Earnings call transcript: Almirall Q4 2024 sees EPS beat, stock gains 5.75%

Almirall, a leading player in the medical dermatology sector with a market capitalization of $6.07 million, reported its fourth-quarter 2024 earnings, surpassing both earnings per share (EPS) and revenue forecasts. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 6.69, indicating robust financial stability. InvestingPro analysis reveals 7 additional key insights about Almirall’s financial position, available to subscribers. The company posted an EPS of $0.13, exceeding analysts’ expectations of $0.09. Revenue came in at $247.7 million, slightly above the anticipated $246.8 million. Following these results, Almirall’s stock price rose by 5.75% in pre-market trading, reflecting investor optimism.

Key Takeaways

• Almirall’s EPS and revenue both exceeded forecasts for Q4 2024.
• The company’s stock surged by 5.75% following the earnings announcement.
• Strong performance in medical dermatology, with significant contributions from key products like ILUMETRI.
• Positive outlook for 2025 with projected net sales growth between 10-13%.

Company Performance

Almirall reported a robust performance in 2024, with net sales increasing by 10.2% and EBITDA growing by 10.6% compared to 2023. InvestingPro data shows the company operates with moderate debt levels and maintains strong liquid assets exceeding short-term obligations. For detailed analysis of Almirall’s financial health and growth prospects, access the comprehensive Pro Research Report, part of InvestingPro’s coverage of 1,400+ top stocks. The company’s focus on medical dermatology has proven successful, with ILUMETRI and ECLIS making significant contributions to sales. Almirall’s strategic investments in research and development (R&D) and market expansion have positioned it well against competitors in the growing dermatology market.

Financial Highlights

• Revenue: $247.7 million, slightly above the forecast of $246.8 million.
• Earnings per share: $0.13, exceeding the forecast of $0.09.
• Gross margin: 64.7% of sales.
• EBITDA: $192.6 million, a 10.6% increase from the previous year.
• R&D investment: 12.6% of net sales.

Earnings vs. Forecast

Almirall’s Q4 2024 earnings per share of $0.13 beat the forecast of $0.09 by approximately 44.4%. This positive surprise is consistent with the company’s trend of outperforming expectations in recent quarters. The revenue beat, though smaller, further underscores the company’s solid market performance.

Market Reaction

Following the earnings release, Almirall’s stock experienced a 5.75% increase, reaching a price of $9.66, up from the last close of $9.135. InvestingPro analysis indicates the stock generally trades with low price volatility, despite having a beta of 1.79. The stock is currently trading near its 52-week high, with analysts predicting profitability this year. Discover more detailed valuation metrics and trading insights with an InvestingPro subscription. This upward movement places the stock closer to its 52-week high of $10.04, indicating strong investor confidence in the company’s future prospects.

Outlook & Guidance

For 2025, Almirall anticipates net sales growth of 10-13% and EBITDA in the range of $220-240 million. InvestingPro analysts maintain a positive outlook, with net income expected to grow this year. The company’s next earnings report is scheduled for March 12, 2025, providing investors another opportunity to evaluate its growth trajectory. Access the full financial forecast and analyst recommendations through the detailed Pro Research Report on InvestingPro. The company plans to continue its focus on medical dermatology, with new product launches and geographic expansions. Almirall is also exploring in-licensing and acquisition opportunities to enhance its market position.

Executive Commentary

CEO Carlos Gallardo emphasized the company’s growth trajectory, stating, "We are entering a new era of accelerated growth and margin expansion." He also highlighted the potential of the medical dermatology market, noting its global value of $46 billion and a growth rate of 7.5% annually. Gallardo added, "Our strategy is working and we are delivering."

Risks and Challenges

• Entry of biosimilars could impact sales of key products like ILUMETRI.
• Market saturation in certain regions may limit growth opportunities.
• Macroeconomic pressures and currency fluctuations could affect financial performance.
• Regulatory changes in key markets may pose compliance challenges.
• Supply chain disruptions could impact product availability.

Q&A

During the earnings call, analysts inquired about the potential impact of biosimilars on ILUMETRI’s growth. The company expressed confidence in maintaining its market position despite these challenges. Questions also addressed the sustainability of ECLIS’s sales growth, with executives expressing comfort with current consensus estimates. Additionally, Almirall expects milestone payments to contribute $80-90 million annually, supporting its financial outlook.

Full transcript - Almirall (ALM) Q4 2024:

Nadia, Conference Operator: Good day and thank you for standing by. Welcome to the Almirall Full Year twenty twenty four Results and Business Update Conference Call. At this time, all participants are in listen only mode. After the speakers’ presentation, there will be the question and answer session.

Please be advised that today’s conference is being recorded. I would now like to hand the conference over to our first speaker today, Pablo Divason. Please go ahead.

Pablo Divason, Investor Relations, Almirall: Thank you very much, Nadia. Good morning, everyone. Thank you for joining us for today’s quarterly earnings update and review of Almirall’s twenty twenty four full year financial results. As always, we are sharing the slides we are using today in the Investors section of our website at almirall.com. Please move to Slide number two.

Let me remind you that the information presented in this call contains forward looking statements, which involve non and unknown risks, uncertainties and other factors that may cause actual results to materially differ from what we are showing today. Please move to Slide number three. Presenting today, we have Carlos Gallardo, Chairman and Chief Executive Officer Mike Makila, Chief Financial Officer and Carl Sincherbar, Chief Scientific Officer. Carlos will start with an aesthetic overview and meet their guidance. The business highlights covering 2024 and will also give us an update specifically on our geologic portfolio as key growth drivers in our medical dermatology portfolio.

Carl will provide you with an R and D status update highlighting the progress of our pipeline. Mike will then talk you through the financials before Carlos close and we open up for your questions. Now, I will hand over to Carlos Gallardo, our Chairman and CEO for an introduction.

Carlos Gallardo, Chairman and CEO, Almirall: Thank you very much, Paolo, and good morning to everyone in the call. So ten years ago, we took the strategic decision to focus exclusively on medical dermatology as we anticipated a fast growing market driven by the tremendous unmet need of patients suffering with skin conditions, but also because of the increased understanding of disease biology on a number of diseases. Today, I’m happy to say that we call it right. Medical (TASE:BLWV) dermatology is already a $46,000,000,000 market worldwide and poised to grow to grow 7.5% on a compounded annual growth rate. In this context, we have executed very well on our strategy, having been able to either source or to internally develop products in all these key categories.

As a reminder, the growth of this market is being driven today, thanks to the biologics in psoriasis and in atopic dermatitis and that’s where we have our two products Idumetric and Aptly. But also let’s not forget that we have other very exciting programs that are helping patients tremendously such as Winthaura, Glycidi, Ficrupoli and more recently Tubria that will contribute to drive the growth of this company going forward. Since I became CEO two years ago, we saw this tremendous opportunity in this nice and growing market. So we’ve been focusing on investing to make sure we could deliver on the biologics and we could position Aptlyce and ILUMETRI as key first line products in moderate to severe patients. I’m happy to say that everything is working according to plan and we entered in a new era of accelerated growth and margin expansion.

In addition to working in building the right capabilities to maximize the growth and the potential of these brands, we were also focusing, of course, in shaping the future in getting ready to deliver the next wave of innovation in our labs in San Feliu, but also in sourcing externally, the next wave of innovation to continue to grow the company in the years to come. A few weeks ago, I was in San Francisco, the JPMorgan Healthcare Conference, and we provided mid term guidance for the first time that are happy to rate the rate and confirm today. We envisage double digit sales compounded annual growth rate in the from now until the end

Pablo Divason, Investor Relations, Almirall: of the

Carlos Gallardo, Chairman and CEO, Almirall: decade and EBITDA to continue to expand up to around 25 by 2028. And this is why skipping our R and D investment rate at around 12%. Moving into the guidance, I’m delighted to say that we have surpassed our 2024 guidance and we have delivered double digit net sales growth, and that shows the high single digit that we had anticipated twelve months ago. And EBIT as well, we anticipated a range of $175,000,000 to $190,000,000 million and we have surpassed this range landing in January. Moving into this year and very aligned with the mid term guidance that we said not or we commented a number of weeks ago.

Now we’re going to be doing what we’ve been done 24 that is executing well on the launches and executing well in the R and D front. So we envisage to accelerate our net sales growth from 10% to 13% this year and EBITDA again aligned with the guidance. EBITDA margin expansion, we expect to launch the EBITDA between $220,000,000 and $240,000,000 in 2025. Moving to the next slide. If we double click on 2024 and some highlights what has worked well, I would highlight that what has worked well is the execution, the capability of our teams to execute consistently on our strategy ranging from pricing to market access to marketing to commercial.

And every single department across the value chain has delivered flawlessly in 2024. I’m going to take this opportunity also as I know that some of my colleagues are connected to the call to congratulate them because the performance in 2024 has been fantastic and the beginning of 2025 seems to be very strong as well. I’m not going to dwell on the finances as we have already commented on them. But in terms of the key growth drivers, growth in the biologics continue to gain market share both in psoriasis and inotropic dermatitis. And but also not forgetting our other growth drivers such as glyceria and four point five performed extremely well.

Moving to R and D pipeline, we have continued in 2024 to develop our pipeline and Karl will comment on the different specifics, but I would like to highlight the inclusion of two new assets in our clinical stage and the breakthrough inclusivity and the IL-twenty one. So going back to the biologics, if we move forward to the next slide please, We can see that combined, we expect to reach more than $800,000,000 and this guidance on peak sales was also updated during the GP Morgan confidence. And again, this is a testimony of the markets are growing very well.

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Carlos Gallardo, Chairman and CEO, Almirall: have our assets are becoming the winning classes. And also we continue and we envision to continue to gain market share in these market segments to the great execution of our teams and the strong partnering that we have with dermatologists. If we move into the psoriasis market in particular, what we can see here is how the psoriasis market has evolved in the past ten, fifteen years. We have seen that has grown exponentially, thanks to the inclusion of new asset classes and new technologies. And we could look at the market and think that this is already a mature market, but it’s not the case because this three hundred and sixty five thousand patients represent only around twenty percent of the number of eligible patients for this type of advanced treatment, advanced systemic treatments.

So there’s still tremendous opportunity for micro expansion, there’s still tremendous opportunity to continue to help patients through partnering with dermatologists and that this is our most of our strategy. Within this context and within this quickly expanding market, our product, ILUMETRI, has continued to perform really well. And has performed very well because one, as I said before, we are in a nicely growing market. Within this nicely growing market, our mechanism of action, the anti IL-twenty three has become in Europe the winning class, the go to class for dermatologists to treat moderate to severe patients. And within this class, we are gaining market share.

And we’re gaining market share because of the great profile, because of the great execution of our teams, because of our strong partnering with hermatologists. And also, I would like to remind you that last year, we launched a two hundred milligram presentation, which is providing additional flexibility to prescribers to achieve their treatment goals and in particular with these patients that are overweight or have a high burden of disease. We don’t think that these dynamics are going to change in the near future. We expect these dynamics to continue in 2025 and beyond. Moving to a topic dermatitis, and this is a slide showing later the market to market evolution.

We see atopic dermatitis market very similar to the psoriasis market, but we are around ten years where the psoriasis market was. We see today that they are at least twenty, twenty three, there were eighty one thousand or eighty two thousand patients treated. That is less than ten percent of the total number of eligible patients. So tremendous growth that we see this market to continue to grow in the year to come. And we look at 02/1931 estimates that there will be four hundred thousand patients treated and we believe that this projection probably is a bit conservative.

So again, we see tremendous opportunity in this market to continue to help patients and this market will continue to expand until 02/1930 and beyond. Within this favorable backdrop, we launched next slide please, we launched ECLIS in Germany in late twenty twenty three. So we had now a full year of commercialization of the product in Germany and we’re delighted to see how the product is performing in this key market. We have achieved already the second largest dynamic new person share in Germany. The feedback that we’re getting from physicians is very good and we already have thousands of patients in therapy.

Also, we have launched already in other countries, but remind you that this 33,000,000 that we have achieved in 2024 are coming largely from Germany, because in the other countries that we launched in 2024 and we are still in the market access stage. So we are getting the product in the formularies, we’re getting the product in the different hospitals and in some cases, we have to go either region by region or hospital by hospital. However, this effort is going to pay off this year in 2025. So you can expect this year 2025 to see a continued strong contribution from Germany, but already a sizable contribution from the other markets. If we move to the next slide, this illustrates the launch sequence.

As I said before, we launched in Germany in 2023, but and a number of additional countries in 2024. And from this country, it takes six countries, which should already start to see a strong contribution in 2025. In 2025, we have launched in a number of additional countries or we are going to launch and there will be up to 12 countries in 2025. I have to say that the execution in terms of pricing and market access is going everything either according to plan or sometimes surpassing expectations. For example, in Spain, we’ve been able to achieve reimbursement six months ahead of what typically takes.

And the same thing in some cases in other countries. Not only the price that we are achieving, but also sometimes in how quickly we are achieving these prices. So and I think that’s a great testimony again of our ability to execute, but also what we’re finding is that payers want this product. And this is helping us a lot to accelerate our agenda in this front. So, so far, things going very well, at least in 2024 with ILUMETRI and ECLIS.

And we anticipate these dynamics to continue at 25,000,000,000. Next (LON:NXT), if we move to the next slide, I invite Karl to give us an update on the positive progress in R and D and our pipeline.

Karl Sincherbar, Chief Scientific Officer, Almirall: Yes. Thank you, Carlos, and I’d like to welcome everybody. Thanks for joining our call today. You can see on that slide the progress of our pipeline. As you may recall, in October, we successfully completed the decentralized regulatory approval procedure for efinacronazole in Europe.

The decentralized procedure completion is the final step before national marketing authorization can be granted by European countries. Work with the national regulatory authorities is now underway and marketing authorizations are expected during the first half of twenty twenty five. Saricycline’s regulatory review in China is ongoing. You may know that timelines are more volatile for regulatory procedures in China and we now expect approval in the second half of twenty twenty five. For glyceri expansion to large fill in Europe, we are currently running a clinical study aiming to launch in 2026.

Together with our partners, we continue to work on expanding the labels for our key products, ILUMETRI and ECLIS. Our partner, Sanpharma, is running two Phase three studies to assess the efficacy and safety of tildekizumab in patients suffering from psoriatic arthritis. First results are being expected in the second half of twenty twenty five. To make ECLSS available to all patients with moderate to severe atopic dermatitis, our partner Eli Lilly (NYSE:LLY) is running a Phase III study exploring the safety and efficacy of leptekizumab in patients six months to under 18. We have created an exciting pipeline of early clinical assets with novel mechanisms and best in class compounds addressing high medical disease.

In the next fifteen months, we plan to initiate four proof of cloncept clinical studies across the spectrum of different kidney disease. Clinical supply manufacturing for our anti L21 monoclonal antibody is ongoing to prepare for Phase AL21 is a cytokine affecting both D and T cell biology and hypothesized to be involved in several immune mediated skin disease. For our anti L1 RET monoclonal antibody, we have completed Phase one single and multiple ascending doses in healthy volunteers. Now pharmacokinetics and safety are being explored in patients. We plan to start a Phase II study later this year in HITRADENTISuperativa high medical need indication.

For our IL2 mutant fusion protein, Phase I single and multiple ascending doses are ongoing. This IL2 mutant fusion protein activates regulatory T cells with the potential to treat various autoimmune disease. ZKNO13 is an oral rethreen user designed to overcome nonsense mutations that cause a premature stop codon. ZKN-thirteen has utility in several rare indications, such as dystrophic epidermolysis purusa, junctional epidermolysis bullosa and familial adenatous polyposis. Phase one is ongoing.

In summary, we are making good progress with both our early and late stage pipeline. Let’s now move to Slide 20. In medical dermatology, there is still a high medical need and many patients suffering from diseases for which there is no adequate treatment. With our comprehensive capability across the entire value chain from discovery to commercialization, we are ideally positioned to address this medical need and build an innovative discovery pipeline with significant potential. Our strategy is to combine internal discovery with in licensing assets at various stages.

Our internal capabilities focus on disease understanding while working with specialized technology provider to select the best modality for a given target of therapeutic approach. We are working with mRNA LMPs, small molecules, antibodies, bispecifics and other modalities. We have a bispecific monoclonal antibody for atopic dermatitis in preclinical development and multiple early discovery programs covering a broad range of skin disease. Next slide please. To maximize the value of ECLSS, we are conducting together with our partner Eli Lilly a comprehensive clinical development program.

Details on the different studies are available in the appendix. In addition, we will complement our excellent clinical data package with real world evidence study. One example is the so called AD TRUST study. AD TRUST is a 1,200 patient pan European perspective observational two year study that aims to explore the physical, psychological and social impact of atopic dermatitis on patients’ lives aligned with our noble purpose. The objective is to assess disease symptoms, severity, control of skin manifestation, patients’ perception of their skin and personal well-being.

Patient quality of life, treatment effectiveness, safety and satisfaction in patients with moderate to severe atopic dermatitis receiving leptekizumab over a period of twenty four months in real world clinical practice setting. The first patient was recruited into the study in January 2025 and we anticipate the study finishing in 2028. With that, I will hand over to Mike for the financial review.

Mike Makila, Chief Financial Officer, Almirall: Thank you, Karl, for providing an insightful overview of the new Eblis studies and the developments in our pipeline. As Carlos mentioned earlier, we were able to slightly surpass our 2024 guidance for sales and EBITDA, reaching an inflection point for future growth. We delivered a great performance for the full year of 2024 with a net sales increase of 10.2%, driven primarily by strong growth in our European dermatology portfolio, which is a key pillar in our journey towards leadership in medical dermatology. We achieved a total EBITDA of $192,600,000 in 2024, a growth of 10.6% versus 2023, largely driven by strong sales growth, while still investing more in R and D and SG and A supporting our new launches. Our gross margin was in line with guidance at 64.7% of sales, as we experienced some pressure from the increased telemetry royalties as we have hit higher sales levels.

SG and A in 2024 was up 10% to $464,600,000 primarily due to investments in the Evolus (NASDAQ:EOLS) launch across Europe, supporting the brand’s growth trajectory in twenty twenty five launch countries. R and D investment was up 11.9% year on year, representing 12.6% of net sales. This is aligned with our annual target and our pipeline strategy to fuel long term innovation. We ended 2024 with a net debt to EBITDA ratio of 0.2 times, which positions us well to take advantage of potential licensing or bolt on M and A opportunities. Let’s move to the details of our sales breakdown on Slide 24.

The European Dermatology business delivered a very robust performance with 22.5% year on year growth, which I’ll cover in more details on the next slide. Our general medicine OTC business performance in Europe delivered a slight growth in 2024 aided by the growth in Evastel and Almax, which offset further generic pressure for epicyptezavail. I’ll share more details in The U. S. On the next slide.

And the performance of the rest of the world general medicine business increased mainly due to strong results from Evastel. Let’s take a closer look at the dermatology business on the next slide. Our European Dermatology segment continues to excel, primarily driven by our biologics, ILUMETRI and EDWIS. Other derm growth drivers such as Fiseria and Winxura continue to expand in key European markets. After just one year on the market, Eblis has achieved $33,200,000 in sales, positioning it as one of our leading contributors.

This result is in line with our expectations and continues to bolster our confidence in its robust growth trajectory. ILUMETRI delivered another strong year of growth, reaching more than $200,000,000 and putting it on track for the new peak sales that Carlos mentioned of more than $300,000,000 The U. S. Business is stabilizing with Seysara sales growing double digit in 2024. The positive impact of the recent large field launch in Klyseri in August is starting to take effect and the overall volume is growing since the launch.

However, The U. S. Legacy business remains under pressure from ongoing generic pressure related to Cordran and Tazarac. However, Axon sales have increased here on. Rest of the World Dermatology sales experienced a slight decline due to lower sales of cyclopoli and less licensing income from non core products.

Let’s now move on to the complete financial statements. As we’ve covered sales, let’s review the rest of the P and M. Gross margin for 2024 was 64.7%. We anticipate continued gross margin pressure in the coming years due to the sales mix and higher royalty tiers primarily for ILUMETRI as its sales increase. Our R and D investments have risen to 12.6% of net sales, up from 2023, and we expect this level to remain in 2025 to support our innovation and pipeline strategy.

SG and A investments have grown by 10% compared to 2023, mainly driven by the Eblis launches and pre launch activities for the 2025 countries. Financial expenses decreased benefiting from higher interest income on short term cash deposits. Keep in mind that our effective tax rate is influenced by the inability to offset U. S. Tax losses against our profitable European business.

We also had some minor impairments due to The U. S. Legacy business, particularly corduro intake. Please move to the next slide to take a look at the balance sheet. The main highlight to call out on the balance sheet is the effect of the investments in intangible assets throughout the year.

In the first half, these include the $10,000,000 upfront payment for the IL-twenty one asset from Novo Nordisk (NYSE:NVO), a smaller upfront payment for the read through Inducer from Eloxx Pharmaceuticals (OTC:ELOX). And in the second half, we’ve had minor investment to acquire the remaining Klycere Global Rights. We also have a $45,000,000 ILUMETRI sales milestone, which will be paid in 2025. This is due to hitting higher levels of sales of the product. We also have a minor sales milestone related to Winzora as well as some capitalization of Eblis Phase four studies.

The total impact has been counterbalanced by depreciation for the year and a minor impairment of The U. S. Legacy assets I mentioned on the previous slide. Please note that our net debt ratio remains favorable at 0.2 times despite significant cash outflows during the year, which we will review in more detail on the next slide. So let’s now turn to the cash flow statement.

We generated an operating cash flow of $160,800,000 in 2024, a significant improvement from 2023 due to flat working capital. Other adjustments mainly relate to net financial income, including interest from short term deposits. Our investing activities saw notable cash outflow in 2024, primarily from 2023 milestones that were paid in early twenty twenty four. In January, we had a $45,000,000 payment for Eblis first commercial sales in The EU and a $20,000,000 milestone payment for ILUMETRI sales. We expect an additional $45,000,000 ILUMETRI sales milestone, which was triggered in Q4 to be paid in the first half of twenty twenty five.

The divestments refer to milestones and royalties collections from the AstraZeneca (NASDAQ:AZN) Covis arrangement. Overall, we have generated a positive free cash flow despite the heavy investments made in 2024. I will now give some more color on our 2025 guidance that is given by Carlos. Getting into the details of the 2025 guidance, I’d like to outline that some guidance assumptions we are using for 2025, which include some pushes and pulls. We anticipate the increase in net sales mainly coming from continued growth of ILUMETRI in Europe and the further uptake of EVLIS, including new launches in several countries.

We will as well have growth of Cliserie Windsor across Europe, while the rest of the portfolio will be relatively stable this year. We will continue to experience slight gross margin pressure giving increased royalty rates, particularly from ILUMETRI. R and D investment is expected to stay around the 12% of net sales level as we’ve seen in recent years. In 2025 and going forward, we expect the net sales growth to accelerate faster than the SG and A growth rate. SG and A growth will slow significantly in 2026 and beyond once the Ebbus launches have been rolled out across Europe.

Regarding the tax rate, it should land somewhere in the mid-forty range in 2025 before declining in 2026 and beyond into the mid-20s as The U. S. Tax loss impact diminishes and the growth of biologics in Europe will allow us to utilize more of our R and D tax credits. Finally, bear in mind that the guidance range does include the small out licensing that we announced in January. The full year effect will only be slightly more than 2024, as we’ve had small activities each year as part of our portfolio optimization strategy and out licensing of non core product lines.

With this, I will hand it back to Carlos for some closing remarks.

Carlos Gallardo, Chairman and CEO, Almirall: Thank you very much, Karl and Mike for your updates. So to close, we have had significant market opportunity in front of us. Nice market, growing market, a tremendous opportunity to continue to help patients and we have the right strategy. We have the right strategy, we’re focusing exclusively on medical dermatology and by partnering long term with our key customers, the dermatologists. For that and to capture this tremendous opportunity, we’ve been focusing on investing to making sure we develop the right platform to capture this growth, but also to develop the next wave of innovation.

Now is a time to whilst continuing this investment to start reaping the rewards of this focus and this good investment that we’ve been doing until now and we are entering a new era of accelerated growth and margin expansion. Today, also I’d like to remind you that all this growth is coming from organic growth is coming from the assets from the products that we already have now in our portfolio. We still keep looking for new assets either in licensing or acquisition as well. And let me remind you what we’re looking for. We’re looking for assets to continue to develop our R and D pipeline.

So products or programs in the clinical stage, but also of course programs in clinical stage. And also in terms of commercial, we continue to look for products in dermatology, mainly in Europe, but we’re going to be looking in The U. S. As well, if and only if there are niche indications. Our strategy is working and we are delivering.

And we are confident in the direction of this company and in our ability to execute. I would like now to pass back the words to Pablo for question and answer.

Pablo Divason, Investor Relations, Almirall: Thank you very much, Carlo. Nadia, back to you for the Q and A, please.

Nadia, Conference Operator: Thank you so much, dear participants. And now we’re going to take our first question. And it comes from the line of Sean Hama from Jefferies. Your line is open. Please ask your question.

Sean Hama, Analyst, Jefferies: Hi, Ben. Thank you so much. Just two for me, please. So firstly, just in terms of EDGlyst, what sort of penetration are you seeing in Europe, if you can disclose? And then with regards to ILUMETRI, so the psoriasis market as we all know is quite saturated and the emergence of biosimilars, particularly, Solara biosimilars might make it increasingly difficult for other players.

So Are you seeing any generic pressure? What sort of drives your confidence in the increase in the metropic sales? Thank you so much.

Carlos Gallardo, Chairman and CEO, Almirall: Thank you very much, Han, for the question. So in terms of first question about EPLIS zero penetration, our strategy is to position EPLIS as first line in naive patients, and that’s where the unmet need is in this developing and developing market. I’m very pleased to say that we are already capturing more than double digit. We are in the double digits in capturing this segment of naive patients first line. And also, I can say that most majority of our prescriptions are in the naive space versus switch.

There’s already a lot of need in the switch space, but our strategy is to focus on capturing the naive. And today that’s working and the majority of patients that we have today on drug have been prescribed naive patients first line. In terms of ILUMETRI, we have with us Paolo Chonino, our Chief Commercial Officer. So I think he’s the best he can answer your question about the impact of biosimilars in the psoriasis market.

Paolo Chonino, Chief Commercial Officer, Almirall: Thank you very much Carlos. And Sean about ILUMETRI and biosimilars. So we expect the overall psoriasis market to slow down a little bit with some other product like Stellaris you mentioned with biosimilars entering in the market. And even in 2026 we had Cosentyx biosimilars. So that is what is going to happen.

But on the other side, we are also convinced that ILUMETRI, I mean, is playing in the IL-twenty three class, as Carlo has said during his presentations. So he’s the leading class in Europe, pulling the growth in this market. So we are convinced to be in the right class. And we think also that doctors and even patients not prefer the new treatments because they are more effective than the other one. So we believe that we can continue the growth that we foresee for ILUMETRI even in 2020, ’20 ’20 ’5.

Karl Sincherbar, Chief Scientific Officer, Almirall: And if I may add just this, the two hundred milligram and the flexible dosing we are offering, I think we have a particular advantage in competing in that market.

Nadia, Conference Operator: Thank you. Thank you. Now we’re going to take our next question. And the question comes from the line of Dion Sampaio from Caixa Bank. Your line is open.

Please ask your question.

Dion Sampaio, Analyst, Caixa Bank: Hello. Thank you for taking my question. So the first one regarding your guidance, what are you assuming in terms of Eblis sales? So I understand the consensus is more or less aligned with your guidance at the midpoint. Is assuming around 95,000,000 of sales from Everest.

Is this consistent with what you see? And the second point, in terms of milestone payments, what should we expect beyond the $45,000,000 that you already mentioned that was paid in January? Thank you.

Carlos Gallardo, Chairman and CEO, Almirall: Thank you, Guillaume, for questions. In terms we are not providing an estimate for our every sales in ’25. However, we are comfortable with the consensus. In terms of milestone payments, Mike, can you add a bit more color on this front?

Mike Makila, Chief Financial Officer, Almirall: Yes. So as we look into 2025, we will pay the $45,000,000 for ILUMETRI. If I look at the full year, we’ll probably be in the $80,000,000 to $90,000,000 range paying different milestones and upfronts that are related to existing agreements. That’ll be slightly down from $2,024,000,000 dollars So that’s probably about the range. Now that’s precluding that we make any kind of major bolt on acquisition or new in licensing.

So anything that we don’t have in our hands today would come on top of that.

Pablo Divason, Investor Relations, Almirall: Okay. Thank you.

Nadia, Conference Operator: Thank you. Now we’re going to take our next question. And the question comes from Francisco Ruiz from BNP Paribas (OTC:BNPQY). Your line is open. Please ask your question.

Francisco Ruiz, Analyst, BNP Paribas: Hello. Good morning. One follow-up from Guillermo question, which may in order to achieve your mid term guidance growth, could you tell us what’s the implicit levels of milestones in order to reach this EUR $450,000,000 sales in a place and more than EUR 300,000,000 in Lumetri? My second question is on the shareholder remuneration. As the company is getting into a big expansion phase on EBITDA generation with a very low level of net debt, are you thinking on increasing the shareholder remuneration or other ways to remonorate the shareholders?

Thank you.

Pablo Divason, Investor Relations, Almirall0: Thank you very much, Francisco, for your questions.

Carlos Gallardo, Chairman and CEO, Almirall: I will leave your first question to Mike, but I think your second question, I think is to we are not prepared now to answer this question. Something that we will of course, we will keep in mind and we will of course, while we prepare the AGM in May, we will be able to provide more details, more comments on that.

Mike Makila, Chief Financial Officer, Almirall: Yes. So we haven’t put out a complete list of milestone payments, but there are some future ones for ILUMETRI and EMPLIS in particular that we could trigger if we’re very successful. I would say, having annual investments of all these different milestones and agreements roughly in that $80,000,000 range for the next couple of years is probably a good way to model it.

Francisco Ruiz, Analyst, BNP Paribas: Okay. Thank you very much.

Nadia, Conference Operator: Thank you. And now we’ll proceed with our next question. And it comes from the line of Alvaro Lenze from Alantra Equities. Your line is open. Please ask your question.

Pablo Divason, Investor Relations, Almirall1: Hi. Thanks for taking my question. I wanted to have a little bit more detail on R and D. It does seem that it’s scaling rather quickly along with sales. So you maintained this 12% of sales and I would have expected some overhead leverage on that front.

So if you could break that up on what is consuming that much R and D investment because you don’t have major Phase III clinical trials. And I would have thought that the early stage pipeline was not as consuming as it is being. And also, you have mentioned that gross margin will be negatively impacted by higher royalty payments for ILUMETRI. I’m assuming something similar will happen as the Eglise takes a larger role on your revenue mix. Do you have any ballpark number in mind as to your midterm gross margin?

Thank you.

Carlos Gallardo, Chairman and CEO, Almirall: Thank you very much, Alvaro, for your question. So in terms of R and D, we have we are keep progressing our pipeline and we keep adding assets to our clinical pipeline. And we are envisaging that we’re going to move we’re going to start four proof of concept trials or Phase II trials within the next fifteen months. And of course, the preparation of these trials is what is consuming a substantial part of our resources and that’s very exciting from our side. However, Karl, can you provide a little more color to Alvaro about his question, please?

And then we can go to Mike for the gross margin question.

Karl Sincherbar, Chief Scientific Officer, Almirall: I think with the about 12% R and D or sales, that covers, as Karlos said, building an exciting early pipeline and starting proof of concept studies in the next fifteen months. But it also means and that is part of our strategy investing in discovery, where we now have in preclinical development a bispecific antibody targeting AD and as you may know in the preclinical phase biologics are a bit more expensive as one molecule for example. We’re also working with different technology in the discovery phase as now we’re seeing many scientific advances and novel approaches to treat skin diseases, which allow us to generate a lot of value in the long term. And then finally, also as part of this figure, we are supporting and continue to support EthClip and ILUMETRI as well as the other products that are on the market, which require a lot of ongoing regulatory work.

Mike Makila, Chief Financial Officer, Almirall: Yes. And in terms of gross margin, I would expect in 2025, probably about 30 to 50 basis points of pressure versus the 64.7% we saw in 2024. As we go into the midterm, we will continue to see a little bit more downward pressure. I think a little bit will depend on the final pricing that we get for Eblis in some of the markets and how quickly we ramp up to higher royalty levels. Overall, Eblis should be somewhat in that range that we have today, but we may see further pressure if we hit higher royalty tiers as we go along.

So very clear for 2025, ’30 to 50 basis points and then going forward some kind of similar pressure, but we’ll be able to quantify that better as we get to each year. Thank you.

Nadia, Conference Operator: Thank And it comes from the line of Aleister Campbell from RBC. Your line is open. Please ask your question.

Mike Makila, Chief Financial Officer, Almirall: Thanks very much. I think we’ve covered most of the ground, but if

Pablo Divason, Investor Relations, Almirall2: I could just have a brief follow-up on your proof of concept studies in the early pipeline, just to get a sense of obviously you’re going to launch four POC trials imminently, but get a sense of when we might expect some data readouts on that, please? Thank you.

Karl Sincherbar, Chief Scientific Officer, Almirall: Yes. Thanks a lot. As mentioned, we are starting for proof of concept trial in the next fifteen months. And usually, depending on the indication, those trials take about one to two years and this gives you roughly a little bit an estimate when first readouts can be expected.

Carlos Gallardo, Chairman and CEO, Almirall: Thank you.

Nadia, Conference Operator: Thank you. Now we’re going to take our next question. And the question comes from the line of Joaquin Garcia Quiros Gonzales Camino from JB Capital. Your line is open. Please ask your question.

Pablo Divason, Investor Relations, Almirall0: Yes. Hello. Thank you for taking my question. Very quickly, just on the EBITDA guidance, which is a bit broad. Just to understand a bit better, what are the levers that would allow Almirall to reach the high end of the guidance aside from sales increase?

Is it that the SG and A you’ll be able to contain it and see very small growth in SG and A? Because aside from that, I just can’t see how you can reach that. Will be a very big margin increase.

Mike Makila, Chief Financial Officer, Almirall: Yes. So if you look at the range, I mean, it’s $20,000,000 which is not a huge amount. It’s about 10% or less. But to reach the high end, it’s basically what you said. It’s either more robust sales, that’s the easy part, or we can get done what we need to in the launches of Eblis and fueling the rest of the growth with a little less SG and A than the initial expectations.

So we’ll be working on both of those. Ideally, of course, we’d like to hit the upper end of the ranges, but we’ll see how that goes along as the year goes. We were very pleased with the performance in 2024 and we were actually able to not only hit the high end, but slightly overachieve and we’d love to do that again in 2025.

Nadia, Conference Operator: Excuse me, Jaki, any further questions?

Pablo Divason, Investor Relations, Almirall0: No, sorry. Thank you. That was perfect.

Nadia, Conference Operator: Thank you. And now we’re going to take our last question for today. Just give us a moment. And the question comes from the line of Jaime Escribano from Santander (BME:SAN). Your line is open.

Please ask your question.

: Hi, good morning. So on Nephilis, can you tell us a little bit what is the roadmap in terms of new launches in new countries? For example, I remember in France you are negotiating the pricing with the Social Security. How is this negotiation going? And what could be other relevant launches this year?

My second question would be regarding, let’s call it Almirall legacy. So excluding derma, Q4 was particularly strong. I just want to know I can see Almax has been growing strongly. Also, Mike was pointing out, Ervastel. But I don’t know if there is any one off or any other drivers of this part and what can we expect in 2025 in this part of the business?

And finally, maybe you can say also a word in terms of ClaiCity also the growth in Europe was strong. What is driving this? Also in The U. S, maybe you can tell us a little bit about the large field. How is this going and what can we expect for 2025?

And finally, Seysara also turning around Seysara China, what could we expect and when? Thank you very much.

Carlos Gallardo, Chairman and CEO, Almirall: Thank you very much, Jaime. I will start with by the end and then pass the word to Paolo for your questions and Mike for whatever I have forgotten to answer. But in terms of Plicily large field, again, very strong performance in Europe sorry, Plicily small field, strong performance in Europe. We are doing the clinical trials to launch the large field in Europe. In The U.

S, what we’re seeing with the large field is an increase of 40% on TRx on total prescriptions without cannibalizing the small field, which is a great development. With Sahara, we’re going back to growth, which is great to see. And in terms of China, it’s too early to say. We’re still waiting for the approval and the partner etcetera. And hopefully, we’ll be able to provide more color in sometime in the next quarter or so.

Paolo, maybe you can take the address question.

Paolo Chonino, Chief Commercial Officer, Almirall: Yes, absolutely. Thank you, Jaime. So basically there’s a bunch of countries where, of course, we have to enter in Europe with that list. We are in negotiation phase with all of them, basically France, as you’ve mentioned, but also Portugal and other countries in Europe. Then you mentioned us about Almax and Evastel.

So I would say that Almax, we have launched four new flavors. So that’s an extension line on Almas that went very well. So they didn’t cannibalize, I’d just say they had on top of that and we are very pleased about it. So as we have seen, Almas has grown 24 in 2024, so very good performance and we are happy with that. And about Evastel, we had a very nice season, seasonality in Europe and also we expand our business out of Europe in region international.

So that’s why Evastel also performed very well in 2024.

Mike Makila, Chief Financial Officer, Almirall: Yes. And let me take the last question on other income type opportunities. So we basically have a line that’s called other net sales. There’s a couple of things in there. There’s royalty income we get from products.

There’s out licensing income we get from non core products that can also include territories outside of Europe and U. S. For assets that are non core like terabeniphene, finasteride or we’ve also been licensing out little bits of Seysara and Klysera rights outside that and then any kind of minor divestments. If we look at the total in 2023 of that whole bucket was $25,700,000 In 2024, that whole bucket was $14,800,000 so a decline. And as we go into 2025, because of this minor out licensing we’ve done already, we would expect in the plus or minus $20,000,000 range for the full year.

So a little decline year on year $23,000,000 to $24,000,000 a little increase in $2,025,000,000 dollars because of the January event we did. Now timing of all those things can come and go in the quarter. So nothing really particular to call out. There was a larger amount early in 2023 and there will be of course this Q1 matter that we’ve already announced in the CNMV. So hopefully that gives you kind of an idea of that whole bucket.

Carlos Gallardo, Chairman and CEO, Almirall: And maybe just to add again, and thank you, Jaime, for bringing this up. I think our strong performance in the, let’s say, non derm acids is great and contributes us a lot of resources to keep focusing on our dermatology strategy. So let’s say that we are the combination of this portfolio is helping us a lot.

: Thank you very much.

Nadia, Conference Operator: Thank you. Dear speakers, there are no further questions for today. I would now like to hand the conference over to Pablo Divason for any closing remarks.

Pablo Divason, Investor Relations, Almirall: Thank you, Nadia. As there are no further questions, ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.

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