hVIVO PLC (AIM:HVO) chief executive Yamin ‘Mo’ Khan talked with Proactive about the company’s trading update for the first half of 2025 and shared insights into its outlook and operational progress.
Khan reported first-half revenue of £24 million, highlighting growth from diversified services, particularly in laboratory operations under hLab and through the newly acquired Clinical Research Services (CRS). EBITDA margins stood at around 12%, aided by operational efficiencies and upfront non-refundable fees from cancelled contracts. The company remains debt-free with cash deposits of approximately £23 million.
Discussing acquisitions, Khan noted that integration of CRS and Cryostore is progressing well. CRS has contributed £5.2 million in revenue, while Cryostore added £300,000. Integration efforts have aligned teams and backend operations, though system integration is ongoing.
While macroeconomic headwinds have delayed clinical trial decisions—driven by U.S. regulatory shifts and biotech funding pressures—Khan said the order book stood at £40 million at June-end, and proposals submitted this year already exceed those of 2024. “Our sales pipeline is strong… I expect our proposal submitted this year to be significantly higher than in 2024,” he said.
Looking ahead, hVIVO aims for £47 million in revenue for 2025, with low single-digit EBITDA. The company is diversifying beyond infectious diseases, tapping into areas like cardio-metabolic trials, positioning itself for broader growth.
Proactive: Mo, very good to speak with you this morning. You've provided a trading update for the first six months of the year. Could you give us an overview of the key financial metrics for the first half?
Yamin ‘Mo’ Khan: So, in the first half, we've recognised revenue of around £24 million. This is driven by strong growth in newly diversified services, especially in laboratory services under hLab and also the clinical services, which now include the new acquisition of CRS.
We have EBITDA margins of around 12%, driven through operational efficiencies, good cost control, and recognition of upfront non-refundable fees from some cancellations reported earlier this year. We are debt-free and had a cash deposit of around £23 million as of the end of June.
The two acquisitions this year—CRS in January and Cryostore in February—were the major factors impacting cash. Financially, we are in a good place. We've laid the foundation for long-term growth, aiming to expand organically and inorganically while maintaining tight cost controls. For 2026, I expect strong growth compared to 2025.
Proactive: You mentioned the CRS and Cryostore acquisitions. How's the integration process going?
Yamin ‘Mo’ Khan: The integration has gone well. Most of it, especially operationally, is complete. We acquired CRS and Cryostore for around £11 million, net of cash acquired. CRS delivered £5.2 million in revenue over the last five months. Cryostore, being smaller, recognised around £300,000 in the first half.
We quickly formed an integration team with representatives from all entities. Operational teams are aligned and working well together. We’re offering similar services at different stages of clinical development, which makes alignment easier. Back-end integration—HR, finance, IT—is ongoing, with full system integration expected by year-end.
Proactive: The CRO industry has faced some market headwinds recently. Has this impacted the company?
Yamin ‘Mo’ Khan: Yes, it has. The entire industry has been affected, primarily by a depressed biotech funding environment and regulatory changes in the U.S., especially around the DHHS, FDA, and NIH. These have delayed customer decision-making. Some contracts were cancelled, but we're already seeing improvement.
Our sales pipeline is strong. In the first half of 2025, we submitted more proposals than in all of 2024. Additionally, U.S. volatility is leading some companies to place trials overseas, creating more opportunities for us. The UK and German regulators are streamlining approval timelines, which helps us. The UK government’s life sciences plan aims to accelerate clinical trials and medicine delivery here.
The fundamentals for human challenge trials remain strong. About 45% of our work is in antivirals. Despite reduced vaccine R&D, rising infection rates—as seen in Texas with measles—support the continued relevance of our services. We now also have capabilities in other therapeutic areas beyond infectious diseases.
Proactive: How has this affected your order book and sales pipeline?
Yamin ‘Mo’ Khan: Our order book at the end of June was about £40 million, net of cancellations. Some unsigned contracts are not included. I'm confident this pause in contract signing won’t last long. Companies will have to resume development, and we’ll be positioned to support them.
Proactive: You’re recruiting a new chair. What’s the update?
Yamin ‘Mo’ Khan: We’ve identified a candidate. Due diligence is ongoing. We hope to announce the appointment and start date soon. The process is well advanced.
Proactive: Looking ahead, what's next for hVIVO?
Yamin ‘Mo’ Khan: For this year, we're targeting £47 million in revenue. EBITDA will likely be in the low single digits due to cost control measures. Despite challenges, the team has responded well by managing costs and diversifying offerings.
We now have a strong foundation—facilities, people, and responsiveness. We’re no longer reliant solely on human challenge trials in infectious diseases. With CRS, nearly two-thirds of new work is in cardio-metabolic diseases like obesity, which is a growing area of R&D. That diversity opens access to a larger market, and I’m confident we’ll deliver strong results.
Proactive: Mo, I hope you'll keep us updated on your progress. Thank you for speaking with us today.