Swedish Orphan Biovitrum AB (publ)

Ladies and gentlemen, welcome to the Q3 2023 Report conference call and live webcast. I am Sandra, the course call operator. I would like to remind you that all participants have been listened only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Guido Oelkers, CEO. Please go ahead, sir.

Thank you so much, Sandra. Hello, everyone. This is Guido Oelkers, CEO of Sobi. We are delighted to welcome you to the third quarter 2023 conference call for investors and analysts. And as you can take from our previous announcement, we are pleased with our performance in 2023 so far. We posted this presentation to SUBI.com earlier today. Please turn to slide two. Forward-looking statement as per usual. We would like to remind you of those provisions in line with normal procedures. unless stated otherwise, we will be making comments that mostly relate to the third quarter performance in 2023 at constant currency rate and in million Swedish krona. Please turn to slide three. Today, we will cover the key aspects of our quarterly report. I'm joined by Henrik Stenqvist, our CFO, and Lydia Bart-Franz, head of R&D and chief medical officer, and during the Q&A session by Armin Reinecker, our senior scientific advisor. We plan to review the presentation first and then do a presentation around 2 p.m. Swedish time. For those on the phone, please join the queue in the queue for questions by pressing star 1. we propose you ask only one or two questions at a time. Please turn to slide four. We successfully delivered on our strategy in the last quarter. We saw a significant top line growth of 23%, 29 reported, and 11% for the first nine months, 19% recorded. This reflects a strong performance in both hematology and immunology, with a growing contribution from our launch medicines in all regions, primarily in the U.S. and in international. In addition, we received a strong contribution from Bongeo as well as by Fortis. The stable growth of Alocta and Alprox provides us with a solid basis from which we are expanding our position with our launch medicines. Hematology revenues were driven by the first full quarter of Wonjo, strong sales for Elocta and continued growth of Doctylid and the launch of Asperbeli. Immunology growth reflects strong Gabifund sales and first royalties of Bifortis. We continue to build the leading rare hematology franchise. This quarter, we focus on the integration of Wonju, which offers considerable strategic opportunities. Our R&D pipeline progressed with five milestones. We launched the Phase 3b Freedom Trial for FNS-Octococ-alpha, our doctor-led ITP studies for Japan, and for the pediatric indication that these are fully enrolled. We announced positive phase two data for the PaxCertical plan, for PaxCertical 1 and C3 and ICMPGL. And Niviracilumab received approval in the U.S. We have strong momentum in the SOBE business. We thus maintain our guidance that was raised in July. We continue to expect high single-digit growth and low 30s for the adjusted EBITDA margin. All four elements of the SUBI strategy contribute to this performance, building a leading position in rare hematology. Our pipeline is progressing. Our immunology franchise continues to grow, and our regional expansion contributes to the overall growth and launch success. Please turn to slide five. You need to be excited about the CTI acquisition, which has been the key focus of our company activities in Q3. The rights issue was fully subscribed, and we used the proceeds of 6 billion Swedish kronor to partially finance the acquisition. Wonjo will be a highly accretive product for us in terms of revenues and margins. We now recorded the first full-time quarter of sales with 347 million Swedish kronor, which is an increase of 13% quarter-on-quarter. The integration has been going on very smoothly. This one was one of our focus areas. We successfully retained key talents. We continue with our thoughtful strategy to maximize Wanzhou's potential and synergies beyond cost savings. We have ambitious near-term goals for our hematology franchise and see exciting LCM development opportunities. Please turn to slide number six. Let's look at our quarterly performance. Our growth of 23% was driven by both hematology and immunology, especially our launch brands. For the first nine months, revenues grew 11%. If we exclude the impact from COVID-19 on Kinect and sales to our Chinese partner, Doctylad, we grew by 15% in a year-to-date setting on a constant currency basis. Both North America and international grew significantly in the quarter, while Europe remained at the same level of last year. In the first nine months, international North America rule out fastest as you can see from this picture. Please turn to slide number seven. So we have been pushing growth in two dimensions or along two vectors. Geographic expansion, extending the market coverage of our medicine, pipeline development, bringing new products to the market, extending indications. For the geographic expansion, we have streamlined our organization so that we are able to process multiple applications in international markets in parallel, prepare international supply, and can rapidly deploy our commercial capabilities. Asfaveli, Dr. Red, Celonta, Gamifund, and Wonjo are examples of our current and anticipated growth in new markets. For the pipeline goals, our recent reorganization in R&D and medical affairs gives us improved reliability and scalability to master new products. Evanesce Octogoc Alpha SEL212 will be launched soon and by Fortis just have a rising start in North America. We are working on expanding the indication for Aspervali, Ceyloncha, Camifant, and This puts SoBe into a new phase of sustained growth, driven by a lot of new products, all on the stable basis of our established franchise. Please turn to slide number eight. This growth strategy has led to strong results, which is now primarily driven by our launch products, launch and host products, or as we call them in the report, launch medicines. 89% of the absolute growth is derived from this part of our portfolio, which you can see in orange here. This reflects their strong momentum. It also shows that despite our growth rate, we still have further headroom because there's still a lot of potential connected to these products from being early in the launch phase or benefiting from further geographic expansions or line extensions or lifecycle management. Please turn to slide nine. Our business continues to be underpinned by stable hemophilia growth at 4% in the first nine months of 2023. We expand the leading presence of Elocta and Alpolix to more patients in new territories. This confirms the community's confidence in these treatments and has been able to overcompensate for price developments that we experienced particularly in Europe. For Elocta, we continue seeing growth in patients, benefits from geographic expansion, and favorable phasing of deliveries. Government interventions compress prices in various European markets, while we see the positive evolution on consumption and patient expansion in Europe. As a result, oil octa grew by 4% during the first nine months. Alpolix was supported this quarter by phasing in the Middle East, slightly offset by unfavorable price developments. It grew 8% in the first nine months. Please turn to slide number 10. DoctorLed is up 15% in the quarter and 21% in the year to date. Sales growth was strong, driven by increased uptake in the U.S., ongoing launches in the regions Europe and international. In the U.S., there is a continued positive evolution of new patients, new prescribers, it shares and duration of treatment. There's also an accelerated growth in Europe and international. Key growth drivers were Spain, UK, Italy, and Germany. As expected, there were no sales of Doctylad to our partner in China in the quarter, excluding sales to China in the third quarter, 2022, sales grew 50 to 57% at CER in Q3 2023. We expect this positive trend to continue even without China sales. During the quarter, Dr. Net has also become available in Japan. Please turn to slide 11. The launch of Asper Valley continues doing very well with quarterly sales of 169 million Swedish kronor, continuing a solid launch trajectory. We have launched in Germany, the UK, France and parts of the Middle East, Australia as well as Canada and more European countries. We also have early sales in a number of other countries where reimbursement is starting to come in. one at a time. Aspirin is one of our candidates for a new indication. Here we have just released positive top-line data of the Phase II novel study. This is a very encouraging sign for our Phase III program, and we expect it to read this one out next year. Please turn to slide number 12. Immunology is also doing very well. with a growth of 27% in the quarter and 9% in the first nine months. Gummy Fund we saw in the second quarter of significant improved Gummy Fund sales. This is the result of an enhanced go-to-market model, more experience with Gummy Fund, and the recent publication of new data. Physicians have gotten more comfortable with the benefit-risk ratio, of Gummy Fund and are increasingly prescribing it for their patients. They are doing this also for a longer period of time. All of this has contributed to a very encouraging quarter for Gummy Fund with growth of 112%. As in Q2, more than half of this is from new patients. There's some volatility between the quarters because of a large number of high-dosing patients, which depends on the patient's body weight. Kineret is now, let's say, flushing out the COVID effects and returns to normal growth as there's a more elevated interest in the IL-1 mechanism. Growth is driven by the U.S. and international sales for the first nine months are down 3%, but are up 5% when excluding the COVID-19 effect. Please turn to slide number 13, and now is the time to hand over to Henrik, our CFO.

Thank you, Guido, and hello, everyone. So please turn to slide 14, and we go to the key financials for the quarter. So Q3 was another very strong quarter with solid business performance. Looking at the bars to the left, we see the consistent trend in hematology with contribution to growth, not only from the addition of Bonjo, but also from hemophilia adopted outside of China. In immunology, we are glad to deliver another very good quarter for Gamifant, while BayFortis royalties more than compensate for lower synergy sales. for which we see a decline in Q3, impacted by the late start of the RSV season. So back to the table, revenue reached almost 5.2 billion, and that was the highest Q3 ever, as reported in SEC, and this was driven by the underlying performance, but also benefiting from currency tailwinds. Reported growth was 29%, and that corresponded to 23% of cost of currencies. The adjusted gross margin in the quarter of 78% is a slight improvement compared to the same period last year, and this is mainly due to the absence of the low margins that stopped to China in the quarter, and also FX effect. The adjusted EBITDA margin reached 30%, slightly below last year of 31%, and this is explained by the increase in operating expenses in the quarter. driven by, first and foremost, the addition of the CTI business, which was not there before. But also in marketing and sales, higher spend related to the launches of Dobsolet, Asta Valley, and Sunlonta, and the pre-launch activities for Sansoctico-Galfa. In R&D, the increase relates also to volunteer activities, but also to the indication expansion of Asta Valley and the phase 3B trials of Sansoctico-Galfa. The non-recurring costs or items affecting comparability of 102 million in Q3 relate to the ongoing integration following the CTI acquisition, and we expect some further non-recurring costs in coming quarters, but at lower amounts. And for details on items affecting comparability in the quarter, please see page three in the Q3 report. Operating cash flow in the quarter was just above 1 billion, 42% higher than the same quarter last year, reflecting an improved working capital. And the net debt at the end of the quarter was 20 billion, a reduction from 27 billion at the end of Q2, reflecting the completion of the 6 billion rights issue in Q3. And if we go to slide 15, we have an illustration of our recent debt and leverage developments. resulting from the financing of the $1.7 billion acquisition of CTI. This acquisition was initially all debt financed and brought net debt up to $27 billion at the end of Q2, and this was equivalent to the net debt to the GA ratio of about 3.7 times. In Q3, the $6 billion rights issue and the underlying cash flow brought net debt down to $20 billion, and leverage to about 2.7 times. And this is a comfortable takeoff point for further deleveraging and further expansion. Please go to slide 16. We now go to the financial outlook for the full year, as usual for revenue growth at constant exchange rates and adjusted EBITDA margin. So we confirm the guidance for the full year from Q2. and that is that revenues anticipate to grow by a high single-digit percentage at CR, and that the adjusted ETH margin is anticipated at the low 30% of revenue. And this outlook is, of course, a reflection of the year-to-date performance and our continued investment in launches and pipeline acceleration. And needless to say, the main uncertainty to our forecast is what will happen to the RSV season in the short term. and how that can play out for synergies and avoid this from before this. And we believe this could be both an upside and a downside risk to this forecast. And with the outlook covered, I will now hand over to Lydia. Thank you.

Thank you, Henrik. And hello, everyone. So let's start with the pipeline milestones on slide 18, please. Thank you. So we hit five key R&D milestones for our latest stage pipeline this quarter. In July, the first patient was those in the Sanezotococ-Alpha Freedom Trial. This is the first phase 3B study we conduct after the ones that are required for filing, and it evaluates both changes in physical activity patterns and long-term joint health, which are pressing concerns for people with hemophilia and for healthcare providers. Also in July, the Doctelet Japan study in immune thrombocytopenia was fully enrolled. This study is required to file Doctelet for ITP in Japan, which is planned for 2024. Later in August, we completed enrollment for the Doctelet Pediatric Study in ITP, which is a global phase 3B study. Together with our partner, Apelis, this month we announced positive Phase 2 data for pexetacoplant in C3G and immune complex membranoproliferative glomerulonephritis. The data will be presented in early November at the Annual Congress of the American Society of Neurology Kidney Week. The results show that pexetacoplant is clearing the deposits that are causing kidney damage and may block fetal damage from occuring. The study also shows improvements across key clinical measures of kidney function. These data give us confidence for the ongoing phase 3 valiant study, which we'll read out next year. And finally, the FDA approved Sanofis and AstraZeneca's bifortas for the prevention of RSV in early July. Please turn to slide 19. As Guido said earlier, we do have a rich pipeline with a lot of expected news upcoming. More significantly, we are preparing for the submission of gamifan in secondary HLH macrophage activation syndrome in a stills disease in the U.S. It is a rare, life-threatening complication of a rheumatic disease with poor prognosis. Gamifan operates at the cutting edge of science and thinking evolves with growing experience. During our ongoing conversations with FDA, we were recently requested that longer-term safety and efficacy data on secondary HLH masks to be included in a supplementary BLA filing. We expect to cover this with the available data from our ongoing study. I would like to highlight that in October, we also completed enrollment of the full cohort one in Stills disease in the MRL study. We intend to use the data from this whole cohort in the filing, so including the total of data from 25 stations. This allows for a more robust and complete data set to be included in the supplementary BLA filing in 2024. We also were able to accelerate the Kineret Regulatory Process, or FMS, in China, which we now expect by the end of this year. Please turn to slide 20. And with that, I hand back over to Guido.

Thank you so much, Lidia. As you can sense, we are really pleased with Suvi's development during this quarter and the first nine months. Just to reiterate, we saw a significant top-line growth of 23% at constant and 29% reported in the quarter, 11% at constant and 19% reported for the first nine months. This is due to our steady base in hemophilia, as well as our expansion position in launch medicines that contributed over 89% to our total growth first nine months. Our R&D pipeline progressed with our key milestones for Epinus Octococc-alpha, Dr. Led Asparvely, and Sivamab. We have a strong momentum in the SOBE business, and we thus maintain our guidance that we raised in July. Please turn to slide 22. We now go to the Q&A session. We will, for those on the phone, please remember to press star one to ask questions. Can I please remind everybody to limit questions to one or two, to be fair to all callers. Thanks in advance. perhaps it's now time to take the first question.

Operator, maybe you can... The first question comes from Gonzalo Artich from ABG Sonderkollier. Please, go ahead.

Hi, can you hear me?

Yes.

Great, great. Thank you very much for taking my questions. The first one is on B4-2s. I was wondering if you could give us some color on how to look at the potential royalties from this drug in Q4. I mean, for synergies, we have seen historically that from Q3 to Q4, there has been a high jump on sales due to the RSV season. Should we see B4-2s in the same way or the number reported in Q3 somewhat showing hospital stocking for Q4? And if so, why would it be different from the trends we have seen historically with synergies?

Thank you so much for your question. I mean, you have seen probably some announcement of CDC that is a little bit worried, you know, about the availability of stocks for Bifortis in a broader setting. And so there's a high demand for the product. Due to competitive reasons, we cannot exchange information with them on Bifortis. So I think this is mostly really a question that you should ask Sanofi. We can give you a take that we think that, you know, for synergies given the constraints that were outlined by CDC, we think that we would probably have a more normal season. But, you know, please remember that season started this year rather late. So, you know, so there's still some uncertainty related to synergies performance as Henrik pointed out. By far, it's obviously doing extremely well and the RSV season, the virus that has started very slowly is now becoming more epidemic in many more states in the US. But we cannot comment on the stock situation at Sanofi.

Great, thank you. And a second question is on the guidance. You did not upgrade it. You're maintaining the expected top line growth at high single digit percentage. So my question here is, having in mind the positive numbers seen in the Q3 report today, could you give us some words on the trends that you are currently seeing in Q4, which make you believe that the top-line growth guidance should stay as it is now? Thank you.

Yeah, thank you. I mean, you know, as usual, you know, the Soviet Union is not known for being, you know, too forthcoming or too... with regards to forecasting. We like to deliver what we forecast. We have increased the guidance in Q2. We have a little bit of uncertainty in Q4. And just remember that we had a really very significant quarter last year for synergies and in Q4, and you have to make this one up in the first place. We see, if you take away the RSE part, we see a very strong momentum across all businesses, and we think that this is going to continue, but we have a little bit of a question mark at this juncture but you know it's not like we are lacking confidence it's more that we don't want to be caught out because we cannot oversee all the elements that's the reason why we left it but we are confident that we can make items and with a bit of luck maybe do better yeah great thank you very much thank you the next question comes from charlie maboud for morgan stanley please go ahead

Hi, it's Charlie from Morgan Stanley. Thanks for taking my questions. Two questions, please. So firstly, on Vonjo, following the integration of the sales forces and the first full quarter of sales, please could you talk to your expectations for the ramp of the product over the coming 18 months and how much improvement do you think you can drive by simply reaching a broader set of prescribers than CTI and its potential contracting with Doctyla and Advantage? And then secondly, Q4 is always a higher cost quarter, but bearing that in mind, Do you believe Q3 is a good guide for the OPEX we should expect into 2024, given CTI has now been fully integrated? Thanks very much.

Thank you. Yeah, let's go right into Wanzhou and Doctylit. We think it's a strength to have Wanzhou and Doctylit. Yes, we have also integrated the field force. I think this was an important step to get more breadth and depth for both products. which are very complementary and benefit from a very big overlap in terms of target audience. We make sure that we don't forget the specificities of the product by a very strong medical team. And we think that the combination now makes us very competitive also with regard to new competitors, new entrants. We think that we will see an improvement of Rampart pretty soon. let's say and you know because you know the team has worked you know doing this uh period of discontinuities quite well i mean there's still a bit of work cut out for us you know to to bring to get really fully productive but we should have some low-hanging fruits and and you know we we believe that one will be a very material product for us next year with very strong year-on-year growth versus what we expect for this year. So we are not yet giving guidance for Bonjour in detail, but, you know, you can expect, you know, a further acceleration in the next year. Significant acceleration. So we think that we are on a good way. I mean, the team is super motivated. It makes us very attractive also as an employer to have two products in the bag in this very competitive space of, With regard to the OPEX line, maybe, Henrik, you want to comment on this, whether this is indicative for the next year?

Yeah, well, when it comes to volunteer costs, you're right that, of course, it is now fully absorbed in Q3. You know, that's an indication that we don't expect the sales and marketing costs to be any larger really in 2024. But that goes for Bongeo and the rest of 2024 we will guide for at the latest stage.

Yeah, so we are ambitious. We see significant growth opportunities. We have now seven products in the stable that are still experienced, really exuberant growth. We need to make sure that they can further flourish and become a much bigger part of our entire cooperation and driving further growth. But we'll provide guidance on OPEC soon. Thank you, Ian.

Great.

Thank you very much. Thank you.

The next question comes from Ewe Young from Jefferies. Please go ahead.

Hi, this is Melanie for Ian. Thank you very much for taking our questions. So the first question is, you know, for Bay Fortis, you mentioned that there's some so maybe it's something this year before, you know, the 2024 to 2025 RSV season. Do you expect synergist usage to be minimal? And if not, how do you expect it would take for in terms of how would you expect to replace before synergist? Thank you.

Thank you. Yeah, I think, you know, we told you that, you know, already in Q2, that what we are expecting with increasing usage of Bifortis, we expect that more confidence is built up for the product. And provided that their safety profile sticks up to what they've demonstrated in Q, in the clinical trials, then that should also have an impact on us, yeah? Now, we are, let's say, with the latest guidelines, or with the latest recommendation from CDC, let's see how, you know, I think we are still confident for this season that we have respectable sales. But, you know, for next year, you would see at one stage, we believe, by borders could play a larger role, which will benefit us in a different way and and then the big question is obviously will their progress outside of the synergies indication will be so large that it will you know balance the negative effects it will have on the expecting for synergies and and there is a good case to do for this but you know, at this stage, we are not providing guidance. So there is a, this is a question mark. But, you know, we obviously, the team around synergies is still very confident. He's working the physicians right now. And, you know, that will, but, you know, over time, you know, whether it's now 25 or 26, 24, 25, to season 24, 25, or 25, 26, you will see, obviously, and erosion of synergies at a more significant scale. Yeah, that's clear.

Before this, what's the anticipated tetanus expiration, and when does SOBE's entitlement to royalties for synopsis expire? Thank you very much.

Excuse me. I mean, it might be my computer, but I have difficulties to hear you, to be honest.

For Bay Fortis, what's the anticipated patent expiration and when does Soviet entitlement to royalty from Sanofi expire? Thank you so much.

Yeah. It is, you know, we have a perpetual license, a perpetual agreement that basically makes us participants that we have announced and this royalty agreement goes from 25% in the first two years to up to 35% on sales. And this is not expiring. As far as the patent of Bifortis is concerned, I can't tell you actually on top of my head, to be honest. let's say when the patent is expiring, and we'll provide this by the either later part of this call or tomorrow when we have the call in the broader audience.

Thank you.

Thank you.

The next question comes from Christopher Ude from SEB. Please go ahead.

Hi there. Thanks for taking my questions. Christopher Ude from SEB. So on the pipeline, Gambafant, you, I guess, what can you tell us about the response rate in Emerald? Was it consistent with prior clinical data presented previously? And then for IFNA's Octogog-alpha, you previously talked about the possibility of a relatively rapid review. You've got the 180-day questions in two weeks by my calculations. So have you any sense whether your optimism there was well-founded? And then, so for my second question, Ilokta, can you quantify the order-phasing impact? Thank you.

Yeah. Thanks, Christopher. You know, the... We cannot probably provide you with too many details on the response rate now because we are still in discussions with FDA and there's not yet a publication. But maybe what we could do is, Lydia, you can give maybe Christopher a sense on where we stand with GAMI funds and give him, you know, because the overall response rate was quite good of GAMI funds. So we were quite pleased with this. But maybe we can give you a sense and also with regard to AFA.

So with regards to GAMISON, what we had was the interim analysis of 16 patients. But what we have achieved, as I mentioned before, was the full recruitment of cohort one. And that's what we want to analyze now because it will make much more sense to present a full cohort instead of only the interim analysis. But of course, I cannot comment on the data and we will be communicating as soon as possible the data from the full cohort. When it comes to FNS OctoCogAlpha, you are right. We received 820 questions and we are ready to answer all of those questions. We are collaborating closely with our co-development partners, Sanofi, and we are confident that And we have all the data to answer the question, but we're raised by CHMP. So.

Yeah, and you know, indeed, I mean, I think the the pipelining or the I think this was more related to not to a lockdown, but more to. But you know, this is not at the material scale, really. I mean, it's a it's more to be you know, to give justice. And, Henrik, you want to comment on this, on the adjustment, the digital adjustment there?

Christopher, I think the question related to the phasing. Yeah, correct. Well, we... There is some fluctuations, obviously, from international markets due to tenders that we have in some quarters, but not in all quarters. In this quarter, about 50% of the growth relates to these new markets.

Okay, great. Thank you very much. Yeah.

The next question comes from Susanna Quekborner from Handelsbanken. Please go ahead.

Hello, Susanna Quekborner, Handelsbanken. I'd like to follow up on Befortis. Has STOBI started to adjust the costs associated with the field force supporting Synergis? And then also, since Q3 net financials were burdened by the bridge loans costs prior to finalizing the rights issue, how should we think about Q4 net financials?

Mm-hmm. So with regard to, you know, the synergies we have, I mean, in a prudent way, you know, managed headcount over the last 12 months. And, you know, and have now a smaller head team, obviously, than we had maybe two years ago or three years ago. But that's okay. It still allows us to be competitive. For us, it's important. that the team feels that we have trust and faith in them managing this period. And they do, so they're very fired up. And we don't anticipate now any short-term changes to this. We'll obviously review this again in Q1 on the strength of any further feedback that we may obtain from the market. With regard to the loans, maybe, Henrik, you want to talk about this?

The net financials in Q4, it's natural that it will be slightly lower. But remember that you don't get an immediate effect. There is a bit of delay in the impact. But it's going to be slightly lower than what we saw in Q3.

Okay, thank you.

Thank you.

The next question comes from Neil Alexander from Deutsche Bank. Please go ahead.

Hi, everyone. Neil Alexander from Deutsche Bank. Thanks for taking my questions. It'd be good to get your views on the pricing outlook for hemophilia and your hemophilia products. And then second question on Altuvio. Expectations of pricing once it's launched, will it be similar to LOCTA? Thanks.

Yeah, and so what we're expecting in the hemophilia field is that we have a more, you know, a price reduction more to the low to mid single digit as we had traditionally. There may be the one or the other outlay that we cannot anticipate at this stage right now that will force us to respond. But overall, as a franchise, I think this is where I would pack it. And with regard to L2BO, I think we will be able to take a premium in some markets, but in most markets, it will be at the same cost of therapy. Thank you. The case really is from the expansion of market share. Thank you. Next question.

The next question comes from Victor Sundberg from Nordea. Please go ahead.

Yeah, hi. Thank you for taking my questions, Victor Sundberg from Nordea. Yeah, a question here on nircevimab also. So we've seen, as you said, you know, the CDC priorities in nircevimab to high risk groups here for mainly the 100 milligram dose. But I guess the 50 mg dose is still quite available if I read the guide correctly, which I guess could be used for premature infants or anyone weighing less than 5 kilograms. So could you elaborate a bit more why synergies could be protected here, giving that overlap? I mean, the fear here, I guess, from my feedback is that you don't get the upside from the 100 mg dose in kids weighing over 5 kg, but you could get cannibalized by the 50 mg dose, maybe the 100 mg dose in high-risk patients or patients with lung or heart conditions. So I just want to get your flavor on that a bit. Thanks.

Yes, thank you. You know, there is still, you know, we will do it, still a bit of consultation with the decision makers because there's a bit of an ambiguity because obviously what we hear in the market is also that, you know, the people are, you know, adding two doses of 50 to compensate for 100. So it is, you know, but, you know, it is not, this is what we hear from the market. This is not official Sanofi. And let's say the but to what extent there is this ambiguity. Unfortunately, we cannot completely remove this ambiguity right now, because A, I think there needs to be further clarification from the agencies, and B, there is the question of how physicians are responding. We have done a survey, as we reported, I think previously that indicates that, you know, in the up to 29 weeks, there's a large group of physicians that sees utility of synergies.

Okay, thanks. And I also had a question here on Stills disease or the MREL study. Since the FDA required more safety data, is that positive somehow? Because before you were a bit uncertain if the data package you had would be enough for the FDA filing and subsequent label extension. So I just wanted to understand more here with your interactions with the FDA if you're more certain now that maybe the data you have is enough if you get the safety analysis to the agency. Thanks.

Yeah, I think it's, you know, we see this more as a, you know, the interaction as a benevolent interaction given the high unmet medical need. And And if anything, the data sets that we are now collecting should give us much more confidence. Do you want to comment on the specifics?

Yeah, sure. I agree, Guido. So we're talking about rare diseases, very small patient population. So the more data that we can present to FDA, the higher chances we will have to really support the benefit-risk profile of GAMI funds. So for us, it's good to present larger data for a longer period of time. So we see this as something very positive for us.

If I could just sneak one question in. I think you hinted that you needed more time to communicate something around synergies with CTI Biopharma. Is that something you plan or something you have some more visibility around here? Thanks.

With regard to the synergies, we have not yet announced this because we obviously reaped quite substantial synergies. Let's say we want to get now the overall triumphs going for indication expansion and also for further lifecycle management. But we will provide you with an account, but today it was unfortunately not yet today.

Okay. Thank you very much.

Thank you.

The next question comes from Eric Hultgaard from Carnegie. Please go ahead.

Yes, hi there. Thanks a lot for taking my questions, too, if I may. First, a bit on Vonyo, if you could provide some type of early feedback from what we're seeing with the GSK launch of Vongera. I know it's early, six weeks post the US approval, but what we're seeing, I know there appears to be some type of overlap with patients that you addressed, but although there is more focused on anemia. Then secondly, if you could provide some sort of feedback on how resilient images is. And I think given the sort of strong demand message conveyed by Sanok, it seems to be a lot of use already. So have you seen or what are you hearing in terms of switches to Bay Fortress in the own label population, that would be really helpful. And I guess that's sort of before the CDC recommendation and the supply constraints that was communicated. Thank you.

Yeah, thank you, Erik, for your question. So with regard to Guadagnon and Onjara from GSK, I mean, we We did say, you know, basically the big battlefield is, you know, we have a clear place in those patients below 50,000 platelets, irregardless whether they are anemic or not. They have now, for anemic patients, let's say a some support in the and also in the guidelines and and basically the battlefield is now really what is more important is is it the thrombocytopenia or is it the anemia when you look at mortality you would think that thrombocytopenia plays a more important role and And let's say we think that based on the feedback, you know, we don't need to be in this phase of our launch. We don't think that we need to be too clever. We have figured out that a lot of physicians were not covered. I think it's fair to say that CTI was more focused on academic centers. And we basically, obviously, we're having now a much larger team. have an opportunity to go deeper and broader. We figure out that, you know, there is still an opportunity for many physicians have not even heard about Bonjo. So, we see this as an opportunity for us to make our claim. And we think that the thrombocytopenia topic is of more serious concern. Armin, do you want to maybe comment on the topocytopenia element?

Yes, thank you. And Eric, thanks for the question. I think it's a very important one because if you consider that Vonjo is really helping those patients at 50,000 and below platelet count, and that literally cuts the survival time in half when you compare to higher platelet counts, or particularly if you compare to red cell counts, like the anemia. And if you also look into the papers, particularly the pivotal report on mamelotinib, you see that their patients were in the range of 100 to 150,000 platelets per microliter, which is much less were severe states as the ones that we looked at for Avonjo. And then the question is, what do the physicians want to see? Because there's also now a publication in Blood Advances that Avonjo also works well on transfusion avoidance and really on the anemia part. Now the question is, if it also works in a much more severe patient group, Isn't that a drug that you want to use, particularly if the other one has not that data that they work also on the low platelet counts? So I think it's up to the physician to decide if they believe that one drug has advantages. But when it comes to the data and the facts, I think we are very confident that Bonto has a very strong data set.

We have not yet heard of a big shift. We were here last week in the U.S., And in the U.S., obviously, there is a group of physicians that will embrace it. But, you know, we always said that the market is large enough. I think our focus right now is really on the more established checkpoint as opposed to be too worried now about those who don't have patients yet. So, you know, but that is obviously going to change. But we feel very equipped cutting along the story short with the profile that we have. And with regard to synergies, I mean, you know, obviously, as you protect the patients and apart from those patients that you carry forward, we have not heard so much of switching. Obviously, the product, let's say, of those patients, otherwise, you know, you vaccinate newly in the season, let's say, with regard to synergies. So we think, you know, the... Most data points make us believe that we have, you know, yes, a shorter season in 2023, but more of a more normal-like season. And, but this is, and, you know, and obviously we see the indication of shortage of supply at this juncture for synergists, you know, because we obviously also like to be beneficiaries of the near-syndrome upstream. But for synergies, it's probably more of a positive than rather believe, you know, that, you know, the 1.4, 1.5% of patient population is where all these stocks of nircimab are going. I mean, so that is, so we think at this stage, you know, it is probably making more of a point that there is also based on the, on FDA, comments that we think that there is more clear a pathway at least for this till the end for synergies than it may have been beforehand.

Great. Thank you so much.

Thank you. Next question.

The next question comes from Alistair Campbell from RBC. Please go ahead.

Thanks for actually squeezing me in. Just a couple of quick questions. GammaFant, obviously you've had two very strong quarters the last couple of quarters. As we roll into Q4 and more importantly, I guess, into 2024, I mean, should I be thinking that the current quarterly run rate is a good base to be thinking of, or would you urge a bit more caution than that? Obviously, you've rightly called out volatility, so just a question on that. We're now obviously seeing Sanofi rolling out, L2VO in the U.S., and so far it looks pretty strong, and overall their hemophilia franchise is growing. Obviously, you have differential royalties on those programs, so the franchise is growing. Is there anything specific we should think about about the royalties you receive? I mean, obviously, you've delivered a good quarter actually in terms of royalties, but is there anything you'd call out there?

Thank you. Thank you. With regard to GAMI Fund, I don't think we are yet at a point to say that the last two quarters are the new normal. it's clear that what we are doing you know that this is not just serendipity yeah that you know let's say because you know i think what we what we understand is data and you know now the medical education programs that we are running and uh and you know the newly composed team which much more insights is paying dividends and uh and so i i think is it already this, but clearly it's an elevated level. So we don't see now, we clearly have moved away from a Q1 situation, which was devastating. And let's say, so we think that we are on a much higher plateau, let's say, and basically are very confident that we can develop the business from here, particular ones we can publish also. the MRL data in its full. I think this will be a big pull also because the physician see more utility and we have a couple of life cycle management programs right now for GAMI Fund in pipeline and one of them reading out mid of next also could stimulate the debate quite a bit. So we think that we are quite positive in this regard. With regard to the royalties, we think that EFA is a much bigger product, obviously, also for Sanofi. Hence, even though it's a differential royalty, when you look at the overall royalty stream, it should be good for us.

Thank you. Very clear.

You're welcome.

The next question comes from Liu Yifeng from HSBC. Please, go ahead.

Hello. Thanks for taking my question. Two questions, please. One is, could you possibly give some timeline and colors on the timeline of OTSIO and the market access in European countries in the next year? And the second question is on your leverage. Obviously, you're coming down from 3.7 times to 2.7 times. How should we think about that going forward in the next few quarters? Thank you.

Thank you. Yeah, so we're expecting to launch in Europe mid of next year, the first country. And it's no surprise it's going to be Germany. Okay, there's holiday season, so we have to see, but But we are committed to bring this on the market as soon as possible because we have such a great demand for the product from associations, from patients that are individual as well as the healthcare professionals. And then basically we will follow the flow. UK would have been also very fast. There's a bit of a queue right now with the agency, but we should be able to resolve this also. by end of year, and then you have various early access programs and in various markets in addition and also, you know, so full launch is really 25, but, you know, you will see some significance already to the course of 24. And with regard to leverage, I can refer to Henrik, obviously,

Yeah, so the current situation after the rights issue is about 2.7 times. Obviously, what we foresee going forward is a further reduction due to our small cash flows. You know, how fast the reduction is, we don't guide on. But we are creating, obviously, a headroom for further expansion.

Yeah. Thank you. Maybe we open up for the last question.

The last question comes from Christopher Ude from SEB. Please go ahead.

Thanks for taking my questions again. So, yeah, just could you comment on gamma fans? You did say about the average duration of therapy being longer, but what are you seeing in familial and rheumatologic HLH, respectively, and that? Orphadin has also been quite flattish lately, despite generic competition, obviously. Is this the kind of run rate we should expect for the, you know, going forward, for a while at least? Thank you.

Yeah, I mean, maybe I'll talk to Garmin Fund first, you know. With regard to Garmin Fund, let's say we think that, you know, we have a good good growth paths ahead of us. Sorry, Chris, I didn't get probably this question completely right. Can you get this competed for gamifan?

Yeah, sure. Just the average duration of therapy that you're seeing in familial HLH and also rheumatologic HLH.

Yeah. The duration is sometimes driven, obviously, you know, we have sometimes longer duration, particularly when when these are heavier patients and they are in rheumatologic conditions or in not necessary primary settings where the physician is making decisions. But what we see is also that the physician is dosing higher at the beginning because there's more confidence And that basically also is impacting this. But, you know, we have not, I would say we don't have a good take on the data on duration, you know, but yes, there's a longer duration and there's also more units that are deployed. Yeah.

Okay, great. Thank you.

And that's basically, yeah, and with regard to Alfred India, I mean, you know, it's not, it's not, you know, as core anymore to our business, but, you know, we have now reached the point where we can effectively compete, and therefore, it's a little bit more of a steady state.

Okay, great. Thanks very much.

Thank you. Armin, you have a point?

Yeah. Maybe, Christopher, just to give you a little bit of perspective, because those patients are so different and so difficult. Literally, ranges that we have seen are from four to 245 days. averaging at roughly 60 days but that is probably a difficult thing to say then how does that translate to the large group unless we have more data and more to come with more experience but that is just to give you a feel of what it could be yeah much appreciate it thanks sir thank you yeah thank you so much for your interest as you can see we feel

reasonably upbeat you know it's uh it feels quite nice you know to be uh at soviet uh you know quarter one or two the quarter grows of 23 percent doesn't feel so bad and uh thank you for your interest in soviet look forward to for those who want to join us tomorrow to answer more questions in more detail thanks a lot wish you well thank you

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