Analyst Forecasts $101-117/Share Offer Price For Horizon Therapeutics' Buyout

Horizon Therapeutics Plc HZNP confirmed it's engaged in preliminary talks with Amgen Inc AMGN, Janssen Global Service, and Sanofi SA SNY on potential takeover offers for the company.
SVB Leerink projects 2023 revenue of $4.0 billion, adj operating income of $1.6 billion, and EPS of $5.51.
Assuming no COGS nor R&D synergies but "fully synergized" SG&A of 21%, the company's theoretical 2023 fully synergized operating margin would be 54%, and adj EPS would be $7.79.
If an acquirer were to pay a low-mid teens (13-15x) multiple of SVB's estimate of fully-synergized adj EPS, it could yield a potential acquisition price of $101-117/share.
Valuation could be higher if an acquirer assumes faster long-term growth prospects or lower if an acquirer is concerned about the potential late-decade erosion of Tepezza following chronic market penetration and new thyroid eye disease competitive entrants.
For Johnson & Johnson JNJ, a deal would be on top of the recently-announced $16.6 billion acquisition of medical device firm Abiomed ABMD. Still, it would help partially offset the upcoming Stelara LOE impact on Pharma Immunology segment revenues.
For Sanofi, Horizon's assets could fit with the company's focus on I&I and Rare Diseases, but appetite is unclear.
For AMGN, Horizon's I&I and rare disease franchises would also fit. Horizon could help drive revenue & profit growth mid-late decade when Amgen faces generic and biosimilar pressures on key franchises.
Price Action: HZNP shares are up 26.9% at $99.94 on the last check Wednesday.

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