Hello everyone, and welcome to this presentation of ALK's Q2 results and outlook for 2020. Please turn to slide number two for today's presenters and our agenda. My name is Per Plotnikof, and I'm head of investor relations, and with me today are CEO Carsten Hellmann and CFO Søren Jelert. Today's presentation is divided into three sections: the Q2 performance with an update on the effects of COVID-19, a status report on our four strategic priorities, and the full year outlook, and then we will, of course, end today's call with a customary Q&A session. And with these opening remarks, I'll hand you over to CEO Carsten Hellmann and slide number three. Please go ahead, Carsten.
Thanks, Per, and thank you all for joining this call. First, let me give you some highlights. Despite the very difficult corona environment, I'm pleased to report that ALK's performance in Q2 saw sales that were in line with expectations and earnings that were strong. Sales in our European and international markets remained resilient. Nevertheless, across our markets, visits to allergy clinics were significantly restricted, with the greatest sales impact in the U.S. and on SCIT in general. Despite this, sales remained on a par with last year, not least because of continued strong performance from the tablets, which grew 25% globally. Tablets are now the largest single product group for ALK. Planned product discontinuations reduced growth by approximately 3 percentage points. This means that the underlying like-for-like sales growth of continuing products was plus 3%.
EBITDA was up 213% to DKK 75 million as a consequence of savings, operational efficiencies, and delayed R&D costs. As a result of all this, we're upgrading our earnings and cash flow outlook. We're maintaining our full year revenue outlook to reflect our H1 performance and encouraging signs of an H2 recovery coming from European and international markets. However, the ongoing impact of COVID-19 in the USA means that right now our overall growth is tracking towards the lower end of our guidance range. Nevertheless, our working assumption is that we will see things improve in the U.S towards the end of the year. Also, at this stage, we cannot rule out that we will see a stronger recovery in the U.S. or elsewhere.
The key growth driver is still the tablet portfolio, and our outlook for the year is still for tablet growth to exceed 30%, and currently, it looks like it might comfortably exceed that despite the COVID-19. Before I go on, let me take a moment to repeat what I said in Q1 about our assumptions for H2. We still anticipate that the majority of allergy patients will once again become able and willing to visit healthcare professionals without significant limitations. This will mean that patients who are normally treated in a clinical setting, such as those receiving allergy shots, can return to treatment. It will also mean that patients who do not have access to online prescription renewals can once again visit their doctor to get a new prescription.
This will allow ALK to begin converting patient engagement via our klarify and web platforms into patient mobilization in time for the Q4 high season, when the majority of new patients typically begin treatment. And finally, a recovery in the way markets function will also allow our reps to promote our products once again in a more normal way. Before we go into Q2 financials, let me just take a moment to go in detail on COVID-19. Please return to slide 4. One thing about the timing of COVID-19 is that it is important to understand that the greatest impact came during what is traditionally the low season for AIT patient initiations, so while these new initiations were lower, the impact was less than you might have seen. Nevertheless, we estimate that sales growth reduced by around DKK 100 million year to date, mostly from the USA.
This was in line with our assumptions made back in May. Let me just give you a flavor of the way we saw Q2. The first thing to note is the amazing commitment from doctors to their patients. For example, in Europe, the majority of patients were kept on treating so they could maintain control over the allergies, while some doctors even found ways to initiate patients onto treatment. In the U.S., the situation was much more difficult, and at one point, as many as 50% of allergy clinics were essentially closed to patients. When you hear all of this, it is no surprise that the greatest effect was on activities that typically take place at the clinic, while home-based treatments were much more resilient. We expect that we will be able to return to growth in H2.
We see a number of indicators, especially in Europe and international markets, that support this view. First, most allergy clinics are now receiving patients, and our reps are also able to visit doctors again. Secondly, sales increased in most markets towards the end of the quarter, including for diagnostic products, which is a leading indicator of intention to treat. Finally, data from our digital klarify and patient support platforms suggested a backlog of patients that are ready to take action on the allergies as soon as they can. In the U.S., we see that allergy clinics have now reopened, although patient flow into the clinics is still down. In R&D, we are facing delays to our clinical development program. The good news is that those who are already involved in trials have continued to receive treatment wherever possible, and we have seen very few subjects dropping out.
We also just restarted recruitment for one of our pivotal ACARIZAX trials. Even so, the recruitment of new patients is still impacted. For example, we're still not able to fly Chinese patients into Austria for the ACARIZAX exposure chamber trial. Once again, I'm proud to report that there have been no major interruptions to our production. All factories are up and running, supply has not been materially affected, and our inventories remain robust. With that, let's move on to Q2 sales breakdown across our regions on slide 5. For that, I will hand over to Søren.
Thanks, Carsten. Let me share a few highlights from the second quarter. As you can see, European revenue was down 2%, although this figure reflects reduced sales from discontinued products worth 5 percentage points. So like-for-like, sales of continuing products were actually up by 3%. Growth was seen from tablets and Jext, just as we also saw further market share gains in important markets. The picture across Europe was mixed because of COVID. However, some trends that are worth noticing include 22% growth from tablets, 15% growth from Jext, as well as resilient sales of SLIT-drops when discontinued products are excluded. We also outcompeted our rivals to gain further market share in Germany. In North America, sales were down 19% organically. Sales were lower than expected on the effect of COVID, which Carsten explained earlier.
International markets saw a 56% growth in the second quarter, with continued strong sales of tablets to Torii in Japan. In China, the effects of COVID-19 were largest during Q1, so that during Q2, the market bounced back strongly, and revenue grew in high double digits. Let's take a closer look at the three product categories on slide 6. We've already highlighted the resilience of tablets, which were up 25% in the second quarter. We've also confirmed that tablets are now our largest single product segment. But what you can also see here on this slide is that tablets are now very close to outselling the combined SCIT and SLIT-drops portfolio. Let's now turn to the year-to-date financials on slide 7. ALK financial robustness improved further in the first half of the year.
Gross profit was DKK one billion and 21 million and yielded a gross margin of 59%, which was an improvement over last year, reflecting changes in the product mix with higher sales of tablets, but also lower sales of legacy products. It also reflects significant investments in product supply robustness, as well as implementation of the product and site strategy. Capacity costs decreased by 6% in local currencies to DKK 868 million. R&D expenses were up by 12%, reflecting a step up in clinical development activities. However, this was much lower than planned due to COVID-19 restricting patient recruitment and delayed clinical activities. Sales and marketing expenses decreased by 11%, reflecting both savings and operational leverage. EBITDA was up 74% to DKK 273 million and significantly exceeded expectations.
We estimate a net positive effect of EBITDA of more than DKK 100 million in the first half of the year from savings and delayed activities as a consequence of COVID-19. Finally, free cash flow of plus DKK 27 million was better than expected, mainly influenced by the higher earnings and postponed employee tax payments. This leaves us with a cash reserve of approximately DKK 900 million. With this, I'll hand you over to Carsten for an update on our strategic priorities.
Thank you, Søren. As many of you know, we are now in the third year of our three-year strategic transformation of ALK, and here you can see a reminder of the four areas that have been the focus of our efforts. I'll talk a little more about our progress in each of these coming slides. But as a general point, I'd like to say that the changes we have made have been key to our ability to deal with the challenges of the past few months. Today, ALK is more resilient, better disciplined, and has a clear vision of the future than it did three years ago. We also have a more focused portfolio and an expanding range of digital tools that are helping us to get closer than even before to both doctors and people with allergies.
So let's turn to slide nine for an update on our progress in the first two focus areas. On the left, you will see the first strategic focus area: Succeed in North America. The situation in the U.S. remains extremely challenging such that in Q2, sales of our tablets in North America actually fell as it was impacted by constraints on new patient initiations, which is relatively of bigger importance in the U.S. than elsewhere. In fact, sales of all products in the region were affected by COVID. Although we did see sales coming back to a certain extent towards the end of the quarter, we now think that our regional full year target of 10% growth is unlikely, even if the anticipated recovery in the U.S. is stronger than expected.
Even so, we continue to take the action for long-term growth, and we are targeting an autumn launch in Canada for ITULAZAX following approval by the authorities in April. In Q2, we also launched our klarify digital platform in the USA, and saw very encouraging early take-up, likely aided by the fact that many people were staying at home and able to try it out immediately. Finally, we announced the deal with Otonomy Inc, where we have taken on the promotion of the OTIPRIO product for swimmer's ear with ENT specialists, pediatricians, and selected primary care doctors. OTIPRIO is a useful door opener for ALK because it allows us to increase contact with the ENT segment, a fast-growing area for allergy treatment prescriptions, and an important target group for the tablet portfolio in particular. On the right is our next priority to complete and commercialize the tablet portfolio.
As you can see, tablet sales growth remains strong, up 25% despite the COVID-19, with ACARIZAX and ITULAZAX leading the way. We see this growth gaining further momentum as the year progresses. I mentioned the imminent launch of ITULAZAX in Canada, where it will be branded ITULATEK, but there are four other launches scheduled for the second half of the year, covering Austria, Czechia, Netherlands, and Switzerland. We already covered the effect of COVID on our clinical trials program, but just a reminder that we have now resumed patient recruitment for one of our studies and expect to have a clear picture of any delays in our programs later in the year. Let's now turn to the other two areas of strategic focus on slide 10. Next, let's look at the patient engagement adjacent businesses.
Our experiences with the award-winning klarify platform, digital patient engagement, clearly shows that we are able to engage more closely with many more allergy sufferers, helping them improve their quality of life through information, tools, and services designed to help diagnose and manage allergies and connect users with doctors who can prescribe a suitable treatment. Part of this universe is the klarify smartphone app that helps users track and manage their allergies, and it provides personalized allergy information, including accurate pollen counts and forecasts, as well as the latest air quality readings. So far, this allergy companion app has been downloaded more than 500,000 times. The klarify platform has now been launched in six markets: Germany, the UK, Denmark, Ireland, Slovakia, and the USA.
Our recent efforts have been focused on gathering patient insights and identifying the most likely candidates for AIT so that, COVID permitting, we can mobilize them to seek treatment in the autumn to coincide with the high season for the need for treatment in season. As you can see, we've made positive progress on this by establishing more than 400,000 relationships with consumers. These are relationships where the consumer has given permission for two-way interaction with ALK. In addition, we see more than 100,000 people take some sort of action on the allergies using the tools and resources we provide. These can take many forms, but typically involve using a find-a-doctor tool. The final strategic focus on the right is to optimize and reallocate.
Here, we continue to phase out older, less competitive legacy products in favor of documented registered products, such as the tablets, while also investing in core legacy products, manufacturing, and product supply. So far, we have phased out more than 300 product variants from our portfolio as it stood in 2016, and we continue to progress towards greater site specialization and the added efficiency that that brings. So let's now move on to the 2020 outlook with Søren on slide 11.
Thanks, Carsten. Back in May, when we reported on the first quarter, we were very clear about the expected impact of COVID-19 on our business, and the second quarter was very much in line with these expectations. We also outlined our assumption of the second half recovery in the allergy market, and today, we shared some of the indicators that still support this, as well as our belief that the U.S. market will remain unpredictable over the short term. As a result, we have updated the full year outlook as follows. We still expect revenue to grow organically by 8%-12% net of product discontinuations, which reduces this range by approximately 4 percentage points. However, because of the situation in the U.S., we are currently guiding towards the lower end of this range, although we cannot rule out a stronger recovery in the U.S. or elsewhere at this stage.
Meanwhile, full-year tablet sales are still expected to exceed 30%. Revenue growth is expected to be strongest in the fourth quarter, reflecting an anticipated timing of the market recovery, shipments of tablets to Torii in Japan. EBITDA is now projected between DKK 300 million to DKK 350 million , reflecting savings in sales and marketing and delayed R&D spend. We continue to see the gross margin roughly on par with last year, and we now see R&D expenses at the range of DKK 500 million to DKK 550 million versus the original plan of DKK 600 million . Free cash flow is now expected at around minus DKK 200 million , reflecting higher earnings and changes to tax payments and working capital. CapEx is unchanged at DKK 250 million to DKK 300 million . Our assumption for working capital includes continued build-up of inventories and one-off repayment of accrued rebates.
With this, I'll hand you back to Per and the Q&A session on slide 12.
Thank you, Søren, and thank you, Carsten. And this concludes the main part of our presentation, and we are now ready to open the Q&A session. And operator, please go ahead.
Ladies and gentlemen, if you do have a question for the speakers, please press zero one on your telephone keypad, and you will enter a queue. After you are announced, please ask your question. Our first question comes from the line of Michael Novod of Nordea Markets. Please go ahead.
Yes, thanks a lot. It's Michael from Nordea. So three questions, please. The first is to the development in international operations and Japan. We know from other areas that Japan is generally a tablet market, also if you look at the diabetes market, for example. So what are sort of your discussions with Torii regarding the continuation of a very strong penetration of the tablets in the Japanese market in the years to come? And then secondly, on the cost side and also on the gross margin, better gross margin than expected, do you just generally see that the product pruning, the margin expansion in general is going faster, or is there anything in particular we should be aware of? And in that respect, Carsten, maybe also can address whether you just see an opportunity on the cost side in general, also with COVID, to sort of do more optimizations.
And then the last thing on the digital strategy, very impressive stats. I don't know whether you can talk to it, but can you say anything about what you expect in terms of conversion rate from klarify users that take an online allergy test and then turn into patients just to get sort of a feeling because we see these download rates and online testing, etc., that they are sort of exploding right now?
Thank you, Michael. I'll start, and then we'll end up with the gross margin question and hand it over to Søren. There's a lot of untapped potential in Japan still, and particularly if you look at the cedar, they have more than 80,000 patients on drug already, which they're converting into tablets, plus it's still an underdeveloped market per se in allergy treatment. So when we talk to Torii without providing their guidance, I shouldn't do that, they are very positive of the years to come in terms of growth rates here. It's not something that we just filled up a hole and then it's going to be flattening out. We're just at the beginning. If you talk to Torii, you also saw their own announcement just a few weeks back that was very, very positive as well.
That's not one of the biggest concerns we have right now at all. You ask about the COVID further optimization, I'm not sure exactly what you mean by that. I think that in the situation we've been in here, we should be very proud of the employees of ALK who have been actually managing all this Q2 mostly from home, including getting ITULAZAX approved in Canada and so forth. The savings you see in sales and marketing is mostly related to not going to congresses and travel and so forth, and the rest is leverage. If you look at the profit increase we have right here in Q2, approximately half of it you should expect comes back in a normalized environment, either as clinical trials cost comes back or in a normalized sales and marketing environment, it's going to be cost that will be ongoing.
The rest of it is actually the efficiencies we do see because also getting the scale, getting the mix right with more tablets and the gross margin, Søren is going to talk to in a second, is a part of our plan. If you talk about the plan, I got a lot of questions this morning about what is the next plan. There isn't a next plan. We promised to stabilize the company, make it more disciplined and focused in these three years. We think we're ahead of that plan, and when we go into next year, we already said we will return to profitability and end up in this 20% to 25% range after 2023. There's nothing that indicates we're not getting there, and that's what we are focused on here.
So if we can build a company with 10% growth and these profit margins, I think we have so far delivered on that, and that's all our focus. COVID is an uncertainty, but also remember there's been a lot of focus on the U.S. relative to the size of ALK and the numbers. When you are 16% down in tablets in the U.S., it's less than EUR 1 million. So it's not the big swing factors, but we are still focused on delivering on the U.S., and we will get there. And you saw also the ENT entrance we're doing right now. So many activities are going on. And there, back to the last question you had about the klarify, we are testing a lot of that are going to be the answer to you right now.
Figuring out how to do that are two elements I can bring to you now, and then I'd rather have the klarify data when we have them. One thing is, for example, that we're not driving patients to doctors who are not signed up to be willing or show they're willing to prescribe tablets. So it's not going to be sort of a general allergy tool. That's one thing. We have also added, for example, some sort of telephone support groups where you can call in and get advice and so forth. So it's a little more holistic right now. It's not just an app. Needless to say, we do see when you have a willing and able doctor to prescribe tablets and you have a patient who are well-educated and are trusting ALK, we have a much better situation.
Whereas the last part of it is then to support that with these decision-making tools at the doctors to find out and diagnose and get the patient on the right treatment, so it's a little more holistic, but definitely having 500,000 users on klarify right now is way above what we thought, but you're right, it has to convert into both tablets and other sales in the future, and we are on it, and as soon as we get the data, we'll bring them to you, and we'll let that hand over to you, Søren, and talk a little bit about the gross margin development.
Yes. Thank you, Carsten. I mean, it's clear that actually when it comes to our gross margin, the strategy is also working. I mean, for the first half of 2019, we had a gross margin of 56.4%. If you look at the same period this year, we had 59.2%, so 3% up. In all fairness, last year we had an asset write-down approximately 1.4%. But underlyingly, we are 1.5% up to 2% up on the gross margin, and that is very much attributed to the tablet penetration we have. So overall, I would at least conclude that we're definitely on the right track to improving our gross margin. When we're looking at the full year, we are still targeting around 58% to 59% gross margin. A couple of reasons for that. We continue to invest in the long-term PACE program, and that is taking still some margin point down.
And in addition, of course, the success of Torii, bottom line for ALK is a very good story, but looking at gross margin, it still pulls us a little bit down on the gross margin. However, when you then look to leverage, because we don't spend marketing money to sell that in Japan. S o overall, it's a really good business for ALK, but sometimes it can erode the margins when you just look at them in absolute terms if the Torii is really high. But so far, I think we're on the right track. We are all the time improving the gross margin, and the product supply is running extremely smooth even despite COVID. I hope that answered the question.
It's perfect. Thanks a lot.
Thank you. Our next question comes from the line of Peter Sehested of Handelsbanken. Please go ahead.
Yes, Peter from Handelsbanken. Thanks for taking my question. I have two. One is regarding your comments in the report regarding your market share gains in Germany. I wondered if you could potentially quantify that and also sort of add more flavor onto. Clearly, it has something to do with the tablets, but perhaps add a little more flavor on that one. And secondly, you've been talking about your Jext manufacturing capacity being constrained. Yes, you report that Jext sales grew by 15% this quarter. Is this 15%, is this something that is sustainable or is it just something, is this a fluke or whatever is it? And I mean, this is your current manufacturing capacity. That was it for now. I'll jump back into the queue. Thank you.
Yeah. Hi, Peter. This is Søren. I'll take the, I think, the very good story we've had now for some years in Europe, and I know that, of course, you're speaking to Germany, but we shouldn't either forget that we are still doing a fantastic job in France, also where we're maintaining the absolute leadership in France. But actually in Germany, which is a very positive story, I think with the community we have online here, you will all have remembered we said that we were going down Germany and we were bottoming out sort of late last year. And I think it really reports out in the stats on the market shares where we are surpassing now the 30% market share, 30.5% year to date. And just two years ago, we were only at 23%. So clearly a super recovery.
And you are absolutely right that the ITULAZAX plays an important role in that recovery. But even on the older SCIT products there, we are actually also having a very good share. As you will remember, we also did an improvement there to a shorter upstart dosing regimen on Alutard. So in many ways, I think Germany is a market where we are clearly winning at the moment and has been for some time, and that is solidified in the 30.5% market share. But then, Carsten, to the other point, Jext.
And just to add to the German, remember this is what we've been talking about the last two and a half years about doing these initiatives. We knew it took some time and then gradually go in and eat the competition up by market share point. I think that's what we see happening right now. On Jext, just remind you that after the optimized reallocate activities, we have almost doubled the output of Jext already. And of course, there are some bottlenecks we are trying to address right now. We have a much more sustainable production right now. We have a much stronger footprint in Europe, which means that we believe actually if we could produce more, we could actually also sell much more. And that's what we're working a lot on trying to fix right now.
One of the reasons for that has been that having a sustainable, strong, and reliable manufacturing actually means a lot for the customers. What I could see before was happening was that we won business in Jext when the others could not supply, and then when the other guys could supply, EpiPen or whatever, we lost it again. Now we keep it because people are actually happy with the Jext and we have these sustainable and strong supplies. So we are working hard to see if we can increase the manufacturing because we believe actually we can sell everything we can manufacture. And then we're working on all parameters we can, price and others as well. So I wish I could double or triple the production tomorrow, but I can't as quickly as that, said.
Again, while I'm here, I think I'll just pop in a few questions if that's okay. Just assuming that you can generate DKK 1 billion in sales in tablets in Europe this year, are you able to sort of splice down or split it up in terms of GRAZAX, ACARIZAX, and ITULAZAX, and also just provide a little bit on where ITULAZAX is right now relative to GRAZAX at the similar point?
Peter, I love the question and the interest for our business. Of course, also the details of it. Actually so far, we still stick to the we have a tablet line, but it's clear that more mature products being GRAZAX and ACARIZAX accounts for approximately 80% currently. I'll give you that one number to play with. Then eventually, I think you will have to live with the fact that we claim that ITULAZAX is doing a fantastic job and actually part of driving the market share gains in Germany. That's how much I would like to reveal right now with what we have. Overall, we have a fantastic product in ITULAZAX. I know we've said that eventually we see GRAZAX numbers on that, probably quicker than GRAZAX because we probably don't want to wait 10 years for that.
Nonetheless, that's how you should picture it right now.
Perfect. Thank you very much.
Thank you. Our next question comes from the line of Thomas Bowers of Danske Bank. Please go ahead.
Yes. Thank you. I'll start with the questions from me. So maybe just turning to what the difference for us. [Audio distortion]
Thomas, we're not able to hear you. Your line is really bad. Try now.
Okay. Perfect. Thanks. [Audio distortion]
I'm sorry. I'm sorry, Thomas. We are not able to hear you. Let's proceed to the next dialer, and Thomas, perhaps you can redial and then move into the line again. I'm sorry. We're unable to understand you.
Thank you. Our next question comes from the line of Benjamin Silverstone of ABG. Please go ahead.
Thank you. Hi, Carsten, Søren. I hope you're well. And congratulations on the performance. And thank you for my questions. The first question is regarding the clinical trials. You mentioned in the report that you would perhaps be able to make up some time, some lost time at a later date. Would you be able to elaborate a bit on which tools you have available to facilitate this? Furthermore, in regards to the U.S., as we know, the U.S. market is a bit more uncertain. Do we have any update or indication of how the prescriber base has developed in North America, especially the U.S. during Corona?
And lastly, in regards to other segments, we know that the diagnostic segment has significantly increased in COVID-19. In regards to others, do you have any indication of whether that segment has started to see a recovery or how would you recommend that we think about this segment going forward? Thank you.
Thank you. The first question was about the clinical trials and catch-up. It's a matter of recruitment that's the issue right now. We have initiated some studies also right now, and that's going fine. And it is only a matter if you can accelerate the recruitment of the patients, it will work fine. Or if you take the Chinese study, if you can double down on the people you take to Austria and gain some time as well to get them into the chamber studies, that's where we sort of can manage it. The only issue we have with clinical trials is the recruitment of patients. It's nothing to do with the endpoint, what we expect from it, and the outcomes we expect from the studies. It's only in the COVID, we're a little bit uncertain on if we can either recruit fast enough or we can recruit enough patients.
And that's what we're looking at right now. And of course, when things are opening up, we can actually work with the CROs to accelerate the recruitment of the patients. If you look at the U.S. and the prescriber base and the tablets, that actually looks fine. It's pretty much in line with our expectation in terms of the prescriber base and the depth of that. And we also saw almost a doubling of the tablet scripts from April till now. So there's a lot of positive signs as well in the U.S., but we don't know what is the chicken and the egg right now because in the beginning of the quarter, the clinics were closed. So there was really game over.
And now the clinics are open, and the doctors in the U.S. are really ready to initiate and treat patients, but they don't see the same patient flow as they normally did. They do a lot of activities, and we help them also with that to see if they can get patients into the clinic, but the level of patients getting into the clinic are lower. So we don't know exactly when is that going to be opening up more. But if you look at the tablets, the NBRxs are doubled since April, as I said, and we are also seeing the number of doctors on tablets are good. For the diagnostics and other businesses in the U.S., it's not that good any longer right now under these COVID times.
And we also saw in the previous quarters when we were a little bit down in the U.S., it was normally non-allergy business, and it still is. So a part of the drop is also that. And there's not really much you can do about that. It's container- sealed devices and diluents, and not much containers are shipped right now.
Thank you very much.
Our next question comes from the line of Thomas Bowers of Danske Bank. Please go ahead.
Try again, Thomas. Yes, try. Go ahead.
Okay. Thank you, guys . So the last quarter was normally after the pandemic, but that was a little faster on the clinical trial. So just in timing the China trial restart in 2020 and in 2021, and then also on the MT-12, and then all the patients have been able to get [Audio distortion] any preliminary timeline on the other readouts with the clinical trials. [Audio distortion] So any thoughts on that? Thank you.
That was good. Yeah. Hi, Thomas. Unfortunately, I'm not sure necessarily it's your line, but the sound quality was still quite bad. We picked up some of it. You picked up some of the clinical trials in your first part of your question on the MT-12, and actually on MT-12, we restarted the recruitment there so that it still looks okay. But again, as Carsten has said many times, whether we can keep up the pace with COVID and the COVID pockets popping up and down across the European recruitment base and in the US for that matter, that's more the uncertainty. But it's actually restarted. Then we have an adolescence study also targeting the U.S. MT-18 that's actually going according to plans. So there are two of the ACARIZAX trials that's actually running perfectly normal, and on MT-11, we actually completed the recruitment on the last cohort.
That's also okay. It's more down to the Chinese that it's clearly under pressure due to this flying in and out of people to Vienna. I hope that at least gave you some perspective on that. Yes, we think that we are impacted by COVID, but it's uncertain how much it will be yet. But it's clear that if it continues in some of these pockets, yes, we could actually eventually have some definite delays. But there are actually also signs that we're opening up on the trials. That's why we are a little bit still too uncertain to finally conclude on the clinical trials. That was at least the question we heard. Unfortunately, you had three other questions as far as I actually heard it. If you can give me a hint on them, then give me a try once again.
We have another way of listening into you now.
Yeah. If you can hear me regarding the prescribing patterns. So here in Europe, so I'm just wondering if prescribers, they are maybe becoming more prone to prescribing oral-based therapies, so tablets. So I'm just wondering if you already could see some sort of tablet acceleration as a consequence of COVID-19. So that was sort of the second question.
We do see 25% growth on tablets here in second quarter. I cannot document to you it's because of COVID-19 changes and so forth. But I think it's a fair thing to say that we see a trend towards that. And if you think about it, you have a situation both as a doctor, but also as a patient. And now you have to choose between in this situation to go to a doctor every second week to get an injection, or you could get offered a home-based treatment that are actually documented and works no matter where you are in the world. The trend will go that way. So we are hearing from the market and we're hearing from the reps, but of course, we don't have algorithms in our numbers that can actually select where it does come from.
But definitely, our expectation is that this is a very bad thing for the world and for the patients who are not getting the treatments in many different indications as right now. But on the longer term for ALK, it's also a reminder of how good the tablet regime is compared to other regimes. So we certainly believe that the pattern we see, the high growth we see, and the momentum we see is also infected by COVID. I cannot document how much it is of that, but I think it will continue in the years to come as well because this is a reminder to people that we actually have a fantastic portfolio of products. And this is also one of the strengths we do have right now that we're not a one-product company. We now cover 80% of the respiratory allergies.
So it's easier for the doctors to actually take it in as a concept. And to that add all the activities. I don't know if you downloaded the klarify app in Denmark. It actually is a very sophisticated tool that also supports you individually to manage your allergy and give you a lot of information and guidance. So I think you start combining those things, I think we are very, very well positioned.
Okay. Sounds good. Thank you very much and sorry for the technical issues.
I think I see it was on our side. So we'll take that. Sorry.
Thank you. Our next question comes from the line of Jesper Ilsøe of Carnegie. Please go ahead.
Yes. Thank you. Can you hear me?
We can hear you.
Perfect. That's good. Two questions, please. One on Torii traction in Japan and one on R&D afterwards. So starting with the tablet traction in Japan, strong momentum in the third quarter, as I recall it, where you exceed consensus. You deliver DKK 127 million in the first half, and you also guide as you did previously, but shipments are skewed towards the second half. So all else equal, is it fair to assume that the sales in the second half will be higher than in the first half? Or how should we interpret this guidance about skew towards the second half?
Perhaps you can also give an update on what is driving sales. Is it these shipments, or is it royalties? And perhaps also how much is attributable to the pediatrics or children label in Japan? I recall it was approximately 50% or 75% in recent quarters. That's the first question. Then I can follow up afterwards with another question.
Certainly give the details of Japan's sales.
It's absolutely right that Torii is doing a fantastic job and actually has been doing it for quite some quarters now, and it's also correct that it's still a combination for us of royalties and in-market sales performance, so that's also why it's sometimes a little bit difficult for you, but also for us to sort of predict exactly when these shipments come out, and of course, you see the Torii sales and cannot always predict what the royalties are going to be to us. Having said that, we are in a growth momentum, and yes, we expect second half to be higher than first half on Torii tablets. That will be the straight answer to that, but it's also clear that the children they have now is the driver, and it's also really good, and they've had some conversions, so we've also had a benefit on a growth trajectory.
But I shouldn't take away the very, very positive performance of Torii in the first half, and it will continue in the second half.
One good thing, if I may add to the Torii performance and our future prospects are that, as we see it right now, that, as you said, more than 50% of new patients are children. The investments we're doing now in children's studies in Europe and U.S. is actually some of the platforms for future growth for ALK as well. So we can just get even close to that uptake. As you probably heard today also in the news, that we are thinking that children as such, the tablets are really, really a good treatment for allergies. With the numbers from Torii with 50% of new patients being children, it's very encouraging for us for the future.
Thank you. Then just on R&D, then I can just follow up on Thomas's questions on R&D and just try to ask in a different way. So would it be fair to expect the data in 2022 on the China and children study with the ACARIZAX, or could it be pushed further out, say, 2023, depending on the recruitment status? And then also one question on the Windgap. You mentioned there could be data out in six to eight months. So is it fair to assume that this clinical data that you will report in six to eight months, is that potential data that could be filed to the regulatory agencies? Is that correct? Thank you.
Yeah. For the R&D, it's not our expectations that we will push it by years, the data outcome from the clinical trials. What we're just signaling to you right now, that the COVID-19 gave us some delays in the recruitments, but we don't know how much we can catch up later and what can happen. No, it's not 12-month postponement for all of them. There might be some issues on the asthma trial that could be in that range, 6-12 months, but that's what we are talking about. If you look at the Windgap, what we're talking about in the Windgap, and it's simply the fact that now we have the different components right now.
We're testing it, the diluent, the powder, and the device altogether. And we'll have the next readout of how it's working, stability, and the solvent and so forth in December. And from there, we will decide when to file, whether that's going to be in 2022 or 2023 or whatever happens. We don't know that yet. We just have the next readout for that. It's not the data that means that we at the beginning of 2021 will file.
Fully understood. I'll jump back into the queue. Thank you.
Our next question comes from the line of Yiwei Zhou of SEB. Please go ahead.
Thank you for taking my question . So actually, most of my questions have been answered. Maybe a follow-up on Japan. Based on your discussion with Torii, could you please give us an indication on how much the current strong growth in Japan attributable to the patient switch from the SCIT treatments to tablet, and how much by the increased number of patients?
We don't have the exact data for that, but it is a combination. Most of it is actually new patients. But we also know that Torii had some SLIT-drop products, in particular in Cedarcure, where the Cedarcure development project they had was with the base of converting their own patients first, but they are also developing the market rapidly because the new patient intake and the growth rates in Torii is way much over and above just conversion of old products.
We are clear. Thanks.
Thank you. Our next question comes from the line of Jesper Ilsøe of Carnegie. Please go ahead.
Thank you so much. Just one question on the revenue guidance. So you say that Q2 was in line also given the COVID headwinds. But with that in mind, what has really changed here in Q2 and the outlook to 2020 versus what you saw in Q1 in May, where you did not see the revenue trending towards the lower end? So perhaps you can just help us balance this. Is it reopenings in H2 that are more uncertain? I fully understand that there are uncertainties in general and that the underlying momentum is intact. But it's just whether or not there's any things that have changed here in Q2 given that you actually see the quarters in line. Thank you.
Yeah. It's simply us being transparent and cautious as we normally are. Remember that one percentage point growth for us is around DKK 40 million , right? So we're just saying that looking at the U.S. right now on the SCIT products, will U.S. recover and give DKK 30 million or DKK 40 million or DKK 50 million more or back to normalized levels? We'll be fine again. We just are in a situation with a lot of expectations or rumors about COVID in different pockets. We don't expect a full close down of Europe again, but what type of uncertainties do we look into? All we are saying is we're trending to the lower end. We're still keeping the guidance, but we're also saying that it doesn't take much of recovery or momentum so we're back on track again. We're just a little bit cautious here, and there is a continued outbreak in the U.S.
And just a month and a half ago, we were fine in Texas, and it was really a blast there, and we were locked down and showed nothing in Florida. Now it's the opposite. Now Texas has an outbreak, and we don't see any dust mite products there, but now Florida is opening up again. It's just we're still being cautious, particularly about the SCIT products in the U.S. that drive that trending towards it. If you look at the rest of ALK, it is actually a solid performance. There's nothing there we really are concerned about. It's a lot of hard work because it's just difficult times with the COVID, but it's predominantly the SCIT in the U.S. and a little bit for Europe's SCIT as well. But that's it. That's what we're talking about.
We're still trying not to overpromise on the delivery, but doing the opposite.
Sounds good. I have one more follow-up, if I may. So on SCIT, SLIT-drops, I know tablets are probably the most interesting things to discuss in the future. But still, if you can just put some color on how you see the SCIT, SLIT-drops business deliver towards 2025, should we expect this to be a flat business globally? Is it single-digit growth? What is fair to assume when you are done with all your product discontinuation and when you are over this COVID-19 headwind? How should we see the underlying, say, like-for-like traction in this business?
I would say single-digit growth would be my answer to that. And that's out of the assumption that you can see we gain market shares. You can see that we have a registered portfolio also of the SCIT and SLIT products. It's a little bit different between the drops and the SCIT products. The SCIT will probably be growing, and then the normalization of the drops in France is give and take. That will stabilize. But in totality, I think you will see low single-digit growth in the legacy business going forward.
Thank you so much.
Our next question comes from the line of Peter Sehested of Handelsbanken. Please go ahead.
Yes, Peter, again. And thanks for taking my follow-up question. And I think it's a bit of the old story about the U.S. I mean, I'm not particularly optimistic about the U.S., but nevertheless, I mean, your tablets are doing very, very well in Europe, also doing very well in Japan. Clearly, I mean, patients cannot be treated in the U.S. because physicians are thinking more about their wallets than they think about patients. They're not giving them home treatments like tablets. I mean, there are so many stuff here. I mean, that if you were really aggressive, I mean, you could have the potential to sort of change some things. I know that's a difficult situation as you have people making money, which at the same time abide by the guidelines, etc., etc.
But there is so much stuff now that sort of indicates that these guys are sort of not getting away with murder, but at least thinking more about their own economic welfare than about patient health. So does this in any way open up for you in the U.S.? And do we have some kind of game plan that's sort of in order to make you utilize what has come out of COVID-19? Thank you.
Yes, we think so. And we think that the new segments outside the allergist, the digital platforms, and the other activities we're doing right now is going to take us there. I am optimistic, but I'm not aggressively on the timeline, optimistically in the sense that I don't think that U.S. will suddenly swing because of COVID and everybody saw the light. But we certainly see, as I said, the script doubled since April. We certainly see that actually more and more patients are asking for it and insisting on it. And we also see that the arguments for the doctors are diminishing. But I think actually that it will take a few years more, but the work we're doing is definitely progressing. We are having more than 25% of our calls now on the ENT segment.
And one of the things that we also keep it pushed this way is that what we just talked about in Japan on children. In a few years from now, we have the children indication on the ACARIZAX. We have on Ragwitek soon, meaning that we're now entering into the whole child segments. And as I've said, taking a three-year-old child for the second shot at any allergist is like putting your cat into a bath, right? It's not flying. So there's a lot of momentum we also expect coming out of pediatrics and ENTs and also allergists on the whole children segment. And that will also drive another momentum because why would a parent very often the children with allergies has parents with allergies. And why would you go down and take a shot every second week if your child is fine taking a tablet?
So we are playing the long game here, the long-haul game, which we think is necessary. And you're right that people do not pay out of their own pocket to do the right thing for the patient in the U.S. necessary. But that's just the facts we have to deal with. But I believe that what we're doing and the way we're investing and what we're pushing it, I understand the disappointment of comparing to future prospects. But I think actually we were ahead of that after Q1, doing very well in the U.S. Yes, COVID happened. But I think on the back of the COVID, we have more arguments. We will still have the children studies coming in. I think a lot of things coming in.
As you can see, we are a strong resilient company despite the fact that it's not the dream scenario in the U.S. right now.
Just to follow up to that, I know it's a bit futuristic modeling, but when you do have your children indication in the U.S., particularly with the house dust mite tablets, should we also anticipate? I guess it would be natural to anticipate a higher level of investment in sales and marketing costs in the U.S. I mean, is that how we should think about it? Let's say more top-line potential, but also some initial investment to support that. And can you sort of anyway add some color on what you're thinking in terms of commercial initiatives when you have those two indications?
Yes. It's a good question. I don't think it's something you will see on the P&L as such. But of course, you will spend some money on launching it and so forth and promoting it. But you're promoting to the same target group or the target group you have decided to develop the next two years anyway. So it's not like you should think about a new sales channel, sales force, and stuff like that. It would be within what you said, normalized budget.
We should not change the idea that you will repartner the product in the U.S.
Partner it? Is that the question? If I would.
Yep. Yep. Yep.
Sorry.
Yeah. Repartnering when you have the children indication.
No, I think we now are spending a lot of time and money on making sure we get the gross margin and we have control of that market for the future. I think that is what we want to continue. And I can't really imagine somebody taking a one product indication like this one and run with it. I don't think that's realistic. And I don't think it's the right thing to do either.
And we have no further questions at this time. Please go ahead, speakers.
Thank you very much, all. Thank you for participating in the call, and thank you for all your good questions. Now, we have a series of virtual roadshow meetings lined up for the coming months. You can see some of them here on the slides. We hope to see you in one of these meetings. If you're not able to attend, please do reach out to us, and we will be happy to set up meetings if you have any interest in doing so. In any case, thank you very much for today, and goodbye.