Hello everyone, thank you all for joining this presentation of ALK's Q1 results and the full year outlook. Let's turn to slide two, where I'll introduce today's presenters and the agenda. My name is Per Plotnikof, I'm Head of Investor Relations. With me today are Carsten Hellmann, our CEO, and our CFO, Søren Jelert. Following up on our pre-release from April 17th , today we'll bring you up to date on the detailed performance in Q1, including the market trends and financials. Then we'll provide an update on the strategic priorities, including a deep dive into the efforts to rebuild our growth momentum for tablets in Europe. Before we round off with the full year outlook, and as usual, we'll end the call with a Q&A session. To get started, I'll hand over to Carsten on slide three.
Thanks , Per, and thank you all for joining this call. Overall results in Q1 supported our full- year guidance, which remains unchanged. Revenue was up 7% on growth in all sales regions, and operating profit, EBIT, increased to DKK 228 million, despite significant investments in growth. The business continued to prove resilient to inflationary pressure and macroeconomic uncertainties. Having said that, we did see changes to the product mix in Q1, with tablet sales approximately DKK 35 million lower than expected in Europe, mainly related to Germany and Nordics, which led us to issue the announcement on April 17th . On the positive side, sales of SCIT and SLIT-drops exceeded expectations, and we expect this trend to sustain throughout 2023. Tablet sales from North America and international markets were as expected.
Torii, our Japanese partner, in-market sales are bouncing back from last year's COVID-led headwinds, and in-market sales in Japan were up by approximately 15% in Q1. In Japan, the underlying demand and awareness of allergy is strong. We still expect full- year tablet revenue from international markets to grow in strong double- digits, even though it was slightly down in Q1. We're talking here about 25%. Europe is a different story. We also saw lower than planned growth in especially Germany and the Nordics, which are two of the main tablet markets for us in Europe. To put it in plain words, we were short of around 10,000 new tablet patients.
To put things into perspective, we still managed to initiate more than 200,000 patients in Europe, and the doctors and clinics still saw many allergy patients. We failed to initiate these 10,000 patients during an unprecedented wave of respiratory infections, which somewhat constrained the capabilities in clinics and crowded out some AIT patients. Also, last year's weak pollen season may also have added to this trend. We strongly believe this is to be a temporary issue and not caused by structural changes in the market. The AIT market in Germany and the Nordics are stabilizing as we speak. We have launched initiatives to restore growth momentum in both markets from the second half of the year at the onset of the new initiation season.
We are the undisputed market leader in both markets, and tablets are a well-established clinical practice, so now it's all about commercial execution. At the same time, we work to unlock further European markets as meaningful growth contributors. We will detail this during the presentation, where we also revisit the full- year outlook, which is unchanged. First, I'll hand over to Søren Jelert on slide four.
Thanks, Carsten. Let's take a closer look at the market trends in the first quarter. Sales in Europe were up 7%. Growth was powered by 14% growth from the non-tablet portfolio. Tablet sales were flat in local currencies. Disregarding the temporary rebate increase for prescription drops in Germany, European tablet sales grew by 2%. Revenue in North America was up 9%, with progress from all product lines. Sales of the largest product line, SCIT bulk extracts, were up 6%, although growth was held back slightly by temporary back orders. Tablet sales increased 23% on double-digit growth in both the US and Canada. Revenue from international markets was up 8%, fueled by growth of SCIT shipments to China, where we continue to build the house dust mite AIT market ahead of the planned launch of ACARIZAX.
As Carsten said, tablet shipments to Japan were slightly down because of the planned phasing of product shipments. The in-market development looks good. Let's take a closer look at the product categories on slide five. The growth rate for tablets was 1% in local currencies. Sales growth was seen in many markets, but progress was offset by Germany, the Nordics, and Japan, as Carsten stated. Combined SCIT and SLIT-drop sales increased 13%, driven by strong sales growth in Europe and China. European SCIT sales benefited especially from higher sales of venom products, which saw underlying recovery, market share gains, and improved pricing. Other products generated growth of 14%. This was mainly due to JEXT, but please bear in mind that Q1 last year was a soft quarter for JEXT.
With these sales trends, let's turn to the P&L slide six. Revenue was DKK 1,234 million, reflecting more than 7% growth in local currencies and close to 7% growth in DKK. The one-year mandatory rebate increase in Germany lowered revenue growth by around one percentage point. The gross margin improved by one percentage point to 65% based on higher sales, changes to the product mix, and continued efficiencies in production. Capacity costs increased 8% in local currencies to DKK 571 million. R&D expenses were largely unchanged, while sales and marketing costs were up 11% in local currencies, especially reflecting the organizational buildup in China and the support of growth initiatives across many other markets. Despite this, the capacity cost to revenue ratio is still expected to improve for the full year.
The operating profit of DKK 228 million yielded an EBIT margin of 18%. The net profit was unchanged at DKK 163 million. Finally, free cash flow was up from DKK 38 million to DKK 65 million. This mainly reflects high cash flow from operations driven by better earnings and changes to working capital. All in all, the results are support the full- year outlook. Let's move to the strategy status on slide seven and back to Carsten.
Thanks, Søren. I will get back to the tablet shortly, but let me first share a few other headlines from the strategic focus areas. Starting in North America, our new independent sales and marketing organization in Canada is expanding the country's position as the second-largest tablet market outside Western Europe. This is an indication of the potential in the neighboring U.S. market if we manage to bypass the financial disincentives among some prescribers. As previously announced, we are refocusing the U.S. tablet organization around building new sales channels without financial disincentives, and things are progressing as planned in the U.S.A. On our consumer engagement and new horizons priority, the development of next-generation adrenaline auto-injectors for the U.S. market continues, and the Chinese partnership for our existing adrenaline auto-injector JEXT is progressing as well.
Finally, we continue to expect the first readout from our phase I trial with a peanut tablet later this year. On the optimize for excellent priority, efforts are on track to upscale capacity for tablet production and prepare for the commercial supply of the upcoming adrenaline auto-injectors. We also continue efforts to simplify our production setup and pursue other efficiencies across product supply. Now, let's move to slide eight and take a deeper look at the European tablet sales. The fundamental structural drivers for tablets are still strong, and we continue to see the respiratory tablet portfolio as key to ALK's growth in the future, also in Europe. Accordingly, we are intensifying our commercial efforts to deal with the challenges we have experienced in the past quarters.
As I said earlier, we are around 10,000 new patients short, primarily in Germany and the Nordics, which are two of our main tablet markets. We have started up more than 200,000 new patients, confirming that doctors still see a lot of allergy patients. Market data indicate to us that we are facing temporary, not structural, issues. The markets are stabilizing. Patient intonations have started to improve both in Germany and the Nordics during Q1. More importantly, ALK has further increased its market share by approximately three percentage points in Germany compared to last year. This indicates that we still have a very strong offering in this key market. In the meantime, we continue to see several competing products struggling with quality and supply issues, as well as reimbursement changes for the older non-registered products.
Nevertheless, we are intensifying sales activities to get back to growth for tablets in Europe, and we expect to see results from these activities from the second half of the year and onwards. The intensified sales execution activities fall into different clusters. The first, mobilization of allergy doctors. We are launching campaigns and sales activities in Central and Northern Europe to mobilize doctors to start broadening the initiation season to avoid conflicts with respiratory infections and other external factors. For example, in our mailings, newsletters, and sales force calls, we are encouraging doctors to get patients initiated on AIT earlier than usual, as soon as possible after the patient's allergy attacks. Our partner in Japan has quite a good experience with this approach. Patient mobilization. The digital patient engagement activities are also important in this context.
Analysis shows that we are increasingly able to funnel patients from our various digital klarify platforms, apps, websites, and other tools all the way to AIT clinics. We are now launching campaigns on klarify in Central and Northern Europe, supported by social media campaigns to engage with allergy sufferers, identify possible AIT candidates, and mobilize them to go and see a doctor who can help them manage their allergies. Furthermore, in Q1, Norway became the 12th country to join the digital klarify ecosystem. Prescriber expansion to increase capacity. In Central and Northern Europe, we are launching medical and sales campaigns to collaborate further with ENTs, GPs, and selected telehealth providers to expand the clinical capacity and improve allergy care.
We're also working on improving pricing, market access, and treatment adherence, just as we have activities focused on further driving the industry towards evidence-based allergy care as we work to strengthen advocacy among key opinion leaders and payers. Let's move to slide nine and more on the long-term structural growth drivers for tablets. In parallel to these immediate efforts to restore growth, in particular Germany and the Nordics in the second half of the year, we're seeing a global tablet outlook that remains strong. There are several medium to long-term growth drivers that support this view. We're working to unlock further European countries as meaningful growth contributors. France is already a substantial tablet market. The Benelux region is well on its way to becoming a meaningful growth contributor.
Next in line are countries and regions like Austria, Switzerland, Eastern Europe, the U.K., and Spain. It is our medium-term priority to grow volumes in these markets to get more balanced geographical exposure in Europe. We are also advancing the long-term structural drivers for the respiratory tablet portfolio. The first key driver is being able to treat young patients what potentially could lead to a sizable expansion of patients and prescriber bases. Efforts are on track. Results from our pediatric phase III trial with the house dust mite tablet in Europe and North America are now expected slightly earlier, meaning mid 2023. Results from the pediatric phase III trial on the tree pollen tablet in Europe and Canada are still expected in Q4 this year. Subject to approval, both tablets could be available with the indications covering children in 2024 and 2025.
We expect Japan to have promising long-term growth opportunities also. The next key driver is China, where, since February, the authorities have been reviewing our regulatory filing for ACARIZAX. Subject to regulatory approval, ACARIZAX could be launched in 2024, or 2025 in China, which is well on its way to becoming the world's largest market for house dust mite AIT, also in value. We have the U.S.A. and other markets with untapped potential.
To sum up, tablet sales growth in Germany and the Nordic has temporarily been challenged over the past month. We're dealing with these challenges. We're intensifying sales execution activities, and we expect to see results from the second half of the year onwards. All medium and long-term drivers for the tablets are intact, and there is a significant unmet medical need, and we continue to see the respiratory tablet portfolio as key to ALK's growth for the foreseeable future. Søren will now end our presentation with slide 10 and the full- year outlook.
Thanks, Carsten. The full year outlook is unchanged, we have made some changes to the underlying assumptions for the SCIT sales and tablet sales. All other assumptions are unchanged. SCIT and SLIT-drops sales are now expected to exceed original expectations, together with life science products. SCIT and SLIT-drops will lead to growth in the non-tablet portfolio, whereas JEXT sales are still expected to decline slightly after last year's extraordinary demand. The number of JEXT pens expiring this year is lower; 2024 will, on the other hand, be the next year with high replacement rates. Tablet sales are now projected to grow 9%-14%. The upper end of the range assumes a positive outcome to ongoing price discussions in Europe, and the lower end of the ranges reflects a limited recovery in Europe.
North America and international markets are expected to lead the way for the tablet portfolio with double-digit growth, while growth in Europe is projected to be in the high single digits. Across regions and brands, we expect to see additional market share gains, expansion of prescribers and patient bases, as well as the increasing influence of the market transition in favor of registered products. Sales growth for tablets will be higher in the second half of the year than in the first half. This leads us to the following revenue outlook. Total revenue is still expected to grow 7%-11% in local currencies, or 8%-12% disregarding the one-year German rebate increase in 2023. The EBIT margin is still expected at 13%-15%, up from 10% in 2022 on sales growth, efficiencies, and lower R&D costs.
The gross margin is expected to increase by up to one percentage points despite modest cost inflation, the German rebate increases, higher shipments to Italy, and lower margins, and changes to the product mix. R&D costs are planned to decline to around DKK 600 million, as previously communicated. Sales and marketing costs are expected to increase by mid-single digits, the overall capacity cost to revenue ratio is estimated to further improve. Despite the current challenges with tablet growth. In parts of Europe, we expect to continue our journey to growth and earnings improvements for 2023. With this, I'll hand you back to Per and slide 13.
Thank you, Søren, and thank you, Carsten. This concludes the main part of our presentation. We will now move into the Q&A session. Operator, please go ahead.
Thank you. At this time, if you would like to ask a question, please press star one on your touch- tone phone. You may remove yourself from the queue by pressing the pound key. Once again, that's star one to ask a question. We will go first to Ben Jackson. Please state your company. Your line is open.
I think that's me. It's Ben Jackson from Jefferies. Just the first question, just to help us better understand tablet growth going forward. I know that you mentioned 210 patients, 210,000 patients started in person, but how many stopped, typically after medications for 33 years. If you have these patients now coming off, you really need to keep on adding a chance to sustain the historical growth rate. Maybe just help us, you know, some of the structural risk.
Sorry, you're breaking up a lot. M aybe if I can... I think I understand what you ask about. Remember that in ALK's business model, we have patients dropping off every year because it's a three-year treatment. Even when you say service and growth, we are catching up a lot of patients. We also have a business model where people are sick in the spring, they're very fresh and healthy in the summer, then we need to get them to a doctor in the autumn. That actually also happened this year. We were just short of about 10,000 patients, particularly in Germany and the Nordics, but we still got the 200,000 new patients. What we will do, of course, is to, as I said, both mobilize more patients.
We'll expand the period of when they can initiate the patient in the autumn, and we'll mobilize more allergy doctors to bring on the patients. It's not really a structural issue. Then you can ask, you know, why did we capture or get 10,000 less patients than we expected this year? We have a number of facts about that. It is a combination about not so many people feeling sick from pollen, to more respiratory diseases filling up the doctor's offices that really were also the fact why we increased our market share, even though we had quote-unquote, "0% growth" and missed the 10,000 patients. Looking forward, there isn't anything there.
We are just a little more vulnerable now when we talk about tablets, Europe is predominantly Germany and Nordics. Of course, what we need to do is continue to investing, expanding our geographic oppressions in Europe, continue to invest in the U.S., get our products launched in China, and also prepare for the market access in Southern Europe and the U.K. a little midterm. That will sort of more balance it out, so we're not so plain on the steel when there's something happening in one market. Yes, we did get 200,000 patients. We'll see if we can catch up these 10,000 patients going forward.
At the same time, remember, we had this rebate we were forced to do on the German market that also cost a little headwind. We hope that will disappear next year. All in all, I think we are very sad that we didn't get the last 10,000 patients. We didn't see that coming. We will initiate a lot of initiatives to get them back in when the season starts again in Q3, Q4. I think is that's a fair reflection of I thought you asked.
Yes, it is. Yeah, thanks. I just have a second one on R&D expense. Your first few expense implies that perhaps you're stepped down for the rest of the year to submit the DKK 600 million guide, despite you've sort of got three ongoing studies. Can you just have a think about the R&D phase in that?
I think, again, here it's really hard as you are breaking up a lot. It's of course, when we look into the R&D decline that we anticipated, that actually has been modeled for some years , as we now see our large phase III trials coming to an end. As Carsten also spoke to, the ACARIZAX pediatric trial report out here around summer, and then the three trial during the end of the year. The R&D spend here is definitely following the path that we have actually communicated and anticipated for some time. It's, it's spot on basically where we expect it to be and around DKK 600 for the full year. That is definitely in line with what we've communicated earlier.
Got it. Thank you very much. Cheers.
Our next question comes from Jesper Ilsøe with Carnegie Investment Bank. Your line is open.
Yes. Thank you. I hope you can hear me. A couple of questions on the tablet development in Europe and your explanations that these are temporary and not structural. My basic question is, what data points do you have supporting that the slowdown is explained by weak pollen season and the spike in the respiratory diseases? Because I know, I understand that there's been a weak season, I understand there's been spikes, but why are you certain that this in fact has been the underlying factor? What hard data do you have that these are the explanation and not something else? Follow up on that, right now, you explained that pollen suddenly is a headwind, but why haven't you called out a weak or strong pollen season in the past as having a significant effect on sales?
Perhaps just help us talk about the correlation between pollen season and the effect on sales and sales growth. Lastly, just on the spikes in RSV, COVID, and flu, why are they impacting ALK today and not when we had COVID back and lockdowns? As I recall it back then, you said that it has very limited effect on the treatment initiation, so why does it have an effect now? Thank you.
Well, thank you for the good questions. Of course, we are about DKK 35 million below our expectations in Q1. We have a DKK 2.5 billion budget. Just remember that what we're talking about is the last 10,000 patients. We did have 200,000 patients in. We, of course, went out and checked a lot of hypothesis about what is going on. Why did we not get the last patients? We, of course, asked the German teams and pulled a lot of data, also from competition, so how they were doing, how our market share was developing, how the visit rates were developing, spoke to a lot of doctors. Our hypothesis is right now that this is why. When you say respiratory diseases, it didn't mean that anything else that...
They did start up a lot of allergy patients, 200,000. However, there was a little more occupied in the clinics, and that's also what you can see from the data, in particular Germany, that there was more respiratory infections calling to the doctors, thereby occupying their, their offices. That could explain that 5% less new patients we got this year. You, you can, you can say, "Could it be anything else?" Yeah, we of course checked if it was market share losses. Was it the competition coming back? Actually, as I said before, on the contrary, we did get 3% market share, gained 3% market share points on the German market. If you look to the German competitor performances, they were doing much worse than us.
When everybody in a market significantly drops or are not growing as much as they wanted, it tends to be a market dynamic hitting everybody. It was not just something that hit us, it also hit all our competitors. I think that's the best explanation we can come out with, and it's not like, you know, we didn't sell anything. We had the hypothesis, we also checked whether our reps were going to the right doctors. We did a lot of initiative to actually call for action because of course we are not happy with just being short of 5% of the initiations we expected. Therefore, we're just going to double down on the marketing and sales activities to see if we can catch them up. This is the best explanation we can come with. There isn't anything like, the government are not wanting it, the doctors not wanting it. We did get 200,000 patients, not just the last 10,000.
Maybe, maybe to supplement Carsten's points, I think what we have seen both in Germany and the Nordics with a decline towards the end of last year in new initiations, we've actually seen a stabilization here in the first month where we've seen the data read out to a slight positive again. Where we came in negative in the period, of course, where we needed to, in all fairness, get to the plus 10,000 as Carsten spoke to, that's where there were the decline, and we're actually seeing that balance back again and leveling out now and even improving. That's the data points we are actually basing our assumptions on as we speak.
Okay. If I can just ask one follow-up. How can you be certain that the European market or the current markets that you have launched tablets in, that market is now starting to mature and penetration has sort of peaked? Because that's of course the investor fear. What sort of data points do you have that that's not the case?
Yeah. First of all, we know there's a lot of untapped potential also in Germany of unregistered products. We know that we are increasing the market shares. That by itself is going to generate more sales for us. Secondly, when you talk about Europe, we're predominantly selling in Germany and the Nordics today. We have so many other markets we can open up. There is no saturation. We have still, and we have said that before, around EUR 100 million of business just in Germany that are unregistered local products that we can actually capture into. Have we been good enough, fast enough to get into that part of the business? We are and have been increasing our market shares by more than 10% in the last couple of years, and we probably should do even more to gain that.
It's still a fact that one out of 10 people that should have immune therapy who have a severe respiratory allergy are being treated. 90% are not. It's a, it's a duality both on market expansion via competition, but also continue to educate the market and get more and more people to realize that they can actually be helped by immune therapy on their severe allergies. This is like the strategy we presented five years ago. This is the one we're pursuing. That has not changed, not at all. Then you can have a setback where you have right now, we have a quarter where you're a little slower than you expected in, new patients. You missed the last 10,000. I can only say that we need to prove to you and the market that in Q3 and Q4, you'll see good growth again, and that's certainly what I expect.
Okay. Thank you so much for answering my questions.
We will go next to Michael Novod, Nordea. Your line is open.
Thanks a lot. It's Michael Novod from Nordea. Just one follow-up question. I still just don't fully understand the dynamics to the replies in one of the first questions regarding the 95% that you've still been able to initiate 200,000 patients. Because if we look at the tablet growth trend in Europe, it's sort of just stating the facts that it's been sort of declining for some time now, growth, when you look at the quarters.
If you're still gaining sort of more or less what you should in terms of starting new patients, does that just mean that we are just seeing that more and more patients are stopping because you're starting to enter a cycle where ITULAZAX has been on the market for a while, GRAZAX has been on the market for a long time, ACARIZAX has been on the market for many years? You're starting to see that your drop-offs are exceeding your starts. Then, of course, it is more of a structural thing, given that you say that you are actually capturing what you should besides sort of five percentage points. Just some clarifications on those dynamics, please. Thanks a lot.
Yeah. I think it's that there could be multiple dynamics, but it is about 5% lower. Remember, this is when we have been launching, for example, ITULAZAX, as you mentioned, and this is the first year. This is the fourth year of ITULAZAX, so that might be the first year that drops off. In terms of initiating new patients, I can't really see that is stabilizing, except that we had some dynamics in Q1. We expect that to come back in Q3, Q4. I think the best proof point we can say is that we expect to come back and also show everybody that this growth rate will come back.
Of course, when you have the first year after a launch where a category sort of had the first drop-out year, it's a little more tough. You have the price decrease in Germany, you have the first drop-off of ITULAZAX, and then it looks like there was a weak pollen season and occupied doctor's offices. That's a perfect storm for us. That's why we probably didn't get the last 10,000 patients. Had we got 10,000 more patients, we wouldn't have had this discussion about tablets, and that's what we're talking about right now. Now we just need to make sure that we take some initiatives in Germany and Nordics to recover that, and maybe we should also accelerate and expand in rest of Europe, so we're not so vulnerable only on one or two markets as we are right now.
Okay. Thanks.
We will go next to Thomas Bowers. Please state your company. Your line is open.
Thank you very much. Thomas Bowers from Danske Bank. So just a few remaining questions here. So if we just take the growth outlook for this fiscal year on tablets. So I'm just wondering why you feel the need to have the low end of the tablet guide set 9%. I guess this does imply some concerns about the next season start in Europe. So that's sort of the first question. Secondly, what's actually needed from Europe in order to reach the, you could say, the middle of the range, excluding of course the outcome of the potential price hikes that you are looking at.
Are you dependent on a material pent-up demand here in the fourth quarter? Then maybe lastly, just referring to those price hikes, when will we have confirmation and then what will the expected impact be from that price hike in the guidance? Then what sort of should we be looking for? Is this more a one-time thing, or could this be something that potentially could be adjusted annually based on, for example, in inflation numbers? Thank you.
I can start and then Søren probably can follow up. The inflationary adjustment of 7% is something that's going to roll in going forward. We haven't got the price confirmation for the adolescence for our house dust mite yet. This, this plus a more normalized enrolled and better activity level in Q4 are going to give us the higher range of this. If everything falls apart, nothing happens; of course, that's the lower range. Of course, we never try to hit that. It's just to give a range to the market because a lot of people misunderstood 0% to say we didn't get any new patients. We actually do. We just need to catch up these 10,000, and that's what we try to do in the end of the year. Søren, would you want to add?
Yeah. I think basically, I mean, we spoke to it also when we did the full year, right? That it was a year moving into where were up front was quite adamant on the pricing cuts of the 5% in Germany. As always, we sort of course, hunt for potential additional corrections for pricing of these inflationaries. Of course, one opportunity as Carsten spoke to in Europe. So for Europe, we are hunting the price. We've always seen price increases in the US. At least when you look at the SCIT, that's very much driven from price. Whereas in SCIT in Europe, it's much more a mix of volume and price. Basically, in China, it's mostly a sense of volume.
Then it's also correct that we are currently in discussions with the German authorities of a price correction linked to GRAZAX and RAGWIZAX, as we have actually improved our label to adolescents over time, and that should give us an opportunity for a price negotiation or price correction with them. Exactly timing-wise of that, when and how much that comes out, but it could be 1%-2% , actually, additional growth on the tablets, and that's part of sort of the high end of the guidance as we've stated. As price negotiations can never be set by a date exactly, it's difficult for us to read out. Rest assured that we are on the case, and we have filed what we believe is what we need to file. Of course, it's up to the authorities to see when and how much, they'll be able to adjust it by.
Great. Thank you very much.
Once again, if you would like to ask a question, please press star one on your touch- tone phone. We will pause a moment to allow questions to queue. We have a question. Caller, please state your name and company. Your line is open.
Hello. This is Sushila Hernandez from VLK. Thank you for taking my question. Could you elaborate on the experience that your partner in Japan has on initiating patients earlier? How does this impact patient compliance, given that these patients will be longer on the tablets before pollen season starts? Thank you.
This will not impact that as, whether you start off four weeks earlier or later, or a lot of people also drop out of the compliance, meaning they don't stay on it for three years. It's a natural product, so what we do, we mobilize your immune system to be able to handle allergies better. There isn't any compliance issues there.
We have a follow-up question from Jesper Ilsøe with Carnegie Investment Bank. Your line is open.
Yes. Thank you. A couple of follow-ups. Firstly, on your expected H2 growth acceleration, what's your visibility into that this actually will occur, that we'll see improved sales in Q3 and in Q4? Perhaps you can also touch a bit upon, I know it's difficult to estimate quarterly sales, but just some thoughts on how Q2 sales can look for tablets. Will Europe still be weak? Will there be a stronger growth in Japan and so on? Lastly , we have of course, had a few of the important pollen seasons ongoing for now. Perhaps you can make a comment on the pollen season in 2023 to date, what... whether or not that makes you comfortable that there will be a stronger growth and more initiations. Thank you.
Yes, well, I think it's of course all good questions, and definitely I also understand why we would like to get a feel for it. Carsten actually started off saying that we believe that the dominating change of tablet growth is actually going to be in the second half of this year. We continue to see Europe, although it's normally also a lower quarter in quarter two at still low rates, but then we actually do expect it to come back again, partly helped by price and partly helped by volumes and increasing initiations. Bear in mind that we have had a negative, you could almost say, tablet sales in partner markets in first quarter.
As you could probably also hear, we are quite adamant that the full- year guidance on partner markets is above 20%. Hence, you will see a better contribution in the subsequent quarters. Exactly how that will pan out, we don't know yet. It could be a very good second quarter and then a softer three or vice versa . Essentially, that will be good in terms of driving growth. When it comes to North America, I actually think that we have yielded these 23% growth, and that's also well in line with what we have stated above 20% for North America. That is quite nice. I mean, without spelling it out, expect lower in quarter two in Europe and then back to good growth in Europe for quarter three and four.
A strong growth, of course, in partner markets for the subsequent three quarters, a continued good growth in North America. We also spoke to a little earlier on that we have seen in Europe these initiations, coming back. Actually the re-report we have, especially on the tree pollen this year, is a very strong tree pollen, flight. That is actually good not only for, of course, people being reminded that they should have gone, by the way, also to get initiated last year.
Again, we hope to be able to mobilize, and then with stipulating the engagement with them, we believe that we might be able to sort of harvest more patients as they really are reminded that they are suffering from tree pollen. In addition to that, it's probably also good for our clinical trials on the tree drop that's also helped by strong pollen seasons. Yes, it looks to be a good pollen season this year, and that at least could give us the possibility with the right market approach to catch more initiations towards the fall.
Thank you. Thank you so much.
It appears we have no further questions at this time. I want to turn the program back to our presenters for additional or closing remarks.
Thank you. Thank you all for joining today's call. I would also like to say thank you to Søren Jelert because this is his last call on from the ALK side of things. Wish you the best of luck going forward in your new role. As always, to all of you listening in, you are most welcome to call us if you have additional questions. With that, I will wish you all a very good day and end today's session. Thank you.