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

Ladies and gentlemen, welcome to the SOBI Q2 Results 2026 Conference Call and live Webcast. I am Valentina, the Chorus Call operator. [Operator Instructions]. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Guido Oelkers, CEO. Please go ahead.

Yes. Thank you. Hello, everyone. This is Guido Oelkers, CEO of SOBI. So we are delighted to welcome you to the second quarter and half year of 2026 conference call for investors and analysts. Our presentation was posted on subi.com earlier today. Please turn to Slide #2. We would like to remind you of the usual provisions on statements about expectations and projections of future wins. Unless stated otherwise, we are making comments that mostly relate to the second quarter at constant currency exchange rates and SEK 1 million. Please turn to the next slide. Today, we plan to cover the key aspects of our Q2 report. I'm joined by Henrik Stenqvist, our CFO, and Lydia Abad-France, Head of R&D and Chief Medical Officer. We plan to review this presentation first and have Q&A until around the 3:00 p.m. today. Central Eastern European time. For those on the phone, please join the queue for questions by pressing star one. If joining on HD audio, please use a virtual keypad and press star. We propose that you ask only 1 or maximum 2 questions at a time. Please turn to Slide #4. I Key is about the key takeaways for Q2. Let me start with the key messages. From what has been a very strong quarter for Sobi. In Q2, we delivered revenue growth of 29% and at constant exchange rates, alongside adjusted EBITDA margin of 35%, which clearly demonstrates both the strength of our portfolio and the quality of our execution. This performance was broad-based driven over our strategic portfolio supported across all regions, which again highlights the resilience and scalability of our business model. We are pleased with the progress with our latest newest launches, such as Asper Valley in Europe, and at the same time, we delivered positive data from the REDUCE-IT trial for postatinered. We continue to make tangible progress across the entire pipeline. We are advancing Gamifant and interferon gamma-driven sepsis with Embrase 2 expected to initiate it in the second half of this year. Additionally, while we received a complete response letter for NAS related to manufacturing, -- the path to submission is clear, and we are taking the necessary steps to address the concerns of the agency. Importantly, based on the strong first half performance, we are increasing our full year outlook, which reflects both the momentum of what we are seeing today and our confidence in continued delivery. So overall, the message for the quarter is very clear. We are delivering strong growth, making consistent progress in the pipeline and building further confidence in our trajectory. Please turn to the next slide. Let's take a closer look at the Q2 performance. Growth was very well diversified across regions and segments. We delivered total net sales of just under SEK 7.8 billion in the quarter, corresponding to growth of 29% at constant exchange rates. -- which is particularly important here is the quality of that growth. It is driven primarily across our strategic portfolio, which accounts around 2/3 of our group sales in Q2 and continues to grow significantly faster than the rest. -- in the rest of the year. From our geographic perspective, the growth was very well diversified across all regions, North America delivered growth of 33%. International markets grew by 45% and Europe contributed 23%. And at the product level, we continue to see strong contributions from Dr. Led toward and Gummy fund, whilst new launches such as OsperVelley are building momentum and expanding their contribution. Taken together, this is a growth profile that is diversified, sustainable and increasingly driven by high-value innovative medicine. Please turn to the next slide. Let me now turn to our pipeline and development progress. We continue to execute against a focused and disciplined development strategy, which with multiple programs advancing in parallel and delivering important milestones. During the quarter, we announced positive top line results of REDUCE-2 with Potginerad, which demonstrated meaningful reduction alongside its favorable efficacy and tolerability profile. At the same time, we are progressing gummy front in interferon gamma ties where we are aligning closely with regulatory authorities and preparing to initiate the EMBRACE 2 study in the second half of the year. Across the broader portfolio, we continue to see steady progress in regulatory filings, life cycle management and new indication development which together underpin a strong and balanced pipeline. Overall, this pipeline replements a diversified set of launches throughout 2028, and supporting our ambition to reach approximately SEK 55 billion in revenues by 2030. Let's look at a few products in more detail. to walk next slide, please. Altaba continues to perform extremely strongly and is establishing itself as a best-in-class product in hemophilia A prophylaxis. In Q2, Autowork delivered very strong growth with sales increasingly significantly on a year-to-year basis. supported by both new patient uptake and continued geographic expansion. We have now launched in 30 markets, including key European markets. We are progressing a 3-wave launch strategy, allowing us to increasingly expand our share of the total market potential in the segment. During the quarter, our combined hemophilia A sales grew by 41% at constant exchange rate -- this performance reflects the strong clinical profile of Alto work and the disciplined launch execution. Please turn to the next slide. The launch strategy in nephrology is progressing well across markets, and we are seeing encourage early momentum supported by an expanding evidence base. During the quarter, we continued to expand access, including approval in the U.K. and we are seeing increasing uptake in markets where reimbursement is already in place. National reimbursement is now in place in Spain or by coming towards the end of Q2. We are introduced -- we have introduced the infused on-body delivery system, with the first patient dosed and very positive initial feedback, which reinforces the differentiation of the product. Importantly, the new term outlook long-term outlook and real-world data continue to support the clinical profile in line with the strong pivotal Valeant data. We are well on track to reach our 2026 target of 400 to 500 patients in nephrology, which underpins our confidence in the long-term potential of this franchise. Please turn to the next slide. So Doptelet continues to deliver consistent performance and is now firmly established as a leading global franchise. Growth is being diversified and is built on a differentiated product portfolio including strong efficacy, pure dietary restriction combined with an excellent execution. We are also continuing to expand it internationally with the recent launches across Asia, Latin America and other regions. Contributing to an increasing ex-U.S. contribution over time. Overall, this remains a highly attractive asset with continued strong growth performance and a growing significant potential in international regions. Let's turn to the next slide. And speak about Gamifant and HLH and MAS. The U.S. launch in MAS continues to perform well with strong momentum driven by increasing the physician awareness and new patient demand. Growth is also being supported by the expansion in international markets following the FDA label. In parallel, we have now completed -- we have not completed filing in both Europe and Japan, with a regulatory decision expected in Japan in H2, providing additional future growth opportunities for the product. Let's move to the next slide. Regarding Gamifant in interferon-driven sepsis. This represents a significant opportunity, both medically and strategically, and we are making good progress in defining the development pathway. We had our first meeting with the emergency task force on the design of the IDS program. And based on the feedback we are pursuing a large registrational Phase IIb/III study in Europe through the EMBRACE 2 study, which we expect to initiate in the second half of this year. This study will be conducted in collaboration with the Hellenic Institute for the study in Sepsis based on the data, we will then decide on the regulatory pathway. This provides a clear fast-to-market approach in the area of significant unmet medical need. While there's a lot of work still to be done, we believe that this presents a very meaningful opportunity to address in a high unmet medical need and further strengthens our pipeline. Let's move to the next slide. Turning to our Gout franchise. We are building a leadership position across multiple segments in the gold market. For NAS, we received a complete response letter in June related to manufacturing, not the outcome we obviously would have wished for. However, it is important to note that this is not related to clinical efficacy, clinical safety or efficacy concerns. And we have a clear plan to resubmit within the next 6 to 12 months. For ports to generate, the positive REDUCE-2 data represent a significant milestone, demonstrating strong efficacy and a favorable safety profile. We are pleased with the data that we have seen so far. We are on track for further data readouts and plan to progress towards filing in 2027. Together, these assets provide the foundation for a meaningful and valuable franchise with significant long-term potential. Slide #13, please. Let me now turn to guidance. Based on our strong performance in the first half of the year. We are increasing our full year outlook. We delivered outstanding first half growth of 26% at constant exchange rate alongside strong margin development. At the same time, we have made significant progress across our pipeline while continuing to execute on multiple key launches. Taken together, this gives us increasing confidence in our ability to deliver both growth and profitability for the full year. Now I'd like to hand over to Lydia.

Thank you, Guido, and hello, everyone. I will start with the pipeline milestones on the next slide, please. We continued our strong run during the second quarter. We received the top line data for odetinerab in its first on the 2 pivotal studies, and the results confirm our excitement. I will come back to this in a minute. For NAST, the FDA issued a complete response letter, which lays out a clear and actionable path towards resubmission and I will share more details on that too. The results on the second line combination LOTIS 5 of Siloda and rituximab became available in June. Based on the study outcome, we will use the lots results to convert the current third line conditional approval to full approval for Sinnomta monotherapy, especially in region international countries like Brazil, Australia and the Middle East region, where we see strong potential to help patients. New positive string of data from and CRI studies was presented at EAS, which I will detail later on. The certification of infused device for Aspabelli in the EU takes the way for home used by people 12 years and older. The initial feedback from patients and physicians highlights the greater convenience compared to the previous solution. Kineret was approved in Japan for Still's disease, making another medicine now available for our growing presence in Japan. And we completed enrollment in the PACIFICA trial of ongoing chronic myelofibrosis, which we already discussed at the last earnings call. Next slide, please. Turning to gout. Clinical results for Podetinura strengthened our decision to make this asset part of the Sobi portfolio and our ambition to build a gout franchise. We reported positive top line results from the pivotal Phase III REDUCE 2 study. Both the 75 and 50-milligram doses met the primary efficacy endpoint with 69% and 56.6% and of patients, respectively, achieving turmeric acid level below 6 milligrams per deciliter at 6 months compared with 8% of placebo. Importantly, Potetinura was overall well tolerated with a safety profile consistent with previous studies. We expect to present detailed data at the Congress later this year, and we continue to expect the reduce 1 top line readout in the fourth quarter. On NAP, we received a complete response letter from FDA. The CRA is related to CMC and contract manufacturing facility topics, which are addressable. The feedback provides a clear and actionable path forward, and we are actively engaging with the FDA and manufacturing partners as we work towards the submission. Importantly, the FDA identified no concerns regarding clinical efficacy or safety profile of NAV that impacts approvability. So we remain confident in the long-term potential of NAV and committed to bring this treatment option to patients with noncontrolled gap. Next slide, please. While in gold is under eager review for severe hypertriglyceridemia, above 880 milligrams per destigitor, new dates that were presented at the EAS conference. This full analysis of the pivotal and CORE II studies looked at patients with severe hypertriglyceridemia defined as TG levels of at least 80 -- this threshold is recognized by European guidelines as requiring urgent intervention to reduce the risk of acute pancreatitis. And this is the population we are aiming for with the European submission. The analysis included 455 patients and focus on those at highest risk of acute pancreatitis. Things have demonstrated an 85% reduction in the relative risk of acute pancreatitis events placebo-adjusted reduction in TG levels with the 80-milligram dose after 6 months of treatment. Importantly, 85% of treated patients achieved TG levels below 80 -- what we find particularly encouraging is that this data further strengthen the growing body of evidence linking teacher reduction with meaningful clinical outcomes. Acute pancreatitis is one of the most serious complications of severe hypertriglyceridemia. And these results reinforce the potential value of Triola begun biomarker reduction only. Overall, we believe this data support the efficacy and safety profile of [indiscernible] in severe hypertriglyceridemia above 880. The days transing our confidence in its potential to address a significant unmet medical need. Next slide, please. Looking ahead, we continue to see a strong and diversified stream of pipeline milestones across this next year. Expanding nephrology, immunology, hematology and specialty curve. In the second half of 2026, we expect several important regulatory and clinical data events. This includes regulatory decisions in Japan for stable in C3G and primary ACM PDGM as well as Gamifant in HLH Mas. In golf, we expect the reduced on top line data readout for Proteturia and in severe hyperclusteridemia above 880, we anticipate CHMP opinion for Kingold. Moving into 2027. We expect continued momentum across the portfolio. Key anticipated milestones include the planned FDA submission for poppetinerat and the resubmission for NAST, regulatory progress for Gamifant in HLH mass in Europe an important Phase III readout for Bango in both myelofibrosis and Vestosyndrome. Taken together, these milestones illustrate the breadth of our development portfolio and our continued focus on delivering innovation for patients living with rare and debilitating diseases. And with that, I would like to hand over to Henrik. Next slide, please.

Thank you, Lydia. Hello, everyone, and please turn to Slide 20. I -- we will now take a look at some key financial metrics for the quarter. looking on the table to the right, we see our revenues of SEK 7.8 billion, corresponding to a growth of 29% in constant currencies. The adjusted gross margin of 77% in the quarter is in line with last year, and this is due to a mix of offsetting products and country mix effects. Operating expenses, excluding nonrecurring items and amortization for the quarter increased by 24% at CER compared to Q2 2025. also excluding nonrecurring items and amortization increased by 15% at CER, driven by launch and prelaunch costs for Aspaveli in nephrology. Aspen Kingos. And these costs were partially offset by lower costs for Bogota R&D expenses increased by 47% at CER, excluding nonrecurring items, mainly due to the additional the those development programs. And as a reminder, we had only a part of a 1/4 of those costs in Q1. And as a result, adjusted EBITDA for the quarter amounted to SEK 2.8 billion, equal to a margin of 35% compared to 34% for the same period last year. Operating cash flow for the quarter was SEK 1.9 billion compared to SEK 1.4 billion in Q2 last year. This increase reflects higher operating profit, but also partially offset by inventory buildup to support our launches. And that gave the net debt at the end of the quarter just above SEK 16 billion. and a debt-to-EBITDA ratio of 1.3x compared to 1.5x in the previous quarter. Please now turn to Slide 21 and the financial outlook for the full year 2026. As usual, this is based on revenue growth at constant exchange rates and adjusted EBITDA margin. So for the full year '26, we have raised the outlook for both revenue and adjusted EBITDA margin. We anticipate revenue to grow at mid- to high teens percentage at and previously low double-digit percentage, and we expect momentum to continue with out-of-box Doptelet and Ganesan being the main growth drivers in full year 2026. However, on a percentage basis, we are up against high comps in H2, which will naturally bring down the revenue growth in H2 compared to the situation in H1, and this is how we come to growth of mid- to high teens for 2026. Beyfortus, although not expected to be a major growth driver remains difficult for us to forecast, but we don't believe the fundamentals have changed with regards to recommendations and reimbursement. Related to adjusted EBITDA margin on that guidance, our margin in H1 was 37%. In the second half of the year, we will have the benefit of after seasonal royalties on our bottom line, as well as some NAS costs that we own now from 2 reals, where we will ensure a strong and well-prepared market entry to address the larger patient opportunity in HFG, which we expect to launch next year. And finally, and as usual, we will continue to be diligent with cost containment in the rest of our business. So with this, I hand back to Guido. Thank you.

To conclude, then maybe we can go to the next slide. SOBI continues to execute across all dimensions. We are delivering robust financial performance, driving successful launches and advancing a differentiated pipeline. At the same time, we are making a disciplined strategic choices that position us well for long-term value creation. With this positive readout of Pozdeutinurad and REDUCE-2 we have significantly derisked this asset and look forward to continue to progress it towards approval. So overall, we are entering the second half of the year with a strong momentum and increasing confidence about our growth trajectory. With this, I would like to hand over to Q&A.

[Operator Instructions]. The first question comes from Christopher Uhde from SEB.

Probably for Guido and maybe Lydia. So Arrowhead has a few trials reading out in Q3 that include acute pancreatitis as endpoints. So what do you see as -- or perhaps hear from your stakeholders as the bar in terms of magnitude of pancreatitis reduction for them to hit that was threatening things as chances of being the clear preferred therapy in Europe. And my second question is basically on why the NASP CRL came and what the impact is. So specifically for Lydia,I think the NAS BLA was originally delayed by about a year as the team worked to get CMC right. So what detail can you share to help us understand the extent to which what happened here was foreseeable or that it was out of your hands such as because of regulator bandwidth and related to the uptick in CRLs that we've seen. So obviously, then obviously, this feeds into what you can say about your confidence in terms of being able to fully address all the outstanding issues within the time frame you've mentioned.

Yes. Thank you. Maybe we start with the competition with Arrowhead, and then I hand over to Lydia. I mean you look at the situation [ Everhad ] being behind us we are now already in the market with FCS. And obviously, you know that we are preparing the approval when the launch for for the broader indication as early as beginning of next year. So from this perspective, we are the lead -- we have very strong data on SDG reduction, which is probably more comparable with the Arrowhead product, and we have new when you account for these data properly. And then you have the -- we have the data in AP reduction, which obviously upped the bars super high. Now, these are not comparative trials. A lot of things can happen. But for them to beat or need is not going to be evident. In any case, we have a time advantage and we have not obviously insinuated that we take the entire market. We just said that we are exploiting the lead position, and we will be up we don't underestimate the competitor, but we think that we have here an edge. And we are building these teams out. This is for us a key priority launch. And we are well on the way in terms of building these teams. I mean, it's one of our foremost points. So yes, they will come, but the market is large enough. We think that we are in the lead. And it's -- and it's for them to try to meet our efficacy level and the bar is super high. And these are noncomparative trials, obviously. So Lydia, you want to comment maybe on the -- what you expect in these trials and maybe then talk about NASP.

Yes. So when it comes to Vedanta, basically, we always need to be very cautious as it says you cannot compare head-to-head trials because you can find differences in the patient population. We need to be also aware that, for example, we already have a had a start also with the auto injector that is something that for this type of current treatment is bringing a lot of value to patients. So I think that we want to see the data first. It's not only about efficacy. We need to look at also the safety profile. So there are many nuances here, but we remain very confident that rings is going to be a very strong asset for this indication. So I think that let's wait and see the data first when it comes yes, probably soon, and then we can comment more based on the facts. But we are remaining very confident on what Trina can deliver. And maybe I can touch briefly on the CRL. And yes, you are right. We had already previous discussions with FDA. And as you know, some of the manufacturing facilities outside the U.S. that that have been resolved. So there are now CMC questions and data that we need to address. And I think the most accurate thing I can say is what we are doing now after receiving the CRL is that we will be meeting with FDA to affect the time lines and we plan to resubmit because what it's clear is that there is a very tough, a clear path and actionable that we can deliver. And yes, that's what we will be doing in the next months being this obviously a high priority for us.

The next question comes from Kirsty Ross-Stewart from BNP Pariba.

It's Kirsty Ross-Stewart from BNP Paribas. So maybe just a quick 1 on Altosoft growth, obviously very impressive in the quarter. So just as you progress through your kind of 3-way launch plan. Can you provide a bit of color on the opportunity associated with kind of each wave of the launch plan relative to your SEK 10 billion set guidance? And bigger picture, just how long can you sustain -- or do you think you see sustain double-digit growth post 2026? And then on the sepsis Phase II/III program, based on some relatively rudimentary statistical assets, I think that the 1,800 patients target across 3 arms of the trial implies that you're powering this trial for kind of high single-digit delta versus placebo, which would imply a little bit of a step down from the 12% LC you saw in the Phase II trial. So firstly, maybe is that a fair assumption? And can you just explain how you're thinking about your expectations for the corn as you go into the registrational trial.

Yes. Thank you for your question. Maybe I'll start quickly with we think that we can sustain this for quite a while. I mean, if you extrapolate the sales numbers that we already achieved in the quarter the product is on a good way. We are clearly on track to make this SEK 10 billion mark. Yes, no question. And we will -- we don't know yet when we will achieve it, but there's a lot of growth opportunities still in Europe and there's obviously significant growth in some of the international markets, as you will see. So we are not worried about this. This is it is -- and also the -- when you think about Alto in combination with Elocta, the number will already be this year extremely substantially. So maybe I refer now to Lydia on the Sepsis trial.

Yes. So yes, you are absolutely right that the plan to have patients recruited. And we recently received the feedback from EMA and the emergency passport. And that's what we are now reviewing and implementing in the protocol. So it's a bit early to comment on details on the statistical power arms design, et cetera. And we will be very happy to come back to all of you once we have finalized the protocol based on all this feedback that has been positive because it's really allowing us to go through a registrational Phase IIb/III trial. So at this point in time, no more details that I can provide, but the good news is that we have this feedback very clear that we are now working to implement in our protocol.

And I think, Kirsty, it's fair to say that we -- and Lydia, we will not power the study for a single-digit difference I think that's -- yes, I think this is clear why would we do that.

The next question comes from Mitchell Kapoor from H.C. Wainwright.

This is Amit on for Mitchell. Congrats on the strong quarter. Just 2 questions, 1 on the NAS I was wondering if the post-CRLFD meeting has already been scheduled and if the 6- to 12-month resubmission estimate is based on direct FDA feedback or at Sobi's internal estimate -- and are there any milestones between now and resubmission we should be looking out for? And the second question on the guidance I guess, what level of sales growth are you modeling in the second half to reach that midpoint of the revised range? And what do you expect to drive this growth? Where have you embedded the most conservatism.

Maybe Lydia, you start is as.

Yes, sure. So the meeting with FDA has not been scheduled yet. We have 90 days to align with FDA on that. So -- but this is something that we are planning, and it will be scheduled soon. So that's the first question related to that meeting. And then the second part on the 6 to 12 months, this is still our estimate and we have 12 months to resubmit and we are looking into every way to accelerate and to make it the close to as possible, but it's a little bit early to be more precise on that. So it's something that is based on our assumptions and we have not yet had that discussion with FDA to really fix the next resubmission date. But in the meantime, we will be working and the CMC team already has started internally and with the external manufacturing facilities to address the issues.

To the team in the technical operation know exactly what needs to be addressed they're working on this, and they've prompted our advice with regard to the time line. Normally, we are not so precise on guidance, but I understand Henrik has a good day. Maybe you can elaborate on your guidance.

Yes, I can. Of course, H2 will naturally come down in terms of growth rates because of the high comps that we have from H2 last year. But I think you were asking for a number, and it's obviously, an H2 growth of some low double digit -- low to mid-double-digit growth, but we won't give any exact number.

Got it. And I guess, just for the NASP CRL, just the last part of the first question was, are there any particular milestones we should be looking for between now and the resubmission kind of other than obviously the FDA meeting?

No, not really. We just need to meet with FDA and agree on the next plan for the recognition, but nothing in between that we will need to communicate.