Horizon Therapeutics (HZNP) PT Raised to $100 at BofA Securities After Including Viela

BofA Securities analyst Jason Gerberry raised the price target on Horizon Therapeutics (NASDAQ: HZNP) to $100.00 (from $99.00) to incorporate the Viela acquisition ahead of the 4Q20 update (on 2/24) and the acquisition closing at the end of 1Q21.

The analyst reiterated the Buy rating, stating "We include market models and probabilities of success (for pipeline) based on our market assessment and (4) physician KOL checks. Overall, while the Viela deal comes with a notable step-up in R&D spend and is dilutive (mid-sd %) to near-term EBITDA, we believe the acquisition brings both an attractive de-risked asset (Uplizna for NMO) and multiple pipeline assets. In our view, Uplizna for NMO is unlikely to be a blockbuster (BofA combined US/EU $463m by ‘28E), but we see four of Viela’s pipeline programs as attractive with nominal/risk-adj peak sales of ~$2bn/~$700m, respectively, which leaves plenty of room for upside pending more data clarifying competitive position/clinical de-risking. While investor focus has been on the Tepezza TED launch, we believe the Viela deal now positions Horizon to offer a steady cadence of impactful 2021-23 clinical catalysts. With Viela bolstering HZNP’s pipeline and recent updates lessening competitive threats to Tepezza, we increase our ’22 PE multiple to 20x (from 18x) offsetting near-term deal dilution; raise our PO slightly to $100 and reiterate Buy on inexpensive to growth/orphan comps."

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