In an outlook statement accompanying its figures for the six months ended June 30, the pharmaceutical services and vaccine testing group said with the contracted work pipeline and with the new projects at an “advanced stage of negotiation”, it is targeting growth with strong operational cash flow in the second half of 2020 and is on target to be operationally profitable in the fourth quarter of the year.
WATCH: Open Orphan 'on target to be profitable' and plans to end year 'with substantially more cash'
The firm also said that it is close to having its hVIVO quarantine clinic block booked with conventional challenge studies until December 2021, while it is also “well progressed in developing the world's first coronavirus human challenge study model to test a range of COVID-19 vaccines”.
“Looking ahead, I am extremely excited by the potential for this business, we have entered a decade of significant spending on vaccines and antivirals by both governments and pharma companies around the world. The Open Orphan Group including hVIVO and Venn Life Sciences is ideally positioned to capitalise on this increase in vaccine development expenditure. Earlier this year we set ourselves the target of being profitable in the second half of 2020 and I am delighted to confirm that, despite profitability taking a few months longer than expected, we are on target to be operationally profitable in Q4 2020”, Open Orphan executive chairman Cathal Friel said in a statement.
In the figures for the six months, the company reported an underlying (EBITDA) loss of £4.7mln, the same as a year ago, while revenues came in at £7.4mln compared to £11.6mln in 2019.
Cash and cash equivalents stood at £14.7mln at the half-year, following two successful fundraisings.
In a note on Wednesday, analysts at house broker finnCap reiterated their 19p price target on the company, saying that the results had covered a “period of significant change” for Open Orphan and while their forecasts required a significant second half performance, they believed this is “very possible given the contracts the company has won this year, the strong forward order book, advanced negotiations for potentially transformative COVID-19 challenge model contracts, and potential new revenue streams”.
In late-morning trading, the company's shares were up 2.7% at 18.9p.
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