Is a big deal on the Horizon?

Horizon Therapeutics has long been discussed as a takeover target, and now it’s official: the group yesterday confirmed that it was in “highly preliminary discussions” with Amgen, Johnson & Johnson and Sanofi. These talks might come to nothing, but it is noteworthy that three players are interested; Stifel analysts also cited Novartis and Abbvie as potentially good matches. One question is whether any bidder will pay what Horizon wants, with the group’s share price well off its all-time high of nearly $120 a year ago, though even before the deal talk it had been creeping up again following a second-quarter blip. Stifel reckons that $120 per share would be the minimum acceptable offer, putting the total takeout cost at $27bn. SVB is slightly less optimistic, mooting a potential price tag of $101-117 per share. Horizon’s net present value is $19bn, as calculated by Evaluate Omnium using sellside consensus, which always represents the bull case. Much cheaper, meanwhile, is Horizon’s thyroid eye disease rival Viridian, which traded up 15% this morning in sympathy – however, an even bigger rival might not be great news for that group. Horizon’s suitors have until January 10 to make their intentions known.

What's it worth? Putting a valuation on Horizon
Product/project NPV ($bn)
Tepezza 10.8
Krystexxa 2.4
Uplinza 2.6
R&D pipeline 1.3
Total 17.1
Horizon total NPV 19.1
Source: Evaluate Pharma.

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