Sobi Earnings: Maintaining Our SEK 252 Fair Value Estimate After In-Line Second Quarter

Sobi’s SOBI 16% constant-currency top-line growth and steady operating profit margin drove an in-line second quarter, and we’re not making any changes to our SEK 252 fair value estimate. With the recent close of the $1.7 billion acquisition of CTI BioPharma and the expected start of royalties on newly approved respiratory syncytial virus antibody Beyfortus in the United States, management boosted revenue growth expectations for 2023 to high single digits from low to mid-single digits but maintained EBITA margin guidance in the low 30s. The firm is seeing some encouraging signs of growth with newer franchises, although we still think it is in the process of establishing an economic moat.

In the largest hematology segment, sales grew 18% at constant currencies, although this was boosted by the phasing of a likely final order for Doptelet in China (due to launching generics). Hemophilia drugs Elocta (down 5%) and Alprolix (flat sales) continue to face pricing pressure, countering continued growth in patients. We remain disappointed in the growth trajectory for Aspaveli, which is gaining patients since its launch in early 2022 but still only saw SEK 144 million in sales in the quarter; data in new indications in 2024 will help clarify the drug’s potential. We expect the European launch of once-weekly hemophilia A treatment Altuviiio in 2024 to help Sobi consolidate patients remaining on factor replacement therapy, slowing any declines due to switches to more novel treatments (including Roche’s Hemlibra and BioMarin’s Roctavian). Going forward, CTI’s myelofibrosis drug Vonjo should fit well with Sobi’s hematology portfolio. Vonjo was approved in early 2022 in the U.S. and is poised to serve myelofibrosis patients who also have severe thrombocytopenia (low platelet counts), creating a parallel to Sobi’s thrombocytopenia drug Doptelet and a pathway to strong leverage and higher margins.