Sandoz Group AG (SDZ) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Sandoz call today. I will now pass on to Craig Marks, Head of Investor Relations for his opening remarks.

Thank you, and welcome to the Sandoz H1 2026 results call. Earlier today, we published a media release and an accompanying presentation on our website, which will follow on today's call. You can find these documents at Sandoz.com/investors. Joining me on today's call are Richard Saynor, Chief Executive Officer; and Remco Steenbergen, Chief Financial Officer. Please turn to Slide 2. Our results announcement presentation and discussion include forward-looking statements. Please see our disclaimer here. Please turn to Slide 3. Richard will begin today's presentation with the highlights of the company's performance in the first half of the year, followed by an update on the business. Remco will give more detail on the financial performance as well as a recap on guidance for 2026. Following a wrap-up of the presentation, we'll be happy to take your questions. And with that, I will now hand over to Richard. Please turn to Slide 4.

Thank you, Craig, and hello, everybody. It's a pleasure to welcome you all on the call today. Before we turn to our H1 performance, I'd like to take a moment to reflect on the growth of Sandoz. Over recent months, we've continued to strengthen our position as the global leader in a port of [ Matan ] and is an increasingly important voice in health care policy and medicine security. Alongside the 3 anniversaries shown on this slide, we're also approaching another important milestone. We are delighted that Sandoz will join the Blue Chip Swiss market index in September, less than 3 years after becoming an independent company. This is a strong recognition of our execution, our colleagues and are growing relevance in capital markets and investor confidence in our long-term growth prospects. Please turn to Slide 5. Now let's look at our performance in the first half. We delivered a strong set of results with excellent progress in our pipeline, business and financials. We further strengthened our industry-leading biosimilar pipeline through the addition of 4 in-house assets, bringing our total biosimilar pipeline to up to 36 assets. We also achieved important regulatory milestones, including EU approvals for our insulin biosimilars and U.S. regulatory submission acceptance for our in-house generic to appetite. In addition, we received regulatory approval for a new semaglutide treatment option in Brazil, paving the way to expand patient access in this import market. From a business perspective, we continue to leverage our scale and competitive advantages. We moved up to become the #2 biosimilar and generic company in North America. We opened our new state-of-the-art biosimilar development center in Lubiana, and our climate targets were validated by the science-based targets initiative. These achievements were matched by a strong financial performance that was in line with our commitments. In the first half, net sales increased by 5%, including 7% growth in quarter 2. Biosimilars reached a record 33% of net sales in the half, while our core EBITDA margin expanded by 90 basis points to 20.9% in Management free cash flow remained strong at around $500 million despite a significant uplift in CapEx. Based on our performance in the first half and our confidence in the outlook for the remainder of the year, we are confirming our 2026 guidance today. Taken together, this outlook and these achievements reflect the strength of our business model and our ability to translate execution into sustainable growth and value creation. Now let's look at the sales performance in more detail, starting with Slide 6. H1 was another period of strong growth for Sandoz with top line momentum led by an outstanding biosimilars performance Indeed, biosimilars grew by 20% in the first half, increasing to 22% in Q2. We continue to benefit from successful launches and excellent commercial execution across every region. Generics also gained momentum from Q1 into Q2. The modest decline in the first half was largely a result of temporary headwinds in the first quarter, including adverse dynamics in the anti-infectives B2B business, in Q2, low single-digit growth for generics was more in line with the long-term trend. Please turn to Slide 7. Well, bison are the key growth engine for our business, Generics are a strong and essential foundation for sustainable growth, providing stability, access scale and reliable cash generation to support our long-term strategy. For the period '27 to 36, we have over 300 assets in the generics pipeline, targeting 2/3 of the loss of exclusivity opportunities by value. Our portfolio strategy remains highly disciplined. We focus on the most attractive LOE opportunities, particularly in oral solids and injectables, where our scale, development capabilities and commercial footprint provide meaningful competitive advantages. At the same time, we continue to convert our generics pipeline into commercial launches. Recent examples for Europe and the U.S. are shown on this slide. We are also making important progress in GLP-1s in Brazil and Visa recently approved Sandoz' first GLP-1 medicine with the launch of semaglutide planned for later this year. This represents a historic milestone for us, establishing our presence in the GLP-1 market and providing access to 1 of the world's largest semaglutide markets. Together with our multisource strategy, this strengthens our ability to participate in what we believe will be 1 of the most significant growth opportunities in health care over the coming years. Now let's turn to biosimilars on Slide 8. Starting with high remarks, we continue to hold leading positions. Alongside an expansion of biosimilar adoption, we have grown our global market share and I was pleased to see high [ Remos ] delivering double-digit net sales growth in the first half. Turning to Peace Gevo, we have quickly established a leadership position in the European ustekinumab market. today, Pactiv is the #1 biosimilar across major European markets with a 35% market share. It also grew double digit in the first half. While short-term market dynamics in Germany have created some headwinds for festive and by a similar pricing more broadly, the underlying performance of our biosimilars clearly remains very strong. Please turn to Slide 9. Let me now turn to Truco and Omnitrope. We continue to make encouraging progress with Taroko in the European natalizumab market with market share increasing from 7% at launch to 17% today. Importantly, that share has remained stable over the last few quarters. Looking ahead, we see potential upside from further adoption in Europe, a longer-term ramp up in the U.S. and additional launches across Europe and international markets. 2026 marks the 20th anniversary of our first regulatory approval of Omnitroas the world's first biosimilar. Today, it remains the class leader with a consistently strong market share of more than 1/3. Please turn to Slide 10. Now let's move on to our most recent growth drivers, starting with Wist and Yubonti, where the launches of exceeded expectations in the U.S., both medicines have quickly established leadership positions after the launch in quarter 2 last year with Jabonti achieving a 64% biosimilar market share and Yost 54%. These results reflect broad provider access, strong commercial execution and early wins with key players. The European launch has also been progressing exceptionally well with rollouts completed across 27 countries on day 1, whilst international launches in markets such as Brazil and Australia are also gaining momentum. Turning to clearlibocab biosimilar, we're equally encouraged. Launch execution across Europe has been strong, and the medicine is now available in 19 markets. With limited competition to date, AdClear is well positioned to drive broader patient access while supporting more sustainable health care systems. Looking ahead, A represents another meaningful growth opportunity in 2027 and 2028, supported by U.S. launches in the coming months. Please turn to Slide 11. This slide highlights the depth, quality and scale of our industry-leading biosimilar pipeline. I am very proud of the progress that we're making. Our biosimilar pipeline now stands at 36 assets. This breadth is unmatched in the industry and provides multiple growth opportunities across a wide range of therapy areas. Importantly, this is not just about the size of the pipeline. What differentiates Sandoz is our ability to continue to expand our pipeline and convert assets into successful commercial launches. This is creating an increasingly attractive portfolio of marketing market-leading biosimilars. Today, we have 5 assets either in regulatory review or you are yet to launch. Assets in clinical development and 10 in technical development with a further 15% in early development. The shape and expansion of this biosimilar pipeline underpin our increasing confidence in the Sandoz road map. We have multiple assets entering late-stage development, a growing number of regulatory milestones ahead and a broad set of future launch opportunities that support our ambitions for the Sandoz golden decade. Please turn to Slide 12. Beyond the medicines we have in the market today, we are investing to ensure we are the leader of the next wave of biosimilar growth. One of the key milestones in the first half was the opening of our new state-of-the-art biosimilar development center in Rubiano, Steven. More than simply a new facility, it is a strategic investment in scientific and technical capabilities that will support our industry-leading pipeline and long-term growth ambitions. It is a huge step up in our development capabilities. and we look forward to showcasing the center to many of you in November. As our biosimilar pipeline becomes larger and more complex, speed, efficiency and execution become critical competitive differentiators. This center strengthens all 3. Alongside our growing commercial scale, the benefits of this investment give us greater confidence in our ability to deliver a leading program of launches and capture significant growth opportunities over the coming years. And with that, I will hand over to Remco on Slide 13.

Thank you, Richard, and hello, everyone. Please turn to Slide 14. Let me start with our strong first half performance, which demonstrates the strength of the Sandoz model and our disciplined execution. In the first half, 5% increase in net sales was driven by the very strong performance of biosimilars, where sales grew by 20%. This growth was broad-based. All regions contributed with strong results from legacy biosimilars and as well as the recent launches. We continued to make excellent progress on profitable growth. Core EBITDA increased by 15% and the margin expanded by 90 basis points to 20.9%. And supported by an increasingly favorable sales mix, continued operational efficiencies and operating leverage. The combination of higher operating profitability and stronger core net income drove a 17% increase in core diluted EPS to USD 1.71 demonstrating our ability to convert top line growth into higher earnings growth. At the same time, our cash profile remains strong. Management free cash flow was stable at USD 503 million despite additional capital investments to support future growth. Please turn to Slide 15. Net sales increased by 10% in U.S. dollars or 5% at constant currencies taking sales from USD 5.2 billion in H1 last year to USD 5.8 billion this time. The performance reflected significant volume growth. Biosimilars with a standout contributor, in North America, biosimilar sales grew by 47%, while Europe and international markets also delivered double-digit biosimilar growth. The impact of price erosion was more than offset by strong underlying demand and enhanced market access. The level of erosion primarily reflected short-term market dynamics in Germany and an outstanding biosimilar performance in North America. Currency movements provided a 5 percentage points tailwind in the first half. I'll touch on our full year expectations in a moment. Please turn to Slide 16. Alongside the rapid growth of biosimilars, generics remain a resilient foundation of the business. H1 generic sales were broadly stable with the performance improving meaningfully in Q2 and after onetime headwinds in the first quarter. While residual headwinds remain in generics in the international region, driven by active portfolio rationalization and market dynamics in Brazil and Japan, the Q2 improvement reinforces our confidence in the trajectory of the business and the sustainability of our growth outlook. Please turn to Slide 17. Looking at the regions. North America delivered a particularly strong performance, growing by 15% in H1 and even by 18% in Q2. This was mainly driven by the successful launches of Westin upon, which continued to exceed our expectations and illustrates the commercial potential of our biosimilars platform. European biosimilars were also up double digits, while the generics business returned to growth in the second quarter. In International, biosimilars continued to gain traction with growth of 19%, supported by Rixatone and recent launches. Now let's have a look at the P&L on Slide 18. Top line growth was supported by strong biosimilar momentum and an increasingly favorable sales mix. This helped lift the core gross profit margin to 9.7%, an increase of 50 basis points. At the same time, we generated further operating leverage, supporting a 90 basis point expansion in the core EBITDA margin to 20.9%. Importantly, we achieved these margin expansions while continuing to invest in our pipeline, launches and future growth opportunities. With core diluted EPS increasing by 17% to USD 1.71. We delivered a more profitable growth, combining strong commercial execution with disciplined cost management and increasing operating leverage. Please turn to Slide 19. As I mentioned, a number of factors helped to grow the core EBITDA margin. The most significant contributor was business mix. Strong double-digit biosimilar growth increased the share of accretive medicines in our portfolio, contributing around 2 percentage points to margin expansion. While price erosion is a constant headwind -- this was almost offset by continued operating efficiencies, including manufacturing and supply as well as support functions. Currency movements continue to have no material impact on our operating margin. Let's now have a look at one-off costs on Slide 20. Excluding litigation and some IT expenditures, we had one-off cost of USD 142 million in the first half. I continue to expect these one-off costs to amount to around USD 0.3 billion over the full year, in line with my previous commentary. Importantly, these costs are trending down significantly from the peak in 2024 as the major separation activities move towards completion. Outside of underlying one-off cost, we announced this week another important step in addressing legacy U.S. generic drug litigation. We have resolved all pending class actions in the U.S. generic antitrust litigation as well as all claims filed by any U.S. federal or state government against the company. The only remaining antitrust claims against the company in the U.S. generic antitrust litigation are those brought by individual plaintiffs who opted out of class settlement. We reached a settlement agreement with 43 U.S. states and territories, covering USD 400 million spread cash wise equally over 7 years, starting in 2027, resolving all federal and governmental claims. The resolution of these claims requires an additional payment of approximately USD 50 million to state that settled earlier. We also entered into a settlement agreement with a putative class of indirect reseller plaintiffs and will therefore be USD 28.5 million in exchange for a full release of Oakland. These settlements reflect our commitment to operating with integrity maintaining strong governance and responsibly resolving legacy meters as we continue to work to expand access to affordable medicines. These settlements do not affect our full year 2026 guidance or midterm outlook. Please turn to Slide 21. Turning to cash. The strong operating performance translated into management free cash flow of around USD 500 million. This was achieved despite a meaningful step-up in CapEx to around USD 500 million as well as higher interest and tax payments, demonstrating the underlying working capital resilience of the business. Be aware that higher interest expense in the first half mainly reflects the coupon payments in March 2026 on recently issued bonds. We continue to expect CapEx to peak during the current investment cycle this year at around USD 1.1 billion. These are deliberate investments to support our future growth. And the performance of management free cash flow underlines the resilience and generative nature of our business model. Please turn to Slide 22. Our balance sheet remains strong. and provides significant financial flexibilities to support both growth investments and disciplined capital allocation. During the first half, we felt strengthened our liquidity position to USD 2.3 billion, supported by successful Swiss bond issuance in April earlier this year. Gross debt increased to USD 5.9 billion. Strong cash generation, however, largely offset this impact, leaving net debt broadly unchanged at USD 3.5 billion. This meant a net debt to core EBITDA ratio of 1.4x at the end of the period down from 1.5x at the end of last year. Our strengthened balance sheet, improving liquidity and investment-grade rating puts us in an excellent financial position to support our ambitions. Please turn to Slide 23. We continue to maintain investment-grade ratings for S&P and Moody's with both having positive outlooks on Sandoz. Our debt maturity profile is well diversified with an average maturity of around 5 years, while our average borrowing cost to remain below 4%. At the same time, we remain disciplined on leverage targeting net debt to core EBITDA below 2x in the medium term. This combination of financial strength, flexibility and disciplined capital allocation ensures we can continue investing for growth while maintaining an attractive risk profile and delivering value to our shareholders. Please turn to Slide 24. And now finally, let's recap on the guidance for the full year. We continue to expect net sales to grow by a mid- to high single-digit percentage at constant currencies, supported by the positive impact of recent launches. The core EBITDA margin is targeted to increase by around 100 basis points. We now expect overall pricing to decline by a mid-single-digit percentage in 2026 compared with our previous expectation of a low to mid-single-digit percentage decline. This reflects the near-term dynamics in Germany and North America, I mentioned earlier. Outside of guidance, we now anticipate a 2 percentage point tailwind to net sales from currency movement this year based on recent spot rates and average rates in the period. Our prior assumption was a 4 percentage point state. We still do not expect a material impact from currency movements on the core EBITDA margin this year. Looking beyond this year, we remain highly confident in the outlook for Sandoz in both 2027 and 2028. Recent launches will continue to contribute more meaningfully and we have a strong pipeline of biosimilar and generic launches ahead, including the rollout of GLP-1 in early markets. Importantly, our multisource GLP-1 strategy positions us well to capture the significant market opportunity. With strong business fundamentals and clear visibility on our growth drivers, we are very confident in what Sandoz can achieve. And with that, I'll hand back to Richard. Please turn to Slide 25.

Thank you so much, Remco. I'd now like to wrap up the presentation before we go to questions. Please turn to Slide 26. To conclude, our business continues to perform strongly across pipeline execution, market position, capability building and financial performance. We further strengthened our biosimilar pipeline, which now comprises 36 assets whilst also achieving important regulatory milestones, and we received our first GLP-1 approval, a historic milestone for Sandoz. We moved up to become the #2 provider of affordable methanes in North America, and I am delighted that we have now opened our state-of-the-art biosimilar development center in Lubiana, further strengthening our long-term development capabilities. Financially, we delivered strong growth, core EBITDA margin expansion and robust cash generation. And based on our performance in the first half, our confidence in the remainder of the year, we are confirming our full year 2026 guidance today. Taken together, these achievements demonstrate the strength of our business, the momentum across our platforms and our ability to create sustainable value whilst continuing to pioneer access for patients worldwide. Please turn to Page 27. As we look forward, we are focused on delivering sustainable growth and creating value for patients. We're excited by the opportunity to share more about this and our goals in decades for biosimilars we view at our Capital Markets Day on the eighth of September in London. Thank you again for listening. Please turn to Slide 28, and I will ask the operator to open the line for Q&A.

[Operator Instructions] Our first question comes from Sophia Graeff Buhl Nielsen at JPMorgan.

Just want to ask clear in Europe. Where are you seeing most of the volume come from? Is it mostly from the originator or competitor brands? Or are you seeing significant uptake in naive patients? And then just what is your expectation for how that volume opportunity might develop will be limited as the originator converts patients to the high-dose formulation? I think they're saying yesterday, they expect 70% of volume to be on the high dose by the end of the year. And then just on Waston [indiscernible] in Europe as well, how are you seeing biosimilar market share penetration progress in Europe relative to what we saw in the U.S. for Sandoz? And have you been able to establish a clear lead as you did in the U.S.? Or is the volume competition a lot closer mobile peers in Europe?

Thank you. And thank you for your questions, [indiscernible] clear. I mean, look, we're seeing very strong uptake. I think what you've seen, clearly, we took a very strong position in terms of our patent strategy. And I think we've been rewarded from that. I really don't -- and really it's a bit early today. We need to see the IQVIA data, but certainly, we're seeing strong uptake broadly in all of the markets that we've launched. And I don't really see a massive -- I mean, clearly, some patients will migrate to a high dose, but also this is an opportunity to offer far more patients this medication. So this wasn't a very expensive medications to what we're seeing payers in Europe using this as an opportunity to drive access. So it actually goes back to a very core purpose as a company. And [indiscernible], yes, we've taken a very strong lead. I think with a lot by far the largest player in Europe, again, we're yet to see the most recent IQVIA data, but very pleased with the performance and uptake of the product.

Our next question comes from Victor Floch at BNP Paribas.

Maybe 1 for Richard on potential U.S. tariffs. I believe you flagged this morning constructive dialogue with the U.S. administration and openness to expand your manufacturing capabilities beyond Slovenia, I guess. So should we read that as a commitment to U.S. CapEx? And should we assume that you need both generics and biosimilars capabilities on the ground locally to comply with U.S. demands?

Thank you, Victor. Yes, look, I mean, I think as I said this morning, we have a very open dialogue with the administration. I was in Washington actually 2 weeks ago. I met with quite a number of senior members of the cabinet I do see opportunities. I think it's too early to say what that would look like. We've always said, look, I think we're broadly aligned to the U.S. administration. We want to find ways to bring affordable medicines to U.S. patients. And I think that's the dialogue that we need to have now. And I think, certainly, we're talking, I think we want the same thing. And I'm optimistic it's way too early to say what that would look like. And so I wouldn't -- I couldn't comment on what specifics would look like, but certainly based on the conversations, I'm very optimistic.

Our next question comes from Charlie Haywood at Bank of America.

Charlie Haywood with Bank America. I have 1 on Cameron on Eylea, please. So first, on [indiscernible]. I know you didn't want to commit too much before approval, and it's not part of your 2016 guide, but I think some more positive commentary out of yourselves today. So now that you have 1 approval and potentially decent visibility on the Canada approval, how are you thinking about that potential contribution '27, '28? And then on EYLEA U.S. launch in fourth quarter, you've got a competitor annualizing $1 billion sales. I think you're likely sero-market with 4 or 5 more coming by the end of 1Q on and you clearly expect as well. So what could you point to help us understand potential differentiation there? Is this dosing device access contracts? And any market proxies that you had flagged where you've been a long way behind an original player that's formed the biosimilars market and you've quickly gained market share?

Thank you, Charlie. Yes, look, clearly, we're pleased with the approval in Brazil. I think certainly for 2026, we never said it would be particularly material, but I think it's a step in the right direction. And we still have the ambition that we would launch in Canada this year as well. it becomes more interesting as you get into 2027. And I guess it sort of underpins sort of confidence in terms of the momentum we would expect to see Clearly, we would launch in Brazil. We expect a number of the other international markets, markets like Turkey, et cetera. And clearly, Canada flowing through into 2017. So it becomes more material and meaningful as we go into '27 and '28. As we've talked many times, it's actually a very difficult product to characterize in terms of how that market will expand, but certainly we're pleased to be participating and excited to be moving forward. In terms of EYLEA, I think the key here is we have a phenomenal ratio. Remember, we bought an ophthalmic pharmology capability a couple of years ago. really with this product very much in mind. So we have the relationship with the payers, and we're well established. I can give you numerous examples where we weren't necessarily first to market. But over a period of time, we've ended up taking a very strong position. And I think the commercial capabilities and our strength in the market sets us up well. So it's clearly -- we're excited about the launch later in the year. And again, I think it's a great opportunity as we go into 2027. And again, another one of the reasons sort of underpins our confidence in terms of how we see the outlook are going. It's very hard to give you a proxy, unfortunately, much as I'd like to try and think about how help you into your terms of modeling. There really is sort of an obvious one, but certainly, I think it's an attractive opportunity, and I think we're very well placed to fit in the product.

Our next question comes from Shyam Kotadia at Goldman Sachs.

Just circling back on to the GLP-1 opportunity in Brazil. So you got the approval I wanted to check if you could provide a little bit more color on the commercial dynamics given that there's around 5 to 6 players, including Novo's rebranded burden that's now approved. It seems like price erosion is more steep than initial expectations. So can volumes offset that? So any color there would be great as well as commercials with Adolo in terms of a profit share royalties? Any color there would be great. And then my second question is on the other revenue line item. This came in below expectations. And looking at the half year report, it seems as though this was due to hardly any profit sharing income. I believe this might relate to squib in the U.S. through your collab with Samsung. So can you talk through what's happening here? Is there some sort of phasing that would unwind in the second half?

Okay. Thank you, Shyam. GLP-1, it's too early to say. I think, look, it's going to be a dynamic market. I think we've always said in a sense, this is an underserved opportunity. Clearly, we have a strategy as we enter that. I think let's get into the market. It'll be something we'll talk about many quarters ahead. I don't really want to disclose our strategy or how I see that market will evolve and make our competition and harder. So let's see, but clearly pleased that we're there. And I think we're now pretty most the only international generic company coming into that market at this point. So we have a strong brand and a strong relationship. And so let's see. I think other revenue, I was just looking at Remco, I'm not sure if you want to comment Remco, but....

I think with regard to your question with the profit sharing, et cetera. There's nothing particular which has happened in H1. I don't have so quickly the answer on the other revenue movement but there's nothing special to be considered in H1 versus what it was before. There are no major changes.

Our next question comes from Simon Baker at Rothschild & Co Redburn.

Two for me. And another 1 just continuing on the Serum Brazil theme. About half that market is, we understand, compounded product. I'm just wondering if you could give any thoughts on how that affects the dynamic? Does that affect price or will quality be a selling point there? And more broadly on SEM and indeed, tezapatide. Lilly & Waters were recently commenting that establishing purity of these chemically-synthesized peptides, is far from trivial. I don't see that as an issue for Sandoz, but it could be an issue for some of your competitors. So I just wondered if you could update us on the quality, quantity and sourcing of your peptides in this space? And then secondly, a slightly bigger picture question. As we see repeatedly in this presentation and previous ones, it looks like the market tends to underestimate the longevity of opportunity for an individual biosimilar that your share stay stable penetration increases. So I'm just trying to get an idea, and I'm sure this is something you've discussed more CMD about how long we should think about the duration? Time to peak may not be quite the right phrase, but -- but it feels like it is a multiyear opportunity and some color on what multiyear looks like if indeed, there is a -- one can generalize would be really helpful.

Thank you so much for your question, Simon. And I think I couldn't have put it better myself. So I'll come back to the moment. Look, segue, I think the compounding -- in a sense, why is compounding there. It's a reflection that the patients want this product at a lower price point. I think in many ways, what would be the entry of generics or copies of this product, I think a lot of the compounding will disappear because quite friendly, the economics don't make sense, you want to have the security of a fully manufactured product and the appropriate supply chain. So I think actually, I see that as an indication of the opportunity, and I expect it to erode pretty quickly as generics enter the market and convert it. To that -- I mean, your comments made me smile. I mean, I've been in the industry over a very long time. Every originator right from the first original generics has been going around saying generic support quality. And then we have that same with biosimilars and how going to buy similar by the same, I'm sorry, it's the same old stick that originators always try and disparage this industry. I'm comfortable with the product. I stand behind the products on our quality. And I think it's just a normal response from originators who are trying to hang on to legacy products and legacy share. So it's not something that unduly concerns me. And I love your question around longevity. This year, Sandoz launched its first-ever biosimilar. We created this market as it were. We launched Omnitrope 20 years ago. Today, Omnitrope is still 1 of our largest products. We still have -- we are still the leader in that share. And these markets don't go away. And I think it's very hard to say what is that longevity. But I can with its high degree of confidence they will no one's ever likely to launch another bio to human growth hormone. So patients will need those products. And similarly, with a lot of the portfolio we have, unlike a small molecule commodity generics, absolutely, there's a very long life cycle. And I think that goes back to the fundamentals of the investment case around Sandoz because we bring more biosimilars to the marketplace. They're accretive and they continue to deliver year after year and we're all broadening that portfolio. So again, I think you're right, we will touch on that at the CMD, but I think we're extremely well positioned. And that's exactly why I keep saying this is Sandoz's golden decade as we look forward over the next 10 years.

Yes, Richard, if I may add to it. We are often being looked at an individual biosimilar, biosimilar case, right? We're not an originator with a fuel biosimilars. It becomes a whole portfolio together. And there's also no end date with an originator, there's an end date. For us, there's no end date, which is also forgotten in the equation if I can adjust 2 things, Richard.

Our next question comes from [indiscernible] at RBC.

The first 1 is on pricing. And you called out in your guidance that you're seeing price erosion step up to the mid-single-digit level rather than low to mid. Can you maybe just expand on that where you're seeing that pricing and your ability to offset that with volume gains? And then my second question on denosumab U.S. It appears that, that continues to be a very strong tailwind for you in the U.S. What is your expectation for the continued market share gains in the second half? And what are you seeing on pricing? It looks like the originator has been a bit more aggressive on rebating there? So any help on the pricing side would be helpful.

Remco, do you want to pick the pricing up?