Speaking after the recent completion of a three-year strategic transformation plan, ALK President and CEO Carsten Hellmann outlines the progress made by the Danish allergy giant under his stewardship, including deeper penetration of the US market, shifting from injections to tablets, and driving digitalisation and efficiency.
To put our work in context, 500 million people globally have respiratory allergies, of which 10 percent (50 million) should be receiving immunotherapy, but only one percent currently are. ALK is by far the largest company within this space, with a global market share of around 40 percent, but this is only 40 percent of the one percent of people currently receiving allergy immunotherapy.
Therefore, there is a huge unmet need for people living with allergies that we are trying to address. Historically, allergy has either been treated with symptomatics – on which EUR 40 billion is spent out-of-pocket every year – or immunotherapies given via injection. These medicines tended to require weekly visits to a doctor who would blend a mix of allergens and administer a shot.
Instead of looking to make one more product, our focus has been on understanding the life of an allergic person, what their biggest problems are, and how we can help them
ALK has moved beyond this paradigm by investing in the development of a complete portfolio of sublingual immunotherapy tablets which can be taken orally. This product is much more straightforward than injections for patients to take and one for which the globalisation possibilities are much greater. Our tablets have gone through extensive clinical trials and are now fully registered and approved by the US FDA, EMA in Europe, and the Japanese PMDA. We expect to receive approvals in China and elsewhere shortly. Additionally, these are green products with the allergens extracted from plants before being standardised and manufactured.
Instead of looking to make one more product, our focus has been on understanding the life of an allergic person, what their biggest problems are, and how we can help them. After conducting an anthropological study to better understand these issues, we realised that many allergy sufferers struggle for six to seven years managing their allergy alone and even if they do visit a doctor, help might not be forthcoming.
Our strategy has therefore been, firstly, to clean up our portfolio and remove a substantial amount of products not registered or clinically proven. This took out almost 10 percent of our turnover immediately. Since then, we have built our strategy around four pillars to turn this potential to our advantage.
The first pillar is to enter the US market and, over time, capture it. There are 27 million people in the US who should be receiving allergy immunotherapy but currently are not due to a reluctance to go to the doctor to get a shot. On all our pillars we are growing quickly and performing well, but I have been a little disappointed by our ability to penetrate the US market, where allergists can make a lot of money from blending their own shots and do not have the financial incentives to switch to tablets. To counter this, we have invested in a fully digital healthcare provider, where people with allergies are funnelled in and can get online consultations, home test kits and so forth.
Secondly, we needed to complete our tablet portfolio and get it fully approved everywhere, including for children, as it already has been in countries like Japan where 80 percent of our new patients are under 18 years old, and 40 percent are under eight. Allergic parents tend to have allergic children, whose probability of getting asthma – which can be a huge burden on families – is very high. By giving children immunotherapy with a clinically documented product early on, the chances of them developing asthma can be significantly reduced. Additionally, getting children to take tablets is much more straightforward than trying to convince them to sit still for a second injection.
Thirdly, we needed to go digital. The 500 million people globally struggling with respiratory allergies need to be made aware of whether they are one of the 50 million that should have immunotherapy and put in touch with a doctor that can give them the right help. For this purpose, we developed a complete ecosystem called Klarify. This is not only an app with allergy information; it has data about pollen in the air, the weather, and the wind direction, but also utilises AI algorithms that can predict how the patient will feel in the coming days. Moreover, Klarify holds over 70 clinical articles, allows patients to find a doctor to get a test. There is a lot that can be done to engage with people with allergies and help them gain a better quality of life.
The fourth pillar was becoming more efficient. This involved taking out a lot of things that did not help us in our daily business.
Performance has been good, and we are forecasting year-on-year growth of over ten percent for the next ten years with a good level of profitability. Looking to the future, over half of our visits are now to ear, nose, and throat doctors, meaning that we are entering other segments, and we are also investing a lot in trials for children to build a stronger footprint in paediatrics. Additionally, we have sought to accelerate our development programs and are now investing a lot in food allergies.