Amgen buying Horizon Therapeutics
Purchase strengthens commitment to drugs for autoimmune ills and rare diseases
Thousand Oaks-based Amgen agreed to buy Horizon Therapeutics for about $27.8 billion in its biggest-ever acquisition, deepening its commitment to treatments for autoimmune, inflammatory and rare diseases.
Amgen will pay $116.50 a share in cash, the companies said in a statement Monday, for a premium of about 48% since Horizon Therapeutics disclosed Nov. 29 that it was in early talks with three suitors. The announcement confirms an earlier report by Bloomberg News.
Horizon shares gained as much as 15% to $112 as of 1 p.m., their highest intraday level since April. Amgen’s fell 1.5%.
Horizon’s focus overlaps with that of Amgen, the maker of the Enbrel treatment for autoimmune ailments like psoriasis and ankylosing spondylitis. Such therapies are often tested and used in a wide variety of indications after inititally reaching the market, which can add to sales.
Horizon gets almost half its $3.6 billion in annual sales from Tepezza, a treatment for a painful autoimmune condition called thyroid eye disease. In October, Amgen acquired another drug company with a similar immune focus, ChemoCentryx.
Emerging from the exhausting focus on COVID-19, big drugmakers are resuming their search for innovative therapies, especially for those that treat rare diseases and cancer. The deal for Horizon is the biggest in pharma since AstraZeneca bought Alexion Pharmaceuticals for $39 billion in 2020. Horizon is developing drugs for conditions including lupus, alopecia, arthritis and kidney transplant rejection.
Amgen in particular is contending with the threat of diminished revenue as some of its biggest products face the loss of patent protection in the coming years.
“That Amgen is looking for larger deals is not surprising,” given expected erosion of its base business, Wolfe Research analyst Tim Anderson said in a note. “Most often it is companies with future holes to fill that do bigger deals.”
The deal has the potential to provide a sales boost to Amgen, executives said on a call with investors.
“We’ve admired Horizon’s success for some time and we’ve studied their business closely through time as well,” Amgen Chief Executive Officer Robert Bradway said. “And when presented with this opportunity, we were prepared to move quickly.”
Murdo Gordon, Amgen’s executive vice president for global commercial operations, declined to project potential revenue, citing securities rules in Ireland, where Horizon is based. He said rapid growth of several of Horizon’s drugs in the U.S. may foreshadow similar trends in other
countries.
Outperformed rivals
Amgen has far outperformed its rivals this year, with its stock rising 24% through Friday to a market value of about $149 billion. Amgen last month reported revenue and profit that beat analysts’ estimates as 11 drugs had record quarterly sales and the company kept operating expenses in check.
Amgen said the purchase of Horizon is expected to increase earnings per share starting in 2024. It anticipates $500 million in annual pretax cost savings by the end of the third fiscal year after completion.
Amgen will fund the purchase with a $28.5 billion bridge credit facility from Citigroup and Bank of America. This is the second time this year the banks have teamed to advise and fund a large deal, following their work on Philip Morris International’s purchase of Swedish Match. Amgen had almost $11.5 billion in cash and equivalents at the end of the third quarter.
Horizon, which is traded on the Nasdaq exchange and headquartered in Dublin, has U.S. operations in Deerfield, Illinois, and Rockville, Maryland.