Business Irish

Wednesday 7 December 2016

Horizon to retain drug prices after $510m deal

Paul O'Donoghue

Published 15/12/2015 | 02:30

Dublin-based Horizon Pharma does not plan to significantly raise the price of the drug for a rare type of arthritis after agreeing to buy its manufacturer in a $510m (€463m) deal.

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The company announced it has entered a definitive agreement to acquire US-based Crealta Holdings for $510m in cash.

Crealta's medicine Krystexxa is the only treatment for chronic refractory gout that has been approved for use by the US Food and Drug Administration. Gout is a kind of arthritis that can cause attacks of sudden burning pain, stiffness, and swelling in a joint, usually in the toes.

Chronic refractory gout is characterised by severe cases of the illness where standard medications are unable to help.

It is an extremely rare disease and affects about 50,000 people in the US. After getting FDA approval in 2010, Krystexxa has been used to treat between 4,000 and 5,000 patients. It has also been approved for use in the European Union by the European Medicines Agency, although it is not sold in the market.

Stock in Horizon fell in October fell by about 8pc in October after the 'New York Times' carried a negative report on the pricing of one of Horizon's trademarked drugs, Duexis.

The article claimed that the drug was being sold at $1,500 per month for a prescription, while a combination of the two main generic ingredients used in the drug would cost about $20 to $40 a month.

Horizon has said most of its medication is distributed through third-party specialty pharmacies, which are independent of the parent company.

A spokesman told the Irish Independent that "during the last seven quarters through Q3 2015, our growth has been driven by 189pc volume vs only 16pc price.

"The same will be true for Krystexxa; volume will drive growth and we do not have significant price increases planned."

Horizon said it expects the deal will add between add $70m to $80m in net sales in the first 12 months. It is expected that the transaction will close in the first quarter of 2016.

Horizon moved its headquarters to Ireland last March after buying Dublin-based Vidara Therapeutics International Ltd in a reverse takeover for $660m.

The company is one of a number of US medical firms that have moved their headquarters to Ireland to take advantage of the company's corporate tax rate, which is 12.5pc compared to the 35pc rate applied in the US. Horizon made a loss last year, so it is difficult to assess the extent of the impact the move has had on its financial affairs.

Irish Independent

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