I-tech: Proposed non-renewal of Selektope in the EU - ABG

* European Commission drafts proposal for non-renewal of Selektope * Limited impact on near-term estimates, EU ~2% of total sales * Voting expected to occur some time in H1'26, final decision in mid-26 European Commission drafts proposal for non-renewal of Selektope This morning, I-Tech issued a press release stating that the European Commission has drafted a proposal for the non-renewal of Medetomidine (Selektope). The draft implementation act, which is yet to be published, will be discussed at the Standing Committee on Biocidal Products (SCBP) meeting taking place at 10 December. Several steps need to be completed before the final decision is made, and I-Tech expects voting on the implementation act to occur some time in H1'26. We expect a final decision in mid-26. Limited impact to near-term estimates In the event of an EU ban, the direct effects on I-Tech would be relatively minor, given that the EU currently accounts for around 2% of I-Tech's sales and ~10% of its TAM. Remain positive on long-term prospects We believe it is likely that the draft will be approved, however, we remain positive on the company's long-term outlook given its small exposure to the EU market. That said, there is always a risk that a ban could have a negative impact on I-Tech's attempts to enter other markets, such as the US (although this is a small market), or on re-application processes in regions where it has already achieved approval (most importantly Japan, South Korea, China). There is also the risk that paint companies may be deterred from using Selektope in other markets as well.