Sobi Earnings: In-Line Q3 Results Driven by Hematology and Immunology, Maintaining Our FVE

Sobi SOBI reported third-quarter results that were in line with our expectations, and we’re maintaining our SEK 252 fair value estimate as shares remain relatively fairly valued. Sobi saw 23% constant currency revenue growth (29% as reported) in the quarter, driven by very strong constant currency growth in core hematology (25%) and immunology (27%) divisions. Hematology benefited from solid single-digit growth of hemophilia drugs Elocta and Alprolix as well as the recent CTI acquisition, which brought the launching myelofibrosis drug Vonjo. We expect the upcoming launch of once-weekly hemophilia drug Altuviiio in Europe in 2024 and Vonjo’s uptake, partly countered by pricing pressure in hemophilia, will support continued high-single-digit growth at constant currencies over the next few years in hematology. We’re closely watching the launch of GSK’s competing myelofibrosis drug Ojjaara to gain clarity on doctor preferences in this setting. In immunology, royalties on new RSV antibody Beyfortus from Sanofi more than offset declines in sales of older RSV antibody Synagis as the RSV season saw a late start, and rare disease drug Gamifant continued to see strong gains in new patients and duration of therapy. We’re more cautious on immunology growth in 2024, given Beyfortus shortages and volatility in Gamifant sales, although we expect sales in this division are also capable of reaching a high-single-digit growth rate in the midterm. EBITA growth in the quarter was slightly lower than top-line growth at 16%, as Sobi plans for the launch of Altuviiio and as it digests the CTI acquisition. We assume EBITA margins of 33% for the year, consistent with guidance in the low 30s, with margins increasing into the high 30s over the next several years. However, the competitive landscape in hemophilia as well as the uncertainty around ongoing launches beyond hemophilia prevent us from assigning the firm an economic moat.