Amgen’s $27.8 Billion Rare Disease Drug Acquisition

On Monday, Amgen Inc announced its acquisition of the rare disease pharmaceutical company Horizon Therapeutics PLC, building on its portfolio of key drugs for treating uncommon conditions. Amgen expects the deal to close next year, barring regulatory holdups.

Horizon accepted an offer of $116.50 per share in cash from Amgen, representing a 47.9% premium on the closing share price before the deal was announced. The acquisition will strengthen Amgen’s portfolio and build a stopgap as some of its legacy drugs lose patent exclusivity. The announcement comes after a contest between major pharmaceutical companies for the right to buy Horizon, where Amgen emerged victorious, edging out competitors like Sanofi and J&J.

“We have accomplished a tremendous amount for patients, their families, and our customers, and created significant value for shareholders,” commented Tim Walbert, chairman, president, and chief executive officer of Horizon, in the acquisition announcement. “These accomplishments are all rooted in our employees’ deep commitment, dedication, and personal passion for those impacted by rare, autoimmune, and severe inflammatory diseases. Amgen is aligned with that commitment and passion and will continue to maximize the value of the current portfolio and pipeline and accelerate the ability to reach more patients globally.”

At the time of the announcement, Horizon had ten drugs in its development pipeline seeking 22 potential indication approvals. The Ireland-based company already has 11 prescriptions approved in the United States, contributing to the company’s $3.23 billion in revenue during the fiscal year 2021.

Horizon also holds orphan status for its medications Tepezza and Krystexxa, which played a part in the acquisition according to an interview conducted by Reuters: "We liked this company, even before the IRA (Inflation Reduction Act)," said Murdo Gordon, Amgen's head of global commercial operations. "Given the IRA, the strategic importance of being in these kinds of disease areas with biologics primarily, and with products that have low Medicare exposure and orphan designation, makes it even more attractive."  

If approved, Amgen’s purchase is one of the most significant acquisitions in recent history and the largest in the sector this year.

In August, Pfizer bought Global Blood Therapeutics, another rare disease pharmaceutical company. That purchase yielded Pfizer one of the few approved sickle cell treatments and several other drugs to treat rare hematological conditions. And earlier in the year, reports emerged of a possible merger between Merck and Seagen Inc worth $40 billion. That deal has yet to close and may face strong regulatory opposition if it goes through.