Release Date: July 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Almirall SA (XMAD:ALM, Financial) reported a 7% increase in net sales and a 3.2% growth in EBITDA, reaching EUR104.5 million in H1 2024.
- Ilumetri, a psoriasis biologic, showed a 25% year-on-year growth, contributing significantly to the company's revenue.
- The company successfully launched Ebglyss in Germany, Norway, and the UK, with promising early sales figures.
- Almirall SA (XMAD:ALM) received FDA approval for Klisyri large field in the US, expanding its treatment area for actinic keratosis.
- The company made significant progress in its R&D pipeline, including the initiation of Phase I trials for new assets and the acquisition of promising technologies from Eloxx and Novo Nordisk.
Negative Points
- The gross margin declined slightly to 65.1% due to increased Ilumetri royalties, despite an improvement in Q2.
- SG&A expenses rose by 8% to EUR232 million, driven by investments in the Ebglyss launch.
- R&D expenses increased by 8%, representing 11.4% of net sales, which may impact short-term profitability.
- The US legacy business remains under pressure from ongoing generic erosion, particularly affecting Cordran and Tazorac.
- Skilarence sales declined due to increased competition, and the product is not being actively promoted.
Q & A Highlights
Q: Can I just clarify on the very comprehensive list of studies ongoing for Ebglyss? Can I just confirm that at present Almirall isn't participating in the non-dermatological studies that Eli Lilly is running? And if not, what would lead you to consider participating or opting into those indications? When might that be? And should that be relatively easy to slot into your existing infrastructure at the moment? And then related to that just in terms of the ongoing pediatric studies do you view the Peds opportunity to be a material one? And is this already factored into your current peak sales guide?
A: (Carlos Gallardo Pique, CEO) In terms of the pediatric expansion, this was always planned for a long time ago. And it's planned and it was taken into account in the calculation of the peak sales. Regarding the non-dermatological studies, we will have an option to commercialize these indications in Europe and will update on any developments in the future.
Q: Just if you could give us some more detail on what the launch for Klisyri large field entails in the coming months? And what we should think of in terms of how that might inflect in terms of the timeline?
A: (Michael James McClellan, CFO) We are launching a slightly bigger packet size to cover the new 100-square-centimeter area. The product will be launching by the end of the month, with the sales force trained up on the new label. We expect sales to pick up, but it will take time to get doctors convinced to use Klisyri for a field therapy instead of a spot therapy.
Q: On Ebglyss, if you could provide a bit more color on how has the market share in dynamic patients evolved versus Q1? And second, if you could provide a bit more color on the expected contribution from the launches in the second half of the year?
A: (Carlos Gallardo Pique, CEO) We saw a very strong uptake in Germany and continued acceleration up to May. Germany will continue to be the bulk of the sales throughout this year. Other countries will have a minor contribution at this point due to longer market access processes.
Q: We have seen a jump in Seysara sales from EUR9 million to EUR15 million. Could you explain the reason for that and what you expect for the full year?
A: (Michael James McClellan, CFO) The increase is due to a EUR3.7 million milestone income for licensing out Seysara in China. In the US, we have seen slight growth due to better pricing and a value approach rather than volume.
Q: On the milestones, could you be more precise on the investment, how much is the milestone regarding Ebglyss, how much is the milestone from Ilumetri and the rest of acquisitions? And what are your expectations for the rest of the year and also for 2025?
A: (Michael James McClellan, CFO) In the first half, there was EUR45 million for Ebglyss and EUR20 million for Ilumetri. We expect total investments to be around EUR120 million for the year unless there is any M&A activity. For 2025, we will discuss potential milestones when we give guidance in February.
Q: On Ebglyss, can you provide the number of the market share on new TRx and what do you think that is coming from? Do you see the feedback from physicians indicating that there are some patients converting from other treatments?
A: (Carlos Gallardo Pique, CEO) We see a good progress of market share, with a healthy combination of new patients and switches from other advanced therapies. The predominance is on new patients.
Q: On the pipeline, from Eli Lilly trials, which of them can you benefit in Europe? For example, if they get the indication for pediatric, does this mean you get the indication for Europe?
A: (Karl Ziegelbauer, CSO) Yes, we will benefit from the data from Eli Lilly's studies. Specifically, the ADorable study in small children is part of the European pediatric investigation plan and may allow us to extend our label into this population.
Q: Regarding the gross margin, which came close to 67% in the quarter, how should we think about the gross margin in following quarters?
A: (Michael James McClellan, CFO) We expect the gross margin to be around 65% for the rest of the year. The variation between Q1 and Q2 was due to mix variation, but it should even out.
Q: On the legacy business, which is declining around 8% in the quarter, how should we think about the rest of the business, excluding derma?
A: (Michael James McClellan, CFO) We expect the legacy business to be relatively stable. The year-on-year decline is due to minor divestments in early 2023. Excluding those, the business is relatively flat.
Q: On the guidance for 2024, you are already making EUR104 million EBITDA. Do you still maintain the current guidance?
A: (Michael James McClellan, CFO) We are confident we can make the guidance we've given. We have additional launches coming up for Ebglyss and pre-launch activities in some countries. We are pointing towards the upper end of the guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
