Amgen acquires Horizon for over $28 billion! Johnson & Johnson, Sanofi withdrew

On December 12, Amgen officially announced that it would acquire Horizon Therapeutics ("Horizon")
for $116.
5 per share.
"Sky-high" M&A news instantly brushed the screen!

Amgen will acquire all of Horizon's issued and to issue common stock for a total value of approximately $28.
3 billion.

In order to complete the transaction, Amgen said it has signed a bridge credit agreement
with financial institutions including Citibank and Bank of America in the amount of US$28.
5 billion.
Once completed, this merger will be the largest in the pharmaceutical industry this year
.

Amgen Chairman and CEO Robert A.
Mr.
Bradway said, "The acquisition of Horizon is an irresistible opportunity for Amgen and is in line with the company's strategy to meet the needs
of patients with serious diseases by providing innovative medicines.
Amgen has decades of leadership in inflammation and kidney disease, as well as Amgen's global presence in biologics, which will allow us to help patients
with drugs such as Tepezza, Krystexxa and Uplizina.
In addition, Horizon's potential R&D pipeline will complement
the enterprise portfolio.
”

Horizon previously disclosed that the three pharmaceutical giants Johnson & Johnson, Amgen and Sanofi are in "highly preliminary discussions"
about potential bids.
On the day, Horizon's stock price rose
.

In less than half a month, two bidders, Sanofi and Janssen Global Services, under Johnson & Johnson, withdrew, leaving Horizon's only buyer with the American pharmaceutical company Amgen
.

Compared with Johnson & Johnson and Sanofi, why can Amgen compete firmly? What kind of core products and pipelines does Horizon Therapeutics have that can attract the attention of major multinational pharmaceutical giants?

Amgen "sits at the negotiating table"

Johnson & Johnson and Sanofi voluntarily withdrew

In the cold winter of capital, any merger and acquisition integration in the industry is of great significance, and mergers and acquisitions between big pharmaceutical companies are particularly interesting
.

Horizon is a commercially developed biotechnology company focused on developing drugs for the treatment of rare, autoimmune, and severe inflammatory diseases to meet urgent needs
in these disease areas.
Horizon's revenue grew 12-fold
from $297 million in 2014 to $3.
565 billion in 2022.

In the industry's view, if Johnson & Johnson acquires Horizon, it will partially offset the decline in the immunology business in the pharmaceutical field, especially the challenge
posed by the blockbuster Stela(ustekinumab) patent cliff.
At the same time, Horizon's gout drug Krystexxa peaked at more than $1.
5 billion
a year in the United States with the help of Johnson & Johnson's marketing system.

Sanofi's bullish favor on Horizon may be due to the company's focus
on self-immunity and rare diseases.
At this year's Expo, Sanofi, as a pioneer in the field of rare disease treatment, exhibited a variety of rare disease drugs, which is enough to show the rich layout
of its drug pipeline in the field of rare diseases.

For Amgen, the addition of Horizon will provide more rare immune disease therapeutics to its product lineup, and Amgen may help Horizon sell more products
overseas.

In fact, all three companies involved in the negotiations have a need to replenish pipelines and have large cash flows, and they have been actively trading
this year.
However, M&A is affected by many complex factors and cannot achieve the desired synergies
.

Not long ago, Johnson & Johnson agreed to acquire cardiac equipment maker Abiomed for $16.
6 billion, further raising high expectations
for corporate acquisitions.
However, a week ago, Johnson & Johnson was the first to announce its withdrawal from the Horizon bid
.

Subsequently, Sanofi officially issued a statement, also announcing its withdrawal from participating in the bid for Horizon, and said that "the transaction price did not meet our expectations"
.

As Johnson & Johnson and Sanofi successively said that they were "strategically abandoned" and "the price was not suitable", Amgen's determination to compete firmly appeared
.

It can be seen from the public information that Amgen is a representative of the field of inflammation, and its sales of etanercept and Otezla, the third in sales, belong to the field of inflammation, and the investment is second only to the field
of hematology / oncology.
In terms of product development, Amgen has laid out 10 products in the form of biosimilars and innovative drugs, covering a wide range
of indications.

It is worth mentioning that Amgen won a patent dispute with Sandoz and Zydus against the blockbuster psoriasis treatment drug Otezla, which has extended the patent term until 2028
.
In addition, Amgen has extended Enbrel, which was first filed in 1995, to 2029 through a series of "patent jungle" layouts.
.
.

These initiatives all show that Amgen is raising investor expectations by extending the life cycle of existing products, and Amgen's participation in the acquisition of Horizon confirms that it is looking for new ways out and urgently needs new products to drive growth
.
The industry expects that after the successful merger and acquisition, Amgen's market capitalization ranking will be able to advance several places in the future, and the pipeline of autoimmune diseases will be richer
.

Dragons and tigers in the field of rare diseases

Why did Horizon become a star in Biotech?

In recent years, the rare disease market has continued to heat up, and major pharmaceutical giants are vying to expand their related product
pipelines.
According to Frost & Sullivan, the global rare disease drug market will increase from $135.
1 billion in 2020 to $383.
3 billion in 2030, with a compound annual growth rate of 11%.

In this market context, Horizon can be described as the hot star of Biotech
in the field of rare diseases.

Founded in 2008 and listed on NASDAQ in 2011, Horizon is a biotechnology company
in the commercial development stage.
In 14 years, Horizon has built a vast pipeline of 12 marketed drugs and 22 clinical products
.

In 2021, Horizon achieved operating income of $3.
226 billion and net profit of $534 million
.
Krystexxa, Horizon's drug for chronic gout, will be a blockbuster, with annual sales of $1.
5 billion
.
In July, the FDA approved expanded labeling of the drug, which will boost its sales
.

It is worth mentioning that Horizon itself has also obtained a number of listed drugs
through a series of mergers and acquisitions.
In 2014, Horizon acquired Vidara Therapeutics International, an Irish specialty pharmaceutical company, for $660 million and moved its global headquarters to Dublin
, Ireland.
Subsequently, it acquired Nuvo Research, Hyperion Therapeutics, Crealta and others
.

Through the acquisition, Horizon acquired its most promising blockbuster product, Tepezza, as well as a range of rare disease products, and began commercialization
.
Tepezza is a monoclonal antibody targeting IGF-1R developed by Horizon that was approved by the FDA in January 2020, becoming the world's first drug
to treat thyroid eye disease (TED).
Tepezza achieved sales of $820 million in less than one year and $1.
661 billion
in 2021.

Horizon also sells Krystexxa for chronic gout, Uplizna for inflammation of the optic nerve and spinal cord, and Ravicti
for the rare genetic disease urea cycle disorders.
With the support of a number of products, Horizon's performance has achieved rapid growth
.
From 2018 to 2021, the compound annual growth rate of its product net sales is expected to reach 37%, and in the eyes of investors, Horizon has been the "most worthy company to invest in" for many years, which may be the main reason
why multinational pharmaceutical companies want to acquire.

Analysts predict a sell-off in stocks this year against the backdrop of rising interest rates, dampening M&A activity but also making valuations more attractive for some companies
.
Under the cold winter of capital, squeeze out the valuation bubble, and the market bottoms out is also a good time
to buy.
The company's valuation is down 27 percent
from its peak share price about a year ago.
The addition of Horizon will provide Amgen's pipeline with more treatments for rare immune diseases, which may help Horizon sell more products
overseas.