Kraków, Poland – November 06, 2019 – Selvita [ticker: SLV] – one of the largest preclinical contract research organizations in Europe – reported today third quarter 2019 financial results and provided a corporate update following a recent corporate split of the oncology therapeutics (Ryvu Therapeutics) and contract research (CRO) business units (Selvita).
The services segment of the Company has recorded USD 5.59 million of commercial revenue in Q3 2019, which marks a 45% increase compared to Q3 2018.
In the first three quarters of 2019, Selvita Group recorded USD 18.8 million of revenues, 32% increase comparing to the corresponding period in 2018. Operating profits, (EBITDA excluding IFRS16 impact) result amounted to USD 3.5 million, an increase of 21% compared to Q3 2018, and the backlog **for 2019 currently amounts to USD 25.1 million and is 38% higher than at corresponding time in 2018.
– Our financial results up to date represent more than we wished for. The increase in the commercial revenues was significantly higher than the declared 30%, as it amounted to 36% in the period from January to September, and 45% in Q3 2019 alone. Operating margin for Q1-Q3 2019 amounted to 11.4% – says Boguslaw Sieczkowski, co-founder, significant shareholder and Chief Executive Officer at Selvita.
Revenues of the services segment in the first three quarters amounted to USD 15.1 million, up by 36% comparing to Q1-Q3 2018, and operating profit to USD 2.0 million (11% more y/y). In the third quarter alone, these dynamics reached 45 and 13%, respectively.
– The last quarters of this year were a period of a dynamic development for Selvita. Not only we have increased employment, but also made significant investments in the equipment. This has allowed us to build a solid base for another organic leap of business scale. The first results of our work were already visible in Q3 2019 – says Boguslaw Sieczkowski.
The service segment is comprised of two departments: chemistry and biology. In 2019, the dynamics of the biology department have stood out in particular – its backlog currently amounts to USD 9.9 million and is 75% higher than for a corresponding point of time in 2018.
The total commercial backlog of the service segment currently sums up to USD 20.9 million, a 40% increase compared to 2018.
Revenues of the bioinformatics segment (Ardigen, in which Selvita S.A. holds 52 percent of shares), amounted to USD 2.5 million and were 32% higher than in Q3 2018. Operating profit amounted to USD 0.2 million, compared to USD 0.3 million in the same period last year.
– At the moment, Ardigen’s primary goal is dynamic development of its own technology platforms, as well as marketing and sales activities. This drives the increase in costs, but in the long run it will lead to a significant growth in the scale of business, resulting in the increase in the value of the company – explains Bogusław Sieczkowski.
The backlog of the bioinformatics segment amounts to USD 2.6 million, which is 27% higher than a year ago.
Selvita after the split
At the beginning of October, the National Court Register of Poland (“KRS”) has recognized the corporate split of the Selvita parent company into two distinct organizations. The recognition by the court follows the Sept. 19, 2019, shareholder resolution to separate oncology therapeutics and contract research (CRO) business units.
Selvita provides comprehensive research and development services, mainly to clients in the pharmaceutical and biotechnology industries. The company’s medium-term goal is to enter the top ten largest preclinical CROs in the world.
Selvita’s Services Segment has been growing in the last years at a rate of 30-40% per year and has been permanently profitable. The company assumes maintaining this level of growth dynamics. At the same time, the company plans to grow through acquisitions, expecting the first transaction in 2020. Selvita is interested both in domestic and foreign companies which will allow it to achieve its business goals: increasing the scale of operations and expanding the portfolio of services offered. As a leading company on the market, Selvita will be in an excellent position to build lasting value, thanks to selective and systematic takeover strategies, which will be made possible through e.g. debt financing, which was difficult to access before the corporate split.
Boguslaw Sieczkowski, serves currently as the Chief Executive Officer at Selvita. He is also one of the co-founders of the company, and former Executive Vice President and Chief Operating Officer. In addition, the Management Board is comprised of three members from the company’s current top management: dr Milosz Gruca, Director of the Biology Department and Executive Vice President, dr Miroslawa Zydron, Director of the Chemistry Department and Edyta Jaworska responsible for the development of integrated drug discovery projects. New appointments to the Management Board have also been made, which include Dawid Radziszewski, General Counsel and Head of Corporate Development who will be directly responsible for the acquisitions and integration of companies within the Group, and Dariusz Kurdas, who assumed the position of Chief Financial Officer.
**Backlog for 2019 as on 28/10/2019, backlog for 2018 as on 9/11/2018. Backlog defined as the value of the portfolio of contracts signed as of the report publication date, incl. commercial contracts and grant agreements.
Selvita is an integrated service company providing multidisciplinary support in resolving the unique challenges of research within area of drug discovery, regulatory studies, as well as research and development.
The company was established in 2007 and currently employs over 450 professionals. Selvita is headquartered in Krakow, Poland, with a second research site in Poznan, Poland and foreign offices located in Cambridge, MA and San Francisco Bay Area, in the U.S., as well as in Cambridge, UK. The company has a proven track record of successfully completed projects and customers in 40 countries. Majority of Company revenues come from pharma, biotech and agro-chemical companies from the US and Europe. Selvita is listed on the Warsaw Stock Exchange (WSE:SLV).
|Natalia Baranowska (corporate) |
+48 784 069 418
|Piotr Książek | InnerValue Investor Relations|
+48 501 988 693