ROVI REPORTS OPERATING REVENUE GROWTH OF 3% FOR THE FIRST NINE MONTHS OF THE FIRST POST-PANDEMIC YEAR

• Operating revenue increased 3% to 594.9 million euros in the first nine months of 2023 driven by the CDMO business, which grew 7% to 287.6 million euros, and the stable sales of the specialty pharmaceutical business, which stood at 307.3 million euros.
• In September 2023, the United States Food and Drug Administration (FDA) approved the company's CDMO's1 plants for injectables in Madrid, San Sebastián de los Reyes and Alcalá de Henares for the fill-and-finish syringe manufacturing of Moderna's COVID-19 mRNA vaccine. ROVI also expects to produce Moderna vaccines for supply in the United States from 2023 onwards.
• Positive evolution of Okedi® (Risperidone ISM®), which reached sales of 9.0 million euros in the first nine months of 2023. Okedi® sales increased by 27% in the third quarter of 2023 compared to the second quarter of the year.
• Sales of the heparin franchise (low molecular weight heparins (LMWH) and other heparins) decreased by 10% to 181.7 million euros in the first nine months of 2023, mostly due to the increase in orders from partners in 2022 related to the treatment for COVID-19, which has led to a lower expected volume of orders from partners in 2023, since they still hold a high level of stocks from 2022.
• Good performance of Neparvis® and Orvatez®, of which sales increased by 17% and 10% respectively, in the first nine months of 2023 compared to the first nine months of 2022, rising to 33.7 million euros and 19.8 million euros respectively.
• Gross profit increased 2% to 350.6 million euros in the first nine months of 2023 compared to the same period of 2022. Gross margin showed a decrease of 0.9 percentage points, from 59.9% in the first nine months of 2022 to 58.9% in the same period of 2023. This drop is mainly due to the higher contribution to the CDMO business of the income related to the activities to prepare the plant for drug production under the agreement with Moderna, which adds lower margins to Group sales. Gross margin increased by 12.6 percentage points in the third quarter of 2023 compared to the second quarter of 2023 and 3.0 percentage points in the third quarter of 2023 versus the third quarter of 2022.
• Net profit decreased by 2% to 118.8 million euros in the first nine months of 2023.
• On 27 July 2023, ROVI reported that the FDA had issued a Complete Response Letter. In this letter, the FDA informed ROVI that satisfactory resolution of the 3 1 Contract Development and Manufacturing Organisation deficiencies from the last inspection was required before the approval of the application and that there were no outstanding questions related to the dossier. On 21 September 2023, ROVI received the Establishment Inspection Report from the FDA with 4 outstanding observations from the FDA inspection of the facility. ROVI provided responses on 29 September 2023 and the FDA has established a new Goal Date of 29 March 2024.
• ROVI takes first place in the Sustainalytics world ESG risk ranking for the second year running. The company has improved its ESG risk rating by almost one point, improving its “Low Risk” rating to 16.4 versus 17.3 in 2022 and remains in first place among the 431 companies rated in the pharmaceutical industry category.
• The ROVI General Shareholders Meeting, on 14 June 2023, approved the payment of a gross dividend of 1,2938 euros per share; which means an increase of 35% compared to the dividend charged to the 2021 profit (€0.9556/ share) and represents approximately a 35% pay out. This dividend was paid on 5 July 2023.

OUTLOOK

In November 2022 and February 2023, ROVI announced that it expected the 2023 operating revenue to decrease by a low-teen percentage in comparison with 2022. When the company published its results for the first half of 2023, this guidance was updated to a high-single-digit percentage decrease on 2022. With the visibility that the company has at present, ROVI is again raising its operating revenue guidance for 2023 from a high-single-digit percentage decrease on 2022 to stable sales.

It is reasonable to expect the company’s results to undergo a downward adjustment in 2023.

For 2024, ROVI expects its operating revenue to decrease by a mid-single-digit percentage in comparison with 2023. Notwithstanding, there are certain factors that have been considered when calculating this guidance that, although they could be relevant to the estimates, are difficult to specify at present, including, among others:

1. First, the 2023 COVID-19 vaccination campaign is still in progress and, as of today’s date, the company is not in a position to forecast how the demand and production may evolve for the vaccination campaign in 2024.
2. Second, it is hoped that the expansion of the compounding, aseptic filling, inspection, labelling and packaging capacities at ROVI’s facilities in Madrid and the current high demand for CDMO services in the market might favour obtaining new customers, with the resulting sales impact. This would have to be taken into consideration but cannot be estimated at present.
3. Last, ROVI expects to obtain marketing authorisation for Risvan® from the FDA (Food and Drug Administration) in March 2024 and to market the product on the United States market, probably through a partner. The potential sales of this product in 2024 will depend on the terms of the agreement reached with the potential partner, which could likewise affect the estimates for 2024.

LAUNCHING OF A SHARE BUY-BACK PROGRAMME

ROVI informed that the Company launched, effective as of 26 July, 2023, a share buyback programme (the “Buy-back Programme”), in accordance with the following terms (see further information on page 26):

1. Purpose and scope: the Buy-back Programme’s purpose is to redeem own shares of ROVI (share capital reduction) while, at the same time, boost the remuneration of the ROVI shareholder by increasing the profit per share.
2. Term: from 26 July 2023 for a period of 12 months.
3. Maximum monetary amount: up to 130,000,000 euros.
4. Maximum number of shares to be acquired: 2,700,000 shares of the Company, representing approximately 5% of the Company’s share capital on 26 July 2023.

As of 31 October 2023, ROVI had executed approximately 27.67% of the buy-back programme, having acquired 747,049 shares.