Ladies and gentlemen, welcome to the Sobi presentation of the Q1 results. I will now hand over to Guido Oelkers, CEO. Please go ahead with your meeting.
Yes. Thank you so much, and welcome everybody. It is my pleasure to start our presentation and lead you through our Q1 results. If you go to the next slide, you know our forward-looking statement as per usual. During the call, I will be joined by our CFO, Henrik Stenqvist, and our Chief Scientific Officer, Milan Zdravkovic. Maybe without spending too much time on other formalities, let's go straight into the highlights of Q1. We feel that we have actually a fantastic result in Q1. We had 66% revenue growth, 54% at constant currency. We have achieved close to SEK 3.3 billion of revenues. Organic growth profile, let's say is pretty much intact, with 24%. We have very strong hemophilia growth, I would like to point this one out, with Elocta growing at 53% at actual currency and 46% at constant, and Alprolix at 120%.
That obviously has, let's say, fueled our organic growth. I think notably, our EBITDA has increased by 96%, almost doubled. I think this is very gratifying. EPS has increased to SEK 3.14. When we think about it, we have launched as well Gamifant and have scored the first SEK 89 million. Very pleased with this result in the first quarter. We brought in Synagis with 135 employees. Let's say, unfortunately, only closed on the 24th of January. Hence, we were missing a couple of days, and we will explain to you a little bit later what this meant for sales. We recorded the first Synagis sales, let's say, of a shorter season of SEK 665 million.
What we have done, just a reflection on the quarter, we have not only grown organically our core business very substantially, we have launched, let's say, in a very important to more spread winner and made a significant impact. We have built a foundation for our future in the U.S. by integrating this business. Granted, let's say, when you integrate such a business, there are always some adjustments, whether it's inventory adjustments and whether it's now the phasing of the data, and we'll take note of this in the later part of the presentation. When we go at the revenue split, I think you get the first taste of the transformation that is happening at Sobi. Just comparing the Q1 results, and basically what we have now, we have called out our now two significant pillars, meaning hemophilia and immunology.
Those two businesses are 87% of our total revenue base. The other specialty business is obviously affected by the patent erosion of Orfadin and some minor businesses that we lost on the partnering side. What you see is that the company is now much more focused in terms of core areas and has substantially shaped and we have now really a two-legged organization. With this, I want to go straight into the business review and basically just familiarize what we have done in hemophilia. I mentioned this also to clarify a little bit our pathway. There are obviously some new entrants and clarify why we are optimistic about our hemophilia also moving into the future. We have done quite a bit of comprehensive research, ethnographic research.
This ethnographic research led us, on slide eight, to a new concept that we are now launching across the region, and it's called Liberating Life. The preamble is that many patients are actually not yet well-served and have a lot of what they call worry days. We felt that those patients are best served taking advantage of the profile of Elocta and Alprolix. The concept is, our foundation is what we believe is a best-in-class EHL platform. We have obviously demonstrated a phenomenal efficacy and safety profile in real-world evidence with thousands of patients. We have impressive results, and Milan will share with you later some latest data in the individualized therapy, that we believe are extremely outstanding and compare very favorably even versus data that new therapies can bring to par.
Basically what this concept is all about is that we will bring possibility back to patients, and we try to bring the patient in charge of their life. We are not like others trying to make the patient believe that he is no longer a patient and he can forget about the disease. We want to bring the patient in charge of his life, live an active life. An active life means that trough levels of 10 to 15% on a consistent basis will not allow this. You need a peak. It's more than life in hemophilia goes beyond the trough. I think this is at the heart of it, and we want to enable patients to take advantage of the products that we have to offer.
When you summarize our hemophilia story on the next slide, we believe that we continue having exceptional momentum. We have still significant opportunities to drive growth via penetration and internationalization. We have, let's say, significant room to further individualize therapy and take advantage of the profile of the two EHLs that we can offer. In totality, we think that, let's say, given those foundations, there's significant promise for the future, particularly now on the strength of our new campaign. When we go into the where are we at, let's say, with the sales growth, maybe go to the next slide, number 10. Elocta, as you can see, very strong quarter-on-quarter growth and also very strong growth with 46% at constant currency and 53% at actual versus previous year, and really driven by the large markets in the EU and reimbursed now in 26 countries.
Alprolix, let's say, has done extremely well, with 120% of revenue growth. Also here, let's say the main markets in France, U.K. and Italy are driving this growth, now reimbursed in 22 markets. What we believe is that this trend, given the activities that we are now doing, will remain our friend. That the best for us in hemophilia is still to come. I would like now to ask Milan to share with you some of the latest scientific findings.
Thank you very much, Guido. This slide illustrates the excellent protection and low annual bleeding rates in adults and adolescents with hemophilia A using Elocta as individualized prophylaxis. These data are important in two ways. Firstly, it represents a long-term clinical trial exposure experience over a period of five years, with a median number of exposure days just above 250. Secondly, we saw a low overall annualized bleeding rate as well as joint bleeding rate. These low bleeding rates are likely important when we evaluate the long-term joint health status, which is illustrated on this slide. The gradual destruction of joints is one of the most important complications of hemophilia, and the pathogenesis involves bleeds into the joints with associated inflammation and cartilage destruction. Therefore, a good prophylaxis, as shown on the previous slide with Elocta, is critical.
This slide shows data over a five-year period on joint health, demonstrating not only a stabilization of the disease, but also a continuous improvement in joint health, in particular on swelling, range of motion and strength. We are very encouraged by these data. The mechanism behind the improvement in joint health, you can say, beyond the successful long-term bleeding control that we see with Elocta prophylaxis needs further study. There are preclinical data suggesting that factor VIII may directly play a role in bone remodeling, and in addition, that it could be speculated that the IgG Fc part of the Elocta molecule may have anti-inflammatory properties. This slide illustrates the excellent protection and low annualized bleed rate with Alprolix prophylaxis. Again, the longitudinal data collection over a five-year period, including a median number of exposure days of just below 150, is important to recognize.
In addition, there was a low rate of joint and spontaneous bleeds over the same period using an eight-16-day individualized prophylaxis regimen. Taken together, we are very excited about the treatment outcomes that we see with both Elocta and Alprolix. The next slide.
Okay. Yeah, thank you so much, Milan. Now basically would like to share with you our thoughts on, let's say, on immunology. Obviously, when you think about the second leg now that we have established over the last, basically 12 months, it's built on Kineret. As you will see, we have regained momentum again, let's say with Kineret. It is basically what we have done is with the latest acquisition, we have expanded our product platform, but also now clearly created a significant platform in the United States moving from a, let's say, from a first attempt to really solidified our position. We launched a new promising monoclonal antibody called Gamifant. You have seen the result. Very satisfied, let's say with the SEK 89 million in the first quarter and makes us obviously even more optimistic for the product moving into the future.
We have bolstered our pipeline by basically the new indications for emapalumab and having access now to MEDI8897 and really look forward to the readout of the phase II-B data. Obviously we will look forward for new external growth. When you look at the numbers on slide 16. What you see is obviously this very significant effect in immunology of Synagis acquisition. Granted, we have not consolidated a full first quarter. Granted, that there is obviously a strong bias. It's a seasonal product, so this is not a product sales that you can expect now every quarter, let's say. It's also fair to say that we are happy that we have integrated this really fantastic talent base from AstraZeneca of 135 individuals. We have probably not changed a lot yet.
We are going to change quite a few things, as we will explain to you later. Obviously, quite encouraging result is Gamifant. Basically let's start with our foundation business, Kineret, now 70% up, quite pleased with this. Granted that at constant it's less than seven, so we still have some room to go, particularly in the U.S. We are in the repositioning phase. We are confident that this product will remain for us a very strong growth driver, and we are also excited about new indications that we would like to debate with you during the Capital Market Day. When you think about Synagis, now it basically has become the second largest product for the group. It's obviously a key priority. The good news is that the demand data suggests first quarter 2% growth of demand.
I know that there has been a debate how to read those data, and one has to clarify. There is a lot of noise out of such a transaction that basically happens at the end of the first month, at the peak, basically, of the season. We have an effect that we are missing not only 23 days, there has been also some consolidation of inventory at the wholesaler level. There has been a small price effect. There is a lot of new noise. We obviously wish that this was not the noise, I'm much more happy to be honest, that the demand engine is growing.
We're buying a growing product, those effects that you see now, let's say in the first quarter, we believe are going to even out during the later course of the year, in particular, obviously, during the fourth quarter, which is the main part of the season. Henrik will explain to you a little bit the seasonality of the product and how you have to think about this product. Our optimism that this is a growing product in our hands remains unchanged. When we did a very thorough piece of work with some external help and with the team, we are even more excited about this product. What we see is that there are significant opportunities with more scripts within the guidelines that we are missing out because this team went through quite a bit of changes, where they were clearly in the non-core area.
They have become a core area. There was a contraction of reps, let's say, last year that still has some ripple effects because productivity of the representatives will take some time until they are at the right level. There's opportunities for us getting more scripts. We see that there are quite a few leakages in the chain where even though you might get the script, the script is not fulfilled. We basically feel that the dosage regimen can benefit. We see in many cases that patients don't get the indicated five dosing and end up with just a little bit more than three. There is a significant opportunity to fix those things as well. We are excited about the product.
This is not going to be into the future, a huge growth in terms of percentage, it will be a steady growth product for us. Obviously, don't forget, we bought this not for the first quarter. We bought this product to build a strong foundation for our U.S. business and having access to an exciting product. Basically, what we are as excited about the platform that it brings, particularly in the pediatric field. Whilst I appreciate that the expectations may have been higher, when you basically rationalize this, there's nothing that point us that we have an operational topic. We have a transitional, let's say, adjustments that we have to recognize. We are excited about the opportunity with Synagis. Coming to Gamifant, I think we have a fantastic launch in Q1. We are getting patients now in quite a number of centers.
We focus obviously a lot on education, disease awareness. It's early days for us, it seems to resonate already quite well. This is also something where I think we want to spend a little bit of time more at the Capital Market Day, is to clarify we see significant opportunities in Gamifant with an expansion in HLH as an overall disease, also beyond. Our investment into our clinical trials actually reflects this. We are now having trials on the way in terms of preemptive treatment of graft failure in children undergoing stem cell transplantation. For us, obviously, it's very important now to move from primary HLH into secondary HLH. There's a study ongoing in children with autoimmune systemic juvenile idiopathic arthritis. There is an adult in the study in the planning. We are excited about Gamifant.
We are excited about the collaboration with NovImmune. Let's then hope that this will lead us even to a closer cooperation in the short-term future. Let's see, very happy with the progress that we have made so far. Just to share the degree of excitement that we have regarding Gamifant, I think the scale probably of this opportunity is we have not yet done the best job to make it understood, and that's something we want to correct also at the Capital Market Day. To share maybe some of the excitement, Milan shares maybe some of the clinical data that have been recently published and, Milan, maybe you take over.
Thank you very much, Guido. Yes. This slide shows the very strong survival data from the emapalumab pivotal trial program in patients with primary HLH undergoing hematopoietic stem cell transplantation. Following emapalumab treatment, both in patients failing conventional HLH therapy, but also in the full study population, there was a very high one-year survival post-transplant of around 90%, sorry. Beyond the importance of these data for patients with primary HLH, this also suggests a permissive effect of interferon gamma blockade on transplant acceptance. This combines with data showing an increase in interferon gamma in patients experiencing immune-mediated graft failure led to the planning of the graft failure study that Guido just discussed. We are very excited about emapalumab and the potential it brings both to patients within, but also outside HLH, and emapalumab is a key focus area for us.
With that, I hand over to Henrik.
Thank you, Milan. Good morning, everyone. Let's start with a year-over-year crosswalk of revenues from Q1 2018 to this quarter. Revenues have increased from just below SEK 2 billion a year ago to SEK 3,265 million in Q1 2019. The main drivers for this development are Synagis adding SEK 665 million to Q1 revenues. The hemophilia, SEK 464 million at constant currencies, contributing to a growth of 33% for the franchise. Gamifant, SEK 89 million. We have all other products contributing, together with SEK -75 million, and here we see, for example, the impact from the decline in Orfadin compared to last year. Finally, we have a positive FX impact of SEK 158 million for the quarter. Then we move to the next slide for some other financial highlights for the quarter.
Revenue for Q1, as we saw, amounted to SEK 3 billion 265 million, corresponding to an increase of 66% and 54% at constant currencies. You saw the growth drivers on the previous slide. If we speak in terms of organic growth, that is adjusting for Synagis, the organic growth was 24% for the quarter. Gross margin jumped to 76%, positively impacted by the addition of the high-margin product Synagis and continued positive product mix effects driven by the hemophilia franchise, also lower relative sales from some of the specialty care products. EBITDA, adjusted for the divestment of SOBI005, reached SEK 1 billion 471 million for the quarter, corresponding to a margin of 45% versus 39% in Q1 2018. Finally, the adjusted EPS number was SEK 303, with a growth of 59% compared to last year.
Furthermore, operating cash flow was a bit soft for the quarter, SEK 388 million, reflecting the working capital impact in Q1 of Synagis with large receivables being settled only in Q2. As a result, net debt amounted to SEK 5.5 billion at the end of the quarter. If we go to next slide, please. Before Guido goes into the outlook for the full year, I just want to highlight the seasonal pattern of Synagis, which will have an impact on how performance will be divided between the remaining quarters of the year. I want to point out that this slide is an illustration only, and it is not about factual numbers. Synagis has a strong seasonal sales pattern with very little sales occurring during the off-season period in Q2 and Q3.
However, the cost structure of this business is not seasonal, but relatively stable between the quarters as the business is getting prepared for the next RSV season starting in the October timeframe. As a consequence of this business, the natural pattern is a negative contribution to EBITDA from Synagis in Q2 and Q3. With that, I hand back to Guido again. Thank you.
Thank you so much, let's see, Henrik. What I want to make sure is, as you can see, we remain firm with our guidance. There is no reason to change the guidance, even though, let's say, you have seen that we have not been able to consolidate the first 23 days. There has been this transitional effect on Synagis. I should also highlight even though that this is not hitting the P&L. The effect of the late clause has been recognized by a purchase price adjustment, let's say of $34 million. It did not hit the P&L, but it is recognizing at least that we did not have to take full advantage of January. When we basically think about it, we believe that Elocta and Alprolix will remain strong growth drivers for us this year. We think that the Synagis will perform well under our ownership.
We are happy to see that there is a demand growth. Yes, there have been some transitional adjustment, but this is not affecting our perspective on the product. Let's say, Henrik has explained to you that there's a seasonal effect, and we think that over the year, there will be a wash out of some of the effects that we have seen in Q1. We are excited, obviously, even more excited about Gamifant now in the U.S., and given the results that we have shown now in Q1. With regard to EBITDA, we stick to our guidance. Also here, no reason to change. Let's say what we will do is we're investing obviously in our franchise in hemophilia because we are convinced that we have a fantastic opportunity in hemophilia and we need to make sure that more patients take advantage of the product.
We focus obviously on Gamifant and the development of the clinical opportunities in emapalumab within HLH but also beyond. We feel that we are extremely well-positioned for the future, given the fact that we have made operational significant improvements, but also made significant strategic leeway now for the future. I think on this note, we open the floor for Q&A.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. That's zero one on your telephone keypad. There will now be a brief pause while questions are being registered. We now have our first question from Eun Yang from Jefferies. Open.
Thank you. I have a few questions. Hemophilia products in your territory looks pretty good. Now with the Hemlibra coming onto the market, I want to ask you a couple of things. One, Roche has commented that Hemlibra uptake in the non-inhibitor market in the U.S. has been quite strong. Are you hearing that Hemlibra uptake in the U.S. is largely from the short-acting product, the conversion or long-acting? That's number one question. Second question, now it's entering the market in Europe, what are you hearing from medical community? Our second question is on the new tender market. I know that the first quarter sales have been quite strong, but are you seeing some pricing pressure in Europe? Because some of your competitors have commented that, particularly ex-U.S., net pricing has been lower, and there has been some increasing pricing pressures.
I want to get some sense of how do you see pricing going forward with the hemophilia products in Europe.
Thank you, Eun, and thanks for the interest. With regard to the U.S. situation, obviously, we are not as close, really to the development. I think, this is really for Sanofi to comment on the U.S. situation when they have their earning call shortly. We obviously have seen the results of Roche, in the U.S. and they had a very good quarter. Frankly, so had we. Obviously, we are still bullish about it and about the opportunity and that's the reason why I think what we see is that we want to make clear, there is no panacea. This is a large market. There's a room for a lot of therapies. For patients who want to have an active life, they need a peak.
This is something that we will obviously promote very strongly and, particularly also the favorable safety profile of Elocta based on real-world evidence, I think is something that we want to make sure comes strongly across. There is, with regard to the medical community, I think there, at least in Europe or what we understand, it's not like there's a consensus that this is now, a therapy that should be made available to all patients, with regard to new therapies. I think there's a clear understanding that EHLs will remain playing an important role. There is, given also the evidence now that we have generated around our products, actually there's a growing interest as you can see reflected in our numbers in adopting, best in class EHL therapy across the board.
Whilst we recognize the strong uptake of Roche, we also recognize the strong uptake of our products in our territory and the growing interest. With regard to the tender situation, yes, there is price pressure, obviously. We are less affected than short-acting or less differentiated EHLs. Therefore we are not as much affected, we see some price pressure, obviously in the tender markets as well.
Do you think that the Hemlibra entry would impact the pricing on long-acting products?
We don't expect this. Can I anticipate, let's say, how Roche is going to price it? I've seen the one or the other documentation where, in fact, cost of therapy are expected to increase, let's say now. I think, I cannot speak for Roche. You would have to ask them whether they want to become a discounter in this hemophilia area. My understanding at this stage is that the cost of therapy are not declining. You never know. I think this is a question you need to ask them.
Okay, one last question. On Synagis, you mentioned that there were transitional adjustments that impacted sales in the first quarter. I get it. If you're accounting for that, like a loss of 20, 30 days as well as some inventory that you mentioned. If you account all that, did you see growth in terms of volume in the first quarter this year compared to the same period last year?
Yes. On an in-market level, we saw a 2% increase. Yes.
Okay. Thank you very much.
That's the reason why we are actually quite happy with the Synagis performance, even though maybe others see it differently.
Okay. Thank you very much.
You're welcome. Thank you.
Our next question comes from Richard Parkes from Deutsche Bank. Go ahead, your line is now open.
Hi. Thank you very much for taking my questions. A couple on Hemlibra impact, first of all. Your estimate for hemophilia royalties from Sanofi expects, seems to imply sales to be down year-on-year at CER. I know that's your estimate, but I'm just wondering how much confidence you have in that, because it seems to imply a greater than 10% quarter-on-quarter decline in sales of Alprolix and ELOCTATE in Sanofi territory. That's the first question. The second one. We're hearing anecdotally that the Hemlibra launch has got off to a very rapid uptake, particularly in the pediatric setting. I was wondering what your current split of sales were between pediatric, adolescent, and adult sales, and maybe it's the pediatric setting where parents seem to be demanding access to Hemlibra in the U.S.
Finally, I wondered if you could give us some insight into the profile of MEDI8897. We know it hit in the phase II study. Just wondering what profile we should expect and when we might see that clinical data. Thank you.
Yes. Thank you so much, Richard. With regard to U.S. sales, I cannot comment on, obviously, Sanofi's performance, because what we got is just an information on an estimation of royalties. What this means in terms of in-market performance, I think you probably have to wait for the earning call of Sanofi and ask them these questions. I don't want to speculate. With regards to the, let's say, different settings of Elocta versus Hemlibra, now with a particular focus on pediatric. To be honest, we don't give guidance at that granular level to be honest either. Let's say I only know in our territory that there is still quite a bit of concern with regard to the safety of new therapies, in particular with regard to newly released safety data that just came out. We believe that this is our main theme.
We believe for patients who want to have an active life and take charge of their therapy, they should not try to forget about the disease. They should manage the disease. This is basically the fundamental concept of Liberating Life, that you take the product when you need it. Individualized therapy. You have seen the data that Milan presented to you with fantastic ABRs. We believe that this concept may not be of value to everybody, but there will be a large group of patients who will try to benefit from this therapy. With regard to 8897, I think the main theme, what you can expect is, and what has been published is that with Synagis, you need to take it 5 times in a season. With this product, it seems that one a season is good enough.
It's a very potent product, and has shown very strong efficacy. I think I would also like to hold horses here, and I think you need to wait for the publishing of the phase II-B data, and which will come out shortly. I hope you will like what we're going to see.
Thank you very much.
You're welcome.
Our next question comes from the line of Johan Berggren from DNB Markets. Please go ahead. Your line is now open.
Yes. Hi. Thank you for taking my questions. The first one, could you elaborate a little bit on the small price effect you mentioned for Synagis? Could you just confirm that, has the pricing of the product changed, or was this strictly a temporary effect that we saw in Q1 here for Synagis?
Yeah. There has been some adjustments, to be honest. It's very hard for us, in this first couple of weeks, that we got this product to say this is now a more systemic effect or is this a temporary effect. There has been some gross-to-net adjustments, with some provisions regarding Medicaid. We think that the overall, but it's a minor effect, the overall impact of that will be overcompensated throughout the year by the value creation initiatives that I've outlined, where we see more opportunities to drive volume. We're obviously gratified via the impact that we have seen already in obviously demand growth. I can't unfortunately give you more granularity on the pricing effect.
Okay. Thank you. Last one. Could you please just give us an update on the patient recruitment in the anaSTILLs trial, please?
The anaSTILLs trials we have terminated.
Okay.
There it was, basically for us, we have got the label in Europe, as you know. Basically, it seemed difficult for something that is already so established to recruit patients. Also didn't really yield more benefit. Honestly, our focus now with Kineret is pointing us more towards oncological indication as a further expansion and potentially IRP.
Okay. Thank you.
You're welcome.
Our next question comes from the line of Peter Sehested from Handelsbanken. Please go ahead. Your line is now open.
Yeah. Hi, it's Peter from Handelsbanken. Thank you for taking my questions. A couple. First one, follow-up, sorry, hemophilia pricing, but not in the tender market, but more in mature, more advanced market in the Nordics, et cetera. Are you seeing any pressure there as well? My second question relates to your Liberate study. Sitting here with a recently published survey that has been published in one of the leading pediatrics journals. This is from Canada. We have citations here, the parents citing, "Mommy, you're hurting me," at intravenous infusion. My question sort of relates to the previous one about the hemophilia uptake in the pediatric setting. There are surveys suggesting that parents are very much concerned about the convenience factor here. You've previously stated that the convenience factor is higher in the U.S. than it is in Europe. We all acknowledge that big profit tradition in Europe.
Nevertheless, parents tend to be the same all over the world. Are you confident that convenience factor is not as important in Europe as in the U.S.? My third question relates to costs. Could you elaborate on whether the average cost for your newly added employees is higher than the average as reported in your fourth? Secondly, give us an estimate of the number of full-time employees by the end of 2019.
Yeah. Let's start with the easy bit, with the Nordics. Let's say, you know there has been last year an adjustment as part of a tendering process in Sweden that we have taken, like everybody else. Basically, that adjustment has not effectively helped us also to grow further volume. Quite actually, let's say I think the outcome, whilst we didn't appreciate it, let's say is still okay. With regard now to the survey, it's a bit like, what is the end? Yeah. Obviously, there will be patients, and we all know them, that already basically freak out when they see a needle. In particular children, there will be patients.
I have also equally, to be honest, I can give you many cases where people will say, "It's not a problem." Then basically, as always in life, it's a trade-off. During the trade-off, I can also quote you patients who went for a simple tooth extraction to a doctor and were on new therapies and were bleeding as if there's no tomorrow after a simple tooth extraction and needed factor to compensate the lack of efficacy of this new therapy. I can quote you actually quite a number of those patients. I think you need to make sure that you don't use anecdotal evidence for a broader extrapolation, I think. Let's say, I think the trade-off decision, also in the pediatric field, will be done by parents and by physicians based on the best knowledge.
Our job is to make sure that people understand the trade-off, let's say, that they are making, because with 10%-15% activity level, it's not enough to have an active life. Yeah. I would know if I'm a parent with a hemophilia patient what my decision would be. Yeah. Let's say knowing a little bit now about the subject matter. Yes, I'm not acknowledging that this trade-off decision for various patients and families will be weighing more towards, let's say, convenience. For others, they will make this trade-off decision will have a different balance. Yeah. I know we are very close to a large group of key opinion leaders and real specialists, and no matter what we think, this is what we still hear in the community, that they are worried.
They will try to help patients to overcome maybe the fear of a needle and of infusion. We're not saying it's going to be a one-size-fits-all. We are saying there's going to be a large group of patients who will want to make a trade-off decision in favor of the profile that we are offering. Then, let's say, there was a third element with regard to the cost.
Yeah, the cost.
Yeah, the cost component. There it is, when you have a highly trained field force, fully loaded cost of a representative, indeed, that they are costing what a fully loaded income in the U.S. costs. That cost are higher than an average employee who would work in a factory or in an office environment, actually quite substantially higher. That's correct. These 135 people are more expensive than what our average cost per headcount would be, as it is in every company who is active in the pharmaceutical industry. With regard now to the headcount end of year, we have a headcount number that we have published, which is north of 900. I don't think we have published an FTE, let's say, that basically gives you full account of all the full-time equivalent. I think we have made a reference to heads.
No, we actually report 1,077 at the end of.
Yeah
March, full-time equivalents.
Full-time equivalents. Sorry, I overlooked this here.
Okay. I have some questions more, but I'll jump back in the queue.
Thank you so much. Appreciate it.
Thank you. Our next question comes from the line of Erik Hultgård from Carnegie. Go ahead, your line is now open.
Thank you so much. Most of my questions have been asked already, but I have a few. First, on Gamifant. Could you comment on the number of patients on treatment or have been treated so far? Also, if you could help us to understand how much of the sales in the first quarter was inventory. If you could give a ballpark number on the inventory effect there.
Yeah.
Finally on Synagis. You mentioned the $34 million USD in purchase price adjustment. Is that basically the sales that was generated the first 23 days of January, or is it more complicated than that?
Yeah.
What was the inventory effect of Synagis? Is it possible for you to give some type of number on that impact in Q1?
Erik, just help me out. Where shall we start? I mean,
With Gamifant.
Yeah.
You can start with Gamifant.
Yeah. Gamifant, basically, we are not reporting on the number of patients on Gamifant. I would say, if you want to know, there's an inventory effect, but it doesn't seem to be a very significant effect. It's a minority effect of this. Given the fact that it's an expensive treatment for a very compromised number of patients. It's not like you're building up inventory. It's an acute product as opposed to a chronic product. The inventory effect is not significant. I'm sure there is one, but to be honest, we cannot account for every vial now. From what we can see, it's really going to the patients, and if you basically would use the average cost of a product in that rare disease category, that will give you an indication magnitudinally of the number of patients. But we would not comment on this. Yeah.
Now, with regard to, let's say, to this purchase price adjustment, the purchase price adjustment was actually more of a simple formula related to the number of days that we missed out. As a reflection, it was built on the estimation of earnings that we are missing out as a consequence of the late close, not of the sales, yeah. That gives you also a good indication. The inventory effect, Henrik, you want to comment on this?
We cannot be specific at this early stage. We are getting our arms around the product during this takeover. We are not in the position to quantify it. We know it's significant, and that inventory levels at the wholesaler level are lower.
Yeah. I think magnitudinally, yeah, when you think this through, it gives you an indication, in particular, when you look at the Q2 results of the product last year, yeah, when there were negative sales. Yeah. Basically, there was a washout. It gives you a sense, what we have seen sales. Anyway, it gives you a dimensional effect, that, okay. Then in conjunction with the 2%, let's say, demand growth that we have seen, I think gives you a sufficient dimensional effect in how to view the Synagis performance.
All right. Thank you.
Appreciate it.
Thank you. Our next question comes from the line of Christopher at ABG Sundal Collier. Please go ahead. Your line is now open.
Hi there. I have a few questions. Let's start with Elocta. Versus some analyst expectations, it was a bit soft. Do you see signs of patients holding off from switching in advance of Hemlibra? Or what can you say about the rate of patients switching in your territory? That's the first question. When it comes to Synagis, you've talked about demand increasing. I think the things you pointed out make sense. When it comes to sales, when you announced the deal for the last 12 months were SEK 269 million. Full year results came in SEK 251 million. You talked about then underlying growth having increased. I struggle to make sense of that. Now they're lower than expectations despite the currency tailwinds. How can we reconcile all that? Third, Gamifant. How volatile were underlying sales during the quarter?
What should we expect going forward? It's an ultra rare disease. When it comes to the Liberate campaign, is it pure marketing, or are you pushing for a higher peak level to go with it? Is it just that you're talking about how yours gives a higher peak level already? That's all from me for now. Thanks.
Honestly, when you look at the switches, 46% Elocta growth. That's obviously on a much higher base than historically. We don't see a slowdown of that. We see strong demand increase despite the fact that people know that Hemlibra is knocking at the door. You can say, could it have been even more if Hemlibra doesn't come? I don't know. At this stage, we get very encouraging signals from the guys who are driving the therapy in Europe, that there is a lot of confidence to build this further. Maybe I take your last point on Liberating Life. Yes. This is more than just a marketing idea.
There are multiple initiatives connected to this that will provide significant help to patients, and we are working with key centers on these initiatives, whether it's in a clinical trial setting or beyond. Where we will further work this out and at the right time, we will update you. This is not just, we believe in real stuff and clearly we want to make sure that people understand the trade-off of what it means, and not to benefit from a peak. That's really at the forefront of this. You need to have, for instance, at least when I believe some of the KOLs, in the discussions, they tell me that if you want to play soccer, for instance, you need to have factor activity levels of above 50, five, zero, not 15. Just to bring things into perspective. With regard to Gamifant, it's a rare disease.
We have commented on the number of HLH patients as part of the announcement. It's a significant patient pool, yes. It's not as big as hemophilia or diabetes. We understand this. This is a rare disease. Whether you call it ultra-rare, depends probably on your definition. We are very comfortable in this area, and we see significant opportunity in indications beyond HLH. 5,000 patients, let's say, out multiplied with an average cost of therapy in this area, it still creates a very significant commercial opportunity. I would not belittle this. We are very encouraged by these results, and it's an acute therapy. The patients either, let's say, are born with it and/or they acquire it as a result, as a secondary condition.
No, no. What I really meant was, there are very few patients. If there were a high number of patients this quarter, just by stochasticity, could we see a reduction in sales? Is that something that rather than normally you'd see an uptake that is fairly consistently increasing early on, but is there a risk with so few patients that it could go down? If we see that, should we be alarmed? That's my question.
We think that also here, we are just scratching the surface and we have to acknowledge that this concept, just to give you a little anecdote. We were with parents of patients, and who basically for two years didn't have the right diagnosis for their child. Two years going to many different institutions and then basically got the diagnosis, and they said, "Well, basically, thank God it's not leukemia." After they understood the disease, basically they told us they wished it would have been leukemia. That gives you a bit of a flavor and there is a lot of educational work necessary, but we don't see that this is, let's say, half the first quarter we are maxing out also.
Let's put it this way. I'm not alarmed. I'm looking forward to consistently building up this product, there's always a risk that in a month, given the fact that it's an acute product that you have less patients, but that's normal. When you look at it throughout the year, we are extremely encouraged by the results in Q1.
Okay, thanks. Great. Thanks.
You're welcome.
Our next question comes from the line of Johan Hynors from Pareto Securities. Please go ahead, your line is now open.
Thank you. My question has broadly been answered already, but some brief follow-ups. Could you please remind us about the visibility on the royalties from hemophilia? About the royalties, basically, to what extent can we actually see for a fact what the level of sales and to what proportion is it an estimate? That can be the first question.
Okay. Royalty is indeed an estimate that we have obtained from Sanofi, and I would recommend you to ask the question at their earnings call that will happen shortly, I think this week.
In its entirety, it is an estimate, put it that way.
It is an estimate that we have obtained from Sanofi. Yeah.
Yeah. Okay. On the Synagis, on the price, recently there's been a change in gross-to-net price. Is that mainly or only related to Medicare?
I think we haven't seen any significant increase of discounts. Obviously when you take over a product, there's always a little bit of noise level. So we don't see this as a systemic impairment, let's say, but there has been some. We don't see that there has been some crazy discounts over there. The majority of the effect is really the inventory level and it's basically the fact that we are not benefiting from 23 days. There has been a different, we know there's also a different, probably an accrual mechanism taking place, but this would take us now, lead us too far, but we don't see there a significant impairment of the net price.
Also, any comment on the influenza season this year? It's been maybe a bit longer than normal, perhaps. Is that correct?
We will update you obviously on the Q2 sales in due course. Just bear with us.
Is it possible to say anything about the GAMIFANT outlook? You mentioned 5,000 patients. What sort of penetration rates can you go for?
I think at this stage it's early days. We are not yet updating, I would say at this juncture, our forecasts. I think we obviously, once we see, because typically we don't give guidance on singular product sales. I think you will get a good taste, let's say already Q2 will tell us quite a bit, and then the team is very focused on it and as I told you, got very encouraging signals.
Okay. Thank you very much.
Thank you. I think in the interest of time, let's say because we said we make an hour, I think maybe one more question and then we should probably close the call.
Thank you. Our next question comes from the line of Peter Verdult from Handelsbanken. Please go ahead. Your line is now open.
Okay. Thank you for taking my additional question. I'll try to make it short and more housekeeping in relation to the modeling and the other stuff at the Capital Market Day. Two here, very short. In terms of the reported amortization costs for Q1, should it be higher simply due to the fact that Synagis will be fully consolidated for the remainder quarters of the year? Second question, slightly related to this one, and it is with regards to your overall cost for the quarter, which was higher than mine and appears to be substantially higher. The absolute number for OPEX, we should also expect that higher going into Q2, because we control due to the Synagis consolidation and secondly, could you give us a little bit more flavor to make us the modeling a bit sharper with respect to SG&A costs from Synagis, from added marketing, et cetera.
Maybe Henrik.
Concerning the amortization charge from Synagis. It will of course be consolidated for full quarters going forward, so it will be slightly higher than in Q1. When it comes to cost by quarter, we don't guide by quarter. I am sure you are able to estimate properly based on our full year guidance that we have given. We also don't want to provide guidance for specific products. We refrain from that, unfortunately.
Thank you.
Yeah. Maybe I round it up. Obviously you have seen that we are building the company to a new scale as you see it. There are really exciting opportunities ahead of us, particularly with regard to Gamifant. We also feel with Synagis the best is still to come. As you can hear from us, we are excited about the opportunities in hemophilia and are here to build. I think this gives you a little bit of a flavor. We have now two very strong pillars. We feel that the company is in a good shape and really happy to take more questions. Please refer to our IR department.
If you haven't been able to address all your questions right now and other than this, we'll be happy to see those of you who can make it at the Capital Market Day. Then go into much more granular depths. Thanks a lot for your interest. Wish everybody a great day. Thank you.