Almirall, S.A.

Thank you for joining us for today's quarterly earnings update and review of Almirall's first quarter financial results of 2025. As always, we are serving 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 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 serving today.

Please move to Slide #3. Presenting today are Carlos Gallardo, Chairman and Chief Executive Officer; Mike McClellan, Chief Financial Officer; and Karl Ziegelbauer.

Chief Scientific Officer. Carlos will start with the business highlights covered in the first quarter of 2025, followed by an update especially on Biologics as the key growth drivers on our Medical Dermatology portfolio.

Karl will provide you with an R&D status update regarding our pipeline. And Mike will then talk you through the financials before Carlos concludes the presentation and we open for questions.

I will hand over to Carlos Gallardo, our Chairman and CEO. Please move to Slide #5.

Thank you, Pablo. We are delighted to share with you that we have started the year with continued strong business performance that is very much aligned with the long-term trajectory of sustained growth we have outlined for Almirall recently.

Therefore, we are pleased to confirm our full year guidance for 2025, our midterm outlook and peak sales projections. This represents another quarter in the right direction in our ambition to transform the life of patients suffering from dermatology skin conditions.

Ebglyss delivered strong sales during the first quarter of 2025, benefiting from the dynamic German market, but also from initial contributions from launches in additional countries. Ilumetri continues to show year-on-year growth, and we confirm our recently updated peak sales projections.

Additionally, Wynzora and Klisyri continued to support our sales in Europe. We remain very active in the medical community, and this first quarter has not been an exception.

As an illustration, we've been at the 2025 Annual American Academy of Dermatology Meeting, where we showcased our success in AK treatment with Klisyri and shared exciting Phase I data on our Anti-IL-1RAP. We were also present at the 16th Skin Academy in Barcelona that is our flagship medical educational event, where we had over 800 delegates from different countries [indiscernible] advancing skin treatment.

We lastly participated on the 11th World Congress of Melanoma and the 21st European Association of Dermato-Oncology Congress in Athens, hosting over 1,200 health care professionals. This is very important for us, this interaction with medical professionals, and we constantly seek external opportunities in the early and mid-stages of clinical development to further enhance our portfolio and impact the dermatology field.

Please move to Slide 7 for an update on our biologics portfolio. Ilumetri and the anti-IL-23 class have continued to secure a strong position in the psoriasis market.

Ilumetri market share remains solid, underpinned by the recent introduction of the 200-milligram presentation. This new treatment option has been very well received and is contributing to our robust performance.

Net sales for Ilumetri are up 13% year-on-year, reaching EUR 55 million in the first quarter of 2025. I would like to reiterate our recently upgraded business projection of over EUR 300 million and underscore our confidence on Ilumetri's continued growth and its potential to make a significant impact in the psoriasis treatment landscape.

Please move to the next slide on Ebglyss for Ebglyss highlights. Ebglyss has shown strong performance after being on the market for just over a year.

Starting with the December 2023 launch in Germany, cumulative sales since then have reached over EUR 54 million. We consider this the best launch in atopic dermatitis in recent years.

Our strategic focus [indiscernible] has allowed for a strong initial uptake in Germany, positioning us well to launch in other European markets. Within a year of launch, we have reached the second highest dynamic new patient share in Germany.

Also, reimbursement pricing in Germany and in other countries is either in line with our expectations or even slightly better and brand awareness is strong, exceeding the average within 1 year of launching in various markets. Sales in the first quarter increased by 52% quarter-on-quarter, reaching EUR 19.4 million, driven largely by Germany.

But as I said before, also, we are seeing the contribution of recently launched regions beyond Germany. Our good partnership with Lilly is leading to fruitful exchanges and key learnings.

Let's move to the next slide for more details on the launch time lines. Ebglyss has already been launched now in all key countries in Europe, which combined represent more than 90% of the total sales potential in the region.

We are progressing with launches in new European markets and have seen significant advancements since the German launch back in December '23. As of today, Ebglyss is available for commercial reimbursement in 13 countries in Europe, including France as of last month, April 2025.

We are very excited about this new launch as France represents a very important market for us. It is important to reemphasize that we have been able to secure solid price levels in the launch markets.

This is a prime example on how the desire for alternative treatments in atopic dermatitis is significant in the different national health care systems. Next, please move to Slide 11, where I invite Karl to give us an update on our positive R&D and pipeline progress.

Thank you, Carlos, and good morning, everyone, on the call. This slide shows you the progress of our pipeline.

Sarecycline's regulatory review in China is ongoing. We expect approval in the second half of 2025.

For Klisyri's expansion to large field in Europe, we are finishing 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 Ebglyss.

Our partner, Sun Pharma, is running 2 Phase III studies to assess efficacy and safety of tildrakizumab in patients suffering from psoriatic arthritis. First results are being expected in the second half of.

Together with our partner, Eli Lilly, we're running a joint clinical development program to make Ebglyss available to additional patient populations. I will give more details on the next slide.

We have created an exciting early clinical pipeline, addressing novel mechanisms and best-in-class compounds in high medical need diseases. In the next year, we plan to initiate 4 proof-of-concept Phase II clinical studies across a spectrum of different dermatological diseases.

Let me highlight a few assets. For our anti-IL-1RAP monoclonal antibody, we have completed Phase I single and ascending doses in healthy volunteers and presented the results at the recent AAD meeting.

Overall, our anti-IL-1RAP monoclonal antibody demonstrated a favorable safety and tolerability profile in healthy volunteers, along with a low immunogenicity risk, supporting its further development for the treatment of immune-mediated inflammatory skin disorders. We plan to start a Phase II study later this year in hidradenitis suppurativa.

Let me also highlight that we are advancing ZKN-013 in Phase I as potential new treatment for severe dermatological indications such as dystrophic epidermolysis bullosa and junctional epidermolysis bullosa. ZKN-013 is an oral readthrough inducer designed to overcome nonsense mutations that cause the premature stop codons.

In summary, we are progressing with both our early and late-stage pipeline. Now let's move to Slide 12.

This slide shows the comprehensive joint clinical development program for lebrikizumab with our partner, Eli Lilly. This joint program will allow us to make lebrikizumab available to additional patient populations or in different settings.

Let me highlight some of the studies. [indiscernible] launching Ebglyss this year in all European markets, we will complement our excellent clinical data package with real-world evidence studies.

One example is the so-called ADTrust study I highlighted in the last call. To make lebrikizumab available to all patients with atopic dermatitis, Eli Lilly is running a Phase III study exploring the safety and efficacy of lebrikizumab in patients 6 months to under 18 years.

Primary completion is expected in 2026. Furthermore, our partner, Eli Lilly, has started the ADTouch study, exploring efficacy and safety of lebrikizumab in adults and adolescents with moderate-to-severe atopic hand and foot dermatitis.

Atopic hand and foot dermatitis is a frequent chronic and difficult-to-treat condition. It can substantially impact the patient's quality of life.

There is tremendous interest from academic investigators in further exploring lebrikizumab in different indications or settings. For example, Professor Johann Gudjonsson from University of Michigan, a leading expert in applying genomics technology to advance the molecular understanding of inflammatory skin diseases, will be the lead investigator for the so-called ADfind study.

ADfind is a mechanistic study aimed at understanding, at the cellular and molecular level, the changes in the skin of patients suffering from moderate-to-severe atopic dermatitis when treated with lebrikizumab. Finally, in addition to the 2 studies in perennial allergic rhinitis and chronic rhinositis with nasal polyps our partner, Eli Lilly, is running, we continue to explore new indications for which IL-13 is hypothesized to be a key pathogenic driver.

With that, I will hand over to Mike for the financial review.

Thank you, Karl, for the update on our R&D progress and pipeline activities. As Carlos mentioned earlier, we're excited to start off the year on a positive note.

We displayed solid performance in the first quarter of 2025 with 15% net sales increase year-on-year. Please bear in mind that this includes the recently announced out-licensing of Algidol and Sekisan in Spain.

Excluding the impact of this transaction, net sales growth for Q1 would land around 10%, aligned with our 2025 guidance. The full year net impact should be approximately EUR 15 million at the EBITDA level.

We're very pleased with the growth of our European dermatology portfolio, which continues to boost our overall net sales. This is a key pillar in our journey towards leadership in Medical Dermatology.

Our gross margin came in at 66.9%, aided by the effects of the out-licensing transaction in Q1, but up slightly from 2024, excluding this impact. We achieved a total EBITDA of EUR 70.9 million in Q1 2025, up 35% versus Q1 '24.

This was driven by robust net sales growth and the previously mentioned out-licensing. Excluding this out-licensing, our EBITDA margin in the quarter would have landed in the low 20%.

SG&A in Q1 2025 is up 9.6% to EUR 122.8 million, driven by investments in recent and upcoming Ebglyss launches to support the brand's growth trajectory as Q1 2024 did not have the full staffing yet in the recent launch countries. R&D investment is up 34% year-on-year, representing 12.5% of net sales, in line with our annual target to advance our pipeline and future growth strategy.

The high growth rate versus prior year is due to phasing impacts as Q1 2024 was lighter before a second half ramp-up last year. We ended the first quarter with a net debt-to-EBITDA ratio of 0.1x, positioning us very well for potential licensing or bolt-on M&A opportunities, although this gives us confidence to reiterate our full year 2025 guidance, and we remain on track with the midterm outlook and peak sales updates announced earlier in the year.

Let's move on to the details of our sales breakdown in Slide 15. The European dermatology business displayed a very strong performance, growing 23.4% year-on-year, which I'll cover on the next slide.

Our General Medicine & OTC sales growth in Europe was driven mainly by the recent out-licensing activity with the rest of the business flat due to a late allergy season and the ongoing decline of Efficib/Tesavel, which was offset by strong Almax performance. The full year out-licensing and royalty income for the company will be relatively similar to 2024 and prior years with roughly EUR 15 million in this total bucket in 2024 and EUR 20 million to EUR 25 million in this total bucket for 2025, including the Q1 activity.

This is part of our normal portfolio value maximization strategy. Our U.S.

business declined slightly, and I'll share more details with that on the next slide. The performance of our General Medicine unit in the rest of the world is down primarily due to lower Ebastel and Imunorix sales.

Let's take a closer look at our dermatology business on the next slide. As mentioned by Carlos, our European Dermatology segment continues to thrive with Ilumetri and Ebglyss as the primary drivers.

Other growth drivers such as Klisyri and Wynzora are making progress with their launches in key European markets. Ebglyss sales reached EUR 19.4 million in the first quarter, becoming our second ranked dermatology product after just over 1 year on the market.

This result is in line with our expectations and enhances our confidence in its strong growth trajectory. The U.S.

business is generally stable with Seysara sales in line with the prior year. The positive impact of the recent large field launch for Klisyri in August is starting to take effect and the overall [indiscernible] has grown since launch.

The U.S. legacy business remains under pressure from ongoing generic pressure related to Cordran Tape and [indiscernible], although Aczone sales have picked up year-on-year.

Dermatology sales in [indiscernible] in Finjuve and Ciclopoli income. Now let's move on to the complete financial statements on Slide 16.

Let's review the [indiscernible] results starting with some elements Carlos mentioned earlier. The gross margin for Q1 2025 increased to 66.9%.

As we mentioned earlier, this is largely due from the onetime impact of the out-licensing deal with a slight increase in the underlying business due to better product mix. We anticipate some gross margin pressure for the full year versus 2024 due to sales mix and higher royalty tiers as Ilumetri sales increase; and we maintain our full year expectations, as mentioned in our February call, which included this out-licensing transaction.

Our R&D investments have risen to 12.5% of net sales, up from 10.7% in Q1 of 2024, and we expect this 12%-ish level to remain steady during the year to support our innovation strategy. SG&A investments grew by almost 10% compared to Q1 2024.

We expect this trend to continue as we focus on launching Ebglyss in new markets and support existing ones, but the growth will decelerate somewhat in the second half once we reach periods with comparable structures. Financial expenses benefited from a EUR 3.9 million improvement year-on-year, primarily due to the positive equity swap valuation driven by recent share price gains.

Bear in mind that our effective tax rate is influenced by the inability to offset U.S. tax losses against our profitable European business.

We anticipate this will continue in 2025, and we should land in the mid-40% range of effective tax rate before declining in 2026 and beyond into the mid-20s, as we mentioned in the full year call. Please move to the next slide and take a look at the balance sheet.

The main highlight on the balance sheet is the impact of the investments in intangible assets during the quarter. In addition to R&D capitalization related to Ebglyss, key investments also include a milestone upon a successful Phase I of our anti-IL-1RAP program, which we in-licensed from Ichnos in 2021.

The total impact has been outweighed by higher depreciation. Our net debt ratio remains solid at 0.1x, allowing for more flexibility in organic growth opportunities.

Let's take a look at the cash flow statement next. We generated an operating cash flow of EUR 26.4 million in Q1 '25, despite significant challenges in working capital compared to Q1 '24 due to the Ebglyss launch in new countries and higher receivables from the higher sales.

And we were able to partially offset this with the increase in profit before tax, which was in our favor. Other adjustments mainly relate to financial income, including the equity swap.

Cash outflows associated with investments are much lower in Q1 '25 than Q1 '24. This is largely due to substantial payments made last year, including a EUR 45 million milestone for Ebglyss in its first EU sales and EUR 20 million for Ilumetri.

We anticipate an additional EUR 45 million Ilumetri sales milestone to be made in Q1 of 2025. The remaining Q1 investments were minor payments on existing agreements.

With that, I hand back to Carlos for the closing remarks.

Thank you, Mike. Thank you, Karl.

We reiterate our 2025 guidance and midterm outlook, aiming for double-digit net sales CAGR by 2030 and reaching approximately 25% EBITDA margin by 2028. As we think of 2025, we are pleased to see accelerating growth [indiscernible] drive total sales growth into double digits.

In terms of R&D, we anticipate more exciting pipeline updates in the next 12 to 24 months. Over the past decade, we have built a successful platform in Medical Dermatology and now several factors set us apart in the field, positioning us well in growing markets with numerous unmet needs.

First, we possess a strong scientific and innovation capability. Second, we have a robust pipeline with disruptive potential, featuring several first-in-class and best-in-class molecules.

Finally, our close relationship with dermatologists and patient groups across Europe give us a competitive edge. Our capital allocation focuses on 4 principles: investing in current and future product launches in dermatology to drive acceleration in midterm revenue growth; strengthening our pipeline via proprietary research and in-licensing assets, maintaining a stable dividend for shareholders and exploring inorganic growth whilst maintaining a prudent financial policy and solid liquidity.

We are very excited to lead Almirall into the next phase of our journey towards becoming leaders in medical dermatology and look forward to continued growth in the coming years. With this, we conclude the presentation, and I hand it back to Pablo for the Q&A.

Thank you very much, Carlos. Sandra, back to you for the Q&A, please.

Just two from me, please. Could you give us an insight into perhaps any physician and patient feedback on positioning, especially versus Dupixent?

And then in terms of streamlining the business further and sort of increasing your R&D engine, should we expect more of these divestments, particularly of your mature derm business and perhaps your OTC business?

Please, could you repeat the first question? [indiscernible].

Yes, of course. In terms of physician and patient feedback on Ebglyss and sort of positioning versus Dupixent.

Yes, I can start with the first question. So the feedback overall is extremely positive.

Physicians value that they can use Ebglyss in all different kind of patients, also specifically in difficult-to-treat patients, and they see a very fast onset of symptoms. I think with the entire clinical [indiscernible] experience from the market, we believe that Ebglyss has a profile that allows us to position it as a first-line treatment for atopic dermatitis.

Yes. And I can cover the question about divestments.

As I mentioned in my remarks, we don’t expect significant divestments or out-licensing income. Last year, we had about EUR 15 million in total between small activities and royalties.

This year, we expect some minor non-derma value maximization we do in [indiscernible]. In terms of the derma products, we do, do some out-licensing of the products that we haven’t launched like, Finjuve and terbinafine.

But we don’t expect to do any major transactions in terms of reshaping the [indiscernible]. Nothing significant is on the plans in the near term.

So two again, if I may. On Ebglyss, if you could quantify a bit the share of Germany sales in Q1 and note any stocking effect in other countries that we should be aware of when extrapolating for the full year?

I remember that at the time of Q4 results, consensus was about EUR 95 million of sales for Ebglyss for this year. Is it still a level that you're comfortable with?

And the second question, in terms of Ilumetri, should we think that in terms of phasing of growth going forward, this low double-digit percentage growth is about the level that we should expect?

Guilherme, thank you for the question. So in terms of Ebglyss, we see, already the other countries, as I mentioned, starting to kick in, in terms of sales.

So we're seeing a healthy growth now coming in, in terms of mix of German sales and other countries. We remain very comfortable with the consensus for the full year as we keep getting exceptional feedback from physicians throughout the different countries where we have launched.

On Ilumetri, given we have Paolo here, maybe Paolo, do you want to comment on the second question?

Yes, sure. Hi, everyone.

This is Paolo Cionini, the Chief Commercial Officer. So the market in psoriasis, of course, is a mature market and IL-23 class is the class basically leading the growth in this market.

Our position, I think, is quite strong with a double-digit market share. We are happy with the positions we are taking and with the trend of the product.

So we expect the market, of course, being more mature in the future and Ilumetri staying in the market and keeping the competitive positions we have. I would like also to mention that we have recently launched the 200 milligrams, which is something extremely important, because we are the only IL-23 with 2 dosages to give an opportunity to both patients and dermatologists to be flexible with their patients and manage at the right levels eventually flares and periods where the variability of the disease can change.

So I think that, thanks to this 200 milligrams, we are also strengthening our positions into the market.

The first one is if you could provide some detail on the pricing in France since you launched. How does it compare to Germany and other European countries?

Second question on Klisyri. If you can provide some figure on the trends there because we are not seeing much of a pickup in revenue contribution despite the label extension?

And lastly, I didn't get my comments on milestone payments for the year. I got some EUR 45 million paid for Ilumetri in Q1, but that doesn't seem to show up in the cash flow statement or maybe I'm looking at it wrong.

Thank you, Alvaro, for the question. So we are extremely pleased with our new launch in France.

This is a fundamental, very important market for us for biologics. We have been able to secure an attractive price, and we've been able to secure to launch it even ahead of what we had in our schedule.

So that's great news. And again, that's a testimony, as we mentioned in my earlier remarks, the great work that the team is doing on the ground for us in France, but also the eagerness of the health systems.

And France has not been an exception to adopt Ebglyss as there's tremendous unmet need still remaining in the treatment of atopic dermatitis. We don't comment specifically on its price country per country.

But what can I say is that it's a price that it was in our plan and we have achieved it. So very pleased about it.

Klisyri largely continues to contribute in the U.S. It's not eating into the head of the whole field, so it's additive.

So, so far, the progression is good. And third question was on milestone, right?

So Mike, do you want to comment on that?

Yes. Yes, I’ll take the milestone question.

Sorry if it wasn’t clear. When I talked about the EUR 45 million for Ilumetri, that will be a Q2 payment.

We had quite a few in Q1 last year, not much in Q1 this year. We’ll have a Q2.

The overall full year milestones and investments, I would say, would probably land between EUR 70 million and EUR 80 million this year, very similar to last year’s full year cash flow. Just a little bit of a different quarterly pattern.

So a couple of questions from my side or maybe 3. First one on gross margin.

So gross margin, excluding the sale, I get something like more than 65%. So this is a little bit higher than the usual.

I think your guidance was more closer to 64% or so. So better than expected.

Just to understand what is behind that? And what should we expect for the rest of the year?

Second question regarding your guidance for the year. If we do a simple run rate EBITDA, taking Q1 without the asset sale plus the asset sale, you get to the high part or even more than the EUR 240 million.

So just wanted to know your thoughts. Is it that you are going to spend more OpEx in the following quarters?

Or do you see upside risk to the mid-range of your guidance? And the final question regarding tariffs.

If you can tell us what would be your exposure in case the U.S. put, just as an example from newspapers, a 25% tariff on imports?

And also, what is your exposure on retaliation if Europe puts tariffs to the U.S. products like Ebglyss or Ilumetri that you are importing from there?

What is your exposure? And what are the mitigating factors you have?

Thank you for your questions. I will leave the question on gross margin for Mike.

Guidance for the year, I think we are very pleased with the start of 2025 quarter 1, great results. We're in line with the guidance that we gave you a few months ago.

So I think it's too early today to make additional comments on that. I think we are very comfortable and moving in the -- definitely in the right direction with the guidance, very comfortable here.

In terms of tariffs, again, we are in a very good place in that regard. Our U.S.

business, as you know, is around 5%. We see really marginal impact, if any, regardless of what is the tariff that is finally imposed, if any, again, and if there is any retaliatory tariff.

So again, there will be no impact or very marginal impact on our side either way. So also we're in a good place here.

Yes. And I’ll take the gross margin question.

Thanks, Jaime. Yes, we had a good gross margin in Q1, even if you take out the out-licensing transaction.

We still expect the full year to be slightly down from last year. Last year’s gross margin was 64.7%.

I would say we probably have a little bit like 20 basis points to 50 basis points of pressure. So still above 64%, but maybe a little bit lower than last year.

It will really depend on the product mix. This Q1, we actually saw a slow allergy season.

We saw a slow cough and cold season. The weather has been impacting in Europe a little bit Q1.

So having a slow cough and cold season actually helped our gross margin a little bit for those margin products. So I don’t think it changes drastically our prediction for the full year.

One final question from my side. On the pipeline, maybe for Karl, hidradenitis suppurativa looks like a very nice opportunity.

Can you dig a little bit deeper on the potential of this new compound, bearing in mind, I don't know, comparison with other peers and size of the market. So any color that you can provide on that opportunity would be great.

Thanks, Jaime. Very happy to provide a little bit of color on that.

Hidradenitis suppurativa is a very high medical need indication. So really with a lot of impact on patients’ quality of life.

There are already certain treatments available, but the benefit so far is rather limited, and there is still a very high medical need in this indication, which is, from the prevalence, about ¼ of AD. So it could become a very significant indication.

We are very excited about our anti-IL-1RAP monoclonal antibody, where we just have completed Phase I and plan to start a Phase II later this year, because it combines a mode of action that has been shown individually already activity in this indication. On the one side, the anti-IL-1 beta antibodies have shown some activity and also the anti-IL-36 antibody has shown some activity.

And as our anti-IL-1RAP antibody inhibits in total 6 different cytokines of the IL-1, IL-33 and IL-36 isoforms, we believe that this combination has a great potential in this indication.

Thank you very much, Sandra. As there are no further questions, ladies and gentlemen, this concludes today's conference call.

Thank you for participating. You may now disconnect.