Raising Our Sobi Fair Value Estimate to SEK 252 as Key Launches Approach

We’re raising our Sobi fair value estimate to SEK 252 from SEK 203 following solid 2022 results that beat our expectations as well as an outlook for 2023 ahead of our prior forecast. Sobi’s total revenue grew to SEK 18.8 billion in 2022, up 8% at constant currencies, and management is guiding for low- to mid-single-digit revenue growth for 2023, with EBITA margin expected to shrink slightly to the low-30s (from 35%, adjusted for restructuring, in 2022). Overall, Sobi’s hemophilia revenue continues to hold up better than we had anticipated despite a crowded competitive landscape. Hematology sales surpassed SEK 10 billion for the year (15% growth), as sales of hemophilia A therapy Elocta were stronger than we had expected (5% growth), thanks to continued demand growth despite some pricing pressure. With Sobi expecting to file for approval of next-generation hemophilia A treatment efanesoctocog alfa in Europe later this year, we think the firm is well positioned to at least maintain its hemophilia sales in the long run. Some newer products—like hematology drug Doptelet—are poised to grow more strongly than we had predicted, and in immunology, RSV antibody nirsevimab is likely to launch in the U.S. late this year, helping drive our forecast for mid-single-digit top-line growth over the next several years. While we think Sobi’s reliance on hemophilia revenue has made it difficult for the firm to establish a moat, we see progress with newly launched drugs and the firm’s late-stage pipeline indicating that it is moving closer to building a narrow moat in hematology and immunology. We think shares look roughly fairly valued at recent prices.