WEST PHARMACEUTICAL SERVICES INC — Call Transcript 2026

Thank you for joining us. We'll kick off our next session. My name is Michael Ryskin. I'm on the Bank of America Life Science Tools and Diagnostics team. We're excited to be hosting West Pharmaceutical Services for our next chat, joined by Eric Green, President and CEO, and Bob McMahon, Chief Financial Officer. Eric, Bob, thanks so much for being here. Great to be here. Great. Thanks for hosting us. Of course. Thanks for being here. Format will be a fireside chat Q&A. As usual, if you've got questions, feel free to raise your hand and we'll incorporate you in. Had a, you know, standard opening question. We're going to pivot a little bit just given the 8-K last night on the cybersecurity issue, kind of have to lead off with that. Just curious, what's your response to that, and sort of, you know, give us a quick rundown of the situation. Yeah, let me start with this, and Bob, if you want. Last night we did issue an 8-K, and what has happened is back, last, early last week we had a notice that intrusion into our systems. We followed protocol, quickly shut down all our systems across the globe so that we can better understand the situation that was at hand. On May 7th, which was last Thursday, we identified that it was identified the intruder, identified that they had access to some of our data and were able to extract a portion of the data. We want to, we obviously, before that period of time, we already secured external support around cybersecurity forensics. We brought in a well-known agency called Unit 42 out of Palo Alto Networks, who have been working with us side by side to do the forensics to understand the situation. Since that time, we, so obviously we want to make sure we got an 8-K out in particular to that reason alone is that we felt the data was ensure that it wasn't compromised. We know that the data was encrypted, a portion of it, and we were able to, at this time, de-encrypt the data and also ensure that there was no additional data loss to the organization. At this time, we're able to, all operating systems are up. We're able to do shipping and receiving for our customers. We're also able to, all our in-service systems are operating appropriately and several of our sites are manufacturing and operating, including Eschweiler, in our global network. There are several plants that we are currently working on to bring up, but it's a very methodical, systematic process to ensure that we harden our systems at the sites that we are bringing up. We're making excellent progress. We believe that we feel that we have secure systems going forward as we are getting all our sites up across the globe as soon as possible. It's important for us because our number one focus is to be able to support our customers to ensure that we're able to get materials to them in a timely fashion. Therefore we are prioritizing our sites accordingly. Maybe just two other quick things. You know, we did take, you know, we made measures to ensure that the data that had been exfiltrated is not going to be disseminated. We feel good about that. We're still finalizing the plans of when the sites are coming up. As Eric said, we've got a number of sites already up and manufacturing in addition to shipping and receiving. You know, we're not in a position right now to determine the financial impact if in fact there is any impact. We are making very good progress here and you would expect to hear from us, you know, as the events unfold in the near future. Yeah, I mean, on that point, Bob, you know, May 4th, that means that some sites were down for a couple days up to a week. Some are now down for a week longer. You know, as you said, you're bringing them back online. Can you talk about ability for the time that things were down, ability to catch up some of that either in the near term, even meaning in the next month or two for 2Q, or over the course of the year, you know, inventory on hand that can help offset some of that downtime? I know you can't, you know, finalize, put a number on it, just directional. Yeah. You want me to take that? As you know, our facilities do have flex capacity, we will be running 24/7 to be able to do that. The demand is still there. I think one of the things that's important is why it's so important for us to work with our customers is these are proprietary products that are associated with a drug. That demand is still going to be there. Those revenues will not go away. We've still got several weeks in the quarter as we're moving forward. You know, we are going to be putting a full focus on bringing back better our sites, you know, hardened and up and running to be able to support our customers. That's the work that we're doing right now. We do have the ability to actually increase capacity, given that we don't run 24/7 across all of our sites and I'll leave it at that. Okay. When you talk about data being infiltrated, is that customer data? Is there any IP around that, or is it internal system? All I would say is we're probably not at liberty to say what kind of data, but it was a material data breach and we've taken measures to ensure that that data doesn't get out to the public. Okay. Last question, I guess you said that, you know, you 8-K'd this yesterday. You, I'm assuming you've now engaged with all of your customers that were impacted one way or another by this, which is a lot of them. Sort of just any sense on how those conversations have gone? Any early feedback from them? Yeah What's the response been from the customer side? Yeah, no, that's an excellent question because that's our primary focus is the first area that we focus on reaching out immediately to our customers had engaging conversations. We gave them an understanding of where we are, what has occurred, and what we are going to be doing, and also give them assurance that we have reached out to some of the best in the industry to support us on this process, and frankly, our customers have been very supportive. They understand, we understand with them the criticality of our products, and they understand that we are working diligently to get the sites up and running in the near term. Okay. All right. I want to pivot to talk about everything else in the business. Yep Glad we kind of got some time to touch on that. Let's start a little bit better news. You know, first quarter result, how the quarter came in relative to expectations, very strong beat. You know, very broad strength across the board. You know, feel a lot more constructive about the year outlook. I mean, very positive surprise, frankly, relative to what we were expecting, to what a lot were expecting. Can you kind of just give us a quick rundown of how the quarter played out relative to your expectations? Why was it so much stronger? I'll start here on the spot. It was a great start to 2026. I'm very pleased on how the team has performed, but this is a continuation of the work that we were doing in 2025. We knew that the key area of growth that we knew the demand was there was around HVP non-GLP-1 components. We had very strong double-digits growth in that area. This is really driven by, fueled by biologics and biosimilars. Our position in that area is continues to be very high. Participation rate is greater than 90%. The second area we see continued success and growth in our Annex 1. This opportunity for West to be a critical partner with our customers to take existing molecules in market to support them on their sterilization strategy through the Annex initiative has been very positive. Our total number of projects that we're working on with our customers continues to grow, and as they convert to commercialization, that continues to grow also. In the 30 areas, the underlying growth of the market continues to be attractive in the injectable medicine space. Very strong start to the year, particularly around the HVP components. Yeah. I think the one thing that just to add to what Eric is saying, you know, one of the things we were really proud of is it was really a broad-based beat. Every one of our major product lines did better than what we anticipated. Led is, as Eric was saying, by our HVP, both GLP-1, which I'm sure we'll talk about, and non-GLP-1. Nice momentum going into the year that continued through Q1. You know, one of the things that we talked about was, you know, supply or demand outstripping supply at the end of the year. We were building additional capacity in our Eschweiler plant that really came online quite nicely, better than what we anticipated. As they were ramping up, the team's done a fantastic job there. By the end of the quarter, you know, demand and supply were more in line. Demand continues to be robust. We feel good about kind of where we are for the year. That was probably one of the biggest areas, just better execution from us and continued robust demand in the marketplace. I want to touch on that a little bit. You called that out during the call a number of times was, just being able to bring on additional capacity online. When you specifically think of CapEx expansion or capacity expansion in this field, it's multi-year project, multi-year investments. You know, it's the heavy lifting. This seemed like a little bit, it was a little bit more on the execution side than on the, on the CapEx side. Can you talk about that, how meaningful it was, sort of how long that was in the works and, you know, how you were able to fine-tune it to get that uplift in 1Q? Yeah. Actually, the benefit we saw in Eschweiler was really a expansion of number of team members being added to the organization. You know, over the years, we've added tremendous amount of capacity in our HVP plants, the 5 plants around the world, particularly around the HVP processing steps, such as washing, sterilization, vision inspection, as an example. Throughout the end of 2025, we started to ramp up with the number of new team members into the site, the training, getting prepared. As you think about Q1, at that particular site, what we saw is a sequential improvement throughout the quarter. We exited Q1 at a very strong output rate of productivity with the resources we have on site there that is now more in line with the supply and the demand equilibrium. I also would say that just be clear that Eschweiler is also a site that feeds into Waterford. We saw a benefit, net benefit with the more output supporting our Waterford plant. Again, another HVP finishing location to be able to support our customers. The third key initiative around outside of just adding resources is around level loading our operations and working with customers to validate a secondary site for HVP on particular SKUs for particular drug molecules in market. That is going well. We want to continue to do that to open up free more capacity in Eschweiler as we have the capacity already available in Jersey Shore, in Kinston as an example. Bob, maybe to a point you brought up in terms of sort of equalizing demand and supply exiting the quarter. I just want to be clear. You know, you had demand outstrip supply last year. You're bringing this capacity online, so it expanded your ability to handle that. Was 1Q a benefit of sort of just like a one-time burn through of that excess, or is this like the new run rate going forward? Yeah. Just from like an arithmetic. Yeah. If you think about it, there wasn't any one time I'll talk about it from an HVP standpoint, which we're talking about right now. You know, there wasn't any one time, you know, pull forward or kind of bolus in the numbers. I think if you looked at kind of how we're thinking about Q2, it's very consistent with that kind of measurement. You know, in full transparency, you know, the one area that we did outperform in HVP delivery devices, about half of that outperformance was a result of our partner for SmartDose 3.5 ordering more than what we anticipated in anticipation of the transaction. Even if you took that out, we still, you know, that was about $10 plus million greater than what we anticipated. Even if you took that out, very strong HVP, what we were talking about before, you know, even the overall total company, very strong performance. Yeah. I think you quantified that as, like, 100 basis points tailwind. Yeah. Organic growth would've been 14%. Exactly. That's now 15. Exactly. Okay. Exactly. Whoop-de-doo. Okay, the other, I mean, the other question we had was the other expectation for the quarter was, you know, oil input costs as far as it relates to resin, the Middle East conflict from late February through March, could that have had an impact on numbers? Just sort of, you know, did you see that impact demand? Was there any stocking related to that? Was there any change in customer purchasing patterns? Sort of how have those conversations played out since then? We really didn't see anything. You know, the conflict started late February. That's well within our manufacturing lead times. Even if there was a bolus of demand, it wouldn't have shown up in revenue, and we didn't see anything like that. You know, we're seeing just continued, you know, strength, but not any, you know, stocking in anticipation of that or in anticipation of trying to get ahead of, you know, potential price increases or cost increases associated with the price of oil. Okay. Now that it's been, you know, it's been a couple weeks since you reported earnings, it's been a couple months since the conflict broke out, you know, in your 10-K, in your filings, you talk about, you know, you have a little bit of a buffer built in terms of your hedge, on oil. Yeah. For me, it's elevated, right? Yeah, one of the things we did say in our Q1 earnings is we've forecasted in our updated guidance, you know, roughly a net impact of single-digit millions for the full year. We do anticipate being able to recover a large majority of the cost increases. I can tell you we've already, you know, communicated that is a potential going forward as part of what we would call a surcharge. Yeah. Yes, you've relayed that to your customers, sort of what's been the feedback? I mean, I guess it's expected. There's not really much to say about that, right? Yeah. That's right. Right. Yeah. It's built into contracts to begin with, yeah. Correct. This is over and above the normal contractual increase. I mean, we've seen this in the past, you know, when we had inflationary aspects back in a couple of years ago, same mechanism. We're deploying that and we typically have good recovery from that standpoint. Okay. Yeah, talking about Q3. That's one of the things we're going to do, is be very judicious about doing that, you know, working with our customers, as opposed to trying to take advantage of the situation. Okay. All right, let's talk about the implications of the first quarter beat and sort of how that flows through for the full year guide. You know, 1Q 15% organic growth. You're guiding about 8% in the second quarter, and you have the full year 7%-9%. The implied second half is more of in the mid-single digit range. Just talk through the moving pieces there and sort of what are the underlying assumptions for that. I think, first of all, first quarter, there's an element of prudence in there, as we think about going through the first quarter of the year. Okay. That being said, we do have the CGM contract in our contract manufacturing, our West Vantage business that ends the end of June, that's about a $40 million headwind in the second half of the year that's not showing up in the first half of this year. Partially offsetting that is what we've already talked about with the sort of drug handling. That's about a $20 million for the full year. That's probably about $15 million in the second half of the year to help offset that. That's one, you know, I think we're well-positioned kind of to continue to execute going forward. Yeah. Anything you can talk about in terms of degree of conservatism in the guide, or you know? No, I would just say it's prudent. Okay, all right. We'll take that. Let's dive into some of the sub-segment performance and the results that you've seen. Eric, you touched on HVP components as being a big driver of the growth. Really strong in the first quarter. Given the size of the business and how important that is to the company, that was a big part of the beat. Both GLP and non-GLP. You've had a little bit of an easy comps dynamic there, but still, very robust results. Anything you can say in terms of what's driving that, besides, you know, the capacity expansion and some of the other things we're talking about there? Right. No, Bob covered that quite well, and the capacity expansion really allows us to be able to respond to our customers quickly and efficiently, and also improve productivity. I do think the number 1 driver of growth in that sector, the HVP area, is around the biologics and biosimilars. We continue to see a number of new launches that are occurring, not just in North America or Europe, but also outside the region that continues to leverage our products and services that enable them to launch and keep in the market for a long period of time. I think the second area that we see is around the Annex 1. What I'm really proud about there is that there's really a pull effect. Our customers are bringing us into the discussions real early when they start developing their contamination control strategies and leveraging West's experience and capabilities really around primary containment, which is what was the change in, I guess it was August of 2023 that we're benefiting from. It's, there's a number of customers that are looking for us to provide those solutions, and what's really unique about this opportunity is that as we take existing formulations that are on their molecules in the marketplace today, by providing that washing and vision and sterilization capability, we're able to help them support on their strategy going forward. That has given us at least 200 basis points of growth over the old total business. We're also seeing drivers around that as historically it's been around the European Union far as end consumption of those drug molecules. We're starting to have conversations with our customers where they're looking to simplify their supply chain to be able to support them in other parts of the world. It's kind of a broadening effect, and we're also seeing more regulatory audits being done, particularly in the U.S., there's more observations around this area, around contamination control strategy. Those conversations are starting to build up and that we participate in with our customers. I guess when we, when we started framing the opportunity, we talked about 6 billion components out of the 25 billion components we produce every year. We do believe that that could enlarge over time as the expectations of the regulators and of our customers outside of Europe require the same type of solution. You talked about the GLP-1s a little bit earlier as another growth driver for us, and we're excited to be able to participate on all the GLP-1s in the marketplace. We're also excited about the new biosimilars that are being introduced in the market that we participate on and also the pipeline, and there's a number of new developments in the works that we have visibility of, and we're very proud to be able to support them as they go through their clinicals and eventually into commercialization. We feel really good about our position on GLP-1s. I think in the earlier in the year, we were cautious because of the oral introduction, but what we're seeing happen there is that it's expanding the market versus cannibalizing the injectable space. We do believe there's growth opportunity both for oral and the injectable space where we play on GLP-1s, not just near term, but for long term. Yes, many different excellent growth drivers in that part of the business. Okay. Since you brought up GLP-1s, I'm going to bite and go after that for a little bit. You know, we estimate, you know, you had about $150 million of GLP-1 revenue in the first quarter. You had $100 million a year ago. 4Q was $137 million, even quarter-over-quarter still grows nicely. Goes to your point on orals. Just as the quarter played out, was there any change in conversation? You imagine you have very close relationship with the major GLP-1 drug manufacturers. As they saw oral uptake over the last five months, has there been any change in those conversations in terms of future demand? You know, I imagine you have very long-term conversations with those customers about future trajectory. Yeah. I wouldn't I'll stay away from conveying on behalf of our customers, but I'll say that from our position, as you know, we're involved with all the injectables within GLP-1s, multiple customers, and we've built the capacity and capabilities to build support the growth we believe that will happen with injectables. I mean, we modeled long term that potentially the orals would be about 30% of the market. Now, if that plays out, that, you know, the initial introduction of orals may not have taken on the same path to get to the 30, but we still do believe there will be a portion of the overall market will be orals. The injectable space is very still attractive on growth. We're very well-positioned to be able to support them. What we're finding is that you know, different products are growing faster than others, but the sum of the whole is still very attractive growth, which again, we play on the whole. Yeah, I think the only thing I would add to that, Michael Ryskin, is if you look at, you know, the way we were modeling it and we went into depth about that at the end of the year, it's playing out exactly as we expected. You know, it's still early days as Eric was mentioning, but, you know, when you look at the scripts data, eight out of every 10 people who are on orals are new to the market as opposed to being switched from an injectable. You know, that is pretty consistent when you hear the others talk about kind of the expansion of that market opportunity. We still see GLP-1s both in the near term, we haven't seen any, you know, in aggregate, very constructive, continues to be. We actually took our guidance up for the expectation for the full year to high teens, in that from, you know, roughly the 10% that we had before. I think there's opportunities to continue to grow beyond that, you know, not only this year, but if you think about all the other things that are coming in terms of increasing access here in the U.S., lowering price is actually really good for us because we're a volume play. You think about kind of the next generation opportunities around indications that are still in the clinical trial pipeline, and the biosimilars and generics that are outside the U.S. right now. That's a very small piece of our business today, but holds a lot of promise, and we're taking, I would say, a muted view of that, only because you know, we want to make sure that we see that uptake going forward. We have a very strong participation in those products as well. We're preparing for faster uptake than what we've built into our numbers. Okay. Yeah, I mean, to that point, Bob, you just touched on it. I think when you were starting the year, you talked about 10%. Yes GLP growth, year over year, and HVPC is what backed into your guide. Yeah. You took it up post 1Q, but your 1Q growth was so strong that it still feels relatively conservative. Yes. Is that, you know, the prudence you were talking about earlier or? Yeah. Yeah. I think if you looked at, if the market continues to do what we're seeing it doing and expecting it to do, there's upside there. You know. Okay There's an opportunity for beating that. We've got to execute and it's got to continue to go that way. The second pill hadn't been launched, but it, you know, again, early days, but it's tracking the way, you know, the first one in the market is as well. Okay, all right. Kind of want to take a step back and just think about how the year, your latest year view is in the context of the longer term algorithm, right? You know, where you raised the guide, you know, guiding to 7%-9% organic, that's also, you know, the LRP effectively, right? For the last couple years, it has been a story of, you know, getting back there, getting back there, getting back there. You know, after one quarter, you suddenly kind of jump back into it. There are a lot of moving pieces in terms of how this year's playing out. Like, you know, you always talk about the CGM headwinds. the divestments, things like that, the extra capacity coming online. Just from a high level, is there any reason to think that, you know, this isn't sustainable going forward, or that there are any things that would, you know, be moving pieces as we head to next year and beyond? Yeah, let me start on this, Bob. If you think about the market itself, the fastest growing area of healthcare is injectable medicines, and then the subset of injectable medicines is biologics and biosimilars, and our participation rate there is very high. We feel really good about long-term trajectory on this business around the core of the company. When HVP components are growing, we saw this in Q1, we've seen it historically, we get tremendous margin expansion in our business, and we can reinvest that back into capital investments back into our facilities. I'm feeling really good about from a market perspective and position us very well. We do know that the market roughly in the injectable medicine space is 1%-2% on the volume, just in general across the whole sector. We do see, if you kind of build it up from the base, 2%-3% on price, and the balance is really the growth areas we talked about. It includes mix in there. I think looking long term, the tailwinds or the secular macro trends that we're seeing, particularly around the biologics, but also the Annex 1, the regulatory changes that are occurring, these are permanent, and they're multi-year events or event that will take place, and we're very well positioned for this because of our market share, but also more importantly because of the technology and capabilities we bring to the table. We see that as a very long-term growth algorithm for us. You have the GLP-1 aspect there, too. I'm feeling really good about as if you think about building from the back, what are the trends that are allowing us to get to that long-term financial construct? Those are the key drivers into that 7%-9%. The only thing I would add is you think about where we are, we've got a very strong market share, and when you think about the participation in those areas of growth, our participation rate is even higher than our current market share. You know, that's a very good leading indicator for us to continue to be able to take, you know, our, you know, help drive the market ourselves and take advantage of those market tailwinds. Okay. Kind of same question on 2026 margin expansion versus long-term construct margin expansion. You've got a lot of moving pieces this year in terms of the divestment, mix shift, CGM headwinds, you know, oil price, Iran war. Still seems to be, you know, very strong margin expansion year over year. Previously, you talked about add 7%-9%, you're getting 100 basis points. Are you kind of like locked in into that? Yeah, we feel very good about that. Actually this year, obviously when you look at it, we're guiding to higher than that. Volume really helps drive it, a significant amount of that volume and mix shift. When we think about the long term, at 7%-9%, I feel very confident that we have several years of opportunity to drive 100 basis points or more expansion, not only in terms of being able to drive that mix shift that we've been talking about from a revenue perspective, if you add on the efficiency efforts that are ongoing in the plant, things like automation, the level loading that we were talking about before, getting back to our 6%-8% CapEx construct will help drive incremental gross margin expansion. Pricing is a lever that I think we have an opportunity to continue to develop over time to really make sure that we're pricing for value across our portfolio. Then you look at it even longer term, things like procurement and other areas where we can kind of bundle our spending and drive efficiencies with fewer suppliers, high increased quality, lower price and so forth. There's a number of steps over the near and medium term that feel good about on a gross margin basis. With that 7%-9%, you know, reducing our spend or not having our OpEx spend at that same level through AI and other efficiency opportunities will help drive, you know, additional margin expansion. Awesome. I think the only other thing I would add is, you know, and I know we're running up against time, is, you know, in Q1, we started driving below the line leverage as well, whether that be through improved, you know, tax rate as well as the capital deployment. I think those are two levers that hadn't been fully contemplated as we go forward, and certainly something that I'm very focused on. Okay. Want to ask one last one for you, Eric. Yes. It's been a great run. Thanks for coming to our conference all this many years. It's been a pleasure covering you. You know, any updates you can give us on the CEO search or just maybe your plans post post-retirement? No, I'm excited actually to be here, so thank you again for the invitation for West. It's, it's a great story. It's a great company. We're on track, looking at second half of this year to do a seamless transition, and the company's operating extremely well. The strategy is very clear, and we have a phenomenal executive team. I'm very confident that there'll be a smooth transition and a lot more success ahead of us. Okay, great. Thank you. Well, thank you so much for your leadership. Thank you. It's been a pleasure. Thank you, everyone.

Speaker 3: Thank you for joining us. We'll kick off our next session. My name is Michael Ryskin. I'm on the Bank of America Life Science Tools and Diagnostics team. We're excited to be hosting West Pharmaceutical Services for our next chat, joined by Eric Green, President and CEO, and Bob McMahon, Chief Financial Officer. Eric, Bob, thanks so much for being here. Thank you for joining us. thank you for joining us We'll kick off our next session. we'll kick off our next session My name is Michael Ryskin. my name is michael ryskin I'm on the Bank of America Life Science Tools and Diagnostics team. i'm on the bank of america life science tools and diagnostics team We're excited to be hosting West Pharmaceutical Services for our next chat, joined by Eric Green, President a nd CEO, and Bob McMahon, Chief Financial Officer. we're excited to be hosting west pharmaceutical services for our next chat joined by eric green president a nd ceo and bob mcmahon chief financial officer Eric, Bob, thanks so much for being here. eric bob thanks so much for being here

Speaker 2: Great to be here. Great to be here. great to be here

Speaker 1: Great. Thanks for hosting us. Great. great Thanks for hosting us. thanks for hosting us

Speaker 3: Of course. Thanks for being here. Format will be a fireside chat Q&A. As usual, if you've got questions, feel free to raise your hand and we'll incorporate you in. Had a, you know, standard opening question. We're going to pivot a little bit just given the 8-K last night on the cybersecurity issue, kind of have to lead off with that. Just curious, what's your response to that, and sort of, you know, give us a quick rundown of the situation. Of course. of course Thanks for being here. thanks for being here Format will be a fireside chat Q&A. format will be a fireside chat q&a As usual, if you've got questions, feel free to raise your hand and we'll incorporate you in. as usual if you've got questions feel free to raise your hand and we'll incorporate you in Had a, you know, standard opening question. had a you know standard opening question We're going to pivot a little bit just given the 8-K last night on the cybersecurity issue, kind of have to lead off with that. we're going to pivot a little bit just given the 8-k last night on the cybersecurity issue kind of have to lead off with that Just curious, what's your response to that, and sort of, you know, give us a quick rundown of the situation. just curious what's your response to that and sort of you know give us a quick rundown of the situation

Speaker 2: Yeah, let me start with this, and Bob, if you want. Last night we did issue an 8-K, and what has happened is back, last, early last week we had a notice that intrusion into our systems. We followed protocol, quickly shut down all our systems across the globe so that we can better understand the situation that was at hand. On May 7th, which was last Thursday, we identified that it was identified the intruder, identified that they had access to some of our data and were able to extract a portion of the data. We want to, we obviously, before that period of time, we already secured external support around cybersecurity forensics. Yeah, let me start with this, and Bob, if you want. yeah let me start with this and bob if you want Last night we did issue an 8-K, and what has happened is back, last, early last week we had a notice that intrusion into our systems. last night we did issue an 8-k and what has happened is back last early last week we had a notice that intrusion into our systems We followed protocol, quickly shut down all our systems across the globe so that we can better understand the situation that was at hand. we followed protocol quickly shut down all our systems across the globe so that we can better understand the situation that was at hand On May 7th, which was last Thursday, we identified that it was identified the intruder, identified that they had access to some of our data and were able to extract a portion of the data. on may 7th which was last thursday we identified that it was identified the intruder identified that they had access to some of our data and were able to extract a portion of the data We want to, we obviously, before that period of time, we already secured external support around cybersecurity forensics. we want to we obviously before that period of time we already secured external support around cybersecurity forensics We brought in a well-known agency called Unit 42 out of Palo Alto Networks, who have been working with us side by side to do the forensics to understand the situation. Since that time, we, so obviously we want to make sure we got an 8-K out in particular to that reason alone is that we felt the data was ensure that it wasn't compromised. We know that the data was encrypted, a portion of it, and we were able to, at this time, de-encrypt the data and also ensure that there was no additional data loss to the organization. At this time, we're able to, all operating systems are up. We're able to do shipping and receiving for our customers. We brought in a well-known agency called Unit 42 out of Palo Alto Networks, who have been working with us side by side to do the forensics to understand the situation. we brought in a well-known agency called unit 42 out of palo alto networks who have been working with us side by side to do the forensics to understand the situation Since that time, we, so obviously we want to make sure we got an 8-K out in particular to that reason alone is that we felt the data was ensure that it wasn't compromised. since that time we so obviously we want to make sure we got an 8-k out in particular to that reason alone is that we felt the data was ensure that it wasn't compromised We know that the data was encrypted, a portion of it, and we were able to, at this time, de-encrypt the data and also ensure that there was no additional data loss to the organization. we know that the data was encrypted a portion of it and we were able to at this time de-encrypt the data and also ensure that there was no additional data loss to the organization At this time, we're able to, all operating systems are up. at this time we're able to all operating systems are up We're able to do shipping and receiving for our customers. we're able to do shipping and receiving for our customers We're also able to, all our in-service systems are operating appropriately and several of our sites are manufacturing and operating, including Eschweiler, in our global network. There are several plants that we are currently working on to bring up, but it's a very methodical, systematic process to ensure that we harden our systems at the sites that we are bringing up. We're making excellent progress. We believe that we feel that we have secure systems going forward as we are getting all our sites up across the globe as soon as possible. It's important for us because our number one focus is to be able to support our customers to ensure that we're able to get materials to them in a timely fashion. Therefore we are prioritizing our sites accordingly. We're also able to, all our in-service systems are operating appropriately and several of our sites are manufacturing and operating, including Eschweiler, in our global network. we're also able to all our in-service systems are operating appropriately and several of our sites are manufacturing and operating including eschweiler in our global network There are several plants that we are currently working on to bring up, but it's a very methodical, systematic process to ensure that we harden our systems at the sites that we are bringing up. there are several plants that we are currently working on to bring up but it's a very methodical systematic process to ensure that we harden our systems at the sites that we are bringing up We're making excellent progress. we're making excellent progress We believe that we feel that we have secure systems going forward as we are getting all our sites up across the globe as soon as possible. we believe that we feel that we have secure systems going forward as we are getting all our sites up across the globe as soon as possible It's important for us because our number one focus is to be able to support our customers to ensure that we're able to get materials to them in a timely fashion. it's important for us because our number one focus is to be able to support our customers to ensure that we're able to get materials to them in a timely fashion Therefore we are prioritizing our sites accordingly. therefore we are prioritizing our sites accordingly

Speaker 1: Maybe just two other quick things. You know, we did take, you know, we made measures to ensure that the data that had been exfiltrated is not going to be disseminated. We feel good about that. We're still finalizing the plans of when the sites are coming up. As Eric said, we've got a number of sites already up and manufacturing in addition to shipping and receiving. You know, we're not in a position right now to determine the financial impact if in fact there is any impact. We are making very good progress here and you would expect to hear from us, you know, as the events unfold in the near future. Maybe just two other quick things. maybe just two other quick things You know, we did take, you know, we made measures to ensure that the data that had been exfiltrated is not going to be disseminated. you know we did take you know we made measures to ensure that the data that had been exfiltrated is not going to be disseminated We feel good about that. we feel good about that We're still finalizing the plans of when the sites are coming up. we're still finalizing the plans of when the sites are coming up As Eric said, we've got a number of sites already up and manufacturing in addition to shipping and receiving. as eric said we've got a number of sites already up and manufacturing in addition to shipping and receiving You know, we're not in a position right now to determine the financial impact if in fact there is any impact. you know we're not in a position right now to determine the financial impact if in fact there is any impact We are making very good progress here and you would expect to hear from us, you know, as the events unfold in the near future. we are making very good progress here and you would expect to hear from us you know as the events unfold in the near future

Speaker 3: Yeah, I mean, on that point, Bob, you know, May 4th, that means that some sites were down for a couple days up to a week. Some are now down for a week longer. You know, as you said, you're bringing them back online. Can you talk about ability for the time that things were down, ability to catch up some of that either in the near term, even meaning in the next month or two for 2Q, or over the course of the year, you know, inventory on hand that can help offset some of that downtime? I know you can't, you know, finalize, put a number on it, just directional. Yeah, I mean, on that point, Bob, you know, May 4th, that means that some sites were down for a couple days up to a week. yeah i mean on that point bob you know may 4th that means that some sites were down for a couple days up to a week Some are now down for a week longer. some are now down for a week longer You know, as you said, you're bringing them back online. you know as you said you're bringing them back online Can you talk about ability for the time that things were down, ability to catch up some of that either in the near term, even meaning in the next month or two for 2Q, or over the course of the year, you know, inventory on hand that can help offset some of that downtime? can you talk about ability for the time that things were down ability to catch up some of that either in the near term even meaning in the next month or two for 2q or over the course of the year you know inventory on hand that can help offset some of that downtime I know you can't, you know, finalize, put a number on it, just directional. i know you can't you know finalize put a number on it just directional

Speaker 1: Yeah. You want me to take that? As you know, our facilities do have flex capacity, we will be running 24/7 to be able to do that. The demand is still there. I think one of the things that's important is why it's so important for us to work with our customers is these are proprietary products that are associated with a drug. That demand is still going to be there. Those revenues will not go away. We've still got several weeks in the quarter as we're moving forward. Yeah. yeah You want me to take that? you want me to take that As you know, our facilities do have flex capacity, we will be running 24/7 to be able to do that. as you know our facilities do have flex capacity we will be running 24/7 to be able to do that The demand is still there. the demand is still there I think one of the things that's important is why it's so important for us to work with our customers is these are proprietary products that are associated with a drug. i think one of the things that's important is why it's so important for us to work with our customers is these are proprietary products that are associated with a drug That demand is still going to be there. that demand is still going to be there Those revenues will not go away. those revenues will not go away We've still got several weeks in the quarter as we're moving forward. we've still got several weeks in the quarter as we're moving forward You know, we are going to be putting a full focus on bringing back better our sites, you know, hardened and up and running to be able to support our customers. That's the work that we're doing right now. We do have the ability to actually increase capacity, given that we don't run 24/7 across all of our sites and I'll leave it at that. You know, we are going to be putting a full focus on bringing back better our sites, you know, hardened and up and running to be able to support our customers. you know we are going to be putting a full focus on bringing back better our sites you know hardened and up and running to be able to support our customers That's the work that we're doing right now. that's the work that we're doing right now We do have the ability to actually increase capacity, given that we don't run 24/7 across all of our sites and I'll leave it at that. we do have the ability to actually increase capacity given that we don't run 24/7 across all of our sites and i'll leave it at that

Speaker 3: Okay. When you talk about data being infiltrated, is that customer data? Is there any IP around that, or is it internal system? Okay. okay When you talk about data being infiltrated, is that customer data? when you talk about data being infiltrated is that customer data Is there any IP around that, or is it internal system? is there any ip around that or is it internal system

Speaker 1: All I would say is we're probably not at liberty to say what kind of data, but it was a material data breach and we've taken measures to ensure that that data doesn't get out to the public. All I would say is we're probably not at liberty to say what kind of data, but it was a material data breach and we've taken measures to ensure that that data doesn't get out to the public. all i would say is we're probably not at liberty to say what kind of data but it was a material data breach and we've taken measures to ensure that that data doesn't get out to the public

Speaker 3: Okay. Last question, I guess you said that, you know, you 8-K'd this yesterday. You, I'm assuming you've now engaged with all of your customers that were impacted one way or another by this, which is a lot of them. Sort of just any sense on how those conversations have gone? Any early feedback from them? Okay. okay Last question, I guess you said that, you know, you 8-K'd this yesterday. last question i guess you said that you know you 8-k'd this yesterday You, I'm assuming you've now engaged with all of your customers t hat were impacted one way or another by this, which is a lot of them. you i'm assuming you've now engaged with all of your customers t hat were impacted one way or another by this which is a lot of them Sort of just any sense on how those conversations have gone? sort of just any sense on how those conversations have gone Any early feedback from them? any early feedback from them

Speaker 1: Yeah Yeah yeah

Speaker 3: What's the response been from the customer side? What's the response been from the customer side? what's the response been from the customer side

Speaker 2: Yeah, no, that's an excellent question because that's our primary focus is the first area that we focus on reaching out immediately to our customers had engaging conversations. We gave them an understanding of where we are, what has occurred, and what we are going to be doing, and also give them assurance that we have reached out to some of the best in the industry to support us on this process, and frankly, our customers have been very supportive. They understand, we understand with them the criticality of our products, and they understand that we are working diligently to get the sites up and running in the near term. Yeah, no, that's an excellent question because that's our primary focus is the first area that we focus on reaching out immediately to our customers had engaging conversations. yeah no that's an excellent question because that's our primary focus is the first area that we focus on reaching out immediately to our customers had engaging conversations We gave them an understanding of where we are, what has occurred, and what we are going to be doing, and also give them assurance that we have reached out to some of the best in the industry to support us on this process, and frankly, our customers have been very supportive. we gave them an understanding of where we are what has occurred and what we are going to be doing and also give them assurance that we have reached out to some of the best in the industry to support us on this process and frankly our customers have been very supportive They understand, we understand with them the criticality of our products, and they understand that we are working diligently to get the sites up and running in the near term. they understand we understand with them the criticality of our products and they understand that we are working diligently to get the sites up and running in the near term

Speaker 3: Okay. All right. I want to pivot to talk about everything else in the business. Okay. okay All right. all right I want to pivot to talk about everything else in the business. i want to pivot to talk about everything else in the business

Speaker 2: Yep Yep yep

Speaker 3: Glad we kind of got some time to touch on that. Let's start a little bit better news. You know, first quarter result, how the quarter came in relative to expectations, very strong beat. You know, very broad strength across the board. You know, feel a lot more constructive about the year outlook. I mean, very positive surprise, frankly, relative to what we were expecting, to what a lot were expecting. Can you kind of just give us a quick rundown of how the quarter played out relative to your expectations? Why was it so much stronger? Glad we kind of got some time to touch on that. glad we kind of got some time to touch on that Let's start a little bit better news. let's start a little bit better news You know, first quarter result, how the quarter came in relative to expectations, very strong beat. you know first quarter result how the quarter came in relative to expectations very strong beat You know, very broad strength across the board. you know very broad strength across the board You know, feel a lot more constructive about the year outlook. you know feel a lot more constructive about the year outlook I mean, very positive surprise, frankly, relative to what we were expecting, to what a lot were expecting. i mean very positive surprise frankly relative to what we were expecting to what a lot were expecting Can you kind of just give us a quick rundown of how the quarter played out relative to your expectations? can you kind of just give us a quick rundown of how the quarter played out relative to your expectations Why was it so much stronger? why was it so much stronger

Speaker 2: I'll start here on the spot. It was a great start to 2026. I'm very pleased on how the team has performed, but this is a continuation of the work that we were doing in 2025. We knew that the key area of growth that we knew the demand was there was around HVP non-GLP-1 components. We had very strong double-digits growth in that area. This is really driven by, fueled by biologics and biosimilars. Our position in that area is continues to be very high. Participation rate is greater than 90%. The second area we see continued success and growth in our Annex 1. I'll start here on the spot. i'll start here on the spot It was a great start to 2026. it was a great start to 2026 I'm very pleased on how the team has performed, but this is a continuation of the work that we were doing in 2025. i'm very pleased on how the team has performed but this is a continuation of the work that we were doing in 2025 We knew that the key area of growth that we knew the demand was there was around HVP non-GLP-1 components. we knew that the key area of growth that we knew the demand was there was around hvp non-glp-1 components We had very strong double- digits growth in that area. we had very strong double- digits growth in that area This is really driven by, fueled by biologics and biosimilars. this is really driven by fueled by biologics and biosimilars Our position in that area is continues to be very high. our position in that area is continues to be very high Participation rate is greater than 90%. participation rate is greater than 90% The second area we see continued success and growth in our Annex 1. the second area we see continued success and growth in our annex 1 This opportunity for West to be a critical partner with our customers to take existing molecules in market to support them on their sterilization strategy through the Annex initiative has been very positive. Our total number of projects that we're working on with our customers continues to grow, and as they convert to commercialization, that continues to grow also. In the 30 areas, the underlying growth of the market continues to be attractive in the injectable medicine space. Very strong start to the year, particularly around the HVP components. This opportunity for West to be a critical partner with our customers to take existing molecules in market to support them on their sterilization strategy through the Annex initiative has been very positive. this opportunity for west to be a critical partner with our customers to take existing molecules in market to support them on their sterilization strategy through the annex initiative has been very positive Our total number of projects that we're working on with our customers continues to grow, and as they convert to commercialization, that continues to grow also. our total number of projects that we're working on with our customers continues to grow and as they convert to commercialization that continues to grow also In the 30 areas, the underlying growth of the market continues to be attractive in the injectable medicine space. in the 30 areas the underlying growth of the market continues to be attractive in the injectable medicine space Very strong start to the year, particularly around the HVP components. very strong start to the year particularly around the hvp components

Speaker 1: Yeah. I think the one thing that just to add to what Eric is saying, you know, one of the things we were really proud of is it was really a broad-based beat. Every one of our major product lines did better than what we anticipated. Led is, as Eric was saying, by our HVP, both GLP-1, which I'm sure we'll talk about, and non-GLP-1. Nice momentum going into the year that continued through Q1. You know, one of the things that we talked about was, you know, supply or demand outstripping supply at the end of the year. We were building additional capacity in our Eschweiler plant that really came online quite nicely, better than what we anticipated. As they were ramping up, the team's done a fantastic job there. Yeah. yeah I think the one thing that just to add to what Eric is saying, you know, one of the things we were really proud of is it was really a broad-based beat. i think the one thing that just to add to what eric is saying you know one of the things we were really proud of is it was really a broad-based beat Every one of our major product lines did better than what we anticipated. every one of our major product lines did better than what we anticipated Led is, as Eric was saying, by our HVP, both GLP-1, which I'm sure we'll talk about, and non-GLP-1. led is as eric was saying by our hvp both glp-1 which i'm sure we'll talk about and non-glp-1 Nice momentum going into the year that continued through Q1. nice momentum going into the year that continued through q1 You know, one of the things that we talked about was, you know, supply or demand outstripping supply at the end of the year. you know one of the things that we talked about was you know supply or demand outstripping supply at the end of the year We were building additional capacity in our Eschweiler plant that really came online quite nicely, better than what we anticipated. we were building additional capacity in our eschweiler plant that really came online quite nicely better than what we anticipated As they were ramping up, the team's done a fantastic job there. as they were ramping up the team's done a fantastic job there By the end of the quarter, you know, demand and supply were more in line. Demand continues to be robust. We feel good about kind of where we are for the year. That was probably one of the biggest areas, just better execution from us and continued robust demand in the marketplace. By the end of the quarter, you know, demand and supply were more in line. by the end of the quarter you know demand and supply were more in line Demand continues to be robust. demand continues to be robust We feel good about kind of where we are for the year. we feel good about kind of where we are for the year That was probably one of the biggest areas, just better execution from us and continued robust demand in the marketplace. that was probably one of the biggest areas just better execution from us and continued robust demand in the marketplace

Speaker 3: I want to touch on that a little bit. You called that out during the call a number of times was, just being able to bring on additional capacity online. When you specifically think of CapEx expansion or capacity expansion in this field, it's multi-year project, multi-year investments. You know, it's the heavy lifting. This seemed like a little bit, it was a little bit more on the execution side than on the, on the CapEx side. Can you talk about that, how meaningful it was, sort of how long that was in the works and, you know, how you were able to fine-tune it to get that uplift in 1Q? I want to touch on that a little bit. i want to touch on that a little bit You called that out during the call a number of times was, just being able to bring on additional capacity online. you called that out during the call a number of times was just being able to bring on additional capacity online When you specifically think of CapEx expansion or capacity expansion in this field, it's multi-year project, multi-year investments. when you specifically think of capex expansion or capacity expansion in this field it's multi-year project multi-year investments Y ou know, it's the heavy lifting. y ou know it's the heavy lifting This seemed like a little bit, it was a little bit more on the execution side than on the, on the CapEx side. this seemed like a little bit it was a little bit more on the execution side than on the on the capex side Can you talk about that, how meaningful it was, sort of how long that was in the works and, you know, how you were able to fine-tune it to get that uplift in 1Q? can you talk about that how meaningful it was sort of how long that was in the works and you know how you were able to fine-tune it to get that uplift in 1q

Speaker 2: Yeah. Actually, the benefit we saw in Eschweiler was really a expansion of number of team members being added to the organization. You know, over the years, we've added tremendous amount of capacity in our HVP plants, the 5 plants around the world, particularly around the HVP processing steps, such as washing, sterilization, vision inspection, as an example. Throughout the end of 2025, we started to ramp up with the number of new team members into the site, the training, getting prepared. As you think about Q1, at that particular site, what we saw is a sequential improvement throughout the quarter. Yeah. yeah Actually, the benefit we saw in Eschweiler was really a expansion of number of team members being added to the organization. actually the benefit we saw in eschweiler was really a expansion of number of team members being added to the organization You know, over the years, we've added tremendous amount of capacity in our HVP plants, the 5 plants around the world, particularly around the HVP processing steps, such as washing, sterilization, vision inspection, as an example. you know over the years we've added tremendous amount of capacity in our hvp plants the 5 plants around the world particularly around the hvp processing steps such as washing sterilization vision inspection as an example Throughout the end of 2025, we started to ramp up with the number of new team members into the site, the training, getting prepared. throughout the end of 2025 we started to ramp up with the number of new team members into the site the training getting prepared As you think about Q1, at that particular site, what we saw is a sequential improvement throughout the quarter. as you think about q1 at that particular site what we saw is a sequential improvement throughout the quarter We exited Q1 at a very strong output rate of productivity with the resources we have on site there that is now more in line with the supply and the demand equilibrium. I also would say that just be clear that Eschweiler is also a site that feeds into Waterford. We saw a benefit, net benefit with the more output supporting our Waterford plant. Again, another HVP finishing location to be able to support our customers. The third key initiative around outside of just adding resources is around level loading our operations and working with customers to validate a secondary site for HVP on particular SKUs for particular drug molecules in market. That is going well. We want to continue to do that to open up free more capacity in Eschweiler as we have the capacity already available in Jersey Shore, in Kinston as an example. We exited Q1 at a very strong output rate of productivity with the resources we have on site there that is now more in line with the supply and the demand equilibrium. we exited q1 at a very strong output rate of productivity with the resources we have on site there that is now more in line with the supply and the demand equilibrium I also would say that just be clear that Eschweiler is also a site that feeds into Waterford. i also would say that just be clear that eschweiler is also a site that feeds into waterford We saw a benefit, net benefit with the more output supporting our Waterford plant. we saw a benefit net benefit with the more output supporting our waterford plant Again, another HVP finishing location to be able to support our customers. again another hvp finishing location to be able to support our customers The third key initiative around outside of just adding resources is around level loading our operations and working with customers to validate a secondary site for HVP on particular SKUs for particular drug molecules in market. the third key initiative around outside of just adding resources is around level loading our operations and working with customers to validate a secondary site for hvp on particular skus for particular drug molecules in market That is going well. that is going well We want to continue to do that to open up free more capacity in Eschweiler as we have the capacity already available in Jersey Shore, in Kinston as an example. we want to continue to do that to open up free more capacity in eschweiler as we have the capacity already available in jersey shore in kinston as an example

Speaker 3: Bob, maybe to a point you brought up in terms of sort of equalizing demand and supply exiting the quarter. I just want to be clear. You know, you had demand outstrip supply last year. You're bringing this capacity online, so it expanded your ability to handle that. Was 1Q a benefit of sort of just like a one-time burn through of that excess, or is this like the new run rate going forward? Bob, maybe to a point you brought up in terms of sort of equalizing demand and supply exiting the quarter. bob maybe to a point you brought up in terms of sort of equalizing demand and supply exiting the quarter I just want to be clear. i just want to be clear You know, you had demand outstrip supply last year. you know you had demand outstrip supply last year You're bringing this capacity online, so it expanded your ability to handle that. you're bringing this capacity online so it expanded your ability to handle that Was 1Q a benefit of sort of just like a one-time burn through of that excess, or is this like the new run rate going forward? was 1q a benefit of sort of just like a one-time burn through of that excess or is this like the new run rate going forward

Speaker 1: Yeah. Yeah. yeah

Speaker 3: Just from like an arithmetic. Just from like an arithmetic. just from like an arithmetic

Speaker 1: Yeah. If you think about it, there wasn't any one time I'll talk about it from an HVP standpoint, which we're talking about right now. You know, there wasn't any one time, you know, pull forward or kind of bolus in the numbers. I think if you looked at kind of how we're thinking about Q2, it's very consistent with that kind of measurement. You know, in full transparency, you know, the one area that we did outperform in HVP delivery devices, about half of that outperformance was a result of our partner for SmartDose 3.5 ordering more than what we anticipated in anticipation of the transaction. Yeah . yeah If you think about it, there wasn't any one time I'll talk about it from an HVP standpoint, which we're talking about right now. if you think about it there wasn't any one time i'll talk about it from an hvp standpoint which we're talking about right now You know, there wasn't any one time, you know, pull forward or kind of bolus in the numbers. you know there wasn't any one time you know pull forward or kind of bolus in the numbers I think if y ou looked at kind of how we're thinking about Q2, it's very consistent with that kind of measurement. i think if y ou looked at kind of how we're thinking about q2 it's very consistent with that kind of measurement You know, in full transparency, you know, the one area that we did outperform in HVP delivery devices, about half of that outperformance was a result of our partner for SmartDose 3.5 ordering more than what we anticipated in anticipation of the transaction. you know in full transparency you know the one area that we did outperform in hvp delivery devices about half of that outperformance was a result of our partner for smartdose 3.5 ordering more than what we anticipated in anticipation of the transaction Even if you took that out, we still, you know, that was about $10 plus million greater than what we anticipated. Even if you took that out, very strong HVP, what we were talking about before, you know, even the overall total company, very strong performance. Even if you took that out, we still, you know, that was about $10 plus million greater than what we anticipated. even if you took that out we still you know that was about $10 plus million greater than what we anticipated Even if you took that out, very strong HVP, what we were talking about before, you know, even the overall total company, very strong performance. even if you took that out very strong hvp what we were talking about before you know even the overall total company very strong performance

Speaker 3: Yeah. I think you quantified that as, like, 100 basis points tailwind. Yeah. yeah I think you quantified that as, like, 100 basis points tailwind. i think you quantified that as like 100 basis points tailwind

Speaker 1: Yeah. Yeah. yeah

Speaker 3: Organic growth would've been 14%. Organic growth would've been 14%. organic growth would've been 14%

Speaker 1: Exactly. Exactly. exactly

Speaker 3: That's now 15. That's now 15. that's now 15

Speaker 1: Exactly. Exactly. exactly

Speaker 3: Okay. Okay. okay

Speaker 1: Exactly. Exactly. exactly

Speaker 3: Whoop-de-doo. Okay, the other, I mean, the other question we had was the other expectation for the quarter was, you know, oil input costs as far as it relates to resin, the Middle East conflict from late February through March, could that have had an impact on numbers? Just sort of, you know, did you see that impact demand? Was there any stocking related to that? Was there any change in customer purchasing patterns? Sort of how have those conversations played out since then? Whoop-de-doo. whoop-de-doo Okay, the other, I mean, the other question we had was the other expectation for the quarter was, you know, oil input costs as far as it relates to resin, the Middle East conflict from late February through March, could that have had an impact on numbers? okay the other i mean the other question we had was the other expectation for the quarter was you know oil input costs as far as it relates to resin the middle east conflict from late february through march could that have had an impact on numbers Just sort of, you know, did you see that impact demand? just sort of you know did you see that impact demand Was there any stocking related to that? was there any stocking related to that Was there any change in customer purchasing patterns? was there any change in customer purchasing patterns Sort of how have those conversations played out since then? sort of how have those conversations played out since then

Speaker 1: We really didn't see anything. You know, the conflict started late February. That's well within our manufacturing lead times. Even if there was a bolus of demand, it wouldn't have shown up in revenue, and we didn't see anything like that. You know, we're seeing just continued, you know, strength, but not any, you know, stocking in anticipation of that or in anticipation of trying to get ahead of, you know, potential price increases or cost increases associated with the price of oil. We really didn't see anything. we really didn't see anything You know, the conflict started late February. you know the conflict started late february That's well within our manufacturing lead times. that's well within our manufacturing lead times Even if there was a bolus of demand, it wouldn't have shown up in revenue, and we didn't see anything like that. even if there was a bolus of demand it wouldn't have shown up in revenue and we didn't see anything like that You know, we're seeing just continued, you know, strength, but not any, you know, stocking in anticipation of that or in anticipation of trying to get ahead of, you know, potential price increases or cost increases associated with the price of oil. you know we're seeing just continued you know strength but not any you know stocking in anticipation of that or in anticipation of trying to get ahead of you know potential price increases or cost increases associated with the price of oil

Speaker 3: Okay. Now that it's been, you know, it's been a couple weeks since you reported earnings, it's been a couple months since the conflict broke out, you know, in your 10-K, in your filings, you talk about, you know, you have a little bit of a buffer built in terms of your hedge, on oil. Okay. okay Now that it's been, you know, it's been a couple weeks since you reported earnings, it's been a couple months since the conflict broke out, you know, in your 10-K, in your filings, you talk about, you know, you have a little bit of a buffer built in terms of your hedge, on oil. now that it's been you know it's been a couple weeks since you reported earnings it's been a couple months since the conflict broke out you know in your 10-k in your filings you talk about you know you have a little bit of a buffer built in terms of your hedge on oil

Speaker 1: Yeah. Yeah. yeah

Speaker 3: For me, it's elevated, right? For me, it's elevated, right? for me it's elevated right

Speaker 1: Yeah, one of the things we did say in our Q1 earnings is we've forecasted in our updated guidance, you know, roughly a net impact of single-digit millions for the full year. We do anticipate being able to recover a large majority of the cost increases. I can tell you we've already, you know, communicated that is a potential going forward as part of what we would call a surcharge. Yeah, one of the things we did say in our Q1 earnings is we've forecasted in our updated guidance, you know, roughly a net impact of single-digit millions for the full year. yeah one of the things we did say in our q1 earnings is we've forecasted in our updated guidance you know roughly a net impact of single-digit millions for the full year We do anticipate being able to recover a large majority of the cost increases. we do anticipate being able to recover a large majority of the cost increases I can tell you we've already, you know, communicated that is a potential going forward as part of what we would call a surcharge. i can tell you we've already you know communicated that is a potential going forward as part of what we would call a surcharge

Speaker 3: Yeah. Yes, you've relayed that to your customers, sort of what's been the feedback? I mean, I guess it's expected. There's not really much to say about that, right? Yeah. yeah Yes, you've relayed that to your customers, sort of what's been the feedback? yes you've relayed that to your customers sort of what's been the feedback I mean, I guess it's expected. i mean i guess it's expected There's not really much to say about that, right? there's not really much to say about that right

Speaker 1: Yeah. That's right. Right. Yeah. yeah That's right. that's right Right. right

Speaker 3: Yeah. It's built into contracts to begin with, yeah. Yeah. yeah It's built into contracts to begin with, yeah. it's built into contracts to begin with yeah

Speaker 1: Correct. This is over and above the normal contractual increase. I mean, we've seen this in the past, you know, when we had inflationary aspects back in a couple of years ago, same mechanism. We're deploying that and we typically have good recovery from that standpoint. Correct. correct This is over and above the normal contractual increase. this is over and above the normal contractual increase I mean, we've seen this in the past, you know, when we had inflationary aspects back in a couple of years ago, s ame mechanism. i mean we've seen this in the past you know when we had inflationary aspects back in a couple of years ago, s ame mechanism We're deploying that and we typically have good recovery from that standpoint. we're deploying that and we typically have good recovery from that standpoint

Speaker 3: Okay. Yeah, talking about Q3. Okay. okay Yeah, talking about Q3. yeah talking about q3

Speaker 1: That's one of the things we're going to do, is be very judicious about doing that, you know, working with our customers, as opposed to trying to take advantage of the situation. That's one of the things we're going to do, is be very judicious about doing that, you know, working with our customers, as opposed to trying to take advantage of the situation. that's one of the things we're going to do is be very judicious about doing that you know working with our customers as opposed to trying to take advantage of the situation

Speaker 3: Okay. All right, let's talk about the implications of the first quarter beat and sort of how that flows through for the full year guide. You know, 1Q 15% organic growth. You're guiding about 8% in the second quarter, and you have the full year 7%-9%. The implied second half is more of in the mid-single digit range. Just talk through the moving pieces there and sort of what are the underlying assumptions for that. Okay. All right, let's talk about the implications of the first quarter beat and sort of how that flows through for the full year guide. okay all right let's talk about the implications of the first quarter beat and sort of how that flows through for the full year guide You know, 1Q 15% organic growth. you know 1q 15% organic growth You're guiding about 8% in the second quarter, and you have the full year 7%-9%. you're guiding about 8% in the second quarter and you have the full year 7%-9% The implied second half is more of in the mid-single digit range. the implied second half is more of in the mid-single digit range Just talk through the moving pieces there and sort of what are the underlying assumptions for that. just talk through the moving pieces there and sort of what are the underlying assumptions for that

Speaker 1: I think, first of all, first quarter, there's an element of prudence in there, as we think about going through the first quarter of the year. I think, first of all, first quarter, there's an element of prudence in there, as we think about going through the first quarter of the year. i think first of all first quarter there's an element of prudence in there as we think about going through the first quarter of the year

Speaker 3: Okay. Okay. okay

Speaker 1: That being said, we do have the CGM contract in our contract manufacturing, our West Vantage business that ends the end of June, that's about a $40 million headwind in the second half of the year that's not showing up in the first half of this year. Partially offsetting that is what we've already talked about with the sort of drug handling. That's about a $20 million for the full year. That's probably about $15 million in the second half of the year to help offset that. That's one, you know, I think we're well-positioned kind of to continue to execute going forward. That being said, we do have the CGM contract in our contract manufacturing, our West Vantage business that ends the end of June, that's about a $40 million headwind in the second half of the year that's not showing up in the first half of this year. that being said we do have the cgm contract in our contract manufacturing our west vantage business that ends the end of june that's about a $40 million headwind in the second half of the year that's not showing up in the first half of this year Partially offsetting that is what we've already talked about with the sort of drug handling. partially offsetting that is what we've already talked about with the sort of drug handling That's about a $20 million for the full year. that's about a $20 million for the full year That's probably about $15 million in the second half of the year to help offset that. that's probably about $15 million in the second half of the year to help offset that That's one, you know, I think we're well- positioned kind of to continue to execute going forward. that's one you know i think we're well- positioned kind of to continue to execute going forward

Speaker 3: Yeah. Anything you can talk about in terms of degree of conservatism in the guide, or you know? Yeah. yeah Anything you can talk about in terms of degree of conservatism in the guide, or you know? anything you can talk about in terms of degree of conservatism in the guide or you know

Speaker 1: No, I would just say it's prudent. No, I would just say it's prudent. no i would just say it's prudent

Speaker 3: Okay, all right. We'll take that. Let's dive into some of the sub-segment performance and the results that you've seen. Eric, you touched on HVP components as being a big driver of the growth. Really strong in the first quarter. Given the size of the business and how important that is to the company, that was a big part of the beat. Both GLP and non-GLP. You've had a little bit of an easy comps dynamic there, but still, very robust results. Anything you can say in terms of what's driving that, besides, you know, the capacity expansion and some of the other things we're talking about there? Okay, a ll right. okay, a ll right We'll take that. we'll take that Let's dive into some of the sub-segment performance and the results that you've seen. let's dive into some of the sub-segment performance and the results that you've seen Eric, you touched on HVP components as being a big driver of the growth. eric you touched on hvp components as being a big driver of the growth Really strong in the first quarter. really strong in the first quarter Given the size of the business and how important that is to the company, that was a big part of the beat. given the size of the business and how important that is to the company that was a big part of the beat Both GLP and non-GLP. both glp and non-glp You've had a little bit of an easy comps dynamic there, but still, very robust results. you've had a little bit of an easy comps dynamic there but still very robust results Anything you can say in terms of what's driving that, besides, you know, the capacity expansion and some of the other things we're talking about there? anything you can say in terms of what's driving that besides you know the capacity expansion and some of the other things we're talking about there

Speaker 2: Right. No, Bob covered that quite well, and the capacity expansion really allows us to be able to respond to our customers quickly and efficiently, and also improve productivity. I do think the number 1 driver of growth in that sector, the HVP area, is around the biologics and biosimilars. We continue to see a number of new launches that are occurring, not just in North America or Europe, but also outside the region that continues to leverage our products and services that enable them to launch and keep in the market for a long period of time. I think the second area that we see is around the Annex 1. What I'm really proud about there is that there's really a pull effect. Right. right No, Bob covered that quite well, and the capacity expansion really allows us to be able to respond to our customers quickly and efficiently, and also improve productivity. no bob covered that quite well and the capacity expansion really allows us to be able to respond to our customers quickly and efficiently and also improve productivity I do think the number 1 driver of growth in that sector, the HVP area, is around the biologics and biosimilars. i do think the number 1 driver of growth in that sector the hvp area is around the biologics and biosimilars We continue to see a number of new launches that are occurring, not just in North America or Europe, but also outside the region that continues to leverage our products and services that enable them to launch and keep in the market for a long period of time. we continue to see a number of new launches that are occurring not just in north america or europe but also outside the region that continues to leverage our products and services that enable them to launch and keep in the market for a long period of time I think the second area that we see is around the Annex 1. i think the second area that we see is around the annex 1 What I'm really proud about there is that there's really a pull effect. what i'm really proud about there is that there's really a pull effect Our customers are bringing us into the discussions real early when they start developing their contamination control strategies and leveraging West's experience and capabilities really around primary containment, which is what was the change in, I guess it was August of 2023 that we're benefiting from. It's, there's a number of customers that are looking for us to provide those solutions, and what's really unique about this opportunity is that as we take existing formulations that are on their molecules in the marketplace today, by providing that washing and vision and sterilization capability, we're able to help them support on their strategy going forward. That has given us at least 200 basis points of growth over the old total business. Our customers are bringing us into the discussions real early when they start developing their contamination control strategies and leveraging West's experience and capabilities really around primary containment, which is what was the change in, I guess it was August of 2023 that we're benefiting from. our customers are bringing us into the discussions real early when they start developing their contamination control strategies and leveraging west's experience and capabilities really around primary containment which is what was the change in i guess it was august of 2023 that we're benefiting from It's, there's a number of customers that are looking for us to provide those solutions, and what's really unique about this opportunity is that as we take existing formulations that are on their molecules in the marketplace today, by providing that washing and vision and sterilization capability, we're able to help them support on their strategy going forward. it's there's a number of customers that are looking for us to provide those solutions and what's really unique about this opportunity is that as we take existing formulations that are on their molecules in the marketplace today by providing that washing and vision and sterilization capability we're able to help them support on their strategy going forward That has given us at least 200 basis points of growth over the old total business. that has given us at least 200 basis points of growth over the old total business We're also seeing drivers around that as historically it's been around the European Union far as end consumption of those drug molecules. We're starting to have conversations with our customers where they're looking to simplify their supply chain to be able to support them in other parts of the world. It's kind of a broadening effect, and we're also seeing more regulatory audits being done, particularly in the U.S., there's more observations around this area, around contamination control strategy. Those conversations are starting to build up and that we participate in with our customers. I guess when we, when we started framing the opportunity, we talked about 6 billion components out of the 25 billion components we produce every year. We're also seeing drivers around that as historically it's been around the European Union far as end consumption of those drug molecules. we're also seeing drivers around that as historically it's been around the european union far as end consumption of those drug molecules We're starting to have conversations with our customers where they're looking to simplify their supply chain to be able to support them in other parts of the world. we're starting to have conversations with our customers where they're looking to simplify their supply chain to be able to support them in other parts of the world It's kind of a broadening effect, and we're also seeing more regulatory audits being done, particularly in the U.S., there's more observations around this area, around contamination control strategy. it's kind of a broadening effect and we're also seeing more regulatory audits being done particularly in the u.s there's more observations around this area around contamination control strategy Those conversations are starting to build up and that we participate in with our customers. those conversations are starting to build up and that we participate in with our customers I guess when we, when we started framing the opportunity, we talked about 6 billion components out of the 25 billion components we produce every year. i guess when we when we started framing the opportunity we talked about 6 billion components out of the 25 billion components we produce every year We do believe that that could enlarge over time as the expectations of the regulators and of our customers outside of Europe require the same type of solution. You talked about the GLP-1s a little bit earlier as another growth driver for us, and we're excited to be able to participate on all the GLP-1s in the marketplace. We're also excited about the new biosimilars that are being introduced in the market that we participate on and also the pipeline, and there's a number of new developments in the works that we have visibility of, and we're very proud to be able to support them as they go through their clinicals and eventually into commercialization. We feel really good about our position on GLP-1s. We do believe that that could enlarge over time as the expectations of the regulators and of our customers outside of Europe require the same type of solution. we do believe that that could enlarge over time as the expectations of the regulators and of our customers outside of europe require the same type of solution You talked about the GLP-1s a little bit earlier as another growth driver for us, and we're excited to be able to participate on all the GLP-1s in the marketplace. you talked about the glp-1s a little bit earlier as another growth driver for us and we're excited to be able to participate on all the glp-1s in the marketplace We're also excited about the new biosimilars that are being introduced in the market that we participate on and also the pipeline, and there's a number of new developments in the works that we have visibility of, and we're very proud to be able to support them as they go through their clinicals and eventually into commercialization. we're also excited about the new biosimilars that are being introduced in the market that we participate on and also the pipeline and there's a number of new developments in the works that we have visibility of and we're very proud to be able to support them as they go through their clinicals and eventually into commercialization We feel really good about our position on GLP-1s. we feel really good about our position on glp-1s I think in the earlier in the year, we were cautious because of the oral introduction, but what we're seeing happen there is that it's expanding the market versus cannibalizing the injectable space. We do believe there's growth opportunity both for oral and the injectable space where we play on GLP-1s, not just near term, but for long term. Yes, many different excellent growth drivers in that part of the business. I think in the earlier in the year, we were cautious because of the oral introduction, but what we're seeing happen there is that it's expanding the market versus cannibalizing the injectable space. i think in the earlier in the year we were cautious because of the oral introduction but what we're seeing happen there is that it's expanding the market versus cannibalizing the injectable space We do believe there's growth opportunity both for oral and the injectable space where we play on GLP-1s, not just near term, but for long term. we do believe there's growth opportunity both for oral and the injectable space where we play on glp-1s not just near term but for long term Yes, many different excellent growth drivers in that part of the business. yes many different excellent growth drivers in that part of the business

Speaker 3: Okay. Since you brought up GLP-1s, I'm going to bite and go after that for a little bit. You know, we estimate, you know, you had about $150 million of GLP-1 revenue in the first quarter. You had $100 million a year ago. 4Q was $137 million, even quarter-over-quarter still grows nicely. Goes to your point on orals. Just as the quarter played out, was there any change in conversation? You imagine you have very close relationship with the major GLP-1 drug manufacturers. As they saw oral uptake over the last five months, has there been any change in those conversations in terms of future demand? You know, I imagine you have very long-term conversations with those customers about future trajectory. Okay. okay Since you brought up GLP-1s, I'm going to bite and go after that for a little bit. since you brought up glp-1s i'm going to bite and go after that for a little bit You know, we estimate, you know, you had about $150 million of GLP-1 revenue in the first quarter. you know we estimate you know you had about $150 million of glp-1 revenue in the first quarter You had $100 million a year ago. 4Q was $137 million, even quarter-over-quarter still grows nicely. you had $100 million a year ago 4q was $137 million even quarter-over-quarter still grows nicely Goes to your point on orals. goes to your point on orals Just as the quarter played out, was there any change in conversation? just as the quarter played out was there any change in conversation You imagine you have very close relationship with the major GLP-1 drug manufacturers. you imagine you have very close relationship with the major glp-1 drug manufacturers As they saw oral uptake over the last five months, has there been any change in those conversations in terms of future demand? as they saw oral uptake over the last five months has there been any change in those conversations in terms of future demand You know, I imagine you have very long-term conversations with those customers about future trajectory. you know i imagine you have very long-term conversations with those customers about future trajectory

Speaker 2: Yeah. I wouldn't I'll stay away from conveying on behalf of our customers, but I'll say that from our position, as you know, we're involved with all the injectables within GLP-1s, multiple customers, and we've built the capacity and capabilities to build support the growth we believe that will happen with injectables. I mean, we modeled long term that potentially the orals would be about 30% of the market. Yeah. yeah I wouldn't I'll stay away from conveying on behalf of our customers, but I'll say that from our position, as you know, we're involved with all the injectables within GLP-1s, multiple customers, and we've built the capacity and capabilities to build support the growth we believe that will happen with injectables. i wouldn't i'll stay away from conveying on behalf of our customers but i'll say that from our position as you know we're involved with all the injectables within glp-1s multiple customers and we've built the capacity and capabilities to build support the growth we believe that will happen with injectables I mean, we modeled long term that potentially the orals would be about 30% of the market. i mean we modeled long term that potentially the orals would be about 30% of the market Now, if that plays out, that, you know, the initial introduction of orals may not have taken on the same path to get to the 30, but we still do believe there will be a portion of the overall market will be orals. The injectable space is very still attractive on growth. We're very well-positioned to be able to support them. What we're finding is that you know, different products are growing faster than others, but the sum of the whole is still very attractive growth, which again, we play on the whole. Now, if that plays out, that, you know, the initial introduction of orals may not have taken on the same path to get to the 30, but we still do believe there will be a portion of the overall market will be orals. now if that plays out that you know the initial introduction of orals may not have taken on the same path to get to the 30 but we still do believe there will be a portion of the overall market will be orals The injectable space is very still attractive on growth. the injectable space is very still attractive on growth We're very well- positioned to be able to support them. we're very well- positioned to be able to support them What we're finding is that you know, different products are growing faster than others, but the sum of the whole is still very attractive growth, which again, we play on the whole. what we're finding is that you know different products are growing faster than others but the sum of the whole is still very attractive growth which again we play on the whole

Speaker 1: Yeah, I think the only thing I would add to that, Michael Ryskin, is if you look at, you know, the way we were modeling it and we went into depth about that at the end of the year, it's playing out exactly as we expected. You know, it's still early days as Eric was mentioning, but, you know, when you look at the scripts data, eight out of every 10 people who are on orals are new to the market as opposed to being switched from an injectable. You know, that is pretty consistent when you hear the others talk about kind of the expansion of that market opportunity. Yeah, I think the only thing I would add to that, Michael Ryskin, is if you look at, you know, the way we were modeling it and we went into depth about that at the end of the year, it's playing out exactly as we expected. yeah i think the only thing i would add to that michael ryskin is if you look at you know the way we were modeling it and we went into depth about that at the end of the year it's playing out exactly as we expected You know, it's still early days as Eric was mentioning, but, you know, when you look at the scripts data, eight out of every 10 people who are on orals are new to the market as opposed to being switched from an injectable. you know it's still early days as eric was mentioning but you know when you look at the scripts data eight out of every 10 people who are on orals are new to the market as opposed to being switched from an injectable You know, that is pretty consistent when you hear the others talk about kind of the expansion of that market opportunity. you know that is pretty consistent when you hear the others talk about kind of the expansion of that market opportunity We still see GLP-1s both in the near term, we haven't seen any, you know, in aggregate, very constructive, continues to be. We actually took our guidance up for the expectation for the full year to high teens, in that from, you know, roughly the 10% that we had before. I think there's opportunities to continue to grow beyond that, you know, not only this year, but if you think about all the other things that are coming in terms of increasing access here in the U.S., lowering price is actually really good for us because we're a volume play. We still see GLP-1s both in the near term, we haven't seen any, you know, in aggregate, very constructive, continues to be. we still see glp-1s both in the near term we haven't seen any you know in aggregate very constructive continues to be We actually took our guidance up for the expectation for the full year to high teens, in that from, you know, roughly the 10% that we had before. we actually took our guidance up for the expectation for the full year to high teens in that from you know roughly the 10% that we had before I think there's opportunities to continue to grow beyond that, you know, not only this year, but if you think about all the other things that are coming in terms of increasing access here in the U.S., lowering price is actually really good for us because we're a volume play. i think there's opportunities to continue to grow beyond that you know not only this year but if you think about all the other things that are coming in terms of increasing access here in the u.s lowering price is actually really good for us because we're a volume play You think about kind of the next generation opportunities around indications that are still in the clinical trial pipeline, and the biosimilars and generics that are outside the U.S. right now. That's a very small piece of our business today, but holds a lot of promise, and we're taking, I would say, a muted view of that, only because you know, we want to make sure that we see that uptake going forward. We have a very strong participation in those products as well. We're preparing for faster uptake than what we've built into our numbers. You think about kind of the next generation opportunities around indications that are still in the clinical trial pipeline, and the biosimilars and generics that are outside the U.S. right now. you think about kind of the next generation opportunities around indications that are still in the clinical trial pipeline and the biosimilars and generics that are outside the u.s right now That's a very small piece of our business today, but holds a lot of promise, and we're taking , I would say, a muted view of that, only because you know, we want to make sure that we see that uptake going forward. that's a very small piece of our business today but holds a lot of promise and we're taking i would say a muted view of that only because you know we want to make sure that we see that uptake going forward We have a very strong participation in those products as well. we have a very strong participation in those products as well We're preparing for faster uptake than what we've built into our numbers. we're preparing for faster uptake than what we've built into our numbers

Speaker 3: Okay. Yeah, I mean, to that point, Bob, you just touched on it. I think when you were starting the year, you talked about 10%. Okay. okay Yeah, I mean, to that point, Bob, you just touched on it. yeah i mean to that point bob you just touched on it I think when you were starting the year, you talked about 10%. i think when you were starting the year you talked about 10%

Speaker 1: Yes Yes yes

Speaker 3: GLP growth, year over year, and HVPC is what backed into your guide. GLP growth, year over year, and HVPC is what backed into your guide. glp growth year over year and hvpc is what backed into your guide

Speaker 1: Yeah. Yeah. yeah

Speaker 3: You took it up post 1Q, but your 1Q growth was so strong that it still feels relatively conservative. You took it up post 1Q, but your 1Q growth was so strong that it still feels relatively conservative. you took it up post 1q but your 1q growth was so strong that it still feels relatively conservative

Speaker 1: Yes. Yes. yes

Speaker 3: Is that, you know, the prudence you were talking about earlier or? Is that, you know, the prudence you were talking about earlier or? is that you know the prudence you were talking about earlier or

Speaker 1: Yeah. Yeah. I think if you looked at, if the market continues to do what we're seeing it doing and expecting it to do, there's upside there. You know. Yeah. yeah Yeah. yeah I think if you looked at, if the market continues to do what we're seeing it doing and expecting it to do, there's upside there. i think if you looked at if the market continues to do what we're seeing it doing and expecting it to do there's upside there You know. you know

Speaker 3: Okay Okay okay

Speaker 1: There's an opportunity for beating that. We've got to execute and it's got to continue to go that way. The second pill hadn't been launched, but it, you know, again, early days, but it's tracking the way, you know, the first one in the market is as well. There's an opportunity for beating that. there's an opportunity for beating that We've got to execute and it's got to continue to go that way. we've got to execute and it's got to continue to go that way The second pill hadn't been launched, but it, you know, again, early days, but it's tracking the way, you know, the first one in the market is as well. the second pill hadn't been launched but it you know again early days but it's tracking the way you know the first one in the market is as well

Speaker 3: Okay, all right. Kind of want to take a step back and just think about how the year, your latest year view is in the context of the longer term algorithm, right? You know, where you raised the guide, you know, guiding to 7%-9% organic, that's also, you know, the LRP effectively, right? For the last couple years, it has been a story of, you know, getting back there, getting back there, getting back there. You know, after one quarter, you suddenly kind of jump back into it. There are a lot of moving pieces in terms of how this year's playing out. Like, you know, you always talk about the CGM headwinds. Okay, a ll right. okay, a ll right Kind of want to take a step back and just think about how the year, your latest year view is in the context of the longer term algorithm, right? kind of want to take a step back and just think about how the year your latest year view is in the context of the longer term algorithm right You know, where you raised the guide, you know, guiding to 7%-9% organic, that's also , you know, the LRP effectively, right? you know where you raised the guide you know guiding to 7%-9% organic that's also you know the lrp effectively right For the last couple years, it has been a story of, you know, getting back there, getting back there, getting back there. for the last couple years it has been a story of you know getting back there getting back there getting back there You know, after one quarter, you suddenly kind of jump back into it. you know after one quarter you suddenly kind of jump back into it There are a lot of moving pieces in terms of how this year's playing out. there are a lot of moving pieces in terms of how this year's playing out Like, you know, you always talk about the CGM headwinds. like you know you always talk about the cgm headwinds the divestments, things like that, the extra capacity coming online. Just from a high level, is there any reason to think that, you know, this isn't sustainable going forward, or that there are any things that would, you know, be moving pieces as we head to next year and beyond? the divestments, things like that, the extra capacity coming online. the divestments things like that the extra capacity coming online Just from a high level, is there any reason to think that, you know, this isn't sustainable going forward, or that there are any things that would, you know, be moving pieces as we head to next year and beyond? just from a high level is there any reason to think that you know this isn't sustainable going forward or that there are any things that would you know be moving pieces as we head to next year and beyond

Speaker 2: Yeah, let me start on this, Bob. If you think about the market itself, the fastest growing area of healthcare is injectable medicines, and then the subset of injectable medicines is biologics and biosimilars, and our participation rate there is very high. We feel really good about long-term trajectory on this business around the core of the company. When HVP components are growing, we saw this in Q1, we've seen it historically, we get tremendous margin expansion in our business, and we can reinvest that back into capital investments back into our facilities. I'm feeling really good about from a market perspective and position us very well. Yeah, let me start on this, Bob. yeah let me start on this bob If you think about the market itself, the fastest growing area of healthcare is injectable medicines, and then the subset of injectable medicines is biologics and biosimilars, and our participation rate there is very high. if you think about the market itself the fastest growing area of healthcare is injectable medicines and then the subset of injectable medicines is biologics and biosimilars and our participation rate there is very high We feel really good about long-term trajectory on this business around the core of the company. we feel really good about long-term trajectory on this business around the core of the company When HVP components are growing, we saw this in Q1, we've seen it historically, we get tremendous margin expansion in our business, and we can reinvest that back into capital investments back into our facilities. when hvp components are growing we saw this in q1 we've seen it historically we get tremendous margin expansion in our business and we can reinvest that back into capital investments back into our facilities I'm feeling really good about from a market perspective and position us very well. i'm feeling really good about from a market perspective and position us very well We do know that the market roughly in the injectable medicine space is 1%-2% on the volume, just in general across the whole sector. We do see, if you kind of build it up from the base, 2%-3% on price, and the balance is really the growth areas we talked about. It includes mix in there. I think looking long term, the tailwinds or the secular macro trends that we're seeing, particularly around the biologics, but also the Annex 1, the regulatory changes that are occurring, these are permanent, and they're multi-year events or event that will take place, and we're very well positioned for this because of our market share, but also more importantly because of the technology and capabilities we bring to the table. We do know that the market roughly in the injectable medicine space is 1%-2% on the volume, just in general across the whole sector. we do know that the market roughly in the injectable medicine space is 1%-2% on the volume just in general across the whole sector We do see, if you kind of build it up from the base, 2%-3% on price, and the balance is really the growth areas we talked about. we do see if you kind of build it up from the base 2%-3% on price and the balance is really the growth areas we talked about It includes mix in there. it includes mix in there I think looking long term, the tailwinds or the secular macro trends that we're seeing, particularly around the biologics, but also the Annex 1, the regulatory changes that are occurring, these are permanent, and they're multi-year events or event that will take place, and we're very well positioned for this because of our market share, but also more importantly because of the technology and capabilities we bring to the table. i think looking long term the tailwinds or the secular macro trends that we're seeing particularly around the biologics but also the annex 1 the regulatory changes that are occurring these are permanent and they're multi-year events or event that will take place and we're very well positioned for this because of our market share but also more importantly because of the technology and capabilities we bring to the table We see that as a very long-term growth algorithm for us. You have the GLP-1 aspect there, too. I'm feeling really good about as if you think about building from the back, what are the trends that are allowing us to get to that long-term financial construct? Those are the key drivers into that 7%-9%. We see that as a very long-term growth algorithm for us. we see that as a very long-term growth algorithm for us You have the GLP-1 aspect there, too. you have the glp-1 aspect there too I'm feeling really good about as if you think about building from the back, what are the trends that are allowing us to get to that long-term financial construct? i'm feeling really good about as if you think about building from the back what are the trends that are allowing us to get to that long-term financial construct Those are the key drivers into that 7%-9%. those are the key drivers into that 7%-9%

Speaker 1: The only thing I would add is you think about where we are, we've got a very strong market share, and when you think about the participation in those areas of growth, our participation rate is even higher than our current market share. You know, that's a very good leading indicator for us to continue to be able to take, you know, our, you know, help drive the market ourselves and take advantage of those market tailwinds. The only thing I would add is you think about where we are, we've got a very strong market share, and when you think about the participation in those areas of growth, our participation rate is even higher than our current market share. the only thing i would add is you think about where we are we've got a very strong market share and when you think about the participation in those areas of growth our participation rate is even higher than our current market share You know, that's a very good leading indicator for us to continue to be able to take, you know, our, you know, help drive the market ourselves and take advantage of those market tailwinds. you know that's a very good leading indicator for us to continue to be able to take you know our you know help drive the market ourselves and take advantage of those market tailwinds

Speaker 3: Okay. Kind of same question on 2026 margin expansion versus long-term construct margin expansion. You've got a lot of moving pieces this year in terms of the divestment, mix shift, CGM headwinds, you know, oil price, Iran war. Okay. okay Kind of same question on 2026 margin expansion versus long-term construct margin expansion. kind of same question on 2026 margin expansion versus long-term construct margin expansion You've got a lot of moving pieces this year in terms of the divestment, mix shift, CGM headwinds, you know, oil price, Iran war. you've got a lot of moving pieces this year in terms of the divestment mix shift cgm headwinds you know oil price iran war Still seems to be, you know, very strong margin expansion year over year. Previously, you talked about add 7%-9%, you're getting 100 basis points. Are you kind of like locked in into that? Still seems to be, you know, very strong margin expansion year over year. still seems to be you know very strong margin expansion year over year Previously, you talked about add 7%-9%, you're getting 100 basis points. previously you talked about add 7%-9% you're getting 100 basis points Are you kind of like locked in into that? are you kind of like locked in into that

Speaker 1: Yeah, we feel very good about that. Actually this year, obviously when you look at it, we're guiding to higher than that. Volume really helps drive it, a significant amount of that volume and mix shift. Yeah, we feel very good about that. yeah we feel very good about that Actually this year, obviously when you look at it, we're guiding to higher than that. actually this year obviously when you look at it we're guiding to higher than that Volume really helps drive it, a significant amount of that volume and mix shift. volume really helps drive it a significant amount of that volume and mix shift When we think about the long term, at 7%-9%, I feel very confident that we have several years of opportunity to drive 100 basis points or more expansion, not only in terms of being able to drive that mix shift that we've been talking about from a revenue perspective, if you add on the efficiency efforts that are ongoing in the plant, things like automation, the level loading that we were talking about before, getting back to our 6%-8% CapEx construct will help drive incremental gross margin expansion. Pricing is a lever that I think we have an opportunity to continue to develop over time to really make sure that we're pricing for value across our portfolio. When we think about the long term, at 7%-9%, I feel very confident that we have several years of opportunity to drive 100 basis points or more expansion, not only in terms of being able to drive that mix shift that we've been talking about from a revenue perspective, if you add on the efficiency efforts that are ongoing in the plant, things like automation, the level loading that we were talking about before, getting back to our 6%-8% CapEx construct will help drive incremental gross margin expansion. when we think about the long term at 7%-9% i feel very confident that we have several years of opportunity to drive 100 basis points or more expansion not only in terms of being able to drive that mix shift that we've been talking about from a revenue perspective if you add on the efficiency efforts that are ongoing in the plant things like automation the level loading that we were talking about before getting back to our 6%-8% capex construct will help drive incremental gross margin expansion Pricing is a lever that I think we have an opportunity to continue to develop over time to really make sure that we're pricing for value across our portfolio. pricing is a lever that i think we have an opportunity to continue to develop over time to really make sure that we're pricing for value across our portfolio Then you look at it even longer term, things like procurement and other areas where we can kind of bundle our spending and drive efficiencies with fewer suppliers, high increased quality, lower price and so forth. There's a number of steps over the near and medium term that feel good about on a gross margin basis. With that 7%-9%, you know, reducing our spend or not having our OpEx spend at that same level through AI and other efficiency opportunities will help drive, you know, additional margin expansion. Then you look at it even longer term, things like procurement and other areas where we can kind of bundle our spending and drive efficiencies with fewer suppliers, high increased quality, lower price and so forth. then you look at it even longer term things like procurement and other areas where we can kind of bundle our spending and drive efficiencies with fewer suppliers high increased quality lower price and so forth There's a number of steps over the near and medium term that feel good about on a gross margin basis. there's a number of steps over the near and medium term that feel good about on a gross margin basis With that 7%-9%, you know, reducing our spend or not having our OpEx spend at that same level through AI and other efficiency opportunities will help drive, you know, additional margin expansion. with that 7%-9% you know reducing our spend or not having our opex spend at that same level through ai and other efficiency opportunities will help drive you know additional margin expansion

Speaker 3: Awesome. Awesome. awesome

Speaker 1: I think the only other thing I would add is, you know, and I know we're running up against time, is, you know, in Q1, we started driving below the line leverage as well, whether that be through improved, you know, tax rate as well as the capital deployment. I think those are two levers that hadn't been fully contemplated as we go forward, and certainly something that I'm very focused on. I think the only other thing I would add is, you know, and I know we're running up against time, is, you know, in Q1, we started driving below the line leverage as well, whether that be through improved, you know, tax rate as well as the capital deployment. i think the only other thing i would add is you know and i know we're running up against time is you know in q1 we started driving below the line leverage as well whether that be through improved you know tax rate as well as the capital deployment I think those are two levers that hadn't been fully contemplated as we go forward, and certainly something that I'm very focused on. i think those are two levers that hadn't been fully contemplated as we go forward and certainly something that i'm very focused on

Speaker 3: Okay. Want to ask one last one for you, Eric. Okay. okay Want to ask one last one for you, Eric. want to ask one last one for you eric

Speaker 2: Yes. Yes. yes

Speaker 3: It's been a great run. Thanks for coming to our conference all this many years. It's been a pleasure covering you. You know, any updates you can give us on the CEO search or just maybe your plans post post-retirement? It's been a great run. it's been a great run Thanks for coming to our conference all this many years. thanks for coming to our conference all this many years It's been a pleasure covering you. it's been a pleasure covering you You know, any updates you can give us on the CEO search or just maybe your plans post post-retirement? you know any updates you can give us on the ceo search or just maybe your plans post post-retirement

Speaker 2: No, I'm excited actually to be here, so thank you again for the invitation for West. It's, it's a great story. It's a great company. We're on track, looking at second half of this year to do a seamless transition, and the company's operating extremely well. The strategy is very clear, and we have a phenomenal executive team. I'm very confident that there'll be a smooth transition and a lot more success ahead of us. No, I'm excited actually to be here, so thank you again for the invitation for West. no i'm excited actually to be here so thank you again for the invitation for west It's, it's a great story. it's it's a great story It's a great company. it's a great company We're on track, looking at second half of this year to do a seamless transition, and the company's operating extremely well. we're on track looking at second half of this year to do a seamless transition and the company's operating extremely well The strategy is very clear, and we have a phenomenal executive team. the strategy is very clear and we have a phenomenal executive team I'm very confident that there'll be a smooth transition and a lot more success ahead of us. i'm very confident that there'll be a smooth transition and a lot more success ahead of us

Speaker 3: Okay, great. Okay, g reat. okay, g reat

Speaker 2: Thank you. Thank you. thank you

Speaker 3: Well, thank you so much for your leadership. Well, thank you so much for your leadership. well thank you so much for your leadership

Speaker 2: Thank you. Thank you. thank you

Speaker 3: It's been a pleasure. Thank you, everyone. It's been a pleasure. it's been a pleasure Thank you, everyone. thank you everyone