IP : hVIVO plc - Preliminary Results 2018

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. We expect to see the full benefit of the actions taken in 2018, and now in 2019, during 2020.

'In addition to the growth in our core services business, we were pleased to announce positive data for FLU-v, the late stage, broad spectrum universal influenza vaccine candidate in our joint venture Imutex. We continue to make progress regarding strategic discussions related to the assets in this JV, helping to maximise the strategic options available. We have had a number of positive discussions and we are continuing to explore a number of options to enable the continued development of the FLU-v vaccine.

'The Company is now stronger and better placed than ever to succeed in its core business and to become a sustainably profitable business in the medium term. Based on the contracted work and the potential contract opportunities currently under discussion, I believe 2019 will be a positive and progressive year for hVIVO.'

For further information please contact:

hVIVO plc	[phone]
Trevor Phillips (Executive Chairman) Shelley Fraser (Finance Director & Company Secretary) Fleur Wood (EVP, Investor Relations & Communications)
Numis Securities Limited	[phone]
Freddie Barnfield / Huw Jeremy (Nominated Adviser) James Black / Michael Burke (Corporate Broking)
FTI Consulting	[phone]
Simon Conway / Victoria Foster Mitchell

Notes to Editors:

hVIVO plc ('hVIVO') is pioneering a human-based clinical trial platform to accelerate drug and vaccine development in respiratory and infectious diseases. Leveraging human disease models in flu, RSV, HRV and respiratory indications, the hVIVO platform captures disease in motion, illuminating the entire disease life cycle from healthy to sick and back to health. Based in the UK, market leader hVIVO has conducted more than 50 clinical studies and inoculated over 2500 volunteers.

Forward-looking statements

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms anticipates, believes, estimates, expects, intends, may, plans, projects, should or will, or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Any forward-looking statements in this announcement reflect the Group's (or, as the case may be, the hVIVO directors') current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Investors should specifically consider the factors identified in this announcement which could cause actual results to differ before making an investment decision.

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