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Operator: Good day, and thank you for standing by. Welcome to the Almirall Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Pablo Divasson, Head of Investor Relations. Please go ahead.
Pablo Divasson Fraile: Thank you very much, Sandra, and good morning, everyone. Thank you for joining us for today's quarterly earnings update and review of Almirall's full year financial results of 2025. As always, we are sharing the slides we are using today in the Investors section of our website at almirall.com. Please move to Slide #2. 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 #3. Presenting today Carlos Gallardo, Chairman and Chief Executive Officer; Jon Garay, Chief Financial Officer; and Karl Ziegelbauer, Chief Scientific Officer. Carlos will start with the guidance and business highlights of 2025, followed by an update specifically on biologics and the key growth drivers of our Medical Dermatology portfolio. Karl will provide you with an update on the pipeline and R&D programs. Jon will then walk 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 #5.
Carlos Gallardo Piqué: Good morning to everyone in the call. Before turning to the highlights of the year, I'm pleased to report that we met our 2025 guidance in line with our midterm outlook. For 2025, we guided for net sales growth of 10% to 13% and delivered closer to the upper end with 12.4%, bringing net sales to EUR 1,108 million. On profitability, we expected EBITDA in the range of EUR 220 million to EUR 240 million and we closed the year at nearly EUR 233 million, comfortably within the range. Turning now to 2026. I'd like to share our guidance, which remains aligned with our medium-term targets. We expect net sales growth of 9% to 12% and EBITDA in the range of EUR 270 million to EUR 290 million. With that, let's revisit our midterm guidance on the next slide. We are pleased to reiterate our midterm guidance, which remains unchanged. Between '23 and 2030, we expect to deliver a double-digit compound annual growth rate in net sales and reached an EBITDA margin of around 25% by 2028. Together with the new 2026 guidance, this confirms our confidence in both short and medium term. Please turn to the next slide on the 2025 highlights. Almirall delivered solid performance in 2025, in line with our expectations, exceeding for the first time EUR 1 billion in net sales. Growth is supported by successful commercial and operational execution, particularly in the sales of biologics. We continue to deliver innovative treatments, broaden access for patients and support our physician community. Ilumetri continues to deliver steady growth, reaching EUR 234 million in sales and is on track to achieve peak sales of over EUR 300 million. Ebglyss maintained a strong momentum during 2025 as the rollout is now complete in all key European geographies and these markets begin to scale. The good performance reinforces our confidence in the product's positioning and growth potential. Regarding our products, Wynzora keeps its leading market share in key countries, while Klisyri maintains a strong performance across Europe. During 2025, we have focused on continuing the development of our strong presence in the Medical Dermatology field. We presented at major events such as the 2025 Annual AAD Meeting, and we reinforced our presence at the 2025 European Academy of Dermatology and Venereology Congress in Paris. On the clinical side, we are excited about the new developments in our pipeline. We have initiated 3 Phase II proof-of-concept studies and 3 other PoC studies are on track to enter Phase II in the upcoming quarters. Most of these assets are either first or best-in-class. Karl will soon provide a full update on the recent developments in our pipeline. Please move on to Slide 9 for our -- for an update on our biologics portfolio. In 2025, Ilumetri net sales reached EUR 234 million, representing a steady 12% year-on-year increase. The brand continues to perform consistently, and we remain firmly on track to deliver the more than EUR 300 million peak sales in net sales, even as both the product and the IL-23 class move into a more mature phase of their growth cycle. Ilumetri remains well positioned within the psoriasis market, maintaining its market share and remains one of the leading therapies within the class. The successful launch of the 200-milligram formulation provides enhanced dosing flexibility for patients, thereby strengthening the product's competitive profile and supporting long-term growth. Additionally, the 2-year positive study results presented at EADV 2025 further demonstrate Ilumetri's long-term value, highlighting meaningful real-word benefits in patient's wellbeing and reinforcing the product's clinical and commercial relevance. Please move to the next slide on Ebglyss highlights. Ebglyss continues to be the most successful atopic dermatitis launch in recent years. Since its approval in Germany in December 2023, it has quickly become our second best-selling product. The advanced therapy segment in AD across the EU5 nations continues to expand rapidly at around 30% growth annually. Full year sales more than tripled to EUR 111 million, up from EUR 33 million in 2024, reflecting the successful European rollout with healthy scaling across all key markets and encouragingly early traction in new country launches. This gives us a strong confidence in Ebglyss as a major growth driver in the coming years. Patient and physician acceptance along with good commercial and operational execution have been key elements to achieve this result. Clinically, our collaboration with Lilly remains highly productive. At EADV in 2025, we presented a wide set of Lebrikizumab data, including real-world evidence, long-term results up to 3 years, patient-reported outcomes and safety data, all showing rapid and sustained efficacy and reinforcing its differentiated profile. Please turn over to the next slide. We are working closely with our partner, Lilly, to build a growing data set for Ebglyss through a series of synergistic post Phase III studies on lebri. The objective is to strengthen the evidence base through life cycle management, supporting broader patient access, expanding our market presence and exploring additional indications for these advanced treatment. As part of this effort, Almirall recently initiated a new Phase III study in nummular eczema. Karl will provide you with additional details in the following section. Additionally, we will be conducting a face and neck study on lebrikizumab to further strengthen the profile of the product. Let me turn it over to Karl for the pipeline update.
Karl Ziegelbauer: Thank you, Carlos, and good morning to everyone on the call. This slide gives an overview of our life cycle management activity for products that are already commercialized. And I would like to highlight the progress we made in recent months. Seysara was approved in China end of last year. We have also signed a partnership agreement with Sinomune to commercialize Seysara in China, strengthening our presence in this important market. Together with our partners, Sun Pharma and Eli Lilly, we continue to advancing label expansion opportunities for Ilumetri and Ebglyss respectively. Carlos has already shown what we expect in terms of clinical data flow for lebrikizumab. The next readout will be the week 16 data of the ADorable-1 study, which we expect to share in the coming weeks. ADorable-1 explores the safety and efficacy of lebrikizumab in pediatric patients with moderate to severe atopic dermatitis. As mentioned earlier, Almirall will also explore lebrikizumab in ADorable-1 nummular eczema. Next slide, please. Nummular eczema is a chronic inflammatory disease with a high unmet medical need. Today, treatment is largely limited to topical therapies, which often fail to provide adequate disease control, and there are currently no approved systemic treatment options. IL-13 is hypothesized to be a central cytokine, not only for atopic dermatitis, but also for nummular eczema. Given the proven efficacy of lebrikizumab in atopic dermatitis, we believe there is a strong rationale for meaningful symptom relief and quality of life improvement in patients with nummular eczema. We expect to start enrolling patients in Q2 2026. Next slide, please. This slide shows you the status of our early and mid-stage pipeline. Today, we have 3 proof-of-concept Phase II studies ongoing with 3 additional studies planned over the next 12 months. In 2025, we progressed our anti-IL-1RAP antibody into Phase II for hidradenitis suppurativa and our IL-2 mutant fusion protein for alopecia areata. In addition, our partner, Simcere, initiated a Phase II study of the IL-2 mutant fusion protein in atopic dermatitis. As a reminder, we retain global rights for this asset outside Greater China. Looking ahead, we plan to initiate 1 additional proof-of-concept study each for the IL-2 mutant fusion protein anti-IL-1RAP antibody in an inflammatory skin disease. The anti-IL-21 antibody we plan to explore in hidradenitis suppurativa. We also expect our bispecific antibody for atopic dermatitis to move into Phase I in the coming months. Furthermore, we have started preclinical development for an oral small molecule targeting Th2 diseases and a new approach using mRNA/LNP technology for non-melanoma skin cancer. Let me show some more details on the most advanced projects on the next slide. For hidradenitis suppurativa, we have 2 programs. The anti-IL-1RAP antibody has recently entered Phase II and the anti-IL-21 antibody is expected to start proof of concept in the coming months. The anti-L1-RAP antibody blocks anti-IL-1RAP inhibit signaling across the IL-1, IL-13 and IL-36 pathway. Inhibiting these pathways concurrently is intended to support deeper suppression of the inflammation and the relevance of the IL-1 and the IL-36 pathways in hidradenitis suppurativa is supported by existing clinical evidence. The second program targets IL-21 and is designed to modulate both B and T cell activity. We believe that this dual strategy targeting 2 distinct inflammatory pathways has the potential to provide meaningful differentiation compared to current treatment. Please change to the next slide. The IL-2 mutant fusion protein has entered Phase II development in alopecia areata. Alopecia areata remains an area of high unmet medical need with fewer than 30% of patients achieving a satisfactory symptom response with currently approved therapy. The disease has a prevalence of approximately 0.1% to 0.2%, a lifetime incidence of around 2% and 44% of cases are moderate to severe. It is also the third most common dermatosis in children. IL-2 mutant fusion protein is designed to selectively expand regulatory T cells with the aim of rebalancing the immune system. This mechanism is intended to support immune tolerance, addressing the underlying autoimmune component of the disease rather than only its symptoms. From those 6 proof-of-concept Phase II studies, we anticipate data readouts 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 approaches. In summary, our investment over the past few years is beginning to translate into tangible progress in our pipeline. With that, I will hand over to Jon for the financial review.
Jon U. Alonso: Thank you, Karl, for the update on our R&D programs and pipeline, and good morning, everyone. As Carlos mentioned earlier, company's consistent execution continues to translate into solid tangible results. In 2025, Almirall delivered a strong performance with net sales growing over 12% year-on-year, achieving our 2025 guidance. Our European dermatology portfolio remained the key growth engine, further reinforcing Almirall's path towards leadership in Medical Dermatology. Gross margin for the year reached 64.4%, reflecting continued royalty pressure from Ilumetri royalties, partially offset by the Q1 2025 divestment. EBITDA came in at EUR 233 million, up 21% year-on-year, driven largely by strong top line growth that outpaced SG&A increase. As expected, SG&A increased 7.9% to EUR 501 million with Q4 reflecting the previously announced uptick. R&D investment grew by roughly 11%, representing 12.5% of net sales, fully aligned with our annual targets and guidance. We closed December with a net debt-to-EBITDA ratio of 0. During the final quarter, we successfully completed the issuance of a new high yield bond at a 3.75% interest rate, a level that reflects the strong trust Almirall has built among financial markets. Company long-term credit rating by Standard & Poor's was improved to BB+, very close to investment grade. Our strong balance sheet gives us meaningful flexibility to pursue licensing opportunities and targeted bolt-on acquisitions as and when attractive opportunities arise. Overall, these results strengthen our confidence in delivering full year 2026 guidance and the midterm outlook we shared earlier. Let's move now to the details of our sales breakdown on the next slide. The European dermatology business delivered a strong performance with net sales up 25.6% year-on-year in 2025. Additional details will be shared on the next slide. In general medicine and OTC, European sales included the divestment of Algidol and the out-licensing of Sekisan. A softer allergy season for Ebastel and lower sales of cardiovascular products such as Crestor, were largely offset by a solid contribution from Eklira Performance in the U.S. declined and further details will be shared on the next slide. In the rest of the world, overall sales were broadly stable with rapid growth in dermatology offsetting a decline in general medicine. Let's take a closer look at the dermatology business on the next slide. Our European dermatology business continued to prosper positively. Ilumetri maintained its healthy year-on-year growth, while Ebglyss further strengthened its role as our primary growth engine. At the same time, we continued to build relevant market share for Klisyri and Wynzora with bought products continuing to gain traction across key European markets. Ebglyss delivered EUR 111 million in 2025, beating slightly consensus as European markets continue to scale up following launches in all key countries. This performance reinforces our confidence in its robust long-term growth potential. Across the rest of the portfolio, Ciclopoli sales remained broadly stable and Skilarence posted a solid improvement versus 2024. In the U.S., performance declined year-on-year. While Klisyri's large field launch continued to deliver some growth, these gains were offset by ongoing pressure on the legacy portfolio. Products such as Cordran, Tazorac and Aczone remain affected by persistent generic competition. In addition, Seysara sales declined, driven mainly by intensifying competition in the oral antibiotic segment for acne. In the rest of the world, dermatology sales increased year-on-year, supported by portfolio momentum and a minor contribution related to the recent Seysara partnership agreement in China. Overall, the performance of our dermatology franchise remained strong. Let's now review the remaining elements of the P&L, starting with some of the ones mentioned earlier. Gross margin came in at 64.4% in 2025, 30 basis points lower than prior year, reflecting margin pressure mainly due to higher royalty tiers associated with Ilumetri's growth. R&D spending represented 12.5% of net sales, broadly in line with last year and guidance. SG&A expenses increased 8% year-on-year, driven by ongoing support for Ebglyss launch across new markets and continued investment behind our key brands. As we highlighted previously, SG&A picked up in the final quarter due to some seasonality in the second half and ended align with expectations. Financial expenses improved versus last year, supported by a EUR 12 million positive impact from the equity swap valuation, reflecting share price gains year-to-date. Finally, our effective tax rate ended at 38%, an improvement by 24 basis points versus prior year, 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 very stable in 2025 compared with previous year. Capital expenditure were elevated in the final quarter, mainly reflecting the Ilumetri sales milestone of nearly EUR 50 million recently extended collaboration agreement with Simcere, capitalization of Ebglyss R&D programs and pipeline progress achieved in prior quarters. This increase was more than offset by higher depreciation, which resulted in a decline in goodwill and intangible assets. Our net debt ratio remains close to 0, providing us with a strong financial flexibility to pursue inorganic growth opportunities. The reduction in net debt primarily reflects solid cash flow generation in the third quarter. Let's take a look at the cash flow statement next. Company's free cash flow more than doubled in 2025 compared to last year. Cash flow from operating activities reached EUR 174.5 million, an increase of EUR 17 million versus prior year. It was mainly driven by a more than twofold increase in profit before taxes, partially offset by higher working capital needs linked to the growth in biologics volumes with the rollout of Ebglyss in Europe. Cash flow from investing activities was minus EUR 127 million, an improvement by EUR 13 million compared to the previous year. It reflects lower investment outflows versus prior year, which included the EUR 45 million Ilumetri sales milestone as well as milestone payments related to Ebglyss, Wynzora and pipeline progress. Cash flow from financing activities amounted to minus EUR 87 million, representing higher outflows versus the minus EUR 31 million recorded in 2024. The difference is mainly explained by the refinancing of the senior notes where the variance in nominal amounts combined with issuance costs had an impact of roughly EUR 55 million. In addition, we recorded a higher cash dividend selected by shareholders, which was partially offset by the positive EUR 12 million equity swap impact supported by the increase in our share price. I will now give some more color on our 2026 guidance. We anticipate quarterly performance to strengthen progressively as the year advances. In the first quarter, in particular, while being positive about the underlying growth of our business, we are going to face a tough comparison considering the divestment of Algidol and out licensing of Sekisan during the first quarter last year. Regarding the details of the 2026 guidance, I would like to outline some assumptions used regarding the rationale behind provided ranges. As in every other year, we have 4 main elements that may impact both net sales and EBITDA. Firstly, the speed and level of penetration of biologics in the overall market; secondly, underlying market growth and competitive dynamics; thirdly, performance of the legacy portfolio; and lastly, potential opportunities that may arise through portfolio management strategy. Any changes in these elements may influence the performance within the reasonable range we have announced this morning with 10.5% as a midpoint of net sales growth at EUR 280 million as midpoint of EBITDA level for 2026. Other than that, we are positive about ongoing performance of the business and confident in delivering a good set of results for 2026, driven mostly by our newer products and biologicals. We feel comfortable with market expectations for our biologics in 2026. Checking Bloomberg or Visible Alpha sources, Ilumetri seems to be in the range of EUR 260 million and Ebglyss seems to be in the range of EUR 180 million to EUR 190 million. At the same time, we reiterate our midterm guidance of double-digit CAGR growth in the period 2023 to 2030. In 2026, we will continue to experience a slight gross margin pressure given increasing royalty rates, particularly for Ilumetri. R&D investment is expected to stay at the level of 12% to 12.5% relative to net sales. And in 2026 and going forward, we continue expecting net sales to grow faster than the SG&A as we have seen in 2025, now Ebglyss has already been launched across Europe. Regarding the tax rate in 2026, it should continue going down towards the mid-20s target by 2028 as a strong increase in the group's overall profitability materially reduces the relative impact of our U.S. business at consolidated level. With this, I would like to thank you all for your attention this morning. I will pass the word to Carlos for his closing remarks.
Carlos Gallardo Piqué: Thank you, Jon. Building on the strong achievements of 2025, let me highlight the momentum we are now carrying into 2026 across our biologics pipeline. We are well positioned to lead in an expanding dermatology market, supported by a broad and highly relevant portfolio. Our pipeline includes disruptive potential programs across immune-mediated skin diseases, rare dermatology and non melanoma skin cancer. Today, we already have 3 studies advancing through proof of concept and Phase II with 3 additional programs expected to start in the coming quarters. That gives us strong scientific foundation and a clear path to sustainable value creation. At the same time, we continue to evaluate opportunistic bolt-on acquisitions in commercialized assets and remain active in pursuing early-stage licensing opportunities in promising advanced therapies. Importantly, we are turning strategy into results through rigorous execution. Having delivered fully on our 2025 guidance, we remain firmly on track to achieve our midterm targets of double-digit sales growth and a 25% EBITDA margin. The Ebglyss launch continues to scale strongly across Europe, while we effectively manage Ilumetri's transition into its more mature growth phase. We are committed to shaping leadership in Medical Dermatology in Europe, turning innovation into growth and delivering lasting value for patients and shareholders. With this, we conclude the presentation, and I hand it back to Pablo for the Q&A session.
Pablo Divasson Fraile: Thank you very much, Carlos. Sandra, back to you for the Q&A, please.
Operator: [Operator Instructions] And the first question comes from the line of Shan Hama from Jefferies.
Shan Hama: Two from me, please. So firstly, what is factored into the top and bottom end of the net sales guidance for 2026? And then secondly, if I can push you a little bit, why is the bottom end of the guide 9% when the midterm guide is double digit? Is there any way you can reconcile that?
Carlos Gallardo Piqué: Thank you, Shan, for the question. Let me for this color, I think Jon can take this question.
Jon U. Alonso: Absolutely. Thanks a lot, Carlos, and thanks a lot Shan, for your question. I think both questions can be replied basically into one for the low range. As you know, usually, the management portfolio strategy is part of our guidance. But as I have said during my script, in Q1 2025, we had the opportunity to execute 2 transactions. One was the divestment of Algidol and the other one was the out licensing of Sekisan computing for around EUR 12 million in Q1 2025 and around EUR 15 million on a full year basis. In order to be able to overcome the double-digit growth, we also need to replicate these 2 transactions or even more to compensate that amount of volume. So this is what it makes the lower range guidance that perhaps we are not able to close this year 2 transactions in the same way. Moving to the higher range, basically means a the other way that we are able to close 2 or even one, but basically that we are able to accelerate Ilumetri and Ebglyss further in the high range of provided guidance. These are basically the main levers for the low and the range, Shan.
Operator: We will now take the next question from the line of Francisco Ruiz from BNP Paribas.
Francisco Ruiz: I have 3 questions, very quick ones. The first one is, if you could give us an update on your peak sales that you expect on Klisyri and Wynzora, now they are gaining some weight on your P&L. The second one is, if you could give us some detail on Seysara's partnership in China and how much will contribute in the future for you? And then there are some question on modeling. I mean you commented on reducing the tax rate towards the 20% target. Could you give us some more detail for next year and also the milestone payment that you're expecting in '26 and '27?
Carlos Gallardo Piqué: Francisco, thanks for your questions. So we are not providing a review on peak sales projections for Klisyri and Wynzora at that stage. I think both brands are progressing extremely well. We're happy with the progress, particularly in Europe. Seysara partnership, we are pleased of the approval. We're pleased of the partnership. The contribution at that stage, we prefer to be prudent, and we think it's going to be modest. And the modeling part, I'll pass it to Jon. I'm sure he will be -- he will do a much better job than me.
Jon U. Alonso: Yes. Can you please repeat the question about the modeling part, Francisco?
Francisco Ruiz: Yes. I mean -- so one is about the tax rate for next year, although you say that we should see 20% or mid-20% in the medium term, but for next year more specifically. And also on the milestones cash out as we should expect in '26 and '27?
Jon U. Alonso: Yes. Thanks. So regarding the effective tax rate, yes, during my script, I have said the expression that by 2028, we expect to be in the range of mid-20s, and we will continue going into that direction. Guidance for 2026, we should expect a reduction at least I would say, mid-double digits is our intention to go in that path as we increase the group overall profitability. Regarding the other aspect about the CapEx payouts, reasonable investment CapEx, excluding recurring CapEx, will average around EUR 70 million to EUR 75 million in the upcoming years, excluding potential additional in-licensing deals. Basically, this covers milestones for in-licensed assets. When we talk about ordinary CapEx, ordinary CapEx are expected to be in the range of around EUR 70 million to EUR 80 million in 2026 and then go down in the upcoming years as we have some ongoing post Phase III studies that are capitalized, as Carlos has mentioned during his script, together with IT projects, industrial CapEx and other minor tax.
Operator: Thank you. We will now take the next question from the line of Jaime Escribano from Banco Santander.
Jaime Escribano: A couple of questions from my side. In terms of gross margin, what should we expect based on the product mix? I guess, Ebglyss and Ilumetri licensed products are putting a little bit of pressure there. And my second question would be on Almirall legacy. So there is a EUR 12 million one-off in 2025. So in 2026, what should we expect from the rest of the portfolio? If you can give us a little bit of color on the different moving parts there?
Carlos Gallardo Piqué: So let me take the second question, and then I'll pass it to Jon for the gross margin question. So as we have shared with you on a number of occasions, we have a big product portfolio on the legacy bid. Our goal is always to keep an optimization strategy. That meaning if we see an opportunity to acquire something where we can add value, we do so, as we did 2 years ago. But also if we think that we are not the best owners of a certain asset because we are not promoting it and someone comes in and offers us a superior value than the value that it has in our hands, then also we divested it. And this is the case that we've done in Q1 last year. So it's difficult to make projections on this because this is business development. But our strategy will be to keep optimizing this portfolio, and it might entail some maybe small minor acquisitions or might entail some, again, divestitures. But it's difficult to anticipate any specific transaction at this point. Jon, do you want to take the gross margin question?
Jon U. Alonso: Thank you very much, Carlos, and thanks for your question, Jaime. So regarding the gross margin expectation for next year, please let me start saying that the gross margin, you may appreciate in Q4 has been lower than expected, and it doesn't represent what you should be expecting. The margin in Q4 came in at 62.8% as a consequence of an accrual to cover potential inventory write-off related to quality observation in some time batches for minor products. Having said this, that this is a one-off, we should expect certain pressure taking the margin down for next year. We don't disclose guidance, but in my earnings call of Q3, I said that the Q3 margin we disclosed could be a good proxy for next year, something in the high 63% could be used as a base. And then coming back to the point of the EUR 12 million milestone you have commented, I linked to this in the reply to Shan, that we need to overcome it to be able to deliver double-digit CAGR growth this year as well. And that's why we have provided the range. But having said that, let me reiterate that we are fully convinced about the 10.5% midpoint of guidance on net sales we have provided this year. We feel comfortable with the market expectation for 2026 is for our biologics, Ebglyss and Ilumetri, and we reiterate the midterm guidance of double-digit CAGR growth between the period 2023 to 2050.
Operator: Thank you. We will now take the next question from the line of Guilherme Sampaio from CaixaBank.
Pablo Divasson Fraile: Guilherme, this is Pablo. We cannot hear you. We cannot hear you very well.
Guilherme Sampaio: Hello? Yes, is this better?
Pablo Divasson Fraile: Yes, no better.
Guilherme Sampaio: Okay. Sorry. So the first one is for Karl. If you can comment on the relevance of IL-13 in the cascade of nummular eczema versus atopic dermatitis? And then 2 ones related to financials. The first one in terms of phasing of the growth for next year, I already mentioned that Q1 is going to be below the average. Just wanted to understand how do you expect this to evolve in the remaining quarters? And the third one, if you could provide a bit more details in terms of Klisyri. So there was some step-up in terms of sales in this quarter. Just wanted to understand how this should unfold over the coming quarters.
Carlos Gallardo Piqué: Karl, you can go straight to question.
Karl Ziegelbauer: Thank you, nummular Guilherme, for the question. I think that nummular eczema is a disease that is different from AD, sometimes there is certain comorbidities or certain coherence and it's characterized by pruritic discoid shape, well-demarcated, you know, some of the most lesions that are frequently occur both on the arms and the legs. IL-13 is hypothesized to be a key cytokine in both indications. And therefore, we believe that we have a good chance to see with lebrikizumab a meaningful treatment effect in this patient population. It is a disease where the prevalence is estimated between 0.1% and 9%. So there is a lot of variability reported. We believe it's at the lower end. And we think addressing this high medical need indication is a good opportunity both to help these patients, but also to expand the use of lebrikizumab.
Carlos Gallardo Piqué: Jon, do you want to take number 2, number 3, there?
Jon U. Alonso: Thanks a lot, Carlos. So in terms of phasing, yes, in Q1, we will face a tough comparison. I have already disclosed that we will be competing against a very challenging Q1 2025, where we reported the divestment of Algidol and the out licensing of Sekisan for about EUR 12 million in that specific quarter and EUR 15 million on a full year. Once we pass the Q1, Q2, we will come back to a more normalized comparison, but definitely, the growth will accelerate in Q3 and Q4. So we expect a stronger second half of 2026 versus a softer in half in 2026 due to this divestment. And then the third question was about Klisyri. Yes, I mean, Klisyri has basically 3 legs, Europe, U.S. and global. In the area of Europe, we have seen a good commercial execution that has driven the good results, nothing to compare. We work with a long-term vision. So some quarters can be better, some quarters can be not so good. We are pleased with the performance of the product in Q4, but nothing specifically to mention. Regarding the rest of the world, we have mentioned during the script that there is a minor contribution in other countries. For example, we signed the agreement with one partner in Asia Pacific during Q4, and it gave us an access. It's a testimony to the strength and scientific value that Klisyri brings to patients, the fact that they are global partners that they want to collaborate with us in territories that we do not operate. And then in the case of -- in the U.S., the performance in the quarter has been impacted by the FX rate. Well, you see our numbers reported for Q4, they are negative by 9% but the reality is the U.S. team is doing a good job. And in terms of volumes and dollars, we are growing in low single digits. The euro-U.S. dollar FX rate has had an impact in this case in Q4 isolated, where last year, the average was 1.15 to 1.17, while in Q4 2025, we are in the range of 1.05 more or less.
Operator: We will now take the next question from the line of Damien Choplain from Stifel.
Damien Choplain: This is Damien. Congrats on the strong full year results. I have a first question on your midterm guidance. So you have guided to a 25% EBITDA margin by 2028. But given that gross margin will remain under pressure and SG&A piece is already well optimized, what specific sources of operating leverage will support reaching your 2028 target? So this is my first question. And second one on Ebglyss. Could you provide some colors on what could be the market size for nummular eczema? And when should we expect the Phase III readout?
Carlos Gallardo Piqué: Thank you, Damien, for the question. In terms of the midterm guidance, yes, there will be operational leverage, and that's where it's going to come this margin expansion. And again, as we've mentioned in previous calls, we've done all the investments that we needed in infrastructure to maximize the value of this asset. So we don't plan to increase or continue to invest in this type of infrastructure. And of course, we're also expecting productivity gains on SG&A. So overall, we are very comfortable with the guidance provided, and we are comfortable that we will deliver on these margins. On Ebglyss, please can you comment, Karl perhaps can do that.
Karl Ziegelbauer: Happy to comment. So as mentioned, the study will enroll patients in Q2 this year, and we expect readout in the 2029 time frame. So far, this indication has not been included into our peak sales guidance.
Operator: Thank you. We will now take the next question from the line of Alvaro Lenze from Alantra Equities.
Alvaro Lenze Julia: The first one is on the rate of growth of Ebglyss. You've been adding roughly EUR 5 million of incremental revenue every quarter. I wanted to know how much of this comes from new launches and how much comes from growth in the -- mainly in Germany? My second question is on working capital. You have invested quite a bit in working capital this year more than in previous years. It doesn't seem to be inventory buildup because I see that your level of inventory is roughly stable. I don't know if this is just a seasonality thing of how some payments ended up in -- at the cutoff date on 31st December or if there is any fundamental reason driving this working capital and if we should see similar investments into working capital in 2026? And my last question would be on capital allocation. You're generating cash, the payments going forward are likely going to be lower than in the past few years in terms of milestones or capital -- cash flow generation should increase. So we were a bit surprised to see the issuance of an additional bond. So I don't know if you see plentiful investment opportunities or otherwise, why are you not reducing your debt levels?
Carlos Gallardo Piqué: Thanks for the question, Alvaro. In terms of the rate of growth for Ebglyss, we're seeing strong contribution from all countries. We are in all the countries where we've launched, we've seen double-digit penetration in terms of dynamic market share. And lately, we're seeing also increased acceleration in terms of growth in some of the latest countries where we have launched such as Italy and France. So overall, very pleased with the rate of growth, very confident, very homogeneous across countries. So that gives us total confidence on delivering on our peak sales estimate. On working capital cash flow, Jon, do you want to take those questions?
Jon U. Alonso: Yes. Thanks a lot, Carlos. Thanks a lot, Alvaro, for your question. Regarding your question about working capital, you are spot on. It's basically facing seasonality of collections. It has happened this year is not structural. So we will not see the same increase in the years to come. And then the third one, which is capital allocation and why we did the bond. First of all, let's start with the transaction that we bought in sale that I think we were able to obtain a very good price in the current environment. And I feel this is a testimony to our prudent financial approach and the good performance of the company. But having said that, I think the bond is very important for us because it represents the commitment to maintain a solid liquidity position to keep investing in early-stage R&D deals and bolt-on acquisitions as and when they come up. It may be in short term, it maybe in midterm, but we want to have this flexibility to execute. That's why we executed the bond, and that's why we reduced it from the prior EUR 300 million to the current EUR 250 million because we also believe we are going to generate positive cash flow in the upcoming years.
Operator: We will now take the next question from the line of Joaquin Garcia-Quiros from JB Capital.
Joaquin Garcia-Quiros: It's just on the alopecia areata and you have hidradenitis suppurativa. If you could give us a bit more color on the market that you see for this or maybe number of patients, if you can? And is this -- do you expect this to be -- with a similar size of Ebglyss? Or we should expect this to be significantly lower than Ebglyss in the contribution for Almirall. And lastly, when should we expect the readouts for these studies?
Carlos Gallardo Piqué: Thank you, Joaquin, for the questions. We are very excited about our alopecia areata and 2 of the HS products that we have in place. Why? Because, one, it's an area of tremendous unmet need, sort of still patients suffering with inadequate treatments for these conditions. And secondly, because we believe that we have our treatments that are now in Phase II have the potential to really transform the standard of care and become first-line for patients. In terms of how many patients out there, there are prevalence data, maybe Karl can help me here with some data. Here, it is important to note that for all programs in our pipeline, we have global rights. So if you compare it to what we have today, with Ebglyss and Ilumetri, Ilumetri only have European rights. So probably these indications are of lesser prevalence, but we have worldwide rights. So the potential is way higher than what we see with Ebglyss and Ilumetri today. And that's why we are super excited. The opportunity to help patients, but also create a significant opportunity from a financial perspective to the company. Can you...
Karl Ziegelbauer: Happy to add a bit more color. So alopecia, as Carlos mentioned, is an indication of high unmet medical need. The only available systemic treatment are check inhibitors with not only their known challenges around the side effect profile, but also it is reported that once this treatment is not recurrence rate is very high, which has a very significant impact as once hair fall out again, it takes like 3 months to regrow. The prevalence is 0.1% to 0.2%. As mentioned, it's also an important indication for children. And the market size is estimated to be around, let's say, $1.4 billion by Evaluate Pharma in 2030. HS, again, another area of high unmet medical need. Currently available treatments are seem to be rather having a modest effect. What experts have told us is due to the complexity of the disease, it's recommended to think about inhibiting multiple pathway, not only a single one. And that's what we're doing with both of our assets. The prevalence is estimated between 0.4% and 2% and with the potential higher prevalence in the U.S. and especially in Afro-American and the estimated market size by Evaluate Pharma is about $5 billion in 2030.
Operator: [Operator Instructions] We will now take the next question from the line of Jaime Escribano from Banco Santander.
Jaime Escribano: So 2 follow-up questions from my side. One, if we look to -- regarding the guidance 2026, if we look to the consensus right now, for example, Visible Alpha in Ebglyss is EUR 188 million. And in the case of Ilumetri, around EUR 260 million. I would like to ask how comfortable you feel with these numbers? And the second question more for Karl. Karl, within the 3 products you guys have in Phase II right now, what is the one you are more excited if you had to pick one in terms of potential efficacy and probability of being successful?
Carlos Gallardo Piqué: Thank you, Jaime, for the follow-on questions. On the guidance for our biologics, we feel very comfortable with the figures that you have mentioned. And let's go to Karl for...
Karl Ziegelbauer: That is always a very difficult question. Now we are talking about 2. One is an anti-IL-1RAP antibody and the reasons why we are so excited about this antibody that antibodies that have targeted individual components, for example, one against IL-1 alpha and IL-beta, but also another one against IL-36 has shown some initial efficacy in this disease. And we believe combining those 2 activity has the chance for, let's say, improving the efficacy. On the IL-2 mutein that is a completely novel mechanism stimulating regulatory T cells. And what makes us optimistic is that there is evidence that this mechanism could work in both diseases, alopecia areata and atopic dermatitis based on initial studies that come from low-dose IL-2, but also from a competitor readout using a PEGylated version of IL-2. So in summary, both are very exciting programs, and we look forward to then having starting readout end of 2026, beginning of 2027.
Operator: There are no further questions at this time. I would now like to turn the conference back to Pablo Divasson for closing remarks.
Pablo Divasson Fraile: Thank you very much, Sandra. 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.