Good morning, and welcome everybody to this first half twenty '21 results people meeting, which will start in a moment. This is Javier Lobde Del Monte, Rovi's vice president and chief financial officer. Please let me introduce Rovi's attendees today, Juan Lobpe Del Monte, chairman and CEO Marta Campos, head of investor relations and myself. At the end of the presentation, a question and answer session will commence. If you want to ask any questions during the presentations, please do not hesitate to send them through the question button on the platform.
Thank you for your presence here today, and let's now start with the presentation. I give Mr. Paulo Pedel Monte the floor.
Thank you, Javier, and welcome to everybody. I'm happy to present our first half twenty twenty one results. It has been almost one years point since the WHO declared the COVID-nineteen pandemic in March 2020. Since then, all of our efforts have been aimed at ensuring the health of our employees, continuing to supply our medicines to patients worldwide and supporting our society with resources and our expertise. Across the value chain, the COVID pandemic had no critical impact in our daily business, as we were able to continue the production of our medicines at all our facilities, to supply our medicines to all the patients in need, mainly at low molecular weight heparins, which were recommended by the WHO as essential medicines for people hospitalized in intensive care units due to COVID-nineteen, and to continue with all our research and development projects with no delays.
All in all, the resources Robbie booked to confront the COVID-nineteen pandemic and protect its employees during this semester were up to €1,000,000 In these exceptional times, Robby's performance during the semester has been above our expectations. Our 52% operating revenue growth was driven by the strength of the total manufacturing business, which grew by 172% and by the specialty pharmaceutical business, which grew by 25%. Data provided by Ecua indicate that the innovative product market in Spain increased by 1.9% in the first half of this year compared to the same period of the previous year. Nevertheless, Rovi, prescription based pharmaceutical product sales increased 25% in the first half of twenty twenty one, outperforming the market by more than 23 percentage points. The company forecasts that it will continue to grow at a much higher rate than the Spanish pharmaceutical market expenditure in the first six months of twenty twenty one, which according to the Minister of Health, Consumption and Social Welfare showed a growth rate of 3.6.
Regarding the classification of laboratories using data from IQA, Rovy was positioned fifteenth in terms of value and was the fastest growing Spanish innovative company among the top 15 top ranked companies in the first half of twenty twenty one. In the first half of twenty twenty one, Rovi climbed two positions in the classification compared to 2020. As you know, Robby reported on April 29 that it's reinforcing its collaboration in the fill and finishing of Moderna's COVID-nineteen vaccine by increasing its current filling and finishing capacity. To this end, a new industrial investment will be carried out in the facilities that the Rocket Group has in Madrid in Spain. These investments consist of the installation of two new production lines and equipment for compounding, filling, automatic vision inspection, leveling and packaging that will provide additional fillfinish capacity for the COVID-nineteen vaccine.
Moderna intends to supply markets outside The United States. These lines, located at Robby's facility in San Sebastian Del Reyes, Madrid, more than doubled the number of vials for which there is fill and finish capacity at this facility. In addition, Robby will also manufacture the active ingredient in Moderna's vaccine against COVID-nineteen. To this end, a new industrial investment will be carried out in the facilities that the Robby Group has in Granada. This investment consists of the installation of a new line supporting production phases of the active substance of the mRNA vaccine, which are prior and additional to the compounding and fill and finish of the vaccine.
This line is expected to begin to supply markets outside The United States in 2021. If we move now into the operating results. Operating revenues increased by 52% to an amount of €290,100,000 in the first half of twenty twenty one. And the main contributor to this growth were tenoxaparin biosimilar, which grew 27% to €62,700,000 Vemiparin, where sales rose 26% to €65,100,000 Neparavis, sales of which grew by 30% and finally, the TOL manufacturing business, where sales increased by 172%. The extraordinary increase in sales pushed profitability up by 3.3 percentage points to 25.5% in the first half of twenty twenty one.
EBITDA increased by 75 to an amount of €74,000,000 Likewise, net profit increased by 72% from €29,600,000 in the 2020 to €51,000,000 in the first half of twenty twenty one. Prescription based pharmaceutical specialties, which grew by 2025% in the semester, are high strategic value products and contribute to give Robby a wider scope for the coming years. Rovi considers its heparin franchise as one of its driving forces. Sales have risen by 26% to €131,400,000 in the first half of the year. Heparin sales represented 45% of operating revenues in the 2021 compared to 54% in the first half of twenty twenty.
We still aim to become one of the leaders in the low molecular weight heparin field worldwide with our two molecules, venipanin and enoxaparin biosimilar. Venipanin total sales increased by 26% to €65,100,000 and Roxaparin biosimilar sales increased by 27% to €62,700,000 in the first half of twenty twenty one. Robi continues with its internationalization plan. Sales outside Spain increased by 94% to €167,600,000 in the first half of twenty twenty one, euros 32,000,000 or 19% of which related to the international subsidiaries, mainly due to an increase in Benipen International sales, an increase in the term manufacturing business And sales outside Spain represented, in the first half of the year, 58% of the operating revenue compared to 45% in the first half of twenty twenty. International sales of the omeparin increased by 58% to €29,000,000 This increase was mainly linked to the increase in sale prices to some partners and wholesalers due to the rise in low molecular weight heparin raw material prices and secondly, a high concentration of purchase orders from the Russian and Chinese markets.
This significant increase was specifically linked to the first half of the year, and Rovi expects a double digit growth increase for international Benipen in sales in 2021. Sales of Benipen in Spain, HIBOR, increased 8% to €36,100,000 in the first half of twenty twenty one, mainly due to a higher penetration of the product in the treatment segment. Regarding the noxaparin biosimilar Pecat, we launched the product in Germany in 2017, in UK, Italy, Spain, France, Austria, Latvia and Estonia in 2018, in Portugal, Poland, Costa Rica, Finland and Sweden in 2019, South Africa, Israel, Peru, Holland, Panama and Dominican Republic last year and in Canada, Malaysia, Albania and North Macedonia in the first half of twenty twenty one. We have signed two important licensing agreements to distribute and market our nosaparin biosimilar: the first with Hikma Pharmaceuticals, who has the exclusive rights for 17 Middle East and North Africa countries and the second with Sandoz for 14 countriesregions. We started the commercialization in Q4 twenty seventeen, with sales amounted to €1,300,000 And sales increased quarter by quarter to reach a 27% rise in the first half of twenty twenty one.
So let me just summarize the opportunity here. This is a €2,000,000,000 market, 1,300,000,000.0 in Europe and €700,000,000 in emerging countries, with high entry barriers, where biosimilars are likely to reach between 50% to 70 of the market share and with only three other players in the market. The latest launches were again a strong driver of growth in the first half of twenty twenty one. Sales of Neparvis, a specialty product from Novartis, launched in December 2016, indicated for the treatment of older patients with symptomatic chronic heart failure and reduced ejection fraction, increased 30% to €17,900,000 in the first half of the year compared to €13,800,000 in the first half of twenty twenty. Sales of Boluksa from Astellas Pharma increased by 11% to €7,800,000 in the first half of twenty twenty one.
Sales of Buterin, Orbotech and Absorcor, specialty products from Merck Cap and Dom, indicated as adjunctive therapy to diet in patients with hypercholesterolemia, decreased by sixteen percent to €13,300,000 in the first half of twenty twenty one. In the first half of twenty twenty, Orbotech price was reduced by 40% due to the entrance of hybrid products formulated with ezetimibe and atorvastatin. Sales of Fidobriz, Briskhaler, Olunab, Briskhaler, both inhaled bronchodilators from Novartis for patients with respiratory difficulties due to a pulmonary disease known as chronic obstruction pulmonary disease, launched in Spain in the fourth quarter of twenty fourteen, decreased 19% to €4,800,000 in the 2021 compared to €5,900,000 in the same period of the previous year, mainly, as you may remember, to Urunar prescaler price reduction of 18% in the first half of twenty twenty. Finally, sales of contrast imaging agents increased by 21% to €17,400,000 in the first half of twenty twenty one. This increase shows the strong recovery of the Spanish and Portuguese hospital activity during this period, and Rovi continues to be the market leader in this segment.
Rovy has reinforced its collaboration with Moderna in the fill and finish of the COVID-nineteen vaccine Moderna by increased its fill and finish capacity and for the manufacturing of the Arctic substance of this vaccine. To this end, further industrial investments, as I mentioned before, will be made in the Robes Group facilities in Madrid and Granada. Regarding TORM manufacturing, sales increased by 172% to an amount of €94,500,000 in the 2021 as a result of the booking of the income related to the production of the COVID-nineteen vaccine, the booking of the income related to the activities to prepare the plant for the COVID-nineteen vaccine production under agreement with Moderna and the redirection of our toll manufacturing activities and strategy towards high added value products. Likewise, in the year 2021, Robby expects the total manufacturing business to increase by between two times and 2.5 times, including the production of the COVID-nineteen vaccine. If we move to research and development, Doria is the first Rovi product based in its leading edge drug delivery technology.
It is a novel investigational antipsychotic for the treatment of schizophrenia with once monthly injection, which has been developed and patented by Laboratoje Pharmaceutical Robi, and which, as of the first injection, provides immediate and sustained plasmatic drug levels and does not require loading doses or supplementation with oral risperidone. In January 2020, Roby announced the start of the centralized registration procedure for risperidone ISM with the European Medicines Agency. Likewise, on its Capital Market Day held on November 24, Rovi announced the presentation of an NDA that is a registration file to obtain marketing authorization in The United States to the FDA. In March 2021, reported the request for a stop of the clock in the authorization process of Respaid on ISM. The purpose of said clock stop is to have sufficient time to repeat the viability study comparing multiple doses of Doria with oral risperidone in response to the major observation of the Committee for Medicinal Products for Human Use, which states that the study must be performed using the European reference product.
The current tortilla of Doria already includes a clinical trial of viability using oral risperidone medicine marketed in The United States. Robbie expected the trial using The USA reference product to be valid for Europe because the two products, the oral risperidone medicine marketed in the European Union and the one marketed in The USA, can be considered via equivalence on the basis of the in vitro and in vivo studies that Rovich had conducted and submitted to DEMEA. Indeed, the therapeutic indication in schizophrenia for oral risperidone was supported by the same efficacy clinical trials in both territories, we consider that additional clinical information requested can still be provided in November. Lastly, Roby's research team has recently started development of a new formulation of risperidone ISM for a three monthly injection, which would complement the current formulation of Doria for the maintenance treatment of patients with clinically stable schizophrenia. This development is still in initial in initial phase.
And finally, let me end this part of creating the guidance for 2021. Robby expects the operating revenue to increase between 3540%, including the production of the Moderna's COVID-nineteen vaccine. We have stayed on the path of sustained growth in the first half of twenty twenty one. We increased sales by 52%, outperforming the market. We have expanded our heparin franchise through the launch of our enoxaparin biosimilar in 10 new countries in the last twelve months and the increase of our presence in countries where we had already launched the product.
We consolidated our pharmaceutical specialties area, thanks to the strength of our leading products such as Neparvis and Volutza, and we achieved growth of 172% in our tool manufacturing business, many thanks to the agreement with Moderna. Likewise, we are making a heavy investment effort in research and development. Focused on our ISM technology, which we see as a new avenue for Robby's future growth. To conclude, we believe that we are at a growth inflection point, with a strong growth opportunity driven by Risperidone and Electrokol, both candidates validating our leading edge drug delivery technology, ISM. Aren'thsaparin biosimilar, which will allow us to transform our European footprint and the agreement with Moderna, which is helping to strengthen our manufacturing area and is providing us with a significant growth opportunity in this area.
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 our high value added toll manufacturing services. And now I hand you over to 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 virtual meeting.
Thanks, Juan. We are very happy with our performance of the first half of twenty twenty one. As Juan already said, our operating revenue increased by 52 percent this year. This growth is driven by the good performance of our TOR manufacturing business, our heparin franchise, veniparin and then also paring biosimilar mainly and our leading products, such as Neparvis and Paluza, with which we intend to achieve an advantageous position in the current competitive environment. Sales of prescription based products increased by 25%, outperforming the innovative product market by 23 percentage points this semester.
Regarding our long molecular weight heparin franchise, we achieved a 27% growth. Sales of bemiparin, our flagship product developed in house, grew by 26% and enoxaparin biosimilar sales increased by 27% to €62,700,000 in the first half of twenty twenty one. Gross profit increased by 37% to €154,300,000 in the first half of twenty twenty one, The gross margin showing a decrease of 5.6 percentage points from 58.8% in the 2020 to 53.2% in the first half of twenty twenty one, mainly due to the 55% increase in the low molecular weight heparin raw material cost of goods sold in the first half of the year compared to the same period last year. In the first half of this year, the heparin raw material prices rose around 55% compared to the last year same period. As I said, it was the same because of the increase of the gross margin.
Rovi expects heparin raw material prices to continue to decline in 2021. And nevertheless, despite the potential decrease in the heparin raw material prices, the impact on the gross margin will continue to be negative because of the long heparin or low molecular weight heparin manufacturing process in which the raw material currently used is stocked for several months was purchased at higher prices. Robby continues to be committed to innovation. R and D expenses amounted to €11,900,000 in the first half of twenty twenty one, and this figure is mainly the result of a focused investment in the ISM projects. Selling, general and administrative expenses, SG and A, 16% to €68,500,000 in the first half of the year, mainly due to an increase in expenses related to the manufacture of the Moderna vaccine and an increase in expenses due to the preparation of the Dorea launch in Europe.
In the first half of twenty twenty one, Rovi also booked €1,000,000 in personnel and other expenses related to the COVID-nineteen measures implemented. Excluding expenses related to COVID-nineteen, SG and A would have increased by 19% to €67,500,000 in the 2021 compared to €56,600,000 in the first half of twenty twenty. EBITDA increased to €74,000,000 in the first half of twenty twenty one, a rise of 75% compared to the same period of the previous year, reflecting a 3.3 percentage points increase in the EBITDA margin, which was up to 25.5% in the 2021 from 2022 sorry, from 2022.2% in the first half of last year. EBIT increased by 93% to €63,400,000 in the first half of twenty twenty one, reflecting a 4.7 percentage point rise in the EBIT margin, which again was up to 21.8% in the first half of this year from 17.2% in the first half of twenty twenty. Net finance result amounted to €500,000 in the 2021 compared to minus €30,000 in the first half of twenty twenty, mainly due to the higher income related to exchange rate derivative financial instruments.
The effective tax rate was 20.2% in the 2021 compared to 99.9 in the first half of twenty twenty, mainly due to increase of the profit before income tax. As of thirty June twenty twenty one, negative tax basis of the group amounted to €25,500,000 of which €9,000,000 will be used in the full year 2020 income tax and EUR 12,800,000.0 will be used in the first half of twenty twenty one. Let me say that all these negative tax bases were already recognized as assets as of thirty seven thirty first, sorry, December 2019. Net profit increased by 72% from 90 from €29,600,000 in the 2020 to €51,000,000 in the first half of twenty twenty one. EBITDA pre R and D calculated excluding R and D expenses in the 2021 and in the first half of last year increased by 62% from €53,200,000 in the 2020 to €85,900,000 in the first half of twenty twenty one, reflecting a 1.8 percentage point rise in the EBITDA margin to 29.6% in the first half of twenty twenty one.
EBIT pre R and D increased by 72% from €43,600,000 in the first half of last year to €75,300,000 in the first half of this year, reflecting a 3.1 percentage point rise in the EBIT margin to 25.9% in the first half of twenty twenty one. Net profit per R and D increased by 54% from €39,300,000 in the 2020 to €60,500,000 in the first half of twenty twenty one. Robby invested €11,400,000 in the first half of this year compared to €7,300,000 in the first half of twenty twenty. Of this amount, 7,000,000 relates to investment CapEx regarding our facilities, including important projects such as the ISM industrialization, the building of a second low molecular weight heparin API facility in Scusar, Granada and the new lines for the Moderna vaccine. The rest, 4,500,000.0, relates to maintenance and other CapEx.
Free cash flow increased to €76,000,000 in the 2021 compared to minus €22,300,000 in the first half of twenty twenty, mainly due to the increase of €31,100,000 in the profit before income tax, the increase of €24,400,000 in the inventory line item in the 2021 compared to a decrease of €77,300,000 in the first half of twenty twenty. And the booking of €12,500,000 in the proceeds from total manufacturing services mainly due to the payments received that are pending to be allocated to the income statement. Regarding our debt, as thirtieth June twenty twenty one, Rovi total debt decreased to €72,800,000. €45,000,000 is debt with banks, representing 62% of total debt, while €10,800,000 correspond to debt with public administration related to the development of R and D projects, which is 0% interest rate debt, representing, therefore, approximately 15% of total debt of the company. And finally, euros 17,100,000.0 correspond to financial liabilities for leases as a result of the IFRS 16 application, representing 23% of total debt.
Since the beginning of the COVID nineteen crisis, has signed credit policies for an amount of €45,000,000 in order to ensure the company's liquidity. As of thirtieth June twenty twenty one, Rovi did not renew these credit policies upon maturity as we did not need them. As of thirtieth June twenty twenty one, Rovi had a gross cash position of €129,000,000 compared to €54,600,000 as at the end of last year and net cash of €56,100,000 compared to net debt of €19,800,000 as end of last year. Regarding the dividend, Rovi General Shareholders' Meeting on seventeenth June this year approved the payment of a gross dividend of €0.3812 per share on 2020 earnings. It means an increase of 118% compared to the dividend on 2019 earnings and represents, therefore, a 35% payout.
This dividend has already been paid on seventh on the July 7 this year. Regarding new growth for 2021, we will closely monitor evolution of the manufacturing of the Moderna vaccine. We don't expect to announce any additional programs this year as a result of the COVID-nineteen crisis. But, however, we expect to inform on new national marketing approvals for the enoxaparin biosimilar outside Europe. With regards to R and D, we expect to obtain the marketing authorization in Europe and also United States for DORIA at the end of this year or at the beginning of twenty twenty two.
Also, we expect to gather more clinical data from LETROSAL Phase I trial during the following months To better characterize the pharmacological profile of LetroSol ISM, in the second half of the year, we expect to discuss these results with regulatory authorities, together with the next steps for continuing the clinical development. And that's all regarding our financial results for the first half of the year. We can now start the Q and A session.
Juan, the first question comes from Isabel Carvallo from ODDO. Could you please elaborate a little bit more the agreement with Moderna? Have you already started the manufacturing works for the active substance of the COVID-nineteen vaccine? Are you considering the fill and finish for other products of the company beyond the mRNA vaccine? Juan, I think you're muted.
I was on mute. Yes. Sorry, I was on mute. Well, thank you, Marta. Basically, the agreement that we have with Moderna is reflected on the different press releases that we have made public with all the major milestones that we have signed with Moderna.
So far, I mean, the business is going as expected. We are just starting our relationship with Moderna. I think Moderna has got a tremendous, interesting and exciting pipeline. We haven't we don't discard the possibility of probably expanding our relationship with Moderna. But to date, we don't have anything signed.
We haven't started conversations. I think both parties, Moderna and ourselves, we are now focused on making sure that we increase the pace of fill and finish of the COVID vaccine and making sure that we're able to supply and to fulfill the demand that Moderna has acquired with these respective countries.
Okay. Juan, Isabel also asks, can you please comment on your plans for the next launch in The U. S?
For our next launch
in The
U. S?
Yes. Algeria.
Algeria. I mean, again, that's that's something that I mean, this is the major topic within the company. That's why we are spending most of our time to really come out with the right solution that can bring Robby a financial quick return and as well gain the insight of the dynamics of the of The U. S. Market.
We are waiting to to get the feedback from the FDA regarding the the registration submission that we did some months ago. We are discussing with different partners on different basis. We have shared with investors before. We are not disregarding any possibility to date. We are considering the scenario of setting ourselves.
We also consider the scenario of making a JV, different models without the JV. And what we are trying in whatever is going to be the final decision, which we will announce accordingly when it comes to time. What Robbie wants to preserve is the the rights of the product and to try to find a financial solution with a partner if we decide to to follow that pathway that can help us to gain the insights of The US dynamics that will help us as well for potential additional products like the quarterly whisper on ISM or as let us all that, hopefully, we also expect to to succeed in getting the product approved in The US.
Thanks, Juan. Javier, Isabelle has two questions for you. The first one is future use of the cash. Are you considering further product acquisitions in Europe?
You, Marta, and thank you, Isabelle, for your question. Again, the strategy of Rovi hasn't changed. And and one of the main uses of funds for the for the company will be m and a in the future. We we believe that one that, again, the most important growth of the company is gonna be purely organic, as always, but we don't disregard to fuel that growth with M and A. And Europe is our main focus on this area.
Okay, Javier. And Isabelle also asks outlook for gross and EBITDA margins in the second half this year.
Well, we are extremely happy with the performance of the company this first half. The growth of the sales has helped us to increase profitability in every line. However, the first half with regards to gross margin, we have the effect, the negative effect from the cost of the heparin raw material. We do believe, and we keep telling people that we expect that the heparin cost of goods will be declining for the next coming years. However, as we have explained several times, we have long period of manufacturing process, long stocks.
And probably, this will not happen until for sure until next year. However, I think that the mix of the sales for the year will help the company to try to offset this negative gross margin during the first half. And we do have at least the hope that in the second half of the year, the gross margin will be improved even though that we will still have to bear the increase of the cost of the heparin raw material. And with regards with EBITDA, it will also depend on the gross margin and possibly on the sales evolution. If the sales evolution is, well, as good as expected and as we have increased the guidance, we probably could be very positive also in the for the outlook for the second part of the year for the EBITDA.
Thank you, Javier. Juan, the next question comes from Harry Sheffton from Jefferies. Please, can you help expand on phasing of toll manufacturing sales? Are you already at peak current capacity? When are you expecting the new injectable lines to come onstream?
Mean, Harvu, thank you, Marta. I mean, on toll manufacturing activities, I mean, the Moderna contract has not impacted so much on our capacity on our existing term manufacturing business. Most of the fill and finish done for Moderna almost to the extent of today is performing multidose vials. And for that purpose, we are using an in house line, and we have also stated that we have bought three new lines. One is already operational, and the next two will be operational in the next quarters.
So in terms of thermal manufacturing operations, our standard thermal manufacturing operations based on preferred syringes. In terms of running rate, our capacity has not been affected by the Moderna agreement. So our free capacity remains the same as we had before. Obviously, the complexity of the Moderna agreement has put a lot of pressure in terms of manpower and human resources. So I mean, we have been impacted in terms of the pardon of work, but we have not been impacted in terms of free capacity of our manufacturing operations outside of the Moderna agreement.
It's true that right now, we are purely focused on making sure that we fulfill Moderna's expectations, And we are we are in a race against time to try to deliver as much product as possible because it's it's, at the end, it's it's a question of saving lives. And, obviously, that has put pressure in in getting new customers for our existing manufacturing operations. Having said that, the Moderna contract has given Rovi a tremendous visibility in the sterile injectable contract manufacturing landscape, And we believe this is going to have a tremendous positive effect to Rovi in the medium term. And actually, we are now engaged in several conversations for potential future collaborations on the prefilled syringe side of the contract manufacturing operations.
Thank you, Juan. Javier, the next question comes from Alejandro Conde from Santander. He asks, aside from the heparin raw material cost headwinds you indicated in your press release this morning, do you think the business mix has also contributed to such a steep, sorry, gross margin erosion in the quarter semester? What are your current expectations for gross margin in 2021?
Alejandro, thanks for your question. As I was to explain before, I believe that the business the current business mix of the company will help us to offset the negative impact on the gross margin. So that's why we look we keep we stay positive on the second part of the year on the gross margin line, let's say, that way. And we expect that the increase of Moderna production, as we've been discussing and we've been telling that we are expecting to keep in to keep on scaling up the production for the COVID-nineteen vaccine will help us to also to increase the gross margin or at least to offset the negative impact with the heparin cost.
Okay. Thank you, Javier. The next question comes from Alvaro Lente, Javier. Are there any additional countries in which you intend to launch Decat this year?
Well, as we've been discussing and telling this, so this afternoon, plans for enoxaparin are really aggressive. And we expect to keep launching the product in many countries not only this year, but the following years. Believe this year that we expect to launch in countries such as New Zealand, in Turkey. I believe Colombia also is there, Arabia, South Arabia, and and also the Jordanian and Lebanon and and probably probably, also in in Serbia.
Thank you, Javier. Juan, the next question comes from Francisco Rith from Exane. Can you update the situation of Letrozole? What are your assumption for Moderna business for next year?
Francisco, on Letrozole, actually, as Jorge has mentioned, we are working better to do a better characterization of the molecule for the ISM technology. So far, we have already request meetings with the regulatory agencies, which it will happen hopefully in the next quarters. And those meetings are going to be critical to define which are the next steps to take in the clinical development of the product. We have already performed successful Phase I studies that it has given us a tremendous information in terms of pharmacokinetics. We think this product is unique.
It's going to be a breakthrough by itself. And we are just gathering information and preparing a good case to show to the regulatory authorities to see what should be the next steps in terms of clinical development. And that's where at least we're excited that we have strong and very and good data, And we expect to have a constructive discussions with the FDA and India. And those and and after those conversations, we will announce which are the next steps of the clinical development for the product. But definitely, the company is devoted to the development of the SM technology.
We have the monthly risk breakdown, which is already under registration. We're already developing the quarterly risk breakdown on SM, which is in an early stage. And let us all, that should be the next project moving into late clinical trials, depending on what may be the requirements by the regulatory agencies that hopefully we will have the possibility to discuss with them in the next quarters. And regarding Moderna, the second question, which are expectations. I have to be honest that, that's difficult to forecast.
Actually, I think the Moderna evolution is going to depend very much on the COVID nineteen evolution. This is unfortunately, it's a scenario that changes every week. Probably, had this call a month ago. We all thought that the COVID nineteen pandemic outbreak was very much under control. Now we have a new strain, the Delta, the Delta Plus.
We are already hearing from the different health authorities that probably a third dose would be required. They still have to define whether it is going to be a third dose, whether it's going to be for all across all ranges of population. They have to define whether this new third dose is going to be on the Wuhan or the Alpha or the Kent strain or it's going to be based on a mix of strains or the new strain. I think there are still a lot of uncertainties. The reality is that we are still investing.
I think we have a very good straightforward relationship with Moderna. And I think that, unfortunately, the COVID-nineteen is going to stay around for a while. Probably, regular vaccination campaigns will be required for the next two years. And if that happens, obviously, the expectations for the company will be also positive because we will be one of the major companies helping Moderna to supply the market. But again, it will depend very much on the COVID-nineteen evolution.
And unfortunately, it seems that it's going to stay around this set for at least for three or four more quarters.
Okay. Thank you, Juan. Alvaro Lente from Alantra Equities asks, any comments you can share on the recent news of delays in the supply chain of the Moderna vaccine outside outside of The US?
Well, Alvaro, you may not believe it, but we have learned this news through through Internet, through his through their statement. Again, this is I don't want to excuse Moderna, but the supply of the vaccine is a tremendous complex supply chain, not only the manufacturer of DPI, but also the fill and finish as as well the release, the testing. So I I'm I'm sorry, but I cannot provide you further information regarding this this statement that Moderna has released, I believe it was last night, because we don't have that much information. The only thing I can tell you is that I think every party on the supply chain of Moderna, we're trying to make the most to really to save one day or two days because we know that saving days and anticipating our delivery is crucial to save lives. So I would say that that we're trying our most, and I don't know really where does that delay that Modena has announced comes from the supply which part of the supply chain it comes from.
Javier Lantisco Rib from Exane asks, could you update on the cost expected this year on European launch of Dorea?
Thank you, Francisco, and hello for your thank you for your question. Hello. Well, as you know, the the launch of Doria is gonna be on the 2022, so next year. So this year, what we are doing is doing the, what we call, pre marketing and and trying to plan a successful launch next year in Europe. No?
We are using Germany as the main country to prepare the launch as is the main the main market. And we already hired some people in order to have a deep understanding of the market and a good preparation of our launch next year. Believe that in the first half, we roughly expand close to €1,000,000 to do all this work, and probably similar quantity will be expand in the second part of the year. So nothing really material.
Thank you, Javier. Juan, the next question comes from Alvaro Lente from Alantra Equities. How is the tone manufacturing ex Moderna performing? Is the high profile nature of the agreement with Moderna opening the door to new customers? Or are you too focused with the vaccine at the moment to explore additional opportunities?
Well, I think thank you a lot for the question. I think the Moderna agreement is being as great news for Robi, not only for the business itself, but as I mentioned before, it has given us a visibility and also has put into the news the importance of the injectable capacity overall. I mean, I think this is going to be a tremendous push for the contract manufacturing operations at Brovi. We were one of the leaders, but we were in, let's say, in a sort of shadow situation in which this was a market that it was not appreciated, that it was not so much well known. I think the Moderna has created the awareness that countries and regions, they need to have a capacity to be able to supply product in case of a pandemic outbreak.
So Rovi was one of the major players in the flu vaccine, as you may all remember. I think that has provided the opportunity that has allowed us to sign with Moderna, and this has provided Rovio tremendous awareness worldwide. And as I mentioned before, I mean, the Moderna contract manufacturing operation is based mainly and so far only into multi dose vials. The main expertise of the company is prefilled syringe. So I think we're going to have a tremendous increase of of business in the near and long term.
I mean, this has provided a visibility to Ravi that that it was impossible to imagine six or one year ago. And we are right now engaged in many different talks with with different companies, having early and later stage discussions to to to sign new agreements with new customers. Having said that, please let me remind you, like I always do, that the to capture a new client in contact manufacture operation is not something that you do in a quarter. Usually, it takes between two to three years. First, you have to sign the agreement, then you have to make the validation batches and the regulatory batches, and then you have to to perform all the regulatory submissions.
So this is not something that we're going to see in our accounts probably in the next year and a half. But definitely, the Moderna agreement is going to to bring the contract manufacturing operations of Rovi to a new level, and that's something that we are going to see probably in the next two years because we are engaged today in many discussions. And we are also accelerating many of the previous discussions that we've had because of the Moderna visibility. So I think overall, it's going to be a tremendous good news for Robby on the short term because Moderna is helping us to improve our financials. But on the meantime, the Moderna agreement is providing Robby a level of visibility and awareness that in two years' time, we're going to see an increase of our ex Moderna similar activities, an increase in a very important way.
Asking your second question, the similar activities, if we ex Moderna is also evolving really well. We are increasing every semester. So I think globally, as Javier has mentioned many times in our different presentations, CMO activity was a core part of the study of the company, and now it's going to become even more important, and it's going to be one of our most important financial drivers in the next years.
You, Juan. Juan, the next question comes from Jose Maria Canoghas from Potawe Capital. First, could you give some color regarding timings for setting up your commercial network in Europe for DORAYA? Secondly, maybe it's still too soon to ask this, but what comes beyond DORAYA and Lipozol for your ISF technology? Are you looking into any other product in preclinical trials?
Okay. Regarding DORIA, as Javier has mentioned before, we are we are using right now Germany as, let's say, as a business case for premarketing activities. We have done all the research work with a few other partners to have an assessment on the human resources required in terms of sales force and as well of SG and A related to the launch of Toria. We have decided to choose Germany because the two most important markets in Europe for schizophrenia, long acting injectables is Germany and Spain. Spain, obviously, will have a tremendous large sales force, so we don't have to bring in anybody.
And Germany, we have we are using now that as a sort of a laboratory experience to see what sort of strategy resources in addition to to those that they are already onboard that we may require to have a successful launch. We once we get the the approval or or the or the or the the first letter of response from the EMEA after we submit the new clinical data in November, that would be really the green light to start hiring all the people. We have the headhunters already being appointed. We have everything in place, just ready to give the go ahead and start and start recruiting all the required sales force. Javier has mentioned, this will mostly happen in q one q one two thousand twenty twenty two.
As you know, before launching a product, there are different phases. First, you have to get the approval from the EMEA. Then this approval from the EMEA has to be sent to to the countries. There, you you discuss the labeling, and then you have to go to the reimbursement process on a country basis. So since we get the go ahead from the EMEA until we can launch the product, at least you have four to six months in the in the in the quickest or the fastest countries with which are basically UK and Germany.
And then and you have to wait in between eight to ten months in the rest of the countries in Europe. So we have enough time, and we have all the time on the calendars based on this time difference to be able to have every everybody on board and the and the Dorea launch fully prepared. So q one twenty twenty two, we will start booking material expenses in terms of recruiting sales force besides Spain and Germany. And regarding your second question, we are right now focused on Doria. We are focused on Letrozole.
We are focused on a quarterly injection of ISM, which is in itself is a follow-up product, life cycle management of Doria, but it's going to be a very important product if we manage to to get it approved. So we have a lot of really to to to cope with at this moment. But as as I we've mentioned before, for us, the Dory approval has two important benefits for the company. The first benefit is to get a product approved that is in a very important and large chronic market like is the schizophrenia. But the second important benefit of getting totally approved is really the validation of ISM technology.
So, really, the the the next generation of ISM after Toria is not only cortisol or the protein injection of ISM or even additional APIs and products that we are testing in our labs with the ISM technologies. But we suspect to be able to convince and to entice other companies to use our ISM technology for the life cycle management of their of their compounds. So, we do have I believe, an important feature beside DORI and LETSORE that it will become from new products that we are right now testing in our labs. But to be honest, right now, we cannot go any faster because we don't have the human capabilities to cope with all these challenges at the same time. And as well, we believe that with the approval of Doria, we will get ISM technology validated.
And they are out there on the market, many potential products which are marketed that it can be eligible to use the ISM technology. And, definitely, that's something that we will market, and we will approach these companies when the moment comes.
Okay, Juan. The last question comes from Guillermo Santayo from CaixaBank. And I'm sorry, it's for Javier. Javier, can you provide us some color on the raw materials purchase schedule over the past year, expectations for future purchases and on the timing of the flow of these purchases into the P and L? Taking all points that you provide, how reasonable is to consider H2 performance as somewhat stronger than H1?
Thank you, Martha, and thank you, Jeremy, for for your question. Well, basically, as as we were trying to to explain, the production cycle time is is for heparin is is quite long. And also, we need to to buy the the we would like to buy heparin in well in advance to have enough safety stock to be able to cope with the market. So that means and that's why we are saying or we are talking about differences, clear differences between the current cost of the heparin in the market, which, again, this year is lower than the year before, and our internal cost of goods. Our internal cost of goods is an average of all the stock we have.
And then we have to take into account this cycle time of the production. So basically, we don't see an upgrade on the second part of the year, thanks to the heparin. We will be much looking forward to having this upgrade on the next year for the heparin cost. So we expect to maintain a stable cost of goods for the heparin for the rest of the year. However, what we are saying is that thanks to the rest of the business mix, we do believe that the second part of the year could be better in terms of gross margin.
Thank you very much, Javier. I give you the floor to close this video conference.
Well, thank you, Marta, and thank you to all of you. It seems that there are more questions still pending to be answered. But unfortunately, we have to call off this call. The our Investor Relations team will answer, and we'll get back to you all the remaining questions. And for this reason, we can now end this first half financial results to our virtual meeting.
We wish you all a great summer break. Well deserved, and hope you have a nice afternoon. Bye bye.