Laboratorios Farmacéuticos ROVI - COVID-19 stockpiling positive impact

Laboratorios Farmacéuticos ROVI (ROVI) reported Q120 operating revenue of €101.0m (+23% y-o-y), driven by strong growth both in the speciality pharmaceutical business (+24% to €88.2m) and in the toll manufacturing business (+19% to €12.7m). Top-line growth has, in part, benefited from COVID-19 related stockpiling across all divisions. As a result of operating leverage, EBITDA increased by 68% to €20.0m in Q120 reflecting a 530bp improvement vs Q119. Sales of low molecular weight heparin (LMWH) products (Becat and Hibor) increased by 43% to €53.9m; sales have benefited from increased heparin use for hospitalised COVID-19 patients during the quarter and this could be a source of further uplift in subsequent quarters. ROVI is maintaining FY20 guidance of mid-single-digit growth in total operating revenues, but in light of these results, this seems conservative. The MAA for DORIA has now been filed with the EMA (January 2020); we forecast launch in 2021. We value ROVI at €1.53bn.