Almirall SA

MAD:ALM

Earnings Call Transcript 2021-Q1

[Operator]

Good day, and welcome to the Almirall Financial Results and Business Update First Quarter 2021 Presentation. Today's conference is being recorded. At this time, I would like to turn the conference over to Pablo Divasson. Please go ahead, sir.

[Pablo Divasson del Fraile, Head of IR & Corporate External Communication]

Thank you, Rina. Good morning to everyone on the call. Thank you for joining us to review Almirall's Q1 results. I hope everyone is safe and remaining healthy. As usual, you can find the slides to this call on the Investors page of our website at almirall.com. Moving to Slide 2. I would like to remind you that information presented in this call contain forward-looking statements that involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. With that, please advance to Slide 3. Presenting today, we have Gianfranco Nazzi, Chief Executive Officer; and Mike McClellan, Chief Financial Official. Gianfranco will make an introduction and then pass to Mike, who will review the first quarter business performance as well as the financials and closing call. After that, we will open up for our Q&A session. I would like to pass you over to our CEO, Gianfranco Nazzi.

[Gianfranco Nazzi, CEO & Executive Director]

Thank you, Pablo. I am delighted to speak to you as the new CEO of Almirall. As you know, I have joined on the 1st of May and I had an extremely busy initial few days introduction to the company. I have engaged with senior management, and over the coming weeks, I will be engaging with a number of external stakeholders in order to develop a solid [ upsizing ] view of Almirall. For those of you who don't know me, I've been working in the pharmaceutical industry for over 20 years. I have had multiple country, regional and global responsibility in senior position at Teva, AstraZeneca, GSK and Eli Lilly. I believe that my previous experiences provide me with a strong knowledge of all key markets and also the requirements for the organization to succeed in such markets. Coming back to Almirall, I've been interacting with a major part of Almirall business and have seen a lot of positive elements. A very engaged and highly qualified workforce, totally focused on the introduction of medicine to benefit patients worldwide. My goal as the new CEO is to strengthen the global strategy of putting patients and customers at the center of the business that the company has forged during the past several years. I joined Almirall because I'm very confident that the company's vision for the near future will present great opportunity for patients, investors and employees. I am passionate about delivering high-quality product to patients in area of unmet need, and I believe that here at Almirall, we are very well placed to exactly do that. The solid results seen in 2020 and this quarter confirm that we are on the right track to strengthen our leadership position in medical dermatology. The priorities now are to drive the midterm growth of the company. And to do this, we'll be investing in new product launches to ensure they perform successfully and grow the core business. In parallel with this, we will continue to look at external opportunities within our key markets which complement our portfolio, such as the Wynzora opportunity we closed this quarter. Our pipeline and our recent transaction have significant midterm value waiting to be unlocked, reinforcing our future prospects in the market. And we will continue to establish strong collaboration and partnership to enable the acceleration of the discovery and development of new therapies in medical dermatology to further build and develop an innovative pipeline. So now we can move to the next slide, the R&D capability and investment. So the significant pipeline potential is focused around our main strategic disease areas where there are severe unmet medical needs. And to accelerate the discovery and development of innovative products, this is dependent on 2 things: collaboration and creativity in which Almirall is very strong aligned with those 2 values. Through AlmirallShare, we are able to foster our own open innovation platform to facilitate new collaborations and partnerships in medical dermatology research. And I am very pleased to contribute to the company with novel and value-added solutions that allow us to advance and become leaders in medical dermatology. Almirall is well positioned for a period of sustained growth of our core business over the coming years, and we are ready to successfully undertake global future challenges. And finally, I would like to take this opportunity to really thank Mike for driving the business forward and to sincerely thank all our employees for the resilience they have shown during these difficult times marked by the pandemic. I look forward to speak with you and meeting many of you in the near future. But for now, I hope you will understand that though I will be here for the Q&A at the end, as you would expect, given that I only just started, Mike will take the questions. So with that, I will pass over to our CFO, Mike McClellan. Thank you, Mike.

[Michael McClellan]

Thanks a lot, Gianfranco, for the introduction, and it's great to have you here. Good morning, everyone on the call. I'm pleased to say that we've had an encouraging start to the year with a solid performance from the core business, showing growth in both core net sales and core EBITDA despite a difficult comparison period due to wholesaler stocking we experienced across the industry in Q1 2020. The growth in the core business is driven by our recently launched products as well as some one-off items, which I'll come to later in the presentation. Based on the good growth of the core business in the first quarter, we are reiterating our full year 2021 guidance. We continue to see strong performance from Ilumetri with excellent momentum from the anti-IL-23 class, including in France where we recently launched. Seysara has seen a modest rebound in TRx in Q1, in line with the overall oral antibiotic market, which is still impacted by COVID restrictions in the U.S. We've also launched Klisyri in the U.S. market, and the initial uptake is encouraging with positive feedback from dermatologists and patients. I will provide further details on the growth drivers shortly, but like many of our peers, we continue to be adversely impacted by COVID, particularly in terms of accessing new patients. We continue to work hard in advancing our late-stage pipeline to drive the significant potential there. We expect readouts of lebrikizumab's Phase III trials in the second half of this year, and we continue to work with our partner, Eli Lilly, towards the 2023 EU launch. Having launched Klisyri in the U.S., we are also making the final preparations for the EU launch, which we expect in the second half. For Seysara China [Technical Difficulty] towards the start of the Phase III trials as planned, having already received the acceptance of our clinical trial application. And finally, following on from our announcement earlier this year of the acquisition rights for Wynzora in Europe, we are preparing for the launch at the end of the year or early next year. So as you can see, it's been a very busy start to the year with important progression on the late-stage pipeline and recent launches, which continue to give us confidence in the growth outlook for our core business. And lastly, we will continue to look for opportunistic bolt-on and licensing deals to reinforce our core business, similar to the acquisition of Wynzora earlier this year. With that, let me move on to more details of our growth drivers. On Slide 10, starting with Ilumetri, you can see here clearly from the German data that the anti-IL-23s are competing very well with the anti-IL-17s, capturing 33% of market share of new patients within the biologics. We believe the strong uptake of the class is a reflection of physicians' beliefs in the sustainable efficacy and reassuring safety profile. Within the anti-IL-23 class, Ilumetri has strong market share despite the continued COVID-related restrictions we are seeing across Europe. In Germany, our data on new patients have constant variation and is impacted on a monthly basis by commercial activity from the other products within the class. We expect that our market share will increase in the coming months. While competition is strong, Ilumetri has a compelling product profile as the first anti-IL-23 to deliver a data set with a consistent long-term safety profile through 5 years, very good tolerance, delivering maintained control for psoriasis patients and its ease of use as its key attributes. Now on Slide 11, as you can see here, Ilumetri has a strong performance throughout the year despite the impact of COVID with a 90% increase in net sales year-on-year in Q1 to achieve EUR 17 million. In Germany, we continue to see strong momentum, and the new country launches will contribute to accelerated overall growth. The launch in France is progressing well, and we expect to have meaningful contribution by this summer. We are pleased with the uptake of recent launches of Ilumetri in countries like Spain, Italy, Austria and Switzerland, where the product is gaining traction. These are very good trends shown in the quarter, and they validate the potential of Ilumetri in Europe. We strongly believe that due to the profile of the product, having a quarterly dosing regimen, a cost-effective price, this continues to support the growth of the product in the winning class. Moving on to Slide 12, let's take a look at Seysara. As you can see, the first quarter, Seysara has shown a modest rebound in TRx, which is in line with the overall oral antibiotic market. More importantly, we have seen improvement in the gross to net in our covered scripts despite the U.S. high deductible season. We've had a good start to the year and are very much in line with our strategy to build the TRx and increase market share as reps increase their face-to-face interactions with physicians when we see a normalization from COVID. We'll continue to dedicate resources to further differentiate Seysara based on the microbiology label, which is an important factor that we are able to leverage with physicians as it really differentiates the product from the older generics that continue to dominate the market. Now let's move on to Klisyri, which we've launched in February of this year in the U.S. Actinic keratosis is the second most common diagnosis made by most dermatologists. Within this context of launching into a COVID-impacted market, we are pleased with the initial uptake of the product, and we have received positive feedback from both dermatologists and patients focusing on the strong immediate benefit to patients by addressing the tolerability limitations of existing treatments. Klisyri offers a good product profile, which represents a significant step forward in the treatment of AK due to the short treatment period, a once-daily application for 5 days, proven efficacy and good safety profile. Our strategy is to focus on gaining payer coverage to drive sales volume. In terms of access, we are going in the right direction, and we should be able to give more updates in the coming months. Our expectation is that we should be able to gain quickly a good level of market share as dermatologists are seeking new options to treat their AK patients. And having successfully launched in the U.S., we're now anticipating the European approval soon. Slide 15. As I mentioned the introduction, we had a good start to the year with growth of the core business in the first quarter. Core net sales increased 5% and core EBITDA increased 46%, driven by a positive contribution from the recent launches despite the effect of stocking in Q1 of last year. We had some one-offs this quarter that are -- we included in our full year '21 guidance, at a similar level to the full year of 2020, but those mainly happened in the second half last year. These items amounting to EUR 16 million include the divestment of a small product in Spain and licensing out income for another product. The contribution of higher-margin products and one-offs have increased the gross margin ratio to 70.8%. In terms of OpEx, SG&A slightly increased in line with our expectations, supporting recent product launches. The overall outcome is a strong growth of the core EBITDA to finish the quarter at EUR 68 million. Let me move on to give more details behind the numbers. Slide 16, here, you can see consistent with previous quarters, the dynamics of our core business in the first quarter. The dermatology business in Europe has had a good performance, while there has been a slowdown of our other products as we previously communicated at the full year results following a very slow cough and cold season due to social distancing and the use of masks. It's also worth reminding you that in Q1 2020, we did have a positive impact from wholesaler and pharmacy stockpiling ahead of the coming lockdowns. The U.S. business is improving, although we're still seeing a negative impact from COVID. As you can see, we have essentially annualized the generic impact of Aczone, and our portfolio has limited patent expiry risk going forward in the near term. Looking at Slide 17, the Q1 dermatology sales. We registered a strong performance in Europe, driven by the growth of Ilumetri as well as strong trends from our Ciclopoli franchise. The rest of the portfolio in the U.S. continues to be impacted by COVID but has seen an improvement this quarter. We anticipate COVID to continue to negatively influence business, and we expect Q2 to be impacted with a slower uptake of new launches and softer demand in some areas. However, by summer, we hope to see progress as the vaccines take hold. And by autumn, we'll start to see things being more normalized. In the midterm, we expect improving product mix, which will be further improved by future launches. On Slide 18, I'm moving to the core net sales evolution, which excludes the deferred income and other income from AstraZeneca. And here, you can see a couple of things I'd like to pull out for you. The existing portfolio net sales increased around EUR 11 million, aided by the onetime items previously mentioned but offset by unfavorable comparison to Q1 2020, which had a COVID stocking impact. As you can see, the growth drivers had good contribution during the year, while our U.S. business took a hit of about EUR 4 million this quarter, mainly related to the impact of COVID. On Slide 19, to continue our focus on the core business. I've already highlighted the key factors of sales performance, so let me run you through the rest of the P&L. We continue to invest in our recently launched products with SG&A increasing in line with our sales growth, as we previously guided. While we continue to invest in R&D, this quarter had a lower spend related to COVID delays versus last year's Q1, which didn't see much of a major COVID impact. We expect R&D spending to pick up during the year. Overall, our core EBITDA increased 46% year-on-year to EUR 68 million, which demonstrates the increased contribution from a better product mix. The reconciliation at the end of the P&L adds to the deferred income, which was EUR 5 million in the quarter and the other income of EUR 1 million from AstraZeneca. As you can see, the previous year, the deferred income was mainly collected in the first quarter, which is why you see the change year-on-year in the total EBITDA line. Going to Slide 20, continuing down the P&L. There's nothing in particular to note for you here except the Q2 impairment charge from our decision not to exercise the Bioniz option. We finished the quarter having generated a normalized net income of EUR 42 million and a normalized earnings per share of EUR 0.24 per share. On Slide 21. If you take a look at the balance sheet, there are quite a few comments provided on the slide, so I'll just highlight one of the most important factors. We have a very healthy balance sheet and finished the quarter with a leverage of 1.5x EBITDA to net debt, which gives us flexibility in the current environment for additional licensing and M&A activity. Slide 22, let's take a look at the cash flow statement. We delivered a strong operating cash flow, generating EUR 82 million for the quarter. We had a negative charge in working capital, which mainly related to the seasonal increase in accounts receivable. This was more than offset by the refund of advanced tax payments made in 2020, particularly in Spain. We have made key investments in the quarter, including the milestone for the U.S. commercial launch of Klisyri and the upfront cost for the acquisition of the European rights of Wynzora. Our full year dividend proposal of EUR 0.19 per share with a script option was approved at the Annual General Meeting held last week. On Slide 23. To summarize, we had an encouraging start to the year with a solid performance from the core business, driven by our recently launched products, while making good progress on our late-stage pipeline. We, therefore, are reiterating our '21 guidance with Almirall set for a period of sustained growth of our core business over the coming years, further accelerated by the recent U.S. and EU launches, Wynzora in the EU and the launch of lebrikizumab in 2023 in the EU. The swing factors which will determine where we land in the range of the guidance will be dictated by the impact of items such as timing of additional generics to Aczone in the U.S., the progress of the COVID vaccination in the U.S. and the EU and our new product uptake. So on Slide 25. To wrap up, this has been a strong start to the year with the quarter demonstrating good momentum for our European dermatology business and an improving U.S. business. We expect the positive contribution from the key products will continue to improve core net sales and core EBITDA. As I highlighted at the start of the presentation, we are progressing nicely with our exciting innovative pipeline, focusing on unlocking the significant midterm potential of our pipeline. This will reinforce our future prospects in the market, which will be led by Gianfranco and the experienced leadership team. The core -- the growth of the core business will come from increasing contribution from the current and future launches as well as potential bolt-on and in-licensing opportunities that complement our portfolio and can generate sustainable value for shareholders to further boost our growth prospects. With that, I hand back to you, Pablo, for the Q&A.

[Pablo Divasson del Fraile, Head of IR & Corporate External Communication]

Thank you, Mike. Rina, back to you for the Q&A, please.

[Operator]

[Operator Instructions] And your first question comes from the line of Trung Huynh from Credit Suisse.

[Trung Chuong Huynh, Research Analyst]

I have 3, if that's okay. So firstly, on the performance of Ilumetri and Skilarence. It looks like a mixed quarter for each. Ilumetri had a very good quarter, and Skilarence looks a bit light of people's expectations. So how are you seeing the momentum build for both of these based on that 1Q? And do they include any one-offs or any stocking within those numbers? And then on that EUR 16 million one-off that you guys mentioned, can you confirm that the out-licensed product is Flatoril from Recordati. And is that EUR 14 million, presumably you put this into other EU products, which is up 20%. So just wondering why you've put this into core revenues. And also, if it is core, why haven't you raised your guidance? And then finally, just on the big catalyst left for the rest of the year, you forecasted EUR 450 million peak sales. Can you perhaps frame the data that you expect to see? And where does that position lebri? So based on your EUR 450 million, does that position it in the first-line patients competing with dupi or competing with the JAKs maybe as a second-line therapy or is a last-line therapy? I'm just trying to get an idea of what forms the basis of your peak sales there.

[Michael McClellan]

Okay. So let me take the first 2, and then I'll ask Xavier to help me with a little bit on the data on lebri. But Ilumetri performance was good. Skilarence continues to be a little weak. Skilarence is really impacted by COVID. You have a requirement for blood monitoring with these kind of products. And given the situation in Europe, particularly in the strong markets for Skilarence, Germany and the Netherlands, new patient uptake has just been slow. I think physicians, dermatologists have been a little bit hesitant to put people -- new patients onto these products because of the monitoring requirement and the uncertainty of whether or not they'll get the patients to come back often enough to do that. So we do expect that to rebound once we get past COVID. But we are very excited about the trajectory of Ilumetri. It's off to a very strong start, and we're seeing very good results there. For the EUR 16 million one-offs, like I said in the text, we've had about the same in the full year this year as last year. The reason it was included in the guidance is we were well advanced with the product divestment that we mentioned. It was Flatoril that you're asking about. The cash was about EUR 14 million. The income was very close to that. The other was just minor little things. The reason we included in core is we're monetizing our core assets. The things we've tried to separate out from the core business have been clearly the AstraZeneca-related income from the divestment done many years ago. If we have little bits of income from monetizing our current portfolio, whether it's out-licensing and territories beyond where we're operating or it's minor product divestments, that's what we do. Last year, we had also a small product divestment of Ansiolin in the second half. So year-on-year, you're going to see very similar numbers. We'll probably have a few more million through the rest of this year, but we don't expect another significant chunk in that. When it comes to lebri, I'll let Xavier give a little bit of a question about the data we're expecting to see this year.

[Xavier Llaurado Alba, Acting CSO and Head of R&D]

Yes. Thank you for the question. We are expecting the product to have very good prospects to mainly meet the unmet medical need. First line and second line is very big. And especially in [ age ] and maintenance of treatment, we expect to have good prospects. But obviously, we need to wait until Phase III results are being released.

[Michael McClellan]

Yes. So clearly, the EUR 450 million peak sales is relating to a product that will be competitive with dupilumab in first-line patients. So we will have to be able to grab a decent market share. I mean, of course, they're the market leader, so we'll have to aspire to being very competitive. And we expect to see a good profile coming out of the Phase III trial. So we'll have a little bit more of an update for you on how we see that developing once we actually have the top line data later this year.

[Operator]

And your next question comes from the line of KC Arikatla from Goldman Sachs. Due to no response, we'll now move to our next question that comes from the line of Francisco Ruiz from Exane.

[Francisco Ruiz, Research Analyst]

I have 3 questions, if I may. One is a follow-up on this one-off on top line, if you could give us the impact that they had in EBITDA in this quarter. The second one is on Wynzora. You commented that is expected to launch for the end of the year or beginning of next year. So why are you delaying the launch of these products so much? And the last question, if you could give us more light on how the SG&A will perform as we have seen some increase during this quarter despite probably all these travel like [ commerce ] activity remains at very low levels compared with other years.

[Michael McClellan]

Yes. So on the one-off, as this was licensing and product related, there's no cost of goods with it. So the amount in the sales is the same in the EBITDA of EUR 16 million. Two, on Wynzora, we're working with our partner, MC2, that we licensed the product from on the approval process. And we think given a normal approval process flow, plus the time it will take to get reimbursement, we'll probably be at the end of this year, beginning of next year. And three, in terms of SG&A, we expect it to track as an increase versus last year, which we said in the full year when we gave the guidance. Q1, of course, had the Klisyri launch and the buildup of France, which was not in the Q1 of last year. So, I think that's why you're seeing a little bit of an increase. I would expect an increase in the low to mid-single digits for the full year in SG&A. So despite the fact that there's less travel and a few other things because of COVID, we still have had some launch expenses which were not in Q1 of 2020.

[Operator]

And our next question comes from the line of Jaime Escribano from Banco Santander.

[Jaime Escribano, Equity Analyst]

So from my side, could you give us -- could you elaborate a little bit more on the growth of Ilumetri? I know someone already asked, but my question would be more to understand if this EUR 17 million run rate sales are due to growth in Germany or is it coming more due to the new launches. And in terms of run rate, how do you envision following quarters going forward? My second question would be regarding the guidance because it was not clear to me in the previous question if you are going to review it upwards with a one-off or do you keep it the same. And if you keep it the same even with this extra EUR 16 million, why would be that the case? Because obviously, Q1 results have been very good. So just want to understand what do you have in mind in terms of following quarters. And finally, if you can also give us some guidance in terms of R&D, which was, on my numbers, lower than expected, EUR 13 million in the quarter. So how should we think about this figure moving into the next -- the following quarters?

[Michael McClellan]

Yes. So Ilumetri, the growth was driven both by increasing the volume in Germany but also the contribution of some of the other countries. I would expect this to continue to grow. So EUR 17 million this quarter should continue a growth trajectory. We don't give a specific number for the year, but we're very bullish about what Ilumetri can do. In terms of the guidance, like I said earlier, the guidance did include these one-offs. If you look at the full year 2021 and the full year 2020, they will be relatively the same. Now of course, if we see another really strong quarter in Q2, maybe we will have to look at our guidance. But right now, I would expect we would end towards the upper end. But there are some risks that we need to keep aware of. One, we don't know when we'll see additional generics of Aczone in the U.S. That will have a little bit of an impact on us. We don't know how COVID's going to clear up. We're assuming the second half will start to be more robust, but that's an assumption at this point. And we need to see where we end up with timing on some of the new launches. But very solid start in Q1. If we see another very solid Q2, maybe we'll have to look at our guidance at that point. But it's a little too early given that there's a lot of things that could still happen. And in terms of R&D, spending is a little bit lower, mainly due to some delays of COVID, mainly in the Phase IV-type trials. I would expect that to start to ramp up again in Q2, Q3, Q4 as we will see things like the Seysara China, we will see some additional investment in preparation for the Klisyri large field trials and a few other things. So we will expect it to ramp up a little bit more. Right now, we'd still expect an R&D increase year-on-year from last year, but exactly where that's going to come out, we'll learn a little bit more at the half year.

[Operator]

And our next question comes from the line of Peter Welford from Jefferies.

[Peter James Welford]

I've got 3, I think. Firstly, just with regards to the EUR 16 million one-off again, can you confirm, was any of that EUR 16 million booked in dermatology at all. Obviously, not the bulk of it, given it was Recordati and Flatoril related. But was any of the EUR 16 million booked in dermatology, just so that we can understand the trend there?Secondly then, just with regards to Klisyri. I appreciate it's early days, but I wonder if you can comment a little bit on payer coverage but also as well the strategy you have with regards to covering out-of-pocket originally in launch. And what sort of patient assistance programs you've potentially put in place for this product given, I would've thought, potentially, out-of-pocket could be a big component of this, particularly, I guess, as we move towards the summer months potentially. And then thirdly, really, I guess, one for Gianfranco, if he's willing to comment. But just curious, when you look at the pipeline really, what sort of opportunities it is you're looking for there? I understand obviously the desire to potentially bring in accretive sort of commercial deals. But just on the pipeline side, I guess I'd be curious to know what he envisages is the right sort of shape and depth of pipeline for a company like Almirall. Is it very much focused on late-stage products, I guess, pretty like you did with lebrikizumab, where it's sort of the Phase III trial that's got to be done? Or is there also potentially also a desire to do earlier-stage even technology sort of deals and build out perhaps some earlier-stage assets within the Almirall pipeline or not?

[Michael McClellan]

Okay. So let me take the first 2, and then I'll pass it over to Gianfranco. So, the EUR 16 million of product sales and licensing were not in dermatology. They were all outside of dermatology. Two, Klisyri, so we've begun, of course, the conversations with payers. They're going very well. There's 2 different blocks for a product like this. You want to get commercial access, and you also want to get Medicare Part D because this is a disease that is prevalent in the older population. Medicare Part D is going pretty well as well, but those tend to be annual plan. So I would expect more coverage in '22 from the Medicare Part D side. From the commercial side, we hope by the time we have our next call to really be able to announce some good wins there. We'd like to get unrestricted coverage or just one step [ edit ] based on generic use of products like 5-FU. We think there's a good path to that. At a minimum, we want to replicate what Picato had before it was withdrawn, which is coverage in the commercial space in the 50% plus and coverage in the Medicare Part D in the 60% plus. So I think we're on good track, but it's a little too early to give you any solid numbers as to when exactly that coverage will start to kick in. In the meantime, we have a reasonable co-pay program to help the patients. I'll remind you that you can't use the co-pay program for Medicare Part D because you're not allowed to do that on the government plan. So that will help a little bit with the initial commercial access. And then once we start getting the plans in place, we expect the product to ramp up pretty well. With that, I'll turn it to Gianfranco to talk a little bit about the pipeline opportunities he kind of envisions.

[Gianfranco Nazzi, CEO & Executive Director]

Yes. Thank you, Peter, for the question. So first of all, we are very happy with the late-stage products. So you mentioned about Klisyri opportunity to launch, Wynzora and, of course, lebrikizumab. So we are very glad of this one. But of course, we are not resting and we are scouting and we are looking for opportunities on earlier stage on the market. I was just mentioning about this AlmirallShare where we have today 10 projects. But again, our team is working in a very nice way to scout and find product in order to fill our pipeline. And also, this is very aligned with our search for the CSO. So as you know, we are looking for a very high, mature, top leader. And I'm very glad to see the progress that we are facing so far, and this is for sure going to help us to really shape the future of our pipeline [ in ] R&D. Thank you, Peter.

[Michael McClellan]

Yes. And Peter, I'd remind you that earlier this year, we did do some technological collaborations like with Tyris on a gene platform, gene therapy platform. So, we are interested in doing those kind of things when the right things pop up.

[Operator]

And our next question comes from the line of Alvaro Lenze from Alantra Equities.

[Alvaro Lenze Julia, Research Analyst]

Just on Seysara, I understand that as the COVID situation normalizes, we should see some uptick. So I wanted to know if you could provide us some color on how are you seeing things with the progress of the vaccination in the States. And also regarding the potential launch in China, whether you could provide us some guidance on how are you expecting to approach the market, whether you have any ideas of potential partners or how are you going to approach the future launch.

[Michael McClellan]

Okay. So an update on [Technical Difficulty], you can see that the TRx is starting to grow. The U.S. has been a little bit mixed in terms of unlocking potential to visit physicians and patients seeing the physicians. So slowly, we're starting to see some progress in some states, but it's still not back to where it was. I'd say right now, we're probably at about 60% of the rep visits where we were at pre-COVID and patient visits are probably closer to 80%. But in the COVID period, if the physicians don't have a lot of staff, sometimes they default to just using generics because of the ease of not having to look at step edits or things like that. So we expect to have more opportunity as COVID starts to clear, and we'd clearly like to get our market share up closer to where it was pre-COVID. In terms of China, maybe I'll let Gianfranco answer that. He's got plenty of experience launching products in China. I think we've got an interesting asset, but we will be looking at the go-to-market. But maybe, Gianfranco, you can give...

[Gianfranco Nazzi, CEO & Executive Director]

So thank you, Alvaro. So, it's early days, but I will bring my experience of launching a difficult product like we did in Teva in China. So I think the focus is crucially important, so you cannot spread out on the territory. So I think that a much focus on the 3 big city like Beijing, Guangzhou, Shanghai can be something that we should explore. I think that launching one product is a little bit difficult unless you are part of the National Drug Reimburse List that can give access to the full territories. So I think that we needed to reinforce our portfolio, so at least adding a couple of products. But in a nutshell, I'm very glad and very looking forward to the launch opportunity of Seysara in China.

[Alvaro Lenze Julia, Research Analyst]

Okay. Thank you very much for your responses, and welcome Gianfranco to the company.

[Operator]

And your next question comes from the line of Guilherme Sampaio from CaixaBank.

[Guilherme Macedo Sampaio, Analyst]

Guilherme Sampaio from CaixaBank BPI. So first of all, can you provide a bit more color on the lower market share in new patients of Ilumetri within the IL-23 inhibitors despite the good performance [ overall ] of the product? Second question, a bit more color again on the evolution of the situation regarding the compounding issue you had with Skilarence last year. And the third question, again, a bit more color on the EUR 16 million nonrecurrent impact that you had last year.

[Michael McClellan]

Okay. So when it comes to the lower market share of Ilumetri, the February data, February is a smaller month, so we think that's a little bit of a one-off. We do expect to drive that back closer to the 30% range. We saw good results for Ilumetri, but we also saw the competitors had a little bit of a strong February. We don't know if there was something special there. I think we'll know a little bit more when we get the March and April market shares. In terms of the compounding issue, we're still going through the courts in the Netherlands on that. Because of COVID, that case has been delayed a couple of times. We're hoping to clear it up in the second or third quarter. And that's probably anywhere from EUR 0.5 million to EUR 1 million a quarter that could potentially come back to us as we go forward. So we also, of course, need to get past COVID because as long as COVID is impacting the market, it's a little bit tough to get new patients in Skilarence, as I kind of mentioned in one of the previous questions. And in terms of the EUR 16 million, it was a lot in Q1. We had probably a similar amount, a little bit more actually last year really concentrated more on the second half. So, I think year-on-year, you're probably talking about roughly EUR 21 million last year and plus or minus a little bit of that this year. So we expect a few more million as we go into the last 3 quarters, but it's not going to be a huge amount. So -- and it was in last year. We had it in our guidance this year because it was already far enough down the pipeline in February that we felt reasonably assured it was going to happen. But it's pretty much a wash when you look at year-on-year.

[Guilherme Macedo Sampaio, Analyst]

Okay. Can you provide a bit more color on what was behind the EUR 21 million last year?

[Michael McClellan]

Yes. It was a string of little licensing of products, some milestones and then the divestment of Ansiolin in Italy, which we announced last year.

[Operator]

And our next question comes from the line of KC Arikatla from Goldman Sachs.

[Krishna Chaitanya Arikatla, Research Analyst]

Apologies for the technical glitch earlier. I have 2 questions, please. On lebrikizumab, if you could describe how the communication will be with regards to the Phase III readouts. You obviously have 2 trials here that are in focus in the near term. Will you be providing pooled headline results or individual trial result at same time? Or will there be individual results from the 2 trials at different times? That's the first one. Second one, this is to Gianfranco. I know you've only been there for a few days, so apologies for putting you on the spot. But as you look at external opportunities, do you see Almirall's strength in the U.S. or Europe, please, given you have a more biologic-focused sales force in Europe compared to the U.S.? And I'm also asking this question because historically, M&A success for Almirall on the U.S. side of things has been mixed. I would love to hear your initial thoughts on this.

[Michael McClellan]

Thanks, KC. Let me take the first one. And unfortunately, I'm not going to be able to really answer that. We're still in discussions with Lilly exactly how we're going to do press releases on the studies. But we do expect to give the [ 16 ] top line data. We will give the full data. But whether it's going to be separate or [ one ] or all that, that's still to be determined. So as we get closer, maybe we'll be able to give a hint on that. But for now, we really can't stick anything out for that. I'll let Gianfranco take the question on external.

[Gianfranco Nazzi, CEO & Executive Director]

Yes. Thank you, KC. So in the U.S., I think that first thing first. So first, we needed to revitalize our business, and I think that we need to focus on the 2 products that we have today that are driving our performance. So I think that as Mike said during the call, we need to achieve better assets for Seysara and also leveraging the new label that we just got in the U.S. Second, I think that we needed to support and push much forward the launch of Klisyri. So this is the things that we are focusing right now. In terms of looking outside, we will be looking, of course. This is something that will be part of our strategic review. But at this stage, I cannot comment or I don't have anything to comment or to give you any type of light on what we can do.

[Operator]

There are no further questions. I would like to hand the conference over to Pablo Divasson for closing remarks.

[Pablo Divasson del Fraile, Head of IR & Corporate External Communication]

Thank you very much, Rina. We are now going to close our Q&A session. And with this, we will complete our conference today. We want to thank you for your participation. You may now disconnect.