Horizon Pharma raises offer to buy Depomed to $33 per share

Irish biopharmaceutical company Horizon Pharma Plc yesterday raised its offer to buy smaller US rival Depomed Inc to $33 per share, contingent on Depomed agreeing to enter into discussions regarding a transaction.

Horizon Pharma, based in Dublin, which had earlier gone hostile with its takeover offer after Depomed refused to enter into discussions (See: Ireland's Horizon Pharma launches $3-bn hostile buyout bid for US rival Depomed), raised its offer by 12.8 per cent from its 7 July bid of $29.25 per share.

Horizon said that based on public information available, it believes the $33 per share is a full and fair price and represents an approximate 60 per cent premium to Depomed's share price on the day prior to its original proposal being made public.

Horizon initially offered to buy Depomed for $29.25 per share, and later raised its offer to $32.25 per share. Both offers were rejected by the board of Depomed and last week adopted a poison pill to fend off the hostile takeover.

The Newark, California-based company yesterday said that it would evaluate the latest offer.

A merged company will have 13 marketed drugs, nearly doubling Horizon Pharma's current portfolio of seven, and is expected to result in 2015 net sales of over $950 million.

Depomed is a specialty pharmaceutical company focused on drugs to treat pain and neurology related disorders. Its products include Nucynta for management of pain, Gralise for postherpetic neuralgia, Cambia for acute migraine and Zipor, a non-steroidal drug for pain in adults, etc.

Early this year, it bought the rights to Nucynta from Johnson & Johnson for $1.05 billion.

Its Glumetza drug has been approved for the treatment of type II diabetes in adults, and is sold in the US by Valeant Pharmaceuticals.

It has also developed and licensed a unique drug-delivery technology called Acuform – a patented oral-delivery technology that allows targeted extended release of pharmaceutical compounds into the upper gastrointestinal tract.

In 2014, Depomed reported revenue of $390 million with net income of $132 million.

Horizon Pharma markets seven medicines through its orphan, primary care and specialty business units for the treatment of arthritis pain and rare diseases. Its Duexis, Pennsaid, Vimovo and Rayos drugs are used in the treatment of arthritis pain and inflammation, while it's Buphenyl, Ravicti and Actimmune drugs are used for treatment of rare diseases.

Apart from Ireland, the company has operations in the US, Germany and Switzerland.

The company reported a 118-per cent jump in revenue at $113 million for the first quarter, compared to $52 million for the same quarter a year ago. Net loss for the period reduced from $206 million to around $20 million.

For the current year, the drug maker has increased its guidance by about 30 per cent to $590-$610 million, on the back of its newly-launched non-steroidal osteoarthritis pain reliever Pennsaid 2%, and strong performance from its arthritis drugs Duexis and Vimovo.