Horizon Pharma PLC (NASDAQ:HZNP), a biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs, today announced it has entered a definitive agreement to acquire Crealta Holdings LLC for $510 million in cash.

“The Crealta acquisition further diversifies our portfolio of medicines and aligns with our focus of acquiring value-enhancing, clinically differentiated, long-life medicines that treat orphan diseases,” said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. “We have a proven track record of strong commercial execution and the ability to generate volume growth for clinically differentiated medicines. With our experienced rheumatology sales force and orphan expertise, we expect to expand the number of patients identified and treated with KRYSTEXXA. As with all of our orphan medicines, we plan to maximize additional development opportunities of KRYSTEXXA.”

Strategic and financial benefits of the transaction:

  • Anticipate transaction to add $70 to $80 million in net sales and $45 to $50 million in adjusted EBITDA in the first twelve months following closing.
  • Leverages rheumatology infrastructure and 41-person sales force currently promoting RAYOS and PENNSAID 2% to rheumatologists.
  • Adds a biologic medicine in an orphan disease with strong intellectual property protection through 2027 and further diversifies net sales.
  • Reinforces focus of Company’s long-range plan where orphan business is expected to be approximately 60 percent of net sales in 2020.

KRYSTEXXA is the first and only FDA-approved medicine for chronic refractory gout, which is an orphan disease and a type of arthritis that occurs when uric acid build up in the blood remains high and inflammation persists even after treatment with conventional therapies. According to estimates, chronic refractory gout impacts approximately 50,000 people in the United States. Since its FDA approval in 2010, between 4,000 and 5,000 patients have been treated with KRYSTEXXA.

Transaction Terms and Approvals
The acquisition is structured as an all cash purchase with no external financing necessary. The transaction, which has been approved by the boards of directors of both companies, is subject to the satisfaction of customary closing conditions and regulatory approvals, including antitrust approval in the United States. It is anticipated that the transaction will close in the first quarter 2016. (Original Source)

Shares of Horizon Pharma closed yesterday at $20.40, up $0.55 or 2.77%. HZNP has a 1-year high of $39.49 and a 1-year low of $12.16. The stock’s 50-day moving average is $19.11 and its 200-day moving average is $27.28.

On the ratings front, HZNP has been the subject of a number of recent research reports. In a report issued on December 3, Morgan Stanley analyst David Risinger assigned a Sell rating on HZNP, with a price target of $23, which implies an upside of 12.7% from current levels. Separately, on November 23, Jefferies Co.’s David Steinberg assigned a Buy rating to the stock and has a price target of $32.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, David Risinger and David Steinberg have a total average return of 3.5% and 16.3% respectively. Risinger has a success rate of 62.0% and is ranked #1048 out of 3638 analysts, while Steinberg has a success rate of 54.7% and is ranked #285.

The street is mostly Bullish on HZNP stock. Out of 8 analysts who cover the stock, 6 suggest a Buy rating , one suggests a Sell and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $36.00, which represents a potential upside of 76.5% from where the stock is currently trading.

Horizon Pharma PLC is a specialty pharmaceutical company. The Company’s product portfolio consists of ACTIMMUNE, DUEXIS, PENNSAID 2% and RAYOS/LODOTRA, which addresses the unmet therapeutic needs in arthritis, pain, inflammatory and/or orphan diseases.