe. So therefore, from hyper generics -- by hyper generics, I mean those very competed generic compounds like statins, for instance, very low priced. So we want to move towards complex products, complex to manufacture or develop and value-adding generics and biosimilar products. In Consumer Health, we have traditionally been one country, one brand. And now we are trying the first multi-country launches. We want to utilize the synergies between the countries as well and be more cost efficient. When we are entering to new geographies or other new customer segments, new channels, then we need to make sure that we have the relevant capabilities in place as well. So we are currently building these commercial capabilities in big five countries, for instance, and really to excel in customer engagement. Last but not least is profitability optimization, which is really core in this type of business. So we are really driving our profitability through healthy price levels and also increasing volumes because that's one way of managing the profitability. We actively manage our cost base, both in sales and marketing and also in development side. And then we try to be very efficient and lean in our internal processes and processes towards stakeholders. We have a couple of projects which support our growth, value-add growth project, direct-to-consumer online pilot. And then certain products, we outsource in order to manage the profitability. About value-add growth project. It has two main objectives. So to create this portfolio of value-add hospital generics and then also build the required commercial capabilities, especially in the Europe big five countries. What I mean by value-add hospital generic? It's a product which brings something extra beyond the standard generic compound. For instance, there could be an originated product which is used in a hospital, and it needs to be stored in cold chain, so refrigerators. So what if we bring the same molecule, but in that kind of formulation that it can be stored in room temperature? You can only think how much extra work that will cut. So there will be less things to remember, to manage, less opportunities for mistakes. There are also other types of value-add characteristics, but this is just to mention one. So this is the project we are very committed to. We source products to this portfolio through developing them ourselves, but also through in-licensing and then strategic partnerships. During the strategy period, we are going to invest in this certain amount of euros, but I assure you, it's nothing significant. Quite moderate actually, and it consists of the licensing fees and then some of the regulatory costs and then development costs. But in our case, we don't talk about the big Phase III type of development cost. It's more like a formulation development and pharmacokinetics [ bioinfluence ], things like that. Then as a result, I hope that during the strategy period, we will have a portfolio of this value-adding hospital generics which will then generate increased sales to the business division. The other project I'd like to talk about is the direct-to-consumer pilot, our online store called Well by Orion Pharma. It was launched last week in Sweden, and it's really -- the aim is to learn more from the consumers. And it's targeting for mothers and babies. The product offering is planned for those customers, creams and ointments, products what mothers and babies need. The thing what differentiates this online channel from the other online shops is that this is really extra curated portfolios, what we are offering. And we also offer a credible source of information. We all know how much information there is in social media and sometimes it's difficult to say what's right and what is wrong. So this is absolutely correct information. And it is also expert guidance to these customers. But this is a pilot, as I said. So next year, we will then see the outcome, the results, and then we can make a further decision about the continuation or possible expansion to other countries. I always love to talk about the capabilities and competitive edge since in this business, I think that we have a few of them. So as many of you probably know, we are in the leadership position in Finland. The total market share is 11%. And in reference priced products, and Consumer Health, it's as high as 25%. Also in Scandinavian countries, we are doing very well in Generic business. So last year, we managed to go higher position from position 6 to #5. And then in Poland, we have many years been on the row, the fastest-growing generic company. What then really facilitates that? I believe it's our portfolio, the broad portfolio. It's also the very strong partnerships, what we have with our key customers like pharmacies and healthcare professionals. And also that we are quite advanced in this digital presence. So in Finland, we have several digital platforms through which we will -- we are communicating with the customers, and now, this new online channel in Sweden. I'm approaching the end of my presentation, and this is my summary slide. So yes, in this business division, we are looking for growth. We look growth through the innovation. So it's this transformation of the portfolio towards complex and value-adding generics and also new channels. The other area we are looking growth is through geographic expansion. So Europe Big Five is our current thinking. But then after that, of course, we need to think about the other geographies as well. We do grow through portfolio expansion, and we have those tools, which I already mentioned, the in-licensing, own development and through strategic partnerships. Then there is this interesting question about organic versus inorganic growth options. So believe me, we have evaluated several hundreds of companies and to see if there is something what Orion could acquire. And -- although there are wonderful companies all over the world, but at least we haven't quite found our match as of yet. So -- although they would bring a good increase to the revenues, but then it requires investments as well. And we just haven't find yet the way how to make it a good fit. However, after having said that, we are very open to the portfolio acquisition. So we are actively looking for portfolios to be acquired in -- especially in Hospital segment. And then also in Consumer Health, we look for local brand acquisition opportunities. Thank you. I thank you for your attention, and I'm ready for questions, if any.

Thank you, Satu. So it's time for questions, and let's start with Iiris first because the mic is there. Then to Sami.

Iiris Theman, Carnegie. You announced a licensing deal with Amneal 2 years ago. So how is it progressing and when it will be reflected in your numbers?

Thank you. So yes, 2 years ago, we made the deal with the U.S. company, Amneal. They have a big portfolio in the U.S. for generic products. And then we are really going through the portfolio and seeing one by one, which of the products we could further develop to the European market. Some of these products need some further studies. Or some -- actually, quite often, they require something. And that's why it is so slow, if I may. However, we have been able to handpick there some of the projects, and they are ongoing, and I hope that in not-too-distant future, we are able to have a few first launches.

Thanks, Iiris, for the question. Then it's Sami's turn.

Sami Sarkamies, Danske Bank. I have two questions on Finland, which is a very important market in your segment. Firstly, can you comment on the competitive landscape? And then secondly, do you see any upcoming regulatory changes that could impact pricing or competitive dynamics in Finland going forward?

Thank you. Yes, the Finland is really the most important country for this business division, 60% of the sales coming from there. The competition, it's tough. There's, all the time, new competitors entering to the market. However, there are also competitors which will be here only for a while and then they step out again. So yes. I would say that being #1, you are always the one who everybody wants to beat and achieve, and that's why we need to really move faster than the others. But yes, I see that the competition is getting tougher and tougher. But luckily, we are in the -- we have 100 years behind us. So we are in a good position in that sense. And then the other question was about the regulations and everything. So it has been a lot in the Finnish news and media in recent months and even years that what will happen, will there be some changes to our referencing pricing system. There are always these cost cuts, what the government is introducing to the drug prices, for instance. But at least currently, my understanding is that this year is now quite secured. I don't foresee any cuts for this year. But we are in a constant dialogue with the responsible ministry. And other than that, there was also a discussion about this OTC drugs, if this would be allowed to be sold in the retail as well. And the ministry has divided these OTC drugs to three different categories. The first one, not requiring any advice. The second one is requiring advice from the pharmacists, and then the third one being very -- they are all the pain medication, for instance. So they are quite -- when if not used right, can be even very critical and dangerous. So I don't know yet. We will hear during the summertime, what the government will say. But if we think about this first category, whereas no advice is required. So if that part goes to the retail. So actually, in the pharmacy, that market is only something like EUR 40 million, EUR 50 million. And we know by experience from other Scandinavian countries, when that has happened, it's only about 20% of that market will then go to the retail because, of course, it will stay in the pharmacy as well. So that just gives you some magnitude, what kind of money we are talking about and potential. So therefore, I'm not too worried. However, I want to say that we do believe that pharmacies are the right channel. They have the information and knowledge, and we want that our drugs are really created in the special care and for the benefit of our patients.

Thank you. There's Anssi, right behind you.

Anssi Raussi from SEB. A question on this direct-to-consumer sales channel, like what kind of expertise is it what you're offering there and who or what is providing that? So is it just an information bank or what kind of knowledge?

To consumer sales channel, like what kind of expertise is it what you're offering there? And who or what is providing that? So is it just an information bank or what kind of knowledge? And also, you mentioned that the sales channels are one of your growth initiatives going forward? So are you planning something new in this front as well?

So it's really we have there some medical experts who write columns there and provide information of cost of products. What we are selling through that online channel and then there will be all kind of information shared what this customer would require. And of course, we are in early days. So we will also develop it based on the wishes and request by our customers. And about the channels, so yes we are thinking about different things outside Finland, so trying to be innovative, but other than this online channel, I don't have anything to share at this point.

Any further questions from the audience here in Helsinki? Now it seems that we have exhausted and we don't have any questions online at least at this stage. Kind of a reminder to the webcast, you utilize the opportunity and sent in your questions using the chat function. We can then address those in the final Q&A. But now it's time to thank Satu.

Thank you.

And it's my pleasure to invite our next speaker, Mr. Niclas Lindstedt from our Animal Health business division.

Thank you. Good afternoon. It's my pleasure to be here today and talk to you all, tell you a little bit about our story in Animal Health. Go into the details or into the future of Animal Health, I think we need to take a couple of years back and look at where we come from. When you look at our history, clearly, in 2019, 2020, we had a very solid companion animal business, which was totally located in Finland with our R&D fully integrated into Orion system and all the parts of Orion -- or other parts of Animal Health was in Orion. In 2020, we had a big change when we lost the distribution agreement in Scandinavia, and that sort of left us in a situation where what should we do next. Then in 2022, actually, the acquisition of Inovet, VMD in Belgium, France, actually put us again backward the market in Animal Health. Of course, when you do something like that in an ever-changing world, in 2023, we had a real setback, not only because of the world situation, where we had -- could find that the war in Ukraine influenced the currency in certain parts of the world, which actually gave some issues around some distribution. But then again, at the same time, after COVID there was a total warehouse offset -- warehouse correction in the U.S., which had a big influence on our U.S. business. And that's why 2023 really were a tough year all in all. But at the same time, we were looking at how do we integrate these 2 businesses. How do we make this one Animal Health inside of Orion Pharma. And at that stage, we started off by building a new management team. We integrated the business to sales. We also looked at the R&D and actually have a fully integrated R&D team today, and that's where we actually go forward from. Then in 2024, we were back on track. Now we are actually where we need to be to accelerate our growth going forward. We're still -- if you look at the world, we have 13 captive markets, we're selling more than 100 countries. And we have -- a major part of our people are actually outside of Finland. Today, almost 70% of our Animal Health people are located somewhere else, 90% of our sales comes from outside of Finland, which means also that we really as -- on Liisa's first slide are really global. We're trying to do going around the world and how do we build from here. When we didn't say that, okay, if you're looking at our market presence and our world presence around the world, how do we grow from here? Well, first of all, Animal Health market is still growing. It's been expected to grow for the next 5, 10 to 15 years. it's been a really hot market over the years, of course, from us, it's been also a good thing, but also there's an opportunity to actually catalyze some of that growth going forward just from a market point of view. When we look at the 2 different businesses with Inovet and Orion Pharma, we have both Companion Animal and livestock products today, which actually gives us an opportunity to play in the whole market. Even though today, Companion Animals are growing a little bit faster, mainly because of certain Western world markets and some specific product launches around there. The livestock market is clearly growing because of protein need in certain parts of the world. As we're now looking at our presence in these markets and with our portfolio, which is very wide in all these different places, we have an opportunity to accelerate our growth going forward. What's also really unique for the Animal Health is, of course, the customer base is consolidating, and it's been doing that for the past 10 years. And I always ask myself, why is that? Why is it consolidating? What's the big reason for that? And my personal view I think that's getting more and more obvious is that because Animal Health is still a very loyal business. You have a customer relationship loyalty with your partners, with your customers and actually, you don't want to change that. So what happens is that the veterinary change have a loyal base and that's what the consolidation is actually going after. It's the same when it comes to partners with distribution that you cannot really still partners from specific markets, but you need to consolidate those. And when we now look forward, and we see what we've already done today is that we already have relationships both with partners and with customers, which goes decades away -- or decades back. And those customer relationships, we need to utilize and expand. The other thing which is clearly coming forward is, of course, the pet increasing in -- especially in the U.S. in Europe. You can see the pet parenting and that's the usage of products. What we also see that this is a consumer business in a consumer where you actually are part of the wallet of the consumer, so inflation, different kinds of cost going up will actually limit how much money you will spend on your pet because -- and also, unfortunately, we have seen lately that the pet spend has gone up significantly in certain markets. And that will clearly, of course, have some backlash on the growth potential. On the other hand, again, regulations in the different world parts is actually growing, which means that the competitive landscape is actually giving us more opportunities to be there and now being present in so many countries with our products and marketing authorizations will give us opportunities to actually utilize that growth. Everybody always ask me, where do we go with our R&D and what kind of things do we look at? And where is the thing where we think we can make a difference. And of course, with the livestock portfolio, we do carry some antibiotics. And now clearly, we're focusing of to the reduction, the replacement and the refinement. How do we do that? And we already have some solutions, for example, competitive exclusion products for broiler of growing, and that's sort of which is giving the sheep healthy gut flora. That means that when the sheep actually is born and does never see its mother, it will have an opportunity to have a healthy immune system and does not need as much antibiotics it could get sick later, different kinds of education around that. And also what we find around antibiotics also is that we're really focusing today individual treatment, not mass treatment, which means that as we also have a big investment inside of an injection facility in France that really is the future where we want to go with having injectable products, which we can have in the Livestock segment. Anesthesia and pain management. This is clearly an area where we been for a long time. And as earlier was said, there's a lot of history in our company and a lot of expertise and this is something where we're also looking for new better ways, both post and pre and the round operation table of the Animals. When it comes to generic developments, it's funny when you think about that, I usually don't talk about specific products, but I can tell you that last year, there was 25 new veterinarian medicines approved in Europe, 2 of those was from Animal Health, both in the pain. So I mean, it's clear that we're doing the generic development all the time, even though we don't make a lot of fuss about it. But these things are, of course, today, public and coming out from that point of view. And as everything else, when we're trying to develop something new, it's really all about convenience of administration. It's all about formulation, but also especially in the livestock side, we're talking about future productivity because it's all about productivity and cost in the livestock. And then, of course, innovation. All we know that Orion Animal Health has been in the past, one of the companies, which is really focused on innovation. We have had some really new innovative NCEs coming up during the past 10 years, 20 years. And now, of course, we are also looking at what is the next one coming. At the moment, we're expecting that next year, we'll have a new chemical entity in the U.S. market so that will be an opportunity for us also to show that we can actually grow through the innovation and the new opportunities. Of course, the generic development is still there, we will always focus on filling our pipeline and improving our products, but that's something which will also take time to fill up the full portfolio. And in licensing, one thing which is clear for the Animal Health side is that there has been a lot of long-term partnerships. There's not that many suppliers around the world, and we have some very good suppliers and the partners, which we've been working for decades as well as everybody around the industry. That means that, that's where we will look for a lot of new opportunities coming forward as well. And of course, at that time also, what we have done after the acquisition is clearly the cross-selling, both repatriation of our own products in France and also working with our new portfolio in Poland and in some markets where they are already being some sales. So really trying to integrate and be more self-sufficient in the markets. When it comes to inorganic growth and opportunities around that, for me, clearly, the acquisition or the merger is all about strategic fit. And as we could see already from the geographic expansion, where we are in all those markets, if there is a opportunity in the current markets where we're looking at if there would be something which would fit nicely and fit right to our expectations, that's where we would go. Simply, our purpose in Orion Pharma Animal Health is to provide meaningful Compassionate Animal Health Care that prioritizes the well-being and of the Animals and their caregivers. Thank you.

Thank you, Niclas for giving us an update on Animal Health business. So you all know how it goes. The floor is open for questions. Do we have any here?

Everybody is excited for Rene.

Sami Sarkamies, Danske Bank. I want to ask about the Inovet acquisition that was done a couple of years ago. So can you talk about the financial performance in let's say, in the recent years. It was tough initially, but where are we today relative to the time of purchase when it comes to top line and margins?

Well, my view is at this time, we actually treat Animal Health as one company, both the Inovet and Orion. So even though there are some ways but because it's so interlinked at this stage, it's very difficult to say what's the financial outcome of that. But if I would say that the 2023 was really tough. But now we can see that when we actually started integrating more and more and the things that we actually combined gives us really an opportunity to see that as Animal Health, we're growing. So I believe that always when you do these kinds of big moves, you have to take steps back before you can go forward, and that's unfortunately what we had to do. So -- but now I feel much more comfortable with knowing that what we're doing today is actually from building the full Animal Health business. So but I'm sure somebody could calculate that, but that's not something which I follow.

But is it roughly in same condition at time of purchase or?

Well, my argument would say it's much better. But of course, that's what I've been doing for the past 1.5 years. So I hope that's the feeling they also have, but you need to ask them that. So I guess I'm biased.

Any further questions here from the live audience? You did a good job, exhausting all the questions during your presentation. Since we don't have any online, you don't need to stay.

Thank you.

You are free.

Okay.

And then we can take a little bit more time for the final Q&A because we are a little bit ahead of schedule right now. But now it's time for the last presentation. And finally, we get in the numbers. So it's my true pleasure to invite Rene to the stage. Please Rene.

Thank you, Tuukka, and good afternoon to everyone. I'll first start with the financial objectives that we set for the midterm until the year '28, and these are the same financial objectives as we've had already since the beginning of last year. So there hasn't been no update to them, but it's good to remind of how they look. And the periods from '24 to '28 with the reference year being 2023. So net sales, we have set objectives to grow with a CAGR of at least 8% in operating profit faster than the net sales growth. And from a balance sheet perspective, we have set a target of an equity ratio of at least 50% and return on equity over 25%. And the dividend policy is to have annual increase in dividends with payout ratio between 50% and 100%. Now if we look a little bit about the -- on the growth figures and how we've been doing against those targets, we've seen decade of slow growth first here, if we look at starting from 2010, about GDP level growth, but of course, then during the last years, we have seen an acceleration of that growth with the launch of Nubeqa, but also because of the other divisions growing very nicely. We reached EUR 1.5 billion net sales last year and you could say that we are a bit have been going a little bit ahead of even our schedule. Now just to illustrate what an 8% CAGR would mean if we continue with that average growth rate starting from the position of where we are in '24, then we would end up at around EUR 2 billion in '28. Now this is not a new objective, it's just an illustrative calculation of how this will go. As a reminder, the year -- reference year is '23. And this is also showing just a very straight-line calculation so naturally, we have a state that we have won Nubega, sales milestone left of EUR 180 million which we have estimated at '26. So that would mean that if we would add that on top, there would be kind of a peak year in '26 going a bit higher than the average line. Now to capital allocation principles. We have been discussing this earlier. And also here, there are no major differences in how we allocate capital. But just to give a little bit more color on each of the areas. Number one is still internal R&D pipeline that we have been discussing a lot. Generally, we would expect the growth rate similar to net sales growth over the long term. In past, the percentage of net sales, R&D spend has been between 10% and 12%. However, timing of projects can cause a variation. And this is also good to understand going forward that we could go both above and below this general historical average rate. dividends is definitely one big part of our capital allocation, as I said, keeping them annually growing and a payout ratio of 50% to 100% of net profit. And we have an extensive manufacturing network, supply chain. And there, we also have maintenance investments, which, of course, are part of every year operations, but also we are increasing capacity. As we need more capacity for growth. We have been increasing capacity for darolutamide, we have been increasing capacity for Easyhaler, and those will also be invested in going forward. In the past, we've seen tangible CapEx levels so into buildings and machinery being about 4% to 5% of the net sales. Now if we look at the next few years, we see a slightly elevated level of CapEx because we have seen, as you all have seen that the darolutamide growth has been quite fast, maybe a bit faster than the initial expectations. So we are increasing also here investments to debottleneck certain production lines. We also have quite large renovations in R&D and quality laboratory facilities within this time frame that will increase CapEx. So you might see levels which are closer to the 5% of net sales in this time period. It will a bit vary depending then on the project timelines and execution. Now in the long term, as we grow, we see that we should be in scale effects and have a relatively lower level of tangible CapEx, so closer to the 4% level. And you also heard today a lot about in-licensing and acquiring commercial assets. This is something which is ongoing all the time in all of the business units so it's part of the process as well. And each case here is always valued separately, we do the business calculations and they have to stand on their own as a product. However, there's natural synergies between products and the portfolios, which add on top of their single product business cases. And then external innovation. We do use also CapEx to extend our internal R&D. We do a lot of cooperation with biotechs. And you can see intangible investments also being made. And this is typically at the early stage upfront fees in terms of signing fees, could be milestone fees. And of course, if it ever enters the commercial stage also. And finally, M&A is in our toolbox. We also have all the time looking at strategic capability competencies that we want to acquire but we do very focused on our current businesses. And it could be used in all of our businesses as well. And just to give a little bit of sizing on the capacity for M&As, we have very low leverage, as you're well aware, and this means that we have a lot of balance sheet capacity using numbers such as EUR 1 billion of new debt and 10% of new equity and with the cash flow we are generating, we would have EUR 2 billion of capacity. Naturally, there are different structures as well available and as we grow, this capacity keeps increasing every year. Now going a little bit more on the numbers side, as discussed on the historical numbers, this just shows that the R&D spend has been pretty steady at 10%, 11% of net sales last year, a bit accelerating going to 12%. And then the rest of the CapEx has been between 3% and 8%, average 5.7% and a tangible part of that 4.3% with the rest then being intangible a lot of these license deals and so forth. And a little bit more detail on the R&D costs. So this is looking at the different parts of R&D which is now here divided into research part, so meaning really early-stage preclinical phases and then development, which is clinical phase of very commercial phase development of products. And also, you have general cost here, which is kind of infrastructure costs that support all of the phases. And you can see the growth in the last year has been fast, 16% CAGR for '22, '24. However, if we take away the write-off that was used last year in '24 of EUR 70.5 million due to ODM-111 being canceled. You can see the growth rate was about 10% CAGR. And the largest growth here has been within the research part, so the early phase. And as you can see, in the other materials, there are plenty of projects in the pipeline, and it has been increasing as well. And biologics projects have been increasing in the pipeline and those are a bit more expensive in the research phase than the small molecules, and that's also one explanation of the '24 increase. And now that we have more biologics entering even later phase of the research part, we see that also increasing the R&D spend also this year. And of course, when it always comes to the rate of increase in operating expenses, our financial targets also give us the frame and at what pace in the end, we increase them. Now moving to the other large operating expense area with the sales and marketing that has also been growing over the last few years with 15% CAGR. Again, here, we had a write-off in '24 for commercial rights. And if we deduct that, the CAGR was 10.3%, happens to be similar as the R&D, not by design, but by chance. And if you look at the main drivers for increasing costs, it is to drive sales. We have been expanding Easyhaler in Europe. We also have other geographic expansion areas. We have opened in Japan, all commercial operations during last year. And but you could say the sales and marketing should always be done in a way that it drives new sales and matching that pace and gaining efficiencies as you heard today. And of course, whatever we do in terms of decisions and investments, we are providing, of course, value generation for shareholders, and that is, of course, the underlying theme. And depending, of course, you could do this in a very different cutoff points. But just looking at the last 10 years, that this TSR the CAGR has been very solid with about 50-50 coming from share price appreciation and dividends. So dividends, of course, is a big portion of the total TSR in our case. So key takeaways -- this very, very short financial update. We focus on long-term growth and value creation. We are in growth mode. We are investing, we are very disciplined in how we use capital allocation, but you can also see there are multiple areas where we use it. So we are investing a lot in many areas and especially, of course, with the R&D spend, which is targeted to invest with the growth of the company. And in-licensing is an important tool for us, both in the commercial sense of having ready products, but also in innovation. And lastly, of course, what is aimed for is that we are increasing our long-term cash flows, ability to pay dividends and while we keep enough capital for investment. So all this is, of course, enabled by the good growth prospects that we have. So that was all for me today.

Thank you, Rene, for the briefing to us. And at this point, I would like to invite all the presenters to join Rene on stage and also go there sit down and we can open the final Q&A session. But in the beginning, I guess, we could take first questions from the audience that are directed to Rene after his presentation and then we can open up questions also to other presenters. Let's start with Anssi again because he's positioned himself well with besides the microphone.

Anssi Raussi from SEB. A few questions to Rene and first, you mentioned a bit elevated CapEx in the coming years. So how much elevated in a ballpark?

Yes. I think as I said there, our historical CapEx has been between 4% or 5%. So the elevated here means closer to the 5% than 4.3% average, so around 5%.

Okay. And the next one about Nubeqa. So can you remind us what was the maximum royalty rate to be paid to end? Or what is the range? Have you disclosed that one?

Yes. I have to look at Tuukka here.

It's a low single digit, constant low single-digit number.

Okay, that's clear. And finally, about the M&A opportunities. And of course, this is a familiar slide is M&A firepower, but what would be that kind of target that you would actually trigger this 10% new equity option but would be so tempting target?

Yes. I mean the targets, of course, sizes can vary. And of course, every case, it depends on the total value generation and it doesn't have to be one single target, which is on that side. It could be multiple targets or most likely would be multiple smaller targets supporting the businesses. And yes, across all the businesses.

Okay. Thank you.

Thanks, Anssi. And Sami had a question.

Okay, starting with Rene, a couple of questions. First one, if we look at the net cash position and the dividend payouts, you have started to lower the payout ratio in the recent years. So despite of material increase in profits, your dividends haven't really grown that much. So is there a reason for you to stop building some sort of headroom? What are you kind of like planning to do with this cash?

Yes, it's a good question. Of course, if you look at our capital allocation priorities, there are multiple of them. So I think there as well, we are in an investment phase as well. So of course, we also need part of that capital to be for investments. Of course, if there are less investments, then we can look at that ratio again. But of course, we do have as you heard today and see we have quite many areas that we see potential to invest. And that's why we think we can keep both of the targets. We increased absolute numbers dividends, but still we have that more flexibility as well in the payout ratio.

Okay. And the second question, okay, it was sort of already asked, but if we think about Orion potentially making one larger acquisition, what would be the motivation that -- what is it that you currently need?

Yes. I think it's, of course, I will not speculate on any what it could be. But I think our strategy basically is to expand in the U.S.A., I think commercialized -- commercial assets, oncology space, those are could be the areas but also, I think, to strengthen the European business that we have. We have in our base business as well. We're looking to expand into the big 5 markets even more than we are today. So I think it could be in both of those areas in both continents.

Then moving on to Iiris. Iiris has a question there in the corner.

Do you see that your R&D costs in the next, let's say, 3 years, good increase above the historical level of 10% to 12% of sales?

It is definitely possible. I mean, if you look at our pipeline at the moment and if we are successful in entering the clinical phases and everything moves along, then yes, I think if we have success there, then yes, that could happen.

Does it mean that you would start a Phase I or II study? Or Phase III?

I guess. Yes, I think all this is the best in to come. Yes, so you were talking about 3 years period, I understand, yes. So if we think about our clinical pipeline at the moment, it is possible that we can make a start with Phase III study. Let's think about both [indiscernible] and 105. And of course, when at the same time, I told you that in '26, we have 3 Phase -- new Phase I study starting. And you put all together and you understand that then in 3 years' time, we would have several Phase II running as well as in a good situation also Phase III. And that means that, of course, the costs are then increasing significantly. But as Rene said, everything is now based on success of our projects.

How big Phase III study could you do by yourself? I mean, in terms of euros?

Yes, I think it really depends on the total portfolio we have. So we have a certain growth rate of R&D that we can do. And even though it would be relatively speaking, growing above the historical average, also looking, of course, the absolute EBIT is what we have as objective. So the more that grows, the more room we can also have to do those Phase III studies on our own. But of course, at some point, those studies might become too big if you look at the way we want to drive the financial structure of the company as well, and then we look at partnering options as well to complement that.

Yes, Anssi again. One quick question on ODM-105 so at this point, do you think that you have to use or you want to use external advisory when you're planning what to do next after Phase II?

Well, of course, we use external advisers and vendors that help us in the evaluation. So it's in a way, part of our business model that we always use external advisers too and consultants, yes.

And I'm just thinking about these costs, which were, of course, quite extensive naturally in ODM-208 back then a couple of years ago, but should we expect something significant or more like business as usual costs?

No, you are talking about 105 and we develop which cost development cost or commercialization.

I'm talking about this. I think you paid more than, yes, it was EUR 20 million when you were using external advisory.

Adviser for the...

Yes, because you have been saying that you're thinking about partnering ODM-105 and for example, ODM-208 of course, naturally generated quite significant external advisory costs.

Okay. You are talking about partnering, negotiations. Yes. All right. Thank you, Anssi for clarifying, we might think about many different paths here as we're talking about R&D and CapEx and all that but yes, you're right, we use an external adviser finalizing that deal. But when we talk about ODM-105, I think we are still more in the phase of thinking of market potential and using consultants and advisers there. When the time comes, to make a decision whether we partner or not. I think it's one possibility that we use an external adviser, but it's case by case, of course. The decision, first of all, as Rene say, whether we are going to partner, whether we can carry out R&D cost by ourselves. And then case-by-case whether it's something that will carry by ourselves the licensing negotiations or whether we will have an external adviser.

Shan, Jefferies. So for 212, obviously, you're planning on keeping that wholly owned and that sort of spearhead into the U.S. as well and studies are interesting more expensive than, for example, in some studies, especially when it comes to Phase III. So what's the level of confidence in being able to compete 212 wholly owned? Be able to spend enough on the studies then also market it yourselves in the U.S.?

Well, maybe I start and then Outi and Rene can continue on that one. You are so correct that cancer studies, especially with the big indications like prostate cancer are very, very expensive. Thus, we have MSD as our partners. But as discussed earlier today, the first indications for 212 are small indications, and we do think that we could have that in our hands and carry out the Phase III and even the commercialization but there comes to the next question, which is just that could you have it fully in our -- or could we have it fully in our own hands as we hopefully would see that there is a bigger potential with combination combining that drug to some of the existing cancer drugs, then we need to consider, as I said it's case by case whether you would find a partner to do kind of a hybrid deal where we can promote in the small indications and then combine forces with a bigger company for the bigger indications. I think there are many variations of the MSD you know that how you could eventually commercialize and develop such assets.

All right. Any further questions from the audience now to all presenters. Sami still has a follow-up.

Okay. Thanks. This maybe to all the just like a general question on R&D strategy. you've been successful with small molecules. But why do you think you can be also successful in biological drugs where you don't really have deep expertise and background similar to competitors?

Well, first, the way how we have now built R&D is that we try to have very strong target confidence for drug target confidence, I mean, for our old projects so that we have a solid scientific basis for the projects. And the reason for that is that the probability of success increases significantly when you build a strong scientific foundation for your drug discovery. And when you have then identified a good target that you can be confident that, that is a true disease driver then if you limit all your attractive recovery to certain modalities, a lot of these targets will be excluded because with small molecules, you can't target all targets and so on. So for that reason, we chose to have also biologics in our toolbox. And now, as I told you, we are moving to that situation that we need to have CMC capabilities in-house for biologics and so on. And this is the time when we have started to establish this biology hub and find the best possible expertise inside Orion. So we are answering to your question that there is a reason to go for biologics to have success and broad pipeline, and we just need to build those capabilities. And when we go to the place where actually the whole antibody therapeutic -- antibody technology was first invented for sure, we will have to find the best experts to work with us. So I think that this strategy is working and we have already the first recruitments happening there and it looks very promising. I don't think that it's rocket science. It's a modality, which has been around more than 2 decades already. So we have even biosimilars in the field of biologics. So as I said, it's only one modality. And when we do this right and have those people who have the experience, I think that we are going to be successful.

Okay. And then second question on ODM-105. It seems that you haven't fully decided that the program needs to be partnered. But can you explain how you would be able to take it to market as it seems to be like a GP product?

Yes. It's a very good question. We already talk about that, how the development program costs are perhaps slower in that area in some area compared to oncology, but it's the opposite then when we talk about commercialization and related costs. And this is exactly the reason why we are considering openly and talking about partnering option when it comes to 105. When we talk about 212 we are still thinking as the first priority to build our own oncology commercial platform. And oncology is, as said, it's an easier field perhaps to commercialize from financial perspective at least. And for that reason, it's the major goal for us to commercialize our oncology products.

And maybe third question, if we think about ODM-212, where you might do the U.S. on your own, at which point would you kind of press the button to sort out distribution in the U.S. that would be like after positive Phase II readout?

Well, then I think it's too late. So I think that we need to be prepared and start to build the commercial platform for our oncology products a little bit earlier. And I -- when we talk about 212, I think that we have also options if it happens that Phase II studies in combinations are going to deliver good results. We have also an option to do co-development programs with other pharma companies and that's also a model how you can go forward with the commercialization too.

Iiris Theman, Carnegie. Your study on pain phase last year. So did you learn anything that you could apply to your upcoming projects in pain?

Yes, for sure, we learned a lot. And I think that those learnings we can use particularly in the field of pain, but also I think that we can use those also in oncology and in general in drug discovery. One important point is that in that program, we did our Phase I study here in Europe, and then we were planning to start a Phase II study in the U.S. And I think that we have now prioritized to open INDs for our studies very early in the U.S. just to be in the discussions and with the FDA very early and let them in a way to be involved in the planning of our studies and these supplies both, of course, pain and oncology. Yes, always, you need to learn from failures.

That's true. And so basically, you still find this area pain as a possible free research area in the future, and that could lead to Phase III study.

Yes. We have in our research pipeline, you saw that we have pain projects there. But you also certainly noticed when I showed the slide that those are early projects now in our pipeline it was much more oncology projects in the later phases in research pipeline. So we are not expecting to have something in pain therapy area Phase III studies as such as stage very soon. So we are -- it takes time before we are there. We do not have even yet Phase I or validated nominations.

Could you acquire or in-license any molecules you think?

Okay. we have done this kind of strategic decision in the company. I think that I can openly say that I already referred to that, that we prioritize some quality products for commercialization in the same way we prioritize also oncology assets to be in license.

Any further questions here. Shan, please?

On 105, when you think about where it could be positioned in the market potentially, obviously, you have your sort of old benzodiazepines then you have the sort of newer more innovative, for example. Where do you think it could sit in the treatment paradigm in terms of the patient population?

And you are now talking about general insomnia or certain subgroups there.

Yes. So...

Yes. So at the moment we are doing the development program for general insomnia because usually, that's something that regulatory body is also favors that you first go general insomnia. And then only after you have shown efficacy and safety there, you can go to those subpopulations. So that's our understanding. And this is the way how the program is spilled at the moment.

No more has up here in Helsinki, then we can turn to the online questions. And actually, now we go back to the first presentation by Liisa and Outi when we had to skip a couple of questions coming from the webcast. Some of them have been already answered but let's start Outi with you. This question may have some misinterpretation about the mode of action of Opevesostat, but of course, you can then explain it. So can you talk more about Opevesostat? How does this antibody differentiate from those already on the market and Opevesostat is not an antibody.

Exactly. It's a small molecule and it targets CYP11A1 enzyme, which is the first enzyme in the pathway of steroid hormone synthesis. And in this way, when you block that first enzyme, you block the production of all steroids, and there is no such drug in the market. at the moment. And also, if there are any competitors, they are behind a lot. So this is a first-in-class molecule that we have.

And maybe could you elaborate then in this field that how, for instance, Opevesostat differs from enzalutamide or the darolutamide, which are then targeting mostly testosterone.

Yes. So enzalutamide and darolutamide are actually targeting androgen receptor which is a receptor for example, testosterone. And testosterone is as we know also steroid hormone but there are also other steroid hormones. And when prostate cancer cells develop, they can also modulate the expression and function and structure of gene of androgen receptor. And when that happens, these cells are not only growing because of testosterone, but because of other steroid hormones. And now we have enzalutamide and darolutamide that can regulate this androgen receptor directly. But with open vessels that we block the production of all the ligands that are able to trigger the activity of androgen receptor. So this is the difference, was it clear?

Yes, yes, that was very, very clear now. Then moving forward there's one question referring to actually a question that was asked already here, but with additional twist. So your internal R&D has been very impressive. But then again, the M&A and licensing track record has been more spotty and this returns now only to Innovative Medicines, not the whole company. Any learnings from previous setbacks, namely ODM-111 and then our collaboration with Marinus regarding ganaxolone. What kind of assets would you look going forward, late stage, early stage, remember to maximize the likelihood of such.

The first thing perhaps to say is that in this business, I have talked a lot about attrition. And attrition happens for different reasons, you have problems related to the safety of the molecule which are not target-related problems at all and issues at all. And then you have this problem of efficacy that even though all the experiments show that your molecules should work in this disease, when you go to humans, those models, those preclinical models are not translated and your project sales. And all these factors are also, of course, embedded in the projects that we in-licensed. And they are not only risks that are in our in-house projects. And even more, perhaps when we do our in-house R&D we know exactly how well we have validated our molecule, how well we have studied safety in preclinical models, in other models and inference platforms. But when we do in-licensing, our visibility, even though we do DD is not the same to the project. and perhaps in those cases, the likelihood for failure may be even higher. But still, almost every company wants to have a broad research pipeline and continuous flow of several clinical projects as Orion wants to have. We are not a start-up we are mid-sized pharma company. They use in-licensing also as a tool because not all wise wisdom is inside our R&D. And I think that we and everybody needs to just understand that the risks are there. And I do not -- I can always afterwards, I can learn from failures, which is always important. And I can also easily say afterwards, what was, in a way, the problem. But then you know the problem so I think that there is no such an answer that I could say that we have failed in our M&As or in licensing because we have not done so many. What is the likelihood that our project is successful, less than 10%. So it's the same likelihood in our M&A and in-licensing approaches. And when we have done only a few and they have failed, it's not against the odds.

That's clear. Then we also have one question that came during all this presentation, so this is directed to you, but maybe also Liisa and Rene can step in if needed. Thanks for sharing impressive perspective. How do you plan to manage sudden sales or market volatility and supply to come as close as possible to growth opportunities. So if we are talking about supply in Innovative Medicines that must mean Nubeqa currently?

Well, I think, especially if we talk about Nubeqa, which is on a high growth rate, We, of course, have a constant discussion with our partners. So we know where we go and during the last year since the launch and before the launch, we've been investing a lot to the capacity, both in Fermion and in Orion Pharma manufacturing. And we are still investing more to that capacity. So I think we are well prepared to the higher growth rates as well.

Thanks, Liisa. And continuing with Outi this question, I noticed in your early stage pipeline that you have many projects focusing on bispecifics ADCs and one CAR-T program. These modalities have had great success so far, but therefore, also become very crowded fields in oncology. What do you bring to the table in these programs? Are they new targets, new payloads? What's kind of the edge there?

When it comes to bispecific antibodies, its targets. I can't reveal now the targets that we have for those programs that I said that will be in clinical phase next year, but we have very first-in-class bispecific. So bispecifics has modality, it's something that many companies use nowadays, and it's very popular, and it's working very nicely. I think that it's here to stay but it's about targets. It's about innovation that we are talking about. And when it comes to ADCs, we have seen already now Orion started ADC research in 2020. And we have seen during that time when we have been in this field how the first-generation ADCs have had many, many problems related to the toxic effects of the release payloads and we have been watching that. We have been learning from those first generations ADCs problems. And we believe that we have a unique linked to payload combination combined with good targeting antibody, and we will have, in our hands, the next-generation ADC, which is effective and safe.

Thanks. So we will have something to wait for and expect when we finally then go to clinic at some point. All right, then we have one question that actually goes to Hao, you basically answered this question already during our presentation, but maybe it's good to remind because we have had this question here. So is your Parkinson's portfolio as it is currently set up able to grow going forward? And considering entacapone products are to stay constant in sales or what is going to drive growth? So is the growth coming mostly from new in-licensed products and developed products and so forth? Or is the current portfolio also capable of growing?

Yes. As I already answered early on, we do not necessarily break these down. But we believe there are synergies to be had. So collectively, hopefully, it will be a positive trend.

All right. Thank you. Now we have exhausted also all the questions coming from the webcast. Now still anybody here in the audience? Any final questions? Anssi, go ahead, please.

One more question regarding ODM-209. So Phase I is done so do you think that there could be an actually used case later? Or how do you see the future of this molecule?

The future of that molecule is in MSD's hands. So in a way, it's difficult for me to speculate anything above that, whether they want to go forward with that molecule. It's totally in their hands. But you can easily check also patent time and so on, try to regulate in your own head how.

And maybe if I may add here now since MSD has started with open also these new trials probably the message that they are now committed to take open as to start forward with full speed.

All right, any other? Last questions here. I see that nothing is coming either from the webcast. So now it's my time as the host and moderator to both thank all the presenters, all the audience here in Helsinki, all the viewers on the webcast. And I'd like to still hand over one more time to Liisa for the final words.

Thank you, Tuukka. And of course, on my behalf and on behalf of my whole team and Tuukka, thank you for spending the afternoon with us here in Helsinki and online. I hope that you have had answers to your questions, and we were able to share a bit more depth and width in our business divisions. And you see that we have a clear vision to future based on our solid financial track record and very robust business divisions to which we can build growth by innovation. Thank you very much. Have a nice day.