Open Orphan hails “transformation” as results deliver on promises

By Anna Farley


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Open Orphan is making headlines as the Covid-19 pandemic highlights the importance of its work in the infectious diseases space.

A profitable young company in a major growth industry is a rare find.

Let alone a medical firm that continues to draw international attention with its ground-breaking studies.

Now covered multiple times by the Wall Street Journal, among other top-tier publications, Open Orphan (LSE:ORPH) is making headlines as the Covid-19 pandemic highlights the importance of its work in the infectious diseases space.

And with this market set to hit $250 billion annually by 2025, the opportunity keeps getting better.

Executive chairman Cathal Friel set time aside to talk ValueTheMarkets through the scale of what’s on offer.

Strong and getting stronger – Open Orphan’s half-year results show powerful growth

Open Orphan posted an incredible set of half-year results recently, showcasing a profitable company boasting rapidly-rising revenues. As Friel highlights: “After 18 months of hard work, we are now firmly profitable for the first half of 2021.”

The company swung to an interim EBITDA profit of £2.1 million from a £4.1 million loss the year before.

Add an astronomical 242% revenue rise to £21.9 million from £6.4 million and the results become even more compelling.

The figures prove how successful the company’s Venn Life Sciences and hVIVO acquisitions have become under Friel’s leadership.

He comments that:

“We’re in month ten and clearly guiding we will be profitable for the full year, which is a big relief for a lot of investors.

“The reason it’s big relief is that we took over two companies – Venn Life Science and hVIVO – and in the previous 20 years neither of them had ever made a profit in their life, so that’s very important.”

The half-year report also addressed any concerns around cash investors might have after a small dip in cash from the end of December 2020 to the end of June 2021.

Friel says the dip came from investing cash in its malaria model, as well as “other models that we still haven’t gone public with”. Some cash also went into preparing for Open Orphan’s Poolbeg and Disease In Motion spin-outs.

Friel notes that the firm is “no longer consuming cash”. As a result, latest guidance would see year-end cash balances close in line with the £14.9 million half-year cash position.

As things stand, Friel says:

“We’re in one of the luckiest positions I’ve ever been in my life and we’ve transformed the business.

“It’s now growing, it’s profitable, but more importantly, we’re front and centre in the infectious disease and respiratory space.”

It’s a space that’s growing minute by minute, and one where Open Orphan continues to snap up contracts.

New contract proves timely as new flu season could be tougher than usual

Excitingly, Open Orphan is continuing to gain momentum beyond its results period.

An excellent recent example is its latest announcement of a £5.7 million influenza human challenge study contract further. This further cements subsidiary hVIVO’s place at the top of the challenge study world.

The contract will see the hVIVO Influenza human challenge study model used to test a biotechnology company’s antiviral product.

In challenge studies , healthy people volunteer to be infected with a pathogen, such as influenza. This helps develop treatments and understand disease.

The studies take place in a safe, controlled environment. The advantage of these studies is that hVIVO can tell a pharmaceutical company within eight weeks if their product is effective. In contrast, typical Phase II and Phase III clinical trials in a general population can take up to two years.

The influenza contract is particularly timely, as concerns mount over a worse flu season ahead.

Thanks to social distancing, fewer people have been exposed to illnesses like influenza. While that seems like a good thing on the surface, it could turn out to be a problem.

In fact, when he spoke to Value The Markets, Friel had just got the flu jab. He explains that:

“Covid has caused influenza to be at an all time record low. When it does come back – and it always comes back, it never goes away – it’s likely to be more virulent because immunity has waned somewhat.”

So, not only is the contract the third influenza contract for Open Orphan just this year, a major jump from none throughout the previous five years, but it’s also part of a crucial effort ahead of what could be a difficult flu season.

Media coverage signals strong interest

Given Open Orphan’s hVIVO unit appeared in the Wall Street Journal three times this past month, it’s clear there’s strong media interest in the firm.

The pandemic made us all more aware of the dangers of infectious disease, drawing attention to the company’s challenge studies. Indeed, the company was one of only a handful able to conduct these important trials.

Interest has been especially strong given Open Orphan’s role in the UK-government-sponsored Covid-19 challenge study.

“There’s very few small-cap AIM companies that get international business coverage,” Friel notes.

He adds that, on top of the WSJ, the company has “been covered regularly in the New York Times and most of the international publications”.

“We’ve got very high brand recognition internationally, despite us being still a rather modest London-centric company,” Friel goes on to note.

“Hundreds of billions” pouring into infectious disease

Open Orphan’s share price has dipped of late from a peak back in April, potentially making this an opportune entry point.

After all, with the infectious disease market experiencing such rapid growth, the size of the market is exploding.

Friel points out that:

“The infectious disease market is guided by all pundits to exceed $250 billion annually by 2025. Within three years’ time it’s going to be the largest pharmaceutical sector in the history of mankind.”

As pharma companies and governments the world over pour “hundreds of billions” into product development in a bid to prevent another global pandemic, the opportunity represented by Open Orphan just keeps getting bigger.

“All of those infectious disease products need to be tested, and we’re ideally positioned to test so many of them,” says Friel.


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Author: Anna Farley

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Anna Farley does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Anna Farley has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of, has not been paid for the production of this piece by the company or companies mentioned above.

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