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Investing.com -- Shares of ALK Abello climbed 5% following the company’s release of its first-quarter results, which surpassed expectations with a 2% revenue increase driven by robust international tablet sales and other products.
The company’s focus on European tablets met forecasts, despite a slight miss excluding inventory stocking effects. The improved gross margin and significantly reduced operating costs led to a substantial earnings before interest and taxes (EBIT) beat, with a 30.8% EBIT margin, partially attributed to seasonal factors.
In the first quarter, ALK Abello’s sales outperformed consensus estimates, with tablet sales 3% above expectations, primarily due to strong performance in Japan. Other products also exceeded projections by 9%, countering the 2% shortfall in subcutaneous immunotherapy (SCIT) and sublingual immunotherapy (SLIT) drops. Notably, the intake of new tablet patients for the 2024/25 season increased by more than 10% compared to the previous year.
The company’s EBIT reached DKK 469 million, comfortably outpacing the consensus estimate of DKK 392 million. The EBIT margin of 30.8% also surpassed the consensus of 26.2%.
ALK Abello also reiterated its 2025 outlook, maintaining its revenue growth target of 9%-13% at constant exchange rates, with expectations at the higher end of the range. The EBIT margin forecast remains at approximately 25%, in line with current estimates. The company anticipates double-digit growth in tablet sales across all regions, mainly driven by volume growth, with a slight increase in gross margin expected.
The initial launches of the neffy product in the European Union are slated for the third quarter of 2025. The company’s commentary regarding minimal exposure to tariffs amid global trade uncertainties is likely to reassure investors, suggesting no significant impact on ALK’s growth or earnings for 2025.
The positive results and outlook for ALK Abello reflect the company’s strategic initiatives, including the recent co-promotion deal with ARS, which is seen as a prudent approach to expanding the U.S. salesforce footprint. While the deal is expected to yield synergies, they may take time to materialize. The company’s phase II peanut allergy tablet study is also progressing as planned, further underpinning the positive sentiment in the stock.
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