Ladies and gentlemen, welcome to the Sobi Q1 2022 report. Throughout the call, all participants will be in a listen-only mode, and afterwards there will be a question-and-answer session. I will now hand over to the company.
Yes, hello, everybody. This is Guido Oelkers as the CEO of Sobi. Welcome to the First Quarter 2022 Report and Conference Call for Investors and Analysts. The presentation was posted to sobi.com earlier. With this, let's go to slide number two. Slide number two has the usual safe harbor statement. We are making comments on our performance using constant exchange rates or CER, and numbers used are in million Swedish Krona for the first quarter of 2022, unless stated otherwise. Please turn to page three. This is the agenda, where we plan to cover all key aspects and results today. We plan to review the presentation first and then do a Q&A until around 2:00 P.M. Swedish time. There are other companies reporting today, and we want to be respectful of your time.
If you keep questions short, we will try to keep the answers short too. For those on the phone, please join the queue for questions by pressing zero. We propose to ask only one or two questions at a time, many thanks, in the interest of the audience. In speaking order, I'm joined by Henrik, our CFO, Anders, our head of R&D and Chief Medical Officer, and for later questions, we have also Armin, our head of Medical and Scientific Affairs here. Let's turn to slide number four. Starting off the presentation, I'm pleased that 2022 has started well for Sobi, despite quite a few uncertainties in the world around us. The revenue grew by 24% or at constant currency 35% as an element of phasing for Doptelet sales to the partner in China.
Synagis ended the RSV season on a high note as patients stayed on medicine. Our new launch medicines, Doptelet and now also Aspaveli and Gamifant combined grew 126%, and the global Sobi network continued to perform well with the launches. The underlying EBITDA margin landed at 40%. On a reported basis of 26%, we included a provision for expected credit loss in Russia of SEK 157 million restructuring costs related to the already communicated contract manufacturing closure with a cost of SEK 360 million. A simplification of SEK 72 million of our site structure and efficiency programs of another SEK 72 million. All items affecting comparability are detailed and fully transparent on page three of the formal Q1 2022 report today.
The efficiency programs will focus resources into core areas, simplify the organization, adjust our cost base to enable to continuously and sustainably grow the company and, generate margin improvement over time. The pipeline continued to deliver with the first phase III data of efanesoctocog alfa. With this, we stated a potentially transformative journey towards normalization of hemostasis in hemophilia A, and which could, enable patients to live a life at the fullest. It is also an opportunity for Sobi to bridge the present with the future and anchor our leadership in hemophilia in the long run. We expect continued pipeline news flow in this year and in 2023. With this performance, we underpinned the 2022 outlook today. Henrik will cover outlook later. Finally, I would like to thank my colleagues at Sobi for their dedicated work, which made these results possible.
We strive to make Sobi a great place to work and, with all due respect, we try to make it the greatest place to work in rare diseases. Slide number five, please. Moving to disease areas and geographies. We had a strong growth among all disease areas with hemophilia benefiting from lower comparisons in 2021. Hematology was boosted by Doptelet, while growth in immunology was driven by Gamifant and Synagis. From a regional perspective, we saw higher growth in new markets or international markets, further adding on global expansion and increased geographic diversification of Sobi's business. All in all, this performance supports Sobi's quest to become a global leader in rare disease. Please turn to slide six. Turning to hemophilia, we saw growth of 7%, but from a low base in first quarter 2021.
As we move forward this year, we continue to see stabilization of sales. Given the lower base, Elocta advanced by 15%, supported by an increased number of patients and factor consumption. Alprolix also saw an increased number of patients, but also a slight offset from the low consumption and some price adjustments. As we move ahead this year, while hemophilia remains competitive on tenders and prices. Remain cautiously optimistic to be able to continue growing this business or at least having a stable development. Further in hematology is Doptelet, a key growth driver in the future. On the next slide, quarterly revenues saw a significant jump from the phasing of sales to the partner in China, which of course creates a higher comparison later in the year.
In the U.S., we continue to see good uptake, and we increase the focus on launch excellence and execution. In Europe, most revenues still came from Germany, but we have seen good progress elsewhere. We recently won a tender in a Nordic country with Doptelet and now rank first ahead of an oral competitor and the injectable competitor not part of the ranking. In many countries, we are the market leader in hemophilia. As we expand in hematology, we aspire to become a leader in ITP and make Doptelet the thrombopoietin medicine of choice. Let's turn to slide number eight. We are pleased to announce the first sales of Aspaveli for PNH in Europe, and the formal launches are now commencing. Please note that the official launch in Europe was in April, but we had already some sales to the market.
Initially in the U.K., obviously, we launched and followed by Germany and then soon in France. We made some initial sales in the U.K. in March, and first commercial patient was dosed in the home care program last week. We have been granted early access authorization in France for EU labeled use in patients with hemoglobin levels below 10.5 g per deciliter. Germany will start once eligible patients have been vaccinated as per the EU label. As we move forward, we carefully track all relevant launch metrics, but, you know, we have some very encouraging signals, particularly when you're looking at the number of patients who have been earmarked for this treatment. Please turn to slide number nine. Turning to immunology, Kineret revenues grew by 11%.
Growth was driven by the use for COVID-19 in emerging markets, partially offset by lower spontaneous use for COVID in the U.S. Underlying sales outside of COVID-19 is estimated to have a growth in the single-digit percentage range. Gamifant revenue increased by 27%, which is less, compared to the second half of 2021. While we continue to see growth in patient volume and duration, we also saw an offset from number of patients who concluded their treatment, and, we'll come later to this. There's also, you have to take note of the Q4 results of Gamifant in 2021. Please turn to slide number 10.
Last in immunology is Synagis, where we saw strong sales growth of 31%, driven by a lower base in 2021 caused by the reduced infection levels as well as patients continuing to get their monthly immunization this year despite the earlier part of the 2021-2022 RSV season. Given the uncertainty heading into the quarter, we are pleased by how the total season has played out and very gratified by the success that the team has been able to achieve. As we look ahead with the RSV season at a low level during the part of this year, it's always difficult to predict the new season. Our assumption is that we will have a season for 2022-2023 following a normal pattern. I will now hand over to Henrik, our CFO, for the financials. Please go ahead, Henrik.
Thank you, Guido. I'm pleased to turn to slide 12. Hi, everybody. I will now take you through the financial performance for the first quarter of the year. Starting with the quarterly revenue, and knowing that Guido just covered some of it, I'm showing quarterly amounts here over the past five quarters. In Q1, all disease areas showed growth over the same period last year. If we look at it sequentially versus the fourth quarter, the lower revenue in immunology was due to higher sales of Synagis and Kineret in the fourth quarter, as we reported in February. Turning to the profit and loss on the right for avoidance of doubt, the table has growth rates at actual exchange rates, the statutory view.
Revenue for the first quarter was high, growing by 24% at CER, and it was elevated by the phasing of Doptelet sales to the partner in China. Doptelet sales to China are volatile due to the ordering pattern and do not carry the same value to Sobi due to a clearly lower margin. As we move into the year, we also anticipate growth rates to moderate due to higher comparisons in 2021. Gross profit included SEK 360 million of cost related to restructuring and asset impairment from the discontinuation of contract manufacturing, as previously communicated. Including this, the gross margin declined to 77% in the quarter from 80% in the comparable period. The mix of business was the main reason for this, with sales of Doptelet to China representing the largest impact on gross margin.
SG&A expenses included SEK 249 million in costs related to restructuring, asset impairment, and a provision for expected credit losses in Russia. This provision alone was SEK 157 million. On an adjusted basis, excluding these costs, SG&A increased by 23% at CER and supported the launches of Aspaveli, Doptelet, and Tegsedi in the U.S. and also our geographical expansion. The R&D expenses included SEK 52 million in costs affecting comparability. Excluding these costs, the increase was a more modest 4% at CER. The reported EBITDA margin, as we heard, was 26%, but when adjusted for the items affecting comparability, the margin reached 40%. Finally, earnings per share for the quarter ended at 3.67 SEK on an adjusted basis.
For more details, look at page three and further on pages 22 and 23 in the Q1 report. If we go to next slide, please. We turn to net debt and cash. Driven by the strong operating cash flow, we saw further material reduction in net debt to SEK 8.3 billion at the end of the quarter versus SEK 9.5 billion at the end of 2021. As a consequence, the net debt to Adjusted EBITDA ratio reduced from 1.7 x to about 1.3 x at the end of the quarter. The reduction in net debt and improved credit metrics highlight once again the strong cash flow generation. Despite the continued investment in sales and marketing and development, we remain very cash generative. Please, next slide.
Finally, I'll turn to the financial outlook for full year 2022, which is on revenue growth at constant currencies and Adjusted EBITDA margin. As discussed in February when the outlook was issued, we will continue to expand the presence in rare diseases and expand into new geographies. As a result of this growth strategy, we expect revenue to grow by a mid- to high single-digit percentage at CER. This means that growth compared to last year is anticipated to moderate as we move further into 2022 due to the higher comparisons from the second half of 2021. Furthermore, we will continue to invest in the pipeline and launches of new medicines to unlock the long-term value of the company. Despite these investments in the future, we maintain a favorable margin. EBITDA margin is anticipated to be at a low 30s% of revenue, measured as Adjusted EBITDA margin. With this outlook covered, I now hand over to Anders for the pipeline. Thank you.
Thank you very much, Henrik. For me, now having been in the job for four months, it's great to see our pipeline continue to deliver positive news and move forward and help deliver medicine to patients in need in orphan and specialty care indications. Looking at the pipeline, next slide, please. At the pipeline news since February, a few highlights from my side. We were indeed very pleased to receive the regulatory approval with orphan status for Aspaveli in the U.K. in February for the treatment of PNH. This followed earlier approvals in the E.U., Saudi Arabia, and Australia. By being granted orphan status, Aspaveli will benefit from up to ten years of market exclusivity from similar medicines in the approved orphan indication. Gamifant was approved in China for use in primary HLH.
This was a milestone for Sobi as the first approval awarded to our company in China. We have worked very hard on our geographical expansion, so it's quite nice to see real progress also from a regulatory and approval point of view. In early March, Sobi and Sanofi announced the first phase III results of efanesoctocog alfa or BIVV001. The XTEND-1 study met the primary endpoint, showing very clinically meaningful prevention of bleeds in people with severe hemophilia A receiving weekly prophylaxis in addition. The phase III studies in patients younger than 12 years of age, XTEND-Kids, achieved enrollment completion with data anticipated in 2023 to support the EU regulatory process. In Japan, Doptelet was submitted for regulatory approval, and the filing was accepted for potential use in chronic liver disease.
This is a small indication in Japan, but it marked a milestone for our company, as this was the first regulatory submission even for Sobi in Japan. As of today, we have also got the pegcetacoplan filing approved in Japan. Our collaborator, Apellis, announced that they achieved enrollment completion in their phase II study in ALS or Lou Gehrig's disease. Finally, we completed the promised U.S. regulatory submission for emergency use of Kineret in COVID-19, and we hope to hear back from the agency soon. Please turn to slide 17. The big news and very exciting news for us in the first quarter was the positive readout of the XTEND-1 phase III study for efanesoctocog alfa in the treatment of hemophilia A.
The study met very clearly the primary endpoint, showing a clinically meaningful prevention of bleeds or bleeding episodes in people with severe hemophilia A receiving weekly prophylaxis with efanesoctocog alfa over a period of 52 weeks. The median analyzed bleeding rate was zero, with a mean annual bleeding rate of 0.71. A key secondary endpoint was also met, demonstrating once-weekly efanesoctocog alfa was superior to prior prophylactic factors to factor VIII replacement therapy, showing a statistically significant reduction in annual bleed rates based on intra-patient comparisons. Efaneseoctocog alfa was well-tolerated and inhibitor development to factor VIII was not detected at all. These data supported our confidence in the potential of efanesoctocog alfa to elevate protection in people with hemophilia A towards normal hemostasis.
Sobi and Sanofi plan to present the detailed data at forthcoming medical meetings, including data on physical health, pain, and joint health. We believe once-weekly efanesoctocog alfa has the potential to represent a new class of factor VIII therapy designed to provide high sustained factor VIII activity levels near normal for the majority of the week, and with that, the potential to transform hemophilia A therapy. Please turn to slide 18. We look ahead to the pipeline news flow in the remainder of 2022 and 2023. We expect more news from Aspaveli life-cycle program, and we anticipate the last phase III patient recruited for Selecta’s SEL-212. In the second half of 2022, we anticipate collaborators to apply for U.S. approval for efanesoctocog alfa and nirsevimab as well as for phase III program readout for SEL-212.
We also expect to hear from the U.S. FDA on Kineret, as well as seeing data for Gamifant in new indication. Looking ahead to next year, we also anticipate a good level of news from the pipeline, a list of events which will get longer as we move ahead. Thank you for your attention and for the opportunity to talk about our science and clinical development in Sobi. With this, I will hand back to Guido, who will now conclude.
Yeah. Thank you so much, Anders. Please turn to slide number 20. So, you know, when you summarize, you know, our presentations, what we wanted to share with you. You know, revenue grew by 24% with an element of phasing of Doptelet and to our partner in China. Our launch medicines delivered and, you know, R&D is under 26%. Very pleased with this result. EBITDA margin landed at 40% on an underlying basis and including the one-time items of 26% on a reported basis, as we outlined. As we stated, the 2022 outlook has been renewed today. You know, the efficiency programs will help us to build the company into the future. I'm very proud of the pipeline progress, particularly in hemophilia A.
I think with this, please turn to page 21, and we are opening up the floor for Q&A. For those on the phone, please remain there to press zero one to ask questions. Can I please remind everybody to limit questions to one or two to be fair to other callers. Thanks in advance and perhaps now we can take the first question.
Thank you. As a reminder, it is zero one to register for a question. The first question does come from the line of Adam Karlsson from ABG. Please go ahead. Your line is open.
Hi. Thank you for taking my questions.
Hi there.
Hi. Compliments on a strong quarter. Two questions if I could, one on Doptelet, and one on Elocta. First on Doptelet, you attributed the strong growth in part to a phasing of sales in China, as you said, but also continued launch progress in the U.S. I was wondering if you could give an indication of the relative contributions of these two components to the growth. For the China component specifically, how much was sort of a phasing of sales or stocking-
Yeah.
Versus, true demand, please?
Yeah. I mean, basically, you know, the China business was in Q1 give or take half. The rest was attributed to the U.S. And, let's say, obviously launch success now in Europe, primarily and a little bit in international markets given the phasing of the launches. You know, it's only so much. You know, we spend quite a bit of time on Doptelet in the U.S. to unlock growth, and we see that this is paying dividends now. Obviously it helps us that we have now more face-to-face interaction with physicians.
Great. Thank you. My second question on Elocta. Anecdotally, to be fair a bit, we've had indications of patients who have once switched to Hemlibra having switched back to Elocta. While I guess net patient gains for Elocta are of course predominantly.
Mm-hmm.
For the mix of short half-life factor replacement gains and Hemlibra losses, can you give an indication of whether you're seeing any sort of meaningful gains from Hemlibra beyond sort of very low number or anecdotal instances?
No, I think, you know, we have indications that there are quite a few patients. You know, but it's not, you know, in terms of materiality, it's, you know, it's still a relatively moderate part. You know, you, as you can see also from the other presentation from the owner of Hemlibra, you know, growth in Europe has pretty much flattened over the last quarters. That is an indication that, you know, we are on a good way. Obviously we are excited now to have the strong data of BIVV001 that basically now we know at least many physicians are very excited of. As we get closer to the launch, you can expect it that more and more patients will be reserved already for BIVV001.
Great. No, that's very helpful. I'll leave it there. Thank you.
Yeah. Maybe we turn back to the operator or to the next question. Viktor.
Thank you. Our next question comes from the line of Viktor Sundberg from Nordea. Please go ahead. Your line is open.
Yeah. Hi, and thanks for taking my questions. So first one on Doptelet as well. Maybe a bit old news. Back in September, you got an unfavorable reimbursement decision in France for ITP. I just wonder if there is any read-across here to other European markets, or did you see this as a one-off backlash in France only? Then I have a follow-up as well.
I think there may be a misunderstanding. I think the main contribution, let's say right now in Doptelet from Europe is coming from Germany. Obviously, we look forward now to roll it out at a more material level across Europe. You can expect that Europe is gaining materiality. There's a price difference, obviously, versus U.S. that will not allow Europe to reach levels as you will see in the U.S. We basically will unlock over time new markets in international markets. The biggest opportunity internationally will be in Japan.
Okay, thanks. Then a second one on Gamifant. So as you mentioned, you will read out MEDLEY in the second half of 2021. It's a bit difficult to interpret what kind of proportion of patients that would need a complete response on emapalumab to hit your primary endpoint. I just wondered if you could guide me a bit here. Secondly, I see in your milestone slide that you don't have Gamifant in macrophage activation syndrome as a regulatory decision in 2023. I just want to confirm if you still believe that Gamifant's label could be extended in 2023 for macrophage activation syndrome. Thank you.
Maybe I refer this question to Anders as he is here and,
Yeah, I mean, in terms of, we still have relatively few patients in the hematological isolate study. In terms of, you know, we based on previous observations and use, we have good expectations that we will get a good response and many complete remissions. I think it's too early to really speculate in what level of efficacy we will see.
Yeah.
The second question.
This was, maybe you, I can take it.
Yeah. Okay. Yeah.
You know, Anders. This was regarding macrophage activation syndrome and regulatory approval. You know, this is less owed to our confidence around the product. It's more owed to the way we're doing things here that we want to provide you with certainty. We only list regulatory decisions, you know, once we have the data in our hands and then we file. Yeah. That is the reason why you don't find it. It's not that we are lacking confidence on the product.
Okay. Thank you. Congrats again on a strong quarter.
Appreciate it. Thank you. Maybe we move on then to the next.
Our next question. Apologies. Our next question comes to the line of Peter Östling from Pareto Securities. Please go ahead. Your line is open.
Yes. Thank you. Just a quick one on the guidance that the EBITDA is now ex one-off items, and you had a 40% in Q1, but you still guide for low 30s%. What will happen in the next couple of quarters that you still believe that you will end up in the low 30s%? Could you elaborate a little bit on this? Thank you.
Maybe Henrik takes this question. Yeah.
Yes, Peter. Well, the main difference is the much stronger comparisons with the second half of 2021. That explains, you know, most of it. We also expect to see slightly higher spend, particularly on the R&D side during the remainder of the year.
Okay. Thank you.
Thank you.
That, that's helpful.
Maybe just to add, you know, obviously the Q1, given the seasonality of Synagis, is tend to be always a little bit higher as Q4, because of the more pronounced Synagis sales. Yeah.
Yeah.
Okay.
That should come back in Q4 this year as well if you expect a normal Synagis season.
Yeah. Yeah. Yeah.
Yeah.
In Q4, yes, but then we have Q2 and Q3 also on an annualized basis, yeah.
Okay. Fair enough.
It's obviously early, but, you know, we will be relentless, Peter.
Okay. Thank you.
Thank you. Okay.
Thank you.
So-
Our next question comes from the line of Christopher Uhde from SEB. Please go ahead. Your line is open.
Hi there. Thanks for taking my questions, and I appreciate seeing the geographic split of sales, so thanks for that. Alprolix is my first question. What percent of performance was due to factor consumption? And what's the driver of the reduced factor consumption that you mentioned? And then what percent is pricing and was there any phasing given the blowout Q4? That's my first question. My second question is thoughts around financing. If you could share your thoughts around financing and the changing rate environment, what would need to happen to make you change your approach to financing M&A? Thanks.
Yeah. Christopher, thank you for your questions. I mean, I think, you know, when you look at the Alprolix performance, what we can see is, you know, we have good patient growth. We had some, let's say, some topics with still a little bit lower consumption that we carried forward. You know, I think, you know, when you look at the Alprolix performance, I'm just looking here at slide number six. You can see obviously a very strong performance in Q4. I think you have to partially see the Alprolix performance also in Q1 and look maybe at the combination of the two quarters.
Because we, when you look at the underlying business factors, you know, patient numbers, we got a little bit, price here and there, but, you know, nothing in a material fashion that would explain, you know, this such a drop. I think you need to, there may be some carryovers, and you need to see both quarters in combination. That's the reason why we have guided on a more stable hemophilia business for the year, yeah.
Great. Yeah, thanks. Basically primarily phasing, essentially it sounds like.
Yeah. I think this is as if, you know, this is a very strong phasing effect. Therefore the product is still making progress, you know, but not exponentially. With regard to the financing question, I like to refer to Henrik.
Yeah. Christopher, can you repeat the question? Something about how to finance M&A or?
Yeah. In terms of your, you know, approaching how you approach financing of M&A, obviously there's a changing macro environment that affects your interest expenses. What would need to happen to make you change what has been your approach or you know in terms of how to secure financing for your M&A?
I don't see any changes in approach. You know, if we go into a period of higher interest rates, you know, I think we have the capacity to stomach that. We have a significant debt capacity, you know, operating out of today's very moderate debt levels. I don't see a change there.
Okay, great. Thank you very much.
Yeah. Christopher, I mean, for us, you know, it's a matter, can we create value? Yeah, I mean, then basically with the interest rate hike, you have, you know, just your hurdle rate that to perform is just elevated. We keep going. All right. Maybe next question.
Thank you. Our next question comes from the line of Mattias Häggblom from Handelsbanken. Please go ahead, your line is open.
Thank you so much. Two questions, please take them one at a time. Firstly, on the productivity measures that caused some of the one-off cost elements in the quarter, help me think about the potential savings from this, and if possible, please quantify what that could lead to.
Henrik.
Yeah. What we are doing here with the one-offs is really, you know, first and foremost to get the resources into the core areas. That is why, you know, we exit the contract manufacturing. We are also simplifying the company. We are consolidating the sites in Switzerland. We believe it's much better to operate out of the one place than several places. There are also efficiency programs ongoing, and that is really broad. You know, our ways of working and our organizational structure is being developed. Of course, we do this also with the expectations to long-term be able to support the growth, but, you know, long- to mid-term improvements in the margin.
We don't quantify it any further than that at this point in time. Of course, that's an important piece of it.
Good. Then secondly, you raised the credit facility of SEK 2 billion in the quarter and a commercial paper program up to SEK 4 billion. Should this be seen as normal balance sheet maintenance, or should we view these activities as signs of your appetite for near-term deals and tie in the status of your business development activities at the moment?
You know, M&A is of course part of the business model, but what you're referring to is, you know, more diversification of the existing financing.
Hello?
Yep. Okay.
Good. Thanks a lot.
Maybe we go on to the next. Thank you.
Thank you.
Thank you.
The next question.
Our next question comes from the line of Erik Hultgård from Carnegie. Please go ahead. Your line is open.
Yes. Hi there. Thanks a lot for taking my questions. I have two, if I may. First on Aspaveli. You mentioned, Guido, in your comments that there is some patients that are already earmarked for this product. I was wondering if you could quantify or at least put some perspective on if that's a significant number of patients, and what this would imply for the uptake. Should we expect to boost the coming quarters and then sort of a catch-up effect, or is it less of a significance? I have a second question, if I may.
Sure. No, on Aspaveli, I mean we have not yet gone public with the numbers, because they are also referring, you know, the material size refers now to April, let's say, where we have seen a significant spike. But you know, let's say it is. We are gratified by it, but just bear in mind with the Aspaveli product is, you know, you have a bit of a lag time. You have to get the patients vaccinated. You know, so until you see materiality of sales, you know, it will take, you know, up to half a year.
That's also what you have seen, let's say, even though they're, you have a bit of a broader label in the U.S. This is what you have seen also with our colleagues from Apellis. You know, you will see a ramp-up, let's say, that basically is a bit slower at the beginning, but then obviously, given the economic size, will be quite significant. With the numbers I have on hand, let's say that at least I can be quite confident that we are up for something good. I cannot give you now. As we always have said, this is not a vertical launch, simply because of the steps we have to go through, not because of the economic potential of the product class. Maybe next question.
Great. Yeah, thanks a lot. On Alprolix, you mentioned on favorable price adjustment in the quarter. Is that related to any specific market? Is this something that will stick the coming quarter, so you have basically lower-
Yeah.
-price point on-
No, I think.
in certain markets.
I think we tried to emphasize that, you know, the primary driver was really the comparability. You know, you should look at Q4 and Q1 as one, and then price is more, you know, it's more spread. There has not been any extraordinary pricing. It's more a competitive behavior because obviously you can appreciate that, you know, we are in a competitive situation. There is other factor IX suppliers. But, you know, nothing that sticks out or that has been for us a reason now to be worried and not basically hold on to our outlook that this is more of a stable franchise for us this year.
Great. Thank you so much.
Thank you, Erik Hultgård. Appreciate it. Maybe we go to the next question.
Thank you. Our next question comes from the line of Adam Karlsson from ABG. Please go ahead. Your line is open.
Hi. Thanks for taking a follow-up. Just the one. On the SEK 660 million in one-offs or items affecting comparability, is it fair to assume that roughly 20% of that will be non-cash, that component being the impairment of tangible assets related to the ReFacto closure and restructuring costs? Or are there any other significant non-cash components to be aware of? Thank you. No, Adam, it's actually probably less than 20% because part of the tangible asset impairments refer to capitalized rent to capitalized leases. So it's obviously mainly cash items here. Okay. That's helpful. Thank you.
Thank you. Next, maybe next question.
Thank you. Our next question comes from the line of Eun Yang from Jefferies. Please go ahead. Your line is open.
Thank you. I have one question on Doptelet and then the other is on SEL-212. On Doptelet, last year, third quarter, half of the sales came from China. Then, you know, fourth quarter sales were kind of low in China, less than third quarter. First quarter this year, growth is driven by phasing of sales to China. Can you kind of quantify how much of first quarter sales came from China? How should we think about quarterly growth for the remainder of the year? That's question number one. Question number two is on SEL-212. Recently, Horizon Therapeutics filed for sBLA, combining KRYSTEXXA with methotrexate. I wanna ask you how that could change your efficacy bar for the data read-out toward end of this year as well as marketing petition. Thank you.
Yeah. Very good. Thanks, Eun, for your questions and great to have you on the call. Regarding the Doptelet, I start with, we have, I mean, we have around 50% of the business this quarter or last quarter in Q1 related to sales to China. We expect that there will be more sales to China, obviously. Maybe this is not a representative quarter. Yeah. To be also honest. You know, there will be what we can expect there will be more sales given the fact that Doptelet is on the NRDL and hence, you know, they basically will ramp up now commercial activities and we have limited visibility on sell-out in China right now, to be honest.
You know, we see that we can look forward to more business from them. For me, the key is that we make good progress now in the U.S., foremost and which we are doing. Very encouraged by the more recent signals after we have done a couple of tweaks to the business and also now that we are ramping up Europe and international markets. The product is in a good shape and, you know, with very strong growth irregardless now of this variation that you have seen in China. Yes, there will be more business coming in from China. Doptelet will become a very material product for us this year. There is no question.
Maybe with regard to SEL-212 and the recent development of KRYSTEXXA, maybe Anders, you want to comment.
The-
Sorry. On the recent
On the methotrexate combination with KRYSTEXXA, and let's say and whether this changes the bar. I'm just paraphrasing. I mean, we have been knowing about that program since some time, and we are still quite confident in the potential and advantages of the ImmTOR technology and the SEL-212 with methotrexate is a well-known compound and with a lot of limitations in the utility. This is not any surprise to us. It's not changing our-
Yes
our expectations on the product.
No. You know, I think, Eun, you need to also see this in a context that methotrexate is not indicated for many patients, and in particular, those, you know, who have a more frequent alcohol consumption, which is quite a significant chunk of those chronic refractory gout patients. In addition, I think the product will speak on the strengths of dosing also and also by from what you have seen, you know, the effect on these more severe patients with tophi. I think, you know, we have the phase III programs on the way, and we are looking forward, you know, to the readout of the second phase III trial.
You know, I think we accept, you know, that Horizon is a formidable competitor, but we hope that we are worthy of them and we can give them a good run for the money when we are out.
Thank you.
Thank you.
Eun, if I may add just on that one. I mean, it's always more difficult approach to treat if you have to combine strong drugs and given also side effects and other aspects, particularly with methotrexate, whatever it is, or it may be need to watch out for liver and other things. I think it's always more straightforward approach if you have one drug that really works on target.
Yeah. Very good.
Thank you.
Maybe next question. Thank you, Eun, yeah.
Thank you. Our next question comes from the line of Christopher Uhde from SEB. Please go ahead. Your line is open.
Hi. Thanks for taking my follow-ups. I think we could just stick with the SEL-212 for the moment here. Obviously getting fairly close to pivotal readouts, but there's been little change to the R&D program. Although it does seem that you need to do some work to reestablish your positioning after the COMPARE trial. When and what might we expect to see in terms of augmenting that R&D program? And then I just wondered if you could detail the external expenses component of the restructuring costs. Thank you.
Anders, you want to talk about it?
I'm not sure if I
No. Sorry. That was the second part.
Can we?
Separate. The first part.
Okay
was about SEL-212 and then previously COMPARE was a head-to-head against KRYSTEXXA. Although it was successful on most of the secondary endpoints, the primary missed. What do you need to do to reestablish your positioning versus KRYSTEXXA in terms of your R&D program? Because nothing's changed in the interval.
Yeah. No. I think what we are doing is that we are running two larger well-designed studies with a significant part of tophi patients. I think we have from earlier studies and earlier observations and neutralizing effects of KRYSTEXXA. I think we are all together with Selecta quite confident that we will see a clinical benefit in terms of number of patients with remaining long-term efficacy in the phase III studies. If that's what they designed for and what they powered for and what we're aiming for.
Mm-hmm.
In terms of your question regarding,
It was restructuring.
That was more for Henrik.
This is basically the financial.
Oh, okay. Sorry.
The financial question probably.
Sorry. Yes, yes.
Yeah, where you basically say what to expect from the restructuring efforts, yeah.
You were asking about external costs.
Yeah, the SEK 72 for external expenses. I just wondered what exactly that was. I mean, I'm trying to understand how much would be potentially recurring, given that you're talking about ongoing restructuring efforts.
Yeah.
Efficiency efforts.
Yeah. I mean, the restructuring here is really almost complete. There could be smaller amounts, you know, in the next quarter, but it is virtually complete, you know, from a cost point of view.
Okay. Thank you.
I mean, basically, Christoffer. Yeah. Kristoffer, these are basically design costs for organizational design because we undertook quite a bit of an effort looking at accelerating the business, building up capabilities, you know, new functions, and then obviously also designing organizational redesign, which we haven't announced yet, and with this some savings. So there is a phase II , but, you know, one-time events will not be at a level, obviously, as you have seen in Q1, and, you know, there we will do this in a sharp way. But it is designed. These are design costs, so these are not yet costs for, you know, that you would typically classify as. Okay. Terrific. Thank you so much.
Yeah. Maybe next question. You're welcome. Next question.
Thank you. The next question comes from the line of Caroline Banér from Danske Bank. Please go ahead. Your line is open.
Hi. Thank you so much for taking my question. A question on Synagis. Do you believe a change in clinical practice, as you mentioned, patients remained on treatment despite the early start of the RSV season? I was just wondering if you think there's a change in clinical practice here.
No, I think not really. I mean, you know, what we basically have to see is, you know, that, you know, when we, you know, when we acquired this business, this was a SEK 270 million business on a seasonal basis. Now, this season has, when you account for what we have achieved last year in already starting a bit earlier in Q3 and in Q4, and then this year in Q1, it's around SEK 330 million. Let's say we have got better, obviously, let's say in bringing patients along.
You know, we have talked about it, that we have driven operational effectiveness in the organization and trying to build up the adherence because, you know, you used to have when we took the business was, I think around, patients got around 3.5 dosing per season. We have improved that. Let's say, sure enough, COVID was helpful. I think, you know, that would be too simple. I think it is a team that has done, over the years, a very consistent effort that was unfortunately blocked by the last Q1 last year by basically the absence of travel and the epidemic level. You know, I think this is now coming back.
I think, we don't see a radical change, but if anything, there's a stronger adherence to the protocol.
All right. Thank you so much.
Thank you, Caroline. Maybe next question.
Thank you. Once again, it's zero one to register for questions. The next question is from Viktor Sundberg from Nordea. Please go ahead. Your line is open.
Yeah. Hi. Thank you for taking a follow-up. So I just wanted to get your take on nirsevimab, although it's Sanofi-AstraZeneca program mainly. I just wanted to get your take on the miss on hospitalization in the MELODY trial. What is your take on that in terms of the potential to reach the full birth cohort in the U.S.? I was wondering if you still are confident on the potential of that drug, or is there more risk here that nirsevimab could be more limited by, say, guidelines, reimbursement coverage, or by the label? Thanks.
Yeah. Thank you so much, Viktor. I mean, where we stand, based on, you know, what our knowledge base is, we don't think that basically the potential of nirsevimab appears to be impaired. If that would influence, you know, we would obviously look forward to selling more Synagis, you know, that would not be the biggest problem at this juncture for us, let's say. You know, I think we are reasonably well insulated. You know, I think, you know, that the other data of the product and based on some of the surveys that have been out, you know, you have to, we assume at least that there is confidence around the strength of nirsevimab.
Okay. Thanks very much.
I think.
Thank you.
Thank you. I think with this, you know, maybe I just, if you don't, if you allow me, I just want to maybe make a point. You know, I would like to summarize. You know, I think we started well. I mean, at least this is what we feel. 24% growth at constant rate. You know, our launch products growing at 126% and on an adjusted basis, EBITDA of 40%, I mean, makes us feel confident that we're on a good way to drive this business forward. You know, it's early days, you know, hence, you know, you can see us a little bit more cautious at this juncture, given an uncertain world around us.
It's really a pleasure to have you with us, and I would like to thank you for your interest in Sobi, and I would like to close the call, and I look forward to have interactions with you in the near term future. Thank you.
This now concludes our conference. Thank you all for attending. You may now disconnect your lines.