ROVI: STRATEGIC PLAN THROUGH 2023 (ANÃLISIS BANCO SABADELL)
From the Investor Day held today, we stress its target of doubling operating revenues and multiplying recurrent EBITDA (pre R&D) by 2.5x in 2023 vs. 2018, meaning > € 600M in sales and € 160 M in EBITDA. However, these figures are +38% and +46% above our estimates.Our estimates do not include Doria, the key to growth going forward (Risperidone phase III for schizophrenia based on its ISM technology where we foresee ~ € 350 M of peak sales in 2026), assuming 95% chances of success and a valuation of € 358 M (€ 6.40/sh., ~28% of the T.P.), the regulatory approval of which is still pending (expected in 2020). If we were to exclude it from our estimates, we would obtain € 587 M and € 147 M of sales and EBITDA in 2023, only -2% and -8% below the company’s estimates. However, the consensus expectations only include 2022, standing at ~486 M (vs. € 440 M BS(e) excluding Doria), and thus, if included we believe they would be very much in line with Rovi’s targets.
Positive messages were conveyed at the Investor Day and in line with the previous strategy that confirm the company’s excellent prospects in the short-term with its enoxaparin biosimilar (~24% sales 2020 BS(e)) and in the long-term with Doria-Risperidone (€ 350 M peak sales BS(e)). On the negative side, we believe that this is already priced in following its good recent performance (+17% vs. IBEX in 1 month), the ratios at which it is trading (22x EV/EBITDA’20 and ~30x P/E), and the lack of upside to our T.P. (-8%) even including Doria. We maintain SELL.
Laboratorios Farmaceuticos Rovi is engaged in the sale of its own pharmaceutical products and the distribution of other products for which it holds licenses granted by other laboratories for specific periods, in accordance with the terms and conditions contained in the agreements entered into with said laboratories.
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