Merck’s agreement to acquire Cidara Therapeutics for about $9.2 billion gives hVIVO PLC (AIM:HVO) a moment of reflected glory.
Peel Hunt’s analysts highlight that Cidara’s lead antiviral, CD388, advanced into late-stage development on the back of data generated through hVIVO’s human challenge trial platform.
That, they argue, is the real significance of the deal: it shows how a well-run challenge study can influence the trajectory of a drug programme.
CD388, a long-acting antiviral designed to prevent influenza A and B, is now in phase III and has Breakthrough and Fast Track status from the US regulator.
Its early proof-of-concept work relied heavily on hVIVO’s controlled infection model. In a 59-volunteer study run in 2023, participants were deliberately exposed to flu after receiving CD388 or a placebo.
Viral load, the amount of virus found in a person’s sample, was tracked using PCR testing and cell culture. CD388 cut both peak viral load and overall viral burden, giving Cidara the confidence to move into broader trials.
That relationship deepened in the Phase IIb field study over the 2024–25 flu season, where hVIVO acted as the only UK site. It recruited more than 1,100 people and dosed 817 within six weeks, the highest enrolment figures globally.
Peel Hunt sees this as evidence that the group’s capabilities stretch beyond challenge studies into large-scale field work.
The wider backdrop is a pick-up in biotech dealmaking after a quiet spell. But, as the broker notes, buyers are not splashing cash indiscriminately.
Clinical data is the filter through which acquisitions are now made, and high-quality early-stage data is especially prized. That, in turn, strengthens hVIVO’s position.
Despite policy headwinds in the US (including weaker vaccine uptake), human challenge trials remain a powerful differentiator when several drug candidates are competing for attention.
For Peel Hunt, the Cidara transaction underlines hVIVO’s claim to be a “king-maker” in vaccines and antivirals.
With the world’s largest challenge-trial site in Canary Wharf and a growing track record in field studies, the group is well placed to benefit when promising assets attract deep-pocketed buyers.
The broker says 'add' with a target price of 10p. Analysts at Cavendish value the stock at 16.5p, while Shore Capital's team, which called the deal a "glowing endorsement", ascribes an enterprise value to the business equivalent to 16.2p a share.
In late afternoon trading, the stock was changing hands for 5.69p.