New growth is on the Horizon

DUBLIN & GAITHERSBURG, Md.—Spring is the season of growth, but Horizon Therapeutics plc is getting an early start this year, having just announced a definitive agreement under which it will acquire Viela Bio, Inc., which specializes in developing novel medicines for autoimmune and severe inflammatory diseases. Horizon will acquire all of Viela's issued and outstanding shares of common stock in a tender offer for $53 per share in cash, for a fully diluted equity value of roughly $3.05 billion, or approximately $2.67 billion net of Viela's cash and cash equivalents.

Once the tender offer is completed, Horizon will acquire all remaining shares not tendered to the offer via a second-step merger at the same share price. Both companies' boards of directors have unanimously approved the acquisition, which is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act. Shareholders that own roughly 54 percent of Viela's outstanding shares have agreed to tender their shares to the offer pursuant to support agreements.

“We are pleased that Horizon recognizes the value of our robust R&D pipeline, our commercial medicine UPLIZNA—which is an important treatment option for patients with NMOSD [neuromyelitis optica spectrum disorder]—and our talented team,” said Dr. Bing Yao, chairman and CEO of Viela Bio. “We believe that the combined pipeline, including the pursuit of additional potential indications, has the potential to yield innovative new medicines to treat autoimmune and severe inflammatory diseases. Our collective R&D expertise, coupled with Horizon’s commercial capabilities, has the potential to provide benefit to more patients with high unmet treatment needs.”

Horizon noted a number of advantages to the deal in its announcement, including a boost to its R&D capabilities by adding new team members “with early-stage research, translational and clinical development capabilities along with deep scientific knowledge in autoimmune and severe inflammatory diseases.” The transaction will also expand Horizon's rare disease portfolio with the addition of UPLIZNA (inebilizumab-cdon) antibody for the treatment of NMOSD, a rare autoimmune disease that attacks the optic nerve, spinal cord, and brain stem.

Including UPLIZNA, the addition of Viela's pipeline nets Horizon four therapeutic candidates being evaluated in nine development programs. UPLIZNA is also being explored in a Phase 2 trial in kidney transplant desensitization (currently paused due to the COVID-19 pandemic) and Phase 3 trials in myasthenia gravis and IgG4-related disease.

Viela's pipeline also includes VIB4920, an investigational fusion protein that blocks a key co-stimulatory pathway that plays a role in several autoimmune and inflammatory diseases, which is undergoing a Phase 2b trial in Sjögren’s syndrome and Phase 2 trials for kidney transplant rejection and rheumatoid arthritis. VIB7734 is an investigational human monoclonal antibody that depletes plasmacytoid dendritic cells, and a Phase 1 study is underway to evaluate the antibody in treating COVID-19-related acute lung injury, with a Phase 2 trial in systemic lupus erythematosus slated to begin in the first half of this year. VIB1116 is a monoclonal antibody for autoimmune diseases, and a Phase 1 first-in-human trial of this candidate is expected to begin in mid-2021.

“This acquisition represents a significant step forward in advancing our strategy—to expand our pipeline in order to accelerate our growth over the long term,” stated Tim Walbert, chairman, president, and CEO of Horizon. “Adding Viela’s research and clinical development capabilities—along with its deep, mid-stage biologics pipeline to our seasoned R&D and commercial teams—advances our transformation to an innovation-driven biotech company where we will build on the success of TEPEZZA and KRYSTEXXA to bolster our long-term growth trajectory. We intend to maximize the full potential of Viela’s pipeline, including the pursuit of additional future indications.”

The deal is expected to close by the end of the quarter, and Horizon expects the transaction to reduce its adjusted EBITDA by approximately $140 million in 2021, the vast majority of which will be due to increased R&D investment.

Photo courtesy of Cytonn Photography on Unsplash

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