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ROVI: MESSAGES FROM THE INVESTOR DAY (ANÁLISIS BANCO SABADELL)

Highlights from the Investor Day held today:
 2023 Estimates: The group reiterated its target of doubling operating revenues and multiplying recurring EBITDA by 2.5x in 2023 vs. 2018 (> € 600 M in sales and € 160 M in EBITDA ex R+D), in line with our estimates (consensus figures unavailable).
 Toll manufacturing (~22% sales 2020 BS(e)): The company confirmed it expects growth to range between +20%/+25% in 2020 (vs. +35% BS(e)) and between +10% and +15% in 2021 (vs. +6% BS(e)), including activities linked with Moderna and excluding the manufacturing of its vaccine. It foresees an annual growth rate for sterile syringes >10% until 2023.
 Agreement with Moderna (18% T.P.): Rovi confirmed it could initiate the filling and finsishing of the mRNA-1273 vaccine starting in the 1Q’21 with a capacity of ~600 M doses (vs. our annual sales estimate of 550 M doses). Moderna has already closed the sale of 80 M doses in the EU with the option of additional 60 M, 20 M in Canada and 50 M doses in Japan. As for the letter of intent signed between Moderna and France’s Recipharm for the filling and packaging of Moderna’s vaccine in Europe (announced this morning), ROVI views reasonable Moderna’s wish of a back-up plant of its own in the event of any contingencies. In any case, it does not believe that Recipharm will have its plants operating in 2021.
 Doria (phase III; Risperidone ISM, 17% of our T.P.). The company confirmed that it has already submitted the registration dossier to the FDA and that it expects the drug to start being commercialised in 2021 in Europe and 2022 in the US (in line BS(e)). As for Letrozol ISM (phase I; ISTM technology applied in the treatment of RH+ breast cancer), ROVI will meet with the regulator in 1Q’21 and will try to accelerate development into phase III based on the data on Doria. We do not include Letrozol ISM in our T.P., given the early stage of development of the drug (it would be rolled out in 2026 at the earliest in our estimates).
MARKET IMPACT
In short, positive (yet cautious) messages from the management team that strengthen the positive outlook for the company both in the short-term, with its enoxaparin biosimilar (~29% of sales 2021 BS(e)) and the agreement with Moderna (~18% of our T.P.), and in the long-term thanks to its product pipeline (Doria-Risperidone; 17% of our T.P. and Letrozol). In any event, the lack of relevant news and the stock’s recent brilliant performance (+70% vs. IBEX this year) would explain today’s market reaction (-2% vs. IBEX).