Hvivo (LSE:HVO) — Full Year Results

0:01 Good evening, ladies and gentlemen, and welcome to the HVIVO PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it's appropriate to do so on the Investor Meet company platform. And before we begin, as usual, we would just like to submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from HVIVO PLC. Moe, good evening, Good evening, I. Thanks for that. And welcome everyone to the HVIVO presentation for full year 2024.

0:51 We're pleased to have you on board. This is our standard disclaimer as a publicly listed company. I'm Yami Mokhan. For those of you who don't know me, I've got over thirty years of experience working in the clinical research industry. I've been on board as CEO of HVIVO for just over, three years now, and I'm very pleased to be here. We'll jump, straight in, into our full year summary for 2024. So this slide shows our financial performance of the company, and it's been a record year for HVIVO and also a transformational one, with regards to operations. So we generated just under, £63,000,000 of revenue. That's a a 12% year on year growth, and a huge 60,000,000, EBITDA at a 26% margin. The underlying margin was, around 23% if you, took out the the facility fee, that we were offered by clients to build out the Clayville facility and, remove the the cost for the, running the overlapping of the various facilities.

1:59 EPS, a 33% increase. Cash, a very healthy position at £44,000,000 and we are going ahead with the dividend of £1,400,000. For this year in 2025, we're giving guidance for full year revenue of, £73,000,000. That's already, contracted, at 70%, and we're aiming to achieve an EBITDA of, margin of around mid to high teens. And we're well placed, to get to our 100,000,000 revenue target by 2028. I'm sure most of you are already aware that we did complete a couple of acquisitions, earlier, this year, and they're highlighted here on the on the right hand side in the map. So you can see that in addition to the, the old HVIVO and then life sciences locations, we've now added three new locations. That's the the two CRS locations in Mannheim just South of Frankfurt and in Kiel just north of, Frank, sorry, Hamburg.

3:05 We also acquired Chrysler facility, in Greenwich, which basically, adds on to our biobank capabilities that we already have near Cambridge. So the three key factors that we are focusing on or have been focusing on over the last two or three years and we will focus on as we move forward really is optimize, scale, and diversify. And we don't use these slogans for the sake of slogans. We do have tangible efforts behind them that we look to achieve. So when we talk about optimize, what we are talking about is the fact that we have built out a purpose built a purpose built facility in Clarendon Wharf that sole purpose is to run human challenge trials. And as part of this, some of the key, attributes of the facility allow us to run human challenge trials much more efficiently than we have ever before. So a couple of key items I I do wanna point out. So one is, for example, the the two way call center that we have established communication with our healthy volunteers and the and the nursing and the, physicians that that overseeing the clinical trials. So previous to this, at the older facilities, the the healthy volunteer would knock on the door and our staff would wear the full PPE gear and then go and, and meet the needs of the the volunteer. Now we have a two way communication center so the HVIVO PLC can speak to the clinicians without our clinicians having to wear the the full PPE gear. We have a new pneumatic chute system for transporting

4:36 all of the clinical samples from the Quarantine Floor to the Lab Floor below. Previously, in the old facilities, we had lab on one location, and we had one of the quarantine facilities in different locations. So the, the lab technician would go down three floors, walk across the street, go up three floors, take samples, then reverse that journey back into the lab. And as I say, now it takes ten to fifteen seconds for the lab samples to be shipped from the quantum facilities to the the lab where they can be analyzed. We also have, more automation. We've invested in technology, starting last year and beginning to implement now. So this include the volunteer management system, which tracks and manages our volunteers. It also includes a new laboratory information management system or LIMS for short that helps us to automate the the different parts of the processing of and handling of the laboratory samples. We're also looking to, install and implement, electronic health record system later on this year.

5:41 With regards to scale, well, I'm sure you already know we have, moved to the world's largest facility for human challenge trials, a 50 bed facility at the Canadian Wolf. So this gives us now scope to expand to many more trials than we've ever had before. As part of the move, we moved from the Upper Floor in a Plumbers Row facility to Creative Wolf. And in instead of the the corporate headquarters, we've added more beds and doubled our screen capabilities. The new lab is two times bigger, as the old lab. We've also added 120 beds in in the two CRS units, which I'll talk about in a second. And in addition to that, with the acquisition of Cryso, we've added additional storage capabilities for clinical and biological samples. So you can see the scale has increased immensely since or even just over the the twelve month period.

6:32 Diversified. So we diversified our services across the board. So if you focus on the, human challenge trial, sector, we've added new talent models. So for example, the h m p v model going live this year, also the omicron, b f I model going live. So we're trying to do more and more different viral, challenge trials than ever before. We've also signed a letter of intent for a phase three human challenge trial and also bacterial challenge trial. Our therapeutic expertise increases by adding the CRS capabilities, which brings onboard cardiometabolic, immunology, dermatology, and renal hepatic impairment population studies, which we never had the capabilities to run before. Then on top of that, of course, we've got the continuation expansion in the h lab and and and the field trials that we're currently running at Plumbers Draw.

7:24 And on top of that, of course, CRS offers a first in human phase one and phase two trials. So I hope you you agree, with me that over the last twelve months, we worked hard on optimizing our facilities so we can run our trials to a much higher level of quality and much more efficiently. On top of that, we'll be able to increase scale, to be able to get to our 2028 target of £100,000,000 in revenue. And, of course, the diversification is important. But that's not to say that we will lose focus on our core business, which is and will remain the human challenge for our business. So a couple of slides on the two different companies we've acquired. We announced this in January of this year. CRS is a very old 45 year old facility running phase one, phase two clinical trials.

8:17 So the Manheim facility runs mostly phase one, phase two trials, single and multi ascending dose as well as proof of concept trials and b or bioequivalence trials. They have 96 beds and they've been going on for more than forty odd years

8:35 and running a lot of trials. They've got some really good customers. They have very strong team, good technical expertise, and I think it's it's it's a great asset to to purchase at the price we we we we we achieved. The Kiel facility is a smaller facility. It has 24 beds, but its key attraction really is the fact they focus on this niche technical type of trials which is the renal and hepatic impairment trials. Now this is a very hard to recruit patient population. It requires technical expertise to be able to run these trials. But together with what we have with then life sciences and HVIVO, we're now able to offer a much more fuller service to our clients. Christoff, of course, is a is a much smaller organization.

9:22 It's a single site organization with three employees based in Greenwich. We know them very well because we have worked with them for the last fifteen, twenty years. They've been one of our vendors that have helped us to sort some of our clinical samples and some of our viruses. So it's great to have them on board, and being fully integrated into the HVIVO group. They have a very good pipeline of work. They have a fantastic 90% plus repeat business, and we hope to use their their market share to expand the their capabilities, including bringing our own biobank that we have near Cambridge into the CryoStraw business. So very pleased to have them on board. They are meet immediately accretive to to revenue and EBITDA. So both exhibition acquisitions are fully complete, and I'll give you a little bit of an update later on on where we are with regards to the integration, especially with CRS, which is the bigger organization.

10:19 On that note, I will hand over to Steven. Thank you, Moe. Good evening, everybody. And for those I haven't met, I'm Steven Pinkerton. I'm the CFO for HVIVO. Been with HVIVO for about eight years, and very pleased to present to you guys tonight. Moe's really covered quite a few few of the key, metrics, and they are all records for this for this business. And we had record revenue, and we are expanding our services, even in 2024. Just a couple of highlights on the the the the factors behind the growth of the business. You know, we grew from 56,000,000 to 62,000,000. One of the key contributors of that growth, you know, 12% growth, was field trial revenue, which contributed 6% of that growth, so, you know, half of that growth. The other, growing factor was challenged revenues.

11:10 They they grew 13%. That does include the fees that we received for, for accelerating, a study in the year and which we used to, develop and pay for, Canary Wharf. But even if you strip that out, you still have a good strong revenue growth underneath, on on challenge revenue. Our consultancy business, our early clinical consulting business in Netherlands, it had a a a, I think, a robust year, given that their their performance in currency terms was level with previous years. And I think that's a pretty good result given the, the backdrop to sort of slow biotechs sort of lacking funding and and and coming to the market. So I think it was a sterling performance that they have achieved.

12:01 This has offset, the strong performance in the first, on field trials and challenge revenue has offset offsets the manufacturing revenue. You know, and certainly in '22 and '23, we signed up a number of full service contracts, and that obviously led to a lot of manufacturing revenue, and and that is halved compared to twenty two to twenty twenty three. Another factor here is if you look at the pie charts on the right hand side, you'll see that little yellow bright yellow sliver, which is lab revenue. It is less than 1,000,000, and that really highlights a sort of a an opportunity. One has to remember that, during the year, we moved, the lab laboratory system the lab the laboratory from QMB to Canary Wharf, and we literally had to shut down laboratory work for about three weeks, recalibrate all the machines, redo some of the assays to make sure everything was working well in the new facility. So, obviously, we weren't gonna get achieve significant amounts of growth in 2024, But the opportunity is there, and that's clearly highlighted by the fact that in early in January, signed a 3,200,000 laboratory contract for a field study.

13:15 And and there have been a couple of other, contracts that we have signed, but we have not, sort of disclosed because they are quite small. So we do see this as a great opportunity. And this is also where, the cryostal buy buyer sample revenue will come through as well in the service line. Eight, the site revenue, which is the field study, which we signed in June, and is the first field study of of volume that we delivered. You know, 817 vaccinations were achieved. And one mustn't forget that this was delivered in six weeks. And, you know, you it's not only just the vaccination visit. They also have follow on visits, you know, two up to about four or five follow on visits that have to be accomplished in a very short space of time.

14:01 So a higher volume of work in a very short space of time. And when we acquire as we've acquired CRS, this is all the type of revenue that they will deliver, but obviously in Germany. Recruitment services. Worth mentioning, it's not featured on here. It's very small at this stage, but it is also nice to know that, we have been able to sell some recruitment services. So this is us passing on our volunteers to other CROs. And it's the revenue is very small. It's not worth mentioning it, but I think, there's opportunity there as well. So, we have developed and continue to develop, our new models. We I think you may you may remember at the very beginning of 2024, we we announced the cancellation.

14:50 Actually, was HMPV. The the the the the biotech that was supporting that decided to shut down because they were acquired by a a big pharma. Well, actually, come to hold. We have now sold, got another biotech to take on that project and finish it off and potentially, run a study with us. Similarly with SARS, we did sign a study in the beginning of the year, and, and then they're completing the the model as well. So what I'm trying to highlight here is that, you know, challenge revenue is three quarters of our, of our business. It'll continue to be a key part of our business, and and we are strengthening that that revenue stream by adding more and more models.

15:42 Going on to EBITDA, not much more to say. This is pretty much what we said in the trading update, but just highlighting it in in writing here. We delivered 26.2, margin an EBITDA margin of 26.2%. The underlying is 3%. This is taking out the, facility funding and the overlapping facility costs, leaving us with 23%. That 23% is is is a robust 23% in the sense that it it does also include quite a bit of continued investment in models. Now not the hMPV or the, Omnichrom SARS study that I've just mentioned. We have also, in the year on 2024 and will continue in 2025, have, manufactured and developed and started characterization of two new models, our what we call our house models, r s and RSVB to replace RSV because we pretty much we we ran out.

16:41 And so we had to replace the the the this virus because our clients are still demanding it as as we've just signed in the that the RSV study in in in the first quarter of this year, three and two left over from the last strain, the new strain, allows us to recruit much more easily. So, for example, if you, you know, currently now existing h three n two strain, if screening tests, only about fifteen will, be eligible to go into a study. But now with this new strain, we will get, around about thirty five to forty will become eligible for a study, for a flu study.

17:29 And that just obviously leads to more efficiency going forward, and we've continued investing in these opportunities. It is high worth highlighting that, our recruitment and operating efficiencies have been felt. So despite operating across three different sites for a while, and extending and increasing the volume of volunteers going through the system, you know, the the field study as well as the, inoculated human challenge trial volunteers, Our operating costs were well, certainly, recruitment fees were perfectly in line with, last year in turn 2023, and our clinical operating efficiencies reflect a very small increase, nowhere near the scale of what they've delivered. So we're definitely seeing some of the efficiencies already coming through there.

18:18 Cash. We continue to bring a strong cash generated business, you know, 37 up to 44,000,000, and, about 29,000,000 of that is HVIVO cash, cash that, is not yeah. Well, we'll we'll based on saying of the 44,000,000, 13,100,000 is upfront payments that we've received and relates to our order book. It's cash we paid upfront from the clients, which is nonrefundable. And if the client cancels or postpones, that cash is ours anyway. So, we're debt free. We're paying a dividend, we'll come on to that a little bit more. We'll pay the dividend in 2024. And on to the next slide, it gives you a a sense. There are a couple of things here to talk about is we often talk about cash conversion, and I I think various people measure it in different ways. The way I generally measure it is cash operations plus working capital less lease payments as a percentage of EBITDA.

19:21 And in the past, the last couple of years, those have been exceeding, you know, well well over a 100%. And this year, it is lower than that. It's about sixty sixty, 65%. One of the key factors here is the working capital was negative. In the past, I have highlighted that the, working capital movement, should be generally positive with this business, but it's open to some fluctuations depending on timing of, new deals and things like that. So how it's been affected in 2024 at the ending of 2024 is we had a r and d tax credit. This is the 2023, tax claim, r and d tax claim that we made. It was received in January second second of January, and it's it's worth 2,600,000.

20:09 Unfortunately, we see received it out of a period on a like for like basis. So that's, you know, that's adding to why the the working capital was negative. And further, the delivery of the field study was concentrated highly concentrated in November, December, and we had to work with the, CRO that we're working with to agree the units delivered, before we could invoice and get, payments. It was such a high volume. We met so many milestones at the same time that, we just couldn't process it fast enough and get the cash in for. But because a field study is you know, it doesn't have an upfront payment like the HCT trials. So that's adding to the working capital. I would still guide that, generally, on a normal like for like basis, year on year basis, I would expect working capital to be movement to be positive. It's also impacted by the lower, order book, which was 80,000,000 and has come down to 67,000,000.

21:06 However, we had some benefits as well. In, Canary Wharf, we obviously didn't, we had a rent for free period, and our lease payments were just over £900,000. And in previous years, they were about 2,200,000, lease lease payments. And we expect in 2025 that will go back up. Quite nice to note that, our net interest received was 1,800,000. The actual, interest, that's net of some FX, and interest costs or FX costs that we've incurred. But so the underlying interest received was GBP 1,800,000 as an average. If we looked at our average, cash, throughout the year, that represents 4.5%, which I think is a great job that the team have done in investing our cash and generate getting that interest in the business.

22:01 Alright. Driving growth. I think we are definitely driving providing our shareholders some opportunity of growth here. You can see that EPS earnings basic adjusted earnings per share has grown over the last three years 3233% in the last year, from 1.27p to 1.69p. I think that is a great trajectory to and and long may it continue. Maybe not for 2025, because of, you know, the acquire the acquisition of CRS, but, certainly, we should be back on track in 2026. Just worth noting that we're providing a dividend of, naught 0.2p. Key dates would be, the record date is May 16, and we're looking to make the payment on the June 11. Remember, if this is a low, cash you know, low dividend, you might say, or it's a high dividend cover at this stage.

22:58 And that's really because we're aiming for HIHT funds. We do want to protect the cash because we do have plans to acquire and grow this business. So we're holding the cash for that, and we're paying a dividend to attract, IHG funds that require dividend more than anything. And with that, I hand over back to Moe. Great. Thank you for the update, Steven. So we'll quickly go on to, what we've been doing for the past, twelve months. So the first slide here really is gonna give you an overall description of what the new HVIVO group looks like. So with the acquisition of CRS and CryoStore and what was in place before for VEN and HVIVO, we've really been able to now provide a much more greater spectrum of services to our our customers.

23:48 So right from providing preclinical, consulting services from when to doing first to human, phase one trials or proof of concept trials at CRS to doing challenge trials at HVIVO and then providing clinical site services. These are outpatient field trials that we will run at both German sites as well as the sites in in London. It gives you a full spectrum of what we are able to offer. So our whole strategy of m and a is based on offering services adjacent to our core services so we can basically offer a much bigger bundle of services to our existing clients and as as well as the new clients. And this this graphic just shows you a typical program of trials and how it could work. So for example, a master protocol under which you have basically a phase one trial, which is run by CRS in Germany, and that's followed by a human challenge trial at HVIVO in London, all under one protocol.

24:47 And then life science is supporting both trials with regards to writing a protocol, developing the data management, the bio stats, and final clinical study report. So it's a very efficient way for clients to work with us and be able to get a full spectrum of services. And especially with biotech, this is really important because biotech don't tend to have a lot of free resource to manage and oversee multiple vendors. And if a biotech comes to you and you can offer multiple services under one contract and one quality and governance agreement, it helps them a lot in meeting their own guidelines and targets as well as, you know, requiring a lot less resources from their point of view to manage all the vendors. So this is something that we had always aimed to do, and now we have the capabilities to go from nonclinical all the way to phase three under one single contract across working across the the different, units within HVIVO.

25:43 So we we started integrating with CRS, right from from get go at the beginning of February, basically. We've completed certain steps. So we've done the full audits, including full IT and systems audit. We have found no surprises. I'm pleased to say post post audits, we were identified around €800,000 of annualized savings. We identified €1,600,000 of potential cross selling, opportunities from CRS into Vend. So this is basically the pipeline of work that CRS is currently working on, and they will go to outsource beforehand. But now because they're part of the HVIVO group, VEN life sciences can support those services in house. So less amount of work is outsourced, more is done internally.

26:35 We have plans, of course, to continue with the integration process. After completing the changes in the internal, reporting lines, we were lining, departments across the different units. We will now work on the SOPs or the the standard operating procedures. The sales and marketing teams are already merged, they're working as one. We have to work on the on the marketing and and the rebranding as we move forward later this year. On top of that, we will look to implement the systems that we currently have at HVIVO into, CRS. And and that's something we we want to do, and I know personally that the CS staff are very excited to have new IT systems implemented to improve their day to day working.

27:29 With all this acquisition and the the diversification of our services, we we we will not forget that our core service is and will remain the human challenge trial concept. Now we are the world leader in this. We have 90% plus market shares. We've done over 70, clinker trials, have inoculated over 5,000 healthy volunteers. And these models, we are developing, continuing to to grow. So we signed the Iliad deal, which is the phase c, human challenge trial. We've characterized the human metapneumovirus, and that's something that will go live this year. The omicron BA five that Steven mentioned is very ready to go live. And we've also been able to have a number of clients to get good efficacy data, effectiveness data for their vaccines and antivirals.

28:20 On top of that, we've seen an increase in the typical size of a human challenge trial. So you can see on the right hand side, the chart depicts that the number of volunteers or subjects required per challenge trial has more or less doubled over the last few years. This basically means that our clients are using human challenge trials not only determine whether vaccine or antiviral works or not, but also potentially what is the most optimal dose at which it works best. In addition, they could be working at looking at different endpoints. So whether it's a primary endpoint or a secondary endpoint, if you investigate multiple endpoints at the human challenge trial phase two stage, then at the phase three stage where it's really important to select the right primary endpoint, we can use the phase two data to determine which endpoint you will use to determine the success or failure of your drug.

29:16 So for us, human count trial remain a long term business. We're looking at expanding into mucosal vaccines. We're looking expanding into bivalent or vaccines that work against more than one, virus, transmission studies, bacterial studies. We also now have the capability to run c l three or more contagious, pathogen human challenge drugs such as, COVID, for example, and also dengue. For the additional services that we launched late last year, I do wanna give you a quick update. So our h lab services are gone strength to strength. We've we've recently, signed, our largest ever h lab contract where we're providing virology and immunology lab services to a a phase two influenza trial. And that's that seemed to be taking off really well. We've hired a new BD person to solely dedicate in selling hLab services, and the Cryo store, of course, sits underneath and within the hLab portfolio of services. In addition, the the the clinical sites studies we're running, which are basically field trials because they don't involve any of the quarantine facilities.

30:31 So patients come in and they get screened. They come in again. They get dosed with the vaccine or or the antiviral. They go back and then come in maybe after a month or so. So these are outpatient trials, and we were awarded large contract, late last year, and we were able to contribute over 800 patients in just over six weeks. Just to give you kind of a little bit of context, the total number of volunteers required for this study was around 5,000, and that was gonna be conducted in over 50 sites. We recruited, around 10 times more than the average, site. So team at flu camp and also in our clinic in Plumbersdale did an amazing job in managing the volume of the volunteers and putting them through the clinical study. We we recently just actually completed the audit of this study, and and and the sponsor gave us, you know, five stars literally to for doing a a wonderful job for this trial.

31:34 Taking a step back a little bit and looking at the overall market. So I do wanna talk a little bit about, ILLiad. You know, we don't typically announce a letter of intent, we thought this was important because it sets a precedent in the human challenge trial concept in that this was the first occasion where the FDA has originally agreed to potentially use data from a human challenge trial as a as a phase three pivotal trial. So this basically means that Iliad, the the biotech company that is basically developing this whooping cough vaccine to run a human challenge trial, and the data from the human challenge trial will go to the FDA to prove whether this vaccine was is effective or not. This has never happened before. No other regulator has agreed to such a concept.

32:23 So we believe this is a a a very significant milestone for us as a company having done 70 phase two human challenge trials to now doing a a phase three challenge trial. But also for the industry in the fact that it could potentially open up other biotechs and other pharma companies who are working in similarly rare or erratic, diseases that could open the door to to use human challenge trials to get to marketing authorization. So this is why it's a significant step and why we decided to announce it to all of you to kind of show you the progress of human challenge trials in the regulatory framework of drug development. And you can see UK, Germany sit very well with regards to number of trials conducted by country. But the bottom left one chart, I think, is key because now this applies not only to HVIVO but, of course, to CRS because CRS conducts phase one clinical trials. So this is part of, their marketplace.

33:22 And for HVIVO, the traditional human challenge trial sitting at phase two or the more phase one trials that are done is logical step, then the more phase two trials will be done including human talent trials. And the diversification of the therapies is given on the bottom right hand corner. So we are not no longer just a respiratory infection disease CRO. We can work across multiple therapeutic areas. The order and the pipeline, this is top of my mind all the time. We want to develop and increase the order book. We've had some challenges, at the second half of last year. Beginning of this year has been extremely good. We have converted some good contracts, and you can see the good diversification in the order book. The pipeline is stronger than ever. We've been getting new opportunities in house. Of course, we want to speed up the conversion of some of these opportunities into contracts and into into the order book, and that's one of our our primary goals.

34:22 If you break down the pipeline by, the human challenge trial pathogen, you can see again a really good rainbow of colors. This means that the new challenge models that we have developed in recent times are now showing traction within the market, and we are getting proposal request proposals for a variety of human challenge model that are currently active with us. The 40,000,000 short term, like, opportunities I talked about, I think, during my last call, all but one have been now signed. The only exception really is the Elliot opportunity that was, part of that that group opportunities. Having said that, we now have added new opportunities since then to the hopper, and we hope to close them in the near future. So the weighted order book looks very good.

35:09 Of course, it could be improved. Our team is working hard in getting the message out there. The number of challenge trials we think will go up, the size of them will go up. And with Iliad coming on board as a phase three client, that opens up a whole new paradigm of potential clinical trials for us in in a human challenge trial setting. So you're pleased to, hear this is our our final slide. So just to kinda give you a quick summary. So we are expanding our human challenge trial models. This will remain, our core business. We are also developing standalone business, streamline, business service lines, especially in, HLAB, inside services. And we now have the foundations and and facilities built to offer this service to get us to 100,000,000.

36:00 There are some current headwinds, side winds. I mean, winds coming from everywhere, to be honest, the way the macro macro climate is going on, especially in The US. But I don't want you to feel that we are severely impacted by this. The tariffs don't apply to us because we don't produce any products or send any products to US. The pharma clients we're working with, most of them are at an early stage of drug development, phase one or phase two. So it'd be at least four to five years before their products go into the market. So they're also not really impacted. The RFK RFK anti vaccine staff. Well, to be honest, it does change on on a daily basis almost. So I'm not sure what the future holds. But you also have to remember, worst case scenario, all vaccines, development stops.

36:51 What you will see as a consequence is increase in infectious diseases across the globe and increase in the development of antivirals and human challenge trial models work effectively equally effectively in antivirals as they do for vaccines. So I don't see that to that's going to impact us. And the outlook, seventy three million, this year. We do think there will be a h two waiting purely because of the delay in in in signatures. We're looking to get mid to high teens in in EBITDA. 70% of this year's revenue is, already contracted. Our key folks right now is, one, on sale, so getting to to build up that order book. Second is to complete the integration with CRS and harmonize that team into one single entity. The market volatility, well, it is what it is, to be honest. Our focus and our goal is to make sure that we give good appropriate guidance, and we hit or beat our our targets on an annual basis. And that's what we're here to deliver. Finally, as we've announced in the IRS, our founding chairman, Kahal Pril, will, not be standing up for reelection.

38:03 I want to thank Kahal for all he has done, over the last, well, seven, eight years since, he founded, OpenOpen effectively from two loss making companies in Ben and HVIVO. He hired me around three years ago, and we've had a a very good working relationship. The companies now stand in a in a very good place with three successive years of revenue growth improvements in EBITDA margin. I wanna thank Kahal on behalf of everyone at HVIVO for doing a great job, and the nomination committee right now is out and looking for a new candidate for the chairman of the of the company. With that, I will close the presentation. Thank you all. Perfect. Moe, Steven, if I may just jump back in there. Thank you very much indeed for your presentation this evening.

38:52 Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that have been submitted already, I'd just like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can all be accessed via your investor dashboard. Moe, Steven, as you can see there, we have received a number of questions that were both presubmitted ahead of today's event as well as those that have made their way through this evening as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. Guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so. And if I pick up from you at the end, that'd be great. Thank you. Thank you very much. So I I I've seen there's a a lot of questions that have come through on the platform. I don't think well, I know we will not be able to answer all of them, but we'll try and get through as many as we can. I'll probably maybe group some of the questions because they they have very similar answers, to be honest. The first one, and as I think there's more than one question on this. It said simple. Why has the share price dropped 50% when you say you are doing so well? What are you doing to improve the share price and so on?

40:00 So the items we control really is making sure we deliver on the numbers we we we put out to the market. That's been our our key goal. And, over the last three years, you've seen that. So every time we've given out guidance on on on revenue, on EBITDA, and some of the other financial parameters, we have every time hit or beat all of those targets, every year. And that that's the first thing. So and that remains key for us. We have to deliver on what we say we're going to deliver. Then we do manage the market, as well as we can. There are some macro events that really we can't control. What's happening in the world with regards to, you know, Ukraine, Russia, or the tariffs, the depression in biotech funding, all those play a fact, in, play a factor in why the share price is, repressed.

40:57 But I'm sure you all agree with me. And just like, you know, we're speaking to brokers and analysts all day today, they all agree that we are very much undervalued, with regards to our market cap. And it's a matter of time before the market realizes the true valuation of HVO, especially with the the numbers we we bring out. I mean, for an AIM listed company, we are in very good health. And not just regards to revenue and EBITDA margin, but the fact that we have such a strong cash generation and built up a, you know, over £40,000,000 of cash reserve at the end of last year says a lot in the way the business model is built and how the team has been performing and delivering on all the targets. Can you give more insight into contract status and future prospects in particular type of size contracts?

41:50 So in general speaking, for the human challenge trials, at least, the contract sizes are are going up. The sales pipeline so these are, sales requests we received from clients is bigger than ever. The challenge has been, as I mentioned, in converting, the sales pipeline into Audible. We have seen some good news. Earlier this year, we started to convert some of those into contracts, and we are hopeful that we will continue to convert more. And that is our number one priority. But but so far, you know, after kind of slowed us in the second half of last year, we've now seen some some improvements. Okay. This is a long question. The share price has more than halved in the last few months.

42:39 Correct? A prime reason a primary reason for this is the investor perception around the appointment of RFK in The US and retail investors appear to be assuming that US business will drop off a cliff that HVO has little residual value. My hypothesis is that RFK's drive for transparency of data is likely to make phase two and three trials more expensive. Therefore, HVO's service is even more compelling. You will clearly be talking to the farmers and the likely impact. And it goes on a little bit more on this. So you're absolutely correct. So RFK does have an anti vaccine stance. As I mentioned, I don't think that really impacts us considering we both we work both with vaccine and also with antivirus. On top of that, we work with vaccine at a fairly early stage.

43:27 These vaccine typically will not hit the market until four to five years from now. By that time, who knows what the US government, would be like. On top of that, having reviewed the news on the fact that the FDA is reducing inside by twenty percent, well, a typical human challenge trial has around five percent of the data points that a a phase three study does. So if the FDA was looking to review less data much more faster with less fewer regulators, then a human challenge job is really a great concept to get back on because the affixi data, so the data that proves whether the drug is effective or not, requires the same number of people.

44:15 And we deliver that. So we deliver the same number of volunteers who have an infection as a phase three does. But a phase three typically requires 10 to 50 times more people to be vaccinated than a challenge trial. So for us, we can do the same data with less than 5% of data data points. So for a regulator and for the customer, I mean, it's much more efficient. It's much more cheaper. It's also less riskier because you're exposing lot fewer people to the vaccine you're testing. So so this this this person, I I don't know the name, has got it really on point that the new FDA, the new Slimline FDA could actually be human challenge plans could actually be more attractive to them than they were previously. Dearmore, as regards, mergers and acquisition, how optimistic are you of turning the two company fortunes financially around in 2026 as regards being financially accretive?

45:14 Steven, do you wanna take that? So I we have a very active, integration program. We are targeting to turn it around this year. So by the end of so for 2026, we are aiming to be accretive for, both, Manheim and Kiel entities. And we've already started in the sense that we had, determined sort of £800,000 worth of savings, annualized savings that obviously will impact the full year impact will be for next year. And I yeah. So I I think we're on track for that, and I think that's that's our target. That's what we're pushing for. Thank you. Are any more acquisitions plan expected? Yes. But not in the short term. We are looking to focus on making sure that we integrate the two acquisitions we have carried out this year, but we are keeping our our eye open, to add any other companies that provide services adjacent to what we already provide, like CryoStor, like CRS.

46:18 How realistic are you of obtaining the '28 forecast as regards to a 100,000,000 revenue? I'm very real realistic. I think we're on the track. I I never, from day one, thought that, where we were back in, what, 2021 to 2028 now that is it will be a straight line of growth. That's not how business work, but the trend is strong and it's good. And I'm very optimistic that we will achieve the 100,000,000 target by 2028. How many institutional investors are actually involved in holding company shares? Well, quite a lot, to be honest. I know, over 40% of our share register includes institutional holders. It may be even a bit more than that right now. So we have a a very good institutional, following right now.

47:08 And some of the very kind of large blue chip institutions as well, by the way. Any interest as regards to the malaria challenge study? So as you know, we did develop a malaria model back in 2021, I think. Malaria challenge models, to be honest, are very cheap to run because they're outpatient. They require very few, patients too. So, yes, we are, but it's not our number one priority. If it's up to me, I would really focus on more influenza, more RSV, more HPV, more COVID. I think this is one for you, Steven. I'm not sure if you can answer this. Please, could you confirm the approximate cash position after the acquisition? So, I think we both know I mean, if you look at the acquisition, what we've paid for the acquisition is €10,000,000, and we paid, 2,700,000 sterling for Christal upfront.

48:04 So that's, you know, that's effectively about £11,000,000. The beginning of the year, we're 44. That's 11. So close to just over 30,000,000. Of course, this will grow again by the end of this year. Hope what it is. Please, could you confirm okay. No. Would the board consider doing a share buyback given the current share price? Absolutely. This have been discussed, at the board. We're not doing it right now, but it's absolutely on the table, and we would consider, at the right share price. One for you again, Steven. Excluding CRS, why are revenues expected to fall by about £10,000,000? Why are margins dropping to mid to high teens this year? Even with CRS, you are forecasting lower EBITDA than this than this year.

48:55 What is the problem here? Right. So the core business is tracking to, normal EBITDA rates between 2023% where we sort of range our EBITDA percentages for for the core business. CRS is actually going to make a loss. So it makes a loss of about 1,500,000 sterling, and that's what we're forecasting at this stage. Combined, you you're getting to mid mid to high teens, performance, and that's our guidance. So it it it, you know, it it will turn around. It will change. Revenues so CRS revenues in previous years was 19,900,000.

49:44 We our guidance has been, you know, $2,020,000,000 euros that's been accounted. That's full year, so that's not prorated for the the period of ownership. The underlying performance of of the core business is pretty much, is pretty much the same as 2024 excluding the facility fees. So I I I make that excluding CRS, the the revenue is down on core business by about 4,000,000. So, really, you're looking at 58,000,000 plus CRS prorated giving you, your 73,000,000. Great. Thank you. Quickly, maybe a couple more. I read that the clearing of wall facility was mainly paid for by your clients. This is correct. Do they then own the facility? No. They don't own the facility.

50:39 If not, what is the quid pro quo? The quid pro quo was that we ran we finished their trial in an expedited manner, and we did deliver that last year. So we as you may remember, the first half of last year, we were running three facilities, and part of that was to use the new facility to finish the trials, for those company. There are no other, commitments to these clients, at all. One for you, Steven, maybe why have you reduced the dividend instead of increasing? It's very disappointing that you have done this as a long term shareholder, especially along with the share price down 50 from its high. Okay. So on a a year on year basis, I mean, 2023, we paid a dividend in 2024 of point two p, and we are doing the same that this year. So for 2024, we're paying a point two p dividend. So it's the same. It hasn't actually gone down.

51:38 There was a in 2022, we paid a a special dividend. It was a one off special dividend that we paid out in 2023, which was, you know, much higher than, it is currently. We we have set the policy that the dividend would be low, would be nominal, and would be really aimed at the AIHT funds that require dividend. What we're trying to maintain, we is the cash so we can grow this business and make acquisitions that we have just done, and there'll be furthermore. Obviously, you know, if things go we don't find the acquisitions that we want on a timely basis, we will be considering and having a look at share buybacks. But at this stage, our policy has been set, and that's what the board has agreed to move forward on.

52:27 Okay. Maybe a final question, I think, just does the weighted pipeline include Iliad? No. It doesn't include Iliad. There's a couple of questions about why should I continue to hold in HVIVO. I will come to that at the end. I will hand back to you now. Perfect, Moe Steven. That's great. And thank you very much indeed for addressing those questions that came in. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended. But, Moe, perhaps before really now just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that'd be great. No. Thank you for that. So, well, HVIVO is a is a very strong business with a very strong foundation now. You've seen what we've achieved over the last three years. We're in a unique position. Nobody else can do what we do, and I mean that literally. You know, we we we hold 90% plus of the market share. The expertise we hold would cost somebody else around £50,000,000 just to set up the the facility, the recruitment database, the challenge models that we currently have. And even then, they won't have the the data or the expertise to run these trials and no pipeline of of new opportunities.

53:44 And for that, I think we we we are at a in a very strong position. We're now being able to use the funds we have generated ourselves to add and diversify into new services and new stages of, clinker development. Of course, when you acquire these companies at the price that we've acquired, so you ask for example, at 50% time the revenue, it does impact the EBITDA short term, EBITDA margin at least. I know you expect that. But our long term goal is that CIS will become financially accretive in 2026. Our goals is I've always been to grow and diversify, and we've hit all those targets. And I feel that at the moment in the current climate, we are very much undervalued. Our trajectory is still going in the right direction, and I'm very optimistic for the future of the company. And for those of you who have been shareholders for for a long time, thank you for your loyalty.

54:41 And rest assured, there will be a time in the future where we will have we we will definitely have an uptick. Thank you, everyone. That's great. Moe, Steven, thank you once again for updating investors this evening. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of management team of HVIVO PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good evening to you all.