Hello, everyone, and welcome to today's presentation of ALK's Q1 results, together with the updated outlook for the full year. Could you please turn to Slide number 2, where I will introduce you to today's presenters and our agenda? My name is Per Plotnikov, and I'm Head of Investor Relations at ALK. And with me today are ALK's CEO, Carsten Hellman and our CFO, Dan Gaeleb. And today, we will look at our Q1 performance, sales trends across our region and portfolio and the Q1 financials.
And then we will give you an update on our 4 strategic priorities before talking you through our improved full year outlook. And finally, we will end today's call with the usual Q and A session. So if you could please turn to Slide number 3, And then I'll hand over to Carsten
and we'll get started. Thanks, Peer, and thank you everyone for joining this call. First, let me give you some highlights. During Q1, we continued to execute on our long term strategy And despite the ongoing effects of COVID and the very strong Q1 last year, Q1 in 2021 So a 9% growth sales growth and represented the best ever quarter for ALK with revenues achieving DKK 1,000,000,000 for the first time. The growth was primarily fueled by tablet sales With better than expected growth of 32% on strong performance in Europe and Japan.
The 9% growth is especially impressive when you consider that we estimate planned product discontinuations in Europe impact This figure by approximately 3 percentage points. There was revenue growth in all regions as revenue in Europe grew by 5%, In North America by 16% and international by 29%. COVID continues to somewhat Distilled the market, especially in Europe, the patient's ability and willingness to visit clinics remained constrained in many places. On the other hand, in the U. S, we are now seeing a positive effect on sales as the continue begins to reopen.
Meanwhile, manufacturing and supply remains resilient and product inventories are still robust. We are also keeping a close eye on the effects of COVID in our clinical development program, which I'll come back to a little later. Overall, operating profit EBITDA increased by 14% despite planned increased Expenses in R and D. Finally, because of the stronger tablet outlook, we have also adjusted our financial outlook for the full year With that quick look at the highlights, I'll hand over to Soren Yigal now, Who will take a look at the Q1 financials in more detail. So please now turn to Slide 4.
Thanks, Carsten. As said, Q1 was a very good quarter for ALK, and we saw overall growth in all regions. As you can see, Europe performed well in Q1. Revenue increased by 5%, with discontinuations reducing growth by 4 percentage points, as we continue to see the effects of our phasing out of older skid and slip drops products in favor of documented registered products. This is likely going to be the last quarter where we see the effect of the effect being so pronounced.
Sales were particularly strong in the Nordics and Central Europe, driven by tablets, which were up by 34% in Europe overall. Once again, we saw Intulosax perform well, but we also see a clear uplift of Classax sales in markets where Intulosax has been launched. As in previous quarters, Germany delivered double digit growth, And we saw the shift towards registered evidence based AIT treatment accelerate. National reimbursement guidelines recommending that AIT patients should be initiated onto registered products only, have now been implemented in the majority of the local regions, And we see this translating into more new patients being initiated onto registered products. Needless to say, These changes to the market structure represent a significant commercial opportunity for us.
Please remember that last year ALK became the 1st company in Germany to exclusively market registered AIT products for the main allergens. And we are currently seeing a very strong double digit tablet growth rates in Germany. In Southern Europe, COOL continued to constrain the market as growth in tablet sales was offset by lower legacy sales. In North America, revenue grew was up 16% as we saw the impact of COVID eased towards the end of the quarter, especially in the U. S, where sales of legacy products increased sharply as doctors focused on bringing patients back into their clinics and hospitals.
In contrast, tablet sales continue to be challenged by the higher financial incentives for prescribing legacy products. Tablet sales were only up by 12%, driven by an increasing acceptance in Canada, especially on the back of the late 2020 Touratech launch, which is progressing well. Sales in international markets were up 29%. This reflected strong tablet sales growth in Japan, especially for Mighty Cure, the HouseDos mite tablet, and we ended up bringing forward some tablet shipments to Toree into Q1, which has originally been planned for Q2. Sales inject in this region also grew due to some markets requiring adrenaline auto injectors to be on hand when administering COVID vaccine.
Now let's take a closer look at the product categories on Slide 5. As I mentioned earlier, the tenant portfolio performed very strongly with 32% growth in the Q1, underlying the fact that tablets continue to be the undisputed growth engine of ALK. As mentioned in previous quarters, sales benefited from various factors, including resilience to the impact of COVID versus alternative treatment options, the ongoing market shift in favor of evidence based medicines and the continued strong performance of Etulazax in Europe, which also created a halo effect for Class Aq. Combined Skin and Sleep Drop sales were down 10%, Roughly half of this was due to product discontinuations in Europe in 2020. However, skip treatments were also disproportionately affected by COVID since we still see that some patients are either unable or unwilling to visit the clinic.
Sales of other products increased by 15% in Q1 as COVID eased its grip on our sales of Life Science products and preprint in the U. S. In Q1 and in contrast to previous quarters, JEGS sales were down in Europe. In the U. K, in particular, we saw an impact from lower pin replacement rates by patients, which is likely linked to the COVID lockdowns resulting in reduced exposure to life threatening allergens.
However, we expect this to be a temporary effect, and we have not seen any significant changes in the market shares. This brings us to the Slide 6 and to the P and L. I'll go through this slide briefly because we've already touched on the themes, but Q1 revenue was up 9% in local currencies. The lower U. S.
Dollar in particular had a negative currency impact, so that reported growth was 7%. The gross margin improved by 1 percentage point to 62%, reflecting increased sales of tablets in Europe, somewhat reduced by increased shipments to Joy in Japan that holds lower margins. EBITDA increased 14% to DKK226 million corresponding to an EBITDA margin of 22%. Capacity costs increased 7% in local currency. And as planned, R and D expenses was up 20% in support of increasing activities relating to clinical trials.
Sales and marketing increased 2% On more normalized activity levels, however, we also continue to see operational leverage of ALK commercial activities. Finally, free cash flow improved to DKK 86,000,000 mainly driven by increased earnings. All in all, a solid start of the year. Now let's move on to a brief strategy status on Slide 7 and over to Carsten again.
Thank you very much, Soren, for the update. I will give you some update on the strategy now. And as you may recall, In February, we updated our strategy to support and pursued a sustained high growth and to continue to improve our profitability towards 20 and 25, but also sustained the growth beyond 25 with some actualization opportunities. Cabinets will continue to be the primary drivers of growth and we will support their success by becoming relevant to ever more Allergy softness. The 4 priorities are still to succeed in North America, to complete and commercialize tablet portfolio, To really improve our digital consumer engagement and new horizons and to optimize for excellence.
By executing on these, we seek to extend our leadership in respiratory allergy and accelerate our long term growth by entering food allergy and expanding our presence in anaphylaxis. The goal is an ALK capable of delivering sustainable High revenue growth of 10% or more annually and earnings growth towards an EBIT margin of 25% in 2025 Or as we call it, 25 and 25. So let's take a look at our progress towards All of this were the first two priority areas on Slide 8. Let's look at let's look first at North America. As Soren mentioned earlier, we're now seeing an easing of COVID restrictions in the U.
S, But the high financial incentive for allergists to prescribe legacy products continue to be a challenge. We saw this in Q1 sales figures of legacy products versus tablets. In particular, because allergists are now catching up for their lost income following the COVID lockdowns of their clinics during the last year. Nevertheless, we do also see an increasing prescription depth among prescribers, which we're supporting with initiatives to overcome barriers Prescription fulfillment and a new Telehealth partnership where patients get direct access to an allergy health professional. In the U.
S, we were already using our Clarify platform to direct potential AIT patients toward doctors We know are willing to offer them the full range of treatment options including our tablets. But this latest initiative In partnership with U. S. Telehealth provider, Cleared, leverages our virtual platform further by actually connecting potential patients directly with an allergy health Care professional. And again, who we know will consider tablets as treatment option.
The partnership focuses on the New York area initially, But has the potential to be scaled up if the results are impressive. You can see more on getcleared.com. The addition of pediatric and adolescent indications around the world is an important lever for commercialization Of the tablets and just after Q1 ended, we received approval from the FDA for pediatric use of Aquatec, following similar approvals in Europe and Canada. Looking at our next priority to complete and commercialize the tablets, For the first time in Q1, we saw that the tablet portfolio is now responsible for more than 50% of ALK's allergy immune therapy sales. The rollout out of etulisarg has been an important factor here, not only because of its own growing sales, but also because it's having a halo effect on the rest of the tablet portfolio in the markets where it has been launched, and Germany is a great example of this.
As I mentioned earlier, previous COVID related delays make This is a big year for our clinical development of the tablets, and I'm pleased to report that patient recruitment for the key European and North American pediatric trials of a kayasax for By allergic granites remains on track. It remains on track. Also on track are the safety trial targeting approval of Odocter for Adelstant in the U. S. And the Phase 3 pediatric allergic gonitris trial for the 3 tablet in Europe and Canada.
Meanwhile, recruitment for a ChiOSAx registration trial in China is expected to resume later this year When we also access any impact of COVID on a European and North American pediatric acid trial and a ChiOS action reduction. Finally, also in Q1, we secured agreement in France for the reimbursement of a QIASAX for dialysis patients. Let's now move on to our 2 other priorities on Slide 9. Focus area number 3 is consumer engagement and new horizon. Here, our patient engagement activities nearly doubled the number of consumers mobilized via digital channels versus Q1 last year to around 50,000 with 3,000 of these in the U.
S. During Q2, we will also expand these activities further to include Canada. On the New Horizons, we continue to target a U. S. Registration submission of a next generation adrenaline solution no later than 24.
While early development of the peanut allergy product continued according to plan with a formulation feasibility study in partnership with Catalent, And we expect to see the results of this later this year. Our 4th and final priority is Optimize for Excellence. Among other things, this heading includes all the work we're doing to both rationalize our portfolio, Simplify our manufacturing processes and to upgrade the regulatory documentation for core legacy products. As a part of this work, during Q1, We submitted 482 regulatory changes covering 86 products to 30 different regulatory authorities, So a lot of work was done in Q1. I'd like to conclude my comments by comments on optimization by adding that the work we have done in this Aerie over recent years has been a major factor in our ability to maintain uninterrupted supply and keep our inventory strong during the channels of Corby.
Of course, along with these incredible flexibility and dedication of our fantastic employees. With that, I'll hand back to Soren, who will talk you through our updated 2021 outlook on Slide 10.
Thanks, Carsten. Our full year outlook has improved based on the solid earnings in the Q1 and the strong tablet sales. The improved full year outlook is as follows. We now expect revenue growth of 9% to 12%. This is driven by an increase in tablets outlook from 20% to now 25% increase, which continue also to be key for our overall long term growth.
We now expect muted sales growth across our legacy portfolio as a consequence of the continuing uncertainty around COVID. EBITDA is now projected between 3.75 and $425,000,000 from previously $325,000,000 to $425,000,000 reflecting a strong Q1 and an improved tepid outlook. We still expect a significant increase in R and D and a gradual normalization of sales and marketing costs. Free cash flow also improved and is now expected which will be around minus DKK200 million, reflecting higher earnings, while CapEx is still around DKK300 million. Adjusting for the one off working capital payments of up to $225,000,000 that were postponed from 2020 into 2021.
This means that we are actually now and an underlying cash flow breakeven. With this, I'll hand you back to Peer and the Q and A session on Slide 11.
Thank you, Sam, and thank you, Carsten. And this concludes the main part of our presentation. So we will now move on to the usual Q and A session, where we'll be happy to take any of your questions. Operator, please go ahead.
Thank Our first question comes from the line of Michael Novod from Nordea Markets. Please go ahead.
Thank you very much. It's Michael from Nordea. Three questions. First of all, on etulisax in Canada. Maybe you
could just Give us a bit
on how the sales are performing in terms of absolute numbers, just for sort of our modeling purposes. It would be nice to see how Sort of the traction is in Canada for this key product. And then secondly, in terms of your trial with ODAXtra in the U. S, Do you have any visibility on how long a potential delay can be if you have to sort of change the trial? And then thirdly, on the peanut program, will it be possible for you to start the first clinical trial In 2021 after the feasibility study?
Or do we need to get into 2022 for the 1st clinical trial to start?
Yes, Kasner, I will start. We do not foresee any Sure. We are on track and have recruited for the DAKTA trial U. S. I think you're thinking about the pediatric trials.
Yes. We don't expect any later. What we were saying is that for the asthma children trial, we don't know how many Temptations there will be. So we are looking at some statistics over this year to see if we get enough and that's it. But for the children's studies in general, That isn't an issue for the U.
S. Children's start of the European U. S. ADACRAAACADA SAX is growing according to plan, and we don't expect any delays there. For the peanut, I don't know.
If you ask me what the ambition is and What I'm asking every morning, if it's possible, then it's, of course, Phase 1 this year. But The Phase 1 will most likely be starting in 2022. It depends. We hope to have the first tablet to show to Board already here in June when we had the strategy meeting with peanut inside. So it's a lot of work in progress, but I don't know, Michael, exactly When that will be happening.
What I don't know either is whether I'll be looking into that. Depending on then the dosage trial and The safety trials we're making here in early days, we might look at if we can do a Phase II and a Phase III trial in parallel To even gain more time. So we have full focused, full investment in that. And I want to remind you that when we say we're going to grow 10% -plus next 10 years, We have not included any peanut sales into that one, so it's purely an upside. So with the total Saks numbers, I'll just hand it to San, our CFO, so he can just answer the absolute numbers there.
Yes. I mean, normally, of course, for a specific market, we don't give a specific number out, Yes, Michael. But I think it's fair to say that it's off to the same good start as we've seen in Europe. And then it's proportionally Also a good size for us in North America with Expectations that etulocyte will also be a core driver in Canada. So Although it's still small numbers, that's also why I'm a little bit hesitant to give out small numbers, but I think it's more important message for me here is that It is progressing according to plan, and we are seeing a same good uptick as we are seeing in Europe.
So I think and I hope I can satisfy you with that
There are no further questions at this time. Please go ahead, speakers.
Excellent. Well, that was a surprise. So maybe the report And the webcast was very clear, so I trust I think there's one more question coming in now from The line is Jesper Ilse from Carnegie. Is that correct?
Yes. Exactly. Please go ahead Jesper. Your line is open.
Yes. Thank you so much. I'm sorry So I'll take the late question here. Maybe you can just talk a bit about what you see in Germany and also the recent Update to the national reimbursement guidelines that you write about in the report, how you see that really, say, Transforming the market and opening up this €100,000,000 opportunity that we have talked about. And also, is this mainly on new prescriptions, new patients?
Or will they phase it out entirely here in 2021? And how should we look at these changes? Thank you.
Thank you, Jesper. I'll start and then hand over to Soren. It is now About 80% of all the different regions that now have implemented these guidelines. And I have two comments to it. One is that what it means de facto in absolute value listed about €100,000,000 of Sales, which are today unregistered undocumented products, would be off for grabs in the next year.
And to answer your next question, it works this way that now when you are within those guidelines, You are required to initiate new patients with their registered products. So no, we do not Go out and cannibalize all our competitors and ourselves, but all new immunizations over the next year. So that means that we are Pretty comfortable with very strong growth in Germany in the years to come. And of course, we have very ambitious targets here, But we're trying not to get ahead of ourselves. You don't want
to add anything, Simon?
No, I think really it's been impressive To see the uptake in Germany and it is actually the biggest country for us and holds huge prospects amongst others due to this New legislation. I think what's also a clear signal for us and what is also helping us here is The good launch of etulisax with a product that clearly helps the patients and that help has spilled over on Classax. So that where we sort of this old lady Classax has actually really fueled the growth, so that we Classax was growing 10% in 2019, 20% in 2020, and we are sort of 30% growth in Classax Here in Q1 in Germany. So and that part of that is probably also the push towards evidence based medicines combined with the Tullosac. So I think we are into a perfect cocktail in Germany these days, and we are seeing that in the numbers.
We are, of course, Extremely pleased that our German organization is executing so well. Thank you so much.
We have a question from the line of Peter Sejerstad from Handelsbanken. Please go ahead.
Yes, hi. It's Peter from Hansbanken. I have a couple. First one with respect to your Anaphylaxis strategy. In the U.
S, you confirm that in for registration no later than 2024, but also that you take some decisions on the Win product later in 2021. I believe you sort of mentioned this before, but this potential strategy or decision on the Wind gap products, does that entail a potential scenario that says, well, we'll drop the Wind gap product and we'll continue with a new one? And then secondly, with respect to your 10% growth over the next 10 years, Could you just repeat and reiterate what actually is embedded in that one? You just stated that peanuts are not included here, but What is sort of included as to what we know and what we don't know in terms of pipelines, etcetera? And on R and D costs, I guess since we have seen some delays On clinical trial activity due to COVID-nineteen, some costs are likely to be postponed into 2022 and 2023.
And can you say a little bit more about how we should think about that from a modeling perspective? Thank you very much.
Yes. Thank you, Peter. Good questions. If you look at the anaphylaxis strategy we have, we are still pushing hard On Win GAAP, we'll be also pushing very hard on Genesis, which is our own project of a new pen to the U. S.
Market, and both could be completed at the same Point in time. So we don't know actually because we're doing all the stability and safety Testing right now on the wind gap, whether it really holds water in a matter that we would like to continue that one except of our own one. The reason why we're doing a parallel stream is that Wingap is a new technology with a blend of a powder and a liquid, and we need to make Be very, very sure that this works well and this is still work in progress. It's not because we're just keeping it alive to keep the story alive because we do have apparel track with our own product. So it's not that 24 U.
S. Launch with a very good competitive pen is not going to happen, it is going to happen no matter what. We don't know yet whether it's going to be wind gap or own concept. It depends if wind because if wind gaps works, It's going to be a transformation technology due to it's just such a new and novel concept, but it's also why we can't conclude it in either right now. And I can just give the first line on the 10 year strategy, then I'm going to hand it over to Soren for some of the more details.
What has been very important to us It's not to dream up fantasy land. So in general, when we say we're going to grow the next 10 years 8% to 12%, 10% ARRAT, is based on what we know and what we know we can execute on. And we know that we have some development projects that might turn out. We have some markets that might turn out, Well, we have the U. S.
Opportunity as well, but none of those is starting to kicking in as a big splash of coming ketchup out of the bottle. Ketu coming out of the bottle was a big benefit to us. It's within an organic control. I don't know if you want to add some flavor to that,
No, I think that's perfectly fine. I think the growth Above the 10%, definitely rests on also the peanut and the anti Phinexis. To what extent that can penetrate well in the U. S. Market.
And then also you could say we also have China where, yes, some of it is baked in, but it's a fantastic opportunity in China beyond. Potentially, yes. And I think that's still what we believe are some of the key strategic levers revenue growth wise out there. But I think we have Good visibility in the first 10%, and I think that's important. When it comes to the R and D costs, Basically, as Carsten said, we for sure are running the trials as we had planned through.
And As such, we can also see that we do burn the cost and we do expect a step up in cost here during the next three quarters. And so that's important to still remember that we are still aiming to burn these 650,000,000 Will some of the trials that we are restarting or starting up again, if that gets pushed out, will that take that number down a little bit? Potentially, yes. And that will then roll into the 2022, where we think it's around CHF 600,000,000 we'll be burning. So of course, you're right.
In the we could potentially see a delay, but bear in mind that all the the majority of the high cost burners of the Trials are running as planned, and they are expensed as planned as the patients are coming in. So I don't expect the same delay as we saw last Due to the fact that the trials are actually running according to plan. So that pattern of picture still holds Water. And then just sort of so you completely understand what's the base case. I mean, remember that Peanuts It's not in the base case.
It's in addition to the base case, if there were misinterpreted anyway. Yes. So perhaps just one final question. I believe that for the first time ever, I actually managed to hit your income tax forecast for Q1 here with a tax rate of 26%. My best guess, is this a total coincidence or are we actually seeing some more, let's say, stable tax rate levels at ALK?
I would like to say that it was a good calculator, but I think it's more coincidence Than anything else. I think we don't expect a huge changes to that tax line. So I think you are It is a coincidence more than anything else. And of course, it will depend on exactly where do the sales and where the profit generated throughout the year. So I think good that you believe in that you hit it right, but I think it can fluctuate quarter by quarter.
At all, just lucky, but just wanted to confirm.
Our next question comes from the line of Thomas Bauhaus from Danske Bank. Please go ahead.
Yes, great. Thank you very much. Just a couple of questions. Just for maybe for clarification in regards to the MT-eleven ASPR trial. So the lower incidence observed in the study right now, COVID-nineteen related, will this potentially lead to a protocol amendment Increasing the sample size or did I sort of misunderstand your first answer?
And then second Question, just on the product pruning. So 4 percentage point this quarter and you also in your prepared remarks also mentioned that That's basically all. It will be a very low number, but you guided for 1 percentage points for the full year. So is this basically Going to 0 for the remainder of the year here. And then just lastly, Just on the if you can comment here.
So on the prescription numbers for the U. S. Market, so we are seeing Some dramatic fluctuations to the downside for when you look at the weekly simply held numbers. And to my impression, the IMS data is not fluctuating as much. So can you maybe just confirm whether you have any insight to whether this Safe error or is there any changes to how you collect or how the providers collect prescriptions For the tablets.
Thank you.
Thank you so much, Thomas. I'll just say, remember, we're talking only about the asthma trials, not the pediatric trials. Getac trials are going according to plan. We don't know yet, and we're just flagging that. We have to analyze The stats and see what's coming out throughout this year to fully understand if we have enough power To complete the trial, the factory.
And we are only saying this now because we know the fact to that Because the children have not been in school or been socializing as much as they normally do, we should expect that they have not Had as many attacks as normally, and we want to make sure that we have enough in our trial to really show the significance we know. We are just looking at those data. What is worst case and worst case is most likely that you then have Take another cohort in when you can see you have enough expectations in general in the country, But we don't do that yet because we don't even know if that was necessary. But that's what we're looking at. And it's only the asthma trial, not the pediatric trial for ODACHTRA, Kai, it's Sanki, Europe and U.
S. Just to be very clear about that. For the pruning part, remember that it was 3% globally and 4% in Europe. And To answer your question, yes, it's not going to be much the rest of the year. I think we're getting there.
And to the last question, there was a data error, and I don't remember which bank who called Bloomberg and got it confirmed if it was you, Michael Novart. But there was actually a altered trait that we had some data error problems in the U. S. That sort of affected our script data. So there isn't any fluctuations like it looks like.
So it was data to be reckoned. Okay, great.
Great. And then just a follow-up on the ASPEN trial. So just to get a feeling, I know it sort of could be I think on the cake maybe compared to the pediatric relatis trials, of course. But do you have any sort of A flavor on what we should expect. Let's assume that this trial reads out positive.
I guess So it will not be sufficient for asthma specialists to start Prescribing tablets immediately. So what's your feeling here? Do you need I guess you need some long term trials And maybe also add another Phase 3 or maybe even 2 more trials. Is that sort of correct understood?
Almost. I think there are 2 things. Remember that for BRAS, there's already some indications there. It's not like we are Expecting that the product will not work in Sorokin Aspen Disease, remember that we're already on the GINA guidelines for asthma treatment in Europe. So we are so the clinicals and the society in general, That's not really the risk.
This is just this specific trial on the dustbine tablets that are going to be evaluated more thoroughly Because we have had this COVID situation. And again, as I've said before on the other projects, We have now built a plan that does not include, for example, that we succeed with dust mite asthma Tablets in the U. S. Children. That's not a part of our base case.
When we say we're going to grow 8% to 12%, that's what We have in our hands. So yes, Peanut, so yes, Aspen for Children and other projects we have been looking at I'm looking at or working with those projects are financed in the plans, but we have not added the sales to that yet. So it will be Clearly an upside to our base case of the 84% Super 6C there. How big that will be? I think personally, it will be an upside that will grow over time depending on how well received it is by the clinical community.
If you look at the data we already do know for some of the long digitity trials we have done on in general, we do see actually That the prevalence of asthma in Chile is going to significantly improve. So you're right in your comment that it's something I guess would grow over time, the importance of that, We haven't factored in our 10 year plan for sales, but of course that we hope it comes very much before, and then we will be very happy to talk about what we think it will bring when we launch it.
Okay, great. Thank you very much.
And we have a question from the line of Alex Kuget from Kempen. Please go ahead.
Hi, everyone. Congrats on the excellent quarter. I just have a question on your peanut allergy program. So it's great to see that you're will be getting an answer on visibility this year for tablet. And I was just wondering If that works out well, could we see you exploring similar formulation for other food allergies?
Or are you looking more to
more of a sequential broad development in food allergies?
Thank you for that question. I actually forgot to mention. When we say Peanut, It's of course a portfolio thinking we have like we also have on the respiratory additives. So we if you should raise them, you will probably Say peanut, then you would say tree nut, then you will say eggmilk. So that's sort of where we also start in our thinking.
That's where The platform holds water, we believe. And so it's just a matter of getting the first feasibility studies and understanding the dosage and tolerance And so forth and how we should opt those it. We are very sure already now that this is going to be a very competitive Product we're going to make not with 20 hospital visits and not with not a complications, but of course, we need to prove that in larger scale right now. But as soon as that concept is proven and we have good notions of how the different allergens in the different food spectrums works in the TAVREN regime with our when they take it already, then I think we can actually scale up Rather quickly, which will be done with a good view on the market potential, our launch capabilities and the investment they would take to get there. So it's a portfolio thinking.
Of course, we start with Peanut as we believe that Aimmune after 5 quarters have a complicated but But more working concept, hopefully, not proving so much yet. And we PBV has some Good notions coming out now, but it's a devicepharma concept, integrated concept, Well, this one would be a very clean concept. But of course, coming later to the market, if both of these succeeds, but also very Sustainable methodology we're going to use. So it's a portfolio thinking. Where that can take us in the future, Let's see.
Now I would very much like to see the Phase 1 done well and a good plan for Phase 2 and Phase 3, and then I promise to come in every morning, ask them to do it faster.
Understood. And Maybe a bit looking ahead, but how do you look at the effectiveness from the market for food allergy Oral treatments in the U. S, Europe and Japan.
We think There's a real detail. I mean, it's probably one of the most complicated allergies to have as Parent, when your child has a peanut allergy, you are literally talking about a child that Might have an influx of shock in the classroom if somebody opened the peanut bank in the back seat of the year of the classroom. So it's a very stressful situation. And remember, the big difference from years back was that everybody was trying Sorry for any new therapy to sort of cure peanut allergy. That's not what people are looking for any longer.
What Aimmune and DPV are getting approved is that by giving the treatment, you reduce the number of Attachs or in flash shocks that your child might get over time and thereby fix some of the burden and stress out of families. So we have done a lot of market research. We have worked a lot on this one, and I think we know both on a customer, on a market and a pricing level what we need to do. And I'm personally Very sure that this is going to be a very good and strong and big product for us should we succeed to get it to the market as we expect. But as I said before and say again, we put in the numbers when I'm very sure that When we're going to launch at what price and then we are very happy that we do another upgrade.
Yes. I appreciate that. Thank you. And then just
the last one on M and A and licensing. Are there any areas that
you are particularly focused on? In licensing? Yes. I think if you ask me, if we are going to work more heavily On the digital platforms and we are, as you know, working with the cleared and the full digital system, you know also in the U. S.
With the CVSs are Addressing a lot of health problems, we're opening these 200 plus health hubs and so forth. If we can in license diagnostic technologies that can support digital strategies and ease off some of the pain points or bottlenecks In a fully digital flow, before they get to the doctor, that will be something we're very interested in. So we are Really screening the market heavily to see if we can find some technologies that can help that and also balance it out with the big players, which also have an Keeping the labs alive. So yes, in diagnostics, if we can get some diagnostics if we can get a diagnostic Kit, where which is bid on and then you show it to your phone and then you have the results, I'm buying it. I just haven't found it yet.
Okay. And then I know where
to call if I have it. Thanks, guys. Yes. You call me and we'll have a beer. Great.
There are no further questions at this time. Please go ahead.
Excellent. Well, I think we will finish off this call then. Thank you all for joining the call. And I'm really glad that we got the questions going after A little bit of an artificial break. Anyway, we hope to begin being able to see you in person again during the coming quarters.
In addition, as you can see from Slide number 12, we are also scheduling a series of virtual roadshow sessions, and we hope that you will join us in one of these. As always, you are most welcome to call me, Zoran or Carsten, if you have Additional questions? And with that, I wish you all a good day, and I will end today's session. Thank you.