Selvita

WSE: SLV

PLN993.4m market cap

PLN64.8 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 announcement of its intention to split into two separate companies was the hallmark event in the Q418 results presentation. By the end of 2019, 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. 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 and is undergoing IND-enabling studies. 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 50.76 122.5 83.6
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 18/04/2019
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 18/04/2019
Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (PLNm) 33.2
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 11.9 14.6 3.8
Relative* 9.4 16.2 (0.7)
52-week high/low 64.8gr/45.0gr
*% relative to local index
Key management
Paweł Przewięźlikowski CEO
Bogusław Sieczkowski COO
Tomasz Nocun IR