Open Orphan PLC (LON:ORPH) said it is at an “advanced stage of planning” to spin out certain non-core assets and is also making preparation for capital reduction that would pave the way for the demerger.
The capital reduction would also allow it to pay dividends.
The pharma services and clinical research group is looking to hive off a portfolio of what it described as intellectual property, including respiratory candidate HVO-001.
The company said it won’t be offloading equity interests in companies Imutex and PrEP Biopharm.
It is likely investors will receive what’s called a distribution in specie, where they’ll be given shares in a new AIM company containing the non-core assets.
Open Orphan added that a spin-out transaction would also allow shareholders to benefit from both the value of the drug development candidates and the standalone value of the core services business.
Chairman Cathal Friel explained: “We now have an opportunity to deliver significant further shareholder value by the demerger of these non-core assets.
“Their development and commercialisation can be accelerated through the demerger, which offers the opportunity to access financing as a separate public company listed on AIM and a separate business focussed on the successful commercialisation of pharmaceutical products.”