Almirall, S.A.

standing by. Welcome to the Emerald First Quarter 2026 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 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 de Barzón, Head of Investor Relations. Please go ahead.

Thank you very much, Matalena. Good morning, everyone. Thank you for joining us for today's quarterly earnings update and review of Almiral's first quarter financial results for 2026. As always, we are sharing the slides we are using today in the investor sections of Almiral.gov. 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 risks, uncertainties, and other factors that may cause adverse 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, John Garay, Chief Financial Officer, and Carl Sigelberg, Chief Scientific Officer. Carlos will start with the business highlights of the first quarter, followed by an update on biologics as the key growth drivers of our medical dermatology portfolio. Carl will provide you with an update on the pipeline and R&D programs. John will then walk you through the panaceas 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 number five.

Thank you, Pablo, and good morning to everyone in the call. Almirai delivered steady performance in line with our expectations and market consensus in the first quarter of 2026. The results reflect the high competitive base in the first quarter of 2025, which was boosted by divestments, alongside a minor revenue-facing effects across quarters. It was anticipated and flagged at the 2025 full-year results presentation. Excluding the different effects, growth remains in line with the guidance and with the recent trends. being last 12 months net sales growth of 9% as of Q1 2026, consistent with our 2026 guidance. Which is why we remain comfortable reiterating our guidance, with growth expected to be driven by our biologics, as well as the strength in our core medical dermatology business. Growth this quarter is underpinned by effective commercial and operational execution, led by solid biologics performance in medical dermatology across Europe. We also continue to advance innovation, broaden patient access, and support the physician community. Turning to products, Illumetri delivered steady double-digit growth, reaching 62 million in sales and remains on track to peak sales of over 300 million. With 42 million in net sales, every momentum picked up in the last quarter following completion of the rollout across growth prospects. Among other products, Winthora continues to beat market share across key regions, while Glycine delivered stable sales growth overall. We remain highly active within the medical dermatology community, continuing to strengthen our presence in the field. At the 2026 American Academy of Dermatology Annual Meeting, we presented more than 15 posters featuring new data across atopic dermatitis, alkenic keratosis, and acne. Earlier in the year, Amirai hosted the 17th edition of Skin Academy, bringing together leading global experts in medical dermatology, focusing on the latest advances in atopic dermatitis and the importance of individualized treatment in psoriasis. We are encouraged by our pipeline developments, with three proof-of-concept studies currently in Phase II and a further three more POC studies on track to begin Phase II over the coming quarters. Most of these assets are either first or best in class. Our B-specific antibody targeting atopic dermatitis has progressed into phase one, and we recently entered a new collaboration with WHOA-OTA to advance the development of a monoclonal antibody with potential applications across multiple indications within medical dermatology. Carl will revisit our pipeline in greater detail. Please move on to the next slide for an update on our biologics portfolio. In the first quarter, Illumetri net sales reached 62 million, marking a steady 12% year-on-year increase. The two-year positive study results were presented at both the 2026 American Academy of Dermatology Annual Meeting and 2025 European Academy of Dermatology and Veterinology Congress. The data continue to highlight Illumetri's long-term value, demonstrating meaningful real-world benefits in patients' well-being Elements. Illumetri continues to demonstrate a solid position in the psoriasis market, maintaining market share in the leading anti-Io253 class. Performance remains consistent, and we therefore continue to be firmly on track to deliver over 300 million in peak net sales, even as both the product and the class enter a more mature phase of the growth cycle. Please move to the next slide on Ably Hype. Since its approval in Germany in December 2023, Evry has rapidly scaled to become our second largest product, underscoring one of the most successful atopic dermatitis launches in recent years. This outcome reflects a strong patient and physician adoption, supported by solid commercial and operational execution. At the same time, the advanced therapy segment in atopic dermatitis across the EU5 continues to expand at around 30% annually. First quarter sales more than doubled to 42 million from 19 million a year earlier, driven by the successful European rollout and continued scaling across key markets. EPLIS has already achieved double-digit market shares in several strategic regions, alongside encouraging early traction in new country launches. This underpins our confidence in EPLIS as a major growth driver in the years ahead. We aim to become a first-line treatment and capture increasing market share. We are confident in the product's potential, targeting the elder 13, as it is the predominant interlocking in AD patients, and there is a broad number of clinical studies validating the product's good efficacy, which is the main factor in picking the most adequate treatment. Our clinical collaboration At the 2026 American Academy of Dermatology annual meeting, Amirai presented extensive Levikithium-up data, including 80 long results showing durable disease control for up to four years. Prior to that, Lilly published their AdorableOne pediatric study data, demonstrating significant screen clearance and improved disease severity children with moderate to severe atopic dermatitis. Please turn over to the next section for Carl to explain our pipeline developments in more detail.

Thank you, Carlos, and good morning to everyone in the call from my side. This slide shows you the status of our early and mid-stage pipeline. Today, we have three proof-of-concept Phase II studies ongoing, with three additional studies planned to start within this year. In 2025, we progressed our anti-AL1 web antibody into phase two for Hidradenitis superlativa and our AL2-mutin FC for alopecia areata. In addition, our partner Sincere initiated a phase two study on the AL2-mutin FC in atopic dermatitis. As a reminder, we retain global rights for this asset outside greater China. Looking ahead, we plan to initiate one additional proof-of-concept study each for the IL-2 mutant FC and the anti-IL-REP antibody in an inflammatory skin disease. For the anti-IL-21 antibody, we will start a proof-of-concept study in Hadronitis superativa in the coming weeks. The Phase 1 study of our bispecific antibody targeting R13 and YO4 deligant has just started. From those six proof-of-concept Phase 2 studies, we anticipate a data readout over the next couple of years, starting end of 2026, beginning of 2027. While these programs remain at an early stage, they address well-defined biological pathways and represent a range of first- or best-in-class opportunities. Next slide, please. In March this year, we inaugurated our business development office in Shanghai, China, to advance innovation in medical dermatology through partnerships. This team is dedicated to life science innovation with a focus on programs and technologies that are complementary to our in-house R&D activity. A good example of what we intend to do is our collaboration with Huerta. We announced recently for the development of another monoclonal antibody in medical dermatology. For this collaboration, we proposed a target for an attractive skin disease, and Qoja will conduct early research and initial development to deliver clinical proof of concept. While Almiral holds global rights outside China and leads further global development and commercialization. Next slide, please. This slide gives an overview of our lifecycle management activity for products that are on the market, and I would like to highlight a few new developments. For terbanipalene applied to a larger treatment area of 100 square centimeters, the regulatory process is ongoing, and we expect launch in Europe late 2026. Together with our partners, Sun Pharma and Eli Lilly, We continue advancing label expansion opportunities and generate additional clinical data for Illumetri and Eblis, respectively. Let me share some recent data on the next slide. At the AAD 2026 in March this year, we presented clinical data that showed that leprechizumab delivers long-term disease controls for up to four years in patients with moderate to severe atopic dermatitis. In the at-long-phase release study, 94% of patients maintained ETH-75, 75% maintained ETH-90, and 68% kept clear or almost clear skin defined as an investigator's global assessment score of zero or one with up to four years of lepricizumab treatment, reinforcing the sustained response achieved over time in patients with moderate to severe atopic dermatitis. Importantly, Each relief was also sustained over the long term, with 78% of patients achieving a four-point or greater improvement on the pruritus numeric rating scale, with measures each in tenancy on a scale from zero to ten. Overall, this result further reinforced the long-term disease control potential of lepricizumab in a chronic condition requiring sustained and consistent treatment. Next slide, please. The ADORABLE-1 phase 3 study met co-primary efficacy endpoints with 63% of patriotic patients achieving meaningful skin improvement, EC75. Forty-four percent of patients reached clear or almost clear skin, IGA-001, at week 16. Adorable-1 is a multicenter, randomized, double-blind, placebo-controlled phase three trial in 363 children and adolescents with a moderate to severe atopic dermatitis that evaluates leprechaun versus placebo on top of standardized low to medium potency topical corticosteroids. Sorry. Given the substantial physical and emotional burden of atopic dermatitis, particularly when disease onset occurs early in childhood, these findings further strengthen the role of leprechaun across the full patientship. Detailed data will be presented at an upcoming scientific meeting. We plan to use this data together with the forthcoming results of the ADORABLE-2, which is the open-label 52-week extension trial of ADORABLE-1, to file for an extension of the label of leprechizumab to the pediatric population aged 6 months to 18 years. Finally, we initiated our Phase III study to explore leprechizumab in patients with pneumolar eczema. The readout is expected in 2029. With that, I will hand over to John for the financial review.

Thank you, Carl, for the exciting pipeline update, and good morning, everyone. Net sales increased by 2.2% year-on-year in the first quarter of 2026, reaching €291 million, which is in line with our expectations and consensus. Last 12 months net sales growth of 9% as of Q1 2026 is equally consistent with our 2026 guidance. As Carlos mentioned earlier, unanticipated in our full year 2025 earnings call, the first quarter of 2026 needs to be viewed against the divestment of Al-Jidol and out-licensing of Sekisan in Q1 2025. In addition, we also had some minor facing of sales amongst our 10 products in derma and non-derma between quarters. Excluding these effects, growth is in line with our expectations and provided guidance, allowing us to remain on track for the full year 2026 guidance. Performance remains solid, and European dermatology portfolio continues to deliver solid growth, further reinforcing Admiral's path towards leadership in medical dermatology. Gross margin landed at 64.2%, slightly above the performance that you may have seen in the prior quarters. There is still a minor recurrent pressure that you should take into account, primarily due to the higher royalty tiers associated with Illumetri's net sales growth. EBITDA came in at 67.5 million euros, reaching 23.2% over net sales versus 21% ratio reported at year-end 2025. SG&E declined by 1% versus prior year and is expected to pick up in the coming quarters driven by facing of our marketing and promotional activities. R&D investment reached 12% of net sales driven by facing of our R&D activities as our POC trials progress gradually. In this sense, 12.5% remains a good proxy for the full year. We closed March 2026 with a net debt to EBITDA ratio of 0.1 after successfully completing the issuance of a new high yield bond at 3.75% interest rate back in December 2025. Overall, the results lead us to reiterate our 2026 guidelines. Let's move to the details of our third breakdown on the next slide. European dermatology portfolio continued to perform strongly, delivering 19.3% year-on-year net cell growth in the first quarter. We will go into more detail on this performance on the next slide. The comparison impact was concentrated in Europe, where general medicine and OTC cells reflected a stronger prior year base due to the algidole divestment and out-discensing of secchysans alongside the mentioned phasing effects on a smaller portfolio area. Lower cells in legacy products, such as Crestor, Satirex, and Eclira, were largely offset by contributions from Evacel and Airtel. In the United States, performance declined year on year, which we will discuss on the following slide. In the rest of the world, overall cells were slightly higher, with solid dermatology growth more than compensating for a modest decline in general medicine. Let me take you through dermatology performance in more detail on the next slide. Our European dermatology business continued to perform well in the first quarter. Illumetri delivered sustained year-on-year growth while Egblis further increased its contribution, now with launches across all key European countries being completed. Egblis generated €42 million in the first quarter, reflecting continued scaling and reinforcing our confidence in its long-term growth potential. We continued to work hard to unlock the full value of the franchise from both the commercial and the R&D side. Winzora continued to build market share, gain interaction across core European countries. FlyCity demonstrated stable growth in Europe year on year in spite of some facing in sales against FireQuarter. Cyclopolis sales were slightly soft following a strong Q4 2025. In the United States, overall performance declined, reflecting continuous pressure on the legacy portfolio. Products such as Cordram Tape, Tazorac, and Axon remain impacted by ongoing generic competition. Seisara saw lower sales amid intensifying competition and exchange rate evolution. In the case of FlyCity, the exchange rate evolution impacted growth negatively by 10 points in the quarter. Additionally, our market strategy to broaden improvement during the year. In the rest of the world, dermatology sales increased year on year, driven primarily by thin-juved demand in China. Overall, our dermatology franchise continues to show solid underlying performance. Let's briefly review the remaining elements of the P&L. Gross margin reached 64.2% in the first quarter. Last year, gross margin benefited from the already mentioned divestment and out-licensing. Aside from this impact, we see continued slight margin pressure, primarily from higher royalty tiers associated with Illumepi's continued growth. SE&A expenses accounted for 41.8% of net sales compared to 43.1% for the same period last year, which is in line with our expectations and facing throughout the year. As highlighted earlier, SE&A is expected to increase in the coming quarter, driven by the facing of our marketing and promotional activities. We continue to anticipate SG&A full year growth to be slower than sales growth, becoming an important contributor to our EBITDA market expansion guidance. Around the investment represented 12% of net sales, a full year ratio of around 12.5% remains a good proxy with the normal quarterly variability expected. Financial expenses increased versus last year, driven by the valuation impact of the equity swap in 2026 following the share price evolution. Finally, our effective tax rate came in at 34.6%, which represents an improvement of 5.1 percentage points year-on-year. We continue delivering on this positive trend, driven by the strong increase in the group's overall profitability, which materially reduces the relative impact of our U.S. business at the consolidated level. Please move to the next slide to take a look at the balance sheet. Our balance sheet remained stable as of March 2026 compared to December 2025. Intangible assets grew in the quarter, driven mainly by egg-based-related lifecycle management activities. The development milestone payments to Sincere as IL-2 fusion mutant protein progresses into Phase II, and a small astronaut access fee linked to the new Poalta collaboration Carl has just mentioned. This increase was more than offset by higher amortization, resulting in a modest decline in goodwill and intangible assets during the quarter. Also, the payment this quarter of the 2,025-kilometer milestone is driving the respective decrease in current liabilities. Our net debt ratio stood at 0.1, continuing to provide us with strong financial flexibility. The increase in net debt primarily reflects higher cash outflows related to investing activities. Let's now come to the cash flow statement. Cash flow from operating activities reached 47.9 million euros and increased for 21 million euros compared to the first quarter of 2025, driven by working capital improvement. Cash flow from electing activities amounted to minus 72 million euros, an increase of 52 million euros versus the same period last year. This increase largely reflects the payment of the $2,025.55 million Illumetri-Seth milestone, which has lived into the first quarter of 2026. I would like to highlight that this is the highest milestone payment expected during the year in the absence of new transactions. Projected investment-related payments in the remaining quarters are marginal, and the total estimated outflow related to investing activities for the whole year remains within the usual limits. Cash flow from financing activities was minus 3 million euros, representing an improvement compared with the minus 9 million euros in the first quarter of last year. The year-on-year difference mainly reflects the change in the new bond structure issued at the end of last year. With that, I would like to hand the word over to Carlos for his closing remarks. Thanks a lot, everyone, for your attention.

Thank you, John. To reiterate, the business remains solid despite the optically lower growth first quarter figures. We also remain very confident in the 2026 outlooks and our ability to deliver on our targets. We know where consensus sits today, and we can confirm we are comfortable with these figures. Turning to the key drivers of the business. First, our biologics portfolio is giving us real momentum. We are operating in a dermatology market that continues to expand, and we are doing so with a portfolio that is both diversified and as well aligned with where unmet needs remain highest. This is reflected in a pipeline that spans immune-mediated skin diseases, rare dermatology, and non-melanoma skin cancers. From a development standpoint, we currently have three programs in proof of concept of phase 2, with a further three expected to enter in the next 9 to 12 months. Taken together, this provides a solid base to support sustainable growth over the coming years, without concentration on any single asset. In parallel, we remain assets, while screening early-stage licensing opportunities where we see differentiated science and a clear strategic fit. Most importantly, execution remains the anchor. We are translating strategy into delivery, staying on track to achieve our mid-term ambitions for double-digit net sales growth to 2030 and a circa 25% EBITDA margin by 2028. EPLIS continues to scale across Europe, while Eulometry is being managed pragmatically as it moves to a more mature phase of growth. Overall, this combination of pipeline depth, financial discipline and execution give us confidence as we continue to advance and mirai towards leadership in medical dermatology. With that, we'll conclude the presentation and thank to Pablo for the Q&A.

Thank you very much, Carlos Magdalena. Back to you for the Q&A, please.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again.

One moment for our first question.

And our first question comes from the line of Shan Hama from Jefferies. Please go ahead.

Thank you for taking my questions. Just two from me, please. So I think I acknowledge that there's quite a noticeable acceleration in EBLIS in 1Q versus the prior quarter. Is this the sort of level of growth we should be anticipating throughout 2026? So that's my first question. And then my second is, which countries have really driven this acceleration? And where do you see a more pronounced prescribing behavior for EBLIS?

Thanks so much. Thank you, Sean, for the question.

So, yes, it is showing a very, very strong momentum. When you look at the recently published 80 long studies, you realize it's not a surprise that the product achieves near complete skin clearings and its relief in up to four years, no? So that translates into what? That physicians and dermatologists are achieving treatment goals in most of the patients. And that's what's driving the success of AIBRIS. The vast majority of dermatologists go to an IL-13 inhibitor to treat moderate to severe atopic dermatitis patients. So, very pleased with the results as well, and we expect, so confident with the consensus, and we're very happy to confirm the guidance of exceeding more than 450 million pixels. In terms of which countries are driving, of course, you know, we have launched in in the vast majority of of the countries where we wanted to launch so all countries are performing well we have double digit market share in most of them but also importantly we have the recently launched countries italy and france that now are contributing so and they are adding to the to the sales of of atlas so you know that the recent performance of the recent acceleration has been driven for the inclusion of these two new important markets to Thanks so much.

Thank you. Our next question comes from the line of Simon Chaplain from Stifel.

Please go ahead.

Yes, hello and congrats on the results. Thank you for taking my questions. First one on the IL-2 meeting at EFC. What level of clinical efficacy and differentiation would you need to see in phase 2 to trigger a phase 3 program in EFT? And would you plan to run and finance a global study or would you consider limiting it to Europe? This is my first question and maybe a quick one on EBLIS. Is the pediatric population included in your PICSELS guidance? Thank you.

Thank you, Daniel, for the questions. I will take the latter. Yes, the pediatric indication is included in our PICSELS estimates. And I will refer to Carl on our very exciting IL-2 program.

Yeah, thanks a lot, David, for the question. As you know, the ultramutin FC targets regulatory T-cell, and with that, trying to restore immune hemostasis. And we believe this mechanism has potential across different skin diseases, including alopecia areata, as well as atopic dermatitis. Now, in terms of future strategy, we, of course, need to wait for the data and the results and how they look like. But I see a lot of different options that we have, even the mechanism. Also, in terms of a more global versus a European study, certainly our goal is to maximize the value of this asset. And once data are available, We will look at all different options.

Okay. Thank you very much.

Thank you. Our next question comes from the line of Jaime Escribano Maiz from Banco Santander. Please go ahead.

Hi. Good morning.

So my first question regarding Epley's positioning on performance, which is being very good. But we also see other peers doing very well, like in the movie, for example. And my question would be, how do you see the competitive landscape? Is it that the overall market is expanding and that's why all the peers seem to be doing good? So this would be my first question. The second one regarding Illumetri, we saw a decline quarter on quarter, but it's true that in Q1-25 we saw something similar. So maybe you can confirm how the product is doing or what's the outlook in Q2. And a final question, if I may, regarding SG&A, so minus 2% year-on-year in Q1, which looks quite content. What should we expect in terms of SG&A? Should we extrapolate this, or do you expect the growth rate to be slightly higher? Because it is quite low.

Thank you. Thank you, Jaime, for the question. So, let me take the first question about EPLIS and competitive dynamics, and John will take the Lumetri and the SG&A questions. So, competitive dynamics in AD. I think it's important to remind what we've been saying in the last quarterly course that this is a market that remains severely under-penetrated. Only around 18 to 20% of patients that are eligible for advanced therapeutics are prescribed with an advanced therapeutic. So, we've always said that new classes will make more noise, of course, for promotion and will expand this penetration and that's what's driving the growth of the market. So, on that regard, new entrants are beneficial towards this growth. In terms of positioning, there's very strong consensus within the dermatology community that IL-13 is the key cytokine, and therefore the go-to product is an IL-13 inhibitor. And why? Because they achieve the treatment goals, right? And IL-31s, they are good at dealing with itch relief, but not good at dealing with skin clearance. And that's why We see higher use in prurigo nodularis, and in atopic dermatitis, they are used more as a second-line or third-line patient. Let me remind you that this is highly heterogeneous patient population, and not all the patients always respond to a first-line treatment. Illumetri, John, can you take Illumetri on this Q&A, please?

Thanks a lot, Carlos, and thanks for the question. If we start with Illumetri, yes, Illumetri grew around 4% in the quarter, which is aligned with the full year growth of 2025. It's true, as you mentioned, that in Q4 2025 isolated, Illumetri grew a bit higher. But so far, on a full year basis, we think Inumetri will be continuing solidly in the range of the double digits. And as we estimated and we shared in February earnings call, at the moment, we are quite comfortable with a ballpark of the market consensus for Inumetri, which is in the range of €260 million. Illumetri is competing in the IL23 segment, which is the leading class for psoriasis moderate to severe. And basically, the product recently will launch the Illumetri 200 presentation. Milligrams presentation that is performing well. And it's providing flexibility to the healthcare professional to individualize care. And we think it's one of the strengths we are bringing to the market. Switching to the third question you raised, Jaime, which is AD&A. Yes, SG&A in the quarter declined 1% versus prior year, reaching around 21% of our net sales. It's mainly driven by the facing of our marketing and promotional activities. It's true this year that in some of our jurisdictions, the main campaigns are going to take place in Q2, and this is the facing you see. You may expect a certain pickup in the upcoming quarters, and on a full year basis, as we disclosed in our full year 2025 earnings call in February, you can expect a lower growth of our AD&A and our net sales growth, and this will become a key contributor to the margin expansion at the data level.

Thank you very much. Thank you. Our next question. comes from the line of P.M. Sampaio from CaixaBank. Please go ahead.

Hello, thank you for taking my question. So three for me. The first one, if you could provide a bit more details regarding your changing strategy for glycerin in the U.S. market. And the second related to, or the second and the third related to readouts from competition, you know, position in the market. So the first, there was a specific readout on the three specific antibodies from Pfizer. in the topic of metatarsis to recognize this quarter. Just wanted to check how you're seeing this data. And the second question on competition regarding your approach in the international market. Considering the profile, how you are in the positioning, and then regarding competition. Okay. So how are you seeing that? Thanks.

Thank you very much for the question, Gilherme. I will take the question on the U.S. Clyde City and Carl will take the questions on the leaders of competitive products. So in terms of Clyde City U.S., the U.S. represents 3% of our sales. And in terms of, and again, this quarter has been impacted by exchange rate, so also taking into consideration. In terms of the strategy for pricing, it has not changed. Of course, one of the things that we are going to do is to broaden coverage to increase volume. This always comes at the expense of a little bit of a price reduction. So what we've seen here is first comes the price reduction and then comes the expanded coverage. So you should expect to see increased volumes in the next quarter if we are successful with this change or with this push in expanded coverage in the U.S.

Carl, back to you. Thanks a lot for the question and the competition. I mean, first of all, what Pfizer calls the tri-specific antibody covers IL-13 and IL-4, and we all know that, you know, maybe the IL-13 component is the more important. So, we rather think of this, of more bi-specific antibodies. There are a number of bi-specific antibodies now in early development, and this is due to the still high unmet medical need in AD and the heterogeneous nature of the disease, as Carlos mentioned. We have to see, you know, how these early data translate into later-stage data. We remain very confident on our data that we see with ATLIS. Carlos mentioned, for example, the very strong maintenance of response for up to four years, or the recent data that we have seen in the pediatric population. And also then, finally, you know, in our bispecific antibody, where we combine the ANTI-R13 approach together with an ANTI-R40 ligand approach, two validated mode of actions in acrobic dermatitis that are highly complementary. Your second question was about HS and the competitive environment. HS is a disease, again, of a very high unmet medical need, and the currently approved therapy, which are either anti-TNFs or anti-IL-17s, According to experts, only provide a limited benefit for patients, and we believe there is a lot of room for improvement. Based on, again, discussions with experts, we have chosen approaches and targets that cover more than one pathomechanism, as this is a very complex disease potentially driven by multiple and different pathomechanisms. On the one side, the anti-IL-1 rep. covers six different cytokines of the IL-1 superfamily, IL-1 alpha, beta, IL-33, and IL-36 alpha, beta, and gamma. And based on data that were achieved or shown with antibody targeting in the anti-IL one beta or the IL-36 component, we remain confident in this mode of action. On the other side, the anti-IL-21, where we are about to start the proof-of-concept study, is a mechanism that covers both B- and T-cell pathophysiology, again, covering more than one pathomechanism. With that, we remain very confident in the two assets and the mechanisms we have chosen.

Okay, just a follow-up. There's a similar, or at least also targeting of an NTI-L1 rat from Kentucky that was recently acquired by Otsuka. How is your position relative to this product?

Thank you. Yes, there is a number of assets targeting IELTS and RETS, one from Sanofi and also one from Fantasia. The Sanofi has started the phase two. We are not aware that Fantasia has already started, and we will continue with our study, I believe, with our phase two A to B seamless design. We will have a very good approach and will be able to be first with this mechanism in HS.

Thank you very much.

Thank you. We have one more question, and this question comes from Natalia Webster from RBC. Please go ahead.

Hi there. Thanks for taking my questions. I have two, please. Firstly, on your pipeline phase one to the anti-IL-13 OX40 by Pacific, I appreciate it's early days, but are you able to talk more on the opportunity you see here, particularly following data from competitor OX40 programs and how you expect this program to sit relative to your current franchise. Secondly, just curious to hear a bit more on the scope of your collaboration with HUETA and the expected financial impact from this. Thank you.

Thank you, Natalia, for the questions. I think both of them are for you, Carl.

Yes. Thanks a lot for the question. Our bispecific antibody targeting IL-13 and the OX40 ligand combines two clinically validated mechanisms for the treatment of AD. For example, it is known that the innate immune system leads to IL-13 release that is not covered by the OX40-OX40 ligand pathway. And on the other side, while Th2 cells that secrete R13 are the main driver of AD in a lot of patients, there is also other T cell population involved that then can be covered by the anti-Ox40, Ox40 ligand blockage. So we believe this combination has a chance for a broader and deeper response in ADs. As Carlos has mentioned, that AD is still an undeserved indication. Only 10 to 15% of patients who are eligible to advance therapy actually get them. We believe there is a lot of room for another therapy like this by specific antibody. Walter? I think on Quota, that is a collaboration where we, based on our activities here in Barcelona, came across a very interesting target and a novel approach for an important skin disease. We haven't disclosed details because of competitive reasons. And we have identified Huerta as a partner with very significant experience in monoclonal antibody discovery and early development. Actually, the CEO of Huerta was one of the inventors of Kyrese, which, as you know, is a very big product in the dermatology market. We haven't disclosed detailed financials, but as you can see in our press release, cumulative payments would sum up to $340 million, including upfront and milestone payments that are linked to the development and commercialization success, as well as tiered royalties.

Great, thank you.

Thank you. We are going to take our next question. And this question comes from the line of Jaime Exibano Maiz, Banco Santander. Please go ahead.

Hi. Just a follow-up question on the pipeline for Carl. Building on one of the products you just explained, so UCB has acquired Candid Therapeutics, mainly a platform which is a specific antibody directed to B cells and CD3 on T cells. The first question is if you have a view on this approach. is this similar or has something to do with the one you just explained that was targeting also B-cells and T-cells? And just a reflection for the management or for Carlos, so UCB is willing to pay 2 billion, which is like two-thirds of the market cap of Almiral for a that is in phase one, while you have several products, what do you think is missing for the market to put a higher valuation on your pipeline, which look much more advanced to buy a tech like this one? Thank you.

Thank you, Jaime, for the question. So before I pass the word to Carl to discuss the program that you have mentioned, Again, we are a specialty company focused on medical dermatology. We're probably the only company in the Western Hemisphere that has capabilities from early research to commercialization. And that's the only thing that we do. And why? Because there's tremendous unmet need. So when we look at it, we see... plenty of places, plenty of opportunities in diseases that don't have adequate treatment, and we have also the ability to come with plenty of novel scientific hypotheses and develop either programs internally or externally. And so far, our strategy is working, you can see it in our pipeline, and we've been able to either secure through licensing or through generating internal hypotheses and doing our program from scratch, right? So we do see other companies paying a lot of money for licensing opportunities for acquisitions. I can only speculate about the reasons and the market prices. But what I can confirm is that our strategy is working. We are being able to spot opportunities. We are being able to capture opportunities through licensing agreements or through generating of internal programs. And we are very, very comfortable with that strategy.

and now back to you about the the program that Jaime mentioned yes uh thanks a lot Jaime for the question uh you know this this program is a so-called t-cell engager that targets the cd910 so pathogenic t-cells and this kind of approach is targeting With CD9, CD9 is B-cell in either an oncology, so malignant B-cells, or in an autoimmune setting, so pathogenic B-cells, either through CAR T or T-cell engager, have recently gained quite a lot of attention, and we are very closely following that space. now to uh explore such a space uh and such an essay um this might be important and that might be a driver for for ucb to go beyond dermatology as you know we are focusing uh on dermatology that is that is one angle to that and i think another angle to it is that A lot of indications are not only driven by pathogenic B cells, by pathogenic T cells as well. So this is an approach that is potentially not universally applied across all of the dermatological diseases we remain interested in.

Thank you. Thank you very much.

Thank you. There are no further questions for today. I will now hand the call back to Pablo de Bazón for closing remarks.

Thank you very much, Magdalena. If there are no further questions, ladies and gentlemen, this concludes our today's conference call. Thank you for your participation. You may now disconnect.