Laboratorios Farmaceuticos Rovi, S.A.

Hello, everyone. This is Marta Campos, Head of Finance for ROVI.

Welcome to our company's review of business results for the first quarter of 2026. Before we begin, let me remind you that today's presentation and associated documentation are available on the Investor Relations section of ROVI's website.

Please note that the information presented in this call contains forward-looking statements based on our current beliefs and expectations. Actual results could materially differ due to known and unknown risks, uncertainties and other factors, and we undertake no obligation to update or revise any of the statements.

Moving to today's agenda. Juan Lopez-Belmonte, ROVI's Chairman and Chief Executive Officer, will discuss our business performance for the quarter.

Javier Lopez-Belmonte, ROVI's Deputy Chairman and Chief Financial Officer, will then review financial results. The presentation will be followed by a Q&A session.

Therefore, if you want to ask any questions during the presentation, please do not hesitate to send them through the question button on the platform. With that, I thank you for your presence here today, and will now turn the call over to Juan.

Thank you, Marta, and thanks to everyone for joining us today. Let me start by addressing our outlook for 2026.

In light of recent developments and greater visibility in key business drivers, we have revised our expectations for the full year. I will provide the strategic context and Javier will then take you through the detailed financials.

Let me continue what we have seen in the business during the first quarter of 2026. Operating revenues reached EUR 152.5 million, representing a 1.5 percentage decrease compared to the first quarter of 2025, mainly due to the performance of the heparin division.

The contract manufacturing business continued to perform well, growing by 5% during the period. Gross profit increased by 5% to EUR 95 million, reflecting an improvement in the gross margin of 3.8 percentage points to 62.3%.

And based on recent developments, we have updated our outlook for 2026 and now expect operating revenue to increase by a low to mid-single-digit percentage compared to 2025. I will walk through the key drivers behind this revision over the course of the presentation.

Before moving on, I would also like to highlight the full integration of our Phoenix facility as of April 1, which strengthens our U.S. manufacturing footprint and CDMO capabilities.

Moving on to the Specialty Pharmaceutical business, it declined 3% year-on-year in the first quarter due to bemiparin. Within this segment, growth was driven by Okedi, hospital products, Neparvis and enoxaparin biosimilar.

I would now like to focus on the performance of the heparin business, a key area that accounted for approximately 40% of the group's operating revenues in the first quarter of the year. The heparin division decreased 12%, mainly due to lower bemiparin sales driven by high inventory levels for international partners.

This was partly offset by a 2% increase in enoxaparin biosimilar sales, supported by higher order volumes in certain markets. The performance of the heparin business may exhibit significant quarter-to-quarter variability depending on the timing of orders and inventory levels held by our partners.

International sales of bemiparin has shown a good performance in the first quarter of 2026. However, for the full year, we anticipate a more moderate decline.

Regarding low molecular weight heparin sales, we expect them to decline by a high single-digit percentage in 2026, reflecting lower order volumes from international partners and an increased pricing pressure in the market, particularly from Chinese players. In response, we are driving cost efficiency initiatives and continuing our progress towards vertical integration and crude heparin self-sufficiency.

Turning now to Okedi. The product remains a key growth driver with sales of EUR 17.2 million, up 37% year-on-year and a further 10% growth versus the fourth quarter of 2025, which was the strongest quarter of last year.

Its differentiated clinical profile continues to support a strong uptake, and we remain excited to reach potential sales of between EUR 100 million to EUR 200 million in coming years. Moving on to our CDMO business.

The contract manufacturing business delivered positive performance during the quarter with revenue increasing by 5% to EUR 37.4 million in the first quarter of 2026. However, based on the most recent information available, we have revised our expectations for the CDMO business for 2026, reflecting a more moderate growth scenario.

This adjustment is driven by lower revenues forecast under the prefilled syringe manufacturing agreement with a global pharmaceutical company announced in April 2024, mainly due to a delay in the initially expected commencement of routine manufacturing operations as well as increased uncertainty regarding anticipated demand. We believe this is a conscious and responsible adjustment, one that reflects the current moment and that we will continue to reassess as the year progresses.

Importantly, this adjustment does not change our long-term view of the CMO division. We remain committed to our investment plan to strengthen our sterile fill and finish capabilities with ongoing capacity expansions and the recent integration on the Phoenix facility into our industrial network.

ROVI is very well positioned to capture long-term opportunities in high-value injectable manufacturing. Finally, our ISM platform continues to progress well.

Letrozole SIE has received FDA approval of its investigational new drug application, which allows the initiation of clinical development in the U.S. with Phase III recruitment expected to start in the third quarter of 2026.

Risperidone QUAR delivered a strong Phase I results and is advancing into Phase II. Together, these programs reinforce the long-term value and innovation potential of ISM technology.

Thank you very much, and I pass the floor to Javier.

Thank you, Juan. Good morning, everyone, and I will now turn to the financial performance.

Total revenues reached EUR 154.7 million, broadly flat year-on-year. Operating revenue declined 1.5% to EUR 152.5 million, mainly reflecting lower international sales of bemiparin.

This was partly offset by CDMO business, which increased 5% during the quarter. I will now walk you through the remainder of our P&L.

So gross profit increased by 5% to EUR 95 million in the first quarter of 2026, with gross margin improving by 3.8 percentage points to 62.3%, partly reflecting the recognition of R&D grant income related to the LAISOLID project. Excluding other income, gross margin increased by 2.5 percentage points to 60.8%, mainly driven by a higher contribution from Okedi, lower low molecular weight heparin raw material costs and the growth of the contract manufacturing business, which contributed higher margins to the group revenues.

SG&A increased 18% to EUR 63.6 million in the first quarter of this year, mainly reflecting higher personnel costs due to the wage adjustments and the addition of CDMO personnel as well as higher other operating expenses. The increase in other operating expenses, excluding R&D, was partially driven by a lower cost base in the first quarter of 2025, following the temporary closure of the Madrid facility to upgrade Annex 1 GMP requirements for sterile manufacturing and by nonrecurring items, mainly related to the write-off of assets that are no longer operational.

Excluding nonrecurring items, other operating expenses, again, excluding R&D, increased by 21% year-on-year. For 2026, ROVI expects SG&A expenses, in this case, excluding ROIS Phoenix from the group to increase by between a mid- to high single-digit percentage compared to 2025.

As for the R&D expenses, these increased by 79% to EUR 11.2 million in the first quarter of this year. These expenses are related to the preparation for the development of the Phase III clinical trial of Letrozole SIE.

Moving to EBITDA, EBIT and net profit. EBITDA totaled EUR 20.3 million in this first quarter of '26 with a margin of 13.3%.

EBIT amounted to EUR 12.1 million in the first quarter of '26 with a margin of 8%, while net profit reached EUR 9.4 million in the same period. I won't go into Slide 15 in detail.

You have the figures and that shows the pre-R&D basis, and we can move to the next slide, please. So let's now move to CapEx and cash generation.

In the first quarter of 2026, ROVI invested EUR 7.7 million allocated as follows: EUR 5.6 million dedicated to investments and EUR 2.1 million allocated to maintenance CapEx and other items. Turning to cash flow.

Operating cash flow came in at EUR 13 million in the first quarter, reflecting 2 main factors. Lower profit before tax compared to the prior year and adverse working capital movements.

Free cash flow amounted to EUR 5.6 million in the first quarter of '26. As of March 31, 2026, ROVI's total debt amounted to EUR 114.4 million with gross cash of EUR 99.6 million, resulting in a net debt position of EUR 14.9 million.

This solid financial position is fully compatible with our shareholder remuneration policy under which we target a 35% payout of consolidated net profit and will propose, therefore, to the General Shareholders' Meeting a EUR 0.9594 per share dividend to be charged against 2025 results and distributable reserves. To conclude, I would like to summarize our outlook for '26 and the key strategic drivers.

Based on the current evolution of the key business variables, and the most recent information available, ROVI has updated its guidance and now expects operating revenue to grow by low to mid-single digit compared to 2025, reflecting a more moderate growth scenario than previously communicated. This update is mainly driven by lower revenue forecast for '26 under the prefilled syringe manufacturing agreement entered into with a global pharmaceutical company announced in April '24 due to a delay in the initially expected commencement of routine manufacturing operations, which remains subject to the regulatory authorization as well as an increased uncertainty regarding anticipated demand.

In addition, we continue to see growing competitive pressure on pricing in the heparin division and greater volatility in supply and cost dynamics. Additionally, the heparin business performed better than expected in 2025, mainly due to an increase in orders from international partners.

Therefore, we expect lower orders from these partners in '26 since they hold a high level of stocks. Overall, let me say that the company maintains a prudent approach to its 2026 outlook, reflecting the current competitive environment and the level of visibility across the main -- its main business lines, which we will continue to monitor closely.

At the same time, our strategy remains focused on our key priorities on which we are focusing our efforts. the development and scaling of the CDMO business, value creation from the acquisition of injectable manufacturing facility in the U.S., progress in the vertical integration of the heparin business and the continued momentum of the Specialty Pharmaceutical segment with Okedi as a key product.

In parallel, we maintain a strongly committed to R&D with 2 Phase III clinical trials currently underway, Letrozole SIE and Risperidone QUAR, supported by a clear focus on international expansion and execution excellence. This approach reinforce our roadmap and our positioning over the medium to long term.

Thank you very much for your attention. We are now happy to take your questions.

Marta?

[Operator Instructions] So the first question comes from Pablo De Renteria from Kepler. Javier, they are for you.

The first one is following the increased uncertainty around demand for the new prefilled syringe manufacturing agreement and the delay in the start of operations, what do you think is a reasonable assumption for 2027 revenues under this contract? Should we think about the minimum contractual commitments as the right baseline at this stage?

Thank you for your question, Marta. I would say that, I mean, today, I think it's still to change our vision or our guidance for the contract or to change any -- or to give any more precise information around the future incomes for next year and the following one.

Let me remind to everyone that this agreement, we shared a guidance to the market a couple of years ago when we signed the agreement, and we shared our outlook for revenues for the coming years in the case of this agreement. I think what is important to highlight is that this is a take-or-pay agreement, meaning that the agreement itself, the contract has some mechanisms and some minimum commitments for both parties, which still gives us a lot of comfort and visibility, and I would say, stability over an important chunk of our revenues for the future.

And again, I think we still remain confident about this.

The second question is, does this softer near-term outlook in CDMO alter in any way your long-term ambition presented at the Capital Markets Day of reaching around EUR 700 million in CDMO sales by 2030? Or do you still see that target as achievable?

I would be very clear, not right now, we are still very committed to that figures to those goals. We still believe that those are achievable.

We always explained to the market that this was an ambitious target, but it was -- we have very solid foundations from our business and from the CDMO business, especially. So right now, I think it's important to highlight that this entire change of guidance is just stick to this particular agreement.

Meanwhile the rest of the business, I think we are seeing a good momentum. We keep signing important agreements.

You know that unfortunately, we are not able to communicate those to the markets because they have very strict confidentiality clauses. But I would say that the tailwind is still there.

So we remain confident about the 2030 goals that we still have seen -- or we still see a great market momentum, an important tailwind from the market that we are signing contracts, important ones. although we are afraid that we cannot disclose those to the markets due to confidentiality reasons.

And that we are also very excited about the Phoenix acquisition, which I was also mentioning that it has been closed at the agreement in a very quick way.

And the third question from Pablo is regarding the new prefilled syringe line in the U.S. When do you expect to be able to start commercializing the available capacity?

And more broadly, are you already seeing interest from potential clients looking to book capacity in the U.S.?

Thank you, Pablo. Yes, yes, for sure.

I think it would be great to highlight 2 different things. One is that, as you know, we are setting up a new campus for Biologics.

This campus includes a new filling line. That filling line will be ready next year.

So it's quite exciting news for us because it's in our business, that's quite quick, I would say. And this is an area or an avenue of growth for the site and for the company.

Apart from that biologic campus, we are starting to market our [indiscernible] potent campus on the cytotoxic campus. And I believe, at least for us, what this very exciting is that in the same campus, we believe we -- not only we can fill a cytotoxic product and a standard high potent drugs, but also I think we are capable of filling ADCs and ADCs, we foresee them or everybody think ADCs as an important driver of growth for pharmaceuticals as a segment or a new modality in the pharmaceutical field.

So I think there are very few competitors in the U.S. that can offer the same -- these sort of capabilities.

And I can tell you that the feedback from customers is very robust. And I would say that there are very -- there are less competitors in the U.S.

than in Europe. So I think I think could be a transformational driver of growth for us this Phoenix site facility.

The next question comes from Patricia Cifuentes from Bestinver. Javier, it's for you.

With the delays in the recruitment of Letrozole SIE and quarterly Risperidone, what level of R&D costs should we expect this year?

Yes. As we announced and commented to in our -- I think it was in our Capital Market Day, the first time we shared with all of you the expansion of the Phase III projects, I think that the first few years will be expanding in terms of R&D, sorry, cost.

So I would say that this year, we can assess that we'll be in this higher end of the range that we presented on the Capital Market Day. So probably closer to the EUR 60 million figure for the full year.

Let me remind to all of you that we will be starting recruiting patients at the -- hopefully, at the end of the year. So this is for sure, we are spending a lot of money in preparing this crucial moment for the company.

The next question comes from Álvaro Lenze from EDM. Can you provide more detail on the approval process for the April 2024 client line?

What is the bottleneck?

I will answer that one. I mean, as you know, the agreement was signed in '24.

We had a detailed time line, but at the end of the day, it's been a lot of processes going on, tech transfer, validation batches. And at the end of the day, we are also -- we are working closely with the customer to see how the regulatory approval goes.

There are different dynamics there, different causes of delay. And also, I would say that there is no -- I wouldn't say it's a big delay.

But at the end of the day, it's a long process. It's been forecasted from 2 years ago.

We depend on a large multinational, and they are quite slow sometimes, quite conservative approach. And what I can tell you is that we are monitoring very closely the different events.

And if we find out that there is any relevant update, we'll communicate to the market. Anyhow, we expect that for sure, next year, the product will be approved.

And I mean, that's the worst-case scenario that at the end of the year, the product will be approved and will be ready and able to manufacture from next year onwards.

So the last question comes from Joaquin Garcia-Quiros from JB Capital. Juan, this one is for you.

Now that competition seems tougher in heparins, how do you see the development of this division in the midterm?

Joaquin, thank you for your question. Yes, actually, we are seeing a very rapid erosion in terms of prices.

Heparin is a very dynamic market. As I mentioned before in my presentation, we expect variability between quarters.

But I mean we're adjusting ourselves. I mean we are still very much optimistic on the long term of the heparin perspectives, investing on Glicopepton to be fully vertical integrated.

We still don't know really what is the basis for this rapidly unexpected price erosion that is impacting our business. But we feel very much confident that the business remains solid, and we expect still to be a driver of growth for the company in the next coming years.

And that's the reason why we are fully investing just to make sure that we remain competitive on the market landscape. But unfortunately, we are seeing a very rapidly unexpected erosion in prices that is impacting our partners future orders for 2026.

And we just wanted to make sure that we will communicate it accordingly to the market. But Heparin is great business.

ROVI has a great knowledge. We have great performance in the past.

And again, we are fully committed to this business, and we believe that we are going to be hearing in not that long future, very good news coming from the bemiparin and enoxaparin franchises.

Thanks, Juan. We are out of time.

Thank you very much for your participation. The ROVI IR team will answer the pending questions as soon as possible.

Thank you again for your assistance, and have a nice day.