Horizon Discovery: Preliminary Results For The Year Ended 31 December 2016

Horizon Discovery Group plc

("Horizon" or "the Company")

Preliminary Results for the Year Ended 31 December 2016

  • Revenue of £24.1m in line with guidance
  • Revenue growth of 19% driven by outperformance in Products business
  • Gross margin improvement to 54% driven by increased Product sales volumes
  • Operational efficiencies taking effect as the Group progresses its Path to Profit strategy

Cambridge, UK, 30 May 2017: Horizon Discovery Group plc (LSE: HZD), ("Horizon" or "the Group"), a world leader in the application of gene editing technologies, announces its preliminary results for the year ended 31 December 2016.

Financial highlights

  • Group revenue increased by 19% to £24.1m (FY15: £20.2m)
  • Product revenues increased by 45% to £11.3m (FY15 £7.8m)
  • Services revenues increased by 5% to £12.7m (FY15: £12.2m) with growth of 30% from in vitro and in vivo services offset by a revenue capacity reduction resulting from consolidation of Boston, USA molecular screening operations into the new Cambridge, UK headquarters
  • Increased share of revenues derived from Products to 47% (FY15: 39%)
  • Group gross margin increased to 54% (FY15: 49%) driven by significantly increased Product margins of 70% (FY15: 57%)
  • Research milestone portfolio of approximately £208m (FY15: £208m) plus royalties enhanced by equity upside from Avvinity joint venture
  • EBITDA loss from Products and Services before exceptional items improved to £3.8m (FY15: £4.6m)
  • Closing cash and cash equivalents of £6.1m (FY15: £25.1m) underpinned by additional debt facility of £8m, undrawn at end of 2016

Post-period highlights

  • Strong start to 2017, with Q1 revenue up c25% year on year, underpinning guidance of FY17 revenue between £30-35m
  • Immuno-oncology set to be a powerful growth driver generating £1.5m in current and ongoing Products and Services in FY17 to date, c40% increase over FY16, and >10 novel drug targets and molecules in development for future or via joint-ventures or spin-outs
  • Exclusive licenses for the use of a novel transposon-based gene editing platform, providing a unique approach to gene editing and DNA delivery and enabling the use of gene editing in bioproduction, diagnostics products and for the first time directly as a cell or gene therapy
  • Signing of a Master Services Agreement with a top three global pharmaceutical company, extending support for their drug discovery and development efforts to Horizon's full suite of services
  • Expansion of license for the use of CRISPR with ERS Genomics to allow the generation of GMP biomanufacturing cell lines

FY16 corporate highlights

  • Strong commercial leadership recruited following business reorganisation, with multiple long term partnerships entered into across the business, driving recurring, visible, high margin revenue
  • Launch of eCommerce, Enterprise Resource Planning system and laboratory automation systems and improved business infrastructure
  • Formation of a joint venture, Avvinity Therapeutics, with Centauri Therapeutics Ltd, to explore the development and discovery of novel therapeutics for immuno-oncology
  • Establishment of Centre of Excellences for in vitro work in Europe and for in vivo work in the US
  • Focus on operational efficiencies through consolidation of Boston, USA operations into Cambridge, UK headquarters and management and business reorganisation into a more scalable and efficient organisational design

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