Swedish Orphan Biovitrum AB (publ)

STO:SOBI

Earnings Call Transcript 2023-Q2

[Operator]

Ladies and gentlemen, welcome to the Q2 2023 Report Conference Call and Live Webcast. I am Alis, the Chorus Call operator. [Operator Instructions] At this time, it's my pleasure to hand over to Guido Oelkers, CEO. Please go ahead, sir.

[Guido Oelkers, executive]

Yes. Thank you so much, and welcome, everybody. This is Guido Oelkers, CEO of Sobi. As you can see from the Q2 report that we published earlier this morning, we're obviously super excited about the performance in 2023 so far and delighted to welcome you to the second quarter 2023 conference call for investors and analysts.

We posted this presentation on our website, sobi.com, and we would like to -- let's go to the next slide, the safe harbor statement as per usual.

We would like to remind you of the usual provisions unless I stated otherwise, we will make comments that most relates to second quarter performance and 2023 at constant exchange rate in million Swedish krona.

Today, we plan to cover the key aspects of our quarterly report. I am joined by Henrik Stenqvist, our CFO; and Armin Reininger, Senior Scientific and Medical Advisor as a member of the [ Ex com. ]

We plan to review the presentation first and then open up for Q&A and around 2 p.m. Swedish time. And for those on the phone, please join the queue for questions by pressing star 1. We propose that you ask only 1 or 2 questions at a time as per usual.

So let's go right to the briefing and go to the first slide. We successfully delivered on our strategy in the last quarter. We saw significant top line growth of 16% at constant rate and 26% at actual rate for the quarter. And this brings us to 6% growth for that constant rate for H1, respectively, 15% as reported. This reflects a strong performance both in haematology and immunology and in particular, our launch medicines, which have been growing over 80% for the quarter at constant rate.

Haematology revenues were growing by 18%, and the growth was mainly driven by our launch products, Doptelet and Aspaveli, whilst we had stable sales from our foundation business with Elocta and Alprolix.

Our stronghold position in haemophilia provides us with an excellent platform ahead of the expected launch of, Efanesoctocog alfa and confirms our strength in rare haematology. Immunology reflected strong growth of Kineret and Gamifant. Our ambition to build a leading rare haematology franchise was evidenced by the closing of the CTI/ Vonjo acquisition.

The acquisition offers considerable strategic opportunities by capitalizing on our haematology expertise and on Vonjo's potential for patients worldwide.

Our R&D pipeline progressed with 2 milestones. We submitted Efanesoctocog alfa to the European Medical -- Medicine Agency. Efanesoctocog has great potential becomes a new standard of care for haemophilia A. Hence, this was a very important milestone for our company.

Yesterday, the FDA approved nirsevimab for RSV and this has been a big or an important milestone for our company as well as we are benefiting from royalties in the U.S.

We have strong momentum in the Sobi business. Taken together with the CTI platform, we have raised our revenue guidance for the year to high single-digit growth accordingly. So all 4 elements of our Sobi strategy contributed to this performance, it's about building our leadership in rare haematology, building our pipeline and allowing us to capture value from it. Building an immunology franchise and growing it, and this is evidenced by the strong leap of Gamifant performance and our regional expansion and becoming a true global player in rare disease. Moving to the next slide, please.

And we are very excited to having closed this transaction with CTI. Because it provides us with a range of benefits, both immediately and in the long term.

Vonjo is a very promising medicine. It is well differentiated as it targets JAK2 and IRAK and ACVR1, while sparing JAK1. It therefore addresses an unmet medical need and severe thrombocytopenic myelofibrosis. Vonjo complements Sobi very well.

Myelofibrosis is a blood cancer, Sobi has extensive experience in thrombocytopenia with Doptelet. In addition, the CTI team has developed formidable expertise in hemato-oncology, which will expand our collective capabilities and create new opportunities for the future. It will be highly accretive to revenue and margins, we already recall the first sales in June was at SEK 36 million. And as said, we are raising our guidance for 2023 partially because of the acquisition.

Please turn to Page #6. So when integrating CTI, we make sure that we fully capture Vonjo's value. In the first weeks, the seamless continuation of Vonjo operation has been our focus. We successfully retained key talents and started the cultural and business integration. There's a lot of energy and engagement on both sides which makes me very optimistic. We also started the life cycle management planning to define how we expand into new indications and territories beyond the U.S.

It is one of the areas that CTI has not been able to fully embark on due to their size. With our experience and capabilities, we can add a lot of additional dimensions to unleash Vonjo's potential. All-in-all, we are very thoughtful about building Vonjo's franchise up to its potential and creating leverage with a newly formed Sobi organization comprising of top talents from CTI and Sobi professionals.

This goes beyond the realization of savings. We have ambitious near-term goals for our haematology franchise and see exciting opportunities in the area of life cycle management and development.

Let's turn to Page #7. So just to share a little bit of excitement on pacritinib. Pacritinib is well positioned for growth, and we will explore its further benefits to patients with myelofibrosis and beyond. Real-world insights into benefit of Vonjo in different patient population to extend its benefits and enable a wider patient access. We also want to embark on the following, therefore, a very strong scientific rationale for benefit of pacritinib in other diseases with underlying inflammation-driven [ pathophysiology ] physiology, regulatory submissions in international markets.

So these are the key drivers. It's insight into new opportunities. It's providing a new strategic rationale into other indications and then obviously taking advantage of our global footprint.

We want to share our excitement about CTI and in particular, Vonjo, for pacritinib, let's call generically to provide you with additional insights. Since we have host an event with Professor John Mascarenhas from Mount Sinai tomorrow. He is one of the foremost experts in the field and will give you an overview on latest data and possibilities. He will be joined by Sarah Buckley, who is our new Global Medical Lead for the franchise at Sobi, who will provide you an in depth understanding on the subject matter as well.

Now it's time to turn to Slide #8. And Henrik, would you like to take this?

[Henrik Stenqvist, executive]

Sure. Thank you, Guido. Hello, everyone. So as many of you will have seen Sobi today call for an EGM on August 15 for the purpose of carrying out the rights issue of approximately SEK 6 billion with preferential rights for existing shareholders. The proceeds will be used to partly finance the CTI acquisition of approximately SEK 17.3 billion corresponding to about 1/3 of the equity value.

Considering Sobi's momentum, this quantum gives us an appropriate starting point post the acquisition for further deleveraging and financial flexibility. Following an authorization by the AGM, the intention is to launch the rights issue soon thereafter. And the terms of the rights issue will be set by the Board shortly before the launch.

And as previously announced, the Investor AB, our main shareholder, has undertaken to subscribe for their pro rata share of the rights issue, corresponding to about 36.2% of the shares.

In addition, Fjärde AP-fonden, Polar Capital and Handelsbanken Fonder and Swedbank Robur, together representing about 12.8% of the shares have expressed an intention to subscribe for their respective pro rata share. So altogether, shareholders representing about 49.1% of the shares. I have undertaken to subscribe or express the intention to subscribe to their respective pro rata share of the rights issue.

And I think, I'll now hand back to Guido.

[Guido Oelkers, executive]

Yes. Thank you, Henrik. Let's turn back to our quarterly performance, and we provide you with a perspective on Page 9 on our performance by franchise and regions. As stipulated before, and our growth of 16% was driven by both haematology and immunology, especially our launch brands over 80% growth just to bring this back to life. And this brings us to a revenue growth at constant rate of 6% for the first 6 months and a constant rate. And basically, what you can see is very strong growth at underlying growth, if you would, the 6% would be around taking away the COVID effect for Kineret and our business with the Chinese partner, Fosun, for Doptelet, we would have grown at 9%. So that gives you a little bit of guidance, one of the underlying growth of the company.

So both regions, North America and international grew very significantly in the quarter, whilst Europe was pretty stable. So in the first half, all regions grew high single-digit rate.

Let's turn to Slide #10. And I think this is -- we wanted to show you a little bit of sources of growth and why we are so excited about Sobi's future as well as we are about our Q2. This is a schematic chart for illustration purposes only. And what you can see is today's growth is fueled by a rich portfolio of growth and launch products, namely Doptelet, Aspaveli and PNH, Gamifant, Zynlonta, and Vonjo. All products have 1 common theme. There's still a lot of headroom to reach full potential.

What that means, that there's a lot of left on the table to grow the company in the forthcoming years. What is exciting for us is that during the second half of this year, this portfolio of 5 growth products will economically be joined by the expected royalty stream from Beyfortus in the U.S. and by the launch of [ Efan alfa ] into the first launch countries likely in the Middle East.

And when you think about the other portfolio, why is SEL-212 and Aspaveli in nephrology indications, are not too far off from launch either, it gives you a perspective that this portfolio of late-stage pipeline, launch products and growth products is very much derisked at this point of time.

In summary, Sobi is looking forward to a period of sustained growth, driven by a lot of new products. Let's turn to Page #11. Obviously, our bread and butter business in our haemophilia. And it is important, particularly also in view of our new launch of Efanesoctocog alfa. So our business continues to be underpinned by stable hemophilia growth of 2% in H1.

We expand the leading presence of Elocta and operates to more patients in new territories. This confirms the community is confident in these trade treatments. For Elocta, we see underlying unit growth in international markets, while the phasing is less favorable in Q2. Government integrations compressed prices in various European markets, while we see a positive evolution on consumption and patient expansion in Europe. As a result, Elocta grew at 2%. Alprolix was impacted by this quarter by the phasing in the Middle East, but grew 8% for the first half.

Let's turn to Slide 12. And this is the Doptelet chart. And here what you can see, obviously, a very nice evolution in the U.S. and Europe accelerating growth in the second quarter very significantly, mainly driven by Spain, U.K., Germany and Italy. And this expected trend, this makes us confident to grow the product double digit for the rest of the year despite the early patent expiry in China. And just a note on the slide is that we are going to launch Doptelet in the second half of this year also in Japan.

Let's turn to Slide #13. And we are very gratified that we made good progress with Aspaveli. On a quarterly basis, we sold SEK 144 million. And we have launched the product now in Germany, the U.K., and France, parts of the Middle East and Australia. And in the second quarter, we are going to add to Canada and more countries in Europe.

There was early sales in a number of other countries where reimbursement is starting to come in one at a time. We are also expecting to launch Aspaveli in Japan, which represents our largest single market opportunity. So we increased considerably the number of patients on commercial supply. We have quite a number of patients also in various trial initiatives as we move on.

So let's move -- turn to Page #14. And Gamifant, let's say, has been the most prominent evolution in this quarter with a big spike. This is a result of an enhanced outreach, more experience with Gamifant and recent publication of new data. We introduced a new go-to-market model which better reaches new institutions.

We have now around 200 patients treated with Gamifant and there's more real-world data and experience available. So physicians have gotten more comfortable with the benefit risk profile of Gamifant and are increasingly prescribing it for their patients.

They are doing this now for longer, too, and this results in the sales evolution that you have seen. This is a new normal, probably not yet. But clearly, it is the Q1 is also not indicative of where Gamifant stands today. So the product is making a lot of strategic progress.

All contributed anyway to a very strong growth of 73% for the quarter and more than half of it is coming from new patients, 60% comes from higher dosing, which adds volatility because it depends also on the patient's body weight.

Kineret has now flushed out the COVID related effects in Q2 and the returns to a normal growth pattern and which is really related to the elevated interest in the IL-1 mechanism. Growth is driven by the U.S. and International. And the H1 sales are still down because of the COVID-related impact, whilst we had moderate cause when you exclude this.

In this note, I'd like now to hand over to Henrik, who will take you through the financials.

[Henrik Stenqvist, executive]

Thank you, Guido, and let's turn to Slide 16. And we go to the key financials for the second quarter. So starting with the top line, Q2 was another good quarter with a solid business performance with revenue of almost SEK 4.9 billion was the highest Q2 ever, as reported in SEK, benefiting from both underlying performance but also currency tailwinds.

So reported growth was 26%, corresponding to 16% at CER, explained mainly by Doptelet in all regions, a very strong quarter as we heard for Gamifant, but also Kineret in the U.S. and some international markets. The newly acquired Vonjo contributed to revenue with SEK 36 million from the period June 26 to June 30.

Looking at the bars to the left, in haematology driven by the strong performance of Doptelet, we see the highest ever quarter sales. In immunology, we see the impact in the quarter of the seasonal pattern of synergies, however, mitigated by strong Gamifant sales and the Kineret performance.

If we go back to the table, the adjusted gross margin in the quarter of 71% was below last year of 74% mainly due to the high Doptelet sales to China in the quarter, which is a low-margin business.

The adjusted EBITDA margin, excluding non-recurring items of SEK 236 million reached 26%, slightly better than last year's 25%. The non-recurring costs or items affecting comparability of SEK 236 million in Q2 relate almost exclusively to transaction and restructuring costs in connection with the CTI acquisition. And we do expect some further non-recurring costs in coming quarters, but at lower amounts, than in Q2.

The operating expenses, excluding amortization and non-recurring items, came in slightly higher than the previous quarter and also increased versus Q2 '22 by 5% at CER, driven by the increased marketing and sales spend related to Aspaveli, Doptelet, Zynlonta which wasn't there a year ago and the pre-launch of Efanesoctocog alfa. Whereas the R&D spend was reduced compared to last year at CER.

The adjusted earnings per share for the quarter ended at SEK 148 million well above the adjusted EPS of last year, an increase of 63%. The operating cash flow in the quarter at SEK 357 million, reflecting the seasonal weakness of our cash flow in Q2, but increased slightly versus last year. But of course, the main event in Q2 was the CTI acquisition, which explains the jump in net debt to SEK 27 billion, which is the status before the rights issue and corresponds to net debt-to-EBITDA ratio just below 4x. For further details on the items affecting comparability in the quarter, please see Page 3 in the Q2 report.

And if we then go to Slide 17. To the financial outlook for the full year '23. And as usual, it's for revenue growth at constant exchange rates and adjusted EBITDA margin. We will continue to expand in haematology, immunology, specialty care through ongoing launches, new medicines and geographic markets and we anticipate a sustained sales growth.

We increased the guidance for revenue for the full year 2023 as follows: Revenue is anticipated to grow by high single-digit percentage at CER where the previous outlook was low to mid-single-digit growth. And as we continue to invest in launches and advance our pipeline of new medicines and emphasize the long-term value of the business, we anticipate an adjusted EBITDA margin at the low 30s percentage of revenue, which is unchanged compared to the previous outlook.

This outlook now includes the expected impact from the newly acquired CTI and the product Vonjo, but also service rights to royalties to nirsevimab. And as already communicated, Vonjo is expected to be accretive to Sobi's adjusted EBITDA margin in 2024.

And with the outlook covered, I will now hand over to Armin for the pipeline.

[Armin Reininger, executive]

Thank you very much, Henrik. Hello, everyone. Well, it's my pleasure to also talk about pipeline milestones. And as Guido alluded to before, we have 2 key milestones that we hit for our late-stage pipeline this quarter on Efanesoctocog alfa for haemophilia A as well as nirsevimab for RSV.

The EMA, the European Medicines Agency validated our marketing authorization application for Efanesoctocog alfa. This puts us on a path towards potential approval in Europe in 2024. We also continue to see high interest by physicians and are convinced that Efanesoctocog has the potential to change the treatment paradigm for haemophilia patients as we also learned at the recent ISTH congress. This is also exemplified by the presentation of the latest data at this congress of our pediatric study, the XTEND-Kids, at a late-breaker session at ISTH.

And also, as said already before, as just yesterday, the FDA approved Sanofi's and AstraZeneca's Beyfortus nirsevimab for the prevention of RSV.

Please turn to the next slide. The increase in R&D pipeline news flow that we want to make you aware of for H2 is clearly on Doptelet, ITP regulatory decision in China. Most important for us also or most significantly is the Gamifant progress that we are making. We are preparing for submission of Gamifant in macrophage activation syndrome, MAS in the U.S. and this is dependent on the interim data from the EMERALD Phase III study, which we will see later in the year.

And the next regulatory submission after that will be for SEL-212 in chronic refractory gas after the positive dissolve data from earlier this year. And on the right-hand side, you see that we also have quite some things coming for Aspaveli/Empaveli on kidney aspects, TA-TMA and also several additional aspects for Doptelet in ITP and also some additional regulatory decisions in China.

So with that, please turn to Slide 21. And I hand back to Guido. Guido, I think you're on mute.

[Guido Oelkers, executive]

Sorry. Yes. So to sum it up, and what I want to leave you with is really the background of our current strength. Aside of from having obviously medicines that matter for rare disease patients or people suffering from rare diseases.

The first success of our success, but there's really our strategy that was built in 2017 and it's about leading in haematology, growing our immunology franchise and specialty care franchise, capturing the value from our pipeline and having global ambitions.

And as you can see from the results, we are delivering on all aspects. Sobi's strengths lie in evaluating, developing clinical projects, commercialization and bringing medicines. To do this, we build a strong performance culture. This is based on our company values. They keep us united, keep us focused on working for patients. And all of this is in an ethical and responsible way.

Certainly, we have a very cohesive senior management team, including the executive committee with a significant tenure. This creates a high degree of trust, which in turn helps us to make better and faster decisions.

So moving to the next slide. As you can sense, we are very pleased with the second quarter and the first half year at Sobi. We successfully delivered on our strategy in the last quarter with significant top line growth and expansion of our pipeline.

Just to summarize, we saw significant top line growth, 16% in the quarter, 26% reported, 6% for the first half year, 15% reported and we continue to build our leading rare disease haematology franchise with the CTI acquisition.

Our R&D pipeline progressed with 2 key milestones for Efanesoctocog alfa and Nirsevimab. We have a strong momentum in the Sobi business taken together with the CTI acquisitions, we are raising our revenue guidance for the year to high single-digit growth.

And I think it's now the time to open the floor for questions and answers.

[Operator]

[Operator Instructions] Our first question comes from the line of Charlie Mabbutt with Morgan Stanley.

[Charles Mabbutt, analyst]

It's Charlie Mabbutt from Morgan Stanley. Two questions, please. So firstly, on the CPI deal, I'm just wondering how you expect Vonjo to ramp in the U.S. The product clearly has a niche in the market where there is an unmet need, as you said. So was there a case of CTI simply being unable to fully invest in the launch? And now could we see the product grow more rapidly over the next 18 months as you broaden awareness?

And secondly, could you talk about how you see the cost lines trending through this year and next, given the divergence in trends across SG&A and R&D for the quarter? I believe CTI had SG&A costs of around $20 million and R&D of around $10 million in Q1. So how much of this should we expect to be taken on by Sobi over the coming quarters?

[Guido Oelkers, executive]

Let me start with the first part, and then on the cost side I refer to Henrik. Basically, you look at CTI, purely philosophically, I think they have done a tremendous job as a team, with a lot of expertise to build -- bring the business where it is today.

But it's also quite clear when you are a one-trick pony, you have 1 product, it's not very efficient to build an infrastructure competitive enough to be in an area where you have quite a few already very significant players today, but more to come. So we think that we can take this to the next level. And this basically relates to the fact and we've spoken about this at an earlier presentation. We have a team with Doptelet that basically has a 90% overlap in target audience with the CTI organization.

The combination of the 2 will give them a very strong foothold in this market, we keep the 2 teams at this juncture separate because we think that there is benefit from the risk at harvesting synergies by using reminder positions in each team and definitely leveraging the overall medical organization. So we think that we will be more competitive together than CTI alone. And then obviously, this should yield and results, we think that we should be up for significant growth.

In addition, I think you need to also realize that the NCCN guidelines were recently expanded. So where the product has reason to believe -- we have reasons to believe to sell the product beyond severe thrombocytopenic patients in a more -- in a broader fashion. And it was the combination of this, I think, is basically the reason why we believe that we can significantly accelerate growth of the product and why we are very optimistic for the future. And then obviously, in the next phase, we take -- we want to take it international. And we are working now with the team very closely together let's say, from ex CTI now, obviously, driving this as part of the Sobi organization.

And you will see tomorrow, I mean, when Sarah Buckley will talk about opportunities with regard to Vonjo. I mean she is a clinical oncologist, has a really in-depth knowledge of the subject that, how we're basically trying to create a symbiosis of domain knowledge from CTI and coupling this with, I think, very strong processes and commercial experience in our North, particularly at this stage in our North American organization that this should yield significant impact.

Maybe on the cost side, Henrik, do you want to comment?

[Henrik Stenqvist, executive]

Yes. Charlie, I think your question was about the SG&A.

[Charles Mabbutt, analyst]

SG&A, just sort of. Yes. Yes.

[Henrik Stenqvist, executive]

Yes. Well, when it comes to SG&A, of course, there is a degree of immediate impact because of the fact that we are obviously combining the 2 companies. But in the short term, there is so much more focus on finding the right go-to-market model and focus on the top line, and that's also reflected by the guidance. We stick to the low 30s margin, whereas we've said that we expect accretion in 2024. But obviously, the focus is on top line growth in the short term. For R&D, of course, the confirmatory trial continues.

[Guido Oelkers, executive]

And we will come back to our Board and then we will obviously makes the right announcement. We are working right now on a comprehensive set of life cycle management initiatives and indication expansions for the product. We want to take this product to the next level. The outcome of this, and that's the reason why we haven't quantified yet synergies because we're obviously ring-fencing synergies, and we have realized quite a bit already.

But we want to make sure that we give you then a complete view on this. Where we see the product going, but also, let's say, obviously with new indications, but also then basically taking account for what we see in terms of efficiencies.

Then maybe we move then to the next slide -- to the next question, sorry.

[Operator]

The next question comes from the line of Christopher Uhde with SEB.

[Christopher Uhde, analyst]

So my first one is on Efan alfa and the EMA process, you previously indicated we should expect a -- we could probably expect a pretty quick process given how well the mechanism is understood and how clear the data is and so on.

Does that mean that there is scope to for the EMA to give you the 180-day questions ahead of the 180-day time? Or should we still expect 180 days to be in place? And then, I think so does the financing increase or decrease the odds or does it impact the odds of you monetizing the nirsevimab royalty stream and then especially in the short term?

And then thirdly, so Vonjo, coming back to the ramp and potential. So obviously, any sort of uptake? There's the usual work to be done to get physicians aware and patients aware and whatnot. But beyond that, just looking at the projections, this could -- this has the potential to be an absolutely massive drug for you guys. What do you need to overcome to get as many patients on to therapy within the label population alone to start with?

[Guido Oelkers, executive]

Very quick. And also, I would like to start with the financing. I mean, Nirsevimab, we will obviously -- we are looking forward to a great performance of Sanofi in the overall ISV area, whilst we're obviously trying to do a good job with synergies and trying to be a product of choice for these very compromised babies. But that will -- we are looking forward to monetizing this financing provides us with a solid position, so we don't need to monetize the royalty stream.

And that basically also company is in a very solid foundation. With regard to Vonjo potential, we will obviously make sure that we harvested. I mean, I'm glad you see that, yes, we share your excitement around the product. And yes, we think that this is a very material opportunity in terms of market penetration, given its mode of action and the data that are clinically differentiated, and we'll share more on this and the excitement tomorrow, and maybe then we can go into more detail.

With regard now to the EMA approval process, Armin, you want to comment on this?

[Armin Reininger, executive]

Christopher, as you know, with the accelerations, you have it when you have it. So I want to be very careful with making some forward-looking statements here. But I think what we see and what we heard at the ISTH is a huge interest in all physicians from the U.S., from Europe, and they really are just waiting desperately to get that product into their hands and treat their patients.

So I think whenever we can do some accelerating moves, we will definitely let everyone know ASAP, but with the authorities, we just need to wait for the process and what they announced to us.

[Guido Oelkers, executive]

So it's too early for us to speculate whether there's any earlier approval, but we are looking forward to the first launch countries pretty soon in the Middle East and when we usually launch sequence around Europe.

[Operator]

Next question comes from the line of Eun Yang with Jefferies.

[Eun Yang, analyst]

On Gamifant, you laid out the factors that drove strong sales in Q2. The question is, what's the duration of treatment on average on Gamifant? And then should we assume second quarter sales as the run rate for the remainder of the year?

[Guido Oelkers, executive]

Yes. I think obviously, the way to see this is, we have improved our organization. We have new data. We have [ entity business ] the probability of getting prescribed when the patient is presenting themselves is increased versus the past. And that was evidenced by a higher number of patients.

Now in which form and shape these patients are coming, we can hardly -- we don't influence as much. But I would think that, let's say, will we have another -- is the Q2 now the new normal, I would not be so daring at this stage. If we would have secondary HLH approved, clearly, you would expect even more than that, yes.

But at this juncture, I think to think something that is on a higher -- significantly higher level than what we had in Q1 and in between what we have in Q2, I think that is probably more how we think about this product. Because you could be unlucky in the quarter again, because patients go off therapy and then -- Armin, you want to talk -- you want to comment on the duration of therapy right now?

I mean we have very different patients also right now. I mean the product is also -- the benefit of the product is also seen this even with certain CAR-T patients at this stage here, so one should say.

Armin, do you want to comment?

[Armin Reininger, executive]

As you know, as per label, it's the primary HLH patients. And those patients, when they are on Gamifant, they're usually treated until they go to the treatment, the curing attempt, which is the stem cell transplant. That is dependent on several factors. Also, as you know, dependent on to get the right donor and those kind of things. It may be several weeks to months.

But at the same time, physicians, as Guido said before, gain more confidence and if the -- as we also know, because we get a lot of requests in Europe for managed access programs or to compassionate use of the drug. There are physicians who see the benefit beyond that very strict primary HLH label that we have in the U.S. So it's very hard to then say the average time treatment period is such and such because it has a quite withstand.

But I would believe that we can really unlock with what you have seen on the news flow with the macrophage activation syndrome. And if we get successful with the EMERALD study data and also with the submission in the U.S., I think we can have a much clearer view on this. And also what we thought initially that those patients are probably more small children with a certain weight. We have seen over the years that the weight ranges quite dramatically all the way into adolescence and early adult, and they may be very heavy. So there's quite a fluctuation that we cannot predict.

[Operator]

The next question comes from the line of Gonzalo Artiach with ABG Sundal Collier.

[Gonzalo Artiach Castañón, analyst]

I will continue with the Gamifant also. And On the reasons for the sales being higher this year. I mean, you're mentioning that physicians are more comfortable with it and the patient care has a lot of influence here also. But I was wondering if this spiking growth is also partly justified by its use in enough label setting in secondary HLH. Could that be the case? I mean, do you have any words on that?

[Guido Oelkers, executive]

I mean, to be honest, we are strictly promoting the product on label in line with familial, which is primary HLH. But we know from real-world evidence that physicians at their decision, use the product also in other indications. And there's quite a bit of body of evidence right now suggesting that interferon gamma is also -- if you inhibit interferon gamma, you can mitigate with CAR-T.

So that is at least heavily debated by various physicians. So there is broader usage, which makes it very difficult for us to predict to have an accurate prediction on the product but therefore, we said, once we have things more on label, then this makes it much easier to predict. But we're promoting strictly on label. And but there is a lot of interest in interferon gamma in the science community.

[Gonzalo Artiach Castañón, analyst]

Okay. Great. And a second one, if I can, on Nirsevimab. Following the approval yesterday, a new ACP meeting has been announced for August 3. Could you give us your thoughts on having the approval and recommendations already placed or in place by August with a few months before the season starts. Do you think they will have an impact on synergy sales whether this would have happened later in Q3?

[Guido Oelkers, executive]

Yes. No, this is -- thank you, I mean. This is, I mean it's beyond us to speculate what the committee will say. We believe in synergies with more than 1 million lives of a safety database. And we know it's the guideline, the committee, there will be people who will have different views on this.

How far will it be like if they said, no, all babies irregardless or will there be a room, I mean we know that there will be some who will be advocating to take a stepwise approach, but we cannot. We have no influence on this. And let's assume it is in line with what was announced yesterday or during the night in Europe.

And then it is a question to what degree will it influence it. I think for this year, you will probably see some impact. But you will see also, obviously, they have a fight on the royalty stream.

Now the question is how quickly can they penetrate on the total patient population. And that's everybody's guess. If you basically can afford a longer perspective, let's say, 2025, we know that in any of those scenarios, it will be better off than we are today. Or that is our conviction anyway.

[Gonzalo Artiach Castañón, analyst]

But, what it will be...

[Guido Oelkers, executive]

Yes, what will be the situation now this year? I mean there's -- there is a bit of uncertainty here. We obviously believe in synergies. Yes. Absolutely.

Maybe next question.

[Operator]

The next question comes from the line of Mattias Haggblom with Handelsbanken.

[Mattias Häggblom, analyst]

Two questions, please. So firstly, on the revenue guidance uplift from low to mid-single-digit growth to now high single-digit growth which is roughly SEK 1 billion in additional sales. The new outlook includes Nirsevimab royalties and CTI biopharma revenues that the previous outlook did not as I understand it.

And when I look at consensus, as we had roughly SEK 200 million in Nirsevimab royalties for this year and sell-side model CTI Biopharma to show revenue of SEK 700 million 2nd half based on Bloomberg forecast which combined almost bring me to the uplift of the guidance.

So what does the new outlook imply for the rest of the business, not least in a very -- in light of the very strong second quarter, including the Chinese shipment of Doptelet?

And then secondly, drilling into Kineret a bit more with regards to the strength we saw here in the quarter. You provided some additional details in the report, but is it possible to expand and help us understand the durability of this strength?

[Guido Oelkers, executive]

When it comes to the revenue guidance, I mean, basically, what you see is that the underlying business is doing quite well, yes. Obviously, and therefore, we are probably more optimistic on our existing business than we, let's say, than we have been at the beginning of the year. So we see an improvement.

And then we obviously see an opportunity with Vonjo material opportunity. And then basically, you have the -- and then you have basically the scenario synergies and the royalty stream from nirsevimab. And there could be effects that can lead other out, and that provides a certain. And we have taken certain assumptions that we believe are reasonable that in sum, we think it is -- we don't lean too much forward by basically saying it is a high single-digit revenue growth. So we don't break it out more.

And with regard to Kineret, I think what we see now is that the product is gaining a little bit more traction. We see some good growth in international, the larger international becomes our organizations. The more momentum we have also with Kineret, we still see some good growth coming from the U.S., whilst it's more stable in Europe, but it is really the interest in the product, and we're making the product obviously available in more countries international, that is really driving the underlying momentum. We would not -- we cannot provide at this stage more guidance.

But that's the reason why we think the product is going to be for us a growth product. Is it going to be a double-digit growth product or maybe not, but it is a product that we -- once we have flushed out the COVID impact that we can grow, yes, moderately grow. That's basically what we see. And this is where it used to be.

So basically if you -- and COVID gave us a bolus that is now flushed out. And then, but we're taking it from there, it still remains a very interesting topic for many physicians around [ Doptelet. ]

Henrik, do you want to give more color to the guidance?

[Henrik Stenqvist, executive]

No, I think you put it well. Obviously, we have slightly increased the expectations of the underlying business, not at least when it comes to Doptelet after the strong performance. But other than that, no, I think you said it, Guido.

[Guido Oelkers, executive]

Yes. Yes, we obviously, as you can see, we have really exponential growth, particularly now in Europe right now. And we don't see this coming down too quickly.

[Operator]

The next question comes from the line of Peter Ostling with Pareto.

[Peter Östling, analyst]

Yes. Just a single one. Most of my question has already been answered. You mentioned regarding Vonjo, you mentioned that there had been some expansion when it comes to guidelines. Does that mean that the basic population of around 7,000 patients in the U.S. will expand?

[Guido Oelkers, executive]

Yes. I mean, when you follow the guidelines, which is not label, but you follow the guidelines, the NCCN guidelines, they cover all thrombocytopenic patients -- sorry, all myelofibrosis patients at this stage. Also the [indiscernible]

[Operator]

Your next question comes from the line of Alistair Campbell with RBC.

[Alistair Campbell, analyst]

Got 2 questions, if I may. The first one is on Doptelet just really want to be clear on this. Obviously, a very large China sales number in Q2. But if I were to assume no more China sales this year -- second half of this year or next year, but the underlying run rate for Doptelet ex China, I'm probably getting to a number that looks like broadly year-on-year, you've been flat for Doptelet. Is that reasonable? Or do you think you can do better than that?

And then the second question is on ALTUVIIIO. A couple of weeks ago, Sam, if you were talking about the launch in the U.S. and saying, it's going ahead of expectations. They're taking about 10% of patients from Hemlibra. So quite an optimistic outlook from them, and I'm sure we'll hear more from them next week. Just how good a proxy do you think the U.S. launch for ALTUVIIIO where is when we think about your launch in Europe albeit it will be slower in sort of market by market.

[Guido Oelkers, executive]

Yes. Let's start with the easy one on Doptelet. And basically, what we see here, and I think there's an echo maybe someone has to go on mute. And basically, when you think about Doptelet, you have -- we think that we can do better than what you think because we think that we can even -- we are optimistic to show double-digit growth for Doptelet here. Because the momentum is so powerful.

And so we see with the business that we have now consolidated from [indiscernible] And with the underlying momentum that we see, we think we should be significant this year. So let's see exponential growth is obviously always difficult to project. But in our -- but that we were going to grow or went above last year, we see very strongly because there, we're also launching in Japan, so we should be we are pretty bullish about Doptelet and we had to increase our orders, so to make sure that we sell it also.

And with regard to the second part of the question, the -- sorry, can you just give me...

[Alistair Campbell, analyst]

The ALTUVIIIO launch?

[Guido Oelkers, executive]

Yeah. The ALTUVIIIO launch, you want to know the 10%. What we have seen historically was that obviously, when you launch in the U.S., you have access to a much larger patient population on day 1, whilst we have to earn our stripes and getting reimbursement in a more sequential way. We try to be fast with this.

So that, and what we saw with Elocta was once we had reimbursement in all countries, then we were actually more effective than Bioverativ was at that time. And again, obviously, a significantly higher market share even though the economics because of the price were initially small.

What we think is that with given the high expectations, we believe that this has really the makeup to become best-in-class and standard therapy. And but how quickly can we take Hemlibra patients, we will obviously try to take Hemlibra patients. But don't forget also that Hemlibra has been much more successful in the U.S. than they have been in [indiscernible] Still there is a significant opportunity for us.

And we will not discriminate where we take the share from. So we are very optimistic and share this optimism but we are now obviously really keen to get this on the schedule in all the relevant markets and doing the -- and starting, obviously, next year and then penetrating from there, yes. So you will have to be a little bit more patient with us, just giving the reimbursement approvals. But once we have reimbursement approval, we hope that we will demonstrate similar uptick curves than what Sanofi is experiencing right now.

Yes. Maybe is this giving you some flavor and maybe we open up for one more question, yes.

[Operator]

The next question comes from the line of Viktor Sundberg with Nordea.

[Viktor Sundberg, analyst]

I have 3 maybe quick ones, if I may. So given the acquisition was finalized quite close to the end of Q2, should we model any more one-offs here in terms of cost for Q3? That was my first question. Secondly, on Doptelet, you highlighted here, of course, the generic competition will be introduced in China this year. So I just wonder if there's an impact here on your ambition in ITP as well in China or if you can give you a rationale for going after that indication in China given the high price pressure on both the VDP and NRDL?

And my final question was also here on the label extension for Gamifant secondary HLH. I guess there's been some uncertainty previously if you're going to have enough data in your package to the FDA. But I just want to understand if you had more interactions with the FDA and how confident you are that the Phase II trial, EMERALD in real-world evidence together will be a strong enough data package for the label expansion?

[Guido Oelkers, executive]

Thank you, Viktor. Let's start from the back. We need to hold our horses. I mean we will have an interim as Armin said pretty soon on the EMERALD data for the first 2 out of the patients, then we will judge whether this is already sufficient. Eli will consult FDA. So it's speculative at this stage, whether we need to recruit the entire study or whether we can already go with the interim cohort.

And that basically, we will have to assess when the data are there with us. Regarding ITP China. I mean, this is a discussion that we have with Fosun. And we are obviously, ITP could be the big opportunity. It doesn't seem in China to be a promotion there. I mean, there seems to be a utility of our product irregardless of the label that has been approved clearly, it will further stimulate growth.

And we will see whether we can find in this new situation with Fosun, maybe an economic arrangement that could be beneficial also for Sobi, but it is too early to, let's say, provide you with any guidance on this. Will come back when we have something at this stage, don't account for it anyway. There's strong under -- with the rest of the business.

With regard to the one-offs, Henrik, you want to comment what you expect in terms of one-off?

[Henrik Stenqvist, executive]

Yes, Victor. We do expect some more one-off costs in coming quarters, however, smaller than we saw in Q2.

[Guido Oelkers, executive]

Maybe one last question and then there may be some opportunity after the Vonjo discussion to for some questions and answers as well tomorrow. Is there one last question?

[Operator]

Our last question comes from the line of Niall Alexander with Deutsche Bank.

[Unknown Analyst]

This is [ Sam ] from Deutsche Bank. Very quick one. Just wondering if you can give your takes on direction of margins midterm and confidence of delivering margin improvement next year given the CTI deal?

[Guido Oelkers, executive]

Yes. Thank you. I mean, basically, this is when you take a step forward, clearly, with what we have now on board with the launch product, with the operating leverage that we will create out of it. If you look at it midterm, clearly, we need to yield margin improvement and Vonjo is obviously no surprise being a small molecule is going to be over time accretive.

Then we have the situation, synergies versus royalties. So when you say midterm, also there, the royalties should be very accretive because by definition, it's 100%, yes, of a smaller it's a smaller percentage, but it's very material. It refers to a much larger, obviously, patient group. So and as we grow our other launch products, and those products, they are also mostly very accretive source of supply for Doptelet that is also very positive for us. So there are a lot of positive factors and that should, let's say, help us.

Now what does it mean for next year? I think that would be premature for me now to give your guidance already. That's something that we typically do at another stage. But we think that we have a lot of opportunity to improve the business and obviously, we will update you once we know how much additional money we want to invest into studies and life cycle management with regard to Vonjo shortly.

But overall, we will not obviously overboard. We believe in this business. We think it's in an excellent shape. There's a lot of opportunity for growth. So I'm afraid that I cannot give you our guidance already for next year. But when you have a bit of a perspective on the business, then there are a lot of factors, favor that should help us over time, yes. And is this now for the next year. I would not provide you with the guidance at this point of time.

So maybe what I do is I wrap it up, I really like to thank you for your interest. As you can sense, we are happy about the company. It's quite nice to see how a lot of these things coming into place. And really like to thank you for your interest. We have to be respectful that there are also other earnings calls as we speak today.

Thank you for your interest and for those who have an interest to learn more about Vonjo communities and may have -- we have a question tomorrow is the time. Thank you so much. Wish you everybody a great day. Thank you.

[Operator]

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call. Thank you for participating in the conference. You may now disconnect your lines. Goodbye.