ROVI’s Earnings Call: Mixed Sentiment Amid Growth and Challenges

Laboratorios Farmaceuticos Rovi ((ES:ROVI)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for Laboratorios Farmaceuticos Rovi presented a mixed sentiment, reflecting both optimism and challenges. While the Specialty Pharma business and international expansion showcased robust growth, the overall revenue decline and a notable drop in CDMO sales posed significant challenges to profitability. Positive developments in research and development (R&D) and awarded aid offer a silver lining, yet financial hurdles in the CDMO segment and reduced profitability metrics remain concerning.

Specialty Pharma Business Growth

The Specialty Pharma segment of ROVI demonstrated impressive growth, with sales increasing by 13% to EUR 237.4 million in the first half of 2025. Notably, the Okedi monthly Risperidone ISM experienced a remarkable sales surge of 115% to EUR 26.9 million, while the Heparin division’s sales rose by 12% to EUR 135.2 million. This growth underscores the strong performance and strategic focus on this business area.

Technological Development and Innovation Center Aid

ROVI received a significant boost with a EUR 36.3 million award for the LAISOLID project from the Technological Development and Innovation Center. This funding will cover expenses from January 2023 to August 2026, supporting the company’s innovation and technological advancements.

International Expansion

ROVI’s international sales strategy is paying off, with sales outside Spain accounting for 55% of operating revenue in the first half of 2025. The enoxaparin biosimilar’s presence in 42 countries highlights the company’s successful global expansion efforts.

Positive R&D Developments

The company is making strides in its R&D efforts, advancing clinical trials for Letrozole SIE and quarterly Risperidone ISM. Positive results in Phase I trials and preparations for Phase III trials indicate promising future developments.

Overall Revenue Decline

Despite the successes in certain segments, ROVI faced a 4% decline in operating revenue, amounting to EUR 314.6 million in the first half of 2025. This downturn is primarily attributed to the weak performance in the contract development and manufacturing organization (CDMO) business.

CDMO Sales Drop

The CDMO segment experienced a significant sales drop of 35%, falling to EUR 77.2 million compared to the same period in 2024. This decline was driven by reduced revenues from Moderna and existing customers, posing a challenge to the company’s financial health.

EBITDA and Net Profit Decrease

ROVI reported a 6% decrease in EBITDA and a 10% drop in net profit for the first half of 2025 compared to the previous year. These declines reflect the financial pressures the company is facing, despite growth in other areas.

High R&D Expenses

R&D expenses surged by 38% to EUR 16.8 million, contributing to the overall decrease in profitability metrics. This increase highlights ROVI’s commitment to innovation, albeit at a cost to short-term profitability.

Forward-Looking Guidance

Looking ahead, ROVI reiterated its guidance for 2025, expecting operating revenue to decrease by a mid-single-digit percentage compared to 2024. Despite the 4% decline in overall operating revenue, the Specialty Pharma business is anticipated to continue its growth trajectory, driven by significant increases in Okedi and enoxaparin sales. The company remains focused on innovation and international expansion, particularly in the heparin division.

In summary, Laboratorios Farmaceuticos Rovi’s earnings call painted a picture of mixed fortunes. While the Specialty Pharma business and international expansion offer promising growth, challenges in the CDMO segment and decreased profitability metrics pose significant hurdles. The company’s commitment to R&D and technological innovation provides a hopeful outlook, yet financial challenges remain a critical area of concern.