London-listed Open Orphan (ORPH)  has signed a new contract with a new European-based biotech company which could generate the group more than £10m in revenue this year.

The European-focused rare and orphan drug services company told investors this morning that the deal would allow for the provision of a respiratory syncytial virus (RSV) human challenge study.

Revenue from the study for the unnamed European-based customer is contracted to deliver £3.2 million in revenue, all of which is expected to be delivered in 2020.

If successful, an additional follow-on pivotal challenge study will commence at the end of the year which the group antiticaptes will deliver significant further revenue to yield a potential minimum value of £7m.

The Dublin-based company said the contract demonstrates Hvivo, which it acquired last year, as ‘successfully converting its pipeline’ whilst reinforcing its position as a leader in the provision of virology services.

Shares in Open Orphan were trading flat at 5.775p during Friday trading.

It added that the services were particularly relevant and topical given the environment of heightened awareness of virology following the outbreak of the novel COVID-19 coronavirus.

Open Orphan's Chief Executive, Trevor Phillips, said the deal would eliminate subcontractor costs of the study which could result in further margin expansion during FY20 and beyond.

"This agreement continues to endorse the importance being placed on the use of viral challenge models supporting product development for companies developing antivirals, vaccines and respiratory therapeutics,” he said.

London-based hVIVO hosts Europe's only commercial 24-bed quarantine clinic and on-site virology laboratory and is the only company globally with the capability to run an RSV human challenge study.

"This agreement demonstrates one of the benefits of the merger with hVIVO and the opportunity the broadened service offering provides in delivering a catalyst for significant revenue growth and margin expansion within the business,” added Cathal Friel, Executive Chairman of Open Orphan.

Follow News & Updates from Open Orphan here: