Laboratorios Farmacéuticos ROVI: Ace Of Spain
Edison | Jul 12, 2017 05:57AM ET
Laboratorios Farmaceuticos ROVI (MC:ROVI), a profitable, speciality healthcare company, markets ~30 proprietary and in-licensed products across nine core franchises mainly in its domestic Spanish market. ROVI is at a major inflection point; its internally developed biosimilar enoxaparin could be first to launch in key European markets (launch expected end 2017), transforming the sales growth and operating margins of the business. ROVI has a strong presence in the Spanish heparin market (and select international markets through partners), where it has been manufacturing and marketing its flagship product Hibor (second-generation LMWH) since 1998. Other top-line drivers include further product in-licensing and the potential launch (2021) of Risperidone-ISM (schizophrenia). We value ROVI at €1.0bn (€20.1/share).
Biosimilar enoxaparin key near-term growth driver
ROVI could be first to launch a biosimilar enoxaparin (low molecular weight heparin [LMWH] for anti-coagulant indications) into major European markets. Originator Sanofi (PA:SASY) reported €1.03bn enoxaparin (Lovenox/Clexane) sales in Europe in 2016. ROVI‘s strengths lie in its long-established expertise and technical proficiency in developing, marketing and manufacturing the LMWH bemiparin (Hibor). Its operations are fully vertically integrated lending to operational efficiencies from start to finish. We anticipate operating margin expansion for the group in the longer term (beyond 2019) as enoxaparin sales ramp up and forecast a 2019 operating margin of 12.0% from 10.7% in 2016.
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