hVIVO, a subsidiary of Open Orphan (ORPH), has signed a further £7.2 million contract with an existing top 5 global pharmaceutical company to test its orally administered antiviral product, using hVIVO's respiratory syncytial virus ("RSV") Human Challenge Study Model.
The Phase 2a double-blinded placebo-controlled study will take place at its London-based quarantine facilities and will evaluate the safety and efficacy of the antiviral against RSV. The study will commence in June 2022, with the revenue being recognised in 2022 and 2023.
The company, which has secured several new contracts with giant pharmaceutical companies of this kind since the start of the year, said today’s contract win underlines its “world leading expertise” and its ability to attract additional contracts from its existing Big Pharma clients.
“I am especially proud that our world-class offering and customer service has secured repeat business from another Big Pharma client, and that we are seen as the 'go-to' partner for an increasing number of global drug developers,” said CEO of Open Orphan, Yamin 'Mo' Khan.
He said hVIVO will now test the efficacy of the client’s drug against RSV infection which, to date, has already been shown to be an effective antiviral in certain disease indications.
RSV, which is the main cause of childhood lower respiratory infections, remains a serious global health threat causing around 100,000 annual deaths in children under the age of five.
Dr Andrew Catchpole, Chief Scientific Officer of hVIVO, also highlighted to investors: "This contract is a strong example of where human challenge studies can provide significant value.
With a drug that has existing safety data and has been approved for one indication, human challenge studies can provide fast, cost-effective efficacy data within a new indication. The data will then indicate whether the candidate is viable for a wider Phase II study, providing substantial time and financial savings compared to traditional field-based studies."
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Open Orphan’s hVIVO subsidiary, which today announced yet another significant contract with an existing top 5 global pharmaceutical company, has seen its average deal size increase significantly over the past 12-18 months, even doubling in value in most cases.
hVIVO says it expects to see more repeat business from its top-tier clients as their infectious disease product portfolios continue to grow in line with the growing infectious disease market.
Following hVIVO’s recent facility expansions, the business can now offer its services beyond the core challenge study offering such as the recently announced vaccination site contract.
Its recent £14.7m contract represents hVIVO delivering one of its key objectives which is to utilise all of its services to a single client. In fact, this is the first time hVIVO has been engaged to conduct a study of this kind with all three parts of the contract being covered by its services - the manufacturing part, the characterisation study and the challenge study, respectively.
Looking ahead, Khan believes hVIVO can expect to see more deals of this kind as the threat of influenza increases, with government agencies and biopharmaceutical companies alike preparing for a high flu season this winter.
Analysts at finnCap have left FY22 forecasts unchanged, given the majority of revenues from this contract are expected to be recognised in 2023; however, they added that they believe that contracts signed to date underpin FY 2022 revenues, subject to client scheduling, and that revenue visibility into 2023 visibility continues to build. It reiterates its target price of 44p.
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