Amgen secures $28.3 billion deal to buy Horizon Therapeutics

© Reuters.

By Scott Kanowsky 

Investing.com -- Amgen Inc. (NASDAQ:AMGN) has agreed to buy Horizon Therapeutics PLC (NASDAQ:HZNP) in an all-cash deal that values the biotech firm at about $28.3 billion, including debt.

In a statement announcing the transaction on Monday, Amgen said it will pay $116.50 per Horizon share - or a 19.7% premium over the stock's last closing price of $97.29. The California-based biotech company will get a bridge loan from Citi and Bank of America worth $28.5B to fund the deal.

Amgen chairman and chief executive officer Robert Bradway said the move will boost Amgen's pipeline of treatments, while also driving revenue and profit growth. The purchase is expected to "be accretive" to Amgen's results from 2024, he added.

"The acquisition of Horizon is a compelling opportunity for Amgen and one that is consistent with our strategy of delivering long-term growth by providing innovative medicines that address the needs of patients who suffer from serious diseases," Bradway said.

The completion of the deal is expected to come in the first half of 2023, according to the firms.

Shares in Amgen fell in pre-market trading, while Horizon Therapeutics soared by just under 15% before the bell.

Horizon first announced last month that it was in talks with three possible suitors, including Amgen, France's Sanofi (NASDAQ:SNY) and Johnson & Johnson (NYSE:JNJ).

Sanofi said over the weekend it had ceased negotiations and dropped a potential offer, adding that the expected transaction price does not meet its "value creation criteria." Johnson & Johnson chose to scrap discussions as well.

Shares in Sanofi SA (EPA:SASY) edged higher in early dealmaking.

It is Amgen's largest acquisition to date and the biggest transaction in the pharmaceutical industry since AstraZeneca's (LON:AZN) $39B purchase of Alexion (NASDAQ:ALXN) in 2021.

Buying the Irish-headquartered Horizon gives Amgen a gateway to a number of lucrative medicines for rare autoimmune and inflammatory diseases, including the blockbuster thyroid eye disease drug Tepezza, which saw sales double over the last year. Revenue from this treatment is expected to eventually top more than $4B once Horizon can secure the right to sell the drug in Europe and Japan.

Although deal activity has slowed in 2022, drugmakers have been harnessing big cash piles and a recent slide in healthcare stocks to renew their medicine pipelines through mergers and acquisitions.

This year, Johnson & Johnson has inked a $16.6B deal for heart technology group Abiomed (NASDAQ:ABMD), while Merck & Co. (NYSE:MRK) bought blood-cancer treatment developer Imago BioSciences (NASDAQ:IMGO) for $1.35B and Pfizer (NYSE:PFE) snapped up biotech Biohaven Pharmaceutical (NYSE:BHVN) for $11.6B.