Amgen is investing more than $26 billion on rare illness therapies through a merger with drugmaker Horizon Therapeutics.
The biotech medicine company announced that it will pay $116.50 in cash for each share of Horizon, which manufactures a thyroid eye disease medication that produced more than $1 billion in revenue in its first year on the market.
After closing a $3.7 billion acquisition of ChemoCentryx, which specializes on autoimmune disease medications, Amgen now has another opportunity to expand its portfolio of rare-disease treatments.
Horizon Therapeutics PLC, situated in Dublin, Ireland, is a company that is working on developing new medicines for uncommon, autoimmune, and severe inflammatory disorders. Tepezza, its best-seller, is only available in the United States and addresses eye bulging and double vision caused by thyroid eye illness.
Tepezza was approved by US regulators in early 2020 as the first treatment for thyroid eye disease. Last year, the drug’s sales more than doubled to $1.67 billion. This accounts for over half of the company’s total sales of $3.23 billion.
In a conference call, Amgen executives told analysts that they want to expand the drug’s use globally. Scientists are also aiming to create an injectable form of the medication, which is now administered by IV.
Amgen Chairman and CEO Robert Bradway stated that the transaction provides his company with a “strong platform” to expand into rare illness medicines, as many Horizon drugs are still in the early stages of development.
Horizon also manufactures Krystexxa, which is used to treat uncontrolled gout. Last year, sales of that treatment increased 39% to $565.5 million. Amgen officials stated that their company’s lengthy experience of collaborating with rheumatologists will benefit in the growth of that treatment’s sales.
Horizon also has a pipeline of additional potential medicines in mid-stage clinical testing, as well as a late-stage therapy for the autoimmune condition myasthenia gravis.
According to Mizuho Securities USA analyst Salim Syed, a Horizon takeover makes strategic sense because Amgen is experiencing competition for some of its important products, such as its autoimmune illness therapy Enbrel. He also stated that Horizon’s presence in Ireland, which has lower corporate tax rates than the US, could assist Amgen in lowering its tax cost.
Amidst all of this, Billionaire John Paulson, Founder of Paulson & Co. an American investment management firm, made $500 Million from this deal, according to sources. Paulson & Co., which changed from a hedge fund to a family office in 2020, has owned a position in Horizon Therapeutics since 2017. Paulson spent an average of $31 per share for the 6.1 million shares in the biopharmaceutical company. Estimations are that Paulson’s take is around $520 million before taxes at the proposed acquisition price of $116.50 per share.
“It’s an important position for us. Excellent outcome for both companies,” said Paulson in an email.
According to regulatory records, Paulson’s investment in Horizon, was his disclosed holding. Horizon has been one of Paulson’s largest holdings since the second quarter of 2021.
Horizon announced late last month that it had begun “highly preliminary discussions” regarding a possible acquisition with three potential suitors: Amgen, Sanofi, and Johnson & Johnson’s Janssen business.
Amgen confirmed that talks were going place and stated that any offer made for Horizon would most likely be in cash.
The recent offer announced marks a 48% premium over Horizon’s closing price of $78.76 before the late-November announcement.
Amgen anticipates the purchase, valued at approximately $28.3 billion, to finalize in the first half of next year.
Horizon’s stock price increased by more than 14% after the markets opened on Monday. They had already risen by roughly 30% since the announcement in late November.