hVIVO, a subsidiary of Open Orphan (ORPH ), scored another large contract today, this time a £6.2m deal with a US-based biotechnology company, to test its antiviral candidate using the hVIVO Influenza A human challenge study model.
Open Orphan in general and hVIBO in particular is perfectly placed for these type of studies as it specialises in testing infectious and respiratory disease products using human challenge trials. hVIVO has 30 years of experience conducting challenge studies across a wide range of respiratory viruses, including influenza, RSV, the common cold virus, asthma and malaria.
The study will commence in H2 2022 at hVIVO's facilities in London.
Revenue Recognition
Open Orphan expects revenue from the contract to be recognised in 2022 and 2023.
Preliminary data has already been published by the undisclosed client, that demonstrates a "favourable pharmacokinetic and safety profile". The candidate exhibits a novel mechanism of action and differs from previously approved drugs, Open Orphan said.
Yamin 'Mo' Khan, Chief Executive Officer of Open Orphan, commented on today's news:
"We are pleased to be working with this US-based client to test its exciting lead influenza antiviral using our Influenza human challenge study model. That the client has chosen us to run this study is testament to our position as the world leader in testing infectious and respiratory disease vaccines and antivirals using challenge studies. Furthermore, the contract underlines the increasing demand in the infectious disease clinical trial market, which is expected to grow to a value of over $5.5 billion by 2027."
View from Vox:
Mr. Khan spoke with Vox's Justin Waite this morning on the Vox Markets podcast regarding todays' news. Click here for that conversation.
Open Orphan has been in the news this year after signing a string of large contracts. In June alone, hVIVO signed a £7.2m RSV contract with a "top 5 global pharmaceutical company", and a £14.7m influenza contract with an existing client. Also, in March hVIVO signed a £5m RSV contract with a European biotech company.
As Open Orphan has now signed its third major influenza study contract this year, it is clear that industry attention is shifting to potential future outbreaks in this disease area. Influenza is a significant global health threat, with an estimated 1 billion cases per year, including 3-5 million severe cases.
"With this increasing demand in mind, we expect to continue to see our work coming from a broad range of infectious and respiratory diseases, and from companies ranging from smaller innovative biotechs to Big Pharma." CEO Yamin Khan said.
That is a fair prediction given how much business the company has seen so far this year and in FY21. In June, Open Orphan reported record revenue and positive EBITDA for 2021. Revenues grew 76% YoY to £39m, while the business saw a £9m improvement in profitability, generating EBITDA of £2.9m, higher than finnCap's forecast of £2.5m.
The company’s order book also grew by 11% to £46m in future contracted revenue, up from £41.6m in 2020. It remained well-funded with cash and cash equivalents at £15.7m on 31 December 2021.
While hVIVO has been busy with influenza studies, the company also announced in June 2022 that it is developing the world's first SARS-CoV-2 Omicron human challenge model. More exciting news from Open Orphan are therefore on the horizon, as the infectious disease clinical trial market continues to grow to an estimated US$5.5b by 2027. Make sure to Open Orphan so you do not miss out on future news.
Investors welcomed today's news with ORPH shares up over 4% in early trading.