Good day, and welcome to Almirall's full year 2021 financial results and business update 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.
Thank you, Nadia. Good morning to everyone on the call. Thank you for joining us to review Almirall's full year 2021 results. As usual, you can find the slides to this call on the investor's 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 risk, 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, Mike McClellan, Chief Financial Officer, and Karl Ziegelbauer, Chief Scientific Officer. Gianfranco will start with our strategic focus, then we'll review the quarter business performance and the growth drivers.
Karl will provide you with detail on the pipeline before passing to Mike to review the financials. Gianfranco will then make the closing comments before opening up for a Q&A session. I would like to pass you over to Gianfranco Nazzi, our CEO.
Thanks, Pablo, for the introduction, and good morning to everyone on the call. I want to start the presentation today with the framework of the strategy focused on medical dermatology and how this has developed our portfolio with exciting innovative launches. Let me first comment on four key priorities.
Firstly, we have a good opportunity ahead of us, and we want to make sure that we execute on the recent and future product launches. We are, and we'll keep investing in building successful platform for growing our business, mainly in Europe, where we have a very strong position.
Second, we are focused on strengthening our R&D pipeline, which is at the core of being a strong dermatology-focused biopharma company. This includes not only our proven internal R&D, but we're also strong track record of successfully identifying and completely integrating strategic acquisition and in-licensing opportunities.
Third, over the years, we have created strong franchises in dermatology diseases that we have been successfully launched in some market. There are additional opportunity for expansion in countries in Europe where we have a small organization or where we have been using partners.
Finally, as we have been a very solid balance sheet, we want to be opportunistic in looking for a creative bolt-on deals and in-licensing opportunities that will reinforce our core franchises and bring critical mass to further leverage our fixed cost base, but always with a prudent financial approach to leverage our liquidity.
Let me now continue with our focus on medical dermatology. The medical dermatology market is over $40 billion and growing at double-digit rates. One of our key strengths is our position in attractive indication within the space.
We believe the market remains an underserved therapeutic area with a sizable addressable population. This is expected to grow over the next few years due to demographic changes, people are living longer, economic drivers, income is growing, and innovation, which will address previously unmet medical needs.
Our medical dermatology portfolio includes key treatment for each of our core therapeutic areas, in atopic dermatitis, psoriasis, actinic keratosis, acne, and onychomycosis. For example, in atopic dermatitis, a market which is growing at 22% compound annual growth rate, we have our innovative product, lebrikizumab, on track to be launched in 2023.
On top of this, psoriasis, this is growing at 8%, Almirall is the only pharma company with a full portfolio of product that cover the patient journey, with product in mild, moderate, and severe psoriasis.
We view this space as ripe for innovation, and we believe that we can use our skills, experience, and R&D commitment to improve patient lives and to continue our quest to become a leader in medical dermatology sector. Within this context, let me give you an overview on the strategic direction in which we are moving right now.
Firstly, the goal is to leverage what we already have to maximize our current portfolio, ensure strong future launches, and expand our commercial presence in key market, especially in Europe, where we have a solid market position. Secondly, continue to further research in immune inflammatory diseases such as atopic dermatitis, psoriasis, alopecia areata, and vitiligo, having already built a solid franchise in psoriasis and atopic dermatitis.
Thirdly, focus on expanding the expertise we have built into newer area like non-melanoma skin cancers diseases such as actinic keratosis, where we have already Klisyri, basal cell carcinoma and squamous cell carcinoma. We have already started to expand our portfolio and R&D capability in this direction, and we are building future opportunity there.
Finally, we plan to explore the field of dermatological rare diseases with high unmet needs. This is an exciting field that has not been properly served by the industry right now. We have an opportunity here to let us have experience in dermatology and our extensive knowledge with innovative therapies.
This is our sharpness strategy focus on the high unmet medical needs. Now let's move into the business performance. 2021 has been a strong year for Almirall, both from a financial perspective and also in terms of pipeline progress.
We saw strong business momentum driven by our growth drivers, and we are pleased to have delivered on our upgraded guidance, which we provided in quarter two and which we further tightened in quarter three. Let me highlight the performance of our growth drivers. Ilumetri continued to perform strongly with excellent sales momentum, and is gaining traction with recent country launches including France, Spain and Italy.
Seysara has had a steady improvement in TRXs and gaining oral antibiotic market share based on new commercial coverage. I will get into more detail later on the presentation. Since we launched Klisyri in the U.S., we have seen positive trend in the second half of the year with improving market access. In Europe, we recently launched Klisyri in Germany and the U.K., where we are seeing very good initial momentum.
I will provide again further details in the growth driver shortly, but overall, very good momentum. We continue to work hard on the late-stage pipeline to leverage the significant potential over there. As you have seen, we provided three readouts of lebrikizumab phase III data in August and December, and Karl will discuss. We continue to work with our partner, Eli Lilly, towards a targeted 2023 European launch.
Additionally, Wynzora has made a very good progress, having launched in Germany and Spain and the U.K., with a further 11-country approval. Seysara China phase III clinical trial are underway. Finally, with efinaconazole, we are working toward the regulatory submission expecting in the first half of this year, and the launch in 2023. Again, Karl will explain more on the pipeline update during the presentation.
With that, let me now move into more details of our growth drivers. As I mentioned, we are pleased to deliver on our upgraded 2021 revenue guidance and hit the upper range of the Core EBITDA level. The strong set of financial and solid operational performance was driven by the core business, which continued to perform well, and which is being driven by our recently launched product and the strength in Europe dermatology business.
Meanwhile, we are also making very good progress in our late-stage pipeline. Almirall starts 2022 in good shape operationally. In addition, we have a good credit rating reflecting our healthy balance sheet, which we can use to actively pursue bolt-on acquisition and late-stage in-licensing opportunity that align with our corporate strategy as we have outlined at the start of the presentation.
Let's move now to the performance of our growth drivers, starting with the strong momentum of Ilumetri. Here in the slide, you can see the market dynamic in Germany, where we can see the market was driven by the anti-IL-23 class and the anti-IL-17, with the anti-TNF losing market share. Ilumetri has had a strong performance with sales growing sequentially.
Sorry, new country launches help drive momentum and contributed to the overall net sales of over EUR 25 million in the last quarter. We expect increased contribution from new country launches to continue to grow in 2022. The uptake in France, which came online last year, is going very well. Italy's continued to grow quite significantly, and in Spain it's ramping up too. We are in a very good shape.
We expect this momentum to continue to 2022 with a similar growth as we saw in 2021. Ilumetri is a great opportunity for us, and we are going to continue to drive it as hard as we can. We will roll out in most of the market by year-end, which is going to help in this growing momentum.
With that, I would like to turn our focus to our recent product launches in Europe, Wynzora and Klisyri. Wynzora is the first and only aqueous calcipotriene, betamethasone dipropionate combination cream being developed using the PAT formulation technology. This is for adult patients suffering from mild to moderate psoriasis. This technology helps make the product highly tolerable and even safe in the sensitive tissues, which is an important feature of Wynzora.
We have successfully launched this topical cream in Germany, Spain, and the U.K., and we are confident that we can have a very nice uptake in this market. Initial data is very good, and we already have achieved more than 5,400 patient prescriptions in the first few weeks.
An extensive European rollout campaign will continue during the year, following the approval in 11 other European countries. To remind you, this is a decentralized procedure with rollout progressing as we get a reimbursement in each of the individual countries.
The product has a clear strategic fit within our portfolio, as Almirall can now provide a full range of psoriasis products covering the full patient journey, and it also helps to strengthen our European psoriasis position.
Almirall will be the only pharma company with a full portfolio of psoriasis product, a biologic Ilumetri, an oral systemic treatment, Skilarence, and Wynzora, a topical product. Now, let's focus on another launch in Europe with Klisyri for the actinic keratosis.
We are pleased with the commercial launch of Klisyri in Germany and the U.K. Klisyri is doing very well, having achieved more than 28,500 prescriptions in launch, and all of the wholesaler having already placed order.
We continue to work on the rollout of the Klisyri in Europe. In the top right of the slide, you can see the performance of the Klisyri in Europe versus other actinic keratosis product relative to month zero. Here you can really see the strong traction of the product is getting since its initial launch.
With key market introduction of Klisyri and Wynzora, 2022 is shaping to be a good and very busy year for our team. These are both important growth driver for Almirall, with more to follow in the short to mid-term. Now let's have a look at the U.S. product, starting with Klisyri. Klisyri continue to make steady gains within commercial lives quarter-on-quarter. As of year-end in 2021, 55% or more than $100 million commercial lives have access.
The product has gained penetration in the actinic keratosis topical market with more than $22 million having been generated since the launch. Let me remind you that the actinic keratosis is the second most common diagnosis made by dermatologists in the U.S., where the existing topical therapies are associated with significant side effects such as pain, inflammatory reaction, hypopigmentation, and scarring.
The strategy has always been to generate a lot of real-world experience, and we are most encouraged by the feedback from dermatologists. Patients are experiencing strong immediate benefit as our product addresses the tolerability limitation of the existing treatment. Klisyri offers a good profile which represents a significant step forward in the treatment of actinic keratosis due to its short treatment protocol, a once-daily application for 5 days, proven efficacy, and good safety profile.
We have made progress also with Medicare Part D, too, which has increased access to more than 14 million lives. We are making good progress as we differentiate Klisyri from what is already available in the market based on the efficacy, tolerability, and convenience.
Our expectation is that we should be able to gain a good level of market share as dermatologists are seeking new options to treat the actinic keratosis patients, and we'll continue to support the launch in the U.S. Now let's take a look at Seysara.
Our strategy remains the same to build the TRx and increase the market share as reps are increasing the face-to-face interaction with physicians. In 2022, we have seen a rebound on TRx, which has helped drive net sales up 30% year-on-year, and an increase in market share very close to the 5% of the oral antibiotic markets. We are focusing our efforts on increasing market access and increasing the quality of the coverage.
As you can see, we made good progression during the year, increasing effective coverage to almost 53% or 100 million commercial lives. We think this is a very good product with good potential, and we continue to work hard in our execution plan to rebuild prescription, grow the market share, and continue to dedicate resources to further differentiate Seysara based on the microbiology label. With that, I will pass over to Karl to update you on the pipeline.
Thank you, Gianfranco. As you can see on this slide, our late-stage pipeline looks promising. We are extremely excited that we have announced the top-line readout for the 3 pivotal phase III clinical trials for lebrikizumab in atopic dermatitis. Furthermore, as Gianfranco has already mentioned, we are launching Klisyri across Europe.
We are working on an expansion to large field with a launch anticipated in late 2024 in the U.S. and 2025 in the EU. For Seysara in China, we have started a phase III trial with first patients being treated. For efinaconazole, a new treatment for onychomycosis, we plan to submit regulatory filings in the first half of 2022, and I will share more details during this presentation. In addition, as already mentioned, Wynzora is launched in 3 countries in Europe and approved in 11 additional territories.
As you can see, we are making good progress with our late-stage pipeline, and we are on the right track to strengthen our leadership in medical dermatology. In addition, we are also building our early pipeline. We recently signed a licensing agreement with Ichnos Sciences for a first-in-class anti-IL-1RAP.
RAP stands for receptor accessory protein, monoclonal antibody, which has potential utility across different autoimmune skin diseases. Let me now turn to lebrikizumab for atopic dermatitis, which we are developing with our partner, Eli Lilly. Lebrikizumab is the most promising pipeline asset we have.
We reported in the second half of 2021 positive top-line phase III results from 3 pivotal studies. The primary and all key secondary endpoint, including itch, interference of itch and sleep, and quality of life, were met at week 16. The safety profile was consistent with prior studies.
At the end of last year, we started a phase IIIb study where we explore lebrikizumab in combination with topical corticosteroids in adults and adolescent patients with moderate-to-severe atopic dermatitis who are not adequately controlled with cyclosporine or for whom cyclosporine is not medically advisable. Cyclosporine is a broad-based immunosuppressant that is used in some patients with severe atopic dermatitis who have failed conventional therapy.
It offers rapid relief, but its effect is not long-lasting. A study in this patient population is part of a data package required to get access in different European countries. We expect to complete the ongoing ADvocate 1 and ADvocate 2 52-week maintenance phase in the first half of 2022. We plan regulatory filings with the EMA in the second half of 2022, and would expect approval about one year later in late 2023.
Now, moving to efinaconazole, a novel treatment for onychomycosis. We recently acquired the EU rights from Kaken Pharmaceutical. Jublia, which is the brand name in other countries, is aimed at a prescription product where Ciclopoli, our other product in this space, is mainly OTC. We think that both products are complementary and help reinforce our onychomycosis franchise, which is an attractive commercial opportunity for us.
We are working towards the regulatory submissions to EMA in the first half of 2022 and an expected launch in 2023. As efinaconazole is already approved in other countries, we are optimistic that we can achieve this. As mentioned at the end of 2021, we in-licensed exclusive global rights to develop and commercialize a monoclonal antibody against IL-1RAP from Ichnos Sciences. RAP stands for receptor associated protein. This antibody, abbreviated ALM-27134, has potential utility across different autoimmune diseases.
ALM-27134 is a first-in-class, fully human, high-affinity, monoclonal antibody against human IL-1RAP. It is unique in the sense that it simultaneously blocks different members of the IL-1 family of pro-inflammatory cytokine receptors, including the receptors for IL-1, IL-33 and IL-36.
These cytokines have been implicated in numerous autoimmune skin conditions, which opens up opportunities across a potentially larger set of indications. IND-enabling work has been conducted and filings with regulatory authorities are underway. We plan to initiate the first-in-human study in the first half of 2022. With that, I will hand over to Mike to walk you through the financials.
Thanks, Karl. As Gianfranco mentioned in the introduction, we have seen a solid performance this year with good growth from the core business, and we've met our upgraded 2021 guidance. We've seen good sales growth during the year, especially in Europe. Core net sales increased 7% and core EBITDA increased over 16% year-on-year, driven by positive contribution from the growth drivers and a strong EU dermatology performance.
For 2021, including special items like product out licensing and other licensing milestones, we achieved a core gross margin of 68.4%. As I explained in the previous call, a gross margin ratio of 67% as seen in the second half is a good proxy for the next few years based on our current mix and the fact that our recently launched products have royalty commitments to our partners.
In terms of OpEx, SG&A increased in line with our expectations to support the launches of Klisyri in the U.S. and EU markets, the continued Ilumetri rollout in the EU, as well as some normalization of spending as COVID impacts were less than in 2020. The overall outcome is a strong growth of our core EBITDA to EUR 211 million.
We've also had a very strong operating cash flow reaching EUR 234 million, resulting in a very healthy balance sheet as we finish the year at 1x net debt to EBITDA with a simplified capital structure. On slide 23, you can see the dynamics of the core business in the EU and U.S. markets, where the European dermatology business in particular has had a very strong performance.
Sales of other products also increased during the year following a soft allergy season and low cough and cold seasons in 2020 as a comparison. Focusing on our U.S. business, which has seen a negative impact from COVID the last two years, there's been some improvement in terms of capturing new patients in 2021. As previously communicated, the generic impact of Aczone has been annualized, but we expect additional competitors launching soon, which will erode most of the remaining sales.
Overall, our portfolio has limited patent expiry going forward in the near term outside of Efficort, Tesavel in Spain, which will be impacted in late 2022 with an impact mainly on price. Additionally, Rest of World General Medicines has seen a small decline year-on-year, driven by Imunorix and Macmiror complex franchises, which had very high demand during the pandemic year in 2020.
Let's take a closer look at dermatology business on slide 24. In 2021, we had a very strong performance in Europe, driven by the growth of Ilumetri, as well as strong trends for our Ciclopoli and Decoderm franchises. The U.S. business has been slow but has steady progress with some improvement in recent months. As discussed earlier, the business has been impacted by COVID restrictions with a slower uptake of new launches and softer demand in some areas.
This has been notable with Seysara, where we continue to work hard to rebuild the TRx and increase market share, as Gianfranco described previously. The other U.S. products were affected by higher returns and rebates in 2021. As I commented at the Q3 results, the consignment income and royalties from authorized generics are included in the U.S. sales.
Consignment income is not large, but it is a common strategy to improve patient access at the pharmacy level. On slide 25, I've already highlighted the key factors on sales performance. Let me continue with our focus on the core business by running you through the rest of the P&L.
For the full year, we achieved a core gross margin of 68.4%, which benefit from the contribution of a favorable product mix and some one-offs previously mentioned. As I detailed on the Q3 results call, going forward, excluding these one-offs, a good proxy is around 67% for the coming years. SG&A is increasing in line with our expectations as we continue to invest in product launches, and the comparison to 2020 is higher because of, spending was affected by COVID restrictions more last year.
The percentage of R&D versus net sales, while lower than 2020, is accelerating as we expected in Q4 with the start of the Klisyri and lebrikizumab studies. Overall, the increase in core sales and overall spending led to our Core EBITDA increasing 16.7% from last year, reaching EUR 211 million.
The reconciliation at the end of the P&L reflects deferred income, which was EUR 17 million, and other income of EUR 7 million from AstraZeneca. Just to remind you, following the AstraZeneca transfer of Eklira to Covis Pharma, we will receive EUR 50 million in cash in the coming years as a result of the transaction, mainly as an acceleration of China-related milestones.
This will have a limited net impact on the P&L in the coming years, and we will continue to receive royalties from the agreement initially signed with AstraZeneca with an income impact in the range of EUR 10 million a year. On slide 26, continuing down the P&L, I'd like to highlight the increase in corporate tax due to the revaluation of our deferred tax assets following a new Spanish law that requires a minimum tax rate of 15%.
The new concept of minimum taxation has implications for the rate we can use our tax credits and other deductions. The normalized net income, excluding the impact of impairments and the deferred tax adjustment, results with a slightly down versus 2020, finishing the year with a normalized earnings per share of EUR 0.45.
The negative net income is affected mainly by the impairments announced at the half-year results and the Q4 tax revaluation based on the new Spanish law. If we now look at the balance sheet on slide 27, there are quite a few comments provided, so I'll just highlight two of the most important factors.
There was a net decrease in financial debt related to the EUR 300 million high-yield bond issued in September, which was more than offset by the repayment of the EUR 250 million convertible bond and a repayment of EUR 150 million in bank loans. We now have a simplified capital structure with no potentially dilutive instruments and a very healthy balance sheet.
We finished the year at a leverage of 1x EBITDA in net debt, which gives us flexibility in the current environment and for additional licensing M&A activity with a cash position currently over EUR 200 million. Let's look at the cash flow statement on slide 28. We delivered very strong operating cash flows, generating EUR 234 million.
Included here is the net refund of corporate taxes, aided by receipt of two years of refunds in Spain in 2021 instead of the normal one a year that we had in previous periods. This works where you pay in the first three quarters, usually amounts in Spain, and then you get a refund in the fourth quarter. The fourth quarter refund for 2020 was actually received in January 2022.
We have made key investments during the year, which included the milestone payments for the U.S. commercial launch of Klisyri and the upfront cost for the acquisition of European rights for Wynzora. The divestments refer to milestones and royalties collected from AstraZeneca. These have been classified as investing activities due to the reduced focus in our operations.
Additionally, there was a disbursement of almost EUR 12 million for a gross dividend in Q2 of EUR 0.19 per share as the dividend was partially paid in scrip. At the AGM in May this year, a dividend of EUR 0.19 per share will be proposed, which is similar to the payments made in previous year, and we will intend to offer a scrip option.
Finally, the debt decrease is related to the net impact of the new high-yield bond issuance offset by the repayment of bank loans in the convertible bond. Let's now take a look at 2022 on slide 29.
In 2022, we expect core net sales growth of single digits. In terms of total EBITDA, we expect to be between EUR 190 million and EUR 210 million for the year. We guide the total EBITDA to avoid confusion as there's only a minor difference with the core EBITDA going forward of approximately EUR 10 million in 2022.
I want to outline the guidance assumptions that we're using for 2022, which includes some pushes and pulls. We anticipate the increase in net sales mainly coming from the continued expansion of Ilumetri in Europe and the new launches of Klisyri and Wynzora across Europe.
In addition, we anticipate a recovery in the US dermatology market, where we'll be working to capitalize on our improving coverage for both Seysara and Klisyri. We assume limited impact from COVID this year as we don't anticipate major shutdowns of healthcare operations in the countries we're operating in. On the downside for sales, we do expect a minor headwind on Aczone with additional generics launching in Q1. Deferred income will also be zero in 2022 as anticipated, with a decline of EUR 17 million versus 2021.
In addition, we are managing the expected pricing impact due to the patent expiry of Efficort, Tesavel in Spain in late Q3, early Q4 this year. We will also expect lower levels of out licensing income in 2022 as 2021 included a product investment in Q1 and several smaller licensing deals for legacy products.
For the spend trends, we intend to invest to support our recent incoming launches, which will lead to an increase in SG&A spend in the mid-single digit range in 2022 to support our growth. This includes the launch of Wynzora, rollout of Ilumetri and Klisyri across Europe, as well as to reinforce Seysara and support the growth of Klisyri in the US.
Additionally, we will also be preparing for the launch of lebrikizumab in 2023. In 2022, we expect R&D spend to be around 12% of net sales. There are two factors that are driving a significant increase in R&D spend. First, the phase III B studies for lebrikizumab. We have to pay the cost, these are reimbursement studies for Europe. Up until now, R&D costs have been low as the phase III was being funded through milestone payments.
Second, the spend on Klisyri large field studies will also shift to R&D P&L, as the phase III was performed by our partner in a similar milestone setup. Finally, we'll increase spend on earlier stage assets such as the anti-IL-1RAP that we recently licensed as described by Karl.
Our Core EBITDA margin, as mentioned last quarter, is going to be in the low- to mid-20s% for 2022 and the following year or two due to investment needs for our exciting product launches, including lebrikizumab in 2023.
We will also see a higher effective tax rate in 2022 due to the new Spanish minimum tax rate, as well as the U.S. being in a tax loss position. For the cash flow, we expect a decline in operating cash flows due to the lack of a double tax refund and lower EBITDA.
Investing activities will increase slightly due to a higher amount of R&D and clinical milestones for existing agreements, offset by additional receipts following the AstraZeneca transfer of the respiratory business to Covis. Any M&A or additional licensing activity during the year could lead to additional cash out for investing activities.
We do not expect major financing activities outside the normal interest expense and dividend payments in 2022 in the absence of any significant M&A or licensing activities. With that, I turn it back over to Gianfranco for the conclusion.
Thanks, Mike. To wrap up, we have delivered a strong operational performance, achieving our upgraded guidance, which for Core EBITDA was at the top end of the range, as the core business continued to perform very well and in line with our expectation. We have started this year with good momentum of the business, where we are confident that Almirall growth driver will continue this trajectory as we continue to support the recent launches.
Ilumetri has had a very strong performance, and we expect increasing contribution from new country launches to continue the growth during the year. Furthermore, as detailed by Karl, we are progressing well with our exciting innovative late-stage pipeline within the strategic framework I set at the start of this presentation. We'll be initiating important clinical trials while executing on key market introduction, which will add to our European growth drivers.
I am pleased with the initial performance in Europe of Klisyri and Wynzora, two important products for Almirall. Our focus strategy on the medical dermatology space position us well for the midterm, and we continue to execute on the transformation of the company by preparing the business for important launches and to support future growth prospects.
This year will be very busy for our teams, not just with an extensive European rollout campaigns, but also as we are preparing the business for exciting future launches like lebrikizumab and Wynzora, which will support our need to long-term sales prospects. Finally, Almirall is well positioned for long-term growth by unlocking the value of the late-stage pipeline.
This growth will come from the increasing contribution from the current and future growth driver and as well as for opportunistic inorganic growth from the external opportunity by leveraging our strong balance sheet and flexible capital structure. With that, Pablo, I will hand back to you for the introduction and the Q&A.
Thank you, Gianfranco. Nadia, back to you for the Q&A, please.
Thank you. Dear participants, we will now begin the question and answer session. If you wish to ask a question, please press star and 1 on your telephone keypad. The first question comes from the line of Guillermo Abello from CaixaBank. Please ask your question.
Hello. Thank you for taking my question. 3 for Mike. The first one, if you can provide a bit more detail on your plans regarding the phase III-B trials for lebrikizumab, additional trials that could be eyed by you, and whether we could see additional 16-week data, possibly even ahead of the 52 weeks data presentation.
The second question on Klisyri. If you could guide us on your market share expectations for 2022. Third, regarding M&A, where are you currently seeing opportunities to report your portfolio through M&A? Thank you.
Thank you, Guillermo.
Maybe I-
Let's start with Karl, and then I will go.
Thanks for the question. As you have seen, we have last year announced positive phase III data for three pivotal trials for lebrikizumab ADvocate 1, ADvocate 2, and the ADhere trial. These data together now with the 52 weeks maintenance data from ADvocate 1 and 2, will be the basis for the regulatory filings in the second half of 2022.
Now, the next step for us is to ensure broad access across Europe. We have already started one study to explore lebrikizumab in patients that have failed cyclosporine A or are not eligible for medical reasons for the treatment. This is a study that is expected by payers and has also be conducted by both tralokinumab and Dupixent.
In addition, we are exploring together with our partner, Eli Lilly, various options of comparing lebrikizumab with available therapeutics and standard of care. This is an ongoing discussion, and we'll keep you updated as these topics emerge.
Finally, in terms of publication of the 16 weeks data, as mentioned previously, our partner, Eli Lilly, will present the data to the scientific community during 2022, and more likely than in the first half.
Okay, I will take the Klisyri. In terms of market share. Let me divide the question into two parts. The first one is about the U.S. You may appreciate that, during 2021, we increased our sales, now it is close to 50% of the commercial sales. Also the market share is ramping up little by little.
In Europe, we just launched, as we said, in Germany and the U.K. We are very pleased with the initial performance, and we can expect this trend to continue to perform also in the coming months. In terms of M&A, M&A, we said that our balance sheet is quite strong. Mike was mentioning about the ratio net debt to EBITDA, that is 1.
We are looking for bolt-on opportunities, and both in the late stage and also in the early stages of, you know, whatever will be available in the market that is closely linked with our strategy. Thank you, Guillermo.
Thanks.
Thank you. The next question comes from the line of Thibault Boutherin from Morgan Stanley. Please ask your question.
Hello. Thank you for taking my questions. The first one on efinaconazole. According to Evaluate Pharma data, the drug is generating $260 million worldwide right now. Obviously, you're not going to give guidance by product, but is it fair to assume that this could become one of your largest products in Europe?
And also, could you give us some color on any additional launching costs for this product? You already have a franchise here, but obviously this is a prescription drug, so does it require any additional commercial support? Second question on Seysara in the China study. First of all, could you just confirm your expected timelines in terms of study completion in China?
Second, if you could just give us a little bit more color on your decision to invest here, because obviously, let's say, the performance in the U.S. was not what was expected initially, and you obviously kind of came back on the guidance on this. What are your expectations in China, and if you could put this in context with the costs for this phase III study. Thank you.
Thank you, Thibault. I will start, and then I will hand over to Karl for the Seysara China study. Efinaconazole, as Karl was mentioning, we are planning our regulatory submission during the first half of this year, with the launch expected in 2023. Efinaconazole is going to be a very strong portfolio because you know that we have Ciclopoli today, that is an OTC.
Between the two products, we are going to cover the full spectrum of the patient with onychomycosis. One will be on the OTC, the other, efinaconazole, will be on the prescription. You know, it's very early to comment on sales, but I think that most importantly will be a very strong message for the patient, because again, we can cover the full spectrum of the disease.
Maybe, Karl, you want to comment on Seysara China?
Thank you. We have started a phase III trial in China with the aim basically to confirm the data we already have in a Chinese patient population. This trial was just started in Q4 2021, and we assume to complete this during this or next year with a submission in 2023 and a potential launch in 2024.
Maybe, Thibault, you were asking also about the performance of Seysara in the U.S. and China. Seysara performance in the U.S., as we said, you know, we improve a lot the market access. We are growing in term of TRx, and we are hoping that now COVID is going to give us a little bit more, less pressure, sorry. We are going to receive doctors and that is going to improve the TRx. In term of China, let's wait for the result and then we will see what will be the go-to-market model. Thank you, Thibault.
Thank you.
Thank you. The next question comes from the line of Álvaro Lenze from Alantra Equities. Please ask your question.
Hi, thanks for taking my questions. The first one would be on the psoriasis franchise. I see that Ilumetri is performing very well, but whether you could comment on Skilarence and whether the declining revenues indicates that it has already peaked or whether we should expect some improvement there. Also if you could comment on the potential revenue contribution from Wynzora in 2022.
My second question would be on the other income guidance from the respiratory franchise that has just been transferred, the EUR 10 million that you indicated. Does this account for the accrual of the EUR 50 million milestone or this also includes the royalties? Lastly, just from a modeling perspective, if you could comment on the expected normalized tax rate going forward. Thanks.
Thank you, Álvaro. We start and then Mike is going to cover the rest. We start with the psoriasis franchises question. Skilarence during the COVID suffered because as you know, the patient need to go under the blood monitoring. That's why, you know, you saw a little bit decrease in the sales of Skilarence.
I think that, you know, with the COVID giving us a little bit less pressure, we are going to see a little bit of rebound. Remember that Skilarence is strong on two main markets that are Germany and in the Netherlands. In term of Wynzora, as I said, will be a fantastic complement for our psoriasis franchise.
I think that is to give, as I said, you know, a full opportunity to treat the patient with a full spectrum of the different type of disease. Maybe Mike, you want to comment on the remaining part?
Yeah. The other income of roughly EUR 10 million plus or minus a few does include the impact on the P&L of the EUR 50 million cash that we will get over the next couple of years from the AstraZeneca Covis transaction. I remind you that this original transaction was accounted for as a business disposal.
A lot of these things are actually on the balance sheet. The majority of that EUR 50 million is just going to offset balance sheet items. There is a possibility that if Covis improves the sales trends, which were declining under AstraZeneca, that this amount of income could increase as we go forward.
It's too early to tell if their efforts are going to drastically change the trends that we've seen basically going down over the last couple of years. It's mainly a balance sheet impact for now with the potential for some upside if Covis does well with these products.
When it comes to the normalized tax rate, we are expecting effective tax rate in the low 30s% in 2022. This is because of the 15% minimum tax in Spain, and the fact that our U.S. operations is on a tax loss, and we're not able to deduct that loss against the taxes we're paying in Europe, where the business is very profitable. We're hoping this will be a temporary impact, and that we'll be able to improve the effective tax rate in future years.
Okay, thanks.
Thank you. The next question comes from the line of Jo Walton from Credit Suisse. Please ask your question.
Thank you. One financial and a couple of product questions. I wonder if you can help us on what the net financial charge should be for FY 2022. It obviously was a lot higher in the fourth quarter of fiscal 2021.
Secondly, on the product side of things, if you are going to, or if you and your partners are going to be filing lebrikizumab in the second half of this year, and given it takes a year to get a European approval, and then you've got to get European reimbursement, would it be realistic to assume that real sales for Lebri don't really kick in until 2024 rather than back end of 2023? I wonder if you can tell us a little bit about the expenses that you say that you're already beginning to ramp up.
When it comes to the extra clinical studies that you say that you need, you've already started the one with the corticosteroids. Would it be reasonable to assume that you might do a non-inferiority versus Dupixent? Given that Dupixent is the, you know, leading biologic today, and it would be clearly very beneficial for you to show that you were definitely no worse than that.
If you were to do that, would it be available in time for your launch? My final question, I'm very impressed to see that you're thinking of adding new products to your franchise, particularly in Europe. Could you give us some sense of what extra you could be able to support given your current infrastructure? Could you take, you know, one or two new products in there without much additional expense?
Given that, particularly in the U.S., we've seen a difficulty in getting, you know, biotech IPOs away recently, is there any softening in prices that might make us more confident that you can sign a couple of deals this year? Thanks.
Yeah. Thanks, Jo. Let me take a stab at the first one or two, and then we'll pass over to Karl and Gianfranco for the other two. The net financial charge, I would expect in the, you know, the EUR 12-15 million range next year. There was a little bit of a higher cost in Q4 as we had to unwind the accounting for the convertible bond.
But overall, you know, we have a very manageable debt situation. We actually were able to launch the bond last year at a very good rate. I think, you know, somewhere in that range, maybe even a little bit lower if we're able to repay some debt and we don't do any further M&A in 2022.
In terms of the Lebri, just the timing, yes. I mean, you shouldn't expect the significant sales up-ramp until 2024. It'll probably be in the later part of 2023 that we launch, and you'll have the initial uptake. But clearly it'll be a growth driver in 2024. Maybe I'll pass over to Karl to talk about the clinical trial for Lebri.
Yeah. As mentioned, we have started As part of generating a data package to ensure broad access in Europe, a study in patients that are either not eligible or have failed on cyclosporine A.
We are also now considering various options to compare against the standard of care and certainly non-inferiority versus Dupixent is one of the options that we discussed. However, this is not yet finalized and we keep you updated once this decision has been taken.
I will cover the part on the product portfolio. You are absolutely right. We are looking to further leverage our fixed cost base. You were mentioning the example on the psoriasis franchise, where today, you know, we can cover the with three product on the same target.
The same is going to happen on the onychomycosis franchise with Ciclopoli and Jublia. I think that's the goal is to becoming a one-stop shop, offering the to the patient and to the physician, you know, whatever we can on the medical dermatology side. In terms of your question about, you know, the US and the pricing to the opportunity to sign more deals, I think that, you know, we did a good job in 2021.
I said that we have a coverage of almost not more than 50% for both Klisyri and Seysara. I think that, you know, is a good one. I think that we are going to continue to work, especially with the Medicare Part D for Klisyri. With Seysara, you know, we can increase another couple of points, but the goal will be more on the quality versus, you know, the total amount of market access. I don't know if I answered your question, Jo.
Yeah. Let me add to the Lebri. You also asked about the expenses. It's just the normal pre-marketing expenses this year. You know, we need to build the brand and a few other things. Not a huge amount, but there are some expenses already kicking in for levering on the SG&A side.
Thank you.
Thank you. The next question comes from the line of Peter Welford from Jefferies. Please ask your question.
Oh, hi. Thank you. I've got just a couple left. Firstly, just with regards to Klisyri, I wonder if you can just talk about for the coverage. You mentioned commercial coverage is 55%, and the Part D lines. Wonder if you could talk about, well, what's the relative importance for Klisyri of the Part D patient population versus the commercial population for this drug in terms of how you see the relative mix of target patients.
And what's your goal ultimately for a reasonable coverage of these over the course of 2022 or perhaps longer term? I guess just trying to understand where we think this could get to. And then, just secondly, with regards to Seysara, you talked there about the trend that you saw in market share there.
Could you just talk a little bit about where you think that can go during 2022 and onwards? Particularly, obviously, there was some challenges I think during COVID, but equally, obviously you had benefits from the label change. Just wondering if you could talk a little bit about how confident you think that trend could get.
And finally, I mean, just with regards to this year now, you talked about the 2023 margins also being below 26% for EBITDA. Just wondering if we think then about the cost base, should we then presumably think about, again, SG&A and R&D trending up in line with sales presumably during 2023? Should we with regard to 2023 still has been another year of investment. Thank you.
Thank you, Peter. I will start, and then I will hand over to Mike. In terms of Klisyri coverage today in the U.S., we have 102 million commercial lives. That is a little bit more than 50%. As I said, the goal is to continue to improve these assets, but, you know, the majority of the goal will be on the quality.
In terms of Medicare Part D, today we have 14 million patients. Again, the goal is to continue to work on this side because you were mentioning the majority of the patients are senior and, you know, they are the ones that are benefiting the most from the Medicare Part D. In terms of Seysara, you are right.
The label change is going to help us to build on the momentum, not only working, continue to work on the assets that today is more than 50% with 100 million commercial lives. Also here, the goal is not only increasing the market access, but the quality of the assets that we have.
I think that today we are at 4.5% market share, so we are going to continue to work to increase our market share and to increase the opportunity to have better TRx. That's it. I think maybe Mike, you want to answer the part on the P&L?
Yeah, I think you know when we look forward from 2022 to 2023, I think you'll see similar trends. You'll see some top line growth. We will have to swallow you know the generic impact on Efficib/Tesavel, which will be mainly a pricing impact in Spain.
Maybe a tad lower sales growth momentum in 2023, but then really accelerating 2024 and beyond as we have the real uptake of all the other launches. So that you will see. I think you will see you know probably increases in SG&A and R&D in 2023 in line with the sales. You won't see a real margin expansion until we get 2024 and beyond. Then in terms of gross margin, it's too early to tell.
It'll really depend on the net pricing we get for lebrikizumab, how fast we can change that dynamic. You will see accelerated sales growth and accelerated profit growth once we start hitting 2024 and beyond.
Sorry, can I just come back to Karl, just a comment you made earlier. Karl, I think you said for the lebrikizumab data more likely than in the first half. With that, you mean that more likely we're going to see the presentation of the detailed data by Eli Lilly in the second half of the year, we shouldn't expect presentation in the first half. Is that what you meant?
Sorry. I meant that, you know, presentation of the 16 weeks data to the scientific community you likely expect them in the first half of 2022.
Right.
That's what I said.
We get the 16-week data presented to the medical community in the first half.
Yeah.
That's great. Thank you.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press Star and One on your telephone keypad. The next question comes from the line of Jaime Escribano from Banco Santander. Please ask your question.
Hello, good morning. One question from my side. We saw in one of the slides that the market share in new patients for IL-23 inhibitors is increasing to 40%, versus around 30% before. My question would be if this is structural, what is behind this increase of market share for the whole category, or is this more something seasonal, affecting Q4 and it will go down? Building on this question, in order to know what can we expect for Ilumetri, if this is one of the reasons why Ilumetri is doing so well. Thank you very much.
Thank you, Jamie. I will take it. You know, the market share of the IL-23 class, you're right, it's the 40%. If you look the graph is up and down. I think that, you know, a good proxy between will be a fight between IL-23 and IL-17 class. That's what we will see. In terms of Ilumetri performance, Ilumetri did a very strong 2021, and we are expecting that it's going to continue in 2022.
The class of the IL-23 is the winning class because of efficacy, convenience and safety profile. Ilumetri is, you know, summarizing all these, you know, type of features in the IL-23 class. We are doing quite well. The example of Germany on the dynamic market, we are head-to-head with big company like Johnson and Abbott. We're very confident that Ilumetri is going to continue to perform as good also in 2022 and the year to come. Thank you, Jamie.
Thank you very much.
Thank you.
Thank you. That's all for the questions. I would like to turn the conference over to Pablo Divasson for closing remarks.
Thank you, Nadia. 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.