Welcome to ROVI first half 2020 financial results. The management of ROVI will run you through the presentation, which will be followed by a Q&A session. Mr. Juan López-Belmonte, Chief Executive Officer, and Mr. Javier López-Belmonte, Chief Financial Officer of ROVI, will be presenting this conference. I pass the word to Mr. Javier López-Belmonte.
Thank you, Denise, and good afternoon to everyone. This is Javier López-Belmonte, Chief Financial Officer of ROVI. At this time, I would like to welcome everybody to this first half 2020 results conference call, which will start in a moment. Let me please first introduce ROVI's attendees today, Juan López-Belmonte, Chief Executive Officer, Marta Campos, Investor Relations, Antonio Marquina, Investor Relations, and myself. All lines are now on mute to prevent any background noise. The conference will also be webcasted on ROVI 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 Chief Executive Officer, Mr. Juan López-Belmonte, for the highlights of this first half 2020 results. Juan?
Thank you, Javier, and welcome to everybody. I'm happy to present our first half 2020 results. The first six months of 2020 have been extremely unusual due to the COVID-19 pandemic. This crisis has no precedent and each day presents new challenges to all of us. Across our company, we are working hard to tackle the challenges that COVID-19 poses. We have focused our efforts on three things in particular, 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-19 pandemic had no critical impact on our daily business, as we were able to continue the production of our medicines at all our facilities, supply our medicines to all the patients in need, mainly our low molecular weight heparins, which were recommended by the World Health Organization as essential medicines for people hospitalized in intensive care units due to COVID-19, and continue with all our research and development projects with no delays. All in all, the resources ROVI booked to confront the COVID-19 pandemic and protect its employees during this first half of the year were EUR 2.5 million. In these exceptional times, ROVI's performance during the first half of the year has been above our expectations.
Our 8% operating revenue growth in the first half of the year was driven by the strength of the specialty pharmaceutical business, which grew by 4%, and by the toll manufacturing business, which grew by 31%. Data provided by IQVIA indicates that the innovative product market in Spain increased 4% in the first half of this year. Nevertheless, ROVI's prescription-based pharmaceutical product sales increased 7% during the first half of the year, outperforming the market by three percentage points. We forecast that we will continue to grow in line with the Spanish pharmaceutical market expenditure in the first five months of 2020, which according to the Minister of Health, Consumption, and Social Welfare, show a growth rate of 3.4%.
Regarding the classification of laboratories using data from IQVIA, ROVI was positioned 16th in terms of value and was the fastest-growing Spanish innovative company among the top 16 ranked companies in the first half of 2020. As you know, on July 9, we announced a collaboration agreement with Moderna for large-scale commercial field finished manufacturing of Moderna's COVID-19 vaccine candidate at ROVI's facility in Madrid. As part of the agreement, ROVI will provide vial filling and packaging capacity by procuring a new production line and equipment for compounding, filling, automatic visual inspection, and labeling to support production of the vaccine candidate intended in principle to supply markets outside of the U.S., starting in early 2021. We would like to mention that we are very happy about the collaboration with Moderna, whose vaccine against COVID-19 is one of the frontrunners in the race to solve this health crisis.
It would be thrilled for ROVI to form part of the solution to this pandemic that is affecting all of us and to support Moderna in supplying it on a wide scale. Our proven experience and capabilities as a third manufacturer of injectables has allowed us to reach this agreement, which would help strengthen our manufacturing area and would, in all probability, provide us with a significant growth opportunity in the area. Operating revenue increased by 8% to EUR 191.1 million in the first half of 2020. The main contributors to this growth were the enoxaparin biosimilar, which grew 35% to an amount of EUR 49.3 million. Bemiparin outside Spain, where sales rose 88%. Neparvis, sales of which grew by 43%, and the toll manufacturing business, where sales increased 31%.
The increase in sales, together with the rise in gross margin and the drop in both promotion expenses as a result of the COVID-19 crisis, and research and development expenses, pushed profitability up by 7.3 percentage points to 22.2% in the first half of 2020. EBITDA increased by 60% to EUR 42.4 million. Likewise, net profit increased by 83%, from EUR 16.2 million in the first half of 2019 to an amount of EUR 29.6 million in the first half of this year. Prescription-based pharmaceutical specialties, which grew by 7% in the first half of 2020, are high strategic value products and contribute to give ROVI a wider scope for the coming years. ROVI considers its heparin franchise as one of its driving forces. Sales having risen by 22% to EUR 104 million in the first half of 2020.
Heparin sales represented 54% of operating revenue in the first half of the year, compared to 48% in the first half of 2019. We aim to become one of the leaders in the low molecular weight heparin field worldwide with our two molecules, bemiparin and enoxaparin biosimilar. Bemiparin total sales increased by 14% to EUR 51.6 million in the first half of 2020, and enoxaparin biosimilar total sales increased by 35% to EUR 49.3 million in the first half of 2020. ROVI continues with its internationalization plan.
Sales outside of Spain increased by 37% to EUR 86.5 million in the first half of 2020. EUR 26.5 million or 31% of those sales of which related to international subsidiaries, mainly due to recognition of enoxaparin biosimilar sales. Sales outside of Spain represented 45% of operating revenue in the first half of 2020 compared to 36% in the first half of last year.
International sales of bemiparin increased by 88% to EUR 18.3 million, representing 35% of total bemiparin sales in the first half of 2020. This significant increase was mainly linked to the increase in transfer prices to some partners due to the rise in low molecular weight heparin raw material prices. ROVI expects international bemiparin sales to increase by a high teens percentage in 2020. Sales of bemiparin in Spain decreased 6% to EUR 33.3 million in the first half of 2020 due to the significant reduction in the number of surgical operations performed during the period of confinement. International sales of enoxaparin increased by 20% to EUR 34.2 million, representing almost 70% of total enoxaparin sales in the first half of 2020. 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, Poland, Costa Rica, Finland, and Sweden last year. Besides Europe, we have signed out-licensing agreements in 88 countries as part of our stage 2 of our commercialization strategy. We have signed two important licensing agreements to distribute and market enoxaparin biosimilar. The first with Hikma Pharmaceuticals, who has 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 quarter- by- quarter to reach a 35% rise in the first half of 2020, in a very difficult environment due to the reduction of the hospital activity during the period of confinement. Let me just summarize the opportunity here.
This is a EUR 1.4 billion market with high entry barriers, where biosimilars are likely to reach between 50%-70% of market share, and with only two other players in the market. The latest launches were again a strong driver of growth in the first half of 2020. Sales of Neparvis from Novartis, launched in December 2016, indicated for the treatment of adult patients with symptomatic chronic heart failure and reduced ejection fraction, increased sales 43% to EUR 13.8 million compared to EUR 9.6 million in the same period last year. Sales of Volutsa from Astellas Pharma increased by 9% to EUR 7 million.
Vytorin, Orvatez, and Absorcol, the first of the five licenses of MSD indicated as an adjunctive therapy trial in patients with hypercholesterolemia, increased by 4% to EUR 15.9 million in the first half of 2020, despite Orvatez price was reduced by 30% in the first half of 2020 due to the entrance of hybrid products formulated with ezetimibe and atorvastatin. Sales of Seebri Breezhaler and Ulunar Breezhaler, both inhaled bronchodilators from Novartis, decreased by 21% to EUR 5.9 million, mainly due to the 18% price reduction in Ulunar Breezhaler in the first half of 2020. Finally, sales of contrast imaging agents decreased by 14% to EUR 14.4 million, mainly due to the significant reduction in the number of diagnostic tests performed during the period of confinement. ROVI continues to be the market leader in this segment.
Regarding drug manufacturing, sales increased by 31% to EUR 34.8 million in the first half of 2020, as a result of the redirection of our drug manufacturing activities strategy towards high value-added products, backed by the high degree of technological specialization of our plants in differentiated niches, such as biological and biotechnological, immunological vaccines, and long-acting injectables. As we already mentioned, we have unified the drug manufacturing area, which will allow us to take better advantage of the synergies between the plants and enhance their efficiency. In addition, we would like to highlight the fact that thanks to the deal with Moderna, ROVI will incorporate one new filling line for vials. Following along the same line, by the end of this year, 2020, we expect the drug manufacturing business to have increased by a high teens percentage.
As the company has recently reported, a very important milestone has already been achieved with its long-acting injectable antipsychotic, DORIA. After the conclusion of the validation phase, the European health authorities have commenced the assessment process to grant marketing authorization for this first product based on a leading-edge drug-delivered technology, ISM. In March 2019, the company announced top-line results from the pivotal study of risperidone ISM, PRISMA-3, which showed that primary and key secondary efficacy endpoints were achieved with both doses tested for the treatment of patients with acute exacerbation of schizophrenia. Besides, in July 2019, the company announced the completion of the clinical trial program that will support application for marketing authorization for DORIA for the treatment of schizophrenia. In addition, an open label extension of the PRISMA-3 study has already finished and will provide clinical data on the long-term use of risperidone ISM.
Furthermore, ROVI informed of the decision to expand its industrial capabilities for the manufacture of DORIA, with the incorporation of a second line for the manufacture of the syringe containing the solvent. The addition of this second line also provides the company with the necessary flexibility to initiate the preparation of the industrial filling processes of letrozole ISM, which will require installation of a specific filling machine. As a result, ROVI has prioritized the submission of the DORIA dossier in Europe, and subsequently the filing in the U.S., targeting the second half of 2020. Furthermore, the company has already announced the commencement of the clinical development of letrozole ISM, which represents the second candidate using ROVI's ISM technology platform. This new investigational medicine is, to the best of our knowledge, the first long-acting injectable aromatase inhibitor intended for the treatment of hormone-dependent breast cancer.
The first phase I clinical trial, LISA-1 study, of letrozole ISM is currently ongoing, and due to the study design and its exploratory nature, the finalization database cannot be anticipated. Nevertheless, preliminary data confirm that this ISM formulation provides a prolonged release of letrozole, which produces a sustained suppression of estrogenic hormones. The company will be gathering more clinical data from this trial over the next few months to better characterize the pharmacological profile of letrozole ISM. Afterwards, in 2020, ROVI's planning to discuss these results with the regulatory authorities, together with the next steps for continuing the clinical development of this novel long-acting injectable aromatase inhibitor. Lastly, ROVI's research and development 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 an initial phase. Finally, let me end with our guidance for 2020. ROVI expects a mid-single-digit growth rate for the operating revenue. We have stayed on the path of sustained growth in the first half of the year. We increased sales by 8%, outperforming the market. We have expanded our heparin franchise through the launch of enoxaparin biosimilar in three new countries in the last 12 months. The increase of our presence in countries where we have already launched the product. We reinforced our European presence through the acquisition of three new products, [Falithrom] for the German market, Polaramine for the Spanish and French markets, and sodium heparin for the Italian market. We consolidated our pharmaceutical specialties area, thanks to the strength of our leading products such as Neparvis and Volutsa.
We achieved growth of 31% in our toll manufacturing business thanks to the redirection of our strategy towards high value-added products. 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 ROVI's future growth. To conclude, we believe we are at a growth inflection point with a strong growth opportunity driven by risperidone and letrozole, both candidates validating our leading-edge drug delivery technology, ISM. Our enoxaparin biosimilar, which will allow us to transform our European footprint, and thirdly, the agreement with Moderna, which would help strengthen our manufacturing area and would provide us with a significant growth opportunity in the 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.
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 telephone conference.
Thanks, Juan. We are extremely happy with our performance in the first half of this year. Our operating revenue increased by 8% this semester. This growth is driven by the good performance of our low molecular weight heparin franchise, enoxaparin and the enoxaparin biosimilar. Likewise, our toll manufacturing business was an important driver of our growth in the first half of 2020. Sales of prescription-based products increased by 7%, outperforming the novelty product market by three percentage points in this semester. Regarding our low molecular weight heparin franchise, we achieved a 24% growth. Sales of bemiparin, our flagship product developing house, grew by 14%, and enoxaparin biosimilar sales increased 35% to EUR 49.3 million in this first half of the year. Gross profit increased by 10% to EUR 112.3 million in the first half of 2020.
The gross margin showing an increase of 1.4 percentage points from 57.4% in the first half of 2019 to 58.8%, mainly due to increase in toll manufacturing sales, contributing higher margins to the group sales. The increase in bemiparin prices in hospitals due to rises in both low molecular weight heparin raw material prices and the demand for the product in hospitals to treat COVID-19. The improvement in enoxaparin margins in Spain, counteracting the drop in the margin on international sales of enoxaparin, and the end of the marketing of the Norgine growth portfolio, which had much lower margins than the group. In the first half of the year, low molecular weight heparin raw material prices rose around 35% compared to the same period last year. ROVI continues to be committed to innovation. R&D expenses decreased 27% to EUR 10.8 million.
These figures are mainly the result of our focused investment in the ISM platform. ROVI expects R&D expenses to decrease for the full year by a low double-digit %. Our investment, therefore, in R&D is fully motivated by our firm commitment to market our own quality and successful products in the immediate future. Selling, general, and administrative expenses, SG&A decreased 3% to EUR 59.1 million in the first half of the year, mainly due to a drop in promotion expenses incurred by the sales force and expenses of international subsidiaries, which amounted to EUR 4 million compared to EUR 4.8 million last year. In the first half of 2020, ROVI booked EUR 2.5 million in personnel and other expenses related to the COVID-19 measures implemented. Excluding expenses related to COVID-19, the G&A would have decreased by 7% to EUR 56.6 million in the first half of the year.
In 2020, expenses related to international subsidiaries are expected to be around EUR 9 million. EBITDA increased to EUR 42.4 million in the first half of the year, a rise of 60% compared to the same period previous year, reflecting a 7.3 percentage point increase in the EBITDA margin, which was up to 22.2% in this semester from 14.9% in the first half of last year. EBITDA excluding expenses related to COVID-19, what we call recurrent EBITDA, increased to EUR 44.9 million in the first half of 2020. A formidable rise of 70% compared to the same period of the previous year, reflecting a 8.6 percentage point increase in the recurrent EBITDA margin. EBIT performance followed the same trend as EBITDA in the first half of the year. It increased by 85% to EUR 32.9 million, reflecting a 7.2 percentage point increase in the EBIT margin.
Net financial result amounted to EUR -0.03 million in the first half of 2020, compared to EUR -0.3 million, mainly due to the gain related to exchange rate derivative financial instruments. The effective tax rate was 9.9% in the first half of 2020, compared to 7.5% in the first half of 2019. Research and development as tax credits decreased in the first half of 2020 as a result of a decrease in R&D expenses in the first half of the year compared to the same period of the previous year. At the end of last year, negative tax basis of the group amounted to EUR 34.9 million, of which EUR 8.3 million will be used in the 2019 income tax and EUR 4.1 million in the first half of 2020.
EBITDA pre-R&D, calculated excluding R&D expenses in the first half of 2020 and 2019, increased by 29% from EUR 41.2 million in the first half of 2019 to EUR 53.2 million in the first half of this year, reflecting a 4.6 percentage point rise in the EBITDA margin to 27.8% in the first half of 2020. EBIT pre-R&D increased by 34% from EUR 32.5 million in the first half of 2019 to EUR 43.6 million in the first half of 2020, reflecting a 4.5 percentage point rise in the EBIT margin to 22.8% in the first half of 2020. Net profit pre-R&D increased by 32% from EUR 29.8 million in the first half of 2019 to EUR 39.3 million in the first half of this year. ROVI invested EUR 7.3 million in the first half of 2020, compared to EUR 8.6 million in the first half of 2019.
Of this amount, EUR 3.6 million related to investment CapEx regarding our facilities. EUR 3 million relates to ISM industrialization concept, and EUR 0.7 million relates to maintenance and other CapEx. Free cash flow decreased to EUR -22.3 million in the first half of 2020, compared to EUR -19.4 million in the first half of 2019, mainly due to increase of EUR 77.3 million in the inventories line in the first half of the year, compared to an increase of EUR 28.3 million in the first half of last year. Regarding our debt, as our first half of 2020, ROVI had a total debt of EUR 75.4 million. At this date, bank borrowings decreased by EUR 7.1 million. In December 2017, ROVI announced the European Investment Bank granted it a loan to support its investment in research, development, and innovation. The loan was for EUR 45 million.
In September 2019, ROVI had drawn EUR 5 million against this credit line at a variable interest rate of Euribor three months, + 0.844%. The latest interest rate paid was 0.551%. As December last year, ROVI had drawn the remaining EUR 40 million. The credit matures in 2029, includes a grace period of three years with a fixed interest rate of 0.681%. Likewise, since the beginning of COVID-19 crisis, ROVI has signed credit policies for an amount of EUR 45 million in order to ensure the company's liquidity. As of June 30, 2020, ROVI had not used these credit policies. Thus, the group in a very comfortable position to meet its payment obligation, debt maturities, and any additional cash needs in the short and medium term.
At this moment, ROVI had a gross cash position of EUR 37.3 million compared to EUR 68.9 million at the end of last year, and a net debt of EUR 38 million compared to EUR 15.9 million as last year. Regarding the dividend, the board of directors agreed to set the date for holding its ordinary general shareholders meeting in October 2020, and to maintain the proposed dividend of EUR 0.1751 per share, which was communicated to the market in February 2020. Regarding the news flows for 2020, we will monitor the evolution of the Moderna vaccine. We don't expect to announce any additional product launches this year as a result of the COVID-19 crisis. We expect to inform on new national marketing approvals for the enoxaparin biosimilars in 70 countries outside Europe.
With regards to R&D, we expect to release the final risperidone ISM phase III data at a scientific congress. We plan to apply for the marketing authorization for DORIA for the treatment of schizophrenia in the United States in the second half of the year. Also, we expect to gather more clinical data for letrozole phase I trial during the following months to better characterize the pharmacological profile of letrozole ISM. In 2020, we are also planning to discuss these results with the regulatory authorities together with the next steps for continuing the clinical development. That's all regarding our financial results for the first half of the year. Now, we can now open the Q&A session.
Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press zero one on your telephone keypad. Thank you. The first question comes from Harry Sephton from Jefferies, p lease go ahead.
Hi there? It's Harry Sephton from Jefferies. Thanks for taking my questions. Firstly, on the Moderna deal, please can you help us understand the potential economics of this deal? If you are planning to produce hundreds of millions of doses of the Moderna vaccine, what is the potential revenue contribution from that? Along that, what is the cost of the new injectable line that you're looking to build for this? Will you start to invest in this line prior to the results of the Moderna vaccine? If so, do you have any sort of backup plans for if the Moderna vaccine is unsuccessful? Similarly, on the margin contribution for this product, do you expect that that will be similar to the current injectable toll manufacturing services you currently do? Thank you.
Hi, Harry. This is Juan. Regarding the Moderna deal, honestly, it's very difficult to provide any guidance in terms of potential revenue or what is going to be the positive impact of this deal in our accounts for this year, as there are still many uncertainties that it needs to be solved. We believe this is going to be a very important contract for the company. Still, there are several milestones that have to be achieved by Moderna, such as the phase III and the review by the U.S. and the European authorities. Again, we are very happy to be in the front race and to be the company chosen by Moderna to be their fill and finish hub, initially for all countries outside Europe.
Really, we don't have the means or the basis really to provide you with an accurate or even a hint in terms of items of how this would be impact. I think as time passes and we get more visibility by Moderna on what would be the final role and to what extent, what are going to be the quantities that we would be filling, I think we'll be able to provide more information to the market. Right now, it would be more a wishful thinking rather than accurate data that we could provide to you today. Regarding your second question, the cost of the line.
We have a pretty strong confidential process in our agreement with Moderna that it doesn't provide us the capability to disclose this information, but be sure that there are scenarios by which, in case that the Moderna doesn't succeed with the phase III clinical trial, doesn't succeed in getting an approval, ROVI gets a certain level of compensation by the cost of acquisition of the new line. I'm sorry I cannot give you further clarity, but again, I think as we get close to the end of the year, we'll be able to provide and to share with you more information as events may develop. Regarding the margins, yes, definitely. I think both Javier and myself, we have shared with you something which is very important for us in regards to the drug manufacturing business. We have completely redirected the strategy of the operations to high added value product.
Definitely, the Moderna COVID-19 vaccine is the perfect type. We are talking for sure in margins on the high end of our current existing business in term manufacturing operations.
That's really helpful. Thank you. If I can just ask a few questions on Becat and DORIA as well, please. Firstly, on Becat, we saw slightly lower contribution this quarter compared to last. Is that more because of this lower hospital activity you're currently seeing? From what you're seeing in the market at the moment, are you seeing a quick recovery in the demands there? On the margins, or the contribution margins for Becat, we're hearing about the sort of oversupply in the global swine market. Are you seeing a decrease in the cost of heparin raw material as a result of that?
Hi, Harry, this is Javier. I think you are fully right. The decrease in sales or let's say the less increase of the sales of Becat this last quarter was fully in line with your assertion. With the impact of the COVID-19 crisis, the hospitals have been focused only on coronavirus patients. All pharmaceuticals product has faced a slight decrease on the usage, and Becat has also been impacted. We expect that the sales could recover the trend in the following months if there is hopefully no more pandemic impact. As regards with the margins and the raw material, I think it's still early to predict a big reduce of the price of the sodium heparin. This year has been very difficult. We have the African swine fever plus the COVID-19 effects, so it's difficult to predict what is going to happen.
We will agree with your view, that we still hope or we believe that in the next few quarters, we could see a slowdown or a decrease in the prices of the raw material. At least it's what our feedback from the field tells us.
That's really helpful. Thank you. Just a quick question on DORIA. You explained very well in the past about the sort of potential benefits for the product, in terms of not requiring cold storage, the fast onset of therapeutic dosing. Can you maybe give us some insights into maybe smaller points, such as what is the needle bore size compared to other treatments in the market, and then also the dosing options and choice of injection sites for DORIA? Thank you.
Hi, Harry. This is Juan. You really put me on that. I think the needle size, the gauge, is identical to the other products on the market. We can send you the technical details. I think it's an intramuscular injection, and in terms of gauge, I don't remember if it's a 25G and a half or a 27G and a half, but it's really the standard needle size for this sort of treatments. In regards to the dosing, our dose that has been tested on the clinical trial is 47.5 mg. Again, we can send you as well the draft protocol that is in the web page in clinicaltrials.gov, where it's specified. We expect to release further data of DORIA on an important congress. Unfortunately, COVID-19 has put a lot of pressure on dates for congress that were scheduled before the year-end.
We expect that before we get the approval to be able to release in one of the major congress all the data. There, there will be some important information regarding all these minor points like the pain on site and things regarding to the dosage as well.
Thank you very much for the insight. That's all from me.
Thank you. The next question comes from Samir Devani from Rx Securities, p lease go ahead.
Hi, everyone? Thanks for taking my questions. Congrats on a good quarter. I've got three. I'll just give them one at a time. I was surprised by the strength of the gross margin in the quarter at 63%. Just reading through the report, doesn't seem to be any reason why, as there's any exceptional element to that. Is that a fair run rate going forward for Q3 and Q4? Perhaps a bit more color on the gross margin. Thanks.
Hi, Samir. This is Javier. You're right. We had an extraordinary quarter in terms of gross margin. I think, as we described, the main reasons was the tremendous growth by the contract manufacturing activities. Hopefully, we expect that the specialty pharma sales will increase more in the next following quarters if there is no impact from the COVID-19 or less impact. Probably, in the following quarters, we'll see a more normalized gross margin with stronger sales from the specialty pharma franchise, which will have less or minor gross margin. Again, third quarter usually is good for us in terms of gross margin. Overall, I would say that this quarter has been extraordinary. Overall, we expect a more normalized gross margin in the rest of the year.
Okay, that's great. Then just, what was the reason for the 18% price cut for Ulunar Breezhaler?
Hi, Samir. Basically, the rationale behind this is the following. One of the criteria for adjusting prices according to the Spanish law is to use the price that has been granted in reference countries within Europe. Usually, Spain, every year or every two years, definitely every five years, checks what is the current price of the medicines in their country peers, such as France, Italy, Belgium, Austria, the former 15 European members. They usually do an average of the price that has been granted or it has been modified after the launch, and they tend to adjust that average to the Spanish market. In the case of Ulunar Breezhaler, the price that would have been adjusted, which has been EUR 45 from EUR 59 that we were before, or EUR 55, don't recall exactly. It is just to be in line with the prices in Europe.
That has been the reason. It's one of the criteria that is listed on our legislation.
Okay, that's fine. The final question, just going back to the Moderna deal. Is there any reason why you can't be involved in the fill finish of the other vaccines that are in development? Perhaps you can just comment on sort of European capacity, as obviously my understanding is there's very few businesses that can do the fill finish like you guys do. Is there an opportunity here to get other deals? Thanks.
Basically, Samir, as you can imagine, we have been in contact with most of the players on the vaccine, on COVID-19 landscape. There are two major type of vaccine designs. One is live virus or attenuated live virus, and the other one is the RNA messenger. Live virus needs biosafety level two facilities, which is not really the strategic or our core business, while RNA messenger is more like a small molecule in terms of fill and finish. That's one of the reasons why we have, let's say, promote initially to try to send out a deal with the RNA messenger companies. Secondly, we are talking about huge volumes. We are talking about millions of doses. Any company is already proposing quantities above 500 million doses, 1 billion doses.
Really, in order to be able to provide a good service, you really need to some extent to be attached to a company. As well, this is going to be a fill and finish that is going to be, whenever they get the data release, it's going to be a race to be really the first to get doses to the market. It's not a question of how much annual quantity you may have, but rather how much capacity you can put into the market as soon as possible. I believe in that sense, we need to be aligned with a company. It's true that we're still maintaining talks with other company developers, but I think for the time being, we'll be sticking to the Moderna option.
Our goal is, if they succeed with the phase III clinical trial, to be able to devote as much capacity as possible to be able to deliver as many doses as we're capable of processing.
That's great. Thanks very much.
Thank you. The next question comes from John Priestner from Edison Investment Research, p lease go ahead.
Thank you for taking my question. I have two, so I'll ask them one at a time. The first half of the year has really seen a reduction in costs across the board, including SG&A and R&D. I was hoping you could speak to how you expect these costs to change over the second half of the year, really looking out to 2021, and if you expect to see a continuation of this current trend.
Hi, this is Javier. Actually, the reduction of SG&A, as we were trying to explain, is very linked to the lack of promotion activities that we had in the first half of the year due to the COVID-19 virus. Hopefully, we are willing to start again the standard and normal promotion activities in the second half of the year. Hopefully, we'll look after a rise in the SG&A figures in the second part of the year. That will mean that our sales force is working in a routine basis, and probably it also has an effect on the sales of the company.
Yeah. Then just in terms of the R&D as well, yeah.
Yeah. Sorry, I forgot about that. With regards to R&D, this year, we expect a decline on the cost compared to the previous year.
Okay, great. My second question is just regarding the collaboration deal with Moderna, and the procuring of this new filling production line and also the hiring of additional staff. I just wonder if you could provide any more clarity on these timelines and really whether you've actually started any of these processes.
Well, hi, this is Juan. Unfortunately, we cannot provide you more granularity or information at this moment of time. I mean, we are just to assure that we are just investing and betting on Moderna's success. We definitely believe that if Moderna's vaccine candidate succeeds on its phase III clinical trial, but ROVI is really putting all our expertise and knowledge and capability to make sure that we can supply the market with the doses required by Moderna. As our expertise, we are one of the most efficient toll manufacturing operators on the market. We have almost 800 people dedicated to toll manufacturing. We have three different manufacturing sites. We have a capacity in injectables, which is one of the largest on the market.
We are really putting a lot of resources behind, as I mentioned before, to be able to supply to the market as many doses as possible, as soon as the market may require them. To be honest, I don't think we will be able to provide much more information until we get feedback or the market gets feedback regarding the phase III data on Moderna. Let me say that we are very excited on this agreement and we are very happy that ROVI could be involved in getting a solution to this terrible pandemic situation worldwide.
That's great. Thank you for that and congratulations on the strong set of results.
Thank you. Ladies and gentlemen, let me remind you again, if you have any comments or questions, please press zero one on your telephone keypad to enter a queue. The next question comes from Guilherme Sampaio from CaixaBank BPI, p lease go ahead.
Hello, good morning? Thank you for taking my question. Three. The first one, can you provide us some color on when should we have further details regarding the letrozole ISM process? Second question, do you see any potential for regulatory measures in Spain that may affect you still during 2020? If they move to 2021, what kind of measures do you expect and how this could affect you? Third question, can you comment on your conversations with the Spanish Government, as a member of Farmaindustria, regarding the potential for further increasing in discounts to the National Health Service this year? Thank you.
Thank you. This is Juan. Regarding your first question regarding letrozole ISM, as we have shared with you, we are currently running a phase I. Because of this exploratory design, it's very difficult to anticipate when the clinical trial will be finalized. With the current data, our idea is to start having discussions with both European and the U.S. regulatory authorities to see how can we design the following steps in order to get the product to the market, whether we have to make a phase II, whether we can go directly to a phase III. Again, I don't believe that we will be able to provide any further feedback to the market until we conclude our discussions with both regulatory bodies, and I don't think that will happen before Q1, Q2 next year.
What I can remark and repeat again is that we are extremely excited with this project. With DORIA, we are a follower. There are other products targeting the schizophrenia indication on a long-acting injectable technology. We're very excited because letrozole would be a really breakthrough.
in treating a major pathology like breast cancer and will be the first one to the market to get a long-acting injectable on the approve. Regarding the measures of the Spanish Government, I will link it as well with the third question regarding our talks with the Spanish Government. Honestly, it's difficult to anticipate what the Spanish Government may legislate in the next coming months. What is true, I'm not going to be the one to hide it, is that Spain is going to end 2020 with a tremendous deficit of 11%. The Spanish Government inevitably will have to take measures, not only in the pharmaceutical spending, but on other fields of the economy to offset this deficit in the next coming years. I have to say that the talks that Farmaindustria is currently undertaking with the Spanish Government are going in the right pathway.
We expect, and that's our hope, to have these discussions concluding in a sort of convenient agreement that we had in the last five years. Always the equal way of having this agreement in place with the Spanish Government is to channel to this agreement whatever financial needs may need to be adjusted on the pharmaceutical spending, in the sense that whatever measures the Spanish Government may need to take, that will be negotiated under the paradigm of this agreement. So far, the communication is pretty good. The communication channels are actually very active. I have to say that I'm at least optimistic that there is going to be a successful conclusion before at the year-end. On timings, we have to be, let's say, conservative.
The Spanish government has just finalized their talks in Europe regarding the transfer that we are going to get from the European Commission. I guess that the spending review of the pharmaceutical industry will definitely be on the agenda in the next coming months. I think that Farmaindustria and all the Spanish pharmaceutical companies, we have already show our authorities our willingness to be able to help the recovery of our domestic economy, and definitely if we have managed to have an agreement in place with clawbacks and rebates in the last five years, I don't see any reason today why we shouldn't be able to sign another one for the next couple of years.
Okay. Thank you very much.
Thank you very much. Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. Thank you. There are no more questions. We will now hand over the call to Mr. Javier López-Belmonte.
Hello. As the Operator said, there are no further questions at this time, so we can finish this first half 2020 financial results call. Thank you very much for attending the call, and have a good day. Thank you. Bye-bye.