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Another upgrade makes this takeover target a buy

It has upgraded guidance and there is increasing bid activity in the sector
September 12, 2023
  • First-half cash profit rises 126 per cent to £5.2mn
  • 52 per cent higher revenue of £27.3mn
  • Cash profit margin expands from 12.6 to 19.1 per cent
  • Net cash has doubled to £31.3mn (4.6p) in past 12 months
  • Analysts upgrade 2023 and 2024 EPS estimates by 62 per cent and 46 per cent

Analysts have significantly upgraded their earnings forecasts for hVIVO (HVO:19.5p), a rapidly growing specialist contract research organisation (CRO) which tests infectious and respiratory disease vaccines and antivirals using human-challenge clinical trials. The group provides early clinical development services for a broad and longstanding client base of biopharma companies.

Contract momentum continues to build. hVIVO has won five major contracts with a disclosed value of £25.1mn since the start of 2023, adding to nine contracts awarded last year which had a disclosed contract value of £65mn. Moreover, house broker Cavendish believes that the actual value of this year’s contract win could be as high as £40mn, which includes a £13.1mn contract awarded by a top five global pharmaceutical client to develop a bespoke Influenza B human challenge model. Clearly, there is potential for that contract to evolve into a human challenge trial (HCT) and add to a fast-growing order book that offers revenue visibility well into late 2024.

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