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.
Summary
- 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.
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.
Source: FactSet
