Member Info for Brumm1875

Broker Peel Hunt reiterated their BUY rating on Hvivo (PT 11p) this morning on the back of the 3 vaccine acquisitions announced yesterday by Elly Lilly. This M&A spree for a combined total of $3.8bn (Cuervo up to $1.5bn cash, Lima Tech Biologics up to $780m cash, and Vaccine Company up to $1.55bn cash) aims at increasing Lilly’s limited, to date, presence in the infectious disease space. Following a tough year in 2025 for Hvivo due to anti vax rhetoric in the US and contact cancellations, this news is encouraging and a sign that the biopharma industry is now starting to look through this political « narrative » in the US. Three recent HCT contact wins announced in 3 weeks, including the largest ever HCT with ILiAD, are signs that the Hvivo’s HCT business has started to turn the corner. Also Hvivo business is now more diversified in the broader CRO space. Share price still down -50% from May 2025 when the first contracts were cancelled. Expect the positive business momentum to continue . Next catalyst will be the Capital Market Day for investors and media on Thursday 11th June at the world leading facility in Canary Wharf.

I checked the average consensus estimates for City analysts yesterday. EBITDA in 2024 was £24m. For 2025/26/27/28 the forecast is £37.9/41.8/45.2/53.0m so currently the market aspect the £50m management target to reached /exceeded by 2028. If they could achieve this sooner there would be upside surprise to expectations. Obviously, the market will react positively/negatively to news & management guidance in the shorter term.

News today from the FDA on covid vaccines. Covid vaccine manufacturers will have to run trials for their updated versions of the jab. Hopefully, HVO will get some of that business using their Human Challenge Trials which are faster and cheaper vs standard trials .

https://www.reuters.com/business/healthcare-pharmaceuticals/fda-sets-new-covid-booster-guidelines-requiring-trials-approvals-healthy-adults-2025-05-20/

Correction. If they were free shares i.e. no acquisition cost his tax liability on exercising the option is c. £500k (45% of £1.1m income). He sold the 3m shares at 17p to raise c.£500k and which covers exactly his tax liability.

Nothing wrong with this. When you exercise options, first you have to pay for the shares. In this case it was 6.44m shares at 10p so £644k. In addition, Income tax is charged on the exercise of the non-tax-advantaged option on the difference between the market value of the shares at the date of exercise and the amount paid to acquire the shares under the option (i.e. the exercise price). So he got taxed 45% on the £455k « gain » (difference between exercise price of 10p and share price of 17p x 6.44m shares). Tax liability of c. £200k. He sold c.3m shares at 17p to raise c. £500k to cover some of these costs (£644k & £200k) and retains the balance of the shares (c. 3.3m) worth c.£600k at the current share price .

Too busy planting red flags around the HVO moat over the past few months, he forgot to watch his own back and got totally shafted. He’s now crawled back under his rock and will hopefully leave this forum alone for a while. Peace at last!

Great to see the fund raise done so quickly with the support from both core shareholders (Red Miles & Vulpes). The biggest risk for small clinical stage biotech companies is running out of cash. This £10m+ raise with limited dilution (c 10% extra shares) gives us good visibility (cash runway till H2-26) and puts us in a stronger position to negotiate partnership deals. Focus back on clinical data which so far has been very promising. If next set of data confirms the trend, the 20% discount offered today to subscribers will be seen as a great bargain for both institutions and retail investors.

The uncertainty /confusion about RFK & his views and the mid-long term implications for the sector have been enough for some investors to sell down pharma/healthcare stocks. Unfortunately, until we get a bit more clarity which could be several months away, stocks like HVO will be in the sin bin. Patience is key. I still like it given its unique positioning, market leadership and structural growth trend in drug/vaccine testing and cost advantage of Human Challenge Trials for the pharma sector. Mid 20s operating margin is attractive and corporate /financial buyers will notice sooner or later.

For those HVO shareholders wondering why the stock is selling off , look no further than the broader sector malaise impacting pharma & biotech stocks. The Trump election and controversial nomination of Robert F Kennedy Jr (RFK) as US Health Secretary has created huge uncertainty for the sector given RFK anti-vaccine and anti pharma stance. Pharma executives will want to wait and see first if his nomination is confirmed by the US Senate and then likely policies regarding drug pricing etc before making decisions on R&D budgets for 2025 and beyond. This of course impacts to some extent HVO given their role in pharma and biotech drug pipeline development. The uncertainty/cautiousness might explain some of the lack of news/communication from HVO atm. Below is the % fall from their 2024 respective high for some of the key European and US pharma stocks:

Sanofi -13%

Pfizer -20%

Elly Lilly -25%

Astra Zeneca -25%

hVIVO -27%

GSK -28%

Novo Nordisk -28%

Large volume of trades continues today. Already 7m shares traded . Guess we’ll soon find out which institution is involved. Will it be Octopus building up their stake or someone else? Or dare I say, the Chairman buying back his stake! After all he knows better than any PI or II :-)

We know Octopus have been increasing their stake to >10% now . Yesterday’s volume was 13m+ shares traded. I guess they are not the only institution looking to build-up a stake . Wonder who is selling as the Chairman is already out (thanks for reminding us daily STTC :-)

Some big trades reported late on. Nearly 3m shares in total. Institutional buying?-

Brumm1875

Posts: 44

Price: 29.50

Buy

RE: ImC investor meetingToday 08:32

No need to remind me and my fellow HVO investors about 1) The Chairman selling out completely is a “red flag” and 2) The CEO having >7m stock options expiring in

No need to remind me and my fellow HVO investors about 1) The Chairman selling out completely is a “red flag” and 2) The CEO having >7m stock options expiring in

This could be a red flag indeed. But in this case for me it isn’t . Have followed this company long enough to know that Cathal’s objective was always to consolidate the various businesses which formed Open Orphan, turn the company around and sell his stake. During the Covid years he was always touting the value of the various parts of the business, hoping/trying to attract bidders. That failed but HVO is now under a much better stewardship with Mo. They have a clear strategy and are executing well both operationally and financially. Cathal got the opportunity to cash in recently as he prefers to invest in his other earlier stage ventures (Renewable Energy, Poolbeg etc). That is fine. I’d rather have long term institutional investors on board than him. He has moved on, may be you should consider moving on too as you clearly have no intention of ever investing in HVO. You’ve made your position clear now and repeating yourself constantly is pointless for 99.9% of the people reading this forum.

Mo is not promising hyper growth . HVO target of £100m revenue by 2028 implies 12% cagr from £62m this year. This includes £10m from M&A. They are transparent, honest , conservative and realistic (his words). It’s a very good business (c.25% margin), cash generative and a market leader in a niche but growing segment of the huge pharma/healthcare sector. The human challenge business is fine and they are not resting on their laurels, constantly adding new diseases to their portfolio. Good strategy to leverage their know how, expertise and assets to add new revenue streams (flu camp, lab services etc) as well. What is not to like for mid-long term investors ? This type cash generative, asset light business with good margins and great moats very often get snapped up by larger rivals or private equity investors. All you have to do is invest now, sit back and ride the volatility. The share price will keep going up and up and up over the medium term and with a take-over bid you’ll get 30% extra. What would make you invest in HVO? Maybe a lower entry price ? That could happen as HVO is not immune to the broader market movements. In my case, I would add in weakness . Happy to see institutional investors increasing their holdings (Mo said they have never had so many IIs on their register. Not bothered with Kathal being out. He has his own agenda , needs the money for other (new, early stage ,turnaround) ventures . Good luck to him

The stock rose c.20% yesterday on high volumes . Quite normal to have some consolidation this morning or even in the next few days. The key will be the H1 results and guidance next week (10th September). If management raise their game, sound confident and give some mid-term operational and financial targets, the stock should resume its upward trend towards 50p. I personally don’t believe in the takeover speculation, certainly not at this early stage of commercialisation. Next year, may be once Eroxon has a sales track record in both Europe and the US. There are other, less talked about, geographies where the product could do well like the Middle East . China is potentially a huge market too but not so easy to find a reliable local distributor. May be Haleon could help there too? Anyway, FUM as a stock will now be valued on “hard” (no pun intended) numbers (revenue, profit & dividend) and no more on hopes. Let’s see.

Correction (2) . Headline should be “250k shares bought at 38p” ! Sorry I am travelling :-)

Correction: Headline should be “95k shares bought at 38p” lol

Just seen a 250k buy has gone through at 38p . That’s £95k . Good to see a 15% move in the share price on high volumes. Might be an institutional investor positioning themselves ahead of the H1 results and strategy update on 10th September. This will put more pressure on management to come up with a clear operational and financial guidance. A US launch with a leading pharmaceutical distributor as partners is big news so now is the tile for management to raise their game. We can only dream after so many years of disappointment with this company. Fingers crossed.