Ladies and gentlemen, welcome to the Sobi presentation of the Q3 results. 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 Guido Oelkers, CEO. Please begin the meeting.
Yeah, thank you so much. Welcome everybody. It's really my pleasure to welcome you to the Q3 earnings call. As per usual, I go straight into it. Forward-looking statement, as we have disclosed at any of those events. I'm joined today by Henrik, our CFO, and the first time by Ravi, who is our new head of R&D and CMO. What we like to share with you is a little bit the journey and bring the numbers a little bit alive so that you can share our excitement around the company. I go straight into the ongoing transformation. When you think about maybe a quick step back where we are today, I think we have built quite a significant diversified portfolio into hematology and immunology. Our two core areas, as you will see later, are growing in the quarter at 16%, respectively 11% in a difficult situation.
Quite satisfied with this progress. We have five very important late-stage assets in our pipeline that I touch upon, then Ravi will really explain into more detail. We have really expanded the company to an international footprint. We have now a pretty entrenched position in the United States and have built organizations now out in Russia, Japan, and China. This was done obviously on the strength of organic growth, but also through M&A. For me, the emphasis is here on thoughtful because one thing for sure is when you're managing risk, there is no certainty. You manage probabilities, and you need to make sure that you apply your good practice as you move on. I start right out with Doptelet.
While we are dissatisfied and would be much more happy if the CIT readout would have been positive, I'm equally gratified that with the CLD and with the ITP indication, we have two very important indications that we are launching. That made us very optimistic about our future. Hence, we didn't have to correct our guidance. We have brought in SEL-212 that has now progressed into phase III. We're expanding GAMIFANT internationally, Are also bringing it into acute graft failure. What I wanted to say is, this is not just an aggregation of assets. Let's say there are various thoughts coming, getting into this, It is actually a very de-risked also pipeline that we have built up with a significant upside potential. We go straight to operational highlights. Basically, we have 6% growth at CER for the quarter, 14% year-to-date.
Please bear in mind, we were able, thanks to our gross margin expansion by five percentage points, to afford a 25% OpEx increase investment that went straight into R&D and into the competitiveness of our commercial organization. As I pointed out, that basically allowed us to drive growth in our core business. Our total sales growth has been pulled down in Q3 by the consolidation, actually, of our specialty care business that we, to a certain degree, divested. Has a negative growth of -45%. Our core moving into the future is showing healthy growth. I'm very gratified that we also made progress at the scale now with Doptelet, 58% quarter-on-quarter growth. With GAMIFANT versus previously in the quarter, 83%.
When you compare the year-to-date number, please bear in mind that we had a price reduction aggregated of over 50%. Very significant progress with the new assets. We come to the pipeline, I just want to say, when you look at this pipeline with BIVV001 in phase III, recently awarded a New England Journal paper. With Doptelet launched in CLD and ITP and now internationalized. Yes, we missed the endpoint, but our peak sales guidance remains unchanged. Gamifant in primary HLH now extended it into acute graft failure. Obviously we are still waiting for the outcome of the 006 trial, hoping to extend it also into secondary indications. SEL-212 moved into phase III and nirsevimab also in phase III. Actually quite a nice, let's say, portfolio of important assets. Moving to the next slide, we see continued top-line growth as you can see here.
Let's say I talked about the 6%, and maybe we can move then into the specific areas of our core business, hematology. When you look at hematology, what you see here is that, let's say while Elocta has not shown that growth, at least on a quarter basis, as much anymore. You see now Doptelet emerging. On a hematology level, actually we see healthy growth also thanks to the significant progress with Alprolix at 33%. When you look at, let's say at Elocta in more detail, and maybe this is what we can do on the next page. These are now Q3 2020 compared to Q3 2019, and we use the sample size of EU5 because we have done the detailed analysis for the EU5 countries that represent 73% of our entire franchise. You see a significant growth from patients, 19%.
Let's say you see a decline of patients or patient loss to competition of 3%. We lost really materially in terms of patient loss and patient consumption, where we have an effect of -12, and the other factors are of minor importance. What you see here is that actually the competitiveness of Elocta continues, and I'm quite gratified that we can take this to the next level. When you think about now hematology, the hope is that Doptelet will gain increasing materiality. Alprolix continue showing growth, and we still hope that we can progress Elocta also moving into the future. The patient growth in the last quarter, on quarter, was around 1% for Elocta, and we think that we can do better in Q4. Yeah. Because Q3 is always a difficult quarter for switching.
I think we are, on the hematology side, in a pretty decent shape. Switching gears to immunology on the next page. There you can see significant growth year-to-date of 25% for the quarter of 11%, held back really by SYNAGIS, where we have not been able to build the same stocking levels in this quarter simply because we changed the distribution model to a special distribution chain. That basically affected us with around SEK 100 million in this quarter. One has to say that the season, in terms of virology, is a little bit slower, but there are various effects into this that maybe we can go into if you're interested in the Q&A session. The product as such, demand signals are positive. The GAMIFANT with 83% in the quarter I touched base on.
Strong double-digit growth obviously with KINERET. Overall, actually the franchise really being in a good shape. I think with this having said this, operationally strong, five strong assets, economic strong, let's say based on the gross margin as well as the EBITDA margin. I'd now like to turn the page and move to Ravi, who will hopefully excite you with what we have in stock in our pipeline.
Thanks, Guido. If you just move the slides on, please. Let me just take a minute to introduce myself. I joined Sobi on the first of September from Aeglea BioTherapeutics, where I've been the chief medical officer. Prior to that, I held various positions in R&D at Roche Genentech and then at GlaxoSmithKline. By background, I'm an academic rheumatologist. I was on faculty and seeing patients at Imperial College in London. I'm really excited to be joining Sobi right now based on the heritage, the pipeline, the people, and the vision for growth that Guido has outlined. Next slide, please. As we mentioned, the portfolio is diversifying both in terms of immunology, hematology, and rare disease assets. That's spread across various phases with a great deal of innovation.
I think it's therefore inevitable that some of the results will be a bit more unpredictable than perhaps we've seen historically. I'll now turn to avatrombopag. If we can just move the slides on, please. What we can see here is the study in chemotherapy-induced thrombocytopenia, which we announced a couple of weeks ago. Whilst we were disappointed that this study did not show a difference in clinical response between the active and placebo arms, and these figures are shown on the left-hand panel, we actually looked at the number of patients who required a reduction or delay in their chemotherapy or required a platelet transfusion as a result of reduced platelets in their chemotherapy cycle. We actually saw very high response rates in both arms. That said, the avatrombopag arm did consistently have a rise in platelet counts and demonstrated a good safety profile.
We still feel there's an unmet need in these patients, and we're continuing to review the full data set and will conduct some post-hoc analyses. We're focusing on aspects of trial design and patient selection, and we're working hard with the clinical community to define next steps that we need to take. Turning now to SEL-212. Next slide, please. We announced the licensing deal in the last quarter with Selecta Biosciences. Just a quick reminder that SEL-212 is a combination product, which consists of a yeast-derived uricase, as well as tolerogenic nanoparticles containing rapamycin. The deal was based on some existing phase I and phase II data, and we recently announced the data for the COMPARE study. This compared SEL-212 with pegloticase in patients with chronic refractory gout in whom conventional therapy had failed.
It was a six-month study, in months three and six of this study, patients had more intensive uric acid measurements. The primary endpoint was defined as the number of patients who had a serum uric acid below six during both these intensive monitoring periods. I should point out in this study that months four and six were affected by the pandemic, although there were a few patients who dropped out of the study, a larger number of patients had missing data as a result of missed visits due to that sort of disruption. Hence, we're showing both the per-protocol, PP, and the intention to treat, ITT, population. In the middle panel, we see the primary endpoint, there was a numerical trend in favor of SEL-212. This was more notable in the per-protocol population, which narrowly missed significance.
In our exploratory analysis, however, significance was seen at month three with an improved response rate of SEL-212 compared to pegloticase. On the right-hand side, if we look at serum uric acid reduction, we see a clear difference between SEL-212 and pegloticase, which is shown in the top panel. In the bottom panel, you can see this difference is further marked in patients with tophaceous gout. Patients with tophaceous gout represent actually the more severe patients with this disease for whom conventional treatment does not always work. They have a worse prognosis, both for their gout as well as for other metabolic complications of this disease. It's worth noting that they're showing a much better response to SEL-212 than to pegloticase. Next slide, please.
SEL-212 has progressed into phase III, which commenced last month and consists of two placebo-controlled studies, each of which has 105 patients looking at two doses of ImmTOR. We expect data in the second half of 2022. This is the core development plan, but we do expect to be adding evidence generation activities as we go through the next couple of years. Next slide, please. Let me move now to BIVV001, which is a development and commercialization collaboration with Sanofi. This is a novel fusion protein, and its structure is shown on the left. It has the addition of an Fc domain and XTEN molecules, as well as different linkage to von Willebrand factor, and all of these modifications result in a prolonged half-life.
As mentioned, the results of the phase I/II study were recently published in the New England Journal of Medicine, and a figure on the top right-hand side is adapted from that paper. What we see is a clear advantage of BIVV001, shown in the dark line, compared to conventional recombinant factor VIII, which is showed in the lighter line. Even by day four, factor VIII activity remains normal and is in target range still at day seven. This suggests that weekly dosing is feasible, and the XTEND-1 study commenced last year and is a one-year interventional study in 150 patients examining both prophylactic and on-demand therapy. Our excitement about the potential for this molecule is shared by the clinical community, and the quotes in the bottom left were taken from an accompanying editorial for that paper from Professor Mannucci in Milan. Next slide, please.
Finally, let me turn to the next chapter for GAMIFANT. Which we feel could have significant therapeutic benefit to prevent graft failure following hematopoietic stem cell transplantation. There are a large number of patients undergoing this procedure every year, and primary graft failure or secondary graft failure is a major issue. In fact, emapalumab recently received orphan drug designation for this indication from the FDA. There's very good preclinical and clinical evidence that both interferon gamma and its downstream mediator, CXCL9, are elevated and can predict the development of graft failure. The figure in the middle of the slide demonstrates that CXCL9 is elevated as early as three days following a graft, and can be readily measured in the serum. Earlier diagnosis in the intervention could be beneficial, allowing the prevention of graft failure in this hard-to-treat population.
We're planning two studies, both of which will start early in 2021. An observational study to validate CXCL9 as a biomarker and to better understand the natural history of patients following stem cell transplantation, and an interventional study to determine proof of concept for emapalumab. Next slide, please. To develop a companion diagnostic, is a bit of a first for Sobi and immunology and is still rare in the immunology field. We've set up a collaboration with bioMérieux to use the VIDAS platform to do this. This approach actually received breakthrough designation earlier this year from the FDA. We like the VIDAS platform because it has a fast turnaround and is hands-off from test to result. The machines are already available in a number of centers that are performing stem cell transplantation.
CXCL9 could be a predictor for graft failure in HSCT, but also could give us an indication of where GAMIFANT might be applicable in a number of other diseases. As you can see, we've got some really exciting scientific innovation to bring to patients, and I look forward to keeping you updated over the coming months on this. With that, I'll hand over to Henrik.
Thank you, Ravi, and good afternoon, everyone. We go to the financial summary for the quarter and year-to-date through September. Revenues for Q3 amounted to SEK 2,970,000,000. That corresponded to an increase of 6% at CER. year-to-date, revenues amounted to SEK 10.68 billion, and that corresponded to 14% at CER. Our hematology franchise, consisting of hemophilia and Doptelet, showed sales of SEK 2.147 billion, a growth of 16% at CER for the quarter.
Elocta at SEK 1.115 billion, decline 1% at CER, whereas Alprolix reached SEK 435 million after a slower Q2 and increased by 33% at CER. For both products, we continue to have positive momentum in patient growth. Offsetting this growth is the negative impact of lower patient consumption, partly driven by COVID. Doptelet had a strong quarter with SEK 145 million in sales. In the U.S. market, the product grew by 29% in USD terms compared to Q2.
In immunology, Q3 revenue increased to SEK 619 million and 11% at CER. KINERET sales of SEK 463 million increased by 20% in Q3, and we continue to see increased underlying demand across our regions. However, in Q3, we limited impacts from sales related to COVID because of fewer patients in intensive care. Since the RSV season has not yet started in Q3, SYNAGIS sales of SEK 46 million for the quarter reflects a lower pre-season stocking than in Q3 2019, when stocking was quite high. This year, things have started to move in October instead. This is early days, and our Q4 sales result will be a better indicator of the expected performance in the 2021 season. GAMIFANT sales of SEK 110 million corresponding to a growth of 83% at CER, reflecting continued patient growth offset by lower price, as we heard.
The specialty care revenue for the quarter declined by 49% at CER to SEK 204 million, this was mainly the result of the discontinuation of various partner products, as we have reported earlier. As we move on from revenue, we saw a gross margin of 79% in Q3, continuing the positive trend coming from a favorable product mix and ceased royalty obligations. EBITDA reached SEK 933 million for the quarter, corresponding to a margin of 31%. Q3 is, of course, a seasonally weak quarter, the margin year-to-date of 39% is in line with the same period of 2019 of 40%, despite our increased efforts this year, particularly in investments in launches.
Looking now into cash flow and debt, we can see that the operating cash flow in the quarter bounced back to SEK 443 million, as expected, clearly lower than the levels we experienced in H1, which becomes evident when we look at the year-to-date number, which is SEK 4.356 billion. This is the result of the seasonal weakness of Q3 and the need to build up working capital for the seasonally stronger Q4. In Q3, cash flow was also impacted by the acquisition of the license to SEL-212 of SEK 933 million and the settlement of the remaining balance of the liability to Sanofi related to Alprolix of SEK 315 million. As a consequence, net debt increased to SEK 12.7 billion from SEK 11.8 billion at the end of Q2. If we go to next slide, please.
This illustrates the net debt development over recent quarters and includes the increase to SEK 12.7 billion in Q3 that I just mentioned, but also the reduction from the peak of SEK 15.4 billion in Q4 2019, which resulted from the major acquisitions in 2019 of SYNAGIS, GAMIFANT, and Doptelet. The net debt of SEK 12.7 billion corresponds to a leverage which is still below two times EBITDA on a pro forma basis, which is very comfortable. We maintain available liquidity of more than SEK 6 billion, signaling a continued position of financial strength for the opportunities of Sobi going forward. With that, I say thank you, and back to Guido.
Thank you, Henrik. Just to round it off, I think, as everybody I think is painfully aware, COVID-19 has not disappeared. For us, obviously, it's a reality that we try to manage for our employees, let's say obviously, try to manage supply and make sure that access to our treatment is available. We know we have ongoing, obviously, trial activities with anakinra in COVID patients, have now 900 patients enrolled in multiple trials. It takes us very seriously, obviously, as we move forward. When you think about the financial outlook, maybe next slide, I think it's important to note that we have not reduced our guidance. We have precised our guidance from SEK 15 billion-SEK 15.5 billion. Please also take note that the currencies are currently, as you can see, between CER and actual rate are currently not in our favor.
We take note of this in the guidance. There's a currency effect of over SEK 200 million to be noted. We can come in the Q&A session to this, and Henrik has a couple of other thoughts here. There's also obviously a reflection of better knowledge. In terms of EBITDA guidance, we are between SEK 5.7 and SEK 6.2 correspondingly. This gives you a view. We are remaining optimistic about our future. We feel that our hemophilia franchise is competitive. We have, as Ravi pointed out, five exciting assets in our stable, and we are investing obviously into our future, and we think that with the leverage below two, that there's still more to do for us. On this note, I think I would like to hand back, and maybe we can open the floor for question and answers.
Thank you, ladies and gentlemen. If you have a question for the speakers, please press 01 on your telephone keypad now. Our first question comes from Eun from Jefferies. Please go ahead. Your line is now open.
Thank you. I have a few questions. A couple of them are really quick. On GAMIFANT, for primary HLH in the U.S., do you think that you are kind of fully penetrated in terms of the number of patients? Another question on GAMIFANT is that you are planning to meet with the FDA for juvenile pediatric secondary HLH indication. Can you talk about the timeline and what you would expect from the meeting? The last question is on Elocta. You mentioned that you see continued share gain, but there was a reduction in consumption for patients because of the pandemic. Can you explain why pandemic would lead to decrease the consumption for patients?
Yeah. Absolutely. Maybe I start with the first two parts, and then Ravi can talk about what, because he's driving this process with regard to FDA interaction. On the GAMIFANT side, we are currently having around You never catch all patients because it's a difficult, let's say, sometimes diagnosis. Until the patient is then transferred to the centers that can diagnose primary HLH, it can take a while or maybe too late, even. I would think that we have now in the primary strictest sense, we are quite well penetrated, probably beyond 80%.
What basically, the growth opportunity now is for us to collect data via registry, what we are doing via different means and have opened up the discussion because we know that obviously the infectious-related patients, which are currently termed as secondary in the If you basically say, "Do they have a genetic disorder?" Actually, there are studies suggesting so and we have discussed this and that prompted the natural group to write about it and this discussion is still ongoing. We have not progressed as much as we would have liked, but it is still our goal obviously because then you're looking at the patient potential which is tenfold. That basically is the immediate one. Yeah. Maybe then later we can talk about, let's say our efforts with regard to sJIA MAS.
On the Elocta side, what basically happens here with the volume reduction, let's say is the following. The pandemic has aggravated this effect because patients actually stayed at home, are less active, as a consequence, reduced consumption or in some cases we know that they actually did not go to the clinic at all, and missed dosing. That basically affected consumption. There is another effect that is part of this and this is the titration in certain jurisdictions, patients are dosed higher at the beginning and then they are titrate down and there is an effect in a couple of countries but this has been exacerbated by COVID. In this regard to the FDA interaction and the promise, I would like to refer to Ravi and what is in stock.
Yeah. Thanks, Guido. Thanks, Eun. Yeah, we're meeting with the FDA later on this year. We'll talk about secondary HLH in children. We've got data on 14 patients. I think we'll get an idea from the FDA as they've given feedback historically on how to collect that data, the number of patients, the extent of response, et cetera. That dialogue has so far been quite productive. Once we lock the database and write the CSR, then we'll hopefully be able to submit those data, all being well. We'll be able to provide more guidance following that meeting in a few weeks' time.
Thank you.
Thank you.
Thank you. Our next question comes from Emily Field from Barclays. Please go ahead. Your line is now open.
Hi. Thank you for taking my question. I just had a question on the quarter-over-quarter patient growth on Elocta. I believe you said that the net growth was 1% sequentially. I was just wondering if you could a little bit more granularity in terms of patients gained and patients lost that sum to that. Also, if you could just comment on share developments in the key EU countries, the U.K., Germany, and the dynamics versus Hemlibra and also the dynamics in France, Italy and Spain where that competitor product was launched more recently. Thank you.
When you look at this, I think net patient gain is mainly what we are guiding on. Let's say we don't typically go beyond this. Let's say you get a sense that the overall magnitude of losses by the chart that is in the slide is I think is within reason. We are still gaining but obviously our ability in Q3 to gain has been impaired while obviously there was progress with our main competitor and that basically is just the case that when you are coming with a new product there are certain patients reserved for you and then you're getting them and let's say while obviously when you are coming with an established product in the holiday season this is more difficult. We have gained share, particularly strong share gain in Germany.
Let's say we are on a very high level and defending position well in France. We are now expanding in the U.K. because of the change of our status there and let's say we are gaining share in Italy and in Spain. Yeah. The competitiveness in those key markets is actually quite good, but we don't comment on market shares by country.
Thank you.
You're welcome.
Thank you. Our next question comes from Christopher Uhde from SEB. Please go ahead. Your line is now open.
Hi there. I have a few questions. I think I'll start on the high level here. You've previously talked about midterm guidance, of double-digit revenue growth. Does that continue to hold, do you think? I guess, if you could potentially clarify a little bit. You've stated publicly a few times that you still have the same peak sales forecast for Doptelet. I guess previously you said that CIT was about half of it. Since there are people who are asking if a write-down is coming, can you just clarify how you arrived there? Are you still including CIT? Were you just being conservative before, and are you still being conservative now, if so?
Let's start with Doptelet. Basically, we have been quite conservative on Doptelet. The SEK 500 million that we guided on did not include CIT. If we would have included CIT, the guidance would have had to be much larger. We gave these examples on the 70,000 patients with a high unmet medical need, as Ravi pointed out. Basically, we think that there's a very significant potential. The market, as we understand it, is globally a $2 billion event. We think that we can be one of the significant players in this field and taking, obviously, the product now internationally, Q1 Europe, then bringing it also to China and Japan. We think that we can have Sorry, in China, Doptelet is already launched now with Fosun, and can make some significant inroads there.
That's really what it is, and that's the reason why we don't have to change guidance simply because we didn't account for it. We were excited about it, and we are also disappointed that it didn't come, but we didn't have to adjust the guidance. Sorry, there was another angle to your question that just escaped me. Can you just remind me?
No, that answered that question very well. The other question was on the midterm guidance for sales.
Yeah. Obviously, we're dealing here with uncertainty. Clearly, this volume reduction was not really part of our original plan. I think, at this stage, it would be premature to say that we are not having the ambition to grow at a hematology product sales level and also on an immunology level, let's say, the ambition of double digit. As we are launching now DOPTELET and as we basically, hopefully, can unlock more opportunities with GAMIFANT, and we see, obviously, significant growth opportunity with KINERET still moving forward, that basically is still our ambition.
Great. The last high-level question would be, obviously, I think you've had a fair amount of bad luck on a couple of recent events. Are there any lessons that can be learned from BD so far?
Yeah. That's the reason why I said it's about, in an earlier discussion I mentioned it's obviously much easier and more comfortable to be the Monday morning quarterback. Basically here, we looked at this and it's clear that we can be better. With Doptelet, for instance, now in particular, could we have seen this? Could we have? Not sure, to be honest. We are still holding horses because we're doing the analysis. For us, if you make mistakes, you will admit them and you say, "Hey, we made a mistake." At this juncture, we can't really see this. We are managing the uncertainty with FDA advising us on the design. We had two of the world-leading thought leaders in the field being a week prior the read out, absolutely optimistic that we have a positive read out and being equally disappointed like us.
Not totally sure, but we will look into this. We clearly have to become better, but that's notwithstanding any of the recent events. We will sharpen this. Obviously, to be honest, Ravi is here also for a reason. We think that we can, overall on the R&D management, get better, and then basically can we be a bit better in the evaluation? Sure. Frankly, when I look at the data points, would I have done the Doptelet transaction with the data that we had at the time, again? Absolutely. Because what we knew at the time about the product pointed us into a winner.
Yet, let's say, when you think about all the top-line guidance or the purchase price that we paid, it will be still a very good deal because everything that is below 2x peak sales is, in my book, still a good deal. We will be self-critical, and we'll self-reflect, and we'll try to improve. I'm not yet at the point that I can find we had a systemic issue. Unfortunately, when you have a couple of misses and you think, "Okay, you could have left this out." I think our conclusion is that we need more shots on goal. We need to get better in managing them and better in selecting them, and that counts for probably most companies. We have some ideas, but I don't think those events we can exclude completely.
I think this is part and parcel of our business model that you will gain some, and you will lose some.
Right. Okay, thanks. I'll get back in the queue. I have a couple more later, but yeah.
Thank you. Appreciate it.
Thank you. Our next question comes from Peter Sehested from Handelsbanken. Please go ahead. Your line is now open.
Thanks for taking my question. I just have a couple. The first one with respect to your re-examination of GAMIFANT at the EMA. Have you submitted additional data to sort of support or improve your chances? Secondly, in terms of headcounts, you cite the current numbers in your reports. That's okay, how much have you increased it in order to build up Russia, Japan and China? Furthermore, could you give us an indication of how much further we should expect your headcount to increase in 2021? Thank you.
Thank you, Peter. Let's say we have resubmitted with regard to Gamifant, and we were not able to provide new evidence, but re-petitioned the evidence that the main arguments become clearer. I think I will refer in a few moments to Ravi, and he can tell you about his own assessment, how we're going. The way this typically works is when you resubmit, you have a core rapporteur and a rapporteur, one who is in favor and one who is more conservative, and that's what happened to us here. The question is, what is the opportunity? I better let Ravi talk to this. Regarding the FTE situation, the build-up in the emerging market at this stage, because these are, in a way, pre-operational activities, is below 40 headcount. It is not the main driver yet.
As these companies obviously get closer to the launch, then we will build up. The good news is the first launch in Q1 will be Elocta in Russia. The situation is that luckily, we don't need to have hundreds of key account managers. It's a more, I would say, incremental build-up that we have. With regard to the full launch program next year, as well as the further indication development, I think we would provide you with some ideas at a later stage. I think we would like to explain a little bit more the opportunity related to our products during the capital market day in December. Then obviously at Q1 when we, let's say, disclose Q4 and our guidance, we will then talk about our assumptions on headcount and also on sales and earnings.
Ravi, maybe you can talk about the opportunities that you see with EMA and how you view this.
As Guido mentioned, the re-examination process does not permit you to submit any new data, but really to reposition some of your arguments. There were four or five fundamental areas that the original application was declined. We've tried to address those as best we can, and we think we've done a good job based on the data that we have. The process is ongoing now, and we've been allocated a rapporteur and co-rapporteur, and we're beginning to get the reports from them. The calendar has us on the CHMP week commencing the 9th, 10th of November. We would expect the committee to be discussing this re-examination then.
Between now and then, we have an opportunity to have a discussion with external experts on the scientific value of GAMIFANT, which we, of course, still believe represents a significant intervention for patients who fail conventional therapy in Europe. That's the status. We should have something of an update in the next few weeks. I'll remind you that obviously the original procedure had a very negative vote against approval. We are trying to address some really fundamental concerns that the CHMP put in front of us. We'll try our best to kind of reverse some of those considerations.
Yeah. You're welcome, Peter. The reason why we said negative, sorry, just to add, was that basically they didn't look as much at the utility of the product, some of the formalities that were not complied with under Novimmune, and that basically was drawn as a main argument. The hope is obviously that we can reopen the discussion at least, but it's an uncertain outcome. Sorry, Peter.
Okay. Thank you very much. Just before I pop back into the queue, whether Henrik could just add some flavor on the comment in the report about ceased royalty obligations, the positive impacts the gross margin. Is that the plan, the reduction from 17%- 12% to Biogen? Thank you.
You mean the improvement in gross margin?
Yeah.
Was that the question?
Yeah.
Now that is not related to the Sanofi royalties. What we refer to in the report is that we have now settled the final debt to Sanofi for Alprolix. Elocta was settled before. However, that doesn't impact the gross margin. It impacts only the cash flow. Your next question would be, what do we mean by the ceased royalty obligation? That relates mainly to KINERET.
Okay. All right. Thank you.
Thank you. Our next question comes from Peter Östling from Pareto Securities. Please go ahead. Your line is now open.
Okay. Thank you for taking my questions, a couple of ones. First on Orfadin, you mentioned for one of the reason for the decline price pressure from generics. I don't know if I, isn't there only one approved generic currently in the market? With that, the price pressure usually isn't that large. Could you just comment on that, please?
We have now substitutes, we have three in the U.S. from what I understand, and one of them is at least substitutable. That basically has now accelerated price pressure. The main driver of what we call specialty care or for decline is just the fact that we just don't have certain products anymore. The Orfadin story is obviously declining. Let's say, but it is not the main event. Let's say it is declining below that 45% at CER. It is price-driven. We are holding on quite well. It's around 30. We are holding on quite well in terms of patients and units, because we want to defend our positions there. There is primary price pressure because of this.
Okay. These two additional generics, did they enter the market just recently, the recent week? When looking at official data, there is only one generic approved.
Let's say from what I understand, actually, they have been on the market for a while. Peter, we will provide you with the details.
Okay.
Yeah, I think we come back to you later today.
Okay. The next thing is looking at the gross margin, which was very good and high in the quarter. You mentioned it was due to product mix. Since the hematology business performed much better than the immunology business there, it implies that there are significantly lower gross margin for the immunology products. Could you just describe the dynamics in gross margin between the two franchises, please?
Sorry. Henrik, why don't you fire off? Yeah.
It's not like all hematology products or all immunology products have the same gross margin. There are differences between the category. There is also one other important element here, and that is the much lower sales of the specialty care business, which then impacts gross margin positively, impacts the mix positively.
Okay. Even if that is only just a small portion of the total sales, it impacts that much anyway, a couple of percentage points.
The drop is significant, as you can see in the quarter.
Yeah. Okay. Two quick ones. Other operating expenses, SEK -54. What is that?
It is operating FX differences from payables and receivables.
Okay, great. Then my last, manufacturing revenue. It's the third quarter in a row with relatively high revenues. Is this a new normal or is it just a phase of high deliveries and expected significant drop in Q4 and Q1? Could you just comment on that?
This is mainly a phasing question, but we are not the underlying performer here. That is Pfizer.
Yeah, they have to give you something in order to plan for.
Yeah. We are not expecting any continued growth when it comes to ReFacto.
Okay. Thank you.
From what we see.
Thank you. Our final question comes from line of Viktor Sundberg from ABG. Please go ahead. Your line is now open.
Yeah. Hi, and thank you for taking my questions. First, I'm a bit confused on the big discrepancy in growth year-over-year on Elocta and Alprolix. Before they moved hand-in-hand with regards to growth. Even in the last quarter, where lockdowns also affected factor consumption. In this quarter, Alprolix is back to a more normal growth trajectory, as I can see.
Yeah.
Elocta is still having a negative growth. Why is that? Why has COVID affected Elocta but not Alprolix in the same way? Could you elaborate on that?
Yeah, sure. The Alprolix number is not affected as much because when you think about it, Alprolix is dosed once a week or every other week. That means that the patient would not necessarily save, whilst Elocta is dosed three times to two times a week, and therefore, let's say patients then sometimes think that they can economize. Yeah.
Yeah.
That is the main difference. Yeah.
Okay. Regarding Elocta, you also showed that you're gaining 90% in new patients in EU5, but still consumption is down as you write there.
Yeah.
I'm just speculating here, but what do you consider to be, for example, a switch to Hemlibra and the other competing products? Many doctors probably could recommend Hemlibra.
Yeah
when you don't do any activities.
Yeah
Maybe recommend Elocta when you're going to play football or running or so on. Maybe if you could explain the dynamics here a bit.
Yeah. Actually Hemlibra, when you look at this now, Q3 this year versus Q3 last year, has not really been the main driver or effect on our economic performance. Obviously, we now see an effect, that Hemlibra has taken patients, we still have gained many more patients. The convenience, obviously, of, let's say, up to subcutaneous once a month or once a week is a factor. Yeah.
Yeah.
There are also patients who want to take one product as opposed to two and want to have an active life. The data for younger kids, it clearly speaks for Elocta. Also in days like this, for compromised patients, we think that there's a clear place for a product like Elocta. We think the market is going to break out. There was a recent survey at the EHA conference with the KOLs, and there, basically, there was a clear vote for EHL products as a first-line therapy. Notwithstanding this, we have to acknowledge that obviously Roche has made significant progress and has taken share. In patients, at least, we can say that we have not lost shares. This consumption topic is obviously an inconvenience.
Yeah.
I wish that we wouldn't have it. Yeah, it is not a question of the competitiveness. I think this was my point.
Okay. Do you foresee this negative effect on patient consumption to continue here into Q4? How should you think here, given that pandemic is on an upward trend in Europe? Also, if we look maybe into 2021. Are you still confident that we will see patient growth and growth in revenues for Elocta going forward here, given the increased competition?
Yeah. I think our assumption is that we see patient growth in Q4 with the Elocta. We think that we can be confident about this. Now moving into next year, I think this guidance, we would rather give you at a later stage. We have good opportunities to expand in markets where we're under-penetrated, and now the launch then in Russia. Obviously, competition is more rampant now. You have more EHLs. You have, let's say, obviously a new bispecific agent now. We have to be more vigilant, and we are ready for this. Yeah. I think we can make still progress on a patient basis, and I think the consumption topic should wash out over time, yeah.
Yeah. Just a final question here. You noted that in Germany you see price cuts. Could you elaborate a bit more on the dynamics behind that? Thank you.
Yeah. I think to be honest, there are currently discussions ongoing with the sick funds. Let's say it is a little bit premature, let's say, to speculate to what effect it will have. In Germany, we have made significant progress this year in terms of volume growth. If there's an adjustment, there will be an offset, let's say, for a product like Elocta to gain more share. I think there's still an open debate, and maybe we can update you on this a little bit because there are two different steps of discussions still ongoing. Whilst the expectation is that prices are not increasing, we can also now not make a huge warning. I just wanted to give you a view here that our German business is a little bit less than 20% of our total business. Yes, there is an offset mechanism in volume.
To what degree this will have now a major effect on Elocta, I think will have to be seen, yeah. I think it's actually inconceivable that it will be the main driver. It could obviously have a singular effect, yeah.
Okay. Thank you very much.
Thank you. I think we like to thank you for your interest, what I would propose is, I am sure there may be the one or the other question that you book maybe with Paula, let us say some schedule that we can have individual sessions thereafter.
Thank you.
Thank you so much for your interest. Yeah.
Thank you. This now concludes our presentation. Thank you all for attending. You may now disconnect your lines.