Sobi Earnings: Beyfortus Royalties Drive Impressive Q3; Maintaining Our SEK 343 Fair Value Estimate

We’re maintaining our SEK 343 fair value estimate for Swedish Orphan Biovitrum following a very strong third-quarter performance. The highlight was nearly SEK 1.5 billion in royalties on RSV prophylactic Beyfortus from partner Sanofi, which helped drive Sobi's total revenue growth of 39% at constant exchange rates (16% excluding the RSV franchise). While we’ve adjusted our near-term forecast to account for management’s new midteens revenue growth guidance for 2024 (up from low double digits previously), adjusted EBITA margin guidance is unchanged in the mid-30s, which to us implies that the strong performance of Beyfortus (which has a strong impact on margins) could have mostly pulled revenue forward that we had anticipated for the fourth quarter. Sanofi should have more detail on Beyfortus demand on its quarterly call on Oct. 25. We continue to see this product holding a very strong profile in the long run, even as competition (Merck’s clesrovimab) appears to be approaching the market with somewhat similar data.