hVIVO's hLAB secures largest standalone lab project worth £3.2m

 () , a contract research organisation specialising in human challenge trials, announced a new £2.7m contract through its standalone virology and immunology service hLAB. The deal, signed with a US-based biotechnology client, brings the total value of the existing project to £3.2m.  launched standalone services out of hLAB in September 2024.

Under the new contract, hLAB will serve as the sole contracted virology lab for a global Phase 2 field study of the client's influenza drug candidate. The trial will begin immediately, with hLAB providing lab services across the 5,000 recruited subjects. The majority of revenue from the contract is expected to be recognised in FY25 with the remainder in FY26.

hLAB has supported 's quarantine studies for over 20 years. The facility has been operating at capacity in recent years due to the steady growth of hVIVO's human challenge trial services. Following 's move to a new quarantine facility at Canary Wharf in H1 2024, the group has tripled its lab capacity and now offers standalone virology and immunology services for preclinical and clinical drug development.

Yamin 'Mo' Khan, CEO of hVIVO, commenting: "It is wonderful to see hLAB secure its largest contract to date, following the launch of its standalone services in September 2024. hLAB is highly specialised and a leader in its field with over 20 years' experience in infectious and respiratory disease drug development. This contract underlines another benefit of the move to the Group's new Canary Wharf facility, with the additional lab capacity enabling hLAB to service standalone contracts in addition to our human challenge trial work, as well as offering field studies. These services support the Group's 'optimise, scale and diversify' growth strategy, by leveraging our existing infrastructure and staff to provide a high-margin new revenue stream."

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hVIVO signs its largest standalone lab services contract to date at £2.7m for a US-based biotech. Standalone services out of hLAB launched in September 2024 following 's move to its new CL3 quarantine facility in Canary Wharf. Previously, hLAB provided virology and immunology lab services for hVIVO's internal challenge trials for over 20 years.

The new £2.7m deal adds to an earlier contract that began in H2 2024, bringing the total value of the project to £3.2m. The majority of revenue should be recognised this year (FY25), with a smaller portion carrying over to FY26.

hLAB has been key to growing 's human challenge trials pipeline. The move to the new Canary Wharf facility last year tripled lab capacity, expected to materially boost the delivery schedule of new projects. In addition to today's deal, hLAB signed 3 standalone lab contracts in FY24, including its first major field study contract. With the additional capacity, hLAB can also expand its provision of field trial biologistics to more clients, offering bespoke services to pharma companies and CROs in large multinational field studies.

Simultaneously, hLAB has significantly expanded its assay portfolio, broadening the application of its serology, PCR, infectivity assay, human peripheral blood mononuclear cells (PBMC) processing and biomarkers services for new pathogens, including Omicron, human metapneumovirus (hMPV), B. Pertussis, dengue, and additional influenza, respiratory syncytial virus (RSV) and human rhinovirus (HRV) strains. hLAB has also launched biobank services and received approval from the UK Research Ethics Committee as a Research Tissue Bank.

As mentioned, hLAB operates out of hVIVO's new state-of-the-art C3L quarantine unit in Canary Wharf. The facility is now the world's largest commercial human challenge trial unit and is expected to significantly diversify 's pipeline with new pathogen models, as well as materially boost operational efficiency and margins in the medium term.

hVIVO maintained a strong orderbook of £71m at the end of H1 2024, with excellent visibility into FY25, bolstered by a recently announced £11.5m RSV contract. In December,  reaffirmed its FY24 revenue guidance of £62m, with management projecting full-year EBITDA margins to be at the upper end of market expectations.

hVIVO has a significant pipeline that is continuing to grow, including new challenge models and new revenue streams (eg clinical site studies, standalone lab services, and volunteer/patient recruitment).  aims for £100m of revenues by FY28, which is highly achievable given its strong sales momentum and US$37m cash position.

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