The board of directors of the pharmaceutical company Rovi has ruled out proceeding with the sale of part of its manufacturing business for third parties after examining the different offers received, as announced this Thursday by the company in a communication to the National Securities Market Commission (CNMV). ). After the announcement, the value fell about 5% on the stock market. On June 26, the pharmaceutical company confirmed that it had received non-binding offers from several entities for the acquisition of its third-party manufacturing business within the framework of an evaluation process for its assets entrusted to Lazard.
The company reported this Thursday that this process attracted offers from several international investment funds and industrial companies who presented various proposals for the third-party manufacturing business. At the time, it was published that CVC, Cinven, KKR, Permira and Antin had been interested in this Rovi business. However, after due analysis, Rovi’s board of directors has concluded that, “given the development, current good performance and prospects of this business, the best way to maximize shareholder value is to continue executing the strategic plan independent of the company, protecting and developing the third-party manufacturing business under the current structure of the Rovi group, without the entry of foreign investors.
However, it is also true that there was some misgivings in the market when it came to valuing the operation. The Madrid pharmaceutical company’s third-party manufacturing business had grown exponentially in recent years, but the main reason was the agreement with Moderna to manufacture Covid vaccines. Not in vain, the income generated by this division decreased by 31%, to 118 million euros, in the first six months of this year. The fall causes the area’s weight on the company’s total sales to fall back to pre-pandemic levels and today represents 36% of total income, far from the 49% with which it closed last year. Now, next November 7, the company will present results again and you will be able to see the performance of the area in the last three months.
The exposure to Moderna is such that every time the American biotech company has announced cuts to its forecasts it has been noticed in Rovi’s shares. A few months ago Moderna estimated that its guidance would be around 3.7 billion euros this year. However, months later it updated its forecasts and now expects to reach between 2,777. According to the company, this update was due to “very low” turnover in the European Union this year.
Rovi Investments
The pharmaceutical company has highlighted that in the last five years “it has invested significant capital” in capacity and technological services for sterile filling and finishing, so, with these recent investments and the current expansions underway, it expects to “substantially” increase its capacity current in its facilities in Spain. In fact, recently, the Madrid company has signed a substantial agreement with a multinational (the name has not been revealed) for the filling and finishing of prefilled syringes, a device that is used in medications for pathologies such as diabetes or obesity. Manufacturing will begin in 2026 and 2027 is expected to be the first full year of production. According to the López-Belmontes, this will bring the turnover of their third-party production business to 600 million.
“This will allow Rovi to continue capitalizing on the significant imbalance between available supply and growing demand in this market, taking advantage of recent momentum with the addition of a high-volume product from a global pharmaceutical client and the good timing of commercial activity, which presents multiple business and alliance opportunities that respond to high-growth strategic models, including innovative biological products, biosimilars, vaccines and other innovative segments for prefilled syringes and cartridges,” the company stressed.
The president and CEO of Rovi, Juan López-Belmonte Encina, thanked, on behalf of the board of directors, the “hard” work carried out in the strategic review process by the company and its advisors.
“We are satisfied with the process that has been carried out, which ultimately has led us to conclude that the third-party manufacturing business will generate greater value for all shareholders while maintaining the current structure of the Rovi group,” he added.
“We remain excited about the short- and long-term potential of our world-leading third-party manufacturing business, given the attractive market dynamics and the pride we take in supporting the manufacturing of medicines that can extend the lives of millions of people.” , stated Javier López-Belmonte Encina, vice president and CFO of Rovi.
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