Swedish Orphan Biovitrum AB (publ)

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.

Guido? Sorry, I was on mute.

Sorry. Thanks, Tony. Let's go straight to slide number 18. And, you know, just to quickly summarize, this was a good, very solid quarter. And, you know, as you have seen, you know, there's a lot of reasons to believe that we have a pretty exciting future ahead of us with all the progress we made on pipeline, on restructuring agreements, and also on approvals. and study and study retards so the business is in good shape you know as you have seen you know that we we asked we are bullish about the uh the prospects of this business and uh and uh stoney said to well you know thank you everybody so we who made this possible and we hope to continue provide good news for patients all this year and as we move forward with uh with, let's say, with our business. So we now go to Q&A, slide number 19. So for those on the phone, please remember to press star 1 and ask a question. Can I please remind you that limit your questions, and we will also try to be sharp on the, regarding the answer. So let's go right into the first question.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch on telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioners on the phone are requested to use only handsets and eventually turn off the volume from the webcast. Anyone who has a question may press star and 1 at this time. Our first question comes from the line of Yuen Yang from Jefferies. Please go ahead.

Thank you. I have a couple of questions. The first one is on the NERSC survey map. So, Guido, you mentioned that, you know, the recently simplified arrangement, royalty arrangement with the Sanofi that could increase your strategic flexibility. So, can you comment on what kind of strategic options that you are considering? And the second question is on doctorate. So, there was a, there were no sales to China this quarter. Are you expecting sales to China in second quarter or beyond? Thank you.

Yeah, thank you. Basically, let's start with the easy question. So, you know, on Dr. Lead, we're expecting a material order in the near term, and that should... bring us back on track. But, you know, looking forward, I think beyond this, it's, you know, we have to see that, you know, the landscape is generic entries in China is changing. So our revenue expectations are going to be, you know, you know, rather moderate. But when you look at our existing business, you know, just for, you know, that was north of 140 million last year. going at 78 right now you can understand why we believe that this this business is uh has a very good future even if basically you know in the second half maybe there's not so much business or nothing in the most extreme case yeah we don't know at this stage but you know so this will be a growing business regardless we always said that you know this business has to grow you know, even if you're not withstanding what your aspiration for China is. And we're on a good way because, you know, now we are launching in Europe. We got the approval in Japan. I mean, so there is going to be a, with longer patent protections, there's going to be a certain dynamic. Regarding, you know, the silver map, I mean, it's pretty straightforward. I mean, we like the silver map because it props up our earnings. Valuities mean, you know, that you record earnings at 100%. So that's, useful for your ratios and basically helps us to fund the projects that are a priority to us where we take ownership so that's option number one and option number two is if we really would have no other way of funding obviously you could monetize this warranty stream now because it's pretty pretty transparent you know we need to just find somebody who likes the uh like the prospect of your silver map and there are obviously many forecasts on so both options are relevant at this stage nothing you know nothing has to be decided in the meantime we love the the earnings and look forward to a successful launch of sanofi and um and the books and nice proceeds and we avoid uncertainty around investing into what we would be for us non-core So this agreement avoids investments also moving into the future and areas that are not core to our business. I hope that this answers it. Maybe we'll go to the next question.

The next question comes from the line of Charlie Mabbitt with Morgan Stanley. Please go ahead.

Hi. Thanks for taking my questions. Charlie Mabbitt from Morgan Stanley. Firstly, I'd say the growth of two Haemophilia products was a decent step up year on year. So at the start of the year, you suggested stability for the franchise in 2023, but is this rather conservative? And secondly, on Zinlanta, given this was the first sales quarter, could you please talk a little bit about the position feedback and the cadence of uptake you expect over the year? Thanks very much.

Yes, thank you. You know, let's say with regard to hemophilia, you know, we always like to hold our horses, obviously. You know, the goals were driven by strong, you know, patient goals, internationalization, and also, let's say, the internationalization. So there we still have a little bit of, more room we don't underestimate competitors you know that's the reason why we always take a conservative stand you know and there will be some price effects also kicking in but you know that but you need the franchises on a good way there's no question i mean this uh it's nine percent respectively sixteen percent uh can't complain too much and uh but you know it's it's too early now to change our view i mean we are excited about obviously FNS, Octococa, IFA, and with a bit of luck, we may already have one or the other Middle Eastern country launching during the course of this year, and then definitely Europe in the following. So I think that will be the engine that will give us reason to have a lot of optimism. With regard to Celonta, it's a bit early. I mean, we have three patients now, and they're very recent. So I would refrain from now, in Saudi Arabia, now giving you feedback. From what I hear, the therapy has worked well, but to be honest, now to draw, extrapolate from there, I think would be premature. I think when we have the next market, the next market will be a German launch. And then, you know, the rollout across Europe, I think then, you know, I think I would like to come back and give you a more profound perspective. But, you know, it's nice to launch it, you know, and nice to make it available because it was high demand. And we are convinced that this product can play a role. And, you know, we don't need a lot of effort for it because we are already in the target audience. Thank you.

Thanks.

The next question comes from the line of Christopher Ude with SEB. Please go ahead.

Hi there. Hope you can hear me. My question first is on Elocta and Alprolix again. So you mentioned phasing. So do you expect the phasing to unwind in Q2 or later this year? And would you please quantify the impact it had on Q1? And then also, if you could give us any more detail on the price cuts, where and roughly how much. Thanks. And then, oh, and the second question I'd like to ask is, so the two-year period of investment has sort of, that you guided to two years ago has, of course, come to an end. And perhaps you could give us some more color on the expenses for R&D going forward for, you know, over the next two years. for the existing product and pipeline portfolio? Thanks.

Yeah, sure. So, you know, with regard to Elokta and Ultramix, you know, they're, I mean, we have never really come out, but, you know, we would have expected a couple of hundred million of impact, yeah, out of these price adjustments and cost containment methods, including clawbacks in Europe. But because we had a little bit of you know, we still have room to improve consumption per capita. And we have a strong momentum from international. We figured that, you know, we should be able to have a stable, at least, hemophilia business, whatever that means, you know, it could be also a slight course. We start well, we like it. But you know, that's already know anything else it's a bonus and you know we are relentless we will not give in here yeah so but you know order of magnitude you know they have a couple of hundred million patrons but you know you've seen you know that they are applicable already now so you know so so having the momentum we had from the consumption and conventionalization out await that impact which is nice but you know if we come in and we will we will have to keep going. But, you know, the hope is that we are still a little bit more in the tank and that we can keep this moderately going. But, you know, our guideline was always stable. Stable goals or stability. Don't change this. It's a structure because we want to understand, you know, you see that the issue is also that the more you have losers in this game who have nothing to offer, but you know, price potentially, you know, that could also have effects in one or the other market. I mean, on a materiality basis, this has not yet provided additional pressure. But, you know, we know that there are, you know, that this is coming. The more we are looking forward to the FNS Octocock IFR launch, the more we are able to step out of this with a better product. At least to a large degree. And with regard to the investment, I hope that we can defend a strong R&D spend the way we have it by further significantly growing our business so that basically you see some leverage coming in over the years. But when you look at it, we have now nice endpoints. in our MDMA, which clearly gives visibility now to a future beyond also 25 and gives reasons to believe that we strongly go into business. So we are not yet at this juncture in a phase where we will optimize because we still have a couple of things to do. But we hope that the spiraling effect that we have seen that basically over the next years will come down. But it will also depend on which opportunities, you know, we will be able to source in. But I think, you know, as a mix, this is a good business. And, you know, I like where we are today. It's a much more, much better strategic position than we have been a year ago or two years ago. It's a nicely balanced portfolio. with access to the earnings, at least, of three main assets. I mean, that's fantastic. Yeah. So I don't have, I don't give you now, because typically we don't give guidance beyond one year. But you know what, for the end of the year, we would not. But you know, I would see, I see the point, I understand, you know, We have obviously given you guidance on 25 by 25. I forgot to copy this. It haunts me nearly every call. And we have given guidance on the delivery. I mean, we have also, when you look at it, we have invested, obviously, in substantially broadening the company. You had China many times, Japan, Australia. All of those companies were not around some time ago. So I think, you know, we are acting in the best interest of shareholders.

Okay.

Thank you very much. Thank you. Next question, Mary.

The next question comes from the line of Alistair Campbell with RBC. Please go ahead.

Oh, yeah. Good morning. Thanks very much for taking the questions. I've got two, please. First of all, just wanted to talk a bit more, if you can, about Bay Force, about Nusabimab. Just in terms of that new agreement with Sanofi, I'm sort of keen to understand how that negotiation originated. Was that something that you sought to do? And ultimately, is the outcome of that value neutral, or have you had to give up some value to sort of gain more flexibility in that deal? And then the other point of that is just basically Sanofi this morning is still saying that they remain optimistic they'll be able to get to the U.S. market with Bay Fortis to participate in the RFV season before the end of the year. I mean, technically, if they did get sales before the end of the year, in terms of the timing of when you receive royalties, could that fall into this year or is that more likely to fall into next year? Thanks.

Yeah. I mean, so firstly, you know, with the silver market, I mean, when you dance with, obviously, two very large companies, so we, you know, you need to wait for the right moment. So we basically, we knew that we could be a piece of the puzzle that these other two companies were trying to address, but we did not. But we did not really champion this because otherwise this would have impaired the economic outcome of the negotiation. And that basically was the reason, was our strategy all along. And as you can see, very positive because clearly where you're neutral to your other question and because we also saved milestones. and simplify the agreement and obviously are now not forced to invest into a product that we don't control or manage. Also forward-looking, there are obviously opportunities for this product. And we basically participate in a very meaningful way in the economics of this product without taking any risk and without having lengthy discussions and negotiations every quarter on on how to define profit or revenues or other things. So we like that. It's simple and clearly keeps us harmless, but it gives us also, as I mentioned earlier, an asset that has a currency. And with regard to RSV, you know, I cannot speak on behalf of Sanofiwe. They know this better. We have, in a previous call, we did an outside-in where we, I think the last one, where we also asked, you know, people close to the subject matter in the committees and everything, you know, asked the consulting firm. And that's, you know, so I can report on both assumptions. Yeah, I think there's a high probability that they will have said, and in that case, depending on how they will record. I think there's a good chance that we have already material this year because the way this works is that normally when a proficient company in this space or when you look at analogs launches, you can, even in two months, can achieve a significant market penetration, and you just need one shot, and you have accomplished the sales for that patient. So we are cautiously optimistic to see something. But, you know, you have to really ask some of the users, because we can only draw, extrapolate from what they have said. We're not in charge.

Great. Thank you.

You're welcome. Thank you.

The next question comes from the line of Peter Östling with Barito Securities. Please go ahead. Thank you.

Yes, thank you. Can you hear me all right? Yes. Yes. Just a question on doptolet in China. How should we look at this? Is it prudent to take away all sales beyond Q2 this year, even in 2024 and beyond that?

Yeah, I mean, you know, there is, I mean, it's prudent for sure. It cannot be less than zero. And then you're very prudent. We hope that, you know, that in the further discussions that the brand that we own carries some weight and we are now rethinking also how to look at this, how to restructure this partnership with Svobodn. so that maybe we can preserve something. But, you know, in terms of materiality, it's not going to be to what we have seen, obviously, last year by any respect. And that's the reason, you know, why you need to grow what we have. And, you know, we have some really explosive goals right now in Europe, even though we don't have all markets there. And we continue to be going strong. I look forward to the launches also in Japan and Australia. and then taking the product into Latin America and in the big markets. I think we are absolutely optimistic that it's a growing product for us, despite the fact that it is conceivable that we flush out the China business as of 2024.

Okay. And just to confirm, did you say that you expect

material order in q2 and then more or less nothing yeah i mean you know i'm always cautious because you know we are dependent here on the ordering of our partner but you know that is you know we're expecting at least one big order here okay and yeah absolutely okay thank you

The next question comes from the line of Victor Sundberg with Nordea. Please go ahead.

Yes, I hope you can hear me well. You know, you had a question on NIRSEVIMAB, but that was partly answered. But I can go ahead with another question on NIRSEVIMAB. So the payments here to AstraZeneca and Sanofi, will they be booked in the P&L or in any other way? That was my first question.

No, their milestone payments are not related.

Okay, perfect. On top of that, if you strip out the China sales historically and look at the growth here, it looks like quarter on quarter that it's quite flat, 4.6% quarter on quarter growth since Q4. Are there any growth to net dynamics that we should be aware of? Do you have any comment on that? And maybe also if you can comment on the growth in Europe versus the U.S. here as well.

Yeah. No, I think what we see is really exponential growth in Europe because you broaden the base, the product responds extremely well to promotional effort, and we are coming in at the right time. In the US, you know, we, I mean, this is always, you know, you, you basically, when you go through this really exponential growth, you always hit that certain point of time, you know, certain milestones where you think, okay, am I still connecting, collecting enough new patients? But that, that is absolutely, you know, when you look at the trend, It's very powerful and also the latest indicators of new patients, new prescribers. This is, you know, we are by far not done. It's, you know, there is, I would not worry too much about the comparisons the way you've done them there. The, you know, the 78% is quite indicative of what we are you know where the product is right now in terms of acceleration also and all of these other parameters the under the leading indicators they're pointing on to the right direction and sometimes you know there's also some inventory that lift and grind you know which we don't uh obviously encourage and enable enable the rush form or shape and then it impacts a little bit when you do the corporate quarterly comparison but when you look at the leading indicators Yeah, all very solid.

Okay, thank you.

You're welcome.

As a reminder, if you wish to register for a question, please press star and one on your telephone. Star followed by one. The next question is a follow-up from Mr. Ude with SCB. Please go ahead.

Yeah, sure. Thanks very much for taking my follow-up. So, I guess... In terms of SG&A and, well, so the number of employees basically at the end of last year was basically unchanged from the year before. But SG&A, excluding amortization, was up 25% and salaries were as well. So what factors are behind that? How much was related to the restructuring and how much to other reasons? for exceeding core inflation, and what should we expect in terms of inflationary impact on overhead in 2023? And also, what are the 56 new hires in the quarter for? Thanks.

Yeah. Henrik, you want to take it?

To start, to be clear, if we look at SG&A in Q1 compared to Q1 last year excluding amortization at constant currencies it is virtually flat so there is no I was looking at the full year from last year from the annual report oh yeah okay so your question relates to 22 compared to 21.

Can you try to use that to get a sense of the trajectory going forward, what factors are involved?

Yeah. Well, when it comes to the increase in 2022 over 2021, it's really about the launches of Asper Valley and Doptalet worldwide, and also our internationalization. When it comes to where we go from here during the rest of the year. We expect some increase in SG&A compared to Q1 because of the same reasons. We continue to try to accelerate both Dobslet worldwide and Asper Valley in our territories. So that will lead to a slight increase from the Q1 level in the coming quarters. In terms of number of FTEs, similarly, the gentleman here next to me, Tony, he is planning to have some increase in staff and similarly in SG&A, but that's really balanced increase across the board for the rest of this year.

Sorry.

Inflationary impact?

Well, we think we can handle inflation fairly well. Like everybody else, we've tried to curb salary increases. We also focus quite a lot on procurement, where we try to, through an improved procurement, actually mitigate or offset some of the inflationary pressures.

Okay, thank you very much.

Thank you. Today's last question comes from the line of Peter Essling with Pareto Securities and his follow-up. Please go ahead.

Yes, it's not a question, just another confirmation. when it comes to price reductions for within your hemophilia business did you say that you had already seen some or that or that you expect some for the rest of the year yeah we we have seen some yeah i mean the effect because they they have been executed and and we're expecting also

let's say, you know, more to come, because they are less because of government, but more because of further competitive pressure. But, you know, we think that we can, the way we look at it, that we can compensate this in a way that we have seen, you know, also in the first quarter, maybe not to the full extent. I mean, this was It was a very nice, obviously, evolution here. But, you know, that's how we look at it. Okay. Thank you. Yes, you're welcome. Yeah, I think, you know, we can have probably more questions and answers. I guess we have tomorrow call as well. And, you know, if you have questions, please refer to us. I mean, this was just the first, you know, meeting in Brighton. And, you know, as you can see, you know, we're quite happy with where we are today. Would I like to present to you an order for Dr. Ledos and Q1? Absolutely. Welcome to CAGE. But, you know, what I like is that our underlying business grows very strongly and that we're doing the right things on our pipelines. On this note, I wish you a great weekend. I look forward to hearing from you. If there are any questions, please refer to our, as per usual, funders. From a summary, just a short detail, we think that our perspectives on 2023 is unchanged, but this is more probably also driven by the fact that this Q1, it's a Why would we go ahead of ourselves at this juncture, which is a good business and strong earnings, strong growth as a product? Yes, some headwinds. But as you can see, we manage. All right. On this note, I wish everybody a good day. Thank you.