- Transaction valued at $9.00 per
share in cash with fully diluted equity value of approximately $800
million -
Horizon Pharma plc (NASDAQ:HZNP) and Raptor Pharmaceutical Corp.
(NASDAQ:RPTP) today announced the companies have entered into a
definitive agreement under which Horizon Pharma will acquire all of
the issued and outstanding shares of Raptor Pharmaceutical Corp.
common stock for $9.00 per share in cash, for an implied fully
diluted equity value of approximately $800 million. The
transaction is expected to close in the fourth quarter of 2016.
“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.”
Strategic and financial benefits of the
transaction:
- Strengthens Horizon’s focus on rare diseases and provides
expansion into Europe and other international markets.
- Adds PROCYSBI® delayed-release capsules and QUINSAIR™
(aerosolized form of levofloxacin) global rights, with PROCYSBI
having strong patent protection through 2034.
- Diversifies revenue with 11 medicines across three business
units: orphan, rheumatology and primary care.
- Bolsters rare disease revenue, which in the first half of 2016
on a pro-forma basis was 45 percent of total Horizon Pharma
revenue.
- Expected to be accretive to adjusted EBITDA in 2017.
“This transaction will deliver significant and immediate value
to our shareholders through a compelling all-cash premium and
provide ongoing value to our patients, their families and the
physicians who treat them,” said Julie Anne Smith, president and
chief executive officer, Raptor Pharmaceutical Corp. “On
behalf of the Board and management team, I extend our deepest
gratitude to everyone at Raptor for their unrelenting commitment to
advancing the development of our medicines and their tireless work
with the patients we serve.”
PROCYSBI is the first cystine-depleting agent given every 12
hours that is approved in the United States for the
treatment of nephropathic cystinosis (NC), a rare metabolic
disorder, in adults and children 2 years of age and older.
PROCYSBI received European Commission approval as an orphan
medicinal product in September 2013 for the treatment of proven
NC. According to estimates, NC prevalence is as high as 1 in
100,000 live births. There are believed to be approximately
550 NC patients in the United States and 2,000 worldwide.
QUINSAIR is a proprietary inhaled formulation of levofloxacin,
approved in the European Union and Canada for the management of
chronic pulmonary infections due to Pseudomonas
aeruginosa in adult patients with cystic fibrosis.
Cystic fibrosis is a rare, life-threatening, genetic disease
affecting an estimated 21,000 adults in Europe and Canada.
QUINSAIR is not approved in the United States.
Raptor’s previously disclosed total net sales guidance for
full-year 2016 is $125 million to $135 million, which includes both
PROCYSBI and QUINSAIR. Horizon will provide additional detail
regarding its guidance for full year 2017 net sales and adjusted
EBITDA in the first quarter 2017.
Transaction Terms and ApprovalsThe acquisition
is structured as an all cash tender offer for all the issued and
outstanding shares of Raptor common stock at a price
of $9.00 per share followed by a merger in which each
remaining untendered share of Raptor common stock would be
converted into the $9.00 per share cash consideration
paid in the tender offer. The transaction, which has been
unanimously 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.
Financing Horizon intends to finance the
transaction through $675 million of external debt along with cash
on hand. The company has put in place fully committed
financing with BofA Merrill Lynch, JPMorgan Chase Bank, N.A.,
Jefferies Finance LLC, and Cowen Structured Holdings, an affiliate
of Cowen and Co. LLC. As of June 30, 2016, the company had
$424.5 million of cash and cash equivalents on its balance
sheet.
AdvisorsMTS Health Partners L.P. and Citigroup
Global Markets Inc. are co-lead financial advisors to Horizon
Pharma in the transaction. BofA Merrill Lynch, J.P. Morgan,
Jefferies LLC and Cowen and Company, LLC are financial advisors to
Horizon Pharma in the transaction. Horizon Pharma’s legal
advisors are Cooley LLP and McCann FitzGerald.
Centerview Partners LLC and Leerink Partners LLC are financial
advisors to Raptor Pharmaceutical Corp. in the transaction.
Raptor Pharmaceutical Corp.’s legal advisor is Latham &
Watkins LLP.
Conference Call Today at 8 a.m.
ETAt 8 a.m. Eastern Time today, Horizon's management will
host a conference call and live audio webcast to review the
transaction and related matters. The live webcast and a
replay may be accessed by visiting the investor relations section
of the Horizon website at http://ir.horizon-pharma.com.
Please connect to the company's website at least 15 minutes prior
to the live webcast to ensure adequate time for any software
download that may be needed to access the webcast.
Alternatively, please call 1-888-338-8373 (U.S.) or 1-973-872-3000
(international) to listen to the conference call. The
conference ID number for the live call is 80632193. Telephone
replay will be available approximately two hours after the
call. To access the replay, please call 1-855-859-2056 (U.S.)
or (404) 537-3406 (international). The conference ID number
for the replay is 80632193. An archived version of the
webcast will be available for at least one week on the investor
relations section of the Horizon website at
http://ir.horizon-pharma.com.
About PROCYSBIPROCYSBI is approved in the
United States for the treatment of nephropathic cystinosis in
adults and children 2 years of age and older. In Europe,
PROCYSBI gastro-resistant hard capsules of cysteamine (as
mercaptamine bitartrate) received European Commission approval as
an orphan medicinal product in September 2013 for the treatment of
proven nephropathic cystinosis.
PROCYSBI acts within the lysosome, converting cystine into
cysteine and a cysteine-cysteamine mixed disulfide, both of which
can exit the lysosome in patients with cystinosis. Adherence
to treatment regimens is associated with improved outcomes, but the
timing of doses is critical, as cystine levels can rise quickly if
patients delay, miss, or stop taking their prescribed treatment
regimen. PROCYSBI is contraindicated in patients with a
hypersensitivity to cysteamine or penicillamine. The most
commonly reported side effects are vomiting, nausea, abdominal
pain, breath odor, diarrhea, skin odor, fatigue, rash and
headache.
About Nephropathic
CystinosisNephropathic cystinosis is an inherited
autosomal-recessive disease affecting lysosomal storage processes
within cells; the amino acid cystine is not transported out of the
lysosome, but instead accumulates and eventually crystallizes
within the lysosomal lumen. Without treatment, high
intracellular cystine concentrations can occur in virtually all
organs and tissues, leading to irreversible cellular damage,
progressive multi-organ failure and death.
About QUINSAIRQUINSAIR is a proprietary
inhaled formulation of levofloxacin, approved in the EU and in
Canada for the management of chronic pulmonary infections due to
Pseudomonas aeruginosa in adult patients with cystic
fibrosis. QUINSAIR, a twice-daily treatment, contains an
aerosolized form of levofloxacin, a broad-spectrum fluoroquinolone
antibiotic with proven activity against a wide range of both
gram-negative and gram-positive bacteria. The
fluoroquinolones rapidly inhibit replication and transcription of
bacterial DNA, which leads to bacterial cell death. QUINSAIR
is not approved in the United States.
QUINSAIR is contraindicated in patients with hypersensitivity to
levofloxacin, a history of tendon disorders related to
fluoroquinolones, epilepsy or who may be pregnant or breast
feeding. The safety profile of QUINSAIR has been evaluated in
two double-blind, placebo-controlled studies and in an active
comparator study in which the most frequently reported adverse
reactions were cough/productive cough, dysgeusia and
fatigue/asthenia.
About Cystic FibrosisCystic
fibrosis is a rare, life-threatening, genetic disease affecting an
estimated 21,000 adults in Europe and Canada. Cystic fibrosis
causes persistent lung infections due to the buildup of thick,
sticky mucus in the lungs and progressively limits the patient’s
ability to breathe. The lung infections are mostly caused by
bacteria with 75 percent of cystic fibrosis patients suffering from
chronic pseudomonas aeruginosa infections.
About Horizon Pharma plcHorizon Pharma plc is a
biopharmaceutical company focused on improving patients' lives by
identifying, developing, acquiring and commercializing
differentiated and accessible medicines that address unmet medical
needs. The Company markets nine medicines through its orphan,
rheumatology and primary care business units. Horizon's
global headquarters are in Dublin, Ireland. For more
information, please visit www.horizonpharma.com. Follow
@HZNPplc on Twitter or view careers on our LinkedIn page.
About Raptor Pharmaceutical Corp.Raptor
Pharmaceutical Corp. is a global biopharmaceutical company focused
on the development and commercialization of transformative
therapeutics for rare, debilitating and often fatal
diseases.
Forward-Looking Statements This press release
contains forward-looking statements, including, but not
limited to, statements related to the anticipated consummation of
the acquisition of Raptor Pharmaceutical Corp. and the timing and
benefits thereof, Horizon Pharma’s strategy, plans,
objectives, expectations (financial or otherwise) and intentions,
future financial results and growth potential, expected sources of
funding for the acquisition of Raptor, anticipated product
portfolio, expected patent terms, development programs and
other statements that are not historical facts, including net sales
guidance provided by Raptor Pharmaceutical Corp. for 2016.
These forward-looking statements are based on Horizon’s and
Raptor's current expectations and inherently involve significant
risks and uncertainties. Actual results and the timing of
events could differ materially from those anticipated in such
forward looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to
Horizon Pharma’s ability to complete the transaction on the
proposed terms and schedule; risks associated with acquisitions,
such as the risk that the businesses will not be integrated
successfully, that such integration may be more difficult,
time-consuming or costly than expected or that the expected
benefits of the transaction will not occur; risks related to future
opportunities and plans for the acquired company and its products,
including uncertainty of the expected financial performance of the
acquired company and its products; Horizon Pharma’s ability to
obtain expected financing to consummate the acquisition; disruption
from the proposed transaction, making it more difficult to conduct
business as usual or maintain relationships with customers,
employees or suppliers; the calculations of, and factors that may
impact the calculations of, the acquisition price in connection
with the proposed merger and the allocation of such acquisition
price to the net assets acquired in accordance with applicable
accounting rules and methodologies; and the possibility that if the
acquired company does not achieve the perceived benefits of the
proposed transaction as rapidly or to the extent anticipated by
financial analysts or investors, the market price of the combined
company’s shares could decline, as well as other risks related to
Horizon Pharma’s business detailed from time-to-time under the
caption “Risk Factors” and elsewhere in Horizon Pharma's SEC
filings and reports, including in its Annual Report on Form 10-K
for the year ended December 31, 2015. Risks related to the
achievement of sales projections provided by Raptor with respect to
QUINSAIR and PROCYSBI include: continued and increased market
acceptance and sales of PROCYSBI and QUINSAIR; expansion of
the use of RP103 and MP-376 and receipt of regulatory approval for
other indications; reliance on single active pharmaceutical
ingredient suppliers for PROCYSBI and QUINSAIR and other third
parties in connection with drug product development; compliance
with healthcare regulations, ongoing regulatory requirements and
potential penalties; any serious adverse side effects associated
with PROCYSBI, QUINSAIR; any product liability claims; third-party
payor coverage, reimbursement and pricing for PROCYSBI and QUINSAIR
and the ability to obtain and maintain orphan drug or other
regulatory exclusivity for PROCYSBI and QUINSAIR. These risks
and uncertainties, among others are described in greater detail in
Raptor’s filings from time to time with the SEC including:
Raptor’s annual report on Form 10-K for the twelve months
ended December 31, 2015 filed with the SEC on February 26, 2016, as
amended by Amendment No. 1 to Form 10-K filed with the SEC on April
29, 2016, Raptor's quarterly report on Form 10-Q for the quarter
ended March 31, 2016 filed with the SEC on May 5, 2016, Raptor’s
quarterly report on Form 10-Q for the quarter ended June 30, 2016
filed with the SEC on August 4, 2016 and Raptor’s other periodic
reports filed with SEC. Horizon Pharma and Raptor
Pharmaceutical undertake no duty or obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or changes in its
expectations.
Additional Information and Where to Find It The
tender offer described in this communication (the "Offer") has not
yet commenced, and this communication is neither an offer to
purchase nor a solicitation of an offer to sell any shares of the
common stock of Raptor or any other securities. On the
commencement date of the Offer, a tender offer statement on
Schedule TO, including an offer to purchase, a letter of
transmittal and related documents, will be filed with
the SEC by Horizon and a Solicitation/Recommendation
Statement on Schedule 14D-9 will be filed with the SEC by
Raptor. The offer to purchase shares of Raptor common stock
will only be made pursuant to the offer to purchase, the letter of
transmittal and related documents filed as a part of the Schedule
TO. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ BOTH THE
TENDER OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION
STATEMENT REGARDING THE OFFER, AS THEY MAY BE AMENDED FROM TIME TO
TIME, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. The tender offer statement will be
filed with the SEC by Misneach Corporation a wholly owned
subsidiary of Horizon Pharma, Inc., which is an indirect
wholly owned subsidiary of Horizon Pharma plc, and the
solicitation/recommendation statement will be filed with
the SEC by Raptor. Investors and security holders
may obtain a free copy of these statements (when available) and
other documents filed with the SEC at the website
maintained by the SEC at www.sec.gov or by
directing such requests to the Information Agent for the Offer,
which will be named in the tender offer statement.
Horizon Contacts:Investors:John ThomasExecutive
Vice President, Strategy and Investor
RelationsInvestor-relations@horizonpharma.com
Tina VenturaVice President, Investor
Relationsinvestor-relations@horizonpharma.com
U.S. Media:Geoff CurtisSenior Vice President, Corporate
Communications media@horizonpharma.com
Ireland Media:Ray GordonGordon MRM
ray@gordonmrm.ie
Raptor Contacts:Investors:Kimberly Lee,
D.O.Vice President, Corporate Strategy and CommunicationsRaptor
Pharmaceutical Corp.(415) 408-6351
Media:Andrew Siegel / Jed Repko / Aura ReinhardJoele Frank,
Wilkinson Brimmer Katcher(212) 355-4449
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