Rainbow DNA
Credit: iStock/DeoSum

Amgen is buying rare disease drug-maker Horizon Therapeutics Plc for $27.8 billion in this year’s biggest biotech deal so far. The deal nets Amgen several promising drugs that could ease the pressure of rising competition for Enbrel, the company’s top selling arthritis drug, which is expected to lose patent protection in the next few years.

Tim Walbert, chairman, president and chief executive officer of Horizon said: “In nearly 15 years, we have built one of the fastest growing and most respected companies in the biotechnology industry from the ground up. We have accomplished a tremendous amount for patients, their families and our customers, and created significant value for shareholders.”

Shares of Horizon jumped 14.4% to $111.37 and gained 23.5% since the company announced in late November it was in preliminary talks with Amgen, Sanofi and Johnson & Johnson for potential takeover offers.  In the end, Amgen emerged as the sole bidder, and will pay $116.50 in cash for each Horizon share held, a premium of nearly 20% to the stock’s last close.

Robert A. Bradway, chairman and chief executive officer of Amgen said: “The acquisition of Horizon is a compelling opportunity for Amgen and one that is consistent with our strategy of delivering long-term growth by providing innovative medicines that address the needs of patients who suffer from serious diseases.”

He added that, “Amgen’s decades of leadership in inflammation and nephrology, combined with our global presence and world-class biologics capabilities, will enable us to reach many more patients with first-in-class medicines like TEPEZZA, KRYSTEXXA and UPLIZNA. Additionally, the potential new medicines in Horizon’s pipeline strongly complement our own R&D portfolio. The acquisition of Horizon will drive growth in Amgen’s revenue and non-GAAP EPS and is expected to be accretive from 2024.”

According to the company’s website, “Horizon Therapeutics plc is focused on the discovery, development and commercialization of medicines that address critical needs for people impacted by rare, autoimmune and severe inflammatory diseases.”

Horizon has 11 drugs already on the market:  Actimmune, Buphenyl, Duexis, Kyrstexxa, Pennsaid, Procusbi, Ravicti, Rayos, Tepezza, Uplizna, and Vimovo. Its pipeline includes trials of these drugs and others for diseases including myasthenia gravis, diffuse cutaneous systemic sclerosis, idiopathic pulmonary fibrosis, focal segmental glomerulosclerosis, alopecia areata, dermatomyositis, gout, and more. Altogether, the company has three phase III trials ongoing, more than a dozen phase II trials, and several phase I trials.

Amgen listed the following reasons for the acquisition:

  • Strengthens Amgen’s portfolio of first-in-class / best-in-class innovative therapeutics by adding a complementary portfolio of medicines from Horizon that address the needs of patients suffering from rare diseases;
  • Capitalizes on Amgen’s 20-year commercial and medical legacy in inflammation and nephrology and its global scale to enhance the growth potential of Horizon’s portfolio;
  • Utilizes Amgen’s industry-leading research and development, process development and global manufacturing expertise in biologic medicines for the benefit of Horizon’s approved medicines and potential new medicines;
  • Generates robust cash flow (approximately $10 billion combined over twelve months through Q3 2022) to support capital allocation priorities, including ongoing investment in innovation and continued dividend growth while sustaining a commitment to an investment grade credit rating;
  • Accelerates revenue growth and is expected to be accretive to non-GAAP earnings per share from 2024; and
  • Increases efficiency for the Combined Group, leading to an estimated annual pre-tax cost reduction of at least $500 million by the end of the third fiscal year following Completion.
Also of Interest