Katie

Katie, on behalf of Mitchell Kapoor, inquired about the key milestones and potential roadblocks underpinning Legend Biotech's guidance for profitability by 2026, and what indicators investors should monitor to assess progress towards this goal.

Answer

Carlos Santos, Chief Financial Officer, reiterated that the profitability view remains unchanged, with CARVYKTI expected to be profitable in 2025 and the company enterprise-wide in 2026. This is supported by the significant growth trajectory of CARVYKTI and disciplined management of operating expenses, leading to positive free cash flow.

Katie inquired about the risk of passing on supplier price increases to customers, especially if they accelerate, considering rising raw material prices like tungsten. She also asked about the year-to-date impact of the government shutdown and how it's factored into the Q1 outlook.

Answer

Martina McIsaac, President and COO, expressed confidence in price realization, noting customers' understanding due to transparency and MSC Industrial Supply's value proposition in optimizing costs. Erik Gershwind, CEO, added that tariff-related inflation is now affecting raw materials like tungsten, and if sustained, more supplier pricing is expected and will be passed along. Regarding the government shutdown, Martina explained that public sector growth softened from September to October, with a small positive mix effect. The Q1 outlook's range accounts for both scenarios: the shutdown ending or continuing. Erik noted federal sector pullbacks but anticipates a reversal and continued market share capture. Ryan Mills, Head of IR, clarified that government exposure is about two-thirds federal, weighted towards military and defense.