Good day, and welcome to the Almirall's Financial Results and Business Update Q3 twenty twenty Presentation. Today's conference is being recorded. At this time, I would like to turn the conference over to Pablo Diversson. Please go ahead, sir.
Thank you, Joao. Good morning to everyone on the call. Thank you for joining us to review Almirall's Q2 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 admiral.com.
Moving to Slide two, 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 three. Presenting today, we have Peter Gunther, Chief Executive Officer and Mike Magellan, Chief Financial Officer. Peter will review the third quarter business performance and later come back to sum up, and Mike will give you detail on the financials.
After that, we will open up for a Q and A session. So with that, I will pass you over to our CEO, Peter Wunder.
Thanks a lot, Pablo, for the introduction, and good morning to everybody on the call. Before I move on to the quarterly results, I would like to first address my decision to leave Almirall. First, let me tell you that I had enormously enjoyed my three years at Almirall. Since I joined the company, we have worked extremely hard to build what I call the new Almirall. This new Almirall is driven by a sound strategy by highly experienced and talented people and by a series of innovative launches and late stage pipeline products.
Above all, we at Almirall are driven by a profound desire and commitment to make a real difference in patients' lives suffering from debilitating dermatological diseases. And I very much believe that we have indeed succeeded in building a very strong company that is poised for future growth. The transformation of the company is quite obvious when you look at the structure of our EBITDA. The core EBITDA, which is at the end of the day what we really manage, has more than quadrupled over the period. Consequently, we are no longer dependent on other and deferred income elements.
Moving forward, growth of core EBITDA is what you should be looking for. Of course, have not done it alone. We have significantly reinforced many parts of our organization by development of internal talents as well as by external hires. I'm proud to say that I leave in place an internationally experienced leadership team capable of driving long term shareholder value. Also, we have built one of the strongest pipelines in medical dermatology.
Thanks to a series of successful in licensing projects, we have evolved from a pipeline based on reformulations with little clinical relevance into a pipeline of late stage innovative new entities that will bring clinical relevant patient benefits. Consequently, Almirall is set for a period of sustained growth of our core business over the coming years, further accelerated by the launches such as tirbanibulin in U. S. And EU, the launch of lebrikizumab in EU and others to follow. We have also strengthened our R and D capabilities for which I thank want to thank Boucher Hardas.
Boucher has recently decided to leave the company for family reasons. Finally, I want to thank many people starting with the Gallardo family for their unwavering support, the Board of Directors, and last but not least, all the employees of Avenirall without whom this transformation would not have been possible. Although this will be my last earnings call, you can be assured that I remain fully committed to Alunorte until year end, and we will of course continue to press forward with our fierce strategy. Now moving to the business. In Q3, we have seen a generally resilient performance despite the environment with a varying impact across geographies.
Our European business has shown steady growth, while our U. S. Business having been severely impacted earlier this year has showed initial positive trends. I will comment on our performance in these markets shortly. To highlight our growth drivers performance, ILUMETRI continued to perform strongly, surpassing pre COVID levels, and we are excited about the imminent launch in France, a key building block for the product going forward.
For SKILARENTS, no surprises here, continuing in line as we had guided you at half one. However, we are pleased to have achieved net sales growth sequentially Q3 versus Q2, plus 12%. Seysara saw TRx back to pre COVID levels in absolute terms as overall U. S. Oral antibiotic market has started to rebound.
These initial positives are supported by the critical label updates we explained during the half one call. Our pipeline leverage potential remains extremely significant as you all know. For lebrikizumab, we expect readouts of Phase three in half two next year, and we are working with our partner Eli Lilly in the planning for a 2023 launch. We feel very confident that lebrikizumab will become our number one product by far in the treatment of moderate to severe atopic dermatitis. We are focused on making the final preparations for the launch of tirbanibulin in The US and EU in Q1 and Q2 twenty twenty one respectively.
For Bionis, we have sixty days to review the data, which we expect to receive by the end of the year, and therefore a decision will be made in Q1 twenty twenty one. And finally, is important to mention that we have received the acceptance of the clinical trial application for Seysara in China. This means we are on track to start the Phase three trials as planned. So as you can see, there's important progress in the late stage pipeline. With the resilience of the business we have seen in year to date, we also reiterate the full year guidance.
On the next slide, I would like to show you in more detail the market trends we are seeing that directly affect Almirall. There is a clear rebound in face to face interactions after a trough in the Q2. Our own internal data follow a similar trend and we have been quite successful to beef up our digital communications with our customers. As you will see later in the Idomety section, we have even launched in Belgium and Italy by virtual means in the months of May and June. Additionally, we will show you the rebound in the OAB market, where we are seeing the increase in prescriptions of Seysara.
Let's now move to Idomethi. So this slide shows you the market dynamics in the anti IL-twenty three class. You can see clearly from the German data that anti IL-23s are competing with anti IL-17s, capturing now 30% of the dynamic share of the market within the biologics with compelling reasons for this trend. The anti IL-twenty three class has a strong efficacy profile with the key attributes being a proven lasting efficacy with convenient dosing and with no significant safety concerns. While competition remains intense, elomitriq's product profile is compelling with long term sustained efficacy, delivering maintained control for psoriasis patients, very good tolerability, and ease of use as the key attributes.
This superior profile benefits patients and physicians in the current environment, but will continue to be a competitive aspect in a post COVID world with a quarterly dosing regimen and a cost effective price, which will continue to support the growth of the product in this clinic class. As you can see on the next slide, ILUMETY had a strong performance with sales growing sequentially and with 125% increase year on year. The performance in a key market Germany has continued to drive sales growth, achieving our highest monthly unit volume since launch in that country with more than 1,200 units. Across the different markets in Europe, most countries are surpassing March levels, which really is a good achievement and validation of the potential of We remain fully confident in its growth potential going forward with data for September being very encouraging, continuing the momentum of ILUMETRI. At the recent EADV Congress, we have released as first anti IL-twenty three, a full five year data set analysis demonstrating long term psoriasis control with a reassuring long term safety profile through five years.
We are confident this evidence will help doctors in their clinical decision making, further adding to our understanding of the role that the anti IL-twenty three P19 class can play in achieving long term control, because that's really the goal of treating a chronic disease like psoriasis. On the next slide, as we mentioned last time, we are very excited with the imminent launch of ILUMETRI in France, which is a significant strategic milestone for the company with France being the second largest psoriasis market in Europe and is a strategic opportunity for ILUMETRI. This enables Almirall to build a strong footprint in the dermatology field for future launches with for example tirbanibulin and lebrikizumab. Also here we provide you with some incremental detail across specific markets where we have launched virtually for example in Italy and Belgium. These are proving to be successful launches even within the current restrictions.
In summary, despite the continued impact from COVID in the third quarter, we delivered a strong performance with ILUMETRI with significant sequential sales growth. Even though we are not back at full normalization, we have been able to continue with the rollout. We strongly believe that coming through this pandemic, the profile of ILUMETRI is really what is making the product for physicians and patients return to. Now let's take a look at Skilarence. Overall, no surprises in Q3.
We are pleased with the sequential positive net sales growth seen this quarter despite the continued impact from COVID. I remind you that patients on Skilarence need blood monitoring. And we have also previously outlined to you the issue of compounding we have faced in The Netherlands, which has stalled our growth there. The legal court case is pending and has progressed, and we are expecting to be able to update you in Q1 twenty twenty one. So it's been a decent quarter for Skilarems.
Furthermore, in a post COVID world, the profile of Skilarence will support, will continue to support this growth. To remind you of this, Skilarence is a product with a good balance between efficacy and safety, indicated as a long term maintenance treatment. The dose is flexible and adjusted according to the clinical response and tolerability of each patient, achieving an individualized therapy based on the minimum effective dose. When we will return to normalizations, new patient starts will begin to increase as patients get back in front of their doctors. Now moving to The US.
In The US, as the chart shows, the OAB market has also rebounded from its lowest level in May and is trading close to its pre pandemic levels. In Q3, the weekly total prescriptions have shown a positive trend and the latest data show that prescriptions are at the highest reported volume since the March. Let's now turn to COVID-nineteen impacted Seysara prescriptions in Q2. In Q3, we are encouraged by the increase in new to brand prescriptions, despite the continued challenges presented to us by COVID, and this gives us confidence in rebuilding our position. This was the first quarter with the FDA updates to the microbiology label of Sifana.
While we are still at an early stage, it is proving 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. The narrow spectrum of Seysara versus other products on the market gives us a meaningful advantage. The overall US OAB market has started to show positive trends and our expectations are for the market to continue to pick up gradually. Our focus remains to build prescriptions and gain market share. With that, I'll turn it over to Mike for the financial
review. Thank you, Peter. Now I want to take you through the financial part of the presentation. As Peter mentioned in his introduction, in Q3, we have seen resilient performance despite the tough realities of the COVID-nineteen impacted environment. The key highlights for the nine months to date are the following: Our European business remained relatively resilient with steady growth, while our U.
S. Business, having been heavily impacted by COVID-nineteen effects, has shown initial positive trends in recent months. Year to date, net sales have declined by 3.7% and total revenues have declined by 9%. However, if we exclude Axone generic impact, net sales increased by 4.3% year to date, which gives us a better sense of the sustainable growth outlook for Almirall. This is important as the generic impact is annualized at the end of Q3 with a reduced drag on net sales from Axsome going forward.
If we look at Q3 in isolation, net sales decreased by 9.7% versus Q3 twenty nineteen, but increased by 1% excluding the impact of Axone Generics. Looking at total revenues, we guided earlier this year that we would see a significant reduction in other income, which resulted in a year to date decline of 9%. The gross margin ratio is in line with our expectations given the adverse impact of the generic competition to Axon on margins. In terms of OpEx, SG and A declined in line with total revenues as increased new product investments were offset by lower promotion activity and general expenses in the nine months due to the COVID situation. The combination of these elements results in a decline in EBITDA of 20% for the nine month period.
Turning to Slide 17. We continue to increase our product sales disclosure, adding a quarterly breakdown to better help you understand the dynamics of our business. The difference between our European and U. S. Business momentum is clear as we see the relative resilience of the European portfolio in Q3, driven by the growth of our dermatology business, which I will detail in the next slide.
Our U. S. Portfolio was still impacted significantly by the generic erosion of Axone as well as the COVID impact on other products such as Seysara. However, following the severe impact experienced earlier in the year, we are seeing initial positive trends in Q3. Our Rest of the World business benefited from strong orders from partners in the first half.
As a reminder, other net sales include the impact of the accelerated recognition of deferred income that we mentioned in the Q1 results. The Q3 deferred income was around GBP 5,000,000, which is GBP 2,000,000 less than the Q3 twenty nineteen. Now that we have essentially analyzed the impact of the generic Axon, our portfolio has limited patent expiry risk going forward in the near term. Moving to Slide 18, looking at the Q3 dermatology sales. We drove a strong performance in Europe, benefiting from the growth of ILUMETRI, as Peter has described, as well as strong trends from our Chiclipoli franchise.
Here you can also see the generic impact of Axone in The U. S, which is compared to the strongest period of last year in Q3, resulting in a challenging comparator period. The rest of the portfolio in The U. S. Is still seeing lingering impacts of COVID situation, but we've seen improving trends during the quarter.
As we move forward, we expect growth to be driven by the recent launches like ILUMETRI and Seysara as well as new products coming to the market such as Turbinemulin in 2021. Looking at the overall net sales evolution, here is a bridge for the nine months, and you will see a couple of things I'd like to pull out for you. The existing portfolio in net sales increased by around $33,000,000 of which $24,000,000 was due to deferred income released in the first quarter when you compare the nine months year to date versus last year. As you are aware, the deferred income included in other net sales will normalize for the full year to a difference of roughly $22,000,000 resulting in around $52,000,000 this year versus $30,000,000 in 2019 for the full year, with a remaining amount of roughly $17,000,000 to be recognized in 2021 before the deferred income is fully amortized. On the opposite side of this, we took a hit of close to $60,000,000 in The U.
S, of which $49,000,000 was due to generic Axsome. To repeat my earlier comments, this impact is now annualized having ended at the end of Q3. Excluding Axsome, net sales would have grown 4.3% year to date for the company. Looking at the P and L, we've now reviewed the sales performance, so let me make some additional comments. Other income reduced as expected and previously communicated as AstraZeneca milestone income declined.
Despite our investment in recent product launches, SG and A has decreased due to reduced spending during the COVID impacted period, which also reduced our R and D spending as compared to 2019. Despite lower expenses, the decline in our revenues, other income and COVID impact led to a 20% reduction in our nine month EBITDA to around CHF 190,000,000. Moving on to Slide 21. Continuing down the P and L, there's nothing in particular of note for you here except the Q2 impairment charge on the legacy portfolio in The U. S, which does impact our pretax profit.
We finished the quarter having generated normalized net income of CAD74 million for the nine months and a normalized earnings per share of CAD0.43. If we now look at the balance sheet, there are quite a few comments provided on the slide, so I'll only highlight one of the most important factors. We finished the quarter with a leverage of 1.7x EBITDA to net debt, which gives us strong liquidity in the current environment and also flexibility for potential M and A activity. We are on track to land the ratio between one point six and one point eight by the end of the year, absent significant M and A activity, which is what we already described at the half year results. Let's take a look at the cash flow statements.
We delivered operating cash flow generating $85,000,000 aided by a collection of a sales milestone for Masters Endicott. We've had a negative charge in working capital for the nine months, which is a combination of the decrease in accounts payable from lower rebates in The U. S. And COVID related activity slowdown across the business as well as increased inventories for recently launched products. There were no significant investments made this quarter.
In Q4, we do not expect a significant amount of investing activities since the decision on the option agreement for Bionase for the underlying CPCL asset will likely be in early twenty twenty one as described by Peter. As you are aware, the dividend payment was delayed as a result of situation, postponing our Annual General Meeting. In October, the gross dividend was paid of $0.02 $03 per share, with a majority of the shareholders choosing a scrip dividend, resulting in approximately $2,000,000 cash out that you'll see in Q4. With that, I'll pass it back to Peter for his wrap up.
Thanks a lot, Mike. To wrap up today, we have tried to provide you with more detail to understand the business and the different moving parts. This quarter has demonstrated the resilience of our European business, which has experienced steady growth and we started to see positive initial trends for Seysara. Going forward, there are many aspects we can be optimistic about, including the performance of ILUMETRI, the good progress of Seysara in terms of prescriptions, as well as our strong financial management and balance sheets. Furthermore, as I highlighted at the start of the presentation, we are progressing nicely with our exciting innovative pipeline.
I'm very pleased to see the continuation of the transformation of the company. Almirall is a company in good shape, set for long term growth by unlocking the value of the pipeline, which will be led by the experienced leadership team. This growth will come from the increasing contribution from the current and future growth drivers as well as management's continued focus on additional external opportunities to generate sustainable value for shareholders and further boost growth prospects. With that, Pablo, I'll hand it over to you for the Q and A.
Thank you, Peter. Joao, back to you for the Q and A, please.
Thank Your first question comes from the line of Trung Hyeong from Credit Suisse. Please go ahead. Your line is now open.
Hi, guys. It's Chung Hyeong from Credit Suisse. Firstly to Peter, all of us at Credit Suisse, we're very, very sorry to hear that you're leaving. But we do you've left the company in a much better position in dermatology than when you joined. So we look forward to meeting you again in your new role.
So three questions from me, mainly for Mike, I think. First one on guidance, Given the high level of cost control that you've done so far this year, is there any risk of beating the $230,000,000 to $250,000,000 EBITDA guidance? Is this simply caution around COVID in 4Q? Then secondly, on the gross margin side, pre COVID, you said you should see a small increase for the gross margin despite the genericization of Axone. But for nine months this year, you're down 4% on sales and up 4% on COGS.
How should we think about the mix of your COGS for this year? And then just looking at cost drivers going forward on SG and A and R and D, we've had this significant step down this year, but it should come back in 2021 as you roll out more countries for Skilarence, Illumimetry, you launched Turbinibulin and invest in your R and D. So is a level similar to the 2019 SG and A and R and D spend look like a sensible assumption for 2021? Thanks very much.
Yes. So let me go through the different aspects there. So with the full year guidance, based on what we've seen nine months year to date, we're confident that we will be in that range. We do see a little bit softer spending, though we also, of course, see in Q4 that there is some increased COVID restrictions across some of the geographies. So we think with all of the different moving parts, we're still on track to land within that range.
I think it would take quite a significant increase in sales to get us above that. So we're comfortable with the range at this point. If we look at the gross margin, we have seen a little bit of an extra drag on mainly related to Axone. If you take out the Axone generification, the sales underlying sales growth and the underlying cost of goods growth is pretty consistent. So we do expect to see a slight improvement in Q4 because we will see the annualization of this Axon impact, and we should get fairly close to last year's gross margin.
I think as you go forward into 2021 and beyond, the increase in sales of the newer launches will help to get us back in that range of 70% -ish. If we look at SG and A, yes, we've been soft this year because of the COVID impact. So I think when you start looking into 2021, and we'll give you our guidance in February, but you've got to think of a couple of different factors. One is that there will be a natural increase in SG and A just by a return to normal activity. You add to that the need to launch Turbinibulin and continue pushing some of the other products, and we will see an increase in SG and A and R and D as well because you'll see a more normalization there.
Our goal in 2021 will be to grow the EBITDA, the core EBITDA of the company. Now keeping in mind that we do have a significant amount of deferred income rolling off, two going down to 17, That will create a stretch at the overall EBITDA level, but we will really concentrate on growing the core EBITDA with the new launches despite the fact that we will see an uptick in expenses next year because of the normalization post COVID, which we don't expect to last as an effect for the full year of 2021 and new launches. So lots of moving parts. We'll give you a much clearer view on 2021 when we get to February.
Perhaps one more comment from my side, Frank. I mean, with all other things being equal, the question also, what is a commercial going go to market model post COVID going to look like? And of course, I think we've learned an awful lot during the confinement period. We have seen the possibilities in an accelerated way. We've all undergone, I think, a kind of a digital evolution for Dummies, so to speak.
And we have learned a lot that by digital interaction, you can also reach many customers in a very cost effective way. So let's see what comes out. I think of course, there will be an increase for sure, but some of the lessons learned during the confinement will be sticking there for the future go to market model.
Thanks very much. I'll jump back in the queue.
Thank you. Your next question comes from the line of Casey Eurekatla from Goldman Sachs. Please go ahead. Your line is now open.
Hello everyone. Thank you for taking my questions. I have four please. The first one, you talked about starting a Phase III trial for seisari in China. How should we think about the timing and the cost of doing that?
And will you be partnering with someone in the region? And also, does this trigger any milestones that you need to pay Allergan? That's the first one. Second, sticking with, say, Sara, do you think COVID-nineteen has changed the long term peak sales potential for the drug in any way, be it increased competition or changes in how physicians are prescribing? Third, for lebrikizumab, when should we expect the Phase III readout, please?
And can you confirm the status of recruitment and how it is going amid the pandemic? The final one, you previously talked about potential Spanish pricing reforms. Can you provide us an update here if you still expect this to happen sometime in 2021? Thank you.
Yes. So thanks, Casey. I think I'll take the first and the last question, and I'll let Peter take the two in the middle. So with Seysara China, we will be ramping up Phase III studies as soon as we can. You will see that in the R and D expense.
But I think this is going to be a couple of years, it's not going to be hugely expensive because it's already capitalizing on the data from The U. S. When it comes to milestones, agreement on Seysara China is with Paratek. It has nothing to do with the Allergan acquisition because Allergan did not have the rights to Seysara in China. So there will be no further payments to Allergan because of that.
The final question was Spanish reforms. Given everything that's going on in COVID, we don't expect to see a fundamental reform package out this year. We'll keep our eye on what's going to happen with 2021. We are seeing, of course, the normal pressures that you see in products that have generic competition and sometimes with new launches, lower prices. But we don't expect anything comprehensive to come out before the end of the year.
Yes. So on your two other questions, Casey, so Seysara long term potential, well, it's obviously 2020 has been a very special year. You could get to some extent the last year because of COVID-nineteen and the impact on, let's say, the acute business of dermatology and of course, acne as an acute business par excellence. But so it's all going to be dependent on when in a normal situation, how fast can we grow the business, how fast can we grow prescriptions, how fast can we grow market share. But it's true that the new label is has a very, very favorable response in the eye of the customers.
So KOLs are very supportive of that new label of Seysara. So but I think it's a little bit early to see, and we have to come to a more normal situation then and see to which extent we can grow the brand. Actually, piggybacking a little bit on your previous question, let's not forget that we have a very interesting business case in China. So a largely de risked clinical trial program, a relatively limited one also, by the way, in terms of costing. And a registration or submission in 2023 for a potential launch in 2024, because as we mentioned in one of the earlier calls, we are looking at a out of pocket business model.
And of course, in the affluent part of China, the price flexibility is there. And so we are very optimistic on that possibility. Then your question on lebikizumab, well, as you know, Lilly had paused all their clinical trials. I have the positive news that they have, of course, resumed. They are accelerating where they can, not only in The U.
S, but they have opened our massive new sites in Europe also, which is very important to us, obviously, to have also European KOLs having a hands on experience with the drug before we launch. And I'm pleased to tell you that for both of the monotherapy studies, but also the combination study with TCS, with topical corticosteroids, most of the sites are open and the patients are recruiting rapidly. Not a surprise to me because even if dibilumab is a great drug, there's a very important remaining unmet medical need. And in such indications, normally, you don't have a lot of difficulties to recruit fast new patients. So we're still on track for readout of these studies by half two next year and a launch in 2023.
Thank you.
Thank you. Your next question comes from the line of Alvaro Lindsay from Alantra Equities. Please go ahead. Your line is now open.
Hi. Thanks for taking my questions. Most of them have already been answered. But I just wanted to know if you could give us some more detail on the performance of Seysara and whether the uptake we've seen during Q3 is more driven by a recovery in the overall market or whether you've been also gaining market share?
Thanks.
Yes, I think it's both. You've seen an increase in market share of a couple tenths of a percentage point as well as a rebound in the market. Of course, as you get into the summer months, you're into the back to school, which is typically better for the OAB. But we're very encouraged by gaining some market share in that period. So we think we're on a good track in trends.
We'll see how COVID impacts the rest of the year. But so far, so good. You have seen an inflection point since the launch of the new label. And that adding with the rebound of the market has helped us to have a much better quarter in Q3 versus Q2.
Okay, thanks.
Thank you. Your next question comes from the line of Jose Maria Carnovas from JP Capital. Please go ahead. Your line is now open.
Yes. Hi. Thanks for taking my question. Just one follow-up on potential changes on Spanish regulation. If I'm not wrong, you guided for a potential impact of up to negative impact of up to €20,000,000 at the beginning of the year.
Just wondering if you're still seeing such impact or if it could be more, should we see these changes in 2021? Thank you.
Yes. So I think we didn't guide a specific number for the Spanish impact. We had a range in our guidance of €20,000,000 and we had mentioned that one of the potential negative factors would be any changes to the Spanish regulation. At this point, nothing's happened so far this year, and we don't think anything will happen to negatively affect us in the last couple of months. So we're still confident with the range of our guidance.
But the revised guidance we gave at the half year didn't have a significant impact from Spanish reforms. When it comes to 2021, it's a little too early to tell. We'll know more in February when we give our view on 2021. But so far, there hasn't been anything approved through the, the Spanish parliament.
I think also a bit of additional color from my side. I think that in many countries, politicians are extremely appreciative for the contribution of the pharmaceutical industry in general, first to fight the COVID pandemic and be part of the solution when you think about both potential vaccines and potential drugs to combat the disease. So I think also that many politicians will understand the importance to have a strong also in the local pharmaceutical industry, and that might hopefully change a little bit the way politicians are looking at this industry.
Thank
you.
Your next question comes from the line of Peter Welford from Jefferies. Please go ahead. Your line is now open.
Hi. Thanks for taking my questions. I've got two, please. Firstly, just with regards to M and A, you mentioned that your 1.6 to 1.8 times net debt to EBITDA still left you firepower to execute on deals. Curious if you can perhaps comment a bit on the environment at the moment you're seeing for that.
Is this an opportune time to be able to pick up on the dermatology assets? Or given the some of the valuations, obviously, we're seeing in U. S. Biotech, is it actually quite challenging to do deals? And are you finding any impact in negotiations, obviously, from COVID-nineteen hindering the ability to do it?
And perhaps just related to that, is it sensible to assume a significant or somewhat significant deal could happen near term or given the sort of management changes, is the inclination to wait until the new management is in place before executing any potential transaction? And then the second question, just it's more of a follow-up, to be honest, but a comment that Michael made on the limited near term LOE risk that there is to the portfolio from generics. Just to help us, given Almirall does have a fairly big portfolio of a lot of things we don't necessarily focus on, could you perhaps just outline when are the next generic sort of risks to the legacy portfolio we should be factoring into our thinking, just to help us sort of frame where our morale goes from here? Thank you.
Yes. So let me take those two questions. First, with M and A, we've got some firepower. We actively look out into the market to see if there's opportunities. Right now in this COVID impacted environment, it's a little more difficult to value things because you just don't know where the trends are going to go.
So I think we'll be cautious. If something does come along that we think we can create significant value, we will take a look at it. But I think in this current environment, you've got to be a little cautious in that it's tough to see where the trends are going to go in the next year or two. And you don't want to overvalue assets based on historical results when we don't know how COVID is going to impact things. So I would say stay tuned.
If we find something interesting, we are ready to move, we've got to be assured that we can really value things properly. When it comes to the LOE, like I said, we don't have any significant LOEs coming up. I think if you look at it across our portfolio, there are products that already have generic competitors. Most of that's behind us. You will see some that decline slowly in the coming years.
But I would say the next one of any significance is one of our partner products in Spain, Efecitsevel, but that's not for another three years. So there are some things that will come later in the cycle, but nothing imminent in terms of further LOEs post Axsome.
Thank you.
Thank you. Your last question comes from the line of Trung Hoon from Credit Suisse. Please go ahead. Your line is now open.
Hi guys. Thanks for taking my follow ups. Just a few housekeeping questions if I can. So on working capital that came in higher, was there any reasons why we see this high inventory needed? On ImmunoRIX, there was a big jump in the quarter.
So it went from being too small to disclose to now being in the top 10 in 3Q. So how should we think about this? Is 3Q a one off or should we treat this as a more sustainable product going forward? And then finally on Peter's question actually on the Spanish products. So things like Crestor and Satabex, are you able to keep the growth of these products flat year on year or when do you expect these to start going down?
Just trying to think about, how these Spanish products can bounce back once COVID is gone or actually given that they're older, they just simply slowly decline. So any help there would be welcome. Thanks very much.
Yes. So on working capital, we saw an extra impact in Q3, but that was mainly because of COVID and the summer months. We saw accounts payable go down significantly. So we had cash out and we didn't have a lot of activities building that back up. That's also a little bit exacerbated by the decline because you're not building up rebate accruals for those sales because the asset has been declining.
We do expect that to improve a little bit in Q4 and that the full year we will not have quite the same working capital charge you saw in Q3. When it comes to ImmunoRyx, that's a very special situation. We've seen a lot of sales into Latin America. This is a product that some countries and some medical systems are using in their battle against COVID. So we've seen a little bit of a one time surge this year in that product.
I wouldn't think that that's very sustainable. We'll see how COVID kind of impacts going forward. But there are some medical practices that are using products like this in their COVID fight. And when it comes to the remaining products facing generic, especially in Spain, when a product faces generic competition, there's a huge price decline. But then a lot of times the volume can stay relatively consistent.
So you don't see those products once they've hit their initial price decline sharply eroding like you do in some other markets. So things like Crestor, Sativex hasn't seen an erosion. It doesn't have any generics on the market. Now of course, there are other similar products in some markets, in Germany where it's a little more open for use of cannabinoids. But we don't expect to see generic competition on our product Sativex in any time in the near future.
So I hope that kind of answers the view on those older products.
That's great. Thanks. And if I can just sneak one last question in for Peter. Is there any news or update on the time line for an appointment to replace you?
Well, that's a question for the Board, I'm afraid, Truman. The only thing I can tell you is that the Board is working very diligently with high priority on this. And then a second more personal comment is that if you look at the attractiveness of the company and the future the ongoing and the future launches, the late stage pipeline, I think it's a very attractive opportunity for a high talented person. So I have no doubt that the nomination committee of the Board will be able to come up with a very interesting list of candidates.
Thank you.
Thank you. We have had one further question come through from the line of Jaime Escalano from Banco Santander. Please go ahead. Your line is now open.
Hi, good morning. So one last question from my side on M and A. If you have to do a wish list, in what therapy would you like to find out? What do you think would be more complementary to your current portfolio if you were going to do M and A and you can do a wish list? What kind of products do you think it would be the best?
Yes. So I think if we look at our M and A priorities, clearly things that help us with our critical mass in markets where we would like to build up to take advantage of the pipeline coming, the levees, the turbinimilians of the world. So if we can expand presence in some of the geographies in Europe where we are a little bit underweighted, that could be interesting. Clearly, dermatology products are of interest to us, whether they are established brands that could give us critical mass or interesting assets that can add to our pipeline. We've got a nice pipeline coming through.
We're always looking at future licensing and then other opportunities to complement that. And those tend to come at a little bit lower cost than buying a business or an existing portfolio. So I think when it comes to The U. S, we would look at niche assets. We have a nice small business there.
We're not going to get in over our head and try to spend billions buying biotechs in The U. S. But if we found interesting assets to add to our portfolio, we would also consider that.
Very good. Thanks.
Thank you. We do have another question from the line of Casey Aracatla from Goldman Sachs. Please go ahead. Your line is now open.
Thank you for taking my follow-up question. For 2021, I know you're not giving guidance on it yet, but are there any potential milestones that you need to make payment for beyond the Bionis one, please, if you decide to go ahead with acquisition? Are there any other ones to keep in mind? Thank you.
Yes. So when it comes to cash out, you've got a couple of things you need to consider in 2021, and this is more on the cash flow statement than anywhere else. You've got the potential Bionase option. You've also got potential launch milestones for tirbanibulin. We're expecting approval late this year and launch next year.
So there will be some further milestones. And then of course, if we continue our success with ILUMITRI, we'll start getting into some minor sales milestones to Sun. So I would expect overall there to be a basket of investments that are maybe down a little bit from this year, but fairly close.
Thank you.
Thank you. There are no further questions. So I now hand back to Pablo.
Thank you, Joao. We are now going to close our Q and A session. And with this, we will complete our conference today. We want to thank you for your participation. You may now disconnect.