Good day, and thank you for standing by. Welcome to the First Six Months of 2024 Novo Nordisk A/S Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jacob Rode, Head of Investor Relations. Please go ahead, sir.

Thank you. Welcome to this Nova Nordisk Earnings Call for the First Six Months of 2024. My name is Jacob Martin Wiborg Rode, and I'm the Head of Investor Relations at Nova Nordisk. With me today, I have CEO of Novo Nordisk, Lars Fruergaard Jorgensen; Executive Vice President and Head of Commercial Strategy and Corporate Affairs, Camilla Sylvest; Executive Vice President and Head of North America Operations, Doug Langa; Executive Vice President and Head of Development, Martin Holst Lange; and finally, Chief Financial Officer, Karsten Munk Knudsen. All speakers will be available for the Q&A session. Today's announcement and the slides for this call are available on our website, novonordisk.com. Please note that this call is being webcasted live and a recording will be made available on our website as well. The call is scheduled to last one hour. Please turn to the next slide. The presentation is structured as outlined on Slide 2. Please note that all sales and operating profit growth statements will be at constant exchange rates unless otherwise specified. We need to advise you that this call will contain forward-looking statements. These are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors, please see the company announcement for the first six months of 2024, as well as the slides prepared for this presentation. With that, over to you Lars for an update on our strategic aspirations.

Thank you, Jacob. Please turn to the next slide. In the first six months, we delivered 25% sales growth and 19% operating profit growth, both at constant exchange rates. The operating profit growth was impacted by the impairment loss related to ocedurenone. I'd like to start this call by going through the performance highlights across our strategic aspirations before handing over the word to my colleagues. Starting with our focus on purpose and sustainability, we are now serving more than 42 million patients with our diabetes and obesity treatments. Our total carbon emissions rose by 31% as compared to the first six months of 2023. This was primarily driven by our increased investments in capital expenditure to meet the high demand for our products. To uphold our commitment to being a sustainable employer, we expanded the number of women in senior leadership positions to 41%, compared to 40% in the first six months of 2023. Across all leadership positions, 46% are held by women. Within R&D, we had a number of exciting readouts this quarter, including the positive Mim8 phase 3 results. Martin will come back to this and our overall R&D milestones later. The quarterly sales growth reflects solid commercial execution across both operating units. The performance in the first six months has enabled us to raise our outlook for the full year. Camilla and Doug will go through the details later. Karsten will go through the financials, but I'm very pleased with our performance in the first six months of 2024. With that, I'll give the word to Camilla for an update on commercial execution.

Thank you, Lars. And please turn to the next slide. In the first six months of 2024, our total sales increased by 25% at constant exchange rates. The sales growth was driven by both operating units, with North America operations growing 36% and international operations growing 11%. In the U.S., sales growth was positively impacted by gross-to-net sales adjustments related to prior years. Our GLP-1 sales increased in diabetes by 32%, driven by North America operations growing 39% and international operations growing 20%. Insulin sales increased by 10%, driven by North America operations growing 36% and international operations growing 3%. Obesity Care sales increased 37%, driven by North America growing 35% and international operations growing 47%. In international operations, we continue to roll out Wegovy gradually with volume cap launches to balance supply and demand. In both geographies, growth was driven by Wegovy, partly offset by declining Saxenda sales as the market is moving towards once-weekly treatments. Rare disease sales decreased by 3%. With 25% sales growth in Diabetes Care, we are growing faster than the total diabetes market. As a result, our global diabetes value market share increased to 34.1%. This is above our strategic aspiration of reaching one-third of the global diabetes value market in 2025. The increase reflects market share gains in both North America operations and international operations. In international operations, Diabetes Care sales increased by 11% in the first six months of 2024, which was primarily driven by GLP-1 sales growing 20%. Novo Nordisk is the market leader in international operations with a GLP-1 value market share of 69%. Ozempic continues its GLP-1 market leadership with 46.6% market share. We are also pleased to see Rybelsus increasing its market share to more than 16%, driven by solid uptake across geographies. And with that, I will hand over to Doug.

Thank you, Camilla. Please turn to the next slide. Sales in North America is driven by market share gains and healthy prescription volume growth of the GLP-1 class above 10% in the second quarter this year compared to the second quarter last year. Sales of GLP-1 diabetes care products in the U.S. increased by 42% at constant exchange rates. The sales increase was mainly driven by a continued uptake of Ozempic. Measured on total prescriptions, Nova Nordisk expands its market leadership now with around 56% market share. Note that the sales growth of Ozempic was negatively impacted by periodic supply constraints in the beginning of the year. To safeguard continuity of care for Wegovy, we reduced the supply of the lower dose strengths in May of 2023, which continued throughout the remainder of last year. In the beginning of this year, we gradually started increasing the supply of the lower dose strengths and I am pleased to see that this has been reflected in prescriptions and we are now seeing more than double the number of prescriptions in the market compared to the beginning of the year. Further, while demand is still expected to exceed supply, we grow more confident in our ability to supply. We will continue to dynamically manage supply, but only the initiation dose strength of 0.25 milligrams. Wegovy still has broad market access with coverage for more than 50 million people with obesity and importantly, around 10 million vulnerable people with obesity now have access to Wegovy through channels such as Medicaid, which is now available in more than 20 states. Ultimately, our focus is to reach more patients living with obesity and as volumes go up, prices will come down.

Thank you, Doug. Please turn to the next slide. I'm very pleased to share the results of the FRONTIER 2 Phase 3 trial with Mim8, which we provided headline results for back in May. The full dataset was also disclosed at the ISTH in June. Before I walk you through the results, I would like to briefly remind you of the innovative clinical trial design. FRONTIER 2 was a pivotal Phase 3 26-week open-label, randomized, controlled, and multi-arm trial. The trial investigated the efficacy and safety of once-weekly and once-monthly subcutaneous Mim8 versus no previous prophylaxis treatment or on-demand treatment and versus prior coagulation factor prophylaxis treatment. 254 people aged 12 years and older with hemophilia A, with or without inhibitors were included in the trial. The co-primary endpoint was mean annualized bleeding rate for treated bleeds for both once-weekly and once-monthly Mim8 versus on-demand treatment and versus prior coagulation factor prophylaxis treatment. Overall, in FRONTIER 2, Mim8 demonstrated superiority of Mim8 prophylaxis with both weekly and monthly doses. In the on-demand treatment population, Mim8 demonstrated superior reductions of 97% and 99% in estimated mean annualized bleeding rate for once-weekly and once-monthly treatment, respectively. This was compared to those receiving continued on-demand treatment. In the intra-patient comparison, in people with prior coagulation factor prophylaxis, Mim8 demonstrated superior reductions of 48% and 43% in estimated mean bleeding rates for once-weekly and once-monthly treatment, respectively. Of note, in the population with prior on-demand treatment, 86% and 95% of people receiving once-weekly and once-monthly Mim8 treatment, respectively, experienced zero treated bleeds. In the population with prior coagulation factor prophylaxis, 66% and 65% of people receiving once-weekly and once-monthly Mim8, respectively, had zero bleeds. In the trial, Mim8 appeared to have a safe and well-tolerated profile with no thromboembolic events observed and no evidence of neutralizing anti-Mim8 antibodies. Further, only 5% to 12% of patients experienced injection site reactions across all five treatment arms. In conclusion, we are very excited about the FRONTIER 2 results. Given the differing needs of people living with hemophilia A, once-weekly or a once-monthly dosing provides optionality and flexibility for people living with hemophilia A with and without inhibitors. We now expect to file for first regulatory approval of Mim8 during the first half of 2025.

Thank you, Martin. Please turn to the next slide. In the first six months of 2024, our sales grew by 24% in Danish kroner and 25% at constant exchange rates, driven by both operating units. In the U.S., sales growth was positively impacted by gross-to-net sales adjustments related to prior years. The gross margin decreased to 84.9% compared to 85.1% in 2023. The decline is mainly driven by increased costs related to ongoing capacity expansions. This is partially countered by a positive price impact from gross to net adjustments related to prior years in the U.S., in addition to positive product mix reflecting increased sales of GLP-1-based treatments. Sales and distribution costs increased by 5% in Danish kroner and by 6% at constant exchange rates. The increase in sales and distribution costs is impacted by adjustments to legal provisions in the second quarter of 2023. In North American operations, the cost increase is mainly driven by promotional activities related to Wegovy. While in international operations, the increase is mainly related to promotional activities for Rybelsus, as well as obesity care market development activities. Research and development costs increased by 79% measured in Danish kroner and by 78% at constant exchange rates. The increase in cost is mainly driven by increased late-stage clinical trial activity and increased early research activities, as well as the impairment related to Ocedurenone of DKK5.7 billion and other impairments of intangible assets. Administration costs increased by 8% measured both in Danish kroner and constant exchange rates. Operating profit increased by 18% measured in Danish kroner, and by 19% at constant exchange rates. Operating profit is impacted by the impairment loss related to Ocedurenone of DKK5.7 billion. Net financial items showed a net loss of DKK530 million, compared to a net gain of DKK96 million last year, mainly reflecting hedging losses on the U.S. dollar. The effective tax rate was 20.6% in the first six months of 2024 compared to 19.9% in the first six months of 2023. Net profit increased by 16% and diluted earnings per share increased by 17% to DKK10.17. Net profit is negatively impacted by the DKK5.7 billion impairment of ocedurenone. Free cash flow realized in the first half of 2024 was DKK41.3 billion compared to DKK45.5 billion in the first six months of 2023. The lower free cash flow reflects increasing capital expenditure, as well as acquisition of intangible assets. This is partially countered by net cash generated from operating activities. The impairment of the intangible asset of ocedurenone of DKK5.7 billion has no impact on free cash flow. Capital expenditure for property, plant, and equipment was DKK18.9 billion compared to DKK10.6 billion in 2023. This was primarily driven by investments in additional capacity for API production and fill-finish capacity for both current and future injectable and all products.

Thank you, Karsten. Please turn to the final slides. We're very pleased with the sales growth in the first six months of 2024. The growth is driven by increasing demand for our GLP-1-based diabetes and obesity treatments and we're serving more patients than ever before. Within R&D, we're very pleased with the first Phase 3 trial results with Mim8 and its potential for people living with hemophilia, as well as the recommendation for a label extension for cardiovascular risk reduction for Wegovy in EU. With that, I'd like to hand over the word to Jacob.

Thank you, Lars. Next slide please. With that, we're now ready for the Q&A. Where I kindly ask all participants to limit themselves to one or a maximum of two questions, including sub-questions. Operator, we're now ready to take the first question.

We will now take your first question. And your first question comes from the line of Emily Field from Barclays. Please go ahead.

Hi, thanks for taking my questions. I have one on Wegovy pricing and one on Wegovy supply. The first question on pricing, in terms of the gross to net in the U.S., widening from Q1 to Q2, can you help us understand the moving parts here? Is there a component of seasonality? How much due to competition or how much due to channel mix, as you talked about more penetrating into the Medicaid channel and you can now sell to the select population in Medicare. And then secondly on supply, it's great to see the 0.5 mg and 1 mg doses of Wegovy coming off the FDA drug shortage list, although it does seem like you're voluntarily keeping the 0.25 dosage capped in order to limit new patients. Do you expect this cap to continue throughout the rest of the year or could it be lifted before the end of 2024? Thank you.

Thank you, Emily, for those two questions. For the first question, I'll hand it over to Lars on overall pricing dynamics before turning to Doug on U.S. specific dynamics pricing-wise and also on the supply situation. Lars?

Yes. Thank you, Emily. Thank you, Jacob. So I would say, overall, the current market structure is one where we really compete and secure success based on ability to supply. So it's not one where, say, classical commercial tactics are dominating. And you should see, I would say, our commercial strategies in that perspective. You allude to the channel mix, and we also just had in our brief that we are now expanding access in Medicaid. So we have 20 states adopting Wegovy in Medicaid. And of course, with that expansion, as we know from all drug categories, when you move into some of these channels, it comes at a lower net price in these channels, which then has an impact. But I would say we are encouraged with stable competitive dynamics. And our focus is really on securing supply to make sure that we can serve as many patients as possible more than others without the need for tougher commercial tactics.

Thank you, Lars. And with that, I'll hand over to you, Doug, on the U.S. specifics, as well as on the supply situation.

Yes, thanks, Lars, and thanks for the question, Emily. So overall, I'd start with, we're pleased with the Wegovy performance. Whether you look at the NBRx moving from roughly 5,000 new branded prescriptions at the beginning of the year to 35,000 currently, or the TRx, which moved from 100,000 at the beginning of the year to roughly 200,000 or doubling. We're pleased with that. We're serving more patients than ever before, as Lars mentioned earlier. And market access continues to be robust. As I had mentioned, there's over 50 million people with obesity and importantly, around 10 million vulnerable patients that have access via Medicaid in around 20 states. So that's robust and we're pleased with that. And in doing that, we're seeing that almost or above 80% of the patients are paying $25 or less. And that is our ambition. Our goal is to grow market access, and it's fair to assume as volume goes up, prices will come down. And we have seen lower Wegovy prices in the first half. I don't want to get into specifics there, but it is in line with expectations. Our focus remains in building even stronger access for AOM treatments across all channels. And again, I'd say that we are pleased with the overall performance and we're serving more patients than ever before.

Thank you so much, Doug. And finally, also on the lower dose strength of Wegovy, any update there?

Yes. And so we don't believe that the 0.25, that was a choice we made. Again, as we've said consistently, continuity of care is incredibly important to us and maybe what separates us. We think it's really important that patients are able to titrate through the appropriate doses. So we will continue to dynamically manage that, but we're also confident in the levels that we see with all the other dose strengths. So you shouldn't anticipate that 0.25 changing throughout this year to the question.

Thank you, Doug. And thank you, Emily. We are now ready to take the next question, please.

Thank you. Your next question comes from the line of Louise Chen from Cantor. Please go ahead.

Hi, thanks for taking my questions here. So first one I have was just on Monlunabant. I wanted to see what type of efficacy and safety you expect to see or want to see to move forward with this product. And then second question was just on ESSENCE, out of the 1,200 patients enrolled in this Phase 3 study, how many patients are expected to be part of the F2-F3 biopsy readout? Thank you.

Thank you, Louise. For those two questions, I'll hand both of them to you, Martin. First, on Monlunabant expectations, as well as on patients enrolled in ESSENCE.

Yes, absolutely. So we continue to be excited about the potential for Monlunabant. We don't have a lot of news yet. We expect the readout from the dedicated obesity trial in Q3 of this year and from the diabetes kidney disease trial at the end of this year. Based on our modeling, we expect around a 15% weight loss. And obviously, our focus is on demonstrating that together with an attractive safety profile. But we don't have a lot of news at this point. You will have to wait a couple of months before that. On the ESSENCE trial, you probably recall we sort of have a two-tier trials. The first proportion of the trial includes 800 patients, which will serve as the regulatory submission. We will see the readout of those 800 patients this year. They will all have liver biopsies, and they will be in the F2 to F3 category. We then go to the full 1,200 patients for a heart outcomes proportion of the trial. It will basically, also be patients who have liver biopsies and be in the F2 to F3 categories. But first step is to see the regulatory readout which we will receive at the end towards the end of the year.

Thank you, Martin, and thank you, Louise. We are now ready to take the next question, please.

Thank you. Your next question comes from the line of Evan Seigerman from BMO Capital Markets. Please go ahead.

Hi everyone, thank you for answering my questions and providing detailed insights during the call today. I have a couple of inquiries. Regarding the Catalent transaction, could you provide an update on that? Specifically, as you consider increasing capacity, what strategies can you implement to boost your supply of incretins to meet the demand? I know that was a significant discussion point today. Could you also share some expectations for the upcoming CB1 inverse agonist data expected later in the third quarter? Thank you.

Thank you, Evan, for those two questions. Firstly to Karsten on Catalent and overall supply chain strategy.

Thank you, Evan, for the question and it's great to connect. Regarding Catalent, we still expect the transaction to close towards the end of 2024. We are engaged in active discussions with various regulators about antitrust reviews, but we maintain our outlook for closing by the year's end. With Catalent, we are significantly expanding our fill-finish network by adding three more sites to those we currently have operational, which are also undergoing expansion. Our overall supply chain strategy focuses on scaling our API facilities in Kalundborg for peptides and in Hillerod, Denmark for antibodies, in line with our pipeline development. Additionally, we are expanding our fill-finish sites globally to accommodate many more patients than we have in the past.

Thank you, Karsten. And secondly, on Monlunabant expectations again for Martin.

Yes. So again, not a lot of news. We're expecting two data readouts; one from obesity, one from diabetes. Later this year, that will be exciting. Our focus will obviously be on the efficacy in terms of the weight loss. Our current modeling is suggesting at least a 15% weight loss. That will be an attractive oral monotherapy in and of itself, but also with the potential of being combined with Semaglutide. But these are early days. These are model data. And we'll see the stronger readouts in Q3 and Q4 of this year.

Thank you, Martin, and thank you, Evan. We are ready to take the next question, please.

Thank you. Your next question comes from the line of Sachin Jain from Bank of America. Please go ahead.

Hi, guys. Thanks for taking my questions. Two, please. Firstly, a big picture one for Karsten, just on guidance. Midpoint, I believe, implies underlying acceleration in second half relative to the underlying growth in the first half. Given there's a lot of moving parts, I wonder if you could just talk through some of the key drivers, pushes and pulls, particularly around Wegovy and Ozempic. And then the second question is to try and get a bit more color, Doug, Karsten, Lars on the Wegovy price and around the commentary of those volumes go up, price comes down. If you would give us some sense of magnitude of price pressure short and midterm. So I'm going to frame the question like this, you've loosely commented to around 10% price pressure per year for Ozempic. Should we think about Wegovy as more or less than that? And can you give any specific color on second half trends relative to first half? Thank you.

Thank you, Sachin. For the first one on guidance building blocks, I'll hand that to you, Karsten.

Yes, thank you for that question, Sachin. And as noted in our release, we are upgrading our top-line guidance by a couple of points and narrowing the guidance range as well. So really supporting the fact that we are off to a really strong start in this year and see strong trends both commercially, as well as supply chain-wise. So that's the backdrop for our increasing guidance. And then to the second half acceleration part of your question. Yes, that is correct. And you could say, the 25% growth we have in the first half of this year benefits from the rebate adjustments we've been talking about related to the U.S., both in the first quarter and in the second quarter, as well as to an easier comparator linked to the phasing of rebates in 2023. So we delivered 25% with both the tailwind and an easy comparator and delivering that for the full year clearly entails an acceleration into the second half in terms of growth despite the fact that the comparator is tougher linked to the rebate phasing of last year. And that acceleration is really a function of continued trends of what you're seeing already in the marketplace today in terms of the Wegovy penetration in the U.S., where we doubled the number of scripts from the beginning of the year until now; also an acceleration in terms of Wegovy sales in international operations and the continuation of Ozempic performance into the second half. So underlying clear acceleration during the second half compared to the first half.

Thank you, Karsten. And secondly, on overall pricing dynamics, Lars?

Thank you, Sachin. We prefer not to discuss pricing in great detail as it tends to create a quarter-over-quarter narrative. However, I want to emphasize that, as I mentioned earlier and as Karsten highlighted, we operate in a marketplace that focuses on increasing volumes rather than engaging in price competition. That said, there are various market segments, and it's important for us to be active in areas that serve vulnerable patients, typically those covered by Medicaid. Currently, 20 states have adopted Wegovy, and we know that products entering Medicaid usually come at lower price points, which is an important factor. Our competitive environment remains stable, and our priority is to scale volumes to meet the access we’ve established since there is evident demand. More than tactical moves, it’s about scaling up to meet that demand. We have the ability to expand and accelerate our services, reaching many more patients in the latter half of the year. This is a positive signal of our progress, especially given the tougher comparisons we face in the second half. There’s clear momentum and effective execution from our supply chain. Thank you.

Thank you, Lars. Thank you, Karsten, and thank you, Sachin. And with that, we are ready for the next set of questions, please?

Thank you. Your next question comes from the line of Richard Vosser, JPMorgan. Please go ahead.

Hi. Thanks for taking my question. Maybe one on Wegovy in the U.S. as well. Based on the new patient, I know you've said that your 35,000 scripts a week, you'll limit those starter doses. But based on the new patients you've already accrued and that level of patients and your knowledge of the pull-through of patients to higher doses, how do you see the TRx developing? You've obviously doubled in the first half but some idea of how that could develop, I think, would be helpful for people. And I suppose the question is at what point do you expect TRx to exceed scripts from Ozempic on a weekly basis? And then one other question just on Ozempic ex-U.S. supply. I think you alluded to that, that could improve in the second half. But just when can you anticipate supply being resolved there so that we can expect strong growth in the second half? When can we expect strong growth for Ozempic to resume in IO? Thanks so much.

Thank you, Richard. On the first one, in terms of the strong TRx trends in the U.S., I'll hand it over to you, Doug.

Yes. Thank you, Richard. And let me just clarify. We're not precisely limiting to 35,000. We're dynamically managing that because, again, critically important to us is patient continuity of care. So that is the starting dose, as you know. And so that's the one we will manage. It's not to limit and so you may see fluctuations in that. What I would anticipate is a steady consistent TRx trend. I don't want to get into where that may go or where that may cross Ozempic. Again, we're pleased with the performance as Karsten and Lars alluded to; we've more than doubled that from the beginning of the year to currently. We're seeing strong NBRx and we're serving more patients. So I don't want to get into predictions of when they'll cross.

Thank you, Doug. And on the gradual supply scaling, over to you, Karsten.

Yes. So talking about ex-U.S. and scaling there. Then first of all, I'd just like to allude to the performance in international operations where Rybelsus or Semaglutide is doing really well in the first half, growing at 66%. So actually contributing as much as Ozempic in international operations. And then looking at IO between the first half and second half, then clearly, our ambition and what's implied in guidance is an acceleration from the 11% we delivered in the first half, and that acceleration will come from the Sema franchise. But as you see, we have now launched in 12 markets with Wegovy in international operations. So clearly, you should also expect to see some pick-up there, driving higher sales growth in the second half in IO.

Thank you, Karsten, and thank you, Richard, for those two questions. We are now ready to take the next set of questions, please.

Thank you. Your next question comes from Peter Verdult from Citigroup. Please go ahead.

Thank you. Peter Verdult, Citi. Two questions. Doug, just some of the obligatory latest data or intel in terms of average duration of use on Wegovy? And then secondly, Karsten, on the 340B. When we last spoke, my understanding was Nova has been very conservative in revenue recognition from the 340B leaving risks very much to the upside. And I think when we last discussed, should the rulings go your way, that could be quite a material uplift to earnings, I think, to the tune of 5%. So can I just check in with you whether that is still the case? Or have you any updated thoughts there? Thank you.

Thank you, Pete. On the first one on Wegovy state time, I'll give that to you, Doug.

Yes. Thanks, Pete, for the questions. So in the U.S., we're still seeing around six months, and that's given the pure supply constraints. And we have to work through that. But I would tell you this, we are confident that over time, the stay time will improve more towards 12 months and beyond, which would reflect the clinical profile of the product and what we saw in some of the clinical trials. So still around six months, we're working through that more to come as we see more stability in supply over time.

Thank you, Doug. And over to Karsten on 340B.

Yes. Thanks, Pete, for that comment. And first of all, I'd just like to refer also to our company announcement and the update on 340B that we included on the legal matters there. And I would say the only new item compared to when we discussed in connection with Q1 is that there's one additional ruling that has come out in this case complex, which is a D.C. Circuit ruling which ruled similarly to the ruling we had in our case. So all supporting our case, but we still have one key ruling outstanding in the seven circuits. And then as to our accounting, I don't remember us discussing it being conservative. I remember I was discussing it being prudent and aligned to the accounting standards of revenue recognition where revenue recognition has to be highly probable in order to book it as revenue. So that's how we do it. But we also call out that there is a scenario that could have a material impact on our financial position. And that's what we called out in our announcement. And then let's see how the Seven Circuit rules and what level of appeals we'll be looking at in the coming months. It could be any day that could be news, but I don't know anything further as of today.

Thank you, Karsten. And thank you, Pete, as well. We're now ready to take the next, please.

Thank you. Your next question comes from James Quigley from Goldman Sachs. Please go ahead.

Great. Thanks for taking my questions. I've got two, please. So firstly, on obesity portfolio considerations. You got a number of obesity readouts in the second half of the year. But how are you thinking of the relative positioning and weight loss expectations for step up, so the 7.2 milligrams Sema and obviously CagriSema as well? Will it be an either/or approach from a commercial perspective? Or will it be purely data dependent? And Sema 7.2 milligram potentially be more desirable given the known CV benefits from Sema across all the trials we've seen, and we haven't necessarily seen that with Cagri yet. And then second question on oral therapy. So obviously, there's been some competitor data, some early competitor data that's been on the market recently. But in terms of your oral offering OASIS for, how would you characterize the competitiveness of the data you've seen so far for the 25-milligram dose? And how are you thinking about positioning in the market or even a market fit approach on the launch? And then maybe also related to that. On the oral SNAC technology, can you remind us where you are in terms of the latest generations? And at what point would you be able to have a peptide-based oral with the SNAC technology that could be as convenient as a typical small molecule? Thank you.

Thank you, James. I think I counted a little bit more than two questions there. But first, over to Camilla on the overall obesity portfolio. And after that, we'll turn to Martin on the SNAC enhancer.

Yes. Thanks a lot. First of all, I'd just like to say that we are very encouraged about the progression of our pipeline in obesity. And of course, we look forward to the readouts that we are having in the second half of this year. It's going to be an exciting second half from the number of Phase 3 readouts that we have in both oral and also in the injectable space. Let's await those readouts. And then later on, of course, when we get closer to launches, we can talk about positioning and how we are going to commercially utilize the strong pipeline that we have.

Thanks a lot, Camilla. And over to you, Martin, on SNAC.

Yes. So specifically in the clinical space, we've been testing, obviously generation 1, 2 and 3, as you know. And in the research base, we continue to evolve this. It goes without saying, we will not take any new generation into the clinic unless we see a potential for a step change in terms of bioavailability. And this is an ongoing journey and an ongoing effort for us. With respect to the sort of dosing restrictions, we actually don't see them as limitations. But I also have to say we don't see a potential of removing those limitations anytime soon.

Thank you, Martin. And just a reminder, in the company announcement also see the approval in EMEA of the new doses related to all semaglutide.

Thanks a lot, Martin, and thanks a lot, James. We are now ready for the next set of questions.

Thank you. Your next question comes from Emmanuel Papadakis from Deutsche Bank. Please go ahead.

Thank you for taking the question. Maybe a question on Sema ahead of potential inclusion in 2027 on rate price negotiation. Perhaps you could just enlighten us as to what magnitude the price cut you see in your midterm planning and your latest perspectives on potential impact in the commercial channel from reduced pricing in Medicare. And then on CagriSema ahead of the first redefined results. Just talk to us a little bit about your device capacity for the dual chamber pen device at launch. Would that be enough to switch a significant proportion of patients from Sema to CagriSema over that 2026, '27 timeframe? Or indeed, is there any reason why you wouldn't expect the majority of patients to start switching over? Thank you.

Thank you, Emmanuel. The first one on the IRA and the latest there, that goes to you, Doug.

Yes. Thanks, Emmanuel, for the question. Maybe as a starting point, I'd like to say that we fundamentally disagree with the principles of price setting. It hurts innovation. It potentially creates higher out-of-pocket costs for seniors and less choice. So that's not good. What I would say is that we're not going to comment on price, but we've worked through the first negotiations on NovoLog and Fiasp, and as you know that's a minor part of our business. So we expect limited impact there. And then I would say, as it relates to a read-through to semaglutide, it's just way too early. This has been a new process for both us and the government. We're learning a lot. I'm sure they learned a lot, but I don't want to speculate on what that may mean for semaglutide read-through.

Thank you, Doug. And for the second question on CagriSema capacity, over to you, Karsten.

Yes, hi Emmanuel, thank you for the question. For CagriSema and supply chain strategy, then, of course, we learned a lot from Wegovy, and we are full speed in terms of scaling our capacities linked to CagriSema. It is a dual advice. So scalability is different compared to multi-use devices that we have in other parts of our portfolio. But we are rapidly scaling the CagriSema device. We are exploring a co-formulation also to improve scalability. It's not without risk, and that's why I say we're exploring the opportunity to do so. And then bear in mind, behind CagriSema in our pipeline, we have Amycretin in a subcutaneous version, which we will report out in the first quarter of next year, which is another offering together with the step-up. And then as my last comment, I would say, given the clinical profile of semaglutide, we believe that we will be selling semaglutide for many years to come, and we are building the infrastructure to compete on that at a global scale for many years to come.

Thank you, Karsten, and also thanks for your questions. With that, we are ready for the next set of questions, please.

Thank you. Your final question comes from the line of Simon Baker with Redburn Atlantic. Please go ahead.

Thanks for taking my questions. Two, if I may. Firstly, going back to the obesity pipeline, you announced that you terminated the development of the once-monthly injectable gap due to portfolio considerations. I wonder if you could elaborate on that and also update us on your appetite for a monthly injectable obesity treatment. And then a question on Icodec in the U.S. Given the complete response letter and leaving aside the questions on manufacturing, is a Type 1 carve-out from the application a possible solution to expediting this? Because I assume that one mustn't just think about Icodec, but also IcoSema, which is potentially the bigger opportunity and obviously held up by this. Any thoughts on that would be much appreciated. Thank you.

Thank you, Simon. Both of those go to you, Martin. Firstly, on the once monthly GLP-1/GIP and secondly, on Icodec.

Yes. Absolutely. So I just want to reiterate, I think we all along stated that the once monthly GLP-1/GIP study that we conducted was an exploratory study, more assessing the concept of a once-monthly technology than the actual GLP-1/GIP component. It was exploratory and while we definitely can use the data, the current profile was not something that we would take into further clinical development. So basically, we still have this focus. We do see once monthly as convenience more than anything else; our primary focus is efficacy and safety. And as we already discussed, we have a very competitive pipeline and portfolio. We'll maintain this focus with either the next generation of this technology or alternative technologies. Specifically on Icodec, we are in ongoing dialogue with the FDA. So I don't want to speculate too much. But obviously, part of this is a potential carve-out of the Type 1 diabetes. You should not see this impact the IcoSema dialogue.

Thank you, Martin. And also thank you, Simon, for those two questions. Then we have time for one final set of questions, please.

Thank you. Your final question comes from the line of Mark Purcell from Morgan Stanley. Please go ahead.

Yes. Thank you very much for taking my question. Wegovy heart failure, could you help us understand the additional data you are looking to file and whether you're going for a CV death and heart failure endpoints, sort of hard endpoints in terms of the claim from the studies? I guess, the pooled analysis of the STEP-HFpEF program showed a strong 6% to 9% risk reduction in CV death and heart failure events. But the significant numbers of patients in select and flow, which I guess could be relevant. So an understanding of what you're aiming to achieve that would be great. Thank you. And then the second one, just as a follow-up to INV-202. Could you help us understand, Martin, how INV-347 differs compared to INV-202 in terms of PK and CNS distribution and selectivity, the CV1 versus CV2 receptors? Just trying to understand whether this could actually leapfrog Monlunabant into Phase 3.

Thank you, Mark. And both of those two to you, Martin. Firstly, semaglutide in HFpEF and secondly, within INV-202 and INV347.

Yes. Thank you very much, Mark, for those questions. First of all on HFpEF. As you'll recall, we conducted two dedicated HFpEF trials in patients with established HFpEF one in diabetes and one in patients without diabetes, but with obesity. When we do the meta-analysis of the two trials, we see a 69% decrease in risk of CV death hospitalization for heart failure. So absolutely very strong data and something that has encouraged us a lot. This was also why the FDA granted us breakthrough designation. As we discussed last quarter, we had fairly few events in these two reasonably small studies, and through our dialogue with the FDA it was very clear that if we could sort of increase the volume of events to further substantiate this, the likelihood of getting hard endpoints into the U.S. label would increase given that we have some strong - have had and will have some strong readouts in the not-so-distant future. It was a reasonably easy decision to say we can accept a small delay and then increase our likelihood of getting hard endpoints into the label as compared to the more functional test. So we saw that as a really good pattern. On Monlunabant second generation, it's still early days. There is a potential for a longer half-life. So a potential for less frequent than once daily dosing, which is obviously attractive. And further, a potential for even less brain penetration. Again, we are quite confident with the safety profile of Monlunabant but if second-generation could have an even lower likelihood of potential adverse events, that would be attractive. I don't think you will see anything surpass our progress of Monlunabant and we see this as a really, really strong life cycle management opportunity.

Thank you, Martin. Thank you, Mark, and thank you to everyone else who have asked questions during the session. This concludes the Q&A session. Thanks a lot for participating, and feel free to contact Investor Relations regarding any follow-up questions you might have. Before we close the call, I'd like to hand it over to you, Lars, for any final remarks.

Thank you, Jacob. I hope it comes across that we are pleased with the momentum in our business, in particular, our GLP-1 business in diabetes and obesity, not least the strong growth for Wegovy script trends in the U.S., which is really fueling the upgrade we have communicated today, which also means that our supply is on track in being able to serve many more patients, both short and longer term. We're also excited about our pipeline, the news we have announced recently, but also what we have coming up later in the year. So with that, thank you also from my side for your questions and attention today. With that, we close the call. Thank you.

Thank you. This concludes today's conference call. Thanks for participating. You may now disconnect.