Ipsen's (IPSEY) CEO Marc de Garidel on Q2 2016 Results - Earnings Call Transcript

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Ipsen SA (OTCPK:IPSEY) Q2 2016 Earnings Conference Call July 28, 2016 8:30 AM ET


Marc de Garidel - Chairman & CEO

Aymeric le Chatelier - EVP, Finance Member of the Executive Committee

Claude Bertrand - Member of the Executive Committee, EVP, Research and Development, Chief Scientific Officer

David Meek - Chief Operating Officer


Marc de Garidel

Good afternoon, good morning, it's a pleasure to welcome you today to our H1 Results for the Ipsen Group. So I'm Marc de Garidel, the Chairman of Ipsen. I am pleased to have along with me our new CEO, David Meek which I'll introduce in a few seconds, David is with us. We have also our Executive Vice President of R&D Claude Bertrand and naturally our CFO, Aymeric le Chatelier. So what we're going to do in the next few minutes is to cover a number of topics. So I'd like to give you an overview of where Ipsen stands after the first six months of the year and a bit of a recap of the current strategy.

And then we'll move into the detailed financial performance which you've seen has been solid for the first six months. Then since we have quite a number of news on the clinical front, Claude will give you a snapshot of where we stand and then we will finish with the concluding remarks from David, our new CEO will be glad to, you know, take us to what he thinks is necessary in the next few months. And then obviously at the end we will take the Q&A as usual.

So let's start by a quick overview of H1. So really probably three key things to remember about H1 at Ipsen, number one is clearly the solid financial performance. We have a very strong specialty business that has been growing at about 14%. And this growth has been particularly generated by Somatuline and in particular due to our performance in the U.S. which we will come back within a few seconds, so great, I think, operation of performance from the team which needs to be really congratulated.

The second element also is H1 has been exciting. We're also very excited about the next few months as we prepare for the launch of Cabozantinib. You saw that we got the CHMP positive opinion which means that hopefully in the next few weeks, by the end of September, this drug will be introduced to the European market.

And thirdly but also very positively, we decided to change the governance of Ipsen. So I will retain the chairmanship of Ipsen and also advisory role at the holding company in but we're very pleased to welcome David Meek, will be our new CEO since actually July 18 and it's a great pleasure to have such a caliber at Ipsen, someone who had worked in big pharma but also in a smaller company, someone who has a great experience around the globe, someone who has business development track record which is very important also for the future of Ipsen but also, finally and very importantly, someone who has the values that we share at Ipsen.

So David will be again presenting himself in a few minutes, but I just wanted to welcome him to the Ipsen family and I can guarantee you that the future is bright with David.

So let's talk quickly about, you know, the business model of Ipsen and where we stand. So this is at the end of the first six months, Ipsen is presently a specialty-based company, now we derive 80% of our sales in specialty. When I joined six years ago it was about 66%, so we see the really gradual increase efficiently, primary care remains still an important part of our business for about 20%.

Now the big new news on the first six months from a geographic standpoint is the steady rise of the United States which as you can see has now become about 15% of our total sales and more importantly of the group which is six months ahead of schedule, because we thought we would reach that level more toward the end of the year. So great performance in the U.S.

Actually, while we're in the U.S., I wanted to just show you this slide, deliberately I picked the Q1 2014 as a reference because it's in Q1 of 2014 when we announced our decision to invest heavily in the United States and to launch Somatuline.

At that time, some of you were skeptical and maybe for the right reasons, because our track record in the United States has not been great before. But I think we have demonstrated in the last two years that this was the right decision, our sales have increased sixfold in the meantime and I can tell you that this is only the beginning as, you know, we still have a lot of legroom on Somatuline's growth and also we're launching Dysport in a new indication as we speak and later hopefully we'll do some business development to accompany that across. So I think a lot of excitement about our U.S. business.

So in terms of the financial performance, a few numbers. So first the growth of the group at constant exchange rate has been nearly 10% which again is in the market today and from a market well above the current growth at the world market. So we're growing in value terms probably three times as high as the market, so excellent performance. It's clearly driven by specialty 14%, primary care has been declined by 6%. But it is important to note that in the second quarter, we actually were flat. So better trend than in Q1.

And then finally with this good performance in sales so we drive the margins and we're again pleased to report that our margin for the first six months was close to 25% of sales and then an improvement about 1 point versus the prior year. So if we look at the strategy of the group, the strategy has been very, you know, simple at least in concept. It's to be very good in a few areas to reach excellence. I think if we look at the NT world beyond again the good performance of Somatuline, we're also very pleased to get the filing of the Telotristat compound done in Europe which means a launch in, for the launch by the end of 2017. So second launch beginning beyond the .

We're also progressing on our acquisition of that we did a few months ago in terms of developing also not only treatment but also diagnosis. So that puts Ipsen in a very privileged place in the field of Cabo. In the field specifically with Dysport we're also expecting now any time soon, very soon the approval of a new indication where Ipsen will be the only company in the world to have indication in the United States which is for pediatric , so a great testimony of our commitment to kids.

Also we're working hard to get and to file a new liquid formulation for Europe and hopefully there we will be again the first one in the world to have that on the market in the couple of years. Finally with Cabo, we're expecting this launch now in a few weeks and it would place us again in a very favorable place as we bring true innovation to the marketplace. On the primary care front, you know that last year we decided to accelerate our strategy toward OTC and GI development, so this is what we've been doing, particularly in China and we'll give you a report on how we're doing with Aymeric.

So just to finish my introductory comments, about Cabo, so Cabo, great news a few days ago with the CHMP positive opinion and this drug is going to be in a market where they are in Europe about 15,000 to 20,000 patients who are affected by this disease as they advance into their cancer. That's a very truly unmet medical need. Cabo is uniquely positioned because of its efficacy, it's the only drug that has accumulated three criteria of efficacy, the overall survival which is the most important because at the end of the day the life of patients are prolonged because of drug, the PFS so doctors can see the effect of the drug on the reduction of tumor and also the OR. So great efficacy data which puts us again in a good footing.

So now where are we in terms of the launch preparation? We're obviously actively recruiting a number of people to get ready in this competitive marketplace. And our key focus has been around particular medical affairs where we're hiring, you know, the right expertise in this field and also market experts, because it's one thing to get approval as you know in Europe. It's another to get reimbursement and you're familiar with the facts that it would be a staggered launch so it would be country-by-country. And the first two key countries that have been targeted by Ipsen are UK and Germany.

So a lot of excitement around this launch and so far I would say we're doing quite well. So let me turn to Aymeric who will describe to you our solid financial performance for H1 and then Claude will take it on and David will conclude. Thank you very much.

Aymeric le Chatelier

Thank you, Marc. I'm very pleased to present you our financial performance for this first half. Very solid results as you will see, both from sales and top line growth perspective but also at the bottom line and at the cash flow level. So maybe first focusing on the sales, clearly the second quarter of the year has shown some acceleration at Ipsen. We've been able to deliver close to 15% growth with our specialty care business growing above 18%. And as Marc was mentioning, our primary care business we suffered during the first quarter and did rebound with a flat quarter in Q2.

For the first quarter - for the first semester as you see, 9.7% growth at constant FX rate with very strong performance from the specialty care coming mainly from Somatuline. Somatuline growing at 37%, two-thirds of the growth is coming from the U.S., but the rest of the country, especially Europe, is also showing a strong performance. Dysport also with a good performance despite we see some stocking impact in some countries but also with our partner Galderma, very strongly in Q1. Still some impact in Q2. We expect that business to go to the high single digit growth for the year and for the period to come in our 2020 outlook.

And the sub-product, Decapeptyl used to be the first product of Ipsen just a year ago, now it's the second product. A good performance we see in Europe, a challenging performance in China and some stocking impact in other areas of world. Primary care main impacting as you see from the performance of Smecta in China, but also some challenges for Tanakan, our product especially in Russia, but we're confident that the dynamic that we see and especially the deployment of our OTC strategy in many countries but more importantly in China will give us the opportunity to be back to growth for the full year.

Let's now spend some time on the performance of Somatuline. Somatuline, clearly the big engine for growth of the group is coming from the U.S. In the U.S., we had very, very solid momentum, this is the second year into the launch as we launched the product in early 2015. Not only we have a very strong volume growth, we also are able to continue to increase price in the market, in the U.S. market but we're also able to expand the size of the market which is something very important given the quality of our product and the quality of the label we get from the FDA to launch the product in the U.S.

As a consequence, we're clearly growing our market share in the market as you can see on the slide, but also we're, continue to expand the number of centers where we're and we're able to convert more and more patients to our product. But not only does the U.S. continue to grow, you see that Europe is also a big chunk of the business and Europe is doing very well, especially if you take some countries like Germany, like France, like Poland where we have very strong performance and we continue to deliver our growth above 10% as compared to the first half of 2015.

Dysport, so a little view, Dysport has been impacted by some stocking impacts as we had a very good performance last year and as we're dealing with our partner Galderma in aesthetics. As you know, aesthetics is a big driver for the business and for the product for Dysport. The Galderma performance is very good, but we have to deliver batches to Galderma every quarter. One batches from Q2 to Q3 is significantly impacting the tougher months of the business.

Outside of that, very important piece is clearly the extension of label that we're now having in the U.S. As we know last year in August we get the triptorelin level and we re-launched the product in the U.S. We're now expecting to get as Marc was mentioning it, the PLL label and thanks to this new expanded label, we hope to be able to address the sizable market in the U.S. And as you probably know, our sales were limited to $50 million last year for Dysport interrupted in the U.S. We're now close to half a billion market and we hope to be able to grow our market share in that market. Clearly, the first half of the year has started to show some momentum. Now we need to convert that and this is going to be an important driver for the continuous improvement and growth of Dysport, notably in the U.S.

Somatuline, as you know, Somatuline - sorry, Decapeptyl, Decapeptyl is a product primarily in Europe and in China. China is a very important market for us. We have been reorganizing our sales organization in China in order to really target the right market by indication. This is starting to pay. We still see some pricing pressure in China but we hope that the growth of the market which is very important will be able to capture that through a better organization of our sales force.

On top of that, in Europe, we see reducing competition on the product and we're able to manage pricing which is always under pressure for a mature product like Decapeptyl and we're able to grow in volume and to compensate the pressure and to benefit from lower pressure from the competition. Primary care, if you remember, had a disappointing first half, we said we were 11% down. Second quarter we show flat sales. A lot of stocking impact especially in 2015 and in Q1 2015 we had a lot of product especially Smecta in China into the channel. We were able to recover from that during the course of 2015. So clearly what we're showing is that for the first half of the year, we've been able to reduce the big impact of the stocking performance.

Having said that, the environment is still challenging, as you know primary care is primarily Russia, China and France. And clearly the Russian market is still challenging, especially our product Tanakan, we're suffering from lower purchasing power for many consumer in Russia as a consequence of the devaluation of the currency. And in Smecta, we're rolling out our plan to switch our business toward OTC, this is taking time and we hope that by the second half of the year, we should be able to get rebound in order to get the business back to growth.

So very dynamic top line which generates a significant increase in profitability. As you see, we've been able to improve our gross margin significantly thanks to other revenue that are also growing at higher rates than top line, mainly coming from royalties that we receive from our partners Galderma, but also for one of our product in primary care from our partner Menarinish. But also we've able to benefit from the positive mix of the growth of specialty care in order to improve our gross margin. As you know, primary care growth margin is higher than partner - specialty care, sorry, is higher than primary care and Somatuline is one of the most profitable products as we own the full IP of this product.

As you can see, very good control of our cost during the first semester. We continue to grow our sales and marketing cost both to support our existing products but also to prepare for the launch of Cabo, we talk later on that element. And also we continue to invest in R&D and we continue to be very cautious on G&A in order to make sure that we leverage our organization and improve our profitability. Maybe just a slide on our exposure to foreign currency, as you can see, our mix hasn't changed that much, we still have close to 50% of our sales which are not denominated in euro. The main currency for us clearly the U.S. dollar is very important and the more we're growing our business in the U.S., the more we start to be exposed to the U.S. dollar. As you know last year, given expenses and the business was just starting to break even and our R&D center in the U.S., we were not exposed to the U.S. dollar.

As the business and the profitability is increasing, we start to be slightly exposed to the U.S. dollar. But by the way, the U.S. dollar is not moving that much against the euro. The big change as you can see without any surprise because they are coming from last summer, hopefully we get a better summer or better month of August was the devaluation of the ruble.

Some impact on the Chinese renminbi and also the devaluation of the ruble that started, for a long time even if we see some recovery. Very importantly, we're hedging our position because clearly we're exposed to these countries which are profitable country for Ipsen and we have some local cost in China, in Russia or in Brazil, but these costs are not enough to compensate for the profit that we're doing there. We have put in place hedging policy and you will see that for - our guidance for this year, we're fully hedged and we don't anticipate any change.

Now maybe just a summary of how do we generate margin improvement. If you remember when we released and we - not only we released our 2015 results but we also give - provided with the guidance for this year, we were warning about the impact of foreign exchange and the impact also of the investment required to prepare for the launch of Cabo.

As you can see the first half is more than confirming the model for Ipsen which is clearly that consolidating our top line growth into margin enhancement and you see that despite other investments that we're doing in China to support the change of business model for primary care especially, we continue to improve 3.2 points of margin enhancement coming from the business which we're able to offset the quite important FX impact especially for the first half. We anticipate this FX impact to be more in line with our guidance for the full year as much as the devaluation occurred during last summer. And you see the slight impact for the first semester of the Cabo cost, here at 0.6 points and for sure this impact will increase for the second half of the year.

A few words on the net income, also a very strong performance in terms of net income primarily due to the impairment that we booked last year for , this had close to $40 million impact net of tax. It explained a lot of net income improvement, but if you look at the core operating income or core net income of the EPS, you see that we're able to show 16% growth which shows that clearly we're able to improve our operating performance but also to manage our tax charge during the period with an effective tax rate at 23% which is an improvement versus 2015.

Now just a slide on the cash flow, to confirm you first that we're no longer on the cash position since we did the acquisition of Cabo. So as you can see our net cash position was close to $200 million at the beginning of the period. We've been able to use that cash to make the Cabo transaction with Exelixis and the good news is that during the first semester we've been able to generate $74 million of free cash flow, paying for CAPEX and we have an increasing program for CAPEX to cope with the growth of our business especially for manufacturing sites in Ireland, in UK but also in France.

We've been able to manage properly our working capital and to limit the increase of working capital in line with the increase of the business and with that money to pay for the dividend of the first half and we hope to be able to continue the cash flow generation over the second half in order to pay for the additional milestone that we will pay as Marc was mentioning for the approval of Cabo in Exelixis most likely by September and some additional milestone that we may have to pay on the commercial side. So this good performance is translating it to the confirmation of our guidance of 2016, but not an easy confirmation, given the solid growth that we have on the specialty care for the first half, we're raising our targets for specialty care to at least 12%, , so it's not 12%, it's above 12% and we're pretty confident that we will be able to be above the 12%.

We're confirming the guidance for primary care to be a slight growth year-over-year and clearly we're putting all the efforts to be able to transform the actions and especially the transformation of the business in China to be able to achieve that objective. And last but not least and most important, we're confirming our guidance for the core operating margin at 21% which maybe a disappointment for some of you, but clearly as Marc was mentioning it in the introduction, we're in a time where there is lot of investments, we need to make sure that the Cabo infrastructure for the preparation of the launch is in place.

We also have to make sure that we have all the resources to benefit from the acceleration of the growth of Somatuline in the U.S. and also making sure that we have the resources to be able to succeed for the launch of Dysport in AUL but also for the new indication that we hope to get in the coming days for PLL in the U.S. So all-in-all, we confirm the guidance at 21% for the full year. You remember the pattern of cost is always different between the first half and the second half, so the fact that we've generated 24.7% on the first half anyway was already anticipated for the second half.

So as a summary, you see from a financial point of you is very strong performance top line, 9.7%, strong core operating margin, 24.7%, net income, 133 million just for six months, Co-EPS going at 16% and lastly we successfully issued 300 million of bond in June which shows the attractiveness of Ipsen, that was the first time that Ipsen was on the bond market and successfully prepare also the company for the business development and the continuation of our growth on the market.

Thank you very much. Over now to Claude who is going to provide you with some detail on the R&D side.

Claude Bertrand

Thank you Aymeric. Very pleased to be with you. So good afternoon, good morning for people abroad. So I'll go through quite a number of news. We had a pretty busy first half of 2016. And I'll just go through a couple of the key milestones for this semester, starting obviously with wonderful work we have done with our BD colleagues to secure Cabozantinib for second line RCC ex-U.S. and ex-Japan. We're then fairly quickly had wonderful, positive and I'll come back to that, overall survival data from the phase three and second line RCC, that's the clinical trial called METEOR.

We then more recently had some top line data on their phase two CABOSUN in first line RCC and actually very recently and is really pleasing, we had very positive feedback from CHMP and their opinion on this second line RCC indication for Cabometyx. While that was already a lot, we also had quite a bit of work on Telotristat, so our colleagues from Lexicon secured priority review guaranteed by FDA earlier this year and we submitted for EAU the file towards the end of June and actually had the validation of the filing from EMA early this month - earlier this month.

We also continue to secure the submission for Decapeptyl in the breast indication in the - in EAU. And while we were doing that, on the neurosciences front with Dysport, we have been fairly busy with the regulatory submission of - for ALL and the phase three data we had in the EAU, we secured the regulatory submission for PLL in the EAU so the Dicycloverine indication in EAU and we're hoping to have the regulatory approval for CD and AUL and we got the approval in Canada.

Finally, we're starting now to phase three for the new indication, Neurogenic Detrusor Overactivity for Dysport so that's the neurological indication that will allow us to expand in specific patient. While doing all that, we have been working really hard on the scientific affairs and BD front to secure a continuous growth of our portfolio across the value chain from earlier research with actually we secured the deal on new targets in oncology and that's in research, obviously Exelixil we already talked about. We already secured 3B pharmaceuticals that will expand our PRP and radiopharmaceutical pipeline and that's for pancreas cancer.

And finally very recently we have signed a long term deal with Oncodesign, as we're strengthening our capabilities in oncology, it's really important that again in research and in development we grow our capabilities, we gain more expertise and Oncodesign with our preferred partner to develop all radiopharmacology and actually will integrate our site in this release, our French R&D site.

I will now move to Cabometyx more specifically and before getting into the most interesting data, I thought it was quite important to make a quick zoom, so don't be afraid, I'm not doing a course in science but a bit of molecular biology to understand why we got such fantastic data in the phase three second line. So as you know, VEGF is one of the key growth factors, vascular endothelial growth-factor is one of the key growth factor in RCC and that's actually driven by the inactivation of the very key tumor suppressor factor called VHL. And this factor being suppressed activate several pathways, most important one being VEGF and that's where more of - most of the tyrosine kinase inhibitors are working on in addition to other less important factors.

But what's really important and where the science behind Cabometyx is so impressive is that our colleagues from Exelixis have been able to work on pathways that could actually intervene in the resistance to first line and first generation tyrosine kinase inhibitors. And that's where MET and AXL are playing a big role and actually AXL, there have been lots of papers published in the last couple of months actually to show that this is probably becoming one of the most important escape factors in resistance to first line TKIs and first generation TKIs and those two factors MET and AXL then participate into the tumor progression growth invasion from the primary tumor. So that was it.

On the science front now, that translates into those fantastic data and first and foremost is that we have to focus on the efficacy that has demonstrated Cabometyx in second line RCC with a quite impressive PFS at 7.4 months which is 3.6 months better compared to that was the second arm in that study. But then obviously very importantly a very impressive overall survival of 21.4 months which is again, 4.9 months better than what you got under treatment with which is an mTOR inhibitor.

And finally quite importantly as Marc highlighted, it's the three that makes it really powerful in terms of efficacy is the overall response rate at 24%. Now if that was not enough, actually what's really, really important is that in preset prior to the study, subgroups actually, we have the same efficacy across those subgroups. Subgroups being defined as a risk group being defined as a type or duration of prior therapy, but also location and extent of metastasis from the primary tumor.

So those data are extremely impressive from an efficacy point of view and obviously that has driven the NTCN and EAU to revise the guidelines to now include Cabometyx in the treatment of second line RCC. So that's kind of the first wave and that generates obviously already a lot of work from Exelixis and ourselves to make sure that we'll have a very successful launch in the second line which is already a fairly significant indication, but as I said, we've got pretty encouraging top line data in first line RCC and obviously we're waiting now for the full analysis of this phase two data and then to have interaction with regulatory and just need to see where that will go.

And then later on next year, we'll have data on HCC second line which is already again a big indication. And on top of that, we have obviously launched quite a number of study - additional study in already existing indications and future indications in view of the mechanism of action of Cabometyx.

Now on the Dysport front, obviously we've been also quite busy. So I think the most important one for this first half and soon, hopefully is to be potentially the first and only - Dysport to be the first and only product to be approved in pediatric specificity and that would be pediatric lower limb indication, we're waiting any day now. PDUFA date in the U.S. is planned for July 30th and hopefully we'll have that on time.

We're obviously continuously working on other indications. So next will be ALL specificity to be filed and our phase three which is quite tough from a recruitment perspective but the other pediatric indication in upper limb specificity is progressing very well and Marc already updated you on the liquid formulation, so we continue to push this one half on the therapeutic side, with cervical dystonia but also for the aesthetic use and while doing that, we're expanding geographies, we have been very successful at pushing the phase three clinical trial in globular line in China.

So as kind of a summary, so you're clear what happened in the first half of 2016. Here on this slide, we highlight basically what are the next R&D milestones for second half of 2016. So obviously we're waiting for regulatory decision now for CHMP positive opinion for second line RCC for Cabometyx. We're filing the symptom controls for GETMET in the U.S. which is really, really important in view of the fantastic data our U.S. team has obtained there, to be able to expand the label would be super important.

Telotristat as I said, actually we have submitted the file, but the validation is actually done but in second half, it was early July and then you have some of the key milestones for 2017. On the Dysport front, ALL submission is the next big milestone for us both in U.S. and Europe and then you have the other programs that I've described in the previous slides to come up in 2017.

Thank you very much. And with that, I'm very pleased to call on stage my new boss, David Meek.

David Meek

Thank you, Claude. Good afternoon, good morning. Let me - I'm David Meek, I'm the new CEO of Ipsen as of 10 days ago. So it's very exciting, it's your first week in the role and you have a positive CHMP opinion by the end of your first week and then very positive earnings result. So I couldn't ask for a better first 10 days up to this point.

I've been in the pharmaceutical industry for more the 25 years. Most recently, I was executive vice president and president of the oncology division at Baxalta. Prior to that, I spent my first 20 plus years in the industry working for Johnson & Johnson and Novartis and grew up in the U.S. environment and had international role, regional role in Europe, country CEO role. So really excited to be here at Ipsen as we continue to grow our business and internationalize our organization and really make a difference in the lives of patients.

So let me talk about our 2016 roadmap which is very similar to what you've seen to the no shift in strategy or shift in direction, we need to execute upon this 2016 roadmap. And the first is we will continue to win with Somatuline. So we will continue to drive Somatuline growth. We will continue in neuro-endocrine tumors of course. We will continue with Dysport as well and hopefully with new indications in the very new future so we can expand this business. We will also if you've heard from the management team, we will continue to focus on our primary care business and the commercial models we have within primary care, implement these new models in particular in China.

As you've heard, we're real excited about the launch of Cabometyx, it's a de-risking event that happened last Friday, so we're in full launch mode for our European launch with Cabometyx. So when we think of our medical affairs teams, our commercial teams, our market access teams, they are working day and night to make sure we have a very successful launch in the second line setting for renal cell carcinoma.

And then finally, we will continue to be very active in the space of business development and M&A. We do need to replenish our portfolio. Claude shared with us some exciting programs and we will continue to add more to that portfolio overtime. We will look for deals and opportunities that are strategically aligned with us, they make financial sense and we can integrate them.

So we're very active in this space already. And we're really convinced if we go down this road and follow this roadmap and execute flawlessly in Ipsen that we will deliver great shareholder value and have a very positive close to 2016 and build a very solid foundation for the future.

So on closing, I would like to thank the Ipsen Associates all over the world for what they do each and every day for the patients and I really want to thank the patients that trust our products every day and for the patients that are involved in our clinical study so we can bring new innovation to the marketplace.

So with that, I thank you. I look forward to meeting you. Look forward to working with you and I'll turn it over to Marc.

Marc de Garidel

Thank you David. So we're coming now to the last part of this presentation which is the Q&A.

Question-and-Answer Session

A - Marc de Garidel

So what I suggest is while we get the operator going, we should try to get first question maybe in the room. So if you can ask - if you can ask concise questions and also present yourself before you do that, that would be great. So do we have questions in the room first? Okay.

Unidentified Analyst

Could you come back on the mix volume and price regarding Somatuline? Thank you.

Aymeric le Chatelier

Yes. So question and clearly most of the work is volume driven. In the U.S., we're benefiting from price increase every quarter, especially traditional gross price. Regarding net price, we don't comment on the net price but a lot of the growth and most of the growth is Talking about Europe, as you know the situation is different, since we have the new level for in Europe, we have pressure from most of the countries to reduce price, so we have done some good in trying to limit the price increase. So the performance that we show including some negative impact on the price, we show that we -- the volume and the market share gain is quite significant in the Europe result.

Marc de Garidel

Next question.

Unidentified Analyst

Obviously, the most obvious question. As you increase the guidance on specialty care, sales growth for this year, everything else being equal, should also have increased operating margins. So how should we interpret this difference? Does that mean that recruiting people is more expensive than you're expecting?

Are you speeding up the way you invest behind Cabo to make it maybe earlier? And could we also anticipate maybe some of the first launches to take place before the end of the year or is it just a matter of caution, getting into the second -- the second half of the year?

Unidentified Company Representative

I think you provided -- most of the, I mean clearly we're benefitting from a very dynamic specialty care growth on the first half to continue to the second semester of the year. Yes, we're investing to make sure that not only we capture the growth and I'm talking about the U.S. today but we're also preparing for the growth of tomorrow.

And this is very important and I think that especially for Somatuline as we're also expecting for Somatuline next year, we'll want to make sure that we have as much market share as possible. Again, Cabo, you may have to remember that when we announced Cabo, this was the date of the announcement of the so we were only working on the preliminary business case.

Now, all the company is very engaged in preparing for the launch. So now we have a more detailed view of how many people and investment that we need to do, how we have to push to make sure we're successful in the market access too. So yes, there is defining of the assumption.

On top of that, the positive outcome of the cabozantinib first line opportunity, lead us to potentially size a little bit differently for investment for Cabo. And as you mentioned, the margins and the profitability, then maybe understand if we were able to get some sense as early as Q4 of this year which today is not contemplated in our data.

Marc de Garidel

All right. Next question? Any question in the room? If not, then we're going to ask the operator to open the calls.


Thank you. We have a first question on the phones from the line of [indiscernible] from Morgan Stanley. Please ask your question.

Unidentified Analyst

I have three. The first one is a follow-up to Eric's question, the margin guidance for '16. So you may declare that Cabo investments will be higher than expected initially. I think you guided for 150 bips or more or less 25 million this year. So could you maybe quantify how much now this could be.

Second, still on Cabo and this time, around the first line RCC related R&D cost. To remind us about the agreements with Exelixis for this specific indication and discuss the various scenarios, i.e. whether or not you decide to start phase three, who pays for what and what kind of impact that may have on your R&D budget.

And finally on primary care growth trajectory. Your full year guidance of slight growth implies a very strong H2 after I think H1 down by 6%. So could you please walk us through the main moving parts and dynamics of primary care in H2. Thank you.

Aymeric le Chatelier

Yes. So maybe on the -- on the margin, we won't provide with a detailed figure but we're not talking about significant higher investment for Cabo. Clearly, we're getting initially 150 basis points. We may add some additional, maybe something like five or ten million maximum, then the timing will depend given the global pricing for next year, it's mostly changed. Some of that being more acceleration of cost than really significantly higher pricing for Cabo.

The second question was about the first line what the implication for, I will let Marc answer on the from the financial point of view, as you know, we -- when we signed the agreement with Exelixis, some R&D expenses were always included in the upfront payment especially regarding the existing indication RCC . For additional communication, we're in agreement where we share R&D two thirds one third with Exelixis.

And then we're in agreement to pay milestons depending on the size of the indication and the quite complicated depending on the size of the indication and the agreement we have with our partner, Exelixis. So that's the implication from financial point of view of the .

Claude Bertrand

Right. So I was telling you, for the moment, we have the top line of the phase two trial and obviously, we'll try to exploit depending on the full advises of those data which will come later this year, what we can do with it in interaction with regulatory agencies.

As you can expect, there'll be probably some significant difference in view of how FDA or EMA will approach those data, the quality of those data and then what will be asked in terms of straight approval versus another phase three or approval of a phase two. But then with what marketing type of studies, so it's far too early to say. We're obviously interested in communication as well, but we'll have to wait a bit more to know more how we will approach and the strategy we will adopt.

Marc de Garidel

On primary care, I think that probably we're not that clear about the, are we rebound to occur for primary care. Just remember, so first quarter even , a lot of that was due to stocking impact. Second quarter, we're flat. So what we expect to get is slight worse on the second semester, together to achieve the entire . So it's not a big challenge but in order to do that, there is two countries that are very important, they are China and a lot of the has to come from China as we have significant stocking impact. And we expect to get some traction of our new OTC strategy in H2. We have close to 100 people new sales force dedicated to OTC and pharmacy.

We're signing many, many contracts with the distribution in order to be present in pharmacies in China which as you know is a huge country. We're also making sure that our products are rebranded to be more OTC-like in China. This is a usual formation of the business but we expect to get -- to start to get some growth there. Second element is Russia. Economic environment getting a little better in Russia. Having said that, there is still pressure.

We're also very careful we monitor our credit limit with our distributors in Russia. So we go on to -- grow the business and not collect the money. This is very -- a country where we have in the second quarter so but we expect that financial situation of our distributor will improve. This is going to be an important element of that.

Outside of that, I mean the business is doing very well especially in France where we have two new formulations for and the liquid formulation and we got some good results, so we totally believe that our strategic towards OTC is paying and would be showing growth for the alternative.


Your next question comes from the line of [indiscernible] from Barclays. Please ask your question.

Unidentified Analyst

First on Decapeptyl, maybe you could just walk me through your strategy here specifically in Europe. If I heard you right, I think Marc said your volumes are still growing at enough to offset price pressure but what is driving that volume growth, how sustainable is it? How actively with market in the past, are you -- are you reducing your sales force right now?

Had you reduced your sales force in the past? Is there a point where you think you could reposition some of the sales force, maybe newer products or just bulk up the oncology portfolio here so they sell more products in the same sales force? And then moving on to just M&A. Maybe you could just go over for us again now that you've done Cabo, what is next for Ipsen when you think about building the pipeline and where does primary care feature when you think about expanding the Ipsen portfolio?

And then if I can sneak a last one in there on Somatuline. Any color on the watch and wait market that you talked about in the U.S. and how far it's been penetrated now with Somatuline in the market for a few years? Thank you.

Marc de Garidel

Well, a lot of questions, you know, remarks, we're trying to answer them. So maybe Decapetyl, Aymeric, you want to say a little few things why we're growing well in Europe, with the dynamic of the market which may not have been expected in the past.

Aymeric le Chatelier

Yes, I can re-explain some of the key elements of the performance of the . Clearly, two different dynamics. One in Europe, one in China. In Europe, we have volume growth, primarily some of our competitors are reducing their investment on the -- on their products which is an opportunity for us to get more market share. At the second half we're managing pretty well the pressure on price that we're experiencing for many years for that -- for that product in the U.S.

In China, it's a very different story where the dynamic of the market is very strong and we're under a market growing at more than 20% for the coming years. The pressure is still coming from pricing. We have a new SK reform in China pricing in China with pricing in Europe. And clearly, we're trying to manage the way we capture the growth in China which may require to expand the number of that you cover and to make sure that we reduce our the pressure that comes primarily from open bids in China province by province. Second part of the question was more on the synergies, maybe Marc..

Marc de Garidel

Yes. So I think the question was related to the redeployment of possible resources from Decapeptyl to possibly cabozantinib or other drugs. Decapeptyl is actually a very promotion-sensitive drug. So actually one of the reason also we're doing quite well in Europe yet some of our competitors are actually reducing their promotion efforts as they launch new things. We're benefitting from them.

So we think that at the moment, it is not a very good ID to, you know, to relieve the pressure on Decapeptyl from a promotion standpoint if we want to keep the good momentum in Europe. And in addition, you know, the people that are dedicated to Decapeptyl, I think mostly urology, the drugs that -- like Somatuline and cabozantinib are essentially other type of doctors mostly in our oncology. So they are not, unfortunately, a good overlap of those two populations.

So for those time being, there is no plan, you know, to redeploy Decapeptyl to other drugs. So that's the first question. I think on the M&A, let me ask David. So what do you think about, you know, M&A? You have obviously a strong background on that front. You've done a lot of business development in your past life. You built it up from scratch. So what do you think what's next for Ipsen? With a, you know, a few days..

David Meek

It has been an important part of our portfolio. And we talked about replenishing our pipeline, we look for assets that are little bit further along the development phase, potentially market the assets. So as mentioned, we all look for deals that are strategic, good financial and they could be integrated into our portfolio.

So we can rapidly maximize the asset and, you know, keep our P&L looking good as well as we grow beyond the next few years and into the next decade is really important for us as a sustainable business. So we're active in this space. We will continue to be active and probably more active. We certainly heard about the cash situation, the credit situation, so we're preparing. And we know it's a very important of our portfolio.

Marc de Garidel

And another question was related to M&A in primary care so yes, I would say that it's very short term focus. We tried to leverage this specific opportunity which is in the Italian market at the end of the year. We will benefit from getting the sector and the right back. So we're looking at potentially buying a platform in Italy which will have GI expertise where we could essentially add on top of our drugs.

So that's one of the focus we have. We think the transaction will be relatively small compared to the one we've done before so that's probably in the short term. The number one, we also are looking at always trying to expand, you know, the OTC offering as we move to RCC more and more important to get, you know, more drugs so that we offer or left discount promises in the end and we increase our margin as a result.

I want to highlight the fact that, you know, we did the licensing here to get a Swedish company, the probiotics which will be very complementary to Smecta. We also hope to leverage in that regard just to make that brand with the probiotics. So here are again ways for us to accelerate the growth of primary care in the future.

And then the last question was on Somatuline in the -- in the U.S. And I think earlier you were asking is where -- what's the next, you know, where are we going to grow in the U.S.? So I'd like, you know, to summarize it, you know, again in different ways. One is the entity market again is related to -- you know, I think of this market is that it's a billion dollar. So we're -- we're in a billion dollar market. And today, we have seen -- and we -- it has a lot of room to grow. So first, the market itself is very big and -- to some extent and why tapped by Ipsen. We have a very differentiated growth. We have a unique claim which is tumor control which our competition doesn't have.

Once we get hopefully the registration for symptom control next year, again, we'd be the only drug in the United States that has both symptom and tumor control, so it's very differentiated. And as a result, what we see currently is -- if you'll think about customers is we're progressing a lot in clinics because that's probably where at least today, there is this differentiation which seems to be more apparent.

So, again, a lot of room for Somatuline in the United States and we've seen the results at the end of the first H1. We're on trajectory, we -- very strong trajectory this year. Thanks for those question. Operator, if you have more, otherwise I have some on my iPad.


Your next question comes from the line of [indiscernible] from Bank of America. Please ask your question.

Unidentified Analyst

Just two quick questions please. Firstly, just a follow-up from your last comment. Roughly 30% growth, 37% growth you've seen in first half for Somatuline. Can you just comment on the sustainability of that growth rate into next year particularly just noting that consensus is roughly 15%? So what I'm just trying to get at is should we focus on, you know, absolute growth rates or the absolute increase in sales as we think about growth rates into next year?

Secondly on Cabo and the launch we're preparing in Europe. You've clearly talked to the profile but why don't you just give us a bit of color on commercial positioning, how you're training the reps to position this versus IO in the existing therapies, you know, just down to the PFS, OS or OR or are there other nuances in terms of types of patients you can focus on. Thank you.

Unidentified Company Representative

All right. So yes, good question about the visibility of Somatuline and essentially the forecast for next year. So, you know, we're not going obviously to spend too much in this call on 2017. We need to let -- on top of that, obviously, David, you know, take a bit of time to, you know, to go into more depth about the Somatuline business.

So we'll come back to you in, you know, maybe we'll come back to you in a -- at the appropriate time to share the perspective about, you know, '17 because more I think importantly, you know, the long term trajectory of Somatuline in the U.S. and worldwide, yes. But clearly next year will be the third year of production of Somatuline in the U.S. . On top of that, I mean we expect to get some time during '17, if we're going to fight at the symptom level we're working on other initiatives also to continue the benefits of Somatuline.

So for next year but we're very confident that we're going to continue the pace of growth of Somatuline. The bigger the business is, the big -- the more difficult it is to continue to in terms of growth rate.

Marc de Garidel

So second question was on the launch of Cabo and essentially, you know, I think what I understood is, you know, what is going to be the positioning of Cabo versus other treatments? I think, you know, what Claude said is the key. This drug is highly efficacious and as demonstrated of our survival data.

There are only another alternative in the market place that -- as part of this offering from an efficacy standpoint which is the number one criteria for prescription of any oncologist in the world including in Europe. It's all about efficacy and we have the drug that has great efficacy. So our team will be trained appropriately to demonstrate that efficacy. And if you were at ASCO, you could see that we have lot of data on efficacy. Claude summarized them on one slide but if you look at, you know, some patient groups, the data is very impressive and more impressive than competition.

So our work is going to be to try to demonstrate to doctors these drugs make a real difference in the life of patients and it is -- should become one of the important gold standards, you know, in treatment of second line. So that's going to be our focus and I'm sure that David will make sure that this appropriately implemented by, you know, our medical representatives but also obviously by our sales force.


Thank you. Your next question comes from the line of [indiscernible] from Credit Suisse. Please ask your question.

Unidentified Analyst

Three questions if I can. The first is around cost trends. Basically, if I look at your guidance and I assume that the vast majority of the margin reduction in the second half of the year is going to be due to selling investment. That suggests you're going to be spending about 400 million Euros in 2H on selling expenses.

Marc, I know you want to avoid 2017 guidance, but I just want to understand whether that's a level that we should consider as a reasonable run rate for each six months in 2017 or whether with the launch of Telotristat and further investment potentially in Cabo whether we should think of a higher number than that.

Secondly, Aymeric, on tax. Can you just give us an indication as to where tax is going to go in the near and medium term particularly as presumably your profitability in the U.S. grow substantially with Somatuline? And then finally, Novartis, for the first time on their 2Q call, highlighted their next-generation Sandostatin analog, the fluid crystalline reformulation from. Looking very briefly at that data package, it looks like they're aiming for a low injection volume and presumably they're going to go for PFS and symptom control when they start phase three. I just wondered where you stood on your competitive intelligence on when we should expect new entrants into the analog market in the U.S. and how that impacts your long term growth expectations for Somatuline.

Marc de Garidel

So a number of questions. So the first one is in terms of cost trends and the impact -- the possible impact of, you know, the H2 buildup and -- you know, in 2017. So, again, I will not give any specific costs or detail for '17. I think the way I would answer it is -- remember, one thing we promised to investor when we did the Cabo deal, we said that the profitability in 2017 will be not lower than 2016 in percentage. So that guideline board, we'd continue to give to the team. So you can make then your own calculation about costs. Aymeric may want to, you know, give a bit of color but, again, we're not in the -- in the 2017 call right now. It will be in a -- you know, early next year. You want to add a few comments?

Marc de Garidel

Just adding a few. Yes, there will be more to that H1 which is part of the . Yes, we will add some more cost than anticipated for the launch of Cabo. We want to -- we want to make sure we . But we keep the same guidance and you were mentioning Telotristat. Clearly, we're going to invest for the launch of Telotristat. This is including in our view of the business. So next year, we're still on target to meet what Marc was reminding which is our objectives to keep the level of profitability at least to the level that we will reach in the -- in '16 and especially we believe that the better hope that we will benefit from Cabo which is why we're also accelerating in terms of costs will also have a -- have a positive impact on the -- on the margin.

Your second question was on the tax. Clearly, the story on tax is not very different. We had quite a good H1 with the tax -- effective tax rate at 23%. The -- by the end of the year, we should a little higher than that, more on 25%. On the long term, we haven't changed our plan. We're warm at 25%, 26% because as you said, the growth of Somatuline and the growth of our business in the U.S. as we start to be paying tax from a P&L point of view -- as you know, we have a very strong level -- the high level of tax losses in the U.S. So we will not pay taxes from a cash point of view but from the P&L point of view, as we have already recorded those tax losses on our balance sheet and the tax rate in the U.S. being 40%, this will have a negative impact of our effective tax rate at the -- at the P&L level.

Unidentified Company Representative

On the competition on Somatuline and in particular this announcement from Novartis. Let me describe a little, you know, what our threat but also what we're doing about it. So in terms of threat, first, we believe in terms of timing. The first question is competition which could become, you know, maybe 2020 and beyond. I think what we have to watch is the fact that the patent expiry of Sandoz statin NAR is in 2017. So one of the question we'll -- what we'll have to watch is whether at some point, they will be, you know, essentially a hybrid or a generic of a -- of a in the marketplace. So that's one thing we're obviously watching very carefully.

So second one is the one that you illustrated. So input formulation of compound. Yes, this formulation could be attractive compared to their old formulation, the current NAR but we have to notice that they have taken a lot of time to get there. The phase three apparently has not started and if they want to develop, you know, an NT-indication, it's going to take several years because of, you know, the scarcity of, you know, of the patients and also the fact that you need, you know, a long time before you demonstrate the PFS value.

So I think the Cameris threat is one but certainly not in the short term. So what are we doing about it? Obviously, you know, Ipsen, as we progress on Somatuline, we're obviously moving full speed to try to anticipate some of the threats, so we've done a few things. One is on the product development standpoint is we're trying to improve the administration of our drug by a new device which hopefully will be available before the end of the decade.

We're working also on what we call a PI formulation, maybe Carl will say a few words in a second. So which could take the market actually to different place, not from a one month formulation but two or three months formulation. At this stage, we believe no one has that kind of capability and then beyond that also, we're going also to expand, you know, the use of Somatuline. So in the United States first hopefully by the end of next year in symptom control. But also we launch an important study in the environment where today, no study has been done. We think that about 20% of the patients overall in affliction and we could potentially demonstrate by '19 that the drug could be -- could be used for that.

Finally, the last thing also we have to remember is that we have in the United States until 2020. And on top of that, we have until 2021. So yes, over time, for sure there will be increased competition in that environment but we believe that, you know, we're developing some of the counteractions to sustain a good growth in this environment.

We have to watch and I'm sure that David in the next few months, we'll, you know, really get to the competitive intelligence that we have. Next question?


Your next question comes from the line of [indiscernible]. Please ask your question.

Unidentified Analyst

I have one question right now. just to understand out of the 12.2% growth in Q2, could you tell us what is coming from -- or roughly what is coming from sales of products to Galderma and what is your -- or I would say the organic growth of the product of the medical -- of your own growth if I may say. Thank you.

Aymeric le Chatelier

So I thought on top of my mind, the but your question is to get the dynamic between where we don't see a very strong difference between the two indication. But underlying business is a little bit different. is more dynamic than the therapeutics. Even in the therapeutics the U.S. low level.

The dynamic in is higher but is conflicted by some certain impacts and as I was explaining by also some of the Galderma batches, particularly the underlying performance of continues to be very dynamic especially in the U.S. where Galderma is doing a very good job but also the business is very resilient in the emerging country where we continue to see very good performance in Brazil but also in Russia where the business is much more dynamic than in present here.


Your next question comes from the line of Lucy Codrington from Jefferies. Please ask your question.

Unidentified Analyst

It's actually Peter Welsh [ph] from Jefferies. I've got a couple of questions. Firstly just on the other revenue line, I wanted to hear give us a bit of visibility on what the royalty and milestone specifically received were in the revenue segment during the interim period.

Secondly then just on the Dysport next generation. Just curious. Are you waiting for the glabellar lines phase three outcome before filing that? Or will that be a step-wise filing of the two? And then finally, just wondering, is dopastatin development being discontinued or de-prioritized or is that still active in the pipeline? Thank you.

Marc de Garidel

Okay. So Aymeric is going to take the first question and then Claude, you take the next two. So other revenues that you want to, Aymeric.

Aymeric le Chatelier

Between the two, but clearly, last year, we got some exceptional gain on one three million Euros but the basis for this year is more which is made of both amortization to receive from some of our partners. We don't anticipate any change should be the recurring trend. The two products especially the . So I think that's all your question -- we have on the pipeline.

Marc de Garidel

Claude, so next question is about regulatory status on Dysport next generation and also the dopastatin program.

Claude Bertrand

Yes. So just your question we're pushing both in file and we're right now mostly dealing with some technical aspects and making sure that we can get the stability data basically for submission and for the moment, everything is on trial for that. So obviously, more traction at this stage for aesthetics than for therapeutics but from a regulatory standpoint, we're planning to submit in both area. On the dopastatin front, you know, this program is still very active. We had some delay for two reasons.

One is that clearly acromegaly does not have the same priorities than it has a couple years ago when we started the program. And therefore while we're starting actually a group of concepts in acromegaly really convinced ourselves that this is added value for patients. We have been also doing quite a bit of work especially on the on the new indication discussion. And while we're planning to start the phase two before the end of year, we've postponed that and to add more data which we're running right now which will be a good decision for dopastatin in that second indication.

So, again, this is typically a program that we're doing great tests with David in the next couple of months we decide where it take from here. Finally, on that one, we're also doing lots of work on the formulation to make sure that very early on in the program, we have a very differentiated device and a very differentiated formulation that will allow less injection than with the existing product.


Thank you. Your next question comes from the line of [indiscernible] from JP Morgan. Please ask your question.

Unidentified Analyst

Hi. It's actually Risa Foster [ph] from JP Morgan. So back to cabozantinib please. Just first of all, you mentioned about the escape pathways of for cabozantinib being that important. Just thinking about -- could you talk about the importance of that in terms of liver cancer, whether it's still very important there or -- and how you see Ras kinase and hitting that being important in HCC. I think the only products that have been successful are those that have hit Ras kinase.

Second question, just on the day that Cabo got its CHMP opinion, I think Levatinib -- Levantinib, sorry, from HI also got a positive opinion. So if you could just talk about how you see the competitive impact of that product on your launch. And then thirdly, just thinking further in advance. How do you see the pricing of the RCC market developing into the future potentially once generics of Sutent come into the market in 2021? Thanks very much.

Marc de Garidel

So on the mechanism of action, what I described and I think was very clear from the slide as well is very much talking about the molecular biology happening and have discovered in the last couple of years in RCC. So I do agree with you that the escape mechanism in HCC could be quite different with alcoholics from they're still quite a bit of work on the pre-clinical side as well as on the translational medicine side to try to understand how we could potentially position the product. Of course, pending positive data in second line HCC but totally agree with you. I don't think we could do a straight translation from a mechanism that has been exposed in RCC to HCC while actually there are still some question mark in the -- in the second setting.

Unidentified Company Representative

So the second question was related to the approval of the combo product between SI and Novartis. So the view that we have is the -- you know, this approval came with data only from PFS so there's no OS data on this combination. So we believe that, again, compared cabozantinib, you know, doctors even ethically should prescribe, you know, Cabo because we have the overall survival data.

Marc de Garidel

Yes, I agree with that and we know from what has been released as well that we have a straight CHMP opinion based on this very impressive data especially the OS data or actually quite a number of post-marketing studies if the -- if the combination improved.

Unidentified Company Representative

Yes. And in addition, what, you know, will be the next challenge is the pricing of combination, so. In Europe, it's going to be probably a bit more complicated than in the United States. And finally, your question about the pricing of, you know, this market. Again, currently there is no generic of Sutent so in 2021, there may be a generic so we'll get there.

Hopefully, by that time, you know, most of the market has moved to Cabo and basically, you know, the patients want to be treated and doctors want to treat with the best drug. And the cabozantinib information subject to further review in late August as this tends to, you know, to lead us to again to Cabo being the future standard for treatment.

So we're not so worried about that type of environment. So we're running a bit out of time. So I'm sorry we have three minutes to go. So any more -- one question on the phone because I have -- which I need to answer pretty fast?


We do not have any more questions on the phone.

Marc de Garidel

Good news for us, because I have a few here. So one of the questions is -- Claude and Aymeric, . Please, could you confirm which indications are included in our 2020 guidance for Cabometyx?

Unidentified Company Representative

I think that for Cabo three indications, where we were expecting very limited -- very limited label upside, taking the product from commercialized for a couple of years. Then RCC is the bulk of the product, RCC second line, so in our 2020 guidance or outlook, there are no view of the impact of the first line that we've initially predicted, we don't know to what extent at this stage.

And thirdly, there was the liver cancer or HCC in second line which was also included but most of the sales will be beyond 2020 as we hope to get result by the end of '17 so we get the approval end of 18, launch in early 19, so in 2020 .

Unidentified Company Representative

Okay. So let's take the -- we'll take the last question because I see a few more so we'll ask our investor relation group to contact the people have who have asked those supplementary questions. So the last one is, were you expecting -- so, were you expecting to get the CHMP opinion so early in the year? Can you remind us how you will account for Cabo amortization? Will it be adjusted from core debit?

Unidentified Company Representative

I'm talking about the amortization of for Cabo. They are part of -- and impact on the margin that just includes next year. The amount of the amortization of the for Cabo.

Marc de Garidel

Okay. So we have come to the, you know, end of this overview of our great H1 results. So thank you very much for your interest in Ipsen and again it's a great pleasure to have been part of this great history in the last six years. And I wish all the luck and -- to David who I'm sure will take us through I know some great times and exciting level. So thank you very much and enjoy the summer. Bye, bye.

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