Horizon Therapeutics plc Completes Acquisition of Viela Bio, Inc.

Rhea-AI Summary

Horizon Therapeutics (Nasdaq: HZNP) has acquired Viela Bio (Nasdaq: VIE) for $53.00 per share, a transaction valued at over $3 billion. This acquisition enhances Horizon's commercial portfolio in rare diseases, particularly with UPLIZNA, the first FDA-approved treatment for neuromyelitis optica spectrum disorder. The deal will strengthen Horizon's R&D capabilities and add a mid-stage biologics pipeline targeting autoimmune diseases. However, Horizon expects a $140 million decrease in adjusted EBITDA for 2021 due to increased R&D expenditures.

Positive

• Acquisition adds UPLIZNA, enhancing rare disease portfolio.
• Strengthens R&D capabilities with Viela's expertise.
• Expands pipeline with four therapeutic candidates in nine development programs.

Negative

• Expected $140 million reduction in adjusted EBITDA in 2021 due to R&D costs.

Horizon Therapeutics plc (Nasdaq: HZNP) today announced that it has completed the acquisition of Viela Bio, Inc. (Nasdaq: VIE) (“Viela”).

“The Viela acquisition provides multiple opportunities to drive long-term growth and solidify our future as an innovation-driven biotech company,” said Tim Walbert, chairman, president and chief executive officer, Horizon. “With its deep, mid-stage biologics pipeline, strong R&D team and on-market medicine UPLIZNA^®, Viela is a strong complementary strategic fit with our pipeline, commercial portfolio and therapeutic areas of focus. It also gives us tremendous potential to make an even greater impact on the lives of people with rare, autoimmune and severe inflammatory diseases.”

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.

Transaction details

The acquisition was structured as a two-step cash tender offer for all the issued and outstanding shares of Viela common stock at a price of $53.00 per share. As of the expiration of the tender offer at one minute following 11:59 p.m. Eastern Time on March 12, 2021, the depositary for the tender offer advised Horizon and Viela that stockholders holding approximately 94% of the outstanding shares of common stock of Viela had tendered their shares, satisfying the minimum condition to consummate the tender offer. All of the conditions to the offer have been satisfied and on March 13, 2021, Teiripic Merger Sub, Inc., an indirect wholly owned subsidiary of Horizon (“Purchaser”), accepted for payment and will promptly pay for all shares validly tendered and not validly withdrawn prior to the expiration of the tender offer.

Also, on March 15, 2021, following its acceptance of the tendered shares, Horizon completed its acquisition of Viela through the merger of Purchaser with and into Viela without a vote of Viela’s stockholders pursuant to Section 251(h) of the Delaware General Corporation Law (“DGCL”). As a result of the merger, Viela became an indirect wholly owned subsidiary of Horizon. In connection with the merger, all Viela shares not validly tendered into the tender offer (other than shares owned by Viela, Horizon Therapeutics USA, Inc. (“Parent”) or Purchaser or any direct or indirect wholly owned subsidiary of Viela, Parent or Purchaser, which were cancelled and retired and ceased to exist, and no consideration delivered in exchange therefor) have been cancelled and (other than any shares held by holders who are entitled to appraisal rights under Section 262 of the DGCL and who had properly exercised and perfected their respective demands for appraisal of such shares in the time and manner provided in Section 262 of the DGCL and, as of the effective time of the merger, had neither effectively withdrawn nor lost their rights to such appraisal and payment under the DGCL) converted into the right to receive the same $53.00 per share, net to the holder thereof, in cash, without interest, subject to any applicable withholding taxes, as will be paid for all shares that were validly tendered (and not validly withdrawn) in the tender offer. Viela common stock will cease to be traded on the Nasdaq Global Select Market. 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.

In addition, Elizabeth H.Z. Thompson, Ph.D., has been promoted to executive vice president, research and development and will lead the day-to-day operations for the Horizon pipeline. Jörn Drappa, M.D., Ph.D., has been named executive vice president, research and development and will lead the day-to-day operations for the Viela pipeline. Jörn was the former chief medical officer and head of research and development at Viela. Karin Rosén, M.D., Ph.D. is no longer with the company.

Information for UPLIZNA Patients

People living with NMOSD who are currently taking UPLIZNA should continue to work with their doctor and Viela VIPs represen

FAQ

What is the acquisition price for Viela Bio by Horizon Therapeutics?

Horizon Therapeutics acquired Viela Bio for $53.00 per share.

How will the Viela acquisition impact Horizon's financials?

Horizon expects a $140 million decrease in adjusted EBITDA in 2021 due to increased R&D investment.

What are the key products acquired from Viela Bio?

The acquisition includes UPLIZNA, the first FDA-approved treatment for neuromyelitis optica spectrum disorder.

What therapeutic areas are focused on in Viela's pipeline?

Viela's pipeline primarily targets autoimmune and severe inflammatory diseases.

When was the acquisition of Viela Bio completed?

The acquisition was completed on March 15, 2021.