Open Orphan PLC (AIM:ORPH) Interim results and Trading Update

Open Orphan plc (AIM: ORPH), (to be renamed hVIVO plc (AIM: HVO) effective 26 October 2022), a rapidly growing specialist contract research organisation (CRO) and the world leader in testing infectious and respiratory disease vaccines and antivirals using human challenge clinical trials, announces its unaudited interim results for the six months ended 30 June 2022.

Financial highlights

· Revenue of £18.9m (H1 2021: £23.2m), with a strong order book for delivery in H2 2022

o Management reiterates full year revenue guidance of c. £50m, underpinned by robust trading in July and August and record contracted order book increased nearly threefold to c. £70m as at 30 June 2022 (H1 2021: £25m)

· EBITDA growth of c.10% to £2.3m (H1 2021: £2.1m) with significantly increased EBITDA margins of 12.1% (H1 2021: 8.9%)

· Cash generative with cash equivalents of £15.9m (H1 2021: £14.9m) as at 30 June 2022

Operational highlights

· Agreement with Vaxart Inc. to develop an Omicron COVID-19 human challenge model with the intent to conduct a subsequent Omicron human challenge study in 2023

· Commenced first full-service influenza challenge model programme for a top five global pharmaceutical client (£14.7m contract)

·Other significant contract wins include £7.3m influenza challenge trial signed with a European biotech, £7.2m respiratory syncytial virus (“RSV”) human challenge study with top five global pharma company and £5m RSV challenge trial signed with a European Biotech

· Modest investment in hVIVO’s facilities enabled the Group to significantly expand screening capacity:

o Doubled volunteer screening capacity to 1,000 per week

o Opened a new primary FluCamp volunteer recruitment facility in Whitechapel, increasing bed capacity by 44% from 43 beds to 62 beds

o Opened a new Manchester volunteer recruitment and screening centre

o hVIVO’s primary lab at QMB expanded and new satellite lab facilities were added in the new screening sites in Whitechapel (East London) and Manchester

· Broadened the scope of the business to offer Phase II / III field based studies

o First contract awarded by existing Big Pharma client to act as a vaccination site for a Phase II field study

· Launched a new Malaria human challenge model to offer anti-parasite challenge models

·Yamin ‘Mo’ Khan appointed Chief Executive Officer in February 2022, strengthening Executive Management Team and bringing significant CRO experience

· Martin Gouldstone appointed Independent Non-Executive Director, adding strong corporate development experience in the CRO, healthcare and pharmaceutical sectors

Post-period end highlights

· £10.4m contract for a new full-service challenge model development programme with an existing top 5 global pharmaceutical client

· 6.2m Influenza human challenge study contract with US biotechnology company Cocrystal Pharma Inc.

· hVIVO’s laboratory received College of American Pathologists (“CAP”) accreditation increasing its marketability to provide third party laboratory services

· Revenue for July and August of c.£9m with cash balance of c. £20m as at 1 September 2022

· As announced this morning, the Group intends to change its name to hVIVO plc, which it expects to take effect on the AIM market of the London Stock Exchange and the Euronext Growth Exchange on 26 October 2022

Current trading and outlook

As at 1 September 2022, Open Orphan’s order book of signed contracts has increased further to c. £80m, which is expected to be recognised across 2022, 2023 and 2024, and remains well capitalised with a cash balance of c.£20m.

Over the period, Open Orphan has further grown its pipeline of new opportunities, with a number of advanced negotiations ongoing with new and existing clients across the Group’s world leading portfolio of human challenge models. This growth is being driven by the Group’s competitive position as market leader coupled with the increasing demand for human challenge services in the rapidly expanding infectious and respiratory disease clinical trials market.

Management is committed to the long-term growth of the Group and is focused on strengthening its position as a partner of choice to the global biopharma industry, to which it counts four of the top 10 global biopharma companies as regular repeat clients. To further drive future growth, the Group has expanded and diversified its offering, and is currently adding new challenge models to its portfolio such as Omicron and a new influenza strain. In addition, hVIVO has expanded its screening facilities, adding new lab and clinical services. Furthermore, Venn has expanded its service offering into new areas including Advanced Therapy Medicinal Products services (ATMP) as it continues to deliver its services to a wider range of clients.

These developments, in addition to an exceptionally strong start to H2 2022, reaffirm the Board’s confidence of meeting current expectations for FY2022. The Group remains well positioned and well capitalised to deliver sustainable long-term profitability targeting double digit EBITDA profit margins of between 13-15%.

Yamin ‘Mo’ Khan, Chief Executive Officer of Open Orphan, said: “I am pleased to report that the Group has leveraged the strong foundations laid in 2021, continuing its profitable momentum into 2022. Importantly, the Group achieved double digit EBITDA profit margins for the first time, a key goal for the business following the first full year of EBITDA profitability last year. In the second half, we expect revenues to grow considerably and profit margins to increase further as a number of significant contracts signed earlier in the year enter the clinic.

“Going forward, I am highly encouraged by the Group’s market-leading position, expanding addressable markets, and very substantial order book. With an order book of signed contracts worth c. £80m as at 1 September 2022, we have excellent forward visibility into H2 2022 and 2023, which gives us confidence in our ability to sustain our considerable organic growth over the long term. The Board expects to deliver full year revenues in line with guidance, and we look forward to the rest of 2022 and beyond with confidence.”

Investor presentation

Yamin ‘Mo’ Khan, Chief Executive Officer, and Leo Toole, Chief Financial Officer, will provide a live presentation relating to the interim results via the Investor Meet Company platform on 8 September 2022 at 18:00 BST.

The presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free and add to meet Open Orphan here.

Interested in becoming a volunteer?

hVIVO recruits many of its volunteers for its challenge study clinical trials through its dedicated volunteer recruitment website, www.flucamp.com. By volunteering to take part in one of our studies in a safe, controlled, clinical environment under expertly supervised conditions you are playing your part to further medical research and help increase the understanding of respiratory illnesses.

For further information please contact:

Open Orphan plc

44 (0) 20 7756 1300

Yamin ‘Mo’ Khan, Chief Executive Officer


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