Horizon Therapeutics (HZNP) to Acquire Viela Bio (VIE) for $53 Per Share in $3.05 Billion Deal

Horizon Therapeutics plc (Nasdaq: HZNP) and Viela Bio, Inc. (Nasdaq: VIE) today announced the companies have entered into a definitive agreement under which Horizon will acquire all of the issued and outstanding shares of Viela Bio, Inc. common stock for $53.00 per share in cash, which represents a fully diluted equity value of approximately $3.05 billion, or approximately $2.67 billion net of Viela's cash and cash equivalents. As previously announced, Horizon had $2.08 billion in cash and cash equivalents at December 31, 2020. The transaction is expected to close by the end of the first quarter of 2021.

“This acquisition represents a significant step forward in advancing our strategy – to expand our pipeline in order to accelerate our growth over the long term,” said Tim Walbert, chairman, president and chief executive officer, Horizon. “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. We intend to maximize the full potential of Viela’s pipeline, including the pursuit of additional future indications.”

Strategic Rationale

• Adds to commercial rare disease medicine portfolio with UPLIZNA® (inebilizumab-cdon)
  • UPLIZNA is the first and only FDA-approved B-cell-depleting humanized monoclonal antibody for the treatment of neuromyelitis optica spectrum disorder (NMOSD), a rare, severe, autoimmune disease that attacks the optic nerve, spinal cord and brain stem, which leads to loss of vision and paralysis, in adults who are anti-aquaporin-4 (AQP4) antibody positive.
• Strengthens current R&D capability by adding a team with early-stage research, translational and clinical development capabilities along with deep scientific knowledge in autoimmune and severe inflammatory diseases.
• Adds deep, mid-stage biologics pipeline focused primarily on autoimmune and severe inflammatory diseases.
  • The current Viela pipeline includes four therapeutic candidates currently in nine development programs.
    • UPLIZNA
      • Phase 3 trials in myasthenia gravis, a chronic, rare autoimmune neuromuscular disease and in IgG4-related disease, a group of disorders marked by tumor-like swelling and fibrosis of affected organs.
      • Phase 2 trial for kidney transplant desensitization (paused due to COVID-19).
    • VIB4920
      • Investigational fusion protein designed to block a key co-stimulatory pathway involved in many autoimmune and inflammatory diseases.
      • Phase 2b trial in Sjögren’s syndrome and Phase 2 trials for kidney transplant rejection and rheumatoid arthritis.
    • VIB7734
      • Investigational human monoclonal antibody designed to deplete plasmacytoid dendritic cells (pDCs), a cell type believed to be critical to the pathogenesis of multiple autoimmune diseases.
      • Phase 2 trial for systemic lupus erythematosus (SLE) expected to begin in the first half of 2021.
      • Phase 1 study for the treatment of COVID-19-related acute lung injury.
    • VIB1116
      • Monoclonal antibody for autoimmune diseases expected to begin Phase 1 first-in-human trial in mid-2021.

“We are pleased that Horizon recognizes the value of our robust R&D pipeline, our commercial medicine UPLIZNA, which is an important treatment option for patients with NMOSD, and our talented team,” said Bing Yao, Ph.D., chairman and chief executive officer, Viela Bio, Inc. “We believe that the combined pipeline, including the pursuit of additional potential indications, has the potential to yield innovative new medicines to treat autoimmune and severe inflammatory diseases. Our collective R&D expertise coupled with Horizon’s commercial capabilities, has the potential to provide benefit to more patients with high unmet treatment needs.”

Financial Impact

Horizon anticipates the transaction will reduce its adjusted EBITDA by approximately $140 million in 2021, nearly all of which is attributable to increased R&D investment.

Transaction Terms and Approvals

The acquisition is structured as a two-step cash tender offer for all the issued and outstanding shares of Viela Bio, Inc. common stock at a price of $53.00 per share. Following successful completion of the tender offer, Horizon will acquire all remaining shares not tendered in the offer through a second step merger at the same price per share as in the tender offer. The transaction has been unanimously approved by Horizon’s and Viela’s boards of directors and is subject to the satisfaction of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976. Stockholders holding approximately 54% of the outstanding shares of common stock of Viela, including AstraZeneca UK Limited, have agreed to tender their shares in the offer pursuant to support agreements.

Financing

Horizon intends to finance the transaction through $1.3 billion of external debt along with cash on hand. Horizon has put in place fully committed financing with Citigroup Global Markets Inc. and Morgan Stanley Senior Funding, Inc.

Advisors

Morgan Stanley & Co. LLC is the sole financial advisor to Horizon in the transaction. Horizon’s legal advisor is Cooley LLP.

Goldman Sachs & Co. LLC is the sole financial advisor to Viela in the transaction. Viela's legal advisor is Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

TEPEZZA Supply Update

Last week, Horizon submitted a prior approval supplement to the U.S. Food and Drug Administration (FDA) to support increased scale production of TEPEZZA drug product for the treatment of Thyroid Eye Disease (TED). The submission includes data to support more product output with each manufacturing slot than is currently approved by the FDA. Horizon will continue to discuss potential additional data requirements and approval timeline with the FDA. Horizon continues to anticipate the disruption could last through the first quarter of 2021.

As previously announced on December 17, 2020, this increased production scale is necessary due to government-mandated COVID-19 vaccine production orders pursuant to the Defense Production Act of 1950 (DPA) related to manufacturing that dramatically reduced the number of drug product production slots available to Horizon at the drug product contract manufacturer of TEPEZZA.

Conference Call Today at 8 a.m. EST

At 8 a.m. EST/1 p.m. IST today, Horizon will host a live webcast to review this acquisition. The live webcast and a replay may be accessed at http://ir.horizontherapeutics.com. Please connect to Horizon’s website at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. A replay of the webcast will be available approximately two hours after the live webcast.

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