Today, Laboratorios Farmacéuticos Rovi, S.A. (BME: ROVI), a pan-European pharmaceutical company specialising and engaging in the research, development, contract manufacturing and marketing of small molecules and biological specialties, has announced its financial results for the first half of 2020. Operating revenue increased by 8% to 191.1 million euros in the first six months of the year, mainly driven by the strength of the specialty pharmaceutical business, where sales rose 4%, and the contract manufacturing business, which grew by 31%. Total revenue increased by 8% to 191.7 million euros.

Sales of prescription-based pharmaceuticals rose 7% to 141.7 million euros, outperforming the market by three percentage points. According to the consulting company IQVIA, the innovative product market in Spain rose by 4% in the first half of 2020 in comparison with the same period of 2019.

In addition, sales of the  heparin franchise (low-molecular-weight heparins (LMWHs) and other heparins) increased 23% to 104.4 million euros. Thus, heparin sales represented 54% of operating revenue in the first half of 2020 compared to 48% in the first half of 2019. Sales of low-molecular-weight heparins (LMWHs) increased 24% to 101.0 million euros. Sales of the enoxaparin biosimilar rose 35% to 49.3 million euros.

Likewise, sales of bemiparin, ROVI’s low-molecular-weight heparin (LMWHs) showed a positive performance during the first half of 2020, with sales up 14% to 51.6 million euros. International sales of bemiparin increased by 88% to 18.3 million euros, due mainly to the increase in transfer prices to some partners as a result of the rise in LMWH raw material prices. ROVI expects international Bemiparin sales to increase at a high-teen rate in 2020.

ROVI increases sales of its prescription-based products and contract manufacturing

Sales of Neparvis®, a prescription-based product from the company Novartis indicated for the treatment of adult patients with symptomatic chronic heart failure and reduced ejection fraction, which ROVI has been distributing in Spain since December 2016, increased 43% in the first half of 2020, totalling 13.8 million euros.

Sales of Volutsa®, a prescription-based product from the company Astellas Pharma indicated for the treatment of moderate to severe storage symptoms and voiding symptoms associated with benign prostatic hyperplasia –distributed by ROVI in Spain since February 2015–, increased by 9% to 7 million euros.

Sales of Vytorin®, Orvatez® and Absorcol®, prescription-based products from Merck Sharp & Dohme (“MSD”) indicated as adjunctive therapy to diet in patients with hypercholesterolemia, increased by 4% to 15.9 million euros in the first half of 2020, in spite of the fact that the price of Orvatez® was reduced by 30% in the first half of 2020, due to the entrance of hybrid products formulated with ezetimibe and atorvastatine.

Likewise, contract manufacturing sales rose 31% in comparison with the same period of the preceding year, totalling 34.8 million euros in the first half of 2020, driven mainly by the repositioning of the strategy of the contract manufacturing activity towards products with  higher value-added

EBITDA grew 60% in the first half of 2020 in comparison with the same period of 2019, totalling 42.4 million euros, reflecting an increase of 7.3 percentage points in the EBITDA margin, which rose to 22.2% from the 14% recorded in the same period of 2019. Likewise, ROVI’s net profit rose 83% to 29.6 million euros.

Research and development expenses (R&D) were 10.8 million euros. These  R&D expenses were mainly related to (i) the preparation of the Doria® registration dossier to be submitted to the U.S. Food and Drug Administration (FDA); (ii) the development of the Letrozole-ISM® Phase I trial; and (iii) the development of a new formulation of Risperidone-ISM® for a three-monthly injection.

In February 2020, ROVI announced that it would put a motion to the Ordinary General Shareholders Meeting for payment of a dividend of 0.1751 euros per share entitled to receive it, charged to the 2019 profit, which would mean an increase of 119% on the dividend paid out of the 2018 profit (0.0798 euros/share) and represent a pay-out of approximately a 25% of the consolidated net profit. In May 2020, as a consequence of the COVID-19 crisis, in accordance with Royal Decree 8/2020 of 17 March, the Board of Directors of ROVI decided to postpone the 2020 Ordinary General Shareholders Meeting and reviewed its dividend proposal. In this respect, the Board decided to fix the date of its Ordinary General Shareholders’ Meeting for October 2020 and maintain the proposed dividend of 0.1751 euros per shares which had been announced to the market in February 2020.

ROVI and Moderna announce collaboration for the manufacture outside the United States of the fill-finish of Moderna’s COVID19 vaccine candidate

On 9 July, 2020, ROVI informed the market of the collaboration with Moderna, Inc. (Nasdaq: MRNA), a clinical stage biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines to create a new generation of transformative medicines, for large-scale, commercial fill-finish manufacturing of Moderna’s mRNA COVID-19 vaccine candidate (mRNA-1273) at ROVI’s facility in Madrid, Spain.

As part of the agreement, ROVI will provide vial filling and packaging capacity by procuring a new production line and equipment for compounding, filling, automatic visual inspection and labelling to support production of hundreds of millions of doses of the vaccine candidate intended, in principle, to supply markets outside the U.S. starting in early 2021. ROVI will also hire additional staffing required to support manufacturing operations and production.

ROVI informs on the impact of COVID-19 on the company’s activities

On 2 April, 2020, ROVI informed the market that since the beginning of the spread of COVID-19, the company has been executing the contingency plans necessary to guarantee the health and safety of its employees and those who work with it, as well as to ensure the continuity of the business and fulfil its responsibility to supply medicines to the hospitals of Spain and Europe.

To this end, the company has adopted a number of initiatives in line with the recommendations made by the authorities. Among them, we highlight the fact that ROVI has reduced the processes that must be performed in person at its facilities to a minimum. Thus, a significant part of the workforce is working from a distance. In the cases where home working is not possible, particularly at the manufacturing plants, ROVI is keeping all its production activities at a reasonably normal level of activity, with the relevant safety measures, in order to ensure that its medicines continue to be available to patients during the health crisis.

ROVI considers it extremely important to keep its manufacturing plants in operation in order to fulfil its responsibility as a pharmaceutical manufacturer. Therefore, the company wishes to acknowledge the commitment and responsibility shown by those of its employees who are physically present at work every day and, for these employees, has approved a bonus of 20% of their salary for the duration of the State of Alarm decreed by the Spanish government. Likewise, in order to work with the greatest safety and maintain the continuity of the production activities, ROVI recommends avoiding the use of public transport for travelling to the plants and assumes the cost of private transport and parking spaces for those employees who so require.

ROVI’s sales behaved in line with company’s expectations in the first half of 2020. As a consequence, the company confirms the growth forecasts reported previously for 2020, which placed growth in operating revenue in mid-single-digit figures.  Notwithstanding, given the uncertainties associated to the development of the current situation (which ROVI will continue to monitor closely), it is not yet possible to make a precise assessment of the impact that the pandemic will have on the current year.

ROVI is continuing with its transformation process and the execution of its strategic plan. To date, the impact of the health crisis has not changed the Group’s plans. Said strategic plan focuses on the expansion of its enoxaparin biosimilar, with which ROVI aspires to become a benchmark player in the low-molecular-weight heparin sub-market, and Doria® and Letrozole®, both of which are candidates that validate its extended-release drug delivery system, ISM®.

ROVI is also contributing to the provision of new solutions that help to improve the health situation of society overall and has taken the necessary steps to donate a million surgical masks and a thousand special protection suits to the Ministry of Health, Consumer Affairs and Social Welfare, taking account of the difficulties that the National Health System is having in accessing individual protection equipment at the present time. With this contribution, ROVI wishes to assist in the indispensable work carried out by the health professionals who are working nonstop to combat the COVID-19 pandemic in Spain.

ROVI wishes a swift recovery to all those affected by coronavirus and sends special recognition to the health professionals, the State security forces and all the other professionals who, in order to protect all of us, are on the battlefront in the fight against the virus. Likewise, ROVI would like to thank all its employees for their commitment, responsibility, involvement and determination, especially those who continue to travel to its work centres every day.

6.3     ROVI announces the commencement of the assessment process to obtain marketing authorisation for Doria® in the European Union

On 31 January, 2020, ROVI informed the market that, after the conclusion of the validation phase, the European health authorities have commenced the assessment process to grant marketing authorisation for Doria®, a long-acting anti-psychotic injection for the treatment of schizophrenia, based on the ISM® technology patented by ROVI, in the European Union (EU).

ROVI filed its application for marketing authorisation for Doria® with the European health authorities, the European Medicines Agency (EMA), through the Centralised Procedure on 27 December, 2019. After passing the validation phase satisfactorily, the dossier was admitted for evaluation on 30 January, 2020. It is forecast that the assessment phase of the Centralised Procedure used by the Company to register this medicine in the EU may take around one year as of validation. It should, however, be noted that the assessment process is subject to interruptions and delays in the event that the European health authorities require additional information. Likewise, mention should be made of the fact that the outcome of the registration process (which may be positive or negative) cannot be known until it has concluded.

ROVI will continue to provide information on the milestones deemed significant in this authorisation as the calendar for registration of the medicine in the European Union advances, as well as the registration of the same medicine with the U.S. Food and Drug Administration (FDA), which it is planned to commence in the second half of 2020.

Growth forecasts

For 2020, ROVI expects a mid-single-digit growth rate for the operating revenue The company expects to continue growing in line with the growth rate of pharmaceutical spending in Spain in the first five months of 2020, which was 3.4%, according to the figures published by the Ministry of Health, Consumer Affairs and Social Welfare.

Notwithstanding, given the uncertainties associated to the development of the COVID-19 pandemic (which ROVI will continue to monitor closely), it is not yet possible to make a precise assessment of the impact that the pandemic will have on the next year. Likewise, the potential increase in the discounts to the National Health Service as a consequence of COVID-19 could affect the materialisation of these growth forecasts.

ROVI expects its growth drivers to be bemiparin, the latest license agreements, such as Neparvis® and Volutsa®, the enoxaparin biosimilar, its existing portfolio of specialty pharmaceuticals, the new products acquired recently (Falithrom® and Polaramine®) and the new contracts in the contract manufacturing area.

Likewise, ROVI ceased to distribute the products of Norgine B.V. (Sintrom®, Salagen®, Cordiplast® and Estraderm®) at the end of 2019, meaning that no sales of these products will be recorded in 2020. In 2019, sales of the Norgine B.V. products were 14.5 million euros.