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Edited Transcript of ROVI.MC earnings conference call or presentation 30-Jul-19 1:00pm GMT

Half Year 2019 Laboratorios Farmaceuticos ROVI SA Earnings Call

Madrid Aug 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Laboratorios Farmaceuticos ROVI SA earnings conference call or presentation Tuesday, July 30, 2019 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Javier López-Belmonte Encina

Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO

* Juan López-Belmonte Encina

Laboratorios Farmaceuticos Rovi, S.A. - CEO & Director

* Juan López-Belmonte López

Laboratorios Farmaceuticos Rovi, S.A. - Chairman

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Conference Call Participants

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* Harry Thomas d'Alton Sephton

Jefferies LLC, Research Division - Equity Analyst

* Joseph Hedden

Rx Securities Limited, Research Division - Healthcare Analyst

* Sean Conroy

Edison Investment Research Limited - Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ROVI First Half 2019 Financial Results Call. (Operator Instructions)

And I must advise you that this call is being recorded today, Tuesday, 30th of July, 2019. And without any further delay, I would now like to turn the call over to your speaker today, Mr. Javier López-Belmonte. Thank you, please go ahead.

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Javier López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO [2]

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Thank you very much, and good afternoon to everyone. This is Javier López-Belmonte, CFO of ROVI. At this time, I would like to welcome everybody to this first half 2019 results conference call, which we'll start in a moment. Let me please first introduce ROVI's attendees today, Juan López-Belmonte, CEO; Marta Campos, Investor Relations; and myself. All lines are now mute to prevent any background noise.

The conference will also be webcasted on ROVI's website. After the presentation, as the operator said, there will be a question-and-answer session.

Let me now turn the call over to the CEO, Mr. Juan López-Belmonte for the highlights of this first half 2019 results.

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Juan López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - CEO & Director [3]

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Thank you, Javier. And welcome to everybody. I'm glad to present our first half 2019 results. Performance, this period, has been over our expectations. Our 21% operating revenue growth in the first half of 2019 was driven by the strength of the Specialty Pharmaceutical business, which grew by 20%, strongly outperforming the market. And by the toll manufacturing business, where sales rose 15%. Data provided by IQVIA indicate that the innovative product market in Spain increased 2% in the first half of 2019. However, sales of pharmaceutical products with prescriptions for ROVI rose 24% in the same period, exceeding the market by 22 percentage points.

We forecast that we will continue to grow at a higher rate than Spanish pharmaceutical market expenditure in the first 5 months of 2019, which according to the Ministry of Health consumption and social welfare, show a growth rate of 3%. Regarding the classification of laboratories, using data from IQVIA, ROVI was positioned 20th in terms of value and was the fastest-growing innovative company among the 20 top run companies in the first 6 months of 2019. In the first 6 months of the year, ROVI behind one position in this classification compared to the same period of 2018.

In the first half of 2019, we made an important investment effort in Research & Development as we concluded our Phase III trial for risperidone, and we continue to develop a Phase I study for Letrozole, both with our ISM technology. And in expanding our biosimilar enoxaparin, with the product launch in 7 new countries compared to the first half of 2019. Despite the operating cost increase in the period, EBITDA increased by 99% from EUR 13.3 million in the first half of last year to EUR 26.5 million in the first half of 2019, reflecting a 5.8 percentage points rise in EBITDA margin to 14.9% in the first half of 2019.

Net profit increased by 114 percentage from EUR 7.6 million in the first half of 2018 to EUR 16.2 million in the first half of 2019.

Prescription-based pharmaceutical specialties, which grew by 24% in the first half of this year, are high strategic value products and contribute to give ROVI a wider scope for the coming years. ROVI counts, as driving force, which it's Low Molecular Weight Heparin franchise, where sales rose 43% to an amount of EUR 81.7 million in the first half of 2019.

Low Molecular Weight Heparin sales represented 46% of operating revenue in the first half of 2019 compared to 39% in the same period of the previous year. We aim to become one of the leaders in the Low Molecular Weight Heparin, filled worldwide with our 2 molecules, Bemiparin and enoxaparin biosimilar. Bemiparin had a positive performance in Spain in the first half of 2019, with sales up 5% to EUR 35.5 million, while the Low Molecular Weight Heparin market increased 0.6%, beating the market by 4.3 percentage points and achieving a market share of 33% in the first half of 2019 compared to 32% in the same period of the previous year.

International sales of Bemiparin decreased by 33% to EUR 9.7 million. This significant decrease was specifically linked to the first half of 2019, and ROVI expects international Bemiparin sales to remain stable in 2019. Bemiparin total sales decreased overall by 6% to an amount of EUR 45.2 million in the first half of 2019.

Regarding the enoxaparin Biosimilar, Becat, we launched the product in Germany in September 2017, in U.K., Italy, France, Spain, Austria, Latvia and Estonia in 2018, and in Portugal and Costa Rica in the first half of 2019.

We should be launching in all major countries in Europe this year. For this purpose, in our first stage of commercialization strategy, we have established subsidiaries in France, U.K., Germany, Italy, and Poland. These 5 countries plus Spain and Portugal, over around 75% of the European enoxaparin market and provide a pan-European infrastructure that is highly leverageable. Besides Europe, we have signed out licensing agreements in 85 countries as part of our second stage of commercialization study. We have signed 2 important licensing agreements to distribute a market of enoxaparin Biosimilar, the first with Hikma Pharmaceuticals, who have exclusive rights for 17 Middle East and North Africa countries and the second with Sandoz for 14 countries/regions.

We started the commercialization in Q4 2017, with sales amounted to EUR 1.5 million. And sales increased to EUR 36.5 million in the first half of 2019. So let me just summarize the opportunity here, once again. This is a EUR 1.5 billion market with high entry barriers where biosimilars tend to reach 50% to 70% of market share and with only 2 other players in the market. The latest launches were again a strong driver of growth in the first half of 2019. Sales of Neparvis and Novartis, launched in December 2016, indicated for the treatment of other patients with symptomatic chronic heart failure and reduced ejection fraction increased 63% to EUR 9.6 million compared to EUR 5.9 million in the first half last year. Sales of Volutsa from Astellas Pharma increased by 20% to EUR 6.4 million, while sales of Hirobriz Breezhaler and Ulunar Breezhaler both inhale bronchodilators from Novartis, decreased by 2% to EUR 7.5 million. Medikinet and Medicebran form Medice increased by 2% to EUR 4.0 million in the first half of 2019. In addition, ROVI will start to market Tetridar from TEVA for the treatment of osteoporosis in adults in Spain for the third quarter of 2019. Both these product launches will lead us to extend average life of our product portfolio by several years, and we expect it will provide us with a sustainable and profitable growth opportunity in the coming years.

Other product sales, such as Vytorin, Orvatez and Absorcol indicated as an objective therapeutic diet in patients with hypercholesterolemia, decreased by 22% to EUR 15.4 million in the first half of 2019. In the second quarter of 2018, the active principle ezetimibe went out of patent, and the price of Absorcol was reduced. Likewise, generic formulated with ezetimibe and simvastatin were marketed in the same period. So the price of Vytorin was reduced to be competitive. In addition, sales of Orvatez amounted to EUR 12.5 million in the first half of 2018, an extraordinary rise of 29% compared to the same period of the previous year. Furthermore, sales of contrast imaging agents increased by 9% to EUR 16.7 million and ROVI continues being the market leader in this segment.

Finally, recent product acquisitions, such as Falithrom and Polaramine fully complements our existing portfolio and have already had a favorable impact on the company's profits. Regarding toll manufacturing, sales increased by 15% to EUR 26.5 million in the first half of 2019. Because of the good performance of the injectable business, where revenue increased by 53% to EUR 15.2 million as a result of higher volumes manufactured for some customers.

ROVI has one of the largest solid forms manufacturing plants in Europe. Frosst Ibérica plant sales decreased by 13% to EUR 11.4 million in the first half of this year compared to the same period of the previous year. By the end of 2019, ROVI expects the toll manufacturing business to have grown from a high single-digit rate to a low double-digit rate. The manufacturing plant at San Sebastian de los Reyes acquired in June 2015, we started to fill syringe filling operations in February 2018, thus expanding the production lines of injectables of the group.

ROVI has made as well a meaningful progress in the development of its long-acting injectable and the psychotic Risperidone ISM. The first candidate for this leading-edge drug-delivery technology, ISM. In March 2019, the company announced top line results from the pivotal study of Risperidone ISM, PRISMA-3, which show the primary and key secondary efficacy endpoints were achieved with both process tested for the treatment of patients with acute exacerbation of schizophrenia. Besides, the company very recently announced the completion of the clinical trial program that will support the application for marketing authorization for Doria for the treatment of schizophrenia.

Furthermore, ROVI informs the decision to expand its industrial capabilities for the manufacturer of Doria with the incorporation of our second line for the manufacture of the syringe containing the solvent. Addition of this second line also provides the company with the necessary facility to the company to initiate the preparation of the industrial filling processes of Letrozole ISM, which will require the installation of a specific filling machine. As a result, ROVI will prioritize the submission of the Doria for sale in Europe, which it plans to file by the first quarter of 2020. Consequently, filing in the U.S. has been rescheduled for 2020.

Lastly, as previously informed, the company started a human testing with Letrozole ISM, which represents the second candidate on clinical development using the ROVI's ISM technology platform. This new investigation on a medicine is to our best knowledge, the first long-acting injectable aromatase inhibitor intended for the treatment of hormone-dependent breast cancer. The first Phase I clinical trial, the LISA-1 study of Letrozole ISM is currently ongoing. And due to the study design, dose-escalation and its exploratory nature, a finalization date cannot be anticipated. Nevertheless, preliminary data confirm that this ISM formulation provides a prolonged release of Letrozole, which produce a sustained suppression of estrogenic hormones. The company will be gathering more clinical data from this trial during the following months to better characterize the pharmacological profile of Letrozole ISM. Afterwards, in 2020, ROVI is planning to discuss with regulatory authorities, these results as well as the next steps for continuing clinical development of this novel long-acting injectable aromatase inhibitor.

And finally, let me end with our guidance for 2019. ROVI's upgrading for the second time this year, its operating revenue guidance for the full year 2019 from low double-digit growth rate to high double-digit growth rate. The main reason behind this new update is the good performance of enoxaparin biosimilar sales. We have to stay on the path of sustained growth in the first half of 2019. We increased sales by 22%, strongly outperforming the market. We expanded our Heparin franchise to launch enoxaparin biosimilar in 2 new countries in the first 6 months of the year and as well the signature of distribution agreements for 23 additional countries. We reinforced our European presence through the acquisition of 2 new products, Falithrom for the German market and Polaramine for the Spanish and French markets and the future commercialization of Tetridar from TEVA in Spain. And we facilitated the pharmaceutical specialties area, thanks to the strength of our leading products such as Neparvis, Orvatez and Volutsa.

Likewise, we are making an effort to heavily invest in R&D, focus on our ISM technology, what we see as a new avenue of future growth for ROVI.

To compute, we believe that we are at a growth inflection point with a strong growth opportunity driven by, first, risperidone and Letrozole, both validating our leading-edge drug-delivery technology ISM; and second, enoxaparin biosimilar, which will allow us to transform our European footprint. These growth levers are firmly underpinned by a very solid ongoing business that has delivered year after year based on our leading specialty pharma franchise and a high value-added toll manufacturing services.

And now, I pass on Javier, who will run you through the financials in more detail. Thank you very much for your attention and for taking the time to participate in this telephone conference.

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Juan López-Belmonte López, Laboratorios Farmaceuticos Rovi, S.A. - Chairman [4]

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Thanks, Juan. We are extremely happy with our performance in the first half of the year. As Juan already said, our operating revenue increased by 22% this period. Sales of prescription-based products increased by 24%, strongly outperforming the Novartis market in 22 percentage point in the first half of the year. Regarding our Low Molecular Weight Heparin franchise, we achieved a 43% growth. Sales of Bemiparin, our flagship product, developed in-house grew by 5% in Spain, and enoxaparin biosimilar sales reached EUR 36.5 million in the first half of 2019.

Gross profit increased by 20% to EUR 101.9 million in the first half of the year. The gross margin is showing a decrease of 0.8 percentage points from 58.2% in the first half of 2018 to 57.4% mainly due to the increase of enoxaparin biosimilar sales, which added lower margins in the first half of the year after the launch of the growth in 7 new markets and the increase in the Low Molecular Weight Heparin raw material prices, which, in the first half of 2019, were running around 35% over first half 2018 prices. ROVI expects this rising trend to continue during this year.

ROVI's commitment to innovation has been reflected in the figures for the first half of 2019. R&D expenses decreased 12% to EUR 14.7 million. These figures are mainly the result of a focused investment in the ISM Risperidone project. Our investment effort in R&D is motivated by our firm commitment to market [owned] quality and successful products in the immediate future. Selling, general and administrative expenses, SG&A, rose 16% to EUR 60.7 million in the first half of the year, mainly due to international subsidiaries expenses, which amounted to EUR 4.3 million compared to EUR 2.6 million in the first half of last year. And second, due to a larger volume of enoxaparin biosimilar production. In 2019, expenses related to international subsidiaries are expected to be around EUR 10 million.

On the one hand, in the first half of 2018, EBITDA was affected by nonrecurring expenses of EUR 2.6 million. EUR 1.5 million of this amount were related to the study and analysis of the capital increase carried out in October last year, while EUR 1.1 million were linked to a substantial change to Frosst Iberica employees' working conditions. On the other hand, as a result of the IFRS 16 application this year, EBITDA was positively impacted by EUR 1.6 million in the first half of 2019. Therefore, EBITDA increased to EUR 26.5 million in the first half of the year, a rise of 99% compared to the same period of the previous year, reflecting a 5.8 percentage point increase in EBITDA margin, which was up to 14.9% in the first half of 2019 from 9.1% in the first half of 2018.

EBITDA pre-R&D calculated excluding R&D expenses in the first half of 2019 and 2018, and the impact of nonrecurring expenses in the first half of 2018 increased by 26% from EUR 32.7 million in the first half of 2018 to EUR 41.2 million in the first half of 2019, reflecting a 0.8 percentage point rise in the EBITDA margin to 23.2% in the first half of this year. EBIT performance followed the same trend as EBITDA in the first half of 2019. It increased by 138% to EUR 17.7 million, reflecting a 4.9 percentage point rise in the EBIT margin. Net financial costs decreased by 35%, up to EUR 0.3 million in the first half of 2019.

Net profit increased to EUR 16.2 million in the first half of this year, a 114% rise compared to the same period of the previous year.

The effective tax rate was 7.5% in the first half of 2019 compared to minus 7.4% in the first half of 2018, mainly due to a decrease in R&D expenses in the first half of 2019 in comparison with the same period of the previous year, which led to lower research & development tax credits. As of 30th June 2019, negative tax bases of the group amounted to EUR 36.3 million, of which EUR 1.4 million will be used in the 2018 income tax and EUR 1 million in the first half of this year.

ROVI invested EUR 8.6 million in the first half of the year compared to EUR 5.1 million in the first half of last year. This amount, EUR 6.8 million, relates to investment CapEx regarding our facilities and EUR 1.8 million relates to maintenance and other CapEx. In addition, in the first half of the year, ROVI invested EUR 13.5 million in the acquisition of Polaramine. Free cash flow decreased to minus EUR 19.4 million in the first half of 2019 from minus EUR 5.8 million in the first half of last year, mainly due to increasing inventories, receivables and payables and the increase in CapEx.

Regarding our debt, effective June 2019, ROVI had total debt of EUR 49.1 million. Of that amount, EUR 13.9 million is debt with banks, representing 28% of total debt, while EUR 12.4 million correspond to debt with public administration related to the development of R&D projects, which is 0% interest rate debt, representing 25% of total debt. And EUR 22.8 million correspond to financial liabilities for leases as a result of the IFRS 16 obligation, representing 47% of total debt.

After the completion of the capital increase last year, as of 30th June 2019, ROVI had a gross cash position of EUR 68.1 million compared to EUR 97 million at the end of last year, a net cash position of EUR 19.1 million compared to net cash of EUR 62.8 million at the end of last year due to the recording of EUR 22.8 million financial liabilities for leases as a result of the IFRS 16 application as of June 2019.

Finally, on the 4th of July, this year, ROVI paid a gross dividend of EUR 0.0798 per share with dividend rights on 2018 earnings. This dividend represented a 25% payout.

Regarding news flow for 2019 and 2020, we expect to announce the following: first, additional new products to be launched in the specialty pharma area; new contracts in the toll manufacturing area; and new national marketing approvals for the enoxaparin biosimilar in 85 countries outside Europe. Likewise, we expect to launch our enoxaparin biosimilar in all major countries in Europe in 2019.

With regards to R&D, we expect to release the final Risperidone ISM Phase III data in scientific congresses. And we plan to apply for the marketing authorization for Doria for the treatment of schizophrenia in the European Union and United States in 2020.

Also, we expect to gather more clinical data from Letrozole Phase I trial during the following months to better characterize the pharmacological profile of Letrozole ISM. Afterwards, in 2020, we are planning to discuss with regulatory authorities these results as well as the next steps for continuing the clinical development.

And that's all regarding our financial results for the first half of 2019. We can now start the Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of (inaudible).

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Unidentified Analyst, [2]

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Three from me. The first one, if you could provide some colors on the drivers of the recovery of international Bemiparin sales and whether this recovery should happen already in Q3, or will it be more biased to Q4? Second, in terms of outlook for gross margins for the remainder of the year, if you can provide some more color on this. And third, how should we think about CapEx and cash flow generation in the second half of the year and perhaps the first half of 2020, considering the additional investments you're undertaking?

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Juan López-Belmonte López, Laboratorios Farmaceuticos Rovi, S.A. - Chairman [3]

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This is Juan. Regarding your first question on the Bemiparin international sales, we -- I mean all our international sales of Bemiparin, with the exception of Italy, has gone through permits. So we always look Bemiparin international sales on an annual basis because depending of where orders fall in a different quarter, we may have important deviation in terms of sales comparison to the previous year. What I can share with you is that up to now, with the different orders that we have already in place, international sales for 2019 we're going to be very much in line with those of the previous year. So we don't expect any decline in Bemiparin sales compared to 2019 figures.

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Javier López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO [4]

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This is Javier. Coming back to your second question about gross margin. As we've been explaining during the year, we've been affected by an increase of the cost of the Low Molecular Weight Heparin raw material prices, that is the sodium heparin. The good news is that so far for the year, we've been able to get this gross margin not that below from last year. Unfortunately, for the second part of the year, we believe that we will face another slightly decrease on the gross margin. It's still difficult to forecast and anticipate as the prices of the raw material change. But as we have stated, we expect that this trend will continue during the year.

And finally, your last question was about CapEx and free cash flows. I think it's something that we've been trying to explain to our investors and analysts that during the launch of enoxaparin and due to the R&D efforts and the needs of the company to -- will keep up with the neutralization of enoxaparin and ISM. We expect CapEx to be high this year, higher than last year. That's improving this EUR 14 million that we use for Polaramine. So we will leave -- again, the second half of the year, we'll be intensive on capital, basically on CapEx, as you were mentioning, and also increasing -- slightly increase in the inventories. And for the first half of the year, we expect and with something that we'll have you updated -- to give you -- updated on the CapEx figure. But we still expect to maintain an important level of CapEx.

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Unidentified Analyst, [5]

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Okay. Just a follow-up, what's the overall amount of CapEx that you expect for this year?

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Javier López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO [6]

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Well, for this year, we haven't provided any figure. We believe it could be in line with last year. That is not including the acquisitions that we did.

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Operator [7]

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And your next question comes from the line of Sean Conroy from Edison Investment.

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Sean Conroy, Edison Investment Research Limited - Analyst [8]

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I'll start by asking if you can give a bit more detail on why the FDA filing for Doria has been pushed back from your previous guidance of the second half of this year? Can we expect this in the first half of next year or the second half? And is data from the open-label extension now likely to form part of an NDA submission? And then secondly, to follow-up on one of the previous questions, can you give a bit more detail on what you believe is driving up the prices of sodium heparin, whether you envisage this system beyond this year into 2020 as well?

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Juan López-Belmonte López, Laboratorios Farmaceuticos Rovi, S.A. - Chairman [9]

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Okay. Hello, this is Juan. Regarding the first question, regarding on the Doria filing, there is a major -- I want to repeat myself again on the Letrozole and LISA-1 and the installation of the machine, there are 2 major differences when it comes to regulatory filing between the U.S. and the EMEA. In the EMEA, the pharmaceutical inspection is not included in the filing this year. But in the U.S., you have to include that as well any evaluation that you've done in your industrial site within the filing this year. And that's the main reason why we have pushed back the FDA submission compared to the European submission.

Anyway, we are expecting -- as you can imagine, we are rushing to try to file as soon as possible in both regions. As well another reason that obviously we are considering is that Europe, to some extent, is a home country. We know the dynamics of the market much better and way more familiar than in the U.S. That's the reason why we will be filing in Europe as soon as possible. We have pointed out in the press release first quarter next year, but we will try definitely to do it as soon as we're capable -- can do it. Regarding the FDA submission, we definitely expect to be in the first half next year rather than in the second half of 2020.

Regarding your second question on the sodium heparin pricing increase, I guess, you might be familiar, there has been an outbreak that started 2 years ago of swine African flu in China. China represents -- the sodium heparin comes from the pig intestine mucosa is really where the -- is where we get the crude heparin. And from crude heparin, we transform it into sodium heparin. And then we transform it into Low Molecular Weight Heparin. According to the data that we have, which is basically from investment banking's report on the pork meat market, China has to slaughter a figure between 150 million to 200 million pigs during this outbreak. That's equivalent, to give you some flavor, to the annual production of the U.S. or 70% of the European production. So a shortage really of animals, of the raw material is really behind the increase of sodium heparin. Again, when the market will recover, that's a question very difficult to address. We do expect that prices may continue to increase for the next quarters. But we believe that the Chinese government has already taken measures on -- to stop and to stabilize this epidemic outbreak. Their annual -- their weekly reports being issued by the FAO, and that seems that the outbreak is starting to decrease in its impact.

So we don't know when this will stop and the number of pigs will start to rise again in China. And that's the reason why, as Javier has explained before, we have done an important effort this year to do the necessary stockpiling to make sure that we have product availability to supply to the markets in which we are present and as well to cover the future needs of the company. But it's difficult really to address when prices will come to the normal trend that were used a couple of years ago.

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Operator [10]

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And your next question comes from the line of Joseph Hedden from Rx Securities.

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Joseph Hedden, Rx Securities Limited, Research Division - Healthcare Analyst [11]

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Congrats on a strong quarter. So I just wanted to ask on the contract manufacturing front. You're now expecting a higher growth rate this year than you were in Q1 results. And it's clear that the injectables business is doing quite well. But can you just outline a little what the outlook might be for Frosst Ibérica? That's the first question. And then second question, just some admin. In the cash flow, it looks like there was a big increase in trade and other payables in the second quarter. It's about EUR 14.9 million. Just confirm what this relates to.

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Javier López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO [12]

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This is Javier. With regards with toll manufacturing, we are very, very excited about the results of the business division. As you were mentioning, injectables are performing very, very strong, and we'll -- we think that it will keep performing that way. And with regard to Frosst Ibérica, the good news that we expect that in the second half of the year, this downward trend will be reverted. And it's one of the reasons that we are upgrading the guidance for the business unit. So there are good news, good prospect for the solid plant. Unfortunately, our customers doesn't allow us to give names and visibility to our investors and analysts because they want us to be private, to keep their names private. But we are very excited also about the positive evolution for Frosst Ibérica in the second half of the year and also in the next coming quarters.

With regards to your second question, trade payables, they are increasing, I guess, due to the increase of the business. The tremendous growth of 21% of the operating revenue are pushing up the trade payables. But again, we don't see any major trend behind that, and we expect that if there is any deviation for this number of days, it will be reverted.

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Operator [13]

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No further questions at this time. I'm sorry, we still have one question coming up. One moment, we need to get the name.

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Javier López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO [14]

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Okay. We'll wait.

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Operator [15]

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One moment, Javier.

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Javier López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO [16]

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Sure. No problem, we'll wait for the question.

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Operator [17]

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All right. Your question comes from the line of Harry Sephton from Jeffries.

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Harry Thomas d'Alton Sephton, Jefferies LLC, Research Division - Equity Analyst [18]

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I just had one on back half actually. Given your disclosed sales on the international subsidiaries, it looks like about half of your enoxaparin Becat sales are now coming from Spain. What I'd interested in is how much of the market share in Spain do you currently have relative to Clexane for Becat? And then also, are you still seeing penetration in those international markets? Or are you seeing that some of the competition from other biosimilars launched from your competitors is starting to intensify? Also, in relation to that, are we expecting to see any of the reference pricing changes coming for either Bemiparin or enoxaparin near term. So effectively, are we going to expect some price decreases in those products?

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Juan López-Belmonte López, Laboratorios Farmaceuticos Rovi, S.A. - Chairman [19]

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This is Juan. Regarding Becat, actually, as you can see on our quarter evolution, really momentum is almost in all markets. As I was saying in the previous question, the fact that there is an issue on the raw material front, that's provoking, let's say, (inaudible) in many of the markets. So really I think momentum is in all our affiliates, and we expect to maintain a steady growth for the following quarters. Obviously, Spain, as it cannot be in a different ways, is the country that should be outperforming the rest of the affiliates because of our stronghold and our sales capabilities. The market is going extremely, extremely well. I don't have from top of my head exactly the market share figure that we have from Becat in Spain, but it should be already -- in terms of enoxaparin sales, it should be close over 15 -- 1.5% between 15% to 17% and the global molecular weight heparin market in Spain should be around 10% already, on 9% -- 8%, 9%, 10%. And again, we see that these figures will definitely improve on a quarterly basis.

On the reference prices scheme that you were mentioning, so far, we don't see any signals that may affect Bemiparin. It's a different acting principle, a different entity. So there is no substitution among Low Molecular Weight Heparin in Spain. Even biosimilars cannot be substitute, according to the existing law. And in the new scheme that it should be issue of the reference prices scheme that it should be published any time. We're expecting after summer. There would be no impact at all in Bemiparin. The only impact that Bemiparin might be -- suffer in the next quarters to follow is that obviously as biosimilar prices may drop, the gap in terms of prices for treatments will -- I mean, will widen. But so far, as you can see on our first half results of Bemiparin in Spain, actually sales are reporting pretty well, growing 5%. We are very much focusing on the treatment indication where Bemiparin has got, as we have mentioned before, clear clinical differences with one dose compared to two doses for enoxaparin. So actually, to the point of today, we don't see any signal, any warning that it may weaken the performance of Bemiparin in the following quarters.

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Operator [20]

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No further questions at this time. Thank you. You may continue.

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Javier López-Belmonte Encina, Laboratorios Farmaceuticos Rovi, S.A. - Second Deputy Chairman & CFO [21]

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So there are no more questions at this time. We -- therefore, we can conclude the call. Thanks very much for attending this first half 2019 results conference call to everybody. Have a good day, and have a good summary -- summer break. Thank you. Bye-bye.

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Juan López-Belmonte López, Laboratorios Farmaceuticos Rovi, S.A. - Chairman [22]

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Thank you. Bye-bye.

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Operator [23]

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Thank you. That does conclude our call for today. Thank you all for participating. You may all now disconnect. Speakers, please stand by.