COSMO Pharmaceuticals Aktie

Good afternoon, everyone, and thank you for joining us today. I'm Gio Di Napoli, Chief Executive Officer of Cosmo, joined by our Chief Financial Officer, Svetlana Sigalova. This year, Cosmo marks 30 years anniversary. As the theme reflected, those 3 decades have been spent on a single discipline, translating rigorous science into medicines and technologies that improve patients' lives.

Proprietary drug delivery platforms, approved therapies used by patients around the world, state-of-the-art manufacturing at our own production site, giving us end-to-end control from molecule to finished product and now artificial intelligence in the hands of physicians during real-time procedures. None of this happened by accident. It comes from a culture built to innovate and the people who have carried that culture for 30 years. This is what has taught us to advance on evidence and let the data lead, and it is exactly the foundation of confidence we carry into today.

Let me walk you through it. Before we begin, the usual but important note on forward-looking statements. Everything we share today reflects our current beliefs and the information available to us now, and actual results may differ. I'd encourage you to review the disclaimer at your leisure. With that behind us, let's talk about the business now.

Here is how we spend our time together. I'll start with our business and strategic execution in the first half. And I think that's where the real story is. Then Svetlana will take you through the H1 financials in detail. I'll come back for closing remarks, and then we'll open up for questions. So let's begin with the business.

If you take one thing away from today, please take this. H1 2026 is the half in which Cosmo became a multi-engine compounder. For many years, we were a company largely defined by a single question. Today, we have 3 engines. All of them are now firing at once. In dermatology, our acne franchise is scaling, and we have a first in 30 years hair loss breakthrough moving to regulatory filing.

In MedTech AI, GI Genius is evolving from polyp detection into a full GI platform. And in pharma CDMO, new customer wins are driving recurring revenue growth. 3 engines advancing together on a fortress balance sheet, and let me show you now the detail.

This is the scorecard, and I want to be precise about it. We did not just stay on track this half. We actually accelerated. We led net revenue grew 38% year-over-year, and we added 14, 1-4, new markets. We are now in 23 countries. Recurring revenue was up 18%, and it was broad-based. Every franchise contributed. We closed the half with over EUR 200 million in cash and investments and 0 debt. And critically, every strategic pillar advanced on or ahead of plan. The hair-loss package is complete. Our GI readouts are approaching. The AI platform is expanding and guidance is reaffirmed. Let me take each engine in turn now.

This slide is the entire first half on a single page, and the headline is that we made progress on every engine, not just one. In dermatology, Clascoterone 5% topical solution Phase III is now complete, and Winlevi European launch is underway. In our GI pipeline, Distal Ulcerative Colitis and Bile Acid Diarrhea are both moving towards near-term readouts. In MedTech AI, we rolled out the next generation of GI Genius platform and expanded both our installed base and our clinical evidence. And underpinning all of it, recurring revenue is up 18% over EUR 200 million in cash, debt-free, guidance reaffirmed and Capital Group joining our shareholder base.

Let me now go deeper on the pieces that matter the most. Let's start with what could be the single biggest opportunity in our portfolio. For roughly 30 years, there has been no genuinely new mechanism in male hair loss. Clascoterone 5% topical solution is that breakthrough, a first-in-class topical anti-androgen. Our pivotal Phase III is now complete with a fivefold improvement in Target-Area Hair Count versus vehicle and 12 months of durability confirmed, which support chronic use.

The next milestone is regulatory filing in both the U.S. and in Europe. As we announced this morning in the press release, we aim to file the NDA Q1 FY '27 and then a quarter after the European submission. And the price is a market north of EUR 28 billion, where -- and I want to be clear about this, we would enter with no mechanistic-level competitor. This is a potential blockbuster, and it is moving to filing.

Now to our GI pipeline and the next value inflection. Distal Ulcerative Colitis is a large market with no dedicated therapy, more than 3.5 million patients worldwide and an addressable market around EUR 1.1 billion. Our candidate, Rifamycin SV enema, it is a local targeted therapy that treats the root cause, inflammation and microbiome dysbiosis. Phase II enrollment and dosing are now complete, and we expect top line data in the fourth quarter of this fiscal year. That's a near-term derisking catalyst with first-mover potential in a badly underserved population.

Now let's talk about the second one which is Bile Acid Diarrhea. And the number here is striking, roughly 95 million patients worldwide, an addressable market around EUR 21 billion. And again, no dedicated therapy. Our candidate, Colesevelam MMX could be the first colon targeted therapy purpose-built for this large underdiagnosed population. Phase II enrollment is completing toward the year-end. So hold these 2 GI programs together in your mind, 2 large markets, not dedicated therapy, both derisking in the near term and both capital efficient. This is exactly the kind of asymmetric opportunity Cosmo is built to pursue.

Turning to MedTech AI. GI Genius began as a polyp detection. It is becoming a multi-application AI platform and is compounding across 4 dimensions at once. Commercially, our next-generation GGM300 hardware continues rolling out across the U.S. and also Europe with high customer retention. And I want to highlight the high customer retention. On the platform, we have begun deploying EMR functionality, extending to our procedural support.

In the pipeline, an R&D collaboration is extending our AI into Barrett's oesophagus, a precancerous lesion and the upper GI tract. And on evidence, we added fresh clinical validation this half that reinforce physicians adoption. Let me be direct. The platform thesis is just getting started with more capabilities advancing through this second half and also in 2027.

Let me make the platform concrete with one capability I'm especially excited about. Today, writing the procedure report is manual, time-consuming, work for physicians and nurses. With GI Genius automated reporting, the report during a colonoscopy writes itself. The system captures every finding through AI as a structured data during the procedures, annotates, generates the finished report and go straight to the EMR system. That's real measurable time handed back to the physicians and to the nurse. And it's exactly how a detection tool become indispensable workflow infrastructure. This is the kind of capabilities that deepens our moat with every single procedure.

Before I hand to Svetlana, let me frame the road ahead because the second half is a catalyst dense. In dermatology, expect AGA publications about our topical solution, Clascoterone 5%. And the European Winlevi continues to expand in Europe. In MedTech AI, the automated reporting launch embeds progress in development. In our GI pipeline, Distal UC Phase II top line readout in Q4 and also Solid Tumors Phase I readout. And new skin and gut candidates are progressing also into clinical from preclinical. Multiple value-driving milestones across every engine before the year-end. And there is more in motion on the platform and the manufacturing side that we look forward to unveiling as it matures. With that, let me hand over to Svetlana for the financials.

Thank you, Gio. I'll now take you through our financial results for the first half of 2026. As you'll see over the next few slides, our business continues to execute well against our plan. We remain on track to deliver our full year guidance with continued growth in recurring revenues and expected acceleration of revenues in the second half, disciplined cost management and a balance sheet that continues to provide significant financial flexibility.

Let's start with our outlook for the full year. We are reaffirming our 2026 financial guidance across all key metrics and remain on track to deliver another year of strong operational execution. We continue to expect total revenues of EUR 105 million to EUR 110 million, including EUR 98 million to EUR 102 million of recurring revenues and EUR 7 million to EUR 8 million of project-based. As planned, we expect revenues to accelerate in the second half of this year, driven by continued growth across our recurring revenue base as well as the timing of project-based revenues.

We also continue to expect EBITDA of EUR 10.5 million to EUR 13.5 million, representing double-digit year-over-year growth. This is an important milestone for Cosmo as we continue our transition to a business where more than 90% of revenues are recurring, providing greater visibility, predictability and operating leverage while maintaining disciplined cost management.

Finally, we expect to end the year with approximately EUR 200 million in cash, equivalents and short-term investments, while remaining debt-free. This exceptionally strong balance sheet provides us with the flexibility to continue investing in our pipeline and commercial opportunities, pursue value-enhancing business development where appropriate and execute our long-term growth strategy without compromising financial discipline.

With that framework in mind, let's now turn to our first half financial performance. Turning now to our first half results. We delivered EUR 50.2 million in total revenues, of which EUR 49.6 million or almost 99% were recurring. Recurring revenues grew 18% year-over-year, demonstrating the continued strength of our core business and the ongoing transition towards a more predictable, higher-quality revenue base. Growth was broad-based across our recurring revenue streams.

Winlevi revenues increased 38%, driven by product supply for our partners' European launches. Lialda grew 35%, reflecting the continued strong performance of our legacy mesalamine business following the amended agreement with Takeda, while our CDMO business delivered 14% growth, supported by new customer contracts and manufacturing programs.

GI Genius revenue was lower in the first half, reflecting the planned timing of Module 300 production scale-up and customer shipments. As these activities progress, we continue to expect revenues to be weighted towards the second half of the year and reaffirm our expectation of double-digit growth for GI Genius for both the second half and full year 2026.

As anticipated, project-based revenues were limited in the first half and are expected to increase in the second half alongside continued growth in our recurring revenue base. This gives us confidence in reaffirming our full year guidance. Our financial position remains a key strategic strength. We closed the first half with over EUR 205 million in cash, equivalents and investments after returning approximately EUR 36 million to shareholders through our annual dividend payment during the period.

Combined with 0 financial debt, this gives us flexibility to continue investing in our pipeline, support commercial expansion, pursue attractive business development opportunities where appropriate and execute our long-term growth strategy while maintaining disciplined capital allocation.

Turning to the income statement. Total revenues for the first half of EUR 50.2 million. While this was modestly below the prior year, the quality of our revenue base continued to improve with recurring revenues increasing 18% year-over-year to EUR 49.6 million, while project-based revenues reflected the expected timing of milestone recognition and are anticipated to increase in the second half.

Looking below the revenue line, other income was lower than the prior year, primarily reflecting lower dividend income received from our investment in RSLs, together with lower R&D tax credits following the completion of the Phase III Clascoterone program. Cost of sales increased 9%, broadly in line with the growth of our commercial product sales and CDMO activities. Research and development expenses declined 16%, reflecting the completion of the Phase III Clascoterone studies, while we continue to invest in advancing our gastrointestinal pipeline, including our Phase II programs in Bile Acid Diarrhea and Distal Ulcerative Colitis.

Selling, general and administrative expenses increased year-over-year, reflecting noncash amortization associated with the European launch of Winlevi and the investments we made during the second half of 2025 to strengthen the corporate capabilities and support the company's next phase of growth. As we move through the second half, we expect operating expenses to remain well controlled with a modest reduction compared to the first half while continuing to support our strategic priorities.

Overall, the first half results demonstrate the continued strength of our underlying business. Despite lower project-based revenues and lower other income compared with prior year, we delivered approximately breakeven EBITDA, reflecting the growing contribution of our recurring revenue base. Looking ahead, we expect revenues to accelerate in the second half, supported by both continued growth in recurring revenues and the timing of project-based revenues, while operating expenses are expected to moderate. This underpins our confidence in reaffirming our full year guidance.

Finally, we closed the first half with over EUR 205 million of cash equivalents and investments, while remaining debt-free. This exceptionally strong balance sheet gives us flexibility to continue investing in our pipeline and commercial opportunities, evaluate value-enhancing business development and execute our long-term strategy while maintaining the disciplined capital allocation.

To conclude the financial section, I would like to reiterate that we are reaffirming our full year 2026 guidance across all key financial metrics. We continue to expect total revenues of EUR 105 million to EUR 110 million, driven by continued double-digit growth in our recurring revenue base, together with the expected contribution from project-based revenues in the second half of the year. We also continue to expect EBITDA of EUR 10.5 million to EUR 13.5 million, supported by the anticipated revenue acceleration and continued operating discipline.

Finally, we expect to end the year with approximately EUR 200 million in cash, equivalents and investments while remaining debt-free. This strong financial position provides us with significant strategic flexibility to continue investing in our business while maintaining the disciplined capital allocation. Overall, our first half year results reinforce our confidence in the outlook for the remainder of the year, and we remain well positioned to deliver on our financial commitments.

Before I hand the call back to Gio, I'd like to conclude with our approach to capital allocation. Our balance sheet is a strategic asset and our philosophy is simple. Every year we deploy must create long-term shareholder value. With a debt-free balance sheet and more than EUR 200 million in cash equivalents and investments, we have the financial flexibility to invest from a position of strength while maintaining disciplined capital allocation. We allocate capital across 3 clear priorities.

First, we invest in differentiated innovation where we believe we can generate attractive long-term returns. We maintain a minimum targeted return of more than 4x our R&D investment, ensuring that capital is directed toward programs addressing significant unmet medical needs with compelling commercial potential.

Second, we pursue disciplined business development, whether expanding our AI and MedTech ecosystem or strengthening our pharmaceutical portfolio through licensing and strategic partnerships. We remain selective and focused on opportunities that enhance our platform and create sustainable value.

Third, we remain committed to returning capital to shareholders through a sustainable dividend as demonstrated by the 2025 dividend paid during the first half of this year. In summary, our capital allocation framework is straightforward: invest where returns justify the risk, partner where we can accelerate value creation and consistently return capital to shareholders. Combined with our strong balance sheet, we believe this disciplined approach positions Cosmo well to deliver sustainable long-term growth and shareholder value. I will now pass it back to Gio for the concluding remarks.

Thank you, Svetlana. A strong first half financially and a balance sheet built to invest. Let me close by pulling it all together. So let me be clear about what 2026 means for Cosmo. This is not a year of reinventing the strategy. It's a year of execution. The first half demonstrated exactly that. Commercial momentum, recurring revenue growth, pipeline advancement and regulatory execution and operating leverage from a position of financial strength and with more than EUR 200 million in cash and investments without any debt. We have a real strategic flexibility. The ability to invest behind our best opportunities and create value on our own terms and our own time line, execute, scale and create value. That's the plan, and we are delivering on it.

I'll leave you with this. Cosmo enters the second half of 2026 stronger than it has ever been. We have the firepower. We have cash. We have no debt. We can invest and reward shareholders. We have a platform in GI Genius that's compounding into multi-application AI franchise. We have a pipeline with a potential hair loss blockbuster moving into regulatory filing. And we have momentum, recurring revenue up 18% on our commercial franchise in scaling, 3 engines all firing on a fortress balance sheet. We will execute the strategy, scale the business and create value. With that said, thank you so much, and we'll open up for Q&A.

The first question comes from the line of Ben Jackson from Jefferies.

I've got 3, and I'm happy to come back to them as a reminder, if that's easy to separate them out. The first, we've obviously seen results for the extended-release oral minoxidil for the hair loss section over the last half. So I was wondering if you at all have changed your view on how potentially Clascoterone as a topical solution could be positioned? And any thoughts you have on -- in and around combination approaches between orals and topicals. So that's my first.

If I could do the second as well, perhaps if you have any updated thoughts on what you're looking for in a commercial partner for Clascoterone as well. Are you looking more for one global partner? Or are you looking taking the regional approach that you also went with Winlevi?

And then finally, I just want to check really briefly, the IP dynamics for the asset as well, your current working expectations and assumptions. Is there any chance of any extensions could be granted from there? And perhaps what strategies or studies could be conducted by either yourselves or a partner that could extend out that IP? So 3 questions for you. If you want me to repeat any, I'm more than happy to.

No, I'm good. Ben, thank you so much for the questions. Nice to hear your voice, Gio here. Let me start with your first question. I think you're referring to the oral minoxidil phase II/III results that were published a few weeks after our 12-month data. I mean I'm sure you know very well that those are 2 very different mechanism of actions.

Ours attack the root cause of a loss, the DHT. Another point of view is that minoxidil is a well-known and very old generic molecule with well-known also side effect. I think if you focus on our safety profile on the 12-month data, you really appreciate the fact that this is ready for chronic use. I think for that reason, we stay bullish about our results, both on the efficacy, but also on the safety profile.

Regarding your question on the combo use, talking to dermatologists, especially in the U.S., they keep telling us that those 2 products are complementary and not in competition against each other. As a matter of fact, minoxidil in pills is already sold in the U.S. It's a generic sold via pharmacy or telehealth with a degradation time of 2 hours instead of a longer degradation time that the other company is claiming. And they believe that could be also an opportunity for patients to use both. Ours is going to be the first topical approved with a unique mechanism of action that can be used in combination with other molecule. In this case, generic minoxidil.

Now with that said, this needs to be proved also through clinical evidence prescribed by dermatologists, but we know that this is the feeling, especially from the doc side in the U.S. Licensing, great question. We have been very busy. We still are very busy. And the good news, like Svetlana said, we have a fortress balance sheet. I think we want to create and maximize value for Cosmo and Cosmo shareholders. We are assessing and evaluating different optionalities, both global versus regional.

I think we are going to decide based on what brings the most value out of those conversations, which are happening as we speak. On the IP, I think you know very well that our IP is very strong, which is also make very unique our product versus other potential competitors you just mentioned earlier. Our IP expired 2037. And yes, we really are looking into extension, but it's too early to speculate around this, but that's an optionality also we have.

The next question comes from the line of Ram Selvaraju from H.C. Wainwright.

Congratulations on all of the recent progress. Also 3 very quick ones from me. I was wondering if you could elaborate a little bit on the publication strategy with respect to the clascoterone pivotal results. In particular, if you can give us a flavor of what kind of fora or journals, the level of impact factor you are anticipating? And if there's any additional granularity on timing as well as whether in that context, do you anticipate providing additional analyses of the efficacy data beyond those that were previously disclosed in the top line press release? So that's one.

Number two, I was wondering if you could comment on capital allocation initiatives and in particular, how potential stock repurchases might fit into how you see the optimal way to deploy your capital going forward? And then lastly, with respect to the pipeline, Gio, you mentioned in your prepared remarks, extensive commentary on the GI-focused development stage pipeline at Cosmo. Maybe just give us your updated thoughts on how you anticipate potentially unlocking value from those pipeline assets and within what time frame this might occur?

Yes. Okay. So let me take the first question, Ram. Nice to hear your voice as well, and thanks for the question. Publications. So we are extremely busy with all the data we were able to collect. And I can tell you that there will be tons of publication coming out moving forward, especially in the fall.

We are targeting high-impact journal, and that's where we want to have the Phase III results published 6 and 12 months with all the information that we will share, including also TAHC and subgroups, you will have a full set of information. That's the goal, and that's the reason why we're moving into that direction. But also, there will be additional publication, especially on the mechanism of actions that is a very unique differentiator of our molecule. What does the mechanism of action means in androgenetic alopecia, why inflammation is also important to be treated and why clascoterone does treat that inflammation as well. So expect to see over the next 3 to 4 months, those publications coming out.

The submission of the paper expected to be at the end of the fall. So I'm expecting this by the end of October. Then based on publication acceptance, this could be as early as 2027. So that's the time line.

Now let me take the GI pipeline, and then I'll let Svetlana reply to you on the capital allocation. We are super excited about how we are moving forward on the GI pipeline. At Distal UC, we really accelerated enrollment, completed the study. We have perceived from those centers in the study trial excitement from the doctors about the opportunity. So that's why you saw an acceleration versus last year. And this is happening also for bile acid diarrhea as we speak. So we reaffirm our forecast of closing the enrollment for bile acid diarrhea by year-end. So then by the end of the year, you will have a publication on Phase II, and you will have also a finished enrollment on every Phase II.

Yes, with that in mind, I think you have 2 assets in 2 large markets. And I think we're going to also there take decisions whether we want to find a partner, license it or drive like we have done in the past to Phase III to maximize additional value. It's great to have optionality, I'm telling you, and it's great to have also our balance sheet managed very well by the leadership team in terms of cost, in terms of opportunities. So we're going to reassess this as we go through the next few milestones. Svetlana?

Thank you. Ram, thank you for the question. We understand why investors on the street are asking us about the share buybacks, particularly given our strong balance sheet. As we've said previously, the Board and the management regularly reviews all capital allocation alternatives, including investments in the business, strategic opportunities, returning capital to shareholders and share repurchases.

At this stage, we have no announcement to make regarding the particular share repurchase program. Our priority remains on allocating capital where we believe it can create the greatest long-term shareholder value, and we'll continue to evaluate all available options as the market conditions evolve. Thank you so much for the question.

The next question comes from the line of Martial Descoutures from ODDO BHF.

Martial Descoutures, ODDO BHF. Two quick questions, if I may. On Winlevi, the sales continue to grow strongly. So what are your expectations for the pace of the European launch over the next years? And my second question is regarding GI Genius. The growth is expected to accelerate in the second half. So could you help us to modelize the short-term dynamics of GI Genius for the next quarters or maybe the years?

Yes. Great question, Martial, and nice to hear from you as well. So let me take first Winlevi. So first off, I think I hope I was clear and loud in the presentation that the fact that we were able to open 14 new markets in this first semester, it's pretty outstanding, and we continue to deliver such great opportunities to our partner with our manufacturing site, regulatory team, clinical team. And like you said, the best is yet to come. In H2, we expect to see commercial launches in Italy, Iceland, France, the Netherlands, Hungary, if I remember very well, Romania, Greece, Qatar, Philippines, Bahrain, Lebanon and so and so.

I think we have another good 15 markets that we're going to open. We are also proud to announce that in Canada, Winlevi has achieved top 3 brand status in acne therapy by sales, and it's the second fastest-growing brand in the category. So we are super happy that this drug developed internally still clascoterone, so which is another important factor, is helping so many patients worldwide. I think that's impressive. We reiterate the double-digit growth also in the second half for Winlevi and happy to see that trend continue.

On the GI Genius side, I can tell that there is super excitement from Medtronic for the performance of this new module, Genius 300, which embeds the new chip of NVIDIA called IGX. And we have seen a significant uptake in terms of customer opportunities to leverage that hardware to work with ColonPRO, the application that we have. So as the units deploy and customers increase, then we're going to also get ready for delivering more units in the second half.

We are in constant conversation with Medtronic. We expect to see a double-digit growth for both the second half, but also for the full year. So you will see a very important second part of the year for GI Genius, both for the application royalties, but also for the hardware that increase the number of users in the United States. Yes, so that's pretty much what I think we have to take in account for GI Genius. Both companies remain focused on expanding adoption and advancing the platform globally.

The next question comes from the line of Estelle Betrisey from Berenberg.

Just a follow up on the previous one. Could you just share with us maybe if you can, the trends and level of take-up you actually have seen in the European countries you have launched and rolled out Winlevi in the first half? And then another question also on the EBITDA that you printed. If you could also give some -- a bit more details on the building blocks that you intend to reach the 2026 guidance. I know there's a milestone that you expect, but also the decline in -- a slight decline in OpEx. But what -- maybe what items more specifically you're referring to?

Yes. So Estelle, thanks for the question. I'm going to take the first one. I'll let Svetlana reply to the second one. So Winlevi expansion, clearly, you can see the results from what we shared in the presentation also this morning. I think I can say that our partners, mainly Glenmark and InfectoPharm in Europe are really doing amazingly across those markets. As we speak, actually, we are launching those drugs, I mean, those markets. So I mean, it's very early now to say for each market, what's happening. I mean what is reassuring is that there is a great ask and demand from Glenmark and InfectoPharm. And I think you will hear more and more from those companies in the next 6 months.

Thank you, Gio. For H2 2026, we expect continued growth from Lialda and CDMO momentum, and so we feel very confident there. We also expect the ramp-up from GI Genius, which together gives us very strong confidence that we will easily achieve the guidance that we've set. We additionally expect a milestone for budesonide that we feel very confident about that gives us confidence in achieving our project-based revenues of between EUR 7 million and EUR 8 million.

We expect R&D expenses to decline modestly as the clascoterone program for Phase III continues to ramp down and come to its completion. And we expect SG&A cost to decline modestly as well. As a result, we remain very positive in our ability to achieve the guidance and hit the double-digit growth, not just on the revenues, but also on EBITDA. Thank you for your questions.

The next question comes from the line of Nicolas Pauillac from Kepler Cheuvreux.

I hope you hear me. Maybe just a follow-up on Winlevi. Would you be able to give us some color regarding what's the growth you are seeing in the U.S. compared to what was in Europe to kind of get a sense on how you got to the half year growth that you reported? And then a second question, just to come back on the hair loss product and the time line that you mentioned. So -- you mentioned that you had active discussion right now. So are we to assume that the previous time line that you kind of soft guided, let's say, that we could expect a licensing deal to happen before the end of the year is still on track there?

And then last one, maybe the most annoying of the 3, but what's the, let's say, goal of this scientific publication? Because I think that this is a drug that's going to be driven by, let's say, retail needs rather than scientific conviction. So if you could walk us back through what was the thinking process to go with the publication compared to what some of your competitors has been doing, which was, let's say, more straightforward communication on results?

Nicolas, let me take the first question on Winlevi. So Winlevi continues to bring majority of the revenues through U.S. at this point, right? Even though U.S. revenues are growing at a slower pace, it still remains the majority of the revenue, while the year-over-year growth itself is coming from European supply revenues at this point. I'll be happy to follow up offline later to provide you a detailed breakdown if it wasn't available in our annual report. Thank you.

So the second question, Nicolas, I think -- as I said earlier, we have been having conversation with different potential partners. There is a very strong interest. Now I can't commit to any forecast on when an agreement is going to be announced. The most important point is that we are busy. We are assessing. And when time will come, clearly, this will be ad hoc announcement for investors and for you guys.

Again, data is solid and safety profile is super solid as well. The market is big. It's above $28 billion. So we are unique mechanism of action, and we don't compete with anyone in terms of mechanism of action. It will be the first topical approved after 30 years. We have ran the largest Phase III trial on a topical drug for hair loss. So I think all of these things are making this opportunity real, and that's why we are taking the right time with no pressure to decide and increase and maximize the value here.

As a matter of fact, also, I want to stress the point that we are running really nicely also the regulatory filing here. I think you can appreciate from the press release that we're going to submit also in parallel between U.S. and Europe, which is kind of a new approach of Cosmo. And I think we're very, very keen to go fast on that side. Company has a long history on submitting NDA and also submitting in Europe, which is also relevant in this space.

And back to you regarding the publication, I think we really believe and our history shows what we have done, it's all based on clinical evidence. You're right, this market could be more driven by consumer, but the base, the foundation of the clinical validation, the safety profile, the efficacy, it's the base of any drug that we release in the market. So for that reason, that publication needs to go in a prime journal high impact, and that's what we're doing and working very hard also with few key opinion leaders in the U.S. who are super happy to support the publication. As a matter of fact, they are working on that publication as we speak.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to the speakers for any closing remarks.

Well, I want to thank you all for the great questions and the interest, and we look forward to update you for the second half and the full year, and I wish you all a great summer and talk to you soon.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Full Year 2025 Results Conference Call and Live Webcast. I'm Mara, the Chorus Call operator.

[Operator Instructions]

The conference is being recorded. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Giovanni Di Napoli, CEO. Please go ahead, sir.

Good morning, good afternoon, and welcome, everyone. I'm Giovanni Di Napoli, CEO of Cosmo, and I'm joined today by our CFO, Svetlana Sigalova. Thank you for being with us for 2025 full year results. We walk you through our performance, our progress on strategic priorities and the path ahead. A quick note on forward-looking statements. 2025 was not a year of noise. It was a year of execution. Today, I want to walk you through 3 very clear messages. First, structural transformation has been delivered. Over the past year, we fundamentally reshaped Cosmo. We simplified, we focused, we aligned the organization around scalable platforms rather than isolated assets.

What you're seeing today is not incremental improvement. It is a different operating model, leaner, more disciplined and built for leverage. Second, financial discipline and recurring revenue. We have moved from opportunistic revenue to structured, repeatable revenue streams. Recurring components are increasing. Cost control is embedded in the culture of Cosmo. Capital allocation is deliberate. We are building predictability into the model and predictability drives valuation. Third, 2026 catalyst and operating leverage. The work done in 2025 creates torque. The platforms we built now begin to scale. The operating structure we put in place starts to amplify growth. 2026 is not about rebuilding, it's going to be about compounding. So as we go through the results today, I want you to keep one lens in mind. This is a company that has completed a decisive structural evolution. We are now entering a phase of acceleration.

Let's start with structural transformation. Before we go into the numbers, let me start with something more fundamental. Cosmo's mission is simple. We are building health confidence. Health confidence for patients, for physicians, for our partners and ultimately for our shareholders. This is not marketing language. It is how we design the company. In 2025, we translated that mission into 3 clear pillars: First, a recurring revenue model that brings visibility and predictability to the business. Second, an AI-enabled MedTech platform that is expanding across procedures and abandoning technology directly into clinical workflow. And third, a late-stage dermatology catalyst with positive Phase III results in androgenetic alopecia and 12-month safety data expected this spring 2026. Together, these elements combine durable recurring revenue, scalable technology and pipeline value. This is how we're building health confidence.

What you see here is the architecture of Cosmo. This is not a single asset company. It is a recurring growth platform with catalysts. At the core is our recurring revenue engine, shifting the company from episodic growth to predictable growth. On top of that fits AI-driven operating leverage. Our installed base continues to expand and software applications layers on top of hardware. Hardware distributes software compounds. We then add pipeline catalysts, starting with Clascoterone, a late-stage dermatology asset with multiple partnering pathways. And finally, a strong balance sheet give us flexibility to invest, partner and scale the platform. So when you step back, the model here is simple. Recurring growth is the foundation. Catalysts are the multiplier.

Let me now show you how that model translated into financial performance in 2025. Revenue reached EUR 104.2 million with approximately 85% now coming from recurring revenue. Recurring revenue grew 15% year-over-year, which was our commitment for double-digit growth, driven by strong GI Genius performance and solid contribution from Winlevi. EBITDA reached EUR 9.5 billion, reflecting operating discipline while continuing to invest in growth. And we closed the year with EUR 128.3 million in cash with 0 debt and the dividend maintained. So the message is clear. We delivered on guidance and above guidance. We did what we said. We improved the quality and predictability of our revenue base. We maintained financial discipline while investing in growth, and we preserve a strong balance sheet.

This combination position Cosmo for sustained value creation. This is not a 1-year performance story. This is a compounding model taking shape. Now let me give you an update on our clinical and R&D pipeline. Our pipeline is focus is disciplined and aligned with areas where we see meaningful commercial opportunity. Let's start with Clascoterone 5% topical solution for main hair loss. We reported positive Phase III top line results last December 2025 with 12-month data safety and tolerability expected in spring 2026. This disease is a large global market opportunity with limited innovation. Patients are actively looking for new options and physicians want effective therapies with a strong safety profile. Well, Clascoterone has the potential to become the first new topical mechanism of action in this space in years.

Given the strength of the data and the size of the market, we are seeing strong external interest and are actively evaluating strategic options to maximize shareholder value. I will come back to this later in the presentation. Moving to Ulcerative Colitis. Enrollment is progressing well with more than 50% of patients already in. We expect to complete dosing in by the end of this calendar year. Next, by Bile Acid Diarrhea. We currently have 19 active sites across the U.K. and Europe and expect to complete also the study and enrollment by the end of 2026. Just as a reminder, Bile Acid Diarrhea is a significantly underdiagnosed and underserved market, representing a very attractive opportunity for Cosmo in Specialty GI, aligned with our portfolio and gastroenterology focus. Finally, CB-03-10 in solid tumors. Dose escalation has been completed with no safety signals observed and we are planning to have a publication on this study in Q2 2026. Following that publication, we plan to initiate partnering discussions in order to be able to out-license this assets. This also was announced last year, and that's the plan moving forward. So if you step back, the structure is clear, a late-stage dermatology opportunity with near-term catalysts, mid-stage GI programs progressing on schedule, and a capital-efficient oncology strategy with clear partnering intent. This pipeline complements our recording commercial platform and adds additional value catalysts through 2026.

Let me now move to MedTech AI, CDMO Gastro and a quick update on ESG starting with MedTech AI. We achieved EU MDR certification, reinforcing the durability of our platform in Europe. At the same time, we continue expanding the capabilities of the platform. Colon Pro integrates real-time detection, sizing, characterization and quality assessment, while the new application Cerebro brings AI guidance into upper GI procedure. We're moving from simple detection colonoscopy towards full workflow intelligence in GI. On the Apple Vision Pro, we completed the first feasibility study combining VisionPro with GI Genius treating 16 patients. The study was positive. A second study will begin in the second half of the year as we continue exploring how spatial computing can enhance procedure visualization and interaction with our customers. Moving to the Derma and Gastro. Winlevi received the EMA approval last fall 2025, with first European launches expected in this first part of the year in 2026. We also expanded approvals and commercialization across multiple international markets, strengthening our global dermatology footprint.

In CDMO, we signed a multi-year manufacturing and supply agreement to Takeda for Mesalazine, adding long-term visibility and reinforcing our recurring revenue base. Finally, on ESG our scores improved across S&P, Morningstar and MSCI, with MSCI upgrading us to A rating. So the message here, again, is simple. We are scaling AI. We are expanding globally, and we are strengthening recurring revenues, and we continue to execute with discipline. Now let me hand over to our CFO, Svetlana Sigalova, who will present our 2025 financial results.

Thank you, Gio, and good morning, everyone. I will begin with a review of our 2025 financial results and performance drivers and then turn to our 2026 financial framework and outlook. Here, I will not repeat the full summary as Gio has already covered the key highlights, but I would like to underscore 2 points. First, our EBITDA performance exceeding the upper end of our guidance. That reflects operating discipline and the scalability of our recurring revenue model. Second, our balance sheet strength that preserves full strategic flexibility as we continue to invest in growth.

I am particularly proud of the execution across the organization, delivering the current growth, maintaining cost discipline and strengthening profitability in a structural transition in year. With that, let me walk you through the financial details.

Looking at the revenue composition, recurring revenues reached EUR 88.1 million, up 15% from 2024, consistent with a double-digit growth commitment we made at the start of the year. Project-based revenues were EUR 16.1 million. As a reminder, 2024 included EUR 186.3 million in Medtronic milestones. The revenue base is now significantly more predictable and commercially driven. This enhances visibility into 2026 and beyond. Now let me break down the drivers of our recurring revenue growth starting with GI Genius. Revenues reached EUR 17.9 million, representing 211% growth versus prior year. The triple-digit growth is exactly what we committed to at the beginning of 2025 and we delivered on that commitment. This reflects expanded installations, increase in adoption and continued collaboration with our partner, Medtronic. The growth rate here demonstrate the scalability of our platform as penetration increases.

Moving to Winlevi. Revenues were EUR 17.2 million, up 27% year-over-year. Again, the double-digit growth is what we committed to at the beginning of 2025. This reflects growing physician adoption, improved market access and geographic expansion. Winlevi continues to establish itself as a differentiated product in its category. The remainder recurring revenues, approximately EUR 53 million comes from our legacy gastro product and CDMO. Within that, EUR 27.9 million from Mesalamine, EUR 15.6 million from CDMO and EUR 9.7 million from all other gastroenterology products. Our diversified base provides stability while growth asset scale, recurring revenue growth is driven by commercial assets with operating leverage, supporting continued expansion into 2026 and beyond. Let me walk you through the P&L with focus on cost discipline and profitability. As discussed, total revenues were EUR 104.2 million. Other income was EUR 7.2 million and includes certain nonrecurring items that we do not expect to repeat at the same level in 2026. On the cost side. Cost of sales increased to EUR 53.6 million. The increase versus prior year primarily reflects higher commercial volumes and product mix effects and recurring revenues expanded.

Turning to operating expenses. Research and development expenses were EUR 34.2 million and decreased 14% versus prior year. This reflects focused execution across the pipeline, prioritization of key programs and disciplined external spend management, while continuing to advance our strategic assets. Selling, general and administrative expenses were EUR 26.8 million and decreased 26% year-over-year. This reduction was driven by operational focus and lower personnel-related costs as we align the cost base with the current structure of the business. Overall, operating expenses decreased 6% year-over-year. Recurring revenue growth combined with disciplined cost management, delivered EUR 9.5 million in EBITDA, exceeding the upper end of our guidance. This performance reflects operational execution. We will continue to actively monitor our cost base, pursue operational efficiencies and allocate capital to the highest return opportunities. The outcome is a more efficient operating model and improved profitability as we enter 2026.

Let me now turn to 2026 guidance and the trajectory of Cosmo. On recurring revenues. For 2026, we guide to EUR 98 million to EUR 102 million, representing 11% to 16% growth and the 2024 to 2026 CAGR of approximately 13% to 15%. This reflects continued expansion of GI Genius and Winlevi supported by the stability of our gastro and CDMO base. On profitability. For 2026, we guide to EUR 10.5 million to EUR 13.5 million, representing 10% to 42% growth year-over-year. As a recurring revenue scale, operating leverage becomes more visible. The structural shift towards predictable commercial revenue supports our sustained EBITDA expansion. As we enter 2026, the business model has become an increasingly recurring, scalable and profitable. Let me summarize the 2026 financial framework. We guide to total revenues of EUR 105 million to EUR 110 million, of which EUR 98 million to EUR 102 million are recurring and project-based revenues are expected to be modest at EUR 7 million to EUR 8 million. Importantly, this guidance excludes any potential revenue from pipeline to development stage assets.

Turning to R&D. For 2026, we expect research and development investments of EUR 25 million to EUR 30 million. This represents a disciplined and focused investment level aligned with key value-driving programs including Phase III and regulatory work in androgenetic alopecia, 2 Phase II gastro trials and continued MedTech AI expansion. We are investing where returns are highest while maintaining overall cost discipline. On profitability, 2026 EBITDA of EUR 10.5 million to EUR 13.5 million is driven by recurring revenue growth and operating leverage, combined with continued cost focus. And importantly, we expect to exit 2026 with approximately EUR 200 million in cash and investments with no debt. This strong balance sheet provides strategic flexibility to fund internal programs, evaluate partnering opportunities and maintain resilience. So the framework for 2026 is clear. Double-digit recurring revenue growth disciplined R&D investment, expanding EBITDA, strong year-end cash position, where scaling the business while preserving financial strength.

Cosmo today is a recurring revenue business with expanding margins and a strong balance sheet. This financial structure gives us flexibility to invest in high-return opportunities, advance our late-stage pipeline, scale our AI platform and return capital to shareholders. Against that backdrop, the Board is proposing a dividend of EUR 2.10 per share. This increase reflects continued confidence in the strength of business and our disciplined capital allocation framework. We remain focused on investing in our growth opportunities while maintaining a consistent approach to shareholder returns. Subject to AGM approval, payment is expected on May 11, 2026.

Let me close with our capital allocation framework. Our priorities remain clear and disciplined. Every year, we allocate across strategic research and development, partnership and licensing and organic business needs is focused on expanding our recurring revenue base and driving long-term profitability.

In research and development, we invest in programs with clear value creation potential. In partnerships and licensing will pursue opportunities that accelerate growth while maintaining financial discipline. And in the core business, we continue to scale our platforms efficiently. At the same time, returns to shareholders remain a priority. The proposed dividend reflects confidence in the strength and stability of our business while continuing to invest for growth. With that, I will pass it back to Gio for closing remarks.

Thank you, Svetlana, for walking us through our 2025 financial performance. Numbers reflect discipline focus and strong execution across the organization. That's clear. Let me now turn to 2026. As we look ahead, we see a year defined by clear catalysts and increasing operating leverage. The foundation has been built. The revenue mix has improved. The balance sheet is strong. Now the focus shift is acceleration. The next few slides, I will outline the key value inflection points ahead of us and how the platform we have constructed that translates into scalable growth, margin expansion and strategic optionality.

2026 is about converting structure into momentum. Let me spend a moment on Clascoterone 5% topical solution. Male androgenetic alopecia is a large, medically driven and underserved market. In the U.S. alone, approximately 65 million are impacted. This represents a market opportunity of roughly $20 billion with premium pricing potential that we tested to a very important market research last year. Importantly, there are limited differentiated FDA-approved therapies. Patients are willing to pay. Persistence rates create a recurring revenue dynamics here. So Clascoterone 5% topical solution introduced a new mechanism of action in a market that has seen very little real innovation over the last 30 years. As you all know, we have already delivered positive Phase III top line data. 12-month safety and tolerability data are expected in the next few months, spring 2026. Even the strength of the asset and the data set and the size of the opportunity, we are actively engaged in discussion with multiple leading global pharmaceutical companies.

Now I will not comment on timing or structure today. But what I will say is this, an asset of this size at this stage, with this level of external interest has the potential to be value defining for customer. Our focus is simple: maximize long-term shareholder value, structure the right partnership, execute with discipline. This is a significant opportunity for Cosmo. Let me take a moment to frame now the MedTech AI franchise and business. And what does it mean for Cosmo? AI, artificial intelligence is rapidly becoming a foundational technology also in health care, not only in consumer. By 2030, the addressable market for MedTech AI is expected to reach approximately EUR 152 billion, growing at close to 40% annually. For us, this is not a distant opportunity. AI is already embedded in our GI Genius platform today. What we are doing now is expanding that foundation into new clinical applications, new procedures and new software layers. Our goal is simple. We want to build a scalable AI platform that sits directly inside the clinical workflow.

So what you see here is the scale of the installed base. GI Genius is already deployed across the globe you can see here, U.S. and Europe and that installed base is the foundation of our strategy. So once the platform is in place, we can begin layering software application on top of it. Colon Pro for colorectal cancer screening, U.S. for pancreatic cancer detection, Barret's Esophagus detection, we just recently made an announcement and with a very important partnership with Amsterdam Medical Center on that topic. Esophageal symptoms analysis and emerging applications such as patient computing with the Apple VisionPro. This is how the model works. Hardware clear distributions, software creates scalability and recurring revenue compounds over time. What makes this model powerful is that it is repeatable. At the center is our installed base and the clinical data that it generates everyday real clinical practice. Around that foundation, we have built the infrastructure required to scale AI in medicine. So we have AI engineering and in-house development capabilities, regulatory and clinical infrastructure, strategic partnership and cloud capabilities, NVIDIA, Apple and the ability to deliver end-to-end solutions directly into the clinical workflow. This combination I promise is very rare.

Many companies developed algorithms. Very few have the platform required to deploy AI at scale inside real medical procedures. Each new application strengths the platform, expand procedure reach and increase the value of our installed base. And importantly, the capabilities we have built in Cosmo allow us to extend this platform across additional procedures, additional specialties and clinical workflow over time. This is how we believe we can scale MedTech AI. And that is why we believe Cosmo is uniquely positioned to lead the next phase of AI adoption in the real clinical markets. All of this leads directly into 2026. Our focus for the year is very clear. First, continued scaling recurring revenue and AI software across our installed base. Second, advanced Clascoterone 5% topical solution to our regulatory and partnering milestone, unlocking the value of a large stage dermatology asset; and third, expand operating leverage as revenue grows across the platform. The combination of recurring revenues, AI software expansion and pipeline catalysts position Cosmo for meaningful value creation.

Since the closing slide, based on everything we have discussed today, the message is clear. Clascoterone further on with strong Phase III data and active strategic discussion, an AI platform that is scaling and laying software onto hardware, a pipeline advancing with defined milestone and part intent, a recurring revenue base now driving the majority of our business. Cosmo is set up for value creation. 2026 is not a planning year. It is a year of actions. It is a year of results. We have capital, we have catalysts, we have operating leverage, execution now will drive the outcome. Thank you so much. And I'll open up now for Q&A.

[Operator Instructions]

The first question comes from the line of Bob Pooler from ValuationLab.

First of all, congratulations on the strong 2025 results and also your double-digit growth outlook for this year. If I may, first, a couple of questions on the products and then maybe on the operating and the financials. Just on GI Genius, we really see that the platform is now taking off. Where is this growth coming from? Is it more the U.S. or Europe? And also, you announced a collaboration last week, the R&D collaboration in the Netherlands. When do you expect also revenues coming from upper GI indications?

Bob, thank you so much for the question, Gio here. So the growth we have seen for GI Genius is coming both from the U.S. and Europe as well. Clearly, the U.S. market is larger by definition. So even a small percentage of increase means a lot in terms of volume, but both regions are demonstrating strong contribution in terms of further adoption. And in terms of upper GI, so we are actively working on the software part of the upper GI with Amsterdam and we have planned to release that part of the software base also regulatory approval in the U.S. end of next year.

So just remember, also we have an application in upper GI that is called Cerebro that is going to be launched this year in June, July in Europe as this already have received the CE mark approval late last year. And also on top of this, we are integrating GI Genius with the electronic medical record in the U.S. And we're going to launch this application this year in the summer in the U.S., which is going to be a very important part of the growth that I was sharing during the presentation.

Okay. Then just on Winlevi, when do you expect significant revenue contributions coming from Europe?

Yes. So Europe, we're going to launch -- we are the first markets to get up and running before the summer. We have seen a lot of prework done by our partners, Glenmark and InfectoPharm. We are very pleased with the success of the drug also in the U.K., which we launched last year. And we expect to see strong supply requirement from Glenmark and InfectoPharm this year. So it's going to be a steady growth over the next foreseeable future for that platform for us in Europe as well.

Maybe just to add up, Bob, we will see the first revenues from Winlevi Europe on the supply side when we report the first half results in July.

Okay. Just on Breezula then, just to clarify, you expect the results of the next few months, I believe, is that what you said?

Yes. As we announced early in September and also today during the call, spring 2026, so we're talking about the next 2, 3 months. We're going to launch the data at 12 months, which is very important for the safety and tolerability to go together with the regulatory package for both U.S. and Europe, but also to show if the drug can be sustained over time.

Okay. Yes. On the partnering, of course, you're not going to explain what you're talking to, but could you maybe share a little bit your criteria because this is really a value defining event for Cosmo?

I think what I said in the presentation, it's in my opinion, clear, there is a lot of interest. We have perceived of interest since December. There is active conversation with multiple partners, big partners. And I think when time will come, we'll share more information. As of now, we are pleased with the interest we have perceived. The market is gigantic. And I want to reiterate the fact that with the market research that we conducted last year, this is a market of over $20 billion just in the U.S. So that's why like I said that this is a value defining asset for Cosmo moving forward.

I fully agree. And yes, just to that on the partnering announcement, of course, and the sign, of course, that could make a huge impact also maybe for this year on your milestone agreements, a milestone contribution there, too.

So I think you --

Yes, go ahead. No, please.

No, I was just saying that our guidance does not include any of this upside, which is a very important piece to clarify if someone did not get this. Our guidance do not guide on those opportunities, those assets that are very short term. So yes, expect to see more in 2026 on that side.

And just finally on the operating expense and your guidance there. You have really shown quite a lot of efficiency there. If you look at SG&A, quite a large drop there. How is this realized? And what's your guidance going forward both on SG&A and also then on R&D?

Bob, I'll take this one. So for R&D, we said that for 2026, we expect expenses to be EUR 25 million to EUR 30 million, which is a continued decline our guidance for 2027 could remain the same or be slightly higher, depending on how the assets that are currently in place to progress through the trials. I'm talking specifically now about Bile Acid diarreha and Distal Ulcerative Colitis. For SG&A, we believe that we now have a strong quarter that has been optimized. However, we continue to monitor for efficiency and it's possible that you will see the expense to decline slightly as we progress into 2027.

And just then what is your estimated cash and cash equivalent because after the year, of course, you have the offering part with Capital Group. What is your estimated cash for -- as of today more or less?

So the estimated cash and equivalents ending for 2026 is expected to be approximately EUR 200 million. I'd now like to open to other participants, please. Thank you so much for your questions.

The next question comes from the line of Nicolas Pauillac from Kepler Chevreux.

Congrats on the results. Maybe 2 for me. The first one is just on this project-based revenue guidance for next year. Could you just break it down a bit? I guess it would be like just commercial milestone that you have put into that from maybe Winlevi. Then a second one just on the -- if you could give us your thoughts on the Veradermics product. There has been a lot of noise around that since the IPO would be nice to have your view on that? And how do you think it might or might not impact the market for Breezula? And then maybe a third one, just -- do you have any idea of big [indiscernible] or things like that, that you would like to present more data on the efficacy on Breezula over the next month?

Nicolas. Let me take the first one. If I could please confirm that when you're talking about milestones, you're talking about 2026 or 2027?

'26.

So for '26, we expect milestones of EUR 7 million to EUR 8 million that are mainly related to legacy gastroenterology programs. So the milestones from Winlevi have been largely realized in 2025, and we do not expect any significant milestones from Winlevi until 2029 or 2030 or so. I will now pass it to Gio to talk about your questions regarding the Veradermics.

Yes. Thanks for the question, Nicolas. So we are very well aware of the Veradermics program. At this stage, we see it more on our side, the fact that we have completed a larger Phase II trial with over 2,000 patients. We have in the next couple of months, also ability to show data on safety and efficacy on 12 months. And I think that's going to be a very important piece and it's a very unique mechanism of action. Ours is an androgen receptor attacking the root cause of hair loss. What I can say is that the interest above hair loss across the market is really, really high, which is good for us because we are advanced compared to any other company.

And I think this is going to bring us even more visibility than what we already have. And then regarding your last question, yes, we are planning to be at the American Dermatology Association event. I think it's going to be this April, May in the U.S. We add up a few things organized, and we'll report back as soon as we have more robust information to share with you.

Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to the speakers for any closing remarks.

Maybe just one quick comment. We will respond to all my questions via e-mail today. Thank you.

Thank you very much. Have a nice day. Bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.