Almirall, S.A.

Good day and thank you for standing by. Welcome to the Almiralfull Year 2024 Results and Business Update conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star 11 on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw a question, please press star 11 again. 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 Almiral's 2024 full-year financial results. As always, we are sharing the slides we are using today in the investor section of our website at almiral.com. Please move to slide number two. Let me 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 from what we are sharing today. Please move to slide number three. Presenting today, we have Carlos Gallardo, Chairman and Chief Executive Officer, Mike MacKillen, Chief Financial Officer, and Carl Singapur, Chief Scientific Officer. Carlos will start with an strategic overview and mid-term 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. Carl 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 got 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, Idumetri and Eplis. But also, let's not forget that we have other very exciting programs that are helping patients tremendously, such as Winthora, Clay City, Cyclopoli, and more recently, Jublia, that will contribute to drive the growth of this company going forward. Since I became CEO two years ago, we saw this tremendous opportunity in this nice and growing market. So we've been focusing on investing to make sure we could deliver on the biologics and we could position Endless and Illumetri as key first-line products in moderate to severe patients. I'm happy to say that everything's 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 San Feliu, but also in sourcing externally the next wave of innovation to continue to grow the company in the years to come. A few weeks ago, I was in San Francisco at the J.P. Morgan 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 from now until the end of the decade, and EBITDA to continue to expand up to around 25% by 2028. And this is while skipping our R&D investment rate at around 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 175 to 190, and we have surpassed this range, landing in 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 2024, that is executing well on the launches and executing well in in the rfd front so we envisage to accelerate our net sales growth from 10 to 13 percent this year and ebitda again align with the guidance a bit of margin expansion and we expect to launch the ebitda between 220 and 240 a 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 2025 seems to be very strong as well. I'm not going to dwell on the finances as we have already commented on them, but in terms of the key growth drivers, You know, great growth in the biologics continued to gain market share, both in psoriasis and in atopic dermatitis, but also not forgetting our other growth drivers, such as glycerin, we thought that they have performed extremely well. And moving to R&D pipeline, we have continued in 24 to develop our pipeline. And Kyle will comment on the different specifics, but I would like to highlight the inclusion of two new assets in our clinical stage, the free-through introducer and the 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 800 million. And this guidance on peak sales was also updated during the GP more than confidence. And again, this is a testimony of the markets that are going very well. The classes where we have our assets are becoming the winning classes. And also we continue, and we envision 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. We have seen that it has grown exponentially thanks to the inclusion of new acid 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 these 365,000 patients represent only around 20% of the number of eligible patients for this type of advanced treatment, advanced systemic treatments. So this is still tremendous opportunity for market expansion. It's a tremendous opportunity to continue to help patients through partnering with dermatologists, and this is our strategy. Within this context and within this quickly expanding market, our product, Illumetri, 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 our our mechanism of action the anti-l 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 it's a great 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 the 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 2025 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 EGLIS in Germany in late 23. So we have now a full year of commercialization of the product in Germany. And we're delighted to see how the product is performing in this key market. We have achieved already the second largest dynamic new person share in Germany. The feedback that we're getting from physicians is very good. and we already have thousands of patients in therapy. Also, we have launched already in other countries, but remind you that this is 33 million that we have achieved in 2024 are coming largely from Germany, because in the other countries that we launched in 2024, and we are still in the market access stage. So we are getting the product in the formularies, we are 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 strong contribution from Germany, but already a sizeable contribution from the other markets. If we move to the next slide, this illustrates the launch sequence. As I said before, we launched in Germany in 2023, and a number of additional countries in 2024. And from these countries, these six 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. There will be up to 12 countries in 2025. I have to say that The execution in terms of pricing and market access is going everything either according to plan or sometimes surpassing expectations. For example, in Spain, we've been able to achieve reimbursement six months ahead of what typically takes. And the same thing in some cases in other countries. Not only the price that we are achieving, but also sometimes in how quickly we're achieving these prices. so and i think that's a great testimony again of our ability to execute but also what we're finding is that payers want these products and this is helping us a lot to accelerate our agenda in this front so so far um things going very well in at least in 24 with illuminati and eclipse and we anticipate this dynamic should to continue 25 and beyond Next, if we move to the next slide, I invite Carl to give us an update on the positive progress in R&D in our pipeline.

Yeah, 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 epinephrine 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. So recycling regulatory 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 glycerin 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 labels for our key product our partners and pharma is running two phase three studies to assess the efficacy and safety of tilakizumab in patients suffering from psoriatic arthritis. First results are being expected in the second half of 2025. To make APCLIS available to all patients with moderate to severe atopic dermatitis, our partner, Eli Lilly, is running a phase three study exploring the safety and efficacy of lepidogizumab in patients six 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 needs, kin disease. In the next 15 months, we plan to initiate four proof of concept clinical studies across a spectrum of different kidney disease. Clinical supply manufacturing for our anti-R21 monoclonal antibody is ongoing to prepare for phase two. R21 is a cytokine affecting both D and T cell biology and hypothesized to be involved in several immune-mediated skin diseases. For our anti-R1 red monoclonal antibody, we have completed phase one single and multiple ascending doses in healthy volunteers. Now pharmacokinetics and safety are being explored in patients. We plan to start a phase two study later this year in Hidradentis superativa, high medical need indication. For our IL-2 mutant fusion protein, phase one 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. ZKN013 is an oral read-through inducer designed to overcome nonsense mutations that cause a premature stop codon. ZKN013 has utility in several rare indications such as dystrophic epidermolysis bullosa, junctional epidermolysis bullosa, and familial edematous polyporesis. Phase one is ongoing. In summary, we're 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, you're ideally positioned to address this medical need and build an inventive 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 LMPs, small molecules, antibodies, bispecifics, and other modalities. We have a bispecific monoclonal antibody for atopic dermatitis in preclinical development and multiple early discovery programs covering a broad range of skin disease. Next slide, please. To maximize the value of EPCLIS, 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 studies. One example is the so-called AD Trust Study. AD Trust is a 1,200 patient pan-European prospective observational two-year study that aims to explore the physical, psychological, and social impact of atopic dermatitis on patients' lives aligned with our noble purpose. The objective is to assess disease symptoms, severity, control of skin manifestation, patients' perception of their skin, and personal well-being. Patient quality of life, treatment effectiveness, safety, and satisfaction in patients with moderate to severe atopic dermatitis receiving leprechaun 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, Carl, for providing an insightful overview of the new EBLIS studies and the developments in our pipeline. As Carlos mentioned earlier, we were able to slightly surpass our 2024 guidance for sales in 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 epitaph of 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 telemetry royalties as we have hit higher sales levels. SG&A in 2024 was up 10% to $464.6 million, primarily due to investments in the Epidemic Launch across Europe, supporting the brand's growth trajectory in 2025 launch countries. R&D investment was up 11.9% year-on-year, representing 12.6% of net sales. This is aligned with our annual target and our pipeline strategy to fuel long-term innovation. We ended 2024 with a net debt to EBITDA ratio of 0.2 times, which positions us well to take advantage of potential licensing or bolt-on M&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 Allmax, which offset further generic pressure for Ephesib, Tessabelle. I'll share more details in the US 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, Illumetri and Eblis. Other derm growth drivers, such as Fiseri and Wenzora, continue to expand in key European markets. After just one year on the market, Eblis has achieved $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. Illumetri delivered another strong year of growth, reaching more than $200 million and putting it on track for the new peak sales that Carlos mentioned of more than $300 million. The U.S. business is stabilizing with Cesara sales growing double-digit in 2024. The positive impact of the recent large field launch in Plyceria 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 Cordron and Tazerac. However, Axon sales have increased here. Rest of the world dermatology sales experienced a slight decline due to lower sales of Cyclopoli and less licensing income from non-core products. Let's now move on to the complete financial statements. As we've covered sales, let's review the rest of the P&Ms. 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 Illumetri as its sales increase. Our R&D investments have risen to 12.6% in 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 EBLIS launches and pre-launch activities for the 2025 countries. Financial expenses decreased, benefiting from higher interest income on short-term cash deposits. Keep in mind that our effective tax rate is influenced by the inability to offset US tax losses against our profitable European business. We also had some minor impairments due to the US legacy business, particularly Cordurante. 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 upfront payment for the IL-21 asset from Novo Nordisk, a smaller upfront payment for the read-through inducer from Elox Pharmaceuticals, and in the second half, We've had minor investment to acquire the remaining Plyceri global rights. We also have a 45 million Illumetri 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 Winsora, as well as some capitalization of EBLIS phase four studies. The total impact has been counterbalanced by depreciation for the year, and a minor impairment of the US legacy assets I mentioned on the previous slide. Please note that our net debt ratio remains favorable at 0.2 times, despite significant cash outflows during the year, which we will review in more detail on the next slide. So let's now turn to the cash flow statement. We generated an operating cash flow of $160.8 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 notable cash outflow in 2024, primarily from 2023 milestones that were paid in early 2024. In January, we had a $45 million payment for Eblis' first commercial sales in the EU and a $20 million milestone payment for Illumetri sales. We expect an additional 45 million elementary 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 elementary in Europe and the further uptake of EBLIS, including new launches in several countries. We will as well have growth of Klyceri Windsor across Europe, while the rest of the portfolio will be relatively stable this year. We will continue to experience slight gross margin pressure, giving increased royalty rates, particularly from Illumetri. 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 EBITDA 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 US 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 non-core product lines. With this, I will hand it back to Carlos for some closing remarks.

Thank you very much, Carl and Mike, for your updates. So to close, we have had significant market opportunity in front of us. Nice market, growing market, a tremendous opportunity to continue to help patients, and we have the right strategy. We have the right strategy. We're focusing exclusively on medical dermatology and by partnering long-term with our key customers, the dermatologists. For that, and to capture this tremendous opportunity, we've been focusing on investing to making sure we develop the right platform to capture this growth, but also to develop the next wave of innovation. now is the time to whilst continuing this investment to start reaping the rewards of this focus and this good investment that we've been doing until now and we are entering a new era of accelerated growth and margin expansion today also i'd like to remind you that all this growth is coming from organic growth is coming from the assets from the products that we already have now in our portfolio We still keep looking for new assets, either in licensing or acquisition as well. And let me remind you what we're looking for. We're looking for assets to continue to develop our R&D pipeline, so products or programs in the clinical stage, but also, of course, programs in clinical stage. And also in terms of commercial, we continue to look for products in dermatology, mainly in Europe, but we're going to be looking in the U.S. as well, if and only if there are misindications. Our strategy is working and we are delivering. And we are confident in the direction of this company and in our ability to execute. I would like now to pass back the words to Pablo for question and answer.

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

Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 11 on your telephone keypad. and wait for a name to be announced. To withdraw a question, please press star 11 again. Please stand by. We'll compile the Q&A roster. This will take a few moments. And now we're going to take our first question. And it comes from the line of Shan Hama from Jefferies. Your line is open. Please ask your question.

Hi there. Thank you so much. Just two from me, please. So firstly, just in terms of EBLIS, What sort of penetration are you seeing in Europe, if you can disclose? And then with regards to elementary, so the seritis market, as we all know, is quite saturated. And the emergence of biosimilars, particularly selera 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 elementary peak sales? Thank you so much.

Thank you very much, Anne, for the question. So in terms of first question, about epiglycerol penetration. Our strategy is to position epiglycerol as first line in naive patients, and that's where the unmet need is in this developing market. I am very pleased to say that we are already capturing more than double digits. We are already in the double digits in capturing this segment of naive patients first line. And also, I can say that most, 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 Illumetri, we have with us Paolo Cionini, our chief commercial officer. So I think that he's the best he can answer your question about the impact of biosimilars in the psoriasis market. Oh, yeah.

Thank you very much, Carlos. And, Sean, about Illumetri and biosimilars. So we expect the overall psoriasis market to slow down a little bit with some of the products like Stellara, as you mentioned, with biosimilars entering in the market. And even in 26, we had the Cosantix biosimilars. So that is what is going to happen. But on the other side, we are also convinced that Illumetri, I mean, is playing in the AIL23 class, as Carlos said, I said during his presentations, so he's the leading class in Europe pulling the growth in this market. So we are convinced to be in the right class. And we think also that doctors and even patients 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 Illumetri even in 2020-2025.

and if i may add just with you know the 200 milligram and the flexible dosing we are offering i think we have a particular advantage in competing in that market thank you thank you now we're going to take our next question and the question comes from lan of guillaume sampayo from kaisha bank your line is open please ask your question

Hello, thank you for taking my question. So the first one regarding your guidance, what are you assuming in terms of Ablis cells? So I understand the consensus is more or less aligned with your guidance. The midpoint is assuming around 95 million of cells from Ablis. Is this consistent with what you see? And the second point, in terms of milestone payments, what should we expect beyond the $45 million that you already mentioned that was paid in January? Thank you.

Thank you, Guillaume, for the questions. We are not providing an estimate for our empty sales in 2025. However, we are comfortable with the consensus. In terms of the milestone payments, Mike, can you add a bit more color on this front?

Yeah, so as we look into 2025, we will pay the $45 million for elementary. If I look at the full year, we'll probably be in the $80 to $90 million range, paying different milestones and upfronts that are related to existing agreements. That'll 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.

Okay, thank you.

Thank you. Now, we're going to take our next question. And the question comes from Francisco Ruiz from BNP Paribas Exxon. Your line is open. Please ask your question.

Hello. Good morning. One follow-up from Guillermo's question, which in order to achieve your meet and guidance growth, could you tell us what's the implicit levels of milestones in order to reach this 450 million euro sales in Eclipse and more than 300 in Lumetri? My second question is on the shareholder remuneration. As the company is getting into a big expansion phase on VTA 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.

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 these questions. I think that we will, of course, we will keep in mind and we will, of course, while we prepare the AGM in May, you know, we will be able to provide more details and more comments on that.

Yeah, so, you know, we haven't put out a complete list of milestone payments, but there are some future ones for Illumetri and Eblis in particular that we could trigger if we're very successful. I would say, you know, having... annual investments of all these different milestones and agreements roughly in that 80 million range for the next couple of years is probably a good way to model it. Okay, thank you very much.

Thank you. And now we'll proceed with our next question. And it comes from Alvaro Lenze from Alantra Equities. Your line is open. Please ask your question.

Hi, thanks for taking my question. 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 overhead 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 three 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 the gross margin will be negatively impacted by higher royalty payments for Illumetri. I'm assuming something similar will happen as the FGLIS takes a larger role on your revenue mix. Do you have any ballpark number in mind as to your midterm gross margin? Thank you.

Thank you very much, Alvaro, for your question. So in terms of R&D, we keep progressing our pipeline and we keep adding assets to our clinical pipeline. And we are envisioning that we're going to move, we're going to start four proof of concept trials, so phase two 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, Carl, can you provide a bit 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 Carlos 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 quick clinical development, a bispecific antibody targeting a DNS, you may know, In the preclinical phase, biologics are a bit more expensive as more molecules, for example. We're also working with different technology in the discovery phase, as now we're seeing many scientific advances and novel approaches to treat skin diseases, which allow us to generate a lot of value in the long term. And then finally, also as part of this figure, we are supporting and continue to support EPCLS and Illumetri, as well as the other products that are on the market, which require a lot of ongoing regulatory work.

And in terms of gross margin, I would expect in 2025, probably about 30 to 50 basis points of pressure versus the 64.7%. we saw in 2024. As we go into the midterm, we will continue to see a little bit more downward pressure. I think a little bit will depend on the final pricing that we get for Eblis in some of the markets and how quickly we ramp up to higher royalty levels. Overall, Eblis should be somewhat in that range that we have today, but we may see further pressure if we hit higher royalty tiers as we go along. So very clear for 2025, 30 to 50 basis points, and then going forward, some kind of similar pressure. But we'll be able to quantify that better as we get to each year. Thank you.

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 1 1 on your telephone keypad and wait for a name to be announced. And now we're going to take our next question, and it comes from the line of Alastair Campbell from RBC. Your line is open. Please ask your question.

Thanks very much. 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 in the early pipeline, just to get a sense of, obviously, you're going to launch four POC trials imminently, but get a sense of when we might expect some data readouts on that, please. Thank you.

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

Thank you. Now we're going to take our next question. And the question comes in the line of Joaquin Garcia Quiroz Gonzalez-Caminho from JB Capital. Your line is open. Please ask your question.

Yes, hello. Thank you for taking my question very quickly. It's just on the EBITDA guidance, which is a bit broad.

It's just to understand a bit better what are the levers that would allow Almiralt 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 would be a very big margin increase.

Yeah, so if you look at the range, I mean, it's $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 EBLIS 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.

Excuse me, Jacques. Any further questions?

No, sorry, thank you. That was perfect.

Thank you. And now we're going to take our last question for today. Just give us a moment. And the question comes from the line of Jaime Escribano from Santander. Your line is open. Please ask your question.

Hi, good morning. So, on FPLIS, can you tell us a little bit what is the roadmap in terms of... new launches in new countries. For example, I remember in France, you are negotiating the pricing with the social security. How is this negotiation going? And what could be other relevant launches this year? My second question would be regarding, let's call it Almirallegacy, 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 Evastel, 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 Clive City 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, Seisara also turning around. Seisara China, what could we expect and when? Thank you very much.

Thank you very much, Jaime. I will start by the end and then pass the word to Paolo for your questions and Mike. for whatever I have forgotten to answer. But in terms of glycerin large field, again, very strong performance in Europe. Sorry, glycerin small field, strong performance in Europe. They're doing the clinical trials to launch the large field in Europe. In the US, 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 Seixara, we're going back to growth, which is great to see. And in terms of Seixara 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 question.

Yes, absolutely. Thank you, Jaime. So basically, there's a bunch of countries where, of course, we have to enter in Europe with Eblis. 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 Evastel. So I would say that we have launched four new flavors. So that's an extension line on that went very well. So they didn't cannibalize after they had on top of that. And we are very pleased about it. As you have seen, Almax has grown 24% in 2024, so very good performance, and we are happy with that. And about Everstel, we had a very nice season, seasonality in Europe, and also we expand our business out of Europe in the region international. So that's why Everstel also performed very well in 2024.

Yeah, and let me take the last question on other income-type opportunities. So we basically have a line that's called Other Net Sales. There's a couple of things in there. There's royalty income we get from products. There's out-licensing income we get from non-core products that can also include territories outside of Europe and U.S. for assets that are non-core like terabenefine, finasteride. Or we've also been licensing out little bits of cesara and glycerin rights outside the and then any kind of minor divestments. If we look at the total in 2023 of that whole bucket was $25.7 million. In 2024, that whole bucket was $14.8 million, so a decline. And as we go into 2025, because of this minor outlicensing we've done already, we would expect in the plus or minus $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-dermacids is great and contributes us a lot of resources to keep focusing on our dermatology strategy. So let's say that we are, you know, the combination of this portfolio, you know, is helping us a lot.

Thank you very much.

Thank you.

Dear speakers, there are no further questions for today. I would now like to hand the conference over to Pablo de Vazón 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.