Horizon Discovery Group plc: Results for the Six Months Ended 30 June 2019

Cambridge, UK, 16 September 2019: Horizon Discovery Group plc (LSE: HZD) ("Horizon", "the Group" or “the Company”), a global leader in the application of gene editing and gene modulation technologies, today announces its results for the six months ended 30 June 2019.

Group Financial highlights

• Reported revenue of £28.6m an increase of 13.9% on the prior year (HY18: £25.1m) or growth of 8.8% on a constant currency basis¹
• Gross margin increased by 5.3 percentage points to 68.5% (HY18: 63.2%)
• Adjusted EBITDA¹ loss of £0.9m² (HY18: £2.2m loss), including a positive impact of £1.3m from the implementation of IFRS 16 Leases
• Loss after taxation² of £5.3m for the half year (HY18: £7.6m)
• Cash position at 30 June 2019 of £24.8m (HY18: £24.9m)

Business Unit performance*

• Research Reagents: Reported revenue of £16.5m up 11.5% on the prior half year period (HY18: £14.8m) or growth of 6.8% on a constant currency basis¹
• Screening: Reported revenue of £4.3m up 38.7% on the prior half year period (HY18: £3.1m) or growth of 32.3% on a constant currency basis¹
• Bioproduction: Reported revenue of £2.8m up 154.5% on the prior half year period (HY18: £1.1m) or growth of 145.5% on a constant currency basis¹
• Diagnostics: Reported revenue of £2.5m down 28.6% on the prior half year period (HY18: £3.5m) or a decline of 31.4% on a constant currency basis¹
• In Vivo: Reported revenue of £2.5m down 3.8% on the prior half year period (HY18: £2.6m) or a decline of 11.5% on a constant currency basis¹

Other

• Post period end, licensing partner Celyad received FDA acceptance of an IND filing for CYAD-02 its CAR-T cell therapy based on Horizon’s optimized SMARTvector™ shRNA technology, triggering the first milestone payment to the Group
• Product revenue increased 14.6% to £22.8m (HY18: £19.9m); Service revenue increased 11.5% to £5.8m (HY18: £5.2m)

Financial Outlook

• Strong start to trading in H2 2019
• Revenues for FY19 are expected to be second half weighted (consistent with previous years) and in line with current market expectations
• The Group is trading in line with expectations for FY 2019

¹ Refer to the financial review for the definition and reconciliation of alternate performance measures

² The HY19 results incorporate the impact of adopting IFRS16 Leases. Refer to the financial review for the reconciliation

*New market aligned business unit structure introduced in January 2019. Prior year equivalents provided for comparison. A detailed explanation of the performance of each Business Unit is provided in the CEO Review.

Terry Pizzie, Chief Executive Officer of Horizon Discovery, commented:

“Horizon has enjoyed a solid performance in the first half of the year with the business as a whole performing in line with expectations.”

“I am pleased to report Group revenues of £28.6m, an increase of 13.9% on the prior year (HY18: £25.1m) or a growth of 8.8% on a constant currency basis. This growth has largely been driven by strong performance in the Group’s Bioproduction and Screening business units, which increased revenues by 154.5% and 38.7% respectively. The Group’s Research Reagent business unit, which encompasses more than half of Group revenues, also had a good start to the year and we expect strong growth in the second half as this Business Unit benefits from the increased capacity in Cell Line engineering that we have implemented in the first half. We have experienced some organisational challenges with our Diagnostics business unit, but the corrective action that we have put in place should lead to an improved performance in the second half.”

“I am pleased to report that the business is on track to complete the delivery of the productivity and eCommerce initiatives that we are implementing as part of our Investing for Growth strategy. We expect these investments to generate significant payback in the short and long-term, by reducing costs, increasing capacity and operating leverage, whilst also opening up new avenues of growth.”

“With our traditional second-half weighting and strong order book for the remainder of 2019, we are well positioned to deliver on our strategy, as we continue to transform Horizon from a scientifically-led business, into a fully commercial tools and services company with industrialised processes and customer-directed R&D.”

Analyst briefing

An analyst briefing will be held at 12:00pm BST on Monday 16 September 2019 at the offices of Numis, 10 Paternoster Sq., London, EC4M 7LT. There will be a simultaneous live conference call.

Conference call details:

• Participant UK dial‐in: 0800 376 7922
• Participant US dial‐in: 1 866 966 1396
• International dial‐in: +44 (0) 2071 928000
• Participant code: 6674702

A live webcast of the meeting and presentation slides, will be available on the Group’s website:

https://www.horizondiscoveryplc.com/category/presentations-recordings/

For further information from Horizon Discovery Group plc, please contact:

Horizon Discovery Group plc

Terry Pizzie, Chief Executive Officer

Jayesh Pankhania, Chief Financial Officer

Jon Davies, Head of Investor Relations

Tel: +44 (0) 1223 655 580

Numis Securities Limited (Broker and NOMAD)

Freddie Barnfield / Tom Ballard / Duncan Monteith

Tel: +44 (0) 207 260 1000

Consilium Strategic Communications (UK Financial Media and Investor Relations)

Mary-Jane Elliott / Matthew Neal / Melissa Gardiner

Tel: +44 (0) 20 3709 5700

Email: horizon@consilium-comms.com

Westwicke, an ICR Company (US Investor Relations)

Stephanie Carrington

Tel. 646-277-1282

Email: horizondisovery@icrinc.com

About Horizon Discovery Group plc www.horizondiscovery.com

Horizon Discovery Group plc (LSE: HZD) ("Horizon") drives the application of gene editing and gene modulation within the global life science market – supporting scientists on the path from research to therapy.

Built upon more than a decade of experience in the engineering of cell lines, Horizon offers an unmatched portfolio of tools and services to help scientists gain a greater understanding of gene function, identify genetic drivers behind human disease, deliver biotherapeutics, cellular and gene therapies for precision medicine as well as develop and validate diagnostic workflows.

Horizon’s solutions enable almost any gene to be altered, or its function modulated, in human and other mammalian cell lines.

The Company’s customers include many of the world’s foremost academic institutes, global biopharmaceutical and biotechnology companies as well as clinical diagnostic laboratories. Insight into the challenges faced by these organizations enables Horizon to focus efforts on development of innovative solutions that not only differentiate the Company’s offering, but also fuel development of the next wave of precision medicines.

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.