On Tuesday, ValueTheMarkets’ Ben Turney hosted Cathal Friel, executive chairman at Open Orphan (LSE:ORPH), in a recorded presentation and Q&A session.
Throughout the event, Friel laid out the specialist pharmaceutical services company’s plans for the rest of the year following its recent, oversubscribed £5.3 million placing – completed at 6.1p a share.
Meanwhile, the director – who personally underwrote the raise – ran through the synergies arising from the recent merger between Open Orphan and challenge studies specialist hVIVO. The pair now operate as part of an enlarged group under the Open Orphan name and are using their complementary services to offer firms a more end-to-end service through the drug trial process.
Friel also took the opportunity to highlight the strength of Open Orphan’s balance sheet, which boasts reliable assets of between £50-60 million, as well as the fact that the firm is currently trading at 1X revenues. Comparatively, the organisation’s peers are trading at an average of around 3X revenues, suggesting plenty of upside potential once it reaches profitability – a milestone that is approaching rapidly, according to Friel.
He also highlighted the company’s £52 million sales pipeline, which has almost doubled in a year thanks to the opportunity presented by the hVIVO merger.
Finally, Friel also confirmed that Open Orphan’s ultimate goal is to be sold to a larger peer over the mid-term for a sale price considerably in excess of its total revenue generation.
For a full recording of the presentation, please see below: