Amgen is close to a deal to acquire Horizon Therapeutics in a transaction worth as much as $20bn, according to sources familiar with the matter, as a sell-off in healthcare stocks creates attractive targets.
A deal between the California-based biotech and Horizon, which is headquartered in Ireland, would mark the largest pharmaceutical transaction since AstraZeneca bought Alexion for $39bn last year.
The takeover would give Amgen access to Horizon’s pipeline of drugs for rare autoimmune and inflammatory diseases, including its blockbuster treatment Tepezza.
Horizon said last month that it was in takeover talks with three potential suitors, among them Johnson & Johnson and Sanofi. The French drugmaker said on Sunday that it had evaluated the deal and decided that the price was not right.
The potential deal comes hot on the heels of Amgen’s $3.7bn acquisition of ChemoCentryx, a San Carlos, California-based company that develops drugs for inflammatory and autoimmune diseases as well as cancer.
Analysts have been predicting a boom in mergers and acquisitions in the pharmaceutical sector as valuations have come down in the worst biotech sell-off since the early 2000s. Shares in Horizon had fallen 27 per cent from the start of the year until late November, when the company confirmed it was engaged in preliminary deal discussions.
While there has been a broader slowdown in M&A this year, drugmakers have been busy putting their large piles of cash to work as they seek to replenish their drug pipelines.
Johnson & Johnson announced in November it had struck a deal to acquire cardiovascular technology group Abiomed for $16.6bn, while Pfizer said in May it had agreed to buy US biotech Biohaven Pharmaceuticals for $11.6bn.
Still, 2022 has so far been a quieter year for M&A, with overall pharmaceutical and life sciences deal value down by 49 per cent year on year, and volumes falling by 28 per cent, according to data compiled by PwC.
Tim Walbert, Horizon’s chief executive, suffers from an autoimmune condition himself, and previously led the global development of Abbvie’s blockbuster Humira.
Horizon received regulatory approval for Tepezza in January 2020. In the third quarter, it had net sales for the drug of $490.9mn, guiding to a high teens percentage growth rate for the full year. In total, it forecasts net sales of between $3.59bn and $3.61bn, and adjusted earnings before interest, tax, depreciation and amortisation of $1.32bn to $1.34bn for 2022.
The company has an extensive pipeline of drugs targeting autoimmune diseases including rheumatoid arthritis, lupus, atopic dermatitis, and gout.
The deal was first reported by the Wall Street Journal.