Open Orphan (LON: ORPH) shares are rallying on Tuesday after the company announced its subsidiary, hVIVO, signed an £8.1m contract with a major global pharmaceutical company to test its inhaled human rhinovirus (hRV) antiviral product using the hVIVO Asthma Human Challenge Study Model.
The study conducted by hVIVO is expected to begin in the first half of 2022. Open Orphan stated that the bulk of the revenue from the deal will be recognised across 2021 and 2022.
The AIM-quoted firm believes the new contract further underlines the increased international focus and investment into respiratory and infectious diseases following the outbreak of COVID-19.
Cathal Friel, Executive Chairman of Open Orphan, said: “We are pleased to sign this contract with this top five European pharmaceutical company to test its inhaled hRV antiviral product using our Asthma Human Challenge Study Model. This contract demonstrates how our broad range of challenge study models can support our clients' varied infectious and respiratory disease product pipelines, and adds to our exciting pipeline of RSV, hRV, Influenza, Malaria, and Asthma challenge study contracts.
“The COVID-19 pandemic has highlighted that for the past 30 years there has been very little investment into the infectious disease and respiratory products space. As such, when the pandemic arrived the world discovered that the medicine cabinet of infectious disease products to deal with COVID-19 was virtually empty.
“Post-pandemic, most governments across the world, all of the Big Pharma companies and many of the smaller pharma companies are now investing hugely in new infectious and respiratory disease products and as such, this market is expected to grow from $20bn in 2019 to $250bn by 2025.”
Open Orphan shares have surged 13.48% to 23.75p following the news. On the 26th of March, Open Orphan shares closed over 7.8% higher after announcing a £7.5 million human challenge study contract win.
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