Selvita pharma sees market stabilising; end-2025 and contract renewals crucial for 2026 backlog

"After experiencing a once-in-a-century winter in our market in April, the situation began to change by mid-June, and the market is stabilising. (...) There is still a lot of uncertainty regarding the market’s development, but optimism is gradually emerging for the medium and long term," Selvita's CEO Boguslaw Sieczkowski told the video conference.

"Compared to the pace of contracting for the second half of last year, we are on track for the second half of 2025 not to be weaker, but we still have a buyer’s market, which means that mostly we sign shorter contracts to protect margins for the coming years. Therefore, the condition we enter 2026 in will be decided in the final weeks of December and the beginning of 2026," he added.

Sieczkowski explained that most of Selvita’s contracts are signed until the end of the year, so the management will only be able to provide any forecast for 2026 once contracts are renewed, which will take place in December and January.

"We have not shown the backlog for 2026 because many important contracts are signed only until the end of this year, and we need to extend them (...) — we believe this will be done. We see the dynamics of building backlog for the second half improving, so I would be cautiously optimistic, but we remain careful," said board member Dariusz Kurdas.

"There is a revival in client contracts, but the most important contracting will take place in the last weeks of 2025 and at the beginning of 2026," he added.

Selvita's backlog for 2025 is 6 percent higher than in the same period last year, amounting to PLN 334 million (EUR 78.5 mln), but the backlog for the second half is 7 percent lower than a year ago.

The CEO noted that since February, contracting on the market has weakened, linked to policies pursued by the Trump administration, but financing is improving after the second quarter, and if the situation does not deteriorate, this year’s level could exceed that of 2023.

"Slowly, after a period of observed market freeze (...), the situation began to normalise, and money started flowing into biotech, but there is also a delay before funds begin to be spent. There is still significant uncertainty in the pharmaceutical companies’ situation," he added.

Selvita is taking actions to improve operational efficiency and adapt to a new reality where margins will be lower.

"We began active operations on the operational side in April (...). We do not expect that the returning market will look the same, hence decisions like shutting down the chemical laboratory in Poznan," CEO Sieczkowski said.

"I anticipate that a significant share of classic organic chemistry services will not return to Europe, so we must be ready with comprehensive, more advanced solutions at the border of small and large molecules," he added.

As part of the optimisation program, the group is reducing rented laboratory space, human resources (mainly support functions), and prioritizing direct client contacts over participation in industry conferences.

These actions are expected to strengthen the operating result by about PLN 2 million (EUR 469,800) in the second half of the year and bring about PLN 27 million (EUR 6.3 mln) in savings for the entire 2026.

Due to the optimization program, Selvita plans a write-off of about PLN 1.7 million (EUR 399,330), which will impact results in the third quarter of 2025.

Asked whether Selvita plans to publish a new strategy, the CEO stated that it is currently not possible to assess whether the market will stabilize enough to plan for the medium and long term.

"The company is unable to predict how the market will stabilize and provide an opportunity to consider future quarters and invest in its own future. We are glad to be entering a period of stabilization after the market has not been helping us," Sieczkowski said.

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