Earnings Call Transcript - NVO Q3 2022

Keyur Parekh, Analyst

Good afternoon all, and thank you for joining us. My name is Keyur Parekh and I cover Novo for Goldman Sachs. It's always a pleasure to have the team in London. It's even a better pleasure to have them the day after they're made new lifetime high from a stock price perspective. Congratulations to that. I'm going to pause it to you, Karsten, to make some opening comments, and then we'll go to Q&A from there. The floor is yours, Karsten.

Karsten Munk Knudsen, CEO

Great. Thank you, Keyur, and thank you to Goldman Sachs for hosting our Quarterly London Launch Meeting and what an opening, right? So it's a tough act to follow, but clearly with the dream team like this with my good colleagues, Ludovic Helfgott from Rare Disease; Martin Lange from Development; and Camilla Sylvest from our Commercial Strategy area. Then I think we're set off for a great session today. We had kind of an unfortunate situation yesterday with our conference call, and some people would say did you plan for that, and at least now we have a sample size of one. Martin will say it's not enough, but that we cut the conference call and then we got an all-time high on our share price. So I'm not sure if you can do any training on that, but hopefully there will be no trend at least, and knocking on wood with all kinds of technical support today that this is being webcasted and out there just for followers to be aware about that. So for today's presentation and we have brought not too many slides that we'll go through in the beginning, and then in case there should be questions, then we'll have time for that. And if not, then we'll run off. But I would be surprised if there wouldn't be a few questions on whatever the flavor of the day is. So jumping into our statements, then of course as usual our forward-looking statements that there is a risk that the future doesn't pan out in line with our forward-looking statements. It could be better, it could be worse, but that is the risk that we all live under and enjoy. And then just one slide on our strategic aspirations, which is basically how we portray the progress in terms of our corporate strategy execution. And without taking too much out of my colleagues' presentations then briefly on each of the quadrants purpose and sustainability, this is a core area for us. This is ESG in Novo Nordisk language. We continue to progress on our carbon emissions. So we're down 18% in carbon emissions compared to pre-COVID 2019. And actually, 18% is even not where we'd like to be. We're more ambitious than that. We have some pressures from distribution of our products, so that's why it could have been even better, but it's something that we're really driving performance management on. In terms of adding value to society then as of today we are serving more patients than ever before in the history of the company. So, of course, the core premise and the core objective of a company like Novo Nordisk is to discover and develop innovative medicine and make it available to patients on a global scale. And therefore, it's not only a pleasure based on the financials and the share price that you alluded to, but even more importantly with serving more patients than ever before. And then we're progressing on our diversity and inclusion efforts and being a sustainable employer. Commercial execution, Camilla will go through, but 16% sales growth in an industry like the pharma industry. I don't know what the current run rate is, but at least the last few years when we've been looking at value at pharma run rate for the global industry is to the tune of 4%, 5% or something like that. So, having a run rate at 16% is of course clearly competitive and in the top tier of the industry. And then pipeline, again, as I said before, this is why we are here as a company. This is to discover and develop innovative products for the benefit of patients. And it's just really a pleasure to see the progress we're making both in diabetes care, progress within obesity and rare disease. So, as you recall, we are pursuing a corporate strategy where we are expanding and diversifying our R&D pipeline and I think this is clearly a picture, and Martin will come back to it that we are stepping up investments in R&D to expand and diversify the pipeline. And then finally on financials, 16% turns into 14% operating profit growth, come back to the details, continued efficiency drive and very competitive cash to earnings conversion, and more than $40 billion return to shareholders. So and when you look at our balance sheet, then on an MAT basis we're around 100% return on invested capital. So a fast-growing high-margin company with a 100% return on invested capital, I think at least finance folks like myself that's that metrics. So with that, I'll hand it over to you Camilla on commercial.

Camilla Sylvest, CRO

Yes, thanks a lot, Karsten, and let's just look at the 16% growth, how that's distributed among North America and international operations. You see 22% growth in North America. It's 62% of our share of growth and then we have 11% growth in international operations that's driven mainly by growth in EMEA, double-digit, and also in the rest of the world. We have, as you can see, a minus 5% in China. That's related to the volume-based procurement, the VBP that was implemented as of May this year. And when we look at how that is distributed across the therapy areas, you'll see that GLP-1 is driving 44% growth and negative growth in insulin both in international operations and in North America. And then obesity care is growing 75%, interestingly 73% in international operations without Wegovy, but only from Saxenda, and then in North America a combination of Saxenda and Wegovy growing 77%. Rare disease, Ludovic will come back to in a minute, growing 2%. And if we then look at the GLP-1 class, especially in the U.S., you see a significant step up in terms of the market growth. This is also what we've seen with previous launches into this segment that the market growth keeps expanding, but now we are at a level where volume growth is above 40%. We can come back how that is being driven also by guidelines. But what you see is, of course, that Ozempic is still the leading brand in the class. But of course, with the market growing so significantly, volume growth becomes much more significant for sales than actual market share developments. And then on obesity here again, you see the 75% growth in the first nine months. You see in the middle also a very strong volume growth of 63%. And I'm sure we'll come back to how our rollout plans are in the rest of the world, and also that we are expecting to supply Wegovy to make all doses available towards the end of this year. That's still the plan exactly as we also discussed last time when we met. And with that over to Ludovic for your update on rare disease.

Ludovic Helfgott, Head of Rare Disease

Absolutely. Exactly, very quickly, just the rare disease franchise grew 2% in this year-to-date, with great growth on the rare blood disorder franchise, RBD, driven by hemophilia A, hemophilia B, and Novo-7, as you can see, still a growth of 6% of Novo-7. Just to give an example for a product that has been there for 26 years. So, it’s still a growing franchise. And then a decrease on the endocrine disorder side, mostly driven by pricing, essentially from the volume perspective the brand is clearly the leader across the world, more than 60% of market share in the U.S., around 36% worldwide. So overall this price decline mostly in the U.S. has expanded the 3% sales decline in North America, while in international operations, it's a 4% sales growth. So we are on our sort of long-term trajectory with this 2% growth in a year-to-date 2022. Shall we move to the rest of the pipeline.

Martin Holst Lange, Head of Development

So you heard from Karsten we are investing more than ever in R&D, and that is leading to a very nice progress of our pipeline in the early research phase, but certainly also in a brilliant progress in our clinical pipeline and in the development space more than ever patients in clinical trials, more than ever active clinical trials in more than ever disease areas. And we are seeing nice progress across the board. So going from the 50,000 patients that we actually have in clinical trials as we speak, I want to talk about 92. And that's basically because you heard of us talk about CagriSema in the obesity space. We think that we have an asset that will lead to a 25% plus weight loss in the obesity space. That's exciting in and of itself. Hopefully you will also notice that we initiated Phase 3 for CagriSema this week, which is going to be super exciting. We did not know what to expect from CagriSema in the space of Type 2 diabetes and glycemic control, and therefore we conducted a very small Phase 2 study. 90 patients being equally randomized by either CagriSema, semaglutide and monotherapy, or cagrilintide and monotherapy. Super excited after 32 weeks of treatment to observe that we saw not only a substantially numerically better reduction in hemoglobin A1c for CagriSema as compared to semaglutide, that was maybe not so surprising, but equally excited about seeing the weight loss. Most of the rules that we observe show that accruing weight loss in Type 2 diabetes is actually more difficult than what we see in non-diabetic patients. So, both with semaglutide, but also whatever else is out there, you see somewhat less weight loss in Type 2 diabetes than what you see in non-diabetes patients. But combining cagrilintide and semaglutide, that leads to a 15% weight loss in 32 weeks. If we extrapolate that to our usual 68 weeks, it's a 20 plus percent weight loss. And that is better than anything we have seen in the Type 2 diabetes space. I'm now looking at a different slide than what I promised. Maybe I should just look at my slide. But that is okay. Now you heard all of my stories about CagriSema. That is super exciting, and I could do it without looking at the slide. It is because it's actually some easy numbers to remember because this gives me a great opportunity to also talk about what we've seen with icodec in ONWARDS 5. It's still a 0.4 percentage point difference in HbA1c as superior reduction as compared to whatever is out there that is also super exciting. We have the vast majority of our patients on insulin treatment, still, more than 30 million across the board. And imagine that you can show a 0.4% difference in this space. This is actually, if I extrapolate for UK PDs, I can start talking about reduction in cardiovascular mortality, reduction in all-cause mortality, and a 20% reduction in risk of amputations that makes it meaningful for the individual patients, obviously, but actually also for peers. And I think when Camilla starts to do pricing negotiations for icodec, that will make it super exciting. So obviously the progress of icodec and as a mission during the course of the first half of next year is going to be super exciting. I do want to call out in the obesity space we also, we'll see the readout of high-dose semaglutide. In that space, 50 milligrams of semaglutide. We also have a 25-milligram story ongoing. In the rare disease space, Ludovic has already touched on that, but suffice it to say, super exciting to see the progress of Mim8. So we initiated Mim8 actually last week. And that basically means that we will, and I hope you can agree with me that is an impressive record. We will spend approximately four years of clinical development. This is to be compared with the normal eight years in hemophilia that we spend in clinical development specifically for Mim8; we've progressed it very fast. We are now in Phase 3 and you should expect a readout from the trial during the course of 2024. And then back to you, Karsten.

Karsten Munk Knudsen, CEO

Thank you, Martin. Financial outlook, so you've seen our nine-month numbers, 16% sales growth, really an amazing push on GLP-1 and diabetes as well as our obesity franchise as Camilla was alluding to. So that has enabled us to raise our outlook for the year from 12% to 16% to now 14% to 17% sales growth at the same currencies. And then you layer in currency impacts, another 10 percentage points mostly from the strengthening U.S. dollar. So all, when you look at the magnitude of growth for the company, in absolute terms, this is the biggest absolute sales growth ever in the history of the company at local exchange rates. And then you add in currencies. So the sheer size of step up in growth is really remarkable in a historical setting. That of course, goes true to our operating profit performance where we are raising our numbers correspondingly, then we lose the currency step up in hedging, that's to be expected. I think when you do our net numbers on hedging without going into details, then our hedging performance this year, our net currency performance this year is very, very attractive even after hedging costs. And then finally, our cash flow to be clear, how can you raise your outlook for the year in terms of sales and operating profit and then lower free cash flow? And there's a very simple explanation to that because the reason is that we lower our free cash flow guidance by 3 billion in the range. But that is a function of the fact that we closed the Forma Therapeutics transaction in the fourth quarter at around DKK5 billion impact to our free cash flow and then underlying benefit of DKK2 billion. So that's how we get to the net minus three on free cash flow. So excluding BD, a step up in free cash flow generation, which we of course allocate to shareholders according to the classic principles around 50% dividend payout ratio and then the remainder done through the share buyback program as we covered before, so no changes on capital allocation. So these are aspirations for 2025, you've seen them before, so I'm not going to reiterate that. I think we're ready to get into a Q&A and I think we have a long tradition of having the host shoot off the first couple of questions. And if we could just restrain to two questions each and then we do the rounds as we move forward.

Keyur Parekh, Analyst

Thank you, Karsten. Keyur Parekh, Goldman Sachs, if I could start with two please. The first one is in the unfortunate circumstance that Catalent wants to receive a warning letter for the Belgium facility between now and your relaunched date in kind of end of December, early January. How confident are you of maintaining that date and how is that going to be a function of supply from other parts of the manufacturing network or would you reconsider kind of pushing that date out? So that's kind of question number one. And then separately, Karsten, Lars, and you both kind of yesterday mentioned a few times about confidence in maintaining current trajectory of growth and having supply from a GLP-1 perspective to continue doing that. How should we think about the timelines associated with that? Was that kind of a fourth quarter comment? Was that a 2023, 2024 outlook, so just kind of any context around that? Thank you.

Karsten Munk Knudsen, CEO

Thank you, Keyur. On the first question vis-à-vis Catalent, we do appreciate the sensitivity around the Catalent situation in the capital markets. And as a consequence, it's not a comment that we take lightly and put into our company announcements. So of course, the comment we put in is based on a careful assessment around the current level of inventories, the fact that Catalent is producing for inventory of commercial product as we speak, and then an assessment based on our quality organization in terms of the quality situation at our CMO. So of course, there are no guarantees in this work, but we would not put this statement into our company announcement unless we're confident that we'd be able to resupply the U.S. market in December with Wegovy. Then to the second point in your question around our forward-looking commentary, we put a statement in our outlook section where basically saying that we're continuously expanding our supply capacity and our assessment is that at a potential we have the supply capacity to supply, according to the current growth trajectory of the company. And the reason why we put it in, just to be clear, was that in the beginning of that section, we're talking about supply chain limitations including for Ozempic. So this was just to avoid, keep becoming only concerns that we are not able to supply at all or we are kind of kept at our current level of supply. So this is a comment intended as a forward-looking statement that we're scaling and that we'll be able to cater for the current potential that materializes based on demand, the current level of growth. Well, I think we have enough questions today, I think actually just to make it simple for me so it's not a speed contest. And then we start here at Intron.

Naresh Chouhan, Analyst

Thanks. Naresh Chouhan, Intron. Just a couple of questions on the Ozempic 2 mg launch. It looks like it got to almost 10% of total Ozempic scripts and looked like a phenomenal launch in four months. So two things. One, how could some of the drivers of that, is there a big bolus of patients that need data intensification, and therefore, should we expect that growth to slow down when you can resupply? And the second thing is, is there any reason to think that this isn't 25%, 30% of the total Ozempic scripts in the years to come as patients progress from the 0.5 mg to the 1 mg to the 2 mg and it becomes a big part of the business? Because it's not something that I've felt that you guys are focused on massively, but it feels like it could be a very big opportunity.

Karsten Munk Knudsen, CEO

All right, Camilla, I think that's for you.

Camilla Sylvest, CRO

Yes. So absolutely right, that we've seen a great uptake with 2.0 so far. And of course, this opportunity is in place to make sure the patient can continue on Ozempic treatment over time. We also know from our initial data that not everyone is progressing to the 1.0 from the get-go. So some people are at 0.5 and approximately half are progressing to 1.0. So you can imagine that over time, people would be able to stay on Ozempic still intensifying the treatment and being very good control both with their blood sugar, their weight, and of course also with the cardiovascular protection that Ozempic is giving them. So you are right that over time the individual person is likely to upgrade. But of course, as we see more and more patients coming onto Ozempic with both of the market, then it's likely that there will be a ratio of people on 2.0, but with many more coming in, it's not so that this ratio is going to significantly differ from, I would assume a quarter or 25% of the total ballpark. But that of course, time will show, but it's really an intensification on the same product. That's the whole purpose of it.

Mark Purcell, Analyst

Thank you, Karsten. It's Mark Purcell from Morgan Stanley. So two questions, the first one is going back to oral semaglutide and the SNAC technology. So obviously, moving once weekly into clinical development. So could you help us understand where you are with the various generations of SNAC as you try to eliminate food and water interactions, you work on the cost component and give us an idea of the advantages and disadvantages versus a capsule peptide where there’s competitors entering the market as well as the oral small molecule as well. We see a lot more data over the next six months or so. That's the first question. And the second question is kind of going back to what Russia was talking about as well. The message around semaglutide is becoming increasingly complex. You've got outcome trials such as FLOW and STRIDE and focus on 1-milligram injectable. You've got obviously 2 milligrams going to 8 milligrams, going to 60 milligrams, then you have Rybelsus AD study, but then you’re going to 50 milligrams, and then the obesity dose, I presume is going to go up as well. So how do you take all this complexity and trying to bridge accumulative evidence into the molecule to create a simple message given that some of your competitors have far more simple messaging when it comes to doses, which they’re using consistently for diabetes, for obesity, for sleep apnea, et cetera?

Karsten Munk Knudsen, CEO

Thanks, Mark. Martin, fill the first one on Alzheimer and the SNAC technology and then branding?

Martin Holst Lange, Head of Development

Yes. So I think you're exactly right. We're focusing a lot on the SNAC technology because we want to and we need to increase the bioavailability basically to reduce the API amount needed for efficacious and safe treatment. We are currently in clinical trials and fourth generation and have made some substantial upgrades to the bioavailability that we've seen. Without going into too much detail, it goes without saying that will give us a good leverage on the FMC part. Our clear aim is actually also going a little bit to your question number two. The efficacy and the safety have to be on par with what we see in subcutaneous. And actually what we have currently right now with Rybelsus is probably from an efficacy perspective, somewhere between 0.5 and 1 milligram of subcutaneous Ozempic. Our aspiration is for 25 and 50 milligrams to be able to compete with 2.0, 2.4 milligrams of Ozempic and Wegovy. It goes without saying, if we substantially increase the bioavailability, there will be a little bit of regulatory complexity in the discussion of the actual sort of doses because all of a sudden what was 50 milligrams could then in the next generation correspond to something lower. But I think that falls at that point in time will be a luxury problem. When you talk about other formulations, I think what we've seen so far, and we are carefully monitoring this SNAC technology is by far the most attractive in terms of securing bioavailability of peptide or protein compared to the small molecules. I think my position on this is that they will be reasonably good when it comes to efficacy. I think they will—we still have to evaluate the safety. There's always some unknown with small molecules. My understanding is actually from an FMC perspective, there's not really a big difference. And therefore, I think and Camilla can also talk to this, the small molecules that will find their place, but they will not be sort of super competitive from an efficacy and safety perspective. So we welcome them as a vehicle to maybe also broaden the field.

Karsten Munk Knudsen, CEO

Thanks, Martin. Camilla?

Camilla Sylvest, CRO

Yes. On the SNAC side, the molecule is clear that we are, of course, optimizing the impact that this molecule can have on different patient populations. And that also caters for the fact that some of these disease areas are very different. For example, diabetes is very often driven by the physician in terms of specialist and primary care physicians; then you have the obesity segment that is, to a large extent, also driven by demand from patients. It’s easy to diagnose. Then you have NASH that we are looking into, which is very difficult to diagnose at the moment requiring a biopsy. And then of course, we are exploring it at Alzheimer’s also, that is yet a completely different target group. So the reason that I’m mentioning all of this is actually that it can sound complicated when you look at it across, but if you look at each of the disease areas and the target groups, both in terms of patients and physicians, we are actually able with different brands as we have it also now to cater for a specific group, a specific key message that relates to that particular target population. And we are also able from a rebating structure point of view to actually work with different segments. So there are some advantages of doing this, plus at the very end, we are able to confirm and detail and promote directly on label, which is of course very important for us to do, so that we make sure that we stay very strongly on our business ethics with regards to what gets promoted to whom, especially the target groups of doctors and this actually gives us a very flexible approach.

Karsten Munk Knudsen, CEO

Thanks, Camilla. Then we’ll move to Richard Vosser.

Richard Vosser, Analyst

Thanks. Sorry, excuse me. Richard Vosser, JPMorgan. One question on five looked very, very strong, but the type one hypos was not non-inferior. It wasn’t non-inferior. What needs to happen for that? And does that have any commercial implications when you’re talking to payers from a pricing standpoint? And then second question, just on CagriSema and GIP combinations, maybe, CagriSema looks pretty good and on weight loss, but the HbA1c was not really at that level. What can you do to further enhance the HbA1c control? Thanks.

Karsten Munk Knudsen, CEO

Martin?

Martin Holst Lange, Head of Development

So we—if I can take the last question first. CagriSema is investigated in a 32-week study and specifically on glucose control part of the effect is seen by the weight loss, and that basically means that if we extrapolate that weight loss over time into, what I would say regulatory grade timeline of 68 weeks actually up to two years in type 2 diabetes. Our extrapolations are indicating that CagriSema on glycemic control will on a normal day be at level, and on a good day could actually also turn out to be superior. And if you combine, so to speak, the base case or even the outside with the weight loss that we’ve seen, this will be the most attractive offering that we would have in type 2 diabetes. Also because, as we’ve discussed previously, the safety profile of CagriSema appears to be very, very attractive. So from that perspective, you had to factor in the timing of treatment. And that’s why we are fairly confident we’ll be able to show superiority of the mono components, but potentially also of potential competitors. On—I could take—I think the type one diabetes is obviously something where we have to go into a dialogue on the risk of hyperglycemia. As we’ve also discussed, even though we did see more hyperglycemia with five than we did with other basal insulins, it was still at a fairly low level. And therefore, the risk-benefit discussion that I will have will regulate us. I think we are still in a reasonably good place. I don’t want to speak to the commercial and the pricing negotiation; that’s for Camilla. But overall, the type one population is sort of the minority in this space. And my sense is that that pricing discussions will be based on phase—sorry, type 2 diabetes patients, and this is where we see the superiority with on par risk of hypoglycemia.

Camilla Sylvest, CRO

Exactly. You could work in commercial…

Richard Vosser, Analyst

Okay, thank you. That’s always good to know.

Karsten Munk Knudsen, CEO

Thank you, Martin. Thank you, Richard. And we’re on to Jo.

Jo Walton, Analyst

I wonder, Camilla, if you could give us an update on the reimbursement sort of attitude of people and payers given there’s so much publicity about these drugs. Are payers thinking, good god, if I don’t put some restrictions, I’m going to have unfettered demand. And perhaps within that, you could say whether you’re seeing any—the longevity of people on Wegovy, it was sort of five months or so on Saxenda. Are people showing their enthusiasm for Wegovy by staying on it for much longer? And my second question is just a broad one on U.S. pricing. So now that you should only raise your prices in line with CPI, and CPI is so high. Is there an opportunity in 2023 to have your list prices higher than you materially you’ve had historically? Because CPI will be 8 or 9 perhaps, which is most unusual? Thank you.

Camilla Sylvest, CRO

Thanks. So maybe I’ll start with the first one, and then I think Karsten would like to speak to next year. Reimbursement attitude towards Ozempic is of course generally very strong in markets that traditionally reimburse. When it comes to weight loss products like Saxenda and Wegovy, then we have now 15 markets in international operations that have reimbursed Saxenda. Of course, it comes at a BMI normally around 30 or 35 with comorbidities. In the U.S. we have about 30 million lives covered. So a very good starting point in general to continue prescribing for more patients with reimbursement. The attitude of course towards Wegovy and Ozempic to make sure that it’s not prescribed off-label. It’s increasing the awareness, increasing here, of course, we have the advancing that we have two different brands, so it’s easier to understand and document. And we have been looking back at can we see a change in the Ozempic patients that have been prescribed to naїve to treatment patients before and after the Wegovy launch. And so we took 1.5 years before the launch up until July last year 2021 and then up until now. And there has been an increasing trend of prescribing TLP1 products in type 2 diabetes earlier. That trend continues. I guess, accelerated a bit after the launch of Wegovy, but not significantly. So I just want to say that the trend of prescribing TLP1 products earlier to type 2 patients has increased a lot coming from guidelines from both EASD and ADA also. And of course, we also learn how well it works, especially with Ozempic with the three benefits it has, including the cardiovascular risk profile. So that’s just a great understanding of that. Then when it comes to stay time on Wegovy, we don’t have new numbers to share with you, but we are following up on that. And as soon as we have more to share, we will share that. But we do know from Saxenda in the countries where that has now been reimbursed, that the stay time of course is significantly extended. Plus that we have seen in our data from Wegovy that people continue to lose weight beyond 60 weeks. So that also gives us an indication that stay time is likely to be much longer in Wegovy than it has been traditionally on Saxenda. Yes, and then to the price…

Karsten Munk Knudsen, CEO

Thanks, Camilla. On inflation terms in the U.S. and the most recent legislation where it takes a baseline back to 2021, as you know, and consequently, we will face a minor negative impact already here from the fourth quarter on products where we’ve taken price increases on above the inflation since 2021. As to our list price increases in 2023, that’s a multitude of factors that go into our decision on list price increases. First of all the benefits of the products we’re providing and the clinical data supporting that for patients, the competitive situation, and of course, the old pricing environment. So this is not the primary factor. But of course, we take all factors into account when we make that decision, so no further comments around that because there’s also a certain level of competition on that front. Thank you. Yes, Jeffrey?

Jo Walton, Analyst

Can I just come back to Wegovy, but a different question, which is if the facility were to have to temporarily close for any reason, would that in any way impact your timeline? And have your thoughts on the amount of drug you need for the launch changed at all since the start of the year? Or are you still aiming for the same volume at the different doses by the end of the year before you make that decision to launch it? And then can I just ask with next year then, when you bring on the other fill finish? Should we think about the first half with the second CMO and then the second half with the second Catalent facility? Is this a sort of step function given we’re talking about fill finish, we’re not talking about sort of ramping up API, if you like? So essentially it comes online or is this a gradual increase we should think in fill finish capacity coming during the course of 2023?

Ludovic Helfgott, Head of Rare Disease

Yes. So resupply in the U.S. market towards the end of the year as I said before, this is based on our combined knowledge and the fact that the CMOs is producing as of today and the required inventory levels to launch that they’re viable. Of course, there are 100 scenarios in the world that can impact any parts of the business. But we would not put into our company announcement the fact that we are resupplying them out unless we believe that’s relevant scenario, speculating in all kinds of hypothetical items, I don't think that adds any value. Then we would not have put this wording in. As to next year, and capacity as you state the second CMO will go online in the first half and online means that they'll be supplying to a marketable product. And then the second site will get online in the second half of 2023 and consequently we will have four different sites supplying fill, finish—sorry, filling for Wegovy. So that that will bring step changes in filling capacity and of course, additional backup capacity in that sense.

Karsten Munk Knudsen, CEO

Thank you, Ludovic. And is that right? So I thank you for your questions today. And I will now conclude this earnings call. Thank you all for attending and we look forward to seeing you on the next call.