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Amgen to buy Horizon Therapeutics

Amgen is spending US$26.4 billion to dive deeper into rare-disease treatments with a deal for drugmaker Horizon Therapeutics.

The biotech drug developer said on Monday that it will pay US$116.50 in cash for each share of Horizon, which makes a thyroid eye disease treatment that generated more than US$1 billion in its first full year on the market.

The deal offers Amgen another chance to build its portfolio of rare-disease treatments after it closed in October a roughly US$3.7-billion acquisition of ChemoCentryx, which focuses on autoimmune disease drugs.

Horizon Therapeutics PLC, based in Dublin, Ireland, develops potential treatments for rare, autoimmune and severe inflammatory diseases. Its bestseller, Tepezza, is only approved in the United States and treats eye bulging and double vision from thyroid eye disease.

US regulators approved Tepezza in early 2020 as the first treatment for thyroid eye disease. The drug’s sales more than doubled last year to US$1.67 billion. That’s about half of the company’s total sales of US$3.23 billion.

Amgen leaders told analysts on a Monday morning conference call that they intend to expand the drug’s use globally. Scientists also are working to develop an easier-to-use, injectable version of the drug, which is given by IV.

Amgen Chairman and CEO Robert Bradway said the deal gives his company a “strong platform” to expand into rare-disease treatments, with many Horizon drugs still early in their life cycle.

Horizon also makes Krystexxa for uncontrolled gout. Sales of that treatment grew 39 per cent last year to US$565.5 million. Amgen officials said they expect their company’s long-standing history of working with rheumatologists will help that treatment’s sales grow.

Horizon also has a pipeline of additional potential treatments in mid-stage clinical testing and a possible therapy for the autoimmune disease myasthenia gravis in late-stage testing.

Amgen is facing competition for some of its key products like its autoimmune disease treatment Enbrel, so a Horizon takeover makes strategic sense, Mizuho Securities USA analyst Salim Syed said in a research note. He also said Horizon’s presence in Ireland, which has lower corporate tax rates than the United States, could help Amgen cut its tax bill.

Horizon said late last month that it had started “highly preliminary discussions” about an acquisition with three potential suitors: Amgen, the French drugmaker Sanofi, and Johnson & Johnson’s Janssen division.

Amgen had confirmed discussions were taking place and said that any offer it made for Horizon likely would be in cash.

The deal laid out on Monday represents a premium of 48 per cent to Horizon’s closing price of US$78.76 before it made that late-November announcement.

Amgen said it expects the deal, which has an enterprise value of about US$28.3 billion, to close in the first half of next year.

Horizon’s stock price jumped more than 14 per cent after markets opened on Monday. They had already soared about 30 per cent since the late November announcement.

Shares of Amgen Inc, based northwest of Los Angeles in Thousand Oaks, California, fell about one per cent, while broader indexes climbed slightly.


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