Open Orphan plc (LON:ORPH), a rapidly growing specialist CRO pharmaceutical services company which is the world leader in the testing of vaccines and antivirals using human challenge study model, has announce its full year results for the year ended 31 December 2019.
Financial Highlights
| Open Orphan plc(As reported) | hVIVO plc(As reported) | Open Orphan plc (formerly Venn Life Sciences Holdings plc -proforma resultson a stand-alone basis and excluding any impact of the 28 June 2019 combination) | Open Orphan DAC(proforma resultson a stand-alone basisand excluding any impact of the28 June 2019combination) | Open Orphan plc(proforma results on a combined basis and including the impact of the 28 June 2019 and 17 January 2020 combinations) | ||||||
| 2019€’000 | 2018€’000 | 2019£’000 | 2018£’000 | 2019€’000 | 2018€’000 | 2019€’000 | 2018€’000 | 2019€’000 | 2018€’000 | |
| Revenue (incl. Other income) | 4,039 | – | 15,092 | 13,626 | 9,854 | 14,291 | – | – | 27,061 | 29,712 |
| Operating (Loss) | (5,837) | (1,611) | (5,893) | (13,427) | (6,469) | (2,367) | (763) | (1,611) | (14,249) | (19,174) |
| EBITDA before exceptional items | (4,311) | (1,611) | (3,785) | (8,862) | (5,053) | (1,432) | (763) | (1,611) | (10,130) | (13,072) |
| Loss for the period | (6,543) | (1,656) | (6,973) | (16,833) | (6,442) | (4,775) | (1,025) | (1,656) | (16,524) | (25,481) |
Post Period End Highlights
· Completion of merger of Open Orphan plc and hVIVO plc in January 2020 creating a specialist pharma services group with complementary CRO services
· Continued action to reduce the cost base with annualised savings of €2.0m in hVIVO and €3.0m in Venn respectively removed since the merger in January 2020 and further annualised cost savings of €2.5m in the merged entity are expected to be implemented by 31 December 2020
· Developing the world’s first challenge study model clinical trial in order to be able to test the efficacy of the large number of Covid-19 vaccines that are in development
· Developing an antibody testing service with capacity for up to 3,000 tests per day using the Quotient testing instruments which is one of the few able to offer 100% accuracy
· Expanded the Group’s pipeline of opportunities and converting pipeline of contracts across the whole Group, including:
o provision of an RSV human challenge study projected to deliver £3.2m in revenue all of which is expected to be recognised in 2020 with potential for additional follow-on £7m Pivotal challenge study delivering significant further revenue
o A contract with a US Biotech company for the provision of an RSV human challenge study projected to deliver £3.5 million in revenue all of which is expected to be recognised in 2020
o Expansion of laboratory service with offerings to third party biotech companies and small cap pharma companies with new contracts already completed and this is anticipated to be an important new revenue generating stream for the Group
o Venn’s traditional pharma consulting business continues to perform well and a significant contract was announced in recent weeks to obtain and support market access of newly developed vaccines into the EU and US markets for one of the top pharmaceutical companies in the world
· Increased liquidity and strong balance sheet through placings of £5.3m in January 2020 and £12.6m in May 2020 to allow the Group to complete its transition and leverage a broader service offering to an enlarged and combined customer base
Outlook
· Unprecedent growth opportunities as pharma focuses funding on Covid-19 and respiratory diseases resulting the development of a strong pipeline of opportunities, for both Covid-19 and non-Covid-19 challenge studies along with the wider CRO services offered by the Group
· Strong pipeline of work to build H2 2020 revenue, targeting operational profitability by Q3 2020
· A further €2.5m of cost to be removed from the business in H2 2020
· Right management team in place, with a clear strategy, targeting the high margin pharma services sector, to deliver significant shareholder value
· A strategic review is underway in order to seek to monetise the 49% stake in Imutex and our other non-core investments such as the 62.5% in PrEP Biopharm and our 100% stake in an immunomodulator
Cathal Friel, Executive Chairman of Open Orphan, said:
“Since the reverse takeover of Venn in June 2019 we have been building the foundations of a soon to be profitable business in Q3 and a rapidly growing CRO pharmaceutical services Group with all loses in both companies confined to the past. The merger with hVIVO, post period end, has given us a full-service business, with world class facilities, motivated colleagues and a strong pipeline of work and transforms out business into the world leader in the testing of vaccines and anti-virals through human challenge model clinical trials.
Traditionally, the testing of vaccines and antivirals had been somewhat of a Cinderella industry, however, following the advent of the Covid-19 pandemic it is clear that for the months and years ahead the development of new and novel vaccines and also the testing of such vaccines and antivirals will be one of the fastest growing areas of the pharmaceutical industry. In recent decades, governments and pharma companies around the world completely underinvested in new vaccines and the onset of Covid-19 caught them significantly off-guard and as such there is a huge capital investment program underway around the world to roll out an extensive range of Covid-19 and importantly non-Covid-19 vaccines to ensure that the world is not caught unprepared in future pandemics.
We have substantially reduced overheads and rightsized the management team including combining the CEO and other senior roles in both Venn and hVIVO. We have also brought forward some long-serving and excellent line managers and heads of departments flattening the organisation structure and giving them more autonomy and responsibility to successfully run their own areas and this is proving very effective both for the company but also most importantly for the individual managers as well. In turn, this has completely transformed the culture of the enlarged business to one of vastly more open communications, sharing of knowledge and a much faster decision-making process.
I am very excited for the year ahead and I am confident that we have created a soon to be profitable, fast-growing business which is creating value for all our stakeholders.”
Conference call for sell-side analysts and investors
The Company will hold a conference call for sell-side analysts and investors at 09:30 today.
Participant dial-in numbers
| Dial-in numbers: | IE: +353 1 526 0106UK: +44 33 0606 1122ITFS: International Access Numbers |
| Room number: | 430863 |
| Participant PIN: | 5880 |
A corporate presentation is available to shareholders on the Group’s website at: https://www.openorphan.com/investors/reports-and-presentations/year/2020
