hVIVO plc (HVO) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Open Orphan plc interim results investor presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via Investor Meet company dashboard. And again, we'll notify you by mail when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you'd be so kind just to give your attention, that would be most grateful. And I'd now like to hand over to Cathal Friel, Chairman, from Open Orphan. Good afternoon, sir.

Mark, good evening. Thank you very much. And thank you, everybody, for turning up on Monday evening to listen to our latest update. Without further ado, first of all, I, hopefully, will make it slightly better. The last time I was up on the platform, the 9th of August, Monday, I've done a lot of presentations. That goes down in history as my worst presentation of my life. Everything went wrong. Audio went wrong. Visual, there was no visual. And then the questions, I had to pare -- a bunch of questions were all the repeating ones. I normally have the repeats reduced. So at least tonight, we're starting at a better note. We've got audio. We've got visual. And I've got a proper set of pre-submitted questions. And please submit lots of questions then, and I'll do my best to answer most of them. Okay. Without further ado, I'm going to take you through our update presentations, where we are, how we got here and where the rest of the year is and, more importantly, how next year is looking. So first of all, let's move to the usual disclaimer and where we've got ourselves. So this is really interesting. We've put together, and this is why I say you've [ come in the journey ] with us, [ ahead of ] most people, we took Venn Life Sciences just over 2.5 years ago and hVIVO just over 1.5 years ago, put them together. Neither were profitable in their life. Neither, if I'm being honest, were particularly good at anything, but I insulted all the staff, I shouldn't say that. They were kind of struggling. However, putting them together, cleaning them up and, on the back of the pandemic, we now have created the world leader in the testing of vaccines and antivirals using human challenge studies, addressing, and this is really important, the growing infectious and respiratory disease market. That market, traditionally, up until this year is about a GBP 30 billion, GBP 40 billion a year market. 90% of that market is your annual influenza jab. By 2025, that market, all the pundits are agreeing on one thing, it will be about $250 billion. That's 3.5 years upward -- imagine, it's going to be a fivefold increase. And we're there to test any and all of those infectious diseases and respiratory diseases. You may ask, well, where did COVID go? Well, hey, [ a; especially tightened ] market outside of here in East London and Whitechapel, COVID hasn't gone away. It's still here. But the bigger market is that growing infectious, very predictable. Big pharma, when I talk about both, I'd like to give you a bit of color what is the plan for the rest of the year, what is the plan for not just next year, the next couple of years. But I just think, never been more excited, we now have a real business in a real sector where we're the world leader. At a glance -- and again, I've done a lot of presentations over the last 2.5 years, but what have we? First of all -- and again, we've gotten a lot of flak. Well, Cathal, exactly how much revenue you did this year, exactly how much revenue you did the full year, exactly which profits. Well, here we go. We're doing that today. First of all, H1, that was the first half of this year over last year, was 242% up. And Leo is going to read through those exact numbers. At a glance, we have now 9 challenge study models and one of them, the latest one, being malaria. And we have another one in the pipeline, and we're looking at TB, tuberculosis, as well, which has been a [ growing model ]. Strong pipeline of repeat big pharma clients. We now have the Pfizers, the GSKs, the Roches, the Sanofis, the Janssens, you name it, the Mercks. It's a hell of a business. And these people now are repeating. Traditionally, hVIVO will get one of those every 4 or 5 years, I'll show you in a minute, all of those either signed a contract or in contract negotiations. That's a pretty nice customer base. Really important, I've been saying it for over a year, we're not just COVID. We're not just COVID. And the reason I've been saying that, I've always believed that vaccines will eventually work and COVID will go away. COVID has been -- the pandemic has been good for the company. But it has created a monster market, this $250 billion infectious disease market. But [ making care ] -- the first half of the year, 75% of our revenues, and I'll come to the Q&A where you're going to see them, were non-COVID. That's traditional influenza studies, like we've done today. That's the third study we signed this year. RSV, we signed 4 of those; hRV, asthma, all that good stuff. So that's the non-COVID revenues. EBITDA, people were a bit spooked to the end of June and when I spoke in August, "Well, Cathal, did you really make money in the first half of this year?" And I was going, "We can't say that yet," but we did. Well, here we go. GBP 2.1 million EBITDA in the first half of the year; gross margin, 28%. It should be better. We'll come to that in a minute. $250 billion infections disease market. We have 43 quarantine beds we own and control. That's 24 in QMB and 19 across the road in a hotel. And guess what? We have also 19, which we don't pay any rent for up in the Royal Free. But more importantly, we've proven over the last year how to take a hotel and convert it into a quarantine unit. The hotel is 50 meters across the road. That's the Whitechapel Hotel beside the Whitechapel Clinic. And we can get away with converting that for less than GBP 1.5 million. The client paid for it. It didn't cost us any money because we designated it as a site extension. Within 250, 300 meters from Whitechapel, there's 4 other hotels that we can pick and choose as site extension. So in case any of you are worried where are we going to fill out more, we can repeat that exercise. It takes us about 3 months. There's a number of hotels that fit the bill, so we can play one off against the other. So we will extend our quarantine facilities on the back of filling these out and on the back of demand. We're not going to fit them out and wait for them to come. We'll get the studies and then we'll get additional beds. So expansion is no longer a problem. First half of the year with 6 active challenge studies. And in the total year, we'll do 10, either start or finish. hVIVO only ever did 1 or 2. Its best year, we did 3. How come we're doing 10? Because we're doing it faster, quicker and we're charging a lot more for them and that the client doesn't really care with the price too much. They want the data. Pfizer signed the study in the 20th of October last year. The previous study they signed with hVIVO was 5 years ago. It took them 18 months to get the data out of the old management. We delivered the data 6 months. That's what they wanted. And the CEO of Pfizer, during his Q2 updates, mentioned 1 of 4 things was our study. The first thing was COVID, and the second was sensational results in an RSV challenge study. He didn't name checkers, but we're the only people doing them in London, and it just transformed their RSV vaccine potential. We have our Paris office. We've got 25 people in Paris. Everyone makes money, and everyone is billable. We have no administration staff there. We keep it at 25. 50% of the revenue comes from supporting the data management bio staff of the challenge studies, and 50% is the big French IPSEN serving all those good people. Breda, we have their support at London as well. It's CMC, PK and preclinical. That's consulting. Again, not a huge business. Between Breda and Paris, it's about EUR 7 million in total. But guess what? Both of them now make a healthy profit margin. They'll grow incrementally by 15%, 20% per annum. Because this is a body shop, every new contract bring in more consultants. Whereas London, new contracts, we've got to fill the basic beds, and every additional one is jammed on it. So basically, we can scale London and make vastly bigger margins. But having Paris and Breda are very, very important. The market opportunity. I know you heard me talk a lot last year about COVID and saying we're not purely COVID. But guess what? The market opportunity is sensational. And that's why I think as the market was falling apart today in London, we're in a big Chinese, we're in everything else. Quite a few of brokers say, "Hey, Cathal, you didn't really build [ a lot ] on your results, and your share price is up a bit as the market has fallen apart." I know we've ended slightly down. But I think the people are looking at, well, this infectious disease market is booming post-pandemic that's going to grow to $250 billion annually, every year, by 2025. Every major pharma company, Pfizer, GSK, J&J, Merck, Sanofi, et cetera, have now rolled out multiple new non-COVID vaccine programs in the last 12 months. Guess what? We either signed a contract with every one of those or in contract negotiations, pretty cool names to have and multiple. They're coming back. What's gone on? Big pharma and government are restocking and replenishing 30 years of underinvestment in infectious disease products. It will be one of the biggest gold rush in the history of pharmaceuticals. Oncology, gene therapy, none of them ever passed $100 billion, $150 billion a year in market size, and this is $250 billion and rising. Even our friend, Biden, in the White House is making a big deal of $65 billion. What they all realize is at least $17 trillion worth of damage done to the world economy. So the governments, big pharma know they need to spend hundreds of billions to ensure we never have a pandemic again. And the beauty about this, every one of those new infectious disease products have to be tested and test them in a challenge study. 6 months can tell them if they have a winner or a loser. So that's where we sit. Customer pipeline. We're making it really clear, in the first half of the year -- and people say, "Well, where is your COVID revenues," [ whether we want to top it ]. We had GBP 5.4 million in the first half and was GBP 16.5 million in real revenue. That's other challenge studies that will repeat, repeat, repeat. We have a significant pipeline of the world-leading pharma companies. The names are there: Pfizer, J&J, Sanofi. You name it, we have them. And it's a pretty cool place to be. Operational highlights. I don't want to dwell too much on this because what we really want to do is Leo to give the financials, and then I'm going to bring people to a lot of questions because I think a lot of where we're going and what we do will be handled in the Q&A. But first of all, we've increased challenge study capability. The Whitechapel clinic, we converted 19 bedrooms. There's another 9 there we can convert. We didn't convert all 29 beds. Royal Free, 19; QMB and the regional one we have, voluntary screening; and we continue to diversify the lab and service offers. Now you might ask, rightly so, "Well, Cathal, what about COVID?" Well, here we are. The COVID work is dependent on finishing the characterization study in the Royal Free. If you read carefully, there's so much we can say and say we'd do because it's government controlled, Imperial University. But if you read our RNS, we said the work in the Royal Free is now completed. That means the characterization study is completed. That means we can now finally look at potentially signing large contracts. The contract we signed this morning for influenza, we only signed with GSK for GBP 8.1 million for asthma 3 weeks ago. We signed them, and then we seek approval from both the MHRA, that's our regulatory in the U.K., and ethics panels. When it comes to COVID work, the reason we're saying we're not going to do much the rest of this year, it's being pushed to next year. A lot of those big studies, we now have to line them up. We cannot sign contracts because that would piss the regulator off seriously. [ Hang in there ]. Each one of our COVID studies will go back to the U.K. ethics panel and the U.K. MHRA. And we seek permission. When they give that, we'll make an announcement. So all I'm saying, the COVID studies, we're trying to be very realistic. Say, look, we know we'll do GBP 50 million next year in real revenues in non-COVID. We'd hope to do substantially more. On top of that, we've baked in already GBP 5 million or GBP 6 million in the existing ongoing government COVID work. And my belief is any additional COVID revenues will be on top of that. So we want people buying in what can we control. It would be remiss of me to say that COVID is over. There is the new variants. We have grown a lot. And there will be always a need to test them quickly. And I think what's going on at the moment, the actual current vaccines, we all know the Pfizers, the Astras, the rest of them are working pretty well. But there's a whole wave of other products coming through: antivirals, monoclonals and other vaccines. And how are you going to compare? And this is the big issue, I think our friends in Valneva went bananas. People like that went bananas. It's very hard now to compare a new vaccine to one of the existing ones when everybody in the world is vaccinated. So the only way, and this is genuinely the only way, will be in a challenge study. We're biding our time. We're the only people who are working a COVID challenge study in the entire world. And guess what? I think we're going to be an exciting year. But I want everybody focused on what we can deliver. And that's the existing challenge studies, the respiratory diseases, what we can do. And Leo will talk us through now where we've actually got visibility on at least GBP 50 million next year and more on top of that. Why were the profits not higher? We wanted to come out early. [ We didn't want everywhere in the journey ] to say, "Oh, we didn't quite make the numbers." We want it to be very clear, set of expectations and beat them. That's what we're trying to do today. Yes, our brokers pared it back a little bit, but it's only a small bit in the overall scheme of things, and we think we can easily exceed expectations that have been set from today. Leo, over to you, please.

Thank you, Cathal, and it's great to be here and to speak to everyone tonight. I'm going to just give you a headline overview of our financial performance in H1 versus last year. And big picture, this is really the culmination of the work that we've been doing for 18 months. It's the promise that we have made to investors in terms of our work plan. And the results are very satisfying. Firstly, revenue is up 242% year-on-year. That's GBP 22 million in the current -- in H1. Our gross margins have grown from 6% to 28% in the period. And those combined to really turn around the loss-making position of last year where we lost EUR 4 million in terms of EBITDA. Now we're making profitable EUR 2.1 million. And importantly, we're continuing the trend that we started in Q4 last year. And a couple of elements just to draw your attention to. Clearly, part of this turnaround performance is driving overall yield, leveraging the fixed cost base that we have on the business, which has held us back. So in the 6 months, our revenue per employee has more than doubled. We have more than doubled our utilization in our facilities, and that's factoring in that we've actually increased our facilities through the Royal Free Hospital and through the Whitechapel Clinic. We are very satisfied with the growth in margin, but we know we still have work to do. 28% is good, but we want to be targeting over 30% ideally, on our way to 40% in terms of margins. And I'll touch on what we're doing on that in a moment. Cash is a critical part of our financial measures. And at the half year, we had approximately GBP 15 million in cash. The trajectory since year-end reflects normal working capital movements because we had significant client prepayments on our balance sheet at the end of December. It's also reflecting some timing gaps in terms of receiving R&D tax credits. And it's also reflecting investments that we've made to enable spin-outs, one of which Poolbeg Pharma we completed in June this year, as well as normal CapEx that we do to replenish ourselves in the labs and across our business. Our outlook for cash is that we will be in line at the end of the year with our H1 balances. So no concerns that we're bleeding cash as we drive the business forward. We touched on the share capital reorganization, which is really the technical changes to our balance sheet to enable us to do a dividend in specie, which we did to enable Poolbeg Pharma in June this year. I want to touch briefly on the key value-added initiatives. And the first key initiative really is how we drive revenue. And we touched on it at the full year review. Driving closed contracts is one of the key leading indicators of our performance and really sets the scene for future periods. Already, with the deals that we've just signed in September, we've exceeded the overall value of deals that we signed in 2020, and we still have 3 to 4 months to go with some really big agreements under negotiation with major pharma players. So that augurs very well and sets the scene for our revenue growth in 2022. We're continuing to make smart investments in our platform. We're investing in malaria, pneumococcus, tuberculosis, all about broadening the challenge model, not just to rely on the historic models that we've had. We're also investing in getting improved accreditation in our labs so we can broaden our services to big pharma and to other CROs who don't have this capability. Finally, linked to my point about margins, this year, it was around turning around the financial performance and getting back to profitability. Going forward, we want to really optimize our profitability so that we're performing in line with our peers or the top performers in the market. So we're focusing on cross-selling. How do we connect with our customers in the other sides of our business in Paris, in London and in Breda, so that the cost of selling actually comes down? How do we focus on driving increased productivity in our business by implementing smart technologies, by simplifying the way we work? Right now, our goal is we need to get well above 30% in gross margins, and that gets us on the right track to be in line with our peer group. Finally, we need to continue to be very, very disciplined in terms of our overhead, managing our cost base. So if we can grow our revenue by another 30%, 40% and more but keep our overheads flat, then we're getting significant operating leverage to drive improved margins to the bottom line. And that's the program of work that we want to continue now that we're basically profitable. But we want to drive ahead on that. Let's talk a little bit about the outlook. Cathal has alluded to it. And I think the big picture here -- there's a couple of big strategic points that we want to call out here. And it's really looking at the trend line rather than focusing on very short-term headlines. It's very clear, we could have done better than the numbers that were -- we could have done -- we could do better in 2021 had we got a COVID deal across the line. But the bigger picture is if you look at movements in the infectious disease market, if you look at the adoption of challenge studies as part of the armory of CROs and pharma companies, there's a huge opportunity to broaden our traditional business. So we're guiding right now GBP 40 million for the end of 2021, and we're guiding full year profitability for 2021. But as we look forward, even if we just focus on our non-COVID business, the deals that we have already signed, plus the pipeline of deals that are in advanced negotiation, if you layer on top the recurring businesses that we have in Paris and in Breda, we are well on track to deliver in excess of GBP 50 million in revenue for 2022. And that's not factoring GBP 5 million of revenue that we have already contracted for COVID. So the message we want to give is, the trend line is very, very positive in terms of our traditional business. We are not relying on COVID to be our engine of growth as we go forward into 2022. But you must remember, COVID remains a really good opportunity to give us upside on the numbers that we're talking about today. There's already GBP 5 million in, but that could easily be GBP 15 million to GBP 20 million, depending on the nature of the trials and the timing of those trials. And our hesitation around calling a number is because there is uncertainty about when these trials would start. As Cathal alluded to, regulatory clearance is an important enabler to get these trials started. So we want to give you real comfort that the base traditional business is a very, very strong engine of growth. We're not relying on COVID, but COVID could be a really strong source of upside as we go into next year. So in summary, we're satisfied with the results that we're sharing with you. And you've seen today the culmination of the work -- the journey we set out on 18 months ago. But we're not satisfied to rest on our laurels, we're resetting our goals in terms of driving long-term performance of the business. And we see a really strong opportunity linked to growth in the market. Cathal, back to you.

Leo, thanks for that. So look, in summary, folks, we could have -- we all know, we have made no COVID challenge study announcement. Reading between the lines, it's ready. So going into next year, we will do COVID work. But I can't emphasize. If it had come in this year, we would have hit the magic number of GBP 50 million and a much bigger profit figure. But we are -- for everybody on the call, we're emphasizing today, guess what? We're finally profitable for the first half of the year to the full year. I'm going to point now to the cash. That cash will not drop. I know at the end of June and August, my disaster presentation on the 9th of August, people were worried, "Hey, you guys are burning cash." So one of the big messages today is we're now in a business that's generating cash, and we're now in a business where we're going to continue [ hounding ] these dividend species back. So let me take you to those. Poolbeg Pharma, we're a small team. Like, probably I get into trouble because I'm a bit too hands-on, and we don't like spending too much money. But we're worried, if we build up this big structure of CEOs and people, how do you get rid of them? They run the company for themselves. So at the moment, we've got a relatively lean-and-mean company. Poolbeg, we did it. Most people thought we didn't. We got our pre-money at GBP 25 million. We raised -- that was 90-odd percent owned by Open Orphan shareholders. It's dividend species. Took a bit of work and time with advisers to find the structure that we could give you and myself and everybody else shares though we didn't pay income tax And we had to do a HMRC statutory demerger to get their approval. So that means the shares you got, there's no income tax. You pay tax on the capital gains. Yes, they're locked up for 9 months. But guess what? We've done very little news flow over the last 2 months. The share price hasn't gone down. It was up 30% at one stage. Watch the news over the next 3 or 4 or 5 months, and I think by the time the 9 months come around, it will be in a very, very different place. The beauty about Poolbeg, it's got a clear trajectory to go straight on to NASDAQ very, very quickly. I'd imagine well before that 9 months. I know people are worried. We'll have the situation under control. The freeing up is not going to damage the share price. The next one, we control 100% of Disease in Motion. We've done all the work. We did spend some of our cash earlier this year, get the malaria model up and running and not long getting pulled back, so getting it structured, but getting Disease in Motion. So there is no more money we can spend on Disease in Motion. It is ready. It's a matter of now going through the process. We probably won't get it done out of Christmas, but we'll get it done very early in the New Year. So I had hope, but around the turn of the year, we'll be giving you -- who knows the valuation? I originally said we didn't know with Poolbeg. I think Disease in Motion should then turn a bigger pre-money. It's more sexy and exciting. It's in an even -- so people are asking, it's about infectious disease and it's wearables, big tech. But guess what? We have a model coming together. It's going to be tooled. [ Everybody can do it ], running clinical trials. Because the big tech, the wearables, the watches, the iPhones are trying to help. But we've got a whole series of tools to give them, indicating post trials. And also it's going to be a really cool CRO tools company, and I think that could grow very fast and very extensively as a totally stand-alone company. Bear in mind, in each of them, Poolbeg has only full time employee, that's Jeremy, the CEO. Everybody else, we've got about 8 or 9 staff, 50-50. So that means we reduced the overall head count cost in Open Orphan, and Poolbeg gets new resources. We share the rent. So there's a lot of -- so basically, the benefit of having these spin-offs, they're actually very good for the parent company as well. Imutex, you know, I'm frustrated, but hopefully, there's a dialogue underway. I think our friends in the SEEK group are now much more attuned to where we should go with this. And trust me, I've been -- I keep saying trust me, I shouldn't say that. Work in progress, we will deliver a result in Imutex; likewise, PrEP Pharma. All I can say, we wanted them all done by Christmas. We want them all done by early next year. And we're going to go early next year as a pure CRO, world leader in testing vaccines and antivirals. And guess what, where do we go next? As we're already looking at Poolbeg into NASDAQ, my previous company, Amryt Pharma, has gone on NASDAQ, it's working out pretty well. It twitched briefly Thursday, $1 billion in enterprise value. That's $750 million market cap and $250 million in bonds. That's my ambition for all of these companies. Open Orphan. How do we get Open Orphan to NASDAQ? Very simply. We're probably a little bit on the small side. We may, at some stage, over the coming months, getting to bed with a much larger company who can't go to NASDAQ, sort of who would love if we put the 2 of them together? In my view, if we did successfully, get into bed with somebody bigger, a merger or some form of that, then we can go to NASDAQ faster and swiftly. And on NASDAQ, not long do we believe we're worth 2x the current share price. It's quite easy to have 3x. As I keep saying, we're a services company, but we're designed for NASDAQ. That's where we're going. So that's the plan over the next 12 months. And a key part of that will be cleaning up, handing back the noncore to shareholders. So hopefully, that gives us a summary, where we are on those. They're work in progress. Yes, we could have moved faster. But hey, the infectious disease market is not going away. Sometimes we rush them out. We might have gotten x for Imutex 6, 9 months ago. We might get 2x between now and Christmas for it. But look, it's work in progress. Final slide, because I really want to get -- there's a lot of questions, I'd say we got a lot of pre-submitted questions. So in summary, 242% increase in H1 over H1 last year. We're EBITDA profitable, we're bloody profitable first half. We're going to be profitable at full year. That's clear. 75% non-COVID. We'll look at 75% non-COVID for most of the year. We're guiding GBP 40 million for the full 2021. We are hoping and planning on exceeding it. We want to reset those expectations because there was one very large COVID study, Pfizer CEO had signed off. And our friends in Royal Free just couldn't get the bloody characterization model finished in time. I emphasize there's tons of COVID products win down the road. It's going to be very hard to test them in community. We saw even last week Valneva complaining, it's really hard to get a good result when half the world is already vaccinated. So that brings it back. The only way to test, not the only one, the main ways to test new COVID products is in a challenge study because we control the environment. Next year, GBP 50 million. We're targeting that. And we're intending to exceed it substantially. That's non-COVID revenues. That's challenge studies that we've signed: influenza today, 2 already this year, so a third one; asthma, a few weeks ago, previous one was years ago. We have 4 more influenza studies. Influenza is the new COVID in this business basically. New challenge study models, we've had malaria. And we're bolting them all now on a very low cost base. So the next challenge money we're looking at is TB. In prisons all around the world, that's becoming a huge issue. We've increased recruitment capacity with -- and then we've sort of done the first spin-off. So without further ado, I think it's time I started answering questions. I know people have a lot of questions. And let me -- we've had over 60 pre-submitted questions or I think, as Mark went in there, in a moment, we're going to see...

I was just going to give you a small pause, Cathal, because, as you say, a number of questions have come in. It will give you a chance just to have a look through some of the live questions. [Operator Instructions] But I just want Cathal and Leo to take a few moments to review investor questions submitted already. I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your Investor Meet company dashboard. And we will send you an e-mail when they're ready for your review. I'd also like to remind you that your feedback is as important as ever to the company. And immediately, after this presentation has ended, we will redirect you for the opportunity for you to provide your feedback in order for the company can better understand your views and expectations. Cathal, I'll hand the floor back to you, if I may. So obviously, you've got those pre-submitted questions. [Operator Instructions]

Absolutely, Mark. I've been reading the Q&A as Leo was talking, so I could see them coming in. First of all, we have 60 pre-submitted. Quite a lot of them naturally are duplication. So we've reduced them down to 22. There is 4 around results and financials, 7 around the spin-offs, 2 around the services non-COVID, 5 around the services COVID, 3 around general and actually only 1 about the share price. I will go through them pretty quickly. Our colleagues on the platform, both [ Wallwork ] and Investor Meet, what they're doing is -- lots of questions are right here. But quite a few of these questions are almost duplication of what we have. So I'll get through these 22. Leo is going to answer a few of the financial ones. And then our colleagues will delete duplication. And the remainder of question that remains unanswered here that's coming in tonight, I'm going to answer -- do our best to answer every one of them. I will try and wrap up around 7. I don't want people thinking, "Bloody hell, when will these guys shut up?" So we'll try and hard stop around 7-ish. Okay, kicking off. First question, about financials, can you give an indication of the current full year forecast both top line and bottom line? Where can we expect to finish? I think that's one for you, Leo. But I think really rather than repeating, you've kind of done that full year at GBP 40 million. Is there anything you'd add to that, Leo?

Yes, that's about right. And I think while we're not guiding explicitly on the margin -- on EBITDA profitability, it will be broadly similar margins as we reported for H1.

I think the most important one, probably on that one, full year profitability and the cash pile not getting smaller, increasing slightly. It would have increased substantially if we had pushed through the full GBP 50 million we're hoping on. But we're trying to be modest. We might still pull a few surprises in Christmas on the revenue line. Question two, we've been told that dividend will be paid by Christmas. Is this still the case? Yes, look, it's work in progress. We'd be more interested in getting the dividend specie up first. And then as that cash builds up. Then, of course, a dividend. And bear in mind, I've been buying shares. I paid GBP 300,000 earlier this summer at 27.5p a share. I will be the first one who would welcome a bit of cash-back because, as you know, I kind of have [ no ] changes to owned shares anytime soon. So yes, a cash dividend will be welcome. But I think the focus is get the dividend species which are vastly bigger. Bear in mind, Poolbeg was GBP 25 million in real shares handed back. And if that performs anywhere close to we think it will, if it's a 3x, that becomes GBP 75 million. Question three, the last auditor's report treats currency as a risk as a key audit matter because of your slim profit margins. Why are margins slim? I think Leo, that's one's for you. You've got to comment.

Yes. This is a typical question that our auditors will ask as part of their going concern review, and you'd expect that. I think it's really looking back at the shape of our business a year or so ago when we had slim margins and there was very little room to manage major swings in currency should they happen. So there's 2 points on that. Firstly, H1 showed that we've actually significantly improved our margins. Our gross margins are now up at 28%. We're now EBITDA profitable. That gives you -- nominally gives you a headroom to manage currency risk if it happens. But the other side of it, in terms of our operations, we're generally hedged quite naturally in terms of our sterling and largely euro spending. We typically fund our euro activity in the Netherlands and in France, and all of our key sterling spend is in London where we get our sterling revenues. So generally, we're quite well hedged in terms of currencies. We have no dollar or other -- no material dollar exposure or exposure to any other currencies. Cathal?

Question four, the last one on results and financial. Please, will you release the full year results in a more timely manner, i.e., February or March? Yes. The one issue to the results is they're subject to an audit. We have 3 companies: 1 in France, 1 in Holland and 1 here in London. So it does take -- results are subject to an audit. So it generally takes 3 months to get audit signed off. So end of March, early April, unfortunately, is the time the earliest a company goes because, bear in mind, plc is just the audit takes a little longer, but 3 months post year-end. That brings us into fifth. Next question, spin-offs. Very quickly, question one, why has Jeremy Skillington not bought any Poolbeg shares? It's a very simple answer. Jeremy came in very late, literally, weeks and days before the IPO. He basically didn't really get an opportunity to invest. But don't worry, Jeremy has got lots of opportunity in the months ahead when we get an open period in terms of investing. So that will be taken care of then. As regards to the Disease in Motion spin-out, when do you envisage this to be done, weeks or months away? I've kind of guided, I've always said, around the turn of the year. Is that before Christmas, after Christmas? Generally speaking, probably more like after Christmas, just take -- given where the markets are. But it won't be long after Christmas. Three, i.e., the previously tech and wearable companies still showing interest in the Open Orphan data? I asked the question because in the previous presentation, it's been mentioned that it's offered to pharma companies. Absolutely. Look, we've got the world's largest infectious disease progression data. Everybody's interested. Disease in Motion is going to be really cool. It's going to be providing data to the wearables. But more importantly, the wearables is one market. But all clinical trials need this data. So we're putting algorithms together that we can sell directly to any pharma company who are all doing any trial. Here is algorithms, here is data that will speed up and give you a better outcome to your trial. And only a company coming with a clinical trial could do that. So I think the whole Disease in Motion spin-out is going to be super exciting. Question four. Also, do you have a potential a CEO in mind yet? Yes, work in progress. We probably should have gotten in the CEO journey much earlier on Poolbeg. We had one lined up. And yes, just somebody counterbade and somebody made a better offer. So again, we're in the business of making offers. We don't want to give away. Some CEOs want a massive slice of the spin-off. I believe the spin-offs are ruled by you and me. I don't believe in giving away [ to them ]. So they're work in progress. We have a spin-off and a CEO or 2 in mind. Five, Imutex spin-out is still delayed, please update us. I think I covered Imutex. It's work in progress. We are now in good conversations with our [ conserve ]. I think they've heard my views publicly, and that's work in progress. So please bear with us. It's a good time to do something with that product. Six, most of the times, you'll conduct spin-outs by Christmas. Is this still the case? Look, it's a work in progress. As I keep emphasizing, we're keeping our team small and focused. We're not building a massive cost structure. Some of these things do take a little longer. That contract we signed this morning -- again, we're a small team. There's not many companies banging out GBP 5.7 million contracts nearly early month as we go forward. There was a lull over the summer because not a lot happens in pharmaceuticals for June, July and August. But hey, we did GBP 8.1 million last month. We've done GBP 5.7 million this month. There's no reason why we won't do one of those each month through now and Christmas. Seven, do you see a cost that will impact profits in spinning off noncore assets? Absolutely none. We spent -- we built up some costs. We said earlier part of the year, the reason we did consume a little cash before the end of June was getting the spin-offs, not 1, not 2 or 3, but 4 ready, get the malaria study ready. So there isn't -- going forward, for the rest of the year, there's no more cost consumption. So that's where Leo is guiding. We will end the year with the same cash we had in June and, hopefully, substantially more, but no less. That's the spin-offs. Services business non-COVID, we've got 2. Cathal, with the new malaria CHIM being accessible to November, is the company developing any more CHIMs? If so, when will it be available to the clients going forward? I think you'll have to cut out the [ vagary ] in it. TB is the next obvious one. It's very simple. There's a ton of products coming down because the world is afraid. Well, could TB come back, and so any of these things. Troubling to say, TB is rife in prisons, especially in Russia and China. They're creating a demand. Government will pay for it. So yes, the next one will be TB and malaria. And we're hoping to sign a few [ white space unit ] in Christmas on malaria. Two, shareholders were led to believe that a major contract will be signed with a Chinese state. What happened to this? Well, I think most people know what happened to China. Cameroon and China were best buddies. [ AG ] was best buddies with Americans. China has gotten a little bit more difficult. The politics has got in the way. But guess what? They, more than anybody, wants China studies. The Chinese want -- they have a huge problem with influenza, a huge problem with pneumococcus. So all this has taken a little longer. Unfortunately, it's a bit like our French friend, politics got in the way. With the old sub in Australia and our friends -- ourselves here, like my British passport winding up some of our French friends, colleagues, and said, [ you weren't good enough ] with building subs. But yes, look, unfortunately, China things are taking a little bit longer due to interruption of politics. And this is services business COVID. Cathal, has the company been in talks with clients regards COVID-19 contracts? If so, when will it commence? And roughly when... Absolutely. When, roughly, yes, very important. This is almost a fun question by itself. When will these COVID studies commence? And where are the sites? Well, the good news, first of all is, we know COVID has now become almost epidemic. We can run them in QMB. We can run them in a hotel. We're not stuck with doing it at Royal Free. We can continue to access the Royal Free. The government pays for it. But we're in extensive conversations. There is actually more inquiries than ever because every midsized pharma company with a COVID product is saying, "How do we test our product because half the world's been vaccinated?" it's an interesting problem. How do you test a product for COVID if you can't find people getting sick, in particular, a challenge study has never been more important. The reason we're emphasizing to understand the revenue today, it is taking time. COVID is still scary for regulators. COVID has got -- we're seeing GBP 50 million next year without COVID, and COVID is on top of that. Is that 10, 20, 30? We don't know. It'd be wrong to say how much other than I generally believe there will still be a lot of COVID work next year. It's just going to take a little bit slower, a little bit longer, but it's a bit like COVID itself. It hasn't gone away, and it seems to mutate and change. Second question, when will the characterization study be completed? Will there be an interest in COVID studies? I think I've answered that. The study is completed. We've had a lot of academics. One could say -- I could use the F word around and mess it around. Customers don't like seeing academics hanging around these studies and never know when there's enough data. It is finished. And I think I've covered, there is probably more interest in COVID studies now than there were 6 months ago and 12 months ago. Yes, the Pfizers of the world have the products, and they're rolling them out and making gazillions. But guess what? There's over 2,000 COVID-related products in the clinic in some forms of trials. So many of them are targets for a challenge study. Three, our big pharma go straight to Phase III with comparison studies and, therefore, do not need this. Absolutely. Some of the big pharma will do comparison studies. But again, they're running into problems. Like, only last week, how do you find COVID naive? How do you test it? And that's the issue. They're all saying, "Oh, it's not fair. Pfizer got to test their vaccine when there was no COVID in the community." There's so much COVID -- or when there was no vaccinated people in the community. There's now -- it's very hard to find people who are not vaccinated. So that's where we are in that regard. Next question, the government COVID challenge study seem to have stalled, awaiting further sign-off decisions. When is this now expected to start? What are we waiting for? Yes. Actually, look, again, I think we're dealing with governments. You know what it's like. It's difficult to get signed off. It's difficult to get decisions. That's why we're emphasizing our non-COVID. But it's not gone away. Britain is the world leader in vaccines, in the rollout [ in the prevalent ]. And Britain is the only country in the world that has decided to do a COVID challenge study. So my belief is, bear with us, they'll come through. It just might take a little longer. With the GBP 40 million U.K. contracts to be delivered -- sorry, will the GBP 40 million U.K. contract be delivered in '21? And will the full contract payment be seen in the '21 books? Look, I think Leo made it very clear. There's GBP 8 million of COVID revenue in the first half of this year. There was some last year. There'll be GBP 12 million for the full of this year. Yes, there's a substantial amount more COVID revenue outstanding when we get round to working with the government. And more importantly, we have also 3 slots, at GBP 7.5 million. They're use them or reuse them stuff: 1 this year, 1 next year and 1 the following year. The government can't pay for slots and then not use them. It's later use them or lose them slots. So I think, look, that has been an interesting contract. There is still quite a bit of work outstanding and quite a bit more work. But in paramount, it's all on a cost-plus basis. We got that, then we'll talk on the outlook. So now we're into the -- I can start switching on to the online ones. I'm down to my last 4 questions from the pre-submits. So this is about the general company. Cathal, seeing the company is pretty well much booked to the end of '22, are you still looking to expand the footprint? Surely, the new CHIM onboard is limited revenue-wise without this. Look, the beauty about our asset, we went from a year ago, 1 quarantine bed in QMB. We expanded up to Royal Free. We managed that entirely from here in Whitechapel. And then we converted the Whitechapel hotel. We can easily now convert another hotel down the road. There is 4 within 200 meters, all of which will be defined as a site extension. So I think we're not going to have a problem with capacity at this stage going forward. We don't need to go abroad. And the more we cluster activities around each other in Whitechapel and East London, the more efficiencies and the bigger margins we make. Two, do you intend to dual-list Open Orphan in NASDAQ as well? Absolutely. My plan now for the moment is, you all know, clean these companies up, fixed them and sell them at GBP 50 million. And then [ we sell this up ] for GBP 100 million. Well, guess what? I think we will get multiple of x uplift if we get our way onto NASDAQ. We would have to stay dual because we have a lot of institutions as well as a lot of family offices. So we'll always stay dual, a bit like Amryt Pharma. That's the other company I co-founded. Amryt is now successfully on NASDAQ. Amryt will do GBP 250 million revenues this year. They closed at GBP 200 million last year. That's a nice number. That was a little oil and gas shale. The people laughed when I said it was going to convert it into. I still have a good stake sitting in it. And yes, NASDAQ is the place to go. I've said earlier, we probably need more scale. And all I'm saying is watch the space over the coming months. That is absolutely work in progress, and we'd be mad not to be trying to be on NASDAQ in the second half of next year. Three, once spin-outs are complete, would you consider selling the core company? I think I answered that earlier. Everything is for sale. I think we'd get a vastly bigger uplift if we ended up joining up with somebody else. And it's not somebody with challenge studies but somebody who needs challenge studies. And I think that's where we're going, and it's very important. I'm going to switch now to all my pre-submits. So I'll take it from the top now, the questions that have just come in. [ Bill M. ], the last week, one of the reasons for a lagging share price was due to a large investor selling. Why is it the reason? Look, folks, I think what happened is that at the end of June, yes, we had a large legacy shareholder. For some reason, he started dumping shares, didn't contact us. We blamed Tony Richardson wrongly. He sold a small amount. His lock-up was gone. He's agreed that he's not to sell anymore. At least it seems so far, so good. So I think any other big sellers will try and manage them. The overall market, we all know -- I probably got a bit of money in small cap companies myself. That's why I give management a hard time. Anytime, over the years, I had spare cash, I don't take it out of my little family office company, it's called Raglan Road Capital, and invest. But I think we all know, the whole market had a pretty c*** summer. I'm very optimistic between now and Christmas, where the market is going to go. [ Mike Peat ], revenue looks good but profits and cash a little disappointing. Are you saying the cash position being equal to H1 at the end of H2 will not be affected by spin-offs of DiM and Imutex? And will these happen this year? If so, will you use a similar model? [ Mike Peat ], absolutely. Leo's made it clear, the cash will increase. We've said it's not going to drop. We're not going to dig in that cash. The money was invested. We got the pullback model right. The advisers are paid. We'll use the same template going forward again. [ Dave G. ], are you open to selling Imutex rather than list it at NASDAQ? Absolutely. The 3 spin-offs, Disease in Motion, we own 100%. We will IPO that, absolutely guaranteed. The other 2 assets, we will extract the biggest price possible we can get from them. And that might involve hey, presto, who -- there's an awful lot of companies who I think now who have gone up to tens of billions [ and a little round figure ] to take Imutex off our hands. I spent 15 years in my previous life selling companies to a corporate finance guy. So I think [ yes, if anybody wants to sell ] Imutex, it's ourselves. [ Graham W. ], how do you reconcile your H2 guidance of GBP 18 million of revenue income as you made in the past on Queen Mary's facility, maxed at GBP 40 million a year, just by itself and basically fall? Bookings will not translate. Yes, look, what we're saying there, if you look at our numbers, we're going to do close to GBP 40 million a year. We have the hotel across the road. The hotel is not, I would say, jammed the gills. QMB is jammed to the gills. There's windows, bear in mind, each of the last 6 or 8 weeks. What we had said before in, again, in my, I would say, cluster, I won't say what, August presentation, I'd say the typical challenge unit, 80% capacity is close to 100 you can never get because after every challenge study, there's a 2-week sterilization and cleaning out. But as we approach 80%, that's close to 100% numerically. That's where we need spare facilities. I think we were very clear. If even half this market materialize that $250 billion, we have to [ dry run ] we need to be able to free up more capacity. And guess what? The capacity is down the street, 165 meters at most, another site extension. If we try and set up a new challenge study in the zone, anywhere across London, anywhere in the continent, it's GBP 25 million because you have to -- all the facilities, the lab, everything else, that's in [ GMB ]. [ Of that, Leo, if he's listened to me ], Woodford, that GBP 25 million established in hVIVO as a quarantine unit, we now use that as a kind of the spider at the center of the web. The hotel across the road is a site extension, another hotel, and that saves tens of millions. And again, the staff can move between them. [ David H. ], revenue-wise, where can you scale to over the next couple of years? Is there a revenue ceiling? Or can you easily scale to GBP 100 million, GBP 150 million? Look, [ David ], I think we'll really scale. There's huge synergies. When we do a challenge study, we get asked, can we do a Phase II in the field, a Phase III? No, we can't do them. We need to be in bed with a CRO with those Phase II and Phase III. So I think you know my logic, where we're going there. And then we go to NASDAQ. So yes, you could sell it today and get an interesting price, maybe 2x. Why do that, as we said, if we can hold on a little longer and get 3x? Now we've fixed the company and we're driving it. There's nobody getting -- my salary is GBP 146,000. There's nobody in the company getting past that, otherwise I have a target on their back. So that's -- we'll keep the cost under control and keep growing it. [ Pat K. ], are you still confident the CHIM studies will take place in '22? If it doesn't, do we keep [ it ]? Absolutely. We said there's 3 of them, GBP 7.5 million. We have possession. We use them or we lose them. That's what we treat the U.K. government. They're very nice. We're all taxpayers. But if they give us -- if they take 3 slots, use them or lose them, folks. And we -- by using them, as Leo grabs them each year to [ CHIM ]. But my view is, there will be COVID studies next year. But again, the government has to bring them to us. If we find them ourselves, that's a whole different ball of wax. So if we get COVID studies next year, the government needs to come to us for their studies and not us going [ to them ]. So those 3 slots are government slots. And that's all I can say there. [ Tin Cara ], can you please give a firmer guidance on revenue and [ marketing ] costs so that we have a clearer understanding of it? I think we've covered that one pretty well. Leo has gone through the revenues and costs pretty well. Where else, some of these are duplication. Let me see. Yes, last webcast here, you answered to a question on consensus. [ Maybe just want to build substantially ] '21 sales of GBP 50 million. What went wrong? That was -- the consensus now is $40 million -- look, the consensus now is GBP 40 million to GBP 41 million, GBP 42 million. We do -- bear in mind, we're now planning those. In fact, it is quarterly. If we're going to do something exciting in the next 3 or 6 months, we don't want to be calling it at the end of January, resetting things. So we're setting expectations at the moment that we will exceed by year-end, not expectations we're just going to [ scrunch through ]. So I think at one stage today, we were one of the few shares [ that was blue ]. Okay, it's come off a little bit. But I think what we're trying to do there is set expectations we can beat, not struggle to get. What else? Somebody's being nice to me here. I know I talk too much. [ John G. ], thank you very much. What a performance, Cathal. You must be very proud of what you achieved in such a short period. Can you remain independent? Actually, look, I'm the biggest shareholder. I'm not rushing. Say, can you stay independent? I think, being listed on NASDAQ and AIM keeps us independent. Maybe as part of a bigger entity, who knows? But yes, look, we've been busy. I think a lot done, a lot more to do. And I'm learning. Sometimes I do get too excited and maybe set expectations too close. But hopefully, in the [ round ], we try and deliver most, if not all, of them. [ Jim C. ], Cathal, do you foresee a time when you'd -- rather than do a challenge study, offer to sell models made by you off to third-parties who then run them as challenge studies? I see it long term. We'll be doing Phase I challenge study, Phase II conventional, Phase II, Phase III, doing the whole package, and that, you can see, will be part of our organization. Our colleague, Brendan Buckley, who co-founded the company with me, he sold his company to a little Irish tech company called ICON 8 years ago. ICON, 8 years ago, have a market cap at $600 million. Today, it's the world's second largest CRO with a market cap, I think, now of $22 billion. The CRO, you get exceptional growth. Poolbeg, the reason I'm so excited about it, there's only 1 company in the world similar to Poolbeg. It's called Evotec in Germany. I'm not great at coming up with original ideas, but I love copying. The reason we put Poolbeg together, that unique model, we get a lot of products, put them through Phase I, [ an outlet to sell them ], that's Evotec. And only reason [ I pointed that ], Elaine O' Sullivan is on the Board as a Non-Exec Director of Poolbeg. She is also on the Board of IP Group here in London. And she's is the Board of Evotec. Evotec had a market cap of $500 million about 4 years ago. They switched from doing clinical trials to this Poolbeg model, have lots of things in Phase I. And guess what? It's got 10x uplift. ICON has a 10x uplift the last 7 years. Why should we not look at getting that 10x uplift? We won't get that by selling out too soon, but we could get 10x by going to NASDAQ as part of something bigger. [ Josh W. ], it would be good to get more clarity on why the R&D tax credit is negative in the cash flow statements, please. Look, I think that's -- Leo, over to you.

That's a timing difference. We get the cash next year for the R&D tax credits that we recognized this year. So we expect very shortly to get the cash for the credits we got. The cash this year for the credits we earned last year, it's an accounting and tax payment difference.

Okay. Thanks, Leo. I'm going to be naughty. I've scrolled just to keep our platform people, I'm now going down to start the questions from the latest ones at the bottom of the chat ones. So I've got a friendly platform, people are deleting the questions as I answer them. So [ James F. ], that came in at 6:54, the very last one that came in. I'm going to work my way back up because I want -- I've taken the early questions. Now I want to take the bottom ones and work our way back. There's about -- don't worry, folks, I will finish up pretty close to 7. I might overrun by 5 or 10 minutes. We'll guillotine at 10 past 7. I know you all have lots of things to do. Right, [ James F. ], came in at 6:54. How much are you expecting to be charged for any additional hotel facility, not the cost to convert? Cost to convert is just over 1 million. The beauty about Whitechapel in East London, we all know post-COVID, there's too many bloody hotel rooms in the world. People are not traveling as much. There's 4 hotels [ a suit ]. We're playing one off against the other. It's a rolling 6 or 12 months' contract. So don't worry, [ James F. ], we won't be paying too much. It's very modest. That's all I can say. [ Rosita S. ], came in at 6:50. For your malaria trials, which institutions do you work with, London School antimalarial, CDC? And which countries are you doing your trials in? [ Rosita ], we're very much -- Leo goes bananas. There's worse. I have a British and Irish passport. I'm more British than the British themselves. That's the problem with giving me a passport. We're trying to do as much as we can in the United Kingdom, here in London, keep it all closed. You have the most famous schools, universities in the world, London School of Tropical Medicines, Cambridge, Oxford, Imperial. Why even go abroad? Let's keep it all here at home, and we can do it. Where are we going to run the trials? Guess what? The malaria trials will be held in our hotel, right in the corner in QMB, or in QMB or one of our facilities. So we will do the malaria studies, everything, here in East London. [ Glenn D. ], came in at 6:50. You keep mentioning increased capacity, converting hotels. What is the arrangement for that? Will you have to buy them? Or do you lease the rooms? Do you pay the hotel? Very simple. We've done it in the other one. We go to a hotel and say we will give you x, not a particularly big sum of money, and we'll take out a floor of your hotel or your full hotel for a year. We want an option to have it for a second year, a guarantee in case we need it. And we want a break clause that we can walk away and give you 6 months' notice and give you your hotel back. It's very simple. So we don't build capacity we can't fill. Let's fill everything we have at the moment, [ like we have to do it smart ]. We're not looking for capacity anytime soon. But if this market comes anywhere close to see it going through the roof, we'll need capacity at some stage next year. But the trick would be fill everything to the gills. We have 3 facilities. Let's fill them up to the gills first. [ David W. ], came in at 6:49. Do Open Orphan own the data they generate, then characterize it? And is this being captured on DiM? Well, believe it or not, we put wearables and all that good stuff in. The data is jointly owned by the partnership. But I'd say, we're pretty good at commercializing data. Our more important data would be influenza data, RSV data, asthma data. And that's been built over 25 years in the company. That's the real data. So the COVID data is interesting. It's part of a partnership there. [ Conner H. ], came in 7:01. Firstly, congratulations on a great progress. With the U.S. expanding, is it easy to acquire staff and to [ run it ]? Absolutely, lots of people. We were -- we should probably publicize more. We don't do it. hVIVO Open Orphan was in the Wall Street Journal 3 times these past 3 weeks. We will be in the New York Times later this week. We are in every scientific publication. Staff love coming here and they say, "Wow, hVIVO, Open Orphan." And we push [ -- I'm a mostly talkative ] CEO or Chairman, but you'll never catch me talking to the scientific committee. Andrew Catchpole and our scientific, we push them out and they say, "Wow, you're sharing the love and you're making a lot of scientists famous internationally." Google Andrew Catchpole's name. He's all over the web. He spoke on Chinese TV, Russian TV. So we have no problem getting staff. [ Avant M. ], when can we expect this merger, '21 or '22? That would be -- I didn't say we're merging. I'm saying we've got plans. We have got plans, big plans, and the plans is get big and get to NASDAQ. So let's see. [ Richard C. ], wouldn't it be beneficial to get some revenue streams coming in for DiM prior to spin-out to get investors the market confidence to launch? I just think that we've proven we can do it very well with Open Orphan or with Poolbeg. I believe that one is -- it's work in progress. We will have no problem IPO-ing DiM. That's all the same, trust me there. We'd be very careful. If we signed up, bear in mind the model, we've got to spin off a newco. It has been 90% owned by you and every owner here tonight by Open Orphan shareholders, and that's part of the tax planning. The management team do get a small -- so the new CEO will get a little bit, and some of the team here work harder, myself included, we'd get a small bit of it. That 90% is then owned by the Open Orphan shareholders. If we do a deal with Fitbit, Google and Yahoo! and all those people in Amazon as an Open Orphan, [ the monster problem taken out ]. So we're keeping them warm. I said none of them are going away. And it's one of these things, it will take a little longer, but we'd get there running. And rather than rush, get a small amount of money now, why not go for the big money over the coming months and years ahead. [ Graham W. ], is there a Delta variant characterization study underway or complete? Do you need a Delta variant challenge money before starting your COVID studies or would you go ahead? Look, it's very clear. We've already growing up. I think we're nearly finished. We're growing up the Delta variant because we're the only people in the world that seem to know how to grow viruses. Imperial engaged us to do it. [ We welcome the trust by AIM ] for this particular one. U.K. government's not. So yes, there will be a characterized Delta variant in the not-too-distant future, and that would be available for challenge studies as well. [ Pollock ], where will you recruit volunteers for COVID studies given that most people have been vaccinated? I'm pressing on a fundamental problem, going beyond recruiting too many COVID-naive volunteers. I think any of them could be my kids and [ 257 ] next month. Most of the volunteers are 25 to 30 year olds. I have met most of them. And I just think that, look, we now have the characterized model. Why test it any more? It's going to be very hard to get COVID-naive volunteers who haven't gotten COVID. Most of them either had the vaccine or had the COVID. So it's still going to be a problem. Any of the COVID studies going forward were previously vaccinated or previously infected, which means massively low risk compared to going in -- imagine the thoughts we had, we were actually given young guys and girls who never had COVID before [indiscernible]. So that -- now we have a U.K. government guarantee. We did it with Imperial College. It's all done. Not a single one got ill, seriously sick, but we've moved on beyond that. So future COVID studies would be much more like influenza, will be giving people something they already have or the vaccine against that. Where will you recruit volunteers? I think we've done that. Look, our -- I see receivables are pretty high relative to turnover even so -- even more so profitable. Are you happy you're generally convert instead of profit? Leo, that's yours.

Yes. So at the half year, we did have a relatively high level of receivables because of the timing of when we could issue invoices to our customers, in particular, there were some big balloon invoices on the characterization study, which we actually issued a little later than we had expected. What I can tell you is that a lot of that cash is now cycled into the business in quarter 3. So I think our receivables are a little bit more balanced relative to revenue right now.

Thanks, Leo. [ Alan D. ], a possible JV to go to NASDAQ? Is it right to presume you would go with a JV with another pharma CRO company given you [ won from it ]? Look, It makes sense. We're offering a piece of the pie. We could be much bigger, much faster by offering the whole pie basically and being the world leader. So all of it to say, let's not get carried away in that. We want to set [ the hare ] running. But as I've said we'd like to be in NASDAQ. There's several ways of getting there. That's one of them. [ John C. ], Cathal, you mentioned before, we may have 2 malaria contracts by Christmas. Absolutely. [ On to the West Side ] space, we're actively working on malaria as we speak. There should be announcements. [ Paul R. ] for Leo, trade creditors, we've done that. Next one, so we've done that one. Peer group, who's your peer group? Believe it or not, there's very, very few. We've created the peer group ourselves by [ being ] the world leaders. So yes, who's the peer group? [ Alan D. ], Cathal, great turnaround, thank you, in the interest of our share price. But is there any way you can make qualifying date for any spin-out, the date of the RNS, as was made to other entitlement? Yes, look, there is -- we keep learning. There were mistakes made with so many advisers. Bear in mind, the only other company that's doing this successfully is EKF, and they didn't get the first couple [ of it ] right. They have a model. One of our large institutions kind of said that Open Orphan is like a Russian doll. You keep opening it and bringing a lot out. That's the plan. That's keep bringing it out. But yes, there were things we learned there. Let's say, the recorded date, we'll have to work on that before Disease in Motion. [ David T. ], Leo, can you explain why H1 is lower than 2x Q4 2020?

Yes. So I think in H1, you saw a significant scaling up of our operations. We took onboard the Whitechapel Clinic. We took on quite a number of extra staff to manage the characterization study in the Royal Free. So overall, while we trended higher, we were carrying a more complex business base, and then that translated into more cost. So the margins weren't quite as good as we had hoped for, but the overall profitability level did rise versus the prior period.

Thanks, Leo. And again, look, we're being very clear, David, is that we could have done better. We should have done better. We probably should have focused more on the monster market in front of us earlier this spring and summer, i.e., the whole $250 billion growth in infectious disease and respiratory where we have a lot of focus on COVID. The money is invested in that. And we can crank it up now as soon as the study is completed. [ Sarah K. ], if a product -- and don't worry, folks, we're nearly -- we're down to our last 4 or 5 questions. So we will finish, attempt by 7, I suppose. [ Sarah K. ], if a product comes along that provides protection from COVID for several years at a time, will there still be need for COVID challenge studies? That's a good question. If a product works, it looks like no one product is going to work well. I had a really good work colleague. He got double vaccinated. I've been very blessed. I've traveled [ certain ] flights every time for 18 months prior to 2 weeks in June, prior to 2 weeks in Christmas and kind of being careful. I was shocked that a work colleague that's double-vaccinated is quite ill at the moment. So if COVID keeps mutating and changes, it's going to be around for quite a while. I think if a product was going to work, we'd have seen it at this stage. I think it's going to become more like influenza. It's going to be around. So I don't think we're worrying. But look, hopefully, it'd be great if there is. But the big thing, even it comes along, [ Sarah ], we're saying, we've got an enormous market in front us from non-COVID, and that's the infectious disease. [ David P. ] -- last 4. [ David P. ], what IP do we have to protect challenge studies? It's a really difficult market. You have to have 25 million initiatives to build the challenge units. Then you have to have the challenge viruses, then you have to have the challenge model, then you have to have the viral laboratory and the staff. And up till recent years, there wasn't many of those staff except for ourselves. So yes, the IP, as I said, difficult. There's a barrier to entry in all of them. And the big IP is each challenge model is a characterization. We don't share it. They're private. They're [ patented ]. The last 2 questions. [ Elle Raquel ], what is each bed worth to the company? And what is the total capacity? And are there any plans to increase? Look, we don't go into that today because that would guide people what we're doing, but each bed is quite valuable. We have 42 we own and control. We can scale it up by 10. And we've 19 at the Royal Free, and we can scale it. So I think the ticket is that we will only increase capacity -- we can do it really fast. We now have a model. It took us 3 months to get the Whitechapel Hotel convert to a clinic. We could do it again in 3 months. And it cost us GBP 1.5 million. We can do it next time at around less than GBP 1 million. Last question, and hopefully, upon the button of 10 past 7. [ Christian A.], what is to stop traders jumping for the free shares in the spin-off and selling? Yes, that's an issue. Looking at some of the things, we're not sure to say what's the stock trader is jumping in for the free shares in the next day and then selling the next day, so we get the free share. Look, we'll have to think of that. We will give thought. That's why we're being careful. We could be charging down the road at the moment, getting Disease in Motion done just out of Christmas and instead then have a lot of chaos. We're trying to see right -- there is -- we won't get everything right. We try and get most things reasonably right. So that's work in progress. Folks, without further ado, I've talked, I think, enough. We won't talk now. It's 10 past 7. We might guillotine it. Mark, what do you think?

Cathal, while you're explaining -- you're 1 minute late, actually, but we'll forgive you. But thank you, Cathal, firstly, for being so generous with your time, and also to the engagement shown by investors who have continued to submit questions throughout. Cathal, Leo, I know investor feedback is particularly important to the company, and I'll shortly redirect investors to give you their thoughts and expectations. But Cathal, if I may, finally, just ask you for a few closing comments, and then I'll redirect to investors.

Yes. Look, Mark, I just think we're delighted people had bear with us. I know it's been a bumpy 3 or 4 months. It's been a bumpy 3 or 4 months for every and all forms of the market. It's going to be a bumpy time, but I think I've never been happier. I'd never be more excited. I'd say that -- as the movie says, a lot done, a lot more to do. And I really think we can really grow like ICON. Why not? Poolbeg, I have designed, I'm the biggest shareholder, to get that 10x. Just look at Evotec. It went up 10x, not 3, 4, 5. The only way we'll grow Open Orphan 10x is getting to NASDAQ and becoming very big fast. We will hit limitations by purely on AIM, but let's see.

Perfect. Cathal, Leo, thank you once again for updating investors this afternoon or early evening, should I say. Can I please ask investors not to close this session as we will now automatically redirect you for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete but I'm sure will be greatly valued by the company. On behalf of the management team of Open Orphan plc, we'd certainly like to thank you for attending today's presentation. That now concludes today's session, and good evening to you all.