Horizon Pharma to buy Raptor Pharmaceutical for $800 mn

Irish biopharmaceutical firm Horizon Pharma Plc on Monday struck a deal to buy Raptor Pharmaceutical Corp for nearly $800 million in order to add rare diseases treatment to its portfolio.

Horizon is offering to pay $9 per share, a 21 per cent premium to Raptor's Friday closing price of $7.45.

Horizon, based in Dublin, plans to finance the transaction through $675 million of external debt along with cash on hand.

As of 30 June 2016, the company had $424.5 million of cash and cash equivalents on its balance sheet.

Horizon said that it has put in place fully committed financing with BofA Merrill Lynch, JPMorgan Chase Bank, Jefferies Finance, and Cowen Structured Holdings.

Raptor is a global biopharmaceutical company focused on the development and commercialisation of transformative therapeutics for rare, debilitating and often fatal diseases.

Horizon said the deal will give Procysbi – a delayed-release capsule for the treatment of nephropathic (kidney) cystinosis - and Quinsair, which is licensed in Europe and Canada for the management of chronic pulmonary infections due to pseudomonas aeruginosa in adult patients with cystic fibrosis, an extended market.

The deal will also diversify Horizon's revenue with 11 medicines across three business units: orphan, rheumatology and primary care and also boost its revenue, which in the first half of 2016 was 45 per cent of total Horizon Pharma revenue.

"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 Walbert, chairman, president and CEO, Horizon.

"Along with the potential for accelerated revenue growth, the addition of Raptor strengthens our US orphan business and provides a platform to expand our orphan business in Europe and other key international markets," he added.

Horizon markets seven medicines through its orphan, primary care and specialty business units for the treatment of arthritis pain and rare diseases. Its Duexis, Pennsaid, Vimovo and Rayos drugs are used in the treatment of arthritis pain and inflammation, while it's Buphenyl, Ravicti and Actimmune drugs are used for treatment of rare diseases.

Apart from Ireland, the company has operations in the US, Germany and Switzerland.