Horizon Discovery revives US public offering push
Cambridge-based gene editing world leader Horizon Discovery has decided to resuscitate plans for an initial US public offering of American depositary shares.
The company believes the time is ripe after a spell of uncertainty caused by the COVID-19 pandemic.
Having put the move on hold to see how markets responded following the coronavirus outbreak, Horizon issued a brief statement this week saying it was now full steam ahead.
As we reported when the proposed move was initially announced in early February, Horizon wants to issue an indeterminate number of shares in the US to raise millions of dollars of extra working capital.
More than 50 per cent of shares in the 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.
It has been a good week for the business. TrueBinding, Inc., a California-based biopharma company, has signed a set of commercial licences for Horizon’s cGMP-compliant CHOSOURCE™ platform.
TrueBinding will use the platform to develop and commercialise multiple biotherapeutic products for applications in immuno-oncology and other disease areas with great unmet medical need. No figures have been released for the deal.
To date, CHOSOURCE has been licensed to 80 organisations globally with at least seven confirmed biotherapeutics expressed in these cells having progressed to investigational new drug filings.
And in a half-year trading update, Horizon tells shareholders it remains in rude health. It says that business remains robust with sustained recovery to 2019 levels as demand for its products and services remains high and the group is confident of a return to growth in the second half of this year. The company plans to report its half-year results on August 17.
It expects to report half-year 2020 revenues of around £22.4 million (HY 2019: £26.1m, c. -13.9 per cent) – approximately £22m (c. -15.5 per cent) 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 group’s 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.
Horizon’s cash position was bolstered by a successful placing in April which raised £6.9m and was further strengthened by the implementation of enhanced cash control measures also implemented in April.
Taking this into account, the group had cash and equivalents of £23.6m at June 30 (HY 2019: £24.8m; FY 2019: £18.8m).
CEO Terry Pizzie said: “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 group’s strategy and prospects.”