Irish firm Venn Life Sciences spends €6.6m on acquisition
AIM-listed Irish contract research firm Venn Life Sciences has acquired Open Orphan for £5.7m (€6.6m).
Under the terms of the acquisition, new ordinary shares are expected to be issued to existing Open Orphan shareholders with reference to a relative value of Venn of approximately £4m.
Last year Venn agreed a "strategic collaboration" with Open Orphan, as part of its aim to increase the focus of the business into the area of orphan diseases. Under the collaboration agreement both parties had committed to resource-sharing and marketing.
Following the acquisition the enlarged company will target the orphan drug services market in Europe.
The orphan drug sector is one of the fastest growing sectors in the global pharmaceutical industry and over 50pc of all new US Food and Drug Administration ("FDA") approved drugs coming to market are for rare/orphan conditions, Venn said in a statement.
The group added that its directors intend to undertake an equity fundraise to new and existing investors.
Cathal Friel, non-executive chairman of Venn, has become CEO of the group with immediate effect.
“The combination of Venn and Open Orphan gives us a strong platform and we have the pipeline and management team to go out and build a leading full-service consultancy offering services to the fast growing orphan drug market right across Europe," Mr Friel said.
Elsewhere and Venn reported revenue of €14.6m in respect of 2018, down from €17.8m in 2017.
The clinical research group recorded a loss of €1.06m last year, a swing on the profit of €960,000 it made the prior year.
During 2018 Venn had a write down of €2.2m on the impairment of intangible assets.
Directors of the group expect there should be an increase in revenues and profitability in the coming months.
However, Venn said it continues to require careful management of available cash resources and the directors expect additional financial resource to be required in order for the company “to successfully execute its growth strategy”.