LONDON (Alliance News) - Horizon Discovery Group PLC Tuesday said its loss widened in the first half of the year, as it expected, but it expects a stronger second half when the full effects of its CombinatoRx acquisition will be realised.
Horizon's pretax loss widened to GBP3 million in the six months ended June 30, from a GBP1.9 million loss a year earlier, as revenue increased to GBP4.1 million, from GBP3 million, but this was more than offset by higher operating expenditure as it spent on research and development and building up its commercial operations. Operating expenditure was GBP4.8 million, up from GBP3.2 million in the first half of 2013.
In the first set of results since the company listed in an initial public offering in March, it said product and service revenue rose 63% to GBP3.5 million, driven by strong growth in genome-editing services, discovery research services and molecular diagnostic reagent products.
The company said declining costs for human genome testing is creating increased demand from drug researchers. The cost of testing was USD10 million per genome in 2007, when Horizon began trading, to less than USD1,000 today, it said.
It said research and development service revenue rose 75% on the year to GBP569,000.
"Based on our trading performance for the first six months and post-period end, and with revenues weighted towards the second half of the year following the acquisition of CombinatoRx in June, we are confident of delivering a strong performance for the full year," said Chairman Ian Gilham.
CombinatoRx, which it bought for GBP4.7 million, only contributed one month of revenue to the company's interim results.
"We have continued to invest for growth, focusing on research and development, building additional commercial channels and corporate development. In line with this strategy we have also continued to build our sales, marketing and distribution footprint in European, North-American and Asia-Pacific markets," Gilham said.
Horizon is seeking to build a fully-integrated company that provides its customers with a broad suite of tools and services that will support them from the moment a patient's genome has been sequenced, through to the way that patient is treated.
On June 30, Horizon had cash and cash equivalents of GBP33.47 million, mainly thanks to the proceeds of its IPO.
"Horizon continues to deliver on the strategic objectives set out at the time of the initial public offering, delivering a combination of organic growth together with acquisitions where these are closely aligned with our strategy to become a fully-integrated life science company," said Horizon.
Horizon's shares were down 1.5% to 157.68 pence per share Tuesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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