Horizon to Acquire Rare Disease Company Raptor Pharmaceutical for $800 Million

DUBLIN, Ireland and NOVATO, Calif., Sept. 12, 2016 (GLOBE NEWSWIRE) — Horizon Pharma plc (NASDAQ:HZNP) and Raptor Pharmaceutical Corp. (NASDAQ:RPTP) today announced the companies have entered into a definitive agreement under which Horizon Pharma will acquire all of the issued and outstanding shares of Raptor Pharmaceutical Corp. common stock for $9.00 per share in cash, for an implied fully diluted equity value of approximately $800 million.  The transaction is expected to close in the fourth quarter of 2016.

“The proposed acquisition of Raptor furthers our commitment to helping people with rare diseases and is a significant step in advancing our strategy to expand our rare disease business,” said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc.  “Along with the potential for accelerated revenue growth, the addition of Raptor strengthens our U.S. orphan business and provides a platform to expand our orphan business in Europe and other key international markets.  We look forward to working with new patient communities and building on the success of the Raptor team.”

Strategic and financial benefits of the transaction:

  • Strengthens Horizon’s focus on rare diseases and provides expansion into Europe and other international markets.
  • Adds PROCYSBI® delayed-release capsules and QUINSAIR™ (aerosolized form of levofloxacin) global rights, with PROCYSBI having strong patent protection through 2034.
  • Diversifies revenue with 11 medicines across three business units: orphan, rheumatology and primary care.
  • Bolsters rare disease revenue, which in the first half of 2016 on a pro-forma basis was 45 percent of total Horizon Pharma revenue.
  • Expected to be accretive to adjusted EBITDA in 2017.

“This transaction will deliver significant and immediate value to our shareholders through a compelling all-cash premium and provide ongoing value to our patients, their families and the physicians who treat them,” said Julie Anne Smith, president and chief executive officer, Raptor Pharmaceutical Corp.  “On behalf of the Board and management team, I extend our deepest gratitude to everyone at Raptor for their unrelenting commitment to advancing the development of our medicines and their tireless work with the patients we serve.”

PROCYSBI is the first cystine-depleting agent given every 12 hours that is approved in the United States for the treatment of nephropathic cystinosis (NC), a rare metabolic disorder, in adults and children 2 years of age and older.  PROCYSBI received European Commission approval as an orphan medicinal product in September 2013 for the treatment of proven NC.  According to estimates, NC prevalence is as high as 1 in 100,000 live births.  There are believed to be approximately 550 NC patients in the United States and 2,000 worldwide.

QUINSAIR is a proprietary inhaled formulation of levofloxacin, approved in the European Union and Canada for the management of chronic pulmonary infections due to Pseudomonas aeruginosa in adult patients with cystic fibrosis.  Cystic fibrosis is a rare, life-threatening, genetic disease affecting an estimated 21,000 adults in Europe and Canada.  QUINSAIR is not approved in the United States.

Raptor’s previously disclosed total net sales guidance for full-year 2016 is $125 million to $135 million, which includes both PROCYSBI and QUINSAIR.  Horizon will provide additional detail regarding its guidance for full year 2017 net sales and adjusted EBITDA in the first quarter 2017.

Transaction Terms and Approvals
The acquisition is structured as an all cash tender offer for all the issued and outstanding shares of Raptor common stock at a price of $9.00 per share followed by a merger in which each remaining untendered share of Raptor common stock would be converted into the $9.00 per share cash consideration paid in the tender offer.  The transaction, which has been unanimously approved by the boards of directors of both companies, is subject to the satisfaction of customary closing conditions and regulatory approvals, including antitrust approval in the United States.

Financing
Horizon intends to finance the transaction through $675 million of external debt along with cash on hand.  The company has put in place fully committed financing with BofA Merrill Lynch, JPMorgan Chase Bank, N.A., Jefferies Finance LLC, and Cowen Structured Holdings, an affiliate of Cowen and Co. LLC.  As of June 30, 2016, the company had $424.5 million of cash and cash equivalents on its balance sheet.

Advisors
MTS Health Partners L.P. and Citigroup Global Markets Inc. are co-lead financial advisors to Horizon Pharma in the transaction.  BofA Merrill Lynch, J.P. Morgan, Jefferies LLC and Cowen and Company, LLC are financial advisors to Horizon Pharma in the transaction.  Horizon Pharma’s legal advisors are Cooley LLP and McCann FitzGerald.

Centerview Partners LLC and Leerink Partners LLC are financial advisors to Raptor Pharmaceutical Corp. in the transaction.  Raptor Pharmaceutical Corp.’s legal advisor is Latham & Watkins LLP.

Conference Call Today at 8 a.m. ET
At 8 a.m. Eastern Time today, Horizon’s management will host a conference call and live audio webcast to review the transaction and related matters.  The live webcast and a replay may be accessed by visiting the investor relations section of the Horizon website at http://ir.horizon-pharma.com.  Please connect to the company’s website at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast.  Alternatively, please call 1-888-338-8373 (U.S.) or 1-973-872-3000 (international) to listen to the conference call.  The conference ID number for the live call is 80632193.  Telephone replay will be available approximately two hours after the call.  To access the replay, please call 1-855-859-2056 (U.S.) or (404) 537-3406 (international).  The conference ID number for the replay is 80632193.  An archived version of the webcast will be available for at least one week on the investor relations section of the Horizon website at http://ir.horizon-pharma.com.

About PROCYSBI
PROCYSBI is approved in the United States for the treatment of nephropathic cystinosis in adults and children 2 years of age and older.  In Europe, PROCYSBI gastro-resistant hard capsules of cysteamine (as mercaptamine bitartrate) received European Commission approval as an orphan medicinal product in September 2013 for the treatment of proven nephropathic cystinosis.

PROCYSBI acts within the lysosome, converting cystine into cysteine and a cysteine-cysteamine mixed disulfide, both of which can exit the lysosome in patients with cystinosis.  Adherence to treatment regimens is associated with improved outcomes, but the timing of doses is critical, as cystine levels can rise quickly if patients delay, miss, or stop taking their prescribed treatment regimen.  PROCYSBI is contraindicated in patients with a hypersensitivity to cysteamine or penicillamine.  The most commonly reported side effects are vomiting, nausea, abdominal pain, breath odor, diarrhea, skin odor, fatigue, rash and headache.

About Nephropathic Cystinosis
Nephropathic cystinosis is an inherited autosomal-recessive disease affecting lysosomal storage processes within cells; the amino acid cystine is not transported out of the lysosome, but instead accumulates and eventually crystallizes within the lysosomal lumen.  Without treatment, high intracellular cystine concentrations can occur in virtually all organs and tissues, leading to irreversible cellular damage, progressive multi-organ failure and death.

About QUINSAIR
QUINSAIR is a proprietary inhaled formulation of levofloxacin, approved in the EU and in Canada for the management of chronic pulmonary infections due to Pseudomonas aeruginosa in adult patients with cystic fibrosis.  QUINSAIR, a twice-daily treatment, contains an aerosolized form of levofloxacin, a broad-spectrum fluoroquinolone antibiotic with proven activity against a wide range of both gram-negative and gram-positive bacteria.  The fluoroquinolones rapidly inhibit replication and transcription of bacterial DNA, which leads to bacterial cell death.  QUINSAIR is not approved in the United States.

QUINSAIR is contraindicated in patients with hypersensitivity to levofloxacin, a history of tendon disorders related to fluoroquinolones, epilepsy or who may be pregnant or breast feeding.  The safety profile of QUINSAIR has been evaluated in two double-blind, placebo-controlled studies and in an active comparator study in which the most frequently reported adverse reactions were cough/productive cough, dysgeusia and fatigue/asthenia.

About Cystic Fibrosis
Cystic fibrosis is a rare, life-threatening, genetic disease affecting an estimated 21,000 adults in Europe and Canada.  Cystic fibrosis causes persistent lung infections due to the buildup of thick, sticky mucus in the lungs and progressively limits the patient’s ability to breathe.  The lung infections are mostly caused by bacteria with 75 percent of cystic fibrosis patients suffering from chronic pseudomonas aeruginosa infections.

About Horizon Pharma plc
Horizon Pharma plc is a biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs.  The Company markets nine medicines through its orphan, rheumatology and primary care business units.  Horizon’s global headquarters are in Dublin, Ireland.  For more information, please visit www.horizonpharma.com.  Follow @HZNPplc on Twitter or view careers on our LinkedIn page.

About Raptor Pharmaceutical Corp.
Raptor Pharmaceutical Corp. is a global biopharmaceutical company focused on the development and commercialization of transformative therapeutics for rare, debilitating and often fatal diseases.

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