Horizon Discovery Group plc Acquires Sage Labs Inc. for $48M (£29M)

Acquisition makes Horizon the world’s leading gene-editing and translational genomics company


  • Horizon acquires Sage Labs Inc. for up to $48M (£29M) comprising up to $16M in cash and up to $32M in new ordinary shares
  • Acquisition creates a fully integrated and world leading translational genomics platform
  • Significantly expands Horizon’s product, service and research offerings providing cost consolidation, and cross selling opportunities into a broader customer base
  • Further enhances Horizon’s US footprint and strengthens its US and EU sales force
  • Strengthens IP portfolio in CRISPR with exclusive rights for in vivo ZFN applications
  • Provides significant additional top line with $4.7M of revenue in the first 9 months of trading to 31st December 2013 ($6.3M annualized) post management buy-out from Sigma-Aldrich
  • Strong growth through 2014 is expected to transition a $1.6M loss in the 9 months to 31 December 2013, through break-even, to accretive profit contribution in 2015
  • Sage had total assets of $14.5M at 31 December 2013 and the business has benefitted from past investment in excess of $25M

Cambridge, UK and St. Louis, MO, USA—September 29, 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 Sage Labs Inc. (Sage) for up to $16M (£9.8M) in cash and up to $32M (£19.6M) through the issue of new ordinary shares. The acquisition of Sage, a world leader in the generation of advanced in vivo transgenic disease models for use in preclinical research, builds upon the acquisition of CombinatoRx in July and makes Horizon the world’s leading gene-editing company and the go-to company for the provision of integrated product, service and research solutions at all stages of translational genomics and personalized medicine research from sequence to treatment.

The acquisition, which is in line with the stated strategy to build a fully-integrated life science business, provides Horizon with an expanded range of genetically engineered preclinical models, important tools for the discovery and development of medicines targeted to the unique genetic drivers of diseases like cancer. The combined gene-editing platform diversifies Horizon’s overall product and service offerings into adjacent markets not currently addressed, increases its cost consolidation and cross selling potential as well as strengthens its intellectual property portfolio. Sage also provides Horizon with long-term organic innovation opportunities and deep customer relationships within the industry which complement Horizon’s existing business lines.

Sage, a former business within Sigma-Aldrich (NASDAQ: SIAL), was known as Sigma Advanced Genetic Engineering and became Sage Labs Inc. when it was purchased by management and Telegraph Hill Partners in 2013. Sage has benefitted from in excess of $25 million of past investment. The company has 50 employees, a direct US and EU sales force and 43,000 sq. ft. state of the art facilities, enabling the scale-up of Horizon’s product and service offerings through access to new capabilities, capacity and access to new markets.

Horizon will gain exclusive access to ZFN for in vivo model generation and certain exclusive and non-exclusive CRISPR in vivo-related intellectual property (IP) to add to its extensive in vitro IP in CRISPR, ZFN and rAAV, the latter of which is a world-wide exclusive to Horizon. Assets and capabilities acquired include a custom engineered in vivo model development service, an inventory of ready to use in vivo models and an inventory of molecularly annotated patient-derived xenograft (PDx) models and custom development capabilities.

Horizon will focus on expanding Sages’ predominantly US customer base by increasing its presence in Europe, Japan and beyond via access to Horizon’s business development and commercial infrastructure and an almost 1,000 strong customer base.

The acquired business will be known as Sage Labs Inc., a wholly owned subsidiary of Horizon Discovery Group plc. Horizon will also benefit from adding further strong leadership capability to its world-class management team. Successful serial entrepreneur Dr David Smoller, formerly CEO of Sage, and previously CSO of Sigma-Aldrich and President of its Research Biotechnology business unit, will become Horizon’s Chief Business Officer. Along with Dr Darrin M Disley, CEO of Horizon, David will lead the implementation of the long-term corporate development strategy. Dr Edward Weinstein will become General Manager of Sage and will lead a team with decades of experience in preclinical model development and commercialization.

The Acquisition is expected to complete on 2 October 2014.

Dr. Darrin M Disley, Chief Executive Officer of Horizon Discovery Group plc, commented: “The acquisition positions Horizon as the world-leader in gene-editing and at the forefront of technological advances in the field of translational genomics. The consolidated offering significantly strengthens Horizon commercially, allowing us to offer product, service and R&D programs to customers engaged at every stage of translational genomics and personalized medicine research from sequence to treatment.”

Dr. David Smoller, Chief Executive Officer of Sage Labs Inc., added: “I am excited that Sage has become a part of Horizon’s important mission. Horizon is now the destination for researchers and scientists worldwide to find both in vivo and in vitro solutions to their biological questions. The addition of Sage now positions Horizon as the true leader in genomics and gene-editing.”

Further details of the acquisition

  • Application has been made to the London Stock Exchange for 10,957,877 consideration shares to be admitted to trading on AIM (“Admission”). It is expected that Admission will become effective and that trading in the new Ordinary Shares will commence on 2 October 2014.
  • $15.2 million (£9.3 million) in cash is payable and 10,957,877 new ordinary shares representing $30.4 million (£18.6 million) of the consideration will be issued by Horizon on closing of the acquisition. $0.8 million (£0.5 million) in cash may be payable and new ordinary shares representing $1.6 million (£1.0 million) of the consideration may be issued by Horizon 12 months after the closing of the acquisition.

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: horizon@consilium-comms.com

Panmure Gordon & Co. (NOMAD)
Corporate Finance: Freddy Crossley / Duncan Monteith / Fred Walsh
Broking: Tom Salvesen
Tel: +44 20 7886 2500

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 1,000 organizations across nearly 50 countries, 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 offers almost 11,500 products, almost all of which are based on the application of GENESIS™ to generate cell lines that accurately model 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, custom shRNA development services and off-the-shelf validated shRNA (through Horizon’s partner Sirion), and haploid cell lines (through Horizon’s partner Haplogen). These latter partnerships provide Horizon with almost 11,000 further products for our customers.

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 Sage Labs Inc.

Sage is a world-class provider of next-generation research models and transgenic support services. Using proprietary platform technologies, such as Zinc Finger Nucleases (ZFN) and the CRISPR/CAS9 system for genome engineering, Sage produces complex in vivo research models in half the time as models produced using conventional technologies.