Amgen’s Record-Breaking $27.8B Horizon Therapeutics Acquisition Is A Win For Rare Disease Fighting Companies 

Pharmaceutical giant Amgen is wrapping 2022 with the largest pharmaceutical acquisition of the year (so far).

The company announced on Monday it will acquire biotech firm Horizon Therapeutics for $27.8 billion, approximately $116.50 per share of the publicly held drugmaker known for developing drugs that target rare diseases.

M&A activity is a different ball game in 2022

M&A activity was rather bleak in 2020 and 2021. Biotech startups saw record investments in private market funding through venture firms that became interested in COVID-related innovations. Moreover, the IPO market flourished — an unprecedented 143 biotech startups went public in 2021, creating funding opportunities for biotech that allowed them to avoid a buyout for as long as possible.

That was expected to change in 2022. Flush with cash, pharma companies were eyeing new innovations in biotech to replenish their expiring patents. But M&A activity hasn’t been in the acquiree’s favor. Ignoring Amgen’s anomaly acquisition move, around 226 biotech companies were acquired in 2022 for approximately $80 billion according to Crunchbase News, a bleak comparison to M&A activity in years past.

Rare disease drugs turn a quick profit

But Amgen’s first foray into rare disease with the Horizon acquisition is a smart one. Because rare diseases (by definition) affect so few people, drugs that target them are very well-funded by the National Institutes of Health as a means of influencing pharma companies to enter the rare disease development game. And since they’re so rare, insurance companies are extremely likely to cover them.

Rare disease drugs are a good bet for drug companies looking to turn a profit. Horizon Therapeutics’ star therapeutic is Tepezza, a first-of-its-kind drug that targets a rare thyroid eye disease. Horizon purchased Tepezza in 2017 for $145 million (and ended up promising more cash depending on if the drug would work). The drug was approved by the Food and Drug Administration in 2020.

Illustration: Dom Guzman

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