Selvita pharma sees slowdown in contracting; H2 marked by uncertainty

"At the end of the year, we had a situation close to normality and stability. We believed that 2025 would be a consequence of what was happening at the end of 2024. In the first quarter, we entered a state of great uncertainty," CEO Boguslaw Sieczkowski told a videoconference.

"The changes in the US administration have made it impossible for any of the players to predict how the market situation will play out in the following months," he added.

The second half of 2025 is marked by uncertainty.

"Currently, we continue to see a lot of uncertainty and volatility in the market, which is causing contracting to slow down and many customer decisions to be postponed, which puts our momentum into question when it comes to the second half of the year," CEO Sieczkowski said.

"We maintain that the first half of the year will be better year on year, but in terms of the drug discovery segment, we still have contracting ahead of us (...) and there is some uncertainty here," Selvita's management board member Dariusz Kurdas added.

As assessed by the CEO, the IPO and secondary funding market has been weak since the beginning of the year.

"We have increased activity, more money is flowing in from M&A transactions, this is somehow feeding the portfolios of investors who will be looking for more places to invest," he added.

Selvita's backlog for 2025 remains at a similar level to the one recorded in the prior year period at PLN 249.9 million (EUR 58.5 mln).

The structure of the backlog shows, among other things, a 7 percent increase in the drug development segment and a 3 percent increase in normalised contracting in the drug discovery segment.

The company's management board believes that changes in the US market will have an impact on the overall market.

A proposal that could have a positive impact on Selvita is the removal of regulations under the Inflation Reduction Act regarding the abandonment of favouritism for large molecule-based drug projects.

"This is something that has rigidly held back new small-molecule drug projects," added the CEO.

Revenues of the unit PozLab (incorporated into the drug development segment), which was acquired a year ago, amounted in the first quarter of 2025 of PLN 3.8 million (EUR 890.1), which allowed the company to almost achieve break-even on EBITDA.

"We expect the third quarter to be operationally neutral. In the meantime, we are building a portfolio of contracts that would give a longer-term outlook," Sieczkowski assessed.

Selvita is a Contract Research Organisation (CRO) and provides comprehensive solutions to support customers and their projects in a wide range of therapeutic areas, specialising in infectious diseases, inflammation, fibrosis and oncology, among others.

The company offers a range of stand-alone or fully integrated drug discovery and development solutions.

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