Orion - What is the future outlook?

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To the roast:

-What is the CEO’s view; what are the most essential factors for Orion’s success in the 1, 3, 5, and 10-year timeframe? How does the CEO define this “Orion’s success”?

-Investments and R&D expenses growing by +35%. Which of these are the most essential, and where will these be visible for Orion?

-Expectations for Nubeqa sales development in the coming years? Both in terms of price and volume?

-Expectations for US “price regulation” that would impact Nubeqa’s sales price? There have been rumors about this on Twitter, which is likely behind the recent share price decline?

-What role do acquisitions play as part of Orion’s toolkit? In 2022, the acquisition of Inovet was carried out. What are the experiences from this?

-How does Orion utilize artificial intelligence 1. in drug development, and 2. in its operations?

-Which companies will disrupt the pharmaceutical industry and how? Which innovative companies will displace the legacy players? E.g., new business models with AI? Cf. Tesla and the automotive industry, Netflix and movies/TV etc.

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First of all, thanks to Verner for the excellent and well-executed Roast format. I have watched many Roasts even from companies that don’t interest me at all, as the format itself is so good.

Excellent question suggestions from fellow investors. For me, a big question regarding Orion is how a relatively small company on a global scale can keep up in the drug development competition and continue to develop successful products like Nubeqa in the future, even though the costs and risks of drug development are so high and the timeline is slow. Will its resources be sufficient in the future, or will larger players, who can diversify risks more effectively, ultimately take the pot, and Orion will decline into a manufacturer of hand creams and other generic products? On this topic, Liisa Hurmetta could be grilled with several questions.

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A basic question: Is there any possibility to partner with a domestic early-stage drug developer now or in the near future?

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Quite a roast of Orion, worth watching! A couple of scattered observations:

-Speculations about selling or spinning off parts of Orion don’t seem to be the primary projects, even though the uniqueness of the veterinary side was highlighted. For example, Mandatum was like a lion caged within Sampo, but it’s hard to see such parts in Orion, and thus the company’s different parts support each other.

-Acquisitions are in sight, but targeted ones, and in the order of USA, Japan, Europe. Especially “commercial platform in the USA” was mentioned.

-AI primarily speeds up the processing of drug development data, but not as much benefit when progressing to the clinical side. AI disruption in drug sales and distribution is not ruled out.

-The USA’s forced reduction of drug prices is comparable to America’s weariness of funding other countries’ defense. When the US market no longer pays for a large part of global drug development, pressure will shift to Europe, and prices will rise here. AstraZeneca’s CEO reiterated the same a few days ago.

-In the 10-year vision, Orion’s oncology portfolio, in particular, will be larger than it is now, and products will be sold worldwide.

-And the party leader of own shares had to bring up even the grandmother card to get dividends from the days :grin: Perhaps it should be added as a mitigating factor that Orion has de facto lowered its dividend recently, because the increase was below inflation.

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OP reported that Orion’s partner Bayer released its Q3 report and as part of it, Nubeqa’s product sales. Nubeqa’s Q3 sales were 622 million euros, while Bloomberg’s consensus estimate was 575 million euros. A significant beat of estimates creates upward pressure on Q4/25 and next year’s Nubeqa sales forecasts.

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Right. Strange stock behavior - though the decline seems to have stopped. Bayer, at least, is up about 2%. We await a possible positive profit warning from Orion and hopefully new indications and permission for additional sales next year. At least early-stage prostate cancer (to a layman’s eye) could be a low-hanging fruit,

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Orion’s CEO Liisa Hurme was talking about the company’s business at the Investor 2025 event :slight_smile:

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€180M Nubeqa Milestone Payment and Outlook Update:

New Outlook Estimate for 2025, issued 3 December 2025

Revenue is estimated to be €1,820–1,900 million.
Operating profit is estimated to be €590–670 million.

Previous Outlook Estimate for 2025, issued 28 October 2025

Revenue is estimated to be €1,640–1,720 million.
Operating profit is estimated to be €410–490 million.

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Here are Antti’s comments regarding that recent release. :slight_smile:

Orion announced on Wednesday that it would receive a EUR 180 million milestone payment based on the sales of the prostate cancer drug Nubeqa. The milestone payment is the last lump sum related to Nubeqa and will be recorded in the last quarter of 2025. With the confirmation of the payment, the company updated its outlook for 2025. The payment has already been in our forecasts for Q4, so the news does not put pressure on forecast changes.

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Orion was covered in Kauppalehti’s Post-Market program.

There was nothing particularly noteworthy in the comments; only the milestone payment news was commented on in a neutral tone:

“In principle, the news was good, although expected by analysts. Reasons for the negative share price reaction can be sought from the fact that the company raised its revenue and operating profit guidance only by the amount of the milestone payment. Most analysts’ revenue forecasts were at the upper end of the new revenue range or above it before the news. The most probable reason is that investors are just too nervous – perhaps now would be a good time to take something to calm down.”

Orion is one of the largest direct equity investments in my portfolio (weight approx. 3%), and will remain so for the foreseeable future.

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Tomorrow, Orion will participate in Inderes’ company evening, which includes the company’s presentation and a Q&A session. Questions can be submitted during the event via chat or through the forum. Messages sent here by tomorrow morning will still be reached.

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Tuukka Hirvonen from Orion was presenting about the company as an investment target at Life Science Night. :slight_smile:

Topics: 00:00 Orion today 01:05 Business divisions 03:52 Track record 05:40 Financial objectives 06:45 Investment case – key themes 09:23 Orion’s key clinical development pipeline 14:47 Q&A session

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It’s quite quiet on the Orion board.

The €180M milestone payment didn’t change forecasts, as it was likely already factored in by everyone. The share price is also stagnant, even though the average target price, when the lowest (€46) and highest (€79) forecasts are excluded, is still €72.25. Quite a bit above today’s price.

No more milestone payments are coming from Bayer, but next year’s growing royalties may well compensate for it. Nubeqa revenues for next year are unlikely to decrease much, if at all.

Tenax Therapeutics’ share price in the US is on a fairly strong rise, +66% in the last month. That is the small outfit (with a market value only a third of Fermion’s) that is bringing Orion-licensed Levosimendan to market, now in oral form, for somewhat new indications. This is practically their only project, so it’s interesting for Orion shareholders as well. Phase 3 is progressing according to plan for FDA approval, and a global Phase 3 supplemental study is also underway. Funding for these is in order. Orion is set to receive 10 MUSD for FDA approval and a total of 60 MUSD in milestone payments. The patent for Levosimendan has already expired, so royalties are low (around 10%), but overall the drug is expected to have a market nearly as large as Nubeqa’s, so annual revenues of a couple of hundred million euros could well be reached in time. At least some in the New York Stock Exchange seem to believe in this company.

MSD’s Phase 3 trials are also progressing. These involve a total of 1,730 MUSD in milestone payments, but perhaps only the first 30 MUSD of those could come next year. The €625M from approvals might only come in the following year and the year after that. Royalties for this Orion-patented Opevesostat will also eventually rise to as much as 22 percent of annual sales. But the tests must first succeed and approvals must be obtained. MSD, as one of the world’s largest drug developers, has good chances for this if anyone does.

If Orion manages to stick to its strategy of at least a 50% dividend payout, at least €2.25 can be expected for this year. Considering the future outlook, more dividends could certainly be distributed without jeopardizing the promise of increasing dividends in the coming years.

The future looks quite good for Orion, and surely many new things are under development. Let’s see how BlackRock plays its game. Quite a lot of the stock trading seems to be concentrated in the closing auction. It might not be worth selling too cheaply.

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From Orion’s own presentations, I have gotten the impression that the dividend will be increased only very moderately for two reasons. Firstly, it ensures a steady increase in the long term. The second reason is, in my opinion, more significant for shareholders: this way, more firepower is obtained for launching future blockbuster drugs entirely on their own, in which case the returns are of a different magnitude than when done through partners. This would enable a positive self-reinforcing development that could elevate Orion to a completely new size category. The prerequisite, of course, is that these blockbuster drugs can be created. So, the dividend will not be over two euros but closer to the current level, but that is a good thing for us shareholders.

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Orion Nubeqa, competitors and patent protection

Orion_nubega

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Orion announced the start of Phase 2 for the ODM-212 molecule. In that project, the target is quite rare cancers, but if successful, ODM-212 could apparently be a valuable addition for many (even more common?) cancers. “…on the potential of the ODM-212 molecule and its mechanism of action in combination therapies, as when combined with other treatments, the ODM-212 molecule can prevent the development of drug resistance in several different tumors. Based on the promising results of the Phase 1 study, we are efficiently and systematically advancing the clinical development of the ODM-212 molecule both as monotherapy and in combination therapy across several different cancers.”

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Siltanen has commented on how ODM-212 is advancing to clinical phase II. :slight_smile:

Orion announced on Thursday that it has started a clinical phase II study with the cancer drug candidate ODM-212. The candidate’s progression is expected and in line with Orion’s strategy, as the company allocates part of Nubeqa’s significant revenues to the development of potential future successful drugs. The news has no impact on our forecasts.

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Orion’s outlook for 2026

Net sales are estimated to be EUR 1,900–2,100 million.
Operating profit is estimated to be EUR 550–750 million.

In the outlook, the largest single factor affecting the level of net sales and operating profit is Nubeqa®, whose net sales are expected to continue strong growth in 2026. The 2026 outlook does not include material milestone payments. For other parts, Orion will publish the grounds for the outlook in the financial statements bulletin to be published on 12 February 2026.

Nubeqa was discussed a lot in the ROAST, it’s worth watching if you haven’t already. :slight_smile:

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Liisa Hurme’s presentation at the Investor event was also convincing and one of the best.

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Nice outlook estimate. Operating profit at the midpoint is 15% above Inderes’ estimate. Revenue is 170 million above Inderes’.

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