Swedish Orphan Biovitrum AB

Welcome to our first quarter 2023 conference call for investors and analysts. As usual, the presentation was posted to usobi.com earlier today. And basically, as per usual as well on slide two, please take note of the safe harbor statement. And unless stated otherwise, we will be making comments that relate mostly to first quarter performance in 2023. at constant exchange rate and a medium Swedish krona. Let's turn to slide number three. This is, let's say, and this is the agenda where we plan to cover all the key aspects of the report today. We are going to share with you presentations on Q1 followed by Q&A until around 3 p.m. Swedish time. And please keep your questions short and we will try to keep our Answers also pretty much to the point. For those who are on the phone, please join in the queue for questions by pressing star 1. We propose you ask only one or two questions at a time. In speaking order, I'm joined by Henrik, our CEO, and Tony Hoos, our new head of R&D MA. And Armin, our senior scientific medical officer, is also participating in the Q&A session. And we have Anders also, Anders Ullmann, on the form, the previous head of RDMA. And you know that he's at least going to be up for election to the board. And hopefully he will be elected at the general meeting of shareholders. And it just shows, you know, that we do this development in RDMA in a very... systematic and organic way. So please turn to slide number four. Starting off, I'm pleased to say that Q1 2023 has been a good quarter for SOBI with continued solid growth. Revenues increased at 6% at actual rate, contracted at by 2% at constant exchange rate, And the main reason is related to phasing of sales to our partner in China and the high comparison for Kineret due to previous COVID-related sales. If we exclude these two factors, the underlying revenues increased by 8% at constant currency, and that's quite gratifying. The launch medicines increased by 66%, driven by COVID. Very proud of our partners. Haemophilia's business grew by 10%. And Asperger's is surfacing to become material and had sales just below 100 million, 95 million. And White Immunology was overall healthy with the COVID comparison for Kineret. Kamefant continued the trend with increased numbers of patients to the tune of 32%. And we are glad that more patients are now benefiting from Gummy Fund because, you know, as you will hear from Tony later, there's a lot of need in the society also beyond or outside of the U.S. EBITDA reached $2.2 billion in the quarter with a margin of 40%. And as much as we like our economic progress, We are very happy with the progress that we have made with the pipeline. And, you know, we have much higher certainty for FNS-Octocoq-alpha now based on the U.S. approval and the positive phase three results for the children's study. And this means, you know, that we are, you know, ready very soon to file. SEL212 met the primary endpoint. in the two phase three studies and dissolve one and two. This is, you know, we are still expecting more details and Tony will update you on this, but we feel that the product base on the primary endpoint data looks pretty competitive with those existing therapy. And this confirmed by market research, simplifying our economic rights in a silver map by the royalty agreement was also an important move for the company, gives us strategic optionability to use the funds for growing the company in different forms and shape, and also simplifies our interaction with Sanofi moving forward by preserving our economic interests. Approvals for Empaveli adopted in Japan speak to the equality of the RDMA team. And we have completed the enrollment for the Emerald Study or Study 14 that is relevant for the U.S. filing. So more use, obviously, to come. But with all that considered, we confirm our outlook for the full year 2023 with revenues anticipated to grow by low to mid-single digit. and and at constant currency and for adjusted avatar in the low 30s the outlook excludes soviet's right to royalty on that set of the civil map in the us and as usual i mean and we were asked earlier in some court you know it's basically our main basic principle that we look at life more in a more conservative and prudent way I would like to take the opportunity to thank all my colleagues in Itsutsubi for their contribution in the first quarter and in everyday striving to bring life-saving medicines or relevant medicines to patients faster. Please turn to slide number five. Moving to disease areas and geographies, the phasing of sales to our partner in China and COVID-related business have you know significantly distorted this uh this picture and the comparability of numbers you know just you know as a reference adopted it did not decline but you know in outside of china it grew 78 percent and our business international business exploding these distorting business exploding factors grew by 54. but it's we wanted we wanted to be transparent hence you know we We have shown this, but we have a very strong underlying business course. Let's turn to slide number six. Turning to hemophilia, this was a very good quarter. This continued stability. L-octa grew at 9%. They're driven by patient growth, consumption, and geographic expansion. Alprolex increased by 16%. driven by patient growth and geographic expansion as well. Next slide, number seven. As earlier mentioned, OptiLit grew 78% in markets out of China, driven by increased uptake of new patients in the U.S. and the ongoing launches in Europe, international markets, and that's a very gratifying development. In Europe, we saw strong growth, and Germany is supported by a reason to be invested in Italy and Spain, so we feel that there's much bigger news to come. In the US, the trend continued with more new patients, new prescribers, and higher share, and also longer duration of treatment. So the market share grain at this juncture is mainly from the injectable competitors giving rise to believe that we could do more. The first quarter was also adversely impacted. as already previously mentioned by the CELSO partner in China. We are expecting compensatory effect in Q2, but future doctorate beyond Q2 will be determined really by the US, Europe, and other international markets due to the generic entry in China in 2023. Please turn to slide number eight. The launch of Aspazeli continued well with quarterly failures just below 100 million, as previously said. We launched now in Germany, UK, France, part of the Middle East, Australia, with some early sales in some other countries where reimbursement is starting to come in. So these sales are really not reflective of our entire territory. We are just at the beginning of around 120 patients at this juncture. Next slide. That's number nine. So turning to immunology, Kineret really declined only because of COVID-related sales and the rebasing will be flushed out in the next quarter. And then you should see a growing business again. Gummy Fund increased by 5%. The growth was mainly due to an increased number of patients, which I quoted already, but shorter. and we have shorter treatment cycles. We are working on this, and we feel that we are on a good way. The study six, or the phase two study in secondary HLH was published. We'll talk more about this later. The R&D section and its study demonstrated really favorable efficacy and safety, and about MRL study I talked about. Also, strategically, the window for gamifund is opening up. Please turn to slide number 10. We are now moving to synergies. And synergies was really in line with our expectations. There's a small variation versus the last year, the first quarter. But please bear in mind that we had a very strong season at the end of last year. so i think there's nothing to read into it product has done very well and we're very gratified with the evolution in april as mentioned we announced a new royalty agreement with sanofi for the civil map determination of the participation of the disaster vinegar this as highlighted this new structure that provides simplification so we increase strategic flexibility Their silver map is under regulatory review in the US and was recently approved in Europe. I will now hand over to Henrik for the financials. Please go ahead, Henrik. Please turn to slide 11, I think.

Thank you, Guido. And hello, everyone. And I think it is slide 12. Yeah. So I'm pleased to take you through the key financials for the first quarter of 2023. Starting with the top line Q1 was a good quarter with a solid business performance. Revenue of more than 5.2 billion was the highest Q1 ever as reported in SEC and the second highest quarter ever. So benefiting from both underlying performance but also currency tailwinds. And as we saw the reported growth was six percent and corresponding to minus two at CER. explained really by the lack of sales of Doppler to China in the quarter and last year's COVID-related sales of Kineret. Looking at the bars to the left, in immunology we see the impact in the quarter of the seasonal pattern of synergies with high sales in Q1, however lower sales in the previous quarter. Furthermore, a strong trend in hematology driven by the strong performance of doptolets in the United States and Europe and the hemophilia products. If we go back to the table, the gross margin in the quarter of 80% is strong because of the seasonality with synergies, but it's also increased from a year ago due to product mix, not at least the lower sales of doptolets to China, which is a low margin business. and the favorable FX impact the EBITDA margin was 40% equal to the adjusted EBITDA margin for the same period in 2022 and there were no items affecting comparability in the quarter this year the operating expenses excluding amortization came in slightly below the previous quarter but increased versus Q1 2022 by 4% at CER driven by increased R&D expenses mainly related to cell 212 where we had the readout in the quarter and a good cost control remains in focus for Sobi and earnings per share for the quarter ended at 360 just below the adjusted EPS from last year The operating cash flow was strong in the quarter at close to 2 billion reflecting increased operating profit and as anticipated in Q1 we had some important milestone payments and cash flow from investing activities was minus 3.2 billion and included milestones related to near survey mob of 175 million dollars sales milestone for Doptelet of 65 million dollars and the EU approval milestone for Zilonta of 50 million dollars and as a consequence net debt in the quarter ended at 8.7 billion and this corresponds to a net debt to EBTA ratio of about 1.25 and for details on the items affecting comparability that we had in q122 please see page 4 in the q1 report so please go to slide 13. and we turn to the financial outlook for the full year 23 which is as before on revenue growth at constant exchange rates and the adjusted beta margin we will continue to expand our presence in hematology, immunology and specialty care through our ongoing launches and new medicines and geographic markets and we anticipate sustained sales growth and we confirmed the previous outlook for 2023 which reads as follows so revenue is anticipated to grow by low to mid single digit presented at CER We continue to invest in launches and advance our pipeline of new medicines and emphasize the long-term value of the business. Therefore, we anticipate an adjusted EBITDA margin at a low 30% of revenue. As before, this outlook excludes any element from Nisevimab. With the new agreement in place, this means that it excludes Sobeys right to royalty on net sales of Nisevimab in the US. And with this covered, I will now hand over to Tony for the pipeline. Thank you.

Tony Hoos If you allow me a personal word, this is day 17 of my journey with SOBI and I personally really look forward to making a contribution to SOBI's success. And another word of introduction, Anders Ullmann, who is on the call today, my predecessor, and I have made a real effort to ensure that this transition occurs seamless, that we have no gaps and nothing is lost, which I think is really in the best interest of everyone, last but not least, our patients. And in addition to Armin, we also have Anders here to take any questions you may have that may be better addressed by him. So that being said, allow me to walk you through the continued progress of the pipeline that we can share and the new slow in the first quarter. And thank you, you already turned to slide number 15. So let me walk you through. If we start with hemophilia, Guido highlighted two events already. I think this has been really, really nice for us with the two events, as you see here highlighted once more, the regulatory approval in the U.S. and the positive kids trial, the Extend Kids Phase III Pediatric Study. If we think about the FDA approval, the label is routine prophylaxis, on-demand treatment and control of bleeding episodes. and perioperative management of bleeding. So really good and meaningful label for the product. And again, primarily based on the data of the EXTEND-1 phase three study, where the once weekly dosing met the primary endpoint, which I personally believe is a significant improvement for patients to protect bleedings for people who suffer from severe hemophilia A. And then the second line in hemophilia, as you can see here, the EXTEND-KIDS phase three pediatric study, did meet its primary endpoint. I think this is very exciting. Just to recap, we had safety, efficacy, and pharmacokinetics of FNS-octococcalpha as a once weekly prophylaxis in these previously treated kids, and they were all under 12 years. Personally, I was quite interested in seeing that we had no factor VIII inhibitors observed in the 74 children who enrolled in the study. And thereof, we had 65 who experienced at least 50 exposure days. So again, I would say this is a very, very good result. And Guido hinted at that already. These two trials combined, of course, will form a basis for a future European submission. And since I just mentioned Europe, you may recall that we were granted the orphan drug designation by the European Commission already in June 2019. So maybe I continue now to Kinneret. our IL-1 receptor antagonist. During the quarter, the third regulatory submission was made for Kynaret in China, this time for the potential use in the treatment of cryopurine-associated periodic syndromes, or CAPs. We would expect a regulatory decision in 2024. And just as a recap, we had two other China submissions, FMF and Stills disease. Probably you are going back to what Guido mentioned already. You will recall cell 212, that's the Pegylid uricase mTOR for chronic refractory gout. In March, Sobian Select announced positive topline results of the phase 3 DISSOLVE programs. Those were two placebo-controlled randomized clinical studies, of course, to determine safety and efficacy of two different dose levels in adult patients with CRG. the primary endpoint of the program was met. The primary endpoint was serum urate control during month six. And of course, now having the top line data, it's extremely important that we very diligently analyze everything that we have, including secondary endpoints, get the full data set and a full study report as soon as possible. And of course, we'll also now check very carefully what additional evidence, including CMC, will need to include in a future license application with the regulators. So perhaps the next point to tackle is StopTelet, our thrombopoietin receptor agonist for chronic liver disease. It did receive regulatory approval by the PMDA in Japan on March 27, 2023. That combined with the approval of Empaveli-Aspaveli on the very same date in Japan, I think is a very powerful story for patients in Japan. And you can look at all the details, obviously, in the respective pieces of information. But I would say, just looking at geography, look at what happened in the US, regulatory submission China, two approvals in Japan, I'm very, very happy with that, I should say. There is another piece of information I'd want to share with you on PEC-SETA-COPLAN. Some of you may remember that PEC-SETA-COPLAN had or has a study in ALS. We have an update regarding this open-label long-term extension portion of the Phase II meridian study that has been led by APELIS. All of these studies, or usually these studies, have independent data monitoring committees. They did an unblinded review of the available data. They didn't find any safety concerns, but the IDMC concluded that the available data did not support continuation of the treatment. And so in consequence, as you will have seen in the press release, The decision has been made to discontinue treatment with systemic Pexetacoplan related to this open-label long-term extension study. Just as an FYI, all patients had completed the randomized treatment portion of that study. And of course, all data will be reviewed as planned. So maybe this allows us now to go into the outlook. So if we go to the next slide, we talked already about hemophilia, epinephrine ectococcal alpha, Of course, now the regulatory submission in the European Union. We'll do everything we can to be as quick as possible. The scheduled date is second half of 2023, as we've shown on this slide. Again, if you go to China, you will see two events for China. You will see DOPTELENT, DOPTELET, and you will see KINERET, and we expect a regulatory decision for DOPTELENT and ITP. and kineretin FMF, i.e. familial Mediterranean fever. So moving on to Gamifant. For Gamifant, we expect to receive data from the MRL Phase III study. This is what we call the Stills Disease Cohort. And we aim regulatory submission for this Stills Disease Cohort in the second half of 2023. And perhaps I offer two additional bits of information for Gamifant. One, you will have seen, Guido referred to that already, the results of study six. This is a phase two study in patients with macrophage activation syndrome, secondary to Stills disease, and that was published in the Announce of Rheumatic Diseases. Again, I personally think this has been very meaningful data. In addition to that, I always have a pretty good signal about how high the medical need is when we receive urgent calls from physicians and requests for compassionate use. And we get quite a lot for this drug. So we see there's a real, real unmet medical need. And again, we're super happy to help in this regard wherever we can. So perhaps this allows us to move on. Just one word about Neusevimab. In the US, it's progressing with a regulatory review. with the decision anticipated at the end of the third quarter. You know AstraZeneca and Sanofi here play a role. And so we have the right to royalties on Sanofi's future net sales in the United States. So that concludes my outlook for the second half of 2023. You will see some anticipated milestones for 2024 on the right-hand side of this slide. My suggestion would be we will keep this without commenting further at this stage. These are certainly our targets. And we will update you with refined goals, targets, timelines as we progress through 2024. And maybe before I close this session and hand it back to Guido, if you allow me again to say a personal word, I really want to say a heartfelt thank you, first of all, to all my colleagues at SOBE for the hard work they do. I also want to express an appreciation for our external experts, and in particular, to all our patients and their families who participate in our trials, because without what they are doing, we would never be able to help advance the science and really care for those who we strive to help. So thank you very much, and let me turn it back to Guido.