hVivo (HVO:AIM) 10.53p

Loss to date: 62.6%

We highlighted CRO (contract research organisation) hVivo (HVO:AIM) in September 2024 for its leading position in the fast growing HCT (human challenge trials) market.

Industry experts forecast the market will grow from its current size of between $100 million and $150 million a year to between $700 million and $1 billion, and hVIVO itself plans to grow revenue to £100 million by 2028 from £62.7 million in 2024.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

On 30 May, the company revealed that it had lost a ‘significant’ HCT contract while a smaller study had been postponed.

The company laid the blame on current uncertainties in the pharmaceutical industry and the continued depressed biotech financing market, but the market reaction was brutal, sending the shares plummeting by 46% on the day, although they have since recovered by around 26% to circa 11p.

The firm said contracted revenue for the year including the cancellations stood at £47 million and it expected to achieve further contract wins during the year to the end of December 2025.

With all but one of the contracts for 2025 having already commenced the board believes the risk of any further cancellations is low. Management also noted a record sales pipeline including some ‘large, high probability opportunities, in advanced discussions’ which could start in late 2025.

Chief executive Yamin ‘Mo’ Khan added: ‘Projects under discussion would represent some of our largest ever value contracts for human challenge trials, such as the world’s first ever Phase 3 HCT.’

However, the company also said that absent any further contract wins 2025 would likely result in a mid-single digit operating loss.

WHAT SHOULD INVESTORS DO NOW?

We note Khan and chief financial officer Steve Pinkerton increased their respective shareholdings on 30 May, in a show of confidence in the group’s growth prospects.

Growth rarely happens in a straight line, but the current setback looks to be out of management’s control and a reflection of the wider malaise in the market, and while losses are disappointing, we believe the prospects at hVIVO are still significant so we are sticking with it. 

‹ Previous2025-06-05Next ›