Amgen is acquiring Horizon Therapeutics in a $28 billion deal that brings one blockbuster drug, another blockbuster prospect, and a pipeline of experimental medicines that span various rare diseases as well as autoimmune disorders and inflammation. It might not have happened without Sanofi.

Sanofi’s initial bid for Horizon kicked off a bidding war that grew to as many as four companies, according to disclosures required of corporate takeovers in Ireland, where Horizon is based. Amgen, Sanofi, and Johnson & Johnson were all potential suitors for Horizon. But the Monday announcement of Amgen’s Horizon acquisition revealed that this entire process started with Sanofi, which made an unsolicited offer to buy the biotech.

Sanofi’s initial offer wasn’t enough, nor were the two higher bids that the France-based pharmaceutical giant made over the next 28 days, according to the Horizon document. Rather than walk away, Horizon’s board of directors concluded that the best next step would be to seek out potential rival bids. Amgen and Johnson & Johnson entered the mix, along with a fourth unnamed company.

Amgen’s initial bid prompted Sanofi to raise its offer. The unnamed company declined to submit an offer. J&J said it would continue to evaluate the information. In accordance with Irish law, Horizon made an announcement of a possible takeover offer, confirming on Nov. 29 the preliminary discussions with Amgen, Sanofi, and J&J.

J&J subsequently bowed out of the buyout discussions but Amgen and Sanofi remained in contention. Horizon’s board set a Dec. 9 deadline for the submission of final offers. Discussions about the offers continued through Saturday with each company upping the ante. Horizon said it concluded that Amgen’s final proposal was the better one.

“The Company believes Amgen has the capacity to maximise the value of the Company’s current portfolio and accelerate the ability for Horizon’s medicines to reach more patients globally with increased global commercial scale as well as enhanced R&D and technology capabilities to rapidly advance the pipeline to find more therapies for patients who are underserved,” Horizon said in the announcement.

According to financial terms announced Monday, Amgen will pay $116.50 cash for each share of Horizon. That price represents a 19.7% premium to Horizon’s closing stock price on Friday and a 47.9% premium to the closing price on Nov. 29, the last day before the company announced a possible takeover. The deal values Horizon at $28.3 billion. Amgen has secured debt financing to pay for the acquisition.

From Amgen’s perspective, the Thousand Oaks, California-based pharma giant sees Horizon’s products fitting alongside its own autoimmune drugs. Amgen’s top seller is Enbrel, a drug first approved for rheumatoid arthritis before going on to add approvals in other autoimmune indications. While that drug is a blockbuster seller, its loss of patent protection means Amgen needs to find other products that can contribute to revenue growth. Incidentally, Enbrel also came to Amgen via acquisition, the 2002 buyout of Immunex.

Horizon’s top-seller, Tepezza, treats thyroid eye disease. Approved by the FDA in 2020, it’s currently the only approved drug for this rare inflammatory disease affecting the eye. Tepezza accounted for $1.6 billion in sales last year. The next biggest Horizon product, gout drug Krystexxa, generated $565 million in revenue in 2021. In its third quarter 2022 financial report, Horizon said that product’s peak annual net sales could top $1.5 billion.

Amgen said the Horizon drugs complement its autoimmune and inflammatory products, including Enbrel and Tavneos, an autoimmune disease drug that came with the $3.7 billion ChemoCentryx acquisition announced in August. It added that Horizon’s Uplinza, a drug approved for an autoimmune condition called neuromyelitis optica spectrum disorder, is also consistent with Amgen’s inflammation expertise.

In a research note sent to investors Monday, William Blair analyst Matt Phipps wrote that the deal brings Amgen several growing assets whose commercialization can be improved by the pharma giant’s manufacturing capabilities and global reach. However, the deal causes Amgen to take on significant debt. Phipps added there are questions about the Tepezza’s long-term growth as drugs currently in development could pose competition.

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