Panmure Liberum has upgraded hVIVO PLC (AIM:HVO) from “hold” to “buy” following the company’s announcement of a major contract for a human challenge trial (HCT) with ILiAD Biotechnologies.
The new agreement, focused on developing a challenge model for whooping cough, is expected to generate significant revenue in the second half of the financial year ending in 2025.
In its note, Panmure Liberum highlighted that the deal is still being finalised but estimated it could be worth around £15 million.
Despite caution over potential risks to forecasts for the first half of 2025 (H1 FY25), the investment bank noted that recent new business wins have strengthened the outlook for the latter half of the year.
Panmure Liberum reduced its target price for hVIVO shares from 27p to 24p but pointed out that the stock is trading at a "pretty cautious" valuation, just over six times expected earnings before interest, taxes, depreciation, and amortisation (EBITDA).
In afternoon trading, the stock was up 8% at 21.15p.