Dublin-listed Open Orphan has signed an option to buy CHIMagents for a nominal sum.
CHIMagents was recently established to assist in the design, manufacture and testing of challenge agents which are used in clinical trials.
CHIMagent's CEO and co-founder Adrian Wildfire has more than 20 years of industry experience and will join Open Orphan subsidiary Hvivo as a director of scientific and business strategy.
Under the terms of the proposed deal, Open Orphan will have three months to exercise its option to acquire CHIMagents.
If the deal completes, CHIMagents will be a standalone company within Open Orphan.
CHIMagents will support Hvivo with the design, manufacturing and testing of its challenge agents.
CHIMagents will also support Hvivo's growing pipeline of challenge study clinical trials and help in accelerating the development of its Covid-19 clinical trials, according to a statement from Open Orphan.
"We look forward to working with Adrian Wildfire and the CHIMagents team going forward and this option is an important strategic step for the business as we rapidly grow our pipeline of challenge studies," said Cathal Friel, chairman of Open Orphan.
The deal comes amid a period of rapid growth for Open Orphan.
The company said its pipeline of challenge studies is expected to grow further given the increasing importance and focus on developing vaccines and anti-virals globally on the back of the coronavirus pandemic.
Europe-focused Open Orphan specialises in rare disease and so-called orphan drugs - treatments developed for medical conditions which, because they are so rare, few pharmaceutical companies pursue research into.
The company was founded in 2017, with the aim of becoming a leading specialist contract research pharmaceutical services business.
In May, Open Orphan raised £12m (€13.4m) via an oversubscribed share placing.
Last year it acquired Venn Life Sciences in a reverse take-over.
And in January it completed the merger with Hvivo.