Annual Report 2015

A new chapter of our story Annual Report 2015 Sobi in haemophilia Introduction ® Year in brief 1 Elocta This is Sobi 2 page 38 Our revenues 4 approved in EU Business highlights 2015 6 CEO’s statement 8 In November 2015, Elocta was approved by the European Commission for the treatment of haemophilia A. Strategic development Business context 12 Strategy and objectives 16 Vision 18 Geographic expansion 20 Sustainability 22 Risk management 28 Our Investing in What we do 30 innovation Innovation 32 model our pipeline Business areas In 2015, Sobi presented three new programmes in preclinical Haemophilia 38 page 32 development aimed at finding treatments for rare diseases. Inflammation 44 Genetics & Metabolism 46 Partner Products 50 ReFacto 53 Financial overview The Sobi share 56 Sobi is Five-year summary 59 growing Reporting* CFO’s statement 63 page 20 Directors’ Report 64 Financial statements 73 Notes 83 We reach more patients Corporate Governance than ever before Chairman’s statement 117 Corporate Governance Report 118 Board of Directors 124 Executive Leadership Team 126 Amendments Auditors’ report 128 Disclaimer In order to utilise the ’Safe Harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995, Swedish Orphan Biovitrum AB (publ) is providing the following cautionary statement. This Annual Report contains forward-looking statements with respect to the financial condition, results of opera- GRI index 129 tions and businesses of Swedish Orphan Biovitrum AB. By their nature, forward-looking statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ mate- 2016 Annual General Meeting 133 rially from that expressed or implied by these forward-looking statements. These factors include, among other things, the loss or expiration of patents, marketing Definitions and glossary 134 exclusivity or trademarks; exchange rate fluctuations; the risk that research and development will not yield new products that achieve commercial success; the impact of competition, price controls and price reductions; taxation risks; the risk of substantial product liability claims; the impact of any failure by third parties to supply materials or services; the risk of delay to new product launches; the difficulties of obtaining and maintaining governmental approvals for products; the risk of *The audited annual report includes pages 64-116. failure to observe ongoing regulatory oversight; the risk that new products do not perform as we expect; and the risk of environmental liabilities. INTRODUCTION YEAR IN BRIEF The financial KEY FIGURES SEK M 2011 2012 2013 2014 2015 Total revenues 1,911 1,923 2,177 2,607 3,228 year in brief Gross profit 975 1,040 1,284 1,548 2,007 Gross margin, % 51 54 59 59 62 Operating expenses 944 1,095 1,351 1,873 1,861 EBITA* 50 367 211 –43 433 • Total revenues increased to SEK 3,228 M (2,607), an increase EBIT –319 –55 –67 –325 146 of 24 per cent. Profit/loss for the year 18 –101 –93 –268 68 Earnings per share, SEK 0,07 –0,38 –0.35 –1 0,26 • Total product revenues increased to SEK 2,568 M (1,989), Cash flow from operations 103 406 185 234 507 an increase of 29 per cent. Equity per share, SEK 19 18 18 17 17 Equity assets ratio, % 74 77 73 71 56 • Gross margin increased to 62 per cent (59). Dividend 0 0 0 0 0 No. of employees 517 514 546 589 702 • EBITA amounted to SEK 433 M (–43)*. • Ended the year with a cash position of SEK 904 M (519). SEK M Operating costs have 3,500 been increasing due to 3,228 3,000 the preparations for the 2,607 2,500 launch of Elocta 2,177 2,007 2,000 1,911 1,923 1,873 1,861 REVENUES, % GROSS MARGIN, % EBITA, SEK M 1,548 1,500 1, 284 1,351 1,095 975 1,040 1,000 944 500 367 433 211 50 -43 0 +24 62 433 Revenue Gross proﬁt Operating EBITA* expenses 2011 2012 2013 2014 2015 * The figures for 2014 include write-downs of SEK 325 M for Kiobrina® and SEK 25 M for Multiferon®. The figures for 2012 include revenues of SEK 308 M from the sale of co-promotion rights of ReFacto AF® to Pfizer. SOBI ANNUAL REPORT 2015 1 INTRODUCTION THIS IS SOBI The patient This is Sobi journey guides us IFE EXP AL L ERIE RE NC E Sobi is an international specialty healthcare company dedicated to rare diseases. Our mission is to develop and deliver innovative S P S A E T C I E therapies and services to improve the lives of patients. C N A T T N N Sobi’s E E I E T D A value chain P D N EV O E TI LO VA PM NO ENT IN Who Pioneers in rare disease Our strong commitment to improving the quality of life for patients with rare diseases guides us throughout our operations. We strive to be pioneers in creating a world where patients are diag- nosed at birth, receive effective and sustainable therapy, and go on to live full and healthy lives within the boundaries of their disease. Read more on page 18 2 SOBI ANNUAL REPORT 2015 INTRODUCTION THIS IS SOBI What How A strong and growing portfolio A collaborative approach We are an integrated biotechnology company ded- We consider real access by patients to treatments a icated to rare diseases. Our research and product far more relevant measure than market access alone. portfolio is primarily focused on haemophilia, This means putting the needs of patients first, in the inflammation and genetic and metabolic diseases. belief that this will create long-term, sustainable value We also market and make available across Europe, for everyone. We have developed a patient and the Middle East, North Africa and Russia a portfolio customer- centric approach to commercialisation of specialty and rare disease products for partner model (PC3) to ensure that patient needs guide us. companies. In addition, we manufacture the drug Our research and development is collaborative and substance for the haemophilia treatment ReFacto patient-centred and ranges from the early phases of AF/Xyntha® for the global market. research to the development of biopharmaceuticals. By working in a collaborative way, we believe it is pos- sible to create a win-win environment for all parties – patients, healthcare systems, budget holders, our Read more on page 30 employees, investors and the pharmaceutical industry. Read more on page 12 EARLY-STAGE Where DEVELOPMENT PROGRAMMES Growing international presence LATE-STAGE Today, our organisation spans 24 countries, deliver- DEVELOPMENT PROGRAMMES ing therapies to patients in 67 countries across the globe. Europe accounts for 54 per cent of sales. The North American business has developed signifi- TRANSFORMATIONAL IMPACT ON RARE GENETICS & INFLAMMATION HAEMOPHILIA PARTNER cantly and will support growth in the coming years. DISEASE METABOLISM PRODUCTS In 2015, we continued to expand our presence by establishing a new affiliate in Canada, and grew our offices in Germany, the UK and Belgium. We INNOVATION also restructured our distribution, assuming more direct responsibility in Latin America. BIOLOGICAL DRUG CANDIDATE SUSTAINABLE REFACTO RESEARCH AND ACCESS TO PROCESS MEDICINES Read more on page 20 DEVELOPMENT SOBI ANNUAL REPORT 2015 3 INTRODUCTION OUR REVENUES Our revenues Revenues and growth percentage, by business area EARLY-STAGE Growth at constant exchange rates DEVELOPMENT PROGRAMMES compared with 2014. LATE-STAGE DEVELOPMENT PROGRAMMES 1% 28% GENETICS & INFLAMMATION HAEMOPHILIA PARTNER SEK 727 M / USD 86 M METABOLISM PRODUCTS SEK 940 M / USD 111 M >100% 17% SEK 96 M / USD 11 M SEK 805 M / USD 95 M REFACTO 2% Total revenues 2011 2012 2013 2014 2015 SEK 660 M / USD 78 M SEK M 1,911 1,923 2,177 2,607 3,228 USD M 227 228 258 309 383 Exchange rate USD 1 = SEK 8.435 (average rate for 2015). 4 SOBI ANNUAL REPORT 2015 INTRODUCTION OUR REVENUES Product revenues per region Excluding revenues from ReFacto. 54% Europe SEK 1,391 M 9% MENAR* SEK 231 M 34%34% North America SEK 861 M Rest of 3% the world SEK 85 M * Middle East, North Africa and Russia SOBI ANNUAL REPORT 2015 5 INTRODUCTION BUSINESS HIGHLIGHTS 2015 Milestones 2015 XIAPEX® APPROVED ORFADIN® ORAL SUSPENSION The European Commission The liquid formulation, Orfadin oral approved Xiapex for the treatment suspension, and the Orfadin 20 mg of Peyronie’s disease. capsule approved by the European Commission. KIDS B-LONG STUDY Positive top-line results announced ALPROLIX SUBMISSION Q2 for the phase 3 Alprolix® paediatric Marketing authorisation application study, Kids B-LONG. for Alprolix submitted in the EU. KINERET® APPROVAL IN HAEMOPHILIA DATA AT ISTH AUSTRALIA 23 abstracts with new haemophilia Kineret received regulatory approval data presented at the International in Australia for use in systemic Society on Thrombosis and Haemo- juvenile idiopathic arthritis (SJIA). stasis (ISTH) 2015 Congress. ALPROLIX VALIDATION Marketing authorisation application for Alprolix validated by the Euro- pean Medicines Agency, EMA. Q1 SALES AND EBITA SALES AND EBITA 865 764 663 573 172 Sales Sales 86 74 EBITA EBITA Q1 2014 Q1 2015 Q2 2014 Q2 2015 −288 Base business showed solid growth across Total revenues were SEK 865 M, an increase the portfolio. of 51 per cent, reflecting our strong under- lying business. 6 SOBI ANNUAL REPORT 2015 XXXXXXXXXXXXXXX ALPROLIX OPT-IN ELOCTA POSITIVE OPINION ELOCTA APPROVED Opt-in right to take over final devel- The Committee for Medicinal Products Elocta approved in the EU for the opment and commercialisation of for Human Use (CHMP) in the EU treatment of haemophilia A.

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