hVIVO plc (LON:HVO), a rapidly growing specialist contract research organisation (CRO) and world leader in testing infectious and respiratory disease products using human challenge clinical trials, has announced its audited results for the year ended 31 December 2023.
Financial highlights
| • | Revenue up 16% to £56.0 million (2022: £48.5 million) |
| • | EBITDA up 44% to £13.0 million (2022: £9.1 million) |
| • | EBITDA margins of 23.3% (2022: 18.7%) |
| • | Cash and cash equivalents of £37.0 million as at 31 December 2023 (31 December 2022: £28.4 million) |
| • | Adjusted basic EPS increased 32% to 1.27p per share (2022: 0.96p) |
| • | Weighted contracted orderbook of £80 million as at 31 December 2023 (31 December 2022: £76 million) |
| • | Dividend for the year of c.£1.4 million (0.20p per Ordinary Share) as the Company commences an annual dividend policy |
Operational highlights
| • | Multiple standalone and full-service end-to-end human challenge contracts signed | |
| • | First human challenge trial contract signed with an Asia-Pacific (APAC) client in over a decade | |
| • | Commencement of the development of challenge agents including Human Metapneumovirus (hMPV) and additional supply of Respiratory Syncytial Virus (RSV) | |
| • | Completed manufacturing of Flu B challenge agent | |
| • | Inoculated a record number of volunteers across nine challenge trials | |
| • | Increased operational efficiencies yielding record margins and cash generation | |
| • | Upcoming move to the new state-of-the-art facility, which is largely funded by key clients, will increase revenue potential and position the Company for further margin improvements | |
| • | Value proposition for human challenge trials has been reinforced by recent positive outcomes: | |
| • | Pfizer’s ABRYSVO™ became one of the first RSV vaccines to receive FDA approval in May 2023 having received Breakthrough Designation, following an PII HCT conducted by hVIVO | |
| • | At least two biotech clients received FDA Fast Track and/or Breakthrough Designation | |
Post-period end highlights
| • | Master Services Agreement signed with mid-sized pharma client for human challenge trial services |
| • | Fit out of new facility at Canary Wharf ahead of schedule HSE Level 2 approval has been received and the unit is ready to commence its first quarantine in April 2024 |
| • | Q1 2024 trading in line with expectations and the Company remains confident that 2024 will be another year of significant growth |
Annual dividend
The Company paid a one-off special dividend of £3.1m in 2023. As part of the Company’s annual dividend policy, a dividend of c.£1.4 million, being 0.20p per Ordinary Share will be payable on 20 May 2024 to shareholders on the register on 19 April 2024. The corresponding ex-dividend date is 18 April 2024.
Outlook
| • | Revenue guidance of £62 million for 2024, H1 2024 weighted, with sustainable EBITDA margins |
| • | 90% of 2024 revenue guidance already contracted with good visibility into 2025 |
| • | hMPV virus manufacturing process on track to complete in 2024 but characterisation trial cancelled, hVIVO has received the cancellation fee and will be able to market the agent for future characterisation and challenge studies |
| • | The Canary Wharf expansion will add a cutting-edge containment level three (CL-3) laboratory and will increase quarantine capacity to 50 beds, establishing this facility as the world’s largest commercial human challenge trial unit |
| • | New medium-term target of growing Group revenue to £100 million by 2028 achievable through strong organic growth complemented by small bolt-on acquisitions that meet the Company’s strategic and financial criteria |
| • | Strong cash position underpins the Group’s M&A strategy |
Dr. Yamin ‘Mo’ Khan, Chief Executive Officer of hVIVO, said: “In 2023, we experienced yet another year of growth in the human challenge trial sector, driven by increased recognition among Big Pharma and biotech firms of the compelling evidence supporting the efficacy of hVIVO’s human challenge trials in expediting the development of novel vaccines and antivirals. Our exceptional financial performance, marked by record revenues, margins and profitability, coupled with the significant number of volunteers inoculated, underscores not only the expansion of the market but also our ability and capacity to meet the increasing demand.
“Looking ahead, I am confident that our robust orderbook, revenue visibility, and increased capabilities puts the Company is a strong position to deliver our revenue target of £62 million for 2024, as well as our medium-term objective of reaching £100 million in revenue by 2028. The hard work and dedication of our team have been instrumental in achieving these results and I extend my thanks to each of them.”
