High level discussions. Suuurre.
Anyway, here’s some of the info from the preliminary proxy statement. I want to draw your attention to 2 statements in particular
1) Globally, including the U.S., the Combined Group will benefit from Amgen’s experience in commercial operations such as access, medical, patient support and overall scale/expertise in marketing and sales.
2) The Transaction is expected to deliver annual pre-tax cost synergies of at least $500 million by the end of the third fiscal year following the Completion.
Now, tell me that sounds like Horizon is going to operate independently like some have predicted. Tell me that there is no plan whatsoever for any changes. You don’t tell the SEC and the world that you predict to save any amount of money without having already figured out some significant parts of the transition. The “OP” on here isn’t a part of any meetings with anyone who knows WTF is going on.
Amgen’s Reasons for the Transaction
Amgen believes there is a compelling strategic and financial rationale for undertaking the Transaction, which is expected to deliver the following benefits:
The Transaction adds first-in-class and best-in-class innovative medicines that fit well with Amgen’s portfolio and strategic vision
• Since its founding in 2005, Horizon has successfully built a robust business with continued growth potential. TEPEZZA, KRYSTEXXA and UPLIZNA are innovative biologic medicines with impressive benefits that are reaching a growing number of patients suffering from serious diseases. These three early life cycle products collectively generated $2.0 billion of sales through the first nine (9) months of 2022.
• Amgen’s long-term strategy includes a focus on first-in-class and best-in-class innovative therapeutics that treat grievous illness, and on delivering those medicines to more patients around the world.
• Horizon’s focus and products align well with Amgen’s long-term growth strategy:
• Amgen’s growth reflects contributions from therapies with large addressable patient populations (such as cardiovascular disease, osteoporosis, psoriasis and asthma), as well as therapies that address diseases with lower prevalence (such as ANCA-associated vasculitis, immune thrombocytopenic purpura and acute lymphoblastic leukemia) that are adjacent to Amgen’s core therapeutic areas. TEPEZZA and KRYSTEXXA are a strong fit with the latter category and help to further diversify the Combined Group’s revenue outlook.
• TEPEZZA has significant growth potential in key ex-U.S. markets such as Europe and Japan, which complements Amgen’s international growth strategy.
• Horizon’s R&D efforts include significant lifecycle management expansion for currently marketed products, along with an innovative mid- to late-stage pipeline with opportunities for advancement of novel programs in disease areas such as myasthenia gravis, IgG4-related disease, systemic lupus erythematosus, lupus nephritis and Sjogren’s Syndrome.
Amgen’s global scale and 20-year history in commercializing inflammation therapies can accelerate growth of Horizon’s portfolio
• TEPEZZA is mechanistically rooted in inflammation and KRYSTEXXA is commercially aligned with Enbrel and TAVNEOS, given the shared rheumatology prescriber base. UPLIZNA targets an autoimmune disorder (neuromyelitis optica spectrum disorder), which is also consistent with Amgen’s expertise in inflammation.
• Horizon also has recent product approvals in Europe and Japan, where Amgen has existing commercial platforms that could be quickly leveraged and augmented with a specialized sales force where needed. Globally, including the U.S., the Combined Group will benefit from Amgen’s experience in commercial operations such as access, medical, patient support and overall scale/expertise in marketing and sales.
Strong financial profile with non-GAAP EPS accretion from 2024 and significant cash flow generation enabling continued attractive shareholder payouts and investment in innovation
• The robust free cash flow generated by the Combined Group (approximately $10 billion over the twelve (12) months through the third quarter of 2022) will enable de-levering following the Completion, while continuing to support investment in the Combined Group’s pipeline and commercial brands.
• The Transaction is expected to be accretive to Amgen’s revenue and non-GAAP earnings per share from 2024. Amgen is not providing or updating 2022 or 2030 guidance as a result of the Transaction.
• Amgen’s goal is to maintain a strong investment grade credit profile with debt leverage that is in-line with current levels by the end of 2025. Amgen expects to support this goal with over $10 billion of debt retirement through that period.
• Amgen remains committed to growing its annual dividend over time.
O• The Transaction is expected to deliver annual pre-tax cost synergies of at least $500 million by the end of the third fiscal year following the Completion.