Almirall, S.A.

Good day and thank you for standing by. Welcome to the Amaral Full Year 2023 Financial Results and Business Update webcast and conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Pablo Diverson. Please go ahead, sir.

Thank you very much, Sharon. Good morning to everyone on the call. Thank you for joining us to review Almirals for year 2023 results and business update. As per usual, you can find the slides to this call on the investors page of our website at almirals.com. Please move to slide number two. I would like to remind you that the information presented in this call contains forward-looking statements which involve known and unknown risk, uncertainties, and other factors that may cause actual results to materially differ. Please, please, with that, advance to slide number three. Presenting today, we have Carlos Gallardo, Chairman and Chief Executive Officer, Mike McKillen, Chief Financial Officer, and Carl Singelberg, Chief Scientific Officer. Carlos will start with strategic vision highlights and guidance, finishing with an update on our biologic growth drivers. Carl will provide you with details on the progress of the pipeline before passing to Mike to review the financials and guidance comments. Carlos will then close and conclude with the comments before opening up for a Q&A session, where we will count also with Paolo Cionini our chief commercial officer. I would like now to pass this over to Carlos Gallardo, our chairman and CEO, to discuss the strategic vision in Admiral.

Thank you, Pablo, and good morning, everyone. In this first call of the year, and given that coincidentally it also marks my first anniversary as CEO of the company, I would like to take a few minutes to share with you some insights and perspectives on where we are as a company in our strategic journey. So 10 years ago, we decided to focus on medical dermatology. And the reasons were, one, we wanted to focus on a therapeutic area and we already had experience in dermatology as we had a portfolio from Hermal and a portfolio in dermatology that we acquired from Shire Pharmaceuticals. But also we saw there was tremendous unmet need in this disease area with a lot of the diseases not having or having super adequate therapies. And also there had been a number of advances in understanding the biology of these diseases that led us to believe that there was an opportunity to come with novel scientific hypothesis to develop exciting therapies for these indications for this unmet need and to support patients there. And also it was already a big and growing market. Today, if we fast forward to... Can we come to the next slide, please? If we fast forward to today, we can say that at Mirai today, we are already a leader in Europe in terms of dermatology with a strong product portfolio of 50 products across modalities. So products in topicals, we have systemics and we have biologics. We have extensive footprint from a commercial perspective. We see almost every single dermatologist that is hospital-based, and we see more than half of the dermatologists that are office-based. But also importantly, we have a growing pipeline of very exciting assets. And also today, we are very happy to announce our latest addition to our pipeline with anti-IL-21 that we have licensed from Novo Nordisk, and will provide a bit more of color in this deal. also looking at the at the market we would see is that it has grown very nicely in the past few years but according to analysts this market that is today around 48 billion if you look at europe and us together is poised for growth for more than double digit in the next five years reaching 75 billion so a very exciting market to be on if we move to the next slide please So I just mentioned that we have a strong footprint in Europe that this is translating into strong commercial capability with a proven track record of executing successful launches of internal and external assets. If we look at our track record in Europe in the past few years, we have launched five brands, five products, and we can see that we have Evolved the company from just a few years ago from being less than 200 million in Europe to north of almost 400 million in the last year with a compounded growth rate of 14%. But this growth rate is accelerating. If we look at the growth rate we achieved in dermatology in Europe in 23, it was closer to 17%. So going forward, what can we expect? We will remain focused on medical dermatology. on areas of high and med need, such as inflammatory skin diseases, such as atomic dermatitis, psoriasis, . Remember, this is the area where we already have a number of products, such as Illumetri with Zora, Skillerans, and now, more recently, Eplis. And we will focus also on two other buckets. One is the non-melanoma skin cancer, where there is still also high prevalence. Can you go back, please? One slide, yes. Well, we still have high prevalence, but also on rare dermatology diseases where there are many indications without treatment. If we move to the next slide, please. What we can see here is why are we focusing on these two latter buckets. With non-melanoma skin cancer, what we see is a growing incidence due to increasing sun exposure and aging population. We see an incidence of almost 0.5 in Europe for PCC and 1% in SCC, a bit less incidence in the United States. But the unmet need in these diseases is very high. The therapy improvements that we've seen over the past year have not occurred as rapidly as in melanoma. That is a better served market. So still a significant pool of patients that remains medically underserved. Also in rare dermatology, there are more than 1,000 rare dermatology indications of which a vast majority, they don't have a single product approved by the FDA or EMA. And many of these diseases are severely debilitating and impairment for patients and a huge impact in patient quality of life. So tremendous opportunity here also in rare dermatology. If we move to the next slide, again, we go here to the immunologically mediated skin diseases. What we can see is that not only we see a high level of unmet need, but also high prevalence. We've got a number of patients that will be eligible for advanced therapies. We see in atopic dermatitis almost close to 3 million patients if we look at U.S. and Europe combined. Look at psoriasis is 2.5 million, and also high prevalence in diseases such as vitiligo, CSU, hydranitis superativa, alopecia areata. And this is where we have heavily focused our efforts in R&D, not only in clinical development, but also in discovery. We have, with the announcement of the anti-IL-21 acid that we announced today, we have 13 assets either in discovery or in early clinical development. And a number of these assets have potential for multiple indications. So it's probably we have around 15, 16 potential programs in these diseases. So many shots on goal on these different diseases that again, not only the med need is very high, but also the prevalence is very high and still the market can expand dramatically. Even in indications like psoriasis, where the first biologic was launched It's more than 17 years ago. As you can see, there's only a penetration of 23% of eligible patients in psoriasis. So with this, let's move on to the 2023 highlights and guidance for this year. Next slide, please. So 2023 has been a good year. The business momentum from our growth drivers remains solid. As expected, we landed around the middle of the EBITDA guidance range and achieved close to our mid-single digit growth guidance, which had matched up in our last call, the 3Q results in November 23. The full year 23 performance was driven primarily by our European dermatology business, that as I mentioned before, grew 17%, underpinned by Illumetri and our recently launched products with Thora and CliveCity. This will be discussed in more detail later in the presentation. Nonetheless, let me touch upon a few highlights. We are pleased to have initiated the first launch of EPCLIS in late December, and we are expecting EPCLIS to gradually start contributing to the imperial dermatology performance during this year. We continue to see strong performance of rheumatria across geographies, with solid growth year-on-year in the mid-30s and quarterly performance aligned with expectations. The launch of Winthoran Glycerin in Europe is being driven by growth in key new countries, as the recent rollouts in Europe continue to progress. In relation to our pipeline, we continue to make good advance with all key assets under development. This includes our anti-RR1 RAP and anti-IL-2 mutant phosphine, both of which are now in phase one. Meanwhile, Glycerin large field supplementary indication is expected to launch in the U.S. in the second half of this year. The CESAR approval in China also remains in track for 2024. And with regards to Feconazole, the regulatory review remains ongoing and we now expect approval by the second half of the year. CAR will soon elaborate a bit more on the pipeline. Let's move on to the next slide for the 2024 guidance. In terms of net sales, we expect high single-digit growth, and we expect a total EBITDA to be between 175 and 190 million for the full year. Mike will provide more detailed comments later in the presentation, including some of the key pulls and pushes for the year. With that, please move to slide 14 to touch upon the biologics growth drivers. Following the recent launch of Eplis, I wanted to share some overall big picture context around our two big biological drivers, Eplis and Illumetri. Between Illumetri and Eplis, we continue to believe we can achieve potential pixels of around 700 million euros by the end of the decade. Of this, Eplis should contribute 450 million euros in atopic dermatitis, while Illumetri will contribute 250 million in psoriasis. This potentially multiplies our current atopic dermatitis and psoriasis cells by four, driving high double-digit growth in biological cells from 2023 to the end of the decade, 2030. Let's take a closer look at EPGLISS now in the next slide, please. We truly believe that EPGLISS has the potential to become a best-in-class treatment for atopic dermatitis, thanks to its unique mechanism of action. It binds to IL-13 with high affinity and selectivity, with results in early set of action and great efficacy in the long term. As early as in week 16 in these trials, we can see the data supporting greater efficacy. In fact, we have data collected over two years now, where patients who responded well at week 16 continue to demonstrate efficacy throughout the two-year period. Furthermore, we have achieved a unique maintenance dosing schedule with one injection every four weeks. providing long-lasting disease control for patients. Let's move to the next slide, please. On this slide, we would like to share the estimated timelines of the EPLIS rollouts across Europe. As you are aware, last year we received approvals for EPLIS in Europe and the UK and have successfully launched in Germany, where the initial feedback has been positive. It is too early to share quantitative data about the launch, as we need more time to gather the appropriate market data. we should be able to share the sales data, and by July this year, we should have more information. Having said this, let me reiterate that the initial feedback is positive. Regarding the resources that we need to launch EGLIS, we will keep investing, but we will not necessarily need to double the size of the Salesforce, considering the competitive nature of Illumetri, although we believe that it makes sense to add sales reps for EGLIS. So we will have to be judicious in how gradually we direct some of the biologic sales force toward EPLIS without disrupting . In relation to 2024 rollouts, our current plan calls for a launch in the UK, Austria, Denmark, and Spain. The rollout in the remaining countries is expected in 2025. We will keep you updated on these timelines as they develop and we get better visibility. Let's move to STYLE17. In this slide, we want to show that atopic dermatitis market today is in a very similar position that psoriasis was several years ago and its beginning stages. The potential room for growth is substantial. We saw psoriasis, which grew eightfold over a 12-year program, mostly driven by the launches of novel advanced therapies. In the atopic dermatitis market, six years ago, there was only one biologic available to doctors to treat moderate to severe patients. The available treatment options are still limited in atopic dermatitis and far fewer than psoriasis. Let's not forget that this is a disease that requires a wide variety of options to serve the patients. In fact, there are still only three mechanisms of action available for moderate to severe atopic dermatitis patients in the market. We believe EGLIS has the potential to be a first-line treatment in atopic dermatitis. Let's move to slide 18, please. Moving to Illumetri, let's take a closer look at the strong momentum of Illumetri, our anti-IL-23 biologic for psoriasis. I would like first to highlight that the class itself continues to maintain its leading market share of new patients amongst biologicals. In 2023, we have launched a 200 milligram presentation with the anti-injector and detailed new clinical data. On the chart on the right, we can see that Illumetri continues to display strong performance during 2023. It also shows balanced growth as the sales contributions of European countries other than Germany are now at 50% of the total sales, with Germany taking up the other half. This demonstrates good traction of the product in other key European markets. With over six weeks behind us in 2024, we expect to resume momentum in Q1, and we continue to expect 2024 to grow in absolute terms sales value to be comparable to 2023. Let's now move on to slide 20. Carl will update you on advances in our pipeline, including the recently signed anti-IL21 deal with Novo Nordisk.