Horizon Therapeutics PLC HZNP, a rare and rheumatic diseases drug company, announced a multibillion-dollar deal Monday to snap up Viela Bio Inc VIE.
What Happened: Horizon said it has entered into a definitive agreement to acquire Viela for $53 per share in cash, which represents a fully diluted equity value of about $3.05 billion, or about $2.67 billion net of Viela's cash and cash equivalents.
The per-share value represented a premium of 52.8% over Viela's Friday closing price of $34.68.
"Adding Viela's research and clinical development capabilities along with its deep, mid-stage biologics pipeline to our seasoned R&D and commercial teams, advances our transformation to an innovation-driven biotech company where we will build on the success of TEPEZZA and KRYSTEXXA to bolster our long-term growth trajectory," Horizon CEO Tim Walbert said in a statement.
The deal has been unanimously approved by both companies. The closing is now subject to customary closing conditions.
Stockholders holding approximately 54% of the outstanding shares of Viela common stock, including AstraZeneca plc AZN, have agreed to tender their shares, the companies said.
Horizon said it intends to finance the transaction through $1.3 billion of external debt along with cash on hand.
The Horizon, Viela Deal Logic: Gaithersburg, Maryland-based Viela is focused on developing treatments for autoimmune and severe inflammatory diseases.
The Viela deal will add to Horizon's commercial rare disease medicine portfolio in the form of Uplinza, which has been approved by the FDA for treating neuromyelitis optica spectrum disorder.
Viela's pipeline consists of four therapeutic candidates being evaluated for nine indications. Apart from the approved indication, Uplinza is also being evaluated for additional indications, namely myasthenia gravis and kidney transplant decentralization.
VIB4920 is being evaluated in separate midstage trials for Sjögren's syndrome, kidney transplant rejection and rheumatoid arthritis.
VIB7734, a third asset, is being studied for systemic lupus erythematosus and COVID-19-related acute lung injury.
VIB1116, which is being evaluated for autoimmune diseases, is set to enter clinics in mid-2021.
What's Next: Horizon and Viela expect the deal to close in the first quarter of 2021.
Horizon said it expects the transaction to reduce its adjusted EBITDA by about $140 million in 2021, nearly all of which is attributable to increased R&D investment.
HZNP, VIE Price Action: At last check, Horizon shares were rising by 1.39% to $73.49, while Viela was rallying 52.71% to $52.96.
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