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Products are focused. Execution on the services pipeline gives us confidence in our ability to continue to grow our base business and address unmet medical need. Fixer is a great example. Last month, we announced positive top-line results that demonstrated the efficacy and safety of a fixer for the treatment of generalized anxiety disorder or GAD Japanese patients with moderate to severe disease. We believe the significant lifecycle opportunity and the potential to be a meaningful treatment option for patients with GAD. The condition, which currently does not have any approved treatment available in Japan, we are targeting to submit an application to the Japanese health authorities in 2025. The growth. Our base business is critical for us to be able to reinvest in our innovative pipeline as we look for opportunities which can make a meaningful difference in patients’ lives. We also have a unique opportunity to leverage our global development expertise and broad commercial infrastructure Tech Flex. The target for the nine Peppa represented good strategic fit for us in paper was previously approved by FDA to reduce the risk of cardiovascular death, hospitalization for heart failure and urgent heart failure visits in adults with heart failure or type two diabetes, chronic kidney disease and other cardiovascular risk factors. We believe that emphasize the differentiated asset sale for a broader label compared to SGLT2 inhibitors in a unique mechanism of action with dual SGLT1 inhibition potentially contributing to the unique safety and efficacy profile of the drug. Our plan is to leverage the FDA approval as a reference in certain ex U.S. markets and conduct clinical studies where needed to expand patients reach. We also believe there is a potential for expansion into further indications, which could include hypertrophic cardiomyopathies. Further, the asset has a strong legacy in cardiovascular disease to our portfolio that expands across the overall cardiovascular continuum from reducing risk factors to improving patient outcomes with well-known products like Lipitor, Norvasc and Caduet. In addition to our expertise in the area of composes with products like Eric strength and flexibility with this legacy and broad portfolio also comes very strong relationship with the medical community, which we’re tapping into as we progress our selatogrel program. It provided details about selatogrel in cenerimod on our last call, but let me share a brief status update. Our recruitment efforts for both our SOSMI. clinical trials and our OPUS clinical trials are progressing well. The development for each asset is on track and aligned to our previous communicated timelines. In addition, we are working on expanding cenerimod indications by initiating a registration program in lupus nephritis. And finally, as part of our innovative pipeline, we are continuing to advance our ophthalmology program with three key registrational readouts expected in 2025. I’m proud of the work to date across our entire and the platform and believe we’ll continue to make an impact for many years to come by harnessing the combination of both our base business and in our innovative pipeline. And with that, I’ll turn it over to Dara.
Thank you, Philippe, and good morning, everyone. Building on Scott’s earlier comments that has been an exceptionally strong quarter and our first full quarter on an ex divestiture basis, the results of which are highly encouraging and indicative of the strong momentum we anticipate carrying into the new year. We’re pleased to report our diversified base business grew 3% year-over-year, marking our sixth consecutive quarter of operational revenue growth performance also carry through to adjusted EBITDA and adjusted earnings per share, which grew approximately 4% and 6%, respectively. We generated significant free cash flow of $866 million, excluding the impact of transaction costs and taxes, which enabled us to continue strengthening the balance sheet by paying down debt. Going forward, we have a strong foundation to execute on our three strategic pillars as I review the highlights for the quarter. To note, my commentary on segment performance will be on a divestiture adjusted operational basis. Growth of our base business revenue was up 3% year over year. And once again, all of our segments grew versus the prior year. We had strong performance from brands up 2% and from generic up 4%. Brand performance included expansion of our cardiovascular portfolio and certain Latin American countries and strong growth in Europe and Greater China generics growth was attributable to strength in our broader European portfolio, complex products in North America and strong volume performance across the channels region. New product revenue was $133 million for the quarter, bringing the total to $497 million year to date. We remain confident we will be at the higher end of our range of 500 to $600 million for the year. In developed markets. Net sales grew by approximately 3%, driven by robust strength in our generics business. In Europe, we saw another quarter of durable growth across our diversified business, up 6%, driven by contributions from new products and strong generics performance in key countries, including France and North America. We saw another quarter of growth in generics, up 5%, benefiting from complex products such as Brianna and Wixela, as well as from with Dex amphetamine. Within our brand business, net sales declined from the continued impact of Medicaid utilization in certain non-promoted brands and lower team, which occurred earlier in the year. And Greater China net sales grew approximately 3% over the prior year. This was as a result of continued strong volume growth across multiple channels, including e-commerce, retail and hospitals. In emerging markets. Net sales grew 2%, driven by the expansion of our branded cardiovascular portfolio and certain Latin American countries and strength in our Nina and emerging Asia regions. These benefits help to absorb supply chain impacts affecting our ARV generics business. And lastly, games grew approximately 8%, benefiting from new products in Australia and volume growth from our promoted brands in Japan. Turning to the P&L and cash flow, adjusted gross margin was stable at approximately 58.5%, and operating expenses were roughly flat over the prior year, both in line with our expectations. Free cash flow for the quarter, excluding transaction costs and taxes, grew 10%, driven by higher adjusted EBITDA and lower working capital. This significant free cash flow and cash from divestitures enabled us to continue executing on our debt repayment plan. We repaid $1.9 billion of debt, including the $325 million that was repaid in October, bringing our notional debt outstanding below $15 billion line of sight to below $14 billion by year end, following the upcoming repayment of approximately EUR1 billion at maturity in November, we expect to exit the year at approximately three times gross leverage, and we will have successfully completed our deleveraging efforts and achieved meeting our long-term growth leverage target at year end. Going forward, we plan to operate within our long range target of 2.8 to 3.2 times dispositions, the company with a meaningfully stronger balance sheet and a continuing investment grade rating, all of which will serve as the foundation of our capital allocation decisions going into next year and beyond. Turning to the remainder of the year, we are reaffirming our outlook with full year 2024 for base business, operational revenue growth of approximately 2% and flat adjusted EBITDA and adjusted earnings per share versus last year. We have revised these earnings ranges solely to reflect the impact of IP R&D related to the cervical flows and licensing agreement incurred in October. A few comments on sequential phasing for the fourth quarter, total revenue is expected to be lower for the following reason, normal product seasonality in developed markets and Greater China region, phasing of certain generic products in North America and generic entrants in our cardiovascular products in Japan, adjusted EBITDA and adjusted earnings per share will be impacted by a step down in adjusted gross margin due to normal product and segment mix and an increase in adjusted SG&A due to timing and normal cadence of investment. And lastly, free cash flow in the fourth quarter is also expected to be lower due to the impact from divestiture costs and taxes, higher CapEx and semi-annual interest payments. I would note that these trends are all consistent with our expectations and prior period. In summary, we believe these results demonstrate our encouraging fundamentals from our diversified and growing base business, which continues to produce significant free cash flow. The prudent work we have done on strengthening the balance sheet provides us with a strong foundation as we pivot to a more balanced capital allocation strategy of funding our vision and returning capital to shareholders. But before I conclude, given the level of investor interest in modeling our selatogrel and scenario what assets, we are providing a workbook as part of our Q3 earnings package that can be found on our investor website. And with that, I’ll hand it back to the operator to begin the Q&A.
Operator
Ladies and gentlemen, at this time, we will begin the question and answer session. If you would like to ask a question, please press star and then one giving a touchtone telephone. To withdraw your question. You may press star and two was again, that is star one to join the question to pause momentarily to assemble the roster. Our first question today comes from Glen Santangelo from Jefferies. Please go ahead with your questions.
Good morning. Thanks for taking my question. Hey, Scott. And just two quick questions for you. The first one, do you a lot of comments around your the base business continuing to have strong momentum in that sort of continuing into into 25? And I appreciate you don’t want to give any forward guidance. But when we look out over the next couple of years, is that sort of $500 million contribution from new product revenues? You’re obviously generating a little more than that this year, but it is that sort of the right zip code for us to think about as a starting point for the next couple of years? And secondly, on the on the capital allocation, the company said repeatedly that you want to use, have the free cash flow for business development and the other half. Are you want to return to shareholders through repurchases and dividends is sort of getting the leverage down to three times by the end of the year. Is that the trigger to start the group based on what you see in the market with respect to business development versus Beatrice trading at only six times EBITDA, does that push you one way or another as you move into 25 banks?
Thank you for your questions, Glenn. So for the first one, I’m here with the base business. We’re not guiding it was 25, but we see the base business continuing to generate and continuing to have momentum similar to where we have this year, we think we can generate. And we have historically since 2020, generating 450 to $550 million the new product revenue every year, and we expect that to continue on. And yes, to your to your second question on capital allocation, I think getting to three times is very, very important for us that will allow us to be able to use $2.3 billion in free cash flow of minimum figure path back to shareholders through dividends. And share buybacks. We’re trying to be more aggressive on share buybacks as we move into 25 and beyond because it will be at the desired leverage ratio. And we want to also be doing some disciplined business development, focusing on what end market or near market assets. So we are getting into 25 beginning about leverage ratio, right, but really as a springboard for us to be able to execute on our capital allocation strategy and 25 and beyond.
Operator
Our next question comes from Jason Gerberry from Bank of America. Please go ahead with your question for Bob.
Hey, guys. Thanks for taking my questions. Couple for me. We saw one multinational company operating in China recently get investigator regarding some reimbursement matters. I’m just trying to get a sense from your perspective that’s an isolated incident Parthus as part of some broader effort or are cracking down on different reimbursement practices. It would be helpful. You can just offer any color around here, but were there any updates to thinking about Sandostatin LAR and a potential to get that approved in the near term and status of the GA depot resubmission banks?
Thank you, Jason. And I will I’ll take the first question on China and then Philippe can fill you in on your new product question. So we don’t have any direct comment on any investigation is going on another from other countries. We have a leadership team. We’re just in China last week and meeting with the affiliate. There was an organization we hold ourselves, so the highest standards possible with a strong compliance organization in China. We’ve got strong overall structure or in China and a very strong affiliate. We’ve developed a deep and strong partnerships within the healthcare community. The and we feel very, very strongly about our business. And John Rowe.
And this is really regarding your second question, Jay depot, we have a meeting scheduled with the agency in mid December, and so we’ll be in a better place to give you an update of next year once we hear from us. And regarding I think your question was about the Sandostatin, yes, we are still going through with you review for this product and we expect will be in a position to launch the program for next year.
Operator
Our next question comes from Chris Schott from JP Morgan. Please go ahead with your question.
Alison Griffin on for Chris. Thanks for taking our question. And first off, if we look at the deals that you’ve done this year between the Adelphia and the SGLT2 transactions, is this what type of the deals that we should expect going forward in terms of size and scale? And then secondly, just looking into two 2025, any initial color on your 2025 expectations for EBITDA and how we should be thinking about the pushes and pulls there? Thank you.
Yes, if you even further question, good morning, and I’ll take the first of all of them and are pushed to the direct side to both the EBITDA going forward. Leo Dorsey transaction was a little bit of a transaction of opportunity. It’s a little bit of an earlier deals and I think there will be normal for us going forward. These were products that we’re in Phase three development, I think very, very good positive assets. We felt like we contribute to the continued development of them. We think they’ve got the potential to be blockbusters at the data comes positive globally. So that you will that was a deal of opportunity for us. I think we’re really focused right now on doing a disciplined business development. We want to really focus on end market for new market assets. Things with we can leverage our Global Healthcare Gateway, but we’ve got a very strong global infrastructure, and we want to be well to deliver the assets we can drive some revenue and 25, 26, 27 time frame. So in terms of size of the year, so I think were that some type of deal we’re looking. We’re I think we’re hoping that multiple different assets over the next couple of years to the pipeline. And again, we’re focusing on very disciplined business development with end market or new market assets.
And I think on 2025 questions, yes, we’re not going to be providing forward-looking revenue and EBITDA guidance. But just the to your point, just to give you a sense of some of the pushes and pulls Scott commented earlier on that momentum that we’re continuing to see from the base business on the revenue perspective and how we expect that at. Can you at the top line from a EBITDA and EPS perspective? We are currently working through the adjustments post the divestitures from a stranded costs TSA perspective. But going into next year, we are focused on really prioritizing adjusted EBITDA stability. And so we’re really balancing the growth of the business, but making the necessary investments in R&D and commercial that can drive our future growth. And I would say we’ll continue to work and provide clarity and provide really an apples to apples comparison when when we provide our 25 guidance. But we do see things reasonably calibrated and in the models. And we also feel confident in our in our cash flow of $2.3 billion and will provide more color as we get into next year.
Operator
Our next question comes from Josh Vogel from UBS. Please go ahead with your question.
Yes, thanks for taking my questions. Are good to see some steady progress year on just the interest on capital allocation question. So with both the debt paydown that you were sort of guiding towards behind you and the stock trading at like sub four XR. and DDBSI., how do you think about balancing business development investment and and and share repurchases? And then secondly, for emerging markets, yes, I saw this like a are we supply chain. In fact, I think you have talked about the spot on for a little bit of time and acute as a vendor to start to lap that. We don’t see this as a drag on the business going forward. Thanks, Josh, and
good morning, and I’ll take your first question again into whether they can pick up your second question. Yes, we will go on to slide on getting our debt repayment rate to the right spot of the target that we have talked about the leverage ratio of approximately 3.0. And we see that the deal very, very closely to us. We’ve got great line of sight on that, but definitely them allows us to move into our capital allocation that you implemented in implementing the full capital allocation strategy, minimum of $2.3 billion in free cash flow have about two to shareholders in terms of the dividend, share buyback, the other half in terms of business development and building the pipeline doing one disciplined way. I think given the share price and the valuation of the Company right now, we’re maybe a little more aggressive on the share buyback side than on the BD side going into 25. But we’re looking at a three, four 5-year period were approximately half going to want to return to shareholders have to be the. But I think implicit in your point is this idea of the valuation of the company. And given what I think we see a nice opportunity as we move into 25 to be more aggressive in terms of share buybacks.
And so with respect to the ARV business, historically, we have made comments around just therapy shifts that have been ongoing in that in the business. However, my comments this quarter were really specific to some delays that we saw in the supply of ARBARB. products. And we are currently working on those backlogs across ARB. assets across our ARV portfolio. And that’s what we’re working through that. Those are what my comments were referring to.
Operator
And once again, if you would like to ask a question, please press star and then one to withdraw your questions. You may press star and two. Again, that is star and then one to join the question queue. Our next question comes from David Amsellem from Piper Sandler. Please go ahead with your question.
Thanks, um. Well, I don’t want to belabor the topic of new launch contribution for 25, and I know that you’ve sounded a lot of confidence regarding some impact from new launches. I did want to drill down on on a little more because it is done away transparency regarding new products going forward than there has been historically. So one question I had is you’ve talked historically about products like Sandostatin LAR. You talked about Victoza as contributors. Can you can you talk to how much products like that are going to be contributors for next year? Other products like on sucrose, Venofer, is that going to be a contributor? You talk about glucagon injectable glucagon in the past. Is that going to be a contributor? And then also one of your competitors have talked about potentially entering the Symbicort market that you’re monitoring. If you can talk to potential competitive there dynamics regarding Symbicort. So I know there’s a lot there on specific products, but hoping to get granularity. Thank you.
Thank you, Dave, and thank you for the question and good morning. From a macro level. We feel very good about the new product. The numbers are traditionally we have. If you take a look over the last four or five years, we’ve delivered 450 to $550 million in new product revenue every year. This year were the high end limit. We believe we’re doing very, very well in terms of the number of submissions are a number of products approved overall. We feel very confident on those numbers going forward. To get to your peers specifics around individual products. I’ll ask Philippe to comment.
Yes. Thank you, Scott. So I think before Scott said, we are very confident about for 55, 50 next year. And this includes carryover from 2024 generic launches in North America and Europe. To your question specifically could includes complex products such as glucagon, iron sucrose and liraglutide. So these three products are clearly in the mix for next year. And we are continuing to work on that broad portfolio and bring over a significant number of submissions every year. So again, I can only reiterate the fact that we’re very confident about 450 550 by volume,
your comment on additional generic competition, Cindy, causing scenario. What I can say that first, as you know, we are very pleased with the execution performance of Breno, which is our complex generic on the business market. We have currently about 15% TRx market share and we expect, but for now, we’ll continue to deliver growth for us going into 2025. Also, again, a good example of having had the possibility to launch early as a complex generic in this market and our and to be able to do for a more durable and sustainable value.
Operator
And we do have an additional question and this comes from balaji prasad from Barclays. Please go ahead with your question.
Just to set of questions from me and apologies if one of them are both have been asked earlier. Firstly, could you comment about on a solid flows and in terms of the contributions and the number of markets that we plan to launch in the next one to two years? And how should we think about modeling those into into our thoughts on? Secondly, a big picture thematic question with the new administration, and that’s likely that we could see a push back towards making America. I want to understand, well, how could that change your priorities towards the U.S. generics market? Is there something that don’t want to refocus our increase in terms of focus and future revenue contributions from this region? Thanks.
Yes, as you think you blogging and I’ll take the macro question and then Philippe and current income, and I can talk a little bit more about them, but sort of the flows. And we know from a from a macro perspective, far too early for us to be able to fully understand healthcare implications who were here. We will work positively and productively with the Trump administration as we would with any administration going forward. But it’s far too early to understand the health care implications at this point in time. But we’re interested to understand what’s ahead and very optimistic about what the years look like for some 25 and beyond.
Thanks, Eric. Regarding. So I think we are what we’re going to do is leverage the US approval and get the drug registered in several large emerging markets in Canada. Australia, New Zealand and for which there is a very clear, straightforward path to approval in Asian markets like Japan and China, it might require another clinical study. And so we’ll be discussing with the health authorities over the next few months. And I put a development plan together for this. So we expect that sort I will start contributing to our revenue growth in around 2027. That I’ll turn it over to Karim for local.
Thank you. So I’m not going to comment on the overall size of the opportunity. But what I can say is that steady flows in fits perfectly. We will now turn investor infrastructure in the regions where we’ll be launching this product. I mean, you should know that we have about $2.4 billion of revenues in cardiovascular disease. So we have in place the appropriate infrastructure to be able to promote these assets across across the regions. And we look at the I think this was it as a franchise that will be no. As Philippe said, we host selling revenue in the year to 2027, but will generate growth through the end of the decade.
Operator
And with that, ladies and gentlemen, we will conclude today’s question and answer session. I’d like to turn the floor back over to Scott for closing remarks.
Thank you very much, and thank you for everybody on the call and closing. It was another great quarter. I’m proud of our team member continued strong performance. We have great momentum, and I’m looking forward to the future with our leverage, target insight and the strength of our balance sheet, our company’s operating from a position of financial strength, we have a clear and focused outlook that centers on capital allocation, returning value to shareholders through dividends and share repurchases will remain a central element of optimizing and maximizing shareholder value. We will balance this with making disciplined investments in regional and global business development to drive our future growth. Thank you all.
Operator
Ladies and gentlemen, with that, I will conclude today’s today’s conference call. We thank you for joining. You may now disconnect your lines.