Full Year 2025 Hikma Pharmaceuticals PLC Earnings Call - Q&A

February 26, 2026

Speaker #1: Okay, good morning everyone. I'm Guy Featherston, Investor Relations. Before we start, I'd like to remind you that any forward-looking statements or projections made by Hikma during this call are made in good faith, based on information currently available, and are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

Guy Featherstone: Okay, good morning, everyone. I'm Guy Featherstone, Investor Relations. Before we start, I'd like to remind you that any forward-looking statements or projections made by Hikma during this call are made in good faith, based on information currently available, and are subject to risks and uncertainties that may cause actual results to differ materially from those projected. For further information, please see the Principal Risks and Uncertainties section in Hikma's annual report. Thank you for joining this Q&A meeting for Hikma's 2025 full-year results. Our pre-recorded presentation is available on our website, and this will be a Q&A session. We're joined today by Said Darwazah, CEO, Mazen Darwazah, Executive Vice Chairman and Deputy CEO, Khalid Nabilsi, Deputy CEO, North America and Europe, Hafrun Fridriksdottir, President, US and Global Head of R&D.

Speaker #1: For further information, please see the principal risks and uncertainties section in HIKMA's annual report. Thank you for joining this Q&A meeting for HIKMA's 2025 full-year results.

Speaker #1: Our pre-recorded presentation is available on our website and this will be a Q&A session. We're joined today by Saeed Darwaza, CEO. Mazen Darwaza, Executive Vice Chairman and Deputy CEO.

Speaker #1: Khalid Nabilsi, Deputy CEO, North America and Europe. Hafren Fredricksdottir, President US and Global Head of R&D. We're also joined by John Cather who heads up the US injectables commercial business, and we have Arab Kurdi, recently appointed Acting CFO, and Susan Ringdahl, Investor Relations, also in the room.

Guy Featherstone: We're also joined by John Cather, who heads up the US Injectables commercial business, and we have Areb Kurdi, recently appointed Acting CFO, and Susan Ringdal, Investor Relations, also in the room. With that, I will hand over to Said.

Speaker #1: And with that, I will hand over to Saeed.

Speaker #2: Thank you very much, and good morning, everybody, and to my old friends, hello again. The decision for me to take over as CEO again was not, was not really a very easy decision.

Said Darwazah: Thank you very much. Good morning, everybody, and to my old friends, hello again. The decision for me to take over as CEO again was not really a very easy decision. Giving up the beach and the sun and the good life was difficult, but I really felt very strongly compelled to do this. Okay? I remember before we IPO'd, we were discussing the ideas of IPO-ing and not IPO-ing, and my father saying, My worry is that one day the team will lose sight of the long term and start looking at short term and short-term wins. This is the only thing that I'm worried about. Frankly, in many ways, this is what happened.

Speaker #2: Giving up the beach and the sun and the good life was difficult, but I really felt very strongly compelled to do this, okay? I remember before we IPO'd, we were discussing the ideas of IPO-ing and not IPO-ing, and my father saying, "My worry is that one day the team will lose sight of the long-term and start looking at short-term and short-term wins." This is, this is the only thing that I'm worried about.

Speaker #2: And frankly, in many ways, this is what happened. I think the company had sort of started looking at, at short-term wins and fixation on modules of the injectable, and so on, and really, you know, lost track.

Said Darwazah: I think the company had sort of started looking at short-term wins and fixation on modules of the injectable, and so on, and really, you know, lost track. That's why I felt very, very strongly about coming back again. As you know, also, I had to, you know, I decided to give up the chair position to concentrate 100% for the next three years on the CEO role. I want to also remind you that last time when I came in, we had a similar situation with the Rx business. The generic business was also doing not very well when I had to step in back again, for a period of a year or so, everybody was on a, you know, on us saying: Get rid of this division, it's weighing you down.

Speaker #2: So that's why I felt very, very strongly about coming back again. And as you know also, I had to, you know, I decided to give up the chair position to concentrate 100% for the next two years on the CEO role.

Speaker #2: I want to also remind you that last time when I came in, we had a similar situation with the RX business, the generic business was also doing not very well when I had to step in back again, and for a long, for a period of a year or so, everybody was on a, you know, on, on, on, on us saying, "Get rid of this division.

Speaker #2: It's weighing you down. You know, why are you keeping it?" But we said we will do what's required. We set reasonable targets of 100 to 130 in, in EBIT, and we said we'll fix it.

Said Darwazah: You know, why are you keeping it?" We said we will do what's required. We set reasonable targets of 100 to 130 in EBIT, and we said we will fix it. Here we are, a few years later, we're looking at that business, and it has margins of close to 20% and EBIT of $200 million or so. We've done this before, and I feel, we feel that we know exactly what needs to be done. It really is not a complicated formula. It's a simple formula. You need to do the right investments, you need to get the right people, the right talent, and take quick decisions. As I've said this morning, my focus is very clear. Number one, we want stability.

Speaker #2: And here we are, a few years later, we're looking at that business and it has margins of close to 20%, and EBIT of 200%, 200 million or so.

Speaker #2: So we've done this before, and we feel I feel we feel that we know exactly what needs to be done. It really is not a complicated formula.

Speaker #2: It's a simple formula. You need to do the right investments. You need to get the right people, the right talent, and take quick decisions.

Speaker #2: So, as I've said this morning, my focus is very clear. So number one, you want stability. We want this two years where people can relax and focus on what is required for them rather than worry who is going to come in and what's going to, to happen.

Said Darwazah: We want this two years where people can relax and focus on what is required for them, rather than worry who is going to come in and what's going to happen. We're reassuring our people, our stakeholders, our investors. Hikma is a very, very strong company, and we have a slide that shows the CAGR of the last five-year growth. This company has consistently delivered growth and quite good growth. I'd like to remind you all that we have EBITDA margins of 25%, while many of our competitors are striving to get to 22%. The second thing is agility. We want to implement a structure of quick decision-making and to allow people across the board to take these decisions. We don't want the decision-making to be centralized with one or a few people or the executive committee.

Speaker #2: So we're reassuring our people, our stakeholders, our investment investors this is HIKMA is a very, very strong company and we have a slide that shows the Kegel of the last five-year growth.

Speaker #2: This company has consistently delivered growth, and quite good growth. Also, I'd like to remind you all that we have EBITDA margins of 25 while many of our competitors are striving to get to 22.

Speaker #2: The second thing is agility. We want to implement a structure of quick decision-making, and to allow people across the board to take these decisions.

Speaker #2: We don't want decision-making to be centralized with one or a few people or the executive committee. Rather, we need to empower people across the board to take decisions. I've always said companies that empower their youngsters—their under-40 crowd—are the ones that will be here tomorrow. Those that do not will disappear.

Said Darwazah: Rather, we need to empower people across the board to take decisions. I've always said, companies that empower their youngsters, their under 40 crowd, are the ones that will be here tomorrow. Those that do not will disappear. We'll be focusing on the empowering everybody across the business so that we take these decisions. Investment, we have to accelerate investment. We have to take the investments that we need to do. One of the first things we've done is we've taken the R&D budget out of the segments, so the segment heads cannot play with the R&D budget to achieve their targets. It's now a corporate decision. We have a budget for it, which is an aggressive budget. We have spent last year building the team. As you remember, we acquired a great team in Croatia.

Speaker #2: So, we'll be focusing on empowering everybody across the business so that we take these decisions. And investment—we have to accelerate investment. We have to make the investments that we need to do.

Speaker #2: So one of the first things we've done is we've taken the R&D budget out of the segments so the segment heads cannot play with the R&D budget to achieve their targets.

Speaker #2: It's now a corporate decision. We have a budget for it, which is an aggressive budget. We have spent last year building the team, as you remember, we acquired, a great team, in, in, in Croatia, Hafrun joined the company, what, two years ago now, and is it Hafrun has a long, long track record in R&D, and she is directly in charge of the R&D team.

Said Darwazah: Hafrun joined the company, what, three years ago now, and Hafrun has a long, long track record in R&D, and she is directly in charge of the R&D team. The other things we need to do is hire the right people. Again, John took over as commercial head of North America or US injectables, and immediately said, We need to hire so many people. Well, what are you doing? We need to do this. We said, John, go ahead and do it. He's already hired so many people and added to the team. We also hired a supply chain. We have now a fantastic supply chain team in place, that will be working to make sure that we don't have bottlenecks across the group.

Speaker #2: So the other things we need to do is hire the right people. Again, John took over as commercial head of North America, or US Injectables, and immediately said, "We need to hire so many people."

Speaker #2: What, what are you doing? We need to do this." And we said, "John, go ahead and do it." And he's already hired so many people and added to the team.

Speaker #2: We are also inter we also hired a supply chain. We have now a, a, a fantastic supply chain team in place. That will be working to make sure that we don't have bottlenecks, across the group.

Speaker #2: And we are still looking to, to hire some more people, like a head of CMO. We are interviewing now. We want to hire somebody that has a lot of experience in CMO because we feel very strongly that HIKMA is well-primed to be a major CMO supplier.

Said Darwazah: We are still looking to hire some more people, like a head of CMO. We are interviewing now. We want to hire somebody that has a lot of experience in CMO because we feel very strongly that Hikma is well-primed to be a major CMO supplier. Finally, what I started by saying, the fear of my father when we went IPO, long-term growth. Focus on the long term, and that's what we are doing now. We are focused on the long term. We are doing the right investments. We are adding, as we said, the R&D. budget is much higher than it was before.

Speaker #2: And finally, what I started by saying—the fear of my father when we went IPO'ed, long-term growth. Focus on the long term. And that's what we are doing now.

Speaker #2: We are focused on the long-term. We are doing the right investments. We are adding, as we said, the R&D, budget is much higher than it was before.

Speaker #2: I think we're targeting 5 to 6% now to spend on, on R&D. Hiring the right people, giving the plant managers the decision to buy the right equipment when they need it, not waiting for, you know, central engineering to come before they can buy that.

Said Darwazah: I think we're targeting 5% to 6% now to spend on R&D, hiring the right people, giving the plant managers the decision to buy the right equipment when they need it, not waiting for, you know, central engineering to come before they can buy that. All these changes that we are taking, all these changes we are implementing, I think will be excellent for the future. I think we have to look at the structure that we are, you know, saying. Why this new structure? Some people have said it looks too complex. In my opinion, for me at least, and for the team, it's a very simple structure. The MENA team is a fantastic team, strong team, that has been doing an excellent job for the last 40 years. Hikma this year, was number one company in MENA.

Speaker #2: So all these changes that we are taking, all these changes we are implementing I think will be excellent for the future. Then I think we have to look at the structure that we are, you know, saying.

Speaker #2: Why this new structure? Some people have said it looks too complex. In my opinion, for me at least, and for the team, it's a very simple structure.

Speaker #2: The MENA team is a fantastic team, strong team that has been doing an excellent job for the last 40 years. For HIKMA this year was number one company in MENA among all companies.

Said Darwazah: Among all companies, this is a big deal, and it's the MENA team that has delivered this. Mazen and his team have been doing this. It was a no-brainer that, you know, the injectables in the MENA report to them, instead of being a distraction for, you know, the whole team. Europe, and let's say, North America or USA, they share many plants and they share the products. Although doing businesses in Europe is different, but it's the same products and the same manufacturing teams. Khalid has been with us for quite some time now, and he has shown to be doing a great job. He understands this business, and we believe that it was time for him to step up and take a strong P&L position. I am very comfortable that he will do a great job.

Speaker #2: This is a big deal. And it's the MENA team that has delivered this. Mazen and his team have been doing this. So it was a no-brainer that, you know, the injectables in the MENA report to them instead of being a distraction for, you know, the whole team.

Speaker #2: And then Europe, and let's say North America, or the USA, they share many plants and they share the products. So, although doing business in Europe is different, it's the same products and the same manufacturing teams.

Speaker #2: Khalid has been with us for quite some time now, and he has shown to be doing a great job. He understands this business, and we believe that it was time for him to step up and take a strong P&L position.

Speaker #2: I am very comfortable that he will do a great job. And Hafrun, since he's joined the company, has just told us all. She has done such an incredible job with the RX, such an incredible job with the, with the R&D team and hiring the right people and getting the right things in place.

Said Darwazah: Hafrun, since she's joined the company, has just wowed us all. She has done such an incredible job with Rx, such an incredible job with the R&D team, and hiring the right people, and getting the right things in place. At some point, we will be sharing a clear R&D strategy for everybody. We are more than comfortable that with the help of John and his team, and the Rx team, that has already proven to be an extremely effective team, we are very confident that this is the right way to go. We believe it's an extremely good company. We're in a very good position. We have a strong track record, a very strong track record of growth.

Speaker #2: And at some point, we will be sharing a, a clear, R&D strategy for, for, for everybody. We are more than comfortable that with the help of John and his team, and the RX team that has already proven to be an extremely effective team, we are very confident that this is the right way to go.

Speaker #2: So we believe it's an extremely good company. We're a very good position. We have a strong track record, a very strong track record of growth.

Speaker #2: We will be investing heavily in the next two years, and we know that we will go back to the moving forward, we will go back to much stronger growth than what we have shown.

Said Darwazah: We will be investing heavily in the next two years, and we know that we will go back to moving forward, we will go back to much stronger growth than what we have shown. Although what we have done is still quite good, we believe that we will do much better than that.

Speaker #2: Although what we have done is still quite good, we believe that we will do much better than that.

Speaker #1: So he's a microphone or microscope?

James Gordon: Do I need a microphone or microphone?

Speaker #3: Yeah, the microscope.

Operator: Yeah, a mic. Thank you.

Speaker #1: Thank you.

Speaker #4: Thanks, James Gordon from Barclays. Maybe first question, just on, on the organizational structure you mentioned, and, and I do follow the logic about having people in each geography, running the geography.

James Gordon: Thanks. It's James Gordon from Barclays. Maybe first question, just on the organizational structure you mentioned, and I do follow the logic about having people in each geography running the geography. Your least reporting, I believe, is still injectables, Rx, and branded. Might you actually just change the company and make it by the 3 geographies rather than the 3 types of division? Ultimately, who is ultimately responsible for injectables now? It seems that lots of people have got responsibilities. Is the first question, maybe if I break them up.

Speaker #4: But then you released your reporting, I believe, is still injectables, RX, and branded. So might you actually just change the company and make it by the three divi by the three geographies rather than the three types of division?

Speaker #4: 'Cause ultimately, who's, who's ultimately responsible for injectables now? 'Cause it seems like lots of people have got responsibilities. Is the first question, maybe if I break them up?

Said Darwazah: Well, we said that for this year and maybe for the foreseeable future, we'll continue to report the injectable, you know, results, because we didn't want to say, you know, why are you running away from that? The reality from a management point of view, when you look at Europe and the US, it's 90% of the injectable business. As I said, it is very different from the MENA injectables. The MENA injectables, there's a lot of products that are in-licensed and, you know, brought up from outside, while the US is much more focused, Europe on manufacturing. Khalid, Hafrun, obviously, but ultimately Khalid is in charge of the US and Europe, and will be in charge, and of course, myself, I will be working very, very closely with them.

Speaker #3: Well, we, we, we said that for this year and maybe for the, for the foreseeable future, we'll continue to report the injectable, mar you know, results because we didn't want to say, you know, why are you running away from that.

Speaker #3: But the reality from a management point of view, when you look at Europe and the USA, it's 90% of the injectable business. And as I said, it is very different from the MENA injectables.

Speaker #3: The MENA injectables there's a lot of products that are in licensed and, you know, brought up from outside. While the US is much more focused, Europe, on, on manufacturing.

Speaker #3: So Khalid Hafrun, obviously, but ultimately, Khalid is in charge of the US and, and, and Europe, and will be in charge and of course, myself, I will be working very, very closely with them.

Speaker #3: So I think this gives us the opportunity to really focus on, on the business rather than you know, I think just forget the tail end, which is the MENA injectables.

Said Darwazah: I think this gives us the opportunity to really focus on the business rather than... You know, I think just forget the tail end, which is the MENA injectables. You know, as I said, I'm very comfortable that the MENA team will do a much better job than before. The bulk of the business now, there is a clear focus on it. We will be reporting geographically as well as segmentally for the foreseeable future.

Speaker #3: And I'm, you know, as I said, I'm very comfortable that the MENA team will do a much better job than, than, than before. So the bulk of the business now, there is a clear focus on it.

Speaker #3: And we will be reporting geographically as well as segmentally for the first year of the future.

Speaker #1: Thank you. Maybe just the second question would be, so what is the outlook now for injectables, as in, what's going to make it grow faster?

Hafrun Fridriksdottir: Thank you. Maybe just the second question would be, what is the outlook now for injectables, as in what's gonna make it grow faster? Is the idea that now you've reset the margin to the level of this year, but you'd have a similar growth rate on the top line as you were previously hoping for?

James Gordon: Thank you. Maybe just the second question would be, what is the outlook now for injectables, as in what's gonna make it grow faster? Is the idea that now you've reset the margin to the level of this year, but you'd have a similar growth rate on the top line as you were previously hoping for?

Speaker #1: And is the idea that now you've reset the margin to the level of this year, but you'd have a similar growth rate on the top line as you were previously hoping for?

Speaker #3: First of all, as we said, the— the amount, the budget for the— for the R&D is— is much bigger than it was the year before.

Said Darwazah: First of all, as we said, the amount, the budget for the R&D is much bigger than it was the year before. Actually, if, you know, if R&D growth was similar to the years before, then the results would be much better. We said, no, we have to do this. We have to take this decision now, we have to invest. Again, it's investing. There's really. You have to invest in the right people, and as I said, we have hired many, many people, and there's still more to come. The R&D team, and we will be sharing more about the R&D moving forward. We believe that Hikma is extremely well-positioned for CMO business, and we are in the process of recruiting a CEO, a head of CMO, in addition to the CMO team we have.

Speaker #3: So I actually, if you know, of, of, of R&D growth was similar to the years before, then the results will be much better. But we said, no, we have to

Speaker #1: Have to do this . You have to take this decision now . We have to invest . So again , it's investing . There's really it's not a you have to invest in the right people .

Speaker #1: And as I said , we have had many , many people and we're still more to come . The R&D team . And we will be sharing more about the R&D moving forward .

Speaker #1: And we believe that Hikma is extremely well positioned for the CMO business, and we are in the process of recruiting ahead of CMO.

Speaker #1: In addition to the CMO team , we have . So all these things will be working together to achieve what we say . Growth in the mid-term to long term for the injectable .

Said Darwazah: All these things will be working together to achieve, let me say, growth in the midterm to long term for the injectable.

Speaker #1: So , James , just on , on on the outlook for the injectable business , we know that this is not something that we would like to to , to be growing .

Khalid Nabilsi: James, just on the outlook for the injectable business. We know that this is not something that we would like to be growing. It's. We have challenges at 25, and this is something that we know that, and 26. There are different reasons for this. It's, as I said in my presentation, is reduced CMO. One of our main customers want to do a domestic manufacturing in the US, so we have a reduced contribution from that. This is something that we cannot offer till we have Xellia up and running in 2028. We are less optimistic on, let's say, the biosimilar that we have, although it's a very small part of our business and the liraglutide. One of the product launches, main product launches, has been pushed.

Speaker #1: It's it's we have challenges in 25 and and and this is something that we know that and 26 there are different reasons for this .

Speaker #1: It's as I said in my presentation , it's CMO , one of our main customers want to do a domestic manufacturing in the US .

Speaker #1: So we have a reduced contribution from that. This is something that we cannot offer until we have Xellia up and running in 2028.

Speaker #1: We are less optimistic on , let's say , the biosimilars that we have , although it's very small part of our business and the liraglutide and one of the product launches , main product launches has been pushed .

Speaker #1: So of course , going forward we are going to go back to to return to very good growth for injectable on top line .

Khalid Nabilsi: Of course, toward going forward, is we are going to go back to return to very good growth for injectable on top line and in terms of the EBIT. Any company, any business, goes into challenges. 2025, 2026 was a challenging year. I think from here, from 2027, we are going to see a different outlook for the injectable business as we used to see in the past.

Speaker #1: And in terms of of the Ebit . So any company , any business goes into challenges . 2526 was a challenging year . I think from here , from 2027 , we are going to see a different outlook for the injectable business as we used to see in the past .

Speaker #2: And just some examples. So, of course, Sam ties, ties. Then, it is an important product for us that will drive some of the growth that we achieved this year.

Susan Ringdal: Just some examples. Of course, TYZAVAN is an important product for us. That will drive some of the growth that we achieved this year. We expect that to do even better in 2027, so that will be an important growth driver. Some of the products that we expected to launch this year, pushed to next year, so that will be, again, another growth driver for 2027. We've got, of course, continued expansion in Europe. That's been an important growth driver for us. That will continue. MENA has been also a good business. We signed six new biosimilars in MENA. There are a lot of opportunities to grow. You know, I think as Khalid said, this is sort of a reset year.

Speaker #2: But we expect that to do even better in 2027, so that will be an important growth driver. Some of the products that we expected to launch this year have been pushed to next year.

Speaker #2: So that will be , again , another growth driver for 27 . We've got of course , continued expansion in Europe . That's been an important growth driver for us .

Speaker #2: That will continue . Mina has been also a good business . We signed six new biosimilars in Mina , so there there is there are a lot of opportunities to grow .

Speaker #2: But I think as I said , this is sort of a reset year .

Speaker #3: So though the challenge is obviously , as you point out , with the injectables and what we're doing with it , but I also like to remind everybody , this is a much bigger company than just injectables , right ?

Said Darwazah: Though the challenge is obviously, as you right point out with the injectables and what we're doing with it, but I also like to remind everybody, this is a much bigger company than just the injectables, right? We have 3 very strong divisions, 2 of them that are doing extremely well. The MENA is growing, again, at a very fast rate with very good margins. The Rx, as I said, has done much better than anybody anticipated 2 years ago.

Speaker #3: We have three very strong divisions . Two of them that are doing extremely well . The mean is growing at a very fast rate with very good margins .

Speaker #3: And directs , as I said , has done much better than anybody anticipated two years ago . If I told you we'd be doing 20% margins in this kind of EBITDA , you know , people , why did we fall ?

Said Darwazah: If I told you we'd be doing 20% margins in this kind of EBITDA, you know, people would, why did we keep on pushing you to sell it? There will be a lot of focus, there will be a lot of investment, and we feel very, very strongly that in the medium to long term, this business, it is already, in my opinion, one of the best businesses. If you compare our margins to our competitors yesterday, who upgraded from 18% to 19%, we are way ahead of them. Again, other competitors saying we want to be at 22% EBITDA, we are at 25% EBITDA. This is a very good business.

Speaker #3: Why did we keep on pushing you to sell it ? So We there will be a lot of focus . There will be a lot of investment .

Speaker #3: And we feel very , very strongly that in the medium to long term , this business will it is already , in my opinion , one of the best businesses .

Speaker #3: If you compare our margins to our competitors yesterday , who upgraded from 18 to 19% , we are way ahead of them again , another competitors saying we want to be at 22% EBITDA .

Speaker #3: We are at 25% EBITDA . So this is a very good business . It's driven by three engines . And as we said , the focus is on long term and total profitability .

Said Darwazah: It's driven by three engines, as we said, the focus is on long-term growth and total profitability, growth in earnings per share, rather than just focus on focusing. I think this is what really hurt us the last two years, the overfocus on the margins of the injectables, where people start saying, Don't sell anything less than 32. Don't accept anything. If I can get $300 million worth of orders at.

Speaker #3: Growth in earnings per share, rather than just keeping on focusing. And I think this is what really hurt us the last two years.

Speaker #3: The overfocus on the margins of the injectables , where people start saying , don't sell anything less than 32 , don't accept anything .

Speaker #3: If I can get $300 million worth of orders at 28% , I shouldn't take them . Of course we need . So that's why the focus will be on top line growth and bottom line growth , rather than margins .

Khalid Nabilsi: There were opportunities.

Said Darwazah: at 28%, I shouldn't take them? Of course, we need. That's why the focus will be on top line growth and bottom line growth rather than margins.

Hafrun Fridriksdottir: If I may ask a little bit about the, how we are going to grow the injectable business moving forward? I don't know if you had the opportunity to listen to our presentation this morning, but I mean, I at least talked a lot about the ready-to-use platform. Even though, of course, the first product is TYZAVAN, as Susan mentioned, but we have multiple others in the pipeline. Those products, they will be launched probably in early 2028. We will not see short term, I mean, growth because of those products, but we have a multiple products in the pipeline, and I talked about, I think, 15 ready-to-use products in our pipeline.

Speaker #4: If I may ask a little bit about how we are going to grow the business , moving forward , I don't know if you had the opportunity to listen to our presentation this morning , but I mean , we talked at least talked a lot about the ready to use platform .

Hafrún Fríðriksdóttir: If I may ask a little bit about the, how we are going to grow the injectable business moving forward? I don't know if you had the opportunity to listen to our presentation this morning, but I mean, I at least talked a lot about the ready-to-use platform. Even though, of course, the first product is TYZAVAN, as Susan mentioned, but we have multiple others in the pipeline. Those products, they will be launched probably in early 2028. We will not see short term, I mean, growth because of those products, but we have a multiple products in the pipeline, and I talked about, I think, 15 ready-to-use products in our pipeline.

Speaker #4: And even though , of course , the first product is , as Susan mentioned , but we have multiple others in the pipeline and for those products , they will be launched probably in early 28 .

Speaker #4: So , so we will not see short term , I mean , growth because of those products . But we have multiple products in the pipeline .

Speaker #4: And I talked about I think 15 ready to use products in our pipeline . And so of course , moving forward we will see we will see the revenue and we will see the growth from from this from this platform , which I'm very excited about .

Hafrun Fridriksdottir: Of course, moving forward, we will see the revenue and we will see the growth from this, from this platform, which I am very excited about. Just to repeat, it, I think it's a really good business, so. Well, lots of other questions I could ask, but someone else-

Hafrún Fríðriksdóttir: Of course, moving forward, we will see the revenue and we will see the growth from this, from this platform, which I am very excited about. Just to repeat, it, I think it's a really good business, so. Well, lots of other questions I could ask, but someone else-

Speaker #4: So , and I just to repeat it , I think it's a really good business . So

Speaker #5: The question I can ask someone else , another question , please .

Susan Ringdal: Let me take the KL, unless you have a question, please.

Speaker #6: Saint Abraham J.P. Morgan , thanks for taking the questions . The first question would just be a follow up on on the previous answer in terms of what you described on the CMO challenges from one of your customers wanting to switch the manufacturing from Europe to the US .

James Morgan: Saying everybody, Jamie Morgan. Thanks for taking the questions. The first question will just be a follow-up on the previous answer in terms of what you described on the CMO challenges from one of your customers wanting to switch the manufacturing from Europe to the US. How do you see that risk going forward for the rest of the injectables CMO business? Just broadly, how do you see the outlook for CMO overall from here? I know you've got there's the small molecule contract in Rx, contributing this year, ramping next year. Just to remind us how you're seeing that outlook.

[Analyst] (Goldman Sachs): Saying everybody, Jamie Morgan. Thanks for taking the questions. The first question will just be a follow-up on the previous answer in terms of what you described on the CMO challenges from one of your customers wanting to switch the manufacturing from Europe to the US. How do you see that risk going forward for the rest of the injectables CMO business? Just broadly, how do you see the outlook for CMO overall from here? I know you've got there's the small molecule contract in Rx, contributing this year, ramping next year. Just to remind us how you're seeing that outlook.

Speaker #6: So how do you see that risk going forward for the rest of the injectables CMO business ? And just broadly , how do you see the outlook for CMO overall from here ?

Speaker #6: You've got the the small molecule contract in RX contributing this year , ramping next year . So just to remind us how you're seeing that outlook .

Speaker #3: Well , the first thing we did we looked at our plants in the USA for instance , we looked at the Cherry Hill plant and see so what were the bottlenecks ?

Said Darwazah: Well, the first thing we did, we looked at our plants in the USA, for instance. We looked at the Cherry Hill plant. What were the bottlenecks? What was needed? Many times it's a small thing that you need to do to increase capacity. We're working on increasing capacity significantly at Cherry Hill, and that will help us with the CMO business as more and more companies want to manufacture in the USA. Of course, we'll talk about the RX later, CMO, because they already have a lot of orders in business. We acquired the Bedford site specifically for this, and it's a big site. It has a lot of equipment in it. It needs to be reengineered in a more modern way. We're working on that diligently.

Speaker #3: What was needed ? Many times it's a small thing that you need to do to increase capacity . So working on increasing capacity significantly , at Cherry Hill and that will help us with with the CMO business .

Speaker #3: As more and more companies want to manufacture in the USA , of course , we'll talk about the RX later . CMO because they already have a lot of orders and business , and then we we acquired the the Bedford side specifically for this .

Speaker #3: And it's a big site . It has a lot of equipment in it . It needs to be re-engineered in a more modern way .

Speaker #3: We're working on that diligently . Sometimes new lines take a bit long to get , you know , need to order them . It takes a year and a half to two years for the lines to be again after they come in , you have to install , qualify and get FDA approval .

Said Darwazah: Sometimes new lines take a bit long to get this, you know, you need to order them. It takes a year and a half to 2 years for the lines to be again. After they come in, you have to install, qualify, and get FDA approval. It's a bit of a long process, long-winded. That's why we're guiding to 2028. With most of the CMO, the big business, you get the order, and the expectation is you deliver 2 to 3 years down the road. They don't expect to deliver tomorrow, 'cause it's a process of moving products in and so on. That's why we feel very strongly about hiring a head of CMO, somebody that has already strong experience, has good knowledge of the industry, and has good contacts with the, with the companies that want to have CMO business.

Speaker #3: So it's a bit of a long process , long winded . That's why we're guiding to 28 . But with most of the CMO , the big business , you get the order and expectation is you deliver 2 to 3 years down the road .

Speaker #3: They don't expect to deliver tomorrow because it's a process of moving products in and so on . So that's why we feel very strongly about hiring .

Speaker #3: Ahead of CMO , somebody that has already strong experience has , well , good knowledge of the industry and has good contacts with the with the the companies that want to have a CMO business .

Speaker #3: So we're very confident that in '28 and forward for the injectables, we'll have a very strong CMO business. For now, we will be showing that the RX already has a very strong CMO business.

Said Darwazah: We're very confident, like, in 28 and forward, for the injectables, we'll have a very strong CMO business. For now, we will be showing that the Rx already has very strong CMO business. Overall, it will become a quite significant part of our business, let's say, three years down the road.

Speaker #3: So overall , it will become a quite a significant part of of our business , let's say three years down the road .

James Morgan: Very helpful. Second question is on R&D. It increased to 5% to 6% of group sales. Are you now comfortable with that as a ratio in terms of thinking about that level going forward?

[Analyst] (Goldman Sachs): Very helpful. Second question is on R&D. It increased to 5% to 6% of group sales. Are you now comfortable with that as a ratio in terms of thinking about that level going forward?

Speaker #6: And second question is on R&D . So the increase of 5 to 6% of group sales , are you now comfortable with that as a ratio in terms of thinking about that level going forward ?

Speaker #3: And or you ask her if you ask her , she says no , we need more . If you ask me , it's enough

Said Darwazah: You ask me or you ask her? If you ask her, she says, No, we need more. If you ask me, it's enough.

Speaker #6: And when do we say pay off from those investments ? Because I know you mentioned 28 for the ready to use , but you started the increase in R&D last year .

James Morgan: When do we see payoff on those investments? 'Cause I know you've mentioned 28 for the ready-to-use.

[Analyst] (Goldman Sachs): When do we see payoff on those investments? 'Cause I know you've mentioned 28 for the ready-to-use.

Hafrun Fridriksdottir: Mm

James Morgan: started the increase in R&D last year, so just to.

Hafrún Fríðriksdóttir: Mm

[Analyst] (Goldman Sachs): started the increase in R&D last year, so just to.

Speaker #6: So just to

Speaker #4: Yeah , of course we slightly increased the investment in R&D last year . But that was I mean really a slight increase . But we also reorganized the the R&D organization .

Hafrun Fridriksdottir: Of course, we slightly increased the investment in R&D last year, that was, I mean, really a slight increase. We also reorganized the R&D organization, now we have a global R&D organization. We also moved activity from US into Croatia, of course, that is clearly helping significantly on the injectable business. We also have a very strong team focusing on inhalations, semisolid, and liquids in Columbus, Ohio. Of course, our team in Jordan is focusing on solid oral. I strongly believe that we have the right team in place. Would I always like more money for R&D? Yes, of course, I would. Said is correct there.

Hafrún Fríðriksdóttir: Of course, we slightly increased the investment in R&D last year, that was, I mean, really a slight increase. We also reorganized the R&D organization, now we have a global R&D organization. We also moved activity from US into Croatia, of course, that is clearly helping significantly on the injectable business. We also have a very strong team focusing on inhalations, semisolid, and liquids in Columbus, Ohio. Of course, our team in Jordan is focusing on solid oral. I strongly believe that we have the right team in place. Would I always like more money for R&D? Yes, of course, I would. Said is correct there.

Speaker #4: So now we have a global R&D organization . And we also also moved activity from us into Croatia . So of course that is clearly helping significantly on the on the injectable business .

Speaker #4: But we also have a very strong team focusing on inhalations and liquids in , in , in Columbus in Ohio . And then of course , our team in , in Jordan is focusing on solid orals .

Speaker #4: So so I strongly believe that we have the right team in place . Which I always like more money for R&D . Yes , of course I would .

Speaker #4: Say it is correct . There , but but I feel very confident though with with 5 to 6% of the revenue in R&D .

Hafrun Fridriksdottir: I feel very confident though, with 5% to 6% of the revenue being spent on R&D. I think that's just in line with what our competitors are doing, so.

Hafrún Fríðriksdóttir: I feel very confident though, with 5% to 6% of the revenue being spent on R&D. I think that's just in line with what our competitors are doing, so.

Speaker #4: I think that's just in line with what our competitors are doing. So,

Speaker #1: Thank you. And we are going to see these returns coming in over the coming years. Some of it will come in '27.

James Morgan: Thank you.

[Analyst] (Goldman Sachs): Thank you.

Said Darwazah: We are going to see these returns coming into the coming years. Some of it will come in 2027, some of it will come in 2028 or 2029 onward.

Speaker #1: Some of it will come in 28 and 29 onwards . Yeah .

Hafrun Fridriksdottir: Yeah. Yep, of course. R&D takes time. Yes, everyone knows that.

Hafrún Fríðriksdóttir: Yeah. Yep, of course. R&D takes time. Yes, everyone knows that.

Speaker #4: Of course, R&D takes time. Yes. So, everyone knows that.

James Morgan: Yep. Next question.

[Analyst] (Goldman Sachs): Yep. Next question.

Speaker #5: Yeah for sure . I think . Yeah . Thank you . Hi Beatrice Fairbairn at Berenberg . Thank you for taking my questions .

Hafrun Fridriksdottir: Okay. Up in Germany. Yeah.

Hafrún Fríðriksdóttir: Okay. Up in Germany. Yeah.

Beatrice Fairbairn: Thank you. Hi, Beatrice Fairbairn at Berenberg. Thank you for taking my questions. You discussed the focus on long-term growth. I mean, one of the targets out there is this kind of $5 billion, 2030 revenue target. My question really was: Does it still stand, and would you be able to give some color in terms of what is needed to get there, and how that looks like over the coming years? Then just on your delay to some timing of some of the product launches in injectables, do you feel like the new timelines that you've got are realistic? Kind of how confident are you that you're gonna be able to launch these products on time?

Speaker #5: You discussed the focus on long term growth . I mean , one of the targets out there is this kind of 5,000,000,020 , 30 revenue target .

Speaker #5: My question really was, does this still stand? And would you be able to give us some color in terms of what is needed to get there and how that looks like over the coming years?

Speaker #5: And then, just on your delay to the timing of some of the product launches and injectables, do you feel like the new timelines that you've got are realistic, and kind of how confident are you that you're going to be able to launch this product on time?

Said Darwazah: I'll take this first part about the $5 billion.

Speaker #3: This first part , about the five , 5 billion .

Hafrun Fridriksdottir: $5 billion. Yeah, the $5 billion, when we set the $5 billion target, it was an aspirational target, but we felt that it was very achievable with the business plan that we had and our business model, which has been to do bolt-on acquisitions, you know, as a matter of course. We still do feel comfortable that $5 billion is within reach.

Hafrún Fríðriksdóttir: $5 billion. Yeah, the $5 billion, when we set the $5 billion target, it was an aspirational target, but we felt that it was very achievable with the business plan that we had and our business model, which has been to do bolt-on acquisitions, you know, as a matter of course. We still do feel comfortable that $5 billion is within reach.

Speaker #2: Yeah . So so the 5 billion , when we set the 5 billion target , we said that this was it was an aspirational target .

Speaker #2: But we felt that it was very achievable with the business plan that we had . And our business model , which has been to do a bolt on acquisitions , you know , as a as a matter of course .

Speaker #2: So we still do feel comfortable that 5 billion is within reach . You know , it's it is we have we definitely see an acceleration of growth after 2026 .

Said Darwazah: Very achievable, yes.

Hafrun Fridriksdottir: You know, it's, it is, we definitely see an acceleration of growth after 2026. It, you know, I think today, it would require a bit of inorganic growth, but, yeah, it is very much within reach.

Hafrún Fríðriksdóttir: You know, it's, it is, we definitely see an acceleration of growth after 2026. It, you know, I think today, it would require a bit of inorganic growth, but, yeah, it is very much within reach.

Speaker #2: And you know , I think today it would require a bit of inorganic growth . But yeah , it is very much within within reach

Said Darwazah: More an organic growth.

Speaker #1: Organic growth . Yeah . It's not like we are talking about transformational like more of a product acquisition . So we are very close to to the aspirational target of 5 billion .

Hafrun Fridriksdottir: Yeah.

Hafrún Fríðriksdóttir: Yeah.

Said Darwazah: It's not like we are talking about a transformation, like more of a product acquisition. We are very close to the aspirational target of $5 billion. If you look into the three businesses, like, the brand is delivering very good growth, acceleration. If you look into the past, it was 5%, 6%. Today, we are doing more, 7% to 8%.

Khalid Nabilsi: It's not like we are talking about a transformation, like more of a product acquisition. We are very close to the aspirational target of $5 billion. If you look into the three businesses, like, the brand is delivering very good growth, acceleration. If you look into the past, it was 5%, 6%. Today, we are doing more, 7% to 8%.

Speaker #1: And if you look into the three businesses like the branded is delivering very good growth . If acceleration , if you look into the past it was five 6% .

Speaker #1: Today we are getting more 7 to 8 . This is driving growth . High value products that we are getting into . The Mena region .

Khalid Nabilsi: this is driving growth, high value products that we are getting into the MENA region. If you look into the number of licensing deals that we've been signing over the past five years, it increased significantly, now we are becoming more and more the partner of choice. This is going to be a key driver. Rx is growing with the CMO business. We are going to see more contribution coming in 2027, 2028, 2029. This is as well going to drive the growth. Injectable, of course, with all these RTUs and the products that we are working on, it's gonna accelerate the growth for the injectable business. Remember, the injectable business has a large portfolio, there will be always opportunities, there will always be shortages.

Speaker #1: If you look into the number of licensing deals that we've been signing over the past five years, it's increased significantly, and now we are becoming more and more the partner of choice.

Speaker #1: So this is going to be a key driver . R is growing with the CMO business . We are going to see more contribution coming in 27 , 28 , 29 .

Speaker #1: So this is as well going to drive the growth and injectable , of course , with all these rtus and the products that we are working on , is going to accelerate the growth for the injectable business .

Speaker #1: Remember , the injectable business has a large portfolio , so there will be always opportunities . There will always be shortages . Europe .

Khalid Nabilsi: Europe, we are seeing a very good growth, very good, great potential, especially that the market is lacking products. We are being the, I would say, most reliable hospital supplier in Europe now. All hospitals are coming to us, and governments coming to us say, We want this product. The agility that we have in Europe, providing the products on time, is differentiating us versus others. This is why we've seen 23% growth this year in the injectable in Europe. Same for MENA. It's not just like the 6 biosimilar. We have many products that we have, that we are going to launch in MENA for biosimilar. This is going to be the growth driver, and we are very confident with our ability to continue growing the business.

Speaker #1: We are seeing a very good growth , very good , great potential , especially that the market is lacking products . So we are being the I would say most reliable hospital supplier in Europe .

Speaker #1: Now , all all hospitals are coming to us and governments coming to us say we want this product , the agility that we have in Europe , providing the products on time is differentiating us versus others .

Speaker #1: And this is why we've seen 23% growth this year in the injectable in Europe . Same for Mena . It's not just like the six biosimilar we have many products that we have that we are going to launch in Mena for biosimilars .

Speaker #1: So this is going to be the growth driver . And we are very confident in our ability to to to continue growing the business .

Speaker #1: As said , 2526 might look challenging for , for for the business , but this is a business cycle . But from here we are going to continue growing .

Khalid Nabilsi: As said, 25, 26 might look challenging for the business. This is a business cycle. From here, we are going to continue growing.

Said Darwazah: The short answer is yes, the $5 billion is very achievable. We are extremely confident in our 2026 guidance. Yes, the injectable launches that we'll be seeing in 2028 and further will deliver the kind of growth that needs to be done.

Speaker #3: So the short answer is yes , the 5 billion is very achievable . We are extremely confident in our 26 guidance . And yes , the injectable launches that we'll be seeing in 28 and further will deliver the kind of growth that we need to be done

Vialto Flaten: Vialto Flaten, Bank of America. Maybe just one question on Rx. I mean, that one seems to go pretty well, and it looks like you have, like, even some room in terms of margin. You've been investing even, like, more than what you're using, actually investing for injectables. Can you discuss, like, the different moving parts this year? I mean, the base business, I mean, I think there might be some competition on, you know, on certain products. On the other, on the flip side, you have some, you know, service payment from your CMO partner. Are you expecting at some point to be able to update the market on, you know, with that CMO, what kind of, you know, what is the product, and what are the economics behind that?

[Analyst] (Bank of America): Vialto Flaten, Bank of America. Maybe just one question on Rx. I mean, that one seems to go pretty well, and it looks like you have, like, even some room in terms of margin. You've been investing even, like, more than what you're using, actually investing for injectables. Can you discuss, like, the different moving parts this year? I mean, the base business, I mean, I think there might be some competition on, you know, on certain products. On the other, on the flip side, you have some, you know, service payment from your CMO partner. Are you expecting at some point to be able to update the market on, you know, with that CMO, what kind of, you know, what is the product, and what are the economics behind that?

Speaker #7: Victor , maybe just one question on on RCS . I mean , that one seems to be to go pretty well , and it looks like you have like even some room in terms of margin .

Speaker #7: You've been investing even more than what you actually invested for injectables. So, can you discuss the different moving parts this year?

Speaker #7: I mean , the base business , I mean , I think there may be some competition on on certain products , on the other , on the flip side , you have some , you know , service payments from your CMO partner and are you expecting at some point to be able to update the market on , you know , who is that ?

Speaker #7: With that CMO ? What kind of , you know , what is the product and what are the economics behind that ? I mean , just like a bit more visibility on the CMO because it's a huge moving part for RX , for sure .

Vialto Flaten: I mean, just, like, a bit more visibility on the CMO, because it's a huge moving part for Rx, for sure.

[Analyst] (Bank of America): I mean, just, like, a bit more visibility on the CMO, because it's a huge moving part for Rx, for sure.

Speaker #4: Yeah, so this year, the revenue from the CMO business will probably be around 10% of our business, but our target in 2030 is up to 20%.

Hafrun Fridriksdottir: Yeah. This year, the revenue from the CMO business will probably be around 10% of our business, but our target in 2030 is up to 20%, at least my target. We are not going to share the name of our customers, but we are working with not only one big customer, but actually multiple. Some of them are talking about contracts which have not been signed but are in negotiation phase, and we will be signing within the next, let's say next few months. That's going very well. You also asked about the base business. For example, a product like Atvil has been doing very well last year, and we expect the same this year.

Hafrún Fríðriksdóttir: Yeah. This year, the revenue from the CMO business will probably be around 10% of our business, but our target in 2030 is up to 20%, at least my target. We are not going to share the name of our customers, but we are working with not only one big customer, but actually multiple. Some of them are talking about contracts which have not been signed but are in negotiation phase, and we will be signing within the next, let's say next few months. That's going very well. You also asked about the base business. For example, a product like Atvil has been doing very well last year, and we expect the same this year.

Speaker #4: At least my target . So we are not going to share the name of our customers , but we are working with not only one , one big customer , but actually multiple .

Speaker #4: And some of them are talking about contracts , which have not been signed but are in negotiation phase . And we will we will be signing within the next .

Speaker #4: Let's say , next few few months . So so that's going that's going very well . And you also asked about the base business for example , a product like artwork has been doing very well the last year and we expect the same same this year .

Hafrun Fridriksdottir: Fluticasone, we are the biggest volume driver in US for fluticasone, as an example, or for Nason. That is a business which continues to do very well. All our base business has been doing really well last year, and we haven't really seen any change, at least for the first 2 months of the year. It's quite it's more stable than maybe most people believe it is.

Hafrún Fríðriksdóttir: Fluticasone, we are the biggest volume driver in US for fluticasone, as an example, or for Nason. That is a business which continues to do very well. All our base business has been doing really well last year, and we haven't really seen any change, at least for the first 2 months of the year. It's quite it's more stable than maybe most people believe it is.

Speaker #4: Fluticasone. We are the biggest volume driver in the US for fluticasone, as an example, or for nasals. So, and that is a business which continues to do very well.

Speaker #4: And all our base business has been doing really well last year . And , and we haven't really seen any , any change , at least for the , the first two months of the year .

Speaker #4: So it's quite it's more stable than maybe most people believe it is . So

Vialto Flaten: Thank you.

[Analyst] (Bank of America): Thank you.

Khalid Nabilsi: Can I just remind people that we have John, who's the Commercial Head of Injectables, on the line, and Mazen, Deputy CEO for MENA. Don't hesitate to address questions to them as well.

Speaker #5: Can I .

Speaker #2: Just remind people that we have John, who's the Commercial Head of Injectables, on the line, and Mazen, Deputy CEO for MENA.

Speaker #2: So don't hesitate to address questions to them as well.

Hafrun Fridriksdottir: It's early for John, so you should really ask him questions now, because he woke up very early for you.

Hafrún Fríðriksdóttir: It's early for John, so you should really ask him questions now, because he woke up very early for you.

Speaker #4: For John, asking questions now because he woke up very early for you guys.

Speaker #2: Okay

Christian Glennie: Thanks. Christian Ryther with Stifel. Again, not to belabor the point, but on injectables and the margin, just to be clear around... You know, it's been quite a dramatic shift, right? From mid-30s to high 20s now. Well, combination of things. One is you talk about the extra investments, you know, needed. Implication potentially may be that you were underinvested before to some extent, so the margin was sort of where it was. And/or is that fair? Then the second part is there something more structural around the market, from a sort of pricing and competition issue that means margin has, the direction of travel has gone?

Speaker #8: Thanks , Christian . Danny with Stiefel again , not not to belabor the point , but on on on injectables and the margin .

Speaker #8: Just to be clear , around , you know , it's been quite a dramatic shift , right from mid 30s to to high 20s .

Speaker #8: Now that there isn't something sort of , well , combination . One is maybe you talk about the extra investments , you know , needed implication potentially maybe that you weren't you were underinvested before to some extent .

Speaker #8: So the margin was sort of where it was that and or is that is that fair ? And then the second part is , is is there something more structural around the market from a sort of pricing and competition issue ?

Speaker #8: That means margin, as the direction of travel, has gone.

Said Darwazah: Okay. First one, as I said, I mean, clearly, we said we're taking the R&D budgets out of the divisions and putting it as a corporate. Clearly indicating that at some point, division heads were sort of reducing R&D expenditure to give higher margins. By taking that out and having it as a corporate with a fixed number that we agree on, I think that will, you know, there will be lower margins a little bit to start with. We are very confident that with the investments we are making in R&D, the new pipeline, the expansion in the manufacturing and the CMO, that we will be achieving higher margins mid to long term. Okay. The second question was?

Speaker #7: Okay . So

Speaker #3: First , first one , as I said , I mean , clearly we said we're taking the R&D budgets out of the divisions and putting it as a corporate .

Speaker #3: So clearly indicating that at some point , division heads were sort of reducing R&D expenditure to give higher margins . So by taking that out and , and having it as a corporate with a fixed number that we agree on , I think that that will , you know , there will be lower margins a little bit to start with .

Speaker #3: But we are very confident that with the investments that are making in R&D , the new pipeline , the expansion in the manufacturing and the CMO that we will be achieving higher margins , mid to long term , okay , the was

Christian Glennie: ... structural something in the market, you know, 'cause ...

Speaker #8: Structural... something in the market, you know, because you've got, you've—

Said Darwazah: Yeah, yeah. There's always competition. There's always people coming in. You lose a few products. We lost two or three products that, not lost, we have competition coming in, two or three products that were doing extremely well. That's why when you have such a well-diversified portfolio, and you have so many products, other products can pick up, and the new launches can pick up. The market has always been competitive. It's always been, you know, competition is coming in. Do we feel that there's more competition? In some areas, yes, in some areas, no. We're confident that with all the changes we're making, we are fine.

Speaker #3: There's there's there's always competition . There's always people coming in . You lose a few products . We lost 2 or 3 products that were not lost .

Speaker #3: We have competition coming in , 2 or 3 products that were doing extremely well . And that's why when you have such a well portfolio and you have so many products , other products can pick up and then you launch a scan , can pick up .

Speaker #3: So the market has always been competitive . It's always been , you know , competition is coming in . Do we feel that there's more competition in some areas ?

Speaker #3: Yes . In some areas , no . But but but we're confident that with all the changes we're making , we are fine .

Khalid Nabilsi: It's not like structural change in the market.

Speaker #1: It's not like structural change in the market . It's the pricing is around , let's say if we exclude the two top products that we have , it's 4% almost .

Said Darwazah: Yeah.

Khalid Nabilsi: It's the pricing is around, let's say, if we exclude the 2 top products that we have, it's 4% or almost less. Low to mid single-digit price erosion that we've seen in this business. Nothing is abnormal.

Speaker #1: So low to mid single digit price erosion that we've seen in this business . So nothing is abnormal .

Hafrun Fridriksdottir: Maybe if I may add. I think, over the last few years, the supply from third party has increased significantly, and third party, of course, is not as profitable as if you're making the product internally. I think it has been growing from 20% to 30% over the last few years. That's, of course, affecting the profitability. Also, I mean, there are different parts of the business which has higher profit than other parts. Of course, while you are building the business, injectable business in MENA, which is less profitable than-

Speaker #4: But maybe , if I may add , so I think over the last few years the the supply from third party has increased significantly .

Hafrún Fríðriksdóttir: Maybe if I may add. I think, over the last few years, the supply from third party has increased significantly, and third party, of course, is not as profitable as if you're making the product internally. I think it has been growing from 20% to 30% over the last few years. That's, of course, affecting the profitability. Also, I mean, there are different parts of the business which has higher profit than other parts. Of course, while you are building the business, injectable business in MENA, which is less profitable than-

Speaker #4: And third party of course is not as profitable as if you're making the product internally . So I think it has been going from 20 to 30% over the last , last few years .

Speaker #4: So that's of course affecting the profitability . But also , I mean , there are different parts of the business which has higher profit than other parts .

Speaker #4: Of course , while you are building the business , injectable business in Mena , which is less profitable than the business in US and in Europe , of course , that will affect the overall injectable injectable profitability .

Said Darwazah: Yes.

Hafrun Fridriksdottir: -the business in US and in Europe, of course, that will affect the overall injectable profitability, and that business has clearly been growing as well. Those are at least two reasons in addition to-

Hafrún Fríðriksdóttir: -the business in US and in Europe, of course, that will affect the overall injectable profitability, and that business has clearly been growing as well. Those are at least two reasons in addition to-

Speaker #4: And that business has clearly been growing as well . So those are at least two , two reasons . In addition .

Said Darwazah: If you exclude the MENA margins, the both for the Europe and the North America injectable business, the margin is north 30%.

Speaker #1: To if you exclude the Mena margins that both for the Europe and North America injectable business , the margin is north 30% .

Said Darwazah: If you exclude the MENA margins, the both for the Europe and the North America injectable business, the margin is north 30%.

Christian Glennie: Thanks. Maybe the natural follow-up is, I know you're probably reluctant to guide beyond kind of 26, you know, just to get a sense for that margin and, you know, is 27 to 28 the floor? Then maybe that's similar until you really get into Xellia, and then margins improve or is this, you know-

Speaker #8: Maybe the natural follow up . I know you're probably reluctant to guide beyond kind 26 , but , you know , just to get a sense for that margin and , you know , is 27 to 28 the floor and then maybe that's similar until you really get into Azealia and then margins should improve .

Speaker #8: Or is this, you know.

Said Darwazah: Again, we're saying we're very comfortable that 2028 and further margins improve. I think once we assess everything and we have it, but, you know, we have the plan, the right plan in place. Are we going to be giving?

Speaker #3: Again , we're saying we're very comfortable with that . 28 and further margins improve . I think once we assess everything and we have a better , you know , have the plan , the right plan in place .

Speaker #3: Are we going to be giving

Khalid Nabilsi: May I take this one? In a way, we guide it to 27, 28. I said in my presentation this morning, you can assume this is for the coming few years, but it's not like if we have an opportunity that is sub 30, we are going to say no to it. We don't want to be strictly held on these margins, because we are going to focus on growing the profits and the EPS, rather than just focusing on the margin, as Said mentioned. You can consider like this 27 for 28 to the next phase. What has changed, just repeating to what I said this morning, from the November when we set the floor is 30%, is literally increase investments in R&D.

Speaker #1: May I take this one ? It's in a way with got it for 27 , 28 . And I said in my presentation , this morning , you can assume this is for the coming few years , but it's not like if we have an opportunity that is sub 30 , we are going to say no to it .

Speaker #1: So we don't want to be strictly held on on these margins because we are going to focus on growing the profits and the EPs rather than just focusing on the margin .

Speaker #1: As I mentioned . So you can consider like this 27 , 28 to the next three years , but what has changed ? Just repeating to what I said this morning from the November when we said the floor is 30% , is literally increased investments in R&D .

Khalid Nabilsi: We are increasing $15 million this year versus last year in injectable. You look into the investments that we are having, as Said mentioned, fitting in sales and marketing, so, and the CMO. This is why we are going down like 2 to 3 percentage points. It's not something structural in the business, but it's more investing for the future.

Speaker #1: We are increasing 15 million this year versus last year in injectable you you look into the investments that we we are having . As I mentioned , filling in sales on marketing .

Speaker #1: So, and the CMO, this is why we are going down like 2 to 3 percentage points. It's not something structural in the business, but it's more investing for the future.

Operator: Just gonna jump to the line for a call quickly now. For a question.

Speaker #9: Just going to jump to the line for a call quickly . Now for a question

Operator: If you would like to ask a question, please signal by pressing star and then one on your telephone keypad. We will pause for a moment to allow the questions to come in. Your first question comes from the line of Kane Slutzkin of Deutsche Bank. Deutsche Numis, rather. Your line is now open.

Speaker #10: If you would like to ask a question , please signal by pressing star and then one on your telephone keypad . We will pause for a moment to allow the questions to come in Your first question comes from the line of Cain Slutzkin of Deutsche Bank .

Speaker #10: Your Deutsche Numis . Rather , your line is now open .

Kane Slutzkin: Thank you. Thanks a lot. Morning, guys. Sorry, could you just clarify, I missed the last point on the higher R&D in the injectables. Could you just sort of clarify sort of the lower guide as sort of those moving factors between higher R&D versus the lower CMO work, like in terms of which has moved the needle more there? I assume it's the R&D. If you could just clarify that. Then, you're obviously spending some time doing the strategic review. I'm just wondering at what point do you think you will be able to sort of reinstate a midterm or a new midterm guide? Then, just finally on the buyback, I guess, you know, why has it sort of taken so long to do it?

Speaker #11: Thank you . Thanks a lot . Morning guys . Just sorry , could you just clarify ? Missed the last point on the higher R&D in injectables , but could you just sort of clarify sort of the lower guide , sort of those moving factors between higher R&D versus the lower CMO work , like in terms of which is moved the needle more there , I assume it's the R&D , but if you could just clarify that and then just you obviously spending some time doing the strategic review , I'm just wondering at what point do you think you will be able to sort of reinstate a mid-term or a new mid-term guide and then just finally on the buyback , just I guess , you know , why ?

Speaker #11: Why is it sort of taken so long to do it ? And , you know , could we could we see a more permanent feature going forward if shares sort of remain where they are ?

Kane Slutzkin: You know, could we see a more permanent feature going forward if shares sort of remain where they are? Thank you.

Speaker #11: Thank you .

Hafrun Fridriksdottir: I think I can maybe take the R&D question, if I could hear him correctly. I think he was asking for the spending for R&D, and the overall increase in the spending for R&D this year compared to last year is around $45 million year-over-year. I think that was your question, but I'm not really...

Hafrún Fríðriksdóttir: I think I can maybe take the R&D question, if I could hear him correctly. I think he was asking for the spending for R&D, and the overall increase in the spending for R&D this year compared to last year is around $45 million year-over-year. I think that was your question, but I'm not really...

Speaker #4: I think I can maybe take that . And then if I could hear him correctly , I think he was asking about the spending for R&D and the the overall increase in spending for R&D this year compared to last year is around $45 million a year over year .

Speaker #4: I think that was your question , but I'm not really time .

Operator: Kane, could you just repeat the last question? Thanks.

Speaker #9: Could you just repeat the Thanks . Yeah .

Kane Slutzkin: Yeah, I was just wondering, sort of in that lower guide, how much of it is sort of the lower CMO work you referred to versus R&D, in terms of what's impacting the guide down?

Speaker #11: Yeah , I was just wondering sort of in that lower guide , how much of it is sort of the lower CMO work you refer to R&D in terms of what's impacting the guide down .

Kane Slutzkin: Yeah, I was just wondering, sort of in that lower guide, how much of it is sort of the lower CMO work you referred to versus R&D, in terms of what's impacting the guide down?

Operator: Injectables margin.

Speaker #9: That margin guide , how much is CMO going versus

Hafrun Fridriksdottir: Yeah.

Hafrún Fríðriksdóttir: Yeah.

Operator: how much is CMO going versus,

Christian Glennie: Sorry.

Speaker #2: Should I think it's more evenly split across R&D, sales and marketing, and CMO? I would say those are the three biggest factors.

Khalid Nabilsi: I think Kane, it's more evenly split across R&D, sales and marketing, and CMO. I would say those are the three biggest factors.

Areb Kurdi: They're of more or less the same magnitude.

Speaker #2: And they're of more or less the same magnitude .

Oday Al-Kurdi: They're of more or less the same magnitude.

Said Darwazah: The buyback, I agree with you, it's taking too long, but we have taken the decision to do that $250 million this year.

Speaker #3: And the buyback . I agree with you . It's taking too long . But but we have we have taken the decision to , to to to do that .

Said Darwazah: The buyback, I agree with you, it's taking too long, but we have taken the decision to do that $250 million this year.

Speaker #3: 250 million this year

Areb Kurdi: In terms of the medium-term guide, yeah, I think we'll get back to you on that. We know that it's important for the market. We want to get it right, and so, yeah, I think.

Oday Al-Kurdi: In terms of the medium-term guide, yeah, I think we'll get back to you on that. We know that it's important for the market. We want to get it right, and so, yeah, I think.

Speaker #2: In terms of the medium term guide , I think we'll get back to you on that . We know that it's important for the market .

Speaker #2: We want to get it right . And so , yeah , I think , you know , we'll come back to you .

Said Darwazah: We'll come back to you.

Areb Kurdi: You know, we'll come back to you.

Oday Al-Kurdi: You know, we'll come back to you.

Speaker #11: All right . Cool . Thank you

Operator: All right, cool. Thank you.

Operator: Thank you. There are no further questions. I'd now like to hand the call back to the Hikma team.

Speaker #10: Thank you. There are no further questions. I'd now like to hand the call back to the Hikma team.

Julie Simmonds: Julie Simmons, Panmure Gordon. Just on a more product-specific basis, wondering with TYZAVAN, clearly, you've just launched it. It feels like the sort of momentum's pushed out a little bit to 27. Are you noticing anything from the first sales in the market there?

Speaker #2: Julie , Pamela .

Speaker #12: Just on a more product specific basis , I'm wondering , with clearly , you've just launched it . It feels like the sort of momentum is pushed out a little bit to 27 .

Speaker #12: Are you noticing anything from the first sales in the market ? There

John Cather: Thank you, Maureen. This is John. Yeah, maybe I'll address that.

Jon Cather: Thank you, Maureen. This is John. Yeah, maybe I'll address that.

Speaker #13: Good morning . This is John . Yeah , maybe I'll address that .

Said Darwazah: You're on mute, John.

Speaker #3: John .

John Cather: No, I am not on mute.

Jon Cather: No, I am not on mute.

Speaker #13: No , I am not on mute Okay , great . Hey good morning everybody . So we are an active launch mode for ties .

Julie Simmonds: We can hear you now.

Said Darwazah: Now we can hear you.

John Cather: Okay, great. Hey, good morning, everybody. We are in active launch mode for TYZAVAN. Let me just frame the market, because this is important to understand, because the RTU bag platform will follow a similar pattern. Vancomycin is a widely used product within the US. There's about 41 million grams of the product used in multiple forms, from a very lyophilized powder, to a frozen bag, to obviously our ready-to-use bag. What we are selling is a system and a process change within large hospital systems and large hospital groups that, by default, TYZAVAN would become the Vancomycin of choice. It is really more of a process change. Now, to put it in perspective, we have already converted 13% of the entire gram market with our existing Vancomycin ready-to-use bag. We have a platform. We will expand that.

Jon Cather: Okay, great. Hey, good morning, everybody. We are in active launch mode for TYZAVAN. Let me just frame the market, because this is important to understand, because the RTU bag platform will follow a similar pattern. Vancomycin is a widely used product within the US. There's about 41 million grams of the product used in multiple forms, from a very lyophilized powder, to a frozen bag, to obviously our ready-to-use bag. What we are selling is a system and a process change within large hospital systems and large hospital groups that, by default, TYZAVAN would become the Vancomycin of choice. It is really more of a process change. Now, to put it in perspective, we have already converted 13% of the entire gram market with our existing Vancomycin ready-to-use bag. We have a platform. We will expand that.

Speaker #13: And let me just frame the market because this is important to understand because the RTU bag platform will follow a similar pattern . Vancomycin is a widely used product in the US .

Speaker #13: There's about 41,000,000g of the product used in multiple forms from a very powder to a frozen bag to obviously our ready to use bag .

Speaker #13: What we are selling is a system in a process change, which in large hospital systems and large hospital groups, that by default, at times, would become the vancomycin of choice.

Speaker #13: So it is really more of a process change . Now put it in perspective . We have already converted 13% of the entire gram market with our existing Vanco myosin ready to use bag .

Speaker #13: So we have a platform we will expand that within that network . There's about 22,000 sites of care that use vancomycin within the US .

John Cather: Within that network, there's about 22,000 sites of care that use vancomycin within the US, all forms, long-term care, hospitals, and such. Our existing customer base on the existing bag product represents about 15% of those sites. There is a very large universe of hospitals and health systems that have not used our historical bag. There is a large opportunity there. You have to think in terms of it as a process progression. We're going to expand our existing base by expanding the usage of the product without restriction, and then we're also penetrating the customer bases that have not used our bag in the past.

Jon Cather: Within that network, there's about 22,000 sites of care that use vancomycin within the US, all forms, long-term care, hospitals, and such. Our existing customer base on the existing bag product represents about 15% of those sites. There is a very large universe of hospitals and health systems that have not used our historical bag. There is a large opportunity there. You have to think in terms of it as a process progression. We're going to expand our existing base by expanding the usage of the product without restriction, and then we're also penetrating the customer bases that have not used our bag in the past.

Speaker #13: All long term care , hospitals and such . Our existing customer base on the existing bag product represents about 15% of those sites .

Speaker #13: So there is a very large universe of hospitals and health systems that have not used our historical bags . So there is a large opportunity there .

Speaker #13: So you have to think in terms of terms of it as a process progression . So we're going to expand our existing base by expanding the usage of the product without restriction .

Speaker #13: And then we're also penetrating the the customer bases that have been that have not used our bag in the past . So yes , this is going to be a progression into the back half of the year , but the momentum that we're seeing right now is very active and very encouraging .

John Cather: Yes, this is going to be a progression into the back half of the year, but the momentum that we're seeing right now is very active and very encouraging.

Jon Cather: Yes, this is going to be a progression into the back half of the year, but the momentum that we're seeing right now is very active and very encouraging.

Julie Simmonds: Thank you. Just following up on that from a sort of RTU perspective, longer term, do you think once a site has switched over to one RTU, it makes it easier to switching to another for a different product?

Speaker #12: Thank you . Just following up on that from a sort of RPE perspective , longer term , do you think once a site has switched over to one RTU , it makes it easier to switching to another for a different product ?

John Cather: That's exactly why the way we're approaching this first one is extremely important. We want to make sure we have the processes in place. You know, hospitals and groups, it's, they have to reprogram electronic medical record systems, infusion pumps, SOPs, ordering patterns, storage platforms, because you're bringing in a new form. As we work with TYZAVAN as the foundational product, we want to make sure we fully integrate it properly. I do believe that that will help us going forward with the additional bags as they come to market.

Speaker #13: Yeah, and that's exactly why the way we're approaching this first one is extremely important. We want to make sure we have the processes in place.

Jon Cather: That's exactly why the way we're approaching this first one is extremely important. We want to make sure we have the processes in place. You know, hospitals and groups, it's, they have to reprogram electronic medical record systems, infusion pumps, SOPs, ordering patterns, storage platforms, because you're bringing in a new form. As we work with TYZAVAN as the foundational product, we want to make sure we fully integrate it properly. I do believe that that will help us going forward with the additional bags as they come to market.

Speaker #13: You know , hospitals and groups . They have to reprogram medical , electronic , medical record systems , infusion pumps , SOPs , ordering patterns , storage platforms .

Speaker #13: Because you're bringing in a new form . So as we as we work with T7 as the foundational product , we want to make sure we fully integrate it properly .

Speaker #13: And I do believe that that will help us going forward with the additional bags as they come to market

[Analyst] (Bank of America): Hey, Charlie here with Bank of America. First one's just, in our models, would it be reasonable to assume that I guess at this stage, a 30% midterm injectable margin is off the table given focus on profitable growth? I'll get to the second one in a sec.

Speaker #9: Hey , Charlie Howard , Bank of America . First one is just in our models . Would it be reasonable to assume that a I guess at this stage , amid a 30% mid term injectable margin is off the table given focus on profitable growth , and then I'll get to the second one in a second .

Areb Kurdi: Yeah.

Oday Al-Kurdi: Yeah.

Speaker #9: Yeah, okay. And then the second one is just on the mid-term guide, which obviously, since giving it, we've seen two cuts too.

[Analyst] (Bank of America): Okay. The second one's just on the midterm guide, which obviously, since giving it, we've seen two cuts to... So first is, I guess, talk me through the decision to issue the midterm guide, if there were some underlying concerns on the spending, the short-term focus to give that? Secondly, sort of, how can you reassure us and the market that this is sort of, you know, the last of the big cuts, and we're back to something profitable, you know, we can be return something growth from here?

Speaker #9: So first is I guess talk me through the decision to issue the mid-term guide . If there were some underlying concerns on the spending , the short term focus to give that .

Speaker #9: And the secondly , sort of how can you reassure us and the market that this is sort of , you know , the last of the big cuts and we're back to something profitable .

Speaker #9: You know , it can be returned to something . Growth from here . Yeah .

Said Darwazah: Again, as I said before, it's not a complicated formula. You have the right people, you have the right equipment, you have the right facilities, you have the right R&D. All of these things, when you invest properly, you take timely decisions to take the, you know, to move the business forward, this is a formula for success, and we've had this formula for 40 years. We sort of slowed down the decision-making, it became too centralized. We were not investing properly in the right places, and now we are reversing that. That's why we feel very confident that, you know, as midterm, we will deliver what we're talking about.

Speaker #3: Again , as I said before , it's it's it's not a complicated formula . You do you have the right people . You have the right equipment .

Speaker #3: You have the right facilities , you have the right R&D . All of these things when you when you invest properly , you take timely decisions to take , you know , to move the business forward .

Speaker #3: This is the formula for success . And we've got this formula for 40 years . So we sort of slowed down in decision making , became too centralised .

Speaker #3: We were not investing properly in the right places . And now we're reversing that . So that's why we feel very confident that , you know , mid-term we will deliver what we're talking about .

Khalid Nabilsi: This is why, as well, 2027 is going to be, as well, a year that we'll see a growth. It's the bottom on the injectable, and from here, we are going to grow in top line and in bottom line. In addition to the other two businesses, they continue to grow, as I said earlier.

Speaker #1: And this is why as well , 27 is going to be a year where we . 27 is going to be as well , a year that we'll see a growth .

Speaker #1: So it's the bottom of the injectables. And from here we are going to grow in top line and bottom line. In addition to the other two businesses, they continue to grow.

Speaker #1: As I said earlier

[Analyst] (Bank of America): Just a third one, if I may. You talked, obviously, heavy investment the next two years. How confident are you that this is a two-year journey of heavy investment, and that won't spill into three or four as the investments start continuing?

Speaker #9: Just a side one . If I may . You talked obviously heavy investment the next two years . How confident are you that this is a two year journey of heavy investment and that won't spill into 3 or 4 as the investments start continuing ?

Said Darwazah: The investment is, it's not a short term. It will continue to be, but we will start seeing the results of what we're doing now, two years down the road and maybe further. When we look at our five-year CapEx, our five-year R&D, all this will continue to grow.

Speaker #3: The investment is not a it's not a short term . It will continue to be , but we will see the we will start seeing the results of what we're doing now two years down the road and with further .

Speaker #3: But when we look at our five year CapEx , our five year R&D , all this will continue to grow .

Khalid Nabilsi: May I just to add to what Saeed just mentioned. In terms of the R&D, it takes time to see results, as Hedvig said. In terms of sales and marketing, these are quick wins. You invest today, it's not like going to take so much time till you get the returns, and this is what Riad Mishlawi is focusing on. You will have these investments, and at the same time, give you an example on the supply chain. Having somebody now focusing on the global supply chain would reduce our inventory levels, will reduce the slow-moving items.

Speaker #1: Maybe just to add to what I just mentioned , in terms of the R&D , it takes time to see results . As Heffron said , in terms of sales and marketing .

Speaker #1: These are quick wins . So you invest today . It's not like going to take so much time till you get the returns .

Speaker #1: And this is what John is focusing on . So you will have these investments and at the same time give you an example on the supply chain , having somebody now focusing on the global supply chain with reduce our inventory levels will reduce the slow moving items , which it was very big this .

Said Darwazah: Yes.

Khalid Nabilsi: which it was very big this year.

Speaker #3: Year .

Speaker #1: Supply failure to supply . So the the immediate impact will be significant improvements to to margins . So this is why we are seeing that we are moving in the right direction .

Said Darwazah: Failure to supply.

Khalid Nabilsi: Failure to supply. The immediate impact will be significant improvements to margins. This is why we are saying that we are moving in the right direction, and I think the results of this will come in the coming years, and we are confident about our medium-term outlook.

Speaker #1: And I think the results of this will come in the coming years. And we are confident about our medium-term outlook. Thank you.

Said Darwazah: Thank you.

Speaker #14: Hi Christopher Richardson from Jefferies . A couple , if I may , you lowered CDMO or CMO expectations . Sorry for the year as some customers require domestic production , which you said you can't offer .

Christopher Richardson: Hi, Christopher Richardson from Jefferies. A couple, if I may. You lowered CDMO or CMO expectations, sorry, for the year, as some customers require domestic production, which you said you can't offer. I was just wondering if there were any reasons for that.

Speaker #14: I was just wondering if there were any reasons for that.

Speaker #1: It's a as we said in Zelia or Bedford acquisition is going to be up and running towards 2028 . So it's the same machinery , the same lines .

Khalid Nabilsi: It's, as we said, in Xellia or Bedford, acquisition is going to be up and running towards 2028. It's the same machinery, the same lines. It's replicate what we have in Portugal. Now, we couldn't offer because we don't have that facility up and running. Once we have that facility up and running towards the end of 2027, early 2028, we'll be able to offer ports.

Speaker #1: It's replicate to what we have in Portugal now. We couldn't offer because we don't have that facility up and running. So once we have that facility up and running toward the end of '27, early '28, we'll be able to offer for.

Speaker #3: And as I said again , the Cherryhill plant and the other plants we looked at optimizing the capacity there , looking at the bottlenecks , bringing in the lines that are required to to up the manufacturing capacity .

Said Darwazah: As I said, we, again, the Cherry Hill plant and the other plants, we looked at optimizing the capacity there, looking at the bottlenecks, bringing in the lines that are required to up the manufacturing capacity.

Speaker #4: And if I can add something about that business , because we are only talking about injectables and as I mentioned , I mean , we have this huge I mean , of course , manufacturing site in Ohio .

Hafrun Fridriksdottir: If I can add something about the Rx business, because we are only talking about injectables. As I mentioned, I mean, we have this huge, I mean, of course, manufacturing site in Ohio, both for solid orals, for nasals, for inhalations. That site has been getting a lot of attraction over the last year or so, since all this discussion about domestic manufacturing started to happen in US. There's a lot of interest in us, in producing products for different clients. I think this is going to be a big opportunity for us moving forward, both in the Rx and also in the injectable business.

Hafrún Fríðriksdóttir: If I can add something about the Rx business, because we are only talking about injectables. As I mentioned, I mean, we have this huge, I mean, of course, manufacturing site in Ohio, both for solid orals, for nasals, for inhalations. That site has been getting a lot of attraction over the last year or so, since all this discussion about domestic manufacturing started to happen in US. There's a lot of interest in us, in producing products for different clients. I think this is going to be a big opportunity for us moving forward, both in the Rx and also in the injectable business.

Speaker #4: Both for solid orals , for nasals , for inhalations and , and that site has been getting a lot of attraction over the last , last year or so since since all this discussion about domestic manufacturing started to happen in the US .

Speaker #4: So there's a lot of interest in , in us in producing products for different clients . So , so I think this is going to be a big opportunity for us moving forward .

Speaker #4: Both in direction and also in the injectable business.

Speaker #3: So many times, clients come in, let's say, for the solid oral, then they feel very comfortable with you and they open up and move injectables and other things to you for you.

Said Darwazah: Many times clients come in, let's say, for the solid oral, then they feel very comfortable with you, and they open up and move injectables and other things to you, for you.

Speaker #14: Great, thank you. And just the guide cut in November was due to equipment delays. I'm just wondering what the situation is now, and what caused you to walk away from 27, and whether the timing for Bedford has changed at all?

Christopher Richardson: Great, thank you. Just the guide cut in November was due to equipment delays. I was just wondering what the situation is now and what caused you to walk away from 2027 and whether the timing for Bedford has changed at all?

Speaker #1: There's no change to the guide that we had in 2020. In late November. So all we said is that we are going to ramp up, start ramping up towards the end of 2027, and the commercialization will start in 2028.

Khalid Nabilsi: No change to the guide that we had in late November. All what we said, that we are going to start ramping up towards the end of 2027, and the commercialization will start 2028. No change to our plans.

Speaker #1: So, no change to our plans.

Speaker #14: Great. And maybe just a quick final one. I was wondering if you could comment on the oral generics pipeline and the margins in the US, excluding any Xyrem impact.

Christopher Richardson: Great. Maybe just a quick final one. I was wondering if you could comment on the oral generics pipeline and the margins in US Rx, excluding any Xyrem impact.

Speaker #4: Excluding

Hafrun Fridriksdottir: Excluding, sorry?

Hafrún Fríðriksdóttir: Excluding, sorry?

Speaker #14: The impact of Xyrem

Christopher Richardson: The impact of Xyrem.

Speaker #4: Sodium . But okay , so last year , sodium oxybate was dragging down our profitability . So so the rest of the business was actually compensating for for the low profit of that , that product .

Said Darwazah: Sodium.

Hafrun Fridriksdottir: Sodium oxybate. Okay, last year, sodium oxybate was dragging down our profitability. The rest of the business was actually compensating for the low profit of that product. We managed to negotiate a better deal, at least for this year and for next year. We will have slightly better profit of that product, but it will not be dragging down the overall profit for the Rx business. Is it helping this year? It potentially will.

Hafrún Fríðriksdóttir: Sodium oxybate. Okay, last year, sodium oxybate was dragging down our profitability. The rest of the business was actually compensating for the low profit of that product. We managed to negotiate a better deal, at least for this year and for next year. We will have slightly better profit of that product, but it will not be dragging down the overall profit for the Rx business. Is it helping this year? It potentially will.

Speaker #4: We managed to negotiate a better deal, at least for this year and for next year. So we will have slightly better profit on that product.

Speaker #4: But so it will not be dragging down the overall profit for that business . Is it helping this year ? It potentially will

Speaker #14: Wonderful . Thank you

Christopher Richardson: Wonderful. Thank you.

Speaker #3: James . Similar .

Said Darwazah: James? Mike.

Speaker #6: I'll go with one from JP Morgan . Thanks for taking the follow up . So on CMO , you mentioned you're looking for a new head of CMO .

James Morgan: I'll go with one. Zane Ribbeck, Morgan. Thanks for the follow-up. On CMO, you mentioned you're looking for a new head of CMO.

[Analyst] (Goldman Sachs): I'll go with one. Zane Ribbeck, Morgan. Thanks for the follow-up. On CMO, you mentioned you're looking for a new head of CMO.

Speaker #6: So, just to clarify, the characteristics you're looking for in the head of CMO, in terms of the type of Canada profile that you're looking at.

Said Darwazah: Yes.

James Morgan: Just the characteristics you're looking for in a head of CMO in terms of, the type of, the kind of the profile that you're looking at, and when we could expect the appointment. Does this mark a potential shift to making CMO like a fourth division, that we saw talked about in the past, in terms of strategically, so integrating the Rx and the injectable team?

[Analyst] (Goldman Sachs): Just the characteristics you're looking for in a head of CMO in terms of, the type of, the kind of the profile that you're looking at, and when we could expect the appointment. Does this mark a potential shift to making CMO like a fourth division, that we saw talked about in the past, in terms of strategically, so integrating the Rx and the injectable team?

Speaker #6: And when we could expect the appointment . And is this Mark a potential shift to making CMO like a fourth division that we've talked about in the past in terms of strategically so integrating the R and injectables

Speaker #3: Historically , we used to CMO as a fill up . So this is extra capacity . Let's get , you know , products to fill it up .

Said Darwazah: Historically, we used to the CMO as a fill up, so we thought, this is extra capacity, let's get, you know, products to fill it up. When we were approached, or we found a client to come in and use the Rx site, it was more of a long-term agreement. Long-term agreements require dedicated facilities, they require dedicated lines and sometimes dedicated teams, and it's a lot, you know, it's a lot of investment to do that. It takes time to come in and, but it's a long term. It's, this is the right, this is what we want to do, not just, you know, bringing in short-term fixes. To do that, you need somebody that has been doing that for a very long time, that knows which companies require CMO business.

Speaker #3: And then when when we were approached or we , we , we found a client to come in and use the RX site , it was more of a long term agreement .

Speaker #3: So long term agreements require dedicated facilities . They require dedicated lines and sometimes dedicated teams . And there's a lot , you know , a lot of investment to do that .

Speaker #3: And it takes time to come in and but it's a long term . So this is the right this is what we want to do , not just , you know , bringing in short term fixes .

Speaker #3: So to do that you need somebody that has been doing that for a very long time that knows which companies require CMO business .

Speaker #3: And also , I think more importantly , when you do the contract . When you're looking at , let's say , 5 billion tablets or something , half a cent per tablet , extra gives you 50 million in profitability .

Said Darwazah: Also, I think more importantly, when you do the contract, when you're looking at, let's say, 5 billion tablets or something, half a cent per tablet extra gives you $50 million in profitability. Having the right negotiation skills, the right contract skills, all these things. This is what we're looking at. Now, we have this, but we think that getting a very senior person that has done this successfully is the right way to go. As I said, we are interviewing. There are several people out there that are available with this kind of talent.

Speaker #3: So having the right negotiation skills , the right contract skills , all these things . So this is what we're looking at now .

Speaker #3: We have this , but we think that getting a very senior person that has done this successfully is the right way to go .

Speaker #3: And as I said , we are interviewing , there are several people out there that are available with this kind of AR talent .

Speaker #3: Make sense ? And yes , could be a fourth division . Very much so . Yes

Hafrun Fridriksdottir: Makes sense.

Hafrún Fríðriksdóttir: Makes sense.

Khalid Nabilsi: Yes, could be a fourth division, very much so. Yes.

Speaker #15: One more

Operator: All right.

Speaker #9: Just quickly, on the CMO headwind for '26—is that the one customer you lost that's gone from Europe to the US?

Madhu Vettikattu: Just a question on the CMO headwind for 2026. Was that one customer you lost that's gone from Europe to the US?

Wimal Kapadia: Just a question on the CMO headwind for 2026. Was that one customer you lost that's gone from Europe to the US?

Speaker #9: I guess, how was that conversation? How are conversations with the remaining customers to ensure that won't happen with someone else before the 28th?

Khalid Nabilsi: Yeah.

Madhu Vettikattu: I guess how was that conversation, and how are conversations with the remaining customers to ensure that won't happen with someone else before the 28th?

Wimal Kapadia: I guess how was that conversation, and how are conversations with the remaining customers to ensure that won't happen with someone else before the 28th?

Speaker #1: It was it was one of our customers . It's not like they are shying away completely . They still have business with us , but they decided to .

Khalid Nabilsi: It was one of our customers. Not like they are shying away completely. They still have business with us, they decided to. Some of the manufacturing, for their own benefits, they wanted to have it in the US. It's not like the business is going down. It's to replace, it's going to take some time to get a new customer. We are confident of our ability to continue growing the CMO business. It's a matter of time, when we have the Xellia, of course, up and running.

Speaker #1: Some of their manufacturing for their own benefits . They wanted to have it in the US , so it's not like the business is going down .

Speaker #1: It's to to replace . It's going to take some time to get a new customer . But we are confident of our ability to continue growing .

Speaker #1: The CMO business . So it's a matter of time . But when we have the azalea of course up and running , we will have much more clients , much more capacity to offer as well .

Madhu Vettikattu: Yeah

Wimal Kapadia: Yeah

Khalid Nabilsi: we will have much more clients and much more capacity to offer as well. There's a lot of demand for US manufacturing, and I think, you know, the Bedford acquisition and what we're doing now, although it's going to take a little time. Like I said, if you want to get a client that will work with you long term, anyway, it will take two years before you can move in the product. Now is the right time to get, you know, to get the clients and get the orders in, so you can put the processes in and do the submissions and all these things.

Speaker #3: There's a lot of demand for us manufacturing , and I think , you know , the the Bedford acquisition and what we're doing now , although it's going to take a little time .

Speaker #3: But like I said, if you want to get a client that will work with you long term anyway, it will take two years before you can move in the product.

Speaker #3: So now is the right time to get , you know , to get the clients and get the orders in . So you can put the processes in and do the submissions and all these things .

Speaker #3: So that tech transfers and so on . So by 28 and and more you'll be ready to to to launch . So it's the demand is there and we are talking to a lot of companies .

Hafrun Fridriksdottir: Tech transfer.

Hafrún Fríðriksdóttir: Tech transfer.

Khalid Nabilsi: Tech transfers and so on, by 2028 and more, you'll be ready to launch. The demand is there. We are talking to a lot of companies.

Speaker #4: So what they are saying is that if we would have had capacity in us to take on those products in us , we could probably potentially have kept that customer .

Hafrun Fridriksdottir: What they are saying is that if we would have had capacity in US to take on those products in US, we could have probably potentially have kept that customer. We didn't have the capacity.

Hafrún Fríðriksdóttir: What they are saying is that if we would have had capacity in US to take on those products in US, we could have probably potentially have kept that customer. We didn't have the capacity.

Speaker #4: So but we didn't have the capacity at that time . So I think that's but now we are building that . So , so moving forward we will .

Khalid Nabilsi: Yeah

Hafrun Fridriksdottir: at that time, I think that's. Now we are building that, so moving forward, we will.

Hafrún Fríðriksdóttir: at that time, I think that's. Now we are building that, so moving forward, we will.

Speaker #2: And if you remember as well , when we did this acquisition and we took the Bedford side on , it was because we were reasonably capacity constrained in our existing facilities .

Susan Ringdal: If you remember as well, when we did this acquisition, and we took the Bedford site on, it was because we were reasonably capacity constrained in our existing facilities. We weren't really very actively selling CMO business at the moment, because we're pretty much, we don't have a lot of spare capacity for CMO without the Bedford site.

Julie Simmonds: If you remember as well, when we did this acquisition, and we took the Bedford site on, it was because we were reasonably capacity constrained in our existing facilities. We weren't really very actively selling CMO business at the moment, because we're pretty much, we don't have a lot of spare capacity for CMO without the Bedford site.

Speaker #2: And so we wouldn't we weren't really very actively selling CMO business at the moment because we're pretty much we don't have a lot of spare capacity for CMO without the Bedford site .

Speaker #2: So

Operator: Okay. Any more? Last question, I think.

Speaker #15: Last question

Speaker #8: Thanks , Chris . Thanks for the follow up . Just maybe on on RCS and just a couple of ones there on the I think you've alluded to a couple of the things around the moving the margin to 20% .

Christian Glennie: Thanks. Christian Glennie. Thanks for the follow-up. Just maybe on Rx, and just a couple ones there on the. I think you've alluded to a couple of the things around the moving the margin to 20%. Just to clarify the step up this year to 20, and is the 20, again, another kind of a base for the business going forward, do you think? Just finally on nasal epinephrine, what's the update there? Well, obviously, it's been delayed, so what's the expectation around that? I think it had been seen as potentially quite a significant product for you, so just an update there.

Speaker #8: Just to clarify, the step up this year to 20, and is the 20 year again another kind of base for the business going forward?

Speaker #8: Do you think ? And then just finally on nasal epinephrine , what's the update there . And obviously it's been delayed . So what what's the expectation around that ?

Speaker #8: I think it had been seen as potentially quite a significant product for you . So just an update there .

Speaker #4: So maybe first on the margin is 20% . The best we can do . No , I think probably you will probably see some improvement moving forward .

Hafrun Fridriksdottir: Maybe first on the margin. Is 20% the best we can do? No, I think you will probably see some improvement moving forward as, I mean, in 2027, even 2028 as well. I'm not going to give you any numbers, I think, I don't think that's necessarily the top of the pie. With regards to epi, epinephrine, as I think I talked about last time when we had this conversation, there were some requirements from FDA to run some additional study. That study is ongoing, we are planning to submit in US in, let's say, after few months now. We did file a product in UK last year.

Hafrún Fríðriksdóttir: Maybe first on the margin. Is 20% the best we can do? No, I think you will probably see some improvement moving forward as, I mean, in 2027, even 2028 as well. I'm not going to give you any numbers, I think, I don't think that's necessarily the top of the pie. With regards to epi, epinephrine, as I think I talked about last time when we had this conversation, there were some requirements from FDA to run some additional study. That study is ongoing, we are planning to submit in US in, let's say, after few months now. We did file a product in UK last year.

Speaker #4: Thus I mean , in 2017 and 28 as well . I'm not going to give you any numbers , but I think I don't think that's necessarily the the top of the , of the pie with regards to epinephrine , as I think we , I talked about last time when we when we had this conversation , we there was some requirements from FDA to run some additional study that study is ongoing and we are planning to submit in , in us in , in let's say after a few months now and we did file the product in UK last year , we will be filing in Europe as well .

Hafrun Fridriksdottir: We will be filing in Europe as well, and we are actively discussing out licensing the product in Europe. That's, yeah, that's the update. Because we have been working so closely with FDA over the last year or so on the product, I strongly believe that the review time will potentially be shorter than maybe we thought in the beginning. It will be an exciting product for us.

Hafrún Fríðriksdóttir: We will be filing in Europe as well, and we are actively discussing out licensing the product in Europe. That's, yeah, that's the update. Because we have been working so closely with FDA over the last year or so on the product, I strongly believe that the review time will potentially be shorter than maybe we thought in the beginning. It will be an exciting product for us.

Speaker #4: And we are actively discussing outlicensing the product in Europe . So , so that's yeah . So that's the update . But because we have been working so closely with FDA over the last year or so on the product , I strongly believe that the review time will potentially be shorter than than than maybe we thought in the beginning .

Speaker #4: So It will be an exciting product for us .

Speaker #3: Somebody asked a question about the vena.

Khalid Nabilsi: Somebody ask Mazen a question about the MENA. He's bored.

Speaker #15: Yeah .

Speaker #3: He's bored

Speaker #15: And with the question. Thank you.

Madhu Vettikattu: There's got to be one right. I can't even hear you.

Wimal Kapadia: There's got to be one right. I can't even hear you.

Speaker #6: So change the Barclays again . Just what are we talking about . Margins . And we're talking about generic margin . And an injectable margin .

James Gordon: Thank you. Chase from Barclays again. Just when we're talking about margins, and we're talking about generic margin and an injectable margin...

Speaker #15: Right .

Speaker #6: So, but then I've also heard, effectively, you're going to centralize R&D spend. And we could think of the divisions as being a bit extra R&D.

Hafrun Fridriksdottir: Rx. Rx.

Hafrún Fríðriksdóttir: Rx. Rx.

James Gordon: Sorry, Rx, apologies. I've also heard that effectively, you're going to centralize R&D spend, and that we could think of the divisions as being a bit ex R&D. You're going to think about what that ex R&D performance is. If we're rebuilding our models off today, is that how we should be thinking about Hikma now, and are you going to start giving us then what the margins are for these three divisions without R&D and then the central R&D line? What do we do with our models?

Speaker #6: You're going to think of it . Or their R&D performance is . So if we're rebuilding our models after today , is that how we should be thinking about Hikma now ?

Speaker #6: And are you going to start giving us, then, what the margins are for these three divisions without R&D? And then the central R&D line, what do we do with our models?

Speaker #1: Eventually , eventually ? This year , we did not want to .

Khalid Nabilsi: Eventually. This year, we did not want to.

Speaker #15: Too much .

Speaker #1: Change, too much change to you. And then changing your model, but eventually next year you will start seeing the margin.

Susan Ringdal: Too much change for you today.

Khalid Nabilsi: Too much changes to you-

James Gordon: Yeah.

Khalid Nabilsi: Changing your model. Eventually, next year, you would start seeing the margin without the R&D.

Speaker #1: Without R&D .

Speaker #15: With and .

Speaker #1: Without , with and without .

Susan Ringdal: With and without.

Speaker #6: A bridge this year. And then we do our rebuild for next year. Yeah.

Khalid Nabilsi: With and without.

James Gordon: Different. A brief this year, and then we do our rebuild for next year.

Speaker #15: Thank you

Khalid Nabilsi: Yeah.

James Gordon: Thank you.

Speaker #2: Madison , I think it would be great . Maybe . I think one of the strengths for for the business in the Mena in the past year has been all of the partnerships that we've signed .

Operator: Okay.

Susan Ringdal: Mazen, I think it would be great, maybe. I think one of the strengths for the business in the MENA in the past year has been all of the partnerships that we've signed. We have excellent momentum in terms of signing new partnerships. Maybe you could just talk a bit about why Hikma seems to be the partner of choice in MENA.

Speaker #2: We have excellent momentum in terms of signing new partnerships. Maybe you could just talk a bit about why Hikma seems to be the partner of choice in MENA.

Speaker #3: You're on mute . That's a mute

Said Darwazah: You're on mute. Madhu, you're mute.

Speaker #2: No he's not . He's just . The sound is very low No . Try again .

Susan Ringdal: No, he's not. He's just ferret. The sound is very low. No, try again. He is on mute.

Speaker #4: He is on .

Speaker #15: Mute I've been working

Madhu Vettikattu: It has been working.

Wimal Kapadia: It has been working.

Speaker #3: This

Said Darwazah: Looks like he's on.

Speaker #4: Luckily , you didn't ask him any questions .

Operator: Luckily, you didn't ask him any questions.

Speaker #15: Okay .

Speaker #3: Next question . Did he .

Said Darwazah: Okay, next question. Till he comes back.

Speaker #15: Comes back, so can you. Sorry for those remarks. At this point.

Madhu Vettikattu: I think in the absence of Madhu, may have to join that either to you, Said, closing remarks at this point.

Wimal Kapadia: I think in the absence of Madhu, may have to join that either to you, Said, closing remarks at this point.

Speaker #3: Sorry .

Speaker #1: Closing remarks .

Speaker #15: Yeah .

Said Darwazah: Sorry.

Operator: Closing remarks.

Speaker #3: Well , again , it's first of all , it's good for me . I'm very happy to be back as CEO . I'm very happy to give up the chair position to be able to do this .

Said Darwazah: Well, again, first of all, it's good for me. I'm very happy to be back as CEO. I'm very happy to give up the chair position to be able to do this. We have an extremely good team. We work very, very well together. We have, I think, a very, very strong business. As we said, if you look at the last 5-year CAGRs and the years before, you've seen how this business continues to grow. We will continue to grow it. We are taking quick decisions. We are implementing a culture of quick decision-making. I also talked about the younger people in the company. For instance, from now on, the executive committees and the leadership council, and so on, we will mix and match.

Speaker #3: We have an extremely good team . We work very , very well together . We have , I think , a very , very strong business .

Speaker #3: As we said , if you look at the last five year figures and the years before , you've seen how this business continues to grow , we will continue to grow .

Speaker #3: It . We are taking quick decisions . We are implementing a culture of quick decision making . I also talked about the the younger people in the company .

Speaker #3: So for instance , from now on , the executive committees and the Leadership council and so on , we will have we will mix and match not only on seniority .

Speaker #3: We will be having more younger people join. There is obviously something we didn't talk about. A lot of focus on AI and seeing how AI can be implemented to move the business forward.

Said Darwazah: It will not only be on seniority, we will be having more younger people join. There is obviously something we didn't talk about, a lot of focus on AI and seeing how AI can be implemented to move the business forward. All in all, I feel very, very positive about this. You know, this is a strong company that has been growing for a very long time, has very solid foundation, has a strong leadership team, and a lot of talent across the board. I am very confident that we will be delivering the kind of growth that we expect from ourselves, and our shareholders expect from us.

Speaker #3: So all in all , I feel very , very positive about this . And you know , this is a strong company that has been growing for a very long time , has very solid foundation , has a strong leadership team , and a lot of talent across the board .

Speaker #3: And I'm very confident that we will be delivering the kind of growth that we expect from ourselves and our shareholders . Expect from us

Speaker #15: Thank you .

Speaker #3: Thank you , thank you everyone . Appreciate you joining us .

Operator: Thank you.

Said Darwazah: Thank you. Thank you, everyone. Appreciate you joining us. Thank you.

Speaker #15: Thank you . Thank you .

Speaker #2: Thank you. Thanks, John.

Speaker #15: Thank you. Thank you, John.

Operator: Thank you.

Susan Ringdal: Thank you. Thanks, John. Thank you, Madhu.

Said Darwazah: Thank you, John.

Madhu Vettikattu: Thank you.

Wimal Kapadia: Thank you.

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