Portfolio news 0

Transitional year, revenues increasing, operating costs reducing

• Re-focussed services business model with strong pipeline of contract opportunities
• Good progress on business turnaround, R&D expense significantly reduced and focussed specifically on  opportunities to support the enhancement of our development services
• Cost base and expenditure reductions implemented to support future growth and provide a pathway to cash  generation
• Positive Phase IIb FLU-v results

hVIVO plc (AIM: HVO), an industry leading clinical development services business pioneering human disease models based upon viral challenge, today announces its preliminary results for the year ended 31 December 2018.

Financial Highlights: Service revenue increasing, financial impact of operating efficiencies and cost savings will be fully recognised across 2019 and 2020

• Revenue & Other Income up 10.5% to £13.6 million (2017: £12.3 million)
• Adjusted Loss Before Tax* down 27.6% to £9.6 million (2017: £13.2 million)
• Loss Before Tax - £18.9 million (2017: £14.8 million)
• Cash and cash equivalents of £13.4 million (2017: £20.3 million)
• Research and development expense down 21% to £4.8 million (2017: £6.1 million)
• Current cost reduction programmes are forecasted to deliver improvements which will reduce operating expense  by a total of £3.9 million, across 2018, 2019 and 2020

* Adjusted Loss Before Tax excludes costs relating to the impairment of intangibles, provision against virus inventory and share of loss from associates and joint ventures: (1) PrEP Biopharm Limited consolidated balance sheet value of £4.7 million impaired to £nil as at 31 December 2018 (2) consolidated balance sheet value of intangible assets of £2.6 million impaired to £nil as at 31 December 2018 (3) provision of £1.2 million made against certain virus stock with consolidated balance sheet value of £1.2 million

Operational Highlights: Good progress on turnaround, enabling greater study throughput and establishing a strong foundation for driving organic growth strategy 

• Increased demand for services translating to a strong base of revenues already contracted for 2019. Operational improvements will bring costs into line with service revenue, supporting business turnaround and enabling future growth and cash generation
• Good progress on business turnaround with re-focussed services business model and R&D expense significantly reduced to focus specifically on opportunities to support the enhancement of development services such as new virus manufacturing or biomarker opportunities
• Pipeline of opportunities for 2020 looking exceptionally strong
• Rationalised business focus onto services business with the closing of certain areas of the business that were not viable
• Assets progressing within Imutex Limited (joint venture) - FLU-v, AGS-v

Dr Trevor Phillips, Executive Chairman, commented:

"I am proud of all that the team has achieved in 2018 and in particular the progress made turning around the business following the management changes instigated in April 2018. As a result, we have been able to quickly re-focus the business and make the necessary operational decisions to ensure we are positioned to run an efficient business that can become sustainably profitable in the medium term. This will allow us to maximise the opportunities for our services that will translate into the delivery of shareholder value.  We have made progress in addressing business operations, taking multiple steps to decrease the cost base and begin to reduce losses and generate profit. There is still more to do.