Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $18.9 million, a 17% decrease from $22.7 million in Q1 2024, primarily due to the largest customer transitioning to another supplier [12] - Gross profit for Q1 2025 was $3 million, consistent with Q1 2024, while gross margin increased to 16% from 14% in the same period last year [13] - Net loss for Q1 2025 was $1.5 million, an improvement from a net loss of $1.7 million in Q1 2024 [13] - Cash and cash equivalents decreased to $17.3 million from $21.6 million at the end of 2024, attributed to timing of payments and seasonal expenses [14] Business Line Data and Key Metrics Changes - The addition of a single-use bicarbonate cartridge technology to the product portfolio represents a growth opportunity in the dialysis products market [9] - The company continues to diversify its customer base, signing new contracts with leading hemodialysis providers [5] Market Data and Key Metrics Changes - Approximately 90% of revenue comes from U.S. dialysis providers, with only 10% generated internationally, and only one country is affected by recent U.S. tariff actions [8] - The company is actively pursuing business development opportunities to strengthen its position in the renal market and expand internationally [10] Company Strategy and Development Direction - The company aims to maintain a long-term arrangement with its largest customer, albeit at a smaller scale than previously [20] - Rockwell Medical is focused on expanding its customer base both domestically and internationally, particularly in Latin America and the West Coast of the U.S. [30][31] - The company is optimistic about the at-home dialysis market, which is expected to grow and provide higher margins [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the largest customer's transition but expressed confidence in the guidance provided for 2025 [21] - The second quarter is anticipated to be the low point for revenue, with expectations of improvement in subsequent quarters [22] Other Important Information - The company is monitoring the impact of a recent cyber attack in the industry but has not experienced direct implications on its systems [6] - The company has reiterated its projected guidance for 2025, with net sales expected between $65 million and $70 million [11] Q&A Session Summary Question: What are the scenarios arising from negotiations with the largest customer? - Management indicated that negotiations are ongoing to maintain some level of service, likely at a smaller scale than before [20] Question: What is the revenue cadence expected for the remainder of 2025? - Management stated it is difficult to predict but expressed confidence in the guidance provided, with Q2 likely being the low point [21][22] Question: What is the status of the at-home dialysis market? - The at-home market is progressing as expected, with increasing sales and higher margins anticipated [24] Question: What are the opportunities for international market expansion? - The company sees significant opportunities in Latin America and is exploring expansion into the West Coast of the U.S. [30][31] Question: How much revenue can be replaced from new customers? - Management believes there are enough opportunities among small independent dialysis providers to replace a significant portion of lost revenue [33] Question: Is the revenue guidance based on the current customer base? - Yes, the guidance is based on the current customer base, with potential upside from new customers [35]

Core Insights - TOMI Environmental Solutions, Inc. reported a 42% increase in revenue for Q1 2025 compared to the previous quarter, driven by strong demand for its product lines and recurring solution sales [2][3] - The company achieved a gross margin of 60.4%, slightly up from 60.2% in the prior year, and reduced its operating loss to $(754,000) from $(1,226,000) year-over-year [6] - Net loss decreased to $(256,000) or $(0.01) per share, compared to $(1,310,000) or $(0.07) per share in the same period last year [6] Financial Performance - Net sales for Q1 2025 were $1,577,000, up from $1,114,000 in Q1 2024, marking a significant year-over-year growth [6] - SteraMist product-based revenues increased to $1,000,000 from $743,000, reflecting a $257,000 rise due to heightened demand for various SteraMist solutions [6] - Service-based revenue also grew by 56%, reaching $577,000 compared to $371,000 in the prior year [6] Market Trends and Business Development - Domestic revenue surged by 80% to $1,192,000 from $662,000, attributed to increased demand for solutions and services [6] - The sales backlog as of March 31, 2025, was $1,225,000, an increase of $348,000 from December 31, 2024 [6] - A significant contract was secured for a SteraMist iHP Custom Engineered System at a university in Rhode Island, valued at approximately $450,000 [6] Strategic Partnerships and Expansion - TOMI announced the deployment of SteraMist iHP technology at NASA Johnson Space Center, indicating expansion into the aerospace sector [6] - An OEM partnership with Pharma Biotech System Components was established to enhance the SteraMist Integrated System [6] - The company is expanding into aquaculture with a new partner, Algafeed, further diversifying its market reach [7]

Financial Data and Key Metrics Changes - The company is positioned for its most profitable year in history, forecasting record revenue, net income, and adjusted EBITDA [6][9] - The first quarter results were in line with expectations, with a seasonal loss of approximately 8% of annual EBITDA, which is an increase from the historical 5% due to recent acquisitions [10][11] - The company spent approximately $8 million in the first quarter on SG&A, primarily related to acquisitions and business development activities [10][30] Business Line Data and Key Metrics Changes - Aggregate volumes are expected to increase by high single digits for the full year, despite a 9% decline in the first quarter due to lower demand in Oregon and weather impacts [26][50] - Ready mix revenue increased by 9% due to higher average selling prices and volume growth, with expectations for high teens volume growth for the full year [28] - Asphalt activity was light in the first quarter, which typically accounts for less than 5% of the full year's volume, but is expected to pick up in the second quarter [28] Market Data and Key Metrics Changes - The company has a strong backlog, with public projects representing 87% of it, and has seen increased bidding activity compared to last year [18][19] - The company is tracking 51 transportation funding bills at the state level, with significant funding approved in states like Idaho and North Dakota [16][17] - The company is experiencing pressure in private construction markets, particularly in Oregon and Montana, while seeing strength in Hawaii, California, and Texas [41][42] Company Strategy and Development Direction - The company is actively pursuing an acquisition program, having closed on Strata Corporation and evaluating additional deals [7][11] - Investments in operational improvements and competitive edge strategies are ongoing, including dynamic pricing initiatives and technology deployment [12][13] - The company is focused on maintaining a disciplined approach to bidding and project selection to optimize margins and minimize risk [19][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategy and the potential for record results in 2025, despite macroeconomic uncertainties [7][9] - The company is well-positioned to benefit from infrastructure investments, with significant funding available for public projects [15][34] - Management noted that while private projects have seen some delays, they expect many to resume in the second half of the year [96] Other Important Information - The company has raised its full-year guidance, expecting consolidated revenue between $3.25 billion and $3.45 billion, and adjusted EBITDA between $530 million and $580 million [33] - SG&A expenses are expected to increase by $20 million for the full year, primarily due to acquisition-related costs and business development activities [30][60] Q&A Session Summary Question: Resiliency in private construction markets - Management noted that private construction is strong in Hawaii, California, and Texas, while facing pressure in Oregon and Montana [41][42] Question: Update on Strata integration - Integration is going well, with expectations for positive contributions to margins and overall operations [44] Question: Volumes across segments - Management indicated that aggregate volumes were down 9% in the first quarter but are expected to increase in the coming months [50][51] Question: End market mix post-acquisitions - The company remains heavily exposed to public works, with 87% of construction revenue coming from public projects [52][54] Question: SG&A breakdown for the quarter - SG&A increased by $13 million, with $8 million related to the step-up in investment and $4 million from acquisitions [62][63] Question: Impact of oil price decline on costs - Management stated that the decline in oil prices has not materially changed cost expectations across segments [86] Question: Future investment cycles - The company views the current $20 million step-up in SG&A as a one-time investment to support future growth [94] Question: Delayed private projects - Delays are primarily in private contracts, with expectations for many to resume in the third quarter [96][97]

Financial Data and Key Metrics Changes - First quarter revenue was $71.7 million, a modest decline from the previous quarter, impacted by $2 million in delayed shipments of calc products [4] - Consolidated orders grew 2.7% sequentially, resulting in a book-to-bill ratio of 1.04, marking the second consecutive quarter of order growth [5] - Cash from operations was $5.3 million, with adjusted free cash flow at $3.7 million [5][19] - Adjusted gross margin remained stable at 38.3%, while adjusted operating margin improved to 1.1% from 0.8% in the previous quarter [15][16] - The company reported a net loss of $942,000, or $0.07 per diluted share, but adjusted net earnings were $468,000, or $0.04 per diluted share, compared to $400,000, or $0.03 per diluted share in the previous quarter [17] Business Segment Performance Changes - **Sensors Segment**: Revenue increased 5.1% sequentially, driven by higher sales in the test and measurement market, with bookings rising 6.7% [7] - **Weighing Solutions Segment**: Revenue increased 2.7% from the previous quarter, but orders declined 9.3% sequentially, resulting in a book-to-bill ratio of 0.99 [9][10] - **Measurement Systems Segment**: Revenue declined 13.8% sequentially due to slow trends in the global steel market and shipment delays, while orders increased 17.3% sequentially, resulting in a book-to-bill ratio of 1.07 [11][12] Market Data and Key Metrics Changes - Demand in the test and measurement applications, particularly from semiconductor equipment makers, showed positive trends [7] - Orders for consumer applications grew sequentially, but demand in avionic military and space markets was soft due to project timing [8] Company Strategy and Development Direction - The company outlined three strategic priorities for 2025: driving business development with new customers, reducing costs and increasing operational efficiencies, and pursuing high-quality acquisitions [13][14] - The company is on track to achieve targeted annual operational cost reductions of $5 million by year-end [14] Management's Comments on Operating Environment and Future Outlook - Management noted a modest recovery in order intake, particularly in test and measurement from semiconductor customers and humanoid robots [21] - The short-term global economic outlook for 2025 is uncertain, but the company remains optimistic about long-term potential [13] Other Important Information - The company expects net revenues for the second quarter to be in the range of $70 million to $76 million [19] - Capital expenditures for 2025 are forecasted to be between $10 million and $12 million, with most spending expected in the second half of the year [18][35] Q&A Session Summary Question: Opinion on incoming order book and inventory trends - Management observed a modest recovery in Q1, mainly in test and measurement from semiconductor customers and humanoid robots, with demand primarily for replenishing current supply chains [21] Question: Revenue profile and gradual upslope - Management confirmed that the revenue profile has troughed and expects a gradual upslope moving forward [22][23] Question: Delay in calc order and cancellation risk - Management acknowledged the significant delay but does not foresee cancellation risks due to the custom nature of the products [24] Question: Timing of $5 million cost savings - Most savings are expected in cost of goods sold, resulting from material cost reductions and process improvements [25][26] Question: Humanoid robots opportunity and sensor usage - Management indicated that each robot may use tens of sensors, with ASPs ranging from $500 to $1,200 per robot [30][31] Question: CapEx ramp throughout the year - Management expects a larger CapEx in the second half of the year due to longer lead times for semiconductor equipment [33][35] Question: Share repurchases and cash location - Management noted that a significant portion of cash is outside the U.S., making share repurchases complicated due to potential tax implications [39][40]

Financial Data and Key Metrics Changes - The first quarter results showed a 4% constant currency revenue decline year-over-year, primarily due to the loss of exclusivity of Atozed in Europe [20] - Adjusted gross margin was 61.7%, down from 62.1% in the same quarter last year, reflecting unfavorable pricing impacts [25] - Adjusted EBITDA margin for the first quarter was 32%, about 150 basis points better than expected [26] - Free cash flow before one-time costs was $146 million, an improvement from the prior year [27] Business Line Data and Key Metrics Changes - The women's health franchise grew 12% excluding exchange, driven by Nexplanon, which was up 14% [10] - Fertility products experienced nearly 26% global growth, with U.S. sales increasing by 70% [12] - Jada grew 20% in the quarter, with significant adoption among major birthing hospitals [13] - Biosimilars showed mixed results, with HEDLEMA growing 57% while Ontrazont and REMFLEXIS continued to decline [14] Market Data and Key Metrics Changes - Approximately 75% of revenue is generated outside the U.S., with Europe and Canada contributing about 25% and China about 13% [7] - The U.S. market is primarily supplied by European manufacturing, with limited exposure to tariffs in 2025 [6][9] Company Strategy and Development Direction - The company is focusing on deleveraging, aiming for a net leverage ratio below four by year-end 2025 [5][30] - A strategic shift has been made to redirect dividend funds towards debt reduction, allowing for nearly $200 million in potential savings [5] - The company plans to pursue business development opportunities while maintaining lower leverage [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue targets for VITAMA, citing strong market signals and positive feedback from healthcare providers [43] - The macroeconomic environment remains uncertain, but the company has limited exposure to current tariff policies [6][66] - Future growth is expected to be driven by the successful launch of new products and ongoing operational efficiency improvements [39] Other Important Information - The company anticipates $200 million in annual savings from restructuring initiatives [5] - Onetime costs related to the spin-off are expected to be zero in 2025, with a focus on improving operating expense efficiency [27][28] Q&A Session Summary Question: Confidence in VITAMA sales target and access issues - Management is confident in reaching the $150 million sales target for VITAMA due to strong market uptake and effective managed care strategies [43] Question: Priorities regarding deleveraging and business development - The focus is currently on deleveraging, with future opportunities for business development as leverage decreases [46] Question: Future business development deal frequency and size - The company has a broad definition of women's health and is open to various deal sizes, focusing on those that align with strategic goals [53] Question: Capital allocation and share buyback considerations - Share buybacks are currently a lower priority compared to managing leverage and growth opportunities [68] Question: Impact of tariffs on future operations - The company has minimal exposure to tariffs in 2025 and is well-positioned to navigate potential future changes [66][76] Question: Nexplanon generic competition and FDA issues - Management is confident in the strength of Nexplanon's patents and the regulatory challenges faced by potential generic competitors [85][90]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.5 billion, reflecting a decrease of 2% year-over-year, or an increase of 1% when excluding foreign exchange impacts [23][12] - Earnings per share (EPS) were reported at $2.22, with a gross margin of 82.2%, an increase of one percentage point due to a favorable product mix [35][34] - The company maintained its full-year revenue guidance of between $64.1 billion and $65.6 billion, representing growth of 1% to 3% excluding foreign exchange impacts [35][36] Business Line Data and Key Metrics Changes - In oncology, sales of Keytruda grew 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and robust demand for metastatic indications [25] - GARDASIL sales decreased by 40% to $1.3 billion, primarily due to reduced demand in China, while global growth excluding China was strong at 16% [27] - The animal health business saw sales increase by 10%, reflecting higher demand across all species and contributions from the Aqua portfolio acquired from Elanco [32] Market Data and Key Metrics Changes - The decline in GARDASIL sales in China was approximately $1.1 billion, which reduced growth excluding foreign exchange by seven percentage points [24] - Outside of the US and China, GARDASIL experienced strong demand, particularly from a catch-up cohort in Japan [27] - The company noted that the ongoing launch of WinRevair generated global sales of $280 million, with significant uptake in both the US and international markets [30] Company Strategy and Development Direction - The company is focused on balancing its manufacturing footprint and has invested $12 billion in US manufacturing since 2018, with an additional commitment of over $9 billion through 2028 [11][10] - The strategic direction emphasizes the advancement of a robust pipeline, with over 20 promising new products expected to launch in the coming years, potentially generating over $50 billion in commercial opportunities by the mid-2030s [16][19] - The company is committed to maintaining its dividend and prioritizing investments in business development to drive growth and returns for shareholders [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current dynamic global environment and emphasized the importance of innovation in addressing health challenges [10][20] - The management team highlighted the ongoing efforts to mitigate potential impacts from tariffs and emphasized a strong inventory position to manage short-term challenges [13][75] - The company remains optimistic about its long-term growth prospects, particularly in light of its expanding late-phase pipeline and the potential for new product launches [18][19] Other Important Information - The company is actively evaluating opportunities for science-driven business development transactions, despite the complexities introduced by the current macroeconomic environment [92][94] - Management acknowledged the disconnect between market realities and seller expectations in the current business development landscape [94] - The company is open to working with the administration on pricing reforms to address the price differentials between the US and international markets [96][100] Q&A Session Summary Question: Can you discuss Merck's mitigating strategies regarding tariffs? - Management highlighted ongoing changes to the supply chain strategy and investments in US manufacturing to mitigate tariff impacts, with a focus on optimizing supply chain operations [70][72] Question: What is the long-term guidance for KEYTRUDA given patent expiry concerns? - Management emphasized confidence in the long-term pipeline, with over 20 new products expected to launch, which could offset concerns related to KEYTRUDA's patent expiry [78][80] Question: Can you comment on the FDA's recent changes and their impact on vaccines? - Management noted that while there are active dialogues with the FDA regarding imminent PDUFA dates, the long-term impact of personnel transitions remains uncertain [85][86] Question: What is the environment for business development given macro volatility? - Management confirmed that the focus on business development remains unchanged, although the current environment presents complexities in executing deals [92][94] Question: What are the prospects for GARDASIL growth and pricing adjustments? - Management indicated that while GARDASIL growth is expected to slow, particularly in China, they remain committed to ensuring the vaccine's value is understood in pricing discussions [132][130]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.5 billion, reflecting a decrease of 2% year-over-year, or an increase of 1% when excluding foreign exchange impacts [23][12] - Earnings per share (EPS) were reported at $2.22, with a gross margin of 82.2%, an increase of one percentage point due to a favorable product mix [35][34] - The company maintained its full-year revenue guidance of between $64.1 billion and $65.6 billion, representing growth of 1% to 3% excluding foreign exchange impacts [36][35] Business Line Data and Key Metrics Changes - In oncology, sales of Keytruda grew 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and robust demand for metastatic indications [25] - GARDASIL sales decreased by 40% to $1.3 billion, primarily due to reduced demand in China, while global growth excluding China was strong at 16% [27][24] - The animal health business saw sales increase by 10%, reflecting higher demand across all species and contributions from the Aqua portfolio acquired from Elanco [32] Market Data and Key Metrics Changes - The decline in GARDASIL sales in China was approximately $1.1 billion, which reduced growth excluding foreign exchange by seven percentage points [24] - Outside of the US and China, GARDASIL experienced strong demand, particularly from a catch-up cohort in Japan [27] - The company noted that the ongoing launch of WinRevair generated global sales of $280 million, with significant uptake in both the US and international markets [30] Company Strategy and Development Direction - The company is focused on balancing its manufacturing footprint and has invested $12 billion in US manufacturing since 2018, with an additional commitment of over $9 billion through 2028 [11][10] - The strategic direction emphasizes the advancement of a robust pipeline, with over 20 promising new products expected to launch in the coming years, potentially generating over $50 billion in commercial opportunities by the mid-2030s [16][19] - The company is committed to maintaining its dividend and prioritizing investments in business development to drive growth and returns for shareholders [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for improved growth in the second half of the year, despite challenges from tariffs and foreign exchange impacts [12][13] - The company is well-positioned to navigate the potential impacts of tariffs due to its global supply chain and inventory management strategies [13][70] - Management highlighted the importance of scientific leadership and innovation as key drivers for long-term value creation [20][19] Other Important Information - The company has nearly tripled its late-phase pipeline since 2021, with significant advancements in oncology, cardiometabolic diseases, and HIV treatments [16][14] - The FDA has set PDUFA dates for several key products, including subcutaneous pembrolizumab and doravirine-based regimens, indicating a strong pipeline of upcoming approvals [60][56] Q&A Session Summary Question: Can you discuss Merck's strategies to mitigate tariffs? - Management highlighted ongoing efforts to rebalance the supply chain and invest in US manufacturing to mitigate the impact of existing tariffs, with a focus on optimizing supply chain strategies [70][72] Question: What is the long-term guidance for KEYTRUDA? - Management emphasized confidence in the long-term potential of the pipeline, with over 20 new products expected to drive significant revenue growth, but did not provide specific line-by-line guidance [78][79] Question: Can you comment on the FDA's recent changes and their impact on vaccines? - Management noted that while there are active dialogues with the FDA regarding imminent PDUFA dates, the long-term impact of personnel transitions remains uncertain [85][86] Question: What is the environment for business development given current macroeconomic conditions? - Management acknowledged the complexities in the current environment but reaffirmed their commitment to pursuing science-driven business development opportunities [92][94] Question: What are the expectations for GARDASIL growth moving forward? - Management indicated that while GARDASIL growth is expected to slow, strong growth is anticipated outside of China, and they are focused on maximizing opportunities in the market [132][131]

Financial Data and Key Metrics Changes - Total company revenues for Q1 2025 were approximately $11.2 billion, reflecting strong demand across the growth portfolio, with an 18% increase in global sales of the growth portfolio [29][38] - Gross margin was approximately 73%, primarily due to product mix, and diluted earnings per share were $1.80 [37][38] - The company is increasing its full-year revenue guidance to a range of $45.8 billion to $46.8 billion, reflecting strong performance and a favorable impact of approximately $500 million related to foreign exchange rates [42][45] Business Line Data and Key Metrics Changes - The immuno-oncology (IO) portfolio, Breyanzi, Reblozyl, and Camzyos were key contributors to the growth portfolio, with Breyanzi's sales more than doubling and international sales tripling [10][32] - Cobenfi, launched in Q1, generated approximately $27 million in sales, tracking ahead of all branded schizophrenia launch benchmarks [36][116] - Eliquis global sales were down 3% due to the impact of Medicare Part D redesign, while Camzyos sales nearly doubled, benefiting from strong global demand [33][34] Market Data and Key Metrics Changes - The growth portfolio's global sales increased approximately 18%, driven by key brands, while the legacy portfolio is expected to decline approximately 16% to 18% for the year [29][42] - The company is seeing strong early uptake of Cobenfi, with approximately 40% to 50% of prescriptions now in second and third-line treatments [56][116] - The company expects total Eliquis revenue to be stronger in the second half of the year due to the Part D redesign and elimination of the coverage gap [34] Company Strategy and Development Direction - The company is focused on maximizing its growth portfolio, accelerating its R&D pipeline, driving operational excellence, and strategically allocating capital [8][22] - Business development remains a top priority, with the company actively pursuing opportunities that can enhance its growth profile [22][94] - The company is taking deliberate actions to rightsize its cost structure and become more efficient, expecting to realize approximately $2 billion in annual cost savings by the end of 2027 [24][40] Management's Comments on Operating Environment and Future Outlook - The current global operating climate presents uncertainty related to tariffs and potential economic downturns, but the company remains confident in its ability to navigate these complexities [25][26] - Management emphasized the importance of strong execution and maintaining a robust pipeline with significant growth potential [26][68] - The company is committed to innovating for patients and advancing first and/or best-in-class medicines through internal discovery and business development [22][68] Other Important Information - The company is on track to pay down $10 billion of debt relative to its March 31, 2024 balance and has maintained its strategic and balanced approach to capital allocation [38][39] - The company has a strong cash position with approximately $12.1 billion in cash equivalents and marketable securities as of March 31 [38] Q&A Session Summary Question: Can you provide any color on the company's US manufacturing footprint ability to shift manufacturing to the US over time? - Management appreciates the administration's efforts to enhance US manufacturing and has been investing in core infrastructure in the US for many years [52][53] Question: How do you think about the future pipeline and riskiness of it? - Management remains confident in delivering growth ambitions driven by the internal R&D pipeline, despite recent setbacks [66][68] Question: How does the readout from ARISE impact your confidence in Alzheimer's psychosis readout? - Management stated that ARISE data has no impact on confidence regarding Alzheimer's disease psychosis trials [80] Question: What are your expectations for the bar for the Alzheimer's psychosis study? - Management indicated that statistical significance in the primary endpoint for hallucinations and delusions is required, but no specific number is predefined [130] Question: Can you provide comments on Bristol's perspective regarding committed capital expenditure going forward? - Management confirmed plans to continue investing in core infrastructure related to R&D and technology in the US [138] Question: How do you approach making M&A decisions in the context of internal success rates? - Management does not tie M&A decisions to specific data readouts but focuses on sourcing new science and innovation that can enhance the growth profile [140][142]

Financial Data and Key Metrics Changes - For the full year 2024, revenue was $6.4 billion, representing a 3% growth rate at constant currency, marking the third consecutive year of constant currency revenue growth [7] - Adjusted EBITDA was $1.96 billion, with a 30.6% adjusted EBITDA margin; excluding IPR&D, the margin was 31.8%, reflecting a half-point margin expansion over the previous year [8][47] - The company expects 2025 revenue to range from $6.125 billion to $6.325 billion, with an approximate $200 million headwind from foreign currency [9][56] Business Line Data and Key Metrics Changes - The women's health franchise grew 5% ex-exchange, driven by Nexplanon, which saw a 17% increase ex-FX, positioning it for at least $1 billion in revenue in 2025 [11][12] - The fertility franchise declined by 2% ex-exchange in 2024, impacted by a late 2023 buy-in and offset by growth in new launches in various regions [15] - The biosimilars franchise grew 12% at constant currency, with expectations of mid-single-digit declines in 2025 due to mature products [16][17] Market Data and Key Metrics Changes - Outside the U.S., strong growth was noted in the LAMERA region, particularly in Brazil and the U.K. [12] - The U.S. market benefited from Nexplanon's leadership and pricing strategies, including management of the 340B discount program [12] - The company anticipates a $200 million impact from foreign exchange in 2025, reflecting the strengthening U.S. dollar [60] Company Strategy and Development Direction - The company aims to demonstrate resiliency in its base business, capture efficiencies, consistently deploy capital, and deliver on growth products and pipeline [22][25] - The focus is on profitable growth, with a commitment to regular dividends as the top capital allocation priority [24][52] - The company plans to launch a Denosumab biosimilar in collaboration with Shanghai Henlius, pending FDA approval [17][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Nexplanon's future growth, especially with the potential five-year indication submitted to the FDA [13] - The company expects to manage through the loss of exclusivity of Atozet in Europe while offsetting it with growth in other products [9][57] - Management highlighted the potential for continued constant currency revenue growth in 2025 despite challenges [68] Other Important Information - The company achieved $967 million of free cash flow before one-time costs in 2024, with expectations of around $900 million for 2025 [48][75] - One-time spin-related costs were $160 million in 2024, with expectations for these costs to be essentially zero in 2025 [50] - The adjusted gross margin for 2025 is expected to be in the range of 60% to 61%, reflecting ongoing pricing pressures [61] Q&A Session Summary Question: Free cash flow estimate for 2025 and biosimilar opportunity for Denosumab - The company expects around $900 million of free cash flow before one-time items for 2025, with confidence in the denosumab biosimilar launch later in Q4 [75][76] Question: Status of Nexplanon and future growth ambitions - No paragraph four filing for Nexplanon has been received, and management is confident that no generics will enter the U.S. market before 2030 [80][85] Question: Competitive landscape for Vtama and margin improvements - Vtama has shown strong growth, with a 51% increase in NRX, and is expected to be a significant contributor to growth [92] - Margin improvements from manufacturing separation from Merck are anticipated to be around 250 to 300 basis points starting in 2027 [96] Question: Future plans for the dermatology business and net leverage targets - The company aims to build out its dermatology portfolio beyond Vtama and expects to reduce net leverage to below four times by the end of 2026 [106][107]