Swedish Orphan Biovitrum AB

Ladies and gentlemen, welcome to the Q3 2024 Report Conference Call and Lab Webcast. I am Alice, the Coral School Operator. I would like to remind today all participants will be listed in only mode any conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Brida Erkers, CEO. Please go ahead, sir.

Yeah, thank you so much and welcome everybody. This is Guido Erika, CEO of Sobi. We are delighted to welcome you to the third quarter 2024 conference called for investors and analysts. We posted this presentation earlier today under sobi.com. Please turn to page number two and as per usual, forward-looking statement. Please take note of it. And unless stated otherwise, we are making comments that most relate to the third quarter at constant exchange rate in million Swedish krona. Today, we plan to cover the key aspects of the Q3 report. I'm joined by Henrik Stenqvist, our CFO, Lydia Bart-Franch, head of R&D, and chief medical officer. And during the Q&A session, by Armin Reininger, our senior scientific advisor. We plan to review during the presentation first and then cover Q&A thereafter, and this session will take until 3 p.m. For those on the phone, as usual, please join the queue for questions by pressing star 1 And we would really recommend to only ask one or maximum two questions at a time. So let's go straight to slide number four. And we are pleased with the performance in the third quarter and the overall strong first nine months of the year. This quarter is about top line growth, strong earnings, progress of recent launches, and important milestones of our pipeline. We saw very significant top-line growth. Growth in Q3 was 39%. EBITDA margin adjusted was 43% for the quarter. This reflects a strong performance across the portfolio and significant seasonal royalty from Bifortis in the US. Excluding this seasonal RSE franchise, the portfolio grew 16% in the quarter, reflecting a strong base of our business. When you look at the first nine months, we grew 24% year-to-date, and excluding the RSV effect, 22%, demonstrating the progress of the company. Hematology growth was primarily driven by Dr. Dett, Asper Valley, and the launch of Altuvox. We have materially improved our market share in Haemophilia A prophylaxis within the first two and a half months of launch. This is even more impressive as Q3 is typically a more difficult period for switching patients in view of the holiday season. We will talk more about this important launch later. We continue to systematically build the launch of Wonjo, and we saw consistent quarter-on-quarter progress, and we are continuing to build awareness around the product and the unmet medical need in myofibrosis. Immunology reflected a very substantial by Fortis royalty income, as mentioned before, and strong growth of Kineret. In terms of the pipeline, our progress continues after the approval of Altuvoct in the EU for Haemophilia A and the filing of SEL212 in the first half of the year, with very encouraging readout of Aspervalli Nephrology, demonstrating a highly significant reduction of 68% in proteinuria in these rare, hard-to-treat diseases. We look forward to sharing the full data set this weekend at ASN. We have a very strong momentum in the SOBE business, both commercially and in development, and we are pleased to update our guidance for 2024 We expect mid-teen growth, previously was low double-digit, and mid-30s for adjusted MTA. Let's move to the next slide and look at our overall performance in more detail. Our growth of 39% in the quarter was driven by both hematology and immunology sales. We saw very strong performance in hematology with 18%. and due to the contribution of bifortis, immunology was 96%. The US and European business are growing strongly with 40 to 15% in the quarter. We look forward to continuing to deliver on this progress through the remainder of the year. Please turn to slide number six. This growth strategy has led to a strong results primarily driven by our strategic growth portfolio. 56% of our total business has been driven by this portfolio in Q3. The strategic growth portfolio has been growing by 113%. Altamogt now on the market is starting to deliver and they're on the way to become a very important medicine for Surrey going forward. Please turn to slide number seven. This slide depicts our power station generating the energy for Sobi's growth. It depicts a healthy portfolio of today's and tomorrow's breadwinners. As outlined, the strategic portfolio has generated impressive growth rates so far this year. On the left, we have the pipeline and the major achievement it has delivered this year. We have received fast rate designation for GAMI Fund and secondary HLH in Q2. and are preparing to complete this filing by end of year. For Cell 212, we are continuing with the submission to the US FDA. In Q3, we had the positive readout for Aspiravalli and Nephrology, as mentioned. At the same time, we continue building our geographic footprint with the launches of Aspiravalli, Doctylid, Wondro, Cylontar, and Gamifant in new markets. This puts SOBE into a position to create strong mid-term growth driven by new products, execution and our development commitments. ASPA Valley in Nephrology and Cell 212 in Chronic Refractory Gout are of substantial relevance for SOBE and will be prepared for the remainder of 2024 and 2025. We are extremely excited to build relevant launch platforms to bring them to patients who are in need of new treatments in these diseases. Whilst Gummy Fund and secondary HLH will significantly enlarge the accessible patient pool for the product, we will rely on our existing go-to-market organization. Please turn to slide eight. Title work. We are very pleased with the first few months of the market with Altuvox. As communicated at previous events, Altuvox has a unique profile allowing it to normalize patients for the majority of the week with a once a week administration. Its molecular structure is creating the foundation for unprecedented levels of protection. Two recent articles in the New England Journal of Medicine confirmed the relevance of this important medicine. Our in-going hypothesis was that this treatment would create or transform patients' lives and the expectation about life. When reviewing the response two and a half months after the launch in Germany, in terms of market share gain and positive feedback from prescribers and patients, our belief to change hemophilia A therapy of tomorrow has further grown. Our market share combined in Locta and Altobox in hemophilia increased by six points in Germany within two and a half months of launch. And please bear in mind that obviously we also took share of our Locta that basically is not considered in this number. We look forward to bring this important medicine to more markets across Europe and Soviet territories as the launch progresses. Please turn to slide number nine, Asper Valley. The launch of Asper Valley in P&H continued well with quarterly sales of 270 million sec and 66% growth, continuing a solid launch trajectory and strong momentum across all regions. We also announced a partnership with Enable Injections to bring much more convenient self-administration experience for patients with the infused injector, which we aim to bring to the market for both PNH and nephrology. As previously emphasized, Aspergeri's future growth will be primarily driven by the new nephrology indications. The highlight of the quarter from a development perspective was undoubtedly the very strong data we have seen in nephrology in two rare kidney diseases, C3G and ICMPGN. showing a very significant 68 percent reduction in proteinuria in the primary endpoint of the phase three valium study. We are excited to be sharing the full data set this weekend at the ASN Congress in San Diego. Please turn to slide number 10. As we discussed internally, to understand the epidemiology of this product, It's quite challenging. We thought it's important that you get our view on these two indications. We are very excited on the opportunity in nephrology, and I wanted to take some time to outline our view. We believe this could represent a blockbuster opportunity for SOBI, considering there are an estimated 8,000 diagnosed patients in Europe with C3G and ICMPGN. Most diseases are significantly underdiagnosed. With an approved treatment, there's an opportunity to increase the number of diagnosed and treated patients. There's a significant work to be done in the coming months to understand the full patient journey with different stages and severity of the disease. This will be key to unlock this important market opportunity. You're in a great position As the drug has been studied in both indications, adults and adolescents, C3G patients, as well as in pre- and post-transplant. Our endpoint reduction of proteinuria of 68% has impressed quite a few experts in the field, particularly in view of the conclusion of a Spanish group, Lawson. 50%, they concluded that 50% reduction in proteinuria is a threshold for clinically meaningfulness in this setting. Please turn to slide number 11. Dr. Lett. Dr. Lett had another strong quarter with 65% growth. We did book the milestone payment from our partner in China on approval of the ITP indication in China during this quarter. Sales growth was driven by increased uptake in the US and ongoing launches in the regions Europe and international. In the West, there's a continued positive evolution of new patients, new prescribers, higher market share. There's also accelerated growth in Europe and international driven by our ongoing launches and continued increased market share in the earlier launched countries. Please turn to slide number 12, Wanzhou. I'm very pleased to provide you with a positive view on Wonjo after some really difficult times. As we discussed, a combination of internal challenges and a new competitive launch eroded part of our new patient base. The economic consequences you can see on the slide in Q4 2023 and Q1 2024. However, it is gratifying to see that we have been making material progress over the last two quarters, and in particular in Q3. Bonjour sales were 379 million SEC in the quarter, with 12% quarter and quarter growth, showing continued momentum with the product reflecting a high level of field activity we have now in the market. This has been seen in September VENT impact data showing Wonjo to have more than 70% awareness now with HCPs. Our thesis to create value by broadening the product in myofibrosis in the U.S., internationalize Wonjo, and expand the product by indication expansion has remained unchanged. Julia will later cover two exciting diseases as potential new indications for Bonjo. Vexus is a disease with no approved therapy currently on the market and a highly unmet medical need. CMML, a rare hematological malignancy, also with a high unmet medical need. We are continuing in the momentum we have now with the product to further expand in myofibrosis and further tap the potential with global launches and the new indication as mentioned previously. Let's turn to Elocta and Alprolex. We are continuing to expand the leading presence of Elocta and Alprolex to more patients in new territories. As discussed earlier, Elocta saw some switches as expected to Altowogt in Germany, however, remains a key medicine in many countries. And I think it's worth noting that if you take away the replacement or the substitution by Altowogt, Elopta actually has been growing. And what you see as a sales effect is more related to phasing of international tenders. Main impact, this quarter, as mentioned, the launch, but also the order phasing. For Alpalix, we continue seeing growth in the number of patients and the geographic expansion, which is partially offset by continued price pressure in many regions and some ordering phasing in the Middle East. Please turn to slide number 14, Gummy Fund and Kinneret. We see continued growth of new patients for Gamifund as we passed in a more important milestone with 1,000 patients treated during the Q3. The quarter was impacted by the ways of treatment as well as some destocking. Competitively, the product is in a very good shape and we look forward to expand later. We are looking forward to submit secondary HLH indication by end of year. And regarding Kineret, we see fantastic growth of 21% in Q3, further reinforced by elevated interest in the IL-1 mechanism, and the demand comes across all regions. Please turn to slide number 15. And at this point of time, I'd like to hand over to Hendrik for the financials.

Thank you, Guido. Hello, everyone. We will now review some key financials for Q3. We move to slide 16. So referring to the table on the right, the revenue of 6.9 billion corresponds to 39% growth at constant currencies. Main drivers were, before this, royalties, Toptelet, Altevoxt, and Asta Valley. The improved Adjusted gross margin of 81% in the quarter compared to 78% in Q3-23 is mainly due to the impact of the Bay Fortress royalties. The adjusted EBITDA margin reached 43%, up from 30% last year, also influenced by the higher sales and high gross margin just mentioned. Looking at operating expenses for the quarter, we observe 12% growth at cost of currencies compared to the same period last year. SG&A, excluding non-recurring items and amortization, increased by 11% at CER in the quarter, driven by launch and pre-launch costs for Altevox, Bonjo, and SAM212. We've managed to partly offset the impact of these activities on the SG&A in the synergies organizations as reported already in Q1. R&D expenses increased by 16% at CR, mainly due to post-approval costs for Altevoxt and on-due activities. With operating cash flow for the quarter at 1.2 billion, net debt at the end of the quarter was 16.9 billion. This included milestones to Sanofi of 1.8 billion following EMA approval of Altevox, as well as a milestone of about 300 million to Cartesian Therapeutics following the rolling submission to the FDA for Cell 212. This corresponded to a net debt to EDTA ratio of approximately 1.8 times down from 2.6 zero times the quarter before. Please turn to the next slide. And we will discuss the financial outlook for the full year 2024. As usual, this outlook is based on revenue growth at constant rates and adjusted beta margin. As you will have seen, we are upgrading our revenue guidance for the full year, anticipating mid-teens revenue growth at CER. And we are reiterating an adjusted EBITDA margin in the mid-30s percentage of revenue. Regarding upgrading revenue guidance and considering the year-to-date performance, the new guidance translates into a slowdown of growth in the fourth quarter compared to so far this year. And this is expected to result from challenging comps from Q423 in general. but in particular in RSV, not at least through synergies, which had very material sales in Q4 last year, and hemophilia with positive facing effects in Q4 last year, as well as the fact that we no longer have manufacturing revenue. The margin guidance remains unchanged at mid-30s percentage of revenue, given the year-to-date margin of 37% and our expectations for upcoming Q4. To reiterate what I said last quarter, we will have continued elevated spending R&D related mainly to multiple filings in CEL 212, county fund secondary HLH, and Estabelli C3G and ICMPGN, as well as accelerated Altevoxt Phase 4 studies. And in SG&A, launch and pre-launch costs for Monjo, Altevoxt, and CEL 212. With the outlook covered, I hand over to Lydia. Thank you.