This article first appeared on GuruFocus .
Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Total revenue increased by 13% to EUR 357 million in the first half of 2026.
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Operating revenue grew by 9% to EUR 344.2 million, driven by a 38% increase in the CDMO business.
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Gross profit rose by 21% to EUR 237.1 million, with a gross margin improvement of 6.5 percentage points.
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Successful acquisition of the Phoenix manufacturing facility in Arizona, strengthening the company's industrial footprint in the U.S.
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Strong cash generation with free cash flow increasing significantly to EUR 64.7 million, highlighting the company's ability to convert earnings into cash.
Negative Points
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Sales of the heparin franchise declined by 4% year-over-year, with low molecular weight heparin sales down 5%.
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EBITDA, excluding the impact of bad will, decreased by 10% to EUR 58.8 million.
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SG&A expenses increased by 28% to EUR 145 million, driven by personnel costs and non-recurring expenses.
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R&D expenses surged by 98% to EUR 33.3 million, impacting overall profitability.
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The company faces ongoing pricing pressure in the heparin sector, necessitating efficiency initiatives to mitigate impact.
Q & A Highlights
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Q: What is your assessment of the German healthcare reform starting in 2027? What proportion of your total revenue is exposed to increase rebate requirements? A: Juan Lopez-Velmonte, Chairman and CEO, stated that the impact of the German healthcare reform on Rovi's products is currently being assessed. The exposure is limited to sales in Germany, which amounted to EUR8.4 million in the first half of 2026. The company will continue to monitor developments and communicate any new information regarding the financial impact.
Q: Have generic heparin raw material prices fully stabilized? Do you maintain your 2026 guidance for the low molecular weight heparin franchise? A: Juan Lopez-Velmonte noted that heparin raw material prices have shown significant improvement and are stabilizing. The company has revised its guidance, now expecting a mid-single-digit percentage decline in low molecular weight heparin sales, compared to the previous high single-digit decline expectation.
Q: What progress is being made in securing new take-or-pay contracts to boost capacity utilization across your 11 Spanish aseptic lines and the upcoming Phoenix Optima line? A: Javier Lopez-Velmonte, Deputy Chairman and CFO, explained that optimizing capacity utilization is a key priority. The company is seeing strong commercial activity and customer interest, although new projects take time due to lengthy evaluation and decision-making processes. The focus is on completing the installation and validation of the Phoenix Optima line, with operational expectations between late 2027 and early 2028.
Q: What remains outstanding for PFS regulatory approval, and when is approval now expected? Does 2026 full-year guidance include routine PFS manufacturing revenue? A: Javier Lopez-Velmonte stated that there is a delay in regulatory approval for the PFS contract, and no material income from this agreement is expected in 2026. The guidance does not include recurring manufacturing revenue from this contract, but approval is expected for next year, with manufacturing anticipated to start in 2027.
Q: Could you provide more details regarding the levers of the organic year-on-year CDMO sales growth acceleration versus Q1? To what extent should this be maintained into H2? A: Javier Lopez-Velmonte highlighted that the CDMO business had a strong quarter, with growth driven by existing business and the integration of the Phoenix facility. The company expects to maintain growth in the coming quarters, supporting the stated guidance.
Q: Could you offer some color on the weaker quarter-on-quarter performance of OCEDI? How are you seeing the competitive environment evolving in schizophrenia? A: Juan Lopez-Velmonte expressed satisfaction with OCEDI's performance, noting robust uptake across multiple countries. The competitive environment in the schizophrenia market is favorable, with growth in long-acting injectables and adherence becoming increasingly important.
Q: Is the 13% BMS contribution a valid run rate on a quarterly basis? It is much higher than the previously communicated minimum order value from BMS. A: Javier Lopez-Velmonte clarified that the agreement with BMS includes a take-or-pay clause with a baseline of $50 million per year. The current quarter's higher income from Phoenix is promising, but the baseline remains at $50 million annually.
Q: If heparin outlook improved, why not improving full-year 2026 guidance? How is the competition environment in heparin? A: Juan Lopez-Velmonte explained that while the heparin outlook has improved, the company prefers to remain cautious with its overall guidance due to the dynamic nature of the market and other factors such as the Neparvis contract resolution. The competitive landscape remains stable, with Rovi maintaining an edge over Chinese players.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
