ORPH.L Regulatory News (ORPH)

Open Orphan plc

("Open Orphan" or the "Company")

Proposal to purchase Poolbeg Pharma shares from distribution in specie shareholders

New Investors offer to purchase distribution in specie shares ahead of end of lock-up period

Open Orphan plc (AIM: ORPH), a rapidly growing specialist contract research organisation (CRO) and world leader in testing infectious and respiratory disease products using human challenge clinical trials, notes the announcement dated 11 April 2022 from Poolbeg Pharma plc ("Poolbeg"), regarding a number of new investors ("New Investors") having expressed interest in acquiring up to £1.6m of Poolbeg which are currently locked-up and held in trust by Croft Nominees Limited as a result of the distribution in specie from Open Orphan on 18 June 2021.

As part of these proposals, the New Investors have committed to purchase up to £1.6m of the distribution in specie shares on or around 26 April 2022 at a price of 5.9 pence per share, the closing market price on Friday 8 April 2022. The New Investors have shown great interest in the Poolbeg story, its significant progress since IPO in July 2021, and its capabilities in developing novel products utilising its unique cost-effective model in the fast-growing infectious disease market which is expected to be worth in excess of $250bn by 2025. This is a clear vote of confidence in Poolbeg's prospects as it enters an extremely exciting phase of its development with its first LPS human challenge clinical trial due to commence in June 2022 with multiple value inflection points expected in 2022 and beyond.

This process will allow the locked-up distribution in specie shareholders in Poolbeg the opportunity to sell part or all of their shareholding, should they wish to do so, prior to receiving the shares once the lock-up period ends on 20 April 2022. The distribution in specie shareholders will receive a letter setting out the New Investors' proposal and a Form of Election informing them how to participate should they wish to sell some or all of their shares prior to the lock-up ending on 20 April 2022. These proposals are open to all distribution in specie shareholders but participation is at each distribution in specie shareholder's discretion. For those shareholders who do not participate, the title to their distribution in specie shares will be transferred to them on or around 26 April 2022. If more than £1.6m is offered by way of valid Forms of Election, then the distribution in specie shareholders will be scaled back on a pro-rata basis.

The distribution in specie shares are exempt from income tax for UK resident shareholders due to the advance clearance obtained by the Company from HMRC for a statutory demerger. As such, there should be no UK income tax liabilities for UK resident shareholders on receipt of these shares. The only time that UK resident shareholder will be subject to tax on these shares will be in the event that the shareholder sells them, and in that event there will be a capital gains tax payment due on any chargeable gain. The base cost for capital gains calculation purposes will be 1% of the original cost base of the Open Orphan shares which will be close to nil (0), therefore nearly the full consideration will be subject to capital gains tax. The above comments are intended only as a general guide, shareholders are encouraged and recommended to seek their own financial and tax advice.

Open Orphan plc and Poolbeg Pharma plc ordinary shares are ISA qualifying investments. Open Orphan understands that any distribution in specie shares held in an ISA should be treated in a similar way to any other income generated from ISA qualifying investments.

A copy of the letter to distribution in specie shareholders can be found on Poolbeg's website here and an FAQ is available here.

Cathal Friel, Executive Chairman of Open Orphan, said: "We were delighted to see that despite the presently turbulent market that Poolbeg has successfully managed to bring in fresh investors to purchase up to £1.6m at 5.9p, the market price on Friday 8 April 2022. The new investors have shown great interest in the Poolbeg story and its significant progress since IPO, its capabilities in developing novel infectious disease products utilising its unique cost-effective model. Poolbeg is well capitalised, with c. £20.9m at year end 2021, so importantly it is not raising any new funds as part of this process and, as such, there will be no dilution of existing shareholders.

"This arrangement has followed significant efforts to help widen the Poolbeg investor base and increase future liquidity, in order to ensure that the dividend in specie remains as beneficial as possible to shareholders of both Open Orphan and Poolbeg in the long-term.

"Due to the nature of the lock-up period, which was designed to allow for an orderly market following Poolbeg's admission to AIM, prospective investors looking to build more substantial stakes were unable to do so. These proposals ensure that any potential shares sold will be going to quality, long-term holders, whilst giving distribution in specie shareholders the option to sell shares prior to the end of the lock-up period, if they choose to do so. In addition, there will be substantially greater liquidity in our shares once the distribution in specie shares have been distributed after 26 April 2022 and we believe this will certainly help us to attract in even more new shareholders."

Footnote

The distribution in specie shares were issued to all Open Orphan shareholders on the share register at close of business on 17 June 2021, following this, Poolbeg successfully listed on the London Stock Exchange AIM market on 19 July 2021. While the underlying shareholders retain the beneficial ownership of the shares, the distribution in specie shares are currently held in trust by Croft during a lock-up period of nine calendar months from Poolbeg's admission to AIM, to contribute to the creation of an orderly market. This lock-up period will end on 20 April 2022 and on or around 26 April 2022, shareholders will be sent a share certificate for the distribution in specie shares. Shareholders will then have the option to dematerialise and hold the shares via CREST. If any Open Orphan shares that gave rise to the entitlement to the distribution in specie shares are held in a nominee account, the share certificate will be sent to the shareholders' broker.

The New Investors' proposals are not open for participation by persons interested in shares who are residents or citizens of or who have an address in, or who otherwise appear to the Company or SLC Registrars to be connected to, the United States (or any of its territories or possessions), Canada, Australia, Japan, Belarus or Russia.

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Notes to Editors

Open Orphan plc

Open Orphan plc (London and Euronext: ORPH) is a rapidly growing contract research company that is a world leader in testing infectious and respiratory disease products using human challenge clinical trials. The Company provides services to Big Pharma, biotech, and government/public health organisations.

The Company has a leading portfolio of human challenge study models for infectious and respiratory diseases, including the recently established COVID-19 model, and is developing a number of new models, such as Malaria, to address the dramatic growth of the global infectious disease market. The Paris and Breda offices have over 25 years of experience providing drug development services such as biometry, data management, statistics CMC, PK and medical writing to third party clients as well as supporting the London-based challenge studies.

Open Orphan runs challenge studies in London from its Whitechapel quarantine clinic, its state-of-the-art QMB clinic with its highly specialised on-site virology and immunology laboratory, and its newly opened clinic in Plumbers Row. To recruit volunteers / patients for its studies, the Company leverages its unique clinical trial recruitment capacity via its FluCamp volunteer screening facilities in London and Manchester. The newly opened facilities have expanded the scope of the business to enable the offering of Phase I and Phase II vaccine field trials, PK studies, bridging studies, and patient trials as part of large international multi-centre studies.

Building upon its many years of challenge studies and virology research, the Company is developing an in-depth database of infectious disease progression data. Based on the Company's Disease in Motion® platform, this unique dataset includes clinical, immunological, virological, and digital (wearable) biomarkers.

About Poolbeg Pharma

Poolbeg Pharma is a clinical stage infectious disease pharmaceutical company, with a capital light clinical model which aims to develop multiple products faster and more cost effectively than the conventional biotech model. The Company, headquartered in London, is led by a team with a track record of creation and delivery of shareholder value and aspires to become a "one-stop shop" for Big Pharma seeking mid-stage products to license or acquire.

The Company is targeting the growing infectious disease market. In the wake of the COVID-19 pandemic, infectious disease has become one of the fastest growing pharma markets and is expected to exceed $250bn by 2025.

With its initial assets from Open Orphan plc, an industry leading infectious disease and human challenge trials business, Poolbeg has access to knowledge, experience, and clinical data from over 20 years of human challenge trials. The Company is using these insights to acquire new assets as well as reposition clinical stage products, reducing spend and risk. Amongst its portfolio of exciting assets, Poolbeg has a small molecule immunomodulator for severe influenza (POLB 001); a first-in-class, intranasally administered RNA-based immunotherapy for respiratory virus infections (POLB 002); and a vaccine for Melioidosis (POLB 003). The Company is also developing an oral vaccine delivery platform and is progressing two artificial intelligence (AI) drug discovery programmes to accelerate the power of its human challenge model data and biobank.

For more information, please go to www.poolbegpharma.com or follow us @PoolbegPharma