Earnings Transcript for SOBI.ST - Q2 Fiscal Year 2024

Operator: Ladies and gentlemen, welcome to the Q2 2024 Report Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants are in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. [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, sir.

Guido Oelkers: Thank you. Hello, everyone. This is Guido Oelkers, CEO of Sobi. We are delighted to welcome you to the second quarter 2024 conference call for investors and analysts. We posted this presentation to sobi.com earlier today. We would like to remind you, please go to Slide #2, of the usual provisions on statements about expectations and projections of future events. And unless stated otherwise, we will be making comments that mostly relate to the second quarter at constant exchange rate in million Swedish krona. Please turn to Slide #3. Today, we plan to cover the key aspects of our Q2 report. I'm joined by Henrik Stenqvist, our CFO; Lydia Abad-Franch, our Head of R&D and Chief Medical Officer. During the Q&A sessions, we will be joined by Armin Reininger, our Senior Scientific Advisor, as well. We plan to review the presentation first and then have a Q&A until around 03

Henrik Stenqvist: Thank you, Guido, and hello, everyone. Please turn to Slide 17, and we will now review some key financial metrics for Q2. As said by Guido, Q2 was a strong growth quarter with a very solid business performance reflected in 11% revenue growth at constant currencies and an adjusted EBITA margin of 28%. Two quick notes. First, and as we heard, there were significant sales of Doptelet to our partner in China last year. Excluding this, our revenue growth in the quarter at CER would have increased to 26%. Second, our EBITA margin in Q2 and Q3 for that matter is typically impacted by the lack of RSV sales, leading to a lower margin in these quarters than the average for a full year of business. Looking at the bar chart on the left, all our therapeutic areas exhibited a strong performance. Specifically, hematology reported a 13% increase, immunology grew by 7%, and specialty care saw a 12% rise. Within hematology, hemophilia grew in the double-digits in Q2. We see continued momentum in Doptelet with a growth of 61%, excluding China, and we see Doptelet growth in all regions. Then, we have the addition of Vonjo contributing SEK347 million in the quarter, and this is a slight quarter-on-quarter growth. In immunology, we continue to see a strong momentum with Gamifant. And this is the fifth quarter starting in Q2 2023 that we have delivered more than SEK400 million in revenue and the first quarter with sales in excess of SEK500 million, an all-time high for the product. Also Kineret continued to grow at double-digit, surpassing SEK700 million in the quarter. Referring to the table on the right, the revenue of over SEK5.4 billion corresponds to 11% at constant currencies. Doptelet outside of China, Vonjo, Elocta and Aspaveli are the key growth drivers in this quarter. The improved adjusted gross margin of 77% in the quarter compared to 71% in Q2 '23 is mainly due to the absence of low-margin Doptelet sales to China in the quarter, but also to other positive product and country mix effects in the business. The adjusted EBITA margin reached 28%, up from 26% last year, influenced by the high gross margin just mentioned. Looking at the operating expenses for the quarter, we observe a 22% growth at constant currencies compared to the same period in 2023. SG&A, excluding non-recurring items and amortization, increased by 7% at CER in the quarter, primarily due to Vonjo which was not materially included until Q3 '23 and accelerated activities for launch products. We've managed to partly offset the impact of Vonjo on the SG&A line through savings in the synergies organization as we reported in Q1. But R&D expenses are the main driver in overall OpEx increase in the quarter and this is about SEK350 million of increased spend reflecting the efforts to file SEL-212 for FDA approval, the additional volume of course and clinical and medical affairs activities related to Altuvoct. Non-recurring costs or items affecting comparability amounted to SEK30 million in the quarter resulting from the adjustment to COGS related to the fair value of acquired inventory in the CTI acquisition. And other than this item, we do not expect any significant additional non-recurring costs from the acquisition of CTI moving forward. For detailed information on items affecting comparability in the quarter, please refer to Page 3 of the Q2 report. The operating cash flow for the quarter was SEK2.3 billion compared to SEK0.4 billion in Q2 last year. The very strong cash flow is due to higher operating profits, but also a lower net working capital buildup. This net working capital reduction is primarily due to lower gross to debt settlements in the US for synergies. Net debt at the end of the quarter was SEK16 billion, corresponding to the net debt to EBITA ratio of approximately 2 times. And in the first six months of '24, we have reduced net debt by SEK3.2 billion, reflecting our solid cash flow generation. If we now turn to Slide 18 and we discuss the financial outlook for the full year 2024. And this is, as usual, based on revenue growth at constant exchange rates and adjusted EBITA margin. We're upgrading our revenue guidance for the full year, anticipating a low double-digit revenue growth at constant currencies and we are reiterating adjusted EBITA margin in the mid-30%s of revenue. The upgrade of the revenue guidance comes from the strong momentum that we've seen in H1 of this year, where we expect the main drivers of growth in H2 to continue to be Doptelet, Aspaveli, Vonjo and the royalties for Beyfortus. Naturally, overall growth rates in H2 are expected to decline versus H1, due to the more difficult comps from H2 2023. The margin guidance remains unchanged at the mid-30%s of revenue, considering the continued efforts in R&D, mainly related to the FDA filing of SEL-212, which is rolling submission and Gamifant. In addition, we have the nephrology indications of Aspaveli, C3G and IC-MPGN, as well as accelerated clinical and medical activities for the recently approved Altuvoct. And with the outlook covered, I will now hand over to Lydia. Thank you.

Lydia Abad-Franch: Thank you, Henrik, and hello, everyone. So, let's start with the pipeline milestones on the next slide, please. We have continued our solid pipeline progress in the second quarter of this year. In hematology, we received European approval for Altuvoct in Hemophilia A as well as for Aspaveli/Empaveli in first line for paroxysmal nocturnal hemoglobinuria. Both medicines also retain their orphan drug status. No other factor VIII product has managed to maintain their orphan designation at the time of marketing authorization, which underlines Altuvoct's significant patients benefit. We are very happy to be able to offer these new options for patients with PNH and Hemophilia A. In immunology, we initiated the rolling submission BLA for the SEL-212 in chronic respiratory gout at the end of June, and FDA granted fast-track designation for Gamifant in secondary HLH masks in Still's disease. Additionally, very promising data for SEL-212 Altuvoct and Vonjo was also prominently presented at the recent EULAR, ISTH and ASCO congresses. And I would like to give you a glimpse of it. Let's start with SEL-212 on the next slide, please. The SEL-212 submission is based on the results of the DISSOLVE I and II pivotal studies. We have been developing SEL-212 for chronic respiratory gout. The DISSOLVE program consisted of two double-blind placebo controlled studies of SEL-212 with 265 dosed patients. And here is the data from the recent EULAR congress for the first time showing the pool data from both DISSOLVE I and II studies. As you see on the left graph, there was a statistically significant higher response rate for SEL-212 versus placebo with the majority of chronic refractory gout patients treated with the dose chosen for the BLA submission being responders. On the right-hand graph, we see that the reduction of serum urate from baseline in treated patients was profound with a reduction of 5.3 milligrams per deciliter or which represents a 60.8%. These are clinically meaningful reductions with unexpected effect on [indiscernible]. It is notable that treated patients have no difference in the number of gout flares within the first three months of therapy. As you might know, during the initial treatment period of these patients, other serum urate lowering therapies increased gout flares in this patient population. And finally, no new safety signals were observed and the overall safety profile of SEL-212 was consistent with previously-conducted studies. This is the data FDA used to grant fast-track designation and which we are basing the BLA on. Next slide, please. Moving to efanesoctocog alfa. The results from the [XTEND and] (ph) XTEND-ed studies were presented at ISTH with four oral presentations. XTEND-ed is the open label extension study to the pivotal XTEND-1 and XTEND-Kids, evaluating the long-term safety and efficacy of efa and will continue until 2027. The primary endpoint is occurrence of inhibitor development. Secondary endpoints shown here include annualized bleeding rate, treatment of bleeding episodes and safety. The results confirmed efa's ability to change the treatment paradigm for hemophilia A. 217 participants rolled over to the XTEND-ed study; 146 adults and 71 kids. Importantly, factor VIII inhibitors did not develop. On the left side of the graph, you see the benefits of efa prophylaxis. The median annual bleed rate remained at zero as in the pivotal studies. Over 94% experienced zero spontaneous bleed over two years in adults and adolescents and over 35 weeks in the children population. And once-weekly prophylaxis resulted in very high compliance, as you see in the lower left side. If we look at the right-hand side graph, we see the high efficacy of efa when bleeds occur. A single injection was sufficient to resolve a bleed in 94% of cases and a large majority of patients, 88%, evaluated their response to treatment of bleed as excellent or good. The mean total dose of efa required to treat a bleed was 48.2 units per kilogram. Next slide, please. Joint health outcomes in adults and adolescents were also presented at ISTH, showing that all 132 evaluable target joints were resolved during the study, as shown on the left graph. The investigators who completed the surgical procedures -- on the right-hand side, you see the outcomes of the 49 major surgeries and the investigators completing the procedures assess the participants response during the surgery and during the post-operative period. All except one procedure were rated as excellent or good and did not require blood transfusion. Importantly, the cumulative median consumption for major surgeries was 162 international units per kilogram over a period of 16 days starting the day before of the surgery. This consumption is unprecedentedly low for major surges in hemophilia and is similar to the 150 international units per kilogram dose of efa for the routine prophylaxis during the same time period. You can see why we believe that efa will make such a significant difference to how hemophilia A is treated. Next slide, please. Moving into myelofibrosis, emerging data on Vonjo highlights a strong rationale for its use in the treatment of this disease. A recently published manuscript analyzed patients treated with pacritinib across the Phase 3 PERSIST studies. Strikingly, the benefit of pacritinib on both spleen volume and symptoms was consistent regardless of baseline platelets or hemoglobin subgroups, as shown on the left side of the slide. In other words, its effect is maintained regardless of baseline blood counts. Symptoms improvement was actually greatest in the patients with severe anemia who had baseline hemoglobin less than 8 grams per deciliter. This group also experienced improvement in hemoglobin after starting pacritinib, as shown on the right upper graph. And there was a correlation between symptoms improvement and anemia improvement. In other words, pacritinib has demonstrated efficacy across MF patients, in particular, in patients with severe anemia. Furthermore, our clinical trial data has now been confirmed by the first real-world evidence analysis of Vonjo recently presented at ASCO and based on its use for treatment of MF in the US. This real-world data shows that the cytopenic patients who receive Vonjo experience stable or increasing platelet counts and hemoglobin levels with the greatest anemia benefit experienced by patients with the most severe baseline anemia, as shown on the right lower graph. Next slide, please. Summing up the first half year, we have delivered on all our major milestones, as you can see on the left-hand side of the slide. Our outlook for the second half of 2024 remains strong. We plan to submit for Gamifant in secondary HLH for macrophage activation syndrome in Still's disease in the second half of the year to the FDA. Doptelet continues its geographic expansion with the planned ITP filing in Japan, and we also will file for the pediatric indication based on the data from earlier this year and we will have the Aspaveli VALIANT Phase 3 data on C3G and IC-MPGN, which we expect to open the path to new nephrology indications for pegcetacoplan. And our momentum will continue in 2025. Next slide, please. We continue to generate data for Altuvoct. And next year, we expect the first year interim data from the FREEDOM Phase 3B study. This will give us insights into physical activity changes for people using once-weekly prophylaxis with efa. And this is a highly relevant indicator for quality of life of patients. For Aspaveli, we aim to submit our nephrology application in Europe and Japan. Gamifant will see both FDA decision and the Japan submission in secondary HLH/MAS and we will prepare our European filing strategy. We also expect a US regulatory decision for SEL-212 in chronic refractory gout. And finally, we also expect Kineret to be ready for submission in a Still's disease in Japan. And with that, I would like to hand back to Guido. Thank you.

Guido Oelkers: Thank you, Lydia. And let's maybe provide you with a summary on the next slide, Slide 28. So, in summary, we are very pleased with Sobi's development in first half of the year and the performance in Q2. We saw a significant top line growth of 11% in the quarter, 26% excluding Doptelet China. This reflects a strong performance in our strategic portfolio and our foundational portfolio in hematology and immunology, and continued growth in our key products around the world. This has led us to upgrade our revenue guidance from high single-digit to low double-digit revenues for the full year and we maintain the guidance of mid-30%s adjusted EBITA margin. Our R&D pipeline showed tremendous progress with the approval of Altuvoct in Europe for hemophilia A and Aspaveli and first line PNH in Europe. We initiated the filing of SEL-212, as you just heard, for chronic refractory gout based on fast-track designation in the US, and received fast-track designation for Gamifant in secondary HLH. In summary, we have a strong momentum at Sobi and in the business and as well as in pipeline development. And we look very much forward to the second half of the year. And with this, I think we would like now to open the floor for questions. For those on the phone, please remember to press star, one and -- to ask a question. Can I remind everyone to limit questions to one or two to be fair to all callers? Apologies in advance that we are a little bit -- we had to stretch it a little bit today, but we had so many areas to cover, shows how busy we are. With this, let's go straight into the question-and-answer session to give you a maximum time.

Operator: We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Brian Balchin from Jefferies. Please go ahead.

Brian Balchin: Hey. Thanks for the question. Just one on Vonjo. So, Guido, as you said, you're currently penetrating around 8% of the US MF market. So, how confident are you in penetrating up to 30%, just in light of the strategic initiatives you've implemented? I guess, have you seen a shift in physician prescribing behavior more towards NCCN guidelines, or is it still kind of in line with the label? Just...

Guido Oelkers: Thank you. We are currently seeing that we are probably more in line with label. There's a lot of work that is cut out for us. We also see that once we are having the right interactions with physicians that there's an opportunity for change that makes us hopeful. And when you look at the data and also we looked at some data from patients, what patients expect, it's clear that they're expecting more than just [Technical Difficulty] and that makes us hopeful. If we can get this conjunct connection right that we can also penetrate below [100,000] (ph).

Brian Balchin: Got it. Thank you.

Guido Oelkers: Thank you.

Operator: The next question comes from Viktor Sundberg from Nordea. Please go ahead.

Viktor Sundberg: Yes, hi, thanks for taking my questions. I have two if I may. So, also on Vonjo here, I just wondered a bit about the difference here between the outcome of these couple of quarters versus what you envisioned for the product when you acquired it. I guess you must have known that you would lay off part of the CTI team to reap the synergies here. But just wondered what kind of -- what the reasons behind the kind of sluggish uptake we see right now versus what you expected when you acquired the products and the reason behind that? And also appreciate if you can relate that to the 36 million you provided here at the final week of the quarter, if that's a reasonable uptake for Q3. And a quick second one, also on Altuvoct and the dynamics here with Elocta. How do you think we should view the erosion of Elocta sales in Europe going forward? I know that in the US, Elocta lost quite a lot of sales, I believe around 35% in the quarters after Altuviiio was approved, but consensus figures in Sobi remain quite flat in '25 versus '24 for Elocta. So, should the market perhaps factor in higher erosion of sales for Elocta when Altuvoct gains market share, or should we have anything in the back of our mind when we model sales for Sobi -- in the Sobi territory versus the US? Thank you.

Guido Oelkers: Thank you. Let's start with Vonjo. I mean, it's fair to say that we would have hoped for better sales. And the whilst we clearly expected to see efficiencies out of the merger with -- out of the integration of CTI, it's fair to say that we also lost a few sales management -- sales leaders and camps we would not necessarily like to have lost. And that's the competition. And we need to just accept it. But we have now, let's say, rebuilt the team. Everybody understands what is at stake. There were some learnings for sure in targeting and segmentation as well, but I think we had the messaging earlier this year as we reported that that needed to be improved. And obviously, we have a formidable competitor who had more time to prepare the market. But the rationale for the product remains the same. So, we think we are delayed, but when you elevate yourself, you still have obviously to deliver PACIFICA to roll it out broader internationally, but we will have significant launches next year, and then we will obviously bring it also in terms of new indications. So, we remain very confident that we can do this. Yeah, we are delayed, but we are not derailed. And I think this is important and we will keep pushing this product very hard. As far as the guidance is concerned for the year, we don't do this on a product basis, but we -- let's put it this way, we stay confident that we will see some growth in H2, which is more material than whatever we have shown so far. As far as Altuvoct is concerned, we look really at Altuvoct and Elocta as one area. I mean, we will obviously try to penetrate and reclaim territories from areas that also Hemlibra have taken and also obviously consolidate more of the factor VIII market. As you have seen from the data from Lydia, I mean, this product is fantastic. I mean, very rarely have we seen so much anticipation of the product. And as part of Q3 then, we can update you on the progress. I mean, it's -- but so far, it is -- there's a lot of anticipation and very positive momentum. We just have the product a few days in the market in Germany and it's fantastic. So, this is -- we see this Altuvoct and Elocta really as one Hemophilia A franchise. For me, the more patients we switch over time to Altuvoct, the better for Sobi because -- and the better for patients, because they have access to the best possible product. So. we will see some erosion. I don't think it's going to be a landslide. It's more gradual. But don't forget that Elocta's patient growth will also come from international territories where Altuvoct is not going to be launched in the first place. So, I'm not commenting now on Elocta forecast. I'm just saying that we believe that we can expand our Hemophilia A franchise.

Viktor Sundberg: Okay. Thank you.

Guido Oelkers: Thank you.

Operator: The next question comes from Mattias Häggblom from Handelsbanken. Please go ahead.

Mattias Häggblom: Yeah, thank you so much. Two questions, please. Firstly, there were a number of products that exceeded consensus expectations in the quarter, including Doptelet, Elocta and Kineret. Could you talk about to what extent there were any one-off tenders or orders that drove the beat by those products or if their performance reflected underlying dynamics in the quarter? And then secondly, on Gamifant, based on consensus expectations, the product will approach SEK2 billion in revenues this year. Back in 2020, at the CMD, you called out peak sales potential of SEK4 billion to SEK5 billion. So, can you remind me the importance of the potential improvement in secondary HLH for Gamifant in order to accomplish these peak sales?

Guido Oelkers: Yes. Thank you, Mattias, for your question. So, with regard to Doptelet and Kineret, they are no one-offs. It's really a reflection of the underlying performance of the business because we are experiencing exponential growth as we go along. In particular, with Doptelet in the growth phase and -- sorry, with Kineret, not exponential, but double-digit growth for the product that obviously has a bit of tenure. And this is really growing interest of the product, but it's not affected by tenders. As far as Elocta is concerned, this growth is really -- there has been some favorability in H1 due to tenders, but it's not as material. So, there's really a strong underlying healthy growth of Elocta, primarily driven by emerging markets, international markets, where we have access to the license, Eastern Europe, North Africa, in Turkey, we have an unbelievable momentum. So that's really what's driving Elocta, but there has been some favorability. So, we are not projecting -- I would not project double-digit growth for Elocta for the full year, particularly as Altuvoct is going to be launched now. But it is not like this flat. I mean, there's -- the product in itself grows very substantially. So that's really -- but this is really an effect of internationalization. With regard to Gamifant, yeah, you do the math, the Gamifant is up for very significant growth. We have unlocked now this new potential of Gamifant, as you can see in Q2. And we will build upon this, the secondary HLH indication, as we have highlighted, is going to be very material for us. And that's the reason why we are showing here so much tenacity, even though this was not the most straight pathway. As you know, it took us a while, but now in second half, we will submit and we will be able to build this business as of next year. And we learned by the virtue of the data and by all the publications that are coming out also from the real world evidence, we think that we -- that the product has much more to go for. So, we are very excited about Gamifant as a very significant revenue driver for the company in the future.

Mattias Häggblom: Thank you so much.

Guido Oelkers: Maybe next question. Thank you.

Operator: The next question comes from Alistair Campbell from [RBC] (ph). Please go ahead.

Alistair Campbell: Thanks so much. Two questions, please. First of all, just to go back to Vonjo, I mean, it's sort of striking that your key competitor, GSK with Ojjaara has been launching very well and gaining traction pretty nicely there. So, just to get a sense of why you think that's happening for Ojjaara versus Vonjo in terms of the competitive dynamic? Does that come down to a broader label for them or perceived efficacy advantage? Or is it maybe something to do with tolerability? Just a sense of how those two drugs stack up? And then maybe just one for Henrik in terms of R&D. Obviously, R&D stepping up this year as you integrate CTI. But as we look forward into 2025, not sort of specific guidance, but just broadly, how should we think about the moving parts in terms of perhaps some trials completing versus others coming on like additional Vonjo studies? Is it going to still be upward tension for R&D in 2025? Thank you.

Guido Oelkers: Yeah. Maybe I'll start with Ojjaara versus Vonjo. I think what you need to bear in mind is that GSK had probably around two years of market shaping with a medical organization ahead of us before they launched the product and they got a label, which is very broad versus Vonjo's label. We got them end of year -- end of last year the NCCN guidelines, so they have a headstart. And I think the -- when you think about the medical education, what probably have more pronounced anemia as an issue than maybe myelofibrosis. And by the same token, as you have seen from the mortality data, we feel very strong that basically, that the thrombocytopenia is a much bigger issue. And maybe, let's say, after Henrik has completed his -- or maybe I think it's good, maybe Armin, because I think it's the essence, to come back myelofibrosis versus anemia, what is here the issue? And then, Henrik talks about R&D. Armin?

Armin Reininger: Yeah. And thank you very much. Hello, everyone. I think one needs to recognize that in myelofibrosis, the end is always fatal. And for the physicians, they really want to treat the patients, so that they feel good along the way. And if the patients come and the biggest concern taken out, all the other aspects which are less so is fatigue. And textbook knowledge says, well, fatigue is linked to low red cell counts to anemia, but a lot of people forget that also low platelet counts could cause fatigue. And if you look at the survival rates, it means that if you have a drug that works in the least favorable population with platelet counts below 50,000, and they have a survival rate, as Guido showed, of 1.25 years median versus anemia -- severe anemia has 2.1 years, that I think tells me as a physician, and this is something that we need to communicate even more to the physicians out there if they really want to treat their patients, it should not just be the anemia aspect, number one. And number two, the anemia aspect in the Ojjaara data are not really in the lowest platelet count patients, because along myelofibrosis development, both go down. It's cytopenia, meaning the platelets go down, the red cells go down. And if you really want to look at which product serves both areas, we have strong data and more emerging for pacritinib and Vonjo. And I think this is why we really need to push much, much more and get more communication going with the physician even than what we have had before.

Guido Oelkers: Yeah. So, I think that gave you maybe a bit of a spell. Henrik, why don't you comment on the R&D expenses?

Henrik Stenqvist: Yeah. So, on the R&D, well, you're right that activity level has been high and will continue to be high during this year. And when it comes to 2025, we don't guide specifically on 2025 right now, but it's fair to believe that we will continue with high R&D activities also in 2025. Even if some studies come to an end, there is also a whole set of important medical activities for all these products that will come to launch.

Alistair Campbell: Thank you.

Guido Oelkers: Thank you. Maybe the next question.

Operator: The next question comes from Harry Gillis from Berenberg. Please go ahead.

Harry Gillis: Thank you very much. So, I also just have a couple of questions on Vonjo, please. So, I was wondering, of the 8% share that you have today, whether it would be possible for you to provide some information on how much of that, as it stands today, is coming from the less than 50,000 platelet group and those with between 50,000 to 100,000? And then, any sort of feedback you're hearing from physicians today about how they decide between Vonjo and Ojjaara and how confident you are that you can ultimately highlight the benefits of Vonjo and start accelerating that sales ramp? And just looking to the longer term, clearly, the sales have been a bit slower than you had hoped, but has this impacted the longer-term potential in myelofibrosis specifically? Thank you.

Guido Oelkers: Yeah, thank you. With regard to the 8% share, we don't break it down. Well, I mentioned that the vast majority of this share is coming from below 50,000, and we are under-represented in the other two segments, meaning below 100,000 and above 100,000. Now, we know that from the work that we have done, once we have a consistent approach and we are coming through with a new messaging that we can change opinions and that makes us hopeful, particularly when you think about the connection that Armin laid out earlier and the data that were presented by Lydia earlier that we can do this. So, in terms of long-term potential, nothing has changed. And I think when you think about the other vectors of growth, we will update you that we stand by what we have communicated to the market. There's absolutely no reason for us. Yes, we are not happy. Yes, we had a fair share of learnings, but we are not, by any stretch of imagination, feeling that we have now to revise our ambition for the product. We go back in there and we will try to convince, let's say, physicians about the merits of our product. That's what we're doing. And there's a ton of data that we are accruing in various different aspects. I mean, you have seen the anemia data from Lydia earlier presented real-world evidence. So, it's very strong. I mean, so, as people will get more accustomed to this, we just have to understand that we have to -- we had some headwinds that were larger than we were hoping for, but that doesn't mean that we don't believe in the place of the product. And I think once you -- once we get into a different rhythm, I think there will be -- we will take our fair share. Yeah. Next question?

Operator: In the interest of time, please limit yourself to one question only. The next question comes from Christopher Uhde from SEB. Please go ahead.

Christopher Uhde: Hi, there. Thanks very much for taking my question. So, I might have misunderstood this from before, but I believe that you have said in the past that you're really targeting the community or local office setting with Vonjo rather than the institutional setting where, let's say, GSK maybe is more focused, which strikes me as a little unconventional. Is that the correct strategy? Why do you think that's the better route than the usual sort of institutional KOL-led launch? And if I could squeeze in a second one? You previously talked about on Vonjo having lifecycle management trials, none has been announced yet. And I just wondered why is a delay. Is it the organization, or is it something else? Thank you.

Guido Oelkers: Thank you, Christopher. Very much appreciated. No, I think we probably were not clear enough. I mean, of course, we are focusing on KOLs and making sure that we get it top down, right? And -- but we also cover community accounts and that's correct, where we have seen some positive feedback. And it's fair to say that the -- when you think about the launch dynamics, the -- in the first wave, before we got the NCCN guidelines, it's clear that Ojjaara probably had taken some share in second line, also in other segments. And we now in the process to correct this. So basically -- so we are not -- we are clearly focusing also on top down -- the top-down strategy on key accounts. With regard to the lifecycle management or new indications, the thing is that we have made decisions and we have progressed those, let's say, quite nicely. Traditionally, we have only announced those studies once you have -- we have first patient in. And sometimes this takes some time. And that's the reason why you haven't heard from us. But H2, we come out and we will share this with you, and I hope you will be happy with the choices that we have made. And there's a much broader, let's say, story that we want to tell you, let's say in the next couple of months. And we will not shy away. So, it is not that we are not daring, we are wavering or we are slow. Sometimes it takes a while, and it's true that, let's say that it took us a while, maybe last year, but now we are absolutely determined to get this one going. And we have made arrangements already and signed contracts, agreements to get this one off the ground. But we wanted to make sure that we come out of the blocks also to make sure that we don't give too much lead time to our competitors. And that's the reason why you haven't heard from us.

Christopher Uhde: Thanks so much.

Guido Oelkers: Thank you.

Operator: The next question comes from Erik Hultgård from Carnegie. Please go ahead. Mr. Hultgård, your line is open. You may proceed with your questions.

Erik Hultgård: Sorry, I was on mute. Thanks a lot for taking my question. Regarding Vonjo, I guess, it's quite obvious that you haven't been successful enough to get your message out to physicians to change sort of prescriber behavior. So, how much of that is just a question of time that it takes time to get the messaging out and how much is actually related to sort of investments behind the product? So, are we considering increasing the number of sales reps or investing more behind other type of channels to get the message out? Thank you.

Guido Oelkers: Thank you. I mean, it is both. It's time, because when we lost quite a few people in the field, then obviously we lost all the contacts. So, that needs to be rebuilt. That takes time. That is also a question of quantity. And we have addressed this as well. So, we have significantly upgraded the team and we have changed the sales management.

Erik Hultgård: Thank you so much.

Guido Oelkers: Thank you.

Operator: The next question comes from Alexander, Niall from DB. Please go ahead.

Niall Alexander: Hi. It's Niall Alexander from Deutsche Bank. Thanks for taking my question. It's one on margin outlook. So, you've historically provided some guidance for FY '25. So, thinking of hemophilia's momentum and the full start of Vonjo, do you feel profit margins can get to north of 40% in the mid-term? And then, if I can squeeze in a very quick one, if you have -- so, we have any appetite for further acquisitions going forward? Thanks.

Guido Oelkers: Thank you. I think the north of 40%, if we keep growing at the pace we are currently growing, it's probably -- with the programs that we are currently supporting is probably not quite realistic. I mean, we will get a significant boost obviously from -- we're expecting a significant boost from the royalty income. And that will clearly give us an uplift. And we'll have to see -- Sanofi will give you guidance next week, as I understand. But I think right now, I think we need to double down on this portfolio and on our pipeline, as you've seen. I mean, we have fantastic pipeline in our stable. I mean, I know that there's still some reservations with SEL-212 and this is also a bit of a struggle, but now to get fast-track designation and to finally submit, I was very excited. We were yesterday together with the team that it has been newly formed for this product, I mean, there's so much excitement around this product and the way they're thinking about it. We're thinking that this is a very material product for the company. I mean, I too worked. We had a launch conference just a few days ago as well. So, you want us to really exploit the opportunity that are related to our portfolio. And therefore, I'm probably more cautious on the earnings, but I'm bullish on the prospect of the company in terms of driving double-digit growth. And that's what we are trying to do. And obviously, building this business in a very sound way. With regard to new deals, I think we are currently looking at this. We have our hands full. As you can see, it's a very rich program. I mean, if the nephrology data look as good in a few weeks as a Phase 2 data look like, I mean, we will have another very happy problem to conquer this very important indication. We think the opportunity is there. This is a spectacular place also for Sobi. In sum, I mean, we believe in this business and building it up. I mean, obviously, we understand that we want to improve margins, but whether this is the time now to think already above 40%, I think it's probably premature. Henrik, you want to comment on margins? This is your area.

Henrik Stenqvist: No, I think you've covered it. It's premature with all the activities that we have ongoing driving the pipeline, but also all the launches that are ongoing and upcoming. It is not a short-term realistic scenario.

Guido Oelkers: Yeah. Thank you. Maybe another question.

Operator: The last question for today's call is from Yifeng Liu from HSBC. Please go ahead.

Yifeng Liu: Hello. Thanks for taking my question. I just got one in there. You commented on the overall sort of myelofibrosis market in first half remains flat. And how should we think about moving part of it in terms of going to H2 and maybe 2025? Do you see any sort of upside and trend? Any color you can provide on that, please? Thank you.

Guido Oelkers: Yeah. Thank you. I mean, when you look at the [evaluated] (ph) data and they're expecting the recovery of this in and around 5% for the year. I think -- I would have a better data point myself. So, I think whilst you see this momentary weakness in Q1 -- sorry, in Q2, I don't see this as a permanent situation. So, I think this will even out and over the next quarters and also driven by the fact of the new launches and taking share and building the market and awareness. So, I don't see this as a permanent. I'm mindful now of time and apologies that we had so much to cover, but -- which is also good. This is a company that has a lot of things currently ongoing. I would propose, if you are okay with this, that we stop now the earning call respecting everybody's time. And if you have questions, please refer to our IR team and we will try to schedule also meetings with other experts of the company as you feel like. We want to make sure that you get the best possible information on our business and that we don't shortchange anybody. So, very much appreciate your time. Thank you for staying tuned during the summer period and wish you a great week and talk to you soon. Thank you.

Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.