hVIVO executives buy shares, signal optimism in growth prospects
() , a contract research organisation specialising in human challenge trials, announced significant share purchases by its CEO Yamin 'Mo' Khan and CFO Stephen Pinkerton. Mr. Khan purchased 1,100,000 shares at 8.9p, increasing his holding in to 5,001,603 shares or 0.73% of issued share capital. Mr. Pinkerton purchased 683,232 shares at 8.76p, increasing his holding in to 750,596 shares or 0.11%.
Today's update follows Friday's news that had received two contract cancellations and a contract postponement. The company's sales pipeline, however, remains at a record level, with a strong balance sheet. Today's announcement should further reassure investors that the company's leadership is confident in 's growth trajectory.
Yamin 'Mo' Khan, CEO of hVIVO, commenting: "Friday's trading update clearly raised concerns for our shareholders, but we remain confident in the continued growth of human challenge trials and the overall prospects for hVIVO, and accordingly Stephen and I have increased our shareholdings in the Company to demonstrate our continued confidence in the growth prospects of the Group."
View from Vox
A reassuring update from that its CEO and CFO have further increased their holdings in the company, following Friday's news of contract cancellations. While did announce last week that two human challenge trial contracts had been cancelled and one postponed, the company's sales pipeline remains healthy and at a record level, its balance sheet remains robust, and its overall sales momentum remains sound despite the setback.
The recently announced contract cancellations can be attributed to ongoing uncertainty in biotech financing and overall volatility in the US pharma industry that is impacting the whole CRO industry. This has led to a momentary uptick in cancellation rates and postponements across the industry.
However, in our estimation, 's fundamentals remain sound as does the underlying value of human challenge trials (HTCs), and the two cancellations should not be reasons to doubt the company's growth path. is currently managing its largest sales pipeline to date, with major projects in advanced talks - such as the world's first Phase 3 HTC trial - anticipated to finalise by late FY25, providing strong revenue visibility for FY26.
In total, currently has £47m of revenue contracted for FY25, with further contract wins highly likely over the course of FY25. Even if those do not materialise somehow, the £47m in turnover would only result in a mid-single digit operating loss for the full year. All but one of these contracts have already commenced, so there is very low risk of further cancellations.
Additionally, has a well-diversified revenue base, with significant contributions coming from its hLAB standalone services as well as new revenue streams from recently acquired Germany-based CRS and its early-phase clinical trial services and participant recruitment. also recently acquired Cryostore, a provider of temperature-controlled storage solutions for biological and clinical materials in London, bolstering its hLAB offering.
retains a strong cash position (most recently reported at £44.2m), and remains well-funded to execute on its growth strategy. For context, the company entered FY25 with strong momentum after a record FY24 that saw an 11.9% YoY increase in revenues to £62.7m as EBITDA surged by 25.9% to £16.4m, EBITDA margin rose by 3pts to 26.2%, and basic adjusted EPS jumped by 33% to 1.69p.
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