hVIVO plc (HVO) Earnings Call Transcript & Summary

Hi. Good morning, everyone. I just want to say, I'm not here to announce that I'm going to the -- I'm a celebrity to get me out of here. I want to quash those rumors straight off, okay? Thank you very much for coming and attending the Capital Markets Day for hVIVO. The company, formerly known has Open Orphan. I really appreciate that you guys are really busy and you've taken the time out to come and listen to us. Today is really about the company. So I'm not going to be doing too much of the talking. I think it's better to look under the hood a little bit of hVIVO and see what we actually do and who are the people who do the work. So I think that from that point of view, hopefully you'll gain some more insight into the company than you maybe have basically had from me talking to you for 20 minutes, so the CFO talking to you for 20 minutes. I'm Yamin Mo Khan. I joined as a Non-Executive Director of Open Orphan back in October last year, when Cathal Friel, the Chairman invited me to join the Board. One of the first thing he told me was he hated CEOs. And I had no ambition to be a CEO. 4 months later, I announced myself as a CEO of the company. The share price plummeted on the same day, not all down to me. On the same day, Vladimir Putin decided to invade the Ukraine. So it wasn't a great day for anyone really. But since then, thankfully, things have settled down. We only had what 4 new chancellors, I think, to date than 3 Prime Ministers and -- 2 Prime Ministers and a new King. But on the upside, I've been informed that we only have 2 more chances left to Christmas. So I think we're good to go. So today's agenda really focuses on -- on the company overall, I'm going to focus a little bit on the overview of the company, but then I will hand over to the very talented Andrew Catchpole. He's our Chief Scientific Officer, who's been with us for over 10 years. And to be honest, he's been overseeing the majority of the challenged trials we have been running. So he'll be able to give you on how we do challenge trials, why we do the human challenge trials. After that, we have Douglas Thomson from Pneumagen, CEO of Pneumagen who are our current customer. Pneumagen are a fairly small biotech company working in influenza. And going great guns. And I think it's good for you guys to hear why does the customer come to us and ask to a challenge trial for one? And then secondly, why do they choose hVIVO as a vendor, a partner for them. After the break, we have -- it's a great pleasure for myself to have Professor Peter Openshaw here, Professor of Experimental Medicine at Imperial College London. For those of you who are not aware Peter is very highly known within the academic circles on challenge trials. And I think a key message you need to kind of understand really is that a lot of the work that we do for commercial companies is really underpinned by the research that happens at the academic level conducted by people like Peter. And based on that, we actually hope to find new targets, new antivirals or vaccines against viruses. So it's really great that Peter is here to kind of give his take on human challenge trials. We will have a fireside chat and to talk about the impact of the COVID pandemic on the challenge trial market. After that, Egle will talk about how we actually go about selling Pitch hVIVO to our customers. So you will effectively get a sales pitch as if you were a biotech or a pharma company and how we sell the challenge study market. And you've noticed I've said challenged trials more than a hVIVO, and that's intentional. So our strategy when you go live to our customers is not to sell hVIVO as a company. It is to sell human challenge trial as a concept to develop their drugs much more faster and less expensive because we know that if we're able to convince the customer to conduct a challenge trial, we are the world leader in doing human challenge trials. They'll come to us. So it's not about saying how wonderful hVIVO is. It's more about showing the customers the benefits of conducting human challenge trials, in their drug development cycle and then saying, okay, once do you agree to do human challenge trials, but we are the world leader in that. Stephen Pinkerton, sitting here, he's our new CFO, joined recently -- or joined recently the CFO role. He's been with the company for a number of years, and he's going to give you a brief outlook on some of the key financial performance metrics. And finally, we'll have some closing remarks, and then we'll have lunch, which I know why you're here anyway. So who are we? So we are the world leader in human challenge trials. So this is not something we said lightly. I know a lot of companies use this in a subjective manner that we are the world leader. But we are quantitatively the world leader in the sense that we have more challenging models in that we can conduct challenge trials in more indications than anyone else. We have conducted more challenged trials than anyone else. We've done 66 human challenge trials to date. Our next competitor that we -- as far as we know, have done 3 or 4 challenge trials, okay, per company. We've inoculated with the virus over 3,500 healthy volunteers. Our next competitor has done about 200 or 300. So when we say we are the world leader, we truly are the world leader. There's nobody there who is dedicated to conducting human challenge trials. There's 2 other companies, commercial entities doing human challenge trials, but they are Phase I units who happen to do human challenge trials. We are the only company across the globe focused on human challenge trials as its core business. Our roots go back to the 1940s. So after the second world war, the common cold unit was set up in Salisbury, South England, which was really there set up there to study an issue the rhinovirus, the common cold virus. So they were challenging healthy volunteer with the common cold and then observing them and see how the common cold progress within those volunteers. Two of the leaders in the common cold unit in the late 80s, established the company known as Retroscreen, which rebranded into hVIVO 2015. As you all know, Open Orphan, acquired both hVIVO and Venn Life Sciences in 2019. And then following in 2021, we spun out pullback to a completely new independent entity. And recently, I'm sure you've seen the news. We've now rebranded ourselves back to hVIVO. hVIVO has always been the operating brand for us, all our customers or most of our employees, all our academic partners, all know us as hVIVO. I think the biggest impact of the net name change is for people like yourselves, investors and shareholders and the people associated with the markets. But the key thing for us is that we are creating a market, okay? People ask me what is the market size of the human challenge trials. It's very difficult to measure because every time our scientists, like Andrew speak to our customers, okay, they're trying to convince them on why a human challenge trial benefit their product development cycle. This is the management team. So I'll quickly introduce some of the key people here. So starting from the left, so we have Stephen Pinkerton here, who took on the role as CFO, very recently; Egle Pavyde, Sitting here to my left, has joined the business development team. So we've increased our sales team as we are addressing a bigger market now. Adam French is here, is heading up to clinical operations, and he will be taking people around a tour of the facilities after lunch. So if any of you -- I think some people already signed up, but if you're interested in having a look around the screening facilities and the laboratories and so on, please let Adam know you will be more than happy to add you to the tour. Andrew Catchpole has been with us for over 10 years, and he is the CSO of the company. So I know you all guys love numbers. So I thought I'd start off with a slide on the numbers. We have a very strong financial footing, okay? We are projected to hit GBP 50 million of revenue this year. We're still line to hit between 13% to 15% EBITDA margin. And as of the beginning of September, we had GBP 20 million in cash. So I think on any sort of measurement, I think we have a very strong financial footing right now. We also believe we are really well positioned for future growth. We had GBP 80 million of contracted order book. You got to remember that this order book includes clients, only includes clients that have contracted and have paid the upfront payment to reserve their slots within our quality facility, okay? And that results in over 80% of the 2022 revenue already being contracted. In fact, some of the revenue for quarter 1, '24 is already contracted to. So we've never had this length of transparency going forward with regards to potential revenue recognition. And one of the key things for me, especially that I like is the 4 of the top 10 pharma are key partners for us right now. So we're doing repeat business with these customers. And that gives us a lot of confidence because if the big pharma keep coming back to us again and again to do human challenge trials, we must be doing something right. They're getting good benefits, good return on investment on the money at the time they're spending on doing human challenge trials. As we look forward to our human challenge trials, we know that the size of the human challenge trials existing people are now looking to get more out of the data from human challenge trials than ever before. So the average size right now of a typical human challenge trial goes between GBP 5 million to GBP 10 million. And the great thing for us is we aim to recognize our revenue under a 10-month period. So it's good for us that we can recognize the revenue, is good for the customer that they can get efficacy data in whether the drug is effective or not in the target patient population under 10 months. If they ran a field study, there's no way they will be able to do that in this time frame. Andrew will go into a bit more detail about that. We're also future-proofing ourselves. We've added a new screening facility in Manchester. So now we can screen up to 1,000 healthy volunteers every week. We've added new models already this year. So we have a malaria that's already announced. Next year, we are looking to announce at least 2 new models, including the Omicron model. We're also adding new revenue streams get based on the current infrastructure, okay? So not adding any more resources, any more infrastructure based on the people we don't put into human challenge trials. We're looking to allocate them into field-based Phase II, Phase III trials. And the key thing for us is the FluCamp branding that we use to ensure we meet our recruitment targets. Strategy for growth going forward, both on revenue and also on EBITDA margins. We talk about the new revenue streams with the current infrastructure -- with the increasing volume of work, we're going to increase our efficiency and improve our EBITDA margins. You will already see this from last year to this year and hopefully next year as well. We are building a library of challenge models is really key for us, and we continue to keep on top of that. We don't want to rely on 1 indication for the rest of the time. We will continue to build a new variety of challenge model. Influenza, for example, is not 1 challenge model. Influenza itself has different variants, and each variant is a challenged model in itself. And that's something we will continue to build up, both at an opportunistic level, both at a strategic point of view. And finally, at some point in the future, we will potentially be looking to open a second challenge unit ex U.K. potentially maybe North America and -- but that's something in the books. My personal goal when I joined the company was to build the backlog. I felt our backlog was too small for us to have a healthy sustainable growth in revenue. We've got to a stage now where we have good backlog. We have a good operational team able to execute and recognize the revenue from that, okay? So stop being a lumpy business and this volatility to historically, okay? Once we have that sustained growth in revenue and EBITDA, we can then look to expand and potentially go into M&A activities. So the market dynamics are very attractive. I think the trials are generally increasing mainly because of COVID, but especially vaccine trials against viruses and antiviral medication, okay? We've seen year-on-year increases in the number of clinical trials taking place. The number of antiviral and vaccines against viruses in preclinical right now is more than it's ever been. And I think Ed sitting somewhere here, Ed has projected that the clinical trial market will go up to GBP 700 million in around 5, 6 years. So we continue -- we will see this growth in the market. And I think -- when you see these numbers and you look at our future projections, you might say maybe we are potentially underpromising. I'm okay with that. So I think people might say my projections are a little bit boring, but as long as we are able to deliver what we're promising, that's the key goal for me at the moment. And 1 more point. If you look at the key pathogens that are currently being researched with a number of products, the ones in bold are where we have active models right now. And this is where -- if you look at some of the other indications, not every indication is there suitable for our challenge model. But as we move forward, we'll continue to expand on those. I will now hand over to Andrew Catchpole, our Chief Scientific Officer. Thank you.

Thank you. I'm delighted to be here today and to give you a little bit of insight about how we actually run challenge studies, and let's start with the basic question of what do we really mean by a challenge study. So the definition of a challenge really is the deliberate exposure of humans to a known pathogen. So conversely, what happens with traditional field trials and antivirals is that you have to recruit people who have become infected in the community. So that's natural exposure or a field trial. What we're doing is we are recruiting typically healthy individuals, and we're deliberately giving them a disease. That's really what we mean by challenge studies that we're deliberately exposing them to the pathogen. So it's not a new concept, though. So even though it may not be a household name challenge studies and people don't rust roll off the tone and know what we do, it is really an old concept and have been used for many centuries by medicine actually. And he just got here some very famous examples on this time line. So Edward Jenner way back in 1796 did a challenge study of sorts, where he was testing for smallpox. So he famously gave a boy James Phipps, he gave him cowpox and then challenged him with smallpox and proved that he could prevent him from getting the disease. So very early concept of vaccination and challenged by giving someone exposure to something they think is going to protect them and then exposing them to the disease. So even way back in 1796, and then we've got rabies being looked at by Louis Pasteur, yellow fever in the 1900s Walter Reed. And even influenza, which wasn't even discovered what influenza was as a quantative agent until the 1930s. But in 1937, it was discovered that if you keep passaging it and growing it in eggs and then take it out, put it another egg, put it in another egg and keep doing that, you've actually weaken the virus. And you can take that virus give it to a person and then challenge them with something natural, and then you've actually protected them. So it's the first concept of how to weaken a virus and turn it from a pathogen into a vaccine. So way back in the 1930s. So -- and as Mo mentioned, in the 1940s, the common cold institute started up in the U.K., which was totally designated to doing challenge studies and in a very constructive and ethical manner and actually ran for many decades. And this is really underpinned in this country a really strong history of doing challenge studies, which is totally unprecedented worldwide. And I think this is actually massively contributing to hVIVO success because before you do any clinical trial, you have to go to the Ethics Board and HMRC. So you submit your package and say, "I would like to do this trial. The regulators look at it from a regulatory perspective, do you have everything do you have all the safety data to be able to go into humans. But every clinical trial and challenge is no exception to that is looked at by ethical review board if this ethical to do. And of course, we're giving people the disease. So this is a slightly different concept of most people. So in the U.K., we've got decades of experience of our ethics committees looking at this. So the concept of giving someone a disease to actually test something is not new, and that really has a lot of advantages. So some other countries where the ethics review boards have never come across this concept gives a lot of barriers to them to even be able to start doing challenge models and get the permissions to do them. So I think this long history in the U.K. is really the underpinning of why we're successful here. So what do we really mean and how does that actually work though? This schematic then describes expensively what we're doing. So in Stage 1, this person standing up is depicting that they're healthy. They're completely healthy. So we're recruiting them and we're medically screening them. So it's 1 thing to say you're healthy, but let's test and have a look at their blood, we look at their lungs, we look at their heart. We make sure they are truly healthy. And then if they meet all our eligibility criteria, we recruit them onto the study and then we inoculate them. So they come into our challenge unit, which is a dedicated challenging service an individual room. So think of like a clinical-wise hotel room with a non-suite bathroom. These individuals are not leaving that room. So all their food is brought into that room or the medical staff go into the room and the bathrooms there. So if it's -- if they need to be quarantine for 2 weeks, they're literally in that room for 2 weeks. So a lot of the skill set on the recruitment isn't just are they medically fit, but from a mental health perspective, do we think they're going to be able to be in that scenario for 2 weeks. So it's a very specialized type of clinical trial and our expert team, this is why we are dedicated to doing challenge studies. This is where we believe we have an advantage over our competitors, which do the odd challenge study as amongst doing other types of clinical trials because it's a really big skill to be able to identify and also then keep the volunteers engaged and able to stay in that quarantine because it's not a lock doors. It's not a prison. They are free to leave, but if they do leave, of course, they impact the scientific integrity. So we have very few people leaving and it's always like for a family emergency outside. So it's a big skill set from our clinical staff to be able to take them on that journey. So once we've inoculated them, we can then follow the disease course. So they gradually get sick until depicted here by the person in the bed. So we're making them sick and then we're recovering them. And actually, they only leave the quarantine when they've completely recovered, and they're not having any symptoms anymore. So we're literally following the whole disease life cycle. So before they're sick, until they're sick and then recovering them. And then they can go home and then we typically call them back about a month after we go then the virus, just to double check that they're truly back to full health and then we can discharge them from the clinical trial. That's what we mean by a challenge study. Now if we think of this green line is like the placebo arm. If we're doing a vaccine study, we typically have 2 arms. Some people get the vaccine and some people get the placebo. So -- and this is what a vaccine what we'd expect to look like. So if a vaccine is efficacious and doing its job, it should truncate the disease. So if you get sick, you get sick only with mild symptoms, and you only have it for a short period of time as depicted here. So you clear the disease much quicker. That's really what we're looking for a vaccine. It'd be lovely if the vaccine stopped you getting the disease entirely, but it's typically not realistic. Most vaccines are significantly reducing the disease burden as opposed to stopping you get any disease at all. So as Mo mentioned, we have a number of different challenge models for different pathogens using essentially the same type of skill set, but a different viral pathogen. So here, we've got here the number of clinical studies that we've run for these different pathogens. So the main pathogen we've worked with are RSV and influenza. And I know Peter is going to talk to you a little bit more about how much of a disease burden RSV really is. So we've run similar numbers on both of those, so 27 and 31 clinical studies, also rhinovirus, which is the common cold virus but actually has a really big impact of asthma exacerbation. So it has a very significant disease burden in its own right. And of course, SARS-CoV-2, we've run a clinical study in that. We're now we're developing an Omicron model and malaria and going into asthma and COPD. So I mentioned to you that challenge studies is where we're deliberately exposing someone to the pathogen and having a healthy volunteer. The converse of how it's traditionally done is what we're calling field trials, where you recruit someone, you give them the vaccine, you send them out into the community to live their normal lives. And then only when they become exposed to the pathogen, can you actually tell anything about the disease whatsoever. So I just got some comparators here about why we believe challenge studies are so effective in testing vaccines and antivirals. So you can see -- you can do them all year around. Now if you think about influenza, we all know you have flu seasons. Now if you're trying to do a vaccine study, that means you need to recruit people, and you can only test if it's working when there's flu. So you chase the disease around the globe. They have to have hundreds of different sites. And they can only do flu in the Northern Hemisphere in the flu season in the winter, in the summer, there's no flu around. So I can't do anything can't learn anything about the vaccine that time. They can only start when there's a flu season. Now because we're giving them the virus, we can conduct these type of clinical studies all year round. So if someone comes to us at Christmas and says I want to do my clinical study in 6 months' time, we can start in the summer. It's no problem for us. So we can do them all year around. We have a lot lower numbers, which means you can do them a lot quicker. Our duration to the period of -- in the quarantine from the first volunteer to the last volunteer in the clinical trial is typically only about 3 months. You compare that to field trials. And they are typically over 2 years. And there are also that complete mercy of how much disease is around in the community at that time. If we're talking influenza, and it's a low flu season, then sort of 2 years, you're probably looking at 3 or 4 years. So they really can't predict how long it's going to take to do the clinical trial because we're at the mercy of how much virus diseases are circulating at that time, we can completely control the timings. And of course, timings and time to market for a vaccine or antiviral it means massive differences to profits on the different vaccines as they come to market. A little schematic here to really illustrate that. So on these 2 studies on the left-hand side, we've got the challenge and on the field trials are on the right-hand side. So in these 2 illustrations, essentially what we're saying is if this is a vaccine trial, you'd need to vaccinate way more people. So everyone in gray has been vaccinated. But if we want to learn if a vaccine is actually working, you can only tell the vaccines working if someone actually becomes exposed to the virus. So the majority of people on a vaccine field trials go about their daily business, but never become exposed to the virus in the community. So actually, you can learn nothing from those individuals, whether the vaccine is working or not. So whereas on our trials, everybody is exposed. So -- if you can only learn if a vaccine is working from the infected individuals, you can see how challenged studies are so effective. So in the pink here, I've illustrated the number of infected individuals. And you can see -- you get the same number of infected individuals in the challenge studies you do a field, but you start with a much less numbers of people. And some published examples of exactly that. So Vaccitech is a biotech company testing an influenza vaccine. So on the left-hand side is the Vaccitech numbers. And in the green on the right-hand side is the equivalent numbers we would need to do exactly the same trial and have the same number of people infected in a challenge study. So you can see Vaccitech recruited 2,152 individuals, but only got 58 of them infected. So it's 58, not 200 -- not 2,000, which tell them anything about the efficacy. To get 58 people infected on a flu trial with our models at 69% infection rate, you only need 84 individuals recruited to your study. So you can see the recruitment numbers are vastly different. You'll probably all be familiar with the Pfizer-BioNTech COVID vaccines, of course, most of us have probably had one. So on that efficacy trial, 43,000 individuals were given the vaccine. But of course, they're also given advice to stay at home and stop in the cells being exposed. So most of them were not exposed to the virus. When we look at the data, 170 people of that 43,000 became infected with COVID. So actually, the number of people what they learned about does the vaccine work or not was the 170, not the 43,000 with our COVID model that we developed with Imperial College that had an infection rate of approximately 50%. So if we were to have 170 people infected, we would only needed to recruit 361. So very different leagues of numbers. You can see this is really the key reason why challenge studies, you can get efficacy data and understand if the products are working so much faster. And speed, of course, is so important when you're talking about preventing from a pandemic or even just time to market. A little bit more detail now about how we actually do it. I thought this might be of interest to you. So of course, the 2 really key things about for viral disease, if you're trying to see if a product is working, whether there will be a treatment from an antiviral drug or whether it be a vaccine is you measure how much virus someone is shedding so we can take a swab we can do a PCR and can get a quantitative measure whether they're actually shedding any virus. And secondly, is the symptoms of course. So the symptoms are actually self-reported by our volunteers. So we give them a symptom direct card, and we asked them to complete that at very structured times each day. So 3 times a day. And on the right-hand side is an example of that. So they would list all the potential symptoms you may expect. So runny nose, stuffing nose, coughing, malaise, tiredness, all of this is listed. And then they score themselves. So if they haven't got that particular symptom, they would score 0 and then depending on how bad they felt that symptom was, they would score 1, 2 or 3. So 3 being really quite bothersome. It's stopping me in my daily activities, whereas 1, yes, it's there, but I can just ignore it. So when we use that, and then we total up that score and you can plot that score over time to track the disease, which is essentially what's been done in this type of graph on the left-hand side. And another thing we do is we're all familiar when we got a really bad cold, we're blowing our noses all the time. So it sounds crude, but it's a really effective way of measuring how much disease. So these people are in a quarantine room. So we are providing the tissues. So we preweigh the tissues. We give them to them at the beginning of the morning, and we have a lovely job of weighing them when they come back. So it's a crude but very effective way. If you can measure that sectorally, the nasal discharge in that is very correlative to how much disease they've got. And that's an example here on the left-hand side, where the people who got placebo, their nasal discharges in the grey. You can see they're shedding a lot of nasty charts, blowing the nose a lot. Where those who've got an effective vaccine in the orange there. They were blowing their nose, but really, they weren't having much nasal discharge at all. So going from quite sophisticated state-of-the-art PCR machines to collecting tissues and weighing them. It's not always a glamorous job. And as Mo mentioned, we've got a lot of experience in doing this. And that's absolutely pivotal when we're trying to design these studies. There are very subtle nuances. You need to understand when you're designing a challenge study as opposed to a normal field trial to make them successful. And one way we do this is because we have a large body of data we've collected over the years. So the placebo data, so those people who didn't get an active drug, but we're still on a trial and exposed to the virus. We collect and we pull them together, so then we've got a big body of data. By doing that, we can really truly understand what's going on and look at it in more depth. And this is an example of that where we basically combined all that individual's data. And on the top left here, we've got those who were given the virus, but they did not become infective. Now although we expose people to the virus, people have underlying immunity. So we do not expect 100% of the people we get viruses to get infected. And indeed, if they did, we'd probably be giving them so much that we'd be overcoming the immune response and it be an artificial model. We're trying to give them the minimum amount of virus to actually cause infection, and then it's like it is natural. So the rest of the individuals who did become infected just like you would expect, when -- when the wife may have a have a typically a mild cold and the man's always got man flu. He's always doing Rest. My wife tells me whether I'm probably not showing very much virus, but I always feel terrible. So hence, people have a very different to be at the bottom right, you can see those people those bars are the symptoms that I talked to you through about on the symptom direct card. So high bars means they have lots of different symptoms, they would have -- they would be coughing, there'll be sneezing, they were had headaches, and the green is how much virus they're shedding. So a good correlation between when they're shedding load of virus, they've also got peak symptoms. And as we move across the go up to just mild disease. And if we are then testing a vaccine and thinking about what we want the vaccine to do. But really, what we're trying to do is to take those people in the red box. And if we can make them into the blue box and then turn the quite severe disease into a mild disease then that's really a successful vaccine. You extrapolate that into what happens into flu in the community. If we can vaccinate the elderly and prevent them from going into a hospital, but just to make it a mild disease, then that success, that's what we're looking for. So this takes understanding this great body of data to be able to design those studies and get those endpoints exactly right so that we are truly giving the efficacy of these products and not throwing out the baby with the bathwater because we designed the study wrong. So having this body of data is critical. And when you do that, you can get great success. So what we bought here is some studies, which we're really proud of. These are a great breakthrough in RSV vaccines. So each of these studies have been tested by hVIVO. So starting off at the top, it was Janssen's RSV vaccine. And then in the middle, we've got Bavarian Nordic's RSV vaccine and in the bottom, most recently, Pfizer's RSV vaccine. And this is a classic example of what 1 often sees in this market is that someone test a vaccine like J&J here, and they saw great efficacy. So in each of the case, Grey is the placebo group. So you can see they're showing great disease and the colored 1 is the vaccinated group. So you can see a much lower disease. So the y-axis is more disease. You can see much lower disease at each of these vaccines are very, very efficacious. So J&J came to us. RSV has been a really tricky pathogen to get vaccines for. It's been studied for decades and very little success. This really showed the first glimmer of hope to the market and then what that happened is it ignited the market then, okay, maybe this can be done. This is a challenge which can be done. And shortly on the back of that, we're then asked to test Bavarian Nordic's by a vaccine and then Pfizer also came into us because their shareholders go, well, it's your vaccine in development as good as J&J, which is in the public domain. So it can create business when you have success as well. And most importantly, it not just didn't just give them the confidence to then take these products into the field. And for RSV, it's very difficult to go into the field because you're typically trying to vaccinate the extremes of the age group. So these very young babies and also the elderly. So they're difficult populations to put experimental vaccines to. So you do want some confidence that your product is going to work. And that's what the challenge study can do. So it meant that these products then were fast tracked within their own organizations and prioritized. And importantly this was also recognized by the FDA and each of them got what we call breakthrough designation, which is a badge of honor effectively from the FDA, which means that their future clinical trials, they're Phase II and Phase III, which are pivotal trials needed for licensure they get fast-tracked reviewing of those packages. So they can save many months on getting that product to market because of the breakthrough status, which was given to them because of the efficacy data from doing challenge studies. So it has benefits from our clients later on as well. So last sort of data slide here just because I like the images and totally stole the technology from Peter and his Imperial team. So he's going to go into this in much more detail for you. But what I've described to you is really our core business is helping our clients discern whether their products are efficacious or not. So if it's a treatment, does it stop the disease and prevent get you better, if it's a vaccine, does it prevent you getting ill or at least less several. But what we're seeing now is an increasing trend of our clients realizing that from challenge studies, you can actually learn so much more than those basic concepts rather than just looking at symptoms and just looking at the viral load. These people who are in the quarantine. It's so easy to take samples over such a defined time frame. You can learn so much about what the vaccine is doing to the immune response and also what the virus is doing to the immune response. And this is an example of that. Each dot is a component of the immune system that we're tracking over time. And as it goes up the Y axis, it's differentiating that those who are infected look statistically different from those who are not infected. So that's what this is showing. So a very short time course, about 57 hours, you can see we're able to discern different parts of the immune response, which are clearly differentiating from infected and noninfected, translate that to a vaccinated population and it gives the clients great insight about how their vaccines are working really at the molecular level. Excuse my voice. So this is essentially an add-on revenue stream. So they don't need to do this, but if they want to, it's an add-on revenue stream that we offer our clients to give them really great insight. And this is important because a lot of vaccines work, but it's hard to demonstrate to the regulators exactly why they work in some instances. So they are required as they move their products forward to get this sort of data to prove biologically how they're interacting with the body and human challenge studies really enable you to do that quite elegantly. And a new change that we've seen is what we're calling clients coming to us for end-to-end business. And what do I mean by that? Well, typically, the historical model was our clients will come to us and say, can you test my vaccine? I know that you've got -- if we use SARS or COVID, as an example, everyone is familiar with the variants. So I know you've got the Alpha strain, but my product really, really want to test it against the Omicron strain. So previously, what would have happened is, okay, I do have to use the alpha strain cause that's what you've got. Now that would all link some clients because if their product is very specific to the Omicron strain, they wouldn't come to us because we can only test against the alpha strain. And as Mo mentioned, this is the same for all viruses. This is the way they evade the immune responses that they change and gradually have different strains. So similarly, for influenza, we had a specific influenza challenge strain. Now some products are agnostic and they don't mind which strain is they're working against all of them, and we have those clients. But some clients have products which only work against specific strain star specific questions. Now what we're seeing is clients coming to us and say, "You guys have got a massive experience in doing challenge studies. You also make your own challenge strains, which is also a completely unique skill set our competitors don't make their own challenge strains. So can you custom make me a challenge strain, which matches my product? And that's what we mean by an end-to-end service. So at the right-hand side of the world, we would normally contract our clients come in, test your product in the model we already have. Now we're contracting our clients on the left-hand side, where they're paying for the whole end-to-end process for us to collect clinical sample, this case, Omicron sample, grow that up to a medical-grade virus and release it test that virus in some individuals to understand how much we need to do, how much virus you need to give to cause infection and then do a Challenge study to compare their vaccine. So instead of us having to invest GBP 2 million to develop a model, we're waiting for customer demand and then they're funding this. So it's not only a new way of getting expansion of models it's also a massively higher revenue stream. And you can see that demonstrated on the right-hand side are some of the we've announced our 3 key clients here. You can see the value of these studies are much higher because of it, so GBP 14.7 million and GBP 10.4 million, for example. And that's where we're in there. Thank you very much.

Thank you, Andrew. So what we'll do is we'll go straight into the next presentation and following that, we'll have a Q&A session. Okay. So I'm very pleased to introduce Douglas Thomson, a very Scottish name. It's a rare Scottish person. You will see when he starts to speak. He's the CEO of Pneumagen, he has had length experience of being a CEO and Chairman, Non-Executive Director also Business Development Director, he had successes previously with 4D Pharma. He has an extensive network of people you can tap into with regards to bringing products forward. I think is he is -- I'm not going to say it, but it's very frugal in the sense that he has a network consultant who uses on and on, rather than building a huge salary-based of permanent staff to running study. So it's a very elegant way of doing things. And he's really here today is because Pneumagen is a current client of ours, and I thought it would be good for you guys to hear why biotech such as Pneumagen would want to conduct a human challenge trial in the first place? And secondly, why would they choose hVIVO? I have warned him to only say nice things about us for the purpose of this presentation. But Douglas, thank you.

I'm tempted to start with okay and oops and so on. So yes, so happy to hear and thank you to Mo, for the kind introduction. I'm not sure when you mean to say frugal or you mean tight, but we'll do our best. So as Mo said, a little bit about Pneumagen at the beginning to give you some context for where we are is also the copro quote of coming in presenting and saying nice things is that I get to say a few things about Pneumagen as well. Then into why challenge studies, why a biotech companies such as ours and think about a challenge study as being the root forward for our clinical development program. And from there, why did you chose hVIVO for the study that's running at the moment that we've already announced. So as I said, this is the structure of the top Pneumagen, pneumophila as early program. We are undertaking a challenge study at the moment, and I talk about the design of that study in 1 of the slides. And then why the challenge study model was the route for us to go. So the next couple of slides are about neuropil and Pneumagen. We were originally a startup from universities St. Andrews in Scotland. Back in 2016, we're working on a broad spectrum antivirus and not a vaccine. It's not a vaccine approach. There's still the challenge model is adaptable to that sort of approach. Fernando was talking was talking more about the vaccine approaches, but clearly, antivirals and the type of drug that we're developing can also be tested in the challenge model. Our ultimate label is looking at prevention of exacerbation in patients with respiratory disease, but this challenge study is an important towards that particular study, improving the output actually can translate into humans. And what we've seen in animals happens in the humans as well. I think I'll jump forward. We've got a very experienced team, very experienced Board, Scientific Advisory Board. We've raised around about GBP 80 million of equity funding to 2022. We have a lot of IP, including owned patent families, and we have composition claims that have gone to grant. So pneumophila, which is our lead program, is a broad spectrum antiviral product. We're not constrained. Andrew was talking a lot about vaccines and how you have to match the antigen to the vaccine. And actually a challenge has to match. We don't have that issue because we're working on a broad spectrum approach. We've shown data that works against flu, RSV, rhinovirus and SARS-CoV-2 and corona viruses in preclinical efficacy. So we've demonstrated that across a number of different in vivo and in vitro systems. We've completed a Phase I study and the product was safe and well tolerated. It's delivered intranasally. As you can see here on the right-hand side, and that study was run here in the U.K. as well. That was a Phase I unit HMR in London. I think I keep on pressing the button. We're now -- we initiated the challenge study in August 2022. We're well into that now, and we're hoping to complete that in the middle of 2023 and have the fuel will be out then. So why do a challenge study. We could have continued on. It's not actually required for a studio challenge study ahead of doing a Phase II in patients. We could have just gone straight to that and missed out the challenge study. But the market recognizes the value of challenge studies, that's the broader market, but also pharma and ultimate acquirer potentially of our business recognizes the value of challenge studies and what they can bring to quickly bring a proof of concept in humans. It mitigates the risk of later clinical development. We are going on to do a Phase II in patients. That's what happens after this Phase II challenge study. But we can go into that with some confidence knowing that our product actually works and we have efficacy in a population. So when we go to Phase II in patients, we're testing it in that population rather than does it work at all. It translates our preclinical safety and efficacy into humans. And it demonstrates that we can look at drug mechanism of action. So we begin to look at how does our drug work we have and understanding of that. But this challenge study gives us more information. And Andrew again talked about getting that understanding of the virus kinetics, the virus and begin to look at how our product may be are working in that setting. We are doing a first challenge study. There's clearly future challenge studies and more and Andrew didn't really talk to that. You don't have to do just one. You can go on to another challenge study, but you may be looking at different dosing regimens, different dose levels. You may also look at -- that you mentioned briefly, COPD, as master the backgrounds here, where you're looking at other disease backrooms other than healthy subjects. The focus, I know has been very much a healthy subject. That's what our first study looks like as well, but you can go beyond that. So doing a CHIM, I mean when we presented this to our board and said, why did we want to do CHIM all of them are familiar with challenge studies. And that is 1 of the One of the challenges if I can say that, of challenge studies, not everybody is aware, not everybody -- sometimes if you talk to people outside of the space and you say, we're going to do a challenge study and they say, what does that mean? So well, we're going to infect people and I think you're off your head and it does need a bit of education. You need to talk people walk through and some of the what the HV we're doing is important in that respect of giving certainty that challenge studies will work and deliver something of value. Recruitment. Mo and Andrew in particular, talked about field studies. You look at the difference in numbers of trying to recruit thousands of people into a field study, you can go quite quickly in a healthy subject challenge study. Our study is 100 subjects. So that's 60 on active and 40 on placebo. And very quickly, we can get through that study and generate some valuable data. We might have to do a few study in the future, but we can go into that with some confidence that our product actually works. Even with 100 subjects, you can get statistical power into the thousands again, what you see in the vaccine type studies, and we can get a meaningful outcome to our end points. One of the important points, and Andrew sort of touched on this as well, is you have certainty, you know when you've infected somebody, you know they're going to get ill and you can follow them. You go into a field study. A lot of the people you're dosing, yes, you'll get safety data out of them because they're not -- they've been given the drug, but you're not going to get any efficacy. They're basically debt to the study from a point of view of you've been able to get useful data. So we know we're infecting these people. We know the infection rate. We know what we should be seeing. Understanding of the infection kinetics and symptomology so we can begin to define our end points clearly because we know what happens on placebo. But also if we see something strange happen we can -- from the experience that HV will have, we can begin to understand whether that's drug-related or virus challenge related. So again, that gives us some clarity. We're also looking in our study, we're looking at cytokine development as well because we can because we know when these people are being infected, so we can take samples and we can look at that. That wouldn't be possible realistically in the field study. CHIM's do -- I mean, this was talked about, I think, by Mo. There is a deep regulatory understanding here in the U.K. U.K. is, to me, the world-leading probably explains why hVIVO here and hVIVO will probably be part of giving that experience. There's no doubt the MHRA has great experience in looking at challenge studies. I think Andrew also touched on about ethics as well and beginning to look at the ethical background to doing challenges. If you go to the wrong Ethics Board, it's never seen a challenge study. I said they'll go, what the hell are you doing? You're infecting people and now you're paying them all these problems begin to come. So the U.K. has a very strong background in this space. And I think it will be 1 of the things that will have to be overcome as we move into different territories, beginning to explain why our challenge study makes sense, what the ethics behind that is. I think we've shown here in the U.K., it can be done and it can be done safely and you can get useful data. But not every regulatory environment has that confidence in the U.S. being 1 where I think there is more work to be done. But hopefully, as we see more and more challenged studies coming through and that data is presented to them, that will give the regulatory authorities not the MHRA, more confidence in what they can achieve. And there are multiple disease models. I talk about in healthy subject study, but again, Andrew and Mo talked about a number of other disease models that we can be looking at. So for all those reasons, it really makes it really powerful argument to use that for a small biotech company. So a little bit back into Pneumagen for a second in pneumophila. So this is our study design, which again, we worked with the group at hVIVO to develop the study design in the synopsis. And again, I'll talk why hVIVO in the next few slides, but that was a big part of it. That knowledge of running challenge what is feasible, what is going to happen? Understanding of the placebo environment, what's the infectivity going to look like? And what sort of end points can we see because we are looking at both infection rate and symptomology. And that's going to be important to us, particularly as we move forward in further development, understanding the symptomology is key. So as I said, 100 subjects, we are actually using H3N2 influenza and we're giving both a single and multiple dose in this study. So we have 2 active arms and 1 placebo arm. Everybody gets 3 doses, some get placebo, placebo, placebo and so on. This study is running at the moment. So I can't tell you anything is going on because it's all blinded. I'm sure it's going really well and the guys and here maybe if I put them up against the old mate we sold anything I don't want to know. But we'll get to the study next year and we'll have the full data set. Coming back to CHIM. And again, I think this was picked up in -- particularly in Andrew's slides, where we showed the RSV vaccine is all being tested at hVIVO. There is a good acknowledgment within Main cap Pharma to the value of chips we see that, and that's important to us because when -- if we as a selling company ultimately want to transact in our assets and our business, do they value the data that's been generated in the challenge study. And the answer to that is yes, we've seen that again and again. So J&J, Pfizer, it delivers proof of concept. It translates the animal data to humans. We can do dose ranging, we can do to schedules as we're doing in our study. We can look at different doses. Interestingly talk to a pharma company just recently. They were very pleased that we were doing a single dose in the study as well, because they felt that was an important aspect to understand. You can use it to update vaccine antigens. We've seen that in COVID and influenza as we begin to go through that. And you can -- I mean, much of the data slides that Andrew showed, I think were vaccine related, but you can test other things, monoclonal antibodies, you can test antivirus small molecules as well. And there's big pharma recognition of CHIM. I've got 1 slide here, and Pfizer completed the acquisition of ReViral for GBP 525 million and that was largely based upon the CHIM data. They had gone into a Phase -- a further study beyond that, but they weren't very deep into it. And it was largely around the CHIM data that the asset is sold. And as I said, in the press release from Pfizer, it's significantly just field in the Phase II RSV human study. So that was clearly a big part of why they put that price tag on the RSV study. This was said to me recently by Europe, partnering conference just last week I think it was, all rose lead to each level. So I thought that would be an interesting point. That's both seen as how pharma see's it, they see it as being the premier challenge group in the world, but also the data coming out of it is solid and strong. And when we come to present our data because they are also customers and clients of hVIVO. They look at the data and then you look at the results rather than starting to worry and have a discussion about the CRO itself. So that's all challenge studies. Why hVIVO? And I think I've kind of touched upon a lot of this already. We did a competitive bid process at the end of last year. We conducted site visits. We didn't just look at hVIVO. I'm sorry, Mo. We did look at somebody else. We did face-to-face meetings. We did desk research. We looked at the facilities and logistics, just to pick up on 1 particular point, particularly that track record. I mean, I think Andrew touched upon this. We talked about the number of studies done by other groups and how many people have actually seen the viruses. There is no comparison between hVIVO and others. And I think Andrew also made the point which I was going to make that a lot of other sites are sites that do challenge studies, but they do a lot of other things. It's not they're so focused are not solely focused on doing challenge us. And I think again, hVIVO was focused on that gives us an advantage. We saw the strong capability of the senior team. We were very impressed. I won't pick out anybody here, but we were very impressed when we did meetings face-to-face with the team about their knowledge and input to challenge study. This is maybe a slightly unusual 1 for us. Now national barriers to supply. Our supply chain is all U.K. So if we manufacture at Fuji Film up in the Northeast of England, our clinical site for Phase 1 was HMR in London, our clinical site for the Phase 2 is also given all the turmoil there's been -- that was probably a good choice, but it's obviously not going to apply to every company. And hVIVO regulatory submission, we talked about that already about the benefits that we've been able to work with a regulator that's seen a lot of challenge studies and isn't put off by the concept. So specialist challenge CRO, I've mentioned that multiple challenge studies conducted. There's a lot more than the H3N2 that I'm talking about here. But there's been 7 studies conducted as I understand it, in H3N2. They've got a good understanding of the infection, the understanding what it does in placebo. So when we run our study, we add to that, but we also get the benefit of that depth of knowledge. So deep understanding performance of the challenge strain. Virologists have talked about this already about how we powered the study. And we took out trade references from pharma, and this is a comment that strongly recommended as hVIVO our challenge CRO. That was not the same pharma as the previous one. So it isn't the same person seeing the same nice things about you. A number of different pharma's all have very positive comments to make. And that's it. Thank you for your time.

Thank you so much. I think I would hire you to do all our sales pitches, if I could afford you. All right. So you heard from our Chief Scientific Officer, you've heard from our current client. So I think I'll open up the floor for any questions for these 2 guys.

Edward Thomason from Liberum Capital. Thank you for the pause for your time today. I know you're very busy. A question for Douglas, just on the competitors at hVIVO compete against. Was there any weaknesses that hVIVO had in that offering that you saw did give some competitive advantages to maybe consider other rival challenge study providers?

Yes, it's a good question. Mo wants to answer no. I'm not even looking at them. The -- I think 1 of the things that can be done is that if you want to do a combined safety and challenge study, that's difficult to run a hVIVO at the moment because they don't run just safety studies and safety and tolerability studies. So we did a safety and tolerability study or a Phase I unit here in the U.K., but some other groups do offer you the chance to do Phase I study in English to into a Phase II challenge study as part of the same protocol. So that is a potential area. Having said that, the gap between us finishing our Phase I study and starting our Phase II study was 2.5, 3 months. So it wasn't a big impact on our because we were able to turn it around in again with the support of the regulatory hVIVO able to get that study started pretty quickly. But that's an area where I think there could be an opportunity.

So offering is actually safety Phase I data and potentially follow on Phase II.

You can do it right at the same protocol. So you don't have to then resubmit to the MHRA, so you can submit the whole protocol and say, right, we're going to go straight on to our chat. We do a safety readout halfway through the study for safety and then you've gone into the Phase II study. So save your a couple of months, which could be important.

And then if the FDA was probably more acceptive to challenge studies, and there was a more -- an easier path to use them for study data or regulatory packages. Would the appeal from a company perspective, be mainly to do a challenge study in the U.S. or maintain a challenge study in the U.K.

Yes. I mean I think the FDA is receptive to data once we generated it, I think what's been the difficulty is actually running challenge studies in the U.S. I think the FDA has been more reluctant to actually sanction those types of studies. And in fact, maybe to talk to this, but I don't think there is a CRO now in the U.S. that's routinely running human challenge study. So I think that's probably more where the issues if you've got good data from a study and you go to the FDA with it, I think they'll be receptive to it. I think that's a pushback. Having said that, the light few studies because that's kind of what where they are.

Just to add to that. We've had clients, which are U.S.-based, which have done challenge study with us, submitted their data to the FDA and the FDA have seen the value of it and actually ask them to do -- to ask -- to do more further challenge studies before they go to the field to answer more questions. So they are receptive and they even encouraged expanding -- what you do with the challenge study, so there's a slight difference of approved moving them to be done in the U.S. for them actually accepting the data they're very receptive of the data. And there are regulatory agreements between the FDA and the MHRA about cross-fertilization and accepting the working practices as well. So that does make that relatively straightforward.

And then last question, I'll drop out. Is the -- clearly, one of hVIVO's [indiscernible] they point to is their volunteer network, the ease of being able to do recruitment. How much was that an appeal? And how did you find here in the buildup of conducting the challenge study, the ease of finding patients and setting up?

Any study, whether it's a challenge study or another type of clinical study recruitment is normally the problem in normally of what slows the study down you just can't get that people want to study quickly enough. So it was a fairly key part of what we looked at when we were assessing and they grew having now open Manchester, and I know hVIVO have also done a lot of other actions, which [ walk and talk ] if you wish to, as to how to improve that throughput of studies, but that was fairly crucial to us. We want to start and finish the study in the defined time frame, not end up leading into the second half of 2023.

Anyone here is interested in participating. Sam is here, he'll be more happy to sign you up for [indiscernible] So, Melvin.

My question, particularly to Andrew and probably Douglas grateful for having your inputs as well. You said 3,500 patients have come through. I mean how many patients have prolonged illness have not been -- not got well in the time schedule that we expect. And any -- can you focus on the answering on the negative bids, if you know what I mean.

Yes, that's an excellent question. So -- so these studies are safe by recruiting the volunteers, which we wouldn't naturally expect to clear the disease. So we're not weakening the virus in any way. I think that's a misconception sometimes. So there are wild-type virus is just like you get exposed to in the community. So that's why recruitment is doubly difficult because you're not just trying to find someone willing to do it medically, they have to be the healthiest of the healthy. So -- and because of that, we have a really excellent safety track record. I mean you're only as good as your last subject, right? If we had -- if we did have someone who had a very severe reaction, it would have likely have shut down us doing challenges. We haven't had anybody with that. So these individuals do clear the infection without even any antivirals given to them. So we're not even medicating them to get them well, they clear it naturally themselves. So I think -- and so that's really where we are. It's got an exceptionally good safety record. The longest attracted symptom we've ever had on any of the challenge studies was with COVID, we were all familiar that the impact on loss of sense of smell can be attracted with a lower frequency of individuals on the COVID studies. So yes, that's our longest by a long way. That's an exceptional virus, which is a very unusual symptom for RSV, flu, rhinovirus they're all clear completely back to the health 100% within...

No patients kind of rush to the ICU of hospital or whatever.

No. We've had like -- we monitor these subjects really, very closely looking at blood levels the whole lot. So sure, we've had some people checked out for strains blood results, but they've all been then returned and cleared absolutely. So there's no long-term impacts. So these are safely done when they're done in the right hands.

Douglas, any words from you?

Yes. I mean I would say there's always potential for people being going to ICU in a study because sometimes people get on well even on the studies, but certainly, in our experience, new evidence of drug-related issues, in particular. So yes, we wouldn't be running the study if we didn't think it was going to be safe.

One more question.

Just sort of following on a bit from Ed's question on the regulatory environment for doing these sorts of trials. You talk about expanding into other geographies with another trial center. I mean, is that going to have to be chosen with the regulators, remind us who's actually going to let you do these challenge studies? And sort of how far have you got in terms of identifying geographies that would or wouldn't allow you to do them?

Absolutely, that's the key fundamentals so that there's 2. It's the regulators and the ethics committee because they are independent. And some countries, the regulators are quite open, but their ethics and the community perception of their ethics is not. So -- but it is becoming increasingly accepted. I mean even within Europe, there are countries which you can't do this and some which you can, right? So -- but they're becoming more and more on the list of countries which accept doing challenge studies. For example, it was very difficult in Germany in modern times. But now there are malaria challenges run quite frequently in Germany. So they're done frequently in the U.S. still to quite a large degree. I mean the U.S. government has actually funded to being done on an academic level. So there are wider and wider exceptions. But clearly, going into -- there are some geographical regions where the whole ethical concept is still very difficult. For example, in India, they're technically illegal to give someone a virus on the Hippocratic Oath, they must not do harm. They perceive that literally under that. So there are some challenges in terms of expanding that level of acceptance in terms of culturally as much as anything else. It's not just regulatory wise, I think it's probably more culturally than regulatory. And I know that Peter's work with HIC-vac is fundamental to that, and he will talk to more about that later and perhaps you can have a few words on your input on that.

Yes. I think -- well, I will talk more about the consortium that we have that tries to promote the use of human challenge internationally and particularly in developing countries for pathogens of high global impact. But I absolutely agree the attitude of the population to these studies does vary from nation to nation. It's very culturally dependent. In the U.K., we have a very amenable population who understand these things and actually step forward in large numbers to volunteer.

So I just also want to just lever the expectations there, right? So we're not looking to expand internationally tomorrow, okay? So this is something a long-term goal for us. U.S. is the target market, at least from a commercial point of view, not for the, what Peter is mentioning. There is a CRO in the U.S., a small are currently doing challenge trials, for example, against noroviruses. So it is being done. There are a number of academic sites in the U.S. currently conducting human challenge trials. The data we have used for, I think, with Pfizer, Janssen and Bavarian Nordic was all produced here, submitted to the FDA, and they were granted breakthrough status. So this is not something alien. We appreciate they're not added acceptive as the U.K. But to be honest, no country in the world is. The U.K. regulations are very favorable for conducting a challenge trails. So this is a long-term goal for us to be able to do this. And in North America, particularly U.S. seems to be the ideal target. But I don't want to blow the top 2 [ mice ]. We have sufficient capacity to meet our revenue targets going into '24 or '25 right now, okay? But depending on the demand, and if we continue to see the surge in increase in interest in change that we've seen in the last 8, 12 months, then we may accelerate that. So one final question.

Yes. It's Christian Glennie from Stifel. I just wondered about the challenge, if I can say, of recruitment of volunteers in terms of what is typically the patients -- people -- sorry not patient, but people you need to screen to be able to get 100, say, in this -- in a Pneumagen example?

Do you have that new slide later yes. So I won't talk to the numbers because I still her thunder in a slide later, I'll talk generically for you. So there's another key element that we're not just trying to -- obviously, they need to be willing to do this. And I say that because it sounds obvious that they come to us. But of course, a key part of doing clinical trial is informed consent. So we spend a long time going through exactly what's going to happen to someone. So -- they may not be -- once they've gone through that process, which is key. They have to be truly informed about what's going to happen. Of course, some people may choose it not for them, and that's the right thing if they choose that. So you'll lose some on that. But really, when we're working with viruses, our major recruitment barrier is that all of us have been exposed to flu, whether we think we've had flu or not. So if you take your blood and test you, most of you would not be eligible to go on our trial. So maybe even as much as 80%, 85% of you because you've already got 2 higher antibody levels that you would be protected if I try to give you that virus, you wouldn't get sick. And as I said earlier, you can't learn anything if you don't get sick. So that already eliminates for some viruses, 80%, 85% of the individuals. So even if they're perfectly healthy. So yes, we are going from many thousands down to these hundreds. So although you end up recruiting small numbers, it's a very large funnel. And that is, I think, why being in London and having a screening center in Manchester is not by accident, these are large populations and actually in London, particularly fairly transient changes of population, which is key. If you were trying to set up a challenged unit in a small geographical area, you'll never get enough volunteers.

And has there been any shift in trend in terms of people coming forward to -- as a result of COVID, maybe that's been favorable?

Yes. So when COVID in development with Imperial colleagues and Peter and Chris' teams we set out the COVID challenge model, that hit the general press, not the scientific press. So that actually gave massive awareness that you can actually do this. So we saw huge, huge influx of people volunteering not just for COVID, but in general. So what we actually saw was a massive influx artificially high. And of course, that's come down to a more plateaued level now. Immediately after, it was probably a little bit of a depression because when we're allowed to go back to living our normal daily lives, people wanted to do that and lead their normal daily life. So the thought of doing something medical was lower. But now we're seeing it coming back out to more normalized levels where -- we still got a wider exposure and people knowing about it and knowing that this is done and seeing it in the press. But we're now above where people are starting to then truly think about, okay, I've got back to life normal. I can consider doing this again now.

What if I may add to that, I think our [indiscernible] study was also a good example because for that study, we had around 26,000 people signing up for the study like voluntarily. And it was only 36 subjects were included in the study. So it was like for picking who goes to the moon. And we needed also to select the healthiest of healthiest. So yes, that's also a good example of numbers. Of course, we don't need that huge numbers to recruit for a study, but it's also a willingness to participate in such study. Even at those times when there was no drug or no vaccine available. So yes.

And one key aspect, which really helps fill a recruitment is having a full order book. So what I mean by that is, if in any 6-month period, we are contracted to conduct a study for RSV, and flu and rhinovirus, then we take an individual and we're exceeding them against all 3 of those pathogens they may not be eligible for flu because they've got 2 higher antibodies, but they may be just buying for the rhinovirus trial. So you lose less volunteers because you're able to put them into a different range of trials. If we're only doing influenza, and they're not good for influenza, you essentially lost that person to challenge studies. So having a full order book really enables us to maximize recruitment as well.

Okay. I think time for a quick break. So can we say recommenced at 5 to 11, please? Thank you, everyone. [Break]

All right. Thank you for coming back promptly. We're honored to have Professor Peter Openshaw, Professor of Experimental Medicine at Imperial College London. For those of you who don't know, a lot of the work that we do with our commercial partners really is underpinned by the work that Peter and his team and his other colleagues do. We've collaborated very successfully with regards to the COVID challenge trial with Imperial College as well as other institutions. But Peter is very experienced in especially studying influenza and RSV, which is the 2 main states of challenge trials. He's also a Chair of the consortium called HIC-vac, which is MRC sponsored and group promoting and the use of human challenge trials in the clinical development products as well as on an academic level. So it's an honor to have him here. He's spending this afternoon with [ JVT ]. So he gets high net worths and I'm really pleased personally to have Peter present to us. So thank you.

Well, thank you very much. So let me just see if I can operate this device, yes. So I was going to, I hope, explain some of the science that we've learned from doing challenge studies, what motivates us as academics to become involved in human challenge. And I must say that it's been hugely rewarding for me as a medical academic to move from doing basic studies in preclinical models in mice. And so I'm trying to understand the immune system in its most fundamental research terms into doing human challenge where we can actually do experimental studies in human biology, looking at the immune system, looking at the immune responses. So just to give a bit of background. So I've been a member of NERVTAG since its inception. I was Chair of NERVTAG at one stage, which is committed at Advisors government in the U.K. I'm the Director of this network, the HIC-vac network, which is funded by the Medical Research Council in order to try to promote infection studies, deliberate infection studies for pathogens of global -- high global impact. A member of the U.K. vaccine network. And I guess also just to highlight, I've advised many, many companies in terms of providing scientific advice, but I'm not a paid advisor to hVIVO. I have no financial interest in hVIVO. So I'm really here as an independent scientific expert. So this is -- this is HIC-vac, this consortium that we set up with money from -- partly from the overseas aid budget, actually, because I think the government was wondering how to use the overseas aid budget for things that would actually be onshore. And it was partly for that reason that we've developed this very big worldwide network of investigators over 300 different investigators around the globe. And actually, tomorrow, we've got our annual meeting down in Leatherhead, where we've got a lot of the key people coming together for a 2-day festival of science based on all of those studies that we've been doing. It's going to be very exciting indeed to see what sort of progress we've been able to make. So my interest, I guess, have been funded full time to work on RSV, another similar pathogen since about 1985. So my background is as a chest physician. I did straight clinical medicine for about 5 years after qualifying before I went off and do the PhD actually on T-cell responses to RSV in mice. And then had about 20 years of working on mouse models and now human models of disease. So I think each of these pathogens is unique unto itself. Each has different ways of overcoming the barriers to infection, each has individual ways of becoming a successful pathogen and continuing its global spread. So in terms of volunteers, so back in the early '90s, we did some very amateurish experimental infections around the lab. This was in an era when there was much less regulation. And basically, we took some virus out of the freezer, and we ask people around the lab. Would you mind having the virus in your nose? And quite a lot of post docs and others volunteered. I'm just looking at the sort of nasal mucus production that we were getting in some of the slides here. I mean, I remember one of our post docs actually got 20 grams of mucus per day, which was assiduously weighed by the graduate student day by day in terms of wet weight. So we did those studies. They were a very small scale, but I think it was useful to us to be able to see how they could be done. And when we started back in 2008 to do more systematic studies. I think the advice that we got through our discussions with people at hVIVO were instrumental in making sure that we were doing the studies in a way that sort of was closer to having some sort of regulatory standard. This is Max Habibi, who is one of my PhD students at the time who is pretending to inoculate another PhD student with virus just for the benefits of the first graph. But we can do a lot of monitoring, not only of the blood, but also of the airway. So because we're embedded within the chest clinic, we can do bronchoscopies, we can get samples from the lower airway. And we can discover an awful lot of science by taking this very intensive approach to sampling and also doing a sequential nasal sampling, which was really developed by my friend and colleague, Trevor Hansel, over many years, refining the way in which you can collect nasal fluid, very a dramatically. So Chris Chiu has really been transformative since he joined the group. He joined on the fellowship, which sent him over to Emory for a while. He came back with expertise in T-cell memory studies, in particular, and has allowed us to do studies on influenza and RSV. And just some interesting contrast between these 2. So influenza. You've all heard about influenza. You all know what influenza is. It tends to be a relatively rapid takeoff in the studies that we did and doesn't have this interesting lag phase that we've seen with RSV. During this period, the first couple of days after we put RSV into the noses, there seems to be a sort of negotiation going on between the nasal mucosa and the virus, which 1 is going to become dominant which 1 is going to defeat the other. And that lag phase is the sort of thing you can only study in human infection challenge, we wouldn't be able to do that in the field study. And it's the crucial events that determine where infection goes. Is it a mild infection. Is it a symptomatic infection. There's no infection or is it a more established infection. All of that is decided in these very early stages before you could ever get in these samples if you were waiting for people to present to you with disease. So absolutely crucial in studying the immunology. So we've been able to do very detailed studies of the dynamics, and you saw those nice volcano parts with different numbers going up and down. This is showing what happens to a number of different, what we call immune mediators over time. So these are the interferons, which were actually described first in the U.K. some years ago. Which are very important in defense against viral infection. These are more inflammatory mediators, things like tumor necrosis factor, which more represent the severity of disease and which had to do with the sort of pathogenesis of why people get severe. And in this particular graphic, basically, it shows that if the virus suppresses the baseline immune response in people soon after its entry, then it becomes successful and becomes an established infection, whereas if there's a slight sort of response from the host, even a very mild response during that interval between inoculating the virus and the establishment of infection, then the immune system can defeat the virus in that very early stage. So here's 1 of our volcano plots. This is actually from whole blood from the peripheral blood. And I think it shows the enormous advantage of being able to control when the virus goes in, when the sample is taken. And it's only by doing these very, very well-timed studies that you can really get a lot of information about the role of different cells, the role of different mediators in defense. It's absolutely fascinating to be able to see this in real time, you'd never be able to do that just from waiting for people to turn up with flu. So in terms of what determines the severity of infection. I think 1 of the things that surprised us was but it's these neutrophils, neutrophil cells in the blood that are typically raised in people with bacterial infections. We wouldn't have thought that those were of any great relevance. But it turns out that the status of your neutrophils in your nose prior to inoculation. So before the virus is ever put in is really important in terms of determining the outcome. So this sort of stuff is crucial for scientific discovery and it can only be done through doing experimental infections of this sort. And I think hVIVO, given credit have been absolutely vital in global terms -- in terms -- in being able to drive these studies and work with academics to develop protocols that have enabled all of this science to be discovered. So switching into RSV. So 1 of my big regrets about RSV is the name. So respiratory syncytial virus. I think anyone in marketing would say that's a disaster. It's a terrible name. It was actually described by research group, led by Dr. Savage. And for some years, I've been trying to get RSV renamed the Savage agent. But so far, we haven't -- we're stuck with RSV. It's a virus arguably of almost equal importance to influenza, but there's often the real hidden pathogen. So it's very hard to diagnose RSV infection, particularly in these older adults, the frail elderly who have a lot of RSV disease, but often by the time you take samples, the virus has been gone and went. It's disappeared. What you see is the inflammation which has resulted from the virus infection. So it's this sort of insidious respiratory disease, which has become much better known in the last 5 or 10 years because of investigational studies. Originally, it was just known as a wheeze babies virus. But actually, it's a really important virus in older adults. So here's the, same, MOC study of infection. We originally started just looking in completely healthy, younger adults because we are very afraid of seeing severe disease. Having got a lot of experience of doing that and with all the experience coming from hVIVO, we've finally plugged up courage to go into older adults. These are still healthy, but they're up to the age of 75 in this study called Inflammage that was co-funded by the Medical Research Council and by GSK because they were really keen to know what was happening with this disease in older adults. So we've published some of this already, and it's been very revealing in terms of looking at the severity, looking at virus replication, trying to work out what it is about older adults that makes them more vulnerable. And age, of course, is an absolutely key determinant. We all know that age is 1 of the major risk factors for COVID-19. But we don't know why. We don't know why it is the babies and young children often getting affected with no symptoms at all. They may pass it on, but they don't develop any symptoms. We don't know enough about the immune system across the whole range of age in order to try and discover what is the reason for this variability? So this is just a bit more detail of the initial studies that we did in collaboration with hVIVO and in collaboration with many other academic units as well. People have said that the reason we could do this study was basically that all the planets were aligned. The funding was there. The will was there, the -- the support was there from a very high level within the U.K. And we had a production facility. We had hVIVO to do all the proper matricular stuff that they do and a database of nearly 27,000 individuals from whom we could down select volunteers who would be eligible for this study. So that was absolutely crucial. And we're able to inoculate with virus and then move up through the protocol. And a thing which astonished us all was how little virus was needed in order to cause infection in this study. We started with this dose because we thought it was such a low dose, nobody would get infected. We thought we'd probably have to go up about 100, 1,000-fold something like that. We just didn't think that this very, very low dose would do anything. But it was astonishing that actually we got 53% infection rate just with the smallest dose that we could measure in the clinic. And when we looked at how much virus they produced, it was vast compared to the inoculum, we worked out that you'd only need a particle about the size of a red cell of nasal mucus in order to produce this inoculum dose. So that was 1 of the things we learned which are enormously infectious. And it all came from these very, very careful and meticulous studies where we weren't just asking them if they've got any problem with smell or taste. We were actually doing very detailed monitoring using smell cards and so on. We weren't just asking, do you feel a bit fuzzy headed? We were doing banks of testing to see if there was any detriment in terms of their psychological performance. So a lot of very detailed stuff, chest CTs, lots of blood sampling, lots of nasal sampling. And that produced this first published study of SARS-CoV-2 challenge, which has been a real landmark. And I think a wake up to the public and to regulators and politicians about the potential of human infection challenge to yield fast amounts of scientific data, some of which may be important in terms of how we manage infection. So here's another nice volcano type depiction where you can see some mediators going down early and then a lot of these other mediators going up. Many of these are the sorts of mediators you'd expect in a viral infection. But this type of output you can only get from human challenge and it's enormously revealing to us as scientists to be able to see what happens over time. So we've -- there are many initial conclusions. We're still analyzing a lot of these. I must say that we're still analyzing a lot of data that we gathered during the 2009 swine flu pandemic. We're still publishing results from that -- from those studies that we did way back. And I think these studies are going to continue to generate absolutely vital data and it's a resource that we can go back to again and again when new questions arise, new products arise that we want to get some information about. We can look back at our data, and you can look back at your databases and we can try and come up with answers that point us in specific directions. We can look at genetics, we can look at some of the different aspects, all of which informs about the biology. Very important to acknowledge the teams and the funders that have been vital in doing all of these studies. And thank you very much for listening.

Thank you, Peter. Any questions for Peter? While he's here.

I didn't expect many questions.

Okay. We'll move on to the fireside chat. So I've put together kind of a list of questions that I thought that you guys might be interested for this panel to discuss. But I'm also open to add any new questions. So if you -- I'll start it off. And then if you have any burning question that you want to kind of address to this form, I think it's really good. I'm always available to you guys all the time. So it's not really -- I mean I can answer your question, but I think it's really good that you've got a client here, a leader in academic and Chief Scientific Officer, especially that you don't normally get to kind of talk to. So anything for them, I think, will be really good. So maybe I'll start up.

So maybe with you, Peter, first. So when the COVID pandemic hit and the fact that we were able to get vaccines to the market in such a short time frame, 2 or 3 years, even less than that was historically, it's been taken over 10 years. Do you think that process, that's speeding up expediting this drug development has had a impact on the usage of challenge trials?

I think there's been many factors that were important in allowing that very rapid development of vaccines. I must say that on the advisory committees, on the planning committees, on the Academic Medical Sciences task force, we were not anticipating that vaccines would be anything like that rapidly developed. We were absolutely thinking that the pandemic was going to be over before we would have a vaccine. But I think we started seeing early data within a few months that made us think that maybe vaccines could be developed. And the crucial elements, I think, were big amounts of money going into vaccine development, which really allowed almost in parallel development of the different stages that you normally go through. Huge amount of commitment from all levels, support from government, support from regulators, all of which set the green light, ready to go as soon as the data came through. I mean I suppose it's a broader question about, would challenge studies have accelerated that process? It's actually 1 of the main topics that we're going to debate at our conference in Leatherhead is what is the role of a human challenge in...

And I mean, as you saw that we've been -- we developed the COVID model together, that was set up and funded by government because to Peter's point, it wasn't expected necessarily that this first wave of vaccines would be successful. And in that scenario, then what do you do as a government, you then faced with a need an answer. We've got 5, 6, 7 other potential vaccines, how do I select which 1 to procure in advance of having field trial data, which may take some time. So challenge studies were seen as a way to help select that process. Now we are all very fortunate that by the time we went out a lot by those -- by that COVID challenge model but actually had got the evidence that these first wave vaccines were very efficacious. But we think of -- remember the context that we developed that model was when there wasn't any vaccines rolled out at all. So I do think they would have really demonstrated that they had their place if the first wave of vaccines hadn't been successful. Don't get me wrong. I'm very grateful that they were.

Karl has a question.

Karl Keegan, at Singers. Following on from your data professor, on SARS 2, what would the sort of -- what was the sort of the strength of the pushback from your Ethics Committee and you think that the data that you showed, which is so very clear, do you think that the ethics committees is now going forward are more amenable to these type of studies in that you've sort of shown in a very sort of serious pandemic situation that you are working on is safe.

I think in the U.K., we've been very not just fortunate, but actually forward planning in terms of making sure that the ethics committees are not there to basically just have a firewall, assess the data and say no. The ethics committees are there in part to discuss with us how we can safely and ethically perform these studies. And I think it's -- there is a question, if we can do these studies and we can do them safely, is it ethical not to do these studies. They're so revealing. They're so important in terms of the information that we can gather that actually there is an ethical imperative sometimes that we do go ahead and we do these studies because they save lives.

So Douglas, for you in a different sense. Do you think that because we had the COVID pandemic and we ran the COVID trial, did that make your job a little bit easier in trying to convince your board and your shareholders to actually approve and give you the goal ahead to do a challenge trial? And secondly, going forward, would you recommend other companies in your situation to do a challenge trial 2?

Yes. I mean I think as I said in the presentation, I would absolutely recommend them doing a challenge study, a very efficient and effective way out of -- sorry, a relatively low cost, that's not a negotiating point to get to efficacy data. So I think it's -- instead of running a field study over a couple of years, you can get to an endpoint in 9 to 12 months. So yes, I think that point has already been made. I'm not certain that COVID had much of an effect. It had an effect upon our approach to the regulator, everything, even our Phase I study was approved much faster than normal because of COVID, we put the word COVID in the headline, and it went through much quicker than we normally perhaps have been reviewed. I think that has been a help. But I'm not certain that having a challenge that. And in fact, our Phase I has started before you would run the challenge study, set it from my Board. I don't think that was much of a factor. Challenge studies per se, yes, but we do 1 specifically in COVID less perhaps. Just picking up on your point about timing in -- for vaccine studies, normally taking 10 years. I mean, I think Peter showed a slide there about RSV -- we've been working RSV vaccine for a very long time, and it's not just how quickly we can put things through their equity process and so on, do we actually have the right science to be able to take it forward. And -- and Peter, and I'll be honest, as somebody comes out of the vaccine industry, I didn't think we'd see a vaccine for SARS or at least at quickly, at least that quickly or RSV for that much. It's a good step forward. Yes.

Thank you very much. You've all touched upon the benefits of challenge trials in your presentations. But I guess, playing devil's advocate with much bigger populations, which potentially give you a more representative sample, whether that be age, sex, race, et cetera. So is there an argument that challenge trials, you lose some of the richness of the data? Or would your point be that actually that's captured in later trials anyway and you're looking for something more specific?

Yes, that's an excellent point, if I may start on that. So challenge studies are never going to entirely replace field trials. And this is a really exceptional example where you physically cannot do it in the field, which is very unusual. But for the pathogens we're working with, they're never going to completely replace it. But for example, what we've seen in some of like some RSV antivirals, so they, in this case, trying to treat RSV is that instead of going into these very complex field trials in babies without really understanding what is the best way to dose, do I give this massive bolus dose or do I give tiny bits every day? They don't want to go into those really complex build trials and a really vulnerable population without really knowing in a human population those answers. So they use the challenge study to whittle down those essentially research questions. So when they are going to late-stage trials, they're only testing what they believe to be the best possible way of using their drug. So in case of a vaccine, it might be the best possible dosing regimen or the best possible amount of antigen in the actual vaccine. So it means when they're doing those Phase II and Phase III trials, which are crucial because to your point, you need to get it across a wider demographic as possible to be representative. And some of those -- some of that demographic is going to be too frail to be in a challenge study safely. So you're going to have to still do those phase trials, but at least what you're then testing in those phase trials are an optimized product rather than spending 2 years and then realizing actually, my product didn't really work. Maybe if I tweaked this -- and then you go back and do another 2 years, and you can do that 5 times, you lost 10 years. So if you can hone it down in the challenge study, you can get that quicker.

I think these studies are so useful in terms of demonstrating how effective the treatment could be under ideal circumstances, under the laboratory conditions. The vaccine efficacy in a field trial is another matter and it depends on lots of other factors to do with vaccine transport, delivery, administration, all the rest of it. So it's not going to answer those questions. We have to be clear that we're only going to be doing challenge studies in a population at low risk. We're not doing these studies in people who might end up in intensive care.

You've talked about developing new challenge agents for various variants, whether it be flu or SARS-CoV-2, what are you actually looking for in terms of a dose and infection rate when you're developing those? Because clearly, if you have 100% infection, you're probably dosing too highly and if you have 0% infection is hopeless. Are you looking for that 50% because you've talked about one of the flu variants having 67% infection rate, and you've talked about 1 of the SARS-CoV-2 having 52% and 49%.

And that's an excellent question. And the answer to it is it depends on what scientific question we're trying to ask. So if we're doing a question maybe without a product like a lot of what Peter and Chris is working exploring the response to infection and actually, if everybody gets in infected, you're not going to hear anything about what prevents people from being infected. So that doesn't help you. You need a mix from our perspective of hVIVO, so it's a combination, and you hit the nail on the head, actually, for -- particularly for vaccine studies or for products which we're administering prior to the actual exposure to the pathogens we're trying to prevent the disease like hemophilia, for example. If we give such a large amount of virus that is going to overcome any products or any immune response, then, a, it's really artificial, and b, you're not going to learn anything whatsoever. So we're trying to give the minimum amount of virus to cause a reproducible infection. Now -- and then you come back to the economics of it. So if the infection rate is only 20%, then -- and clearly, you have to still put 5x more people in there to get your answers. So it becomes economically not viable and it becomes -- a lot of the benefits of doing challenge or it's cheaper and it's quicker. So you need to be around that 50% really to make that speed and cost benefit still hold true. So really, we're mainly targeting somewhere between the 50% and 70% infection rate. I'd love to be able to design the studies and pick at 70%. But that requires colleagues [indiscernible] much better and us having a great better understanding of the immune response. We don't understand nearly enough about the immune response right now to be able to select a volunteer and know who's going to get infected or not. So we really don't. So we are targeting the 70%, we may achieve 50%, and then we power against it.

And clearly, if you're getting an infection rate -- infectivity rate of 50%, it is commercially better for hVIVO because you're going to be recruiting more patients into the study to get the end result?

No. I mean I think it becomes -- it puts -- it will put our clients off as well because a lot of the benefits of them do in the challenge and then suddenly disappear because our costs are our costs. And most of our clients won't be able to bear that cost, particularly if it's small biotech or won't be able to tolerate the time lines if it's large biotech and pharma. So it's in our interest to have as effective models as possible as well because then the most -- if we can make these as most efficient as possible, then we attract more and more usage of challenge models. And that's really where the business comes from, not doing a really expensive 1 for a client because they can't afford it. We need to make it affordable for all and do more and more of them.

Hello again. So Peter, Douglas, you've both spoken about the value add of challenge studies, but exactly to the point of the fireside chat. Where do you see the demand for challenge studies evolving looking ahead and over to you of where you think the impacts ethical changes or regulatory changes might have on the demand?

Yes, sure. Well, first, there's a lot of viruses out there that we don't have challenge models for -- so on the list that Mo put up, I think there was 4 or 5 that you were covering -- and within that, there was influenza and RSV and different strains. So I think there's a lot of opportunity there. There's -- from a point of view of hVIVO that are bacterial challenges, which I don't think hVIVO will have currently got on the list. So if I was looking at hVIVO, I think there's plenty of opportunities out there to have a look at. I think generally, there's been more -- one good thing from COVID, if I can put it that way, is that there's a lot more interest in infectious disease now. There's a lot more funding coming to infectious disease, even for early-stage companies such as ourselves. So there is more customers of hVIVO now than they perhaps would have been a few years ago. So I think there is also that opportunity there.

I think -- I mean it is a growing field, and that might be a surprise to some people that there's such growth in this area. I mean, as a chest physician, I would say that I really want to see more studies in rhinovirus. Rhinoviruses are a major problem. And I've had a couple of rhinoviruses over the past few months from my grandchildren. They've severely impacted my own asthma. And in the clinic, my patients with asthma, chronic bronchitis, pediatricians who we're seeing people with cystic fibrosis. The major reason for exacerbation of those diseases is these days infection with rhinovirus but with other viruses as well. There's not enough going on in terms of how do we tackle rhinovirus. And I hope that, that's going to be an area for future growth. But there are many, many other pathogens out there, which it might be possible to do infection challenge. We still lack vaccines for things like gonorrhea. Gonorrhea is developing multidrug resistance around the globe. It's a major, major concern. How is that going to be tackled. If we could use challenge studies to try to understand better how you defend yourself against a bacterium like the gonococcus, and I think there is the potential to do that. There may be challenge studies, we'll find a niche in other areas.

But you -- both of you point there to expansion of challenge studies into additional indications. What about actually the demand within audio proved indications for challenge studies?

The 2 trends that we tend to see on that is that, for example, back in even 2018, there was a classic example. 2014 sort of a classic example where we had -- if you look at our revenues every year, there was a big spike. And that spike at the time was because there was an academic paper 2 years prior, which said the particular part of the influenza molecule, the stock of the key outside protein, could be a good target for an antiviral. This has not been considered before. So what happens is a lot of people then start developing products, specifically targeting that new discovery as a new target and then within -- we had 4 or 5 customers who all had different antibodies, which bind that, which wouldn't have existed 3 years ago because it wasn't even thought of as a target. So what you see is you see 1 way is getting a new target comes available, normally from academic research, that then gets developed either academic spin-off or company with a product or big pharma and biotech develop products against that new target. So that's 1 way, and we have seen that an example of the RSV vaccines as well when you have something successful go through, others realize actually, this is a potential area where we can cure this disease or help in this disease, and they put investment into it. So you do breed your own success in that. Another trend we're seeing much more recently is as there becomes more adoption by big pharma and biotech, particularly on vaccines, there's a trend of doing larger trials. And that takes a much larger infrastructure. So rather than doing traditionally, if you look back 5 years ago, they were to come to us to do the minimum possible study. So maybe 20 in placebo, 20 in the vaccine before they move on. And now we've got contracted on our books some trials, which are 250 individuals because they're trying to get much more clarity of the data, answer more questions, look at endpoints, which are lower frequency to see to derisk further and further their field trials. So that's 1 trend we're seeing. Also, the other impact of the pandemic is it really brought home a phenomenon which some people have forgotten about, which is you cannot rely on a seasonal virus to be there when you want it to be there. The pandemic completely messed up the flu seasons. There was virtually no flu last year. So you better trying to run a field vaccine trial in the flu when there's no flu. You can't do anything, right? So it really brought home the fact that or you are so dependent of what's circulating. So what a new trend we're seeing is, okay, this strain of flu I managed to see in my field trial, but I want to claim to the regulators that my vaccine or antiviral works against all flu and the regulators go fine, prove it. They can't prove it in the field because it's not circulating anymore. So they use the challenge study to fill the gap with a pacific strain that is now very infrequent in the field so they can get a broad label claim, and that massively improves it with the regulatory and improves the market value of that product.

I think another point to make is that the first product to market may not be the best product to market. There may be other coming along through the pipeline, which are going to be much better. But in the presence of an already partially effective intervention, it's very hard to design even very large scale studies to answer the question, is this superior let alone non-inferior. And by doing these challenge studies, comparing product A, product B, product C, you can actually get a lot of information about the relative efficacy in relatively small studies.

Douglas, Peter and Andrew. They'll all be here, hopefully, for lunch, so you can approach them directly then and then hopefully, they will be able to answer your questions. So we're going to move on to a sales presentation from Egle Pavyda. Egle is based in Lithuania. She joined us a few months ago, a very impressive half year well, time flies -- an amazing addition to our BD team. And the real focus here of this presentation is really kind of to show you how we, as a company, make our sales pitches to people like Douglas doing sales process. Thank you.

So hi, everyone. It's a pleasure for me to be here, and I will try to explain how we explain challenge studies to our clients. Sorry. Yes. So I will start with a service offering basically. And I'm sure that you've seen the slide already many times, but the core focus here is basically to show the integration that we have with our subsidiary, Venn Life Sciences, so we worked very closely because Venn Life Sciences starts with our clients from even earlier part, so from discovery stage. And then moving forward, it was actually a question about that about not integrating Phase I, Phase II studies. So basically, Venn Life Sciences can do that. And we already have proposals in our pipeline where we will do a combined Phase I, Phase II study for our clients, while Venn will select a vendor a specific site for the Phase 1 to be conducted most probably in the U.K., we will continue with a challenge study. So where there's a lot of integration and cross-selling in that regard. So I will start very shortly with Venn, as mentioned, they start with the clients quite early from the discovery stage due preclinical consulting forum writing where dossiers, helping as well the Phase I studies and then we can very much cross-sell between those 2 subsidiaries. And moving forward to hVIVO, as already Mo emphasized, I think, in his presentation, we are a full-scope human challenge CRO, and we are a world leader in human challenge studies. So this is basically the services that we provide to the clients and they are very continuous and very seamless. So we start from the study design, we help with the regulatory interactions, with the competent authorities even before the submission of clinical trial application with the scientific advice and Andrew is the 1 attending those scientific advice meetings of the regulatory bodies and helping clients to explain what we are planning to do. And then moving forward to the clinical conduct of human challenge studies, which is highlighted here, but also right now in our clinical part of services, we are looking much more adding some other studies, such as Phase II Phase III vaccine studies, also nonfirst in human healthy volunteer studies and mild condition patient studies. I will talk about that in a moment. Our laboratory is designed to support everything that is needed for a challenge study, but all those assets are absolutely suitable for all other kind of studies. So for example, Phase II, Phase III studies Therefore, we are also looking to expand that piece as a stand-alone for our clients. So the benefits of human challenge studies were already touched, but I want to emphasize that they are also our unique selling proposition. So as Mo mentioned, I think -- we not only want to present a hVIVO and say we are the world leader, but we really want to promote the human challenge studies that itself. So Andrew touched a bit on the scientific piece, but from a clinical development perspective, it was also mentioned that it requires fewer subjects in the study. So therefore, it is a significant time saving, and then there's no seasonal dependence. From the regulatory perspective, there was some case studies shown that our clients obtained breakthrough designations, which helps them to shorten their path to the market. And then there is a financial benefit, when especially for the smaller biotech companies when we obtain their Phase IIa efficacy data, and they can show to the sponsors that the drug works, of course, is a significant valuation uplift. So for me, as a BD person, I'm very happy that I have all these colleagues, something to catch their attention. So if I'm speaking to scientists or regulatory or clinical colleagues, or even the folks who are most interested in money. So I have some things for everyone to say and to hook their attention. And then we are a partner of choice for the big pharma and biotech clients. And as you can see, there is a nice mix between the big pharma as well as the stars in the biotech industry. And also, it serves very much to us as a reference. So when you can show to the client a case study from a big pharma client who successfully conducted their study, there is much more confidence for those smaller biotechs to invest these money in their challenge studies. So I will touch a bit our strategy for growth, but in a nutshell, we recently strengthened our BD function in different ways not only adding myself to the team, we have a very diverse pipeline right now. We have new challenge models coming in or newly challenged models recently set up. We have also new service offerings to our existing clients. And we're also looking at ways to increase the cross-selling and upselling between the subsidiaries hVIVO and Venn. So looking at our business development department, I joined the team half a year ago. And right now, me and Rich, we basically are split by geography. So my colleague, Rich, who has been a company, I think, 7 years already. He is now more focusing on U.S. and Canada, where he is very strong at he is from U.S. And I'm focusing on Europe and Asia Pacific. So Asia is something new in our portfolio where it was not too much clients or too much interest in that region. And I think there's quite a lot of opportunities there for us. And we also see a growing pipeline from Asian clients. From a business operations perspective, so the scientists are the ones who are shining bright in the client calls. So recently, we had some additional scientists assigned to us to include those interactions with clients and also in the proposal preparation process because our proposals are really scientifically oriented. Then from the business operations and marketing perspective, we just added a new FTE to help us with prospecting activities on lead generation and also revised our marketing structure to focus more on business-to-business marketing. From the legal and finance perspective, we've added additional resources to speed up the process of proposal preparation and also contract negotiations and then, I mentioned already a bit on the field studies. So for those, we have a principal investigator assigned within our team who will be helping us on those opportunities. So we are really a sales-focused organization, and I'm enjoying hVIVO so far very much. I was very happy actually to prepare this slide for you, and I was happy to see how the numbers diversify, because we basically do not depend on anything looking at our pipeline. It's very diverse, and it means that we don't depend on a single client type, we don't depend on a single region where the opportunities come from or on the model or on the investigational medicinal products. So if you look at the distribution by clients, we have a good mix between pharma and biotech. There might be a question why we have a bit less of proposals from pharma. But basically, those opportunities, I would say, they are with a higher probability. So pharma clients usually have a financing secured to finance their studies while the biotech might still be looking for funding. So it's a really good mix in that way. Then from the distribution by region, for sure, most of our proposals right now comes from U.S. and Europe. But there is a portion, as mentioned before, from Asia, which is growing right now, and we want to increase that even more. From the model perspective, again, there is a very nice mix from those already established models. So influenza and RSV and HRV, but there's also a nice portion of the new ones. So SARS-CoV-2, asthma and even other models looking beyond and discussing whatever models we could add to the portfolio for the clients. And then by the IMP, we talked a lot, I think, today about vaccines. But again, there is a good mix between the vaccines, antivirals, antibodies, immune modulators and other molecules in the pipeline. Also, there were some questions on the new models in development. So we have currently existing models and asthma and malaria are the newest ones additions. But also, we have Omicron under development. We will start challenge studies on this 1 next year. There is also a new influenza model being developed, and we are also looking quite extensively into dengue. But maybe worth mentioning, these are the list of viruses of models that we could add out our portfolio. It doesn't mean that we will add them all, but if there is a significant commercial background to do that, we will definitely look into it, and we will follow our customers' demand. And then talking about the expansion of services, so for hVIVO, I want to emphasize that it will definitely remain a challenge focused CRO. But from the existing resources that we have, we can see that we can increase the efficiency in our work by adding some additional service, such as Phase II Phase III vaccine field studies, nonfirst in human healthy volunteer studies and mild condition patient studies. And for Venn Life Sciences, our subsidiary, we see a huge trend on the need of advanced therapy medicinal product consultancy as well as medical devices. So just to touch a bit more on those field studies that I mentioned. We have this huge apparatus of FluCamp pat was already mentioned around the recruitment of healthy volunteers. And the recruitment of health -- subjects in general in CRO industry is the #1 issuer problem that either CROs or pharma might face. So having this huge numbers of volunteers that we screen and having a small portion of volunteers, which are 0 suitable for our challenge studies, we want to use those 85% or 80% of subjects which are not suited for the challenge studies. So we can easily recruit them to the vaccine field studies Phase II, Phase III and act as a site, a high recruiting site in such case. So this is definitely something that we are discussing and already have opportunities on our pipeline on that. And then very shortly about this integration between our laboratory and Venn Life Sciences. So our lab can work starting from preclinical all the way up to Phase III trials. Therefore, we see this good match between Venn Life Sciences when they offer services around preclinical, nonclinical testing together with our laboratory. So first of all, we are trying to increase our brand awareness for laboratory as stand-alone services as well for Venn Life Sciences for those new areas, so ATMPs and medical devices. We also want to increase leads coming for stand-alone laboratory services. Therefore, we added this lead generation person to our team and we are working very closely right now actually with Venn Life Sciences team to increase the cross-selling and upselling because Venn hooks those clients from the early stage, and therefore, we can move forward with a seamless extension moving forward. So thank you very much. And if you will have any questions later on I will be happy to answer.

Thank you. Great. So our final speaker for today is Stephen Pinkerton. Stephen has been working in the financial industry for over 25 years. He joined hVIVO as a Commercial Financial Director in 2017. He's worked across transforming the business with regards to going to get the budget reporting and also building up our costing models for our proposers. Recently, he took over the role of Chief Financial Officer, and this is his first Capital Markets Day, so be gentle.

Thanks, Mo, to just make sure I know how this works, left to right. Okay. Good morning, everybody, and thank you. I'm delighted with this appointment, and I do work with a really great team. I've known him for 6 years, known Most of them for 6 years. And they are a great team and they deliver definitely. And Mo, thank you for giving me almost the last watch. I'm a sailor by heart. So for me, the last watch is when I'm crossing the sea and going over to France, and I'm having to be awake to make sure I don't hit any ship tankers and things across the sea. So thank you for that. I've been asked to keep the presentation fairly short because actually, the team have already done a fantastic job in explaining the numbers and the performance. So we can just look at the graphs pretty much because actually you've heard all the explanations for the performance that we're projecting. So this is our contracted order book. It is a record. It is a fantastic result. And you can see we've gone up 500% from '20 -- from the end of 2019, we've gone from GBP 12 million to GBP 80 million. And the core drivers for that has been already explained by everybody in the team today, where we have end-to-end models on play, where the market is expanding. We have more clients on board, and this is great as giving us more visibility on 2024. I think the other thing to the highlight on the contract is Andrew highlighted was that we -- when we contract a client, we ask for a reservation fee, and it's about 15% of the value of a contract, of any contract. And that secures the commitment of the client as well as a slot, a time period when we're going to deliver this study. It also adds to our cash flow. So we do have a healthy cash balance, as you know. So I think one of the questions we often receive is that tradition going to continue? Maybe not quite as aggressively, but we do expect a positive growth trend and largely because the market is growing as explained by Egle, we have improved our -- increased our BD resources. And Egle has already started selling. Clients have been here with 6 months, and she's already sold 2,3 studies coming on board. So I think that's a fantastic result. And clearly, we're beginning to capture that market more. This is our revenue. So obviously, if you've got a record contracted order book, it really means that actually revenue is down to delivery, operational delivery, right? It's not so much about the sales because we've already got the sales. So 2022, we're looking to grow from 39 million to '22 -- in 2021, and we're going to go up to GBP 50 million in 2022. As at the end of September, we're bang on track on our forecast for delivering that GBP 50 million. Of course, we do need a strong -- well, a solid performance in Q4. But Adam is in the audience and he's certain I'm quietly positive about it. Most determined, right. 2023. The market consists of GBP 55 million. It is a reasonable growth. Now we'd rather -- as Mo would say, we'd rather sort of under project and over deliver is what we're really after doing here. But the -- it's good to note that 80% of that is already in the bag as we've sold it already. So it's just down to delivery for this period. What else? I think the other thing I want to just highlight on this slide is just, for example, the volume of work that's going through the business. So in 2020, we did 127 volunteers. In 2021, 312. In 2022, we're again going to do about 400 volunteers is going to go through our unit. One thing to highlight, as Mo has mentioned, we don't have a capacity issue to deliver that growth from GBP 55 million, and we don't see we have a capacity issue for the next couple of years without -- for '23, '24, '25, I think we have enough capacity to deliver that revenue in our existing facilities. Core to delivering all this revenue is obviously recruitment, and we have touched on what we're doing with recruitment. We've invested in the CRM. We've expanded our reach by having Manchester office, and we've also improved the facilities in Plumbers Road, so we can get a much higher throughput. This slide gives you a flavor of -- just gives you a sense of the work activity that's going in the business. So there are many clients where we're sort of servicing per quarter. In 2020, Q1, we had 2. We're now growing up to about 16 to 14 clients at any -- that we are working on and delivering revenue. The graph below highlights that how much revenue we are delivering more than -- or how many clients we're delivering more than GBP 1 million per quarter. So you could see in 2020, Q1, about 1 client, and we're delivering revenue for GBP 1 million. And then we're now delivering around 6 clients. We're delivering quite a lot more revenue going through. I like this graph. This gives you a sense of the mix. We could see from -- the government revenue is declining and is being replaced by big pharma. But what I think is also interesting in this slide is the fact that you can see biotech is still holding its proportion of revenue. So the implication on this graph, looking at 2023, for example, is that our revenue is growing. It is also growing not only just because of big pharma contracts but also because biotech coming on board. I think one other thing to note -- to mention is that our studies are increasing. When I joined hVIVO, our studies were typically 44, 60 volunteers. I think we've only got 1 study that is around about 80 volunteers at the moment. Every other study is closer to 100 or 100-plus going forward. And that's because people are beginning to understand what challenge models can deliver. They're looking for more information, right? Pure 60 volunteer study just delivers you efficacy, whereas the other study, greater volunteers delivers you a healthy of a lot more information, and that's what clients are looking for. Spend a little bit more time on sustainable -- our EBITDA margin. You can see it's going from 7.4% to 13% to 15% is our expectation 2022. And there are some core drivers for this. I mean, first note on 2021. 7.4% is slightly understated in the sense that we had COVID studies. And obviously, if you remember COVID, there was a lot of issues around COVID and we had one-off COVID costs. And that amounts to about 1%, 1.5% impacting that 2021 revenue. So that's not repeating. So obviously, we benefit that from 2022 because we don't have a COVID study or the COVID regime happening in 2022. The other drivers for performance and EBITDA is what I would call operational leverage. And we have two things we've touched on. One of them is recruitment. Recruitment is an expensive part of any study and is experienced by any CRO. But with more studies on board, more viruses, the volunteer has a much greater chance of getting onto a study. Volunteers also have a very prescriptive time when they want to get onto a study. So they have semesters when they can do -- when they're not a university and they want to come on onto a study. So they will choose a slot. And we have many slots. Now we have a lot more studies on the go so that we are able to leverage our recruitment costs across more clients. The other item on operational leverage is our clinical facilities. Where we have -- so a typical unit if we have invited 12 volunteers onto the entire unit. We need around about 6 clinic staff to manage that unit. Staff is there at any time, whether it's about 8 volunteers or 12 volunteers. But if we have 20 volunteers, the incremental spend on our staff, we only have to have maybe 8 or 9 staff, clinical staff to manage those number of volunteers. So we get that leverage as well. So the last thing I wanted to highlight is that we used to be known as -- before we joined Open Orphan was a lumpy, bumpy business. We would have to scale up, and we have to scale down that includes, so you lose all -- you train all your staff, you lose them. You recruit, you pay recruitment fees and you lose them again. And we've kept on doing it. Now with a very solid trajectory of work, we are able to stabilize our staff and stabilize our resources. We still have an element of scalability in that, but it's not as extreme as we had to do in the past. So that will deliver strong profitability gains. And I think that's pretty much all I wanted to say. Let me just check. Yes, I think that's it. I think -- thank you very much. And I'll hand over back to Mo.

Thank you very much. So before I conclude with my closing remarks, I want to open up to the floor for any final questions for the whole panel. Yes.

David Herman from Azusa Capital. Just a question on the EBITDA margin. Could -- what is kind of the maximum EBITDA margin you can achieve given the capacity constraints that you might face? And how much is that in compared, I think like you mentioned 400 volunteers you had this year and something like 16 active clients, like what is kind of the highest margin you can achieve versus capacity?

Well, first thing I want Douglas to close his ears and -- we don't really have a maximum. We do want to grow our margin more. I think we aspired to try and getting close to 20% as much as possible with the businesses overall. And with steady growth and at the moment, what I'm seeing is we're getting in the utilization. We're getting good improvement on our margin from utilization. That's just using the staff that we have at the moment and the facilities. But what we haven't started seeing in our metrics yet is what I'd call the efficiency, the operational leverage. There's a little bit of glimmer of that coming on board, but it's not there sufficiently. So we're not an Ergomed. I think 20% is quite strong. We're not a subscription business, so we do have a cost base to deliver, a solid cost base. So I mean, as I said to you, we are inspired to 20%. But at this stage, we're very comfortable with the 13%, 15%, and we expect to grow on that as well.

And in terms of capacity constraints?

We don't have capacity constraint at this stage. Certainly, our revenue projections and our business projections for the next 2, 3 years, we have sufficient capacity. We've got 43 beds where something like -- which is more than sufficient capacity for our growth certainly for '23 and '24.

Great. And just on the -- I think you have something like 20.

I was going to add just to that one point. We did set up new facilities. And Mo has mentioned that earlier today was that we are able to set new facilities should we need to do so and should there be an extreme demand or unprojected demand that we don't expect currently, we would be able to set up new facilities. And we have done so in the past. In fact, that's why we have 43 beds today because we've kept one of those facilities that we set up within 4 months.

Yes. Yes, because I think you have something like GBP 20 million in cash at the moment as well. Is that kind of like do you have some current liabilities that are coming up? Or what's kind of the -- some CapEx plans or.

Our CapEx spend is low. We have our facilities that have been well established. So effectively, some of our CapEx spend is maintaining those facilities or replacing lab equipment. There's no significant spend. I mean I think in the half year, we spent something like GBP 700,000. For the full year, we're looking at maybe GBP 1.2 million for this year in terms of capital spend. So I mean I would expect a similar level, obviously, we're improving things and taking it over more than having to go out and spend vast amounts of CapEx.

So is it the amount of cash you have is, I mean, versus market cap is quite high, right?

It is.

That's why I'm just wondering, is it -- do you have any plans what to do with that cash or.

I'm -- well, we have it on deposit. We're earning interest. We don't have any plans for it at this stage.

So I think you have to be aware of where we're coming from. What position we were 18 months ago, right? So we're building the foundations currently to be able to grow and hopefully get into the M&A activity. So right now because of the model we run, we have a large amount of up-front payment. So this is a lot of this is accrued revenue. It's not cash, cash. It's nonrefundable in the sense that if it's a client would cancel that project, we have the right to keep that money, okay? But it's not recognized revenue as per project, okay? But as we move forward, and we are able to run these multiple challenge that is concurrently and be able to recognize the level of revenue we're recognizing right now, then that's going to drive future M&A activity and what we do with the cash. My goal first was to build the backlog, like I said, that was really important, then to be able to operationalize multiple studies because historically, we never run more than [ 1 3 ] at any given time. So then operational multiple studies concurrently, which we are doing right now, okay? Once we have that sustainable model in growing the revenue and EBITDA then the third step. I know it's boring, but the third step is to then look at M&A opportunities, whether it's a Phase 1 unit, for example, someone I think Douglas kind of mentioned, that's a potential target, whether it's a separate challenge unit, whether it's another, a consulting firm that aligns well with our van subsidiary. So we are actually -- we will be actively looking at that. But right now, as of today, the goal is to be able to have a model that gives you sustainable growth in revenue and also EBITDA margins.

It's Edward Thomason with Liberum. Egle, quick question for you on the pipeline slide, is that showing the pipeline by a number of opportunities or by value of opportunities?

By number of opportunities.

By number. So if we looked at it by value opportunities, how would that look? I mean, I guess what slightly surprised me was the 30% pharma, 67% biotech. I'm guessing if I looked at it by value, that will look very different.

Yes, I looked at it by value and then the pharma piece gets a bit bigger for sure. So yes, you're right. But at the slide was shown by the number of opportunities.

And are these risk-adjusted at all? Or is there a kind of cutoff to get in the pipeline? I'm trying to get a sense of how early stage some of these are versus whether you've actually done RFPs for some of them and so on.

So we have shown on a slide where only the ones that our proposal submitted, not the ones that are in discussion phase or whatever.

Okay. All right. And Andrew, a quick question for you. I'm going back to the slide you showed at the start where you're working for big pharmas and you're starting to actually develop bespoke models for them. Who owns those model at the end of that process? Are they yours? Can you then go and commercialize them with other people?

That's the model, which we need to get to. So it depends on the contract. On the current, was on the slide, there's 3 listed contracts. Two of those, we will end up owning the model and be able to use it for others. The other one was a very, very bespoken and was done just for that client.

And presumably, there's a commercial trade-off then if you end up having the ownership of the model and the ability to kind of commercialize it versus what you might charge someone for having an exclusive model?

It's very unique. So equally, they get a trade-off because they get data, they wouldn't be able to get otherwise. So they're tapping into a skill set from us. So under that scenario, we have access to the viruses, we're sourcing the virus to make to match to them as well. So essentially, we have all the IP in it, all the know-how and the ability to do it. Yes, they're funding it, but they would not be able to get this data otherwise. So under those circumstances, yes, we're not doing it cheaper for them because we're in to do others to use it for others. So it's not with discounting or anything like that. No, it's just the fact that they need to get a particular means to an end. We have the skill set to do it. We're in when are matching in that sense.

Anyone else? Yes, Julie.

Julie Simons [indiscernible]. Just wondering in terms of the proposals that you get from the pharma or biotech companies, how much help they need in terms of turning them into a proper challenge study? And how often do they come to you asking for things you can't provide? And what would those be?

Yes. So basically, as mentioned, why we include our scientists in the proposal preparation process or even initial discussions with the clients is due to the fact that we do everything for them from a very scratch. We are not a CRO when the client comes with a synopsis study synopsis and we just need to vote for that. But we really work with them to design the study, we even show them. Sometimes the ideas comes during those conversations. Now what additional groups they can into that study? What can we check in those challenge studies? So it's definitely very from scratch, I would say, working with them. And your other part of the question was when we cannot do something.

Yes. [indiscernible].

Actually, the recent congress as I've attended, speaking with clients, I've seen a lot of interest in new challenge models. So there's a variety of those clients who comes to us and say, we need this model, can you develop it for us? But then we need, as mentioned also in my slides, a strong commercial background to do so. We won't develop 1 -- for 1 single study a model. But if we are 2 free clients that we could work on it, so we would definitely go forward and do it. And also what is very nice with my scientific team, each time I can bring to the craziest project, and they are considering it. Is there a way to do that? How we can do it? So where it's a very nice approach from the team that we can do very much. But of course, there are certain things that we are saying no.

And this we're working with some clients really early on matters because, for example, if a small biotech isn't talking to us, they go to their investment and get an investment to do a study which they think is going to work and then come to us to be told actually, that doesn't work in challenge model. and they then need to get a new investment. That doesn't help anybody. So that's why we do go to these conferences with the scientific team and the BD team to talk to our customers very early so they're actually designing the study and then going to raise the money for it. So they know that they're designing the right study and getting the right funds for the study. Biotech -- sorry, big pharma a little different. They're so used to doing it all in-house and giving it to you. So that's a bit more diplomatic, so we say or we say you could do it like this, but -- and then point out the alternatives and normally coach them around to where it needs to be. So -- and then that's a case of matching the skill sets they know about the product, but we know the nuances on that. So the big pharma we have repeat business for, we're now very used to that model. When we first started with big pharma, as an educational piece about you need to tweak what you're doing to get the right answers.

Carl? Can't say no to him again.

Second time lucky. It comes back to the challenge agent itself. Aside from the bespoke models, is that like a real intangible value or a sort of a barrier to entry that you have internally to know-how? And then flipping over to Egle. Is that like a real selling point for you as a USP win, I guess, Douglas could comment that your ability to work with the right challenge agent and get it just right like Goldilocks, not too hot, not too cold. Is that something that perhaps we as sort of on the sell side have missed that intangible value?

That's an excellent point. And it definitely is a barrier to entry. There are many people around the world who can grow a virus in an academic lab. There are not many people around the world who could take that and make a medical grade version that the regulators and ethical review boards would be happy to inoculate someone. This is a really unique skill set we have within hVIVO, being able to make challenge viruses. And putting together those different sometimes competing problems of making a virus that reflects what's in the community, keeping it pathogenic, but also abiding by all the regulatory standards because they're unlike a vaccine where you can pick up a regulatory book and it tells you the path where you have to follow. There is no regulatory broker telling you how to make a challenge virus, which means is gained knowledge. It's not sitting out there by the regulators about how to do it. You have to re-interact with the regulators and say, we're doing, this works well, doesn't it and bring the regulators on board with you. Because we've been doing that for so long, we can now do that. It's not something someone could just start doing and expect it to be successful. So know-how is definitely a barrier to making new challenge agents. Financing is also a barrier. It costs to make a new challenge virus can cost as much as GBP 2 million depending on the virus. And then you've got to do a small study to characterize it, which means we've got to work out what is the dose that we need to give before we can then test products. So these things are expensive to do, which is why the end-to-end sales when the customer is paying for it is ideal. That's not always possible, which is why having some of the GBP 20 million in there. I'm always asking Stephen, can I use some of it for a new model? And he says, show me the return of investments. So if we have 2 or 3 clients, which are interested in it, that's all it would take to make that profitable.

Yes. And I think what Andrew mentioned and what I mentioned before about the new models and adding those. So I think many of clients who are working in the space with the models which are not yet developed or not well developed, they see the challenge data coming from other companies working on those developed models like RSV, influenza, and we want the same for Wave company. Therefore, right now, we really see a huge interest in different models, which we haven't seen an interest before. So for us, it's only to decide how much of a commercial benefit there is and how much to invest in those discussions.

Cool. I think everyone's getting hungry, which is good. Right. So just on closing, hopefully, we've kind of extend out some key message to you guys as to why hVIVO is a good investment case. We are the world leader in what we do. I think that is undoubted, regards to a number of challenge trials we have we've done and the models we've done. We know the market is increasing. I mean we know there's more research in antivirals and vaccines against viruses. But on top of that, the number of challenge trials and the size of the challenge trial is also increasing. So even if the overall infectious disease market was stagnant, I still expect to see a growth in the challenge at market because the reason why people are doing challenge trials, it is expanding every day. We have a scalable infrastructure. We have already invested this year in expanding our screening facilities, our beds, our laboratory services to cater and meet the growing needs of the market. We've invested significantly in our flu cap initiative to be able to meet the needs of our clients who need all healthy volunteers to come in and take part in these link trials. I think as, as Douglas and others have mentioned, patient recruitment or subject recruitment is the single biggest challenge in clinical research, okay? 80% of the trials that fail or delayed and the time line are delayed because of poor patient enrollment. But the capacity in itself is not a rate-limiting factor for us. We've shown previously that we've been able to set up our new capacity within a 4-month period. It generally takes us 6 months from award to the study being ready to go into quality because you have to get regulatory and ethics approval. So from that point of view, I don't see capacity as a limiting factor for us in our growth. We have a strong customer base, and I think we've shown already that from a regulatory and a financial point of view of our customers that benefited. So I think Andrew showed 3 different customers who got breakthrough status based on challenge data and Douglas showed a company that was on board for GBP 0.5 million based on human challenges. So we're already seeing the fruits of the data produced through challenge studies. And I think having the big pharma come to us again and again, I think gives me a lot of confidence that what we're doing we're right. We know a bit from our wealthy institution. But as Douglas knows, they're very frugal. They don't like spending a panic. They do lengthy due diligence before they commit funds. And the fact that they keep coming back to us year-on-year. I think like I said, it means we have a very good robust model when it comes to challenge trials. And the new end-to-end programs that are running 2 already signed up, more being negotiated. Our key message in that, I believe. This year, I was especially pleased that we're able to do some cross-selling between the 2 different entities, Venn and hVIVO. Two of the customers on Life Sciences were converted into challenge study customers, which is really good to see. And as we move forward, we're now seeing full service being provided across the 2 companies on single challenge trials. So Venn Life Sciences is providing different phases compared to hVIVO as Egle mentioned. I mean financially, I think, I hope you all agree, we are in a very strong position. We are reiterating our guidance of GBP 3 million of revenue this year, 13% to 15% EBITDA margins. We've got a healthy cash position. And we're giving, I think, good growth projections for next year. Again, I would like to say that's our minimum, we want to do better than that. But I think, the underpromise or delivery is a key sentiment for me. I think historically, we may have been guilty in promising, overpromising on certain stages. And I think I've heard this comment that your share price is depressed because of the baggage you carry, okay? A lot of nodding here. So I'm fully aware that we want to overcome that. And the only way I can do that is to be able to set the right expectation and deliver on those expectations. So we will be growing our revenue and EBITDA from year-on-year. We've shown that last year. We'll show that this year, well, come the end of January. And positioning for growth, yes, especially considering what we currently have with regards to the amazing management team we have in place. The key focus in sales, especially with the scientific team moving and educating and coaching our potential customers in that. My final message really is, I know all of you -- as we focus on the EBITDA and the margin and the profits and so on, but I think sometimes we, we forget that we do actually make a difference. We as a company have made a difference. This was an article in the Guardian published on Monday this week, where the author mentions how human challenge trials are a way of moving and accelerating drug development. And he mentions that the fact that these human challenge trials have given us hope finally for some RSV vaccines. We have ran all of these human challenge trials for the RSV models, okay? So I'm not saying without these human challenge trials, there'll be no RSV vaccines, but I can say hand on not that we have definitely accelerated that process. So through the use of human challenge trials, we hope that infants and the elderly will be able to get access to a safe and effective RSV vaccine for the first time in our lives. And that's all we have. Thank you for your time. I hope it was useful. I hope you've had some good insights, not just me selling hVIVO to you, but also from an operational, scientific point of view. I'd like to extend my thanks again, especially to Danes and Peter for their attendance and for their contribution to the meeting. I hope they will stay here for lunch. And hopefully, you guys as well. Thank you very much, and have a great day.