Selvita

WSE: SLV

PLN958.3m market cap

PLN60.6 last close

Selvita is an R&D and drug discovery services company. It operates three business segments: Innovations Platform (internal R&D pipeline), Research Services (medicinal chemistry/biology, biochemistry) and Ardigen (a spin-out bioinformatics company, 52% owned).

Investment summary

Selvita’s ongoing split into two separate companies will be the hallmark event in 2019. By the end of this year, the drug discovery services and oncology R&D will be split into separate listed entities (subject to financial authority and shareholder approval). We believe both businesses have sufficient momentum to sustain such a split. The profitable Services segment again delivered substantial sales growth of 34% in 2018 followed by 29% q-o-q growth in Q119. The R&D pipeline is progressing according to plan and two clinical trials with SEL24 and SEL120 could deliver data over 2019–20. The lead product is SEL120, a CDK8 inhibitor, partnered with the Leukemia & Lymphoma Society for AML. Recently the FDA cleared an IND application to conduct a Phase I trial. SEL24 is a dual PIM/FLT3 inhibitor in Phase I/II for AML out-licensed to Menarini in March 2017.

Y/E Dec
Revenue (PLNm)
EBITDA (PLNm)
PBT (PLNm)
EPS (gr)
P/E (x)
P/CF (x)
2017A 105.9 18.5 10.2 50.76 118.2 80.7
2018A 110.1 (5.4) 9.0 (0.68) N/A N/A
2019E 130.7 (7.8) (13.1) (88.05) N/A N/A
2020E 153.1 (1.7) (10.7) (73.04) N/A N/A
Last updated on 11/09/2019
Industry outlook

The profiles of SEL24 and SEL120 are potentially unique compared to existing clinical-stage competitors and both candidates may offer efficacy advantages. Contract research is a fiercely competitive, but still rapidly growing market and we believe Selvita’s geographical location and lower cost benefits make it well placed to compete.

Last updated on 11/09/2019
Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (PLNm) 33.2
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 1.7 7.1 17.7
Relative* (2.0) 11.7 18.8
52-week high/low 64.8gr/45.0gr
*% relative to local index
Key management
Paweł Przewięźlikowski CEO
Bogusław Sieczkowski COO
Tomasz Nocun IR