This Year's Biggest Pharma M&A... US Amgen Acquires Horizon for 36 Trillion Won

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] U.S. pharmaceutical company Amgen is acquiring Horizon Therapeutics for $27.8 billion (approximately 36.3 trillion KRW). This is the largest M&A deal in the pharmaceutical and biotechnology sector this year.

According to the Wall Street Journal (WSJ) and others on the 12th (local time), Amgen, which has been in exclusive negotiations with Horizon, agreed to pay $116.50 per share for Horizon. This represents a 19.7% premium compared to the closing price of $97.29 on the last trading day of the previous week, the 9th. Compared to the stock price at the end of last month when preliminary M&A negotiations were announced, it is about 50% higher.

The M&A deal size of $27.8 billion is the largest in the industry this year. Horizon, an Irish company, is a biotech firm that has developed treatments for rare autoimmune diseases and severe inflammatory diseases. It is listed on Nasdaq and operates facilities in Deerfield, Illinois, and Rockville, Maryland, in the United States.

Its flagship product is the thyroid eye disease treatment "Tepezza." Last year, sales of Tepezza more than doubled compared to the previous year, leading to a 47% increase in Horizon's total revenue, reaching $3.23 billion. Earlier, Horizon announced at the end of November that it was conducting preliminary M&A negotiations with Amgen, Sanofi, and Johnson & Johnson (J&J). Subsequently, J&J and Sanofi announced they were halting acquisition talks, making Amgen the leading candidate.

Robert Bradway, CEO of Amgen, stated, "This acquisition aligns with our strategy to grow long-term through innovative medicines," explaining the rationale behind the acquisition.

WSJ analyzed that Amgen will be able to strengthen its lineup of immune disease treatments through the acquisition of Horizon. Currently, Amgen holds autoimmune disease products such as "Enbrel" and "Otezla," but this acquisition allows expansion into rarer immune diseases. Jefferies & Co. analyzed that "Amgen could achieve an additional $4 billion in sales by 2024 through the acquisition of Horizon."

However, concerns remain that a significant amount of debt will be inevitable as Amgen has signed loan agreements with financial institutions such as Citi to raise funds for the Horizon acquisition. Additionally, the acquisition must go through approvals from antitrust regulators in the U.S., Austria, and Germany, as well as the Irish courts. Amgen expects the acquisition process to be completed as early as the first half of next year.

On the New York Stock Exchange this afternoon, Horizon's stock price is trading at $112.46, up 15.59% from the previous close. Meanwhile, Amgen is showing a slight decline of around 1%, affected by concerns over loan burdens.

This content was produced with the assistance of AI translation services.