Monday saw rare and orphan drug consulting specialist Open Orphan (LSE:ORPH) announce the signing of a contract with Cara Bioscence for a First In Human Clinical pharmacology trial.
The contract is expected to deliver significant revenue for Open Orphan over the next 12 months, and builds on the company’s strategy of securing long-term partnerships with high quality businesses. Carna Bioscience is a small to mid-size Japanese biotech company that specialises in developing innovative treatments against cancer and immune disorders.
For the last several years, the firm has used one of the two sides of Venn – Kinesis Consulting, which provides early stage consulting work to pharma companies. Following this announcement, Carna will now use both sides of Venn, with the latter’s Cardinal Systems helping to create clinical trials.
On this, Open Orphan’s chief executive Cathal Friel added:
“This contract is further evidence of delivering against one of Open Orphan’s key objectives, transforming Venn. The contract is an exciting one as we are now providing a much broader range of pharmaceutical services and the Venn team have managed to transition the provision of its initial pre-clinical consultancy services to Carna into a formal Phase 1 Clinical Trial. We look forward to delivering the contract for Carna Bioscience and I look forward to announcing more positive news in due course.”
The announcement follows the recent preferred partner agreement with Ipsen Group, and on yesterday’s podcast with ValueTheMarkets, Friel mentioned that he hoped to be able to announce more contracts in the coming weeks and months. The company expects to be profitable within the next few months, with the integration of Venn going well. Friel expects to rightsize Venn, as well as deliver newsflow on the AI-led Open Orphan genomic database.
Open Orphan is 35% owned by management, with Friel putting in €2 million of his own cash. The strategy of the business is growth, with the goal of acquiring companies that are cheap on low price-to-sales multiples. The management team are locked up for three years and so they intend to exit the business before the end of that period through being acquired.
The majority of the business is led by small consultancies, and Open Orphan is targeting €50 million in revenues. Once that level is reached, Friel believes the business will become attractive for buyers. These contracts certainly will help.
To listen to our podcast with Friel in full, please see below: