Ladies, and gentlemen, welcome to the Sobi Q2 2022 report. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question-and-answer session. I will now hand over to the company.
Thank you so much. Hello, everyone. This is Guido Oelkers, CEO of Sobi. Welcome to the Second Quarter 2022 Report and Conference Call for Investors and Analysts. The presentation was posted to sobi.com earlier. Please refer to slide number two. As usual, the safe harbor statement, we will be making comments on our performance using constant exchange rates and numbers used are in millions of SEK for the second quarter of 2022, unless stated otherwise. Comments will be mostly related to the second quarter performance. Please turn to slide number three. This is the agenda where we plan to cover all key aspects of results today. We plan to review the presentation first and then to go to the Q&A until around 2:00 P.M. Swedish time.
We want to be respectful of your time as there are a couple of other companies reporting. If you keep questions short, we will try to keep our answers short too. For those who are on the phone, please join the queue for questions by pressing zero and one. We propose you ask only one or two questions at a time. Many thanks. In speaking order, I'm joined by Henrik, our CFO, Anders, our Head of R&D and Chief Medical Officer. For questions later, we have also Armin, our Senior Scientific and Medical Advisor, as part of this conference call. Please turn to slide number four. Starting off, I'm pleased that 2022 has continued well for Sobi despite uncertainties in the world around us.
Revenue increased by 10% and by 21% at actual, at actual rate, including an element of continued phasing of Doptelet sales to our partner in China. Launch medicines, Doptelet, Aspaveli, and Gamifant combined advanced by 96%. This is very gratifying. This performance was underpinned by a strong executional dimension in our commercial organizations. We continued to invest in our growth in spending in R&D and medical, and we concluded efficiency programs with limited impact in the quarter. As a reminder, the efficiency programs focus on resources into core areas, simplify the organization, and adjust the cost base to enable Sobi to continue sustainably grow and margin improvement over time. Anders will cover changes in R&D and medical scientific affairs later in his presentation. The EBITDA margin adjusted landed at 25%.
All items affecting comparability are detailed on page three of the former Q2 2022 report and also in the Appendix of the presentation. The pipeline continued to deliver with the first efanesoctocog alfa phase III presentation. We expect continued pipeline news flow during the year and in 2023. Recently, we announced an agreement to license the orphan medicine loncastuximab tesirine from ADC Therapeutics to augment our strategic presence in hematology. With the performance today, we added further commentary to the 2022 outlook. Henrik will cover that later. Finally, I would like to thank all colleagues at Sobi for their hard work and the focus on providing innovative medicine that transform lives of people with rare and debilitating diseases. Please turn to slide number five. Moving to disease areas and geographies, we saw hemophilia showing the promised stability.
The growth in hemophilia was boosted by Doptelet in geographies, while immunology was held back by the lack of COVID-19 sales for Kineret offset by Gamifant. From a regional point of view, we saw higher growth in our new markets, further adding to the ongoing global expansion and increased geographical diversification of Sobi's business. We have also seen that in most markets, our sales and marketing efforts are back up and close to the level seen before the pandemic. Overall, we are happy with the performance and, you know, quite gratified by the overall growth. Please turn to slide number six. Turning to hemophilia, we saw growth of 5% in sales, 1% in revenues, including royalty and manufacturing. This performance is underpinning our commitment to continue stability in 2022.
Elocta advances by 6%, driven by the growth in patients and higher factor consumption, but slightly offset by price. An element of price retention also supported performance. Alprolix advanced by 2%, driven by growth in patients and slightly offset by price and some stocking effects with consumption being relatively stable. We are pretty happy with the performance and stay focused on continuing a stable development. Please turn to slide number seven. Doptelet had another strong quarter with continued phasing of sales to China. Excluding China, sales grew by 66% based on a sustained uptake in the U.S. and also in Europe. In the U.S., we have seen new to brand prescriptions increase to teens percentages with another significant part of business coming from switches from competitive medicine.
In Europe, Germany is leading the way, and we saw sales from across the continent and obtained more reimbursements, including Italy and Spain, which will benefit us later on. In China, we now provide detailed sales number and see continued benefit of sales phasing. We discussed also at the last quarter, this will provide a tougher comparison later in 2022. Please turn to slide eight. The launch of Aspaveli progressed well with sales of SEK 38 million in the quarter. This is a large increase from SEK 4 million in the first quarter, and we are pleased with the progress we have now launched in the U.K., Germany and France, and with good patient and physician feedback. We estimate to have around 35 patients on commercial supply by the end of June. We move forward, we will continue to track and share all relevant launch metrics.
Please turn to slide nine. Based on our commitment to provide innovative medicine that transform the lives of people with rare and debilitating diseases, as well as stated capital allocation priorities, we were pleased to announce the licensing agreement with ADC Therapeutics for Zynlonta in Europe and most international markets. We believe Sobi's heritage and strong presence in hematology, coupled with the new medicines like Doptelet, will provide a competitive platform for bringing this product to more patients with orphan diseases. As you know, the medicine is under regulatory review in Europe by the EU and with an anticipated decision in the first quarter of 2023. Please turn to slide 10. Turning to immunology, Kineret sales were impacted by the lack of sales for COVID in emerging markets and therefore rebased with only a slight offset by use in other indications.
Gamifant sales increased by 34% following a softer first quarter and underpinned by growth in new patients. During the quarter, Sobi launched the INTO-HLH registry, a new disease registry for patients with HLH. It is designed to define the natural history of the disease, including the full diagnostic and treatment journey of patients' experience. The registry also aims to provide critical insights into burden of HLH and its impact on quality of life and healthcare resource use. A steering committee will oversee the registry for Sobi. Please turn to slide 11. Last in immunology is Synagis. We saw little revenues in the quarter from positive gross-to-net rebate adjustments. There were also no sales from earlier increase in the U.S. RSV detection, and Sobi continues to expect the 2022-2023 season to follow a normal pattern. I will now hand over to Henrik for the financials.
Please go ahead, Henrik.
Thank you, Guido, and hello, everybody. Please turn to slide 13. I will now take you through our financial performance in the second quarter of 2022. Starting with quarterly revenue, we are showing quarterly amounts here over the past five quarters. Apart from the steady growth in hematology over the quarters, which, with Doptelet as the main driver, we see that revenue in the second quarter was higher than both the second and the third quarter of 2021. Sequentially, versus the first quarter, immunology in Q2 is as expected, lower due to the seasonality of Synagis. Turning to the profit and loss on the right, this table has growth rates at actual rates, the statutory view.
As mentioned earlier, revenue for the second quarter was high with 10% growth at constant rates and elevated by increased sales of Doptelet to the partner in China. Given their importance, we are now giving more details on Doptelet sales to China. We do expect sales to China in both Q3 and Q4, but at lower levels than we've seen in the first half of this year. As I also mentioned at the last quarter, we expect growth rates in H2 for Doptelet and also overall to moderate due to the higher comparisons in H2 2021. Gross margin in the quarter was 74%, down from 76%, reflecting the mix of business with sales of Doptelet to China having a lower gross margin than the Sobi average.
Selling and administrative expenses increased 22% at CER when adjusted for effect, items affecting comparability and amortization, and supported launches of Aspaveli and Doptelet, and also supported the ongoing geographical expansion. R&D expenses increased by 7% at CER when adjusted for items affecting comparability. The Adjusted EBITDA margin realized was 24%, but 25% on an adjusted basis. We do not anticipate any further restructuring charges this year. EPS for the quarter ended at SEK 0.87 and SEK 0.91 when adjusted. For more details on items affecting comparability as we heard, please look at page three in the Q2 report, or the Appendix 2 to this presentation. Please turn to slide 14. Finally, I'll turn to the financial outlook for 2022, which is on revenue growth at constant exchange rates and EBITDA margin adjusted.
As discussed in February when the outlook was issued, Sobi will continue to expand the presence in rare diseases and expand into new geographies. As a result of this growth strategy, Sobi expects revenue to grow by a mid- to high single-digit % at CER, now potentially towards the higher end of the range. Growth is anticipated to moderate as we move into the second half of 2022 due to the higher comparisons from the previous year. Sobi will continue to invest in the pipeline and launches of new medicine to unlock the long-term value of the business. With these investments in the future, Sobi maintains a favorable margin.
The EBITDA margin adjusted is anticipated to be at the low 30s% of revenue, but now including the cost effects of the agreement to license the new orphan medicine loncastuximab tesirine in hematology. With the outlook covered, I will now hand over to Anders for the pipeline. Thank you.
Thank you very much, Henrik. Hello, everyone. I am pleased for the opportunity to take you through the pipeline highlights this quarter, including data from an important recent medical meeting, an overview of our new R&D and medical affairs team, and a list of upcoming news flow. Please turn to slide 16. The pipeline saw continued progress since April with several key milestones being achieved. Milestones included the first phase III study data presentation for efanesoctocog alfa at the International Society on Thrombosis and Haemostasis 2022 Congress in London. Earlier, the medicine had been rewarded breakthrough therapy designation in the U.S . Aspaveli/empaveli also achieved multiple milestones with regulatory submission acceptance in Japan for the potential treatment of PNH and the start of a new phase III study into rare hematologic kidney disorders.
Kineret saw its first regulatory submission in China, and SEL-212 had the last patient being dosed in the phase III program. Please turn to slide 17. Now, the big news for us was clearly the presentation last week at the phase III data for efanesoctocog alfa, the XTEND-1 phase III study. The study met the primary efficacy endpoint with once-weekly efanesoctocog alfa prophylaxis providing clinically meaningful bleed protection for people with severe hemophilia A. The median and mean annualized bleeding rates were 0 and 0.71 respectively.
The study also met the key secondary endpoint, demonstrating superior bleed protection over prior Factor VIII prophylaxis, with an estimated analyzed bleeding rate reduction of 77% and a mean analyzed bleeding rate of 0.69 compared to 2.96 on prior prophylaxis based on intra-patient comparison. Finally, in a subset of participants studied at baseline and at week 26, mean Factor VIII levels remained in the normal to near normal range, above 40 international units per deciliter for the majority of the week and at 15 international units per deciliter at day seven post-dosing, providing increased factor activity level protection for patients with once-weekly prophylaxis. Other secondary efficacy endpoints were also met, including clinically meaningful improvements in physical health, pain, and joint health. Treatment-emergent adverse events were generally consistent with the population with severe hemophilia A.
Inhibitor development to Factor VIII was not detected. These data support our confidence in the potential of efanesoctocog alfa to elevate protection in people with hemophilia A towards normal hemostasis. In other words, we will seek to move from treating bleeds to normalizing lives, an exciting journey ahead of us and ahead of many patients who will benefit from this treatment once approved and launched. Please now turn to slide 18. In the last quarter, we announced the transformation of research and development and medical affairs, which includes a new operating model, a revised governance, a new structure for the organization, and more efficient processes. We did this to accelerate the development of our medicine, to ensure that we are well-equipped for global expansion, and that we are more efficient to accommodate QT growth. The new model is based around cross-functional teams that are responsible for our core assets.
They are supported by a combined R&D and medical affairs organization with simplified processes and strategic external partners. I would like to thank all colleagues in the new RDMA team for their support of the change and their continued commitment to patients and science of this recent journey of change. Please now turn to my last slide 19. As we look ahead to the pipeline news flow in the remainder of this year and all of 2023, we expect more news of importance. In the second half of 2022, we anticipate collaborators to apply for and get acceptance of U.S. regulatory submission for efanesoctocog alfa and nirsevimab. We also expect to hear from the U.S. FDA on Kineret in COVID-19. Looking ahead to next year, we have now split the news into the first half and second half of 2023.
In the first half, we anticipate the second phase III study of efanesoctocog alfa to read out, and we expect a couple of regulatory decisions in Japan for Doptelet and Aspaveli. We anticipate a regulatory decision for our new orphan medicine in hematology, loncastuximab tesirine. We are getting the Gamifant data in macrophage activation syndrome for rheumatological disease, specifically the Still's disease cohort, and with our partner, Selecta, we anticipate the phase III program readout for SEL-212. In the second half, we generally expect the data received in the first half to convert into regulatory submissions. With that, I want to thank you for your attention and for this opportunity to talk about science and our pipeline in Sobi. I hand it back to Guido, who will now conclude.
Yeah. Thank you so much, Anders. You know, it's really a pleasure to round it off. Please turn to slide 21 to recap, you know, at the end of the Q&A session. In summary, you know, I think we can be very pleased that 2022 has continued well for Sobi despite uncertainties the world around us. Our revenues increased by 10%, as I mentioned earlier, and by 21% at actual rate, including an element of continued phasing of Doptelet sales to our partner to China. You know, the fundamental business of Doptelet in the U.S. and in Europe obviously remains very strong. Launch medicines, Doptelet, Aspaveli and Gamifant combined advanced by 96%. Very strong indicator that Sobi has developed to become a launch machine.
This performance was underpinned by the very strong commercial execution. Finally, we added a further commentary to the 2022 outlook today. We will now go to the Q&A session. For those on the phone, please remember 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. Perhaps now we can take the first question from the conference call.
Thank you. The first question comes from the line of Adam Karlsson from ABG. Please go ahead.
Hi, all. Thanks for taking my questions. I have two, one on efanesoctocog alfa, and another on RSV. Starting on efanesoctocog alfa, it's on reimbursement. The data at ISTH was clearly very strong.
Mm-hmm.
We heard from some U.S. KOLs at that congress that efanesoctocog alfa would be the obvious first choice for any patient choosing factor replacement going forward. In Europe, payers typically have a greater say on the therapy choices through the tendering processes. My question is how you and I guess Sanofi are thinking about firstly pricing of efanesoctocog alfa relative to say Elocta, and how readily you expect European payers to recognize the convenience and efficacy benefits of efanesoctocog alfa relative to other extended half-life factors and how willing they are to pay for that. Your expectations around that would be interesting. Thank you.
Yeah. Our view on efanesoctocog alfa has actually not changed. Our thought process is that we position the product at comparable cost of therapy to Elocta and other prevailing medicine and basically allow the product to expand our franchise by its benefits now clearly emphasized in the phase III trial. Yeah. That's really our assumption. Cost of therapy comparable and based on our research, that's not an unreasonable expectation to get approved with payers in Europe.
Okay. Thank you. Secondly, on RSV, you're highlighting that you're expecting a normal season. Just given the RSV detection trends we're seeing for the U.S., is that expectation of a normal season based on what you're hearing from your commercial organization on the ground, something that contradicts what the RSV detection trends are showing? Or is that just you being sort of sensibly cautious given the unpredictable nature of the RSV season at this early stage?
I think we are sensibly cautious. You know, that we obviously are recognizing the fact that there are pockets of RSV already happening as we speak, yeah, emerging. This could lead to an advancement of sales. You know, at this stage, it always depends on the adoption of the respective bodies and then recommendation. That's very difficult to predict. Hence, you know, our perspective is let's assume a normal season, and we have no indications that this season is gonna be negatively affected by any stretch for this part of the year.
Okay. No, that's clear. Thank you very much.
Yeah. You're welcome. Next question. Maybe back to the operator.
The next question comes from the line of Eun Yang from Jefferies. Please go ahead.
Thank you. I have a question on BIVV001. It's a great data from ISTH. I wanna ask you about how you think about the potential of a BIVV001. You know, aside from Elocta conversion, I assume the greatest market share gain would be from other factor VIII replacement therapy. Two questions. Is it reasonable to assume that you could potentially double Elocta sales with the BIVV001? And second question is, how do you think about conversion from potential conversion from Hemlibra? Thank you.
Yeah. Thank you, Eun. I mean, maybe I take this first and then, you know, maybe let also Armin, you know, as we were both at ISTH, maybe comment his impression. I mean, when you think about it, I mean, the product obviously normalizes patients for the majority of the week, providing clearly an additional benefit that was also reflected by earlier feedback that we got from patients and physicians as we reported. You know, if anything, our conviction about the product has increased. We think that this is clearly a very important option in the treatment algorithm that will take share from, not only from Elocta, but from all factor treatments.
We also think, you know, as activity levels are increasing, we see this, you know, in our consumption data from Elocta, as they improve as well. As activity levels are increasing, patients will increasingly also recognize the limitations also of non-factor treatment. As a consequence, there will be a quest from a significant patient pool also to look at efanesoctocog alfa as an alternative. We think that this, BIVV001 or efanesoctocog alfa, we will have a very significant opportunity to expand our market share.
At this juncture, we would not comment on whether we think that we can double the Elocta share, but clearly we will not hold back, and we see this as a very, very important opportunity for our company. We are extremely gratified by the response at ISTH, you know, got a lot of encouragement and people see the utility as earlier pointed out from your colleague from ABG. Maybe, Armin, you want to comment?
Yes. Hello, Eun. Just a few highlights from ISTH. Clearly, all the physicians, key opinion leaders we spoke to saw the huge importance of the protection level that efanesoctocog alfa can deliver to patients. I mean, for four days, they are normalized with their clotting symptoms. That delivers something that is unheard of. They also believe that also, as Guido mentioned, non-factor therapies clearly now have something that is provided by EFA that will be measured against. The benefit is if you do this, you can measure, you can predict what levels will be achieved, and you are not in the dark like with other products and other therapies where you do not, like gene therapy, for example, not know is the patient benefiting and to which level. Also it's EFA is for all patients. It's not just for a selected group of patients.
I think we have a very broad approach here that will benefit, and this is what we literally heard from everyone we spoke to at ISTH.
Yeah.
Thank you.
I hope that gives you a bit of a flavor. Thank you.
Thank you.
Thank you. Back to the operator then maybe for another question.
Thank you. The next question comes from the line of Viktor Sundberg from Nordea. Please go ahead.
Hi, and thanks for taking my questions. I have a few, but I will start also by the good data you presented of efanesoctocog alfa. Thinking here of moderate hemophilia patients with 1%-5% normal factor level, it was a lot of talk about these patients at ISTH that they could also benefit from a treatment that patients have such high factor concentration throughout the week. What is your thinking around this patient category, especially given that Hemlibra does not have that on the label here in Europe? Or do you think that these patients are already well controlled on, say, desmopressin?
Have you seen any PK data at day 10? That, I'm now thinking if these levels are maybe above the 3% of normal factor level that's recommended by the World Federation of Hemophilia, or in their guidelines, that could enable less frequent administration. Thank you.
Yeah, thank you for your good question. I would straight refer to Armin. Armin, can you-
Yeah. Hello, Viktor. Clearly, if you look at the clinical picture of moderate patients, there are some that bleed heavily. If you refer to those, they will probably not be treated enough with what you just mentioned, but they definitely need factor replacement because they have fairly high bleed rates, at least in some. For those, I absolutely agree with you that efanesoctocog alfa can be a treatment choice that will really get them to a completely different level of protection, and this is what we pursue. The dosing regimen needs to be what will be on the label, so we cannot recommend anything else. As you know, it's always the physician's choice then what to do with it.
Okay, thanks. Just a final one here on hemophilia. Congrats on the strong growth here also for Elocta. Is there any major tenders coming up in major markets here in the second half of the year and then could have a negative price effect? If you can give any guidance on that would be great. Thanks.
Yeah, no, we don't anticipate any major impact. I mean, no, that will basically negatively impact what we have. We see a big opportunity for us in certain geographies. I mean, we are making good progress in international markets, but you know, we don't see, let's say, our core being affected by major tenders that would erode our prices.
Okay, great. Just a final one here also on Gamifant and the EMERALD study. I note that there was a delay there, and I just wanted to get some flavor on that. I guess some patients with Still's disease get that from a secondary virus infection. Has the low circulation of virus infections in general during COVID-19 impacted recruitment? Now, do you see that the outlook of finding more patients here in 2022? I'm just wanting to get some flavor on if you're close to recruiting that cohort or in the beginning, and also given here the eight-week follow-up, if we should expect a readout early in H1 or maybe later for next year. Thanks.
Thanks. Anders, you want to comment?
Yeah, Viktor, this is a tricky, complex study to perform and with severely ill patients, but spread over a large number of rheumatology sites. We still expect we need to have very many more sites than we will need patients in the end of the day. The whole process of activating the study, activating the centers, during the worst year of the COVID pandemic, I think was the initial main challenge that caused a little bit of delay in startup. When we have then got into a more stable situation, improved our collaboration with a very dedicated team also from ICON, who is our CRO here.
I think we are now rapidly initiating sites and we still have relatively few patients enrolled, and this is, as we see, largely dependent on exactly what you're talking about, that this is a seasonal disease related to infection rates, et cetera, which are currently low. We are optimistic that we will catch up and deliver on the now somewhat appropriately revised timelines. I think we have a good momentum in the team internally and with our external suppliers. We and the investigators are clearly excited and committed to make this happen.
Yeah. Thanks. That's all for me. Thank you.
Thank you. Maybe back to the operator.
The next question comes from the line of Christopher Uhde from SEB. Please go ahead.
Yeah. Hi, thank you for taking my questions. I'll start with two and get back in the queue. I guess my question is on loncastuximab tesirine. You're moving into oncology, which is of course, quite different from benign hematology. How are you preparing the commercial organization for this? I mean, what do you see as notable differences to your commercial approach in the existing markets? And can you tell us about any key competencies in oncology on the team already? And perhaps sort of what are key competitive differentiating attributes of Zynlonta versus, you know, other CD19 targeted products in development? Thanks.
Yeah. Thanks, Christopher. I mean, the way we see this license is as a logical extension of our approach in hematology. We don't position ourselves, to be honest, as an oncology company, but we see this broadening of our scope into a niche area of hematology oncology as an opportunity to make our calls and our interactions as physicians more meaningful. That basically should benefit the new product, but it also should benefit Doptelet. We have actually quite significant capabilities in our team already because we got quite a few people in from the oncology sector. You know, when we recruit in Europe because the approach to promotion via medical marketing is similar.
We have quite a bit of capabilities in our medical departments already with deep onco background. But basically, you know, see it as a first extension of our hematology franchise that gives us optionality. That basically allows us, you know, to improve our contribution per patient in the hematology area. We will not get confused. We know who we are at this juncture, but it will give us, let's say, an opportunity to extend our franchise. You know, just to round it off, then I leave it to Armin, who can talk about our perspective on competitive approaches there.
I mean, this is, you know, particular in Europe, we have breadth and depth of a pretty complete rare disease company, you know, that basically is able to apply itself to very different diseases, you know, as demonstrated in the example most recently with Tecfidera and Waylivra. Our organization, as long as we are operating in a very refined niche environment, in this case, actually connected to an area that we know already and where we have a significant overlap of physicians, it should actually, based on, you know, the kind of work we have done with the team, it should lend itself. Yeah. Maybe, Armin, you want to comment on the product and how it compares with other products coming in the CD19 space.
Thank you, Guido. Hello, Christopher. I think just looking at Zynlonta to the, I would say, almost direct competitors, you need to think about the monotherapy approach, which is in those very difficult patients with who have many different aspects to watch out for, probably elderly people. You would really want to have something that is not overloaded with many additional other therapies and drugs. The monotherapy is clearly one of the advantages. The other one that I want to point out here is the safety aspect. The safety profile that we have seen so far, I believe, really makes this a standing out among those competitors, a standing out drug and product. I mean, the efficacy is more or less in the same range as what you would expect from others.
In the combination, I think this clearly has an advantage, and it has already shown in third line treatment, not to be forgotten, those are patients who were refractory or not responding at all anymore or literally relapsing. Very difficult patient group to treat and to have such an overall response rate and a complete response. I think that proves that this product is targeting the right aspect.
Yeah.
With this
Christopher, you'll queue ?
Yeah, thanks. I'll get back in the queue.
Excellent. Thanks. You know, operator, maybe take the next question.
The next question comes from the line of Peter Östling from Pareto Securities. Please go ahead.
Yes, thank you for taking my question. Most of them has already been asked, but I have a brief one. You just mentioned that you even in Q2 had some price adjustments, negative price adjustments for Elocta. Could you just talk about in which countries you saw those price adjustments? Thank you.
Yes, thank you, Peter. I mean, these price adjustments are mostly actually in the ordinary course, low single-digit, as you would see in negotiations with hospitals. There's no country to pick out. I think, you know, what you see as a price adjustment is more in our average mix that we're making significant progress, particularly in Central and Eastern European countries and Russia and basically as a consequence, you know, the prices, the average price goes a little bit down. There's nothing to report, you know, that is affecting the core of the business.
Okay, great. Thank you.
Thank you. Operator, maybe next question.
The next question comes from the line of Mattias Häggblom from Handelsbanken. Please go ahead.
Yeah, thanks so much. Two questions, please. I'll take them one at a time. Firstly, on Doptelet, so SEK 281 million in China in the quarter, down from SEK 358 million, but I think materially higher than consensus had anticipated. I may be wrong, but I recall some comments about SEK 500 million to China for the full year, but that's already exceeded by now. Henrik mentioned we should expect additional shipments for the coming quarters. Maybe help us understand what we should expect for Doptelet China going forward. Is the average per quarter first half a reasonable expectation per quarter, or should we expect a continued fade as we saw in Q2? That would be helpful.
Yeah. I mean, the business, there's a very significant business build up by our partner, Fosun in China. We got some recent data point, you know. It's probably in the mid hundreds of millions of dollars. At this juncture in market sales are progressing on a rolling forecast and progressing relatively rapidly. What you see is, you know, that obviously inventory movements are always hard to predict. Let's say what is their perspective. That's the reason why it's tough to comment, you know, what will be our quarterly sales. Because, you know, we have a rolling forecast, obviously, with them and have an agreement. We will have continuous sales into China. But it's too early for us to comment, you know, of the magnitude.
You know, as we are selling to them, and as a business continues making significant progress, we expecting that this is not just a one-off. We will have continued sales into China during the second part of the year. I wouldn't like to comment already on the magnitude because that's with China can be quite flux, yeah, given the inventory build up and then sell off.
Yeah. Okay. That's fair. Secondly, assuming you obtain for nirsevimab rights later this year when Sanofi submits, and assuming the product gets approved for the second half of 2023, I guess the market needs to start to think about the size of the portion of the initial loss that later will convert into profit for the portion you have rights to down in the U.S. I guess two things really.
Yeah.
At this stage, do you have insight to the magnitude of Sanofi's investment plans, or is this sort of a guessing game for you as well? Then secondly, consensus seems to have started to model a loss for the operating income in 2023. The mean is close to zero, but we have some with a profit and others with a loss of up to half a billion krona. So anything to help us put this into context, please?
Yeah. I mean, basically, you know, the dilemma is that we cannot give you any insights on Sanofi's numbers because due to the competitive situation with Synagis, they cannot share those numbers with us. I mean, we can tell you what we think outside in, but that, you know, this is always with a caveat. You know, this is not gonna be, I mean, a humongously expensive launch. You know, like in a, it's gonna be intense. They will have leverage with the existing teams. You know, that will obviously be subject to the guidance of AAP. The broader the guidance, the less the promotional effort will be necessary, probably. We think, you know, that, yeah, there will be a loss.
We, on the other hand, we believe that we will still have in 2023 material sales of Synagis. To what degree the substitution will take place, you know, I mean, there have been multiple surveys going on, and obviously some of the surveys would suggest a very efficient rate of substitution. We think that we will be able to retain a fair share. The size of the share will determine, you know, how we can compensate for the promotional for the introduction cost, market introduction cost. You know, we share 50% of that. I think, you know, the question is how would it affect your valuation? I mean, we see this as unchanged.
We see that the earnings stream for this, for nilotinib is probably to the tune of the sales level in the mid-run that we are currently yielding with Synagis. Hence, you know, if you can afford, you know, to do it discounted, we should be fine. I cannot comment to you for these reasons. Is this now a good assumption or a bad assumption because I cannot speak for Sanofi.
That's all. Thanks so much.
Thank you. Back to the operator. Next question, please.
The next question comes from the line of Erik Hultgård from Carnegie. Please go ahead.
Yes. Hi, thank you for taking my questions. I have two, if I may. First on BIV and then a follow-up on Doptelet. First on BIV, relating to an earlier question on access in Europe. Can you talk a little bit about what to expect in terms of timing when we should have access for BIV in the major geographies? Some of that Elocta took almost 12 months before you had access in all top five markets. Will there be
Mm.
a much faster access for BIVV given the precedent with Elocta and similar cost of therapy, or will there be similar timelines? I think, yeah. Then I'll go shoot another one for Doptelet. Thank you.
Sure. Thank you, Erik. I mean, with regard to BIVV, you know, I think it's the concept is obviously much more intuitive. We have the experience from the Elocta rollout. I mean, we will try to create an environment that you know makes it easier for payers to accept this new therapy even though they basically get the same cost of therapy at a much better product. But and obviously physicians want it now and patients want it. There is gonna be quite a bit of pressure to have access to the therapy on a broad base.
You know, we will do everything, cutting a long story short, to provide quick access to the product, let's say that maybe faster than the experience we had with Elocta. To what degree we will be successful is obviously depends on the negotiation with the payer once the product is approved. I think, I would not necessarily like to speculate.
All right. Great. Thank you so much. I think I'll take another one on BIVV, then.
Yeah.
Any plans to develop a subcutaneous version? I know that you showed some early clinical data a couple of years back at the scientific meeting that was quite mixed. Given the convenience benefits with Hemlibra, and some technological advances lately, do you consider it viable to develop a subcutaneous version?
Subcutaneous version normally for Factor VIII is very, very difficult and we don't intend it. That from what I remember, this was related to the Factor IX therapy, and also this program is currently going through some challenges.
All right. Thank you so much.
Thank you. Back to the operator.
We have a follow-up question from Adam Karlsson from ABG. Please go ahead.
Hi. Thanks for taking my follow-ups. Two brief ones then, in the interest of time. A first one, are you able to clarify the costs from the licensing of loncastuximab in 2022 as it relates to the Adjusted EBITA, given that the guidance now incorporates these costs?
Mm-hmm.
Secondly, on that licensing deal, which was obviously of relatively modest deal size, I'm wondering what that might imply in terms of your appetite for further BD activity here in the second half or let's say the coming quarters. Any commentary there would be appreciated. Thank you.
Yeah, thank you. I mean, I start with the easy bit. Our appetite is large. We wanted to do more because, you know, we think that we are in a position that we can take advantage of this environment of uncertainty and we are focusing on further acquisitions, even though we believe that this product actually can be quite meaningful, a meaningful contributor, you know, as we generate Synagis here. Henrik, you want to comment on the appropriation of payments for this licensing deal?
Sure. We estimate that the additional costs that weren't in the previous forecast, as a result of this licensing would be between SEK 100 million and SEK 150 million in 2022.
Great. No, that's very helpful. Thanks.
Thank you. Back to the operator.
The next follow-up comes from Christopher Uhde from SEB. Please go ahead.
Thanks for taking my follow-up questions. I guess the first question is, as the pricing of Elocta declines, the gross margin should of course be pressured to some degree. To what extent are there offsets to that? While we're talking about margins, can you quantify the potential margin impact, pre- and post-reorganization, say, a couple of years out? I mean, is it more than a few tens of basis points? Thanks.
Yeah. I mean, I start with the hemophilia one. There will be pricing in Europe will have an effect. You basically have to offset this by efficiencies in manufacturing and scale economies. You know, we are here working together with our partner, Sanofi, and that will internalize the production. Then, you know, to what degree can this really offset pricing pressure is speculative, but let's say you need to believe, you know, that this will be an important medicine. You will get operating leverage if your expense is fixed because there are so many physicians that you can see.
By expanding your patient numbers and with a new therapy and a more advantageous cost structure, you should be able to manage this. That's what my view is. With regard to the efficiency programs on a corporate level, I think you know, we basically think that you know, this is an important part for us, but you know, to expand to make sure that we can compensate some of the increases in our cost structure on the expansion of footprint launches and R&D expenses. At this stage, it's you know, we have not guiding more than we on the exact size.
Okay, thanks. In terms of the R&D reorganization that Anders kind of summarized here this time. What could it mean in terms of, say, the average time to market saved or, you know, the number of indications like that a product in-house could be expanded toward, you know, either for existing or pipeline medicines and also for pricing power?
Uh,
Yeah. I can start and you can fill in, Guido. I don't think we can put up any distinct comparative numbers from the initial plans and the new plans. I think what we have really tried to do here, because we have been growing so very fast, we have incorporated organizations that we have acquired, et cetera. We have now ensured that we get a single set of governance principles, a single set of principle team set up, that we have a key talent on top of each core assets.
What I think it will lead to is that it really enable us with the leanest possible investment keeping our timelines moving to competitive labelings submissions and labeling for a rapidly increasing portfolio and increasing geographic footprint. I hope that you will see that we will be acting as a very professional organization within our spaces and our rapidly increasing portfolio.
Mm-hmm. Yeah. I think, you know, it's tough to quantify, but, you know, as Anders said, what we want is improve our delivery in R&D, so to get more credit for this. I think the teams are on a good way, in order to do so. With this having said, may we come to the next last question, back to the operator. Maybe you have time.
Our last question comes from the line of Mattias Häggblom from Handelsbanken. Please go ahead.
Oh, great. Thanks so much for taking the follow-up. Firstly on sales growth in constant exchange rates for the quarter. If I adjust for the very impressive Doptelet sales, I end up with + 1% for the rest of the revenue. Of course, we need to think of this in light of the tough comp last year when sales grew 14% in local currency second quarter. Anything to add beyond the tough comparison, what's going on for the rest of the business? A lot of focus here on Doptelet and, in particular, Elocta, I guess, during the call. Anything to add there? Then I have a follow-up.
Yeah, no, I mean, Mattias, I mean, as you can see, I mean, you know, purely mathematically, there is some room, but, you know, we don't want to speculate. We have a mountain to climb, you know, with given that the Synagis season last year started earlier. We have extremely good momentum with Doptelet, as you spotted. We hope that we can carry also the strong quarter for Gamifant into the next, and that we can keep the strong performance in hemophilia. At this juncture, we don't want to get ahead of ourself and would rather prefer to update you on, in a Q3 environment, let's say, where we are, where we are heading. Hope that this makes sense. Yeah.
Sure.
So
Just lastly.
Yeah. Yeah
A financial question for Henrik. Tax rate surprisingly low first half was 19%. That's 500 basis points lower than last year at this stage. Is this something fundamentally different about how we should think about tax rate for Sobi, or is it simply phasing?
No, the just below 20% is a good mark for the full year. There is nothing extraordinary happening in the quarter.
For the full year.
Yeah
That's the rate we should think for going forward as well?
It's likely to be slightly higher, beyond 2022.
Fantastic. Thanks so much.
Thank you.
Thank you. Yeah. Guys, thank you so much for your engagement. You know, I know this is the summer season is coming soon. The more we appreciate you to stay tuned and we're so engaged. Really thanks for your time today. As you can see, we didn't need a heat wave in Europe that is currently affecting everybody to get our metabolic rate up, business in a good shape. You know, we look forward, you know, to deliver also during the second part of the year. As you understand, we don't get ahead of ourselves. Thanks for your interest into Sobi, and wish you a great summer and look forward to re-engage.
If there are further questions, please do not hesitate to connect with Thomas. He would be very happy to either facilitate a meeting or answer directly. Thank you, and wish everybody a great summer. Thank you.
Thank you. This now concludes our presentation. Thank you all for attending. You may now disconnect.