Open Orphan completes hVIVO merger as trading resumes
The specialist pharmaceutical group said the merger had a long-term operational synergies potential of £3.1m in 2020, with the figure rising to £4.4m in 2021.
A proposed placing of £5m fundraising was also announced, of which up to £2.5m is being underwritten by former Chief Exeuctive, Cathal Friel, to enlarge the group’s business plan to enable hVIVO to convert its pipeline proposals.
“I am personally participating in the placing as I believe in the strategy of the business and its ability to deliver substantial returns to shareholders in the next 12 months,” said Friel, now Executive Chairman of the group.
The company, where Trevor Philips has now assumed the role of CEO, said it holds a ‘robust’ pipeline of over £100 million at January 2020, with a confirmed €10.5m of signed contracts and an additional €4m ‘at an advanced stage’ with clients.
Shares in Open Orphan were trading 3.88% lower at 6.2p on Monday morning.
A number of joint pitches between Open Orphan and hVIVO have already been submitted to hVIVO clients with the now expanded Venn service capability, the company said.
In particular, the merger is expected to bring further benefits as a result of the additional Venn offering which means a wider range of services will be available to a broader customer base.
Phillips said this would give the group the opportunity to generate "substantially larger revenues" over the full-time course of the customer relationship.
As a result of the merger, the group expects to deliver total synergies of £3.1m in 2020 rising to £4.4m in 2021, whilst £1.7m of savings are anticipated for FY20 with the figure rising to £2.3m in FY21.
Friel, who will be continuing a full-time ‘hands-on role’ in the business, and Phillips, the current CEO, expressed their excitement at the merger, with Phillips adding: “With a robust combined pipeline, I am confident we have the solid platform to achieve our goals."
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