Horizon Therapeutics (NASDAQ:HZNP) stock is up 15% today on news that pharmaceutical giant Amgen (NASDAQ:AMGN) will acquire the Ireland-based company for $27.8 billion.
The acquisition of Horizon Therapeutics is one of the biggest deals in the healthcare space this year, according to industry data. The deal will give Amgen access to Horizon’s best-selling medication, Tepezza, which is approved in the U.S. to treat eye-related symptoms of thyroid disease.
AMGN stock is down 1% today on news of the purchase. However, shares are also up more than 20% year-to-date (YTD), trading for around $275 per share.
What’s Happening With HZNP Stock?
In a news release, Amgen said that it will pay $116.50 per share for the acquisition. Based in Dublin, Horizon is a biopharmaceutical company that focuses on treatments for rare autoimmune diseases. Its Tepezza drug treats eye-related symptoms of thyroid disease and is approved solely in the United States.
Tepezza has the makings of a blockbuster medication. In its first full year of release on the market, the treatment racked up $800 million of sales. It has also racked up much more since then.
In particular, Amgen appears to be keen to get its hands on Tepezza, as well as Horizon’s robust pipeline of future medications and patents. Apparently, both Sanofi (NASDAQ:SNY) and Johnson & Johnson (NYSE:JNJ) were also in discussions to acquire the company.
Why It Matters
This deal is good news for Horizon shareholders, as Amgen is paying a nearly 50% premium for HZNP stock since the company first put itself up for sale last month. For Amgen, the deal provides an opportunity to expand its portfolio of rare disease treatments, which are proving to be lucrative. In October 2022, Amgen also acquired ChemoCentryx in a deal worth $3.7 billion.
More broadly, the Amgen-Horizon deal is positive for the markets and deals in general as well. With stock markets around the world down sharply this year and interest rates marching higher, mergers and acquisitions have dried up. The first half of 2022 saw $995.3 billion worth of mergers and acquisitions, down 29% from a record $1.4 trillion in the same period for 2021.
All told, HZNP stock is getting a nice bounce today on the news. This friendly deal looks like a win-win for both pharmaceutical companies as well as a healthy sign for markets around the world. It may signal a return to more robust dealmaking to come in the year ahead.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
