Morningstar | No-Moat Sobi Is Building an Immunology Portfolio, but Relies on a Competitive Hemophilia Market
Rare-disease drug firm Swedish Orphan Biovitrum, or Sobi, markets drugs in immunology, hematology, and rare genetic diseases, but sales in Europe of two hemophilia drugs, Elocta (hemophilia A) and Alprolix (hemophilia B), dominate Sobi's top line. While Elocta enjoyed first-to-market status in Europe among extended half-life, or EHL, factor replacement therapies, Alprolix launched at the same time as CSL’s Idelvion, and we expect the competitive landscape to become more crowded with time. Sobi recent deals to acquire rights to immunology drugs (Astra's Synagis and MEDI8897, Novimmune's emapalumab) help bolster long-term growth prospects. Sobi and partner Sanofi (Bioverativ was acquired by Sanofi in March 2018) compete in a $10 billion global hemophilia market that is growing 7% a year, based largely on volume increases as patients grow and as more patients move to prophylactic dosing (to prevent bleeds rather than treat them). Elocta is one of the leading EHL products in a $6 billion global hemophilia A market. However, disruptive entrants are arriving on the market, as Roche's Hemlibra is poised to launch in Europe (Sobi's key marketing territory) in 2019, and Alnylam's fitusiran, another convenient subcutaneous option, should have phase 3 data in 2019. The $2 billion hemophilia B market is going through a similar evolution, and fitusiran could compete here, as well. Bioverativ and Sobi are also studying Elocta as an alternative to standard factor replacement therapy as part of tolerization treatment for patients who develop inhibitors, and while Elocta could allow patients to dramatically shorten treatment, patients could also opt for Roche and Alnylam's newer treatments. With competition intensifying in hemophilia, Sobi is expanding its portfolio into other rare diseases, most recently with emapalumab (launching in 2019 in haemophagocytic lymphohistiocytosis) and Synagis (a mature therapy to prevent RSV in high-risk infants). Most of Sobi’s remaining pipeline programs are still preclinical, and we expect the firm will need to make more acquisitions to support long-term growth.Swedish Orphan Biovitrum AB is a healthcare company focused on rare diseases. Co. develops, manufactures and commercializes treatments with a particular focus on four therapeutic areas: Inflammation, Genetics & Metabolism, Haemophilia and Neonatology. Co. also markets a portfolio of rare disease products for partner companies. Co.'s pipeline programmes include research and development focused on recombinant protein drugs in late preclinical and clinical phase for indications.
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