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Amgen agrees €26.8bn deal for Dublin-based Horizon Therapeutics

Largest transaction in the pharma sector this year gives US biotech access to portfolio of rare disease drugs

Dublin-headquartered Horizon Therapeutics has been bought in a €26.8 billion deal - the biggest in the pharma sector worldwide this year - by US group Amgen. Photograph: Dominic Coyle

Mon Dec 12 2022 - 07:25

Horizon Therapeutics, the Dublin-headquartered rare disease drug specialist, has agreed a deal for $28.3 billion (€26.8 billion), including debt, that will see it acquired by US biotech Amgen.

The biggest pharmaceutical deal of the year and the largest to date for Amgen saw the US group win out in a three-way tussle with Sanofi and Johnson & Johnson.

It gives the US group a new pipeline of drugs for rare autoimmune and inflammatory diseases, adding a blockbuster drug to Amgen’s portfolio and helping to counter the impact from rising competition for its top-selling arthritis drug, Enbrel, from newer treatments and expected expiry of patents for the therapy in 2029.

Sales of Enbrel have declined over the last four quarters, tumbling 14 per cent in the latest reported quarter to $1.1 billion.

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Horizon shareholders will receive $116.50 per share in cash, a premium of nearly 50 per cent to where the shares were trading late last month when it first emerged that the company was in sale talks. The deal comes at a time when the valuation of healthcare stocks has dropped dramatically, and is the largest transaction in the sector this year.

Sanofi said on Sunday that it will not proceed with an offer for Horizon because the “transaction price expectations do not meet our value creation criteria”. A takeover by the French drugmaker would have been one of its largest, Bloomberg said.

“The acquisition of Horizon is a compelling opportunity for Amgen ... the potential new medicines in Horizon’s pipeline strongly complement our own R&D portfolio,” said Robert Bradway, chairman and chief executive of Amgen. “Horizon will drive growth in Amgen’s revenue and non-GAAP earnings per share, and is expected to be accretive from 2024.”

Amgen anticipates $500 million in annual pretax cost savings by the end of the third fiscal year after completion.

The deal is expected to close in the first half of 2023, according to the companies.

Traded on the Nasdaq exchange and headquartered in Dublin, Horizon gets almost half of its $3.6 billion in annual sales from Tepezza, a treatment for a painful autoimmune condition called thyroid eye disease. Other top drugs include Krystexxa for chronic gout and Ravicti, a treatment for inborn urea disorders.

Horizon has said it expects annual revenue for Tepezza to grow to $4 billion, with Krystexxa on course to become a $1.5 billion a year blockbuster.

The company became Irish domiciled in a tax-driven transaction known as a corporate inversion when it acquired Dublin-based Vidara Therapeutics for close to $600 million in 2014. Vidara, a private business, had two years previously bought what was left of AGI Therapeutics, a listed specialty pharma set up by a team of former Elan Pharmaceutical executives.

It established its first in-house manufacturing facility with the takeover of EirGen’s Waterford plant last year in a $65 million deal.

The company, which employs close to 200 people here, opened a new corporate headquarters on Dublin’s St Stephen’s Green earlier this year and also announced a six-year sponsorship of the Irish Open, rumoured to be worth in the region of €50 million, starting with this year’s event in Mount Juliet and running up to Ireland’s next hosting of the Ryder Cup at Adare Manor in 2027.

Amgen, which is based in Thousand Oaks, California, already has an Irish presence with a manufacturing base in Dún Laoghaire and a commercial office in Santry which, between them, employ about 450 people.

The company last month reported revenue and profit that beat analyst estimates as 11 drugs had record quarterly sales and the company kept operating expenses in check.

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. Still, growing market volatility and a looming economic recession could dampen the appetite for deal making.

Amgen said it would fund the purchase with a $28.5 billion bridge credit facility from Citigroup and Bank of America.

Shares of Horizon rose about 15 per cent in pre-market trading in New York, while Amgen fell 3.1 per cent. – Copyright the Financial Times Limited 2022/Reuters/Bloomberg

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