Open Orphan plc share price, company news, analysis and interviews

Open Orphan plc (LON:ORPH) Executive Chairman Cathal Friel caught up with DirectorsTalk for an exclusive interview to discuss the results from the COVID-19 characterisation study, the next phase of the human challenge programme and whether we can expect COVID-19 revenue this year.

Q1: Now you’ve announced the results of the COVID-19 characterisation study this morning. What does this mean for Open Orphan?

A1: It’s exciting time. There’s been a lot of talk about this study, it’s the world’s first, the United Kingdom leads world in the study of COVID.

Really what it means is we’ve held off signing commercial COVID-19 contracts because we use healthy volunteers for trials and we have to be absolutely certain, it had to be published internationally that the COVID 19 human challenge characterisation was safe, so it’s safe.

Now that means not saying it’s opening the floodgates but that means we’re open for business to deal with big pharma and biotech’s who want to test their COVID-19 products and we know there’s a lot of them coming down the track.

Q2: So, when do you plan to initiate the next phase of the human challenge programme?

A2: Up to this, we were very much dealing with a partnership, funded by the Vaccine Task Force, the British government, our colleagues and friends, the sponsor Imperial College and ran in their Royal Free Hospital.

So, going forward, one naturally knows dealing with a lot of bodies like that can be a bit slower and our plan now, we will focus on the commercial studies, highly academic studies. We will certainly keep close and work with our colleagues and friends in the Imperial University, but where it goes now, we would be looking to do commercial studies, testing the efficacy of a lot of COVID-19 therapies, vaccines that we all know is in the pipeline.

Q3: Are these studies still needed to approve new vaccines and antivirals?

A3: Yes. It’s great news. I think the pandemic is over with the arrival of Omicron so we’re in post-pandemic in my head or getting there, but COVID is not going away. It’s in the camp of influenza now and RSV common cold, it’s going to pop up every winter.

So, the only difference is there’s so many hundreds of products being developed all around the world to deal with COVID, a lot of them are a combination, you’ll get the flu job and the COVID jab, you’ll get an RSV and the COVID jab. So all of them be tested. Now that COVID is reducing., there’s never been a better time to use human challenge studies because we can do, in three months, what can take a year or two or three in the field.

So, yes, we believe there will be quite a bit of work for us, but I’d say let us quote first, let us sign it, let us announce it and let’s see where that goes in the coming weeks and months ahead.

Q4: You said before Christmas that Open Orphan had 95% of 2022 targeted revenues contracted, this was non-COVID revenue. Can we expect to see some COVID-19 revenue this year?

A4: Absolutely, we would be very optimistic we’ll have COVID revenue. What we tried to do last year is set guidance, we have a very fast grown, sustainable, profitable, a large cash balance that grows by the month and it’s primarily influenza studies or RSV studies, malaria studies, asthma studies, and HRV studies. That’s our bread and butter.

Going forward, now that we have a characterisation study that is safe to use and we have 95% of our target this year in revenues in non-COVID already contracted, it’s a great start to the year.

So, any revenues we get from COVID will be on up of that 95% and people might say, where’s the capacity, well, there’s always the Royal Free and we always can create capacity, we’ve proven exactly this time last year, we doubled our capacity by converting the former White Chapel Hotel to a quarantine clinic. So people shouldn’t worry about capacity.

Let’s see if we sign some commercial COVID contracts first and then that will be on top of the current 95% of our existing target already in the bank, already signed.

Open Orphan plc (LON:ORPH) CEO Cathal Friel joined DirectorsTalk Managing Director Darren Turgel to discuss progress on a number of fronts.

Q. Great to see today you increased your holdings in Open Orphan? 

A. I am delighted to have now had the opportunity to increase my personal stake in Open Orphan plc by today purchasing £300,000 worth of additional shares i.e. two times my annual salary. I am equally pleased that Brendan is joining me in doing likewise. These share purchases further demonstrates my and the Board’s commitment to the Company, and reiterates my confidence in Open Orphan’s future prospects as we enter a period where the infectious disease market is rapidly expanding and expected to grow to in excess of $250bn per annum by 2025.

Q. How is the pipeline for new contract wins looking?

A. We continue to roll out new contract wins and having signed and announced this week and last week, two significant challenge study contract wins for our London office and earlier today a €900k contract win for our Breda, Netherlands office.

Q. How are you looking on the financial side, are you still on target?

A. In the past week I was also delighted to confirm that we were solidly EBITDA profitable in H1 2021 and remain on target for a profitable and successful 2021.

Q. Previously you talked about spinning off non-core assets, how are you progressing?

A. Likewise, earlier today Poolbeg Pharma plc filed its Schedule One confirming that it had successfully raised £25m in fresh funds on a pre-money valuation of £25m, thus when it completes its IPO in the coming week it should be listing with a market cap of c. £50m. This is an excellent start to our strategy of spinning off and monetizing our non-core assets. We plan and expect to spin off the other three non-core assets between now and year end; namely our 49% stake in Imutex, our 62.6% stake in PrEP Biopharm and Disease in Motion platform business. Thus, we have a very exciting year ahead for Open Orphan.

Open Orphan plc (LON:ORPH) Chief Executive Officer Cathal Friel caught up with DirectorsTalk for an exclusive interview to discuss the operational and financial highlights from their interim results, post period activity and the outlook going forward.

Q1: Now, interim results for the first six months ended 30th June 2020, can you tell us about the operational highlights for the first six months?

A1: Look, it’s a year of very much two halves. The first half of the year, Open Orphan only acquired formally hVIVO end of January, but operationally we really didn’t get operational control until well into March and April.

When we acquired at the end of January, hVIVO had no contracts so it was pretty much not in great shape, however, our core task and what we’re really doing, we ensured we started getting contracts bedding the, integrating them.

So, really the core highlights in the first half, we’ve actually turned the business around, we got into the market, we’ve made it profitable, Venn Life Sciences and hVIVO have never made a profit in their life before. We’re now very much on target to making profits in Q4 and we’ve guided the market that way, which is a big turnaround in the previous, let’s say 10 years of both businesses.

Likewise, we’ve ended the half with about £14.5/£15 million cash in the bank, that cash we say got to grow and grow very significantly by the year end, Christmas, and that’s because we’re generating cash.

Other highlights are we’ve started to sign very serious and very major contracts  and we’re guiding that we’re going to have an exceptionally good second half and that’s already clear in the last three months of the number of very, very large contracts who have signed.

Q2: Can you tell us about the financial highlights?

A2: The financial highlights is that we’re guiding, most importuning and I keep emphasising it, is that we’re operationally profitable in Q4, likewise we’ll be building large cash reserves.

We’re guiding as well, but really importantly and financially, that this business, particularly the core business now is hVIVO’s human challenge studies. They’ve used the Queen Mary’s quarantine centre, never in the past had been much more than 20%/25% occupancy, they key to the financials is getting that to 100%. We’re now saying we’re at 100% occupancy and we will ensure it’s that way now at the moment for a year, and we’re guiding, within a month on whenever we sign the next contract which shouldn’t be too far away, we’ll be fully occupied for 18 months. That really puts the business on a firm footing.

Q3: Now, it’s been a busy period for you but post the period, as we now at the end of Q3, can you bring us up to speed with anything that has happened in the last three months since the end of H1?

A3: Post period end, this is end of really Q3 now we’re in, we’re really delighted.

We’ve signed a £4.3 million deal there earlier this week for one of our traditional RSV challenge studies, three weeks ago we signed a similar one, £4 million with Pfizer for an RSV challenge study so nearly every month now we’re on a roll, today. So nearly every month now we’re on a roll, it’s a £4 million contract each month so that’s pretty good.

Post period, we’re putting very significant contracts, our French subsidiary, likewise, are sending off really great contracts and our colleagues in the Amsterdam office is signing a contract with J&J.

So, post period, we’ve really got the business functioning as a proper business.

Q4: Just looking forward, how would you view the outlook for Open Orphan?

A4: The outlook is really exciting, we are the world leader in the testing of vaccines and antivirals through traditional human challenge study models but we did say we would be the first company to do a test COVID-19 using human challenge study models, a little bit controversial, but we’re there. We would hope to announce in a fairly, very close future.

There was a media leak about it last week in the FT saying we were close to a contract with the British government and that would be very exciting, we well down the track. Beyond the British government, we have a queue of large vaccine companies looking to sign up similar, basically, test COVID-19 vaccine and, as we all know, that’s a big piece of business.

The underlying business, every deal we’ve announced so far this year are non-COVID, bar one, we’ve announced one COVID-19 phase I trial. We’ve a really good business now in non-COVID testing vaccines and we have the COVID business so is a dual business and both of them firing on all four cylinders.

Open Orphan plc (LON:AVCT) Chief Executive Officer Cathal Friel caught up with DirectorsTalk for an exclusive interview to discuss their new contract with a top 3 pharma company.

Q1: Cathal, you have announced a major new contract with a top 3 pharma company, what can you tell us about it?

A1: We are very excited about this new contract with a top 3 pharma company, this is a £4m RSV (respiratory syncytial virus) human challenge study clinical trial which kicks off immediately with the bulk of the revenues coming in this year. This is the second time in 6 weeks that we have signed a substantial contract with a top 3 pharma company and as such, within this period, we have now done business with 2 of the top 3 pharma companies in the world which is quite achievement for a small and fast growing company such as Open Orphan given that we only completed our IPO 14 months ago.

Q2: How many RSV contracts is this now?

A2: This is the third such RSV contract win for the company in 2020 following the announcement on the 4th May of a £3.5m challenge study and on the 6th of March of a £3.2m challenge study with the potential to deliver significant further revenue expected to be a minimum of £7m.

Q3: What does this contract mean for Open Orphan?

A3: This new contract win is very exciting as it re-affirms that we have now completely transformed and turned around both Venn and hVIVO and after a period of restructuring and cut backs, the business is very much on the expansion, winning and signing new contracts. As you will see in the announced RNS, we are the only company in the world who is able to supply an RSV human challenge study clinical trial and it also reaffirms that we now have a very steady and flowing traditional human challenge study clinical trial business while rapidly building up capabilities to start signing covid-19 human challenge study vaccine trials later this year.