ALK-Abelló A/S (ALKB) Earnings Call Transcript & Summary

Hello, everyone and welcome to this presentation on the ALK's Q2 results. Thank you all for joining us, and let's turn to Slide #2 with an intro to the agenda and the speakers. My name is Per Plotnikof, I'm Head of Investor Relations. With me today are CEO, Peter Halling; and CFO, Claus Steensen Solje. We'll first share a couple of highlights from the quarter, and then we will take a closer look the markets, product trends and financials. We'll also provide an update on the Allergy+ strategy implementation before we cover the full year outlook. As usual, we will end the presentation with a Q&A session. And to get started, I'll now hand you over to Peter and Slide #3.

Thank you, Per, and thank you all for joining this call. The current performance is strong and Q2 sales, particularly in Europe, exceeded the forecast that we gave back in May. This will have a positive carryover effect into the second half, which is why we have further upgraded the full year revenue and earnings outlook on 21st of June. Today, based on our current performance and the outlook for the remainder of the year, we have upgraded both our revenue and earnings outlook. We'll come back to this later. Looking at Q2, Q2 revenue was up 21% organically on double-digit growth in all AIT vaccine categories, tablets and injection-based SCIT and sublingual drops. Tablets stood out with 32% sales growth globally and 35% growth in Europe. But in all fairness, also measured against a weak quarter last year. Priority #1 in recent quarters has been to solidify the momentum in European tablet sales after the difficult first half of 2023. And these efforts are on track. We are pleased that we managed to further build on the momentum in Europe in Q2. And as Claus will elaborate on in a short while, this has been a strong quarter. Based on prudent cost management and capital allocation, we've succeeded in raising the EBIT margin by 10 percentage points year-on-year from 9% to 19%. The EBIT result include DKK 38 million in one-off costs to optimization and reprivatization initiatives in line with our new Allergy+ strategy. Looking at the strategy, the implementation continues well and is well underway. Allergy+ is where it needs to be. Focus in Q2 has been on initiatives to extend the respiratory tablets reach to new patients and on initiatives to optimize ALK's business platform, enable scale and free up resources to support growth and future scale. Now we are looking into a busy second half where we expect business activity to be roughly on par with first half. Still, we remain confident that we'll be able to deliver a robust full year growth across all sales regions and all product groups. We'll further detail this in the presentation shortly. But first, I'll hand it over to you, Claus, and the Q2 market trends on Slide 4.

Thank you, Peter. Before going through all our regions and product groups, let's dive into European sales. Our European sales were up 25% on double-digit growth in all product lines, particularly sales of tablets and SLIT drops exceeded expectations. Tablet sales grew by 35% against the soft quarter last year. Growth was driven by higher volumes linked to the robust inflow of new patients in the past year, both in the pollen segment and in the house dust mite segment. Growth was also positively influenced by pricing and repaid adjustments, including the reversal of the 2023 mandatory rebate increase in Germany, which added more than 2 percentage points to growth. In addition, Q2 sales continue to be less influenced by trading patterns at wholesalers than in 2023. In Germany, Europe's largest AIT market, both tablet sales and SCIT sales grew by high double digits as we benefited from competitive dynamics and the accelerated market transitions towards evidence-based registered AIT products. Court rulings previously confirmed that private payers may reject reimbursement for nonregistered AIT products, and this is now impacting the clinical practice to the benefit of tablets and our SCIT products. This trend is also supported by the recent recommendations from the German allergist associations who published our white list of registered products recommended to be used for new patients. France, Europe's second largest AIT market, also did well. Both sales of tablets and SLIT-drops grew by double digit after higher patient inflow to both existing and new doctors. In France, we have seen a more positive market development emerging recently. Part of this is likely linked to higher burden of disease and patient activation last year as well as increased clinical capacity at certain doctor offices, meaning that they are able to treat more patients. We have also seen good effects from our commercial activities such as medical events, prescriber expansion and so on. Performance was also good in the Nordics and Benelux countries where we benefited from the focused sales and marketing initiatives, which we developed last year. We have been able to activate more payers and more patients, and we have also broadened the prescriber base and managed to increase the debt with current AIT prescribers. Finally, we continue to work with doctors to extend the initiation season to mitigate conflicts with common respiratory infections and other external factors during winter initiation season. We saw small improvements outside the main initiation season last year, and the upcoming initiation season will show if we are tracking towards further improvements in this area. Let's now turn to Slide 5, please, and the regional performance overview for the second quarter. Europe accounted for 65% of total revenue in Q2, while the remainder was evenly split between North America and international market. Total sales in North America grew by 3%, while tablet sales were up 29%, driven in part by volume growth, in part by higher realized selling prices in the U.S. Sales of SCIT bulk extracts increased by 4%. It has been impacted by previous loss of a customer, but growth is improving compared to first quarter. Sales of other products, so our business of Diagnostics, PRE-PEN and Life Science, fell short of expectations with a 9% decrease, primarily due to PRE-PEN. Revenue from international market was up 32% and positively influenced by timing of product shipments to both China and Japan, our 2 largest markets in this region. In market sales, both countries continue to grow by double digits underpinning the commercial potential in these markets. Now let's turn to the product categories on Slide 6. Global tablet sales increased by 32% on strong double-digit growth in all sales regions. Tablets accounted for 52% of total revenue in the quarter. Global sales of SCIT and SLIT-drops grew by 16% after a robust growth for both SCIT and SLIT-drops in Europe, combined with increasing SCIT shipments to China. Finally, sales of other products and services, including JEXT, increased modestly by 1%. Global JEXT sales grew by 17% as market supply continued to normalize after last year's fall in supply. But this progress was offset by a weak performance in other products in North America, especially the PRE-PEN. The integration of the PRE-PEN operation progresses as planned. However, sales continued to be impacted by stocking at wholesalers prior to ALK's acquisition in January. Let's now move on to Slide 7 and the 6 months financials. Half year revenue were up 15% in local currencies to DKK 2.7 billion. Growth was mainly driven by tablet sales, particularly in Europe. A gross profit of close to DKK 1.8 billion, yield a gross margin of 64.4%, an improvement of close 1 percentage point. This improvement was due to changes in the sales mix, volume growth, improved pricing, production efficiencies and the reversal of last year's rebate increase in Germany. In line with our expectations, these factors were partly offset by inflationary pressures on input cost. But including one-off restructuring costs in Q2, total capacity costs were unchanged at DKK 1.2 billion. R&D expenses were down 20% after the completion of last year clinical trials of the respiratory tablets. Sales and marketing expenses were up 7%, while admin costs increased 8%, and this increase was mainly due to costs related to the Allergy+ strategy process. Optimization and savings contributed to the overall cost development, and it remains a priority to lower the capacity cost to revenue ratio. The operating profit, EBIT, was DKK 580 million, an improvement of 84% in local currencies and 78% in Danish kroner. The EBIT margin increased from 14% to 21% and when excluding the DKK 38 million one-off restructuring cost, the underlying margin was 23%, a clear indication that we are moving in the right direction towards the 25% margin target in 2025. Finally, free cash flow improved to plus DKK 272 million as higher earnings offset changes in working capital and investments, including the PRE-PEN acquisition. So all in all, a good set of results, the best half year performance so far. I'll now hand it back to Peter for an update on the Allergy+ strategy on Slide 8.

Perfect. Thank you, Claus. As you recall, we presented the Allergy+ strategy at a very well-attended Capital Markets Day back in June. And I'd just like to state on behalf of the entire ALK team, we really thank you for your participation, and truly appreciate meeting so many of you out here. Now to briefly recap, the strategy aims to further strengthen ALK's global leadership in respiratory AIT, establish leading positions in food allergy and anaphylaxis. And on top, pursue new innovations to address unmet adjacent allergic conditions. As a company, we want to provide life-changing solutions for millions of people living with allergy and by doing so, grow revenue by at least 10% on average until 2028 and beyond, in other words, throughout this fancy period. We continue to aim for an EBIT margin of around 25% next year, in 2025, after which earnings improvement beyond the 25% margin will be reinvested in initiatives to bolster growth and profitability after 2028. The new strategy has 4 main pillars as illustrated here on the slide. We will prioritize and focus our commercial activities and footprint to further strengthen ALK's leadership. Tablets remain key to growth as we extend their reach to new patient groups and increase prescription depth and breadth amongst health care professionals. Now to help even more people with allergy, we will continue to innovate and expand the R&D pipeline in a meaningful and balanced way. We'll maximize the value of existing core products and diversify the portfolio into allergic diseases with a potential to become new growth levers in the longer run for ALK. To reduce complexity and maintain our competitiveness, we will continue to optimize operations, adjust the cost base and reduce structural complexities across the value chain. Further, we'll invest in infrastructure and continue to improve processes to be able to scale and grow the business. Moreover, we will also explore commercial corporations and innovation partnerships to maximize reach and speed up market adoption of our products. All of this is underpinned by a commitment to cultivate and invest in our people and organization as well to conducting business in a sustainable way. Slide 9, please. Now as I said in the beginning, the implementation of the strategy is well underway, and we prioritize initiatives with the largest potential to generate strong returns and the greatest impact for patients and prescribers. Just a few highlights and examples. A key initiative is to extend the tablet offering to new patient groups and particularly help children early on with allergies and prevent the disease from impairing their lives. Our regulatory filings for children use of tablets have now been accepted for review by all authorities in Europe, the U.S. and Canada. Subject to approvals, the house dust mite tablet could become available for children in Europe from late 2024 and in North America in '25. Likewise, and subject to approval, the tree tablet could become available for children and adolescents in Europe and Canada in 2025. The children approval -- all the children approvals are important catalysts for ALK's long-term growth. Launch preparations continue as planned with a particular focus on building disease awareness and mobilizing the allergy community. In Q2, we started reallocating resources to high-impact markets, particularly in Northern and Central Europe. We're stepping up our presence in markets with sustainable demand for AIT and strong endorsement of evidence-based AIT from regulators payers and prescribers. Now unfortunately, not everything has moved in our way. In China, we withdrew our application for the house dust mite tablet in June. Recent dialogue with the authorities in China has confirmed that additional clinical data in Chinese patients will be required to obtain approval. We're now evaluation the best approach to this market, and we will be adapting our and activities to a new launch time line for the house dust mite tablet. We still work under the assumption that it will be possible to secure a Chinese approval within the strategy period. Moreover, we continue to see progress on the important Japanese market. Our partner Torii is working to increase capacity in the production of active ingredients for the cedar pollen tablet, one of more initiatives to overcome temporary capacity limitations given the high demand in Japan. This capacity is, by the way, expected to come online towards the end of 2025. Now moving to new product opportunities. The development programs in anaphylaxis and food allergy continue as planned. We have intensified our business development activities, and we are screening new administration forms in anaphylaxis with the aim of establishing a future-proof portfolio of solutions. And finally, we have reorganized parts of our operations. Other initiatives are under making to enable scale, further reduce complexity and optimize our cost base. For example, this includes investments in infrastructure and as previously stated, we expect optimization and prioritization initiatives to free up around DKK 250 million in 2025. Now roughly half of these savings will be reinvested in growth initiatives and roughly half will support our [ '25-in-'25 ] earnings ambition. We continue to see good progress and are very happy and satisfied with the execution. Finally, we have a comprehensive plan land off for the second half year, and we have some very important decisions ahead of us. We look forward to keeping you posted on future progress. And with this, let's move on to the full year outlook and over to you, Claus, on Slide 10.

Thanks, Peter. As we mentioned early -- initially, we have upgraded the full year outlook. We now see 14% to 16% top line growth this year versus 12% to 15% previously. At the same time, we raised the EBIT margin guidance to 19% to 21% from 18% to 20% previously. Let me take you through the key assumptions. We expect Europe to lead the way with robust double-digit sales growth, while we project mid- to high single-digit growth for North America and international markets. Tablets will be key to growth across regions. Combined SCIT/SLIT-drop sales are projected to grow by high single digits, while other products are expected to deliver mid- to high single-digit growth. And looking at the second half of 2024, we expect a strong underlying momentum to continue. Growth is expected to be roughly on par with first half. There are a few swing factors yet, which may influence the second half of this year. The upcoming high season for new patient initiations. We assume that the initiation season in Europe will be a rather normal one based on our leading indicators. That is significantly better than the poor 2022/'23 season but not as good as the exceptional good 2023/'24 season. However, I also need to emphasize that this is still too early for us to be very firm on this assumption. In first half of this year, in Europe, we had tailwind from certain competitive dynamics and we need to see if this persists in second half. And then finally, we have the usual items, namely phasing of product shipments to Japan and China, which will be impacted by an upcoming renewal of our import license in China, which means we will not be able to ship products during that period. And then finally, beside that, we have tougher comparables for EU tablets. We expect lower tablet growth in U.S., and we are being cautious regarding the parallel trade patents in Europe. Moving to earnings. The EBIT outlook is also raised by 1 percentage point to 19% to 21% from previous 18% to 20% as a consequence of the revised top line guidance. In addition to increased sales growth, we continue to see scale benefits, optimization and lower R&D costs. Guidance includes one-off restructuring costs of around DKK 60 million. The gross margin is expected to improve by around 1 percentage point despite inflationary pressure in product supply. Our capacity cost to revenue ratio is expected to improve as we capitalize on existing platforms to enhance efficiencies, benefit from optimization efforts and reduced R&D spend. R&D expenses are still expected to decline to around 10% of the expected revenue, while single-digit increases I assume for both sales, marketing expenses and administrative costs. So to sum up, we expect 2024 to mark the sixth consecutive year of revenue growth and improved earnings fully in line with our long-term financial ambitions. With this, I would like to hand it back to Per and Slide 11.

Thank you, Peter, and thank you, Claus. And this concludes the main part of our presentation, and we will now move to the Q&A session, and I'll kindly ask the operator to go ahead.

[Operator Instructions]. The first question today comes from Michael Novod with Nordea.

A couple of questions. So firstly, on the peanut allergy tablet and more around the sort of investments into a larger scale program. So I know there's a lot of tailwinds in '24 that may not repeat in '25. But if you sort of see a new traction in your business and growth sort of beyond expectations, is there a way that you can accelerate the peanut program with additional funds, if you still do 25% EBIT margin, but on a higher sales base, make a broader program, potentially also advanced plans within peanut or adjacent food allergies, just to get a feeling for how you're willing to invest further should your financial numbers also look better going forward? And then secondly, on China, could you try to detail a bit more around the scope and size of a potential clinical program in China for the house dust mite tablet and how this will also be sort of impacting potential costs in the coming years?

Okay. Great. Thanks, Michael. So let me see if I can answer both. Let me start with the peanut. As you know, we are awaiting new data, and that is expected in the second half this year. And depending on that, we'll make choices around do we try to accelerate further? Do we do anything [ different to ] accelerate on the third phase of the study? So that was important to us. So that's already we've made a choice to invest further. Future investments depends actually less on how we perform overall as long as we deliver on what we said from the get-go and our long-term ambition. But obviously, if something comes up, that looks very, very interesting and relevant. We'll make a choice around whether we try to accelerate further. But again, we need to see data first. That's kind of the starting point. So that's the best answer I can give you on that one. And unfortunately, it's a little bit the same on China. We are currently in dialogue with the Chinese authorities. We are in a positive dialogue with the Chinese authorities. And as we also stated, our ambition is to set up a study that meets the expectations of the Chinese authorities and ours. It will not be a full-scale clinical study that much I can say, but the scope and the size of it depends on the dialogue. Ideally and this is also the expectation we operate under is that, that study will be finalized, and we will be able to launch within the strategy period, meaning before end of '28. That said, in terms of the investments, et cetera, into it, it is embedded in our guidance. So this will not impact at this stage, and that's not the expectation that it will impact our guidance going forward. So I think those are the best answers I can give you and jump in, Per, Claus, if anything, to add.

The next question comes from Martin Parkhøi from SEB.

Martin from SEB. Firstly, about the tablet growth in Europe, you did 21% organic growth overall for the group and according to my calculations, you did around 11 percentage points of that was coming from -- which means more than half is coming from EU tablet growth. But can you maybe split Europe down a little bit, say, okay, how dependent are you on single market, for example, like Germany? How much is that actually of the growth in EU? And then I had to talk about the margin again and maybe that's for Claus, and you can say because now you have lifted your margin guidance by about 2 percentage points in basically 2 months. And I guess it is driven by the higher top line. So it's difficult to understand that, it's not like that you have got cost savings earlier to reach the 25%. I guess it's because of leverage and top line. So in reality, you must have even more money to invest next year, if we're assuming a normal [ policy ] and a normal growth in '25.

Thanks, Martin, for the 2 questions. Let me start by the tablet growth in Europe and try to break a little bit down, and then I will come back to the margin improvement. We are, of course, as you know, not commenting on each of the individual market, but there's no doubt that the usual suspect is, of course, as you know, Germany and the Northern market, but what we have seen lately over the last quarter is that we start to see a very good broad-based growth across many markets in Europe, and it's actually across those that we see it. So this time, we are not dependent on 1 or 2 markets that are actually growing. It's actually across many of them. And if I have to point to one market, you have followed us for a long time and know that France has been a bit of pain point for us over the years with quite low growth, actually some years 0 growth, and we have really been able to drive that up. What we have seen in the last couple of quarters, and that's also helping us and that's also part of why we are increasing the guidance is actually that France has started to show very nice momentum, both within the tablet business but also within the drops business. There are a few arguments, but as I said, related to doctors and capacity and so on. And we, of course, also believe some of the initiatives that we have been driving in France and invested into, that this is now starting to pay off. So it's both tablets and SCIT-drops across many different markets, but also France now adding in together with other ones. Yes. And then, of course, this time with Europe, it's important just to notice this about the parallel trade. Maybe we'll comment and discuss it later. But that's, of course, also helping us across the different markets here. And we are a little bit cautious about how that will impact us in the second half, but then maybe we can come back to that. Then you talked about the margin and the improvements that you're seeing there. You are right that, of course, a big part of that is coming from the top line going down into our bottom line. It is coming a lot from the tablet business. Our margins is highest on our tablet business. And we have the infrastructure and the production set up already today related to the tablet business. So every time we can increase and invest into more tablet growth on the top line. We have kind of the infrastructure set up to have a large part of that dropping down into the bottom line and thereby impacting positively the EBIT. So it is coming from there. We are also seeing some improvements in our cost base. As you know, we have the program around the DKK 250 million that will free up next year. But we have, as you know, started some of the layoffs and rounds for people leaving us, and that is, of course, starting also to provide some few savings. But most of the impact on the EBIT is coming from the increased top line and especially the tablets.

The next question comes from Ben Jackson with Jefferies.

It's Ben Jackson from Jefferies. Just a follow-up on the China opportunity. Is this something now that is more likely to be considered with a partner, and that's the best way forward with that? And then secondly, just on the guidance. I appreciate you've already touched on this, but perhaps if we can just get a little bit more clarity around it on both, what are your assumptions for this upcoming initiation season? Is the assumption here that this is a more normal season and if the numbers are continuing being strong and continuing to improve that actually, that's a positive upside on what you're expecting? And then secondly, also just a bit more clarity about the parallel trade and how that could impact numbers into the second half.

So thanks, Ben. Let me start out, and then Claus, you can jump in along the way. So if you take China, specifically, we've made no decisions yet in terms of how we will move forward. But we have been successful in China. We have a sales organization and a commercial team out there that has done well with a growing business. And obviously, we've been further looking into how we could use that organization to launch ACARIZAX. Currently and depending on the timing of the study, the timing of when we can launch, we will make choices around how do we best take this to market. So you still have to be a little bit patient with us as we consider it, but we are looking obviously at our option space in that sense. And do remember that we already have a partnership in China with Grandpharma on the adrenalin. So that's not necessarily a negative. So all in all, we are not set on anything, but we do have a great team in China who's been doing well. Then on the guidance, and Claus, you can also jump in here, but just a few highlights from my side. So basically, as Claus also said earlier on, a couple of factors that has helped us and provided more clarity going forward. We've had some additional tailwind that wasn't expected and that became clear in terms of the potential [indiscernible] on pricing. So Germany, France, some of those places where we always have the risk of changes. It's been clear that it will not impact us this year to the extent that one could fear. So that's a portion. Secondly, on the pollen initiation season. As you recall, a couple of years ago, the season '22/'23 was a tough season and extremely tough on the company. That hit us in the beginning of '23. Now '23/'24 season last year was an extremely strong and solid season that has -- and is obviously enabling and helping us this year. Now what we're looking into and it's still too early to say due to the delay of data and due to the fact that we are in the midst of the high season in August/September, but the early indications we've had and the leading indicators, and it's still data that we're working on indicates that it would be what we would call a normal season, primarily helping us a bit on both house dust mites and also on the grass side, but maybe a little weaker than what we otherwise see on the tree side. So all in all, it looks like a [ balanced ] season. But just before you take this as -- that's the way it's going to end, please bear in mind that we are in the midst of it. So maybe, Claus, I'll just add one last comment on my side on this. That's the competitive situation in Europe. Again, we've seen that we've gotten some tailwind because other competitors have had a more difficult time supplying, and that has helped us and it also helped us to a larger extent than what we previously forecasted. So that is the reason. This is not necessarily something that's going to help us into '25. A lot of things can change around that. So that's obviously always something that we keep an eye on. So maybe, Claus, a few words on the guidance in addition to what I said on the parallel trade.

Yes, I can do that. Thanks, Peter. And thanks, Ben, for the question. I think Peter covered very well the season part and also the competitive situation that we have. Besides that, you could mention for the second half of the year, the parallel trade, it is a thing that we especially during '23 learned a lot about and how it was impacting our growth at that point in time. Here in '24, we have seen a less impact of that, actually quite low impact of parallel trade, meaning that we don't see a big effect on the top line from that. We would expect that, that impact, positive impact, you can say, would be less in the second half of the year. And that's why we are a little bit cautious related to that one. Then we also have a few other things that could be mentioned. Please remember last year, when you compare to the second half of the year, this is where we started to see a significant growth in the tablets in Europe. So the [ comparator ] for last year and '23 was very tough compared to this half year. So that's also going to help. And then we have the phasing of the China and Japan. That's always a little bit of a -- for us which quarters are they impacting. But remember, we have a license renewal in China in the second half of the year, which means we can't really ship as much product to China in that period until that import license has been renewed. It's not something that is going to impact the underlying business, but our top line expect it will and that will also have an impact and take a bit down on the sales in the second half. So these dynamics is why we believe that the guidance we have now set with realized 15% is quite fair and accurate for the last remainder part of the year.

So -- and maybe one last thing to just boil it down. Another way of looking at the 15% is we have a solid underlying volume growth of around 10% and then the other 5 percentage points came from pricing competitive dynamics, et cetera. So we believe that the volume growth supports our long-term ambition. And then obviously, we have factors playing into the mix along the way, ups and downs, positives and negatives. I hope that answers, Ben.

The next question comes from Sushila Hernandez with Van Lanschot Kempen.

On the new initiations, I appreciate you already commenting on this, but could you elaborate on the high number of new patients starting treatment over the past year, in particular in Q2? What were the main drivers? And then second question on the PRE-PEN. When do you expect the stocking effect for the PRE-PEN to subside?

All right. Let me see. So the first question on the high [ number ] of patients. Then Per, you had a comment specifically on ACARIZAX. So jump in?

Yes. So if we look into Q2, I mean, we still got a little bit of help on new patient initiations from ACARIZAX and again, very much linked to France, linked to Central Europe and Germany also. So those were the main driver in Q2, which normally -- it's more of a low season for new treatment starts. But of course, ACARIZAX treating house dust mite, which is perenniality. So a little bit of a different pattern there.

Good. And then just your question around PRE-PEN. So we've been working with PRE-PEN for years, obviously, and then acquired it late last year. What happened and that has caught us a bit by surprise was that there was a lot of stocking and also more stocking at the doctors than what we had initially expected. And that is basically now an inventory that is being worked down outside of the company. We expect that to start normalizing in the second part of the year, but the exact timing is always difficult to estimate. It's a small product. But nevertheless, it's an interesting product for the company, and that's also why we chose to acquire it. So I think that's the best answer I can provide you on PRE-PEN.

[Operator Instructions]. The next question comes from Peter Sehested with ABG.

I have 2, maybe 2.5. Number one, now that Neffy is on the U.S. market, I guess the products in market performance at some point in time, shape what you're doing within anaphylaxis. Could you just elaborate a bit on what particularly are you looking for? And what sort of observations are the most important in the sort of judging -- affecting -- impacting your decision on the anaphylaxis portfolio? Secondly, on children, any learnings, I mean you were working on market -- preparing the market, but anything that you have learned since the Capital Market Day? And following -- or adding to this, I know we shouldn't be too optimistic on the U.S. and keep estimates and I think we all have that. But nevertheless, I can still remember a conversation I had with the U.S. physician some years back, where that person said, as the situation is right now, you guys have no chance. But you come in with something for children that works, that's a total game changer because a U.S. parent irrespectively of what allergists say will never sort of block their children from being cured. So just your thought on that particular dynamic initiative come through? And then I have a question on the season, but it might already been asked but nevertheless, splitting the season into sort of the weather impacts and the things that you are doing a normal season, coupled with your activities in the market, which seem to have been [ better ] over the past years would suggest that a normal season, coupled with that will give you a better season compared to what's seen historically. So just your comment on that sort of way of thinking.

Thanks, Peter. I'll -- let me start out and I like the fact that you kind of bring us around all over the company here, but good questions. So let's start out by Neffy. This is the nasal product from ARS Pharma that got a label approval in the U.S. and obviously, are intending to go global on the anaphylaxis or in the anaphylaxis market. So first and foremost, I think that what we've seen is they've done well, they got a good label. Be reminded that we are not present in the U.S. with our anaphylaxis portfolio. But what I think it's important to say is what we are looking for is, obviously, we're looking for adoption potential is these products and not necessarily Neffy but more broadly coming into the market that can help accelerate the growth of the market, also that can help expand the market not only in the U.S. but across. And then on our side, obviously, would these be products that are enabling us to complement or build synergies with our portfolio. So those are some of the key things. We believe that given our position in the value chain or with the prescribers that we have something to offer on the sales and marketing side and also in terms of our setup. And then final comment on that one. Whether we see nasal film or auto injectors, we actually believe that the combination of products and new innovation being brought into the market will expand the market. And hence, we actually believe that a lot of these products can coexist together. So all in all, we think it's actually great that ARS has gotten the nice label for Neffy, and we believe it's going to be a market expansion. So for ARS, we continue to observe and make our choices. And then in the coming period, will be clear in terms of where we're heading. So that's that one. Then I think your question on the U.S., and correct me if I'm wrong, Peter here. But basically, what you were asking, you said, okay, so what are you seeing in the U.S. that makes you believe that something could change versus the past. And you kind of gave a little bit of answer yourself. Tablets -- and tablets for children could be something that allergists and pediatricians obviously would find interesting. We agree. I think it's important. I don't think it's simple that, that all allergists will adapt and go with tablets because we have them for children. But we do hope that, obviously, there's going to be an uptake. And that said, you also have to remember, we have nice growth in the U.S. on the tablet side, but you still have the dilemma for the prescribers around where they make money on the products. More, I think it's important to say, not only tablets for children educations on the existing types of allergies we have today. But bear in mind that by the end of the '23, we will have also the peanut tablet, if everything goes well. And that should also be an enabler for the U.S. market, including allergists because they don't have solutions or solid solutions today. So I think that's what I can say, and otherwise correct me if I didn't get your answer right. And then the last one was on weather and the weather patterns and the spread. I think the best answer is, obviously, we are working, as you know, to work with doctors, prescribers and KOLs to expand and enable more people to get in earlier and get treatment year-round rather than in certain portions of the season, for instance, around August, September. So if we can continue to enable that capacity and build it, then obviously, the seasons will be of less important. But there is a caveat. That caveat is obviously, if you don't have an extreme -- when you don't have the extreme seasons, then people are also less observant of their allergies. And there's also, obviously, if you have a weak season where people don't get the normal signs of allergy, then obviously, there would be less interest in getting treated because it takes time and resources to do so. So that's always the challenge around that piece. So I think the answer is we are hoping that we'll be less dependent on the weather, but we also realize that's still part of the game for the company, and that's also going to be part of it for the foreseeable future. So I don't know if I got around to all the questions here.

Yes, I think it did. So [indiscernible] the season was that you're performing better in the market with your initiatives, I guess. You are potentially more robust to what you would call a normal -- excuse me, metrologically speaking, I would say. I wouldn't know we should expect you to perform better now on the normal, let's say, metrologically speaking. That's sort of my point I was getting to.

But I think it might be premature. I mean when we talked about it last time, we said we're putting in initiatives, and we had some last year when the organization worked on, we had early signs. I think it's premature to say that we've successfully expanded capacity. But you're right in the sense that if we are successful and hopefully, we will become more successful, would be less dependent on the seasons like in the past. So when you get hit by a virus in the fall or in the early fall, then hopefully, we'll be able to still get more patients through than when it's only August, September. So from that standpoint, you're right.

One more question, and then we'll need to round off for the day.

The last question today comes from Jesper Ilsoe with Carnegie.

I have one on pricing. So just -- thanks for the comments on 10% volume growth and 5% price and other things here in H1 '24. Just to understand the sort of the pricing dynamics going forward, also considering the price wins you've had here in '24. So can you just remind us if there are any visible upcoming price decisions expected in the next, say, 12 to 24 months? And also how we should, in general, look and expect the price development to look in the coming years? Is it fair to assume sort of a stable price development in the coming years? And in that perspective, just remind us of your latest thoughts about this German rebate staying at the current '24 levels or whether you will return. Again, I know it's difficult to predict, but any update there will be welcome.

Yes, absolutely. Claus?

Yes. Thanks, [ Ilsoe, ] for the question. I think you almost answered yourself with the word stable. I also think you can say that's how we see it. And when we are making our plans for this year and next year, then we are planning with a stable pricing environment. And then, of course, what is that? Well, that is that in some markets, we will see some -- hopefully, some price increases on some of our products linked to inflation and so on. And maybe there will be some price decreases in other markets, so going a little bit up and down. But overall, I would say, stable. When you then ask 2 kind of the biggest swing factors, for example, the German rebates and so on, it could also be a French price decrease or situation. We don't see anything right now coming up. But of course, I'm saying that with the expectation that it's difficult to forecast what's going to happen. We don't see anything, but of course, we are following it very closely. We know that in Germany, they're talking about it. The politicians and authorities are talking about it. They miss some money in their budget. So maybe they will come up with the idea that widen our pharma, add more to it, and they know they can implement it quite easy. But right now, we don't expect it. And if it's coming this year, it will be with a little impact and more impact in '25. So right now, no major pricing impact out there. But of course, we are monitoring and when we know something or see something, we will let you know. So I think the word stable pricing is probably the best we have for now.

This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

Thank you very much, operator, and thank you all for the good questions. And before we end the call, please take a look at this slide, Slide #12, with upcoming news and events. And we hope to see you at one of these events. And as always, you are most welcome to contact us if you have additional questions. With this, we will end today's session, and we wish you all a good day. Goodbye.