Michael Leuchten

Michael Leuchten followed up on Scemblix, asking why its first-line share in the US appears to be plateauing and what factors might be hindering continued momentum.

Answer

Vasant Narasimhan, CEO of Novartis, explained that CML data can be noisy due to its rare disease nature, but internal assessments show steady first-line share growth for Scemblix, which is ahead of their original plan. He identified overcoming the perception of weak access and addressing Gleevec loyalists as key challenges, but reiterated the ambition to reach 40%-50% share.

Michael Leuchten asked about Scemblix's shared data across lines of therapy, noting an apparent plateau in first-line use in the U.S. over recent quarters, and what might be hindering its continued momentum.

Answer

Vasant Narasimhan, CEO of Novartis, clarified that CML data can be noisy due to its rare disease nature. He stated that internal assessments show steady share growth in the frontline setting, actually ahead of their original plan. He identified overcoming the perception of weak access and addressing Gleevec loyalists as key challenges, with an ambition to reach 40-50% frontline share.

Michael Leuchten from Jefferies asked about the performance of Fabhalta in IgAN and C3G, noting that the company's framing of the opportunity seemed conservative and asking what might lead to a more optimistic outlook.

Answer

CEO Vasant Narasimhan clarified that Novartis is very optimistic about Fabhalta and its potential to achieve significant peak sales. He explained that the growth trajectory is expected to be a steady, indication-by-indication build-up rather than a sharp, rapid inflection, as the company establishes the drug in IgAN, C3G, and PNH.

Michael Leuchten asked for context regarding reported reductions in R&D staff in the U.S. and U.K., inquiring if it's part of a broader program or normal attrition. He also questioned the launch curve for Extensa in 2026, specifically the strategy for targeting experienced versus bio-naive patients to broaden the market.

Answer

Luke Miels, Chief Commercial Officer, explained that R&D staff adjustments are part of a dynamic and disciplined approach to reallocate resources to more promising programs, aiming for the best return and compelling assets. Nina Mojas, Head of Global Product Strategy, stated that Extensa's main objective is to target bio-naive patients due to low biologic penetration and high discontinuation rates in severe asthma. She noted that while some switching from Nucala and other agents is expected, the focus is on gaining share from new initiations, driven by enthusiasm for six-monthly dosing.

Michael Leuchten from Jefferies asked Luke Miels about reported R&D staff reductions in the U.S. and U.K., seeking context on whether this is part of a broader program or normal attrition. He also asked Nina Mojas about the launch strategy for Extensa, specifically whether GSK would target experienced or bio-naive patients, and how the launch curve for 2026 is expected to progress.

Answer

Luke Miels (Chief Commercial Officer) explained that staff adjustments are part of managing the business dynamically, shifting resources to more promising programs to generate compelling assets and ensure the best return. Nina Mojas (Head of Global Product Strategy) stated that Extensa's main objective is to target bio-naive patients, given the high discontinuation rate of biologics in severe asthma. She acknowledged some switching from Nucala and other agents but emphasized gaining share from patients who would otherwise start on other biologics or not start at all, driven by enthusiasm for six-monthly dosing.

Michael Leuchten asked for clarification on Q2 supply chain costs impacting COGS and their effect on the H2 gross margin outlook. He also questioned if peak sales expectations for Nucala in COPD had been lowered.

Answer

CFO Julie Brown stated that despite supply chain charges and anticipated tariffs, she expects full-year gross margin accretion driven by the specialty product mix. CCO Luke Miels confirmed the £500M peak sales figure for Nucala in COPD is a fair starting point, but the company aims higher, citing positive early physician feedback. CEO Dame Emma Walmsley emphasized the broader strategy is leadership across the entire COPD portfolio.

Michael Leuchten inquired about the residual risks from the U.S. administration's pricing agreement and whether the $10 billion catalyst potential for 2027-2028 is part of or incremental to the $80 billion 2030 revenue ambition.

Answer

CEO Pascal Soriot confirmed that the agreement addresses all four points from the president's letter, and the company expects no further action. He clarified that the $10 billion peak-year revenue opportunity is risk-adjusted and included within the $80 billion 2030 ambition, with an additional $11 billion expected from next year's readouts.

Michael Leuchten asked about the potential residual risks from the U.S. government agreement on pricing and innovation costs, and whether the $10 billion catalyst potential mentioned is incremental to AstraZeneca's $80 billion 2030 revenue ambition.

Answer

CEO Pascal Soriot clarified that the agreement addresses all four points from the president's letter, and the company expects no further actions. He confirmed that the $10 billion peak-year revenue potential is risk-adjusted and part of the $80 billion 2030 ambition, with an additional $11 billion expected from next year's readouts.

Michael Leuchten of Jefferies asked whether the strong Q2 oncology performance was achieved despite a weaker-than-expected volume uplift from the Medicare Part D redesign, a dynamic noted by a competitor.

Answer

EVP of Oncology Business, David Fredrickson, stated that the Part D redesign impact played out consistently with their expectations. He described it as a 'rebasing event' where the gross-to-net impact was offset by lower abandonment rates. He highlighted strong sequential demand-driven growth for Calquence (15% in the US) and Tagrisso (12% in the US) post-rebasing, indicating the volume dynamics were in line with their plan.

Michael Leuchten sought further clarification on the seasonality of gross margin, specifically what 'return to normal patterns' implies after Dupixent's manufacturing process is fully integrated. He also questioned why Sanofi did not raise its full-year guidance despite strong Q3 performance.

Answer

CFO François-Xavier Roger clarified that the 2.5 percentage point gross margin increase in Q3 is not a proxy for 2026, with an underlying increase of ~1% expected from volume and product mix. He reiterated the full-year guidance of high single-digit sales growth and low double-digit business EPS growth, expecting Q4 to be the strongest quarter. He also highlighted that Regeneron profit sharing grows significantly faster than Dupixent sales (e.g., 11 percentage points faster in H1 and Q3).

Michael Leuchten asked François-Xavier Roger about the seasonality comment on gross margin, specifically what 'return to normal patterns' meant after the Dupixent process, and why Sanofi opted not to increase its full-year guidance despite Q3 gross margin drivers.

Answer

François-Xavier Roger (CFO) clarified that the 2.5% Q3 gross margin increase is not a proxy for 2026, with an underlying increase of about 1% expected from volume and product mix. He confirmed full-year guidance (high single-digit sales, low double-digit EPS excluding buyback), expecting Q4 to be the best quarter. He also highlighted that Regeneron profit sharing grows faster than Dupixent sales (e.g., Q3 Dupixent sales +26%, profit sharing +37%).

Michael Leuchten of Jefferies asked if Novo Nordisk would provide an outlook for 2026 with its Q3 results, given the many variables. He also later questioned the confidence in amicretin's Phase III dose selection and whether there was flexibility to change it.

Answer

Karsten Knudsen, EVP & CFO, stated that 2026 guidance would be provided with the full-year results, not at Q3, but offered building blocks including the oral semaglutide launch and a low single-digit LOE impact. On amicretin, Martin Lange, EVP & Chief Scientific Officer, expressed confidence in the chosen doses and titration steps, noting the Phase III design has built-in flexibility and that they have had productive dialogues with regulators.

Michael Leuchten of Jefferies asked if Novo Nordisk would be in a position to provide a 2026 outlook with its Q3 results. He also questioned the company's confidence in its Phase 3 dose selection for amicretin, given recent competitor data.

Answer

Karsten Knudsen (CFO) confirmed that 2026 guidance would be provided with the full-year results, per standard practice, but offered building blocks including a low single-digit top-line impact from LOE. Regarding amicretin, Martin Lange (CSO) expressed confidence in the chosen doses and titration schedule, noting the Phase 3 program has built-in flexibility and has been discussed with regulators.