Sobi looking to make a deal, report says
- Swedish Orphan Biovitrum AB, better known as Sobi, is ready to do some M&A, according to a Jefferies analyst report on Tuesday.
- The company, which made its mark in hemophilia and subsequently partnered with Bioverativ, is looking to become more of a force within the industry.
- Recently appointed CEO Guido Oelkers told Jefferies analyst Eun Yang that "his #1 focus is to acquire marketed products to rapidly grow top-/bottom-line via M&A," the report said.
Sobi has long been a small rare disease drugmaker lingering in the shadow of larger partners like Biogen. But the Swedish company is hoping to dramatically increase revenues, and M&A could be the ticket to do just that.
New CEO Oekler, who was appointed in May, hopes to ramp up sales to hit $2 billion within the next two to three years, he told the analyst. That would be strong growth from the $780 million that is expected for the fiscal year 2017. Currently, Yang has only modeled about $1.2 billion in sales by 2020.
"This would allow SOBI to build its clinical pipeline via internal/external sources for longer term growth," wrote Yang in the Sept. 12 report to clients. "He seems confident of a transaction within next 12 months & more M&A to follow."
The company intends to continue its focus on rare diseases, but is also looking at plays in inflammation, as well as genetic metabolism.
Sobi hopes to expand its current offerings in the U.S. and add more partnerships in the EU. Yang speculates that at least one of these partnerships could be with long-time business partner Bioverativ (which inherited the hemophilia deal when it was spun out of Biogen), and could focus on one of the hemophilia assets in Bioverativ’s pipeline.
"CEO notes SOBI needs 'two legs' to stand on in order to progress, with one leg being the hemophilia franchise and the other coming through an acquisition," wrote Yang, who noted that Sobi currently has no debt. "CEO underscores that at current time, a transaction for marketed products is necessary to grow near-term top-line/bottom-line, which allows it to develop/acquire pipeline assets for the longer term."
This new interest in later-stage partnerships or assets is a shift from the focus on early-stage compounds that the previous leadership had maintained.
Due to its positive cash/debt position, Sobi indicated it is willing to shell out as much as $4 billion should the right deal arise.
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