Almirall, S.A. (ALM) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Almirall Full Year 2024 Results and Business Update Conference Call. [Operator Instructions] 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 Divasson. Please go ahead.

Thank you very much, Nadia. Good morning, everyone. Thank you for joining us for today's quarterly earnings update and review of Almirall's 2024 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 #2. Let me remind you that the information presented in this call contains forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from what we are sharing today. Please move to Slide #3. Presenting today, we have Carlos Gallardo, Chairman and Chief Executive Officer; Mike McClellan, Chief Financial Officer; and Karl Ziegelbauer, Chief Scientific Officer. Carlos will start with a strategic overview and midterm guidance, the business highlights covering 2024, and will also give us an update specifically on our biologic portfolio as key growth drivers in our Medical Dermatology portfolio. Karl will provide you with an R&D status update highlighting the progress of our pipeline. Mike will then talk you through the financials, before Carlos closes, and we open up for your questions. Now I will hand over to Carlos Gallardo, our Chairman and CEO, for an introduction.

Thank you very much, Pablo, and good morning to everyone in the call. So 10 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 Dermatology is already a $46 billion market worldwide and poised 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 key products, Ilumetri and Ebglyss. But also, let's not forget that we have other very exciting programs that are helping patients tremendously, such as Wynzora, Klisyri, Ciclopoli, and more recently JUBLIA that will contribute to drive the growth of this company going forward. Since I became CEO 2 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 that we could position Ebglyss 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're entering 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 Sant 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 at the JPMorgan Healthcare Conference, and we provided midterm guidance for the first time that I'm happy to reiterate and confirm today. We envisage double-digit sales compounded annual growth rate for now until the end of the decade and EBITDA to continue to expand up to around 25% by 2028. And this is whilst keeping our R&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 versus the high single digit that we had anticipated 12 months ago. And EBIT as well, we anticipated a range of EUR 175 million to EUR 190 million, and we have surpassed this range landing in EUR 192.6 million. Moving into this year and very aligned with the midterm guidance that we signaled or we commented a number of weeks ago. Now we're going to be doing what we've been doing in '24, that is executing well on the launches and executing well in the R&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, and we expect to land the EBITDA between EUR 220 million and EUR 240 million 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. 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 '25 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, great growth in the biologics, continue to gain market share, both in psoriasis and atopic dermatitis, but also not forgetting our other growth drivers such as Klisyri and Wynzora that have performed extremely well. Moving to R&D pipeline. We have continued in '24 to develop our pipeline. And Karl will comment on the different specifics, but I would like to highlight the inclusion of 2 new assets in our clinical stage, the readthrough inducer and the anti-IL-21. 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 EUR 800 million, and this guidance on peak sales was also updated during the JPMorgan conference. And again, this is a testimony of the markets that are growing very well. The classes where we have our assets are becoming the winning classes. And also, we continue and we envisage to continue to gain market share in this market, thanks 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 10, 15 years. And 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 365,000 patients represent only around 20% of the number of eligible patients for this type of advanced treatments -- advanced systemic treatments. So there's still tremendous opportunity for market expansion. There's still tremendous opportunity to continue to help patients through partnering with dermatologists and that this is our modus operandi, 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're in a nicely growing market. Within this nicely growing market, our mechanism of action, the anti-IL-23 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 product profile, because of the great execution of our teams, because of our strong partnering with dermatologists, and also, I would like to remind you that last year, we launched a 200-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 '25 and beyond. Moving to atopic dermatitis. And this is a slide showing a little bit the market and market evolution. We see atopic dermatitis market very similar to the psoriasis market, but we are around 10 years where the psoriasis market was. We see today that there are -- at least 2023, there were 81,000 or 82,000 patients treated. That is less than 10% of the total number of eligible patients. So tremendous growth, but we see this market to continue to grow in the year to come. And we look at 2031 estimates that there will be 400,000 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 2030 and beyond. Within this favorable backdrop, we launched -- next slide, please, we launched Ebglyss in Germany in late '23. So we had now a full year of commercialization of the product in Germany. And we are delighted to see how the product is performing in this key market. We have achieved already the second largest dynamic new patient 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 sales, this EUR 33 million that we have achieved in 2024, are coming largely from Germany, because in the other countries that we launched in '24, 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 late '23, and in a number of additional countries in '24. And from these 6 countries, we should already start to see a strong contribution in 2025. In 2025, we have launched in a number of additional countries, or we are planning 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 6 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're achieving these prices. 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 '24, with Ilumetri and Ebglyss, and we anticipate these dynamics to continue in '25 and beyond. Next, if we move to the next slide, I invite Karl to give us an update on the positive progress in R&D and our pipeline.

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 last year, we successfully completed the decentralized regulatory approval procedure for efinaconazole 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 2025. Sarecycline'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 2025. For Klisyri, expansion to large field 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 label for our key products, Ilumetri and Ebglyss. Our partner, Sun Pharma, is running 2 Phase III studies to assess the efficacy and safety of tildrakizumab in patients suffering from psoriatic arthritis. First results are being expected in the second half of 2025. To make Ebglyss available to all patients with moderate-to-severe atopic dermatitis, our partner, Eli Lilly, is running a Phase III study exploring the safety and efficacy of lebrikizumab in patients 6 months to under 18 years. We have created an exciting pipeline of early clinical assets with novel mechanisms and best-in-class compounds addressing high medical need skin diseases. In the next 15 months, we plan to initiate 4 proof-of-concept clinical studies across a spectrum of different skin diseases. Clinical supply manufacturing for our anti-IL-21 monoclonal antibody is ongoing to prepare for Phase II. IL-21 is a cytokine affecting both B and T cell biology and hypothesized to be involved in several immune-mediated skin diseases. For our anti-IL-1-RAP monoclonal antibody, we have completed Phase I 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 hidradenitis suppurativa, high medical need indication. For our IL-2 mutant fusion protein, Phase I single and multiple ascending doses are ongoing. This IL-2 mutant fusion protein activates regulatory T cells with the potential to treat various autoimmune diseases. ZKN-013 is an oral readthrough inducer designed to overcome nonsense mutations that cause a premature stop codon. ZKN-013 has utility in several rare indications such as dystrophic epidermolysis bullosa, junctional epidermolysis bullosa, and familial adenomatous polyposis. Phase I 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're 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 or therapeutic approach. We are working with mRNA LNPs, 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 diseases. Next slide, please. To maximize the value of Ebglyss, 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 ADTrust study. ADTrust is a 1,200 patient pan-European prospective observational 2-year study that aims to explore the physical, psychological and social impact of atopic dermatitis on patients' life 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 lebrikizumab over a period of 24 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.

Thank you, Karl, for providing an insightful overview of the new endless 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 EUR 192.6 million in 2024, a growth of 10.6% versus 2023, largely driven by strong sales growth, while still investing more in R&D and SG&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 Ilumetri royalties as we have hit higher sales levels. SG&A in 2024 was up 10% to EUR 464.6 million, primarily due to investments in the Ebglyss launch across Europe, supporting the brand's growth trajectory and 2025 launch countries. R&D investment was up 11.9% year-on-year, representing 12.6% of net sales. This is in line with our annual target and our pipeline strategy to fuel long-term innovation. We ended 2024 with a net debt/EBITDA ratio of 0.2x, which positions us well to take advantage of potential licensing or bolt-on M&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 Ebastel and Almax, which offset further generic pressure for Efficib/Tesavel. I'll share more details on 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 Ebastel. 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 Ebglyss. Other derm growth drivers such as Klisyri and Wynzora continue to expand in key European markets. After just 1 year on the market, Ebglyss has achieved EUR 33.2 million 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 EUR 200 million and putting it on track for the new peak sales that Carlos mentioned of more than EUR 300 million. The U.S. business is stabilizing with Seysara sales growing double digit in 2024. The positive impact of the recent large field launch in Klisyri 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 Tazorac. However, Aczone sales have increased year-on-year. Rest of the World Dermatology sales experienced a slight decline due to lower sales of Ciclopoli and less licensing income from noncore products. Let's now move on to the complete financial statements. As we've covered sales, let's review the rest of the P&L. 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&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&A investments have grown by 10% compared to 2023, mainly driven by the Ebglyss launches and prelaunch 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 Cordran Tape. 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 million (sic) [ EUR 10 million ] upfront payment for the IL-21 asset from Novo Nordisk, a smaller upfront payment for the readthrough inducer from Eloxx Pharmaceuticals. And in the second half, we've had minor investment to acquire the remaining Klisyri global rights. We also have a EUR 45 million 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 Wynzora as well as some capitalization of Ebglyss Phase IV 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 (sic) [ net debt/EBITDA ] ratio remains favorable at 0.2x 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 EUR 160.8 million 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 a notable cash outflow in 2024, primarily from 2023 milestones that were paid in early 2024. In January, we had a EUR 45 million payment for Ebglyss first commercial sales in the EU and a EUR 20 million milestone payment for Ilumetri sales. We expect an additional EUR 45 million Ilumetri sales milestone, which was triggered in Q4, to be paid in the first half of 2025. The divestments refer to milestones and royalties collections from the AstraZeneca/Covis arrangement. Overall, we 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 was 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 includes 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 Ebglyss, including new launches in several countries. We will as well have growth of Klisyri and Wynzora across Europe, while the rest of the portfolio will be relatively stable this year. We will continue to experience slight gross margin pressure given increased royalty rates, particularly from Ilumetri. R&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&A growth rate. SG&A growth will slow significantly in 2026 and beyond once the Ebglyss launches have been rolled out across Europe. Regarding the tax rate, it should land somewhere in the mid-40% 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&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 noncore product lines. With this, I will hand it back to Carlos for some closing remarks.

Thank you very much, Karl and Mike, for your updates. So to close, we have a 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 with 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 the time, 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. We would also like to remind you that all this growth is coming from -- this 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&D pipeline, so products or programs in preclinical 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 word to Pablo for questions and answers.

Thank you very much, Carlo. Nadia, back to you for the Q&A, please.

[Operator Instructions] And now we're going to take our first question. And it comes from the line of Shan Hama from Jefferies.

I have just 2 from me, please. So firstly, just in terms of Ebglyss, 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 STELARA biosimilars might make it increasingly difficult for other players. So are you seeing any generic pressure? What sort of drives your confidence in the increased Ilumetri peak sales?

Thank you very much, Shan, for the question. So in terms of first question about Ebglyss European penetration. Our strategy is to position Ebglyss as first line in naive patients, and that's where the unmet need is in this developing market. I'm very pleased to say that we are already capturing more than double digit. We are already in the double digits in capturing this segment of naive patients first line. And also, I can say that a 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 are having prescribed naive patients first line. In terms of Ilumetri, we have with us Paolo Cionini, 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.

Thank you very much, Carlos. And Shan, about Ilumetri and biosimilars. So we expect the overall psoriasis market to slow down a little bit with some other products like STELARA, as you mentioned, with biosimilars entering in the market. And even in '26 with 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-23 class, as Carlo has said during his presentation, so it'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 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 2025.

And if I may add, just with the 200-milligram and the flexible dosing we are offering, I think we have a particular advantage in competing in that market.

Now we're going to take our next question. And the question comes from the line of Guilherme Sampaio from CaixaBank.

So the first one regarding your guidance. What are you assuming in terms of Ebglyss sales? So I understand the consensus is more or less aligned with your guidance at the midpoint is assuming around EUR 95 million of sales from Ebglyss. Is this consistent with what you see? And the second point, in terms of milestone payments, what should we expect beyond the EUR 45 million that you already mentioned that was paid in January?

Thank you, Guilherme, for the questions. We are not providing an estimate for our Ebglyss sales in '25. However, we are comfortable with the consensus. In terms of the milestone payments, Mike, can you add a bit more color on this front?

Yes. So as we look into 2025, we will pay the $45 million (sic) [ EUR 45 million ] for Ilumetri. If I look at the full year, we'll probably be in the EUR 80 million to EUR 90 million range, paying different milestones and upfronts that are related to existing agreements. That will be slightly down from 2024. 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.

Now we're going to take our next question, and the question comes from the line of Francisco Ruiz from BNP Paribas Exane.

One follow-up from the question, which is, in order to achieve your midterm guidance growth, could you tell us what's the implicit levels of milestones in order to reach this EUR 450 million sales in Ebglyss and more than EUR 300 million in Ilumetri. 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 on other ways to remunerate the shareholders?

Thank you very much, Francisco, for your questions. 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, 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 and more comments on that.

Yes. So we haven't put out a complete list of milestone payments, but there are some future ones for Ilumetri and Ebglyss 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 EUR 80 million range for the next couple of years is probably a good way to model it.

And now we'll proceed with our next question. And it comes from the line of Alvaro Lenze from Alantra Equities.

I wanted to have a little bit more detail on R&D. It does seem that it's scaling rather quickly along with sales. So you maintain this 12% of sales, and I would have expected some operating leverage on that front. So if you could break that up on what is consuming that much R&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 Ebglyss takes a larger role on your revenue mix. Do you have any ballpark number in mind as to your midterm gross margin?

Thank you very much, Alvaro, for your question. So in terms of R&D, I mean, we 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 4 proof-of-concept trials, so Phase II trials within the next 15 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.

I think with the about 12% R&D or sales, that covers, as Carlo said, building an exciting early pipeline and starting proof-of-concept studies in the next 15 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 small molecule, for example. We're also working with different technology in the discovery phase as now we are 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 Ebglyss and Ilumetri as well as the other products that are on the market, which require a lot of ongoing regulatory work.

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 Ebglyss in some of the markets and how quickly we ramp up to higher royalty levels. Overall, Ebglyss 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.

[Operator Instructions] And now we're going to take our next question. And it comes from the line of Alistair Campbell from RBC.

I think we've covered most of the ground. But if I could just have a brief follow-up on your proof-of-concept studies and the early pipeline. Just to get a sense of, obviously, you're going to launch 4 POC trials imminently, but get a sense of when we might expect some data readouts on that, please.

Yes. Thanks a lot. As mentioned, we are starting for proof-of-concept trial in the next 15 months. And usually, depending on the indications, those trials take about 1 to 2 years, and this gives you roughly a little bit an estimate when first readouts can be expected.

Now we're going to take our next question. And the question comes from the line of Joaquin Garcia-Quiros Gonzalez-Caminho from JB Capital.

Very quickly, it's 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&A, you'll be able to contain it and see a very small growth in SG&A? Because aside from that, I just can't see how you can reach that. It will be a very big margin increase.

Yes. So if you look at the range, I mean, it's EUR 20 million, 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 Ebglyss and fueling the rest of the growth with a little less SG&A than the initial expectation. 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.

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.

So on Ebglyss, can you tell us a little bit what is the road map 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 Ebastel, 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 Klisyri, 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, Jaime. I will start by the end and then pass the word to Paolo for your Ebglyss questions, and Mike for whatever I have forgotten to answer. But in terms of Klisyri large field, again, very strong performance in Europe -- sorry, Klisyri, small field strong performance in Europe. We are doing the clinical trials to launch in a 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 Seysara, we're going back to growth, which is great to see. And in terms of Seysara, China, it's too early to say. We're still waiting for the approval and the partner, et cetera. And hopefully, we'll be able to provide more color in sometime in the next quarter or so. Paolo, maybe you can take the Ebglyss question.

Yes, absolutely. Thank you, Jaime. So basically, there's a bunch of countries where, of course, we have to enter in Europe with Ebglyss. 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 about Almax and Ebastel. So I would say that Almax, we have launched 4 new flavors. So there's an extension line on Almax that went very well. So they didn't cannibalize actual sales they had on top of that, and we are very pleased about it. So as you have seen, Almax has grown 24% in 2024. So very good performance, and we are happy with that. And about Ebastel, we had a very nice, let's say, seasonality in Europe. And also we expanded our business out of Europe in Region International. So that's why Ebastel also performed very well in 2024.

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 noncore products that can also include territories outside of Europe and U.S. for assets that are noncore like terbinafine, finasteride, or we've also been licensing out a little bit of Seysara and Klisyri rights outside that, and then any kind of minor divestments. If we look at the total in 2023 of that whole bucket, it was EUR 25.7 million. In 2024, that whole bucket was EUR 14.8 million, 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 EUR 20 million range for the full year. So a little decline year-on-year, '23 to '24, a little increase in 2025 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.

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 assets 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.

Dear speakers, there are no further questions for today. I would now like to hand the conference over to Pablo Divasson for any closing remarks.

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.