Hello, everyone, and thank you all for joining this presentation of ALK's Q2 and half year results and the full year outlook. Let's turn to slide two, where I will introduce today's presenters and the agenda. My name is Per Plotnikof. I'm Head of Investor Relations, and with me today are CEO Carsten Hellmann and our new CFO Claus Steensen Sølje, who joined ALK on the 1st of June this year. Welcome on board, Claus. Today, we will detail the performance in Q2, including market trends and financials. We will also provide an update on our strategic priorities, including a deep dive into the growth drivers for the respiratory tablet portfolio before we cover the full year outlook. As usual, we will end the call with a Q&A session. To get started, I'll hand over to Carsten, who will elaborate on the highlights on slide number three.
Thanks, Per, and thank you all for joining this call. I am proud of the strong results that we have achieved in the first half of the year. Revenue was up 11%, with growth in all sales regions. Growth of 12%, disregarding the one-year mandatory rebate increase in Germany. Revenue growth in Q2 was fueled by Tablets and SCIT, with double-digit growth: sales growth for both categories: 17% for tablets and 13% for combined SCIT and SLIT drop sales. The operating profit, EBIT, more than doubled, increasing to 120% in local currencies and reached DKK 97 million, despite continued significant investments in growth. Tablet growth are driven by strong growth from Torii in Japan and continued double-digit growth in North America.
As we anticipated and communicated earlier, sales in Europe were still impacted by the tailing effect of the lower intake of new patients in the past initiation season. As a reminder, we initiated approximately 200,000 new patients, but had expected to start up 10,000 more. This shortfall resulted in sales in Q1 that was around DKK 35 million, lower than we originally budgeted. To secure a good upcoming treatment initiation season, we have launched several initiatives to restore growth, especially in the key European markets of Germany and the Nordics. All initiatives have been deployed, and we are confident that these will have a positive impact second half of 2023.
Since leading indicators point to a stronger initiation season with a large inflow of new patients in Europe, we expect good recovery and double-digit sales growth in tablets in second half of the year. Moreover, key markets are stabilizing and recovering from last winter's unexpected dip. Nevertheless, I fully recognize that the proof will be in the actual tablet sales over the coming quarters, but I remain confident that we can deliver on our goals and promises. While Q2 traditionally is the smallest quarter in ALK, reflecting the seasonality of our business, activity levels were high.
We are running full steam, and we expect to benefit from these efforts during the remainder of 2023, in 2024, as well as long term. The global tablet outlook remains strong, and the outlook has been further solidified in the recent months.V We have narrowed our revenue guidance to 8%-10%, while the earnings outlook is unchanged. We will detail all this during the presentation. First, I would like to welcome Claus to his first webcast as CFO of ALK, and I will now hand it over to you, Claus, to take us through slide four.
Thanks, Carsten and Per, for welcoming me. I have been looking forward to this first financial reporting day as CFO at ALK. But let's take a closer look at the market trends in Q2, where growth was led by our international markets and North America. If we start with Europe, then sales in Europe were up 2% in Q2 and 5% in the first six months. Overall, we saw growth in Q2 in Germany, Nordics, and the smaller Central and Eastern European markets. Growth across markets was powered by SCIT, but the overall sales performance in Q2 was impacted by flat tablet sales, as expected, and decreasing Jext sales. Revenue in North America was up 10% in Q2, and 9% in the first half year.
Sales of all product lines progressed, although growth for SCIT bulk extracts was still held back slightly by temporary back orders. Revenue in international markets was up 64% in Q2, and 30% in the first half year, driven by product shipments to China and Japan. Revenue from SCIT shipments to China continues to grow by double digits. The in-market sales also progressed, and we invested, and still continue to invest, in the market ahead of the planned launch of ACARIZAX. Revenue from Japan continued to fluctuate between quarters with the timing of product shipments, but the trend is clearly upward and the tablet momentum in Japan remains strong also for the long term. Our partners, Torii's in-market sales, grew by 19% in the first half year. Now, let's take a closer look at the product categories on slide five.
Tablet sales growth picked up in Q2, where growth was 17% versus 1% in Q1. The pickup was mainly driven by product shipments to Japan, while Tablet sales in North America continued to grow by around 20%. European Tablet sales were unchanged in Q2, which was as expected, but sales were up 2% on a like-for-like basis, disregarding the temporary rebate increase in Germany. The low growth was due to the trailing effect of the lower-than-expected intake of new patient in the most recent initiation season, as Carsten just outlined in the beginning. Combined SCIT and SLIT-drop sales were up 13% in both Q2 and in the first half year, driven by growth in all sales regions. European SCIT sales especially benefited from higher sales of venom products. Revenue from other products decreased 8% in Q2.
Life science products, such as vials and dilutions and diagnostics, did well in the USA, but progress was overshadowed by a drop in Jext sales in Europe. This decline was partly expected after last year extraordinary demand, mainly due to a disrupted supply by our competitors. With this sales trend, let's turn to the P&L on slide six. In general, higher sales drove margin improvements in the first half year for ALK. Revenue came close to DKK 2.4 billion, after 9% growth in local currencies and 8% growth in Danish kroner. When disregarding the one-year mandatory rebate increase in Germany, growth was 10%. The gross profit of DKK 1.5 billion yield a gross margin of 64%.
This was an improvement of 1 percentage point on higher sales and efficiencies, partly offset by the larger shipments to Torii at lower margins. Capacity costs increased 6% in local currencies to roughly DKK 1.2 billion. R&D expenses were unchanged, while sales and marketing costs were up 5% in local currencies in support of growth initiatives. Administrative costs were up 27% in local currencies. This increase mainly reflects one-off costs associated with the leadership changes. You should expect administrative costs to normalize in the second half year, and we still expect an improvement in the capacity cost- to- revenue ratio. The operating profit, EBIT, was up 33% in local currencies and 23% in Danish kroner.
The EBIT result of DKK 325 million yields an EBIT margin of 14%, an improvement of two percentage points over the last year and are level in line with our outlook for the full year. Finally, free cash flow was -DKK 48 million, which is as planned. This mainly reflects changes in working capital, including a continued buildup of inventories, as well as significant investments in capacity for tablet production and upgrades to our legacy production. All in all, and as planned, a good set of results that support the full year outlook. Now, let's move to our strategy status on slide seven, and back to you, Carsten.
Thanks, Claus. I'll get back to the Succeed in North America and Complete and Commercialize priorities in a moment on the next slides. First, let me share a few headlines from the two other strategic focus areas shown to the right. On our Consumer engagement and New Horizons priority, we still expect the first readout from our phase I trial with the p eanut tablet later this year. The trial is currently running well and according to plan. The adrenaline auto- injector projects continue to progress, and so does the digital mobilization of consumers, which I will return to shortly. On the Optimized for Excellence priority, efforts are on track to upscale capacity for tablet production, both in house at ALK and externally at our contract manufacturer site. We also continue our efforts to pursue efficiencies across product supply.
For example, by simplifying the production setup and standardizing the product portfolio. This will eventually help us strengthen the gross margin. Let's move to slide eight and take a deeper look into the European tablet sales. As I said before, we have developed a series of commercial activities to accelerate tablet sales growth in Europe from the second half and onwards. Activity has been centered around Germany and the Nordics, although we naturally also work with other markets. All indicators today point towards a stronger initiation seasons in the key markets. Let me explain some of these indicators. This year's pollen season was quite burdensome for patients. In Germany, for instance, we saw a big step up in the use of symptomatics.
We also saw an increasing number of severe symptoms reported by Nordic users on our digital platform, Klarify, and the number of Google searches related to allergy grew significantly. So in contrast to last year, the burden of the disease was substantially in the recent months, and pollen allergy seems to be top of mind. Moreover, an increasing number of people taking action on their allergies. We have launched campaigns on our Klarify platforms to engage with people who have allergies, to identify AIT candidates, and mobilize them to get to a doctor's appointment. All our KPIs for digital engagement are well above target. For instance, in first half of the year, 553 consumers in Europe used our Klarify platform, typically to find a doctor, which is a 61% growth over last year.
47,000 doctors visits were arranged and confirmed via digital platforms. We are working with doctors to start initiating patients earlier to avoid conflicts with potential other respiratory infections and other external factors in the autumn, an approach that has proven quite successful for our partner in Japan. The number of patients initiated is growing this year. We are currently looking at a high single-digit growth rate for new tablet patients in Germany and the Nordics ahead of the onset of the initiation season. Finally, the key AIT markets are stabilizing and recovering from last autumn's unexpected dip, and ALK is in a good position to capture further growth, growth and increase in its market shares.
To sum up, these indicators are promising, and we remain confident that we will see high tablet growth in Europe in the second half of the year, driven by this larger inflow of new patients. Let's move to slide nine. Looking beyond our immediate efforts to restore tablet growth in Europe, the global tablet outlook has been solidified in the recent months. Let's look at some of these hotspots, starting from the right-hand side of this slide. In Japan, the government has launched a comprehensive action plan to combat the growing burden of pollen allergy, particularly allergy from Japanese cedar pollen. A key element of this plan is to significantly expand for the availability of Japanese cedar tablets, and our partner, Torii, currently market the only approved tablet for treatment of Japanese cedar pollen allergy, our product, MITICURE, under an exclusive license from ALK.
We and Torii are currently assessing how to best support the action plan, and we are carefully examining the existing infrastructure needed. How do we secure a stable collection and supply of pollen? What investments should we make to significantly upscale production of APIs and production of finished products, et cetera? We do not know the outcome of these considerations yet, but the strong public and governmental sentiment of allergy underlines the promising long-term growth opportunities in Japan. Moving to China, ACARIZAX has been prescribed to the first patients in a special medical pilot zone. This is small scale, but it gives us valuable input from prescribers and patients ahead of the nationwide launch of ACARIZAX, expected in 2024-2025.
To pave the way, we continue to invest in an organizational build-up and further market coverage. We now have more than 150 people on the ground, and our current SCIT offering is listed in more than 600 predominantly large top-tier hospitals. In Europe, the main event in Q2 was the strong top-line result from our pivotal phase III pediatric trial of ACARIZAX. The trial met its primary endpoint and all key secondary endpoints at the same time. Results showed that ACARIZAX both reduced the children's allergy symptoms and the need for pharmacotherapy. We are now preparing a registration application to expand the current product indication to include children aged 5 to 11, with effect from 2024, 2025. We hope for a similar outcome of the pivotal trial on our tree tablet, ITULAZAX, in Q4 this year.
Pediatric indication for both tablets will potentially lead to a sizable expansion of patients and prescriber bases in the medium-term future. Bear in mind that children today constitute the majority of all new tablet patients in Japan. We are also working to unlock further European countries as meaningful growth contributors. Key to our ambitions with these markets are initiatives to gain effective market access, which saw further progress in Q2, where authorities in Spain published a new allergen regulation. It looks like Spain will eventually change its system so that only registered products for the main allergies will be allowed and reimbursed, as is in the case of Germany. Although the timelines for implementations are uncertain, this is obviously good news for ALK and a step in the right direction.
Progress on market access were also seen in other markets in Q2. Moving to North America, the changes to the organizations, which we implemented six months ago, has become fully effective, and they have sharpened the focus on each product group. The number one job is to build new prescriber bases and sales channels with a particular focus on pediatricians. The recently obtained adolescent indication for the house dust mite tablet is very helpful in this context, and the upcoming children indication will also be important. The initial dialogue with pediatricians is positive. They recognize the need for clinically validated add-on treatment to symptomatics, and many tells us that they would prefer to retain the patients in the clinic if they have the right treatment options, rather than referring them to allergists.
In general, across all regions, we're determined to gain market shares, expand prescriber bases and patient bases, and strengthen the advocacy among key opinion leaders, and benefit from the transition in favor of registered products. So the global tablet outlook remains strong. All medium and long-term growth drivers are strong, and some future drivers has been even further solidified in the recent months. Hence, we continue to see the respiratory tablet portfolio as key to ALK's growth for the foreseeable future, and our strategy continue to stand on a strong foundation. Claus will now end our presentation with the outlook on slide 10. Thank you.
Thank you. As Carsten mentioned earlier, we have been able to narrow the full year revenue outlook, while the earnings outlook is unchanged. Full year revenue is now expected to grow by 8%-10% in local currencies, against the previous range of 7%-11%. We feel comfortable raising the bottom from 7%-8% based on the current performance year to date. And we are lowering the top of the range from 11%-10%, mainly due to a further decline in Jext sales caused by intermittent supply shortages in selected markets, caused by temporary capacity issues at our contract manufacturer. We still expect both tablet sales and combined SCIT and SLIT drop sales to grow by double digits in the second half of the year.
Full year tablet sales growth is expected within the previous communicated range of 9%-14%, led by double-digit growth in North America and international markets. Full year growth in Europe is still projected to be single-digit, driven by a higher inflow of new patients in key markets in the upcoming initiation season. As previously communicated, the upper end of the tablet range is pending possible price adjustments for tablets in parts of Europe. However, these adjustments are subject to some uncertainty, as the discussions are still ongoing.
Moving to earnings, the EBIT margin is still expected at 13%-15%, up from 10% last year, based on the following assumptions: The gross margin is expected to increase by up to 1 percentage point on higher sales and efficiencies, partly offset by adverse factors such as the modest cost inflation, the German rebate increase, and higher shipments to Torii at lower margins. R&D costs are still planned to be around DKK 600 million. Sales and marketing costs are expected to increase by mid-single digits, and the overall capacity cost to revenue ratio is estimated to improve. So we are now looking into the second half year with confidence. We expect to continue our journey of higher revenue and earnings growth in 2023, while we lay the foundation for additional growth from 2024 and onwards. With this, I would like to hand it back to you, Per.
Thank you, Claus, and thank you, Carsten. This concludes the main part of our presentation, and we will now move on to the Q&A session. Operator, please go ahead.
At this time, if you would like to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue at any time by pressing the pound key. Once again, that is star and one to ask a question. And our first question will come from Brian Balchin with Jefferies. Your line is open.
Yeah, thanks for the question. Just on the upcoming pollen season, helpful that you specified the leading indicators that point to a stronger initiation season. But perhaps maybe which of these indicators gives you the greatest confidence then in seeing an inflection in tree tablet sales in the second half? And how does that differ to last year? Thanks.
Thank you. I alluded to it also in the script. Contrary to last year, what we do see, we can track actually both, you know, the pollen in the air, but we can also see how many symptomatics are actually bought by people in different markets. And it's significantly higher, which is a very strong indicator that the burden is higher. And one of the things that can hit us if we have a very low pollen season, a lot of people forget to book a doctor before in the autumn because they don't think about it, because they're not so burdened and during the spring. And when they then try to get an appointment in the autumn, the doctors are fully booked. This is also one of the things we saw last year.
Right now, but we can see both these things are changing significantly. Also, in our Klarify app, which we have hundreds of thousands of allergic people on, more we can actually see 500,000 people are telling us now, because they, they note every day how they're feeling, that they feel that symptoms are much higher. I think it's 550,000 that said, "It's much more burdensome for me this spring than it was last year." So that's also an indicator. We also saw about 50,000 more doctor visits were booked than we saw last year. So we see a lot of things going in that direction. So last year we saw this, you know, temporary slowdown of the market. It sort of dropped almost 10%.
You saw our competition were even doing much worse. We gained a lot of market shares, even though we missed these DKK 35 million in sales. However, it looks very different than it did last year. So, we've been a lot in the market now to talk to the doctors, make sure that these bookings are made. We're doing a lot of social media activities and sales activities and marketing activities to sort of make sure that that is happening. So when you are early in the bookings with the doctors, then you will actually get the place and time, and we also try to expand the time in which the doctors are initiating the patients.
So instead of just having a very, very small window where you initiate our tablet patients, we try to learn from Japan and expand that period. And all these, you can say, if you look at it as traffic lights, they're actually all green in terms of the tablet season for us, but of course not for the patients who are struggling more than they did last year.
Very helpful. Thank you very much.
Thank you. Our next question will come from Martin Parkhøi with SEB.
Yes, I tried to spell my name. It's Martin Parkhøi from SEB. A couple of questions. Firstly, I know it's a little bit specific because you're promising, of course, a hope to see a rebounding growth in the second half of European tablets, but if we look a little bit at numbers on comparison figures, should we then expect most of the rebound to be in Q4 rather than Q3? Then, second question, just on the Japanese opportunity, as you write about in and we maybe also heard a little bit about it before.
Of course, I know it's mostly in the hands of Torii, but do you think that it entails any kind of additional cost in the short term or CapEx, additional CapEx, for you to meet this potential extra demand? And then, thirdly, just on the price hikes, potential price hikes, which are part of the high end of the tablet growth this year. You've been talking about it for some time now, and now we are almost at the end of August. How much impact can it actually have by now in 2023, or should we start to consider it more as a 2024 option?
Yeah. Thank you, Martin. Thank you for the questions. Regarding, we think, you know, in average, we'll have the opportunity to tablet growth in Europe. And of course, it's scooted towards the end of Q3, so we will know more sort of in September-ish, how much of it will land actually in Q3 versus Q4, but we are pretty confident that the season here will be strong. So in totality, I wouldn't say that, that, don't expect that it would be very low Q3, but there can be a little bit of flexibility between September, October. That's not really what we know.
I mean, Torii, I mean, it's a little bit elastic band by the meter or by the feet, because if it really is what the government and Torii talked about, the full potential, of course, it would require that we work strongly together with Catalent and others to make sure we secure that huge capacity we would need for that. But as we look today, it's not something that's going to burden us for the next couple of years, but let's see how it plays out with the Japanese government, how solid it. It's a multifaceted strategy. The Japanese government is also to cutting down millions of cedar trees. It's about offering solutions like the tablets to patients and so forth. It's very potential, but it's also early days.
And we promised Torii, as they also listed, that we will not comment on what we think exactly the potential will be, but we've been working with them for the last month, so the facts are, and the planning are good, and it's not going to be a very negative situation of our planning for ALK going forward. I can promise you that. But the prices, one of the elements, of course, is the German prices of the two new indications. And you're right, of course, the effect of a price increase is different, whether it's a six month or three month or two month, but it's also other prices in Europe that we are working on.
But you're right, that of course, when you get to the end of the year, the effect will be little less. But the last sort of half one percentage point to the upper range, it will depend on whether you get those this year or next year. We are still hit this year by the 5% extra rebate we had to give in Germany. That would disappear next year. So there's a little bit where it actually lands. So, but if you look at the fundamental underlying momentum on tablet, it looks good.
Great. Thank you.
Thank you. Our next question will come from Jesper Ilsøe with Carnegie.
Great, thank you for taking my questions. A couple of follow-ups. Firstly, on the European tablet sales and leading indicators. Basically, I'm just trying to understand and get your thoughts on how reliable these indicators are as a predictor for improved sales in the second half. Do you have perhaps any historical data points that they can predict or turn into tablet sales in the past? I know, of course, there's no certainty. It's difficult to estimate, but I'm just trying to avoid that we stand in six months from now and indicators looked fine, but in the end, there's no sales improvement. So that's the first question. Second question, on Japan, also following up on Martin's question.
Of course, turning into an important region and new plans by government, perhaps you can help us understand what the magnitude on improved potential sales we can see here. Any numbers, scenarios on where sort of the market expansion, how large it could be, and also potentially, speculate on timing. Is it five years from now? Is it 10 years from now, or, or what are we talking? Thanks so much.
Yeah, start with Japan. I mean, this is something that could be four times higher sales in Japan, potentially. So it's a serious business, this one. But of course, it's Japan and what the timing will be and how it's actually going to play out, we don't really know that yet. But we are planning with Torii to make sure that whatever happens, both on the price parameters, on the capacity parameters and volume parameters, it's a myriad of activities we have with the people operating with Japan and Torii to see if we can support the Japanese government to do what they want to do with the population. So it's not insignificant.
Regarding the indicators, of course, you can say if 50,000 people more than last year documented went to the doctors asking for help with their allergies, and it yielded absolutely no tablet sales, that would be, that would be strange. But yes, we have 100 years history in allergy, and we know there will be sequences where when you have a very, very weak pollen season, as I said before, people tend to book the appointments later, which could—which they did last year, and you have a tailing effect. We know about the use of symptomatics.
Those that you can go in and look at, for example, the German use of symptomatics this first quarter, compare that to last year, and you'll see a 5-10-fold use of symptomatics in the spring as you saw last year. You can Google that, and we have the stats on that. That also is a very strong indicator that you wouldn't take symptomatics against your allergies if there's no pollen in the air. So there's a lot of indicators there. And of course, we are also driving it ourselves. We are helping people to get help. So when 500,000 people are saying, "We are much more burdened," which they do on our app, they tell every day how they feel. So we have very concrete stats of how people feel affected by the allergies.
Of course, we then support these people by what can you do about it? We know, and we can see already now that about 10% of those have already asked and went to a doctor to get help. So, I can't tell you as any—no, no pharma companies can tell what happens when a rep or somebody is sent to a doctor because of GDPR.
But I mean, I would assume in those markets where tablets are most of the sales, that so, so it's, we think it's, and believe, it's very strong indicators, and it, it's not going to be a big excuse that the indicators were wrong. It will be something that we know from years and years back, that when this is happening, plus we are fueling it even more, plus our stats are stronger. So, I will never use the word confident because a company's problems is always a constant, but I think this one, this one we believe are okay, are okay.
Okay, thank you.
As a reminder, that is star one to ask a question. Our next question will come from Michael Novod with Nordea.
Yeah, it's Michael Novod from Nordea . Sorry, I just spilled this, but... Anyway, four questions, please. First of all, regarding the U.S. business, because you, you sort of made a big announcement last year around sort of changing management, taking a sort of validated concept from the Nordic markets into the U.S. But we've not really seen any kind of impact. So, can you talk to what is to be expected from here, if anything, it's the sort of flattish developments also here in the first part of 2023. Secondly, can you just explain, I think Cartsen mentioned something about single figure growth in new patients for tablet indications. What kind of dropout rates are you seeing against them?
Michael, Michael, sorry.
Thanks.
Mike, we heard the first question about the U.S., but the second question was a little bit dropped in a broken line. Could you please repeat the second question?
Sorry. Can you hear me, can you hear me now?
Yeah, it's better.
It was just about the growth in new patient tablet starts in Europe, that you've seen single digits. What is the dropout rate? Because I guess that's pretty important. Thank you.
Okay. Let me start with U.S. and, yeah, and in the U.S., it's true that what we have done is we have sort of focused the organization and a lot of the work is about. You said that you couldn't see an impact. We grew 20% of the tablets last quarter. But I would say, though, that what we are preparing a lot for right now is, of course, to support those allergies that are with us, about 1,000.
But we also work a lot using the adolescence indication approval we got earlier last year to really penetrate and start discussions and understanding and segmenting the pediatric segment so we can actually push the pediatric indication when it comes out with ACARIZAX here in later 2024 and 2025. So a lot of the work they're doing is to prepare for the future. We don't think that there will be a certain red button that the hands will find over in the U.S. and the world will change. But a lot of the solid work he's doing is a lot like what we had of issues in the Nordics when we started, and he's just step by step getting into that.
Likely, like you see in Spain, whereas, which I mentioned that now the government are taking an approach that looks like the German one. We talked about that four to five years ago. We got a lot of pushback. When do we see the results? It takes some time, but that's moving in our direction as well. U.K. is a little bit different game. Here we also have a new general manager. He's about getting it out of the hospitals into the clinics and the specialists. So there's a lot of different things that are moving around. In the U.S., though, you might say that instead of trying to further cannibalize allergists that don't really want to want the tablets as they make the money on these shots.
We are more likely, and that's the 3 million patients in treatment, we're more likely to continue to focus on building a presence in the 27 million patients in the U.S. that are not treated, and we are seeing a big opportunity with the pediatric segment. And the doctors, pediatric doctors, who are not disincentivized to use tablets and are looking for a treatment that are safe, that are well documented, for their children with allergies, and get out of the symptomatics and hormones. So it looks pretty okay. Patient dropout, we do not see any big changes in the dropout rate.
That's one of the things I hope we could improve more than we have done, because we know that just a few months longer on our treatment means a lot of points. It looks pretty stable, and it's different from different countries and different parts of different countries, but there's no big changes, either in the dropout rates or one way or another, we can see at least. This is one of the things I hope when we get even more critical mass on the digital engagement platforms, that when we're not only mobilizing people to get into treatment, that we later on can stay with them to support them in the treatment.
So we don't have too many dropout if somebody finds a side effect or people think, "Okay, now I'm fine. I haven't had any symptoms this spring, so I drop my treatment," and get them to continue the treatment because we know then the everlasting effect is better and so forth. So there's still potential in decreasing the dropout rate or prolonging the treatment period, so to speak.
Okay, thank you. Just, just one follow-up on that. Just out of curiosity, are there any time point where the Torii deal is renegotiated? Because you did it in 2011, or is this just a deal with the terms that continues indefinitely? Just, just out of curiosity.
No, we right now Torii and ALK has a fantastic partnership, and it's built in trust, and we have a lot of future projects in the pipeline. It is only looking good. We have no incentives or interest in rocking that boat. We are very satisfied with the collaboration. We are having a good margin with the Torii business. Of course, because of the way it's structured, it actually hurts our margin in sort of in the ratios. But if you look at it net-net, it's actually a very profitable business for us, and we want to continue having it like that. Do you want to supplement, Claus?
Yeah, I could just say that it's a very good question, Michael, but we are in some way, you can say, mutually dependent on each other. Also, in the future, how we are working together, they kind of need us, and we kind of need them. So, there's no incentives right now for any of us to work our different ways. And, as Carsten said, it's a very valuable collaboration for both of us, so there's no indication that it should for any of us split hairs at some point in time.
Okay, great. Thank you very much.
Thank you. At this time, there are no further questions in the queue, so I'd like to turn it back over to our speakers for any closing remarks.
Thank you very much, operator, and thank you all for good questions. Before we end today's call, please have a look at slide 12. We have a couple of very important pipeline news lined up for Q4. We expect to report top-line results from the phase III trial of the ITULAZAX in children. Also, we will have the first readouts from the phase I trial in peanut allergy in Q4. Moreover, we have a couple of roadshow events lined up also, and more events will be added and will be visible on our website. Of course, we hope to see you at one of these events. As always, you are welcome to call us if you have additional questions. With this, I wish you all a good day, and I will end today's session. Thank you all for participating. Have a good day. Bye.