Swedish Orphan Biovitrum AB

Ladies and gentlemen, welcome to the SOBE Q4 2024 report conference call and live webcast. I'm Sandra, the chorus 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 Oerker, CEO. Please go ahead, sir.

Thank you. Hello, everyone. This is Guido Oerker, CEO of Sobe. We are delighted to welcome you to the fourth quarter and the full year 2024 Conference Call for Investors and Analysts. We posted, as mentioned, this presentation to Sobe.com earlier today. Let's move to slide number two, forward-looking statement as per usual, unless otherwise stated, we will be making comments that most relate to the third quarter at constant, to the fourth quarter at constant exchange rate in the million Swedish krona. Today, we plan to cover the key aspects of the Q4 report. I'm joined by Henrik Sundqvist, our CFO, Lydia Bart-Franzsch, our head of R&D and chief medical officer. We plan to review the presentation first and then have Q&A until around 3.30 Swedish time or Central European time. For those on the phone, please join in the queue for questions for pressing star 1. We propose that you ask only one or two questions at a time. Let's move to the beef. This is our overview on the performance of Q4. We are very pleased with the performance of the portfolio in the fourth quarter and overall for the full year. The full year was announced a few weeks ago. Our internal expectations with 26 billion SEC in revenues representing 90% growth at CER. And the full year adjusted EBITDA was 36%. In the quarter, we saw growth at 8% and adjusted EBITDA margin was 34%. This reflects a very strong performance across the portfolio. Please bear in mind that the RSV impact by Fortis had very strong quarters in Q3 and Q4. Synergies in Q4 2023 was also extremely significant. Hence, there was a negative variation in the underlying business In Q4, excluding RSV, has been growing over 20%. Hematology growth was driven by continued growth of Doctolet, Asper Valley, and the launch of AlteWorks. There has been a strong interest in AlteWorks in just the first half of this year on generating 300 million sec in the quarter. We continue to build the launch of Wondro and see consistent quarter-on-quarter progress and we are continuing to build awareness around the product and the unmet medical need in myofibrosis treatment. In immunology, it is reflected very substantial, obviously, as mentioned, by Fortis Royalty Income in both in Q3 and Q4. In terms of the pipeline, our progress continues with the filing of GAMI Fund in the U.S. for HLH-MAS in Stills disease, and we are happy to announce that we have also submitted ASPR Valley in Europe for C3G and ICMPGN. We look forward to continuing the discussion with health authorities and bringing these important medicines to patients in these disease areas. We have very strong momentum, as you can see, in the SOVI business, both commercially and in development. And 2025 will be a busy year with multiple filings ongoing. preparing the organization for a number of new launches whilst we bring SOBI to the next level. With that in mind, our outlook for 2025 is that we expect revenue growth at high single-digit at CER and adjusted EBITDA margin at mid-30s, reflecting the investment that is necessary. Let's move over to the overall business growth. Let's look at, and this is the next slide, let's look at the overall performance in more detail. Can you move to the next slide here? Our growth of 8% in the quarter was driven primarily by hematology sales, while strong by Fortis royalty income was not able to offset Synergy's negative evolution. We saw a very strong performance in hematology with 22%. Overall, the full year, all areas delivered strong performance with hematology growing 24% and immunology 11%. In the second half of the year, the U.S. business was impacted by the loss of synergies, as already mentioned, but Gummy Fund and Kinoet have grown strongly throughout the year. Europe saw a strong growth of 14% for the full year, reflecting the launch of Altovox and other strategic growth products. In the US, we saw, as mentioned earlier, the impact of synergies, and international is continuing its robust growth with 14% in 2024, while if you take away the Fosun effect, it has grown actually at 43%. When you think about the composition of our portfolio, regional portfolio, It just shows that our internationalization strategy that we laid out in 2017 is now showing the fruits when you just think about the composition of North America, including the Bifortis royalty and this very dynamically growing international business. Let's move to the next slide and go a little bit more deeper. Focusing a bit more on the portfolio in 2024, we have seen a strong momentum across the portfolio with already significant contributions from the AltaWalk launch. We are starting to see an impact on Alokta as expected from AltaWalk. However, we have seen 30% growth across the hemophilia franchise in 2024. Dr. Laird showed continuous growing demand across all regions with 58% growth in 2024. and Asper Valley continued to grow double-digit in 2024 with 76% growth. We do expect increasing competitive pressure from orals in 2025, but in those markets where we have seen this, where we are facing this competition, the product has shown good perseverance in these markets so far. Bonjour continues its sequential quarter-to-quarter growth, and I will cover it in more detail. Kineret grew at an impressive 24% in Q4, driven by growing interest in the IL-1 mechanism in multiple settings, some phasing and some gross-to-net adjustments. For Globby Fund, we are happy to have filed in secondary HLH indication, and we see, and this will mean obviously an inflection point for the product, as it will significantly broaden the overall potential for the product. By Fortis continued its strong demand as seen in Q3, and with Q3 and Q4 reflecting the peak of the RSV season. Let's move to the next slide. And on the next slide, you can see our portfolio approach of today's and tomorrow's breadwinners. You know, while the foundation business is very resilient and has shown 6% growth, you know, this used to be essentially the DNA of Sobe. Today it is 50% of revenues, while the other half is on the right hand, where you have a nice blend of catalysts that allow us to transformation of Sobe and investing into our pipeline and into our strategic growth product and the new royalty streams from Bay Fortis and also Etuvio help on this list to go out. And when you look at the strategic growth product, they have grown very substantially. So they are 35% today, including the royalty stream is basically half of this portfolio. And this half was 55% in Q4. And then we have on the left, in the left, And this is for us obviously super important as we have a significant product that will determine the future of SOBI. So we received fast break designation for GAMIFUND in secondary HLH in Q2. And we have now submitted the filing package as indicated in December. For CEL 212, we are continuing the submission to the USF TV and we will complete the filing before Q2. We had the positive readout of Asper Valley in nephrology, and we have now submitted the filing to EMA and look forward to receiving the CHMP decision later during the year. At the same time, we continue building on our geographic footprint with launches of Asper Valley, Doctylert, Celonta, Gamifund, and Vonjo. This puts SOBE into a new phase of sustained growth driven by new products, execution in our development, on our development commitments, and we have an exciting launch in progress with Altuvox and two substantial indications in our hands with Asper Valley Nephrology and NASP in chronic refractory gout, which we will now prepare in 2025. Let's move to Altuvox. We are very pleased with our first half year on the market with Altuvox. Altuvox has seen a rapid adoption in Germany, and our market share in Haemophilia A in Germany has grown for Elocta and AlteVoc by 15 percentage points, essentially in the first five and a half months after launch. Our Haemophilia A sales grew as a consequence in Q4 at 9%. To date, in Germany, we have seen around 50% of the switches from Elocta, while the others are coming from competitive products. And the last three months clearly favor that we are taking significant more share from competition. We look forward to bringing this important medicine now to more markets in Europe and other Thobe territories in 2025. Let's move to Kaspar Valley. As you have seen, we had very strong sales evolution of Asper Valley in P&H. However, the main part of this franchise future is clearly related to Nephrology. And we are very pleased to have submitted the filing package for Nephrology of Asper Valley in EU after an impressive readout in 2024. The combination of very significant reduction in proteinuria, clearance of C3 staining from the kidney, and a high percentage of patients, and the stabilization of EFGR at such an early time makes the potential of this medicine that we were bringing to patients. For us, this product is fantastic. really right at the heart of what SOBE is about, given the fact that many of those patients are kids, and to prevent them from progressing to end-stage renal disease, we feel is an obligation and mission. We look forward to working with the regulatory authorities to move this forward and parallel with rebuilding the internal infrastructure and nephrology and prepare for the launch. we believe that Asper Valley has the potential to become a blockbuster product for Sobeys. Let's move to Bonjo. Bonjo sales were 460 million SEC in the quarter with 27% growth at constant currency and 6% quarter-on-quarter growth showing continued momentum with the product. Growth is primarily coming from They're labeled below 50,000 platelet population, and we are continuing to work to expand the use according to the NCCN guidelines in myofibrosis. We have recently hired a new U.S. chief medical officer, Jamie Friedman, who is a HEM-ONC specialist who is leading our medical organization in the U.S., and we're expecting further impulses from him to help us to expand the product. We are continuing to roll out our strategy to increase awareness of the product and the unmet medical needs with the NCCN guidelines and recommendations. The second pillar of our strategy is to bring Bonjo to patients outside of the US this year, and we will launch in selected markets which will follow the FDA label. and ultimately going to bring it to Europe and Japan, and Japan once we have the Pacifica trial concluded. The next step is to broaden the use, and we have initiated a Phase II study in Vexus, an area with currently no approved treatment, which Lydia is going to cover in her presentation. And we have also made an important strategic step to form a research collaboration to get CMML on label. And this is also another demonstration that we stand by the product. We want to further develop the product and bring it to the level that we earlier indicated when we consummated the transaction. On this note, I'd like to head over now to our CFO, Hendrik Stenqvist.

Thank you, Guido. And hello, everyone. Please turn to slide 12. We will now take a look at some key financial metrics for the quarter. In Q4, our revenues of $7.4 billion meant that we exceeded $7 billion of revenue in an individual quarter for the first time, while also making significant progress on our pipeline assets. Revenue growth for the quarter was 8% at constant currencies, and we delivered an adjusted beta margin of 34%. For the full year 2024, we achieved revenues of 26 billion corresponding to a growth of 19% as outlined in our early announcement, as well as an EBITDA margin of 36% in line with guidance of adjusted EBITDA in the mid-30s. So if we look at the bar on the left with revenues by quarter and business area, we see the solid growth in hematology of 22% in the quarter driven by all adopted hemophilia On the other hand, Immunology experienced a decline of 12% in the quarter as a result of the much lower sales of synergies and the facing of Bay Fortis royalties this year, with a clearly larger share of royalties in Q3 than in Q4. Referring back to the table on the right, the adjusted gross margin of 78% in the quarter compared to 80% in Q4-23. Royalties in general were net positive to our gross margin in the quarter, but offsetting this was the loss of Synergist sales. Synergist was a high margin product with significant sales in Q4-23. Gross margin was also negatively impacted by other product mix items, but to a lesser degree. The adjusted EBITDA margin reached 34% compared to 38% last year. The drop of 4 percentage points was due to Two percentage points lower gross margin, as already discussed, and higher OPEX driven by our investments in pipeline and launch products. Looking at the operating expenses for the quarter, we observed an 11% growth at CER compared to the same period in 2023. SG&A, excluding non-recurring items and amortization, increased by 10% at CER in the quarter. driven by launch and pre-launch costs for Altevoxt, Asta Valley Nephrology, DASP, and Bonjo. We've managed to partly offset the impact of these activities on the SG&A line through savings in the synergies organization, as we have reported in prior quarters. R&D expenses increased by 13% at CR, excluding non-recurring items, mainly due to post-approval activities for Altevoxt, and development programs in Gamifund, Bongeo and Sylvonta. The operating cash flow for the quarter increased by 67% to 1.8 billion, benefiting from less capital tied up in receivables from synergies than a year ago. And if we turn to slide 13, we see on the right-hand side of the slide that net debt went from 16.9 billion at the beginning of the quarter to 15.2 billion, corresponding to that EBTA ratio of 1.6 times. And to the left, we see the debt reduction of more than 4 billion during the year and the leverage journey from 2.5 to 1.6 during the same period, driven by the improvement in EBTA and strong cash flow. Please turn to slide 14. And we will now discuss the financial outlook for the full year 2025. And as usual, this outlook is based on revenue growth at constant exchange rates and adjusted EBITDA margins. For the full year 2025, we anticipate revenue to grow by a high single-digit percentage at CR and an adjusted EBITDA margin in the mid-30s percentage of revenue. On the revenue guidance, we look forward to continuing to launch Altevox into new markets in 2025, growing the Himophilia A franchise, as well as continued progress with our existing commercial portfolio. We expect a continued strong contribution from day four to three, although this is a factor where we do not control the outcome ourselves. In regards to our EBITDA margin guidance, we will continue to invest in our pre-launch assets, specifically NASP and ASPA Valley in Nephrology. In R&D, we will also continue with post-approval studies for Altavox and the new studies for Bonjo in Paxos and CMML, as well as major registrational efforts for ASPA Valley, Gambit Fund, and NASP. With the outlook covered, I will now hand over to Lydia. Thank you.