Horizon Discovery Group plc – Horizon Discovery Group plc Half Year Trading Update – GlobeNewswire
Posted: August 2, 2020 at 5:58 pm
Horizon Discovery Group plc
Half Year Trading Update
Cambridge, UK, 29 July 2020:Horizon Discovery Group plc (LSE: HZD) ("Horizon", "the Group" or the Company), a cell engineering company focused on commercialising the application of gene editing and gene modulation to accelerate scientific innovation and biopharmaceutical drug development, today provides an unaudited pre-close trading update for the six months ended 30 June 2020. The Company plans to report its half year 2020 results on 17 August 2020.
Financials
Horizon expects to report half year 2020 revenues of approximately 22.4 million (HY 2019: 26.1 million, c. -13.9%)1, approximately 22.0 million (c. -15.5%) on a constant currency basis. The change was largely due to the rapid reduction of academic research work caused by the COVID-19 pandemic impacting the Groups Research Reagents business unit and was broadly in line with Board expectations. The greatest impact was seen in the second quarter of 2020, most notably in April. This was then followed by a period of sustained recovery, which resulted in large parts of the business regaining momentum and returning towards 2019 levels of revenue by the end of June 2020.
Gross margin from continuing operations1 is expected to be approximately 66.0% (HY 2019: 71.2%). The margin decline is primarily due to the impact of COVID-19 on manufacturing costs and additional provisioning for aged inventory. Adjusted EBITDA is expected to be a loss of 4.6 million (HY 2019: 0.0 million1).
The Groups cash position was bolstered by a successful Placing in April 2020, which raised 6.9 million in gross proceeds, and was further strengthened by the implementation of enhanced cash control measures implemented in April. Taking this into account, the Group had cash and cash equivalents of 23.6 million as of 30 June 2020 (HY 2019: 24.8 million; FY 2019: 18.8 million). The Groups strong balance sheet provides financial flexibility to ensure operational delivery and continued strategic investment to fully benefit from market recovery.
1. In December 2019, 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 Companys continuing operations
Terry Pizzie, Chief Executive Officer of Horizon Discovery, commented:
Thanks to the fantastic efforts of our staff, we have continued to operate effectively throughout the crisis and have built stronger and deeper relationships with our biopharma customers based on our ability to add value in difficult conditions. Our customers have increasingly adopted outsourcing as a
solution to their own business challenges and we have become recognised as an invaluable long-term partner.
We expect the trend for increased outsourcing to continue, for these relationships to endure and facilitate high level access within our biopharma customer base that will help lay the foundations for commercialising our new high growth areas.
We are encouraged by our H2 2020 prospects and look forward to the remainder of the year with optimism and confidence about the Groups strategy and prospects.
Performance by Business Unit
Research ReagentsRevenue for the Research Reagents business was 16.0 million, down 15.3% against the same period in the prior year, with trading significantly impacted by COVID-19. Academic and government research labs account for approximately 50% of the Research Reagents business units revenues, and the closure of many of these facilities starting from mid-March, led to a rapid reduction in orders for RNAi and CRISPR reagents and cell line products.
In April, revenues for reagents reduced to a low of 56% of the same period in 2019. Trading started to improve in May as researchers began to return to work and, by the end of June, trading had recovered to 2019 levels.
As a result of the repositioning of the Groups Cell Line Engineering (CLE) business, with a new value proposition, pricing and go-to-market strategy introduced at the end of Q1 2020, demand has increased significantly in Q2. This is not yet reflected in the reported revenues as a result of c. 10-week project delivery and revenue recognition timelines. Given the significant increase in demand, the Group has committed to additional investment in lab equipment and automation of approximately 3.5 million over the next 18 months, to further increase capacity to levels 25 times those of January 2019. To conserve near-term cash, this investment will be largely funded through leasing equipment. More detail on this will be provided at the Groups half year 2020 results. In H2 2020, the Group also expects to benefit from demand for CLE from academic and government research, as most researchers return to work following the loosening of lock-down restrictions.
For the first time, the results for this business unit now include Diagnostics due to operational synergies, including e-commerce. Diagnostics revenues were down 8.5% from H1 2019. The Group expects this part of the business to return to growth in H2 2020.
ScreeningOverall revenue of 4.4 million represented a 2.8% increase on the same period in the prior year. In line with typical biopharma spending patterns, the Screening business saw a relatively flat first quarter. However, after the initial slowdown in late March, the Group saw a notable increase in orders from its biopharma customer base, as these companies responded to the challenges of the COVID-19 crisis by prioritising key projects and supplementing their own in-house resources by outsourcing both CRISPR screening and High Throughput Screening (HTS). The Group expects the trend for outsourcing to continue in H2 2020.
BioProductionOverall revenue of 2.0 million for H1 2020 was down 29.7% on the same period in the prior year, with revenues suffering from the impact of COVID-19 restrictions and changes of prioritisation within bioproduction facilities globally, resulting in delays to evaluations of our CHO cell line. Pick-up in activity in May and June indicates a potential road to recovery in H2 2020.
The Group remains excited about its collaboration with Mammoth Biosciences and the development of a suite of next generation engineered CHO lines as these initiatives are progressing well.
Base EditingAfter establishing a new Base Editing business unit in H1 2020, the Group has making good progress working with its early access customers, including a large global pharma company, to assess and shape the development of this technology. The Group believes this technology is well-positioned to benefit both the CAR-T therapy market and the gene therapy market.
Supporting COVID-19 Research
Horizons products and services are being used by our customers in several important areas of COVID-19 research, including in efforts to uncover the virus weaknesses, find targets for potential therapies and help guide vaccine design. The Groups RNAi and CRISPR reagents are being used by high profile organisations such as the Krogan Lab, based at University of California San Francisco. Nevan Krogan, PhD, Professor of Cellular Molecular Pharmacology at UCSF, who leads the facility, has cited Horizons ability to be quick and flexible in meeting the laboratorys needs for CRISPR and siRNA reagents as being instrumental in the rapid progression of its COVID research.
Outlook
The fundamental drivers and demands for Horizons products and services remain strong and the Group is confident of a return to growth in the second half of 2020. Horizon remains focused on executing its strategy, and the management team is excited about the continued expansion of its screening market and the opening-up of new high growth areas that will come from commercialising its investments in BioProduction and Base Editing.
Horizons strong balance sheet position provides financial flexibility to ensure operational delivery and continued R&D investment to fully benefit from market recovery. The Group will continue to prudently manage the business, ensuring operational delivery and focused investment in order to be in a strong position as markets normalise.
Ends
Capital Markets Webcast and conference call today:
Horizon Discovery will host a Capital Markets Webinar for institutional investors and analysts at 15:00pm BST. There will be a simultaneous live conference call. The joining instructions are as follows:
Webinar link: https://www.lsegissuerservices.com/spark/HorizonDiscoveryGroup/events/4ab97991-3d5b-45de-959b-9486da1e2d60
Conference call details for analysts and investors:
The webcast and presentation slides will be available on the Groups website shortly after the event: https://horizondiscoveryplc.com/news-events/presentations-and-recordings/
For further information from Horizon Discovery Group plc, please contact:
Horizon Discovery Group plcTerry Pizzie, Chief Executive OfficerJayesh Pankhania, Chief Financial OfficerJon Davies, Head of Investor RelationsTel: +44 (0) 1223 655 580
Numis Securities Limited (Broker and NOMAD)Freddie Barnfield / Duncan MonteithTel: +44 (0) 207 260 1000
Consilium Strategic Communications (Financial Media and UK Investor Relations)Mary-Jane Elliott / Matthew Neal / Melissa GardinerTel: +44 (0) 20 3709 5700Email:horizon@consilium-comms.com
Zyme Communications (Trade and Regional Media)Lorna CuddonT Tel: +44 (0) 7811 996 942Email:Lorna.cuddon@zymecommunications.com
Westwicke, an ICR Company (US Investor Relations)Stephanie CarringtonTel. +1 646-277-1282Email:horizondiscovery@icrinc.com
About Horizon Discovery Group plc http://www.horizondiscovery.com
Horizon Discovery Group plc (LSE: HZD) ("Horizon") is a cell engineering company focused on commercializing the application of gene editing and gene modulation to accelerate scientific innovation and biopharmaceutical drug development. Horizons portfolio of tools and services is built on decades of experience in altering the expression of genes across mammalian and human cell types to provide cell engineering tools and services to customers in three key areas of the therapeutic ecosystem: basic research, drug discovery and development and therapeutic applications. Horizons offerings support and enable critical elements of the drug development and therapeutic value chain, particularly in the area of precision medicine. Horizons customers include biopharmaceutical and diagnostics companies, contract research and manufacturing organizations and academic researchers across the globe.
Horizon is headquartered in Cambridge, UK with offices in USA and Japan. The Group is listed on the London Stock Exchange's AIM market under the ticker HZD.
Read more:
Horizon Discovery Group plc - Horizon Discovery Group plc Half Year Trading Update - GlobeNewswire
- Gene Therapy Could Prevent Blindness [Last Updated On: June 10th, 2010] [Originally Added On: June 10th, 2010]
- Gene Brodland Sits with Cambridge Who's Who in a Revealing Interview [Last Updated On: June 16th, 2010] [Originally Added On: June 16th, 2010]
- Researchers Make Colon Cancer Breakthrough [Last Updated On: July 20th, 2010] [Originally Added On: July 20th, 2010]
- Pro abortion- Antiabortion myth8 - Fly to India for safe abortion! [Last Updated On: October 16th, 2010] [Originally Added On: October 16th, 2010]
- New Fertility Test / Whooping Cough Alert / Gene Therapy for Depression [Last Updated On: October 21st, 2010] [Originally Added On: October 21st, 2010]
- Alzheimer's Breakthrough? [Last Updated On: October 23rd, 2010] [Originally Added On: October 23rd, 2010]
- Audio Genetics Lab - Native Flute - MP3Tera Forums [Last Updated On: December 8th, 2010] [Originally Added On: December 8th, 2010]
- Gene Therapy - Cortical Studios [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- There Shall Be Physicians for the Spirit: USC Institute for Genetic Medicine Art Gallery [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- IRRI: Rice genetic diversity and discovery [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- Research Symposium: Mork Depart - 2006 - Video 1 [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- Mendelian Genetics [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- Ayurveda [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- Drs. Kaspar and MacKenzie discuss the promise and path forward for SMA Gene Therapy [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- 3. Genetic Engineering [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- Prof. Martinez Cruzado Lecture Part 3 "Amerindian Gene Study In Puerto Rico" [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- Gene Therapy Research Makes Nationwide Children's Worthy of Wellstone Center [Last Updated On: May 8th, 2011] [Originally Added On: May 8th, 2011]
- Gene Therapy Example [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- Sweet Tooth Gene [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- OHSU's video of new gene therapy method developed at the Oregon National Primate Research Center [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- Gregor Mendel's Punnett Squares [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- Ethical Concerns With Genetic Engineering [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- Dr. Laura Niklason on the importance of her AFAR grants for telomerase gene therapy research [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- What is the future of genetic medicine? [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- Prof. Martinez Cruzado Lecture Part 2 "Amerindian Gene Study In Puerto Rico" [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- Jewish DNA - Genetic Research and The Origins of the Jewish People [Last Updated On: May 9th, 2011] [Originally Added On: May 9th, 2011]
- Future of genetic engineering - by Futurist Dr Patrick Dixon. Genetic mutations and genetic disorders. Gene science by conference keynote speaker [Last Updated On: May 11th, 2011] [Originally Added On: May 11th, 2011]
- annstewart82's Genetic Medicine and God [Last Updated On: May 13th, 2011] [Originally Added On: May 13th, 2011]
- Genetic research could unlock breeding seasons in sheep [Last Updated On: May 13th, 2011] [Originally Added On: May 13th, 2011]
- Genetics 101 Part 1: What are genes? [Last Updated On: May 13th, 2011] [Originally Added On: May 13th, 2011]
- Molecular and Cellular Foundations of Medicine, 1 of 2 [Last Updated On: May 13th, 2011] [Originally Added On: May 13th, 2011]
- Dan Arking of Johns Hopkins Medicine [Last Updated On: May 17th, 2011] [Originally Added On: May 17th, 2011]
- Genetics : How Is Gene Therapy Done? [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Gene Therapy Shows Promise for Blindness [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Tomato suicide gene therapy [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Cancer Alternative Treatment - Gene Therapy for Cancer a Report from Channel 4 News [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Muscular Dystrophy Gene Therapy: ScienCentral News Video [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Sickle Cell Anemia -- Hope from Gene Therapy [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Challenges of gene therapy [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Pain Gene Therapy [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Gene therapy success 'reverses' blindness [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- DNA Gene Therapy [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- The Neural Circuitry of Perception [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Resetting Metabolism- Nuclear Receptors and AMPK: A Lecture by Ronald Evans, PhD [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Islands at Risk (Part 2) - Genetic Engineering in Hawai'i [Last Updated On: May 19th, 2011] [Originally Added On: May 19th, 2011]
- Gene Therapy journal videocast from ASGCT 2011 Xiao Xiao on gene therapy for muscular dystrophy [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- HYBRID HUMANS-Hair Follicle Gene Therapy [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Genetics 101 Part 4: What is phenotype? [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Lloyd Pye - Ancient Genetic Engineering [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Study Designs: Genetic Association Studies [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Gene Therapy for Genetic Disease: The Long and Winding Road [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Introduction to Population Genetics [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Islands at Risk (Part 1) - Genetic Engineering in Hawai'i [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Genetics Based Research on Treatment-Resistant Epilepsy [Last Updated On: May 20th, 2011] [Originally Added On: May 20th, 2011]
- Science in Action: Gene Therapy for Color Blindness [Last Updated On: May 21st, 2011] [Originally Added On: May 21st, 2011]
- Gregg Semenza of Johns Hopkins Medicine on HIF 1 [Last Updated On: May 21st, 2011] [Originally Added On: May 21st, 2011]
- The Sleepiness Gene [Last Updated On: May 21st, 2011] [Originally Added On: May 21st, 2011]
- Blind Gene Therapy [Last Updated On: May 21st, 2011] [Originally Added On: May 21st, 2011]
- Richard Dawkins and Dr Yan on genetic ancestry (extended version) - Bang Goes the Theory - BBC One [Last Updated On: May 22nd, 2011] [Originally Added On: May 22nd, 2011]
- Joshua Mendell of Johns Hopkins Medicine [Last Updated On: May 22nd, 2011] [Originally Added On: May 22nd, 2011]
- Genetic/Genomic Faculty Champion Initiative (PM session) [Last Updated On: May 22nd, 2011] [Originally Added On: May 22nd, 2011]
- euronews science - Epigenetics [Last Updated On: May 22nd, 2011] [Originally Added On: May 22nd, 2011]
- The Genetic Age, Panel 1 [Last Updated On: May 22nd, 2011] [Originally Added On: May 22nd, 2011]
- Biobanking and Bioethics: When Genetics Research Hits the Courts [Last Updated On: May 22nd, 2011] [Originally Added On: May 22nd, 2011]
- Gene Therapy journal videocast from ASGCT 2011 Darren Wolfe on gene therapy for pain.m4v [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Genetics 101 Part 3: Where do your genes come from? [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- ASHG 2010 Mtg.: "Complex Disease Genetics Research in Populations" (Dr. Carlos Bustamente) [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Public Talk - Prof Leonard Seymour, Oxford [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- A New Era in Medicine: Genetics [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Genetic Engineering Animation [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Linda Brzustowicz - Genetic Causes of Schizophrenia [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Hadassah Gene Therapy Center [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Gene Therapy journal videocast from ASGCT 2011 Robin Ali on gene therapy for retinal disease [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- UF cardiologists study gene-modified stem cells to help Dobermans with common heart condition [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Akhilesh Pandey of Johns Hopkins Medicine [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- China's Cancer Drug - China [Last Updated On: May 23rd, 2011] [Originally Added On: May 23rd, 2011]
- Genetic Therapy Restored Boy's Sight [Last Updated On: May 24th, 2011] [Originally Added On: May 24th, 2011]
- Molecular and Cellular Foundations of Medicine Class, 2 of 2 [Last Updated On: May 24th, 2011] [Originally Added On: May 24th, 2011]
- Talking Research - Professor George Ebers - Vitamin D and genetics in MS [Last Updated On: May 24th, 2011] [Originally Added On: May 24th, 2011]
- Designing Humanity - Genetic Engineering [Last Updated On: May 30th, 2011] [Originally Added On: May 30th, 2011]