Open Orphan Plc announced the completion of its acquisition of UK-based hVivo Plc on Monday, 20th January 2020.
Cathal Friel, Executive Chairman of Open Orphan commented, “I am hugely excited by the combination of Open Orphan and hVIVO. We have a fantastic team, substantial revenue potential and the opportunity to grow quickly in the year ahead. I am personally participating in the placing as I believe in the strategy of the business and its ability to deliver substantial returns to shareholders in the next 12 months.”
Open Orphan PLC (LON:ORPH) Completion of Merger with hVIVO and Re-Admission
Highlights:
· Completion of merger between Open Orphan and hVIVO creating a European full pharma services company in a compelling strategic combination
· Enhanced management and Board with a strong operational track record and M&A experience
o Cathal Friel, moving to Executive Chairman with a full-time hands-on role in the business
o Trevor Phillips and Tim Sharpington becoming CEO and COO, respectively, of the enlarged group
o New board with the appointment of Michael Meade as an additional non-executive director, along with Brendan Buckley and Mark Warne as non-executive directors and Trevor Philips and Cathal Friel as executive directors
· Combination creates a platform of highly specialised, complementary CRO service providers
· Combined robust pipeline of over £100 million at January 2020. The Group is focused on building long term contracts with recurring revenues. Open Orphan has confirmed signed contracts of €10.5m as of January 2020 which is the highest in its history with an additional €4m at an advanced stage with clients under an existing MSA. Open Orphan is successfully moving Venn away from short-term contracts to long-term, 3-year contracts with recurring revenues e.g. IPSEN (Nov ’19) and a German Tier One pharma company (Jan ’20). hVIVO has a solid pipeline of identified and pitched for contracts of £81.2m as of January 2020, which is significantly higher than the prior two years
· A number of joint Open Orphan and hVIVO pitches have already been submitted to hVIVO clients with the now expanded Venn service capability
· Estimated operational synergies of £3.1m in 2020 rising to £4.4m in 2021 – longer-term revenue synergy potential through utilisation of Open Orphan’s Phase II capabilities for hVIVO’s challenge study clients
· New combined revenue model unlocks potential for substantial revenue growth and sustainable profitability – by combining Open Orphan’s existing preclinical, phase 1 and Phase 2, regulatory and other services along with hVivo which is an industry leading services provider in viral challenge studies and laboratory services creating a leading European specialist pharma services company
· Proposed placing to raise £5m – underwritten by up to £2.5m by Raglan Capital – to support the Group’s growth plans
Cathal Friel, Executive Chairman of Open Orphan commented:
“I am hugely excited by the combination of Open Orphan and hVIVO. We have a fantastic team, substantial revenue potential and the opportunity to grow quickly in the year ahead. I am personally participating in the placing as I believe in the strategy of the business and its ability to deliver substantial returns to shareholders in the next 12 months.”
Trevor Phillips, CEO of Open Orphan commented:
“We now have an industry leading team with the ability to generate substantial revenue growth and profitability, delivering the leadership’s vision to create a successful European full pharma services company. With the now complementary and wider specialist CRO services offering, it gives us the opportunity to generate substantially larger revenues and over the full-time course of the customer relationship. With a robust combined pipeline, I am confident we have the solid platform to achieve our goals.”
