• Net Sales Growth: 10.2% increase in 2024.
• EBITDA: EUR192.6 million, surpassing the anticipated range of EUR175 million to EUR190 million.
• Gross Margin: 64.7% of sales.
• SG&A Expenses: EUR464.6 million, up 10% due to investments in EBGLYSS launch.
• R&D Investment: 12.6% of net sales, up 11.9% year-on-year.
• Net Debt to EBITDA Ratio: 0.2 times.
• European Dermatology Growth: 22.5% year-on-year increase.
• Ilumetri Sales: Over EUR200 million, with a new peak sales target of more than EUR300 million.
• EBGLYSS Sales: EUR33.2 million in its first year on the market.
• Operating Cash Flow: EUR160.8 million in 2024.
• 2025 Guidance: Net sales growth expected to accelerate to 10%-13%, with EBITDA projected between EUR220 million and EUR240 million.

• Warning! GuruFocus has detected 7 Warning Signs with LBTSF.

Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Almirall SA (LBTSF) surpassed its 2024 guidance, achieving double-digit net sales growth and an EBITDA of EUR192.6 million, exceeding the anticipated range.
• The company has positioned itself well in the growing medical dermatology market, with key products like Ilumetri and EBGLYSS driving significant growth.
• Almirall SA (LBTSF) has a strong R&D pipeline, with plans to initiate four proof of concept clinical studies in the next 15 months.
• The European dermatology segment showed robust performance with a 22.5% year-on-year growth, driven by biologics and other derm products.
• The company maintains a favorable net debt to EBITDA ratio of 0.2 times, allowing for potential licensing or bolt-on M&A opportunities.

Negative Points

• Almirall SA (LBTSF) faces gross margin pressure due to increased royalty tiers, particularly from Ilumetri, as sales increase.
• The US legacy business remains under pressure from ongoing generic competition, impacting products like Cordran and Tazorac.
• R&D investments are consuming a substantial portion of resources, maintaining a high level of 12.6% of net sales.
• The company anticipates continued gross margin pressure in the coming years due to the sales mix and higher royalty tiers.
• There is uncertainty regarding the impact of biosimilars entering the psoriasis market, which could affect the growth of Ilumetri.

Q & A Highlights

Q: What is the penetration of EBGLYSS in Europe, and how is Almirall addressing potential generic pressure in the psoriasis market with Ilumetri? A: Carlos Gallardo Pique, CEO, stated that EBGLYSS is capturing double-digit penetration in the naive patient segment, focusing on first-line treatments. For Ilumetri, Paolo Cionini, Chief Commercial Officer, noted that despite the entry of biosimilars like STELARA, Ilumetri remains strong due to its position in the leading IL-23 class in Europe, which is preferred by doctors and patients for its effectiveness.

Q: What are the expectations for EBGLYSS sales in 2025, and what milestone payments are anticipated? A: Carlos Gallardo Pique mentioned that while specific sales estimates for EBGLYSS in 2025 are not provided, the company is comfortable with the consensus. CFO Michael James McClellan added that milestone payments are expected to be in the $80 million to $90 million range, slightly down from 2024, excluding any new acquisitions or in-licensing.

Q: What are the implications of Almirall's midterm guidance for EBGLYSS and Ilumetri sales, and is there a plan to increase shareholder remuneration? A: Michael James McClellan explained that annual investments in milestones are expected to be around $80 million for the next few years. Regarding shareholder remuneration, Carlos Gallardo Pique indicated that more details would be provided during the AGM in May.

Q: Why is R&D investment remaining high, and what is the expected impact on gross margins? A: Carlos Gallardo Pique and Karl Ziegelbauer, Chief Scientific Officer, explained that R&D investment supports the development of early-stage pipeline assets and proof of concept trials. Michael James McClellan noted that gross margins are expected to face 30 to 50 basis points of pressure in 2025 due to increased royalty rates, particularly from Ilumetri.

Q: What is the timeline for data readouts from the proof of concept studies in the early pipeline? A: Karl Ziegelbauer stated that the proof of concept trials, starting within the next 15 months, typically take one to two years, suggesting data readouts could be expected within that timeframe.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.