Rovi Expands Manufacturing Capabilities with $250M BMS Deal and Phoenix Facility Acquisition

Laboratorios Farmacéuticos Rovi, the Spanish contract development and manufacturing organization (CDMO), has significantly bolstered its production capacity through a landmark deal with Bristol Myers Squibb (BMS). The agreement, valued at $250 million, includes the acquisition of a state-of-the-art manufacturing facility in Phoenix, Arizona, and a five-year manufacturing pact with the pharmaceutical giant.

Facility Acquisition and Expansion

The cornerstone of this deal is Rovi's acquisition of BMS's 34,000-square-meter (366,000-square-foot) production facility in Phoenix. This site is equipped to manufacture a diverse range of pharmaceutical products, including high-potent cytotoxic compounds, vaccines, obesity drugs, monoclonal antibodies, biosimilars, and antibody-drug conjugates. The facility has received approvals from key regulatory bodies, including the FDA, European Medicines Agency, and Japan's drug regulator.

Since 2021, BMS has invested approximately $100 million in upgrading the Phoenix site. Further enhancements are planned, with a new prefilled syringe line scheduled for implementation in 2027, which will significantly increase the facility's production capacity.

Strategic Manufacturing Agreement

The deal structure ensures a steady stream of business for Rovi, with BMS committing to a minimum annual payment of $50 million over the next five years. During this period, Rovi will continue to manufacture products for BMS, solidifying a mutually beneficial relationship between the two companies.

Juan López-Belmonte Encina, CEO of Rovi, commented on the strategic importance of the deal: "This acquisition not only expands our manufacturing footprint but also deepens our partnership with a global pharmaceutical leader. It's a testament to Rovi's growing capabilities and our commitment to serving the evolving needs of the industry."

Rovi's Market Position and Future Outlook

This latest move comes at a crucial time for Rovi, which has been navigating the post-pandemic landscape. The company gained global recognition during the COVID-19 crisis through its partnership with Moderna, producing the mRNA-based vaccine Spikevax. In 2022, Rovi and Moderna extended their collaboration with a 10-year agreement covering COVID-19 boosters and other mRNA vaccines targeting respiratory syncytial virus and influenza.

However, like many CDMOs, Rovi has faced challenges as pandemic-related demand waned. Earlier this year, the company cautioned analysts that profit estimates for 2024 were overly optimistic, primarily due to reduced activity in its contract manufacturing business.

Despite these headwinds, Rovi's leadership remains confident in the company's trajectory. The acquisition of the Phoenix facility and the long-term manufacturing agreement with BMS underscore Rovi's commitment to growth and diversification in the competitive CDMO landscape.