hVIVO CEO: Order book hits record £72m as H2 revenue set to nearly double

that this order book has been determined using a more strict, more conservative uh algorithm. So, if you compare like for like, this is the highest uh record uh order book in the company's history, which is really kind of uh really gives a good visibility into rest of this year and also into 2027 and 2028. So, that that's one of the key reasons why I'm confident uh for the rest of this year and also going into uh 2027.

Hello, you're watching Proactive, I'm joined by HVvo's CEO, Mo Khan. Mo, very good to speak with you. Could you give us an overview of the interim results you released today?

Yeah, absolutely. Uh first of all, thank you for having me on your podcast. So, yeah, we've just released our interims for first half of 2026. Um no, not many surprises really, considering we've uh published our first half uh trading update in July of this year. So, we generated around 16.3 million pounds in revenue, around 4.5 million pounds of uh EBIT loss. Um so that was really expected because we had always stated that in 2026, we will be a second half waiting. We ended the period with uh 30 million uh pounds in cash. Some of the key highlights are really um are the three uh fairly large human challenge trial contract we signed including uh our first ever uh pivotal phase 3 trial with Illiad as well as uh two others uh since then uh which all led to a record order book of 65 million pounds at uh end of June. And if you include um the uh order book from CRS Berlin which we acquired in quarter three, um then that brings the order book to a a very promising 72 million pounds.

Mo, could you could you talk us for your guidance for full year 2026?

Yeah, so we're expecting our uh revenue to almost double from uh H1 to H2 of this year. and we've talked about um the fact that we had very strong commercial momentum um towards the end of last year and into uh 2026. and that uh has built up the order book. Now, of course, we are working on converting that uh order book into revenue. So with almost doubling the the revenue in the second half, we are looking to um get to uh 47 million pound and and a low uh single digit loss. In fact in the second half of the year, we expect to be uh EBIDA positive. So this is mainly um due to uh some shifts in programs uh going into 27 and 28 instead. Um but no cancellations uh which is the upside. Remember, we are only now reporting in our order book fully uh signed clinical trial agreements. So we expect the cancellation rate um to come down from the data we are reporting going forward.

Stephen Pinkerton's retiring as CFO after 10 years with Hvo. What does the transition look like, Mo?

Yeah, so uh as you said, Stephen's been here for um, well just over 10 years with four years as a CFO. He's been part of the senior management executive team uh and the board as well in in helping um see the transformation of a what was a really a niche small uh CRO to a fully fledged CRO conducting end-to-end clinical uh development program. So, uh really kind of uh want to thank him uh for his service to date and wish him all the best for retirement. And with regards to the uh transition going forward, um one of our uh non-executive director Richard Cotton, um who has got a a huge experience uh in finance being CFO multiple publicly uh quoted companies, uh will take over as interim uh CFO while we continue uh with our search for a new permanent uh CFO.

Uh you you've recently pivoted from a specialist provider of human challenge trials to a more integrated, diversified offering. How's that playing out in practice?

Well as you can see uh from the numbers uh that we are uh forecasting for H2, uh it is now bearing fruit. I don't want to lose the um the core business we have as a human challenge trial uh provider. I think that's that's still key, but now we are much more than that. So we have a uh a consulting arm uh that provides customers with early preclinical or clinical uh development stage consulting services. Our laboratory has been uh I mean it was our core business right from the beginning uh since the inception of the company, but it supported human challenge trials mostly. Uh but we are now uh doing a good amount of stand on uh lab work and of course this is also another gating event for future uh phase two trials including human challenge trials. And the third piece is the is the clinical trials. These are non-human challenge trials either in phase one or phase two. Now we have been conducting some of those in our London facility um that normally caters for the human challenge trials uh studies too. But over the last what almost two years now through the acquisitions of CRS uh Mannheim and Kiel, uh we've added new capabilities, additional capacity, uh more uh therapeutic expertise. And now uh with the recent acquisition of CRS Berlin to add dermatology, uh women's health as well as 36 beds. I think we're adding capacity. So all in all, this should ease um our our clients' pains to be honest because under a single contract, one vendor, we can take a customer from preclinical to all the way to proof of concept. So that means for us earlier engagement with our customers, longer time with with with our customers, and hopefully generating more revenue per client.

Mo, what's giving you confidence in the outlook for the second half and and for drug development more broadly?

Well, the obvious answer to that, to be honest with you is is our record order book, right? So the 72 million pounds I I mentioned earlier. Now you also have to know that this order book has been determined using a more strict, more conservative uh algorithm. So, if you compare like for like, this is the highest uh record uh order book in the company's history, which is really kind of uh really gives a good visibility into rest of this year and also into 2027 and 2028. So, that that's one of the key reasons why I'm confident uh for the rest of this year and also going into uh 2027.

But when it comes to the overall market, now we've seen an increase in biotech funding, we've also seen more M&A activity. So one of the key um milestones that we see uh coming up is around, I think around 300 billion dollars worth of drug market uh where the drugs are coming off patent in the in the next five years. So that means that the farmer industry now have to find new drug assets to fill their pipeline. and historically, the biotech industry has always played a huge role in in filling um the coffers of of big farmer. But this means that the biotech needs to do more work because if the big farmer have more money, they can invest in later stage drugs. So the biotechs have to run their phase one and phase two. And that's where we come in. So we are working diligently with biotech companies helping them to get to uh the phase two stage where they can market themselves to to Big Farmer. So, I think that really plays well into our offerings because it's suited to smaller biotech companies who don't have large pools of people managing vendors and different service lines. So, for us, I think the biotech industry is is really a key area of growth, but of course, we continue to still work with the big farmer.

Well, I hope you'll continue to keep us updated with your progress. Thanks for the update today.

Thank you for having me on.

Hvo CEO, Mo Khan.