hVIVO plc (HVO) Earnings Call Transcript & Summary

Good afternoon, and welcome to the hVIVO plc Full Year Results Investor Presentation. [Operator Instructions] I'd now like to hand you over to Yamin Mo Khan. Good afternoon, sir.

Thank you. So good evening, everyone. It's wonderful to speak to you again. I know it's been a while, but we've had a year in 2022, and we're busy growing the business in 2023. So right here to represent the fully audited results for year ending 31st of December 2022. Hopefully, there's not too many surprises because we did give a comprehensive trading update at the end of January. But what spike there are on the upside with regards to the financial fundamentals. So to the second slide is the kind of normal disclaimer for these types of presentations. And briefly, for those of you who have not seen me before, I have not met me before, so I'm Yamin Mo Khan, I'm the CEO of the company. I've got over 25 years experience in Clinical research. I joined as a Non-Executive Director in October of 2021 and took on the CEO role in February of last year. And so I'm very happy to be talking to you. I also have my colleague, Stephen with me.

I'm Stephen Pinkerton. I have been with the business for about 7 years -- Coming up to 7 years. I've been CFO since October and prior to that, I was with Thompson Reuters. I have a very good understanding of the business and the commercial operations of this business.

Thank you, Stephen. So today's update really is kind of a brief walk through the financials, which we were being more or less announced 3 months ago. But also give you kind of more color and flavor on how we achieve the numbers we achieved and give you some insight into the future looking out to look at how we intend to deliver on our 2023 targets. So firstly, an overview of 2022 coming up, but we do want to share with you guys our new mission, which is delivering today's health care by empowering tomorrow's innovation. This really goes to the seed of the human challenge concept, which we believe is a fairly new innovation that we have really optimized in helping our customers, deliver their drugs and bring to market faster. And we've seen this already take place. And we expect the very first RSV vaccine to go on to market partly because we've had a human challenge trial with that drug. So effectively, we are helping of customers to bring drugs to the market faster to the human challenge concept. As we go forward, of course, we're building now a much more mature company. We have a mission and a vision statement. We also have values and established an ESG segment for the company. But going back to 2022, which I've phrased a transformational year for the company because I believe it is. We've grown the headcount by more than 50%. We've delivered a revenue greater than our guidance to going to GBP 50.7 million, that's a 30% year-on-year increase. EBITDA margin of almost 18% and Stephen we'll go through in more details how that is made up of. And then a very healthy cash balance at the end of last year of GBP 28.4 million. And we're very pleased to announce that we will be making a dividend payment this year, and Stephen will elaborate on that in his section. With regards to our performance last year, we had 7 active human challenge trials. We inoculated more than 400 healthy volunteers, and we gathered around 120,000 online human volunteer leads. So all of these numbers are, by the way, record-breaking numbers. And 2023, we expect to beat each one of these numbers. We now have over 11 different challenge agents, which are basically the viruses we use to inoculate our individuals with. We completed around 70 human challenge trials and not like around 4,000 healthy volunteers. And we continue to be the dominant force in the challenge -- human challenge to our market with over 90% of the share. And we are really well-positioned for growth. And the key metric for me really and for you to take home is that we have GBP 76 million worth of contracted order book. And this is a weighted order book because we realize that there is inherently postpone and cancellations within our industry when it comes to clinical research. So we mitigate for that risk and use the probability in fact that determine the likelihood of each project actually taking place and going to completion. And with that in mind, that GBP 76 million gives us full visibility into 2023. And in fact, almost all of the first half of 2024. On top of that, we are guiding towards a GBP 55 million revenue and mid- to high- teens margin. So the key message really is that we are definitely growing our revenue year-on-year, but at the same time, improving on our EBITDA margins, which is key. So I'll now hand over to Stephen to go through the financial numbers from last year.

Thank you, Mo. It's a very nice to present -- the fine set of results for 2022, and let me take you through some of the figures. Revenue of GBP 50.7 million does include other income and grew 30% year-on-year. And the fundamental growth of this business was down to and the challenge services business. Our Venn business did grow sort of 5% if you just -- if you think about on the stand-alone basis, but it also contributed significantly to the challenge models and services as well. And if you take that into a clear is closer to 10%. So solid performance from Venn. The main reason for the growth in the challenge models is that we obviously started off with -- we had a good order book and then it does come down to delivery. In the second half of the year, we had 6 clinical trials in quarantine. So we're managing 6 different studies and fielding volunteers through our unit. And the benefit of that is because we're crossing over a number of variants, it gets much easier to recruit the volunteer. And for an example of that, we did 413 volunteers this year in 2022, last year was 300. Of the 413 volunteers that we delivered in 2022, 295, so almost the same number of volunteers that we delivered in 2021 was delivered in H2. And that has all got to do with the fact that we had 6 studies on the go going through quarantine unit. The other driver for the increase in terms of revenue is that we signed 4 sort of end-to-end full-service studies where we do -- we're manufacturing the agent, we characterize it and we do a challenge study. And 2 of those -- so our manufacturing revenue grew fairly significantly -- grew almost 100% from year-on-year. We've delivered 2 new agents, and we too were started and will complete in 2023, setting up a good performance for 2023 as well. The other thing just to touch on this fact is that this is a growth across all sort of our sectors. Obviously, the government sector reduced year-on-year from -- and this was more than made up by Pharma. Biotech have remained the same sort of share, they account for 46% of the revenue in 2022, and they grew to 30% equally as well. So a solid performance in revenue. If we move on to EBITDA, we delivered 17.9% as the final figure. At the 25th of January, we were suggesting it would be close to 17%. Obviously, we had the orders and figures then so we're a little conservative. It is worth highlighting that we will have cancellation or postponement fees coming through, and that certainly impacted our margin in 2022 to about -- to suggest that the underlying margin for this business was achieved, that was close to 16%. This reflects quite well on 2021, where we had a margin of 7.4% and some of the key drivers for that, again, is having 6 challenge trials, you're recruiting for 6 different studies at the same time. This allows you to -- get the volunteers on, get the volunteers in and more efficiently recruit volunteers, but also more efficiently get volunteers into the unit, and therefore, you improve your utilization on your facilities and your clinical staff. So that is a core driver for the improvement in margin. We also in 2021, just briefly, we did have 3 sites where we were doing the [ Royal Free ] and for the COVID study. And so there was a very minor impact having a third site in 2021, but obviously support -- not having it in 2022, also alluded to a small improvement in the margin. If we go to the next slide. So we are a cash-generative business, and that is really boils down to the way we contract with our clients. You can see that we've generated our cash increased from GBP 15.7 million, all the way up to GBP 28.4 million and it comes down to the way we contracted our clients. So the order book grew from GBP 46 million to GBP 76 million. And every time we contract with a new client and a book a slot in our quarantine unit sometime in the future, they pay us an upfront fee in cash. And it's worth noting that those deposits or those booking fees are not refundable, so if they postpone or cancel or we keep that value. And there's just ensures the commitment of the client to doing the study with us and also because we're designing the study with them, we don't want them to go off and give it away to somebody else. The other reason for the growth in the revenue is we have quite a strong milestone program. So we had a high delivery in H2 with a lot of 295 volunteers delivered and that hit the number of milestones, and therefore, we get the cash coming through for hitting those milestones. It's worth noting that all our deals have milestones that ensure that we get revenue upfront before we do that final next step. So in essence, each study -- if you look at a stand-alone, it's generally in a cash positive position, except for the very tail end of the study, where we might be GBP 100,000 or for had to accrue for revenue and wait for the final invoice. The [indiscernible] gives us about GBP 1.5 million almost every year, which is nice, because we are in R&D business. While we support -- we don't do R&D, but we support programs that are classified as an R&D and so for, we get a kickback from that. Financing activities is really our leasehold -- our lease payments and we've also made a small payment debt settling our last debentures in the Q1. And so we don't have any debt on our books at the end of the year, whatsoever. It was also partly offset by the fact that we had good ethics exchange profits where we hedged our -- a deal that was based in U.S. dollars. Moving on, investing activities of GBP 1.4 million. It's very modest. It was really made up to the fact that we spent -- Two, we set our [indiscernible], our screening facilities there and also enabling us to do some outpatient work it shouldn't when we win those studies and get those coming through. We also have increased set up an office in Manchester and -- so that's -- to also expand our reach -- our recruitment reach in the U.K. and make sure we're getting our volunteers in. The rest of it was very minor changes to [indiscernible] facility just to improve labs, the workflow through labs and around the nurse station in the quarantine unit. We've replaced a bit of labs, but it is -- I think the one thing that I should highlight is that 1.4 million doesn't include any challenge agent development or replacement because so far this year, we, as I hinted and when we talked about revenues, we've managed to get our clients to pay for new challenge agents. So that's about our investing activities are very modest. And two, if we had to acquire a new agent, it's not that expensive, we would expect next year, we probably have a new agent to replace mainly because we're running out. And so the spend -- the investing spend might go up to about GBP 3 million at the most. So it's not a big exposure there at all. So anyway, at the end of the year, we'll end up with GBP 28.4 million which is a robust amount of cash. And given that we have agreed to reward our shareholders a dividend of 0.45p per share, which equates to about GBP 3 million being paid out. This represents about 50% of our adjusted earnings per share of 0.90p. Yes. Don't get confused one of the analysts work up in the night and thought we had printed 45p, which obviously doesn't work. Just to highlight a couple of things. Obviously, important dates would be the ex dividend date being the 4th of May, and we expect the payment of the dividend to be on the 9th of June. Just to reiterate our guidance for 2023. Our revenue guidance is GBP 55 million. We're expecting EBITDA to be in mid- to high- teens. And I'm not going to go allude too much because actually most presentation covers quite a lot about what we're looking to do and how we're looking to grow and why the market is changing and moving. So I'm going to hand over back to Mo. Thank you.

Thank you, Stephen. So I'm going to further detail about last year. So one of the things I want to talk to you about is what are the factors are influencing the increase in human challenge trials. So I kind of break this down into 4 sections. So academic research in human challenge trial is increasing, and I'm listed here a few of the new challenge agents are currently being utilized in a human challenge trials in academic circles. And we, of course, use the academic experience and their models then really develop them and commercialize them so we can sell them to our commercial customers to expedite drug development. Secondly, the acceptance of the data from human challenge with our regulators. We see that is also increasing. And we've seen the FDA, for example, grant 4 of our clients fast track status which means that they get priority regulatory review of their data and effectively means they get to market faster. And we also look to see that the RSV vaccine for Pfizer come to market early, mainly due to the human challenge trial that we ran for Pfizer. At a commercial level, so one of our tech customers, for example, ReViral sold itself to Pfizer for $0.5 billion purely due to the results of the data from the human challenge trial. And secondly, Cidara, a recent client also showed a [indiscernible] for the drug early in the human challenge trial. And now that asset is being taken forward by Johnson & Johnson. And finally, I already kind of mentioned the Pfizer news. So all of these factors, I think, are key in ensuring that we are showing that our customers, both biotech and pharma are getting good value on doing human challenge trial in expediting product development and getting to market faster. And finally, we've also had positive feedback from nonprofit organizations. So the Welcome Trust, for example, is helping to promote human challenge trial as a concept in drug development. Hic-Vac, a U.K. organization that has European membership, which looks to standardize human challenge models, both from manufacturing, characterization and a challenge trial conduct. One day sooner as another voluntary organization that helps to promote the human challenge trial concept to healthy volunteers and also to commercial entities as well as the regulators. And the WHO last year published guidelines on conducting challenge trials. So the key message really is that this is almost the inception of a human challenge trials in commercial drug development. We are just starting to see an increase in this. You have to appreciate the pharma industry is fairly conservative. So these changes are always slower than you'd anticipate. What you're seeing from the numbers year-on-year, we've seen a significant increase in the number of trials that we are running. And I think that is really good news for us as we move forward in 2023 into '24. The market itself one of the key drivers for its growth or firstly, the infectious disease market is increasing. There are more vaccines and antiviral treatments being researched by biotechs as well as pharma industry. We've also seen the number of challenged trials per asset increasing. And of course, the actual size of human challenge trial is also increasing. And I will give you a little bit more detail on that in the following slides. We also expect to see more mosquito-borne diseases in human challenge trial models. This could be driven by the climate change and an increase in prevalence of these types of diseases in North America as well as Europe. And third one really is the development of precision medicine. This is where a client comes to us and they're asking us to run a human challenge trial in a specific variant rather than just say, influenza, they want to do a study in H3N2, for example of flu B. And this means that we have to manufacture a challenge agent. We have to then characterize the challenge agent in order to find the right dose and then do the actual challenge trial. And we've seen more of this. And I think this is something that will continue to increase as we get maturity in a challenging model. New teacher methodologies. So for example, we expect to see in the future combo drugs where you have one vaccine for example is very active against more than one virus. We also expect to see mucosal treatments, for example, Omicron, where either an oral or inhaled product is used rather than a systemic injection. And we will, of course, continue to build on our human challenge portfolio. And on this slide, we're showing you the various challenge models we have. I appreciate we haven't really discussed this too much before, and I want to be more open and more transparent. But also you need to appreciate that we have our goals and we have our strategy. And I will make sure that we achieve all our financial goals, but the strategy may change. So for example, if a client was to come in tomorrow and want to run a Zika trial, we would then, of course, prioritize the development of a Zika challenge agent. But at the moment, the ones in green are the current challenge models, we have active, the ones in orange are the ones that we're looking to develop this year or next year as per market needs. But the key kind of message for this slide at least is that we are diversifying the portfolio of challenge agents we are using. And within influenza, for example, we have multiple different challenge agents. And as I mentioned, we now have customers asking us to conduct the study with a specific variant of influenza rather than just influenza. We had 3 significant awards last year of what we call the unique end-to-end human challenge service. This is something we -- at hVIVO can offer no other company in the world exists that can offer the full manufacturing of a challenge agent, the characterization and then conduct the challenge study. And this is something led by the precision medical -- medicine concept, we expect to see increase and more of in the coming years. And it's something that we are proud of, especially because this requires very comprehensive and specific scientific expertise and experience, which we alone can provide to our clients. We, of course, still use FluCamp as a platform to recruit healthy volunteers, and they've performed tremendously well over 2022 and continue to do so in 2023 in delivering the volunteer to run our human challenge trials. As you may have -- you may remember from last year, 80% of clinical trials are delayed due to poor patient enrollment. And we've invested significantly in increasing the resources within the FluCamp platform department as well as updating the system to improve the engagement with a healthy volunteers. On the left-hand side, you can see the ever-increasing number of new online leads we have with regards to new volunteers, volunteering for challenge trials. On the right-hand side, we can see that the number of volunteers we screened per quarter has gone up. One of the great advantages of doing multiple challenge trials with multiple agents is that we will look to improve the conversion rate from screening with all the way to quarantine. And we have a database of healthy volunteers now over 0.25 million volunteers, which is I think, industry-leading. So a growing trend is that we are actually conducting more human challenge trials. So this is a result of aggressive selling and marketing from our point of view but also the market is definitely expanding. We have a loyal base of big pharmaceutical customers, but we are adding new smaller biotech companies to our customer base too. The fact that we're now offering a greater diversity of challenge agents mean, we can have access indications. We have never had a challenge trials for before. And we're also now running concurrent trial at the same time. Effectively, this should improve the utilization of our capacity and be able to do more trials in a given year. On top of that, the average size of the human clinical challenge trial is going up. So you can see on the chart on the right-hand side, the number of volunteers per challenge trial is definitely increasing. And this is mainly driven by our sponsors wanting to get more out of the clinical data from human challenge trials. So it could be to achieve different endpoints. It could be, for example, to look at different doses or even optimize platform selection or this help them design and optimize a Phase III study. But effectively, there are more challenge trials coming to us and each challenge trial is bigger. And as you may imagine, the key driver for revenue or with the contract size of each trial is a number of healthy volunteers. So the greater the number of volunteers, the larger the contract size. This is an interesting chart because firstly, it shows you the longevity of the order book that we have. So this consists of the contract in order book where the client has paid the nonrefundable upfront payment. So you can see that going into -- at least at the end of the first half of next year, we have a good steady number of patients -- number of volunteers to be inoculated in our order book. So this gives us long-term planning and consistency and stability within our working practices and for our resources. And secondly, each color on the chart and the bar represents a different challenge agent. And this is important because it means that we can screen one individual multiple times. So there's fair screening from example to take part in influenza trial, we can screen them for an RSV trial. Effectively, this drives an improved conversion rate. And we, of course, expect this to drive improving EBITDA margin. So one of the key reasons, as I mentioned earlier, of our increasing revenue is doing more trials at any given year and more healthy volunteers. And the key driver for improvements in EBITDA is the ability to make use of a static number of healthy volunteers and put more into and quarantine from what we have. I want to talk to you now about a couple of case studies that we have recently completed. So Cidara Therapeutics is one such case study. We ran an influenza challenge trial for Cidara and during the interim analysis, they were able to show a significant difference between the placebo and the active group and that the drug was effective. This drug is now being taken forward by [Janssen] to be developed into Phase III and hopefully, to get to market. And secondly, we also ran a couple of years back now, to be honest, we ran a human challenge trial for Pfizer on their RSV vaccine. This vaccine showed 100% efficacy in the more severe patients, and I'm pleased to say that Pfizer have now completed the Phase III and it has shown good efficacy. The reason why this slide is important is one of the reported weaknesses, apparent weaknesses at least in challenge trials is that the question remains is, does the challenge trial model mimic what happens in the field. So in other words, We, in the challenge trial are inoculating our healthy volunteers artificially while there's a progression -- the disease progression in those volunteers, mimic what happens in the field when you get the disease naturally. And this is a chart proving that it does. We presented this data at a major world Vaccine Congress a couple of weeks ago in Washington, D.C. So on the left-hand side, you can see the response rates with a vaccine in a human challenge trial. And on the right-hand side, you can see the similar results in field study that was run by Pfizer in 32,000 patients. And you can see they correlate very, very closely. The fact that the response rate and the trend is very similar shows us evidence that, yes, indeed, the human challenge study does mimic what happens in the field. This is one of the first cases we have been able to show this because previously, our clients have used the human challenge study data to refine and redesign the Phase III program. So you couldn't able -- you weren't able to courage between the Phase III study that was conducted and the human challenge trial that we conducted because the designs were dissimilar. But in this case, the designs were very similar. And the only difference you may have noticed, for those of you looking closely, the response rates in the challenge that are slightly higher compared to the field study. We believe this is because the human challenge trials are done in a healthy young population. So their response rate, you expect to be much better, whereas the Phase III study is done in a target population mostly in the elderly population. So you would expect to see a decrease in the response rate. But the fact that the severity of disease and the rate of response rate, [indiscernible] really well. This means that the human challenge model is a very good way to get an efficacy or effectiveness signal for our clients. So they can indeed derisk their Phase III program rather than just going in blindly and taking a risk on 100 million trial without knowing whether the drug is effective or not. So with regards to our order book, I think you've seen this before on the left-hand side. As you can see, we still have a very healthy order book of GBP 76 million in contracted order book. Again, this is mitigated for risk. So we -- this is a weighted order book. So we appreciate, and we are aware that there will be cancellations. There will be postponements, and we have to cater for that and plan for that. On the right-hand side is the sales pipeline. So these are the number of studies we're currently -- opportunities that we're currently working on. So this is unsigned work seriously there are sales teams are currently dealing with. I want to give you an indication of the distribution of these across different factors. So by region. So as you expect, Majority of the leads we have come from the U.S. and also from Europe, but we're also seeing a good number of leads coming from the APAC region. And this year, of course, we have already announced an APAC award. So it's really good to open a new market, and we will continue to build on that. On the right-hand side there, it shows you the breakup between biotech and pharma. So you can see the pipeline is really kind of mostly biotech and then big pharma. The chart at the bottom shows you the diversity between the digital different models in the pipeline. I'm proud of this chart, especially because we're not able to see that we are not just a 1 or 2 indication company that we now have interest from our clients across a variety of different challenge agents. That was one of my goals to be able to diversify challenge portfolio and able to sell that to our clients. So you can see we have interest in HRV, in COVID, in malaria, in asthma from our customers. In the other section, for example, we're also including dengue fever as well as HMPV. In addition to our human challenge trial offering, we do have a really good non-challenge offering. Now just one thing to note. Our core service will always be human challenge trials. We also want to make sure we're optimizing our operations across the board. So we have come up with a new concept of Bench-to-Bed model. This basically relates to preclinical and the clinical -- early clinical consulting services conducted by Venn Life Sciences and then the human challenge trials done by hVIVO. So you can see at hVIVO, we haven't non-challenge services in the laboratory as a clinical side, QA consulting as well as one day repurposing. So we have signed our first clinical site contract. We also got the accreditation for laboratory. So we are selling that and winning some lab awards. But remember that the lab awards will not be anywhere near the size of the human challenge trial models. We're also pleased that we're looking to finalizing the contract with another CRO where we can repurpose our healthy volunteers who are not eligible to go into a challenge trial, going into one of our CROs trials. Venn Life Sciences, of course, has a long history in providing regulatory CMC, nonclinical and clinical and bio macro services. And -- we at hVIVO Group now are utilizing all 3 main hubs, London, [indiscernible] in the Netherlands and Paris to conduct all our human challenge trials. So we don't use any third parties in conducting these trials, and all 3 offices are fully integrated in delivering the human challenge trials we run. In addition, last year, Venn Life Sciences added new consulting expertise in the areas of drug device combinations and advanced therapeutic medicinal products. This is gene therapy and cell therapy. So I expect both the challenge trial work and the non-challenge trial work to continue to grow in '23 and beyond. Aside and Venn Life Sciences. So this year, I have a focus on growing Venn Life Sciences because I believe that there is a really good potential for growth. We have some amazing expert at Venn Life Sciences across different departments, and we've seen some significant awards already. So the GBP 3.2 million award at the end of last year is a huge contribution to the overall revenue for this year and for next year. The company has been going for over 25 years. And I think for us now, the fact that they're fully integrated in delivering human challenge trial is great. And for me, us opening up a new office for Venn Life Sciences in Leiden Bio Science Park means that we are closer to almost 250 new customers, and that expansion helps us to get exposure to new business units that we've not had exposed to before. So overall, the market continues to grow. And I always said that it's very difficult to say define the size of the human challenge trial market. But even the last 12 months, a number of occasions, we have spoken to our clients, we've never really considered do a human challenge trial as part of their thinking development plan. But we have -- our scientists have convinced the customers to do a human challenge trial because they've now seen the benefits of human challenge trial can bring to their development plans. But it is estimated that the human challenge trial market in 5 years will reach 700 million. The number of vaccines currently being studied continues to grow. You saw a huge kind of blip in 2021 due mainly due to COVID vaccine. But you can see if you take that outlier out, there's been a steady growth in number of vaccines being studied. One of the key components of doing more human challenge trial is that because this, generally speaking, a depressed market when it comes to funding, well, if you want to know whether your vaccine or antiviral works, you can conduct a human challenge trial. Would will cost you what 20% of a Phase II study and within 10 months, you'll know whether you're vaccine or antiviral work. So firstly speaking, I don't see that the depressed financial markets or the biotech funding environment we're currently seeing should impact us on severely. Of course, the big pharma are free to continue to develop their drugs. But on the biotech side too, I don't expect to see a downturn in the number of human challenge trials we are conducting or the number of trials we should be awarded this year. Two of the areas we look to focus on is HMPV and Dengue. And again, as I mentioned, if a client comes in with a different virus and we prioritize that, we will definitely do that. But HMPV and Dengue are both really good candidates for future challenge models and I've given you some of the data on why we believe that is so HMPV is related to RSV and the currently no vaccines or specific antiviral medications available in the market. And you can see that the incident is significantly high with over 16,000 deaths worldwide in children under 5. Dengue is quite scary too to kind of see that over 50% of the world population is at risk of Dengue infection. And I mentioned that the mosquito-borne diseases prevalence continues to change with climate changes, and we probably will see a higher incidence rate in Europe and in North America. And over 319 fractions per year, resulting in 36 deaths. So there's definitely a gap in the market and it's the medicine, vaccines or at antivirals are really needed for this indication. There are no antiviral treatments to date and one vaccine that has been approved recently. So these 2 indications, we expect more researching. We expect more funding from biotech and big pharma, and we look to develop these models in conjunction with our customers. Update on noncore assets. So I think we've been talking about this for since at least I've been here, and we've been working hard to make this happen. But for a number of reasons in the current market climate, we've been unable to what PrEP Biopharm have decided to commence solvent liquidation in 2023. The process has already started. It should complete in the next couple of months. We did have an impairment on this, I think, in 2018, if I'm not wrong, on Imutex, which we hold a 49% holding in, a joint venture with PepTcell. We have run a full impairment this year after making an assessment of the investment. And I think this is a good decision. With regards to disease in motion, we are postponing all activities in the spinout. We still use the disease in motion data to optimize and design our human challenge trial. So the data is still there. We are still utilizing it. In the future, we may still use it and spin it out. But for the time being, We, as a company, we realize that the key core business was human challenge trial models and we're seeing significant growth in that area. And there's no reason why we should be distracted by anything us. So we will be focusing on developing a human challenge trial model. But of course, the Imutex evaluation could still be there at a later date and disease in motion is still in the back pocket, but we will still continue to utilize that in designing human challenge protocols. We have developed a full ESG policy in the company. So you'll see this in our upcoming annual report. We would use 2023 as a base year to be able to measure and monitor different environmental and social parameters. And this is something you will see more of in the coming years, and we were looking to get ISO 14001 accreditation next year. And I believe this is important for us as a company as we continue to grow. We've added more than 50% head count to the company. We are growing as a business. I think it's important to make sure we look after our ESC and our carbon footprint. So you pleased to hear. This is the final slide, the investment case for the company. But I think that the strong financial fundamentals really speak for themselves. We've grown record revenues, EBITDA and sales. We have a very strong cash position, and we're improving on our operational efficiencies and our margins. The market is definitely expanding. We're seeing more of human challenge trials per asset. The size of those trials is increasing, and we're now actually seeing tangible benefits for our customers. The hurdle to entry for our competitors remains high with regards to having the facilities, the resources, the challenge models, the one-day database and the experience of the challenged trial models in actually clinical trials. So we believe that we will remain the dominant force in human challenge trial market. But we're not going to sit back and relax. We will continue to aggressively pursue new opportunities and grow the human challenge market. We, of course, have word-leading unique capabilities. We are the only human challenge trial dedicated CRO in the world. We have a team that has unique experience and expertise in developing the challenge models and conducting human challenge trials. We, of course, we believe, are the sole provider for the Big Pharma when it comes to human challenge trials. They are looking forward, while we're projecting guidance to get GBP 55 million in revenue for me personally, this is a baseline, not a target. I would like for us to beat that and we are predicting higher mid- to high-teens EBITDA margins. We have full visibility in 2023 revenue going into at least the end of June for 2024. And we will be -- we have already to be honest in certain cases open new markets. We will be opening new human challenge trial indications and opening up new services. And our pipeline -- our sales pipeline, these are new leads remain the strongest. So I remember talking to you guys almost about a year ago, just under a year ago, my goal was really to make sure that hVIVO, we have a long-term, sustainable growth model, and I believe we have that now. Thank you for your attention.

Fantastic. Mo and Stephen thank you very much indeed for your presentation. [Operator Instructions] I'd like to remind you the recording of the presentation, along with a copy of the slides and the published Q&A can be accessed via our investor dashboard. Guys, as you can see, we've received a number of questions, both pre-submitted throughout today's live event. Thank you to all the investors for submitting their questions. Just a reminder, due to the number of attendees on today's meeting, the team will not be able to answer every single question it receives during the session, however, we're going to review all those questions and publish responses where appropriate to do so on the Investor Meet company platform. Mo. If I may, just hand back to you just to read out the question where appropriate and give your response or direct to Stephen, that would be fantastic.

No, thank you for that. So yes, we do have a lot of questions, some are pre-submitted earlier. So I do -- I have seen there's a large number of questions on spinout. Hopefully, I've answered a number of those, but if you want any further elaboration you can continue to submit them, and we will get back to as many questions as we can. But the key goal really is that for me, personally, the focus is hVIVO in delivering the revenue and the EBITDA margins. We've announced the current update. And you've seen our broker, at least one of them has increased our target price. So they've seen the value in the human challenge trial model and the fact that we are performing more trials and generating more revenue as well as at the same time, improving margin, which is a difficult thing to do to increase the revenue and improve the EBITDA margin. And that's think significant. And that's what we will continue to build on, and that's why I would like to grow as a business. So going to your questions, with the U.K. government recently allocating GBP 4.7 million of funding to the University of Liverpool Hospital for a facility to undertake human challenge trial, do we view this enterprise as an opportunity for partnerships and complementary services or as a competitor when bidding for government contracts. Well, to be honest, we don't really bid for government contracts. I appreciate we have that historically with regards to COVID, but currently in a pipeline or in our order book, we have zero government books. And the fact that other academic sites are establishing human challenge units is really good for us because this shows us that the prominence of the human challenge trial concept is increasing, and academia is using them for more an R&D purposes. And of course, that would mean that when it comes to commercializing those models, we will be there to take advantage of that. Can you give a time line for when COVID challenge that is will be available for hVIVO to sign contracts? Well, I'm hoping that we will have COVID challenge trials in 2024. That's the goal. We are currently finishing up the manufacturing proportion of the COVID challenge trial, and we are aggressively marketing and selling the COVID challenge model. So as soon as we have some clients ready and we need to push forward, we will do so. Going for some of the other question, is there any institutional interest? Stephen, do you want to take that one?

So we have been working hard to get institutional interest and actually, it has started improving in our shareholding. It's not where we want it to be, but we are working on getting institutional interest. Mo and I have been visiting a number of institutions and showcasing our business, our model and our performance and we expect them to come on. It just takes a long time for our institution to come on board. They have to go through quite a few processes before they've taken. But I think there is quite a significant interest from our institutions that we are showcasing to.

Thank you, Stephen. I love this question. Why are you forecasting only GBP 5 million extra in revenue for '23 and almost a flat EBITDA. I love a challenge. So the GBP 55 million, as I said, that's a baseline for me. So I would want to beat that. The flat EBITDA, so one thing you have to remember that the '22 EBITDA included cancellation and postponement. So that did increase the EBITDA. But mid- to high-teens is a very good EBITDA target for any contract research organization. So that is something that we will strive to hit. Do you expect to undertake COVID, Omicron challenge? I think I've covered that. With 413 volunteers used in 2022, how many active volunteers does hVIVO have today and how many are required to deliver full year '23 and '24 plans? So we have around 0.25 million healthy volunteers on our database. So we've increased the contact center staff to 20 FTEs, so we can manage and engage with these guys much better. We've increased our marketing spend with regards to TikTok and Instagram and other platform we used to market for healthy volunteers. We haven't publicly shared the target for this year, but absolutely, it will be higher than last year. Quarter 1 to date, we are in plan. So I know we haven't published any numbers for this year, but we are going as planned for quarter 1 with regards to the number of healthy volunteers that are being inoculated within our clinical trial units. Do you expect to expand the number of challenge this year to meet demand? If the demand needed, absolutely. Currently, our projections show that we have sufficient beds to be able to hit our target numbers. But for example, we got a huge increase in new sales and new opportunities in investor projects, and we had to add capacity, we will do this. I think I mentioned this previously, it takes 6 months from a study award and to get all the approvals to get ready to go into quarantine. It takes us 5 months to get a new building and convert it into a quarantine facility. So for me, capacity constraint does not really exist. We just need to increase our sales performance to be able to build new capacity. Are you planning to have a dividend every year? No, we're not planning to have a dividend every year, but we will assess this in due time if and when we need to. We would like to utilize the cash power we have for bigger things and to pursue M&A activity and to grow the company. Can you discuss the effect of inflation on the business? I think this is one for you, Stephen. Have any particular cost items increased, [indiscernible] salaries, have you been able to raise prices to customers and still win business?

So I'll start off with the customer side of things, first of all, actually, where we have a study that crosses over couple of years or 18 months, it crosses over from 2023, 2024, sort of example. We always define our budget is based on a certain price level. So -- in our contract, we will submit a budget, and we'll say this is based on 2023 prices. And if it goes into 2024, we include the right to increase our prices for inflation relatively. So from a price perspective and from a client relationship perspective, we build in an inflationary increase. So that's sort of thing. And the other thing is we have increased our prices significantly to deal with our increase in our cost base. Our cost base hasn't increased that much. It's pretty we are exposed to utility costs have obviously gone up -- they've gone up from GBP 60,000 to GBP 120,000 for example. But overall, there are some reasonable increases. But we are -- because we track -- we have a lot of KPIs where we track the costs of doing things. And therefore, we are able to update our business models quite quickly. Our contract models quite quickly, and that allows us to flex our prices. So we don't start beginning the year and say, "Oh, this is the price for a flu study or an RSV study. It will move constantly as we get to make sure coming in and we adjust our pricing accordingly all the time. So I'm comfortable that we're more than covering any inflationary increases in our cost base as they come across.

Thank you, Stephen. How much will you keep in booking fees from the contract cancel referred [indiscernible]. 100%. I mean this is part of a contractual obligation with our customers. We dedicate them rooms in the quarantine facility in a certain time frame and that gets canceled. We need to be compensated for loss of revenue with regards to those rooms being unoccupied. So this is the way this business works, and I think it's part and partial and our customers recognize that. Very impressive results given the increase from GBP 39 million to GBP 51 million in 2022, GBP 55 million target for '23 seems modest. I think I've kind of answered that. What is a limit on more accelerated growth? The limit really is sales. We've added a new salesperson -- or 2 new salespeople in the Europe, one for hVIVO, one for Venn Life Sciences, and we are pursuing aggressively more business. And that is the only kind of rate limiting step in future growth. As I mentioned, we now have a really good recruitment machine, and we also have the capacity -- the ability to increase capacity in a timely manner. So I don't believe those 2 are the restrictions. What is the plan with field trials? Is it going to be more than helping with [indiscernible]. So field trials basically means we act on the clinical side to contribute healthy volunteers to a global trial run by a third party. So that's the goal. And this will not be a huge significant addition to our revenue. But what we will do is it will improve our margins in the sense that we were using the same facilities, the same resources to drive additional revenue. So the individuals, the volunteers cannot -- who are not eligible to take part in a challenge trial could be eligible to take a in a field trial because the restrictions and the eligibility criteria is much, much looser in the field trials. In the past presentation, you have given an update for the current period EG order book value, can you give an update on Q1 2023? It's too early in the year to be able to do that. I think the next update we will give will be the half year of this year. But suffice to say that I hope you're getting to know me now, and I've made certain promises before and delivered on all of those targets. And my goal is to continue to do that. Mo, you and your team are doing a good job. Thank you. [indiscernible], this is not reflected in the share price. I just a comment on that before I move forward. So the share price, there is a lot of extensive factors that affect the share price. My goal really is to make sure that we deliver on our guidance or beat our guidance numbers. And I believe that in the long term, if we continue to do that, the share price will take it ourselves. Well, when do you estimate hVIVO will reach a revenue of GBP 80 million. I have my own estimate. Unfortunately, I cannot share that with you right now. But we have a strategic plan to be able to increase our revenues by a significant mind as we go forward. But currently, the guidance is for this year, and that is GBP 55 million. What else. Is a 10% revenue growth, aggressive enough, would you be targeting something higher? I'm driving for greater growth. But at the moment, I want to make sure that we don't overpromise. I think that's key. So as I said before, underpromise or over deliver. I think that's a strategy that has set us up well with me in the past, and I'll continue to use that strategy. Let's see -- given the staff numbers were up, maybe Stephen, you can comment on this one. Staff numbers were up 50% last year. Given the strong growth prospect of the business, do you need to continue to be hiring at this pace? Or is there a scope for operating leverage stroke productivity gains?

So our staff numbers have increased last year, but -- and that was mainly because from the beginning of the year, we had scaled down at the start of 2022. And then we have increased our head count towards the second half of the year to deliver a very strong second half of year. So therefore, we've had quite a growth in the year on our headcount. What's actually interesting if you look at year-on-year, if you look at the average headcount for 2022 and 2021, they are comparable. And -- but last in 2021, we had a third site. So actually, what's quite interesting is that we are running 2 sites at the same number of headcount, but we're delivering a hell lot more revenue and more volunteers with lower staff than we did in 2021. So we have increased our headcount significantly in 2022, not expecting it to grow significantly in 2023. It's pretty much stabilized for delivering this year's growth rate for 2023. We have invested quite a bit of management -- middle management. And also, we have done a little bit of restructuring in the team and moved things around a little bit to make it a little bit more efficient. So it's full balances out for 2023.

Thank you. You have not harnessed any contract wins since early February. Does that mean nothing has been on in that period. So I have intentionally given instructions to the IR team, not to harness every contract we signed with. We're working with our broker to basically determine what is a significant event and announced those. I also believe that we need to kind of retain a certain level of competitive intelligence in-house to be able to continue to grow and deliver our target. So don't take this in a negative way. We will continue to harness any significant events as per AIM regulations, but the event that happened so far, we have announced and I'm sure you will see more announcement in the coming months. What is the expectation of the revenue from field trials? I think I kind of answered this it will not be significant. It's more about improving margins rather than adding significantly to the revenue line. Who are your main competitors in the HCO sectors? I mean a human challenge trial sectors. And you see skill for consolidation. So we have a couple of key competitors. But to be honest, we have 95% plus of the market. So I don't think that I'm sitting here in fair of competition. I think competition to be honest, is good and healthy to increase market awareness and keep us on our toes. But we managed to do that by ourselves. So our scientific team, for example, collaborates with leading academic sites, sometimes teaching them on how a human challenge trial to be done. Scientist also go around the world at publishing and speaking at world-leading compresses on vaccines and antivirals. So we are known from a scientific point of view, a key innovator in human challenge trial. But on top of that, of course, we are able to generate good revenue and EBITDA margin to have a really very sound growing business. I think that's all we have time for, I think, it's 6:00. So I think I'll call it a day there.

Fantastic. Thank you indeed for addressing all those questions that you can from investors. Of course, the company review all the questions that have been submitted and with published responses [indiscernible] the Investor Meet Company platform. Just before we redirect investors to provide you with their feedback, which is particularly important to you, that just the last few closing comments for me, please?

Yes. So -- thank you for your time. I hope you enjoyed this presentation. I think the numbers speak for themselves. We've delivered on what we promised. In fact, we delivered, I think, more than what we promised. On the spinout, I wouldn't be too worried. I know we have impaired the Imutex value, but that doesn't mean it's worthless. We'll still continue to work on that when the time is right. And the disease in motion is still in the back pocket and we are continue to utilize that data in-house. As we look forward, I think we are in a very healthy position. So even from 12 months ago, I think the company is -- has been transformed. To the commitment and [indiscernible] and the teamwork I see in our company is completely different to what it was even 12 months ago. The order book is tremendous. The operating model is so efficient and to be able to do multiple trials at the same time is something new and keen taken on board really well. The pipeline is looking tremendous. The order book, that signed order book is looking great. So I think I'm very optimistic for the future. And my goal really is threefold. One is to look after employees, make sure they're fully engaged and rewarded for what they do. Secondly, our customers to make sure that we have a quality deliverable for our customers within the time frame that they're giving us. And finally, our loyal investors, such as you all to make sure that we're building value and rewarding you for your loyalty and investment in our company. So thank you again for your time and your investment in the company.

Mo's and Stephen, thank you indeed for updating investors today. Could please asking investors not to close the session. It should be automatically redirected to provide your feedback and order the team can better understand your views and expectations. It will only take a few moments to complete and how is greatly valued by the company. On behalf of the management team of hVIVO plc. We'd like to thank you for attending today's session. That concludes today's presentation. Thank you.

Thank you very much.