Personalised medicines standard bearer, Horizon Discovery, wowed the UK market with a transformational trading update flagging up a revenues surge, an R & D milestone treasure chest and the promise of more to come.
The figures released by the gene editing business reshape the bottom line as Horizon puts the finishing touches to a new flagship headquarters in the Cambridge Science & Technology cluster.
The preliminary full year 2015 results will be announced on April 26 but all the lights pointing to further growth are firmly on green. The group reports a second consecutive year of on-target performance since its IPO, with full year 2015 revenues expected to be at least two per cent ahead of the £19.8 million market consensus, representing growth of at least 69 per cent on the previous year’s £11.9m.
CEO Dr Darrin Disley (pictured above) said the group was eligible to receive future R & D milestones of up to £208 million plus future product royalties – 32 per cent up on the prior year.
He said revenue growth reflected strong product and service sales to large pharmaceutical and diagnostic development companies as well as an increasing number of academic customers buying from a product inventory that increased from 2,750 to 23,000 in the year.
Growth in the Products business has been particularly strong, with organic revenue improvement of at least 120 per cent expected to be reported (2014: £3.5m), driven by strong demand for genetically-defined cell lines and derived molecular diagnostic reagents.
Growth in the Services business of at least 65 per cent on 2014’s £7.2m has been driven by a strong demand for custom gene-editing, genetic screening and drug combination screening projects.
Dr Disley said the leveraged business continued to generate a portfolio of up-front, milestone and product royalty upside as exemplified by the deals announced with two new collaborations signed in 2015 with Redx and Servier.
Commitments were also made to invest up to £10m across the following two years in two cutting-edge areas of cancer biology – synthetic lethality and immuno-oncology – which have the potential to deliver significant upside.
Horizon also expects to report a full year EBITDA loss that is a positive improvement to the £7.7m market consensus as investment continues in the long term growth of the business consistent with our previously reported strategy.
Year-end cash is expected to be £25.1 million – up from £18.5m in 2014.
Dr Disley, said: “2015 has been another strong year for Horizon, with growth underpinned by organic and inorganic revenue, new product launches, and the establishment of new channels to market.
“Horizon’s reputation as a leader in gene-editing, translational genomics and personalised medicine is exemplified by the range of partnerships we have announced in the areas of product development (e.g. Axol Bioscience, CareDx, Definigen), market access (e.g. ThermoFisher, Abcam), and leveraged research (e.g. Servier, Redx).
“Horizon continues to deliver on its strategy of: sustainable core revenue growth; increasing the value of what we provide customers; scientific leadership via academic partnerships and grant funded research; and accelerated growth through product in-licensing and M & A activities.
“Our rAAV, ZFN and CRISPR gene editing platform continues to prove that it is fundamental to the elucidation of the genetic basis of disease and the evolving personalised and genomic-medicine value chain, and we are confident and excited about the prospects for the year ahead.”
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