- Looking to diversify its rare disease portfolio, Horizon Pharma has locked down an acquisition of River Vision Development Corp. that gives it access to an investigation biologic that could become its first marketed product in the eye care space. Horizon will pay $145 million in cash upfront plus undisclosed earn-outs and milestones.
- The buyout puts Horizon in control of teprotumumab, a monoclonal antibody that drugmakers have investigated for several indications, including some cancers and diabetic macular edema, before pushing it ahead as a treatment for thyroid eye disease (TED), which affects about 2% to 3% of the U.S. population. Only about 10,000 of those patients have the moderate-to-severe form of the disease, however, according to a May 8 statement from Horizon.
- Picking up River Vision was "an important first step at assembling a portfolio of development stage orphan medicines through acquisition, in-licensing, and internal development," Horizon CEO Timothy Walbert told investors during a May 8 earnings call.
There are currently no Food and Drug Administration-approved treatments for TED. Should teprotumumab change that, Horizon expects the drug could fetch $250 million in peak annual sales.
Teprotumumab getting the greenlight isn't all that far-fetched either. The treatment received a breakthrough designation from the FDA last year, and performed well in a Phase 2, placebo-controlled study — with 69% of patients in the experimental arm demonstrating clinical activity responses versus 20% in the placebo arm. And in terms of safety, hyperglycemia in diabetic patients was the sole adverse event.
Horizon plans to initiate a pivotal Phase 3 trial of teprotumumab in TED in the second half of 2017. A strong performance there would also benefit River Vision, which stands to receive unspecified regulatory and sales milestones as the drug progresses to and potentially enters the market.
Pipeline and portfolio diversification has been on the top of Horizon's list for some time, and the company said during its most recent earnings call it will continue to consider bolt-on acquisitions and licensing deals as a means of achieving such expansions.
What's more, the company will have the necessary capital to do more deals after the River Vision transaction, reporting $603 million in cash and cash equivalents as of March 31, according to its most recent quarterly filing with the Securities and Exchange Commission.
A medicine at the intersection of ophthalmology and rare disease seems like a strong place to start, as both areas are seeing impressive growth. The global rare disease drug market, for example, is slated to have a compound annual growth rate of 6.8% from 2016 through 2022, topping out at $169 billion by that later date, according to an April report from Allied Research.
For Horizon, rare diseases representative a vital pivot for the company's future.
"Two years ago, we had all primary care," Walbert said on May 8. "Now, 65% of our business is in orphan [and] Krystexxa, and we expect that to continue to accelerate, especially with the addition of teprotumumab and moving into late-stage development."
Primary care markets were once dominated by blockbuster drugs, but many of those drugs have gone off patent and once-lucrative markets are now flooded with low-cost generics. Many big pharmas have been forced to shift gears away from the primary segment in order to keep growing.