15 May 2014 07:00
Horizon Discovery Group plc to Acquire CombinatoRx
Service Business and Assets from Zalicus Inc.
Highlights
· CombinatoRx service business and assets to be acquired from Zalicus for £4.74m ($8m USD)
· Acquisition provides a proven, revenue generating high-throughput screening business supported by a deep expertise in drug combination studies
· Horizon CombinatoRx Incorporated, the new US trading entity, to be housed in state-of-art laboratory and office in Kendall Square, Cambridge, MA, the heart of the East Coast Biomedtech and Pharma hub
· Platform to be deployed with Horizon's GENESIS™ and X-MAN™ technologies in new high-throughput functional genomics offering
· Potential for delivery of increased scalability of service revenues and will provide a base for future growth in North America
Cambridge, UK and Cambridge, Massachusetts, USA - 15th May 2014: Horizon Discovery Group plc (LSE: HZD) ("Horizon" or the "Company"), the international life science company supplying research tools and services to organizations engaged in genomics research and the development of personalized medicines, today announced it has agreed to acquire the CombinatoRx service business (known as the combination high throughput screening (cHTS) business) and related assets from Zalicus Inc.(Nasdaq Global Market: ZLCS), a biopharmaceutical company that discovers and develops novel treatments for patients suffering from pain.
Pursuant to the acquisition the establishment of a new subsidiary, Horizon CombinatoRx Inc., will provide research organizations engaged in drug discovery and development with access to the unique cHTS platform and Chalice™ analytics software which enables the screening and analysis of thousands of complementary drug combinations with the aim of identifying personalized medicine solutions for the treatment of cancer.
The new business will be further enabled by combining the cHTS platform with Horizon's GENESIS™ and X-MAN™ technologies to perform novel phenotypic cell-based screens with compound siRNA, shRNA and sgRNA (for CRISPR-based screening) libraries. This scalable translational genomics platform will be capable of generating increased service revenues as well as opportunities to leverage into the pharmaceutical value chain to deliver future milestone and royalty payments.
Horizon CombinatoRx, Inc. will be located in a 23,000 sq. ft. laboratory and office space in Kendall Square, Cambridge, MA, the heart of the US East Coast, biomedtech and pharmaceutical hub, providing a base for future growth of Horizon's business operations in North America. The business will benefit from expansion of its historical customer base in North America to Europe, Japan and beyond via access to Horizon's business development infrastructure and an 800+ strong customer base.
Details of the Acquisition
· Acquisition for gross cash consideration of £4.74 million
· £0.59 million ($1 million) rent rebate from Zalicus applied to the sub-lease of the Kendall Square facility over the first 24 months
· cHTS and Chalice™ informatics platform has benefitted from over $30 million of historical investment and has generated over $100 million in cumulative service and alliance revenues from an almost exclusively US customer and collaborator base
· cHTS and Chalice™ informatics platform delivered revenues of $8.1 million in 2013 (10% growth against 2012 revenues of $7.3 million) and generated net profit in 2013 of approximately 20% prior to the allocation of central costs
· Assets acquired include: two fully-integrated robotic screening platforms, outstanding customer contracts, the Chalice™ informatics platform, a library of approximately 800 cell lines and an extensive compound and chemical probe library
· Potential milestones of up to $58 million per combination progressed through pre-clinical and clinical stages attached to contracted alliance deals in place
· cHTS platform to be deployed with Horizon's GENESIS™ and X-MAN™ technologies enabling more scalable service revenues and improved margins
· Jeb Ledell, Vice President of Corporate Operations, Zalicus Inc. will become Chief Operating Officer of the subsidiary, Horizon CombinatoRx Inc., and will lead a dedicated operations and R&D team with decades of experience in combination sciences
· Horizon's Lydia Meyer Turkson will become Vice President (US) Business Development
· The Acquisition is expected to complete in early June 2014
Dr Darrin M Disley, Chief Executive Officer of Horizon Discovery Group plc, commented:
"We are delighted to have agreed to acquire the CombinatoRx service business and related assets from Zalicus Inc. The deployment of the scalable and proven cHTS and Chalice Informatics platform with our world-leading translational genomics platform significantly broadens the portfolio of discovery research services we can offer to our global customer base.
"The cHTS platform enables the deep exploration of efficacy and mechanistic synergies of thousands of drug combinations with the potential to treat serious diseases like cancer by simultaneously modulating multiple biological pathways with targeted therapeutic regimens.
"The acquisition is in line with our ambition, stated at the time of our recent IPO, of expanding our intellectual property portfolio, capabilities and commercial offerings as well as creating a strategic geographical presence in the heart of one of our core markets. We have been very impressed by the scientific excellence, passion and resilience of the CombinatoRx service business over many years. We look forward working with the team to deliver growth in our combined services business via the delivery of science-driven solutions that add real value to our customers' research."
Dr Mark Corrigan, Chief Executive Officer of Zalicus Inc., commented:
"I am pleased that Horizon recognizes the value of the cHTS platform. Importantly, if closed, the sale of cHTS, will increase our cash balance and should provide Zalicus shareholders with a greater ownership position in our previously-announced merger with Epirus Biopharmaceuticals."
ENDS
For further information from Horizon Discovery Group Plc, please contact:
Consilium Strategic Communications (Financial Media and Investor Relations)
Amber Bielecka / Mary-Jane Elliott / Jessica Hodgson / Matthew Neal
Tel: +44 (0) 20 3709 5701
Email: horizon@consilium-comms.com
Zyme Communications (Trade and Regional Media)
Katie Odgaard
Tel: +44 (0)7787 502 947
Email: katie.odgaard@zymecommunications.com
Panmure Gordon & Co. (NOMAD)
Corporate Finance: Freddy Crossley / Duncan Monteith / Fred Walsh
Broking: Tom Salvesen/ Adam Pollock
Tel: +44 20 7886 2500
For further information from Zalicus Inc. please contact:
Justin Renz, CFO, Zalicus Inc.
Tel: +1 617-301-7575
JRenz@zalicus.com
Gina Nugent
Tel: +1 617-460-3579
gnugent@zalicus.com
Notes for Editors
About Horizon Discovery Group plc
Horizon is a revenue-generating life science company supplying research tools to organizations engaged in genomics research and the development of personalized medicines. Horizon has a diverse and international customer base approaching 800 organizations, including major pharmaceutical, biotechnology and diagnostic companies as well as leading academic research centers. The Company supplies its products and services into multiple markets, estimated to total in excess of £29 billion by 2015.
Horizon's core capabilities are built around its proprietary translational genomics platform, GENESIS™, a high-precision and flexible suite of gene editing tools able to alter almost any endogenous gene sequence of human or mammalian cell-lines. Horizon has applied GENESIS™ to create over 550 X-MAN™ cell lines, accurately modeling the disease-causing mutations found in genetically based diseases. These 'patients-in-a-test-tube' are being used by customers to identify the effect of individual or compound genetic mutations on drug activity, patient responsiveness, and resistance, which may lead to the successful prediction of which patient sub-groups will respond to currently available and future drug treatments.
In addition, Horizon provides GENASSIST™ CRISPR and rAAV gene editing tools, custom cell line generation services for research and bioproduction applications, quantitative molecular reference standards, contract research and custom screening services, haploid cell lines (through Horizon's partner Haplogen), and custom shRNA development services and off-the-shelf validated shRNA (through Horizon's partner Sirion).
Horizon is headquartered in Cambridge, UK, and is listed on the London Stock Exchange's AIM market under the ticker "HZD", for further information please visit: www.horizondiscovery.com
About Zalicus Incorporated
Zalicus Inc. (Nasdaq Capital Market: ZLCS) is a biopharmaceutical company that discovers and develops novel treatments for patients suffering from pain. Zalicus has a portfolio of proprietary clinical-stage product candidates targeting pain and has entered into multiple revenue-generating collaborations with large pharmaceutical companies relating to other products, product candidates and drug discovery technologies. Zalicus applies its expertise in the discovery and development of selective ion channel modulators and its combination high throughput screening capabilities to discover innovative therapeutics for itself and its collaborators in the areas of pain and oncology. To learn more about Zalicus, please visit www.zalicus.com
About cHTS
cHTS is an integrated and automated system of customized hardware and software for combination high throughput screening (cHTS™) in phenotypic mammalian cell based assays which allows exhaustive combination screening. Together with an analysis platform capable of recognizing and quantifying complementary drug combinations and integrating complex disease, pathway, target and drug information, the platform enables the discovery of specific combinations of drugs with the potential to treat serious diseases.