ZUG, SWITZERLAND )-- Galderma Group AG, the pure-play dermatology category leader, today announced its financial results for the first half of 2024.

· Record net sales of 2.2 billion USD in the first half of 2024, with net sales growth of 10.8% on a constant currency basis[1], predominantly driven by volume growth complemented by favorable mix
· Broad-based growth across all product categories, with constant currency year-on-year growth of 13.4% for Injectable Aesthetics, 11.8% for Dermatological Skincare, and 2.2% for Therapeutic Dermatology
· Growth across geographies, especially in International markets with continued growth momentum, including in China
· Progress updates on its two biologic candidates with blockbuster potential, with RelabotulinumtoxinA’s (QM-1114) first marketing authorization in Australia under the brand name RelfydessTM and nemolizumab’s launch readiness after filing acceptances
· Profitability improvement in the first half of 2024, with Core EBITDA[2] of 514 million USD, a 23.4% margin, up 30 basis points (up 40 basis points at constant currency) compared to the 2023 full year Core EBITDA margin
· Leverage[3] reduced to 2.6x by end of June 2024 and 100 million USD of debt repaid early post-IPO, resulting in an expected interest cash expense of approximately 120 million USD for the second half of 2024, with interest rate on gross debt down approximately 50 basis points
· 2024 full year guidance updated on net sales, towards the upper end of the previously communicated growth range of 7-10% at constant currency, while confirming Core EBITDA margin guidance, in line with 2023 at constant currency

“Galderma delivered a strong first half of the year with excellent sales, profit and cash generation results, underscoring the benefits of our unique and growth focused integrated business model. Dermatology continues to be an attractive market despite some slowdown in a few segments which we have been able to overcompensate via market share gains and continued global expansion. We are also progressing our late-stage pipeline with two potential blockbusters on track to start contributing to the overall company performance as early as 2025. We remain confident in delivering strong 2024 full year results and are well set up for continued future growth.”

FLEMMING ØRNSKOV, M.D., MPH
CHIEF EXECUTIVE OFFICER
GALDERMA

Commercial performance

Galderma achieved record net sales of 2.2 billion USD for the first half of 2024, representing 10.8% year-on-year net sales growth on a constant currency basis, predominantly driven by volume complemented by favorable mix.

Performance in the first half of the year was underpinned by continued execution of Galderma’s growth-focused integrated dermatology strategy and its three strategic pillars, including new launches and progress on its two biologic candidates with blockbuster potential, focus on commercial execution, and delivery of market-leading education and services.

Net sales growth was widespread across product categories and geographies. All product categories grew, with notably strong performance in Injectable Aesthetics and Dermatological Skincare. Across International markets, there was continued double-digit growth momentum fueled by strong performance in major markets in Asia, Europe and Latin America. Notably, in China, Galderma maintained a robust double-digit growth trajectory in both Injectable Aesthetics and Dermatological Skincare. The U.S. continued to deliver growth despite a softer market environment.

Injectable Aesthetics

Injectable Aesthetics net sales for the first half of 2024 were 1,139 million USD, with year-on-year growth of 13.4% on a constant currency basis. Growth was rebalanced after the phasing impact of the first quarter of the year, while driving quarter-on-quarter growth.

Both Injectable Aesthetics sub-categories performed strongly. For the first six months of 2024, Neuromodulators net sales were 622 million USD, with year-on-year growth of 16.6% on a constant currency basis, and Fillers and Biostimulators net sales were 517 million USD, with year-on-year growth of 9.8% on a constant currency basis.

Growth was driven by strong brand performance and scaling execution across its Injectable Aesthetics portfolio, along with increasing penetration in terms of geographic reach, portfolio breadth as well as healthcare professional education and training.

Commercial highlights for the past quarter included sales force expansion in China to reach additional cities, broad activation in Thailand with city banners to support the continued strong uptake from its recent Sculptra launch, and celebrating key milestones in the U.S. such as Dysport’s 15-year anniversary, coinciding with the 25th anniversary of Sculptra globally. Galderma also continued to demonstrate its commitment to healthcare professional education and training, with leading presence at major medical congresses, including Vegas Cosmetic Surgery (VCS), and local Galderma Aesthetic Injector Network (GAIN) events, covering market-shaping topics such as the treatment with Restylane and Sculptra for patients experiencing rapid weight loss.

Innovation highlights for the past quarter include launching Restylane VOLYME in China, designed for contouring and volumization of the mid-face region, as well as regulatory and manufacturing updates for RelabotulinumtoxinA (QM-1114). Restylane SHAYPE, launched in Canada in the first quarter, as the first filler with ‘bone-mimicking’ properties using NASHA HD technology for temporary augmentation of the chin region, also continues to perform well.

In terms of RelabotulinumtoxinA, Galderma’s next generation neuromodulator, Galderma received its first marketing authorization from Australia’s Therapeutic Goods Administration for the treatment of both frown lines and crow’s feet under the brand name RelfydessTM. Galderma expects first launches in its International markets could take place in the first half of 2025 subject to additional regulatory approvals to gain relevant production scale. Galderma’s Uppsala site already received license updates from the Swedish Medical Products Agency authorizing the future manufacture of the first and only ready-to-use liquid neuromodulator created with Galderma’s proprietary PEARL Technology, which provides sustained results for six months and fast onset of action as early as day one. Results from the phase III READY-1 study were recently published in the Aesthetic Surgery Journal4.

Dermatological Skincare

Dermatological Skincare net sales for the first half of 2024 were 675 million USD, with year-on-year growth of 11.8% on a constant currency basis. Growth in the U.S. was rebalanced after the first quarter phasing impact in Cetaphil.

Cetaphil in International markets and Alastin both grew double-digits, more than offsetting the skincare market softness in the U.S.. Galderma continued to drive tailored strategies in key markets to deliver growth, such as Brazil, Canada, China, India, the Philippines, and the U.K. & Ireland.

Growth was based on focused execution behind science-based flagship brands, with an emphasis on detailing, sampling, as well as notable digital and e-commerce activation, all underpinned by targeted innovation and scientific engagement.

Commercial highlights for the past quarter included increasing Cetaphil digital- and influencer-first efforts to activate viral campaigns and drive e-commerce growth. Building on the first quarter success of its ‘Face of Cetaphil’ and ‘Game Time Glow’ campaigns in the U.S., Cetaphil recently went viral in India, for example, and became one of the top trending topics in the country by capitalizing on local trends with men’s skincare. E-commerce remained Cetaphil’s fastest-growing channel, whether in the U.S. with continued growth momentum at Amazon or in China with growth boosted by the recent ‘618’ shopping event performance. Leveraging the science behind the brand, Galderma continued to engage consumers and healthcare professionals through sales force detailing, healthcare professional education, and its Galderma Sensitive Skincare Faculty (GSSF). Alastin momentum also remained strong in the U.S. while continuing to expand internationally.

Innovation highlights for the past quarter ensured a consistent flow of targeted new Cetaphil launches designed for sensitive skin, particularly supporting our face range and relevant line expansions globally. Recent launches for Cetaphil included two high potency face serums in the U.S. and its Baby line expansion in Asia, including a tailored product specifically designed for China. Meanwhile, the recently launched Alastin C-Radical Defense Antioxidant Serum continued its robust market uptake, based on strong clinical differentiation and external recognition, with awards as a top performing Vitamin C serum.

Therapeutic Dermatology

Therapeutic Dermatology net sales for the first half of 2024 were 388 million USD, with year-on-year growth of 2.2% on a constant currency basis. The growth was mainly driven by International markets, more than offsetting anticipated lower volumes and ongoing market genericization in the U.S.

The main highlight is the progress on launch preparations for nemolizumab in prurigo nodularis and atopic dermatitis. In addition to the filing acceptances announced for the U.S., including priority review for prurigo nodularis, Europe, Australia, the U.K., Singapore and Switzerland, filing acceptance has also been received for Canada. Focus in relevant markets has been on launch readiness, first and foremost in the U.S., where the required infrastructure is in place, including commercial, medical and market access teams with extensive biologic launch expertise. In key International markets, launch teams are also in place, including experienced market access and medical affairs teams. Galderma remains focused on disease education for prurigo nodularis and atopic dermatitis at medical congresses. In terms of data dissemination, detailed results from the phase III ARCADIA 1 and 2 trials evaluating the safety and efficacy of nemolizumab in atopic dermatitis were just published for the first time in The Lancet. Data from this robust phase III program demonstrate the potential of nemolizumab (in combination with background therapy) to improve skin lesions, itch, and sleep disturbance in adolescent and adult patients with moderate-to-severe atopic dermatitis.

Meanwhile, a phase II proof-of-concept dose-finding study for the reduction of itch intensity in adult patients with advanced chronic kidney disease associated pruritus (CKD-aP) reinforced the potential for nemolizumab in other indications to be explored. The study demonstrated rapid onset of action in itch as well as a favorable safety and tolerability profile, aligned with previous phase III clinical trial results in prurigo nodularis and atopic dermatitis, with no safety signals identified. Given the multiple potential indications for nemolizumab, along with the existing CKD-aP treatment landscape, Galderma has decided to deprioritize the CKD-aP program and explore additional dermatological indications with significant unmet treatment needs to have the greatest impact for patients.

Financial scorecard

Galderma delivered 514 million USD in Core EBITDA for the first half of 2024, representing a 17.7% year-on-year growth at constant currency and a 23.4% Core EBITDA margin. Core EBITDA margin at constant currency was 23.4%, an increase of 30 basis points (an increase of 40 basis points at constant currency) compared to a 23.1% Core EBITDA margin for the full year 2023.

Core EBITDA growth was driven by sales growth and benefits from a scalable platform driving operating leverage, along with positive phasing impact from nemolizumab costs which are expected to ramp-up in the second half of 2024. Beyond an increase in underlying profitability in the first six months of 2024, spend for nemolizumab was of 95 million USD, representing 38% of the expected spend for the year.

Galderma also progressed on its deleveraging trajectory, with leverage reduced to 2.6x by end of June 2024. Net debt was reduced to 2,589 million USD, including early debt repayment of 100 million USD behind confidence in cash generation. Debt repayment after the IPO was possible despite 108 million USD payments in the first half of 2024 for two out of the three expected milestones and earn-out payments planned for the year. For the full year, leverage is expected to be towards the lower end of the previously communicated 2.25-2.50x range. In addition, the second half of the year will benefit from an improvement of approximately 50 basis points in the interest run-rate expense on gross debt, resulting in an expected interest cash expense of approximately 120 million USD for the second half of the year.

Galderma also continues to advance its ESG agenda, having published its 2023 Environmental, Social and Governance (ESG) update, developed based on the Task Force on Climate-Related Financial Disclosures (TCFD) framework. Galderma remains committed to advancing its ESG agenda and progressively increasing the disclosed ESG metrics which are already tracked internally and linked to the compensation of its senior leaders.

Full year guidance

Based on a strong first half year, Galderma is updating its 2024 full year guidance on net sales, towards the upper end of the previously communicated growth range of 7-10% at constant currency, and is confirming guidance on Core EBITDA margin, in line with 2023 at constant currency. With better visibility following the IPO, Galderma also updated select modeling metrics for the year, with details available in the Appendix.

Webcast details

Galderma will host its financial results call today at 12:30 CEST to discuss first half 2024 results and respond to questions from financial analysts.