ALK-Abello A/S

CSE:ALK B

Earnings Call Transcript 2022-Q2

[Per Plotnikof, executive]

Hello, everyone, and thank you for joining us for today's presentation of ALK's quarter 2 results and full year outlook.

Let's start by turning to Slide #2, where I will introduce our presenters and the agenda. My name is Per Plotnikof, and I'm Head of Investor Relations. And with me today are ALK's CEO, Carsten Hellmann; and our CFO, Soren Jelert.

And today, we will look at our Q2 performance, sales trends across our regions and portfolio, and then the financials. And then we'll give you an update on our strategic priorities before covering the preannounced full year outlook. And then we will end today's call with the usual Q&A session.

So if you please turn to Slide 3. I'll hand over to Carsten to get started.

[Carsten Hellmann, executive]

Thank you, Per, and thank you all for joining us today.

Let me kick things off by giving you the 2 -- the quarter 2 highlights. I'm happy to report that we delivered our best Q2 result on the back of a better-than-expected performance. A growth in local currencies of 17% and 20% on reported currencies. This is indeed a strong result, meaning that organic sales growth for the first half year is now at 14% in local currencies and 16% reported. Profits are up 38% and EBITDA margin is now at 17%. We saw double-digit sales growth in all 3 sales regions, and a bounce back in our biggest region, Europe, after sales were held back slightly in Q1 by a number of factors under COVID, lower tax replacement rates, and a brief supply interruption that affected some SCIT venom products as we explained last quarter.

European sales were up 14% in Q2. And here, the tablet portfolio grew 21%. And we saw a very good performance from Jext with strong post-COVID replacement rates. Momentum in Europe is strong, and why we upgrade our full year outlook on revenue and earnings a few days ago. As a result of higher sales and improved margins, overall operating profit for the quarter increased by 123%.

In Q2, the biggest headline on our strategy progress was the initiation of a Phase I clinical trial with our peanut SLIT-tablet, which we'll discuss in detail later. But we also remain on track with our 2 Phase III pediatric trials with house dust mites and tree tablets. We also signed an important and significant expansion to our agreement with the contract manufacturer, Catalent, to secure long-term access to increase manufacturing capacity for tablets in line with our long-term sales ambitions.

With these highlights, I'll hand over to Soren now, who will take a look at the Q2 financials in more detail. Please turn to Slide 4, please.

[Søren Jelert, executive]

Thanks, Carsten.

As you can see, quarter 2 was a solid quarter for ALK, with broad-based double-digit sales growth from all 3 regions. In Europe, as Carsten mentioned, we saw sales bouncing back strongly after the headwinds in first quarter. Quarter 2 sales were up 14%, on the strong performance of tablets and Jext, while sales of SCIT further recovered. We also managed to resolve the release issues that were affecting a few of our venom SCIT products in first quarter. Tablet sales were up 21%, primarily on the ongoing uptake of ITULAZAX and GRAZAX, which continued to increase the percentage of new patients that they are capturing.

Once again, our biggest market, Germany, delivered double-digit growth and increasing capture rates for new patients. Other important markets in Central and Northern Europe also recorded double-digit growth, while sales in France were down, although less than first quarter. So the core momentum in Europe is solid, even though we may see fluctuations quarter-to-quarter.

In North America, we saw growth of 19%, driven by all segments, in particular, diagnostics and non-energy-related life science products contributed to the growth. Revenue from international markets were up 30%. This reflected high levels of shipments to China, while tablet shipments to Japan, as expected, were modest in this quarter due to phasing of shipments. Both China and Japan continued to see good in-market momentum, although both markets were temporarily impacted by recent resurgence of COVID. However, this is not something we expect to significantly impact this year's supply of shipments.

Now let's take a closer look at the product categories on Slide #5. Revenue from the tablet portfolio continued to grow in line with our full year expectations. Tablet -- global tablet sales were up 18% in the second quarter. Europe was the key driver, and capture rates remained solid. Combined SCIT and SLIT drop sales increased by 4% on growth from international markets, especially China. Growth from bulk SCIT products in North America improved compared to first quarter. Sales on other products were up 50%, mainly on strong growth in Jext sales and the sales of other products in North America. As expected, with Jext, we saw much higher replacement rates compared to the previous 2 quarters, but we also saw a positive effect from the temporary supply disruptions that have been affecting competing products. So all in all, we are well on course to deliver on our guidance of double-digit growth in 2022.

This brings us to Slide 6 and the P&L. Half year revenue was up 14% in low currencies at DKK 2.2 billion, and higher U.S. dollar had a positive currency impact, so that reported growth was 16%. The gross margin improved by 3 percentage points to 63%, reflecting increased sales of tablets in particular and production efficiencies, although this was somewhat offset by increased shipments to Japan at lower margins. EBITDA increased by 38% in reported currencies to DKK 379 million, corresponding to an EBITDA margin of 17%. Capacity costs increased 11%. In local currencies, sales and marketing spend were up 13% due to investments in market expansion in China, a high activity level as well as restructuring costs to close down our activities in Turkey, where market conditions have become unsustainable for our products.

Finally, free cash flow was positive by DKK 93 million. This reflects changes to working capital, buildup of capacity, tablet production, upgrades to the legacy production and investments in the in-house adrenaline auto-injector currently in development.

A quick note here. Free cash flow did not include any repayment of mandatory rebates that reflect in the annual report. And we now expect these payments to be lower than originally anticipated for 2022 and instead take place in 2023.

All in all, a very strong first half of the year, which led us to upgrade the outlook a few days ago. But now let's move on to the brief strategy stage on Slide 7. And over to Carsten again.

[Carsten Hellmann, executive]

Thank you, Soren.

Let me give you a quick update on the Q2 progress on our long-term strategic priorities. Each of which you can see summarized on this slide.

In the U.S., we continued our work to overcome the long established market barriers to our tablet adoption. This takes a number of forms here under using digital patient engagements to mobilize patients, working with the prescribers, and pursuing pediatric and adolescent indications for the house dust mite tablet. Our work to complete and commercialize the tablet portfolio aims to sustain and build on the successful commercial momentum we currently enjoy, as evidenced by expectation for full year sales growth of 20% or more. We are doing this by augmenting the portfolio in key areas and by accessing new patient groups and new territories. Our pediatric trials of the house dust mite and tree tablets remain on course for completion in 2023. Meanwhile, following the clinical trial waiver we received in Q1, we continued preparations for regulatory submission of the house dust mite tablet in China later this year.

As we have reported several times in the past years, our pediatric trial of the house dust mite tablet in allergic asthma were impacted by a major reduction in asthma exacerbations due to behavioral changes during COVID. Based on a dialogue with the authorities, we've decided to end this trial since we now expect to be able to meet the key commitments made by and agreed in the pediatric investigation plan. The next step would be to unblind the trial, analyze the data and report the results. Since house dust mite-induced allergic asthma is a comorbidity of allergic rhinitis, we still expect to gain full pediatric coverage via our allergic rhinitis trials. Also, as I said many times before, the situation of this trial does not impact our ambitions nor commercial or any other results in the long term.

Our consumer engagement efforts continue to mobilize patients via our digital engagement platforms. We saw impressive growth in the number of patients mobilized, up to 160,000 in the first half of '21 to 500,000 in '22. Furthermore, we launched our digital klarify ecosystem in 4 new countries: Austria, Czechia, Slovakia and Switzerland. As I mentioned before, we made some important progress on our new horizons priority in Q2, while we initiated Phase I development of our peanut allergy tablet. Work also continued on the 2 adrenaline auto-injector projects toward the planned submission to the U.S. FDA in '24.

Optimized for excellence covers the work we're doing to be bold and lean, rationalize our portfolio, simplify our manufacturing processes, and upgrade the regulatory documentation for core legacy products and build capacity for the longer term. As mentioned in the highlights, a major achievement in Q2 was the signing of an expanded agreement with a contract manufacturer, Catalent, which secures priority access to expanded manufacturing capacity for the tablet portfolio, which means that we now have safeguard the volumes in line with our growth ambitions toward 2030. We also submitted 493 regulatory changes, covering 103 legacy products to 40 different regulatory authorities to improve efficiency and reduce complexity.

Before we move to the outlook, let's just focus in on the exciting news about the new peanut tablet on Slide 8. First, some background on what is a significant unmet medical need for millions of people. Food allergies effect an estimated 2.5% of the global population. The main allergies are to peanut, tree nut, milk and eggs. And they usually occur in children before they reach school age. For peanuts and tree nuts, allergy often persists into adulthood. Peanut allergy alone is so widespread that affects an estimated 2.5 million children in Europe and in the U.S. That translates into a lot of parents who constantly worry whether a tiny exposure could trigger a life-threatening situation for their child.

And just to illustrate the unmet medical need here. The current standard of clinical intervention for peanut allergy is still emergency care. So this is a very important development program for ALK and potentially for people with food allergies.

And if you turn on to Slide 9, I'll tell you a little about the clinical trial we just initiated. The Phase I trial of our peanut allergy tablet is called Alliance. It brings together a number of objectives. We want to access tolerability and safety of a single daily sublingual tablet. And we want to identify the optimal starting dose, up-dosing regimen, and maintenance dose. Around 100 patients would take part of approximately 15 centers all in North America. The cohort will include adults, adolescents and children. And the trial builds on more than 20 years of experience in setting up clinical trials and developing our existing respiratory tablet portfolio. We are all very excited about this program. And we aim to obtain multiple important information output from this trial, which we'll report on next year.

In terms of timings, in first half 2023, we'll have the first take on tolerability and the starting dose. And then in H2, second half, we'll have additional information on the tolerability and the updosing scheme.

Now let's turn to the next slide, where Soren will talk you through the outlook.

[Søren Jelert, executive]

Our full year outlook was upgraded a few days ago based on a strong sales momentum and a robust outlook for the remainder of the year. So as a reminder, revenue growth is now expected at 10% to 13% and is expected to be broad-based across all sales regions. Tablets remain key to this. And we now see overall global sales growth from the tablets at a minimum of 20% in 2022.

In addition, we now expect mid- to single-digit growth from the remaining non-tablet portfolio. The midpoint of the projected revenue range now assumes that total sales in Europe will grow by approximately 10%, while sales growth in North America is still expected at around 10% and growth in international markets is expected to exceed 10%.

As in previous years, we expect product shipments to Japan and China to fluctuate between the quarters. The higher end of the revenue range assumes continued strong sales growth, including higher tablet growth in Europe and improved sales of legacy products, while the lower end factors in pricing pressures in Europe, possible inability to meet market demands of some of our legacy products in the U.S. and/or increased negative effects from COVID, which may result in some volatility across quarters.

EBITDA is now projected between DKK 675 million and DKK 750 million due to the better sales outlook. CapEx still expected around DKK 400 million based on the higher EBITDA and only a partial repayment of rebates in '22 of some specific accrued rebates, we now assume that the free cash flow will be around zero.

With this, I'll hand you back to Per, who will then kick off the Q&A session on Slide 11.

[Per Plotnikof, executive]

Thank you, Soren, and thank you, Carsten. And this concludes the main part of our presentation. So we will now move on to the usual Q&A session, where we are happy to take any of your questions. Operator, please go ahead.

[Operator]

[Operator Instructions] And we'll take our first question from Michael Novod from Nordea.

[Michael Novod, analyst]

It's Michael Novod from Nordea. 2 questions to the peanut program. So first of all, how should we think around when the Phase I data report? I know it's still sort of probably in the first half '23. But more to staying around how can you sort of progress even sort of normal speed or even faster speed in terms of moving straight into a potential Phase III program? That was the first question, then I have a follow-up.

[Carsten Hellmann, executive]

Michael, this is Carsten. I don't know for sure, but our first expectation beginning of '23. These data here is very important because as we are on a totally new technology, but within what we know the tablets, it means a lot about what the tolerability is and what the dosage is and what the upscaling of the patients would be. And these data will be so [ decremental ] on what we can do afterwards. And I believe in a year's time from now, we will have those data maybe earlier.

I think we know a lot already. And with these 100 patients in the program, we'll get the first data out there second half of this year. I think we'll know a lot more. Because if you imagine, in a tablet, the volume of peanut we're inducing is very low compared to any other technologies out there. So we have a lot of hopes, but hope is not a strategy. So let's talk about it in 9 months' time. That's my best guess right now.

[Michael Novod, analyst]

Okay. And then the follow-up is actually relating to -- you say there's -- it's a much small amount of allergen coming in via the tablet. What is sort of the target profile of this product? Is it sort of to induce the best possible efficacy? And then maybe still being having a safe drug, but compromising a bit, but clearly focused on the efficacy? Or is it to be more on the safe side and have easier product to use because it's super safe, then it may not be as efficacious as other stuff we see. But want to understand the product profile and the target profile you're going for.

[Carsten Hellmann, executive]

I mean safety is apparent because one is peanut, you die if it's not safe. So, we need to have a safe product, but we also need to have efficient product like we have with the other ones. And I think, Mike, the best way to say it is that, remember that this is not a traditionally immune therapy as we know it from the respiratory tablets. What you most likely will get approved is that you can prove that the chances that you get an event is much lower than without taking the tablet. So if you have a safe product and you can do with a very low dosage and prove that the risk of you getting an event and going into shock is significant, then we have the right product. And that will be a product beating all competition.

[Operator]

We'll take our next question from Jesper Ilsoe from Carnegie.

[Jesper Ilsoe, analyst]

Yes. So firstly, just on your expanded agreement with Catalent to, as you say, prepare for future growth. Can I just ask, so can we read anything into it regarding demand? Or is it basically just you being well prepared? And perhaps, just a question on the timing. So why do you make this agreement now and not say in the year? So just on the timing of the agreement. And then I have a follow-up afterwards.

[Søren Jelert, executive]

I think -- this is Soren speaking. I think we're extremely happy that we are very proactively engaged with Catalent at this time. And we have had a long partnership with them. And it's clear that over the last years, as you also know, the tablets have suddenly become very meaningful and sizable.

And for us, it's been important that we are also seen as a strategic partner to them. And that they basically can scale up to the needs that we see and jointly and timely as we see them coming. And for that, actually, we secured now a much higher visibility in terms of the outlook towards 2030 for us to make sure that we can deliver. And here, remember also, in this time frame, we have also China kicking in, for instance.

So we simply needed to be on the forefront so that they can plan well and essentially still be responsible also for the CapEx they will need to put on the table and basically also make sure that we have a priority to that and not sell it to someone else.

So in many ways, we see this as sort of proactive handling of a risk that ensures that we can continue of growing the business in the market while they'll be able to deliver top quality tablets to ALK. So both of us have all to win of being proactive ahead of the game here.

[Jesper Ilsoe, analyst]

Okay. Makes sense. Just to follow up then on the gross margin, so again, this quarter, very strong, up 3% versus last year and more than 2% for the first half, yet you still guide 1 to 2 percentage point improvement versus '21. So can you just explain why you don't stay a bit more bullish on the gross margin this year and perhaps more importantly, talk about the trends when you look into '23 and '24 on the gross margin given the strength you've seen in the recent quarters and also, of course, the recent years.

[Carsten Hellmann, executive]

A super good question and well spotted, that we maintain the 1% to 2%. I think we have a strong underlying performance. So of course, you can say, is it exactly the midpoint of 1% to 2% or where are we? I think it's great that we are now coming out with a strong performance year after second quarter. Actually, so far following still the improvement when we sell tablets outside Japan, it has a positive impact. When Japan is in there, it's a little bit lower. So that completely follows the plan we have promised you all along. And then, of course, when we move into '23, we have all along said that part of the journey will also be our increased efficiencies and the programs we're running on the past projects. And they will still take some time before they start to kick in and actually be basically put on the products that are sitting on our inventories and then eventually also expense so that you can see them in the gross margins. So I think '23 will be too early to see a kicker on it, but we will follow the plan with a gradual improvement. That's actually what we anticipate right now.

[Operator]

Our next question comes from Martin Parkhoi from SEB.

[Martin Parkhoi;SEB;Head of Equity Research, Denmark, analyst]

It's Martin Parkhoi from SEB. A couple of questions, and I will take them upfront. Firstly, on the supply disruptions for competitors. You mentioned on the Jext in the second quarter. Can you just give an update on where it looks now and where did you include -- what you have assumed for the second half of the year in your guidance?

And then secondly, the strong capital growth in the second quarter in Europe compared to the first quarter. There can be some spillover or some pent-up from people with a delayed of starting treatment due to COVID. Can you quantify how much of the growth in this -- of tablets in Europe in the second quarter, there's actually some kind of pent up from the first quarter?

And then finally, just on the risk factors on the guidance or the reason for you having the low end of the full year guidance. I have been on the phone with Per talking about pricing, U.S. supply and COVID. Can you quantify this a little bit? Because COVID has already been there in the first half, and you have talked about that, yet you have delivered 14% on the top line. So why should that be a risk in the second half?

[Carsten Hellmann, executive]

This is Carsten. If we start from the back end of your question. You're right. We are putting in some risk factors because we don't know what we don't know. And there's a lot of rumors about some price threats from different governments around Europe. We just put it in as one of it. As you can see, we said 10% to 13%. So the bottom is 10%. So you can quantify that many millions in totality from the midpoint that we will drop there. And yes, there might be some disruptions here and there that can sort of hit us. But I think actually, in totality, we are in a good momentum margin. We certainly expect to hit the midpoint of this guidance of 11.5%. But of course, as I said, we don't know what we don't know. And last 2 years, we've been sitting every summer and say now COVID is over and then we hit full throttle like in October, November. So we're just factoring that in, but it's not really like business factors where we're waiting for the red or the blue light to turn on to see if it hits or not. It's a more generic type of risk factors we're just factoring.

So comfortable is never a word you'll hear from me. But I'm pretty okay with the guidance we have today and that we will hit the midpoint. And we'll certainly do all we can to do better. For the Jext, it's a little more -- there are different things in the Jext. We had a lot of uptake in the Jext.

If you remember, in first half, we were talking and also got a lot of "feedback" about what's happening -- what's going on with Jext, where we talked about this prolonged shelf life. We talked about the people didn't replace their Jext, and we said we think it would come.

And they didn't replace the Jext. We expect it because they hadn't been out of the house, there were not going to football matches, whatever, schools, and so forth, they ever used it, but they did now. So we saw a huge replacement rate coming in right now as we expected. And I think that's going to continue.

So we're back on track there. At the same time, as you noted, EpiPen seems to have some supply issues. And we are all in, in manufacturing and trying to supply all the different markets with everything we've got to cover that. I think the good news for us and Jext is that since the last years we have been working on having a sustainable manufacturing, good quality and so forth.

Before, when EpiPen was out, we got the business. When EpiPen came back, we lost it again. We can see now in Europe that we have a constant market share. And we also keep something every time we get out. So I think this is only an upside for us, and we will sell as much as we can, of course. It's not that we have unlimited capacity. We might have from time to time some issues in order supplying because the demand is suddenly increasing, but I think we look okay.

[Søren Jelert, executive]

And then you had a question on the tablets. I think the question was related to whether we saw an increased effect, I guess, you said in Europe on the tablets sales. And I think the good answer here is we actually did see a better underlying performance in the second quarter. And it was actually across our portfolio of products in Europe that was up in the second quarter on the tablets.

[Operator]

Our next question comes from Benjamin Silverstone from ABG.

[Benjamin Silverstone, analyst]

Carsten, Soren, firstly congratulations on the very strong Q2 and hope you are well. I have a question regarding the online engagement. We have seen Klarify being launched in additional 4 countries here in this quarter, with the total number of countries now starting to be rather material. Could you just remind us how far along this rollout is? And also, if there is any quantitative results that you're able to share from this digital focus at the current moment?

And the same question is regarding the New Horizons. So we have covered the peanut part, and I know you do get this question quite often. But just regarding the adrenaline, are there any more nuances to this progress? So are we nearing any sort of inflection point where you might start to focus more on just one of them? Or are both of them continuously delivering on the internal success criteria, so to speak?

[Carsten Hellmann, executive]

This is Carsten. On the klarify, yes, it's true we are rolling it out, and it is going to be a global engagement system. And we can see, we mobilized, I think it was 375,000 allergic people to take action on the allergy just in the U.S. So there are things happening, and even more in Europe. So we know from when they engage with us, what they're doing on the app, what they're looking at.

We know they find a doctor. We know they go to the doctor. But I cannot give you the reasons what exactly happened in the doctor's office because you will not share the journal -- the patient journal with us. However, what we can see in those countries where we have been now for a couple of years with the klarify universe, that the tablet sales of the business itself has been significantly growing.

So we know there's something there. So what we're working on right now is just continuing to refine that and maybe even get better on follow-up post the doctor office visits to have a continued engagement and dialogue with the patient to figure out, are you in compliance? Do you like it? Do you have adverse events? Or whatever happens, so forth. That we're working on, that's one thing that we are working on to optimize it.

The second one is that we will very soon get the first patient through a fully digital system from an onboarding via the klarify universe till a test, till an online consultation and an initiation of a tablet. So there's also another dimension to it where, of course, we try to work on new channels.

Because if we are going to capture the big unmet need and huge patient populations that are out there waiting for us faster, we need also to find ways to open up the funnel that are sort of the gatekeepers, which is the limited amount of doctors, the waiting time and so forth, to see if we can find new models to get a better market access. And digital is certainly going to be one of them and the klarify universe is certainly going to be one of them as well.

We continue to invest at a high level. We will continue to roll it out, and it should be a global thing. I also expect when we get into China, with the klarify universe, that these type of digital tools and engagement tools are going to be very, very important to us.

I think I said it many times, and I will also say on the road show this time, to understand how the whole health care environment is changing right now. What you see is going to happen with the pharmacies, for prescription medicine and the engagement from patients to doctors to actually how they get their products are going to be significantly changed in the next 5 years.

And we need to make sure we are exactly where we need to be when this is happening. Because a shrewd population of patients going into whatever pharmacies or wherever they use antihistamines and other products, that's where also the big patient population are today.

And to segment those, to screen those, to use the algorithms and AI, to identify the right patient populations, and then help and mobilize and support those are going to be key. So we haven't talked much about it. But the team behind, the investments behind and the ambitions behind the klarify is actually very high. And I expect a lot from it, and we are investing a lot in that. So that was one thing.

The other thing, adrenaline. I mean, when we were out of money and we really had to turn every penny, I mean, of course, we thought about when do we have to pick and choose. So far, we are having 2 projects. The Windgap team in the U.S. has been fully financed.

I think they raised something like $24 million, $28 million recently just to continue to run that part of it. So I think we're not out of the woods on that one. But I certainly think it's a plausible and interesting concept, and there's no reason for us to stop that. And we will still continue also with the Genesis. We are running exactly to plan for submission and filing and launch.

And should we have 2 pens of different concepts, I mean, I would love that, too. I don't see any reason for in the end, choose one of them. But let's see. So far, we're not planning to stop any of those, and we'll continue to derisk the profile. We must be in the U.S. with a pen system.

And even with a lower than the lowest generic price pen system and even with a lower than the lowest generic price point and a very low market share in the U.S., it will be a game changer to ALK as well. So we just keep pushing.

[Operator]

Our next question comes from Thomas Bowers from Danske Bank.

[Thomas Bowers, analyst]

Yes. Thomas from Danske. Just a few remaining here. So just a follow up on the previous question regarding tablets. So well, you highlight GRAZAX and ITULAZAX as key drivers once again. So can you maybe add a little bit of flavor on how ACARIZAX is actually doing in Europe? Are you down to x growth or single-digit growth on this product?

And then on the asthma trial, so just to avoid any potential misunderstandings here. So by having sufficient documentation, is that primarily for the broad label in Europe, so commitments to the rhinitis and asthma in Europe, so commitments to the rhinitis and asthma indications? Or is there also sort of an element here related to the safety profile in the pediatric setting? So you can say maybe there is a potential risk to the allergic rhinitis pediatric label, of course, assuming that MT12 reads out positive? And then just in addition to that, following the dialogue with the regulators, is there any post-market commitments? Anything else that you have committed to beyond the MT11 trial?

[Carsten Hellmann, executive]

Let's start with the latter one. No, there's absolutely no risk to the MT12 trial, our labels in any other products, nor there is any commercial or any other type of risk or the outcome of this trial. It was a regulatory requirement that we had, which we fulfilled, and we're discussing with the authorities about. So there's nothing there.

For us, commercially, it's a nonevent. But it's something that we needed to do for housekeeping purposes way back, started maybe even before my time, in order to fulfill the regulatory requirements on the process. There's nothing there. For the tablets, all tablets are growing.

When you hear the comments about ITULAZAX , it's just because ITULAZAX is doing extremely well. GRAZAX is doing extremely well and so is ACARIZAX, but ITULAZAX even better. This has been an amazing product. And if you look at the penetration of the ITULAZAX after launch compared to ACARIZAX and GRAZAX when they were launched, I think, it's threefold. It's really, really something that's picking up.

And if you have anybody or know anybody who's using ITULAZAX, they will say they were in bed for 3 weeks every summer, and now they haven't been sneezing the whole year normally. So I think it's a very good product, and it spreads. So no, we're not -- there's no crisis anywhere in any tablet. ITULAZAX is just doing very well.

And I don't know if you remember, a couple of years ago, we started talking about -- we saw some halo effect because back then, GRAZAX was sort of fading off. And then when we launched the ITULAZAX, certainly, we saw GRAZAX going from like 4% to 20% growth. And that halo effect, we actually see also on ACARIZAX and all the other products.

And I guess it's because a doctor have a very good result on ITULAZAX with the patient. And then a dust mite allergic person comes in and they think, oh, maybe I should try the other tablets on this one as well. And then they come in and say, oh, this works very well. I think that this time is happening as well. So we also have beyond our own marketing efforts, the market is also with us in this one.

[Thomas Bowers, analyst]

So in regards to, ITULAZAX, I guess it has surprised everyone with the strong penetration there. So is there any -- I remember a few years ago when you launched the products, that you saw ITULAZAX as sort of being a product that could do somewhere in between GRAZAX and ACARIZAX when looking at peak sales. Is that still your assumptions? Or are you now closer to ACARIZAX peak sales when you look at the future?

[Søren Jelert, executive]

I think it's, of course -- I think that's a super good question. And please bear in mind, when you talk, ACARIZAX, you certainly also have then China into the mix eventually. But I think what we did prior to China comment on that it was at least to the tune of GRAZAX. And here then, of course, it depends on, are we adding more markets to ITULAZAX but it is tremendously good uptake we see. And we -- yes, we do believe that it's at the size of GRAZAX. Will it go even higher? I think ACARIZAX, of course, has the benefit of being in more geographies essentially. So of course, it's a little bit difficult to complete that very long term. But overall, very satisfactory on ITULAZAX and definitely a competing product to GRAZAX.

[Carsten Hellmann, executive]

And this is Carsten. Just to add to what Soren is saying, we have to remember that even though ALK is a strong company with a big market share, even in Europe, I mean, we're not in South of Europe yet. We're not in the U.K. yet. I mean there's a lot of dimensions on which we can grow, where the different products can enter and how fast we penetrate, what prices and so forth, a little bit up in the air. But we still are in a situation where 40% of 1% of the patients were treated. So the growth runway is strong for a long time. And then the answer to the question might rather go into the timing of events. When is where, which products are launched? And is that a grass country? Is that a tree country and so forth? How it picks up? In the end, I think when you look 20 years from now, all the products would be very big. And ACARIZAX will be the biggest, I'm very sure for obvious reasons. But the other one would be very big and pretty much the same size, I think.

[Operator]

[Operator Instructions] We'll take our next question from [Jacob Mikhail ] from Campden.

[Unknown Analyst]

I just had one regarding if you had any plans to target additional food allergies beyond peanut? And if so, what are the special ones that you would target?

[Carsten Hellmann, executive]

Yes. We have the peanut program right now. But like everything else we do, we do it with a strategic mind long term. Meaning that, of course, this should be a food platform. And depending on -- let's see how the Phase I pans out in peanut because that will also give us some notions about what tree nut, egg and other products could actually look like and what the profile of the product could be, what are the costs to development and so forth. But of course, like we started with grass on the respiratory allergies, now we're starting on food with the peanut. When exactly that is going to happen? I think the Phase I data on peanut will tell us a lot about the plausibility of food and our tablets and so forth. We are very positive ourselves about that. And when I say positive, there's the R&D teams and those who are working with it and has been doing that for the last couple of years. But let's see the results. But of course, it's a platform we want to develop.

[Operator]

[Operator Instructions] And it appears we have no questions at this time. I will now turn the program back over to our speakers for any additional or closing remarks.

[Per Plotnikof, executive]

Thank you, and thank you to you all for joining today's call and for all the good questions. As you can see from this final slide, we have a couple of presentations scheduled over the coming weeks. And we hope to see you at one of them or both of them potentially. Also shown here is the date for our Q3 results in the quarter -- in November. And as always, you are most welcome to call Soren, Carsten or myself at any time if you have additional questions. And with that, I will wish you all a good day, and I'll end today's session. Thank you, and goodbye.