What happened
Shares of Horizon Therapeutics (HZNP) were soaring 14.8% higher as of 10:51 a.m. ET on Monday. The nice gain came after the company announced that Amgen (AMGN -0.19%) plans to acquire Horizon in a deal that values the smaller drugmaker at $27.8 billion.
So what
This news wasn't exactly a surprise. Horizon revealed a couple of weeks ago that it was in preliminary discussions with Amgen, Johnson & Johnson, and Sanofi about potentially being acquired.
What wasn't known then, though, was what the price tag of any deal might be. Investors are understandably pleased with the $116.50 per share Amgen plans to pay. It represents a premium of 47.9% above Horizon's closing price on Nov. 29 -- the day before the company announced acquisition discussions. It also reflects a premium of 19.7% above Horizon's closing price on Friday, Dec. 9.
Amgen shareholders don't seem to be as thrilled with the buyout of Horizon. Shares of the big biotech stock were down a little in early trading on Monday. However, Amgen CEO Robert Bradway called the acquisition "a compelling opportunity for Amgen." He said that Horizon's approved drugs Tepezza, Krystexxa, and Uplizna would help Amgen. Bradway also stated that Horizon's pipeline was a good fit with Amgen's programs in development.
Now what
Amgen's acquisition of Horizon isn't a done deal just yet. Horizon's shareholders must first approve the buyout. It also must receive a thumbs-up from the Irish High Court and clear regulatory hurdles in several countries, including the U.S. Amgen and Horizon expect that all of this will be done in the first half of 2023.
