Swedish Orphan Biovitrum AB (publ) (SOBI) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Sobi Q2 2022 Report. [Operator Instructions]. I will now hand over to the company.

Thank you so much. Hello, everyone. This is Guido Oelkers, CEO of Sobi. Welcome to the Second Quarter 2022 Report and Conference Call for investors and analysts. The presentation was posted to sobi.com earlier. Please refer to Slide #2, has the usual -- as usual, the safe harbor statement. We will be making comments on our performance using constant exchange rates, and numbers used are in million Swedish krona and for the second quarter of 2022, unless stated otherwise. Comments will be made -- will be mostly related to the second quarter performance. Please turn to Slide #3. This is the agenda where we plan to cover all key aspects of results today. We plan to review the presentation first, and then to go to the Q&A until around 2:00 p.m. Swedish time. We want to be respectful of your time as there are a couple of other companies reporting. If you keep questions short, we will try to keep our answers short, too. [Operator Instructions]. We propose you ask only 1 or 2 questions at a time, many thanks. In speaking order, I'm joined by Henrik, our CFO; Anders, our Head of R&D and Chief Medical Officers. For questions later, we have also Armin, our Senior Scientific and Medical Adviser, as part of this conference call. Please turn to Slide #4. Starting off, I'm pleased that 2022 has continued well for Sobi despite uncertainties in the world around us. Revenue increased by 10% and by 21% at actual rate, including an element of continued phasing of Doptelet sales to our partner in China. Launch medicines, Doptelet, Aspaveli and Gamifant combined advanced by 96%. This is very gratifying. This performance was underpinned by a strong executional dimension in our commercial organizations. We continue to invest for our growth in selling and R&D and medical, and we concluded efficiency programs with a limited impact in the quarter. As a reminder, the efficiency programs focus on resources into core areas, simplify the organization and adjust the cost base to enable Sobi to continue to sustainably grow and margin improvement over time. Anders will cover changes in R&D and medical and scientific affairs later in his presentation. The EBITA margin adjusted landed at 25%. All items affecting comparability are detailed on Page 3 of the former Q2 2022 report and also in the appendix of the presentation. The pipeline continued to deliver with the first efanesoctocog alfa Phase III presentation. We expect continued pipeline news flow during the year and in 2023. Recently, we announced an agreement to license the orphan medicine of loncastuximab tesirine from ADC Therapeutics to augment our strategic presence in haematology. With the performance today, we added further commentary to the 2022 outlook. Henrik will cover that later. Finally, I would like to thank all colleagues at Sobi for their hard work and the focus on providing innovative medicines that transform lives of people with rare and debilitating diseases. Please turn to Slide #5. Moving to disease areas and geographies, we saw haemophilia showing the promised stability. The growth in haemophilia was boosted by Doptelet in geographies, while immunology was held back by the lack of COVID-19 sales for Kineret offset by Gamifant. From a regional point of view, we saw higher growth in our new markets, further adding to the ongoing global expansion and increased geographical diversification of Sobi's business. We have also seen that in most markets, our sales and marketing efforts are back up and close to the level seen before the pandemic. Overall, we are happy with the performance and quite gratified by the overall growth. Please turn to Slide #6. Turning to haemophilia, we saw a growth of 5% in sales, 1% in revenues, including royalty and manufacturing. This performance is underpinning our commitment to continued stability in 2022. Elocta advances by 6%, driven by the growth in patients and higher factor consumption, but slightly offset by price. An element of price -- patient retention also supported performance. Alprolix advanced by 2%, driven by growth in patients and slightly offset by price and some stocking effects with consumption being relatively stable. We are pretty happy with the performance and stay focused on continuing a stable development. Please turn to Slide #7. Doptelet had another strong quarter with continued phasing of sales to China. Excluding China, sales grew by 66% based on a sustained uptake in the U.S. and also in Europe. In the U.S., we have seen new-to-brand prescriptions increased to teens percentages, with another significant part of business coming from switches from competitive medicine. In Europe, Germany is leading the way, and we saw sales from across the continent and obtained more reimbursement, including Italy and Spain, which will benefit us later on. In China, we now provide detailed sales number and see continued benefit of phasing. As we discussed also at the last quarter, this will provide a tougher comparison later in 2022. Please turn to Slide #8. The launch of Aspaveli progressed well, with sales of SEK 38 million in the quarter. This is a large increase from SEK 4 million in the first quarter, and we are pleased with the progress. We have now launched in the U.K., Germany and France, and with good patient and physician feedback, we estimate to have around 35 patients on commercial supply by the end of June. As we move forward, we will continue to track and share all relevant launch metrics. Please turn to Slide #9. Based on our commitment to provide innovative medicines that transform the lives of people with rare and debilitating diseases as well as stated capital allocation priorities, we were pleased to announce the licensing agreement with ADC Therapeutics for loncastuximab tesirine in Europe and most international markets. We believe Sobi's heritage and strong presence in haematology, coupled with the new medicines, like Doptelet, we'll provide a competitive platform for bringing this product to more patients with orphan diseases. As you know, the medicine is under regulatory review in Europe by the EU and with an anticipated decision in the first quarter of 2023. Please turn to Slide #10. Turning to immunology. Kineret sales were impacted by the lack of sales for COVID in emerging markets, and therefore, rebased with only a slight offset by use in other indications. Gamifant sales increased by 34% following a softer first quarter and underpinned by growth in new patients. During the quarter, Sobi launched the INTO-HLH Registry , a new disease registry for patients with HLH. It is designed to define the natural history of the disease, including the full diagnostic and treatment journey of patients' experience. The registry also aims to provide critical insights into burden of HLH and its impact on quality of life and health care resource use. A steering committee will oversee the registry for Sobi. Please turn to Slide #11. Last, in immunology is Synagis. We saw little revenues in the quarter from positive gross-to-net rebate adjustments. There were also no sales from earlier increase in the U.S. RSV detection, and Sobi continues to expect the '22, '23 season to follow a normal pattern. I will now hand over to Henrik for the financials. Please go ahead, Henrik.

Thank you, Guido, and hello, everybody. So please turn to Slide 13. Now -- I will now take you through our financial performance in the second quarter of '22. Starting with quarterly revenue, we are showing quarterly amounts here over the past 5 quarters. And apart from the steady growth in haematology over the quarters, which, with Doptelet as the main driver, we see that revenue in the second quarter was higher than both the second and the third quarter of 2021. And sequentially versus the first quarter, immunology in Q2 is, as expected, lower due to the seasonality of Synagis. Turning to the profit and loss on the right that this table has growth rates at actual rates, the statutory view. And as mentioned earlier, revenue for the second quarter was high, with 10% growth at constant rates and elevated by increased sales of Doptelet to the partner in China. Given their importance, we are now giving more details on Doptelet sales to China. We do expect sales to China in both Q3 and Q4, but at lower levels than we've seen in the first half of this year. As I also mentioned at the last quarter, we expect growth rates in H2 for Doptelet and also overall to moderate due to the higher comparisons in H2 2021. Gross margin in the quarter was 74%, down from 76%, reflecting the mix of business, with sales of Doptelet to China having a lower gross margin than the Sobi average. Selling and administrative expenses increased 22% at CER when adjusted for items affecting comparability and amortization and supported launches of Aspaveli and Doptelet and also supported the ongoing geographic expansion. R&D expenses increased by 7% at CER when adjusted for items affecting comparability. The adjusted -- the EBITA margin realized was 24%, but 25% on an adjusted basis, and we do not anticipate any further restructuring charges this year. EPS for the quarter ended at SEK 0.87 and SEK 0.91 when adjusted. And for more details on items affecting comparability, as we heard, please look at Page 3 in the Q2 report or the appendix to this presentation. Please turn to Slide 14. Finally, I'll turn to the financial outlook for 2022, which is on revenue growth at constant exchange rates and EBITA margin adjusted. As discussed in February when the outlook was issued, Sobi will continue to expand the presence in rare diseases and expand into new geographies. As a result of this growth strategy, Sobi expects revenue to grow by mid to high single-digit percentage at CER, now potentially towards the higher end of the range. And growth is anticipated to moderate as we move into the second half of '22 due to the higher comparisons from previous -- from the previous year. Sobi will continue to invest in the pipeline and launches of new medicine to unlock the long-term value of the business. And with these investments in the future, Sobi maintains a favorable margin. The EBITA margin adjusted is anticipated to be at the low 30s percentage of revenue, but now including the cost effects of the agreement to license the new orphan medicine, loncastuximab tesirine in haematology. And with the outlook covered, I will now hand over to Anders for the pipeline. Thank you.

Thank you very much, Henrik. Hello, everyone. I am pleased for the opportunity to take you through the pipeline highlights this quarter, including data from an important recent medical meeting, an overview of our new R&D and Medical Affairs team and a list of upcoming news flow. Please turn to Slide 16. So the pipeline saw continued progress since April, with several key milestones being achieved. Milestones included the first Phase III study data presentation for efanesoctocog alfa at the International Society of Thrombosis and Hemostasis 2022 Congress in London. Earlier, the medicine had been rewarded Breakthrough Therapy designation in the United States. Aspaveli/Empaveli also achieved multiple milestones, with regulatory submission acceptance in Japan for the potential treatment of PNH and the start of a new Phase III study in 2 rare hematologic kidney disorders. Kineret saw its first regulatory submission in China and SEL-212 had the last patient in being dosed in the Phase III program. Please turn to Slide 17. Now, the big news for us was clearly the presentation last week at the first Phase III data -- on the first Phase III data for efanesoctocog alfa, the XTEND-1 Phase III study. This study met the primary efficacy endpoint, with once-weekly efanesoctocog alfa prophylaxis, providing clinically meaningful bleed protection for people with severe hemophilia A. The median and mean annualized bleeding rates were 0 and 0.71, respectively. The study also met the key secondary endpoint, demonstrating superior bleed protection over prior factor VIII prophylaxis, with an estimated annualized bleeding rate reduction of 77% and a mean annualized bleeding rate of 0.69 compared to 2.96 on prior prophylaxis based on intrapatient comparison. Finally, in a subset of participants studied at baseline and at week 26, mean factor VIII levels remained in the normal to near-normal range, about 40 international units per deciliter for the majority of the week and at 15 international units per deciliter at day 7 post dosing, providing increased factor-activity level protection per patient with once-weekly prophylaxis. Other secondary efficacy endpoints were also met, including clinically meaningful improvements in physical health, pain and joint health. Treatment-emergent adverse events were generally consistent with the population with severe hemophilia A. Inhibitor development to factor VIII was not detected. These data support our confidence in the potential of efanesoctocog alfa to elevate protection in people with haemophilia A towards normal hemostasis. In other words, we will seek to move from treating bleeds to normalizing lives, an exciting journey ahead of us and ahead of many patients who will benefit from this treatment once approved and launched. Please now turn to Slide 18. In the last quarter, we announced the transformation of research and development and medical affairs, which includes a new operating model, a revised governance, a new structure for the organization and more efficient processes. We did this to accelerate the development of our medicine to ensure that we are well equipped for global expansion and that we are more efficient to accommodate future growth. The new model is based around cross-functional teams that are responsible for our core assets. They are supported by a combined R&D and medical affairs organization with simplified processes and strategic external partners. I would like to thank all colleagues in the new RDM&A team for their support of the change and the continued commitment to patients and science of these recent journey of change. Please now turn to my last Slide 19. As we look ahead to the pipeline news flow in the remainder of this year and all on 2023, we expect more news of importance. In the second half of 2022, we anticipate collaborators to apply for and get acceptance of U.S. regulatory submission for efanesoctocog alfa and nirsevimab. We also expect to hear from the U.S. FDA on Kineret in COVID-19. Looking ahead to next year, we have now split the news into the first half and second half of 2023. In the first half, we anticipate the second Phase III study of efanesoctocog alfa to read out, and we expect a couple of regulatory decisions in Japan for Doptelet and Aspaveli. We anticipate a regulatory decision for our new orphan medicine in haematology, loncastuximab tesirine. We are getting the Gamifant data in macrophage activation syndrome for rheumatological disease, specifically the Still's disease cohort. And with our partner, Selecta, we anticipate a Phase III program readout for SEL-212. In the second half, we generally expect the data received in the first half to convert into regulatory submissions. With that, I want to thank you for your attention and for this opportunity to talk about science and our pipeline in Sobi. And I hand back to Guido, who will now conclude.

Yes. Thank you so much, Anders. And it's really a pleasure to round it off, and please turn to Slide 21 to [indiscernible] at the end of the Q&A session. So in summary, I think we can be very pleased that 2022 has continued well for Sobi despite uncertainties around us. Our revenues increased by 10%, as I mentioned earlier, and by 21% at actual rate, including an element of continued phasing of Doptelet sales to our partner to China. But the fundamental business of Doptelet in the U.S. and in Europe, obviously, has remained very strong. Launched medicines, Doptelet, Aspaveli and Gamifant combined advanced by 96%, very strong indicator that Sobi has developed to become a launch machine. This performance was underpinned by the very strong commercial execution. And finally, we added a further commentary to the 2022 outlook today. So basically, when -- we will now go to the Q&A session.

[Operator Instructions]. Can I please remind everybody to limit questions to 1 or 2 to be fair to other callers. Thanks in advance. Perhaps, now we can take the first question from the conference call.

The first question comes from the line of Adam Karlsson from ABG.

I have 2, one on efan alfa and another on RSV. So starting on efan alfa, it's on reimbursement. The data at ISTH was clearly very strong, and we heard from some U.S. KOLs at that Congress that efan alfa would be the obvious first choice for any patients choosing factor replacement going forward. But in Europe, payers typically have a greater say on the therapy choices through the tendering processes. So my question is, how you and, I guess, Sanofi are thinking about, firstly, pricing of efan alfa relative to, say, Elocta? And how readily you expect European payers to recognize the convenience and navigate benefits of efan alfa relative to other half-life factors? And how willing they are to pay for that? Your expectations around that would be interesting.

Yes. Our view on efanesoctocog alfa has actually not changed. I mean, we will -- our thought process is that we position the product at comparable cost of therapy to Elocta and other prevailing medicine, and basically allow the product to expand our franchise by its benefits and as now clearly emphasized in the Phase III trial. So that's really our assumption, so cost of therapy comparable, and based on our research, that's not an unreasonable expectation to get approved with payers in Europe.

Okay. And then secondly, on RSV. You're highlighting that you're expecting a normal season. But just given the RSV detection trends we're seeing for the U.S., is that invitation of a normal season? Is that -- is that based on what you're hearing from your commercial organization on the ground, something that contradicts what the RSV detection trends are showing? Or is that just you being sort of sensibly cautious given the unpredictable nature of the RSV season at this early stage?

I think we are sensibly cautious that we obviously -- we are recognizing the fact that there are pockets of RSV already happening as we speak, emerging, and this could lead to an advancement of sales. But at this stage, it always depends on the adoption of the respective bodies and then recommendation, and that's very difficult to predict. Hence, our perspective is, let's assume a normal season, and we have no indications that this season is not going to be -- it's going to be negatively affected by any stretch for this part of the year. Next question. Maybe back to the operator.

The next question comes from the line of Eun Yang from Jefferies.

I have a question on BIVV001. So it's a great data from ISTH. So I want to ask you about how you think about the potential of BIVV001? Aside from Elocta conversion, I assume the greatest market share gain would be from other factor VIII replacement therapy, so 2 questions. Is it reasonable to assume that you could potentially double Elocta sales with BIVV001? And second question is, how do you think about conversion from -- potential conversion from Hemlibra?

Yes. Thank you, Eun. I mean, I take this first, and then maybe let also Armin, we were both at ISTH, maybe comment his impression. I mean, when you think about it, I mean, the product obviously normalizes patients for the majority of the week, providing clearly an additional benefit that was also reflected by earlier feedback that we got from patients and physicians as we reported. So if anything, our conviction about the product has increased. And we think that this is clearly a very important option in the treatment algorithm that will take share from -- not only from Elocta, but from all-factor treatment. But we also think as activity levels are increasing, we think that -- and we see this in our consumption data from Elocta as they improve as well. So as activity levels are increasing, patients will increasingly also recognize the limitations also of non-factor treatment. And as a consequence, there will be a quest from a significant patient pool also to look at efanesoctocog alfa as an alternative. So we think that this is actually a pretty -- that is BIVV001 or efanesoctocog alfa, we will have a very significant opportunity to expand our market share. At this juncture, we would not comment on whether we think that we can double the Elocta share. But clearly, we will not hold it back, and we see this as a very, very important opportunity for our company. And we will -- and we are extremely gratified by the response at ISTH and got a lot of encouragement, and people see the utility as earlier pointed out from your colleague from ABG. Maybe Armin, you want to comment?

Yes. Eun, just a few highlights from ISTH. Clearly, all the physicians, key opinion leaders we spoke to saw the huge importance of the protection level that efanesoctocog alfa can deliver to the patients. I mean, for 4 days, they are normalized with their clotting [indiscernible] delivers something that is unheard of. And they also believe that also, as Guido mentioned, non-factor therapies clearly now have something that is provided by efan that will be measured against. But the benefit is if you do this, you can measure, you can predict what levels will be achieved, and you are not in the dark like with other products and other therapies where you do not like gene therapy, for example, not know is the patient benefiting and to which level. And also, it -- efan is for all patients. It's not just for a selected group of patients. So I think we have a very broad approach here that will benefit, and this is what we literally heard from everyone we spoke to at ISTH.

Yes. I hope this gives you a bit of a flavor. Thank you. Maybe back to the operator then, maybe for another question?

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

I have a few, but I will start also by the good data you presented of efanesoctocog. Thinking here of moderate haemophilia patients with 1% to 5% normal factor level, it was a lot of talk about these patients at ISTH that they could also benefit from a treatment that patient stays at such high factor concentration throughout the week. What is your thinking around this patient category, especially given that Hemlibra does not have that on the label here in Europe? Or do you think that these patients are already well controlled on, say, [ desmopressin ]? And also, have you seen any PK data at day 10? I'm thinking if these levels are maybe above the 3% of normal factor level that's recommended by the World Hemophilia Federation or in their guidelines, that could enable less frequent administration.

Yes. Thank you for your good question. I would straight refer it to Armin. Armin, can you?

Yes, Viktor. Clearly, what -- if you look at the clinical picture of moderate patients, there are some that bleed heavily. And if you refer to those, it will probably not be treated enough with what you just mentioned, but they definitely need factor replacement because they have fairly high bleed rates, at least in some. And for those, I absolutely agree with you that efanesoctocog alfa can be a treatment choice that will really get them to a completely different level of protection. And this is what we pursue. The dosing regimen needs to be what will be on the label, so we cannot recommend anything else. But as you know, it's always the physician's choice then what to do with it.

Okay. And just a final one here on haemophilia. So congrats on the strong growth here also for Elocta. But is there any major tenders coming up in major markets here in the second half of the year? And could that have a negative price effect? If you can give any guidance on that, that would be great.

Yes. No, we don't anticipate any major impact. I mean, there will be -- no, that will basically negatively impact what we have. We see a big opportunity for us in certain geographies. I mean, we are making good progress in international markets. But we don't see, let's say, our core being affected by major tenders that would erode our prices.

Okay. Great. And just a final one here also on Gamifant and the EMERALD study. I know that there was a delay there, and I just wanted to get some flavor on that. I guess some patients with Still's disease get there from a secondary virus infection. Has the low circulation of virus infections in general during COVID-19 impacted recruitment? And how do you see that the outlook of finding more patients here in 2022? I just want to get a flavor on if you're close to recruiting that cohort during the beginning. And also given here the 8-week follow-up, if we should expect a readout early in H1 or maybe later for next year?

Thanks. Anders, do you want to comment?

Yes. Even I -- right now, I mean, this is a tricky complex study to perform. And with severely ill patients that spread over a large number of rheumatology sites. And we still -- we expect -- we need to have very -- many more sites than we will meet patients at the end of the day. And so the whole process of activating the study, activating the centers during the worst year, month of the COVID pandemic, I think was the initial main challenge that caused a little bit of delay in start-up. When we have then got into a more stable situation, improved our collaboration with a very dedicated team also from [ Icon ], who is our CRO here. I think we are now rapidly initiating sites, and we still have relatively few patients enrolled. And this is, as we see, largely independent cycle, which you're talking about, that this is always seasonal disease related to infection rate, et cetera, which are currently low. But we are optimistic that we will catch up and deliver to the now somewhat unfortunately revised highlights. But I think we have a good momentum in the team internally with our external suppliers, so we -- and the investigators are clearly excited and committed to make this happen.

Thank you. Maybe back to the operator?

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

And so I'll start with 2, and then get back in the queue. So I guess my question is on loncastuximab tesirine. So you're moving into oncology, which is, of course, quite different from benign haematology. So how are you preparing the commercial organization for this? I mean, what do you see as notable differences to your commercial approach in the existing markets? And can you tell us about any key competencies in oncology on the team already, and perhaps sort of what are key competitive differentiating attributes of ZYNLONTA versus other CD19 targeted products in development?

Yes. Thanks, Chris. So I mean, the way we see this license is as a logical extension of our approach in haematology. So we don't position ourselves, to be honest, as an oncology company, but we see this broadening of our scope into a niche area of hematology, oncology as an opportunity to create -- to make our calls and our interactions with physicians more meaningful. And that basically should benefit the new product, but it also should benefit Doptelet. And we have actually quite significant capabilities in our team already because we got quite a few people in from the oncology sector when we recruit in Europe because the approach to promotion via medical marketing is similar. And we have quite a bit of capabilities in our medical departments already with deep [ onco background ]. But basically, see it as a first extension of our haematology franchise that gives us optionability, that basically allows us to improve our contribution [ per visit ] in the haematology area. We will not get confused. We know who we are at this juncture. But it will give us, let's say, an opportunity to extend our franchise. And just to round it off and then I'll leave it to Armin, who can talk about our perspective on competitive approaches there. I mean, this is -- particular in Europe, we have breadth and depth of a pretty complete rare disease company that basically is able to apply itself to very different diseases as demonstrated. And as an example, most recently with Tegsedi and Waylivra. So our organization, as long as we are operating in a very refined niche environment, in this case, actually connected to an area that we know already and where we have a significant overlap of physicians, it should actually -- based on the kind of work we have done with the team, it should lend itself. So maybe, Armin, you want to comment on the product and how it compares with other products coming in the CD19 space.

Thank you, Guido. Christopher. I think just looking at ZYNLONTA to the, I would say, almost direct competitors, you need to think about the monotherapy approach, which is in those very difficult patients who have many different aspects to watch out for, probably elderly people. You would really want to have something that is not overloaded with many additional other therapies and drugs. So the monotherapy is clearly one of the advantages. And the other one that I want to point out here is the safety aspect. So the safety profile that we have seen so far, I believe, really makes us standing out among those competitors, standing our drug and products. I mean, the efficacy is more or less in the same range as what you would expect from others. But in the combination, I think this clearly has an advantage, and it has already shown in third-line treatment. Not to be forgotten, those are patients who were refractory or not responding at all anymore or literally relapsing. So very difficult patient group to treat and to have such an overall response rate and complete response. I think that proves that this product is targeting the right aspect.

So Christopher, you okay?

Yes, I'll get back in the queue.

Excellent. Thanks. Operator, maybe take the next question.

The next question comes from the line of Peter Östling from Pareto Securities.

Most of them has already been asked, but I have a brief one. You just mentioned that you, even in Q2, had some price adjustments, negative price adjustments for Elocta. Could you just talk about in what countries you saw those price adjustments?

Yes. Thank you, Peter. I mean, these price adjustments are mostly actually in the non-ordinary course, low single digit, as you would see in negotiations with hospitals. So there's no -- I mean, no country to pick out. I think what you see as a price adjustment is more -- and our average mix is that we're making significant progress, particularly in Central Eastern European countries and Russia. And basically -- and as a consequence, the prices -- the average price goes a little bit down, but there's nothing to report of that is affecting the core of the business. Thank you. Operator, maybe next question.

The next question comes from the line of Mattias Häggblom from Handelsbanken.

Yes. Two questions, please. I'll take them one at a time. So first on Doptelet, SEK 281 million in China in the quarter, down from SEK 358 million, but I think materially higher than consensus had anticipated. I may be wrong, but I recall some comments about SEK 500 million to China for the full year, but that's already exceeded by now. So Henrik mentioned we should expect additional shipments for the coming quarters, so maybe help us understand what we should expect for Doptelet China going forward? Is the average per quarter first half a reasonable expectation per quarter? Or should we expect a continued fade as we saw in Q2? That would be helpful.

Yes. I mean the business, there's a very significant business build up by our partner, Fosun in China. And we got some [ recent ] data point, it's probably in the mid hundreds of millions of dollars. And at this juncture in market share, they're progressing on the rolling forecast and progressing relatively rapidly. So what you see is that obviously, inventory movements are always hard to predict, let's say, what is their perspective. And that's the reason why it's tough to comment what will be our quarterly sales because we have a rolling forecast, obviously, with them and have an agreement, so we will have continuous sales into China. But it's too early for us to comment of the magnitude. But as we are selling to them and as businesses continues making significant progress, we're expecting that this is not just a one-off. So we will have continued sales into China during the second part of the year. But it's -- but I would not like to comment already on the magnitude because that's with China can be quite flux, given the inventory buildup and then sell out.

Yes. Okay. That's fair. And then secondly, assuming you obtain for [ nirsevimab ] rights later this year when Sanofi submits and assuming the product gets approved for the second half of 2023, I guess the market needs to start to think about the size of the portion of the initial loss that later will convert into a profit for the portion you have rights to them in the U.S. So I guess 2 things, really. At this stage, do you have insight to the magnitude of Sanofi's investment plans? Or is this sort of a guessing game for you as well? And then secondly, consensus seems to have started to model a loss for the operating income in 2023. The mean is close to 0, but we have some with a profit and others with a loss of up to SEK 0.5 billion. So anything to help us put this into context, please?

Yes. I mean basically, the dilemma is that we cannot give you any insights on the Sanofi's numbers because due to the competitive situation with Synagis, they cannot share those numbers with us. I mean, we would -- we can tell you what we think outside in, but that's -- this is always with a caveat. But this is not going to be, I mean, a humongously expensive launch, like -- it's going to be intense. They will have leverage with the existing teams, and it will obviously be subject to the guidance of AAP. The broader the guidance, the less the promotional effort will be necessary probably. And -- but we think that, yes, there will be a loss. We, on the other hand, will still -- we believe that we will still have, in 2023, material sales of Synagis. To what degree the substitution will take place? I mean, there have been multiple surveys going on and obviously, some of the surveys would suggest a very efficient rate of substitution. We think that we will be able to retain a fair share. The size of the share will determine how we can compensate for the promotion -- for the introduction cost, market introduction cost. But we share 50% of that, yes. I think the question is, how would it affect your valuation? I mean, we see this -- and this is unchanged. We feel that the earnings stream for this, for nirsevimab, is probably to the tune of the sales level in the mid-run that we are currently yielding with Synagis. So hence, from a -- if you can afford to do it discounted, we should be fine. So -- but I cannot comment on you -- comment to you for these reasons, is this now a good assumption or a bad assumption because I cannot speak for Sanofi. Back to the operator. Next question, please.

The next question comes from the line of Erik Hultgård from Carnegie.

I have 2, if I may. First, on BIVV, and then a follow-up on Doptelet. And first on BIVV, relating to an earlier question on access in Europe. Can you talk a little bit about what you expect in terms of timing? When we should have access for BIVV in the major geographies? Some of that, the lot that took almost 12 months before you had access in all top 5 markets. Will there be a much faster access for BIVV given the presidential election and similar cost of therapy? Or will there be similar time lines? I think -- yes, and then I'll shoot another one for Doptelet.

Sure. Thank you, Erik. I mean, with regard to BIVV, I think it's -- the concept is obviously much more intuitive. We have the experience from the Elocta rollout. I mean, we will try to create an environment that makes it easier, easy for payers to accept this new therapy, even though they basically get the same cost of therapy, a much better product. And obviously, physicians want it now and patients want it. So there is going to be quite a bit of pressure to access -- to have access to the therapy on a broad base. And -- but we cannot speak for -- but -- and so we will do everything, cutting a long story short, to provide quick access to the product. Let's say, that maybe faster than the experience we had with Elocta. But to what degree we will be successful is obviously depends on the negotiation with the payer once the product is approved. So I think -- so I would not necessarily like to speculate.

All right. Great. I think I'll take another one on BIVV. Any plans to develop the subcu version? I know that you did some -- you showed some early clinical data a couple of years back at the scientific meeting that was quite mixed. But given the convenience benefits with Hemlibra and some technological advances lately, do you consider it viable to develop the subcu version?

Subcu version normally for factor VIII is very, very difficult space, and we don't intend it. And that from what I remember, this was related to the factor IX therapy. And also, this program is currently going through some challenges.

We have a follow-up question from Adam Karlsson from ABG.

Two brief ones then, in the interest of time. The first one, are you able to clarify the costs from the licensing of loncastuximab in 2022 as it relates to the adjusted EBITA, given that the guidance now incorporates these costs? And then secondly, on that licensing deal, which is obviously of relatively modest deal size, I'm wondering what that might imply in terms of your appetite for further BIVV activity here in the second half or, let's say, the coming quarters? Any commentary there would be appreciated.

Yes. Thank you. I mean, I'll start with the easy bit. Our appetite is large, to do more, because we think that we are in a position that we can take advantage of this environment of uncertainty. And we are focusing on further acquisitions, even though we believe that this product actually can be quite meaningful -- a meaningful contributor as we generate Synagis here. Henrik, you want to comment on the exact -- on the appropriation of payments in -- for this licensing deal?

Sure. We estimate that the additional costs that weren't in the previous forecast as a result of this licensing would be between SEK 100 million and SEK 150 million in 2022.

Back to the operator.

The next follow-up comes from Christopher Uhde from SEB.

So I guess the first question is, as the pricing of Elocta declines, the gross margin should, of course, be pressured to some degree. To what extent are there offsets to that? And then while we're talking about margins, can you quantify the potential margin impact pre and post reorganization, say, a couple of years out? I mean, is it more than a few tens of basis points?

Yes. I mean, the -- I start with the haemophilia one, there will be -- pricing in Europe will have an effect. You basically have to offset this by efficiencies in manufacturing and scale economies. And we are here working together with our partner, Sanofi, and that will internalize the production. And then to what degree can this really offset pricing pressure is speculative. But let's say, you need to believe that this will be an important method. You will get operating leverage if you expense this franchise because there are so many physicians that you can see. So by expanding your patient numbers and that's with a new therapy and more advantageous cost structure, you should be able to manage this. That's what my view is. With regard to the efficiency programs on a corporate level, I think we basically think that we -- this is an important part for us, but to expand -- to make sure that we can compensate some of the increases in our cost structure on the expansion of footprint, launches and R&D expenses. But at this stage, we are not guiding more that we -- on the exact size.

Okay. And then in terms of the R&D reorganization that Anders kind of summarized here this time, what could it mean in terms of, say, the average time to market saved or the number of indications that a product in-house could be expanded toward either for existing or pipeline medicines and also for pricing power?

Anders, can you comment on that?

Yes, I can start and you can fill in, Guido. I don't think we can put up any distinct comparative numbers from the initial plans and the new plans. I think what we have really tried to do here, because we have been growing too very fast. We have incorporated organizations that we have acquired, et cetera. So we have now ensured that we get a single set of governance principles, a single set of principal team set up, that we have key talent on top of each core assets. And what I think it will lead to is that it really enable us with the latest possible investments, keeping our time lines moving to competitive labeling submissions and labeling for a rapidly-increasing portfolio and increasing geographic footprint. So I hope that you will see that we will be acting as a very professional organization with -- in our spaces and our rapidly increasing portfolio.

Yes. I think it's tough to quantify, but as Anders said, what we want is improve our delivery in R&D to get more credit for this, and I think the teams are in a good way in order to do so. With this having said, maybe come to the last question. Back to the operator.

Our last question comes from the line of Mattias Häggblom from Handelsbanken.

Great. So firstly, on sales growth in constant exchange rates for the quarter, if I adjust for the very impressive book sales, I end up with plus 1% for the rest of the revenue. Of course, we need to think of this in light of the tough comp last year when sales grew 14% in local currency second quarter. But anything to add beyond the tough comparison, what's going on for the rest of the business and other focus here on Doptelet, and in particular, Elocta, I guess, during the call, but anything to add there? And then I have a follow-up.

Yes. No. I mean, Mattias, I mean, yes, you can see. I mean, purely mathematically, there is some room, but we don't want to spur at this juncture. We don't want to speculate. We have a mountain to climb given that the [ Synagis ] season last year started earlier, but we have extremely good momentum with Doptelet as you spotted. We hope that we can carry also the strong quarter for Gamifant into the next, and that we can keep the strong performance in haemophilia. So -- but at this juncture, we don't want to get ahead of ourselves and would rather prefer to update you on -- in the Q3 environment, let's say, where we are heading. I hope that this makes sense.

Sure. And then just lastly, a financial question for Henrik. So tax rate's surprising low first half at 19%. That's 500 basis points lower than last year at this stage. Is this something fundamentally different about how we should think about tax rate for Sobi? Or is it simply phasing?

So I -- just below 20% is a good mark for the full year, so there is nothing extraordinary happening in the quarter.

For the full year, and then that's the rate we should think for the -- going forward as well?

It's likely to be slightly higher beyond 2022.

Yes. So guys, thank you so much for your engagement. I know this is the summer season is coming soon. The more we appreciate it, we stay tuned and [indiscernible] engaged. And really, thanks for your time today. As you can see, we didn't need a heat wave in Europe that is currently affecting everybody to get our metabolic rate up. Business is in a good shape, and we look forward to deliver also during the second part of the year. And -- but we did -- but as you understand, we don't get ahead of ourselves. So thanks for your interest into Sobi, and wish you a great summer and look forward to reengage. If there are further questions, please do not hesitate to connect with Thomas. He would be very happy to either facilitate a meeting or answer directly. Thank you, and wish everybody a great summer. Thank you.

Thank you. This now concludes our presentation. Thank you all for attending. You may now disconnect.