Good day, and thank you for standing by. Welcome to Galderma's Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session with financial analysts. To ask a question during the session, analysts connected on the teleconference call will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Emil Ivanov, Head of Strategy, Investor Relations and ESG, to introduce the call. Emil, please go ahead.
Thank you. Warm welcome to the Galderma Q3 2024 trading update call. As customary, the press release was published this morning at 7:00 A.M., Central European Standard Time today, and you can consult it at any time on our corporate website. Today's presentation slides, as well as a recording of the webcast, will be made available on our website after the call. Please be advised that today's presentation contains forward-looking statements, which would be treated with the appropriate level of caution, as detailed on this slide. Let me now introduce today's Q3 trading update webcast, which is scheduled for approximately 45 minutes. Dr. Flemming Ørnskov, CEO of Galderma, will provide a performance update for the first nine months of the year, including commercial and innovation highlights by product category. Thomas Dittrich, CFO, will then cover the trading update and financial outlook for the full year.
Both Flemming and Thomas will be available to answer questions from financial analysts before Flemming provides his final remarks to close the webcast. With this, I would like to invite Flemming to start the Galderma Q3 highlights. Flemming, over to you.
Thank you, Emil. Good morning, good afternoon, and welcome to Galderma's trading update for the first nine months of the year. This month is special for me, as I just celebrated five years in my role as CEO of Galderma, and I cannot be prouder of what the Galderma team has achieved despite multiple external headwinds over the period. Yet, as an avid soccer fan, I know don't dwell on the last game, but prepare for the next one. We still have a lot of exciting games ahead of us. Now, focusing on our performance for the first nine months of the year. 2024 has already been a year of many achievements. Two of those stand out for me. First, Galderma's record net sales results and continued strong growth momentum.
We continue to outperform the market based on the focused execution of our unique integrated dermatology strategy, despite a challenging economic background. Secondly, the important milestones in our innovation pipeline across our product categories. This includes the first approval for nemolizumab in the U.S. for adults with prurigo nodularis, commercialized under the brand name of Nemluvio, which is already having tremendous impact on patients' lives, as we'll cover later. Also, first approvals for Relfydess, or as some of you may still refer to it, QM-1114, our next generation liquid neuromodulator, as well as the differentiated new lines to the Cetaphil flagship brand. Starting with our trading update highlights for the first nine months of the year, Galderma achieved a record $3.3 billion in net sales for the period, which represents a 9.2% year-on-year growth in constant currency.
Let me also highlight that we also achieved a record for the highest third quarter net sales. The growth, which was predominantly driven by volume, complemented by favorable mix, was broad-based across our product categories. The strong performance was driven by injectable aesthetics and dermatological skincare, which continued their strong growth momentum with double-digit year-on-year growth at constant currency. Growth is also increasingly driven by Galderma's larger reporting geography, international, which drives 59% of our group sales. International continued on a robust double-digit growth trajectory, gaining market share in many of our key markets. We have a solid runway for growth in international markets, where we remain significantly under-penetrated. In the U.S., we grew single digits in the first nine months of the year, successfully navigating a softer market environment.
Given the operating environment in the US, growth in the near future would increasingly be driven by market share gains, which we have already been driving in key parts of our portfolio, notably in neuromodulators with Dysport, biostimulators with Sculptra, and in physician-dispensed skincare with Alastin, as well as from entry into under-served, under-penetrated markets, such as biologics and the fast-growing prurigo nodularis and atopic dermatitis market, with Nemluvio, subject to remaining regulatory approvals. As for the full year outlook, in light of the strong performance achieved in the first nine months of the year, and the strong performance expected for the last quarter of the year, we are confirming and also narrowing full-year guidance on net sales.
On net sales, as we had last guided towards the upper end of the previously communicated growth range of 7-10% at constant currency, and are now narrowing the growth range for 2024 to 8.8-9.9% - 9.5% year-on-year at constant currency. Guidance on Core EBITDA margin is confirmed as well, with the margin percentage for the year expected to be in line with 2023 at constant currency. Let's now move to the performance I state for the period, as well as key strategic highlights by product category for the third quarter. Looking at net sales across the portfolio for the first nine months of the year, Galderma has maintained a strong growth momentum. Let's discuss the growth a bit more in detail before commenting on the Q3 key commercial and innovation highlights.
In injectable aesthetics, our largest product category, net sales year-on-year growth was up 10.6% at constant currency. Both sub-categories achieved double-digit growth, with neuromodulators up 10.4%, and fillers and biostimulators up 10.9%. Despite market softness in key markets, there was strong performance in both international markets and in the U.S. Our broad and differentiated portfolio, our focused execution with expansion in under-penetrated markets, as well as market-leading education and services, continue to be the drivers of growth. In dermatological skincare, with our two flagship brands, Cetaphil and Alastin, growth for the period was of 10.6%.
Cetaphil growth was driven primarily by international markets, which more than offset lower consumer consumption in the U.S., where we are re-energizing the brand and the execution of our commercial strategies, as we'll see later, while Alastin continued its strong U.S. growth across channels. In therapeutic dermatology, growth was 2.9%, mainly driven by continued momentum in international markets, which offset the anticipated decline in the U.S., impacted by ongoing genericization. This trajectory is in line with expectations. As you may recall, we don't expect, we don't expect therapeutic dermatology, excluding Nemluvio, to be a contributor of growth in the midterm. Now, on a geographic level, there was continued double-digit growth momentum in international markets, with growth up 14.5%, fueled by strong performance in major markets.
The US grew 2.5%, despite a softer market environment, impacted by the continued softness in fillers, lower consumer consumption in dermatological skincare market segment, impacting our Cetaphil business, and ongoing genericization of our mature therapeutic dermatology portfolio. The US recorded its first sales for Nemluvio, which was made available in August, after the US FDA approval with priority review for adults with prurigo nodularis. Bringing to market Nemluvio sets us up for strong growth in therapeutic dermatology, as well as in the US. I will share more on these first weeks later in the webcast. Let me now comment on the strong progress we made during the third quarter of 2024 across our blockbuster platforms, securing key regulatory approvals and launching new products expected to further fuel growth and its trajectory. Let's look into each of these on the next slides.
Starting with injectable aesthetics, let's look at highlights, focused on our market-leading innovation and in-market execution, with a focus on education and services. First, Relfydess received a positive decision for use in Europe, along with approvals for five European markets already, which followed the approval earlier this year in Australia. With these approvals, Galderma is on track for the first launches of Relfydess by the first quarter of 2025. Relfydess, pioneering the next generation of aesthetics, provides a fully differentiated profile in neuromodulators for the treatment of moderate to severe glabellar lines, you may know that as frown lines, and lateral canthal lines or crow's feet, with its durable results, rapid onset of action, convenient and consistent liquid, ready-to-use formulation, as well as clean and green formulation...
Second, Sculptra, one of the fastest growing brands in our portfolio, continued its geographic expansion following a very successful launch in Thailand earlier this year. We have now received approval for Sculptra in China, one of the world's fastest growing aesthetics market. As the first and the original biostimulator, with a unique PLLA-SCA formulation that activates the skin's natural power to revitalize collagen production for a more youthful appearance, Sculptra further completes our portfolio offering in China, where we continue to grow at a fast pace in an under-penetrated market. Third, Galderma continued to expand its market-leading education and services, which included leading presence at medical congresses and proprietary GAIN events, the Galderma Aesthetic Injector Network. Notably, Galderma hosted its annual GAIN Latin America event this year in Mexico, and had nearly seven hundred healthcare professionals in attendance.
With a targeted scientific agenda, a leading faculty of 17 key opinion leaders addressed key trends over the two-day program. Growing our GAIN Connect educational platform for healthcare professionals, growing both reach and content with over 24,000 healthcare professionals registered, up nearly 60%, 60% compared to the beginning of the year. Deepening penetration of FACE by Galderma, our exclusive visualization consultation tool, to see the after, before, with already over 70% growth in registered healthcare professionals compared to the beginning of the year. Now at over 2,000 healthcare professionals, while we continue to roll out the solution into new markets. Overall, in injectable aesthetics, growth continued to be driven by strong brand performance and scaling execution across our portfolio, along with increasingly penetrating in terms of geographic reach, portfolio breadth, as well as healthcare professional education and training.
Let's now move to highlights for dermatological skincare, focused on differentiated innovation and upgraded execution across channels with a digital-first, advocacy-driven activation. Starting with Alastin, our leading peri-procedure skincare brand and strong complement to our injectable aesthetics business, we're continuing to expand our national footprint with launches in Brazil and in Colombia. Emphasizing the power of our integrated dermatology strategy, the recent GAIN Latin America event, which I commented on earlier, also provided a great platform to showcase Alastin to leading healthcare professionals in that region. We leverage all relevant opportunity to showcase our full portfolio, a key pillar of our unique strategy. Another recent example was the showcase of Cetaphil and our thought leadership on sensitive skin, with scientific presentations and the 33rd European Academy of Dermatology and Venereology, also called EADV, which took place at the end of September.
Talking about Cetaphil, the new gentle exfoliating line was introduced in the U.S. Developed by dermatologists, the line provides gentle chemical exfoliation that is suitable for daily use, even on the most sensitive skin. The launch campaign of this new Cetaphil line featured Gen Z It Girl, Katie Fang, among other skin influencers, as well as renowned dermatologists. It was a digital-first activation, pushed also across different channels, including the in-store channel. In addition, the new and improved look of Cetaphil was first unveiled with dermatologists end of September, leading into the first Cetaphil Skin Labs activation, which took place at the beginning of October, and fully debuted the re-energized branding, unlocking the science behind our skincare and launching our new campaign, called For Everyone's Sensitive Skin.
The global activation brought together in Los Angeles over 135 key voices, including dermatologists, key opinion leaders, renowned influencers from across the world, and of course also the press. This follows suit in our advocacy-first strategy, which introduced the Face of Cetaphil campaign earlier this year, which was just awarded the Glossy Pop Award as the best ambassador program for 2024. With a very strong reach and engagement, including over 1 billion impressions already, I look forward to sharing more details on the impact of this activation during our full year results. Also, from an exceptional standpoint and execution standpoint, Cetaphil notably upgraded its positioning in Walmart in the U.S., further enabled by digital and by traditional activation.
In store, Cetaphil improved its shelving position in the face category by moving up to the top three shelves from previously the bottom three, and by improving its assortment for HBL, an abbreviation for the hands and body lotion category, along with focused digital campaign across social channels, which included content, especially targeting also to reach younger audiences. The upgraded position is already translating into sales growth from Walmart, and is a positive example of the focused execution and digital-first strategy, which we have started to implement. Last, but far from least, moving now to therapeutic dermatology.
Before speaking about Nemluvio, let me also note that there are many highlights from the rest of the portfolio, such as the differentiated label updates for Aklief, with first markets having already an updated label, reflecting the latest data on acne scarring, or the continued growth momentum behind the Benzoyl Peroxide Power Patches for acne across geographies. Switching to Nemluvio, there is a lot to share. Within 48 hours of the U.S. FDA approval of Nemluvio for the treatment of adults with prurigo nodularis in August of this year, the first treatment was administered to a patient, 48 hours. Acknowledging the life-changing impact of Nemluvio on patients and on their quality of life, our teams worked hard to ensure that the product could rapidly be supplied and administered to patients.
Since the launch, we have been overwhelmed by the positive feedback from patients and healthcare professionals alike, who are astounded by the results, including patients experiencing relief from itch within the first days, if not sooner. While we received a lot of messages, I'd like to share an extract from a patient's email to their doctor. The patient wrote, "Amazingly, the new medication is working. My skin hasn't been this clear, I can't tell you for how long. I didn't realize how much this inflammation was affecting my daily life." After details on the improvements on their energy, their sleep, their itch, they closed their email with, "My friends, family, and coworkers can't even believe the difference in just a few days." Here's another quote by a dermatologist practicing in the Chicago area: "The real-world experience of Nemluvio has exceeded my expectation.
Galderma was very well prepared with product in market and access made possibly early on. It's valuable to have a new mechanism of action with an IL-31 receptor alpha, targeting to help my patients with continued, significant, unresolved itch, skin nodules, and lesions." As you may also have noted from our press release regarding the EADV Congress, we also presented new clinical data demonstrating nemolizumab's long-term efficacy and long-term safety in atopic dermatitis, and durability in prurigo nodularis. Nemluvio uptake among patients is progressing well, with Nemluvio representing already over 25% market share of new patient starts, also called NRX, as of October the eleventh of this year, following IQVIA data. Recall, this is a rare skin disease with an estimated 200,000- 300,000 adult patient population in the U.S.
The ramp-up is also strong among prescribers, with already over 1,100 healthcare professionals prescribing Nemluvio in an underdiagnosed, undertreated disease area. I'm proud of our sales force, who have been very busy in the field with tens of thousands of sales calls and who have already reached more than 85% of the target prescribers in prurigo nodularis. As for reimbursement and provider discussions, they're progressing well as planned. We are successfully supporting prescribers with the exception request progress, while progressing towards commercial coverage discussions. Galderma remains committed to its patient services, which are in place to help bridge to secure patients with treatment and support them through the process of getting coverage. The start to Nemluvio has been very positive, and we're proud to be able to make a meaningful difference in the lives of patients we serve.
With that, I would like to hand over to Thomas to give you a bit more details on the financials.
Thank you, Flemming. I'm pleased to comment on our Q3 year-to-date trading performance and outlook for the full year. Let's start with our trading results. As mentioned earlier, we achieved record net sales of $3.259 billion in the first nine months of the year, along with setting a sales record for the highest third quarter ever in Galderma's history. Year-on-year growth on a constant currency basis for the first nine months was 9.2%. Reported growth was 8.3%, reflecting the impact of depreciating currencies, especially the Argentine peso, Brazilian real, Chinese yuan, and the Thai baht. When it comes to the composition of growth, it was primarily driven by healthy volume growth, along with a positive mix contribution. Growth was widespread across our product categories and was spearheaded by our larger region, international.
Let's look at the details on the next pages. Injectable aesthetics, the largest of our three product categories, performed strongly in the first nine months of the year, achieving sales of $1.698 billion, with year-on-year growth of 10.6% at constant currency. Both injectable aesthetics subcategories achieved double-digit growth. Neuromodulators grew 10.4% year-on-year at constant currency, with fillers and biostimulators net sales were up 10.9% year-on-year at constant currency. Growth for the product category was supported by strong performance in both international markets and the U.S. International, which is increasingly driving growth for Galderma as a whole, continued its double-digit growth trajectory in injectable aesthetics. Overall, in the first nine months of the year, Galderma delivered strong performance in injectable aesthetics, outpacing the market and continuing to gain shares globally.
Neuromodulators experienced particularly strong demand in Europe and Latin America. Fillers were impacted by continued market softness in some markets, while we continue to see markets with strong growth, such as China and Thailand. Biostimulators continued its strong broad-based growth trajectory, especially fueled by the successful Sculptra launch in Thailand earlier this year, increased penetration in the Middle East, and broad-based strong demand across key markets. Now, for Q3, third quarter stand-alone, neuromodulators growth was roughly flat, and fillers and biostimulators had high growth, impacted by comparable base effects in 2023 and phasing into Q4 this year. Starting with neuromodulators. Year-on-year growth for the quarter, discretely, was impacted by a high base in 2023, with above 20% year-on-year growth in Q3 a year ago.
In 2024, there's also a phasing impact between Q3 and Q4. For Q3 2024, Galderma continued to gain share in both international markets and the U.S. As for fillers and biostimulators growth, there was some phasing impact with higher sales in Q3, which we expect to be partially offset in Q4, noting that fillers continue to be impacted by softness in some markets. Let me now turn to dermatological skin care, which recorded $990 million in net sales for the first nine months, with 10.6% year-on-year growth on a constant currency basis.
We continue to outperform the market, driven by continued strong volume-based growth of Cetaphil in international markets and Alastin in the U.S. Cetaphil in the U.S. is successfully navigating a softer market environment based on stronger innovation, execution, and sensitive skin engagement, as presented earlier. Let me highlight that we continue to perform extremely well in the large and relatively lowly penetrated Indian and Chinese markets as a result of focused and well-executed commercial strategies, with emphasis on tailored local activation, expanding distribution, and strong e-commerce. Next, turning to therapeutic dermatology. Net sales for the first nine months of the year were $571 million, with year-on-year growth of 2.9% at constant currency. As Flemming noted, this is in line or slightly above our expectations, excluding the impact of Nemluvio.
Growth was mainly driven by continued momentum in international markets, which offset the anticipated decline in the U.S., impacted by generics competition. With first sales recorded for Nemluvio for prurigo nodularis in the U.S., it sets Galderma on its trajectory to deliver strong growth in therapeutic dermatology, as well as in the US in the future. Now, looking at net sales on a geographical level, growth is increasingly driven by Galderma's larger reporting geography, international. International market net sales represented 59% of group net sales at the end of the nine-month period and will remain with a long headway for further growth as Galderma remains underpenetrated, behind which we are focusing our investments. International markets maintained double-digit, broad-based growth momentum, fueled by strong performance in major markets, with notably China continuing on its strong trajectory in both injectable aesthetics and dermatological skincare.
Beyond China, we saw standout performance across key international markets such as Canada, India and Sri Lanka, Mexico, Thailand, and the U.K., and Ireland. The U.S. grew single digits despite a softer market environment, impacted by the continued softness in fillers and lower consumer consumption in the dermatological skincare market segment, particularly for Cetaphil, while Alastin continued its strong growth trajectory. Now, moving to the guidance for the full year. Based on the strong momentum in the first nine months of the year and our confidence in the fourth quarter, I am pleased to confirm our full year guidance for net sales and Core EBITDA. For net sales, as a recall, we raised our full year net sales guidance in H1 towards the upper end of the previously communicated growth range of 7%-10% at constant currency.
Today, we are confirming and narrowing the range by half again to 8.8%-9.5% growth year on year at constant currency. This reflects the expectations laid out in H1, with a slightly lower year-on-year growth rate for H2 compared to H1, as well as within H1, a seasonal re-acceleration into Q4 compared to the third quarter. As a reminder, following typical seasonal patterns, Q4 net sales in absolute dollars tends to be the highest sales quarter of the year for us. As for Core EBITDA margin, we are confirming our full year guidance in line with 2023 Core EBITDA margin at constant currency. This takes into consideration the planned ramp up in Nemluvio spend and the continued improvement in our underlying profitability.
Finally, I would like to reiterate that the additional modeling metrics for 2024, which we provided with our first half results in July, remain unchanged following the inaugural bond issued by Galderma at the end of August. As a reminder, in terms of leverage, specifically, we expect to be at the lower end of the previously communicated 2.25-2.5 turns range at year end. This concludes the introductory remarks of Galderma's Q3 trading update. With that, and before we close the meeting with Flemming's final remarks, I would like to hand back to the operator to open the call for questions. May I ask you all on the call to, if possible, stick to one question at a time so that we can get everybody to ask their questions.
Operator, can you please open the call for the first question?
Thank you. To ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We will now go to your first question. One moment, please. And your first question comes from James Gordon, from JP Morgan. Please go ahead.
Hello, James Gordon, JP Morgan. Thanks for taking the question. Two questions, please. The first one was injectable aesthetics. So, you gave a medium-term guide before of low to mid-teens in local currency growth. I know growth was quite a long way below that this quarter. It sounds like that's more of a phasing issue, but can you just remind us that that medium term guide, I assume that still stands, and what did that already factor in, in terms of any economic headwinds or consumer sensitivity on out-of-pocket costs? Was a cautious view on that already reflected, and how are you now thinking about the medium-term guide there? That's the first question, please, and I've got a follow-up on Derma skincare.
Okay. James, thanks for the question and, of course, our growth rate this year to date, nine months, stands pretty nicely at double digits. Our low- to mid-teens CAGR, where low- to mid-teens is defined as numbers greater than 10 and lower than 20. Yeah, we are within that on a year-to-date basis. That's maybe the first takeaway. Then clearly, you are referring to the midterm guidance, which goes out until 2027, and clearly within that period, we'll have more penetration to do, more countries to get into, and most notably, also, as you heard from Flemming's remarks, the launches of Relfydess, which are well underway in a number of countries. He mentioned Australia.
There are five more European countries which we got access to, so that ramp up, of course, will happen during that time. You also heard Flemming refer to... I think I repeated it also, that Sculptra, you could say finally, we now got into China, which we are very excited about, and then further filling of, so to speak, white spaces within our portfolio, where we are bringing number one SKUs to large aesthetics geographies, will be playing out throughout that year, so with that, we're in a good position and we're not having any reasons to make any changes to midterm guidance at this point in time.
... Thank you. And the follow-up was just on derma skincare. So the 8% growth you reported this quarter looked a lot stronger than what L'Oréal reported on Tuesday night. And but is that already getting a lot of benefit from some of the things you talked about, like shelf upgrades and new launches within derma skincare? Or actually some of those factors still to have their effect, and you'd actually see a benefit from them more in Q4, so you could actually grow even more strongly in Q4 than Q3? Or was the good performance today already benefiting a lot from those factors?
Thanks a lot, James, for your second question. I think what you also saw in the reply from Thomas, we grow very simply through three simple things. Commercial execution, which means that we basically penetrate more in markets we're already in, or we get into countries we're not in. That's one growth factor. Number two way we grow is we basically continue to drive innovation. And number three is we use our, you know, unique integrated model to cross-sell between aesthetics, dermatological care, Alastin. So those are three ways we grow, and I think you're seeing the impact of that. We also have one unique thing is, we are not bound by geography. If a market has a tough hurdle to grow, we shift resources.
As I think I've mentioned many times, we allocate at beginning of year, 70%-80% of the variable spend that the countries have upfront. We still can claw back some, but the rest, you have to present a plan for how you're gonna grow. So if the market, like the US, doesn't have a good plan, I'm sure we can find China, we can find India, we can find others that can develop it. That's the way we grow. So the things that we have introduced in the US are just starting to show impact. Okay? We know the consumer sentiment in this particular category. I think you heard, L'Oréal. I think you've seen activities around Kenvue. What we do is, we try to fix the fundamentals. We started off getting strong in e-commerce.
We realized that probably if we focused on Target and Walmart, we would be stronger. In Walmart, we realized also by talking to Walmart, that if we wanted to move off the shelf, it had to require innovation. It had to also continue to be strong in face, but also supplement in HBL, and that's all what we're doing as we speak. For a Walmart or for a Target to improve your position in a given shelf, they want to see you drive activity. Katie Fang had people waiting overnight to meet her, so that's the way you do activation. All of these things have just started. I would say the U.S. is maybe less advanced, even though we continue to see share growth, despite others having share losses, but we're just at the beginning of some of things.
I'm not gonna predict what the sales are gonna be for the fourth quarter, but the initiatives in the U.S. have just started.
Thank you.
Thank you. Your next question comes from the line of Richard Parkes from BNP Paribas. Please go ahead.
Hi, thank you very much for taking my question. I'll just stick to the one. So just wondered if you could talk about the makeup of patients starting on Nemluvio between treatment naive and Dupixent failures, and I think the reason I'm asking, I'm just looking for any anecdotal feedback on responses in patients that have previously failed on Dupixent or not had full resolution in symptoms. I don't know whether the patient and physician experience you reported there reflected the patient's prior Dupixent or not, but I'm just interested in that, and how that's playing out. Thank you.
Thanks a lot, Richard. So it's early days. I've been heavily involved in preparing the U.S. launch and also monitoring the launch. So remember, there are multiple things we've had to do. So first, we've of course focused on generating as many scripts as possible. And then the next focus has been to turn those scripts into paid scripts, which involves a dual approach. It involves getting more and more commercial plans activated and to also activate CMS. Both of those activations are going according to plan, maybe even a bit accelerated on the government side. So that's the first activity we had. So the number we mentioned, 25% of NRXs, you can say, is the end result of that.
Of course, we've also on top of that, you can say, get share gains by having samples, but we really want to turn as many of the prescriptions into paid prescriptions as possible. We put services in place, we put other activities in place, so when a physician prescribes something, that it as fast as possible and as frequently as possible, leads to a prescription, because time is also of the essence, because some patients or some physicians don't want to wait a long time. So anecdotally, we haven't done the research. It looks like currently we have like a fifty-fifty split between commercial and governmental. It also looks like initially we were mainly getting patients that had failed or were not, optimally treated with others. That is documented by EADV speeches and others.
I remember one doctor from California said, "I took all my 10 most challenging patients and put them on Nemluvio," and then she glaringly reported the results in some of them. It's all anecdotal at this stage. Recently, I've heard we also have become first line.
Thank you.
Thank you. Your next question comes from the line of Jo Walton from UBS. Please go ahead.
Thank you. I'd like to continue on the same vein, if I could please. So just to get an updated view of your size of the market. So of the two to three hundred thousand PN patients in the U.S., we were thinking that perhaps 75,000 of those would be biologically eligible. Given the number of prescribers that you have over a thousand, I'm surprised that there are that many doctors seeing PN patients who are severe enough to take a biologic. So presumably, you are accessing that a little bit more broadly. So an update there, please. And could you also tell us how, where you are getting coverage, payer coverage, is there a step through? Do patients have to show that they failed something else?
I mean, that should be relatively easy to do, presumably, if they are severe patients, but just looking at the level of access, because cynically, we could say that you're getting this high degree of uptake because you're offering so much of it for free. And as a final element of that, could you just tell us whether we would be able to see some sales in the fourth quarter, even if it is largely, you know, pipeline filling, but when you would expect to be able to report sales for us? Thank you.
Yeah, I can take your anxiety away immediately by saying that what we're reporting are not products that we've given away for free. We're talking about paid prescription. We're not gonna comment on the size of our target audience, but we're telling you that over 1,100 physicians have been writing. The actual size of this market and the growth of this market, given what I also experienced with Shire, these rare-ish kind of conditions, once you have available treatments, you actually see more patients. So it's really an underserved, underdiagnosed category. What we're seeing and what we've seen is since Dupixent, which is also a great option, came into the market, there's been a very rapid growth. I'm sure that grows, but it's really early to say. It's probably gonna accelerate it by us. Physicians like choices.
Of course, in PN versus in AD, it may be that we have a profile that is particularly attractive, given the relatively rapid itch relief that people are, the sleep impact and then, the good clearance. But it's really early days. But what we were referring to were paid prescriptions. We, of course, have many more, patients on product, based on, on free, but we are really trying to turn trials into, actual, prescriptions. The, in most cases, in this category in the U.S., you are assumed to have been tried on a steroid. That would be the first thing. I'm sure as the plans are now developing, what is first line, what is second line? You have to assume that most of these patients will have had to or will be on or will have been on a, steroid treatment.
It's anecdotal. We've not seen that they have stepped through Dupixent, if that's what we're referring to, but it's early days, and I think we are in contract negotiations. We are talking to the governmental payers through the CMS, and we also have specialty pharmacies. Needless to say, I think like we have the product available in forty-eight hours, I think people are pretty impressed with how much progress we've made, but it's too early, and sales reports on Nemluvio, that's potentially a topic for next year.
Thank you.
Perfect. We will extend the time to make sure we get through the few questions that are in the waiting room, so we can just go through. If you could keep it to one question, we'd appreciate it.
Thank you. Your next question comes from the line of Emily Tedbury from Citi. Please go ahead.
Oh, hi there, Emily Tedbury, Citi. I'll stick to one. Just a quite high level one. Can you please talk through your priorities when it comes to use of capital, specifically in the medium to long term? I know in short term, the focus is gonna be primarily on delevering the balance sheet, restructuring debt, to improve interest costs. But beyond that medium to long term, how are you thinking about capital allocation? Thank you.
I think the most important for us is we've given crystal clear guidance on debt paydown, so that's been our priority. We have a very sophisticated CFO and finance team, so they've also raised the $500 million bond on the very favorable terms. So we also know that the other part of the equation with debt is what interest are you paying on that debt? So that's another thing we're looking at. And you know, we are focused on investing in our products and paying down and building out, you know, things like in Uppsala, to make sure that we have Relfydess ready and you know, with the strong demand we expect there. So that's where our priorities are. If you're referring to, I assume, M&A or other things, that's out, further out.
Currently, it's funding Nemluvio, funding Relfydess, paying down debt, looking at the interest burden we have and making sure that we get the factory in Uppsala completed, and ready for whatever demand we may see with Relfydess.
Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please go ahead.
... Hi, thanks for taking my question. I wanted to return to the phasing and injectable aesthetics, if you don't mind. So just to understand, I guess we understand in neuromodulators that there was a high base that you flagged clearly from last year. And I wonder if you could just say that it sounded as though you were seeing strong demand in the quarter in some markets, but I was a little bit confused as to which markets you particularly flagged during the third quarter. But then fillers and biostimulators, it looks as though actually that there was a pretty strong third quarter from outside the U.S. I wonder if you can just talk a little bit about, you know, what happened in the international market.
You did mention the strength in three Q. Can you just provide a bit of clarity as to what actually happened in three Q and how we should think about that with regards to the future growth? Thank you.
Yeah, I think I'll pass it over to Thomas to supplement. I think it's important to understand the trends in the aesthetic market. So in the U.S., there is a deceleration on fillers, but we've seen in many markets that is not yet happening or may not happen. Also, remember, in many of those markets, we have a relatively low share. We are relatively new, like China and others, so we see a very good opportunity there. The U.S. is more acting like a mature market, but remember that we are coming in with new fillers in the short term in the U.S., next year, maybe the year after, skin boosters and others, which is our fastest growing filler outside the U.S. So, we think there's still good opportunity.
We are seeing a bit of a shift. We saw that initially in Latin America and Brazil to Sculptra, so the collagen stimulation. We also see those trends. So we see very good growth with that. And with the neuromodulators, I think most markets continues to do really well. Of course, we recently, you would say, within the last two years, launched in China, which is a significant market. We continue to see Brazil performing well. We see many European markets performing well, in the US also there. So it's a little bit of a mix, but the good news about being one of the very few companies in aesthetics that has both biostimulatory fillers and neuromodulators are now adding in all those categories, two of those three categories. We shift a little bit the resources around.
But it looks like neuromodulation is kind of backbone of a lot of the aesthetic business, with very good and solid growth, which is also why we really look forward to the impact of Relfydess.
Yeah, if I just add, I mean, Flemming said it for fillers and biostimulators there. We had a really very strong quarter this year, and there was a little bit of phasing, and it may be a little bit lower year-on-year growth rate against in Q4 than compared to this quarter, because, yeah, it always depends on when what gets shipped across the world. This Q3 or Q4, compared to a year ago, it's Q3, Q4. That's phasing. So that's that. And then on neuromodulators, when you look at that, what I can say is that we do see, especially in the U.S., strong sell- out growth to doctors, to HCPs, to clinics of our neuromodulators.
What you see here is our sales, which went into our wholesale distributor, 4 PL, in the U.S., but that is not the demand growth. The demand growth is the so-called sell- out into the clinics that I mentioned before. Now, there I can say to you that that is really strong. And Peter, you might want to triangulate that, and one way to triangulate is if you would refer to what our colleagues, partners, manufacturing partners at Ipsen have reported. They also break out the Dysport sales for aesthetics use, and there you see a double digit growth number this quarter. And why is that?
Very simply, Ipsen's sales this quarter are roughly minus some pricing impact, promotion impact, our Dysport sales in the following quarter because there is a stocking cycle in between. So if you want to look up what they reported there, that shows you already our expectation of what we ordered from them for the coming quarter. So that would line up with the strong sell-out growth that I just mentioned before, and that's one way of squaring this away for you.
Okay, helpful. Thank you.
Okay.
Thank you. Your next question comes from the line of Chris Shibutani from Goldman Sachs. Please go ahead.
Thank you very much. I think many of us are looking ahead into 2025, and certainly the narrative coming through the initial public offering was how the expense levels, particularly in the therapeutics biotech portion of the business, were anticipated to not be as great, since a lot of the pivotal studies have been accomplished. Can you give us a sense for what that push-pull might be as sales begin to ramp and the level of operating expenses broadly, and in therapeutics specifically, so that we have some framing for 2025 as we look forward? Thank you.
Yeah. Look, Chris, we're not yet giving guidance for 2025. We'll do that later, but I can remind you on key points we did say before, and we said that with regards to Nemluvio, that-
... we would invest, and we're on track to invest $250 million overall into Nemluvio this year. Larger portion of that, of course, now becoming the commercial outlay as the studies ramp down or are increasingly completed. We also did say that for 2025, we expected the peak negative P&L impact of our combined Nemluvio investment to occur in 2025. In order to secure a steep and very effective ramp, and you saw a lot of these early indicators that Flemming mentioned, and that's all going in the right direction.
In order to, and that's also what we said earlier, get Nemluvio onto a billion-dollar sales runway, in the last year of our mid-range period of 2027, which is the year in which we expect Nemluvio to break even on a contribution basis, or overall. So if you triangulate between those points, I think you have a good view on that we're expecting an accelerated launch and uptake, not only in the U.S., but also in the early launch countries then, and that should help you put your head around Nemluvio's investment profile.
Great, thank you.
Perfect. Thanks. I think we have one final question, and then Flemming is going to close the call. Appreciate a short one, single question so that we can wrap it up by the hour.
Thank you. Your final question today comes from the line of Thibault Boutherin, Morgan Stanley. Please go ahead.
Yes, thank you. Just a quick question on China, and in particular for the injectable aesthetics and dermatological skincare. You've achieved very high growth rates despite relatively sluggish markets. You know, part of it is due to execution, but also a strong growth from a low initial base. Just wondering for how long do you think we can expect this sort of base effect to beat the general market conditions? And when do you expect growth to start to maybe normalize closer to market growth in China? Could it be next year, or could we see many more years of above market growth?
I think it's tough to predict, but I would say, we're compared to AbbVie or other local players in the Chinese aesthetics market, we still have a low share. We continue to do really well, and so what I think you have seen is, we have grown basically through continuous innovation. We bring in our full portfolio in China. We've launched a new filler. We recently, a year or so ago, brought this product into the market. We just told you that Sculptra will be next, Alastin will be next. So we expect that we can continue to show very good growth and continue to gain share.
Of course, as you will have heard from L'Oréal and others, they have a totally different market share, and they're in a much broader segment, including beauty, much more affected by some of the trends that you also have seen in luxury. We are very strong in the e-commerce channel. Cetaphil has a totally different position, also an ex-U.S. distribution that it has in the other part of the world, and some of the SKUs for Cetaphil, like the big white jar , continues to do really well, but we're not resting on our laurels. We're starting from a small base, but we'll continue to drive growth there.
Super. Thank you, Flemming. Thomas, thank you to all the financial analysts. I'll just invite Flemming to close the call with a very brief final remarks.
Yeah. First of all, thanks for all your thoughtful questions. I think as you've seen, Galderma has continued on its strong growth momentum this time around, led by the international geographies, led by injectable aesthetics and dermatological skincare product categories, but at the same time, we made very significant progress also on future, quite innovative growth drivers, so this has all led to record net sales for the first nine months of the year. It's a growth that's been driven by volume, and we've had very favorable mix, and it's very broad-based in terms of product categories, geographical performance, and I think very strong double-digit growth that we've sustained in injectable aesthetics and dermatological skincare, and we've sustained that in international markets.
Yeah, in the U.S., we're clearly, like anyone else, navigating a softening market, but we continue to have market share gains in injectable aesthetics and dermatological skincare. I think we all are enthusiastic about what we've seen with the early days from Nemluvio in a relatively small indication. AD is hopefully to come next year, and based on the performance so far on the seasonal re-acceleration that we expect in Q4, we, as we said, and Thomas repeated, we're confirming and narrowing our full year guidance on net sales, as well as confirming our full year guidance on Core EBITDA. I think we continue to deliver very strong performance, and we absolutely remain confident about the year to go. With these short closing remarks, I want to thank you for joining us today and for your thoughtful questions. Thanks a lot.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.