Breakthrough year in the development of Selvita – strategic acquisition & strong financial results

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Selvita (WSE: SLV), one of the largest preclinical contract research organizations in Europe, reported today EUR 31.8 million of consolidated revenues which constitutes a 35% increase compared to the values reported a year ago. The Company’s EBITDA result and net profit in 2020 amounted to, respectively, EUR 7.4 million and EUR 4.5 million, comparing to EUR 5.8 million and EUR 3.3 million for a corresponding period last year. The acquisition of Croatian contract research organization Fidelta from Galapagos which took place at the turn of 2020/2021 strengthens Selvita’s position as one of the largest preclinical contract research organizations in Europe.

Strong financial results

Commercial revenues in the Services Segment increased in 2020 to EUR 25.5 million, showing a 35% increase, compared to EUR 19.6 million in the last year. The EBITDA result of the Services Segment amounted to EUR 6.3 million, which indicates a 23% profitability.

Selvita’s Bioinformatics segment – Ardigen S.A. – reported dynamic development as shown by a 69% y/y increase in commercial revenues up to EUR 4.0 million. The Company’s EBITDA result in 2020 amounted to EUR 1.1 million, an increase of 128% y/y, indicating a 23.6% margin.

In 2020 Selvita focused on expanding its international sales. Revenues from the services originated from the most significant market i.e. commissioned by the customers from the United States, increased by 133% y/y and already constitute nearly 30% of the entire Services Segment revenues. Simultaneously, revenues from the services commissioned by customers from the United Kingdom increased by 42% y/y. Increasing customer recognition related to the high quality of services offered and competent scientists, strengthens Selvita’s position on the largest global biotechnology markets and results in further contracts.

“Year 2020 was the first full year where Selvita operated as an independent, purely Contract Research Organization, following the corporate split in October 2019, which was crucial for the Company’s further development. We maintained a high growth rate and achieved very good financial results. In spring, we announced a new development strategy and raised the capital from investors, thanks to which we continue our dynamic organic growth, as well as we initiated the development through acquisitions. The most significant event in our nearly 14-year history occurred at the turn of the year when Selvita acquired Fidelta, a Croatian CRO. This acquisition was a true milestone for our business scale and services portfolio. Our current achievements only motivate us to work further, we are not slowing down and we are looking into the future with optimism” – comments Boguslaw Sieczkowski, Chief Executive Officer at Selvita.

“Thanks to the teamwork, we consistently strengthen our position among customers. Our employees’ dedication and responsible attitude, allowed us to achieve such good results despite all turbulences caused by the COVID-19 pandemic. Every single person working at Selvita has a significant impact on the Company’s successes” – adds Boguslaw Sieczkowski.

Towards further development

In 2020 Selvita consequently realized its strategic goals set up after the corporate split. In the first half of the year, the Company announced a new development strategy for 2020-2023 which assumed further organic growth supported with acquisitions. Selvita successfully raised EUR 20 million from the issue of C series shares and consistently increased its scale of business, hiring world-class specialists, expanding its services portfolio, and investing in technology and state-of-the-art equipment.

One of the key elements of the development strategy is securing own research space, through building Selvita Research Center, that will provide 4000 m2 of own research space necessary for further growth. The Company has already made the first step towards executing this goal and in August 2020 it has signed a contract to purchase a plot of land in the neighborhood of its current laboratories, as well as raised the funding for the investment which includes a EUR 9.3 million grant and a bank loan.

A breakthrough milestone in Selvita’s history – international acquisition

In the fourth quarter of 2020, Selvita announced the acquisition of a Croatian CRO company Fidelta. The transaction valued at EUR 31.2 million was finalized in January 2021. The scope of services provided by Fidelta will extend Selvita’s offer in the area of pharmacology in vivo and toxicology, as well as will increase its scale of operations within DMPK, medicinal chemistry, and in vitro pharmacology. Fidelta brings in also expertise in areas such as infectious diseases, inflammation, and fibrosis. As a result of the acquisition, Selvita gained over 150 highly experienced scientists with a track record of providing integrated drug discovery services to the largest global biotech and pharmaceutical companies, over many years. This historic step in Selvita’s development results in a significant expansion of its scope of services as well as revenue growth.

Last year had a strategic meaning in Selvita’s development, which managed to almost double in business scale thanks to organic growth and the acquisition. Simultaneously, Selvita’s stock price increased by 110%. The increase in Company’s valuation was also continued in Q1 2021. As a result of strengthening its position on the capital market, Selvita was promoted to the mWIG40 index, which gathers 40 leading mid-cap companies listed on the Warsaw Stock Exchange.

Moreover, in recognition of the Company’s performance, Selvita was named the Stock Company of the Year in the competition organized by ‘Puls Biznesu’ – one of the largest business daily in Poland. Selvita also won in two other categories: ‘The Board Competencies’ and ‘Development Perspectives.’

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