WSJ Exclusive News | Amgen in advanced talks to buy Horizon Therapeutics

The deal could be finalized by Monday if talks with Amgen do not fall apart, the people said.

Horizon develops drugs to treat rare autoimmune and severe inflammatory diseases that are currently sold primarily in the US. Its biggest drug, Tepezza, is used to treat thyroid eye disease, a disease characterized by progressive inflammation and damage to the tissues around the eyes.

The company is listed on Nasdaq but is based in Ireland and has operations in Dublin, Deerfield, Illinois, and a new facility in Rockville, Maryland.

Horizon said last month it had takeover interest from Amgen, Sanofi and

Johnson and Johnson,

a revelation prompted by a Wall Street Journal report.

Johnson & Johnson later said it had dropped out.

Last year, Tepezza revenue more than doubled, driving Horizon’s total net sales up 47% to $3.23 billion. Horizon said annual global net sales of the drug are on target to eventually peak at more than $4 billion as the company seeks approval to sell it in Europe and Japan.

This type of growth is attractive to big drug companies — many of which have large piles of cash — which rely on acquisitions as a key strategy to expand sales. Many major drugmakers are looking for new sources of revenue to offset losses when some of their core products lose patent protection.

Analysts expect Amgen to lose sales when patents on its top-selling osteoporosis drugs Prolia and Xgeva begin to expire later this decade. The two drugs accounted for nearly $5.3 billion of Amgen’s $26 billion in revenue last year.

In October, Amgen completed $3.7 billion deal for ChemoCentryx and its drug to treat a rare disease of the immune system.

Adding Horizon would bring more drugs for rare immune diseases to Amgen’s lineup, which also includes biotech immune disease therapies Enbrel and Otezla. Amgen could help sell more of Horizon’s products overseas, according to analysts.

The acquisition of Horizon could add about $4 billion in new revenue for Amgen by 2024, according to Jefferies & Co.

Other major life sciences companies have made deals in recent months.

Johnson & Johnson recently hit $16.6 billion deal to acquire cardiac device maker Abiomed Inc. to boost sales of its medical equipment division, which had lagged behind those of its pharmaceutical unit.

Merck

& Co. followed by own dealagreeing to buy a blood cancer biotech

Imago BioSciences Inc.

for $1.35 billion, ahead of the patent expiration of its Keytruda cancer immunotherapy.

Pfizer Inc.,

meanwhile, agreed in August to buy Global Blood Therapeutics Inc. for $5.4 billion in a deal that will give the big drugmaker a foothold in treatment of sickle cell disease.

A Horizon deal is likely to rank as the largest global healthcare acquisition in 2022, overtaking the Johnson & Johnson-Abiomed tie-up. The stock sale this year amid rising interest rates, while hampering deal activity, also made some companies more attractive targets. At the stock’s peak about a year ago, Horizon was valued at roughly $27 billion.

Shares, which had fallen sharply earlier this year, have rallied since the takeover possibility emerged, and the company now has a market value of about $22 billion.

Horizon’s other drugs include Krystexxa to treat gout, a form of inflammatory arthritis, and Ravicti for a rare, potentially life-threatening genetic disorder known as urea cycle disorder, which raises blood ammonia levels.

Drugs to treat rare diseases have become a big source of pharmaceutical sales because they can command high prices that health insurers are willing to pay.

Write to Ben Dummett c ben.dummett@wsj.comDana Cimiluca c dana.cimilluca@wsj.com and Laura Cooper c laura.cooper@wsj.com