The Sunday Telegraph - Business & Money
Inside the London lab company infecting humans with Covid
Open Orphan is the only company in the world running human challenge studies with coronavirus
Step into the foyer of the Whitechapel Hotel in the East End of London and it seems no different from any other business in the capital. But venture further in, and it becomes clear that something very strange is going on in this former textile factory.
Biohazard signs on each floor warn observers not to enter. Next to the double beds in the bright and modern en suite rooms are white trolleys containing swabs, vials, gloves and other medical paraphernalia. Peepholes on the doors are not there so that guests can look out into the corridor. Instead, they are reversed for safety reasons.
This former hotel, a victim of the Covid pandemic, has been transformed into a 19-bed quarantine facility used to house volunteers taking part in human challenge studies – specialist clinical trials where people are infected with a virus or bacteria to see how they respond to experimental vaccines or treatments.
They are being run by Open Orphan, a tiny, Aim-listed company whose fortunes have been transformed by coronavirus. “The pandemic has been good to us,” says Cathal Friel, the company’s executive chairman.
Open Orphan was flung into the spotlight in March 2020. As the world went into lockdown, it announced bold plans to design a taxpayer-funded human challenge study that would infect people with Covid to see how they responded to treatments and vaccines. It was, and remains, a world-first. “The world came flocking to our door, big pharma, small pharma, asking if we could help,” Friel says.
That trial design has taken more than a year to put together. It’s a delicate procedure. The virus has to be isolated from the “wild”, grown in labs, and manufactured at a special standard so that all the molecules are identical. The minimum dose necessary to infect people must also be determined.
Now, with the framework in place, the first volunteers ever to take part in a human challenge study for Covid will be dosed in London in the second half of next year, pending approval from regulatory and ethics authorities.
The company’s headquarters, which are in the Queen Mary Innovation Centre (QMIC) across the road from the former Whitechapel hotel, houses its labs along with a further 24-bed quarantine facility.
Builders are upgrading it to a higher level of biosecurity, category three, needed for the Covid trials next year. On the ground floor, a former Costa Coffee shop – another Covid casualty – has been turned into a screening centre where volunteers have their blood taken to see if they are eligible to take part in any one of Open Orphan’s ongoing studies in other disease areas.
If accepted, they are paid about £3,000 to £4,000 as a tax-free reimbursement. Rooms are kitted out with televisions and Playstations to keep participants occupied during their quarantine, which usually lasts about two weeks.
“We have had so many pharmaceutical companies, big and small, approaching us about doing Covid trials to test new treatments and vaccines – about 100,” Friel says.
“But the bigger story for us is that big pharma and governments are now not only chasing Covid, they are putting huge resources into vaccine development and programmes for influenza, respiratory syncytial virus (RSV), which is one of the biggest killers of children under 12 months in the developed world, and human rhinovirus (HRV). A few weeks ago we signed a deal for a challenge study with GSK in asthma.”
In the last year alone, Open Orphan has worked with Janssen, Pfizer and Boehringer Ingelheim, conducting human challenge trials in RSV. In July, Pfizer’s chief executive announced “stunning” results from an RSV vaccine phase II study in London, showing it was 95pc effective – that was Open Orphan’s study.
So why the sudden focus on flu and RSV? It is widely believed that there are really only five viruses or bacteria in the world that can result in a pandemic. Flu, RSV, HRV, coronavirus and tuberculosis/antimicrobial resistance.
Every pharma company in the world, backed up by national health authorities, is now looking to develop vaccines and treatments in this space, so that if another pandemic arises, they have the resources, and infrastructure, to tackle it. The infectious disease market is expected to grow from $30bn ($22bn) a year today, to $250bn by 2025.
Human challenge studies work particularly well with antiviral and monoclonal antibody treatments, vaccines and prophylactics. They are also quicker and cheaper to run than field trials. The average number of volunteers in a human challenge study is 100, with a trial duration of about three months from signing the contract to getting the final, definitive data.
Field trials, by contrast, involve 10,000 to 20,000 patients and can take two to three years. Pfizer, for example, paid Open Orphan £4m to do a human challenge study. It will now spend roughly £100m for a field study. “They have to do a field study to get regulatory approval, all vaccines must do this, but before they spend that £100m, they know that it works,” Friel says.
It also means smaller pharma companies that don’t have the money to do a field study, can pay for a challenge one, prove their drug works and then sell it to big pharma.
“Suddenly our small little niche business, which was doing one or two challenge studies a year, has started 10 this year,” Friel says. “Next year it will do 15. The world has woken up to the fact that we need to restock the shelves with vaccines and antivirals.”
The company has its roots in 1947 when the British government realised that influenza killed more allied soldiers than the Germans in the Second World War, and decided to set up the Salisbury Common Cold and Flu Clinic. For decades it carried out cutting-edge research doing the world’s first human challenge studies. “Britain was way ahead of the rest of the world,” Friel says.
That came to an end in 1987, but a couple of years later two former employees set up a company doing the same sort of work, calling it Retroscreen. In 2008, it caught the attention of the fund manager Neil Woodford, who backed the business, changed its name to hvivo and floated it on the stock market. Woodford pumped £120m into the company between 2010 and 2017, but never made any cash out of it. Then his investment empire collapsed after a series of risky bets.
“Our feeling was that if Woodford had put in £120m, there has got to be something in the asset,” says Friel, whose speciality is taking on distressed companies and turning them around.
So where does Open Orphan fit into all of this? Friel started the company just over two years ago, initially as a pharma services business helping American drug developers to launch treatments for rare diseases in Europe. But just before the float, Friel stumbled across a struggling clinical trials company called Venn Life Sciences, based in Dublin. It was “going nowhere”, had never made a profit in its 15 years and was on the verge of bankruptcy.
“We had heard through Venn that European pharma companies were starting to increase their spend on vaccines and antivirals. Everyone kept saying the vaccines business is dead and it’s all moved to India and China, but we kind of had a feeling.”
Friel decided he could fix it. He paid off its debts and Open Orphan did a reverse takeover of Venn in June 2019. “Then we said, oh dear what sort of a mess had we got ourselves into?”, he recalls. “It was actually in far worse shape than we had realised.”
After chatting with some investment bankers, Open Orphan looked at hvivo, another struggling clinical trials company. “If we put these two together we thought we might just have something,” Friel says.
By pure luck, hvivo’s chief scientific officer, Andrew Catchpole, had a special interest in coronaviruses. Two years earlier he had tried and failed to get pharmaceutical companies interested in doing coronavirus challenge studies because he thought they had the potential to be incredibly dangerous.
“They laughed and said, Andrew you’re smoking dope, you do understand coronaviruses are pretty harmless,” Friel says. hvivo’s previous management team, who Friel has mostly replaced in favour of promoting “long-suffering staff that had been there a long time but been ignored”, took a similarly dim view of Catchpole’s ideas.
By December 2019, Open Orphan had acquired hvivo. Covid struck two months later and the rest is history. Open Orphan will be profitable this financial year for the first time ever, its share price has more than quadrupled and it remains the only company in the world doing human challenge studies at a commercial level.
So what next? Friel says work is being done on designing more trials in other infectious and respiratory diseases, from malaria to strep throat to tuberculosis. Friel also wants Open Orphan to list on the Nasdaq in the next 12 months, although the company will keep its dual listing.
“We would be mad to drop our Aim listing,” he says. “I feel in a way, given the company’s history from a world first in 1947, to a world first today, that the circle has been rounded.”
‘We have had so many pharmaceutical companies, big and small, approaching us about doing Covid trials’