Small Company Champion & Lemming Investors Research and Newsletter Updates

Tuesday, 9 February 2021

Open Orphan - Opportunities Key Events Rocket Boosters


The most recent webinar by Open Orphan Plc (ORPH) was again very encouraging on several fronts. It is not unusual for a webinar - Investor presentation not to be optimistic. What is out of the ordinary, from my experience, is the level of opportunities, primers for significant appreciation for even more share price gains; yes, even after the 400% plus increases in 2020, and the bull gains in 2021. Had it not been for Invesco selling down, Open Orphan would likely be north of 40p now.

So what of these opportunities? 

The highlights for me are as follows:

  • The company could be split from its core business resulting in 3 in-species dividends; is 1 for 1 Cathal explained.
  • PrepBiopharm, Influenza Immune Modulator & disease in motion (DIM)
  • He explained the first of these (Imutex) could be as early as 4-6 weeks. He explained Covid-19 had hindered progress but stressed this is very close now.
  • Two further spin-outs, again, one Open Orphan share, one newco share
  • Chinese very keen on challenge studies 
  • Potential huge Covid CHIM licensing deals/studies with the Chinese State
  • Emphasis profitable no more losses 
  • The expectation is to reach a market value of  £1bn as being realistically achievable.
  • FY results after easter - they will not disappoint.
  • Looking for investors stake build 
  • Six challenge models
  • Company is the world leader in testing vaccines via Controlled Human Infection Models (CHIMs)
  • New ''Disease in Motion'' (DIM) platform with potential current market cap valuation of £200m
  • DIM could be spun-out
  • New Whitechapel Quarantine Clinic opened February 2021 with an expanded 19-bed capacity.
On of the question that I could understand (sound issues - mad echo), not, it wasn't a ramping echo chamber. Cathal explained that competitors out there could challenge the company's status as the world leader in disease challenge studies, but expressed scepticism a real challenge would be successful due to the global situation the company has, plus high entry barriers and the time required to gain credibility.

There was a lot of excitement around the DIM - this was pleasing to me because it is exactly the area of the business I emphasised has huge financial implications for the future; its pretty much free cash. On top of the enormous revenues coming in from the vaccine studies, which will be a cash cow for the foreseeable years; it is clear the UK government contract worth £46m for the CHIM's is just the start, not the end, even so, this is a small part of the business. 

Disease In Motion

Intelligent Wearable Technologies and Clinical Applications in Low- and Middle-income Countries (LMIC)

''The webinar will discuss the growing medical applications of wearable technologies for healthcare and potential roles in guiding clinical and public health decision-making. Ongoing work between Imperial College Centre for BioInspired Technology and Oxford University Clinical Research Unit, Vietnam in development and clinical evaluation of these technologies for infectious diseases management will be introduced. This work forms part of a multi-national collaboration funded by the Wellcome Trust Flagships Award.''

Global Smart Devices Market - Huge and Growing Fast

The global wearable medical device market size was valued at USD 13.0bn in 2019 and is expected to witness a CAGR of 27.9% over the forecast period. The growth of industries, such as home healthcare and remote patient monitoring devices, is anticipated to positively influence wearable devices' demand. Besides, increasing consumer focus on fitness and leading a healthy lifestyle positively fuel the product demand.
More from the report here.

The Global Smart Healthcare Market size stood at US$ 141bn in 2019 and is expected to grow at 14.5% through 2030. Smart Healthcare is technology integrated diagnostic tool used for treating patients and improving the quality of life using e-health, m-health and ambient assisted living services. Rising government initiatives for the digitization of healthcare infrastructure are driving the growth of the smart healthcare market.
More from the report here.

The number of connected wearable devices worldwide has more than doubled in the space of three years, increasing from 325m in 2016 to 722min 2019. The number of devices is forecast to reach more than one billion by 2022.

Two important factors to the growth within the wearable devices market are primarily being powered by sales of smartwatches – shipments of smartwatches worldwide are forecast to surpass 100m in 2020. Apple, who unveiled their first smartwatch in 2015, currently dominate the smartwatch market and have held a share of around 45% since 2018. Another reason for the growth of the wearables market is the rise in popularity of wearable devices. Also referred to as earwear or ear-worn devices, this category is expected to soar over the next few years with shipments of devices forecast to increase by 45% to 105m units by 2023.
Any search you chose to do for smartwatches, or health monitoring devices will vary from the cheap and nasty, to the premium expensive kind. What is important as far as we are concerned, and Open Orphan, of course, is that the company has a very lucrative database of infectious diseases. Some of the world's largest companies are seeking to supplant in their wearable smart devices. While these devices may have been around for a while, and in some cases become a short-term fad for the post-Christmas fitness bunny, I think, as do Apple and Amazon, probably others, a new more important market has just opened up, one that has the potential to save lives as well as monitor health and wellbeing on an all-new level previously only health care professionals had access too. 

Open Orphan is one of my multi-baggers for 2021