hVIVO plc (HVO) Earnings Call Transcript & Summary

The Vox Markets Podcast with Justin Waite. Nothing in this podcast is intended as investment advice, and the people in this podcast may hold positions in the stocks they talk about. Do not buy anything based solely on a tip or recommendation. Please do your own research.

And joining me on the podcast right now is Cathal Friel, Executive Chairman of Open Orphan, ORPH, ticker. Cathal, thanks for joining me.

Justin, it's a pleasure to talk.

Yes. And today, you've published amazing results from the world's first COVID-19 Characterisation Study, which was a partnership between hVIVO, Imperial College London, the Vaccine Taskforce, Department of Health & Social Care and the Royal Free London NHS Foundation Trust. So it's a big study, very important, and we'll get into that. Before we do, as always, Cathal, well, people maybe just catching up and they're not quite that familiar with Open Orphan. Just explain what the company is about, please, if you could.

Yes. Justin, it's a pleasure. Briefly, Open Orphan is now the world leader in the testing of vaccines and antivirals. And what does that mean? We do clinical trials. So we're very much a cost plus. We have a fantastic business, fast growing, cash balance is growing by the week, by the month, and profitable. And really, we're building the business now for the long haul and the aim is could we make it really big. So that's what we are, and lovely space to be. And today's announcement is part of that long haul of just continually growing, continually adding to the business.

Yes, yes, yes. Explain this. You announced the results in the COVID-19 Characterisation Study this morning. What does this mean for Open Orphan and gov?

Yes. Look, simply I know people have been waiting and waiting and say waiting, but this is a very important study. Like we all know, COVID, it's first time in 100 years, we've had a real pandemic and hopefully another 100 years, but COVID is not going away. So our bread and butter is doing influenza studies, RSV studies, HRV studies, asthma studies, all sorts of respiratory studies and malaria studies, but we are going to be doing COVID studies. We had to kind of hold off to today the problem but every one of our studies, we deliberately, in fact, healthy volunteers to test a vaccine or antiviral. So today's study, really importantly, it's a world's first, it's a partnership and it says very clearly took a while to say absolutely perfectly safe. So that's really I'd say, is a COVID-19 Characterisation Study is safe. That's our bread and butter. And now that's been added to our list of challenge studies.

And so when do you plan to sort of initiate the next phase of the human challenge program then, Cathal?

Yes. Look, over the last 18 months, we've worked closely with the partnership, with the vaccine task force, the government, Imperial College and the Royal Free. But that was very much government and university lads. So that kind of goes on speed. We're more used to dealing with vaccine companies, pharma companies, biotechs to be honest, probably move much faster. So the plan is that, hopefully, we're good to start working on contracts. The critical part why we took our time as well. COVID as we all know is dangerous and unpredictable. It's very clear now that COVID is a lot less pathogenic, there's a lot less dangerous with arrival of Omicron. It's not going away. It's going to be with us for a very long time. So I would say we'll be optimistic in the months ahead. It will be our plan to now start working on signing up COVID human challenge studies with commercial partners.

Yes, absolutely. And where do these studies sit? Are they still needed to approve new vaccines, antivirals?

Yes. As I said, Justin, COVID is going to be like influenza. Look, the great years. I'm firmly the pandemic is over. COVID is now joining the list of common cold, influenza, RSV things we can live with and things we used to deal with, but it's not going away. So yes, there's going to be an awful lot of new products every month, every year for quite a few years ahead. There'll be combinations. There will be a flu, a jab with a COVID jab or a COVID jab with a pneumococcus or whatever. So yes, there's a lot of products going on the track, many of them that needs to be tested. So yes, so I think quite a few of them and even more importantly, now that COVID's on the rise, it was easy to test vaccines in the community when everybody was getting it. Now that COVID is on the reduction, okay beyond Omicron, so now it's a time for human challenge studies because we can do in 3 months in our quarantine units, what could take a year or 2 out in the field.

Yes. Understood. Understood. You said before Christmas that you had 95% of 2022 targeted revenues contracted. This is non-COVID revenue. Can we expect to see some COVID-19 revenue this year?

Here, what we want to get a refocus. I know I've got a bit of flag, I didn't want you to getting COVID bug and going may I said, look, we were very much focused on by Christmas with 95% of our 2022 target already contract, which is a great way to start here. And that was -- we guided the market, it was non-COVID. So yes, look, we would be expecting. We don't want people to go wild. But watch the space, we are working. There's a lot of appetite for COVID commercial human challenge studies. So yes, I'd say probably let's give us some space and time, then we will do our best to sign up some COVID-19 human challenge studies.

Marvelous stuff. Okay. The drill here, Cathal, if you could. If someone is liking this, but not yet following the story. If you could 3 bullet points, while I should hit that follow button on your page on Vox and add Open Orphan to their watch list, please?

Yes. I would say, first of all, we're a very ambitious, growing very fast with a lot of cash. The cash keeps building up. So this is a company we will never be fund-raising again. It's handing back to our shareholders at the appropriate time. Second reason is we're probably -- I'm the largest shareholder by far. I keep adding to my position as of last June. So the entire management team would be probably the -- we're the highest management team participating as shareholder. And third, it's a fantastic space. Infectious disease is the new growth area for the next 5, 10 years. So if I had to pick any area that would be infectious disease and Open Orphan is front and center of the testing products for infectious disease. So yes, exciting days ahead.

Yes. And Cathal, it's a tough market, but now is the best time to research isn't. When companies are not running strongly, this is the best time. It has been tough for like, I'd say, 6 to 8 months, at least for the small-cap, micro-cap space in the U.K. And sometimes that puts people off. But it should not be opposite, in fact ready. This is the best done research, isn't it?

Yes. Look, my tip, just on 57 this year, started work at 16. I bought my first share in November 1981 pre-BT privatization. And then the market used to correct every 5 or 6 years with Black Thursday, Holy Monday, all this stuff. But I think where the market is now is correcting almost every 9, 10 months, we are absolutely in a correction, but I think give us another week or 2 that my view is COVID is over, the pandemic is over. I don't think anything is going to go wrong in Ukraine. So those worries are there. Give us a few more weeks, I think -- and the public markets will react, and I feel we'll have a good run for another 6 or 9 months and eat Presto. There could be a correction in come autumn/winter again. So I think those corrections are used to come every 7, 8 years, they are now coming every 7, 8 months. So I think in times like this, things are cheap. People have cash. It's a good time to get into the market, but yes, people are going to be careful. But I'm very optimistic. I just think the public markets are a great place to be. And we've sort of just bear with these little dips that are currently -- and we're definitely in a dip period. But my belief is a month or 2 the dip will then pass-through and will be on an up run again.

Yes, absolutely. I mean there are lots of businesses out there. The underlying businesses are improving. It's not being reflected in the share price. And to me, that's a good time to say, do the research. So marvelous stuff. Cathal, good to chat to you. And hopefully, we will catch up in the not too distant future. Thanks very much.

Thank you very much, Justin.

Vox Markets Podcast with Justin Waite. Nothing in this podcast is intended as investment advice, and the people in this podcast may hold positions in the stocks they talk about. Do not buy anything based solely on a tip or recommendation. Please do your own research.