Horizon snaps up rare disease drugs, pipeline, in $800M Raptor buyout
Horizon Pharma has bagged Raptor Pharmaceuticals $RPTP and a pair of rare disease drugs on the market — along with a multi-drug pipeline — in an $800 million cash deal. Horizon is paying $9 a share for Raptor, which also has been pursuing a troubled development path for a new drug for Huntington’s drug, now in a pivotal trial.
Horizon $HZNP is looking for some quick returns on Raptor’s two approved drugs, Procysbi and Quinsair, used to treat a rare metabolic disorder called nephropathic cystinosis and chronic pulmonary infections due to Pseudomonas aeruginosa in adult patients with cystic fibrosis. Procysbi has U.S. and European approvals, while Quinsair is OK’s in Europe and Canada.
The company trumpeted the move for beefing up its orphan drug portfolio, which will now include 6 drugs for rare diseases. It’s also chuffed that it can now extend its operations into Europe.
That news sat well with investors, who bid up Horizon’s shares by 5% Monday morning.
Raptor’s shares closed at $7.45 on Friday after climbing back from a $3.32 low in January. The biotech’s revenue hit a quarterly high of $32 million in Q2. That’s not blockbuster territory by any means, but it allows Horizon an opportunity to grow the company while expanding in a rare disease field that has attracted widespread interest in biopharma in recent years.
A few weeks ago, Raptor was the subject of considerable market chatter from Bloomberg and others, which cited Retrophin and Shire as likely acquirers. Those reports were right about the interest, even if they failed to identify the buyer. But it is noteworthy that despite the buzz, Raptor did not fetch a big premium.
Raptor’s top drug in the pipeline is RP103, which failed a Phase II Huntington’s study in late 2015 but was shoved into a pivotal trial in any case, as investigators say they were persuaded by enough clinically significant data to push ahead. The setback on RP103 followed a complete failure on NASH at the biotech. Raptor also has drugs in the clinic for cystic fibrosis, bronchiectasis and non tubular myobacteria.
“The proposed acquisition of Raptor furthers our commitment to helping people with rare diseases and is a significant step in advancing our strategy to expand our rare disease business,” said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. “Along with the potential for accelerated revenue growth, the addition of Raptor strengthens our U.S. orphan business and provides a platform to expand our orphan business in Europe and other key international markets. We look forward to working with new patient communities and building on the success of the Raptor team.”
— Brad Loncar (@bradloncar) September 12, 2016