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The company has created a Hengrui revenue volume with a market value equivalent to Baekje, listed 1 blockbuster and 1 potential blockbuster in 14 years, and successfully transformed from Biotech to Biopharma
.
Perennially at the top of the list of the most worthy investments of well-known investment banks such as Goldman Sachs, it has been acquired by three multinational giants, what enlightenment does it bring to China's Biotech?
Recently, the well-known Biotech Horizon
Therapeutics said its board is in highly preliminary talks
with Amgen, Sanofi and Johnson & Johnson (Janssen) on a potential takeover offer.
"If the transaction is successfully implemented, it will become the largest M&A in 2022
.
" A longtime investor in Horizon said
.
The news pushed Horizon's shares soaring 31 percent
in after-hours trading.
As of November 30, Horizon's market capitalization was approximately $18 billion (close to BeiGene's).
Horizon is known to focus on drug development
for rare diseases, autoimmune and severe inflammatory diseases.
Since its establishment in 2008, it has built a huge product pipeline
with 12 listed drugs and 22 clinical products in 14 years.
With this pipeline, it achieved operating income of US$3.
226 billion (about RMB22.
5 billion) in 2021, with revenue volume close to Hengrui Pharmaceutical (revenue of RMB25.
9 billion in 2021) and net profit of US$534 million
.
Among them, Tepezza's contribution accounted for half of the country, and the sales of this product reached 1.
661 billion US dollars in 2021, a year-on-year increase of 103%, and was included in the list of "20 new drugs with the best market performance in 2021" by foreign media
.
Tepezza is a monoclonal antibody developed by Horizon that targets IGF-1R, which was approved by the FDA in January 2020 and became the world's first drug to treat thyroid eye disease (TED), achieving sales of US$820 million in its first year on the market, surpassing all similar drugs (see below).
Horizon expects Tepezza to peak annual sales at more than $4 billion
worldwide.
Interestingly, Tepezza was first developed by Genmab and Roche to treat tumors after discontinuation and licensed to River
Vision was used in eye disease research, which Horizon acquired for $145 million
.
.
Other blockbuster drugs include chronic gout treatment drugs such as Krystexxa (polyethylene glycolase) and Ravicti (glycerol phenylbutyrate), which are used to treat urea cycle disorders
in adults and children.
It is estimated that Krystexxa's annual sales peak in the United States exceed $1.
5 billion
.
In addition to blockbuster products, Horizon's resume in all aspects can only be described
as "excellent".
Its founder and CEO
Tim
Walbert spent nearly 30 years as a biopharmaceutical company executive and global business leader, one of whose accomplishments was leading the global development, launch and commercial expansion
of Humira through lifecycle management at Abbott (now AbbVie).
In the eyes of investors, Horizon has been on the list of "most worthy companies to invest in"
for many years.
Goldman Sachs recently released the list of "Top 25 Biotech Companies with Quality Growth", ranked second and only Spec
Pharma
。
1 Horizon Story
Horizon StoryIn 14 years, Horizon "created a Hengrui revenue volume with a market value equivalent to Baekje", created 1 Blockbuster, 1 potential Blockbuster, 10 listed products, and successfully transformed from Biotech to Biopharma
.
For domestic Biotech, Horizon, as an innovative drug company that became during the same period, its growth process also has significance
for reference.
Horizon grew out of its founder's obsession
.
"Our story began long before Horizon was founded in 2008
.
During college, CEO Tim
Walbert was diagnosed with an autoimmune disease; Ten years later, after seeing more than 100 doctors, he was diagnosed with a rare disease
.
"For Tim, Horizon is not just a business, it's an investment
in his future and the future of other rare disease patients.
To achieve its goals quickly, Horizon takes an open and proactive strategy rather than stuck in R&D
.
"Our strategic focus is to build a balanced growth pipeline and openness to transformative M&A opportunities, and we are actively looking for partnerships
that can achieve our goals together.
"
Under this strategy, Horizon went through three phases
.
The first stage is the start-up period (2008~2013), which creates sustainable development
through the initial inflammatory drug portfolio.
A milestone in this phase was the listing of NASDAQ, and Horizon landed on the capital market
in its third year.
The second stage is the rapid development period (2014~2020), through investment repositioning, to establish a combination of
rare disease models.
This is when Horizon begins a series of acquisitions, as many as nine, worth more than $6 billion
.
.
In March 2014, Horizon Pharma acquired Vidara Therapeutics, an Irish specialty pharmaceutical company, for $660 million International and relocated its global headquarters to Dublin, Ireland;
In October 2014, it acquired the distribution rights of Nuvo Research's osteoarthritis drug Pennsaid (diclofenac sodium) in the United States for $45 million;
In March 2015, it acquired Hyperion Therapeutics for $1.
1 billion to expand its orphan drug portfolio.
In December 2015, it announced the acquisition of Crealta Holdings for $510 million.
In September 2016, it acquired Raptor, a rare and severe drug research and development company, for US$800 million Pharmaceutical, which includes Procysbi (cysteamine hydrogen bitartrate) and Quinsair (levofloxacin) in its rare disease drug portfolio;
In 2017, it announced that it would acquire River Vision Development Corp for $145 million, acquiring Teprotumumab
, the company's ophthalmic product under development.
Through the acquisition, Horizon acquired its most promising blockbuster product, Tepezza, as well as a range of rare disease products, and began commercialization
.
As it expanded, Horizon changed its company name from Horizon
Pharma was changed to Horizon Therapeutics
.
From this Horizon
Therapeutics enters Phase III (2021–present), a period of expansion in the pipeline portfolio and disease areas
.
In early 2021, Horizon Therapeutics made a major acquisition, acquiring biotech company Viela for $3.
05 billion
Bio acquires an autoimmune disease drug pipeline
.
It is reported that Viela Bio was formerly known as Med, a subsidiary of AstraZeneca Biologics
Immune, which became independent
in 2018.
However, years of non-stop have made Horizon seem a little "empty" and "attacked" in this capital winter
.
"The successive acquisitions in the early stage have made his balance sheet very weak, and the combined ratio of intangible assets and goodwill to assets has risen to 56.
5% since 2021, and the funds are basically from large borrowings and bonds
.
" An industry insider who has been engaged in financial management for many years said
.
At Horizon
In the Phase 3.
0 strategy, capital is an element
of its expansion.
And when the capital winter comes, funds are becoming more and more difficult to obtain, and even the best companies will have to face it
.
2 Who is the best owner
Who is the best ownerWhile Horizon is uncertain whether it will make an offer, the three companies involved in the talks have pipeline replenishment needs, large cash flows, and have been actively transacting
this year 。 Amgen acquired Chemo in October for $3.
7 billion
Centryx, expanding into the autoimmune space, while Johnson & Johnson announced earlier this month its $16.
6 billion acquisition of Abiomed, a device company; Sanofi completed an investment in immuno-oncology company Amunix earlier this year for about $1 billion
Acquisition
of Pharmaceuticals.
So, the next question is, who are the best owners of Horizon among the three? From a company's value creation perspective, a business has no fixed value, but depends on who drives it
.
The best owner of each company may be different at different stages, for example, a large oncology pharmaceutical company with strong sales capabilities may be the best owner
of a small oncology biotech without a sales team.
A common metric is potential business synergy
.
First of all, Horizon's assets mainly include two parts, rare disease drugs and inflammatory drugs, the most expensive asset is Tepezza, the current indication is rare autoimmune diseases, or chronic self-immunity has development potential; The pipeline assets in the pipeline are mainly in the field of autoimmunity and inflammation
.
Amgen is the representative of the field of inflammation, and its first sales etanercept and third Otezza are both in the field of inflammation, 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.
If acquired by Amgen, the benefit is that Horizon's inflammatory products are expected to achieve synergy with Amgen's resource network, but homogeneous products may need to be stripped.
.
Johnson & Johnson (Janssen) and Sanofi are representatives
of the field of self-immunity.
Ultekinumab, Gusecchilumab, and golimumab, three $1 billion blockbusters, are the new three major power engines in the field of immunity, including the patented infliximab
.
The sector is currently growing strongly, which may affect acquisition intentions
.
On the other hand, its indications in the pipeline overlap with those in the Horizon pipeline, such as its potential BIC product, Nipocalimab, for the treatment of myasthenia gravis and lupus nephritis
.
After the sale of dupilumab, Sanofi occupied a position in the global autoimmune field, and after tasting the sweetness, Sanofi accelerated its autoimmune layout and acquired Principia in the United States
Biopharma acquires BTK inhibitor for next-generation transformative autoimmune therapy; Acquired Synthorx for $2.
5 billion to gain a portfolio
of immunology and oncology.
Now that its pipeline revolves around Dupieu, the acquisition of Horizon could re-strengthen its position
in the autoimmune space.
Horizon is an important pipeline in progress
Price is important in M&A negotiations today, and some multinational executives still believe that many assets are not in place
.
According to media reports, it was previously rumored that Merck would buy Seagen, or fail
due to price problems.
Horizon's market cap is close to Seagen's, and previous M&A prices can be used as a reference
.
3 Store grain for the winter
Store grain for the winterAn interesting phenomenon is that whether it is developed into fragrant food or in the dilemma of "nine deaths", Biotech/Biopharma, which is mainly used for rare diseases (with a revenue contribution of more than 60%), will always be Big
Pharma eyed
.
They almost all end up
being acquired.
This year, many small rare disease pharmaceutical companies have moved towards the process of
laying off employees and cutting pipelines.
According to Fierce
Biotech data shows that about one-third of the more than 100 Biotechs laid off in the first half of this year are companies
that do rare disease therapies.
In addition to selling yourself, laying off employees, and cutting pipelines, you can also sell priority review vouchers
.
Bluebird recently sold its Priority Review Certificate (PRV) to Argenx for about $100 million, which can shorten the FDA review period from 10 months to 6 months
.
Recently, due to the continuous optimization and adjustment of epidemic policies, many institutions' forecasts have turned optimistic, but the cold winter is far from over
.
.
At least in the pharmaceutical industry, on the one hand, as an important driver of recovery, despite the rumors of acquisitions, major mergers and acquisitions have not yet appeared, because many asset valuations have not yet been adjusted; On the other hand, several well-known domestic pharmaceutical companies are raising funds and merging subsidiaries to reduce management costs
.
On November 30, Junshi Biologics announced that it intends to issue shares to specific objects to raise a total of no more than 3.
969 billion yuan, and the actual amount raised is 3.
777 billion yuan
.
The funds raised will be used for the innovative drug R&D project and the Shanghai Junshi Biotechnology Headquarters and R&D Base Project, of which the construction of the global headquarters and R&D base will integrate the scattered preclinical research laboratories and clinical research teams in Junshi Shanghai to adapt to the international development trend
.
Keep up and spring will come
.
The cold winter of medicine has become an industry consensus, and "how to survive the winter" has become a key topic
.
As a biotech company, how to seek survival and development has also become an unavoidable problem
.
At present, the most important thing is to survive, "open source" is not yet clear, "throttling" has become the first choice of many biotech companies, layoffs, restructuring, pipeline reduction.
.
.
More Biotech saves operating expenses and reserves more cash flow to survive the winter
.
