hVIVO reports another year of record growth, aims for £100m revenue by 2028
() , a contract research organisation specialising in human challenge trials, announced its final results for the year ended December 31, 2023 (FY23).
hVIVO reported a revenue increase of 16% to £56m, an EBITDA increase of 44% to £13.0m, and an EBITDA margin of 23.3%, up from 18.7% in FY22. Available cash also increased to £37.0m on December 31, 2023, from £28.4m the previous year.
The company signed multiple large contracts during the year, bringing its weighted orderbook to a record £80m on December 31, 2023, from £76m at the end of FY22. Adjusted EPS climbed by 32% to 1.27p, and dividend for the year was c. £1.4m. Going forward, will pay an annual dividend.
Operationally, hVIVO achieved a number of milestones in FY23. The company commenced development of new challenge agents, including Human Metapneumovirus (hMPV) and Respiratory Syncytial Virus (RSV). It also completed manufacture of a Flu B challenge agent. In total, completed inoculations across 9 challenge trials in FY23.
Post-period, hVIVO is readying a new facility in Canary Wharf, largely funded by a number of its clients, that will host 50 additional quarantine beds, an expanded labs, an outpatient unit, and a new corporate office. The facility is expected to significantly boost revenues and margins. First quarantine is scheduled for April 2024.
View from Vox
hVIVO reports another year of significant growth, with record revenues, margins and profitability as the company inoculated a record number of volunteers across 9 challenge trials in FY23. maintains a strong orderbook after signing multiple standalone and full-service end-to-end contracts in FY23, including the first human challenge trial contract with an an Asia-Pacific client in over a decade. Cash generation was boosted by improvements in operational efficiency, and is expected to improve further as the new facility in Canary Wharf comes online.
The new facility will add a state-of-the-art CL3 lab and increase quarantine capacity to 50 beds, with the potential to expand to 70. When fully online, it will be the world's largest commercial human challenge trial unit, and should materially boost 's revenues and margins. As HSE Level 2 approval has now been received, the unit is ready to commence its first quarantine in April 2024.
Demand remains high for hVIVO's growing portfolio of human challenge studies, which offer significant benefits to biopharma clients - namely fast and cost-effective data that enables fast-tracking of larger Phase 2 trials. hVIVO signed 3 large bespoke or full-service human challenge trial contracts in FY23 in Respiratory Syncytial Virus (RSV), Influenza B and Human Metapneumovirus (hMPV). With the range of services and average size of challenge studies increasing, the average contract value has increased as well, resulting in a weighted contracted orderbook for of £80m on December 31, 2023.
The value proposition of human challenge trials has been further boosted by recent positive outcomes, including Pfizer's ABRYSVO - one of the first RSV vaccines to receive FDA approval in May 2023. Additionally, at least two of 's biotech clients have received FDA Fast Track or Breakthrough Designation.
hVIVO issued revenue guidance of £62m for FY24, being H1 weighted. 90% of this revenue guidance is already contracted, and there is excellent visibility into FY25. aims for £100m of revenues by FY28, which is highly achievable given its momentum and cash position. Q1 2024 trading has been in line with expectations as heads for another year of significant growth.
Follow News & Updates from hVIVO:
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.