KRAKOW, Poland, March 30, 2023 /PRNewswire/ -- Selvita S.A. [WSE: SLV] ? one of the largest CRO (Contract Research Organization) companies in Europe has published a full-year report for 2022*. The Group reported record results for 2022, in excess of meeting the objectives of its ambitious development strategy for 2022-2025. In 2023 the Company is strengthening the base for further dynamic growth of its business scale.
Boguslaw Sieczkowski, co-founder, major shareholder and Chief Executive Officer at Selvita, comments:
- 2022 was a record year for us. We made good use of several years of excellent economic conditions, growing more than three times faster than our environment and more than quadrupling the scale of the business between 2019 and 2022. At the same time, we have built a solid base for further dynamic growth and are now focusing on increasing and diversifying our revenue base. There are many indications that this year the distribution of backlog between quarters will be different than usual. Thus, we expect growth rates to increase and margins to improve in the second half of 2023. Returning to the high dynamics of revenues and margin levels that we got our investors accustomed to is our top priority at the moment.
Both biotechnology and pharmaceutical companies have high cash reserves and are gradually increasing their R&D spending, outsourcing an increasing portion of its activities. At the same time, access to new capital has been difficult for several quarters, making our clients more cautious with their budgets. This situation allows us to hope that as market sentiment improves, our clients will quickly return to bolder investments in R&D. In the long term, we operate in an attractive market, which gives us excellent prospects for growth.
While funding for the global biopharmaceutical sector more than doubled in the pandemic years - 2020-2021 ? in 2022 it dropped to the 2019 levels, with the largest amount of capital (more than 70%) going to companies in the U.S. market. In Europe, the U.K. market stands out positively. Selvita is very active in both these markets, based on its local sales offices in major biotech centers.
Dr. Milosz Gruca, Executive Vice President and Chief Commercial Officer at Selvita, said:
- We are trying to play on our numerous competitive advantages and focus on the most attractive markets and customers at the moment. We took the first steps towards strengthening sales back in 2022, and since the beginning of this year we have significantly intensified these activities.
In 2022 Selvita completed the integration of Fidelta, the Croatian company, acquired in early 2021. Selvita has strengthened its market position, significantly increased its customer portfolio and introduced new high-margin services. At the same time, the Company continued to invest in team and infrastructure development. In March 2023, Selvita announced the completion of its new headquarters in Krakow, which constitutes nearly 4 000 sq. m. of new research space and can provide workspace for approximately 250 scientists.
FINANCIAL PERFORMANCE AND MARKET ENVIRONMENT
In 2022, Selvita's drug discovery services generated EUR 63.7 million (up by 24% y/y) and accounted for 84% of Selvita's commercial services revenue. Services in the area of regulatory research constituted the remaining part of commercial services revenues and amounted to EUR 11.7 million (up by 61% y/y).
Dr. Milosz Gruca adds:
- We are continuing very strong business development activities. While in 2022 we participated in more than 80 events, this year we plan to take part in more than 110 shows and conferences. We are working hard to strengthen our visibility and scientific recognition.
The bioinformatics segment (Ardigen) generated in 2022 EUR 10.2 million in external revenues, indicating a 51% year-on-year increase. EBITDA in this segment of the business amounted to EUR 1.3 million. The company continues its intensive development investments. Starting in 2023, Ardigen will not be consolidated in Selvita's results.
For the full year 2022, Selvita Group generated EUR 88.8 million in revenue, showing an increase of 31% year-on-year. EBITDA amounted to EUR 24.0 million (stable profitability at 27.0%), a result which is 32% higher than a year earlier. Net profit reached EUR 13.5 million (up by 28% y/y, profitability of 15.2%).
In Q4 2022 alone, the Group generated EUR 23.1 million in revenue, up by 16% year-on-year. EBITDA amounted to EUR 5.6 million, and due to Ardigen's intensive investments, remained at a similar level to a year earlier.
There are numerous indications that in 2023 the dynamics of contracting between quarters will be different than usual. Selvita's backlog for 2023 reached EUR 43.3 million (as of March 28, 2023) and is 7% higher than the value reported a year earlier (as of March 24, 2022), despite a demanding market environment and a high base. The Company expects intensified contracting in the second part of the year.
The market in which Selvita operates is at the advanced stages of the longest and deepest cycle of restrictions on access to new financing seen in the last 15 years. Both biotech and pharma companies have high cash reserves, but due to heightened uncertainty, they are investing in R&D activities more cautiously, and what follows R&D outsourcing is also handled more cautiously. Selvita is expecting this situation to improve swiftly once market sentiment improves.
Boguslaw Sieczkowski adds:
- We are looking ahead to 2023 with a lot of caution but also optimism. We have taken numerous measures focused on business development growth, targeting the market sectors which are currently most attractive. At the same time, we are implementing various optimization measures, and have introduced cost-saving policies that will have a positive impact on Selvita's efficiency both in the coming quarters and further in the future.
*The results do not include non-cash costs of the non-dilutive employee incentive program. Backlog as of March 28, 2023.
Selvita is one of the largest preclinical contract research organizations in Europe, driven by a clear mission: to offer a comprehensive scope of services bridging the gap between early drug discovery and the clinical stage of drug development.
Selvita provides comprehensive solutions supporting Clients and their drug discovery projects, across a broad range of therapeutic areas, specializing in infectious diseases, inflammation, fibrosis, and oncology. The Company offers a range of stand-alone or fully integrated drug discovery and development solutions spanning the entire value chain from early drug discovery to preclinical development. On top of that Selvita also offers analytical support for drug development and contract testing studies.
Selvita, established in 2007, operates globally with almost 900 highly qualified employees, of which over 40% hold a PhD degree. The Company's research sites are in Krakow (HQ), Poznan, Poland, and Zagreb, Croatia. The international offices are located in Cambridge, MA, and San Francisco Bay Area, in the U.S., as well as in Cambridge, UK.
Ardigen, a bioinformatics company harnessing advanced Artificial Intelligence methods for novel precision medicine, is part of Selvita Group portfolio of companies. The company employs over 180 professionals. Selvita is listed on the Warsaw Stock Exchange (WSE: SLV). For more information, please see www.selvita.com.
Natalia Baranowska | Selvita
+48 784 069 418
SOURCE Selvita S.A.
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