Laboratorios Farmacéuticos ROVI - Investing for future growth

Laboratorios Farmacéuticos ROVI has reported a strong set of FY19 results, with all pillars of the business contributing to revenue growth of 26% and EBITDA margin expansion of 620bp to 16.0%. Total revenues of €382.5m were driven by its low molecular weight heparin (LMWH) franchise (Becat and Hibor) and toll manufacturing business. Becat (enoxaparin biosimilar) and flagship drug Hibor (bemiparin) reported combined sales of €177.6m (+46%). ROVI has consolidated its toll manufacturing units into a single entity; this division grew 20% in 2019 (€65.6m). Management has guided to mid-single digit growth in total operating revenues for 2020, which seems conservative. The MAA for DORIA has now been filed with the EMA (January 2020) and the NDA filing with the FDA is expected in H220. We value ROVI at €1.49bn.