Selvita to Separate Oncology Therapeutics and Contract Research Business Units Into Two Global Companies
KRAKOW, Poland, March 28, 2019 /PRNewswire/ -- Selvita (WSE: SLV), a clinical stage company engaged in the research and development of novel cancer therapies as well as provision of drug discovery and development services, today announced that it plans to separate into two companies. One company will focus on development of small molecule therapeutics in oncology and the other will provide contract research services. Each company will build upon capabilities that have been integral to the Company since the founding of Selvita in 2007. Both companies will be publicly listed on the Warsaw Stock Exchange.
"There are clear opportunities for value creation from two entities with freedom to operate independently, built from the separate business units of Selvita today," commented Pawel Przewiezlikowski, Chief Executive Officer of Selvita. "We are proud of the work that has brought us to the stage where each unit is at the forefront of an area of expertise. Our capabilities in each unit provide excellent potential for sustainable, long-term growth. We look forward to the increased overall value from each distinct company, building upon an established tradition of operational excellence."
The oncology therapeutics company will control the current Selvita pipeline of small molecules and its engine for consistent discovery of differentiated compounds in oncology. The research services company will pursue further dynamic organic growth and expand its business model with acquisitions of high value complementary biopharmaceutical service providers. The research services company will retain the Selvita name and the oncology therapeutics company will be named at a later date. At the time of the split, approximately 170 individuals or full-time equivalent employees are expected to become part of the therapeutics business and the research services company will employ approximately 325 individuals.
A Foundation in Research Services and Discovery
The Selvita research services unit has provided recognized value with an established, sustainable customer base. Services provided by Selvita recognized 2018 revenue of nearly $16 million, built on a strategy of prioritizing organic growth on core offerings. Over recent years the company services segment has demonstrated consistent organic revenue annual growth of more than 30 percent (cumulative 276 percent growth in 2014-2018) and sound net earnings. Selvita has established a strong reputation in the biopharmaceutical industry for maintaining consistently high standards of quality and client satisfaction.
The Selvita discovery pipeline has led to global, first-in-class programs for oncology therapeutics, a diverse set of preclinical programs, and discovery stage partnerships in areas that reflect world-class expertise for oncology therapeutics. Two programs generated from the Selvita discovery engine will have active clinical programs in the first half of 2019: partnered Menarini program SEL24/MEN1703 and wholly-owned therapeutic candidate SEL120, a CDK8 inhibitor with potential for development in acute myeloid leukemia and multiple other areas of oncology.
Distinct Opportunities for Growth
Following the split, Selvita research services will broaden beyond its historical pattern of organic growth to include the pursuit of consistent, sustainable acquisitions of contract research businesses. As an established, well regarded and specialized acquirer, Selvita will be positioned to return high value with a strategy of selective, systematic acquisitions. As a result of the split, the company will be able to acquire external debt and other non-dilutive financing. The research services company will continue to target organic growth from within and maintain its strengths as a straightforward research partner for biopharmaceutical industry clients that achieves goals with strong organizational management and delivers client satisfaction at the highest level.
Following the split, the Selvita oncology therapeutics company will advance SEL120 and other early stage programs from three current discovery platforms: Targeted Therapeutics, Cancer Metabolism/Immunometabolism and Immuno-oncology platforms. The oncology therapeutics business will prioritize opportunities that use novel scientific approaches directed at improving treatment outcomes for patients, executed with agility and a balanced approach to risk management. The therapeutics company will have capabilities to select one new candidate per year to advance into the clinic from diverse discovery-stage research platforms.
Subject to corporate approvals the current Selvita CEO Pawel Przewiezlikowski will become CEO of the oncology therapeutics company and the current Selvita Chief Operating Officer Boguslaw Sieczkowski will become CEO of contract research. The supervisory boards for each company will be determined and announced at a later date.
The transaction is intended to result in maintaining the current shareholding structure of Selvita with both new companies. For each existing share in Selvita S.A., shareholders will receive one share in the Selvita oncology therapeutics company and one share in the Selvita research services company. The Selvita research services company will retain ownership of shares in precision medicine AI company Ardigen. The Selvita oncology therapeutics company will assume ownership of shares of spin-off company NodThera, which is focused on therapeutics based on inflammasome biology.
The transaction is expected to be completed by the fourth quarter of 2019, subject to approvals by Selvita shareholders and the Polish Financial Supervisory Authority.
Selvita is developing novel small molecule therapies that address emerging targets in oncology with
industry-leading research expertise supported by a research services division. Pipeline candidates apply diverse mechanisms directed at kinases, synthetic lethality pathways, immuno-oncology pathways and other cancer-related targets. SEL24/MEN1703 is a dual PIM/FLT3 kinase inhibitor licensed to the Menarini Group in clinical development for the treatment of acute myeloid leukemia. SEL120 is a CDK8 kinase inhibitor with potential for development in indications including hematological malignancies and solid tumors. Selvita is headquartered in Krakow with offices in the U.S. and U.K.
Julia Balanova (investors)
Rich Allan (media)
Piotr Ksiazek (investors and media, Poland)
Malgorzata Syjud (corporate)