Horizon Discovery Group plc Announces Intention to Float

27 February 2014 

Horizon Discovery Group plc Announces Intention to Float 

Horizon Discovery Group plc ("Horizon" or "the Company"), the revenue generating life science company supplying research tools to organisations engaged in genomics research and the development of personalised medicines, today announces its intention to launch an initial public offering of ordinary shares on the AIM market of the London Stock Exchange. Panmure Gordon is acting as Nominated Adviser and Broker to the Company. 

Highlights 

  • A revenue generating business, centred around the proprietary GENESIS™ gene editing and X MAN™ cell line platforms 
  • These platforms enable the understanding of the genetic basis of disease, the manipulation of genomes and the creation of genetically-defined human cell lines or "patients in a test tube" 
  • This technology is becoming widely used in genomics research and the development of personalised medicines targeted to specific genetic drivers of diseases like cancer 
  • Based in Cambridge (UK) Horizon operates through three commercial units: contract research services, cell line and reagent products and leveraged research and development 
  • Blue chip customer base including AstraZeneca, Bayer, Boehringer Ingelheim, Genentech, Jannsen Pharmaceuticals, Merck & Co., Novartis Institutes of Biomedical Research and Takeda, with 353 unique customers in 2013 
  • £6.6 million revenues generated in 2013, up > 70% on 2012 (126% CAGR from 2007 to 2013) 
  • Leveraged research and development potential future milestones payments currently totalling approximately £120 million plus royalties on tiered product sales 

Darrin Disley, Chief Executive Officer of Horizon Discovery, commented: "Horizon Discovery is at a very exciting stage in its development where investments made into the scale up of its three commercial units will accelerate growth, transforming the Company into a global market-leader in translational genomics research tools. 

"The personalised medicine market is growing rapidly and Horizon is poised to capitalise on this through flexible and leveraged deployment of its GENESIS™ gene editing and X MAN™ cell line platforms with customers operating at all stages of the healthcare paradigm. 

"An IPO further enhances the profile of Horizon Discovery, facilitating the expansion of our sales and distribution channels, expansion of our product lines and increasing opportunities to engage in 

leveraged R&D. It also allows us to acquire additional IP and commercial offerings, including sales channels that will enhance our geographic reach." 

Strategy 

The Company's strategy is to: 

  • Increase the market awareness, sales and penetration of existing products and services 
  • Increase the scope of the commercial offering via internal product development, around the GENESIS™, X-MAN™ and GENASSIST™ product ranges, in-licensing and M&A 
  • Increase its IP portfolio in gene editing and add therapeutic area expertise beyond cancer 
  • Increase leverage into the pharmaceutical and diagnostic value-chain 
  • Expand its geographic footprint and commercial offering to achieve global market penetration 

 Summary of the offering and use of proceeds 

The offer consists of the sale of both existing shares and an offer of new shares by Horizon Discovery to institutional investors. 

The new share offer raising £25 million will be used to: 

  • Increase awareness of the Company's services, products and leveraged R&D programs in their target markets; 
  • Expand the sales and distribution channels for the Company's services, products and leveraged R&D programs; 
  • Expand the number of cell line and reagent products available for sale via increased product development and the in-license of new product ranges from third parties; 
  • Increase the pipeline of leveraged R&D opportunities delivering downstream milestone and product royalties; 
  • Expand the intellectual property portfolio, via licence or selective acquisition; and 
  • Acquire additional sales channels that deliver an expanded commercial offering and strategic geographical footprint 

Key Strengths 

The Directors believe that Horizon Discovery's core strengths lie in the following areas: 

  • Established and growing customer base The Company has a broad international customer base including pharmaceutical, biotechnology and diagnostic companies as well as leading academic research centres around the world. 2013 revenues were derived from 353 unique customers. 
  • Proprietary genome editing platform 
    Horizon Discovery's, proprietary, translational genomics platform, GENESIS™, comprising three gene-editing tools, rAAV (under exclusive license), ZFN (under non-exclusive license) and CRISPR (under non-exclusive license), offers a precise and flexible gene-editing solution. 
  • Differentiated approach 
    The Company draws on a long heritage of oncology and translational research, a key differentiator to other commercial proprietors. By being experts in the application of its commercial offering, peer-to-peer credibility is achieved and a basis for leverage established.  
  • Versatile business model 
    The Company operates a powerful business model where it can leverage both internally-funded and customer-funded cell line development, drug discovery services and cell line and derivative reagent product offerings. Additional leverage is achieved by combining the offering with novel IP, oncology and drug discovery expertise allowing Horizon to accrue downstream milestones and potentially product royalties. 
  • Large and growing target markets 
    The Company supplies its services and products in multiple markets including the translational genomics research market; the cell based assays market; the molecular diagnostics market, and the bioproduction market. Combined, it is estimated that these markets will total in excess of £29 billion by 2015. 
  • Significant experience of management and Board 
    The management team has significant experience in: precision genome-editing, genetically-defined cell-line manufacture, oncology and translational medicine combined with extensive experience of operational R&D management and, together with other members of the Board, the growth of high-growth companies in the Healthcare sector. 

For further information please contact: 

Consilium Strategic Communications 

Amber Bielecka / Mary-Jane Elliott / Jessica Hodgson / Matthew Neal 

[email protected]

+44 207 920 2352 

Panmure Gordon & Co. 

As Nominated Adviser and Broker 

Corporate Finance 

Freddy Crossley / Grishma Patel / Duncan Monteith / Fred Walsh 

Broking 

Tom Salvesen/ Adam Pollock 

Tel: +44 20 7886 2500 

Information on Horizon Discovery 

Overview 

Horizon Discovery is a revenue generating life science company supplying research tools to organisations engaged in genomics research and the development of personalised medicines. The Company, which is Cambridge (UK) based, has a diverse and international customer base approaching 800 organisations, including major pharmaceutical, biotech and diagnostic companies as well as leading academic research centres. The Company supplies its products and services into multiple markets, estimated to total in excess of £29 billion by 2015, including the translational genomics research market; the cell based assays market; the molecular diagnostics market, and the biopharmaceutical production market. 

Horizon's core capabilities are built around its proprietary translational genomics platform, GENESIS™, a high-precision and flexible suite of gene editing tools. Most diseases, such as cancer, are associated with genetic variations, which may pre-dispose disease onset, progression or clinical response to therapy. Horizon Discovery's expertise in understanding the genetic drivers of disease in conjunction with the GENESIS™ platform have allowed the development of an extensive inventory of human isogenic cell line pairs that are genetically-defined and accurately model the disease-causing genetic anomalies found in human diseases. These are marketed as X-MAN™ cell lines. 

The GENESIS™ and X-MAN™ platforms are broadly applicable in translational genomics, a field which is increasingly informing the research of life science organisations. The platforms are deployed by researchers to: understand the genetic basis of disease in human, animals and plants; manipulate genomes to deliver enhanced yields of crops and biopharmaceuticals; and create "patients-in-a-test tube", used to identify novel medicines targeted to the patient populations with a genetic profile that predicts clinical outcome. 

Horizon Discovery's business comprises three commercial units: contract research services, comprising cell line manufacturing and discovery research; products, comprising cell line and reagent products; and leveraged R&D, comprising IP licensing, target identification, target validation and bio-production. 

The Board of Directors 

Dr. Ian Gilham – Non-Executive Chairman 

Ian is currently non-executive chairman of Multiplicom NV, focused on the development and commercialisation of DNA sequencing products; and Biosurfit SA, focused on development and commercialisation of point-of-care diagnostic products. He is also director of Stowheath Ltd., which offers advisory services to private equity companies and corporate finance organisations investing in clinical diagnostics and medical device companies. Ian has previously been chief executive officer of Axis-Shield plc and vice president, Pharmacogenetics and Diagnostics at GSK, as well as holding various positions within Abbott Laboratories. 

Dr. Darrin M Disley – Chief Executive Officer 

Darrin is a life scientist who has been involved in the start-up and growth of a number of business ventures. He has a track record of raising business financing from grant, angel, corporate and venture capital sources as well as closing high-value product, service, and licensing deals. In 2012, he was named Business Leader of the Year at the European Life Science Awards. Darrin holds a PhD in Biotechnology from the University of Cambridge has been the author of numerous papers, patents and conference abstracts and has been an advisor on biotech commercialisation strategies around the world. Darrin supports academic, business plan competition and mentoring programs in the UK and is an Entrepreneur in Residence at the Judge Business School and Enterprise Fellow at the Department of Chemical Engineering and Institute of Biotechnology both at the University of Cambridge. He is currently Chairman of GeoSpock Limited and Desktop Genetics Limited two Cambridge technology start-ups as well as an Investment Advisory Board member of the Home Run SEIS/EIS Fund managed by Boundary Capital Ltd. 

Richard Vellacott – Chief Financial Officer and Senior Vice President, Operations 

Richard is an experienced chartered accountant, working with life science companies from start-ups to global pharmaceutical businesses. He also has a first class degree in biological sciences from 

Durham University. Past roles include Vice President, Finance at CSR plc. During his time at CSR, Richard had worldwide responsibility for finance, making significant contributions to the transformational acquisition and integration of NASDAQ listed Zoran Corp., product portfolio management, R&D financial management and business investment / divestment decisions. Before this, Richard was a director in Deloitte's life sciences practice, where he specialised in capital market transactions including IPOs, M&A and fundraising on both the UK and the US markets. Beyond corporate responsibilities, Richard has advised the European Committee on funding for life science companies and presents at investor conferences and seminars on financial issues facing the life science industry. 

Dr. Jonathan Milner – Non-Executive Director 

Jonathan is an experienced entrepreneur and business leader with a background in genetic research. He is an active supporter of the Cambridge business community, is a founder of Abcam Plc, the 2013 AIM business of the year with a recent market capitalisation in excess of £1 billion. Jonathan gained his doctorate in Molecular Genetics at Leicester University after graduating in Applied Biology at Bath University. 

Hugo Harrod – Non-Executive Director 

Hugo is a partner at MVM Life Sciences LLP, a venture capital firm with over $500 million under management, investing in technologies and products for the life science and healthcare markets. Before joining MVM Life Sciences LLP, he qualified as a chartered accountant with KPMG working with biotechnology and pharmaceutical clients. Hugo has a degree in Molecular and Cellular Biochemistry from Oxford University. 

Dr. Vishal Gulati – Non-Executive Director 

Dr. Vishal Gulati is a specialist healthcare investor in diagnostics, digital healthcare and biotechnology and has served on the boards of companies across Europe, the USA and in India for over a decade. Vishal gained investment management experience at Atlas Venture LLP, the Wellcome Trust and at a series of investment ventures including Ivy Lane Capital (UK and Mauritius). 

Having been a practising physician, Vishal is able to combine the insights from a technical as well as a financial perspective. Vishal qualified in medicine in India and received his postgraduate training in Oxford and London as a Rhodes Scholar (1995-1998). In addition to several company boards, Vishal also serves on the BioCatalyst awards committee (a UK Government backed £180 million fund for emerging technology companies) an advisor to the Mayor of London's health commission. 

___ 

This announcement is for information purposes only and does not constitute or form part of any offer or invitation to underwrite, sell or issue, or any solicitation of any offer to purchase or subscribe for, any ordinary shares or other securities in the capital of the Company, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract whatsoever relating to any ordinary shares or securities. 

Panmure Gordon & Co. is regulated by the Financial Conduct Authority and is acting exclusively for the Company and no one else in connection with the Placing and Admission and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing or Admission and will not be responsible to anyone other than the Company for providing the 

protections afforded to its clients or for providing advice in relation to the Placing, Admission or any transaction, arrangements or other matters referred to in this announcement. 

The Placing and the distribution of this announcement and other information in connection with the Placing in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. 

The Ordinary Shares have not been and will not be registered under the United States Securities Act 1933 (as amended) nor under the applicable securities laws of the United States of America or any province or territory of Canada, Australia, the Republic of South Africa or Japan, nor in any country or territory where to do so may contravene local securities laws or regulations and will not be made to any national, resident or citizen of the United States of America, Canada, Australia, the Republic of South Africa or Japan. No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change. Investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. This announcement does not constitute a recommendation concerning the Placing. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Placing for the person concerned. 

Forward Looking Statements 

Certain statements contained within the announcement are forward looking statements and are based on current expectations, estimates and projections about the potential returns of the Group and industry and markets in which the Group operates, the Directors' beliefs and assumptions made by the Directors. Words such as "expects", "anticipates", "should", "intends", "plans", "believes", "seeks", "estimates", "projects", "pipeline" and variations of such words and similar expressions are intended to identify such forward looking statements and expectations. These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties, outcomes of negotiations and due diligence and assumptions that are difficult to predict, qualify or quantify. Therefore, actual outcomes and results may differ materially from what is expressed in such forward looking statements or expectations. Among the factors that could cause actual results to differ materially are: the general economic climate, competition, interest rate levels, loss of key personnel, the result of legal and commercial due diligence, the availability of financing on acceptable terms and changes in the legal or regulatory environment. 

These forward-looking statements speak only as of the date of this announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SHARES IN THE CAPITAL OF THE COMPANY, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER.

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