Dublin-listed pharma services company Open Orphan has announced the signing of a new contract with a European biotech company that could yield it more than £10 million in revenue this year.
Open Orphan, a European-focussed, rare and orphan drug consulting services platform, informed the Irish stock exchange of the deal for the provision of an respiratory syncytial virus (RSV) human challenge study on Friday.
The study with the unnamed company is projected to deliver £3.2 million (€3.7m) in revenue, all of which is expected to be delivered in 2020.
If the study is successful, it is anticipated that an additional follow-on larger pivotal challenge study will begin at the end the year, delivering significant further revenue and expected to be a minimum of £7 million.
Open Orphan is the result of executive chairman Cathal Friel reversing his pharma services business of the same name into Dublin-listed drug clinical trials manager Venn Life Sciences last year.
The company said the contract demonstrates Hvivo, which it acquired last year, “successfully converting its pipeline”.
The deal also “reinforces its position as world leader in the provision of viral challenge studies, vaccine and viral laboratory services, supporting product development for customers developing antivirals, vaccines and respiratory therapeutics”.
It said these services are “particularly relevant” in the environment of heightened awareness of virology as the world grapples with the Covid-19 virus.
London-based Hvivo is unique as it has 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.
Open Orphan chief executive Trevor Phillips said the deal would eliminate sub-contractor costs of the study.
“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.
“This agreement is the first agreement utilising what is now, a broader and complementary in-house service offering.
“All aspects of the study will be conducted within Open Orphan, leading to the elimination of sub-contractor costs and retain more contracted revenue.”
Open Orphan executive chairman Cathal Friel said the acquisition of Hvivo was reaping benefits for the company.
“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,” he said.
“In the short term, the combination of Open Orphan and Hvivo is expected to result in substantial cost savings through the elimination of subcontractor costs where they can be replaced by new capabilities within the company.”