Novartis (NYSE:NVS) reported second-quarter financial results on Tuesday. The transcript from the company's second-quarter earnings call has been provided below.
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Summary
Novartis reported a 1% growth in net sales for Q2 2026, reaching $14.4 billion, with core operating income flat at $5.9 billion.
The company reaffirmed its full-year guidance for 2026, expecting low single-digit growth in net sales and a decline in core operating income.
Notable growth drivers include Kisqali, Kesimpta, and Scemblix, with Kisqali showing a 43% increase in constant currencies.
Pluvicto and Leqvio also demonstrated strong growth, with expectations for further expansion following regulatory updates.
Strategic initiatives include advancing its pipeline with upcoming pivotal readouts and potential multi-blockbuster assets like ianalumab.
Operational highlights include reaffirming a $10 billion peak sales goal for Kisqali and expanding global reach for key products.
Management emphasized disciplined capital allocation, with ongoing share buybacks and investments in R&D.
No change in M&A strategy, focusing on bolt-on acquisitions and selective larger deals fitting strategic criteria.
Full Transcript
Sharon, Operator
All participants will be in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions by pressing star 1 and 1. At any time during the conference, please limit yourself to one question and return to the queue for any follow-up. A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. With that, I would like to hand over to Mr. Nigel Trotman, Head, Business Planning and Analysis and Digital Finance. Please go ahead, sir.
Nigel Trotman, Head, Business Planning and Analysis and Digital Finance
Thank you, Sharon. Good morning and good afternoon, and welcome, everyone, to our Q2 2026 conference call. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors. These may cause actual results to be materially different from any future results, performance, or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that, respectively, were filed with and furnished to the U.S. Securities and Exchange Commission. Before we get started, and as a reminder, please kindly limit yourselves to one question at a time, and we'll cycle through the queue as needed. And with that, I'll hand over to Vas.
Vas Narasimhan, Chief Executive Officer
Thank you, Nigel, and thanks everyone for joining today's conference call. Moving to Slide 4, as you saw in the results we released earlier today, Novartis delivered strong performance across our priority brands and launches while advancing the pipeline, allowing us to return to growth. In the second quarter, the business grew 1% in constant currencies and USD, and we had flat core operating income at $5.9 billion. Mukul will go through the numbers in more detail later on in the call, but we're reaffirming our full year guidance for 2026.
We also had some important pipeline highlights which I'll talk about more during the course of the conference call, including updated Kisqali OS data, the Delbrax biomarker data in FSHD, as well as some other regulatory milestones we were able to deliver over the course of the quarter. Then moving to Slide 5, our growth drivers continued a strong trajectory in quarter two. They were up 36% in constant currencies. Some of the highlights include strong performance from Kisqali, Kesimpta, Scemblix, solid performance from Pluvicto, and strong performance as well from Leqvio.
So overall, taken together, these growth drivers are performing strongly. We believe that gives us momentum going into the second half of the year as we now move beyond the Entresto patent expiry and set us up well to deliver on our midterm growth guidance. Now moving to Slide 6. Kisqali was up 43% in constant currencies on the quarter. We outpaced the CDK4/6 market. We had strong performance in the US and outside the US. In the US we were up 39%, reaching over a billion dollars in sales for the first time.
We continued our metastatic breast cancer leadership with an increasing share in first line and we also sustained our early breast cancer NBRx and TRx leadership, with 58% of new patients now from our exclusive N0 and N1 nodal population. We also continue to grow our total prescriber base, up 16%, and we see future growth continuing to be driven by these exclusive Kisqali early breast cancer segments. Outside of the US we were up 49%. With continued metastatic leadership, our growth was accelerating in our EBC launches.
We're now approved in 76 countries and reimbursed in 42. And as you can see in the chart, in a case study in Germany we've reached 79% EBC NBRx share. We're having similar performance in other key markets. Overall, we're pleased with the trajectory for Kisqali and remain confident in our $10 billion peak sales goal. Now moving to slide seven. We're announcing today also updated six-year follow-up data demonstrating that Kisqali showed clinically meaningful OS in that broadest at-risk EBC population.
That data will be presented at an upcoming congress. This is the 6-year prespecified landmark data for IDFS as well as for OS. The IDFS benefit continues over time and continues to strengthen the case for use in the broadest at-risk EBC population. Safety remained consistent with the known profile of Kisqali. We believe this data underscores the value of dual inhibition with Kisqali and endocrine therapies across all subgroups. So we'll look forward to providing the full details of this data, as I mentioned, at our upcoming medical congress.
Now moving to Slide 8, Kesimpta had another strong quarter, up 32%, continuing to increase its share across our key markets. In the US we were up 32% in quarter two, increasing our TRx share in both B-cell and MS markets. Importantly, we're growing our NBRx share ahead of our competitors in the first-line and first-switch segments, which are our target segments for this medicine. Outside of the US, also very good performance. We're seeing strong growth in Europe as well as sustained NBRx growth in our top international markets.
We see a continued opportunity in these international markets, given that two-thirds of patients remain treated with older therapies not on B-cell therapies; this is a clear opportunity for expansion over time. We also continue to progress our next-generation evidence and continue lifecycle management for Kesimpta. Our ongoing phase three with a once-every-two-month dose of Kesimpta for maintenance dosing is on track for a 2027 readout. So moving to Slide 9.
Pluvicto grew 43%, and this is driven primarily by our PSMA-4 population and the pre-taxane mCRPC. We also see now acceleration outside of the US. In the US, pre-taxane is now driving over 70% of new patients. We continue to focus on use after the first ARPI. This is our largest segment, and we believe we now have the opportunity to drive further growth, given that the NCCN guidelines have been updated to remove routine use of a second ARPI in this setting.
We continue to expand our sites — over 880 sites now providing Pluvicto — and a lot of our focus now is getting additional depth in those sites, especially as we prepare now for the HSPC launch. Outside of the US, strong growth — 83% growth in new patients — with accelerating adoption in Europe and launch momentum in Japan and China. The number of sites now that are providing RLT outside of the US is over 650. This sets us up well as well for our future RLT pipeline, where we're excited to continue to progress beyond Pluvicto and Lutathera, hopefully into additional cancer types in the coming years.
The next wave of growth for Pluvicto will be the expected approval in quarter three in HSPC. This will increase the eligible patient pool by 75%, giving us a strong foundation for further growth. Two-thirds of the patients in the PSMA Addition population are with healthcare providers that currently use Pluvicto today, or with established referral patterns. We think we have a strong base for rapid adoption. And then we continue to progress the pipeline.
We presented promising results for our actinium-PSMA in mCRPC. This medicine is now being studied in the post-Pluvicto setting, in the post-chemo setting, and then as well in the first-line mCRPC setting in combination with ARPI. So an opportunity here to lifecycle manage Pluvicto for the longer term. Moving to Slide 10. Leqvio had a strong quarter, growing 59%, driven by strong demand we saw across the globe. In the US we were up 55% in quarter two; we outpaced the advanced lipid-lowering market. This was driven by monthly TRx growth of 49%, demonstrating Leqvio's differentiated profile and strong persistency. The demand is being driven with increasing depth in the priority health systems that we're targeting. The most important segment for us remains the Medicare Part B segment, where we see 23.3% share — that's up 3.6% year to date — and we see an opportunity for continued expansion. I think even with orals launching, our opportunity remains for driving strong growth in the segment that wants infrequently administered, physician-administered medicines for lipid lowering in the United States. And we see this as an attractive and growing segment that supports our peak sales potential in the US and beyond. Outside of the US, NRDL inclusion is unlocking significant demand. You saw that in quarter one and it continues in quarter two. Our market share has doubled now versus the pre-NRDL share we were previously seeing. We also see sustained growth in Europe and Japan. So, overall, pleased with our performance. We keep generating additional data for Leqvio.
Three real-world studies demonstrated that inclisiran (Leqvio) improves adherence and persistence compared to other advanced lipid-lowering therapies. And then we also have the V-challenge head-to-head study of inclisiran versus bempedoic acid to prevent NEs?cron. And lastly, we're on track as well for our two outcome studies to read out in 2027 for Leqvio. Then moving to Slide 11. Scemblix had a very strong quarter — 89% constant currency growth driven by both US and ex-US performance.
In the US we had 93% growth in the quarter. This is driven by sustained leadership across all lines, but importantly we now expect to reach first-line NBRx leadership share in the second half of the year. You can see steady improvements in that first-line NBRx share. Outside of the US, we're primarily still driven by the third line and beyond performance, with 75% NBRx share across our key markets. But importantly for future growth, we're seeing early-line adoption now starting to pick up.
We are now approved in 65 countries outside of the US. In Japan, we've already reached first-line NBRx leadership. As you can see in the lower chart, in Germany our early first-line NBRx share is already up to 15%. So we're very excited for the trajectory of Scemblix and to continue to be a growth driver long into the future. Now with Cosentyx, we had a solid quarter — 10% constant currency growth — in part driven by some one-timers but still strong underlying growth.
In the US we were up 16%. You can see that in HS we were steady in our NBRx share in the high 40s, and we expect that to continue. We see steady demand growth in HS and IV. Underlying growth in the US is around the mid-single digits, as we've guided to in the past, and outside of the US continued solid growth in Europe. We do see additional challenges in China with more competition, but we're able to manage that to maintain the overall global performance of the brand.
And then we're excited by the phase 3 Replenish PMR (polymyalgia rheumatica) data, which we recently published and presented at EULAR. It showed very strong data with sustained remission at 52 weeks that was twice as high in patients treated with Cosentyx versus placebo. So we're anticipating FDA approval for that indication in the second half and remain on track for the $8 billion peak sales guidance that we previously provided. Now moving to Slide 13.
Remibrutinib continues its strong launch trajectory with phase 3 CIndU data now available to support our broader potential in urticaria. Starting with the CSU launch, we see continued solid US uptake — over 4,000 prescribers, over 10,000 patients treated. 60% of those patients are treated in the first-line setting. We see steady expansion in our patient access. We have two of the three major PBMs now covering remibrutinib with PA at label, and in the second half we expect steady expansion in that access with an effective bridge and sample program in place.
We don't expect an inflection per se; we think this will be steady expansion. We want to ensure that we're disciplined in how we approach getting reimbursement, given the multiple indications we hope to secure for remibrutinib over time. Outside of the US, we see good traction in China. Launches are ongoing across Europe and the Middle East, and we'll see further expansion in the second half post the EMA, Japan, and Swiss approvals. Now, importantly, in chronic inducible urticaria we presented our Remind data supporting remibrutinib's potential as the first targeted therapy for chronic inducible urticaria.
We had early and broad efficacy with onset as early as week two in the two additional largest subtypes. Consistent 12-week responses versus placebo. So we're on track for the FDA approval in SD, which is the most common CIndU subtype — two-thirds of CIndU patients — and then we'll have global filings across all three subtypes later this year. Just as a reminder, we estimate in the US there's about 100,000 CIndU patients that are uncontrolled with antihistamines with no other treatment options.
So this is a significant expansion in the population that can be helped by remibrutinib. Now turning to Slide 14. We also presented some updated data on ianalumab, showing the favorable SDAI benefits of the medicine in longer-term follow-up, and we remain on track for a US launch in Sjögren's disease in the second half. So you can see on the left-hand side of this chart in our pooled NEPTUNUS data, you can see the consistent benefits in SDAI, statistically significant versus the placebo arm across both studies when pooled, demonstrating the benefits we see with the medicine.
And then as well, we presented 108-week long-term extension data, which showed that we can maintain the benefits of ianalumab over time, and it also was supported by clinically meaningful improvements for the placebo crossover group when crossing over onto the active arm. Also, throughout all of these long-term follow-ups, we see a favorable safety profile, no increase in adverse events. So this supports ianalumab's multi-blockbuster potential. We're on track for the ITP first-line readout in the second half of 2026, the SLE and lupus nephritis phase 3 readouts in 2027, and the systemic sclerosis phase 2 readout as well in 2027.
So turning to Slide 15. I wanted to provide an update on two of the acquired programs from Avidity. First, with Del Zoda, we achieved our first FDA submission for the therapeutic use of an antibody-oligo conjugate. That FDA submission is for accelerated approval in the DMD exon 44 skipping, using dystrophin as a surrogate biomarker. We previously received FDA Breakthrough Therapy designation for this. The submission package is based on the outstanding data that we had in the Explorer 44 study as well as long-term follow-up, and we expect the first launch here in 1H27.
With the ongoing Phase Reach studies ongoing, we have multiple follow-on programs now targeting additional exons that we'll be bringing forward as well. So we're quite excited to leverage this technology to take on DMD across multiple subtypes. And then with respect to the Delbrax data, we read out in the quarter as well that the phase 1/2 study at the target dose that we are taking into phase 3 studies met its primary and key secondary biomarker endpoints.
So as a reminder, this is a study that looked at KHDC1L and creatine kinase reductions in the plasma. KHDC1L is a protein that's downstream and believed to be regulated by DUX4, DUX4 being the gene that's impacted in FSHD. And so having these plasma biomarkers indicates that we have strong target engagement and muscle damage reduction, as indicated by the statistically significant creatine kinase reductions that we saw. Our base case remains a submission in 2028, but based on the data that we've seen in the biomarkers and ongoing work we're currently conducting to hopefully correlate the biomarkers to DUX4 as well as clinical improvements in these patients, we plan to engage FDA and other regulatory authorities in the coming months, and then we'll ultimately provide an update if those regulatory authorities support our ability to file this medicine based on data. And moving to Slide 16, we're on track for a busy second half. We already had four readouts in the first half. In the second half we expect pelacarsen, remibrutinib, and daldisaran readouts in the coming months, and then before the end of the year, readouts for ianalumab, remibrutinib in HS, as well as additional readouts for phase 2 programs QCZ4A4, as well as VHB937 in ALS.
So, exciting second half coming up. Solid first half of the year and looking forward to continued progress in the months ahead. So with that I'll hand it over to Mukul.
Bakul, Chief Financial Officer
Thank you very much, Vas, and good morning. Good afternoon everyone on the call. I will now share more details on the financials for the second quarter. And as a reminder, my comments, as always, refer to growth rates in constant currencies unless otherwise noted. Turning to slide 18: in the second quarter, net sales grew 1% to $14.4 billion while core operating income was flat at $5.9 billion. This is as our sales growth drivers and continued productivity offset the impact of the significant generic erosion that we saw in the first half of this year.
The strong performance of Priority Brands supported a return to net sales growth in quarter two, faster than we initially expected. The second quarter core operating income margin was at 41.2% of net sales. This was a decline of 70 basis points versus previous year mainly due to the incremental avidity cost, with a lower gross margin being offset by productivity gains. It's worth noting that Q2 is generally a stronger margin quarter when we look at the phasing across the whole year.
Free cash flow for the second quarter was at $5.6 billion, which is in line with expectations. Worth to note that Q2 results were also positively impacted by some one-time phasing items which will reverse in the second half. Together, these items positively impacted net sales by approximately 1 percentage point and core operating income by about 5 percentage points. And then for the first half of the year, net sales declined 2%, core operating income declined 7%, and the core operating margin declined 2.3 percentage points to 39.4%.
Free cash flow for the first half of the year stood at $8.9 billion. Turning to slide 19, we remain committed to our shareholder-friendly capital allocation strategy that has served us well as a company, balancing disciplined growth investments in the business with meaningful capital distribution. In Q2, we continue to execute multiple bolt-on M&A and BD transactions, including the completion of the Piccavision and Xcelogy acquisitions. At the same time, we continue to invest in our internal R&D pipeline.
Our capital distribution during the first half of this year: we paid out $9.1 billion in dividends and repurchased $2.1 billion of shares under the current up to $10 billion share buyback program. There is still $5.6 billion to be executed in this program, and we target to complete the program by end of 2027 as previously indicated. Slide 20, please: with this we are reaffirming our full year 2026 guidance. We continue to expect net sales to grow low single digit and core operating income to decline low single digit for the full year 2026.
We also continue to expect core net financial result to be around $1.7 billion and core tax rate to be around 16.5%, both in line with our guidance from the beginning of the year. Moving to slide 21: as I shared previously, H1 net sales declined 2% with a strong momentum of growth drivers delivering performance at the upper end of sales guidance from the start of the year. Turning to H2, we continue to expect net sales to grow mid single digit as we move beyond the impact of US generic erosion.
However, it's worth pointing out that there will be a notable difference in the sales growth rates between the two quarters, Q3 and Q4. This is because we still have about $800 million of US interest in the sales in previous year quarter 3 base. We expect H2 core operating income to grow mid to high single digit with continued investment in our growth drivers as well as our R&D pipeline. Slide 22: finally, if exchange rates remain at mid-July levels, we expect a positive 1 percentage point impact on full year net sales and a positive 1 percentage point impact on core operating income.
As a reminder, we publish updated FX estimates monthly on our website. That concludes my remarks and I will hand it back to Vas.
Vas Narasimhan, Chief Executive Officer
Terrific. Thanks, Bakul. So in closing, we delivered our first half performance at the upper end of guidance. With Q2 returning to sales growth, we remain on track to deliver our full year guidance. We're progressing our indications for Rupsedo Unalumab, both potential multi-blockbuster assets, and we're focused on our second half pivotal readouts that remain on track that would allow us to raise our mid- to long-term growth outlook. And with that, we'll open it up to questions.
Sharon, Operator
Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. Please limit yourself to one question and return to the queue for any follow-ups. To withdraw your question, please press star 1 and 1 again. We will now take the first question, and your first question today comes from the line of Peter Fadolt from BNP Paribas. Please go ahead.
Peter Fadolt, Analyst at BNP Paribas
Thanks, Pete. BNP Paribas. I realize there's not much incremental you can say re: up following phase three readouts, and I heard your comments on Delbr XVAs. So with that in mind, can we focus on the accelerated approval potential for branaplam in Huntington's? I know phase three planning is underway, but do you have any visibility or ballpark timelines you can give us for when FDA might make a decision and whether you can file early on the phase 2 data generated thus far?
Thank you.
Vas Narasimhan, Chief Executive Officer
Yeah, thanks, Peter. So we're in the process of engaging with the FDA on that phase II data. I think at this point our base case remains that we would need to do the phase three study as designed. So no change on that expectation. I don't have a specific timeline. I would expect it to happen in the second half to provide more clarity. And I would also note that we continue to follow these phase 2 patients for a longer duration as well, which could provide us additional data.
You know, we do note the FDA's recent decisions or recent guidances from some of the other therapies that are available for—or could be available for—Huntington's disease, which certainly I think show the FDA's openness if the data ultimately is compelling. So we certainly want to have that engagement. But I wouldn't change our base case at this point that a phase three study would be required.
Peter Fadolt, Analyst at BNP Paribas
Thank you.
Sharon, Operator
Thank you. Our next question comes from the line of Sachin Jain from Bank of America. Please go ahead.
Sachin Jain, Analyst at Bank of America
Hi there. Thanks for my question. So I am going to ask a question on the upcoming pipeline, and given there's a lot of focus it's a kind of catch-all question. So given the change from your communication in and out of mAb Sjogren's on clinically meaningful, just wondering whether you've decided internally how you define clinically meaningful for the three reads investors most focus on—so pelacarsen, remibrutinib in MS, and DM1. Maybe I just give you a catch.
Is it fair to think that any stats benefit is clinically meaningful in your eyes for different reasons for each asset, and any changes in level of confidence on each? Thanks a lot.
Vas Narasimhan, Chief Executive Officer
Yeah, thanks, Sachin. So no change from previous comments. We don't have anything else that I can provide on any of the three. I think in terms of how we will read them out, I think we always focus on the primary endpoint and statistical significance and reaching the goal on the primary endpoint in the study. I think certainly that will guide how we communicate and then, as appropriate, additional secondary endpoints as well if appropriate to comment on them.
I mean, I think for pelifarsan, as we've guided in the past, we powered the study for the kind of 13 to 15% CVRR benefit and certainly are hopeful to see that level or higher, and if we can see higher, obviously we'd prefer that. But I think that's how we think about it. In MS, we'll certainly be looking at not only the ARR reduction but also the impact on disability, and clearly in DM1, in addition to VHAT, also want to see some of the secondary endpoints and how they perform as well.
But I think that the reality is we have to be thoughtful because we want to be able to preserve the ability to present this data at high-profile congresses in the future. So we'll navigate that best we can, making sure investors have clarity on what we believe the path forward is but still preserving that ability to present the data as well.
Sachin Jain, Analyst at Bank of America
Can I just say one follow-on, Vas? You've commented on the powering of pella. I don't think you've ever given us any color on how remi MS or DM1 are powered.
Vas Narasimhan, Chief Executive Officer
Yeah, I don't think we have for either of those. I think for MS, you all know well how studies that are head to head against Aubagio have been powered in the past, so I think you have that as background. So I don't think there's more that I could provide there. And I think on DM1, primary endpoint is VHOD, and then we have the various secondary endpoints that we've been discussing with the agency. But I don't think we could provide any further clarity on that one at the moment.
Sachin Jain, Analyst at Bank of America
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Florence Hesperis from ODDO BHF. Please go ahead.
Florent Cespedes, Analyst at ODDO BHF
Good afternoon, thank you very much for taking my question. A quick one for Bakul. Maybe could you give us a little bit more color about the one-off events which impacted the Q2 top line and operating profit margin? Some color on that point would be great. Thank you.
Bakul, Chief Financial Officer
Yeah, thank you very much, Florent, for the question. So the one-time phasing that I mentioned—so we have a 1 percentage point impact on top line—this is primarily inventory-related changes that we saw across the whole world. This would simply move from Q2 to Q3 from an inventory perspective. And then on the cost side, on the R&D phasing side, we have a couple of clinical trial-related costs that essentially were planned for Q2 and now will move to Q3.
If we put both of them together, then on the top line it's an impact of 1%. And on the bottom line, the cumulated impact of the top line over-delivery, added or compounded by the cost phasing, leads to a 5% impact on the core operating income.
Florent Cespedes, Analyst at ODDO BHF
Thank you very much. Very clear. Thanks, Bakul.
Sharon, Operator
Thank you. Your next question comes from the line of Colin White from UBS, please go ahead.
Colin White, Analyst at UBS
Hi, Colin White from UBS here. Thanks for my question. Just to go back to remibrutinib and MS, please could you recap specifically what gives you confidence that remibrutinib can improve upon the annualized relapse rate of about 0.1 Aubagio has achieved in recent RMS studies?
Vas Narasimhan, Chief Executive Officer
Well, I mean, I think for us, as you know, we don't have phase two data, so we're basing this on other BTK inhibitors' performance in similar studies. You know, we continue to monitor blinded rates for safety and relapse rates, and I think taken together that gives us confidence that the study is performing as expected—in terms of the differences between the active and the control arm—but not more we can say at this point until we ultimately read out the trial.
I think for us, clearly with remibrutinib, in addition to looking at annualized relapse rate and MRI performance, how it performs in disability progression will be important to understand. Is REMI something that would be used in a setting post the B cell antibodies, or could it be used in a setting in line or ahead of the B cell antibodies? And this will all be data driven, and obviously once we see that data, we'll be able to provide better guidance on that use.
But that's probably about as much as we can provide at this point.
Colin White, Analyst at UBS
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Richard Vosser from J.P. Morgan. Please go ahead.
Richard Vosser, Analyst at J.P. Morgan
Hi, thanks for taking my question. Just another question on pelacarsen. We've seen some other cardiovascular trials recently suffer from high levels of drop-ins of existing therapies, so wondering how you've controlled for that in the HORIZON trial. Just thinking about it in relation to, I suppose, PCSK9s, but also for GLP-1s and SGLT2s given the 25% of patients that are diabetics. So how should we think about that level of use and potentially the impact on any benefits of pelacarsen?
Thanks very much.
Shreeram Aradhye, President, Development and Chief Medical Officer
Yeah, thanks, Richard. I mean, it is important to note we study pelacarsen on top of optimized background lipid-lowering therapy. Our current estimate is that the number of patients who were on incretin-based therapies in the study is less than 10%. I mean, we estimate it to be around 6%. So we don't believe that if there was any effect from those medicines in the setting that we wouldn't expect that to impact the results here. So when we look at it overall, it's more or less as we planned in terms of background therapy.
And so we don't think that will be a major swing factor, at least based on what we can see so far.
Richard Vosser, Analyst at J.P. Morgan
Thank you.
Sharon, Operator
Okay, go ahead, Richard.
Richard Vosser, Analyst at J.P. Morgan
No, it was just on PCSK9s. Just one quick follow-up. Was that controlled as well? I know it was 11% at the start, but does that creep up during the trial? Anything you can say?
Shreeram Aradhye, President, Development and Chief Medical Officer
I think with respect to PCSK9, I believe they've also been in line with what we saw earlier in the study, but we could follow up with the details. I know the GLP-1 data for sure, but I don't recall that the PCSK9s are a source of concern either.
Richard Vosser, Analyst at J.P. Morgan
Brilliant. Thank you very much, Faith.
Sharon, Operator
Thank you. Our next question comes from the line of Michael Leuten from Jefferies. Please go ahead.
Michael Leuten, Analyst at Jefferies
Thank you. Question from Okul, please. The guidance for mid to high single-digit CER EBIT growth in the second half seems to imply more cost control, especially taking into consideration the Avidity R&D phasing that you just mentioned. Can you talk about the P&L dynamics? Like where are you containing costs? And is that something that we need to take into consideration as we think about '27, or is that sort of tucking in expenses that will not recur?
Thank you.
Bakul, Chief Financial Officer
Yeah, thanks, Michael, for the question. I think from a P&L dynamics perspective, two things I'd say is H1 to H2 we always have, from a profitability perspective— from a spend perspective, H2 being the higher-spend half. For example, Q2, our profitability finished with 41.2% operating margin. And we know that Q2 is typically the most profitable quarter, so to say. So that part of the dynamic will remain going into this year as well. In terms of where we are working from a productivity perspective, things have been pretty consistent from the beginning of the year.
Beginning of the year we said we'll continue our productivity measures when it comes to our manufacturing operations. Operations has done very well. Gross margin would be pressured as the portfolio shifts, but productivity should help us keep gross margins more or less to where second half last year was on gross margin. On R&D, we will continue to invest what the pipeline needs. And this would mean incremental investments this year on the back of Avidity, but also a couple of other assets that we took on, including Tourmaline, Regulus, and Anthos last year.
And then SG&A as a percentage of sales is a place where we believe we as a company can do more productive efforts, specifically focused on third-party spend, which is upwards of $10 billion for the company. And that is what we continue to do. As we look at Q2, we actually see while quarter-on-quarter gross margin has been a negative, SG&A as a percentage of sales has actually been a positive, negating that gross margin impact. And that, I would think, from a prognosis perspective, is something that we will continue towards the second half of the year.
Michael Leuten, Analyst at Jefferies
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of James Quigley from Goldman Sachs. Please go ahead.
James Quigley, Analyst at Goldman Sachs
Great, thank you. To my questions, I've got one on deals and M&A. You're quoted on Bloomberg as you'd consider larger deals again. So this is a bit of a transition into the commentary over the years. A few years back it was no big deals. Then it was focused on bolt-ons. Then we had Avidity, which is later stage and a bit larger. So what's changed either internally at Novartis or externally that's driven openness to larger deals? And what could a bigger deal look like in terms of strategic fit given your therapeutic areas and technology set?
Thank you.
Vas Narasimhan, Chief Executive Officer
Yeah, thanks, James. I don't know what exactly Bloomberg wrote, but I can say there's no change in our M&A strategy. We've been disciplined and consistent that we focus on steady deals in the kind of sub-$2 billion range, with the upfronts in that range, often lower, and then selectively do larger deals in the range of things like Avidity when there is a compelling asset that fits with either our platform strategy or our TA strategy, or both, and Avidity fit both.
So no change at all in our M&A strategy. We don't need to do anything larger than that. We have full confidence in our internal portfolio and pipeline and R&D engine. And yet we know we need to constantly supplement that engine with additional external innovations. So you can expect just a continuation of what you've seen over the recent years.
James Quigley, Analyst at Goldman Sachs
Great. Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Simon Baker from Rothschild and Co. Please go ahead.
Simon Baker, Analyst at Rothschild & Co.
Thank you for taking my question, one on the pipeline if I may, please. I wonder if you could just update us on your thoughts on the confidence and potential for abolazumab. And also, I see that it's still showing as 2027 readout milestone in the slide deck. ClinicalTrials is now showing a late December '20 primary completion. So is that still a '27 readout event, or is there potential for slippage into 2028? Thanks so much.
Shreeram Aradhye, President, Development and Chief Medical Officer
Yeah, thanks, Simon. So we remain excited about avalosumab. As a reminder, this is a monthly monoclonal antibody that has shown outstanding, I think, overall pharmacokinetic/pharmacodynamics— very well-behaved antibody on factor 11. We've seen with competitor data that factor 11 appears to deliver on the promise of very strong anticoagulation without increased bleeding risk, which is what the genetics would indicate for us. And so we have the study ongoing in patients who are ineligible for NOACs.
And that study—we have upsized that study given the event rates that we saw. So you can also see that at ClinicalTrials.gov, but we're on track for a readout before the end of the year. That is a readout at 75% of events, just to be clear. And then the study would continue if it's not successful at that point, or that doesn't meet the stopping criteria at that point, to finish the number of events in 2028. And then we evaluate now, or are in the process of beginning additional studies in secondary stroke prevention as well as assessing other indications as well.
So excited about that opportunity. Think it could be a significant asset if the trials ultimately read out positive.
Simon Baker, Analyst at Rothschild & Co.
Great, thanks so much.
Sharon, Operator
Thank you. Your next question comes from the line of Thibaut Bothering from Morgan Stanley. Please go ahead.
Thibaut, Analyst at Morgan Stanley
Thank you. Just a question on Idvisma. Now that you have launched the drug and we start to see the sales coming in, do you have any more visibility on what you expect to be the shape of the bolus of sales from this therapy over the next few years? If you have any indication on when you expect the sales to peak, is it next year, is it '28? And then on the magnitude, I think in the past Novartis was talking about multibillion dollar for this asset.
So just if you could comment on your confidence on the pixels here.
Vas Narasimhan, Chief Executive Officer
Yeah, thanks, Thibaut. So no change. I'd say, as you know, we just got the European Commission approval. I think in general with gene therapy, as we learned with Zolgensma, it does take some time to get the reimbursement. But once we get the reimbursement, we see a relatively rapid ramp on the product. So I would say over the three-year period is where we would expect to see the ramp on Idvisma as we get additional countries online. It's also worth noting, as with Zolgensma, we expect ex-US to be larger than the US— the same dynamics, we saw that with Zolgensma.
So all on track. But it is important to note this first year will be mostly focused on securing reimbursement. And, you know, from a peak sales potential, also no change. With Zolgensma we expect the continued steady state in this blockbuster, billion-dollar-plus territory, and we expect the Idvsma to have a kind of $2 billion range so that the overall package of these two medicines have a $3 billion potential.
Thibaut, Analyst at Morgan Stanley
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Steve Scala from TD Cowan. Please go ahead.
Steve Scala, Analyst at TD Cowen
Oh, thank you so much. Vas, you called out Kesimpta in non-US markets as a growth opportunity, but Kesimpta had leadership in 9 of 10 markets in Q4 and Q1 and 8 of 10 markets in Q2, and one difference appears to have been China. So I'm curious what happened with Kesimpta in China in Q2. Thank you.
Vas Narasimhan, Chief Executive Officer
Yes, Steve. So no change in China that we're aware of. We did drop off in Italy, actually, from 9 out of 10 to 8 out of 10. I'd say in general, Kesimpta does very well in Asia. It's a market leader in Japan. But it is worth noting that multiple sclerosis levels in Asia are significantly lower than what we see in other parts of the world. So the overall sales potential is lower. But I would say overall, we continue to see significant opportunity outside of the US just simply because the market has not— these B cell therapies have just not adequately penetrated the market outside of the US.
So for all B cell therapies, there's just an opportunity to get more patients on the best possible medicine. And I don't have the details on the Italy shift, but I imagine it's just market share dynamics in a country that we have, of course, other competitors.
Steve Scala, Analyst at TD Cowen
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Seamus Fernandez from Guggenheim Securities. Please go ahead.
Seamus Fernandez, Analyst at Guggenheim Securities
Thanks for the question. So I guess the question on our side is, just given the substantial valuation increases that we've seen across biotech in the last year, how should we be thinking about the business development opportunities as you see going forward? You talked about the BD focus really being no change, but certainly one change in that mix has been valuation. So just trying to get a better sense of how you're thinking about that and the kind of risk that Novartis needs to take going forward.
And then just, you know, a quick question that I wanted to ask on the pelacarsen side of things. You know, it's a composite endpoint, and, you know, my recollection was we saw, you know, a muted benefit— or maybe not muted, but a teens benefit— with SGLT2s, but an outsized benefit in the heart failure population on cardiovascular death. How might that kind of an outcome play out? Or do you see that as a potential outcome for pelacarsen as the data reads out in the second half of this year?
Vas Narasimhan, Chief Executive Officer
Thanks, Seamus. I think on valuation, I mean, look, when I reflect over nine years, I would say that the price of assets that don't have minimal clinical data has gone up quite dramatically. You see now ourselves and our peers doing upfronts that are over a billion dollars for assets that have limited or no clinical data, which is, I think if you look at the long arc of the sector, a significant shift which I think just means you have to have higher levels of conviction in the science and something that you believe is unique and differentiated.
In our case, the three deals we did this year, you know, with picovation, we believe that there is an opportunity to address more of the mutant to a pan-mutant kind of approach in PI3 kinase-driven breast cancer; with accelargy, to tackle with a hopefully much higher efficacy than historical IgE therapies given the ability to target IgE in a fundamentally different way; in the case of Mirrix, a novel payload that hopefully has the NMTI payload that has a cleaner profile than the topoisomer payloads.
But I think you have to have some sort of differentiated conviction just given that the price levels are climbing. That said, you have to be able to access external innovation to grow companies of our size. So we have to just keep looking for that right balance of breakthrough science and then finding the right balance from a valuation standpoint. Your point on pelacarsen is well taken. I mean there is an element here of the MACE endpoint versus CV death.
Lp(a) is associated with high rates of sudden cardiac death, particularly in younger patients. Very difficult of course for us to say without having locked the database and seen the data to know exactly, but there is at least the potential for CV death to be an important component, at least theoretically given the profile of Lp(a). It's something we'll have to look carefully at and how that drives versus other elements of the endpoint. Next.
Sharon, Operator
Next question. Thank you. Your next question comes from the line of Kerry Holford from Berenberg. Please go ahead.
Kerry Holford, Analyst at Berenberg
Thank you very much. Question for me on Kisqali, just on the IP, the extension that you've been granted related to pediatric exclusivity. Can you confirm now that that compound market expiry is May 2032 and, in the context of your earlier settlements with generic players, is that when we should now be assuming generic market entry?
Bakul, Chief Financial Officer
Yes, thanks for the question. So our guidance is second half 2031. So Q3 2031 guidance for LOE for Kisqali with the pediatric exclusivity and that's inclusive of the settlements that we have with generic manufacturers.
Kerry Holford, Analyst at Berenberg
Thank you.
Vas Narasimhan, Chief Executive Officer
And just a quick note as well. We double checked in China for Kesimpta. We have 70% market share and are market leader as well.
Sharon, Operator
Next question. Thank you. Thank you. Your next question comes from the line of Emmanuel Papadakis from Deutsche Bank. Please go ahead.
Emmanuel Papadakis, Analyst at Deutsche Bank
Thank you for taking the question. Maybe I'll take one on ianalumab and Sjogren's. Given we must be relatively late in the regulatory review process, could you perhaps just give us an update on how that's proceeding? Is everything on track? I know you expect a panel. And then on commercial readiness, some sense of expectations for magnitude of initial access, breadth and willingness to prescribe, etc. Could you just give us a sense in those parameters?
Should we be looking at something like classic immunology launch, like Syntyx, or are there other analogues we should perhaps bear in mind? Thank you.
Vas Narasimhan, Chief Executive Officer
Thanks, Emmanuel. So again, as far as we know, no advisory committee planned for ianalumab. We've had the mid-cycle review meetings and so we're continuing to provide FDA all the information they're requesting. So all on track from that point for a Q3 approval. I think from a market uptake standpoint, our current expectation is given that there's no approved therapy in Sjogren's, we should get relatively broad access, with all the caveats that this does take time to get the environment opened up.
And then we think that physicians, given that the drug has a clean safety profile, will err on the side of trialing the drug in patients and ultimately seeing how patients respond. I mean this is a very heterogeneous patient population. Even the SDI endpoint is covering a broad range of domains. And we do see in our own data sets there are patients who are super responders and patients who respond less well. And so we're I think going to see in the marketplace, you know, for patients who respond, they'll stay on medicine and other patients will cycle off.
But I think the key thing here is we have a clean safety profile which lowers the, I think, bar for physicians to at least give patients the option given the nature of disease. These are often young female patients in working age who obviously want better control of their symptoms and their disease. So we're optimistic on that front as well. We continue to guide that standalone in Sjogren's we should reach a multi-billion-dollar potential. And then, as I mentioned in my opening comments, ianalumab has a number of other indications that we're also pursuing both in hematology and in immunology.
Sharon, Operator
Thank you. Thank you. Your next question comes from the line of Graham Parry from Citigroup. Please go ahead.
Graham Parry, Analyst at Citigroup
Great, thanks for taking my questions. So on telecast and a quick follow up actually to receive, clarify the 13 to 15% is what the trial is minimally powered to detect. I think you said it was just what it was powered for. But I think the design paper says it's 20% on all comers. And would you view that 13 to 15% as a clinically meaningful result? So that was a follow up. And then on Remi MS, could you just comment on your confidence in achieving disability progression?
Perhaps talk to the brain penetration of the molecule and action at the microglia compared to remibrutinib, which actually didn't show that with statistical significance in its phase three. Thank you.
Shreeram Aradhye, President, Development and Chief Medical Officer
Yeah, thanks, Rob. So you are correct. 13 to 15 would mean a win. It's powered for 20% for the patients who are 70 milligrams in DL and above or 25% for the 90 milligram DL and above. And so I think we would say in the mid-teens it's clinically meaningful given that these patients have no other option and that this is an independent risk factor. And so yeah, we'll ultimately see what the data shows. And then with respect to REMI and MS, I think we have everything that indicates to us that the trial is being conducted and the data that we're seeing, that from an ARR standpoint we're on track versus what we would have expected in the data set.
As you know, with disability progression we have no way to know and I think it's very difficult for me to handicap that. We saw the data with fenebrutinib. We do believe that our molecule is more potent on the target and more selective. And so we're hopeful that that leads to the improvements in disability progression that would bring us in line with the antibody-based B-cell therapies. But there's no way for us to assess that in any sort of objective way at this point until the study reads out.
Graham Parry, Analyst at Citigroup
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Rajesh Kumar from HSBC. Please go ahead.
Rajesh Kumar, Analyst at HSBC
One question for Mukul. Thanks for clarifying, you know, what sort of copy cut is flowing forward. Just if we are thinking through the P&L on margins, the gross margin level we have now, you know, sort of captured most of the interest or negative impact. Should we sort of expect this to be the level from which you can build based on when you get growth from, you know, younger products in the portfolio while you get the profit growth through SG&A management and R&D phasing, obviously growth in the second half.
So just in terms of gross margin trough point, should we be thinking about now or later in the year?
Bakul, Chief Financial Officer
Thanks for the question, Rajesh. So I think gross margin, we already said we had this discussion beginning of the year and I think the point on the gross margin where we are now is a good point to take for modeling for the future. And what we already said is end of last year, Q3, Q4 of last year, if you take an average of that, that should be the gross margin point that we take. But worth saying is that gross margin would never be flat. It depends on the product mix that we have from a quarter-on-quarter perspective.
And as we move the portfolio forward there are pushes and pulls that we have in our portfolio. We've got a great drug if it comes to life like remibrutinib, small molecule, we don't have any royalties versus some of our other portfolio where the gross margins would be more stretched. But I think from a modeling perspective I would take the year-to-date gross margin as a good indicator of what to expect for year to go.
Rajesh Kumar, Analyst at HSBC
Thank you very much.
Sharon, Operator
Thank you. As a reminder, if you wish to ask a question, please press star one and one on your telephone and wait for your name to be announced. Please limit yourself to one question and return to the queue for any follow ups. We will now go to the next question. And the next question comes from the line of Florent Cespedes from ODDO BHF. Please go ahead.
Florent Cespedes, Analyst at ODDO BHF
Good afternoon. Thank you very much for taking my follow-up question. A question on the cardio business. Assuming positive results on pelacarsen later this year and positive Leqvio outcome trials next year, will you have to use either or will you use an existing sales force? That'd be the one on Leqvio, some color. Also on the budget going forward, will you have to invest massively in marketing to promote the new exciting clinical results? Thank you.
Vas Narasimhan, Chief Executive Officer
Yeah, thanks Laurent. I think at the moment we would expect that for pelacarsen that we would be able to leverage the existing global Leqvio field force that we have, of course with usual adjustments that we might need to make, and I think overall any investments that would be required for the pelacarsen launch, particularly around disease awareness to get additional patients tested for Lp(a) levels, we would be able to—it's all factored into the guidance that we've given on margin progression.
I think as we've noted in the past it will take time to drive up these biomarker testing rates. But we're hopeful that with a drug that has an attractive efficacy that will motivate physicians to test and ultimately patients to get on therapy. I think for elsewhere in the cardiovascular portfolio, obviously with avalosumab as well as the Phase 3 program we'll be running with our anti–IL-6 recently acquired medicine as well. Those might require additional field force investments and we'll of course provide any guidance on that once we get those Phase 3 results and have a better read on those.
Obviously go to different physician segments both for anticoagulation and, in the case of the anti–IL-6 pacibetu, would be for physicians who are treating in the more acute coronary setting.
Florent Cespedes, Analyst at ODDO BHF
Good. Thank you very much, Raf.
Sharon, Operator
Thank you. Your next question comes from the line of Colin White from UBS. Please go ahead.
Colin White, Analyst at UBS
Hi, Colin White from UBS. Thanks for taking my question. Just on the stocking in the quarter, understand the 1% of sales beat was from stocking. Kesimpta explains some of this, but not all of it. So are you able to provide any color on what other drugs may have experienced stocking?
Bakul, Chief Financial Officer
Yeah, Colin, this was no particular brand I would call out on stocking. I think this was across the board. It was not just in one single geography but multiple geographies. And I would not attribute this to a specific drug, the stocking.
Vas Narasimhan, Chief Executive Officer
Yeah, and maybe just to provide a little bit of color as well. I mean, this was related to the implementation of our new SAP system where it's often the case when we roll that out in multiple geographies, we do have to shift stocking levels for the cutover to the new SAP system. So that's the driver and the reason why it's not associated with one brand per se.
Sharon, Operator
Thank you. Your next question comes from the line of Michael Leuten from Jefferies. Please go ahead.
Michael Leuten, Analyst at Jefferies
Thank you for the follow-up. Vas, interested in your Scemblix comment about the second half aiming for NBRx leadership in the US. Is that just natural progression of the dynamics that we're seeing, or is there a pivot point that would inflect that further?
Vas Narasimhan, Chief Executive Officer
Yeah. Thanks, Michael. I think yes, it's just the momentum we're seeing. I also think that now we've gotten a very strong access position for the brand. And so I think that stronger access position as it flows through... I mean, one of the things with CML is because it is a rare disease and there's a limited number of newly diagnosed patients in a given year, it just takes time. And so any of the smaller fluctuations that you see quarter on quarter is driven by very few patients.
But all indications we're seeing is that, given the very strong safety profile that physicians are seeing with the drug and obviously the known efficacy profile, there's just a lot of momentum now. So that gives us confidence that we'll get to that market leadership position in the US. And I'll flag again, I mentioned in my opening comments that we're really just at the beginning now of moving from third line to first line ex-US. And I think one of the things that's been a positive trend as well: there are multiple generic medicines available in that first-line setting.
There seems to be a strong demand from physicians, but also payers are accepting the fact that Scemblix has demonstrated that it is a superior medicine in that frontline setting, and more openness to give us the reimbursement we would expect for such a medicine.
Sharon, Operator
Thank you. Your next question comes from the line of James Quigley from Goldman Sachs. Please go ahead.
James Quigley, Analyst at Goldman Sachs
Hello. Thank you for taking a follow-up. So earlier this year, Lutathera generics were cleared to launch by the courts in Delaware, so a small impact overall on the sales perspective. But how should we think about potential launches for future generic RLTs? We don't have an experience here. Obviously when thinking about generic impacts for RLTs, and Novartis clearly has a number of competitive advantages. But how are you thinking the markets could react, or how could this play out if and when we see generic RLTs launching?
Thank you.
Vas Narasimhan, Chief Executive Officer
Yeah, thanks, James. So as far as we know, neither of the two companies has received an FDA approval. One is a 505(b)(2) and one is a generic. We continue to believe there needs to be a high threshold used by regulators to ensure that the same dose of radiation is being delivered to the tumor versus the originator brand that we have now. That being said, we do believe that given our extensive network of supply and our ability to deliver on time in full to physicians across the globe, but also across the United States, we've exhibited impact from a generic launch even with a lower price being brought into the market.
We think that RLT will behave very differently than either small molecule and potentially biosimilars just for biologics, just given the logistical complexity and as well the expectation that physicians have that the medicine is delivered on time each time given the nature of the logistics for the office. So, you know, we feel confident from that. That said, we continue to work to keep bringing better medicines not only with the case of PSMA in prostate cancer, but we also have follow-on efforts as well for GRPR and really try to improve the treatment for neuroendocrine tumors as well, follow-ons for Lutathera.
So stay tuned on that front as well.
James Quigley, Analyst at Goldman Sachs
Great, thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Urban Fritzer from ZKB. Please go ahead.
Urban Fritzer, Analyst at ZKB
Yes, thanks a lot for taking my question. A question on Leqvio in China. Maybe if you could share some details on how the momentum is developing and what would be needed to really have upside to your current guidance of, I guess it's 1 billion in China.
Vas Narasimhan, Chief Executive Officer
Yeah, thank you. Thank you, Erwin, for the question. So with Leqvio, we initially saw very strong uptake in launch in the private self-pay-based segment, which I think really indicates there's a high demand for the medicine in the secondary prevention, but importantly as well in the primary prevention setting as well from a self-pay standpoint. And then I think what we've seen is very strong performance. Now once we had the NRDL listing, we see that both in the hospital segment and in the traditional segments as well, very strong performance.
So I think seeing that continued steady growth should get us to it being our largest medicine potentially that we've ever delivered in China. Entresto gives us a very strong benchmark in China, but we think Leqvio has the potential as well. And I think really it depends now on the dynamics on the growth as we try to continue to expand into additional hospitals, into additional regions. I would say as well, we look now to also bring additional siRNAs into the China market rapidly.
We think there's an opportunity in cardiovascular hypertension and CV risk reduction for our follow-on siRNAs in China, where there seems to be a high demand for infrequently administered therapies with very clean safety profiles. And I think that gives us a bigger opportunity in China in the longer term for that cardiovascular siRNA portfolio.
Urban Fritzer, Analyst at ZKB
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Steve Scala from TD Cowen. Please go ahead.
Steve Scala, Analyst at TD Cowen
Oh, thank you for the follow-up. Were there any surprises in the label or the pricing of the oral PCSK9 inhibitor recently approved that alter Novartis' view of the commercial potential for Leqvio? And Vas is a very skilled and experienced drug developer. Any thoughts on how limiting the fast ultimately will be? Thank you.
Vas Narasimhan, Chief Executive Officer
Yeah, thanks, Steve. So I think no surprises other than the reference to the PCSK9 outcomes trials. So I think we're trying to understand that, you know, given that usually we don't get to refer to somebody else's outcome studies. And I think with respect to that, nothing that changes our view. I mean, look, our belief is that there's a significant segment of market. This is a huge market. The number of patients who are not at goal for lipid lowering to reach their lipid targets is significant.
In the dates we're talking about here, a 70 million patient segment overall, a significant portion of these patients who are not at goal. And so I think the opportunity for the PCSK9s, for these advanced lipid-lowering therapies, is significant. And we see that there's ongoing demand for patients who want infrequently administered therapies and physicians who want to provide the therapy as well in a physician-administered setting. So I think the fact that we are not participating in the gross-to-net battle that will ensue between the monoclonal antibodies and the orals, and actually are in a segment that's insulated from that, I think gives us a strong position in the longer run for our goals of a $4 billion to $5 billion plus product. Now, with respect to the food effect, I think it remains to be seen. I mean, I think clearly the 8-hour fast plus the 30, I think it's a 30 minute or so post-fast in this particular drug. But, you know, I think we'll have to see because obviously patients can find ways to manage that. And I would say there are other competitors coming that as far as we understand may not have the food effect.
So given that, I think we just have to focus on our segment and focus on the patients that we can reach in that Part B buy-and-bill setting in the US. I do want to pitch again: outside of the US, particularly in Asia, we see very strong uptake for siRNAs, and we think that in some, it's a very country-by-country situation as to, you know, what kind of profile people are looking for in the medicines. And at least in Asia and Middle East we see high demand for siRNAs.
That gives us a lot of confidence.
Steve Scala, Analyst at TD Cowen
Thank you.
Sharon, Operator
Thank you. Your next question comes from the line of Sachin Jain from Bank of America. Please go ahead.
Sachin Jain, Analyst at Bank of America
Hi. Thanks for the follow-up. I just had one on FSHD. In your introductory comments you referenced ongoing analysis looking at correlating CDOs to outcomes and that you would use that for the conversation with the regulator. So I guess two linked questions. One, will you comment about data when you have it? And B, what conversations have you had with the regulator around using that analysis to try and accelerate the biomarker-driven file. Thank you.
Shreeram Aradhye, President, Development and Chief Medical Officer
Yes. So we have the previous interactions that Avidity had with FDA on what would be required in this Phase 1b/Phase 2 study to enable filing. So we're very clear on what the FDA is looking for. I mean, if you think about it, the way the FDA thinks about this is: we know that DUX4 score is impacted in this disease. How is circulating khdl c correlating with DUX4? How is that relating to creatine kinase? And how is all of this relating ultimately to function, muscle function, as best as we can determine in the patient set that we have.
So we have that data. We're analyzing the biopsy data that we have as well from the patients and the trial, and then putting that all together to take it to the FDA. What I can say is the data that we've seen thus far gives us—we believe we have reason to have the discussion with the FDA and to make the case. We can't guarantee that we will win the case, but I think we have what we think is worthy of a case that should be made to the FDA for an accelerated filing.
And once we have that meeting, we'll provide further guidance.
Sachin Jain, Analyst at Bank of America
Very clear. Thank you.
Sharon, Operator
Thank you. We will now take our final question for today. And the final question comes from the line of Peter Fadolt from BNP Paribas, please go ahead.
Peter Fadolt, Analyst at BNP Paribas
Yeah, thanks for the follow-up. Quick one to end for Bakul. Just on Remibrutinib. The IQVIA trends look great and I heard your comments earlier about don't expect an inflection, but can you help us at all, giving us a ballpark split between what is bridge versus paid prescriptions right now? Just any ballpark numbers would be helpful. Thank you.
Vas Narasimhan, Chief Executive Officer
Bakul. Or is it asking me? I think... Well, I can take that, Peter, for directing it to Bakul. But on Remibrutinib, yeah, we're not providing any detailed guidance on the bridging program. What I would say is it's in line with what we've historically seen in terms of getting patients over to paid scripts. I think now for Remibrutinib, it's really just a story of step by step continuing to drive up the access environment. We see strong demand, very strong demand in the dermatology segment.
We're working on building stronger demand as well in the allergy segment. In general, once physicians start using the medicine and they get the feedback from the patients that they're seeing disease improvement within hours and certainly within a week, that gives a very compelling case to continued use. But we're trying to stay really disciplined on the gross-to-nets here. We just believe that if we play the long run out here, Remibrutinib has the potential to be used in a broad range of indications, as you all well know.
And any points we give now, we won't be able to get back in the future. And so we're just being very thoughtful. So I think the access will improve sequentially over the course of this year, but that will ultimately set us up, I think, for a strong 2027 and then a strong longer term outlook for Remibrutinib in the future. Thank you.
Sharon, Operator
Thank you. I will now hand the call back to you, Vas.
Shreeram Aradhye, President, Development and Chief Medical Officer
Absolutely. And I just wanted to come back to Richard Vosser's question. We can confirm that the PCSK9 use was just modestly increased versus the 11% from the baseline population, so not a significant factor we expect in the studies. But thanks for that question, Richard. So thanks, everyone, for joining today's conference call. We look forward to keeping you up to speed as we have the readouts over the coming months and, of course, catching up with you in various settings in the meantime.
And we look forward to a strong second half and wish you all a great summer break as well.
Sharon, Operator
Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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