Analyst Note | Oct 09, 2020
We have lowered our Swedish Orphan Biovitrum fair value estimate to SEK 190 from SEK 207 following the disappointing results for avatrombopag (Doptelet) in chemotherapy-induced thrombocytopenia. Patients taking the medication did not see significantly fewer platelet transfusions, or fewer reductions or delays in chemotherapy, due to thrombocytopenia (the composite primary endpoint) relative to patients in the placebo arm. Although SOBI attributes this failure to an unexpectedly strong performance for placebo patients, this is still a setback for the drug in one of its largest market opportunities, and we have lowered our peak sales assumptions for the drug to $300 million from $700 million. Most of our sales forecast now stems from approval in ITP (approved in the U.S., filed in Europe). We continue to view SOBI's franchise as lacking an economic moat, despite current strong sales for the firm's hemophilia therapies Elocta and Alprolix, and this setback reduces SOBI's ability to diversify its product revenue away from hemophilia therapies, which are vulnerable to competition from Roche's Hemlibra (approved) as well as RNA-based and gene therapies in development. SOBI also saw disappointing data for gout therapy SEL-212 relative to standard of care Krystexxa in a phase 2 trial in September, leading us to question the decision to push forward into phase 3 studies and whether the drug has the ability to displace this approved competitor. However, we had not modeled significant revenue potential for the gout drug, and this did not have a significant impact on our valuation.
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