Laboratorios Farmaceuticos ROVI (MC:ROVI) reported FY17 operating revenue of €275.6m (+ 4%), driven by strong growth in the toll manufacturing business (+8%). The speciality pharmaceutical business grew 3%, within which biosimilar enoxaparin reported fledgling sales of €1.5m despite only being available in Germany since September 2017. This asset remains a key driver of top-line growth in the near term and operating profit growth in the medium term. The R&D pipeline progressed in 2017 with the long-acting DORIA (schizophrenia) and letrozole (breast cancer) having entered Phase III and Phase I clinical-stage development respectively. Our revised valuation is €0.96bn.
Biosimilar enoxaparin key top-line growth driver
ROVI is at a major inflection point. Its internally developed biosimilar enoxaparin (Enoxaparin Becat, EB) is the first to launch into a major European market. ROVI reported €1.5m in EB sales (€1m of which were booked in December alone in Germany). Guidance of €20-30m for 2018 EB sales seems reasonable and acceleration of sales in 2018 and 2019 will depend on growth in Germany and on launching in further European countries; we expect manufacturing capacity constraints to ease from H218 enabling further launches.
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