Specialist pharmaceutical services clinical research company, Open Orphan, is considering a possible spin-out of certain non-core development intellectual property assets.

The company said the potential demerger is at an advanced stage of planning.

The assets include HVO-001, a candidate drug with potential applications in the treatment of respiratory disease.

However, the assets do not include the company's equity interests in Imutex Limited and PrEP Biopharm Limited.

"Over the last year we have been busy transforming Open Orphan into a profitable enterprise with a world leading position testing vaccines and antivirals using human challenge studies," said Cathal Friel, Executive Chairman of Open Orphan.

"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 focused on the successful commercialisation of pharmaceutical products."

The company’s board thinks such a move would maximise shareholder value, provide the opportunity to secure separate financial resources for these assets, enable accelerated development of them and achieve commercial milestones.

Details of the plan were circulated to shareholders today, including proposals for a reduction of capital and distribution of assets so that they can potentially be spun out and admitted to the Alternative Investment Market (AIM).

"It is well known in the global public markets that value is better recognised in the life sciences space when profitable services businesses are viewed separately from pharmaceutical development businesses that have different funding needs," said Mr Friel.

"This is now an excellent opportunity for shareholders in Open Orphan to maximise value through separate shareholdings in both a profitable pharma services company as well as an exciting pharma products commercialisation company."

All the proposals will be put to shareholders at the company’s general meeting on April 29.