Earnings Call: Q4 2018

Feb 20, 2019

Ladies and gentlemen, welcome to the survey presentation of the Q4 results. I will now hand you over to Dieter Ochus, CEO. Yes. Thank you so much. This is Guido. I'm joined today by Milan Sarkovich, our Head of R and D and by Henrik Stenqvist, our CFO. It's really a pleasure to share with you the results. And I think I would like to go straight into the meat of the presentation to give time for Q and A. You've seen our results. Total revenues for the year now increased 40% and 74% on the earnings. In Q4, we had a nice increase as well. We are with SEK 2,571,000,000 in revenues and which represents a 37% increase and an EBITDA of $9.16 for the total year $3,500,000 So when you look at this, earnings per shares increased as a consequence as well to 8.97. And the whole thing was quite cash accretive. So we were able to build in a year of investment also a net cash position. I think very important for us is that we made substantial progress with our hemophilia franchise, with Elocta and with Alprolix. So essentially, we doubled the franchise during the year and even better even. And this growth, was very positive. So we made great strides, and we picked up momentum in Q4 again. And I think this is this was nice to see and it gives credit to the commercial effectiveness of the organization so that we have been focusing on quite a bit on and invested into growth. When you look at the other side of the metal for Q4, we only basically took care of operational effectiveness and getting leverage into the company. But we also managed to acquire the perpetual right of Synagis. And as you know, the deal closed later on the 23rd Jan and was subsequently announced. And with the Synagis deal, we not only got a product, but more than 130 professionals, extremely well qualified, and we got a candidate drug called 8,897. That gives us rights to believe that there's a more longitudinal earnings stream. We'll come back to this later. We were very happy to see Gamifant getting approval in November, and we had the 1st patient in for Gamifant before the end of the year. So the product became a reality, and we are now in the midst of the launch. So we overall, we thought it was a very eventful and very strong quarter for us and we're quite satisfied with this. So when you think about and I go now to the business review, basically what we wanted to share with you is we start with hemophilia. And you know our 2 products, they're very well established. And what we wanted to make sure that you let's say that we hammer out because there's so much noise now outside the hemophilia space. We have a very well established safety and efficacy profile in real world evidence with thousands of patients Let's say, in the real world, we replace what is fundamentally missing. We replace the factor. We address in a natural way what needs to be done. We have become now standard of care in quite a couple of countries, but there's still room to grow. And the good news is that this product is suitable for all types of patients. And we create possibilities with this franchise to be in charge of your disease and create an active life. And basically, when you think when you summarize this on the next stage, we feel that we are extremely well positioned also for the future as our hemophilia franchise. If you think that we have an exceptional momentum, the trend is our friend. You have seen the very strong growth that is underlying this business. There's a clear recognition, let's say, of the therapeutic benefit. And we believe that with the further opportunities for penetration in the T accounts that we have there quite a bit of transparency and also further internationalization we have room to go. The other thing is that we don't believe, let's say, that hemophilia is going to be a one size fits all. But we believe that we have an important role to play because there is a clear wish on the physician level, let's say, but also on the patient level to be in charge and to control your life and have an active lifestyle. With our franchise, and you will see later some data, we have the opportunity of an individualized personalized therapy that gives phenomenal outcomes for patients. We think that this is important that patients do not forget about the disease, but actively manage it. The other part is that we have also we feel a big chunk of the future in our hands. And when you think about the results that represented for BIIFS, there was a one at ASH. We think that this is right to believe that there is much more in this franchise than what you see today. And with the data that represented, and we will talk about this in a few moments, there is a clear indication that you can achieve an area under the curve that surpasses what has been shown even with previously with new therapies. So we think that the future is on our hand as well. There's a great promise. So coming back to the exceptional momentum, and let's say, so when you look at both products, so we have picked up the pace, let's say, again, in Q4. And I have a very nice patient acquisition in both for both products and which basically clarifies that we are making significant progress in our territories again. And this is built primarily in terms of absolute numbers in the year 5 countries. When you come to the second item, which is the individualized therapy, for me, when you look at these data and you look at the left side in the circle, 0.7 overall bleed rate and you have spontaneous joint bleed of 0, and you think, well, that actually is extremely impressive. So when you take care, like the case now of this individualized arm and the ASPIRE study in a personalized way, you can achieve extremely impressive results. And I would like maybe to ask Milan from a physician perspective to provide some additional color. Absolutely, Guido. I think I very much agree. I think it's important also to start with recognizing, you can say, the breadth and wealth of this data set. So these two studies essentially represents long term safety and efficacy data experienced with Elocta and Alkolix to the tune of around 4 years treatment on a median basis. For Elocta, this represents over 2 50 exposure days and for Aprolix, a little less than 150 exposure days. And as Guido mentioned, if you compare the individualized therapy with the on demand therapy in the 2 treatment algorithms, I think there are 2 key messages. Firstly, there's a very, very strong efficacy profile with individualized therapy with a very, very low median bleeding rate for both Elocta and Alprolix, And this is in contrast to the substantially higher bleeding rate you see in patients on demand therapy, clearly supporting the notion that individualized therapy improves patient outcomes with the Loctan Alprolix. Lastly, I just want to mention that not only does these data confirm the long term efficacy profile and durability of effect, but it also adds safety data to these two treatments and we did not observe any inhibitors during this full year treatment with neither Elocta or Alprolix. And with that, I'll hand back over to you, Gil. Yes. Thanks, Milan. And the other important element is that we feel that we have a significant promise in our future related to BIVV001 and foremost. And I would like to draw your attention to the right. And when you think when you look at basically what was achieved, at the end of the 1 week term, 18.45% trough level. Then it gives you a sense of what kind of breakthrough treatment this is potentially going to be obviously to be proven in Phase III. Because when you think about what has been shown recently by other products and you draw a line, you can get a sense because don't forget, this is a logarithmic scale. What's the difference between the area under the curve is potentially to be proven in further clinical trials versus other 3 year therapies that have come recently on the market. Milad, maybe you also would like to maybe from a medical perspective give us much more color. Yes. So I think I agree with you, these data are truly remarkable. This is the data from the emerging clinical Phase I2 study with BIP001, which is the 1st investigational molecule that has been able to overcome the vanvylibrand factor mediated half life ceiling. As Guido mentioned, on the left hand side of the slide, you see the low dose of 25 units per kilogram. Here, there was a half life with BIP001 of around 1.5 days and a trough level after 7 days treatment after single dose, but after 7 days of just above 5%. And on the right hand side, again, after a single dose of 65 units, you see trough levels at the 65 units per kilogram just north of 18% and a half life just below 2 days. We think these data are truly remarkable. And I just want to maybe add a few more highlights around why we are really excited about this opportunity. We think that this provides an opportunity to fundamentally, let's say, improve the treatment for patients, the outcomes for patients with hemophilia A by providing better protection, but potentially also with prolonged dosing insulars. And I think if you look and consider, for instance, a once weekly dosing regimen, at least for the high dose group, there would be a normalization of Factor activity for a duration of 5 days. And this area under the curve in the 1st 5 days represents a very substantial activity of factor A activity level with a normalization for these patients. I think it's also important to recognize that this technology builds on the well established principle of Factor Replacement Therapy, which is the cornerstone of hemophilia A treatment. So I think all in all, we are very excited about the data with BIVV001, and we look forward to sharing more information as they become available. Perfect. Thank you so much, Winan. And maybe now it's time to talk about the other emerging filler of the Sobeys franchises and this is immunology. And I think it's fair to say that we built this franchise on a strong base, meaning the Kineret franchise. So we have quite a bit of gained quite a bit of experience over the last years in the IL-one area. And this is a very nicely growing franchise for us, as you've seen in the data and over 16% growth over during the last year. We have expanded this platform and the footprint with Synagis in the U. S. That gives us gave us a significant boost in terms of reach, coverage, but also in terms of opportunities or leverage points. We launched in addition now a newly a new monoclonal antibody called enapalumab. And as we told you, we got approval in November. And this is for us, it's a very significant opportunity. And as we have given you guys beforehand, just think about, we've got primary HLH indication approved, but we have significant program, let's say, running that is mining basically the other HLH patient totality EU, U. S. And Japan, 5,000 patients. And we out multiply this obviously with the customary pricing in this rare disease areas. It's a very significant commercial opportunity for us. Hence, we are very excited. And hence, we are investing into it on a commercial side, but also on a clinical development side. And we have the opportunity now with the indication expansions for emapalumab, obviously, to considerably and we have access to MEDI-eight thousand eight hundred and ninety seven, which we share in the U. S. With Sanofi, the commercial proceeds. And 8,897 being a much broader product gives that makes us believe that the earnings stream for Synagis, which we believe is a growing business, is a more longitudinal earnings stream for the company because the opportunity for 887 is substantially broader than what we have for Synagis. When we go to the next slide, I just wanted to show you where we are coming from. So Specialty Care, let's say, is a substantial part of the company. But we expect already the vast majority of our sales in specialty care this year to be immunology driven by the fact that we have obviously the patent expiry that we're facing for ofadine, but also the one or the other loss of contracts in the partnering business. So basically immunology and with the growth that we have in the immunology franchise, they become more much more important for us as we go along. So it's really about immunology, building this franchise moving into the future. We think that the overall trajectory for Kynaret is on a good way and 16% increase in the last year was a positive outcome for us. And when we go straight into the next opportunity for Synagis, let's say, then it's fair to say on the next slide that Synagis is the largest product for us in immunology. It's a core product for the group. When you look at the demand growth of the product, we have taken it over on the 24th January this year. It's the latest data for Q4 suggests a 1.5% demand growth. So it is a growing business. It fits as a team, mostly ex MedImmune people fits very beautifully to the DNA of our company. And for us, this is obviously totally in focus. We think that with the expansion of the field force that was to a large degree already executed prior to our takeover. The product will do extremely well. We see opportunities also in driving and improving adherence to the treatment protocol, but also in the expansion of the patients that are potentially eligible according to the guidelines. We think there's opportunities for growth here. It obviously creates scalability for our U. S. Organization. It will also give us opportunities to have leverage points in the pediatric setting. And clearly, as you know, as we have told, we see some opportunities already now to create more awareness at one stage in the HLH area or primary HLH area to be precise. And when you think this through, we know this 8,897 coming and we based on the communication last year, the product met the primary endpoint in Phase 2b that was announced And the full readout of the Phase 2b is in Q2. So we are looking forward to this. But for whatever we can see now, it is a very promising opportunity for the group that makes this a more longitudinal learning stream. So very excited about Synagis, very excited to have the team on board and basically now trying to drive this business. But the real impact for this of SOVI on this business will be only surfacing, to be also quite frank, during the next season, which will start somewhere in October this year, because essentially the work now for the next season will start as soon as April. And this is when you don't see a lot of output in terms of sales, but this does not mean that we are not very focused on preparing the next season. Yes, so we're very excited about Synagis, touches a lot of points that we felt were important according to our strategy. And now we are in the launch phase. This is the next slide of Gamifant. Got the approval on the midst of launch, have now a couple of patients on the product, very exciting to make a difference to patients in a highly unmet need area. And it's early days, obviously. But when you think about the potential of this product, you hopefully will gain an understanding that we believe it's worth investing for because the commercial opportunity, economic opportunity of this product is extremely significant for the group. And maybe Milan explains to you a little bit what we are doing in the clinical development area because this is a very significant effort in terms of our investment, particularly when we think about forward looking guidance on earnings. Absolutely. Thanks, Guido. Yes, I very much agree this is a very, very exciting molecule, and I think it opens up a number of opportunities to potentially change the lives of patients. And this is also the reason that we are planning a number of clinical activities in 2019 as illustrated on this slide. We, of course, want to continue in primary HLH with a particular focus also on quality of life. We want to continue and expand the ongoing clinical study in secondary HLH in children with autoimmune saurae developing macrophage activation syndrome. And then we also start planning activities in adult patients with HLH, both malignancy and non malignancy induced. And then finally, we want to branch outside HLH by studying by planning a clinical study in preventive treatment of graft failure in children undergoing hematopoietic stem cells transplantation. And this fundamentally is based on data suggesting an early increase in interferon gamma before the graft rejection, and we want to see if we can enable that in a different way. And that's why we're planning the 2 large studies. So I think in summary, we're very excited about this opportunity and what it may bring for improvement patient lives in the future. Very good. Thank you, Milan. Maybe on this note, we go straight now what this means in terms of financial results. Maybe Henrik, you can share with us how this is hanging together. Of course. Thank you, Gjo, and good afternoon, everyone. So let's then look at some financial highlights of the quarter. Revenues for Q4 amounted to close to SEK 2,600,000,000 corresponding then to CER growth of 29%. And as you've seen, the main growth drivers for the quarter were Elocta and Alprolix as expected. Full year revenues reached SEK 9,100,000,000 slightly ahead of our guidance for the year of SEK 8,900,000,000 to SEK 9,000,000,000 Gross margin came out about 74%, both for Q4 and the full year, in line with our full year guidance of 73% to 74%. The ongoing positive product mix effects driven by the hemophilia franchise explained the improved gross margin compared to last year. EBITDA reached €916,000,000 for the quarter corresponding to a margin of 36%, and the year to date EBITDA amounted to SEK 3,571,000,000, again, ahead of our full year guidance, which was SEK 3,400,000,000 to SEK 3,500,000,000. And finally then from a P and L perspective, net earnings for Q4 amounted to SEK 595,000,000 corresponding to an EPS growth of 66 percent and 110% growth for the full year. Furthermore, we continued with a very strong cash generating cash generation with operating cash flow for the quarter amounting to more than SEK 500,000,000, which translates to a conversion over EBITDA of 59%, both for the quarter and for the year. If we move to the next slide, this is the balance sheet at year end where we can conclude that there are no major changes compared to Q3 because closing of Synagis Medi 8,897 transaction occurred in Q1 of 2019. So let's therefore flip to next slide, which illustrates the pro form a impact of this large transaction on our balance sheet. Starting from the left, we ended 2018 with total assets of some SEK 17,000,000,000. Through the transaction, we will add non current assets of about $14,000,000,000 small inventory and we will reduce our cash position by about 3,000,000,000 adding up to the balance sheet total and has moved that from SEK 17,000,000,000 to SEK 28,000,000,000 On the equity and liability side, we issued some SEK 4,500,000,000 of equity as part of the payment for the assets, and we financed SEK 6,000,000,000 with that. And we will record a deferred payment for future payments of SEK 500,000,000. So the transaction is transformational also from a balance sheet perspective. But with a net debt of about $6,000,000,000 and a pro form a net debt to EBITDA of not so much more than $1,000,000,000 there is still plenty of headroom for our continued expansion, both organically and through M and A activity. And I hand over to Guido again. Yes. Thank you so much, Henrik. So how does it all fit together and basically relate to our strategy? I mean, we told you in September 20 17 what we intended to do and actually we did exactly this. Yes, so we drove our hemophilia penetration, invested into the growth of our franchise. We developed Specialty Care and articulated the focal point of Specialty Care now towards immunology, particularly with the Semiquant and obviously the Synagis acquisition. We grew substantially in our U. S. Business and are growing our U. S. Business on the strength of the organic growth potential around Kineret, but also now the opportunities related to Synagis and to Gamifant to overall positioning our geographies on a stronger scale. Obviously, Gamifant also benefiting EMEA, and we have submitted the file in August last year. And we are strengthening our R and D portfolio. So when you think about it, VIF-one during the course of this year likely moving into Phase 3. 8897 being a product that is in Phase 2b and having a readout, let's say, in Q2 and then subject to this moving into late stage, We have, let's say, broad 3 into clinical and on a good way to recruit patients in the study. And then in a not too far distant future, also moving into Phase III. And we have bolstered our pipeline with emapalumab line extensions indication extensions. And this is all geared to drive not only today's growth, but also tomorrow's growth because we are interested as management in driving a sustainable business evolution. And we think that this is we have made significant progress in this regard. So when we look at when we have the outlook in mind, the €12,500,000,000 to €13,000,000,000 of growth, this is reflected now in a combination of very strong growth in hemophilia. Let's say the business, obviously, addition of Synagis, initial benefit, obviously, from the growth of Gamifant, which we think is a material opportunity for us. And obviously, recognizing that we have, let's say, some erosions or expect some erosions offered in on the patent side. And let's say, more having a stable outlook for the other the rest of the business. The investment that we put into the commercial launch of Gamifant into the indication development of Gamifant for emapalumab. In the commercial drive of hemophilia and I hope we could give you a glimpse why we are extremely confident about our hemophilia franchise and why we believe in the future of this franchise so much. Is resulting then in an earning forecast of $5,000,000,000 to $5,300,000,000 that is a significant increase obviously versus previous year, but does not bring the operating leverage. And the reason is really that we believe in our future and that we want to take advantage of these opportunities. But basically, we are guiding here 37% to 42% top line growth. That is very material. And let's say, you don't get the same you don't get the leverage as much into the P and L because we are investing into the future. Let's say, and we hope that this combination in a way you want us to spend this money because we are having an interest and hopefully you have an interest as well to see the company this company further evolving in towards the direction of leadership in West East. And I think on this note, I would like to stop here and would maybe give room for questions as they may arise. Thank And our first question comes from the line of Eun Yang from Jefferies. Please go ahead. Your line is open. Thank you. Few questions. So on hemophilia elocta, Roshi noted that they saw increasingly strong penetration in non inhibitor patient with HEMLIBRA in the U. S. And they also mentioned kind of imminent approval of HEMLIBRA in Europe in severe patients. So question to you is, Kido, is it your revenue guidance assuming potential impact from Hemlibra launch in Europe? Yes. I mean, we obviously looked at this. We are not ignorant to the emergence, obviously, of Roche. And we think that obviously we have to think about them. But basically what we think is that this market is going to fall into different camps. There are those patients who want to more actively control life and where the individualization of therapy is giving a clear opportunity to do so. And we see also there, let's say, people also in the community of the KOLs clearly advocating for this. And then there are people who will look for convenience. We think that in the European context, the group that will look for individualization, personalization will give us enough opportunity to grow our business at a very substantial rate. And we think that, let's say, more the 1st generation, let's say, of recombinant factors will probably give opportunities for taking share, which is still a material part. And we think that we need to focus more on our opportunity for growth on the base of the strength of our portfolio than rather being worried too much about those who don't actually have the share and need to still gain the share. And let's say and yes, there will be people who will want this new product. But we think based on our interactions that there will be a significant still there is a significant opportunity for us, particularly as Europe will somehow the markets work a little bit different than in the U. S. For us to take significant share in prices business. Obviously, no guarantee as there is never a guarantee in life, but we have made some further changes to our commercial infrastructure and we are confident that we can deliver this. Okay. And the second question is on BIVV001. Sanofi mentioned that they are expecting to start the Phase III in second half of twenty nineteen. Can you confirm the timeline? And if indeed it starts in the second half of this year, when do you expect 1 to be marketed? I think we have no reason not to confirm what Sanofi said, yes, as we are collaborating obviously with them and this is accurate. And on the timeline of launch, there I think we have not given any guidance we won't do it either today. So it takes what it takes, but it is a priority program obviously for Sanofi and clearly for us. And we are very excited about this opportunity. Okay. Last question is on gross margin. So you exited the year with about 74%, but I don't think I saw guidance for 2019. And so could you provide the guidance for that? At least can you say whether it's trending upward? Yes, it will trend upward by definition because of the Synagis integration. But we have not given guidance that's correct, but it will trend upwards. Okay. Thank you very much. Thank you, Joon. Appreciate it. Thank you. Our next question comes from the line of Carl Malabic from SEB. Go ahead. Your line is now open. Yes. Hi. Thank you for taking my questions. In terms of guidance for 2019, given your historical conservatives, when initially guiding for EBITDA at the start of the year, looking at historical outcomes, which have been materially higher. Is there anything in particular you would like to draw our attention to this year that makes it any different? Thank you. I mean, the big obviously, when you grow your business, let's say, between 37% 42%, you will have an uplift of SG and A. I mean, that's there is some leverage, particularly when you're integrating a new organization in the U. S. Of more than 130 people that once the transition services from AstraZeneca are supposed to be able to add another 40 people. So it's just a very material increase. But that's part of the story that where you would still expect obviously more leverage. But what is the difference is what we are investing now in the clearly developed net. And just to basically clarify with this to a certain degree. You think about the Gavi Fund indication, where we are coming from, the evolution from primary into the full scope of secondary HLH, mining 5 stores in patient potentially. This is for the size of our company a very material opportunity. You clearly don't want to miss this by now trying to shortcut, let's say, your expenses. So the business is there. The business is producing gross margin. So the earning capacity of the company is built. But we have elected to make choices in building our future. We feel that this is important. We feel that this gives rise to believe that the company has a very nice future growth story ahead of itself. And then you basically go into the stem cell transplantation, which goes beyond HLH. And there you have in Europe and in North America, there are 40,000 of those in a year. So give and take, not everybody is obviously, let's say, in danger of having graft failure. I mean, I'm not suggesting this, but there will be a selection and we don't know exactly how many of those will be elective to our treatment. But you can sense that we are now working on something very material. Hence, we have taken the made the choice in discussions obviously with our Board to invest into this business. Therefore, you don't see the leverage as much on the Board. Yes? So very simple. But the good news is the business is there. The earning capacity of the company is there. We have just made choices because we feel so strong about our growth opportunities moving forward to invest in our business. Okay. Thank you. You're welcome. Thank you. Our next question comes from the line of Hans Muller from Nordea Markets. Please go ahead. Your line is now open. Yes. Good afternoon. Hans Meller here. First a question on pricing. As of the rollout of Hemlibra in Europe, have you noted any change in the price dynamics for hemophilia A? And also secondly, in terms of Kineret sales in the quarter, I guess it was basically flat in organic terms. And you talked about the strong Q3, but I guess growth rates in Q3 was probably the same as in Q2. I wonder has something changed in the terms Kineret? It's the Q1 in a very long time where we have basically no growth, if you can add some color on that. Thank you. Yes. Let me start with the pricing. I mean, we have not seen any material changes to the pricing. Obviously, this area will always have in certain segments tendering mechanisms. We had some changes in Sweden during the course of last year. But that basically, when you look at the overall, let's say, size of the business, we have not seen things now that would suggest that we should be which we should now provide you with warnings. I mean, this is we have we are predicting, obviously, that prices do not go up. Yes, but this is more in a small single digit area that, let's say, that we see efficiencies in the system, which is normal. But when you look at the itinerant, yes, in Q4, we have not made as much progress. Now you can say, for product and maybe there has been an overlap, It's you cannot totally exclude it from the Q3 to Q4. When you look at the overall progress for the year, yes, with 12% at CER, 16% in total, probably not so bad, yes, let's say. Now could it have been better in Q4? A we had some alignment of the distribution in the U. S. That affected this, but we are confident that we can research the business for growth. We still have some leverage on the new indication. So we think that Kineret will remain a growth product. And yes, we were Q4 was not the strongest quarter, but we don't think that this is now the new normal because there has been some alignment in the supply chain as a consequence of a distributor change that basically led to this. So we still believe that this is a growth product and at the right time we would like also to share with you some ideas on further education expansion for the product. Understood. So is it fair to look for double digit growth also in 2019? I mean, we don't give guidance on the product level, but we are confident to grow the product there. And finally, in terms of the other category in Specialty Care, any additions there that explains the accelerated growth in Q4? No. I think we have good growth momentum in the other part with first of all, the at least on an absolute at actual rate, offer deal was reasonably stable. But we are still having some growth with RAVICTI and Ciafix that are doing well. And let's say, an argument is I think there's nothing too much happening. We had an uplift because of the supply chain on the manufacturing side in Q4. That's the reason why we had a significant increase there, which basically offsets the lower portion in Q3. Okay, great. Thank you very much. You're welcome. Thank you. Our next question comes from the line of Peter Seistead from Handelsbank. Please go ahead. Your line is now open. And it seems that we've lost his line. So our next question comes from the line of Erik Holt from Carnegie. Please go ahead. Your line is open. Yes, hi. Thank you for taking my questions. First on Gamifant, you're obviously very excited about the commercial opportunity for this product. And so my question is more related to what type of uptake we should expect here in 2019 for primary HLH. Do you expect a rapid adoption in clinical practice? Or do you see the requirement of significant education of physicians patients before we start to see some meaningful sales? That's my first question. Then maybe if you could say something about the overall market growth for hemophilia A and B respectively in your territories, if you are seeing sort of similar to previous years, if it's decelerating or accelerating? Thank you. Yes. I mean, maybe with regard to Gamifant, I mean, is this going to be now a vertical launch? The answer is no. I mean, this is let's say, this will take some time. We need to make sure that physicians understand when the product is indicated and when not. We need to go through a certain process. But it is we believe that obviously there will be already material sales surfacing during the course of this year. So it is But it is probably more weighted towards the second half than towards the first half, whilst we have already quite a number of patients now on the drug right now. So there will be also some because people have been waiting for a choice and when you have children and your alternative is cytotoxic agents and high dose steroids is a tough choice. It's a trade off that has to be made. So we think that this product is going to help to make trade off decisions and treatment decisions. And we see we will see some uptake, but in terms of materiality, I think probably more weighted towards the second half. And then it will come. And then with regard to the overall hemophilia growth, I think we have I mean, that's very tough to see the data points. But I mean, we have I think basically it may be a slightly, but very slightly less than maybe in the last 5 years. But it's still a 3% to 5% growth gain, very hard to speculate because the dividends are also now on pricing of new therapies and versus, let's say, where we have not complete visibility yet and then their impact. But give and take, it's a growing category still and with substantial shares in sil and plasma and in 1st generation products. So we feel that's the best to come to be honest. Okay. Thank you. You're welcome, Erika. Thank you. And once again, we go over to Peter Ciese from Handelsbanken. Peter, please go ahead. Your line should now be open. Yes. Hello. Can you hear me? Yes. Okay. Thank you. I have a bunch of questions, but I think I'll just kick off with some housekeeping accounting stuff. My first question relates to the booking of the intangible assets for Synagis. Could you give us a split into goodwill and amortizable assets to get a feeling for the amortization vote on that one? In terms of the costs for 2019, could you elaborate a bit on how you see the increments in SG and A costs, in R and D costs? Secondly, your guidance range, could you please specify the assumptions underlying high and upper end of the guidance respectively? And finally, at least for this round, you stated that you see Synagis as a growing business and you sort of elaborated to some, let's say, drivers of that potential growth. But what kind of development for synergies would you be comfortable with us baking into our numbers instead of just looking at, say, at the declining business that we that modeled AstraZeneca numbers perhaps had factored into this business? Thank you very much. Thank you, Peter. I can start. The question on the asset as such, it's amortizable. There is no goodwill in the assets. Then on your question on the cost split, we don't guide line by line here. I mean, we provide a top line guidance and an EBITA guidance. But as already has been indicated here, there is an expected uplift in the gross margin. But other than that, we don't go any further at this point in time. Yes. And with regard to what we basically what you should expect from Synagis in the long run. I mean, we basically think that there is this is a product that we will believe that responds well to our ownership model. That means we will this is not maybe a high growth asset anymore. I think this would be not realistic, but it is a product that we probably can steadily grow. And let's say and the reason is that we still see opportunities on the adherence to the protocol, that we see more babies who could potentially benefit. We have increased in the overall field force. We believe that we can do maybe a little bit better on one or the other lever there Simply because for us, this is obviously a very big product, yes. For AstraZeneca, this was probably a non core business, yes. So for and that should do something. Do we believe that we that we it's realistic to dream of guideline change? We don't know. But we will look into all areas. And let's say, but what we think at least, this is more of a steady growing business where we hopefully can improve further, The proof in the pudding is going to be what are we what we can do already in the next season, yes, because the lever for this season is relatively limited. We took it over on the 23rd Jan. And I think that this should give you maybe some hints, because we don't provide obviously guidance by product in detail. But this is how we look at this. We'll spend quite a bit of time on this as it is so important. And then let's see whether we can how far we can leverage this phenomenal setup in the pediatric setting, maybe in terms of awareness programs for primary HLH, but also maybe at one stage for other things in the pediatric setting. So what we have to but we feel that this team is well supported by the earnings team that we have. And we want to make sure that we give justice to Synagis first because we are very well aware that the let's say about the one or the other, let's say, view on this, but we believe we can grow it. Okay. So just before turning back to my question on the guidance, perhaps just a follow-up question to the accounting on the Synagis. What is the time period that you have factored in for writing off the intangible assets related to synergies? Thank you. 20 years is a reasonable estimate. And with respect to the upper and lower end of the year guidance assumptions in terms of sales? Sorry, guidance on sales, let's say Yes. Just a flavor on what kind of now my question was relating to what kind of assumptions you have baked into your upper and lower ends of your full year sales guidance? We basically said that obviously there is a bit of variability in, let's say, in the forecast. You don't know how quick patent erosion will work. For operating, for instance, we don't know, let's say, there's, let's say, we'll see how quickly the ramp up is. There's an opportunity that more patients, let's say, could benefit from Gamifant faster. We'll see it how quickly is there a possibility for changes even more for guidelines, we'll find out as we go along. Then there is let's say, so this could be an uplift and then there could be obviously, we don't we are not so arrogant to believe that we can accurately forecast the exact number of patients that we are going to switch, let's say, during the course of this year. So we allowed for this as well, but in hemophilia. So but overall, it's not the range is not that, let's say, too broad when you think about it. We think it also there is going to be, let's say, maybe also give and take. There is going to be a mix, but we've that's the reason why we allowed for March. Okay. Thank you very much. You're welcome, Peter. Appreciate it. Thank you. Our next question comes from the line of Christopher Ude from ABG. Please go ahead. Your line is now open. Hi there. So I have a few questions. So you mentioned in the report here that gammafinch is expected to be approved in the EU at year end. And I guess I was thinking maybe I'd seen it somewhere or else the August submission that while that seems a little long, has there been a delay? That's the first question. Then also, just in terms of the timing of the change in gross margin on Eloctate, can you give any indication of, let's say, when you'd be surprised if it's not gone up yet? And then 3rd was so you mentioned 4 out of 5 major markets in the EU are driving growth in hemophilia. What can you say about uptake in Spain? Is there anything that we should be aware of that's a little bit different about it? That would explain why you don't say that it's one of those drivers? I guess that's it. Yes. No, I mean we are maybe with the overall uptake we are very happy with the growth in Spain as well, recognizing that we came from a lower base, but now it seems that the product get both get really recognized or Elocta gets recognized in Spain. So it's good growth. And with regard now to, let's say, the regulatory process, as you would expect in the regulatory process, we have discussions with authorities. And that takes the time it takes. Nina, you want to comment maybe? No. I think the dialogue is ongoing. I don't think we can comment beyond that. Yes. So it's a normal process. And basically, we gave guidance when we submitted. At the end, it's in the eyes of the beholder and we have to respect this when done approval with them. So I don't think we are that presumptuous to speculate on this. With regard to gross margin expansion on hemophilia, maybe, Henrik, you want to comment? I think the gross margin we alluded to, the expansion, it's not so much related to Elocta, but rather to Synagis. And obviously, you will see the impact during the season, which is basically Q1 and Q4. So that's the answer to that. Okay. Thank you very much. You're welcome. Thank you. Our next question comes from the line of Erik Hult from Carnegie. Please go ahead. Your line is open. Yes. Hi, again. I have 2 follow-up questions. 1 for Henrik. On the tax rate post the Synagis acquisition, will that change? Or should we expect a similar tax rate as 2018 for 2019? And secondly, just on the guidance, assuming if we sort of take out the expected contribution from Synagis on EBITDA, given the 60% margin guidance that you issued in conjunction with the acquisition, it seems like you are sort of projecting a flat slightly growing underlying EBITDA for 2019 over 2018. So I just wanted to confirm that that's how we should look at it. Thank you. Your first question concerning the tax rate. No, we don't expect any material difference to the tax rate due to the Synagis consolidation. When it comes to margins, excluding Synagis, and I can confirm that we expect an improved margin also without Synagis, but we are not quantifying that. All right. Thank you. You're welcome. Thank you. And as we seem to have no more questions registered, I'll now hand back to our speakers. Yes. Thank you so much for your interest. As you can see, we substantially grow the business, but we also build the future. And hopefully, over time, over the next couple of weeks, we can explain ourselves better in this regard. So that you can, let's say, understand us better how we think about it. But he felt given the opportunities that are in front of us, it would have been a big shame to make sure that we build the future. And that's what we are interested in obviously as a management team. So appreciate your interest. And thank you so much. And we look forward to staying in contact. Thank you. This now concludes our conference. Thank you all for attending. You may now disconnect.