USA — Amgen has agreed to acquire Horizon Therapeutics of Ireland, outlasting rival suitors Sanofi and Johnson & Johnson in takeover talks that were first revealed last month.

The transaction values Horizon at US$27.8 billion on a fully diluted basis. In terms of dollars, it is the largest in Amgen’s four-decade history, surpassing a 2002 acquisition of Immunex that gave the California biotechnology company rights to Enbrel, its best-selling drug and, for many years, one of the most profitable pharmaceutical products.

While acquiring Horizon is unlikely to provide Amgen with the next Enbrel, it does provide the company with a portfolio of rare and immune disease drugs expected to generate US$3.6 billion in sales this year.

Enbrel’s market exclusivity will expire at the end of this decade, and Amgen, like other pharmas facing patent cliffs, has turned to dealmaking to find new products. It paid US$4 billion for ChemoCentryx and its inflammatory disease drug Tavneos in August.

Amgen will pay US$116.50 per Horizon share, a roughly 20% premium to their closing price on Friday and a 48% premium to what they were worth before Horizon disclosed it was in deal talks. J&J backed out of the talks on December 5, and Sanofi followed suit on Sunday.

According to Horizon’s disclosures as part of the deal’s announcement, Amgen and J&J entered talks only after Sanofi made three acquisition proposals.

Horizon’s board of directors deemed Sanofi’s initial offers insufficient and approached Amgen, J&J, and an unnamed third party.

According to the disclosures, J&J and the other company never made formal bids, whereas Amgen and Sanofi submitted and revised competing bids. Horizon’s board of directors accepted Amgen’s bid over Sanofi’s in a meeting on Saturday.

The boards of directors of Amgen and Horizon have both agreed to the acquisition, which is expected to close in the first half of 2023.

Horizon is based in Ireland, so the deal must be approved by the Irish High Court, as well as shareholders and antitrust regulators in the United States, Germany, and Austria.

Amgen will fund the transaction with cash on hand and new debt.

Horizon’s best-selling drugs are Tepezza, a medicine for thyroid eye disease, and Krystexxa, a chronic gout treatment.

The company raised its peak sales forecasts for both drugs in November, citing their market opportunity in Europe and rising demand.

Horizon also sells nine other therapies in the United States, including one acquired in 2021 for the rare autoimmune disease neuromyelitis optica spectrum disorder.

Horizon provides Amgen with an immediate revenue boost, helping to strengthen its business as biosimilar knockoffs erode sales of former top-seller Neulasta and threaten Enbrel’s future.

In the meantime, Amgen expects growth from its new cancer drug Lumakras, as well as the asthma medication Tezspire, and has recently attracted investor interest for a promising weight-loss treatment in early testing.

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