- 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
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
Dr. Darrin M Disley, CEO of Horizon Discovery Group plc, commented: “2016 was a strong year for the Group characterised by continued robust revenue growth and the realisation of operational efficiencies which are all driving the Group towards a positive EBITDA on our trading business this year.
“As outlined at the IPO, the focus of the Group has been to invest for scale to drive a long-term high growth trajectory for the business, and to support the Group’s Path to Profit strategy. Our Services business has a target to deliver at least 15% revenue growth at a greater than 50% gross margin, and our Products business has a target to deliver at least 30% growth with at least a 70% gross margin. This revenue mix increasingly contains a larger share of Products and so we are confident that our path to profitability and high growth trajectory are truly underpinned.
“With a world-leading position in the application of gene editing, Horizon now operates at the nexus of three powerful forces that will drive life science research and healthcare paradigms for decades to come, namely 1) the provision of novel research and drug discovery tools designed to develop personalised medicine and associated companion diagnostics; 2) the development of novel cancer immunotherapies; and 3) the development of cell and gene therapies. With our gene editing expertise and scientific leadership, and global commercial resources, sales channels and business systems now all in place, we are extremely well positioned to take advantage of the international opportunities before us and the Board is confident and excited about Horizon’s future.”
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Horizon Discovery Group plc
Darrin Disley, Chief Executive Officer
Richard Vellacott, Chief Financial Officer
Chris Claxton, VP Investor Relations
Tel: +44 (0) 1223 655 580
Zyme Communications (Trade and Regional Media)
Katie Odgaard
Tel: +44 (0)7787 502 947
Email: katie.odgaard@zymecommunications.com
Consilium Strategic Communications (Financial Media and Investor Relations)
Mary-Jane Elliott / Susan Stuart / Matthew Neal / Melissa Gardiner
Tel: +44 (0) 20 3709 5701
Email: horizon@consilium-comms.com
Numis Securities Limited (Broker and NOMAD)
Michael Meade / Freddie Barnfield
Tel: +44 (0) 207 260 1000
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