Ladies and gentlemen, welcome to the presentation of the Q3 results for Sobi. I will now hand you over to CEO, Guido Oelkers. Please go ahead.
Yes, thanks. Thank you everybody for joining us for today's call. I will be joined today by Henrik Stenqvist, our Chief Financial Officer, and Armin Reininger, Head of Medical. What we want to cover today is give you an intro, provide you with a business review, talk about our acquisition of emapalumab, discuss financial and obviously provide a summary. We go to the next slide on page two. As per usual, the forward-looking statement, just to take note of this, we go right into these Q3 highlights. Today was a bit of an eventful day, we are very bullish and very happy actually with our results, as you can see from page three. When you look at it, total revenues, let's say, have improved to SEK 2.3 billion in Q3 and SEK 6.6 billion for year to date.
That represents a 45% top-line growth at actual currency and 34% at constant. When you look at the EBITDA increased by 74% in Q3 and an 85% year to date. When you look at those numbers, we think very impressive numbers and even though there was a question earlier on quarter growth. What I can tell you is, we had fantastic growth on a patient acquisition rate in the hemophilia business, and I will talk about this. We believe that the story is really continuing and we are gaining momentum even though the summer quarter is always a tough one, particularly in the southern part of Europe. Net cash position as a consequence increased. Revenues for Elocta, Alprolix were up considerably as you can see to SEK 873 million and to SEK 255 million for Elocta respectively.
What is very gratifying is the increase of Kineret by 28%. As you see now, there's beautiful acceleration in the third quarter, which is very gratifying for us. It shows that the investment we put behind the product and the excitement we see in this product is paying dividends. Increase of Orfadin despite patent expiry of 8% at actual currency, -2% meaning flat at constant. Also very nice outcome, let's say, ensuring the loyalty attached to this product. Overall, we complemented obviously our inflammation franchise in particular with the acquisition of emapalumab. We dosed the first patient of SOBI003. Summing it up for us, it was a great quarter. When you then go to the next page, on page five, we go straight to hemophilia.
Basically, we increased our patient market share considerably, and we got reimbursement for Alprolix in Sweden and Slovakia. I just want to make a point because we saw some reports on this and just to hit it off right away. You have to see when you look at the quarter-on-quarter results, which we will discuss in a moment. You see maybe not as much progress as some maybe of you would have hoped for. However, you need to realize that there are certain buying patterns and what I'm interested in is did we increase demand? I want to make a point that we increased demand by close to 30% incremental growth versus last year patient acquisition. What we want to make sure is that you get, let's say, we have not slowed down, we are not sailing into the sunset.
We are here to extend our market share, I think it's an important point to note. Basically, this is not totally reflected in the numbers, but there's always a phasing effect in those numbers that they are the result of the demand creation. Demand creation significantly increased and there's always a bit of a difficulty to assess what is the true demand when you look at the third quarter, given the bias to the vacation period in the southern part of Europe in particular. When we come to the emapalumab situation, let's say second paragraph. We are now becoming increasingly, obviously standard of care in a variety of those markets or becoming the leader in the respective category, but still have substantial room to grow. The other beauty for the story is really that we have advanced BIVV001.
We reported back on the data that we presented at ISTH earlier. We attended the WFH Congress. We think that this is a fantastic product that has so far already is well received by numerous opinion leaders. When we go to the next page six, I think it is important to note that there's a lot of noise around new therapies. We just wanted to make sure that you clearly understand, based on real-world evidence. Many thousand patients. Elocta and Alprolix have an established safety and efficacy profile, allowing personalization of the therapy, giving patients what they need, and basically, feeding back to us that they feel better, experience less pain.
Coupled with the individualization and knowing that you can dose higher when you need it, and that you're also protected when you undertake, for instance, surgery and other parts, feel that this is a fantastic portfolio that is not matched anytime soon. When you then go to the next page, on the hemophilia, let's say, slide quarter-on-quarter growth, page seven. You can see that we, let's say, had obviously a record quarter influenced to a certain degree by the French clawback. When you look at also the Q3 development last year, you know that the behavior in Q3 this year is very similar to the behavior the year before.
When you then know that you have quarter-on-quarter close to a 30% increase of your patient numbers, despite the fact that many clinics are not actually converting patients because, of the vacation period, actually, I'm satisfied. I'm thinking that this growth is actually making us confident. When you look at the Elocta increase, let's say on page eight, you see a very nice, obviously growth curve and that with 110%, let's say growth and 93% at constant exchange rate. Making also progress in 25 countries. Quite gratifying. Obviously the progress now with Alprolix is pretty significant, particular in the key, let's say, in the EU 5 or in the large EU 4 markets, but also now recently got reimbursement in Sweden.
Very pleasing and, basically the Q2 versus Q3 is more buying pattern, let's say, than indicative of demand because demand also for Alprolix in Q3 has substantially increased. We are actually very positive here. That basically, this is my notes, what I wanted to make sure that there are no misunderstandings when you look at our quarter-on-quarter results. We go to the specialty care business. Here in specialty care, nothing has changed. We have a world-class platform. We are in the launch process of Ravicti. We are very pleased, that when you look at Ravicti and Amgen or Amgen in combination, let's say there is a shift and we're growing this business very nice, but really the flagship product of specialty care is Kineret.
As I alluded to earlier, our investment in the U.S. and our strength, let's say, and the still to approval in Europe really propelled growth and basically allowed us now to accelerate growth in Q3. I think what you also should take away that when you look at the number of publications or citation in peer journals for Kineret, you have seen a significant increase over the last year. When you look at the average of 2016 and 2017, it has more than doubled than the years beforehand. This means that there's a keen interest in the product, and we see utility of this product beyond. Let's say, therefore we are quite bullish. You've seen the phase II data that we have launched for Kineret in gout.
Here you have to say, see very clearly, the product performed in line with what you could have expected from an IL-1 in this setting. The control group was performing better. Hence, we didn't show significance, but we were overall very, let's say, satisfied with the result. We will let the study play out and then basically see whether we can go straight into phase III, and we'll have discussions with the FDA. Specialty care. Let's say, when you basically look at it, solid performance on page 11, across all the segments. Yes, also affected in Q3 by the, let's say by obviously the holiday period, but also by a slowdown of Orfadin at constant rate. Very pleased with the overall performance, 18% over growth and 8% at constant.
When you look at Kineret, I think I talked about this, I think this gives you a good feel. With Orfadin, we mentioned this earlier, we are quite happy with the way we manage this, even though we are giving in at constant a little bit. When you think about, we lost the patent. We're defending the product quite nicely. Yes, we will not be able to defy gravity. We don't see a cliff for Orfadin in the way you would have expected for other products at this point of time. This is basically our legacy franchise. Now we come to a very exciting part, which is emapalumab, which we consider as an important strategic deal for us. Basically, this is turning.
You remember that we made an announcement that there are two parts to this deal, we are now in the phase I of this deal, which is, we have acquired the license, obviously we are in discussions with the seller to consummate, let's say the second part, there will be a couple of steps still necessary. When you think about it, what it does to us, emapalumab, it basically strengthens our immunology base that we have this Kineret. It clearly, given the bias of the franchise towards the U.S., it will bolster our U.S. presence. It will also give us a strong pipeline because there is utility of the product beyond HLH.
We are currently in an explorative stage to agree with the R&D community in our company on what would be the next trials to extend this franchise and obviously with what we expect is an approval during the later part of this year. PDUFA date is on the 20th of November. Basically, MAA filing in Europe around August. We have paid, let's say the first payment of the total proceeds for this deal of CHF 50 million. As you know, that there is a clause in that both parties can accelerate the remainder of the payments mid of next year. We think very highly of this and believe that this product has a phenomenal future.
As this deal is as this product is a very substantial opportunity for the company, it also means that we need to prepare it well. We have, initially, we guided the market at, let's say SEK 200 million to CHF 300 million, CHF 250. We think now, that we will spend based on what we understand around SEK 200 million. There will be later, this will be important because when we did the guidance for the year, we did this without emapalumab expenses. I wanted to come back to this when we talk about the increase of guidance that de facto we have done, I think this was potentially misunderstood. Clearly, like for like, we are increasing guidance, now we have the emapalumab expenses that we have classified in a more precise way.
When we come to emapalumab now, why is this such a fantastic opportunity for Sobi? It will help us to articulate what specialty care is about. It will strengthen our immunology franchise. It will strengthen our U.S. presence. With the additional indications, it will allow us to build and to bolster our late-stage pipeline. On this note, I think I would like to hand over now to Armin Reininger, our Head of Medical, who will bring this product closer to you and make you understood why this is such an important addition to our franchise.
Thank you very much, Guido. Hello, everyone. It's my pleasure to really talk a little bit about emapalumab, which is a fully human monoclonal antibody that targets interferon gamma, which is a central mediator of inflammation. In order to assess and really appreciate more what this interferon gamma product can do, you need to also clearly have an understanding of what HLH is, which is the second bullet point. HLH is hemophagocytic lymphohistiocytosis. You will see it also spelled out on the next slide, which is a life-threatening syndrome of extreme immune activation. Interferon gamma is one of the key players of the immune system, of the innate immune system, what is happening in this kind of disease is that the inflammation really goes completely overboard. It is such an excessive inflammation and tissue disruption due to abnormal immune activation that there is a lack of normal downregulation.
Deactivated immune cells, mainly the macrophages and lymphocytes, go overboard, that literally has a pretty high death rate. You will see on the next slide that HLH is a rare and life-threatening syndrome that has two patient segments. There is a primary HLH, which is genetically determined, then there's a secondary. The secondary has, as a trigger, infections, autoimmune diseases, or malignancies. Infections also could trigger the primary HLH, although there is not then a clear cure once the underlying disease is treated, but that is only cured by most cases, by bone marrow transplant, stem cell transplantation. Indeed, we have a very high unmet medical need. There is a fatality with a median survival of less than two months without treatment, overall treatment, there are no approved drug treatments up to date.
We are pursuing the first approval for that kind of disease with emapalumab, there's currently a widely accepted treatment protocol that apply a combination of different treatments like dexamethasone and chemotherapy. What we want to also show is that this kind of treatment will be more beneficial to the patients and will have literally also a higher survival rate. Overall, we are targeting both patient groups combined, roughly 5,000 patients in the U.S., Europe, and Japan of both primary and secondary HLHs. What we also hear back from the opinion leaders and from the field is that there's quite a number of even undiagnosed patients. There's clearly a huge unmet need that we try to target with this kind of product. With that, I hand back to Guido.
Thanks, Armin. When you look at page 19, it gives you a bit of a, let's say, flavor why we are so really excited. We are creating a product with peak sales, on what we know today, conservatively around $300 million. It's a late-stage product. There's utility beyond. It will help us, obviously, in the U.S. to expand our position. We have already recruited quite a few people. We have expensed quite a fair amount. Frankly, this is what we feel our team has to spend to make sure that we take advantage of this very significant opportunity for the group. Obviously, we are in the process to plan studies, and we are working with external help on this to give the product justice.
When you think it through, emapalumab essentially is an important catalyst for us to build out a more immunology franchise under the heading of specialty care. Essentially enabling us to build another leg for the company, and we feel very strong about it so that we are building on strengths and going into an area where with our business systems, we can add a ton of value in a relatively de-risked environment, meaning late stage. I hope you can share our level of excitement. When we come to page 21, our pipeline, I don't want to go through the entire pipeline. I just want to make reference to a couple. I think the key here in this context is that XTEND BIVV001, the successor to Elocta, is making very good progress. An update will be made at ASH in November. Very excited about this.
Let's say, you have seen the data from the WFH meeting, that's clearly one of the probably most exciting compounds in the hemophilia environment. I think important to note is now the PDUFA date for emapalumab on the 20th of November, let's say. We acquired the rights to this, already for emapalumab secondary HLH progressed. I think in our own stable, I think important to note is that we are nicely in the recruitment phase, non-clinical phase with SOBI003, and are also thinking about different ways on how to accelerate the product. Obviously very, also again, as let's say an environment with high unmet medical needs. For anakinra, we are now already in commercialization in Still's. In Europe, sorry. When you think about it, actually we touched quite a few key points of the company.
What does it mean in terms of numbers? Instead, I would like to ask Henrik, our CFO, to talk about the financial results.
Thank you, Guido, and good afternoon, everyone. Let's look at some financial highlights for the quarter. Revenues for Q3 amounted to SEK 2.3 billion, corresponding to an increase of 45% and 34% at constant exchange rates. This Q3 number was positively impacted by SEK 56 million related to the adjustment of the provision for pharmaceutical taxes in France from the year 2017. If you remember, we gave a heads-up of this coming adjustment in Q2. Gross margin came out strongly at 75%. In addition to the ongoing positive product mix effects that we have, the gross margin was obviously positively impacted by this French adjustment and also favorable FX effects. EBITA reached SEK 933 million, corresponding to a margin of 40%, which is equal to the margin year to date.
We also had a very solid cash flow during the quarter, with operating cash flow amounting to more than SEK 700 million, which translates to a conversion over EBITA of 76%. Thus, we managed to increase our cash balance by close to SEK 200 million, despite the acquisition of the emapalumab license of almost SEK 500 million. Go to next slide. This slide is the full P&L, where you can see that below the solid gross profit for Q3, we have OpEx of SEK 808 million, representing an increase over Q2 of just above 10%. This increase reflects, in addition to the continued market investments and ongoing R&D programs, also development and pre-launch costs for emapalumab, amounting to some SEK 50 million for Q3. Furthermore, with a tax rate for Q3 of
just below 23%, we are back to normal after the one-off adjustments in Q2, and that resulted in a net profit of SEK 623 million for the quarter and a growth in EPS of 92%. Go to next slide. Finally, a quick look at the balance sheet where the only major movement since Q2 is the capitalization of the emapalumab license of about SEK 4.1 billion in intangibles. The remaining license fees for the product, some CHF 400 million or some SEK 3.6 billion, have been classified as current liabilities because these payments can be accelerated unconditionally by either party after July 1st, 2019. I hand over to Guido again. Thank you.
Thank you, Henrik. When you summarize it on the regarding the strategic direction, page 27. We said, we obviously need to maximize the opportunity in hemophilia. That's what we are doing. We have made significant progress in hemophilia. We have 2.3 times more patients end of Q3 than we had last year at the same time, 2.3 times. We have increased the patient acquisition Q3 2018 versus Q3 2017, the incremental rate by 30%. In the Q3 environment, you have not as many switches as you would have in other quarters, granted, and there is a phasing of the buying pattern, but we actually are confirmed. We see a confirmation in our strategy that we are acquiring patients, we are expanding our market share, and actually we are very satisfied with the progress that we made in the environment that we are dealing with.
We are developing the specialty care business. We are very satisfied with the progress that we have made with Kineret, particularly in Q3. We are very satisfied with the patent defense of Orfadin. We are expanding now our presence in the U.S. We see this as a great opportunity for our group. With emapalumab, we will strengthen our pipeline and significant progress was made with 001. Overall, actually, when you look at the next page, we are very positive about our outlook. We have strong profitable growth. It is over 70% in the quarter EBITDA growth. We have strong cash flow generation. Company is in excellent shape to explore external growth opportunities from a position of strength, which we believe is particularly important in today's volatile environment. We have increased financial flexibility.
When we come to the outlook and also to make sure that there is no misunderstanding, we increased guidance on the top line to SEK 8.9 billion and SEK 9 billion. We had a favorable gross margin, increased guidance on the gross margin. We have increased our guidance on a like-for-like basis for EBITDA. Just to make it very clear that to avoid misunderstandings, we originally guided SEK 3.4 billion-SEK 3.6 billion. If you account on a like-for-like basis, this would have meant without the emapalumab expenses, a guidance from SEK 3.6 billion-SEK 3.7 billion. We are investing into the launch activities of emapalumab and into the clinical development activities for emapalumab. As a consequence, our guidance is SEK 3.4 billion-SEK 3.5 billion. We are by no means reducing our guidance on a like-for-like basis.
We are preparing the future essentially stick to what we had originally told you, we are making significant strategic progress by diversifying our company. I think this gives you a little bit of a flavor of where we are at today, then we might now open the floor for questions.
Thank you. Ladies and gentlemen, if you do wish to ask an audio question, please press 01 on your telephone keypad. If you wish to withdraw your question, you may do so by pressing 02 to cancel. Once again, please press 01 to register for a question. The first question comes from the line of Yoon Yang from Jefferies. Please go ahead.
Thank you. On hemophilia, Guido, you mentioned that there continues to be increased demand. It is more of the buying patterns that are affecting seasonality. When I looked at third quarter this year, if we particularly exclude the adjustment in French pharmaceutical tax, quarter-over-quarter growth is kind of flat-ish. What I am trying to understand, given the buying patterns, do you expect in the fourth quarter there would be a nice uptick in hemophilia sales?
You would obviously hope that your patient number eventually translates into, let's say, obviously growth, let's say, also in economic growth. Just magnitudinally, just to give you a sense, we have increased our total number of patients despite the fact that there is a vacation period in Q3, and centers are not so hot on switching patients, by more than 10%. We have made significant progress, let's say, in this more tougher period of time, and clearly much more progress than last year at the same time. Patient switch does not mean you get your money right away. Patient switch means that you get a prescription, but sometimes the product is used that you have or that is still available. The economic results will come deferred. You will see some of these, let's say, these effects also having a deferred effect.
Frankly, I am much happier having a strong demand uplift than showing you a sales line, which is a result of the demand.
When I look at your outlook guidance, the upper end of total revenue guidance for this year, that kind of implies the fourth quarter total revenue would grow at a kind of a middle single digits. I am trying to figure out whether the middle single digit growth expected in the fourth quarter based on your guidance, from there you still expect nice uptick in hemophilia franchise sales in the fourth quarter.
Obviously, we're known not to tell stories if everything works out, life is going to be beautiful. Yeah. You will see, if you follow the guidance, you obviously expect a significant, again, quarter-on-quarter growth, let's say. You will see an uplift, obviously, very likely on the hemophilia side as a consequence of this. You have momentum with Kineret. The unknown is Orfadin as it was. We have, let's say, the last quarter was also affected by relatively poor sell-in into the Pfizer chain on the ReFacto manufacturing that clearly affected the quarter. There's likely going to be a bounce back. Overall, I think we are very confident about the guidance that we have given for the full year.
Thank you. Can you give us what the current market share of Elocta and Alprolix in your territories?
I think with these market shares, let's say, we don't provide here guidance, we are now in various markets. We have standard of care, that means we are market leader. Let's say, that the good news is that we are still, because we are looking at this in the funnel of penetrations, we'd be tracking obviously the patient number by account, then we still see substantial growth opportunities for us. Let's say, basically, as we just highlighted, saw an acceleration of the growth. I think we are a little bit careful now providing guidance on market share, we obviously give you the-- you have the total market numbers that are published, so you can literally just use your equation there. We are now becoming quite substantially. Let's say, the good news is we haven't peaked that. Yeah.
That's clear, the team are extremely excited and motivated now to drive growth.
All right. Thank you very much.
Thank you, Yoon. Appreciate it.
The next question comes from the line of Peter Sejersted from Handelsbanken. Please go ahead.
Yeah, it's Peter from Handelsbanken. Thank you for taking my questions. Regarding your EBITDA guidance, you are increasing your top-line guidance by CHF 300 million, then you're adding another CHF 200 million on costs. That should give you a +CHF 100 million, but you actually guided the midpoint down by CHF 50 million. What's sort of the discrepancy between the +CHF 100 million and the -CHF 100 million that you are sort of adjusting your guidance by? Secondly, you're saying the way that you are guiding for the years was that you discussed previously. You say Orfadin is an unknown. Are there other, let's say, factors where you are cautious? A couple of months, for the past many quarters when the trend was, let's say, the share price reflected a more positive trend.
Everyone was sort of implicitly assuming that you were being bullish, and I think you also previously stated that you wanted to be cautious, or let's say, rather surprised positively than negatively. I wanted to give you the kind of flavor again when it comes to the guidance for the guidance you're providing now. Are you also getting a guidance that you believe you can beat, or do you believe that you are actually realistic at this point in time? Those were two to start with, and I'll jump back in the queue. Thank you.
Yeah. Thank you, Peter Sejersted. Just to be quite explicit, what actually affected our guidance are the expenses that we didn't have initially in our guidance for emapalumab. That's it. If you look at this guidance like for like, we would have increased it to the higher point of SEK 3.7 billion. We have not done this because we are taking the SEK 200 million expense line on emapalumab, and as a consequence, we have guided, let's say, for a narrower range, SEK 3.4 billion-SEK 3.5 billion. The earning machine is doing extremely well and producing more than what we guided for. What basically at the top line comes in, flows through, then you deduct essentially the emapalumab expense line. That's to this point. We wouldn't represent those numbers if we would not be very confident at this rather late point of time that we can make those numbers. Yeah.
Okay.
A high degree of confidence. Yeah. Peter Sejersted, was another angle to your question that we could maybe take, or did I answer this?
No, it was just with respect to the top line component of the guide. Like I said, yeah, I think you probably embedded it in your final question, if that's okay.
Yeah. I think as we've always said, we don't want to underperform.
Okay. Thank you.
Thank you.
The next question comes from the line of Hans Maella from Nordea Markets. Please go ahead.
Yeah. Hi. Thanks for taking my questions. I have a few on emapalumab. Firstly, when it comes to your somewhat lower initial costs for the launch process, has this also changed the timing for break even or when it will be accretive to your earnings? Also, I wonder if you can specify how much of this sort of one-off cost you took in the third quarter, and maybe how you see the split between the R&D line and the sales and marketing line. Thank you.
Yeah. Maybe Henrik can talk about this.
Well, there is no change to timing. We still expect the product to be accretive in 2021. When it comes to the SEK 200 million that we think we will spend in 2018, about SEK 50 of them were spent already in Q3, so that would mean about SEK 150 left for Q4. For the remaining cost in Q4, it is more or less an equal split between R&D and sales and marketing. Slightly more on R&D.
Okay, great. Also, could you specify one on the intangible assets on the how long period will you amortize the amount? Maybe if you can comment a little bit on what kind of volumes you need to get to break even on the product.
Well, we will start to amortize it when we launch it, and it will be amortized over 15 years. Your second question was regarding?
When you had assumption on the break-even timing of emapalumab, what kind of underlying assumptions in terms of volumes have you included there?
We haven't guided on that yet.
Okay. Fair enough. Thank you.
When you look at it, at the top line, peak sales, that gives you an indication that obviously we have significant hopes for this product. We wouldn't provide such an indication if we would not be absolutely certain that we can beat those. We think it's a very significant product, and that's the reason why we're investing into this, why we're looking at new indications. Once you buy a product and you don't do anything with it would be a fallacy. Yeah.
Totally understand. Thank you so much.
Thank you.
The next question comes from the line of Richard Parkes from Deutsche Bank. Please go ahead.
Hi. Thanks very much for taking my questions. First one, just a little bit more sort of clarification on the 3Q quarter-on-quarter performance when you adjust for the French tax adjustment. Obviously, there's been that slowdown. I just wanted to clarify the point that you made. I think you were saying that you've seen a 10% increase in patients on therapy throughout the quarter. I just wanted to check whether that was correct. I'm trying to understand why that's not yet been reflected in sales. Is there any negative impacts in the quarter, either from pricing adjustments or buying pattern stocking that's dragged on that Q-on-Q performance? That's the first question.
Yeah. The way this works with these prescriptions is you get a prescription, you have product to use a product, then you convert to a new product. Now, depending on the patient, this can be instant, but this can take a couple of months. That's the reason why, let's say it is not instant. In the case now of Elocta, just to possibly there quite clear. Just to give you a little bit of a data point. If basically we have, for Elocta, made very substantial progress also beyond 10% incremental increase of patients in the Q3 2018, and we have significantly more than 20% growth, actually more than 25% growth, Q3 2018 to Q3 2017 in terms of absolute patient acquisition rate. Switches. What it means is also Elocta is actually doing extremely well. Let's say we enter in our funnel.
The team, the machine that we have out there, which is not incentivized now to smooth over, let's say, basically manage the sales. They are there to create demand. The sales is what basically the channels and the clinics and others are ordering. Obviously, it's basically then also driven by those things. There is a time delay over time that obviously is going to equalize itself. What you can see is that we still on the way up in augmenting relatively our share in this market. That's the reason why we are actually quite bullish.
Okay. There were no specific negative impacts in terms of pricing or buying patterns. It's just a case of a sort of delay between the prescriptions being written and getting sold.
I mean, obviously, there are price effects. There are some net price adjustments in Sweden, for instance. In terms of materiality, it is primarily it's a phasing effect. Let's say, there is obviously a price effect as well, but this is not driving now, let's say, the quarter-on-quarter development.
Okay, perfect. Second question. I understand there's a factor VIII tender in the U.K. that's coming up, I just wondered how much of your sales are currently coming from the U.K. and what your confidence is in taking part in that tender going forward.
Yeah, we don't comment on singular countries. Let's say the U.K. is for us an important part of the business, but it's not the important part of the business. I don't want to comment on what basically our tactics for the next tender are.
Okay. Third question just on emapalumab. Just wondered when, because I think the clinical data hasn't been presented since 2015. When would you expect to present data from the updated clinical studies, which I think have been submitted to the FDA for review? I'm just wondering whether there might be something at ASH, or would you time something for next year during the launch phase?
Armin, you want to comment on?
As you can imagine, right now, we are pursuing heavily discussions with the FDA to really get that on track and get approval for that product. That is for us now the primary objective. Once that is accomplished, we want to go into publishing more what is already in the books, and you can also find it on the ASH website. There is a Medscape CME accredited symposium that will talk about HLH and other [fluke] therapies. Clearly that is a hands off from our side. There's clearly the top opinion leaders talking about the disease and new therapies on the horizon. This is for us more getting the approval and then doing the next steps. The next congresses are clearly in our publication plans.
Okay, perfect. Then I might just second one last one, if that's okay. Since the Hemlibra approval, there's been quite a lot of negative pressure on your share price. Despite the fact that wasn't really a surprise that that was coming. I'm just wondering, based on the label of Hemlibra or that approval, has anything changed in your view of the competitive threat from Hemlibra?
Yeah. We were, to be honest, a little bit also surprised that actually news in a way that were no news, let's say, had such an impact. That's not for us to comment on. That's really in the eyes of the beholder. Basically, yeah, Hemlibra is becoming effect, let's say. As we have pointed out, we believe in the profile of our product, strong safety profile. A lot of it based on real-world evidence, not on patient selection in a clinical trial setting. Let's say, and basically allowing you to personalize a product. I think that equation, honestly, hasn't changed. We're obviously in a permanent dialogue with those people who really matter for making such decisions. Because no matter what we believe, it's essentially, in this context, really irrelevant. It is what the physicians believe and what patients feel.
We haven't sensed that this equation has changed. Armin, you want to comment?
Yeah, I want to comment.
Quite a number of contacts we have via advisory boards, personal face-to-face interactions. In essence, what we hear, without exception, is there are certain dimensions that you need to look at when you are assessing such a product, a new product or existing products. I just list them down to you. Those are the dimensions that were given to us by the physicians as those are their most important ones they look at. Protection, safety, personalization, reduced treatment burden, the capability to treat on-demand bleeds and surgery where there's a much higher need for higher factor levels, the possibility that it is a factor replacement and not a substitute for the factor VIII replacement, and the ability to measure that factor.
If you take all those dimensions together, you get a score number or an index or whatever you want to do with it to assess a certain kind of product. If we look at Elocta and also at BIVV001 to come, we are, I would say, literally the standard of care with Elocta right now, and we even want to beat that with BIVV001 coming. This is our view on any new technologies entering.
Perfect. Thank you very much.
Thank you.
The next question comes from the line of Christopher from ABG. Please go ahead.
Sure. I guess, the first question is on Alprolix. Obviously, you've said a lot about the seasonality and the phasing. I'm just wondering, is there anything more you can add on the switch rate? I'm wondering if, given that the number was lower than Q2, was competition from IDELVION or Refixia a factor?
No. We had a record high, let's say, switches in Q3, let's say, versus previous year. In fact, let's say for Alprolix, the switch, let's say, was even higher than, let's say, the relative contribution to the overall than for Elocta. So it was more than 15% of new patients coming in in Q3. Even though when you look at it quarter-on-quarter sales performance, it is not reflected in what we have seen in the acquisition of new patients.
Okay, thanks. On Kineret, what's driving growth and, it sounds like from the presentation that it still became significant now. Do you see a chance of approval for in acute gout on the anaGO data?
I think, this is a phase II data. Let's say, I think there needs to be a phase III program. We now hold our horses, and basically wait for the meeting that we will have with FDA. We think that the product has utility, obviously, in the indication, otherwise we wouldn't have done what we have done. What basically drives the Kineret growth is growing scientific interest. It is a distinct indication, and it is our investment into the marketing and sales organization and the medical organization in the U.S. that has accelerated growth. We think that there is utility of the product in new indications as well. When we have basically made the decision to enter into new programs, we will let you know, obviously.
Okay, thanks. Let's see. Do you have any data yet on whether therapeutically relevant levels of SOBI003 cross the blood-brain barrier?
No. We know that we have now three patients randomized, and we know that the product for the patient that has been enrolled in the program first was well-tolerated. At the moment, this we cannot say. It's a blinded trial, and let's say, we have to wait.
Okay. All right, tax, though. That was nearly 23% this quarter. Perhaps I'm recollecting correctly, but my sense was last quarter you were indicating that it might be more like 21 point something. What's the reason for the difference at any rate Q on Q? Should we expect a higher rate going forward?
Henrik?
You've put me in a difficult situation because I wasn't here in Q2. We've normalized now, I would say, in Q3, because Q2 was obviously impacted by the one-time effect. If you mean 2018, we are heavily dependent on the Swedish tax rate, so it's more likely to be between 22 and 23. As you know, from 2019 onwards, we will have a reduction in Swedish tax rate.
Okay, thanks.
Our last question comes from the line of Peter from Handelsbanken. Please go ahead.
It's Peter from Handelsbanken. I have a couple follow-up questions. The first one relates to emapalumab and the primary versus secondary. Could you give an estimate of how the 5,000 patients are distributed between primary and secondary? Secondly, with regards to Orfadin alkaptonuria. You have it in your pipeline slide, but it's not really something that you talk about in your full year reports. Given how this is developed and the particular structure there, could you just update us a bit on what your, let's say, go-to-market strategy for this particular indication is? Or is it used so much off-label already that we really shouldn't expect anything from Orfadin in this indication?
Thirdly, just an update on Kineret, exclusivities, how the current formulation of what you're selling relates, or how much of that is associated with the 2032 patent, et cetera, just to give us a flavor for how we should think about, let's say, threats from similar products. Thank you.
Maybe we should start with the question on primary and secondary HLH. Obviously, there's a majority of patients which is secondary, let's say, I don't think we are providing, let's say, guidance on the disease. Please feel free, but there will be, obviously, utility of the product based on the patients that have been recruited in the current trials in both parts of HLH. We don't want also to have any comments on the label discussion on anything. We think that the product has utility both. This trial, it is now developed for primary, let's say, we'll find out. I think there we might take a step back, but in total there, it's 5,000 patients that can benefit from the product. It's quite a significant, actually, number of patients.
Yes, granted, let's say the effect of secondary HLH will come later at this stage. To be honest, we will provide guidance on this at a later point of time. I hope you understand that, particularly as we are currently in the midst of various discussions, so I don't want to speculate. The second part of your question, sorry, Peter, can you just remind me what the second part was?
It was regarding the alkaptonuria indication for
Yeah.
What you are.
To be honest, this is something that we did to justify basically utilization of the product in this indication because we felt it's important. It was a request that was made to us, and we did this in the interest of patients and physicians. It is not materially affecting by any stretch our P&L, unfortunately. It is a service indication that we did because we were asked by the medical community and by patients to get this on label.
Okay. Thank you.
Sorry, there was a third question to the first, or maybe I missed this.
No, it was actually relating to Kineret exclusivities, how much is actually protected, not protected right now by existing patents, and yeah, just to get a flavor for how the product's sort of protected against biosimilars, generics, et cetera.
From what we understand, we are developing the product, and we are not aware literally of competition for now.
Okay. I'd like to throw in a final question on a question I've gotten a lot this morning, relating to how costs might develop going forward. That appears to be quite a large uncertainty, and the question is, how will the Sobi cost base grow from here? Could you give us some flavor on that? What we heard, the SEK 200 million, are they one-off for the quarter? Or, sorry, for the year, would they be replaced by something else? How much more cost would there be for emapalumab, et cetera? Also the commercial infrastructure and what might the additional acquisitions of the emapalumab assets imply for the cost base? Some flavor on the cost base going forward.
Obviously, the opportunity for emapalumab is very significant. Let's say there is a one-time cost element in the cost right now included, but there is also a significant part is ongoing cost. Now we bought the product, and we now need, it is our duty to develop it and make it a big success in the market in the interest of our shareholders, but clearly in the interest of patients, given this very high unmet medical need in both those parts of HLH. We will provide guidance on 2019 in line with our usual schedule, and then we will give you a detailed guidance on what we want to spend and what our forecast for the year is for 2019.
We would not necessarily at this point in time endeavor to do this because, first of all, we think we want to conclude on how many indications we can develop, and we want to get a sense for obviously for the earnings of the company. We feel very bullish about this product, and it is a beautiful opportunity for Sobi. It ticks so many boxes of our strategic fit at late stage, and we get to launch now in the U.S. soon. I hope that analysts and investors will want us to spend money on emapalumab because it is really a very good investment into the future.
Thank you.
Thank you very much. I'll hand the conference back to the speakers for closing comments.
Yeah. Thank you so much. I hope we could clarify the accounting of our guidance for the year. I hope we could also clarify that we actually have made substantial progress also in Q3 in hemophilia. I hope we could share with you at least a little bit that we made quite substantial progress and when I look at my colleagues here, we felt those 45% top-line goals and over 70% earning goals, actually didn't feel so bad. Yeah. Let's say with all due respect. Thank you for your interest and for the very good questions and please stay tuned. Appreciate it. Yeah. Thank you so much and have a great day