ORPH.L Share News (ORPH)

(Sharecast News) - Orphan drugs-focussed pharmaceutical company Open Orphan announced the signing of a new contract with an unnamed European biotechnology firm for the provision of an RSV human challenge study.
The AIM-traded firm said the study was projected to deliver ?3.2m in revenue, all of which would be recognised in 2020.

It said that, if the study was successful, it expected an additional follow-on larger pivotal challenge study would begin at the end of the fourth quarter, delivering "significant" further revenue of at least ?7m.

The board said the contract demonstrated hVIVO, part of Open Orphan, as successfully converting its pipeline.

It also said it reinforced its position as a "leader" in the provision of viral challenge studies, vaccine and viral laboratory services, supporting product development for customers developing antivirals, vaccines and respiratory therapeutics.

Those services were described as "particularly relevant and topical" in the environment of heightened awareness of virology amid the Covid-19 coronavirus outbreak.

London-based hVIVO was described by Open Orphan as "unique", as it had Europe's only commercial 24-bed quarantine clinic and on-site virology laboratory, and was the only company globally with the capability to run an RSV human challenge study.

The firm said the study reinforced hVIVO's position as a leader in the provision of virology services.

"This agreement continues to endorse the importance being placed on the use of viral challenge models supporting product development for companies developing antivirals, vaccines and respiratory therapeutics," said chief executive officer Trevor Phillips.

"This agreement is the first agreement utilising what is now, a broader and complementary in-house service offering."

Phillips said all aspects of the study would be conducted within Open Orphan, leading to the elimination of subcontractor costs and the retention of more contracted revenue.

"We look forward to delivering the work for a European Biotech Company and further developing our relationship."

Executive chairman Cathal Friel added that the agreement demonstrated one of the benefits of the merger with hVIVO, and the opportunity the broadened service offering provided in delivering a catalyst for significant revenue growth and margin expansion within the business.

"In the short term, the combination of Open Orphan and hVIVO is expected to result in substantial cost savings through the elimination of subcontractor costs where they can be replaced by new capabilities within the company."

At 1521 GMT, shares in Open Orphan were up 2.35% at 5.91p.