Brisbane, CA and Dublin, Ireland — Horizon Pharma plc (NASDAQ: HZNP) and Hyperion Therapeutics, Inc. (NASDAQ: HPTX) today announced they have entered into a definitive agreement under which Horizon Pharma will acquire all of the issued and outstanding shares of Hyperion’s common stock for $46.00 per share in cash or approximately $1.1 billion on a fully diluted basis. The per share consideration represents a premium of approximately 35 percent to Hyperion’s volume weighted average price for the trailing 60-days. The proposed transaction has been unanimously approved by both companies’ boards of directors.
“The Hyperion acquisition will expand and diversify our product portfolio by adding two complementary orphan disease products, RAVICTI and BUPHENYL, and leverage as well as expand the existing infrastructure of our orphan disease business,” said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. “This transaction will be immediately accretive to adjusted EPS and we expect the contribution of RAVICTI and BUPHENYL in 2016 will add approximately $100 million to our adjusted EBITDA, including cost synergies contributing greater than $50 million. Additionally, this acquisition further accelerates our near- and long-term sales and adjusted EBITDA growth and provides significant value for both Horizon and Hyperion shareholders.”
“During the last two years, we have solidified our position in the orphan disease space and made significant progress in bringing life-changing medicines to people with urea cycle disorders,” said Donald J. Santel, president and chief executive officer, Hyperion Therapeutics, Inc. “I would like to thank my colleagues for their tireless commitment to advancing the clinical development and understanding of RAVICTI, BUPHENYL and urea cycle disorders. Horizon shares our commitment and I’m confident that the strength of its existing orphan business unit will continue to expand the reach of these important medicines to more patients impacted by these disorders.”
Strategic and financial benefits of the transaction:
•Increases the number of Horizon’s products from five to seven, with the addition of RAVICTI and BUPHENYL to Horizon’s orphan business unit, providing additional revenue diversification
•Leverages Horizon’s orphan business unit offering attractive revenue and operating synergies
•Expected 2016 adjusted EBITDA of approximately $100 million from the acquired business with expected cost synergies of more than $50 million
RAVICTI and BUPHENYL are medicines for people with urea cycle disorders (UCDs), a collection of inherited metabolic disorders, which impact approximately 2,100 people in the United States with approximately 1,100 diagnosed. A marketing authorization application has been filed for European marketing of RAVICTI. The prevalence of UCD is similar in Europe and other international markets.
Net sales of RAVICTI and BUPHENYL for Q4 2014 and full year 2014 were $30.8 million and $113.6 million, respectively.
Transaction Terms
The acquisition is structured as an all cash tender offer for all the issued and outstanding shares of Hyperion common stock at a price of $46.00 per share followed by a merger in which each remaining untendered share of Hyperion common stock would be converted into the $46.00 per share cash consideration paid in the tender offer.
Horizon has entered into agreements with certain stockholders of Hyperion, including certain members of the Hyperion management team and certain funds affiliated with members of the Hyperion board of directors, pursuant to which each of these stockholders has agreed to tender the Hyperion common shares owned of record or beneficially by such stockholder, which in the aggregate represent approximately 21 percent of the outstanding Hyperion common shares as of the date of the agreements.
Closing of the transaction is subject to customary conditions, including the tender of a majority of the outstanding Hyperion shares and expiration or termination of the HSR waiting period. It is anticipated that the transaction will close in the second quarter of 2015.
Financing
Horizon has secured $900 million in debt commitments from Citigroup Global Capital Markets Inc. and Jefferies LLC, which in addition to Horizon’s cash and cash equivalents, is available to finance the transaction, repay Horizon’s $300 million Senior Secured Credit Facility and pay fees as well as expenses related to the transaction. Horizon plans to replace a portion of the debt commitments through new debt issuances and the use of Hyperion’s cash and cash equivalents.
Advisors
Jefferies LLC, Citigroup Global Markets Inc. and Cowen and Company acted as advisors to Horizon Pharma in the transaction. Citigroup Global Markets Inc. and Jefferies LLC are initial lenders and lead arrangers for the debt commitments in place to finance the transaction. Horizon Pharma’s legal advisors are Cooley LLP and McCann FitzGerald.
Centerview Partners LLC acted as financial advisor and provided a fairness opinion to Hyperion and Shearman & Sterling LLP acted as legal advisor. Houlihan Lokey Capital, Inc. also provided financial advice to the board of Hyperion.
About Horizon Pharma plc
Horizon Pharma plc is a specialty biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring and commercializing differentiated products that address unmet medical needs. The company markets a portfolio of products in arthritis, inflammation and orphan diseases. The company’s U.S. marketed products are ACTIMMUNE® (interferon gamma-1b), DUEXIS® (ibuprofen/famotidine), PENNSAID® (diclofenac sodium topical solution) 2% w/w, RAYOS® (prednisone) delayed-release tablets and VIMOVO® (naproxen/esomeprazole magnesium). Horizon’s global headquarters are in Dublin, Ireland. For more information, please visit www.horizonpharma.com.
About Hyperion Therapeutics, Inc.
Hyperion Therapeutics is a commercial-stage biopharmaceutical company committed to developing and delivering life-changing treatments for orphan diseases. The company’s first commercial product, RAVICTI® (glycerol phenylbutyrate) Oral Liquid, was approved in February 2013 and is currently being marketed in the United States. The company also owns worldwide rights to BUPHENYL® (sodium phenylbutyrate) Tablets and Powder, which it markets in the United States. BUPHENYL is also marketed internationally through business partners. In addition, the company is developing RAVICTI for the potential treatment of hepatic encephalopathy. For more information, please visit www.hyperiontx.com.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to Horizon’s anticipated acquisition of Hyperion and the timing and benefits thereof, estimated future financial results and performance of RAVICTI and BUPHENYL and Horizon’s business as a whole, Horizon’s financing plans, the combined company’s strategy, plans, objectives, expectations and intentions, anticipated product portfolio, and other statements that are not historical facts. These forward-looking statements are based on Horizon’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’s ability to complete the acquisition on the proposed terms and schedule; whether Horizon or Hyperion will be able to satisfy their respective closing conditions related to the acquisition; whether sufficient Hyperion stockholders tender their shares in the acquisition; whether Horizon will obtain financing for the transaction on the expected timeline and terms; the outcome of legal proceedings that may be instituted against Hyperion and/or others relating to the acquisition; the possibility that competing offers will be made; risks associated with business combination transactions, 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 acquisition will not occur; risks related to future opportunities and plans for the combined company, including uncertainty of the expected financial performance and results of the combined company following completion of the proposed acquisition; disruption from the proposed acquisition, making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers; and the possibility that if the combined company does not achieve the perceived benefits of the proposed acquisition as rapidly or to the extent anticipated by financial analysts or investors, the market price of Horizon’s shares could decline, as well as other risks related to the Horizon and Hyperion businesses, including the ability to grow sales and revenues from existing products; competition, including potential generic competition; the ability to protect intellectual property and defend patents; regulatory obligations and oversight; and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in Horizon’s and Hyperion’s respective SEC filings and reports, including their respective Annual Reports on Form 10-K for the year ended December 31, 2014. Horizon Pharma undertakes no duty or obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or changes in its expectations.