Horizon Therapeutics to buy rare-disease drugmaker Viela for $3.05 billion

Drugmaker Horizon Therapeutics Plc on Monday offered to buy Viela Bio Inc for about $3.05 billion, in a bid to expand its rare-disease portfolio.

Viela's rare disease drug Uplizna, which raked in $2.3 million in third-quarter revenue, is the star attraction for Horizon.

Stifel analyst Derek Archila said the brokerage has a favorable view on Viela's emerging pipeline, which seems to be the key driver of the acquisition. Uplizna is Viela's only approved drug.

Horizon has offered a premium of 52.8% to Viela's last close, by agreeing to buy all of its common stock for $53 per share in cash.

"The Viela portfolio is highly complementary to our rare disease business in many of our therapeutic areas of focus," Horizon Chief Executive Officer Tim Walbert said on a call with analysts.

Guggenheim analyst Seamus Fernandez called the acquisition price "reasonable".

Shares of Viela were up 53%, while Horizon was marginally up in early trade.

Separately, AstraZeneca Plc said on Monday it agreed to divest its 26.7% stake in Viela and expects to receive cash proceeds and profit of $760 million to $780 million upon closing of Viela's deal with Horizon.

Horizon said it will continue to evaluate additional acquisition and licensing opportunities beyond Viela and plans to significantly increase its R&D investment in 2021.

The company already has some treatments for rare diseases, ranging from drugs to treat genetic disorder Chronic Granulomatous Disease, nephropathic cystinosis to urea cycle disorder.

It intends to finance the Viela transaction, expected to close in the first quarter of 2021, through $1.3 billion of external debt and cash on hand.

Horizon, which had $2.08 billion in cash and cash equivalents as of Dec. 31, expects the transaction to reduce its adjusted EBITDA by about $140 million in 2021.