Horizon Discovery reports six-month loss following Covid-19 impact, but aids researchers’ efforts to fight virus
Horizon Discovery made a £4.6million loss in the first half of the year, following the significant impact on revenues from the Covid-19 pandemic, but is expecting a return to growth in the rest of 2020.
The Waterbeach-based cell engineering company, which provides gene editing and gene modulation services for the life science industry, reports revenues of £22million on a constant currency basis for the six-month period, down about 15.5 per cent on the first half of 2019.
In its unaudited trading update, Horizon reports: “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 2020.”
Its adjusted earnings (EBITDA) are expected to be a loss of £4.6 million, compared to breaking even in the first half of 2019.
But it reports a strong balance sheet of £23.6million at the end of June, noting: “The group’s cash position was bolstered by a successful placing in April 2020, which raised £6.9million in gross proceeds, and was further strengthened by the implementation of enhanced cash control measures implemented in April.”
Its research reagents business secured £16m in revenue, down 15.3 per cent against the same period in 2019.
The closure during the lockdown spell of many academic and government research labs - which account for about half of the unit’s revenues - was responsible for this reduction, with orders for Horizon’s RNAi and CRISPR reagents and cell line products falling rapidly. In April, revenues for reagents were just 56 per cent of 2019 levels, but improved in May and had recovered by the end of June.
Its bioproduction unit was also hit, with revenue of £2m, down 29.7 per cent. But there was better news from screening, which secured revenue of £4.4m, up 2.8 per cent.
Horizon’s services have been used by researchers in the fight against Covid-19, aiding efforts to uncover the virus’ weaknesses, find targets for potential therapies and help guide vaccine design.
Terry Pizzie, CEO of Horizon Discovery, 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.”
Horizon created a base editing unit in 2019, which it believes is well placed to benefit both the CAR-T therapy market and the gene therapy market.
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