Open Orphan, Operation Yellowhammer and a Bridge to Ireland

This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Last night I attended a ShareSoc company presentation seminar. One of the companies that presented was Open Orphan (ORPH) which used to be called Venn Life Sciences but changed name after a reverse takeover of Open Orphan and a change of CEO. The new focus is on orphan drugs which are those medications that are focused on rare diseases, i.e. those with relatively few patients and where historically there have been few treatments available and typically very little research. Big pharma tends not to spend money researching such drugs because the likely revenue from them is small. As a sufferer from a rare disease this presentation was of particular interest to me.

As the presentation indicated, Venn was historically loss-making and was viewed as “under-capitalised”. Market cap of ORPH is only £17 million when forecast revenue this year is £16.5 million.

Open Orphan’s new strategy is to concentrate on launching additional services focused on orphan drugs and develop a proprietary data platform. That includes building a database of patient and genomic data. They are also developing a “virtual sales rep” service to enable lower cost sales to specialists in orphan diseases. This seems to be a telemarketing operation supported by webinars. I was surprised to learn that drug sales in big pharma are still promoted by personal visits from highly-paid sales staff when in other fields a more “hybrid” approach is long established.

There is clearly a lot of work going into digital health platforms and databases – Renalytix which I covered in a previous report is one company focused on doing this for renal disease. So there are no doubt opportunities here although the presentation was short on information on the likely cost of developing such a platform and building the databases. Future fund raising looks a distinct possibility.

One question raised by the audience was whether patients would volunteer their own data (which in Europe they “own”). But I don’t think they will have objections because the chance of assisting development of treatments when there may currently be none will incentivize them to do so.

I suggest Open Orphan is a company to keep an eye on for the future. It’s still at an early stage of development.

Which brings me onto the subject of Operation Yellowhammer, the Government report which has now been published on the impact of a “hard” Brexit, or the “Reasonable Worst Case Planning Assumptions” as they headline the document (see https://tinyurl.com/yy2oll7p for the full document – it’s only 5 pages). As I am personally dependent on drugs to stay alive, the scare stories being propagated by some people about shortages on a hard Brexit are not just of academic interest.

The report suggests some disruption at Channel ports, including possibly up to 2.5-day delays to HGVs in Kent, i.e. similar to past disruptions caused by strikes in France which had no obvious impact on consumers although it might have some impact on “just-in-time” operations of manufacturing businesses.

But three-quarters of medicines come by the Channel straits which might have an impact on the supply of medicines and medical supplies, if unmitigated. As Nigel Farage has pointed out, the UK has 100 ports so alternatives to the Channel ports are readily available. Only a minority of drugs are time-sensitive and those could possibly be transported by air freight.

Pharmacy2U, one of the biggest prescription suppliers have published this note which covers patient concerns about Brexit: https://tinyurl.com/yxubdlsu . It basically says “don’t panic”, and carry on as normal. There are often problems with drug supplies due to complex supply chains, manufacturing or regulatory issues so this will be nothing new.

The report says demand for energy will be met as there will be no disruption to electricity or gas interconnectors but there may be rises in electricity prices. But it does warn about the availability of fresh foods, e.g. salad products from southern Europe which may be reduced. Are you worried about not being able to purchase tomatoes at Christmas? I cannot say I am.

In summary the Yellowhammer document is not something that will put off Brexit supporters from wanting to exit the EU on October 31st regardless.

One way around the problem of the Irish “Backstop” in the Withdrawal Agreement is to simply move the customs border to the Irish sea. This won’t please the DUP party of course but can they be bought off with the sop of a new bridge linking Northern Ireland to Great Britain? Or is this another of Boris Johnson’s bridge fantasies like the Garden Bridge in London? Is it even practical?

The Daily Telegraph published an analysis by a civil engineering expert. In essence it is possible because there are similar bridges in terms of length (13 miles or more depending on the chosen crossing point) elsewhere in the world. Even the deep water, up to 160 metres on one possible route, can be done. The cost might be £15 billion. So it’s perfectly feasible and probably better value than HS2.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

Post Date: September 12, 2019

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