Horizon breaks with M&A-shy specialty peers to snag Raptor for $800M

Wall Street Bull

Back in June, rumors swirled that Horizon Pharma may be gearing up for some more M&A. And that M&A is here.

Monday, the Dublin drugmaker announced it had inked an $800 million agreement to pick up California’s Raptor Pharmaceuticals, a deal it’ll finance with $675 million of external debt along with cash it has on hand.

The news follows buzz that the Irish pharma was considering selling off a sizable equity stake to an investor to beef up its balance sheet and allow Horizon--whose debt pile measured close to $1.3 billion in June, according to Reuters--in line for new buys.

But taking on more debt doesn’t seem to bother the Irish company, which focused Monday on the growth potential of Raptor’s rare-disease products. In particular, it touted more than $300 million in potential peak sales for Procysbi, a treatment for rare metabolic disorder nephropathic cystinosis.

“Horizon Pharma has consistently demonstrated strong commercial execution and ability to generate volume growth for our clinically differentiated medicines,” CEO Timothy Walbert told investors on a conference call, and “we expect the same to occur with Procysbi.”

Horizon has been pretty active in the M&A arena lately--especially considering the slowdown that’s hit some of its specialty peers. Early this year, it sealed a $510 million deal for Crealta, the owner of gout med Krystexxa; and last year, it spent months on a hostile pursuit of California’s Depomed, though that endeavor ultimately failed.

But some of the other players in the specialty arena have run into more trouble in that department. Valeant, for one, has put its trademark buying on hold in the wake of a debt buildup and controversy over its specialty pharmacy connections. Like Horizon, it’s seen its specialty pharmacy program come under the lens at the Department of Justice--and payers have frozen out both companies’ products over their specialty pharmacy links, too. 

- read the release

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