Open Orphan (LON: ORPH) on Thursday announced not only strong annual results but also that spin-off Poolbeg is planning to seek admission to trading on London’s AIM market.
The company explained that Poolbeg will primarily use the funds raised as part of its admission for clinical trial costs associated with developing severe influenza treatment POLB 001, as well as to acquire and develop new assets.
A unique approach to severe flu
POLB 001 is a “first-in-class, Phase II ready small molecule immunomodulator for severe influenza”. First-in-class means the drug’s mechanism of action is new and unique for this condition.
Small molecule drugs have a low molecular weight. This allows them to pass through membranes to the inside of a cell, and they can usually be taken orally.
Immunomodulators modify immune system activity. This is important for treating flu because, in most cases, it is the immune system and not the flu virus itself that kills a person.
Influenza enters the body typically through the nose, mouth, or eyes. There, it takes control of cells, forcing them to make copies of the virus. Typically, the virus takes hold in a person’s lungs and respiratory tract.
To tackle this, the body launches an immune response. White blood cells, inflammatory molecules, and antibodies are released and rush to attack infected cells. However, this immune response can sometimes be too strong. If the immune system attacks too much lung tissue, it can prove fatal.
POLB 001 addresses an unmet need for effective treatments for severe influenza, representing an approximately $800 million addressable market.
According to Centers for Disease Control and Prevention data, from 2010 to 2020, flu resulted in between 140,000 to 810,000 hospitalizations and 12,000 to 61,000 deaths annually in the US alone.
In addition to severe influenza, applications for POLB 001 in other illnesses are possible through label extensions and Poolbeg has worldwide rights for all of those uses. There are other viruses, including Covid-19, where the immune system response can kill.
A host of valuable assets
As well as lead asset POLB 001, Poolbeg also has a Vaccine Discovery Platform. The platform harnesses data from the human challenge model in order to discover new vaccines.
A human challenge study, like the kind Open Orphan carries out, is when healthy volunteers agree to be deliberately infected with an illness in a safe environment. These studies test medications and vaccines.
Plus, Poolbeg also has a PredictViral Biomarker platform aimed at predicting severe disease.
It also has licensed access to Open Orphan’s data and biobank from its years of studies. Advanced talks are underway to combine this data with an AI data analysis platform in the future. The combination which would speed up identification of drug targets and potential products.
Poolbeg also has a pipeline of further assets to acquire once its IPO is complete.
Open Orphan chief executive Cathal Friel said: “In Poolbeg we have assembled a leading management team, generated an exciting pipeline of potential acquisitions and entered advanced discussions with leading AI data analysis platforms to increase the attractiveness of the company and its offering.”
Friel said he is confident and excited in Poolbeg’s future prospects and will be personally investing alongside incoming investors as part of the potential IPO.
Profitability and soon
In terms of its annual results, Open Orphan performed excellently. Revenue from contracts with customers multiplied to £20.6 million from £3.4 million.
Not only that, but the company is targeting a full year profit in 2021 and will focus on enhancing both profits and earnings going forward.
Friel explained that, notwithstanding Open Orphan’s strategic investments in new challenge models and its Disease in Motion platform, the firm “will relentlessly focus on cross selling our services across our broad client base”.
The company, he said, will use technology to drive improved efficiencies and will strip away unnecessary cost.
“The new financial year has started well and is already very well advanced. We are confident that the actions we are taking now to drive our core clinical research organization business and monetize non-core assets should create significant value for all our stakeholders,” Friel concluded.