Amgen AMGN announced that it will acquire Ireland-based Horizon Therapeutics plc HZNP for $116.5 per share in cash or $27.8 billion.
The acquisition represents a premium of approximately 47.9% to the closing price of $78.76 of Horizon on Nov 29, 2022.
We remind investors that Horizon had confirmed on Nov 29, 2022 that it is engaged in preliminary discussions with biotech giant Amgen, Janssen Global Services, LLC and Sanofi SNY for a potential acquisition offer being made for the company.
However, Sanofi recently dropped out of the race.
The acquisition offer by Amgen also represents a premium of approximately 19.7% to Horizon’s closing price of $97.29 per share on Dec 9, 2022. The offer by Amgen implies an enterprise value of approximately $28.3 billion.
Shares of Horizon are trading up in pre-market following the announcement.
The acquisition will add a complementary portfolio of rare disease drugs like Tepezza, Krystexxa and Uplizna to Amgen’s broad and diversified portfolio and should be accretive to the bottom line by 2024. Tepezza is approved for the treatment of thyroid eye disease. Krystexxa is used in adults to help reduce the signs and symptoms of gout that are not controlled by other treatments. Uplizna is a prescription medicine used to treat adults with neuromyelitis optica spectrum disorder (NMOSD) who are anti-aquaporin-4 (AQP4) antibody positive.
Concurrent with third quarter results, Horizon said it expects Tepezza annual sales percentage growth in 2022 in the high teens and increased Krystexxa full-year 2022 net sales growth to approximately 25% compared to the previous guidance of more than 20%.
Amgen expects an estimated annual pre-tax cost reduction of at least $500 million by the end of the third fiscal year following completion.
Amgen’s stock has risen 22.1% this year so far against a decline of 19.1% for the industry.
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The acquisition will diversify Amgen’s portfolio and add an incremental stream of revenues to combat the generic pressure on leading drugs later.
Amgen had earlier acquired erstwhile ChemoCentryx, Inc. for $3.7 billion.
After a lull of a couple of years due to the coronavirus pandemic, Mergers & Acquisitions (M&A) are back in the spotlight. Earlier, pharma bigwig Pfizer PFE acquired Global Blood Therapeutics, a biopharmaceutical company focused on treatments for sickle cell disease (SCD).
Amgen currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Sanofi (SNY) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Horizon Therapeutics Public Limited Company (HZNP) : Free Stock Analysis Report
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