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 half of 2021. Operating income in the first half of 2021 increased by 52%, reaching 290.1 million euros, mainly as a result of the strength of the third-party manufacturing business, which grew 172%, and the specialty pharmaceutical business, whose sales grew 25%. Total revenues increased by 52% to reach 290.6 million euros in the first half of 2021.

Sales of prescription pharmaceutical products increased 25% to 177.5 million euros, outperforming the market by more than 23 percentage points. According to the IQVIA consultancy, the innovative product market in Spain grew by 1.9% in the first half of 2021 compared to the first half of 2020.

For its part, sales of the heparin division (Low Molecular Weight Heparins (LMWH) and other heparins) increased by 26% to 131.4 million euros. Thus, heparin sales represented 45% of operating income in the first half of 2021, compared to 54% in the first half of 2020. Sales of Low Molecular Weight Heparins (LMWH) increased by 27% to reach 127.8 million euros.

Sales of Bemiparin, ROVI’s low molecular weight heparin (LMWH), had a positive performance in the first half of 2021, with a growth of 26% compared to the first half of 2020, reaching 65.1 million euros. International sales of Bemiparin increased by 58%, reaching 29.0 million euros, mainly due to (i) the increase in sales prices to some partners and wholesalers as a result of the increase in the price of the raw material of the LMWH; and (ii) a high concentration of purchase orders from the Russian and Chinese markets. This significant increase is specific to the first half of 2021 and ROVI expects international sales of Bemiparin to increase in the range of the second ten (that is, the ten between 10% and 20%) in 2021. Bemiparin sales in Spain (Hibor®) increased by 8% to 36.1 million euros in the first half 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 30% in the first half of 2021 until reaching 17.9 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 11%, to 7.8 million euros.

Likewise, manufacturing sales to third parties grew 172% in the first half of 2021, reaching 94.5 million euros, mainly due to (i) the recording of revenues related to the production of the COVID-19 vaccine, (ii) 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 (iii) the reorientation of the strategy of the manufacturing activities to third parties towards products of more value added.

ROVI expects that in 2021, manufacturing sales to third parties will increase between 2 and 2.5 times, including the production of the vaccine against COVID-19.

EBITDA increased 75% compared to the same period of the previous year, reaching 74.0 million euros in the first half of 2021, reflecting an increase in the EBITDA margin of 3.3 percentage points to 25.5%, from the 22.2% registered in the first half of 2020. Likewise, ROVI's net profit increased 72%, to 51.0 million euros.

Research and development (R&D) expenses increased by 10% compared to the same period of the previous year, reaching 11.9 million euros in the first half of 2021.These R&D expenditures are mainly linked to (i) 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) ; (ii) the development of Phase I of Letrozole ISM®; and (iii) the development of the new Risperidone ISM® formulation for a quarterly injection.

ROVI’s General Shareholders Meeting, at its meeting held on June 17, 2021, agreed to pay the shareholders a dividend of 0.3812 euros gross per share charged to the results of the year 2020, which represents an increase of 118% compared to the dividend paid out of the results of the 2019 financial year (0.1751 euros / share) and implies the distribution of approximately the 35% of the consolidated net profit for the year 2020 (compared to 25% of the consolidated net profit of 2019). This dividend was distributed on July 7, 2021.

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 revenues 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 May the company announced that in 2021 it expected to reach the high band of this range. With the visibility that the company has at this time, ROVI updates its operating income forecast for the year 2021 upwards from the high band of the range of 20% to 30% to the range between 35% and 40%.

The Company expects to continue growing above the growth rate of pharmaceutical spending in Spain in the first six months of 2021, which amounted to 3.6%, 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.