Horizon pays $3bn to bolster its pipeline

But forecasts of over $3bn in annual peak sales from Viela’s portfolio look steep.

Deals

With a successful launch under its belt and plenty of cash in the bank, striking an acquisition was the logical next step for Horizon Therapeutics. And in the Astrazeneca spinout Viela Bio it looks to have found a good fit, with both companies active in rare autoimmune conditions.

However, Horizon’s expectations look exuberant to say the least: the group expects Viela’s portfolio to bring in over $3bn in peak annual sales, well above the $960m revenues currently forecast by the sellside for 2026, according to EvaluatePharma.

If Horizon does turn out to be right it will have bagged a bargain, paying $3.05bn for Viela, or $2.67bn net of Viela’s cash and equivalents. But the bigger group has work to do: apart from Uplizna, which got the go-ahead in neuromyelitis optica spectrum disorder (NMOSD) in June, the rest of Viela’s pipeline is some way from the market.

Viela Bio's pipeline
Project Description Indication & status 2026e sales ($m) Product NPV ($m)
Uplizna Anti-CD19 Mab NMOSD - marketed 383 1,422
Myasthenia gravis - ph3 (NCT04524273) 132
IgG4-related disease - ph3 (NCT04540497) -
Kidney transplant desensitisation - ph2 (NCT04174677)* 51
VIB4920 Anti-CD40L-Tn3
fusion protein
Sjögren's Syndrome - ph2 (NCT04129164) 258 894
Kidney transplant rejection - ph2 (NCT04046549) 71
RA - ph2 (NCT04163991) -
VIB7734 Anti-ILT7 MAb Systemic lupus erythematosus - ph2 to start H1 2021 8 3
Covid-19-related lung injury - ph1 (NCT04526912) -
VIB1116 Anti-dendritic cell MAb Ph1 to start mid-2021 in "autoimmune diseases" - -
Total 962** 2,319
*Paused owing to Covid-19; **includes $59m forecast Uplizna sales for "other metabolic indications". Source: EvaluatePharma & clinicaltrials.gov.

And there are worries that Uplizna, a B-cell depleting agent, could struggle to gain a foothold in NMOSD, which has suddenly become a crowded area since the approval of Alexion’s (soon to be Astrazeneca’s) Soliris and Roche’s Enspryng. In addition, the fellow B-cell depleter Rituxan is widely used off label in this condition (A niche market beckons for Viela’s Uplizna, June 12, 2020).

Uplizna appears to be off to a slow start, with Viela reporting sales of $2.3m in the third quarter of 2020. More details on the launch are expected during Horizon’s fourth-quarter earnings call.

However, the main driver behind the deal was Viela’s R&D efforts, both with Uplizna and its broader pipeline, Horizon’s chief executive, Tim Walbert, said during a conference call today.

He added that Horizon would look into moving the Viela projects into other indications. But the company will take a $140m hit to its earnings in 2021, “nearly all” of which is driven by that R&D investment.

Mr Walbert stressed the Viela takeout was not “a synergy deal” but was about adding R&D capabilities plus Viela’s scientific and commercial team.

Still, there could be more to come: the chief exec concluded that Horizon would “aggressively” look to add new medicines over the coming months and years as it continued to build its pipeline.

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