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UPDATE - Horizon Discovery snaps up high volume genomics platform for £6mln

Horizon Discovery maintains rapid pace of expansion with acquisition of Vienna-based Haplogen Genomics.

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Horizon Discovery’s (LON:HZD) acquisition of Haplogen Genomic, a Vienna-based human cell lines specialist, has prompted more broker price upgrades.

Having raised its price target to 229p only yesterday, house broker N+1 Singer has upped it again to 233p. Panmure Gordon, meanwhile, increased its target to 234p (230p).

Horizon has been selling Haploid Genomics’ products for over a year and knows the business well, N+1 said. 

The deal will boost its inventory ten-fold and also enable an on-demand cell line development service to be launched this quarter.

Cell lines are used to compare normal and diseased patients to find the best combinations of medicines to treat an illness. 

Haplogen's technology can generate precisely engineered human cell lines more easily than normal cell lines as only one copy of a gene, instead of the normal two, needs to be targeted.

It means the price is lower and more affordable for academics.

The acquisition is the latest step in a rapid expandion of Horizon's portfolio of research and diagnostic tools since its IPO in March.

An exclusive distribution agreement was signed with diagnostic tool developer Adarza BioSystems in November and followed the acquisitions of CombinatoRx in June and SAGE Labs in September.

Horizon will pay £6mln in cash for Haplogen, with a possible further £3.9mln depending on its performance.

Darrin Disley, Horizon’s chief executive, said: "We have seen increasing interest in Haplogen Genomics' offerings from all customer segments including academic researchers, drug development companies and research tools providers since we started working with them.

"This acquisition is a continuation of our ambition, stated at the time of our IPO, of expanding our intellectual property portfolio, product development capabilities and commercial offerings to gain broader access to important markets, especially basic academic research.”

Panmure Gordon said the acquisition gives Horizon a strategic platform from which to target the underdeveloped academic market.

Haplogen is a powerful development tool for research and diagnostic products and will expand Horizon’s high margin commercial sales, it added.

N+1 said that revenues will rise over the next two years, but heavy investment may mean Haplogen does not break even until 2016. 

Shares rose 1% to 208p.


Quick facts: Horizon Discovery Group PLC

Price: 156.4 GBX

AIM:HZD
Market: AIM
Market Cap: £235.28 m
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