Strength in heparins; next up DORIA

Laboratorios Farmacéuticos ROVI 6 March 2019 Update
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Laboratorios Farmacéuticos ROVI

Strength in heparins; next up DORIA

FY18 results

Pharma & biotech

6 March 2019

Price

€18.35

Market cap

€1,029m

$1.14/€

Net cash (€m) at 31 December 2018

61.3

Shares in issue

56.1m

Free float

32%

Code

ROVI

Primary exchange

MADRID

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(1.6)

5.8

8.6

Rel (local)

(4.6)

3.5

11.8

52-week high/low

€19.4

€14.8

Business description

Laboratorios Farmacéuticos ROVI is a fully integrated Spanish speciality pharmaceutical company involved in developing, in-licensing, manufacturing and marketing small molecule and speciality biologic drugs, with particular expertise in low molecular weight heparin.

Next events

PRISMA-3 DORIA data

Q219

DORIA US NDA filing

H219

Enoxaparin biosimilar launch in select European countries

Ongoing

Analysts

Dr Susie Jana

+44 (0)20 3077 5700

Dr Sean Conroy

+44 (0)20 3681 2534

Laboratorios Farmacéuticos ROVI is a research client of Edison Investment Research Limited

Laboratorios Farmacéuticos ROVI has reported strong revenue growth in FY18, with total revenues up 10% (€304.8m) beating guidance for the year. Its low molecular weight heparin (LMWH) franchise consisting of Becat (enoxaparin biosimilar) and flagship drug Hibor (bemiparin) reported sales of €121.5m (+42%). Hibor sales in Spain rose 14.7%, outperforming our 4% expectation. Becat (enoxaparin biosimilar) reported sales of €30.2m; its performance benefitted in 2018 from the ongoing roll-out in several European countries. Gross proceeds of the €88m capital raise will be used partly to fund the acquisition or in-licensing of additional products and sustain R&D efforts; of importance is Phase III DORIA (LA risperidone for schizophrenia) and data are anticipated in Q219. We value ROVI at €1.23bn.

Year end

Revenue* (€m)

PBT**
(€m)

EPS**
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/17

277.4

20.3

0.40

0.12

45.9

0.7

12/18

304.8

19.3

0.39

0.08

47.1

0.4

12/19e

335.4

26.9

0.49

0.10

37.4

0.5

12/20e

363.2

46.5

0.83

0.19

22.1

1.0

Note: *Total revenue including government grants. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Strong LMWH franchise

Flagship product Hibor (bemiparin) sales grew to €91.3m (+9%) with sales in Spain up to €74.2m (+14.7%), more than compensating for a decline in international sales to €22.7m (-5%). Proprietary product Becat (enoxaparin biosimilar) is now available in eight European countries and is directly marketed by ROVI in Germany, the UK, Italy and Spain. ROVI’s commercial strategy for Becat is to market the product in Europe itself and internationally via out-licensing deals (agreements are now in place with Sandoz and Hikma). ROVI has grown its pharmaceutical offering by acquiring three additional products and has committed to broadening its portfolio further; revenue contribution from these in 2019 onwards should offset declines in the mature product portfolio.

DORIA Phase III top-line results next

PRISMA-3 data for DORIA (long-acting risperidone injection) is an important near-term inflection point; results are due in Q219 (trial has completed). The schizophrenia market is vast and growing steadily. We believe DORIA’s profile will provide it with a 5% share of the long-acting injectable (LAI) market and drive peak sales of US$412m (US and Europe) in 2027. DORIA is a high gross-margin asset (85–95%) and will be the critical long-term driver of operating margins.

Valuation: €1.23bn or €21.9 per share

Our revised valuation of ROVI is €1.23bn or €21.9 per share, up from €1.13bn. We have rolled our model forward and updated for net cash of €61.3m at 31 December 2018. We have made changes to our sales forecasts in 2019, mainly increasing Hibor in Spain and Becat, offset by some minor downward tweaks to mature products. Gross proceeds of €88m from a capital raise in October 2018 will ensure near-term costs are covered and, more importantly, provide an increase in liquidity to the stock with the improvement in free float.

FY18: Strength in heparins

ROVI reported operating revenue of €303.2m for FY18 (+10.0% y-o-y), driven by strong growth in the speciality pharmaceutical business (+15.8% to €248.6m), offsetting declines in the toll manufacturing business (-10.6% to €54.6m). The speciality pharmaceutical business consists of approximately 40 marketed products across nine core franchises. Total revenues (including other operating income of €1.6m) grew 9.9% to €304.8m in FY18.

Revenue growth led by LMWH franchise

ROVI reported strong growth in its internally developed LMWH franchise (anticoagulants), which consists of its flagship, second-generation LMWH Hibor (bemiparin) and Becat, a biosimilar of enoxaparin (first-generation LMWH). Since launching Becat in Europe (end 2017), ROVI has strengthened its franchise with both Hibor and Becat growing simultaneously in Spain, and will build on over 20 years of experience in the LMWH market as it looks to evolve into one of the top players in the LVMH market.

Becat has experienced a strong uptake in sales (€30.2m) in FY18, beating guidance of €20–30m for the year. The product has received approval in 24 EU countries and is available in eight, including the core EU5 (UK, Germany, France, Spain and Italy). Becat launched in France in September 2018 through an agreement with Biogaran, a leading player in the French biosimilar market; ROVI expects to be directly marketing in France by end Q119. We continue to forecast total peak sales of €160.2m for Becat, which includes Europe and the international opportunity ex-US. Exhibit 1 highlights the sales trajectory across the last five quarters. ROVI is no longer providing guidance for FY19 Becat sales expectations; we forecast Becat annual sales to grow by 80% to €54.4m in 2019 based on the strong quarterly growth seen in H218.

Exhibit 1: Becat sales ramp since launch

Source: ROVI, Edison Investment Research

Sales of Hibor in Spain grew to €67.4m in FY18 (+14.7%), which is better than we had expected. In Spain, Hibor has partially benefited from the launch of Becat; Hibor is administered once a day vs Becat twice a day and Hibor has been placed on preferred formulary positioning. Furthermore, availability of enoxaparin biosimilars has translated to reduced detailing by Sanofi for its branded enoxaparin (Clexane) in Spain. Hibor sales in international markets declined 5% (€23.8m), reflecting shifts in market dynamics caused by the launch of Becat (enoxaparin biosimilar) in Europe and the impact of exchange rates (particularly the TRL/euro rate). We forecast Hibor sales of €96.8m in 2019.

In the broader portfolio of in-licensed products, growth in Neparvis (heart failure, in-licensed from Novartis) and Volutsa (benign prostate hyperplasia, in-licensed from Astellas) sales offset declines in the mature portfolio. The cholesterol franchise (Vytorin, Orvatez and Absorcol) faces challenging conditions as the active principle of these products (ezetimibe) went off-patent in Q218. ROVI has provided operating revenue guidance of high single-digit growth for 2019. We have increased our FY19 total revenue forecast to €335.4m from €322.0m (implying 10.6% y-o-y growth) from an increase in our expectation of Hibor and Becat, mitigating reducing the sales expectation of mature products.

Gross margins squeezed in the short term

In October 2018 ROVI raised gross proceeds of €88m from a capital raise that will be used to fund R&D efforts (DORIA Phase III and Letrozole ISM Phase I), ongoing marketing of Becat, and the in-licensing or acquisition of additional products. ROVI is a profit-generating company and the capital raise ensures these near-term costs are covered, importantly, it has also provided an increase in liquidity to the stock with an improvement in the free float. ROVI reported end-FY18 net cash at €61.3m (FY17 net debt at €2.5m) based on cash of €95.5m and debt of €34.2m (FY17: cash of €40.7m and debt of €43.2m).

ROVI reported gross profit of €176.2m (+5.4%) in FY18; we note a reduction of gross margins to 57.8% from 60.3% in FY17. This is a function of lower volumes in the higher-margin injectables business, Becat launches in several new markets and an increase in LMWH raw material prices (30% higher in 2018). Operating profit decreased to €17.5m in FY18 and operating profit margins declined to 5.7% FY18 (6.6% in FY17), reflecting higher R&D and SG&A expenses plus €1.1m non-recurring expense linked to compensating employees for a change in the working conditions at the Frost Iberica plant.

We believe investors should focus on longer-term margin growth prospects for the group. While ROVI reports pre-R&D metrics such as pre-R&D EBITDA, which helps to demonstrate the profitability (and growth) of the underlying business as it stands, fluctuations in R&D and SG&A costs are likely to vary as management looks to maximise return on internal investment by investing in R&D and SG&A as necessary, and should be seen as part and parcel of the business. We forecast an absolute 1.1pp improvement in operating margin from 10.7% in 2016 to 11.8% in 2020. Margins should ramp up beyond this as the operating leverage from enoxaparin sales starts to flow through to the P&L, whereas R&D levels will decrease to €22m pa in 2020–21.

ROVI has given guidance for R&D expenses (October 2017 DORIA presentation) in the region of €32m pa in 2018–19 and €22m in 2020 and 2021 to support clinical trials for Risperidone ISM and Letrozole ISM. Becat is a product of the R&D invested by ROVI and the ramp-up in sales of this enoxaparin biosimilar has positive longer-term implications for development, mainly through operational leverage.

In terms of operating margin, we believe that after the costs of the initial launch period for Becat are met (as ROVI invests in European selling infrastructure) and DORIA is launched in the US and European markets, longer-term total SG&A for the group will grow at a slower rate than sales, which should provide the operational leverage to enable operating margin expansion. Gross margin evolution should benefit from 2022 as the high-margin asset DORIA starts to contribute to the top line. In the nearer term, given management’s guidance the gross margin depression is likely to persist until 2020 (due to the inflation in LMWH raw materials). We have reduced our guidance for gross margin to 57.5% for 2019 (from 58.5%); however, our guidance for PBT has increased slightly to €26.9m (from €26.1m), driven by the 24.5% growth we now anticipate in revenues from the LMWH franchise (€151.2m).


2019 drivers: DORIA data and portfolio expansion

ROVI’s internally developed biosimilar of enoxaparin, Becat, is a key driver of near-term, top-line growth. With proceeds set aside from the capital raise to rejuvenate the product portfolio, ROVI has recently acquired rights to market three new products (Falithrom, Polaramine and Polaracrem), which had combined net sales of c €9m in 2017 (for a total cost of €22.5m).

Falithrom (phenprocoumon) is an oral antithrombotic from the same class of anticoagulants as Warfarin (vitamin K antagonists). Phenprocoumon is generically available, and a widely prescribed anticoagulant in Germany. In December 2018, ROVI acquired marketing rights in Germany from Hexal AG (a Sandoz subsidiary) for €9m. Management has guided that in-market sales of Falithrom (Germany) totalled €3.5m in 2017; we would expect that with ROVI’s current LMWH anticoagulant franchise (Hibor and Becat), and its growing foothold in Germany, it should be able to leverage its existing sales infrastructure to maintain a similar level of sales once the marketing authorisation has been transferred.

In February ROVI announced that it has acquired certain rights to Merck Sharp & Dohme’s (MSD) antihistamine product line of dexchlorpheniramine maleate formulations (for €13.5m), namely, marketing and distribution rights to oral and iv formulations (Polaramine) and topical formulations (Polaracrem) in Spain, and iv formulations (Polaramine) in France. Management has guided that 2017 sales were $6.5m for these two products; given the seasonality of antihistamine usage, we would expect a cyclicality in reported sales by quarter.

DORIA Phase III data expected in Q219

ROVI’s R&D focus is on its proprietary ISM technology, which centres on developing novel, long-acting (once a month or once every three months) formulations of approved drugs. Assets include DORIA ISM (Phase III schizophrenia) and Letrozole ISM (Phase I breast cancer). DORIA is a fast onset of action LAI version of risperidone (off-patent). As well as rapid onset of action, the key advantages are that there is no need for a loading dose or oral supplementation. The schizophrenia market is vast and growing steadily. We believe DORIA’s profile will provide it with a 5% share of the long-acting injectable (LAI) market and drive peak sales of US$411m (US and Europe) in 2027. DORIA is a high gross margin asset (85–95%) and will be the critical long-term driver of operating margins. ROVI expects to present PRISMA-3 DORIA data in Q219 and file the US NDA in H219.

Exhibit 2: Interview with Javier López-Belmonte, vice president and chief financial officer

Source: Edison

Valuation

Our revised valuation of ROVI is €1.23bn or €21.9 per share, from €1.13bn. We have rolled forward our model, reflected the current FX spot ($1.14/€) and updated for net cash of €61.3m at 31 December 2018. We have tweaked up our Hibor and Becat sales forecasts for 2019 and 2020, and lowered expectations for the mature pipeline. We value DORIA US and EU using a standalone NPV calculation (Exhibit 5) and derive value for the rest of the business by using a DCF of our sales and P&L model excluding DORIA (Exhibit 4). Compared to ROVI’s current portfolio of drugs and footprint, the US opportunity for DORIA is large and a key valuation driver, accounting for 17.7% of our valuation (EU DORIA accounts for 10.4%).

Exhibit 3: ROVI sum-of-the-parts valuation

Value (€m)

Value per share (€)

DCF of base business

880.4

15.7

rNPV of DORIA

344.8

6.2

Valuation

1,225.2

21.9

Source: Edison Investment Research

Exhibit 4: Three-stage DCF valuation of base business (excludes DORIA cash flows)

€m

Sum of for DCF for forecast period to 2025

286

Sum of DCF for growth 2026 to 2030 (transition period)

159

Terminal value

375

Enterprise value

819

Net cash at 31 December 2018

61.3

Value of equity of base business

880.4

Value per share of base business (€)

15.7

Discount rate

10%

Terminal growth rate

2%

Number of shares outstanding (m)

56.07

Sum of for DCF for forecast period to 2025

Sum of DCF for growth 2026 to 2030 (transition period)

Terminal value

Enterprise value

Net cash at 31 December 2018

Value of equity of base business

Value per share of base business (€)

Discount rate

Terminal growth rate

Number of shares outstanding (m)

€m

286

159

375

819

61.3

880.4

15.7

10%

2%

56.07

Source: Edison Investment Research.

Exhibit 5: DORIA NPV

Indication

Launch

Peak sales ($m)

NPV (€m)

Probability

rNPV
(€m)

rNPV per share (€)

NPV DORIA US

Schizophrenia

2022

236

296.4

75%

217.2

3.9

NPV DORIA Europe

Schizophrenia

2022

176

178.1

75%

127.6

2.3

Total

474.5

75%

344.8

6.2

Source: Edison Investment Research

Exhibit 6: Financial summary

Accounts: IFRS, Yr end: December, EUR: Millions

 

2015A

2016A

2017A

2018A

2019E

2020E

Hibor revenue

 

75.1

79.7

83.9

91.3

96.8

99.4

Enoxaparin revenue

 

0.0

0.0

1.5

30.2

54.4

70.8

Other (Pharma & Manufacturing)

 

170.9

185.5

192.1

183.3

184.2

193.0

Total revenues

 

246.0

265.2

277.4

304.8

335.4

363.2

Cost of sales

 

(97.1)

(112.0)

(110.2)

(128.6)

(142.5)

(154.4)

Gross profit

 

148.9

153.1

167.2

176.2

192.9

208.8

Gross margin %

 

60.5%

57.8%

60.3%

57.8%

57.5%

57.5%

SG&A (expenses)

 

(101.7)

(101.9)

(108.5)

(113.2)

(123.9)

(129.3)

R&D costs

 

(16.5)

(17.5)

(28.3)

(32.4)

(32.0)

(22.0)

Other income/(expense)

 

1.0

5.6

(0.6)

(1.1)

0.0

0.0

EBITDA (reported)

 

31.8

39.3

29.9

29.5

36.9

57.5

Depreciation and amortisation

 

(10.0)

(11.0)

(11.5)

(12.0)

(14.5)

(14.8)

Normalised Operating Income

 

23.8

30.7

21.2

20.1

26.8

46.6

Reported Operating Income

 

21.8

28.3

18.4

17.5

22.4

42.8

Operating Margin %

 

8.9%

10.7%

6.6%

5.7%

6.7%

11.8%

Finance income/(expense)

 

(0.9)

(0.5)

(0.9)

(0.7)

0.1

(0.1)

Exceptionals and adjustments

 

0.0

0.0

0.0

0.0

0.0

0.0

Normalised PBT

 

22.9

30.3

20.3

19.3

26.9

46.5

Reported PBT

 

20.9

27.9

17.5

16.7

22.5

42.7

Income tax expense (includes exceptionals)

 

(1.1)

(1.8)

(0.3)

1.2

(1.1)

(2.4)

Normalised net income

 

21.8

28.5

20.0

20.6

25.8

44.1

Reported net income

 

19.8

26.1

17.2

17.9

21.4

40.3

Basic average number of shares, m

 

49.5

49.0

50.0

53.0

53.0

53.0

Basic EPS (€)

 

0.40

0.53

0.34

0.34

0.40

0.76

Normalised EPS (€)

 

0.44

0.58

0.40

0.39

0.49

0.83

Dividend per share (€)

 

0.14

0.18

0.12

0.08

0.10

0.19

 

 

 

 

 

 

 

 

Balance sheet

 

2015A

2016A

2017A

2018A

2019E

2020E

Property, plant and equipment

 

81.8

82.8

89.1

95.8

103.8

112.4

Goodwill

 

0.0

0.0

0.0

0.0

0.0

0.0

Intangible assets

 

18.9

24.9

27.1

34.7

30.2

26.4

Other non-current assets

 

9.1

13.1

14.1

18.2

18.2

18.1

Total non-current assets

 

109.8

120.8

130.2

148.7

152.2

156.9

Cash and equivalents

 

29.3

41.4

40.7

95.5

77.3

78.0

Inventories

 

63.9

67.4

75.5

94.9

117.2

126.9

Trade and other receivables

 

57.0

53.8

49.7

60.2

59.7

59.7

Other current assets

 

3.9

4.5

2.2

3.5

3.5

3.5

Total current assets

 

154.1

167.1

168.2

254.0

257.6

268.0

Non-current loans and borrowings

 

32.6

20.8

27.0

16.6

16.6

12.7

Other non-current liabilities

 

7.2

7.2

6.4

11.1

10.6

10.0

Total non-current liabilities

 

39.8

28.0

33.5

27.7

27.2

22.7

Trade and other payables

 

45.7

59.9

52.9

68.2

60.4

63.8

Current loans and borrowings

 

10.1

13.0

16.2

17.6

17.3

3.9

Other current liabilities

 

3.3

3.6

4.1

1.7

1.7

1.7

Total current liabilities

 

59.2

76.4

73.2

87.5

79.5

69.4

Equity attributable to company

 

164.8

183.4

191.7

287.5

303.2

332.8

 

 

 

 

 

 

 

 

Cashflow statement

 

2015A

2016A

2017A

2018A

2019E

2020E

Profit before tax

 

20.9

27.9

17.5

16.7

22.5

42.7

Depreciation and amortisation

 

10.0

11.0

11.5

12.0

14.5

14.8

Share based payments

 

0.0

0.0

0.0

0.0

0.0

0.0

Other adjustments

 

(1.1)

(2.7)

(1.2)

0.7

(0.1)

0.1

Movements in working capital

 

2.3

12.7

(9.8)

(24.4)

(30.1)

(6.9)

Interest paid / received

 

(0.6)

0.0

0.0

0.0

(0.9)

(0.9)

Income taxes paid

 

(2.0)

(3.4)

0.1

(3.1)

(1.1)

(2.4)

Cash from operations (CFO)

 

29.4

45.5

18.0

8.5

4.8

47.4

Capex

 

(19.9)

(18.1)

(19.9)

(26.5)

(18.1)

(19.5)

Acquisitions & disposals net

 

0.0

0.0

0.0

0.0

0.0

0.0

Other investing activities

 

0.6

1.7

0.7

0.1

1.0

0.8

Cash used in investing activities (CFIA)

 

(19.3)

(16.3)

(19.2)

(26.2)

(17.0)

(18.7)

Net proceeds from issue of shares

 

(5.1)

(0.5)

0.5

88.0

0.0

0.0

Movements in debt

 

5.9

(9.7)

9.0

(9.2)

(0.3)

(17.3)

Other financing activities

 

(8.3)

(6.9)

(9.0)

(6.0)

(5.6)

(10.6)

Cash from financing activities (CFF)

 

(7.6)

(17.1)

0.5

72.5

(6.0)

(27.9)

Cash and equivalents at beginning of period

 

26.7

29.3

41.4

40.7

95.5

77.3

Increase/(decrease) in cash and equivalents

 

2.6

12.1

(0.7)

54.8

(18.2)

0.7

Cash and equivalents at end of period

 

29.3

41.4

40.7

95.5

77.3

78.0

Net (debt) cash

 

(13.5)

7.6

(2.5)

61.3

43.4

61.4

Source: Laboratorios Farmacéuticos ROVI accounts, Edison Investment Research


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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Laboratorios Farmacéuticos ROVI and prepared and issued by Edison, in consideration of a fee payable by Laboratorios Farmacéuticos ROVI. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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