Horizon Pharma (HZNP) Announces Completion of Raptor Pharma (RPTP) Acquisition

October 25, 2016 8:41 AM EDT
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Horizon Pharma plc (Nasdaq: HZNP) announced that it has completed the acquisition of Raptor Pharmaceutical Corp. (Nasdaq: RPTP).

“The acquisition of Raptor directly aligns with our long-term strategy and evolution into a rare disease focused company, where now more than half of our medicines are used to treat patients with rare diseases,” said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. “The added infrastructure in Europe and other key international markets will further benefit the access to both our current and newly acquired medicines as well as position us for the potential introduction of ACTIMMUNE® for Friedreich’s ataxia in Europe in future years if the results of the Phase 3 trial are positive.”

Strategic rationale

  • Strengthens Horizon Pharma’s focus on rare diseases and provides expansion into Europe and other international markets.
  • Adds PROCYSBI® (cysteamine bitartrate) 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.

Financial impact

  • Including the expected impact of the Raptor acquisition for the remainder of 2016, Horizon Pharma is raising its full-year 2016 net sales guidance on a GAAP basis, including the previously announced $65 million settlement with Express Scripts as a one-time reduction, to approximately $980 to $985 million. Horizon Pharma is raising its net sales guidance on a non-GAAP adjusted basis to approximately $1.045 to $1.050 billion excluding the $65 million settlement. The exclusion of the $65 million settlement from GAAP net sales guidance is the only adjustment reflected in Horizon Pharma’s full-year 2016 non-GAAP adjusted net sales guidance. Net sales from Raptor medicines for the last two months of 2016 are expected to add between $20 and $25 million to Horizon Pharma total net sales.
  • Including the expected impact of the Raptor acquisition for the remainder of 2016, Horizon Pharma is confirming its full-year 2016 adjusted EBITDA guidance of approximately $450 to $460 million.
  • As previously announced, Horizon Pharma expects the acquisition of Raptor to be accretive to adjusted EBITDA in 2017. Horizon Pharma will provide guidance for 2017 net sales and adjusted EBITDA in the first quarter of 2017.

Transaction details

The depositary for the tender offer has advised Horizon Pharma and Raptor that, as of the expiration of the tender offer at midnight, New York time, at the end of the day on October 24, 2016, a total of 71,590,496 shares of Raptor common stock were validly tendered and not validly withdrawn, representing approximately 83% of Raptor’s outstanding shares. In addition, the depositary advised that Notices of Guaranteed Delivery have been delivered with respect to 3,014,509 additional shares, representing approximately 3.5% of Raptor’s outstanding shares. All of the conditions to the offer have been satisfied and on October 25, 2016, Horizon Pharma and Misneach Corporation accepted for payment and will promptly pay for all shares validly tendered and not validly withdrawn prior to the expiration of the tender offer.

Following its acceptance of the tendered shares, Horizon Pharma completed its acquisition of Raptor through the merger of Misneach Corporation with and into Raptor without a vote of Raptor’s stockholders pursuant to Section 251(h) of the Delaware General Corporation Law. As a result of the merger, Raptor became an indirect wholly owned subsidiary of Horizon Pharma. In connection with the merger, all Raptor shares not validly tendered into the tender offer (other than shares owned by Raptor, Horizon Pharma, Misneach Corporation or any of their respective direct or indirect wholly owned subsidiaries and shares held by any person who was entitled to and has properly demanded statutory appraisal of his, her or its shares) have been canceled and converted into the right to receive the same $9.00 per share in cash, without interest (less any required withholding taxes) as will be paid for all shares that were validly tendered and not validly withdrawn in the tender offer. Raptor common stock will cease to be traded on the NASDAQ Global Select Market.

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