Amgen/Horizon: swoop on rare disease specialist will push up debt load But good assets do not come cheap
Harried last minute shoppers tend to overspend in the run-up to Christmas. Amgen, the US biotech heavyweight, risks doing the same.
The company is buying Ireland-based drugmaker Horizon Therapeutics for more than $28bn, including debt. The $116.50 all-cash offer represents a 67 per cent premium to the three-month average of where Horizon’s shares were trading at before news last month that the company was in sale talks.
The strategic logic of buying Horizon is hard to fault. Amgen needs to bolster its pipeline for new drugs as pressure on its legacy products grows. Sales of its blockbuster rheumatoid arthritis drug Enbrel fell 14 per cent in the third quarter to $1.1bn. Another hit will come when the US patents on its top selling osteoporosis treatments Prolia and Xgeva expire in 2025. Together the three drugs account for 37 per cent of Amgen’s $26bn in revenue last year.
This story originally appeared on: Financial Times - Author:Faqs of Insurances
