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hVIVO primed for profitability next year

The creator of pioneering human disease models based upon viral challenge generated revenues of £5.9mln in the six months ended June 30

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hVIVO PLC (LON:HVO) said it is primed for profitability next year.

The projection was made alongside interim results, which revealed £11mln of costs have been extracted from clinical development services business since 2017.

The creator of pioneering human disease models based upon viral challenge generated revenues of £5.9mln in the six months ended June 30, up £1mln year-on-year, or 20%.

The adjusted operating loss narrowed by more than a quarter to £3.7mln, while research and development spend fell by 60% to just £1.1mln.

More importantly, hVIVO had cash and equivalents of £4mln at the period-end, supplement by an R&D credit worth £2.4mln that was paid earlier this month.

"In the first half of 2019 we have continued to rationalise the company's cost base to further reduce our operating costs and improved our operating efficiency,” said chairman Trevor Phillips.

Operationally, the focus has been on the efficiencies that will get the business beyond break-even, hVIVO said.

It did reveal there had been an “unprecedented levels of contract cancellations”, due to client portfolio prioritisation, that had hit the cash position at “a time when business turnaround and efficiencies are still to be fully realised”.

Looking ahead, the 2020 pipeline is looking “strong”, hVIVO added. Nearer-term, it has entered the second half with a “robust backlog of contracted work”, despite the aforementioned cancellations.

"We have made progress in expanding our service offerings to enhance revenue opportunities, delivered further successful client studies and extend our position as a leader in viral challenge studies,”  chairman Phillips added.

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