Almirall (Madrid:ALM) Q1 2026 Earnings Call

0:00 Thank standing by. Welcome to the Almirall First Quarter twenty twenty six Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Pablo Di Vason, 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 Almirall first quarter financial results for 2026.

0:48 As always, we are sharing the slides we are using today in the Investors section of almirall.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 risks, uncertainties and other factors that may cause actual results to materially differ from what we are sharing today. Please move to Slide three. Presenting today, we have Carlos Gallardo, Chairman and Chief Executive Officer John Garai, Chief Financial Officer and Carl Sighabar, 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.

1:42 Carl will provide you with an update on the pipeline and R and D programs. John will then walk you through the financials 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. Almirall delivered steady performance in line with our expectations and market consensus in the first quarter of twenty twenty six. The results reflect the high compacted base in the first quarter of twenty twenty five, which was boosted by divestments, alongside a minor revenue phasing effects across quarters. This was anticipated and flagged at the 2025 full year results presentation.

2:32 Excluding the different effects, growth remains in line with the guidance and with the recent trends, being last twelve months net sales growth of 9% as of Q1 twenty twenty six, consistent with our 2020 sales 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.

3:18 Turning to products. ILUMEDY delivered steady double digit growth, reaching CHF 62,000,000 in sales and remains on track to peak sales of over CHF 300,000,000. With €42,000,000 in net sales, Evrys momentum picked up in the last quarter following completion of the rollout across key regions with launches in key European markets continuing to scale. With 2026 now providing a clear reflection of the product's potential, this strong performance reinforces our confidence in its positioning and long term growth prospects. Among other products, Winfora continues to be market share across key regions, while Glycidi delivered a stable sales growth overall. We remain highly active within the medical dermatology community, continuing to strengthen our presence in the field.

4:09 At the twenty twenty six American Academy of Dermatology Annual Meeting, we presented more than 15 posters featuring new data for atopic dermatitis, acne keratosis and acne. Earlier in the year, ADI hosted the seventeenth 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 pilot 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 I and we recently entered a new collaboration with Huaota to advance the development of a monoclonal antibody with potential applications across multiple indications within medical dermatology.

5:09 Karl 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, ILUMETRI net sales reached $62,000,000 marking a steady 12% year on year increase. The two year positive study results were presented at both the twenty twenty six American Academy of Dermatology Annual Meeting and twenty twenty five European Academy of Dermatology and Veterinology Congress. The data continue to highlight ILUMETRIX long term value, demonstrating meaningful real world benefits in patients' well-being and reinforcing the approach clinical and commercial relevance. ILUMETRI continues to demonstrate a solid position in the psoriasis market, maintaining market share in the leading anti IL-twenty three class.

6:00 Performance remains consistent and we therefore continue to be firmly on track to deliver over $300,000,000 in peak sales 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 Eblis Hyalgas. Since its approval in Germany in December 2023, Eblis 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.

6:49 First quarter sales more than doubled to $42,000,000 from $19,000,000 a year earlier, driven by the successful European rollout and continued scaling across key markets. Edcliz has already achieved double digit market shares in several strategic regions, alongside encouraging early traction in new country launches. This underpins our confidence in Edcliz 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 approach potential targeting the IL-thirteen 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 a main factor in picking the most adequate treatment.

7:37 Our clinical collaboration with Lilly continues to support EPI's positioning through a growing body of evidence. At the twenty twenty six American Academy of Dermatology Annual Meeting, AMELI presented extensive lebikizumab data including AD lung results showing durable disease control for up to four years. Prior to that, Lilly published their ATORABAL one 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 Karl 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.

8:26 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 L1 rep antibody into Phase II for hetradinitis suppurativa and our IL-two mutant Fc for alopecia areata. In addition, our partner Sinsere initiated a Phase II study on the IL-two mutant 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-two mutant Fc and the anti ILRAP antibody in an inflammatory skin disease.

9:20 For the anti IL-twenty one antibody, we will start a proof of concept study in heteroknife suppurativa in the coming weeks. The phase one study of our bispecific antibody targeting IL-thirteen and YOX40 ligand had just started. From those six proof of concept Phase II studies, we anticipate data readouts over the next couple of years starting end of twenty twenty six, beginning of twenty twenty seven. 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.

10:06 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 and D activities. A good example of what we intend to do is our collaboration with Huerta. We announced recently for the development of a novel monoclonal antibody in medical dermatology. For this collaboration, we proposed a target for an attractive skin disease, and Quartzar will conduct early research and initial development to deliver clinical proof of concept.

10:56 While Almirall 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 tirbanibulin applied to a larger treatment area of 100 square centimeters, the regulatory process is ongoing, and we expect launch in Europe late twenty twenty six. Together with our partners, Zanfarma and Eli Lilly, we continue advancing label expansion opportunities and generate additional clinical data for ILUMETRI and EPLISAV respectively.

11:48 Let me share some recent data on the next slide. At the AAD twenty twenty six in March this year, we presented clinical data that showed that lebrikizumab delivers long term disease controls for up to four years in patients with moderate to severe atopic dermatitis. In the at long Phase 3b study, ninety four percent of patients maintained EC75, seventy five percent maintained EC90, and sixty eight percent kept clear or almost clear skin defined as an investigator's global assessment score of one with up to four years of lebrikizumab treatment, reinforcing the sustained response achieved over time in patients with moderate to severe atopic dermatitis.

12:48 Importantly, itch relief was also sustained over the long term with seventy eight percent of patients achieving a four point or greater improvement on the pruritus numeric rating scale which measures each intensity on a scale from zero to 10. Overall, these results further reinforce the long term disease control potential of lebrikizumab in a chronic condition requiring sustained and consistent treatment. Next slide, please. The ADORATE-one Phase three study met pro primary efficacy endpoints with sixty three percent of pediatric patients achieving meaningful skin improvement EC75.

13:38 Forty four percent of patients reached clear or almost clear skin IGH-one at week sixteen. ADORA B1 is a multi center, randomized, double blind, placebo controlled Phase III trial in three sixty three children and adolescents with a moderate to severe atopic dermatitis that evaluates lebrikizumab versus placebo on top of standardized low to medium potency topical corticosteroids. 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 lebrikizumab across the full patient show.

14:33 Detailed data will be presented at an upcoming scientific meeting. We plan to use these data together with the forthcoming results of the ADORABLE-two, which is the open label fifty two week extension trial of ADORABLE one to file for an extension of the label of lebrikizumab to the pediatric population aged six months to 18 years. Finally, we initiated our Phase III study to explore lebrikizumab in patients with numeral eczema. The readout is expected in 2029. With that, I will hand over to Chun for the financial review. Thank you, Karl, for the exciting pipeline update, and good morning, everyone.

15:23 Net sales increased by 2.2% year on year in the first quarter of twenty twenty six, reaching €291,000,000 which is in line with our expectations and consensus. Last twelve months net sales growth of 9% as of Q1 twenty twenty six is equally consistent with our 2026 guidance. As Carlos mentioned earlier and anticipated in our full year 2025 earnings call, the first quarter of twenty twenty six needs to be viewed against the divestment of Algidol and out licensing of Sekisan in Q1 twenty twenty five. In addition, we also had some minor phasing of sales amongst our paid products in derma and non derma between quarters.

16:10 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 remained solid and European dermatology portfolio continued to deliver solid growth, further reinforcing Almirall'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 recurring 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 €67,500,000 reaching 23.2% of our net sales versus 21% ratio reported at year end 2025.

17:03 SG and A declined by 1% versus prior year and is expected to pick up in the coming quarters driven by phasing of our marketing and promotional activities. R and D investment reached 12% of net sales, driven by phasing of our R and 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 guidance.

17:49 Let's move to the details of our sales breakdown on the next slide. European dermatology portfolio continued to perform strongly, delivering 19.3% year on year net sales 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 sales reflected a stronger prior year base due to the Algero divestment and out licensing of Sekisans alongside the mentioned facing effect from smaller portfolio areas. Lower sales in legacy products such as Crestor, Sativex and Eclera were largely offset by contributions from Evacel and Airtab. In The United States, performance declined year on year, which we will discuss on the following slide.

18:39 In the Rest of the World, overall sales were slightly higher with solid dermatology growth more than compensated 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. ILUMETRI delivered sustained year on year growth, while Eglise further increased its contribution now with launches across all key European countries being completed. Eglise generated €42,000,000 in the first quarter, reflecting continued scaling and reinforcing our confidence in its long term growth potential. We continue to work hard to unlock the full value of the franchise from both the commercial and the R and D side.

19:27 Wizzora continued to build market share, gaining traction across core European countries. Slide three demonstrated a stable growth in Europe year on year in spite of some pacing in sales against prior quarter. Cyclopoly sales were slightly soft following a strong Q4 twenty twenty five. In The United States, overall performance declined, reflecting continued pressure on the legacy portfolio. Products such as Cordantate, Tazorac and Axon remain impacted by ongoing generic competition. Seysara 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 coverage and increase volume has put some year on year price pressure, expecting sequential quarterly improvement during the year.

20:21 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 and L. Gross margin reached 64.2% in the first quarter. Last year, 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 ILUMETRI's continued growth. SG and 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 pacing throughout the year.

21:09 As highlighted earlier, SG and A is expected to increase in the coming quarter, driven by phasing of our marketing and promotional activities. We continue to anticipate SG and A full year growth to be slower than sales growth, becoming an important contributor to our EBITDA margin expansion guidance. R and D investment represented 12% of net sales. The full year ratio of around 12.5% remains a good proxy with the normal quarterly variability expectations. 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 strength, 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.

22:09 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 Aggregates related life cycle management activities, the development milestone payment to SINCERE as IL-two fusion lithium protein progresses into Phase II and a small upfront access fee linked to the new Qualta 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 2025 Filumetric milestone is driving the reflected decrease in current liabilities.

22:56 Our net debt ratio stood at 0.1, continuing to provide us with a strong financial flexibility. The increase in net debt primarily reflects higher cash outflows related to investing activities. Let's now turn to the cash flow statement. Cash flow from operating activities reached €47,900,000 an increase for €21,000,000 compared to the first quarter of twenty twenty five, driven by working capital improvement. Cash flow from investing activities amounted to minus €72,000,000 an increase of €52,000,000 versus the same period last year. This increase largely reflects the payment of the $20.25 dollars 55,000,000 Illumetri sales milestone, which is leased into the first quarter of twenty twenty six.

23:45 I would like to highlight that this is the highest mass con 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 €3,000,000 representing an improvement compared with a minus €9,000,000 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 figure.

24:33 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 II with a further three expected to enter in the next nine to twelve months.

25:21 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 disciplined but active on capital deployment. We continue to assess selective bolt on opportunities in commercialized 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 through 2030 and a circa 25% EBITDA margin by 2028. EpiLis continues to scale across Europe, while ILUMETRI is being managed pragmatically as it moves to a more mature phase of growth.

26:12 Overall, this combination of pipeline depth, financial discipline and execution give us confidence as we continue to advance Almirall towards leadership in medical dermatology. With that, we'll conclude the presentation and turn to Pablo for the Q and A. Thank you very much, Carlos. Magdalena, back to you for the Q and A please. Thank To ask a question, you will need to press star, 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star, 11 again. One moment for our first question. And our first question comes from the line of Shan Hama from Jefferies. Please go ahead. Hello, thank you for taking my questions. Just two for me, please.

27:02 So I think acknowledged there was quite a noticeable acceleration in EPGLIS 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 Ebola? Thanks so much. Thank you, Sean, for the question. So yes, Ebblis is showing a very, very strong momentum. When you look at the recently published AD log studies, you realize it's not a surprise that we, the product achieves near complete skin clearance and its relief in up to four years, no?

27:49 So that translates into what the physicians and dermatologists are achieving treatment goals in most of the patients. And that's what's driving the success of Ablease. The vast majority of dermatologists go to an IL-thirteen 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 order of four fifty million pixels. In terms of which countries are driving, of course, we have launched in the vast majority 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 they are adding to the sales of Eplis.

28:44 So, you know, the recent performance and the recent acceleration has been driven for the inclusion of these two new important markets to the accounts where we have launched Air Lease. Thanks so much. Thank you. Our next question. Comes from the line of from Stifel. Please go ahead. Yes, hello and congrats on the results. Thank you for taking my questions. First one on the IL-two meeting at FC. So what level of clinical efficacy and differentiation would you need to see in Phase II to trigger a Phase III program in that sector?

29:32 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 Emblis. Is the pediatric population included in your guidance? Thank you. Thank you, Jaime, for the questions. I will take the latter. Yes, the pediatric indication is included in our PIXCEL's estimate. And I will refer to Karl on our very exciting IO2 program. Yes, thanks a lot, Damien, for the question. As you know, the alpha mutant 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.

30:33 Now in terms of future strategy, we of course need to wait for the data and the readout and how they look like. But I see a lot of different options that we have given the mechanism. Also in terms of more a 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 Esquimano Maiz from Banco Santander. Please go ahead.

31:22 Hi, good morning. So my first question regarding F please positioning and performance, which is being very good. But we also see all our 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 seems to be doing good? And so this would be my first question. The second one regarding ILUMETRI, we saw a decline quarter on quarter, but it's true that in Q1 twenty twenty five, we saw something similar. So maybe you can confirm how the product is doing or what the outlook in Q2? And a final question, if I may, regarding SG and A, so minus 2% year on year in Q1, which looks quite content.

32:17 What should we expect in terms of SG and 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 take the first question about that, please, and competitive dynamics. And John will take the Lumetri and the SG and A questions. So competitive dynamics in AD, I think it's important to remind what we've been saying in the last quarterly calls that this is a market that remains severely under penetrated. Only around fifteen percent twenty percent of patients that are eligible for advanced therapeutics are prescribed for advanced therapeutics. 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 to towards this growth. In terms of positioning, there's very strong consensus within the dermatology community that IL-thirteen is the key cytokine and therefore the go to product is an IL-thirteen inhibitor and why? Because they achieved the treatment goals, right?

33:36 And IL-thirty ones, they are good at dealing with itch relief, but not good at dealing with skin clearance. That's why they are more in we've seen higher use in prorego nodularis and in atopic dermatitis, they are used more as a second line or third line patients as let me remind you that this is highly heterogeneous patient population, and not all the patients always respond to a first line treatment. ILUMETRI, John, can you take ILUMETRI and SG and A, please? Thanks a lot, Carlos. Thanks for the question, Sine. If we start with ILUMETRI, yes, ILUMETRI grew around 12% in the quarter, which is aligned with the full year growth of 2025.

34:23 It's true, as you mentioned, that in Q4 twenty twenty five isolated, ILUMETRI grew a bit higher. But so far, on a full year basis, we think ILUMERITY will be continuing solidly in the range of the double digit. 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 ILUMETRI, which is in the range of EUR260 million. ILUMETRI is competing in the IL-twenty three segment, which is the leading class for psoriasis, moderate to severe. And basically, the product recently we launched the Lumetri two hundred presentation, media presentation that is performing well and is providing flexibility to the health care professional to individualized care, and we think it's one of the strengths we are bringing to the market.

35:11 Switching to the third question you raised, Jaime, which is SG and A. Yes, SG and A in the quarter declined 1% versus prior year, reaching around 21 of our net sales, is mainly driven by the phasing 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 phasing 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 twenty twenty five earnings call in February, you can expect a lower growth of our SG and A than our net sales growth, and this will become a key contributor to the margin expansion at EBITDA level. Thank you very much.

35:59 Thank you. Our next question comes from the line of Piyam Sampaio from CaixaBank. Please go ahead. Hello. Thank you for taking my questions. So three if I may. The first one, if you could provide a bit more details regarding your changing strategy for Qlik TV in The U. S. Market? And the second related to and second and third related to readouts from competition and your position in the market. So the first, there was a specific readout on the three specific antibody from Pfizer in atopic dermatitis to recognize this quarter. Just wanted to check how we're seeing this data.

36:45 And the second question on competition regarding the your products in the pharmaceutical market. Considering the profile, how are you in the positioning number 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. Glyceria and Karl will take the questions and the readouts of competitive So in terms of glyceria 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, it's something to take into consideration.

37:30 In terms of the strategy for ICB, it has not changed. Of course, one of the things that we are going to do is to broaden coverage to increase volume, right? This always comes at the expense of a little bit of a price reduction. So what we're 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 in or with this push in expanded coverage in The U. S. Karl, back to you for Yes. The Thanks a lot for the question and the competition. I mean, first of all, what Pfizer calls a trispecific antibody covers IL-thirteen and IL-four, and we all know that, you know, maybe the IL-thirteen component is the more important. So, we rather think of this as more a bispecific antibody.

38:29 There are a number of bispecific 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 this early data translate into later stage data. We remain very confident on our data that we see with Eplis. Carlos mentioned, for example, the very strong maintenance of response for up to four year 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 IL-thirteen approach together with an anti IL-forty ligand approach to validated mode of actions in atopic dermatitis that are highly complementary.

39:34 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-seventeen, according to experts, 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 part of mechanism as this is a very complex disease potentially driven by multiple and different other mechanisms.

40:28 On the one side, the anti IL-one rep covers six different cytokines of the IL-one superfamily, AL1 alpha beta, AL33, and AL36 alpha beta in gamma. And based on data that were achieved or shown with antibody targeting EENS, the anti IL-one beta or the IL-thirty six component, we remain confident in this mode of action. On the other side, the anti IL-twenty one 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 mechanism.

41:20 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, at least, also targeting an anti IL-one wrap from Catarget that was recently acquired by Atsuka. How is your positioning relative to this product? Thank you. Yes, there is a number of assets targeting IL-one 101 from Sanofi and also one from Kantasia. The Sanofi has started the Phase IIs. We are not aware that Pantascia has already started. And we will continue with our study. I believe with our Phase IIaIIb seamless design, we will have a very good approach and will be able to be first with this mechanism in HS.

42:21 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-thirteen, OX40 bispecific. 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 EdGlass franchise? Secondly, just curious to hear a bit more on the scope of your collaboration with Huata and the expected financial impact from this. Thank you.

43:14 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-thirteen and the OX40 ligand combines two validated two clinically validated mechanisms for the treatment of AD. For example, it is known that the innate immune system leads to IL-thirteen release that is not covered by the OX40OX40 ligand pathway. And on the other side, while Th2 cells that secrete IL-thirteen 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.

44:12 So we believe this combination has a chance for a broader and deeper response in AD. As Carlos has mentioned that AD is still an under deserved indication. Only ten percent to fifteen percent of patients who are eligible to advance therapy actually get them. We believe there is a lot of room for novel therapy like this bispecific antibody. Walter? I think on HOTA, that is a collaboration where we, based on our activities here in Barcelona, came across a very interesting target and another approach for an important skin disease.

45:03 We haven't disclosed the details because of competitive reasons. And we have identified 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 Tyrese, 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 US340 million dollars including upfront and milestone payments that are linked to the development and commercialization success as well as tiered royalties.

46:00 Great, thank you. Thank you. We are going to take our next question. And this question comes from the line of Jaime Exibano Maeste, Banco Santander. Please go ahead. Hi, yes, just a follow-up question on the pipeline for Carl. Building on one of the products you just explained, so UCB has acquired Candida 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. Second, does this 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, UCB is willing to pay $2,000,000,000 which is like two thirds of the market cap Almirall, while for a platform 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 biotech like this one? Thank you.

47:30 Thank you, Jaime, for the question. So before I pass it over to Carlos 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 is 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 opportunity 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 study is working. You can see it in our pipeline.

48:16 And we've been able to either secure through licensing or through generating internal hypothesis and doing our product 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 comfortable with that strategy. And now back to you, Carl, about the program that Jaime mentioned. Yes. Thanks a lot, Jaime, for the question. You know, this program is a so called T cell engager that targets CD9, so pathogenic T cells.

49:08 And this kind of approach is targeting with CD9, CD9 is B cell in either 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 very closely following that space. Now to explore such a space and such an assay, this might be important and that might be a driver for UCB to go beyond dermatology. As you know, we are focusing on dermatology. That is one angle to that. And I think another angle to this is that a lot of indications are not only driven by pathogenic T 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.

50:16 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 Besson for closing remarks. Thank you very much, Emmanuel. 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.