Transcripts
Almirall, S.A. (LBTSF) Q1 2023 Earnings Call Transcript
Operator
[Operator Instructions] The first question from Jo Walton from Credit Suisse.
Jo Walton
A few questions, please. Firstly, on Ilumetri, you pointed to a biosimilar launch impacting in February. I wonder if you could tell us a little bit more about that, whether that’s something that is permanently going to reduce your price in some way? On Klisyri, can we just confirm that if you are going to be able to file in the third quarter, it should be a 6-month review so we should see in probably mid of 2024 your ability to launch Klisyri large field in the U.S. And just to confirm that effectively with the positive tolerability, there’s nothing else you need to do in the U.S. We understand there’s more that you need to do in Europe. On Seysara, you’re going to be able to file in 3Q, have you made any more decision on how you will commercialize that? You’re going to file before you have a partner or could we see a partner being brought in quite quickly? And on lebrikizumab, you talk about recruiting a long-term extension study. Will that have an active comparator in that and is there anything you can tell us? You say that you are discussing with Lilly more studies that you might do. Can you give us some idea of what those might be? And my final lebri question is just to confirm that you haven’t had any significant clock stoppage within the EMEA and that we should be able to see a full approval in the fourth quarter. So could you give us perhaps your best guess of which months we’ll see the CHMP decision on it?
Carlos Gallardo
Thank you very much for the questions, Jo. I think that most of the questions are for either Mike or Karl. So I think the first one was the…
Mike McClellan
Yes, I can take the first one on Ilumetri. What we were referring to is on the Slide #9, you can see in the month of February there’s a slight tick up for the anti-IL-17 class in Germany. It’s mainly coming from the older classes and that was because of a biosimilar launch of 1 of the IL-17 class products. It really hasn’t affected the momentum of Ilumetri, it’s just something that we wanted to point out on that slide. For Klisyri, I’ll pass that over to Karl.
Karl Ziegelbauer
Thanks for your question, Jo. I mean in Klisyri, we have the situation that in the U.S. we had an agreement with FDA for the expansion to large field to have a clinical program containing a PK study that we already completed earlier and an open label, safety and tolerability study where we just reported a positive outcome. Based on that, we plan a submission for Q3 this year and then expect an approval in 2024 maybe around midyear or so, but we’ll have to see what the exact timelines will look like.
Mike McClellan
And in terms of Seysara China, we’re actively looking at potential partnerships. It’s a little too early to say if we will announce and sign something before the filing or not, but we are definitely in active discussions to find the right partner in China.
Karl Ziegelbauer
For lebrikizumab, I think your first question was around this long-term extension. I mean this long-term extension is basically a study where we will try to the extent possible to move patients from our Phase III studies into extension study because they have been already treated with lebrikizumab for up to a year. With that design, there is maybe not so much to think about an active comparator for this type of study. Now for additional studies, we’re looking very broadly based on excellent properties of lebrikizumab and the data we have seen so far, what other studies that would potentially make sense. We have already covered a broad spectrum of different patient populations.
Now for example with the ones we reported today, the ones that are not adequately controlled by cyclosporine A. As you may know, Eli Lilly is doing a dedicated study in patients of [indiscernible] and patients that have been pre-exposed to the extent. Those are I think important studies and important patient population. A pediatric study is also ongoing. And in addition to that, we are exploring various other options, but today it’s a bit premature to comment on the detail. And then your final question on lebrikizumab in terms of the regulatory process, I think what we can say today that the regulatory process is on track and we expect an approval in Q4 this year. In terms of an exact month, that I think is a bit premature to comment on.
Operator
The next question is from Alistair Campbell from RBC.
Alistair Campbell
Just two, please. First of all, a question for Mike, just on the tax rate. Obviously your guidance elements are all pretax. So I’m just wondering if you can give me some kind of sense of how you think the net tax rate would look for the full year. Obviously it looked very high in Q1. And then quick question for Karl on just the general acts of the market. Just some thoughts on the competitive landscape. I think since the last time we spoke, we’ve seen for instance data from Roivant on the tapinarof cream. So just your sense of how some of those other competitive dynamics are reading out and what you think about that relative to the lebrikizumab, please.
Mike McClellan
So I’ll take the first question on tax rate. When we gave the guidance, we did indicate that the tax rate was going to be elevated because of the situation in the U.S. and I would expect the tax rate to remain elevated around the level that we saw in the first quarter. Too early to tell. It really depends on exactly how the income falls between the different buckets, the U.S. and the EU. But I think the first quarter is already a good indication of a relative rate.
Karl Ziegelbauer
I think on the competitive landscape on AD, perhaps a couple of thoughts. First of all on the jak inhibitors, we are now seeing that the European evaluation of the safety is being completed basically indicating that there are concerns about the broad utility of jaks and actually the BRAC has recommended if alternatives are available in certain patient populations to use those and the interesting piece is it’s for all jaks in all indications. This is for patients that are older than 65 or have certain risk factors for example in cardiovascular or also at risk of thrombosis, things like that. So that certainly will in a way limit jak inhibitors. We have to see to what extent. Now in terms of other biologics, we see the anti-IL-31, but those are mainly targeting the itch but not the eczema and we believe to effectively treat AD, both aspects need to be covered like we’re seeing with lebrikizumab.
And then maybe a comment on the anti OX40s. Here we have 2 advanced compounds, 1 targeting of OX40 from Sanofi, this is perhaps a little weaker in terms of early data as compared to dupilumab. And the other is from Amgen targeting the OX40. They are now advancing into Phase III, including in every 8 week schedule. At the end, we have to see how the data will look like. There has been [Technical Difficulty] to the immune system. But in essence, I think it’s too early today to comment. Overall, we still think that we are very well positioned with lebrikizumab and with the profile that we’re seeing and we believe we will be very competitive in that space.
Operator
The next question from Francisco Ruiz from BNB Paribas.
Francisco Ruiz
I have 3 questions for me. One is a follow-up on the tax rate. Taking into account the tax rate on the P&L, we will see a similar cash tax in the cash flow statement on this. The second one is if you could give us more detail on the milestones this quarter and if you could anticipate what is the milestone that we could expect lebri approval at the end of the year? And last question is on SGA. We have seen that the cost has been performing better than sales, but you commented that you expect an acceleration during the year due to the launches of the new products. So could you quantify what could we see the SG&A at the end of the year?
Mike McClellan
Yes. So on the tax rate, I mean the cash tax will probably be very similar to the last year. It really depends on whether or not we get a Q4 refund from the Spanish authority. Sometimes it’s Q4, sometimes they push that payment into January. So that will have a little bit of effect on the cash tax, but we’re expecting it to be very similar to last year. In terms of the milestones, I mentioned the key buckets. So we had an extension payment for the Efficib/Tesavel, we purchased the Physiorelax asset and then we had some milestone payments related to Klisyri as well a payment on Ilumetri for participating in the psoriatic arthritis trial that Sun is doing to try to get an approval there.
So for the full year, I would expect this to be roughly in the EUR80 million to EUR100 million range in terms of investments absent any new bolt-on acquisitions or major licensing we do. If we do anything that’s not been contemplated right now, that could go a little bit higher. But we’ll manage that and we’ll try to manage the communication. The lebri milestone is expected to be around EUR20 million at the end of the year for the approval in the EU. In terms of SG&A, when we gave the guidance we talked about mid-single digits. We expect that still to be for the full year. If you look in the Q1, it was only about a 2% increase so that will accelerate. Partially as we start to get ready for the lebrikizumab, we will be putting more resources particularly into Europe in the second half of this year. So that’s where you’ll start to see the acceleration.
Operator
The next question from Guilherme Sampaio from CaixaBank.
Guilherme Sampaio
So 3 questions if I may. The first one, net sales growth was slightly above the guidance for this year in Q1. If you could provide some color on the percentages for the remainder of the year. Second, there was some quarter-on-quarter slowdown in Klisyri. There was not a lot of seasonality in [summer], just whether you could provide some color on what are the drivers of the slowdown? And third, if you could provide some color on the ADvantage efficacy data?
Mike McClellan
Sorry, the third question. ADvantage, okay. So let me take the first 2 and I guess Karl, you can take the third one. So we had a good quarter, we were slightly above. We saw some good seasonality particularly in Spain. We had about EUR3 million year-on-year gain in the cough and cold. We also saw a good seasonality from the allergy products. We still feel confident with our low to mid single-digit sales growth for the year. Let’s see how the remaining quarters will play out, but I think we’re in good shape so far. Klisyri did go down a little bit quarter-on-quarter, but Q4 is typically a higher quarter for the treatment of actinic keratosis, particularly in the U.S. You come off the summer sun and a lot of people go in to get treatment in the fall and winter. So that’s just a little bit of a seasonality, it’s not a huge amount. So that we would expect to see that pattern going forward as well. And then, Karl, if you want to take ADvantage.
Karl Ziegelbauer
Thanks for the question. The Advantage trial, as mentioned, is a trial to explore efficacy and safety of lebrikizumab in what you can call a hard to treat patient population. These are patients that have been treated with cyclosporine A already and still need further treatment or for whom cyclosporine A is medically not advisable. This trial has a size of about 300 patients of adults and adolescents. It also includes patients that have been pre-exposed to DUPIXENT. So we learn more about this population as well. Been exposed to DUPIXENT, in addition having failed on cyclosporine or for which medically this is not advisable. The primary endpoint was after the induction phase at Week 16 and it’s patients achieving an easy 75. This primary endpoint was met in this and detailed data, as mentioned, will be then presented at 1 of the scientific meetings later this year.
Operator
The next question from Jo Walton from Credit Suisse.
Jo Walton
Just a follow-up. You mentioned in the ADvantage study that some patients have had a pre-exposure to DUPIXENT. Can you give us an idea of how big that group is and whether you’ll be able to call that that out with specific detail and publish that before you get the chance to launch the drug so that you can use that with your marketing?
Karl Ziegelbauer
Well, yes, happy to talk about that. I mean that was a smaller portion as if the patients need to meet both criteria and are more I think difficult to get. We are in the process of analyzing all the detailed data that we received. We are reporting today just the top line and, as mentioned, we will publish those results in a scientific congress later this year.
Operator
There are no further questions at the moment. I will hand back the conference over to Mr. Pablo for closing remarks.
Pablo Divasson
Thank you very much, Roberto. We are now going to close our Q&A session. And with this, we will conclude our conference today. We want to thank you for your participation. You may now disconnect.