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Research: Healthcare
The corporate split is now complete and Selvita is continuing as Ryvu Therapeutics, which will focus on innovative drug development. The contract research organisation (CRO) business, which was spun out, has retained the Selvita brand and is also trading on the Warsaw Stock Exchange. Pawel Przewiezlikowski, co-founder and CEO of the former Selvita, continues to lead Ryvu Therapeutics, while Boguslaw Sieczkowski, co-founder and COO is now the CEO of the newly listed Selvita (CRO). We performed a detailed analysis of Ryvu Therapeutics assets in previous notes. Our last published SOTP valuation of the former Selvita implies a valuation for Ryvu of PLN935m or PLN58.6/share, which we will update with the Q3 results on 6 November 2019.
Written by
Ryvu Therapeutics |
Introducing Ryvu Therapeutics |
Company news |
Pharma & biotech |
31 October 2019 |
Share price performance
Business description
Analyst
Ryvu Therapeutics is a research client of Edison Investment Research Limited |
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The corporate split is now complete and Selvita is continuing as Ryvu Therapeutics, which will focus on innovative drug development. The contract research organisation (CRO) business, which was spun out, has retained the Selvita brand and is also trading on the Warsaw Stock Exchange. Pawel Przewiezlikowski, co-founder and CEO of the former Selvita, continues to lead Ryvu Therapeutics, while Boguslaw Sieczkowski, co-founder and COO is now the CEO of the newly listed Selvita (CRO). We performed a detailed analysis of Ryvu Therapeutics assets in previous notes. Our last published SOTP valuation of the former Selvita implies a valuation for Ryvu of PLN935m or PLN58.6/share, which we will update with the Q3 results on 6 November 2019.
Year end |
Revenue |
PBT |
EPS |
DPS |
P/E |
Yield |
12/17 |
N/M |
N/M |
N/M |
N/M |
N/M |
N/M |
12/18 |
N/M |
N/M |
N/M |
N/M |
N/M |
N/M |
Note: Ryvu Therapeutics (formerly Selvita) spun out its CRO business in October 2019, therefore our previously published estimates should be considered outdated.
Key value drivers
Following the split, Ryvu will be a classical drug developer, with the benefits of a biotech business model: flexible capital allocation to R&D and direct access to capital markets. We believe this will allow it to progress its R&D programmes faster. The pipeline is diversified from various stages in preclinical development to two assets in Phase I/II trials, which will allow for well-paced news flow.
Upcoming news flow
The lead asset, wholly owned SEL120, is a selective CDK8 kinase inhibitor that is being tested in a Phase Ib clinical trial for acute myeloid leukaemia (AML) and myelodysplastic syndrome (it also has potential in multiple solid tumours). Ryvu should present SEL120 interim data from the Phase Ib study in 2020. SEL24/MEN1703, a dual PIM/FLT3 kinase inhibitor licensed to the Menarini Group, is in a Phase I/II trial for AML. We expect SEL24 data from Phase I part (dose escalation) of the ongoing Phase I/II study in 2020, but the timing depends on Menarini.
Ryvu asset valuation of PLN935m or PLN58.6/share
Our last published pre-split valuation of Selvita was PLN1.46bn or PLN91.5/share, of which the oncology drug development corresponded to 57% (rNPV), CRO to 36% (DCF) and net cash to 7%. Our SOTP valuation of the former Selvita included a DCF model for the revenue-generating CRO business and risk-adjusted NPV projects for six different programmes in R&D. Removing CRO from our model, the rNPVs of Ryvu’s R&D assets imply a valuation of PLN935m or PLN58.6/share. This will be updated with the Q3 results (6 November 2019) when we expect more details on the respective cash positions, capex and expected grant financing.
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