ROVI scores a Phoenix windfall but faces German headwinds on Okedi

The CDMO acquisition and improved heparin outlook frame a quarter where one-off gains mask an otherwise cautious guidance.

ROVI.MC · Earnings Call · 2026-07-23

Phoenix and the CDMO engine

The headline numbers for Laboratorios Farmaceuticos Rovi’s first half of 2026 are flattered by a one-time bargain purchase gain. Total revenue rose 13% to EUR 357 million, but the real story is the acquisition of the Phoenix injectable manufacturing facility from Bristol Myers Squibb, completed on April 1. As CFO Javier López-Belmonte put it: “we completed the acquisition of the Phoenix manufacturing facility on April 1. As a result of the preliminary purchase price allocation exercise, we recognized a EUR 62.4 million bargain purchase gain or badwill.” — Javier López-Belmonte Encina, Executive, likely CFO or senior finance role · 2026-07-23 That badwill lifted EBITDA by 85% to EUR 121.2 million, but excluding it, EBITDA fell 10% to EUR 58.8 million. The underlying growth engine is ROIS Phoenix being integrated into the CDMO network, with the business posting a 38% revenue increase to EUR 106.3 million in the half. BMS contributed roughly 13% of CDMO revenue, and management confirmed a baseline of at least USD 50 million per year under the take-or-pay agreement: “the agreement, which is at least a take-or-pay agreement, it's at least USD 50 million revenue per year coming from BMS.” — Javier López-Belmonte Encina, Executive, likely CFO or senior finance role · 2026-07-23 The question now is how quickly the remaining lines at Phoenix and the existing Spanish aseptic capacity can be filled. Javier remained optimistic about demand but acknowledged a lengthy qualification cycle: "new projects typically involve lengthy evaluation and assessment and then qualification and decision-making process."

Heparin: a healing wound

The Low molecular weight heparins franchise, which accounts for ~38% of operating revenue, saw sales decline 5% in the half, but the second quarter delivered a notable recovery in international bemiparin, up 52% year-over-year. This improvement prompted management to upgrade the full-year guidance from a high-single-digit decline to a mid-single-digit decline. Juan Encina explained: “we have revised our estimates. And now we expect low molecular weight heparins sales to decline by a mid-single-digit percentage compared with our previous expectations of high single-digit declines.” — Juan Encina, Executive, likely CEO or similar senior management · 2026-07-23 The pricing environment remains competitive—"raw material prices" continue to trend downward, though nearing a floor. The ongoing vertical integration via Glicopepton is the strategic answer to Chinese competitors and to protect margins. This is a business that has suffered from inventory destocking by partners and aggressive Chinese pricing, but the underlying volume stability and the recovery in Q2 suggest the worst may be behind.

Okedi and the German overhang

Okedi remains a bright spot, with sales up 27% to EUR 34 million in the half. However, the company faces a new regulatory risk: the German health care reform that takes effect in 2027 could include Okedi in a reference price system. On the call, Juan Encina was candid:

When it comes to Okedi, we are right now assessing all the different scenarios, the inclusion in the German reference price system. And to be honest, at present, there is not that much visibility to really quantify precisely the final impact on pricing or revenues.
Juan Encina, Executive, likely CEO or similar senior management · 2026-07-23

German sales of Okedi were EUR 8.4 million in the half, roughly 36% of its revenue, so the exposure is limited but not trivial. The product's strong uptake across Europe and its differentiated clinical profile continue to support management's confidence in reaching EUR 100-200 million in peak sales, but the reform adds a layer of uncertainty for 2027.

ISM: building for the next decade

R&D spending nearly doubled to EUR 33.3 million as Rovi prepares for Phase III trials of Letrozole SIE (which received FDA IND clearance, with recruitment to start in Q3 2026) and advances Risperidone QUAR into Phase II. This is a deliberate investment in the ISM platform that management believes will be a major growth driver. The company is targeting superiority over existing therapies, which if successful could justify the heavy R&D outlay. The recent tax inspection that concluded without penalties and the recognition of deferred tax assets provide some financial clarity, though the associated nonrecurring costs and late-payment interest weighed on net financial cost. Financially, the company ended the half with a net cash position of EUR 22.5 million, a swing from net debt of EUR 21.9 million at year-end, driven by strong operating cash flow of EUR 94.3 million. Free cash flow soared to EUR 64.7 million, providing headroom for the ongoing CapEx program and dividend payout of 35%. The balance sheet is solid, but the heavy spending on R&D, capacity expansion, and the integration of Phoenix will keep the cash burn elevated in the near term.

Conclusion

The quarter is a mixed bag: the Phoenix acquisition and badwill provide a short-term boost, the heparin outlook is improving, and Okedi's growth continues. But the German reform casts a shadow over 2027, and the underlying profitability excluding one-offs has declined. The company is navigating a transition from a mature heparin business to a high-growth CDMO and ISM-driven specialty pharma model. The market will be watching for further CDMO contract wins and the execution of the clinical pipeline. As one analyst noted a few months ago about the CDMO contract delays, "we expect that for sure, next year the product will be approved. And I mean, that's the worst-case scenario" (prior Q&A, 2026-05-09). Rovi is betting on a future that is not yet fully priced.