Oct. 16--Horizon Pharma, a fast-growing Deerfield biotech, is getting ready to put the squeeze on Depomed Inc., a California company that makes pain drugs.
On Thursday, Horizon announced a special shareholder meeting Nov. 13 for the purpose of issuing 81.7 million shares to launch a hostile takeover of the smaller company. If successful, it would be the latest in a flurry of Horizon acquisitions that have turbocharged its revenue and product lineup.
In the last two years, Horizon has made two huge acquisitions, boosting its revenue from $73 million in 2013 to a projected $660 million to $680 million this year. With Depomed under its belt, Horizon's revenues would climb to more than $950 million, according to a company filing with the Securities and Exchange Commission.
Unlike most other pharmaceutical companies, which spend huge sums to build their product pipelines organically, Horizon last year spent just 6 percent of sales on research and development, far below the industry average of 18 percent.
With Depomed, Horizon would pick up several big drug brands, including migraine drug Cambia, painkiller Nucynta ER and nasal spray Lazanda.
Depomed's board has twice spurned the Illinois company's advances, saying it wants to remain independent. In May, Horizon said it offered to buy Depomed for $29.25 a share. A month later, Horizon said it offered $33 a share.
Depomed on Thursday said Horizon's recent statements on the value of the offer were "confusing and misleading." It said Horizon's offer now has a current value of about $17 a share, pulling the value down from $3 billion to just over $1 billion. The reason: most of the offer consisted of Horizon stock, and the market value of Horizon stock has fallen from $32.14 a share in late August to $29.97 a share on Sept. 8.
In August, Horizon said it would seek a special shareholder meeting to replace the directors of Depomed.
Earlier this month, Horizon said it would move its U.S. headquarters from Deerfield to Lake Forest and planned to triple its workforce to 600 employees in about four years.
The company's shareholder meeting will be held in Dublin, where Horizon moved its world headquarters last year in part to lower its tax bill. It did that by buying Irish pharmaceutical company Vidara Therapeutics International for $587 million. Earlier this year, it bought Hyperion Therapeutics for $1.1 billion.
jrussell@tribpub.com
