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Amgen to acquire rare disease specialist Horizon in biggest buyout of year


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Amgen Inc on Monday agreed to buy Horizon Therapeutics Plc in a deal valued at $27.8 billion (£22.67bn), fortifying its rare diseases portfolio in the biggest buyout in the sector this year.

The company will pay $116.50 in cash, a premium of nearly 20 per cent to the stock’s last close, for each Horizon share.

Horizon shares closed up 15 per cent on Monday at $112.36. They had climbed 23.5 per cent through Friday since the company disclosed in late November it was in preliminary talks with Amgen, Sanofi and Johnson & Johnson for potential offers. Amgen shares dipped less than 1 per cent to close at $276.78.

Sanofi said Sunday it ended discussions with Horizon after concluding the transaction prices “do not meet our value criteria.”

J&J also said in early December that it had dropped its pursuit of the deal.

Founded in 2005, Horizon Therapeutics develops and markets drugs for rare, auto-immune and inflammatory illnesses. Amgen said the deal would strengthen its drug portfolio, while positioning Horizon’s products through its global commercial and manufacturing network.

“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,” Amgen CEO Robert Bradway said.

With the deal, Amgen gains two fast-growing drugs, the thyroid eye disease treatment Tepezza and gout treatment Krystexxa. Amgen hopes they can act as a bulwark against rising competition for its blockbuster arthritis drug Enbrel and as other key drugs in its portfolio, such as psoriasis therapy Otezla, face loss of patents over the next few years.

Both Horizon medicines have an orphan drug designation, a status granted by the US Food and Drug Administration to encourage development of drugs for rare conditions that comes with a market exclusivity period if the drug is approved.

Orphan status also means they would likely not be among the drugs for which the US government’s Medicare program can negotiate lower drug prices under the Biden Administration’s Inflation Reduction Act (IRA).

“We liked this company, even before the IRA,” Murdo Gordon, Amgen’s head of global commercial operations, said in an interview.

“Given the IRA, the strategic importance of being in these kinds of disease areas with biologics primarily, and with products that have low Medicare exposure and orphan designation, makes it even more attractive,” he added.

Amgen plans to finance the deal through debt and cash, and has entered into a $28.5 billion credit agreement with Citibank and Bank of America.

Amgen said it expects the deal to close in the first half of next year and add to earnings from 2024. It does not anticipate any “overlaps of concern to regulators.”

Sales of Amgen’s Enbrel tumbled 14 per cent in the latest reported quarter to $1.1 billion.

Tepezza, Horizon’s largest selling drug, saw sales double to $1.66 billion in 2021 from a year earlier.

Analysts forecast Tepezza sales reaching $3.85 billion in 2028, while Enbrel sales are expected to fall to $1.89 billion during the same period, according to Refinitiv data.

Horizon’s gout treatment Krystexxa brought in sales of $565.5 million last year. They are forecast to reach $1.36 billion by 2028.

The transaction shows “Big Pharma will pay top dollar for a solid portfolio and pipeline in therapeutics for rare diseases,” where the competitive landscape is “generally much less crowded,” said Derren Nathan, head of equity research at Hargreaves Lansdown in Britain.

“With AstraZeneca’s acquisition of Alexion still fresh in the mind, the trend for consolidation is clear but the universe of large specialists in the space is dwindling, so further deals may be more bite-sized and opportunistic,” Nathan added.

Amgen is testing a closely watched obesity drug in early trials as it seeks to tap a potential multibillion-dollar market that has excited biotech investors.

The Horizon bid follows Amgen’s $3.7 billion deal in August for rare blood vessel inflammation treatment maker ChemoCentryx Inc.

The offer values Horizon at $27.8 billion on a fully diluted basis, according to the company, which includes ordinary shares to be vested. Based on Reuters calculations, it values Horizon at about $26 billion and gives Horizon a $28.3 billion valuation, including debt.

“In nearly 15 years, we have built one of the fastest-growing and most respected companies in the biotechnology industry from the ground up,” said Horizon chief executive Tim Walbert.

“Amgen is aligned with that commitment and passion and will continue to maximize the value of the current portfolio and pipeline and accelerate the ability to reach more patients globally.”

The deal is subject to approval by antitrust regulators in the United States, Austria and Germany, as well as the approval of the Irish High Court. Horizon is based in Ireland, but trades in New York.


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