hVIVO plc (Euronext & LON:HVO), (formerly Open Orphan plc) 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 12 months ended 31 December 2022.
Financial highlights
· Revenue up 30% to £50.7m (2021: £39.0m)
· EBITDA increased threefold to £9.1m (2021: £2.9m)
· EBITDA margins of 17.9% (2021: 7.4%), ahead of guidance due to positive impacts of over £1m
· Cash and cash equivalents of £28.4m as at 31 December 2022 (2021: £15.7m)
· Adjusted diluted EPS increased to 0.90p per share (2021: (0.19)p)
· Contracted orderbook increased by 65% to £76m as at 31 December 2022 (2021: £46m)
· One-off special dividend of c.£3.0m, being 0.45p per share reflecting strong cash generation during the year, payable on 9 June 2023 to shareholders on the register on 5 May 2023. The corresponding ex-dividend date is 4 May 2023
Non-core assets
Due to the challenging market conditions, the Board are providing the following updates in relation to hVIVO’s non-core assets:
· PrEP Biopharm – hVIVO holds 62.62% of PrEP Biopharm Limited. The directors of PrEP Biopharm Limited have made the decision to commence the process of a solvent liquidation in the coming months
· Imutex – hVIVO have performed an impairment assessment on its 49% holding in Imutex Limited and have determined that a full impairment of the carrying amount of the investment in Imutex is prudent. This impairment reflects a write down from £7m to nil as at 31 December 2022
· Disease in Motion – the Board has decided to postpone all activities relating to the spin-out of Disease in Motion and pursue other growth opportunities that are more aligned with our near term strategic objectives as a human challenge trial business
Operational highlights
· Delivered seven challenge studies and inoculated 413 volunteers in 2022, a 32% increase on the prior year
· Positive impact from efficiency initiatives, including concurrent running of multiple challenge trials, a flexible booking model, and a re-vamped FluCamp platform, resulted in improved staff and volunteer utilisation and lead conversion. This is reflected in the much improved EBITDA margins
· Larger trial sizes, award of multiple unique full-service challenge contracts, and the expansion into new markets (APAC) as a result of increase market awareness of human challenge study benefits
· Expanded portfolio of human challenge models with launch of the Malaria and development of Omicron models
· Facilities expanded in London and Manchester, doubling screening capacity, and increasing bed capacity
· Broadened the scope of the business to offer Phase II / III field based studies
– First contract awarded by existing Big Pharma client to act as a vaccination site for a Phase II field study
· hVIVO laboratories achieved the College of American Pathologists (CAP) accreditation, confirming high standards of excellence and increasing the marketability of our laboratory services
Management strengthened
· The executive management team strengthened with appointments of Yamin ‘Mo’ Khan as CEO, bringing substantial CRO experience and expertise, and Stephen Pinkerton as CFO
· Martin Gouldstone appointed Independent Non-Executive Director, adding strong corporate development experience in the CRO, healthcare and pharmaceutical sectors
Outlook
· Revenue guidance for 2023 of £55m
· Full visibility on 2023 revenue and into H1 of 2024
· Targeting 2023 EBITDA margin in the mid-to-high teens
· Strong contracted orderbook continues to grow into 2023 despite cancellation of recent contract win
Yamin ‘Mo’ Khan, Chief Executive Officer of hVIVO plc, said: “2022 marked a transformative year for hVIVO, as we achieved record financial and operational performance, providing strong validation of our sustainable growth model. With exceptional financial strength, and an impressive orderbook, we are proud to have full visibility of 2023 revenue guidance with strong visibility into H1 2024.
Moving forward, we will continue to leverage our world leading position in the industry, taking advantage of favourable market dynamics. We are expanding our services and challenge models to better support our clients’ clinical development portfolios, while simultaneously improving our margins with impactful efficiency initiatives. I have full confidence in the team’s ability to deliver operational excellence as well as orderbook conversions, paving the way for long-term sustainable growth and profitability.”
