In its latest investment research note, Stifel highlights hVIVO PLC’s strong position in the global healthcare market, notably in conducting human challenge clinical trials (HCTs) for infectious and respiratory diseases.
The investment bank projects hVIVO’s revenue to hit £62 million in 2024, a target considered well within reach given the company’s current contracted order book of £80 million as of year-end 2023. This order book lays a solid groundwork, with 90% of the 2024 revenue already secured and visibility extending into 2025.
hVIVO, a contract research organization (CRO), is renowned for conducting HCTs, which test vaccines and antivirals by intentionally exposing healthy volunteers to pathogens in a controlled setting. This approach allows for precise observations of disease progression and provides critical data quickly, establishing hVIVO as a go-to partner for major pharma and emerging biotech firms alike.
In 2023, hVIVO reported revenues of £56 million, achieving a 16% year-on-year increase, with EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins rising to 23.3% from 18.7%.
Stifel expects a 10% revenue growth for hVIVO in 2024, alongside sustainable EBITDA margins, further solidifying its appeal as an attractive investment in the UK healthcare sector.
The company is also expanding its operations, with plans to open the world’s largest commercial HCT facility in Canary Wharf, pending Health and Safety Executive (HSE) approval. The new site will include a containment-level-three lab, significantly enhancing hVIVO’s research capabilities.
Highlighting hVIVO’s robust financial health, Stifel points to its £37 million in cash reserves and no debt, positioning the company well for organic growth and potential acquisitions.
Stifel maintains a ‘buy’ rating on hVIVO shares, with a price target of 35p, representing a 33% premium over the current price, citing the company’s superior growth prospects, potential for margin improvement, and strong market standing.
