Cambridge-based gene editing world leader Horizon Discovery is considering issuing an indeterminate number of shares in the US to raise millions of dollars of extra working capital.
Over 50 per cent of shares in the biotechnology business are already in the hands of US stockholders.
While such a move would not constitute an IPO as such it would effectively provide the company with a dual UK and US listing and transition shareholder liquidity to the other side of the Atlantic.
The London share price headed north on the news even though Horizon declined to go into specifics. At the time of writing the stock was up 9.58 per cent (15.33p) to 175.33.
Well informed sources believe that if the move goes through trading will shift to the States through an American Depositary Receipts manoeuvre which may lead to either an official dual list or a delist in the UK and a switch to NASDAQ, the American technology market.
Horizon isn’t saying much at all, other than announcing a proposed US public offering; it has confidentially submitted a draft registration statement on Form F-1 with the Securities and Exchange Commission relating to the offering of American Depositary Shares.
It adds that the number of American Depositary Shares to be offered and the price range for the proposed offering have not yet been determined and that the company expects to use the proceeds for general corporate purposes.
Horizon said: “The Offering is expected to commence after the SEC completes its review process, subject to market and other conditions, and shareholders and potential investors should note that the potential Offering may or may not proceed.”
The company has also issued a trading update for the year to December 31, 2019 forecasting that unaudited revenues from continuing operations are expected to increase by around eight per cent to approximately £58.3 million.
Reported revenues for full year 2019 (including continuing and discontinued operations) are expected to be around £62.9m, – approximately £61.2m on a constant currency basis, representing growth of some seven per cent on the previous year.
Revenue growth has been driven by a strong performance in the Research Reagents and Screening Business Units. BioProduction continued to perform well and generated a strong second half performance but, as expected, ended the year broadly flat year-on-year, reflecting the business unit’s exceptionally strong prior-year comparator performance.
As previously reported, the Diagnostics Business Unit had a challenging first half of the year, reporting revenues 28.6 per cent down on prior year. The group took prompt action to rectify the situation and under new leadership this business unit had a stronger second half.
In December, the company completed its divestment of its non-core In Vivo business unit to Envigo RMS LLC. Revenues generated in the period in the financial year that the company owned In Vivo are excluded from the continuing operations update.
The cash balance of £18.8m at year-end 2019 (HY 2019: £24.8m) was in-line with expectations and reflected continued investment in the business with a focus on continued growth and increasing market share.
Horizon continues to follow its Investing for Growth strategy with continued investments in IT, Screening and R & D to support its new Base Editing platform.
Management believe this will help to accelerate Horizon’s transformation into a high-growth, pure-play tools and services company; it expects revenue growth in FY20 to be in-line with expectations and for the increased investments to reduce FY20 EBITDA to a marginal loss for the year.
CEO Terry Pizzie said: “We have reported a solid full year 2019 performance based on the unaudited results against the backdrop of a busy second half that has seen a number of notable developments that will help to accelerate our transformation into a high-growth, pure-play tools and services company.
“These include the divestment of our non-core In Vivo business unit and a new strategic collaboration with Mammoth Biosciences, which will see us jointly develop new CRISPR tools to develop a next-generation, technologically disruptive suite of CHO cell lines that have been optimised to solve challenges in biologic drug development.
“Just after year-end, following a year of reviewing the technology, we exercised our option to exclusively license a novel Base Editing platform from Rutgers, The State University of New Jersey (US), for use in therapeutic, diagnostic and service applications.
“We are committed to continued focused investment in commercially-led, scientific innovation to stay at the forefront of emerging technologies.
“By extending our capabilities through in-licensing technologies, partnerships, and collaborations, such as these, we seek to more closely align our tools and services offering to the needs of our pharmaceutical, biotech and academic partners.”
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