Back to the future for high octane Horizon
Tough-minded Cambridge entrepreneur Dr Darrin Disley doesn’t take much lying down. But that’s exactly how he set gene editing world leader Horizon Discovery on the road to global success – flat on his back knocking out crucial deals.
In almost constant discomfort from a football-related lower back injury, Dr Disley (above) took the pain and turned it into gain. Operating on a diet of medications he was often forced to lay prone in airports, on boardroom tables and in customer meetings as he winged around the world to put vital early sales in the coffers.
In 2008 he was prostrate as he negotiated with four lawyers from Novartis in Boston, USA to close a transformative four-year deal to deliver early revenues that put the fledgling Horizon on its feet.
“I did 18 deals flat on my back under a laidback laptop,” he recalls with only a slight wince. “I took almost no pay at the time. The next year it was 40 deals still in pain and on a cocktail of medicines.”
Commercially born in July 2007 and almost lost by Cambridge to Torino, Italy at birth, Horizon is now galloping towards unicorn status as that rarest of beasts – a Cambridge-based billion dollar biotech – with its CEO restored to the prime fitness of his halcyon soccer and tennis playing days.
A Cambridge spinal therapist – Kevin Hunt of Gilbert Road – recently worked the oracle for Dr Disley in terms of restoring physical fitness but it is fair to say that the transformational acquisition of Dharmacon from GE this summer for $85 million would have put a spring in his and everyone associated with the company’s step.
It has undoubtedly accelerated Horizon’s progress towards a billion-dollar market cap but has had the added benefit of sending Horizon’s star shooting ever higher in the global life science galaxy as far as investors, collaborators and customers are concerned.
The US market, particularly, is not used to UK companies popping over the Pond to execute such landmark deals – especially when it involves a Colorado business that has matured into a leading provider of RNA interference (RNAi) products with a gene editing product portfolio specialising in CRISPR (pronounced crisper) reagents and arrayed libraries.
Dr Disley calls it “a marriage made in heaven” and little wonder. Dharmacon ended last year with EBIDTA of $5.4m on revenues of $36.7m and over 10,000 influential (mostly academic) customers – and the integration of the thoroughbred business into the Horizon stable is already ahead of schedule.
What’s more, without having had to undertake a NASDAQ float, Horizon has harvested a new and cash rich cohort of deep-pocketed US investors (27 per cent is now in US investors’ hands) who can spot a game-changing deal when they see one.
Horizon funded the acquisition from an £80m ($104.61m) placing of shares. AIM, on which Horizon is listed in the UK, confirmed to Business Weekly that the Cambridge company had become a triple record-breaker on the market.
The £68.6m Horizon raised on IPO in 2014 added to the £120m secondary raise (£188.6m total) was a cumulative fundraising record for a biotech company in the Cambridge science & technology cluster – and on AIM itself. In addition, the £80m raise to underpin the Dharmacon deal was the biggest secondary placement on AIM in the past two years.
The markets received the move with open arms with the deal placing at 205p and, despite the dilution of the Horizon share capital by 50 per cent, actually increased at its peak to 297p (£442m market capitalisation) before settling back to current levels around 250p (£373m market capitalisation).
Dharmacon’s RNAi capability added to Horizon’s already powerful gene editing and gene modulation armoury makes the Cambridge company the go-to cell builder on the planet.
Its credentials were further underlined only this week as Horizon and ERS Genomics extended a pre-existing non-exclusive, worldwide licence agreement to significantly expand Horizon’s coverage for the use of the CRISPR gene editing technology.
This will enable Horizon to use CRISPR in multiple new areas across its products and services, providing access to additional revenue streams in new and existing markets, and further reinforcing Horizon’s leadership position in gene editing and cell biology. ERS Genomics was formed to provide broad access to the foundational CRISPR intellectual property held by co-inventor and co-owner Dr Emmanuelle Charpentier.
With that patent having been granted in Europe, China, Australia, New Zealand, Singapore, Hong Kong and Mexico as of December 1 Horizon has taken the opportunity to expand the group’s rights.
They include the grant of research rights for the identification of novel genetic traits in species relevant to disease model generation and the industrial production of certain animals, including, mouse, rat, chicken, fish, pig and rabbit, enabling Horizon to generate new streams of revenue through the provision of high-value products and services to this market.
New rights to have Horizon products made and sold by partners are also significant. These support Horizon’s original equipment manufacturer (OEM) strategy and will enable new relationships to be developed across Horizon’s products business.
The extended agreement includes one joint venture or spin-out in which Horizon has a significant minority interest, allowing that entity to use CRISPR for its own internal research without an additional license being required.
Dr Disley said: “Horizon was the first company to take a licence for CRISPR from ERS Genomics and currently holds what we believe to be the broadest access to this technology.
“CRISPR is a key component of our gene editing strategy and has enabled us to become the cell builders of choice for partners and customers whose aim is to design, engineer and apply gene-edited cells. Through this expanded licence, we are now able to provide unencumbered access to the benefits of this cutting-edge technology for an increased range of high value products and services.”
This shrewd piece of business reinforces Horizon’s status as a global force in the march towards personalised medicines based on a patient’s individual genetic make-up.
In an exclusive anniversary interview with Business Weekly even the eternally optimistic Dr Disley had to concede that the turnaround in the company’s fortunes from launch to present day had been remarkable. The way the business was shaping before Dr Disley took a grip would have seen it lost to Cambridge; it actually established its first laboratory with six employees in Torino, Italy before raising Series A cash and finding a parallel home at the Babraham Research Campus.
After moving to a stand-alone base at Cambridge Research Park and buoyed by a steadily escalating tide of commercial deals, the company started picking up pace.
The inexorable growth has meant that in recent months, Horizon has been in a position to import manpower and expertise from its global operations based in Boston and Vienna into a majorly expanded Cambridge Research Park headquarters while reinforcing its transatlantic credentials with the Dharmacon acquisition.
In terms of its technology portfolio, what was at birth something of a one-trick pony has grown and flourished to become a thoroughbred performer. Dr Disley says: “There is no one perfect gene editing technology; across the raft of technologies all have different upsides and downsides. We have finessed the Horizon offering to become utterly agnostic to individual technology solutions.
“If you were facing a major operation you wouldn’t want to be in the hands of a surgeon with only one instrument at their disposal. We have continued to expand our own toolbox, as it were via in-licensing the best of the rest and inventing two new gene editing platforms internally.”
Such turnkey excellence is a far cry from the embryonic Horizon when founders Dr Chris Torrance and Professor Alberto Bardelli worked overtime in a bid to gain traction.
It was in September 2007 at the behest of life science serial entrepreneur Dr Jonathan Milner of Abcam fame, that Dr Disley was asked to chart a roadmap to growth and formulated a business plan to raise £150k at a valuation of £650k – modest even at that time but essential if the business was to have any chance of being scaled.
Horizon began to accrue increasing numbers of cell lines from academia, just as Abcam had done with antibodies; revenues went from a modest £345k in 2008 to £1.1m in 2009 in the first really successful year for the company, then into the £6.7m area in 2013 – the year before its record AIM IPO.
Compare those figures to the current lofty heights: Horizon is on target for consolidated revenue of at least £37m for FY17 – representing at least 54 per cent growth on the 2016 figure of £24m – and that at break-even EBITDA. The consensus for FY18 is £65m to £68m revenue with anything between £1m-£2m pure profit.
No wonder Dr Disley describes the 2014 IPO as “the end of the beginning.” The company raised £68.6m in a massively over-subscribed exercise which sealed a market cap at that time of £120.5m.
Floating at 180p a share, which some thought a little high at the time, City sources said the placing was six-seven times oversubscribed compared to the original £25m target. It was a fabulous result for the company, its founders and early shareholders.
Today most of the original shareholders’ register has been replaced by a new set of stakeholders; the Dharmacon acquisition allied to the potential for ongoing major growth will further globalise the shareholder base. Even conservative market analysts we have quizzed privately are not going to be surprised if horizon triples the value of the company in the next three years.
Dr Disley does not rule out the possibility of further synergistic international acquisitions but stresses they will have to be a great fit and genuinely enhance the company’s gene editing and gene modulation capabilities.
His broad vision is to fashion Horizon into one of the biggest but most influential companies the Cambridge biotechnology cluster has ever seen. As part of the long-term blueprint to further scale the business he wants Horizon to demonstrate that it has all the answers to companies and research institutions committed to delivering the right drug to suit the requirements of individual patients.
It takes us back to Dr Disley’s analogy of the surgeon’s instrument case; for example, while they have their high-end scalpels, scissors etc., there is still the need in the genomics toolbox for the Swiss Army Knife multi-capability of CRISPR-Cas9 and a multiplicity of other tools if personalised medicine, cell and gene therapy is to be accelerated and perfected.
So Horizon’s gene editing and gene modulation toolbox can be deployed in most cell types; it enables powerful gene expression, silencing, knockout and knock in capability to enact the maximum phenotypic effect.
As approaching 12,000 customers worldwide will happily testify the technology is highly flexible and can be deployed in several modes. And it is rapid, facilitating fast generation of complex models which reduces the need for compromise in target validation and functional genomics.
Second-guessing how disease types may evolve or mutate in the future, Dr Disley says Horizon will use all of these tools to support the development of a new pharmacopeia of medicines that enable the treating of patients individually – acknowledging that “it’s always the patient that counts.”
The copper-bottomed certainty, in his view, is that gathering and analysing an expanding wealth of genetic and epigenetic data from diverse patient populations pre-and post-treatment is absolutely fundamental to the successful delivery of personalised medicine. The solution is complex and academic, biotech, tech and pharma companies will need to work in a multidisciplinary R & D paradigm and adopt new business models that engage with the healthcare consumer so that a cradle to grave and personalised solution to disease evolution, diagnosis and treatment can be implemented.
“We have to broker into the equation behavioural changes, people’s lifestyles; the environment. What is the blueprint of your life? Are you living near a nuclear power plant; are you fighting poverty? Do you smoke or drink? Boiling it down, it’s about how patients engage with their own health.
“Having said that, if people are not diagnosed with disease until shortly before they die we have to significantly improve the way we use health and wellness telemetry, early and non-invasive diagnosis and more preventative and predictive diagnostic regimens.
“There is a wealth of technology available now that enables us to gather Big Data on greater scale and more efficiently; to screen technologies and deliver non-invasive treatment at a cost people and the country can afford. It’s networked rather than personalised medicine really and I truly believe the business model for patient treatment in the future will be greatly changed.
“Analysis and treatment will be delivered more along the lines that Google delivers internet-related services; that Spotify transmits music, podcasts and video streaming; or how Netflix delivers streaming media, video-on-demand online and DVD by mail.
“The current generation is comfortable with hi-tech delivery methods and future generations will be even more so. Biotechnology is no longer all about drugs; it’s all about science and technology coming together to deliver more efficient, more effective patient treatment in a timely manner. I want Horizon to be a showcase for every conceivable element of bringing about genuine and effective personalised medical treatments.”
No-one could doubt Dr Disley’s credentials as a thoroughly decent individual, altruistic in his motives and totally committed to improving the image and reputation of life science in general as well as the enhancement of treatment for patients suffering all manner of potentially fatal diseases.
His selfless work for charity and in mentoring budding entrepreneurs as he does for CUE at Cambridge University, funding students with hardship bursaries and scholarships, supporting the Cambridge Science Centre, Footprint Cafes and numerous other causes, he is providing a multitude of benefits such as improving young people’s lives and career prospects, underpinning new cohorts of startups that go on to global greatness as major employers – and generating widespread social enterprise that helps people and communities in underprivileged territories worldwide.
As an evangelist for the cause of humanity and services to business he has been honoured by HM The Queen at Buckingham Palace. And, practising as he preaches, he is taking Horizon into schools to spread the gospel for better healthcare and bringing a fresh phalanx of young students and apprentices into the business.
Many of these young people have already been promoted and in his broader management succession plan, he is already cultivating a fresh generation of future executives for the business.
But Dr Disley is also CEO of a quoted UK company with increasing international muscle and, as such, cannot afford to pursue pure altruistic aims at the expense of the business’ bottom line. As he did as a professional soccer player and national standard tennis ace, Dr Disley never takes his eye off the ball.
He devotes hours of his own extracurricular time to helping others to ensure that he never loses sight of where Horizon is going and – just as importantly – how it is going to get there.
He enjoys the analogy of the mountain. Several ways to climb to the top but rarely just one right way! “Some people are so keen just to get to the top of the mountain that they don’t look at the alternative routes. One may be a longer way to get up there but at least it ensures that you will get up there.”
Dr Disley says Horizon has succeeded because it has eschewed the ‘Route 1’ approach of many businesses seeking success in “relentlessly chasing the dream. That way they are increasing their chances to lose by not seeing the path less travelled.
“We have always had control of our business because we raised money when we didn’t need it. Our new investors love that. We believe that another of our great strengths is that we specialise in our core cell building technologies and build into market adjacencies from there.
“In strengthening our hand we see no point in going wider. We always seek greater depth in terms of our technologies and expertise. I have a fantastic board pursuing a great vision with strength and high skill – not afraid to embrace change or opportunity for further scale-up.”
Horizon globally has scaled to approaching 420 people – 220 of them in Cambridge – and Dr Disley believes the city remains a prime springboard for future growth but has no need to stampede in its ambition to rival Silicon Valley.
Having been based in Silicon Valley in 2000 at the height of the tech bubble burst Dr Disley witnessed at first-hand how an infrastructure that had “exploded” turned into a nightmare.
“Multi-family households, gridlocked roads – long commutes – it was a miserable place to be,” he says. “There is a danger to Cambridge if the rate of change is forced and not managed; the cluster needs to go at its own pace to evolve successfully.”
If the city elders need testimony to that strategy they need look no further than Cambridge Research Park and a large building that bears the name Horizon with what looks like a flickering flame above the ‘i’ – it might well be a beacon of entrepreneurial inspiration.
• PHOTOGRAPH (top of article) Horizon Discovery CEO, Dr Darrin Disley – picture courtesy of Getty Images.