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Open Orphan (LON: ORPH) on Wednesday said that it has received court approval for the reduction in capital as it looks to go ahead and spin out certain non-core development IP assets.
The specialist pharmaceutical services company said the reduction of capital will give it the ability to not only affect the distribution in specie, as part of the proposed spin-out of certain non-core development IP assets, but also to make other distributions to shareholders and/or buy back its own shares in the future.
The company has previously said that it was at an advanced stage of a possible spin out. They believe a spin-out and admission to AIM of the wholly-owned assets may provide the opportunity to secure separate financial resources, enable accelerated development of the asset portfolio, and achieve development and commercial milestones.
The development IP assets include HVO-001, an orally available, small molecule immunomodulator drug with potential as a treatment for severe influenza.
“A spin-out pursuant to the Demerger would allow the Company's shareholders to benefit from both the value of the Development IP Assets and the standalone value of the remaining business as it progresses through its own key milestones,” Open Orphan said in a statement.
The reduction of capital will become effective on registration of the Court order at Companies House, which is expected to occur in the next few days.
“The reduction of capital will allow us to return value to shareholders as we go forward either as a distribution in specie as part of the proposed spin-off or through a share buy back or a payment of a dividend, as appropriate,” Open Orphan's Executive Chairman, Cathal Friel, said.
Open Orphan shares are down 1.33% on Wednesday morning at 37p.
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