Laboratorios Farmacéuticos Rovi, SA (BME: ROVI), company Pan-European pharmaceutical company specialized and dedicated to the research, development, licensed manufacture and commercialization of small molecules and biological specialties, today announced its financial results for the first quarter of 2021.

Operating income in the first quarter of 2021 increased 29%, reaching 130.5 million euros, mainly as a result of the strength of the third-party manufacturing business, which grew 179%, and the specialty pharmaceutical business, whose sales grew by 8%. Total revenue increased by 29% to € 130.9 million in the first quarter of 2021.

Sales of prescription pharmaceutical products rose 8% to 86.2 million euros, outpacing the market by thirteen percentage points. According to the consulting firm IQVIA, the market for innovative products in Spain decreased by 5% in the first quarter of 2021 compared to the first quarter of 2020.

For its part, sales of the heparin division (Low Molecular Weight Heparins (LMWH) and other heparins) increased by 15% to 63.9 million euros. Thus, heparin sales represented 49% of operating income in the first quarter of 2021, compared to 55% in the first quarter of 2020. Sales of Low Molecular Weight Heparins (LMWH) increased by 15% to reach 62.2 million euros.

Sales of Bemiparin, ROVI’s low molecular weight heparin (LMWH), had a positive performance in the first quarter of 2021, with a growth of 35% to reach 32.8 million euros. International sales of Bemiparin increased by 132%, reaching 13.9 million euros, mainly due to (i) the increase in transfer prices to some partners as a result of the increase in the price of LMWH raw material, and (ii) to a high concentration of purchase orders from the Russian market, where the product was launched in 2020. This significant increase is specific to the first quarter of 2021 and ROVI expects that the international sales of Bemiparin will increase in the band of the second ten (that is, the ten between 10% and 20%) in 2021. Bemiparin sales in Spain (Hibor®) increased by 3% to 18.9 million euros in the first quarter of 2021, mainly due to a greater penetration of the product in the treatment segment.

ROVI increases sales of its prescription and manufacturing products to third parties

Sales of Neparvis®, a prescription product from the Novartis company indicated for the treatment of adult patients with symptomatic chronic heart failure and reduced ejection fraction, which ROVI has distributed in Spain since December 2016, increased by 10% in the first quarter of 2021 until reaching 8.7 million euros.

For their part, the sales of Volutsa®, a prescription product from the Astellas Pharma company indicated for the treatment of moderate to severe filling and emptying symptoms associated with benign prostatic hyperplasia —distributed by ROVI in Spain since February 2015— , increased by 2%, to 3.9 million euros.

Likewise, manufacturing sales to third parties grew 179% in the first quarter of 2021, reaching 35.6 million euros, mainly due to the recording of revenues related to the production of the COVID-19 vaccine , the recording of the income related to the activities developed to prepare the plant for the production of the vaccine under the agreement with Moderna, and the reorientation of the strategy of the manufacturing activities to third parties towards products of more added valued.

ROVI expects that in 2021, manufacturing sales to third parties will increase between 15% and 20%, including Moderna’s activities, but excluding vaccine production. Including vaccine production, ROVI expects to roughly double its 2020 third-party manufacturing revenue.

EBITDA increased 74% compared to the same period of the previous year, reaching 34.8 million euros in the first quarter of 2021, reflecting an increase in the EBITDA margin of 6.9 percentage points to 26.7% , from 19.8% registered in the first quarter of 2020. Likewise, ROVI’s net profit increased by 71%, to 23.8 million euros.

Research and development (R&D) expenses increased by 30% compared to the same period of the previous year, reaching 5.8 million euros in the first quarter of 2021. These R&D expenditures are mainly linked to the preparation to repeat the multi-dose comparative bioavailability study of Risperidone ISM® versus oral risperidone, in response to the further observation of the Committee for Medicinal Products for Human Use (CHMP); the development of Phase I of Letrozole ISM®; and the development of the new Risperidone ISM® formulation for a quarterly injection.

ROVI will propose to the General Shareholders' Meeting a dividend charged to the results of the year 2020 of 0.3812 euros per share with the right to receive it, which represents an increase of 118% compared to the dividend paid out of the results of the year 2019 (€ 0.1751 / share) and would imply the distribution of approximately 35% of the consolidated net profit of the year 2020 (vs 25% of the consolidated net profit of 2019).

ROVI reinforces its collaboration with Moderna for the manufacture of Moderna’s COVID-19 vaccine

ROVI informed the market (by communication of privileged information dated April 29 and registration number 858) that it is reinforcing its collaboration in the filling and finishing of Moderna’s COVID-19 vaccine by increasing its current filling and finishing capacity. For this, a new industrial investment will be carried out in the facilities that the ROVI Group has in Madrid (Spain).

This investment consists of the installation of two new production lines and equipment for formulation, filling, automatic visual inspection, labelling and packaging that will provide additional capacity for filling and finishing the vials of the COVID-19 vaccine with the objective of supplying markets outside the US. These lines, located at ROVI’s facilities in San Sebastian de los Reyes (Madrid), will begin to be operational from the fourth quarter of 2021 and fully operational in the first half of 2022 and will allow more than doubling the filling capacity and finishing of the vials in these facilities.

Likewise, ROVI informed the market (by communication of privileged information dated April 12, 2021 and registration number 837) that it will strengthen its collaboration for the manufacture of the active principle of Moderna’s vaccine against COVID-19. For this, a new industrial investment will be carried out in the facilities that the ROVI Group has in Granada (Spain).

This investment consists of the installation of a new line to support the production phases of the active ingredient of the mRNA vaccine, which are prior to and additional to the work of formulating, filling and finishing the same. This line would have a production capacity of the equivalent of more than 100 million doses per year and is expected to start supplying markets outside the US in the third quarter of 2021.

Growth forecast

In February 2021, ROVI announced that it expected operating income for 2021 to increase between 20% and 30%, including the production of Moderna’s vaccine against COVID-19. As a result of the expansion of the collaboration between ROVI and Moderna, in 2021 ROVI expects to reach the upper band of the range.

The Company expects to continue growing above the growth rate of pharmaceutical spending in Spain in the first three months of 2021, which amounted to -5.0%, according to figures published by the Ministry of Health, Consumption and Social Welfare.

However, given the uncertainties associated with the evolution of the COVID-19 pandemic (which ROVI will continue to monitor closely), it is not yet possible to accurately assess the impact that the pandemic will have in this year.

ROVI expects its growth engines to be Bemiparin, distribution licensing agreements, such as Neparvis ^® and Volutsa ^®, the enoxaparin biosimilar, the existing portfolio of specialty pharmaceutical products, the agreement with Moderna and the new contracts in the third-party manufacturing area.