Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Swedish Orphan Biovitrum AB (BIOVF, Financial) reported a significant top-line growth of 11% in Q2, with an adjusted EBITA margin of 28%.
- Hematology growth was driven by continued sales of Doptelet, Aspaveli, and the addition of Vonjo, with Elocta and Alprolix also contributing through geographic expansion.
- The company received European approval for Altuvoct in hemophilia A and filed SEL-212 to the FDA under fast track designation for chronic refractory gout.
- Strong performance in the immunology segment, particularly with Gamifant sales reaching SEK522 million.
- The company upgraded its revenue guidance for 2024 to low double-digit growth, previously high single digit, with an adjusted EBITDA margin in the mid-30s.
Negative Points
- Vonjo's market penetration has been slower than expected, currently holding only an 8% market share in the myelofibrosis market.
- The company faced challenges with the integration of CTI, including the loss of key sales management leaders.
- There were significant sales of Doptelet to China last year, which if excluded, would have shown a higher revenue growth of 26%.
- Operating expenses grew by 22% at constant currencies compared to the same period in 2023, driven by increased R&D expenses.
- The overall myelofibrosis market has been flat in the first half of 2024, impacting the growth potential for Vonjo.
Q & A Highlights
Q: Just one on Vonjo. So Guido, you said you're currently penetrating around 8% of the US MF market. How confident are you in trading up to 30% just in light of the strategic initiatives you've implemented? Have you seen a shift in physicians prescribing behavior more towards NCCN guidelines?
A: We are currently seeing that the vast majority is in line with the label. There's a lot of work set out for us. However, we also see that once we have the right interactions with physicians, there's an opportunity to change. This makes us hopeful, especially when looking at the data and patient expectations.
Q: On Vonjo, I just wondered about the difference between the outcome of these couple of quarters versus what you envisioned for the product when you acquired it. What are the reasons behind the sluggish uptake we see right now?
A: It's fair to say we would have hoped for better sales. We lost a few sales management leaders and key accounts, which we would not have liked to lose. We have now rebuilt the team and understand what is at stake. There are some learnings in targeting and segmentation as well. We remain confident that we can achieve our goals, though we are delayed.
Q: Could you talk about to what extent there were any one-off tenders or orders that drove the beat by products like Doptelet, Elocta, and Kineret, or if their performance reflected underlying dynamics in the quarter?
A: For Doptelet and Kineret, there are no one-offs; it's a reflection of the underlying performance. For Elocta, there has been some favorability in H1 due to tenders, but it is not as material. The strong underlying growth of Elocta is primarily driven by emerging markets.
Q: On Gamifant, based on consensus expectations, the product will approach SEK2 billion in revenues this year. Can you remind me of the importance of the potential approval in secondary HLH for Gamifant to accomplish these peak sales?
A: The secondary HLH indication is very material for us. We will submit in the second half and build this business next year. The product has much more potential, and we are very excited about Gamifant as a significant revenue driver for the company in the future.
Q: Just to go back to Vonjo, your key competitor GSK with Ojjaara has been launching very well. Why do you think that's happening for Ojjaara versus Vonjo in terms of the competitive dynamic?
A: GSK had around two years of market shaping ahead of us and got a broad label versus Vonjo's label. We are now in the process of correcting this. We are focusing on both KOLs and community accounts. The rationale for Vonjo remains strong, and we are working to change opinions.
Q: On R&D, how should we think about the moving parts in terms of trials completing versus others coming on like additional Vonjo studies? Is it still going to be upward tension for R&D in 2025?
A: It's fair to believe that we will continue with high R&D activities in 2025. Even if some studies come to an end, there will be important medical activities for all these products that will come and launch.
Q: Of the 8% share that you have today for Vonjo, how much is coming from the less than 50,000 platelet group and those with between 50,000 to 100,000?
A: The vast majority of this share is coming from below 50,000. We are underrepresented in the other two segments. We are working to change this and remain confident in the long-term potential of Vonjo.
Q: Regarding Vonjo, how much of the challenge in changing prescriber behavior is just a question of time versus related to investments behind the product? Are you considering increasing the number of sales reps or investing more in other channels?
A: It is both. It takes time to rebuild lost contacts and also a question of quantity. We have significantly upgraded the team and changed the sales management.
Q: On margin outlook, can your profit margins get to north of 40% in the midterm? Do you have any appetite for further acquisitions going forward?
A: If we keep growing at the current pace, achieving north of 40% is probably not realistic in the short term. We need to double down on our portfolio and pipeline. We are looking at new deals, but we have our hands full with our current rich program.
Q: You commented on the overall myelofibrosis market in the first half remaining flat. How should we think about the moving parts going into H2 and 2025?
A: While there is momentary weakness in Q2, I don't see this as permanent. The market is expected to recover and grow, driven by new launches and increased awareness.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
