Horizon Therapeutics Fields Takeover Interest From Pharma Giants

A deal for Horizon would be big. The company had a market value of almost $18 billion as of the close of trading Tuesday and, with a typical takeover premium, could fetch a price well over $20 billion. The shares rose some 33% after hours on the news.

Any tie-up, however, is uncertain and a deal may not emerge.

Horizon is Nasdaq-listed, but headquartered in Ireland and with operations in Dublin, Deerfield, Ill., and a new facility in Rockville, Md. It develops medicines to treat rare autoimmune and severe inflammatory diseases that are currently sold mostly in the U.S. Its biggest drug, Tepezza, is used to treat thyroid eye disease, an affliction characterized by progressive inflammation and damage to tissues around the eyes.

Last year, revenue from the product more than doubled, driving the company’s overall net sales 47% higher to $3.23 billion. Horizon said this month that annual global net sales of the drug are targeted to eventually peak at more than $4 billion as the company aims to win approval to sell it in Europe and Japan.

That type of growth is attractive to big pharmaceutical companies—with many sitting on big piles of cash—that rely on acquisitions as a key strategy to expand sales. Many big drugmakers are looking for new sources of revenue to offset losses when some of their main products lose patent protection.

This month, Johnson & Johnson struck a $16.6 billion deal to acquire heart-device maker

Abiomed Inc.

to bolster sales of its medical-gear division, which had been lagging those of its pharmaceutical unit.

Merck

MRK 0.36%

& Co. followed that deal with its own, agreeing to buy blood-cancer biotech

Imago BioSciences Inc.

IMGO 0.14%

for $1.35 billion, ahead of the patent expiration of its cancer immunotherapy called Keytruda.

Pfizer Inc.,

PFE -0.16%

meanwhile, agreed in August to buy Global Blood Therapeutics Inc. for $5.4 billion, in a deal that would give the big drugmaker a foothold in the treatment of sickle-cell disease.

Horizon’s other drugs include Krystexxa for treating gout, a form of inflammatory arthritis, and Ravicti, a prescription used to manage high blood levels caused by a genetic condition known as urea cycle disorder.

Drugs treating rare diseases have emerged as a large source of pharmaceutical sales, even though there aren’t a lot of patients, because they can command high prices that health insurers have been willing to pay.

Sanofi, J&J and Pfizer are among the big drugmakers that have built portfolios of rare-disease therapies.

Any deal for Horizon, if it happened this year, could rank as the largest healthcare acquisition globally in 2022, ahead of the Johnson & Johnson-Abiomed tie-up. The selloff in stocks this year amid rising interest rates, while putting a damper on deal activity, has also made some companies more attractive targets. At the stock’s peak about a year ago, Horizon was valued at roughly $27 billion.

Horizon said that, in accordance with Irish takeover rules, possible bidders must announce whether or not they intend to make an offer by Jan. 10.

—Jonathan D. Rockoff contributed to this article.

Write to Ben Dummett at ben.dummett@wsj.com and Laura Cooper at laura.cooper@wsj.com