Monday, May 2, 2022

An International Equity holding: Horizon Pharma plc. (HZNP, $105.84): “New Growth on the Horizon?” By: Grace Schwartz, AIM Student at Marquette University


Horizon Pharma plc. (HZNP, $105.84): “New Growth on the Horizon?”

By: Grace Schwartz, AIM Student at Marquette University

Disclosure: The AIM International Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it, and I have no business relationship with any company whose stock is mentioned in this article.


  • Horizon Pharma plc. (NYSE:HZNP) is an international biopharmaceutical company that focuses on the discovery, development and commercialization of treatments for rare, autoimmune inflammatory diseases. The company operates in two segments: the orphan segment (89%) and the inflammation segment (11%). HZNP was founded in 2008 and is headquartered in Dublin Ireland.
  • Horizon acquired Viela Bio, Inc for $2.5 billion in 2021. This acquisition added one approved product, Uplinza, to the orphan segment. Additionally, two drugs in Phase 1 trials, five in Phase 2 trials, and two in Phase 3 trials, were added.
  • The company operates in China, Japan, Germany, and the United States. 99.5% of revenue comes from the United States.
  • HZNP has increased 110% since being added to the International Fund in January 2020, well past the target price of $49.96
  • HZNP currently has over 20 programs in its pipeline, with three programs in Phase 3 and four additional Phase 4 programs. The company expects ten program approvals in the second-half of the decade.

Key points: In March 2021, HZNP completed its acquisition of Viela Bio, Inc. This expanded the company’s commercial medicine portfolio by adding Uplinza to the orphan segment. Management expects that this acquisition will provide multiple opportunities to drive long-term growth and solidify HZNP as an innovative-driven biotech company. Viela’s mid-stage biologics pipeline, R&D, and initiated clinical trials will assist with this.

2021 also saw the global agreement with Arrowhead. This collaboration is for ARO-XDH, a discovery-stage investigational RNA interference therapeutic meant to treat gout. HZNP has agreed to pay potential milestone payments of up to $660.0 million contingent on the achievement on development, regulatory, and commercial milestones.

In addition to bringing new medicines to market, HZNP is also leveraging current drugs. Daxdilimab is an antibody that was originally intended to treat lupus. Recently, HZNP has initiated four additional Phase 2 clinical trials for Daxdilimab. These trials will target Alopecia Areata and Dermatomyositis.

What has the stock done lately?

For the month of April 2022, HZNP is down -3.24%, trading at $107.15 on April 1 and $105.84 on April 22.

Past Year Performance: Over the course of HZNP’s most recent fiscal year, the stock increased 10.85% YTD. The 52-week range includes a low of $83.42 and a high of $120.53.

1 Year Stock Chart vs. Benchmark from FactSet here

Source: FactSet

My Takeaway

Since the addition of HZNP to the International fund, the company has far exceeded expectations. The stock has increased well past its original target price and been consistent with investment drivers. Additionally, HZNP has shown the potential for future growth through its acquisitions and commercialization of new products. The acquisition of Viela Bio has already shown success. Management has also given reason to believe the company will continue to acquire other companies and expand its portfolio. Although the stock has met investment drivers and surpassed original price target, there looks to be growth in Horizon Therapeutics. Because of this, it is recommended that the AIM International fund holds the position.

1 Month Stock Chart from FactSet here

Source: FactSet