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HZNP

Horizon Therapeutics NasdaqGS:HZNP Stock Report

Last Price

US$61.21

Market Cap

US$14.1b

7D

-8.8%

1Y

-40.7%

Updated

18 Aug, 2022

Data

Company Financials +
HZNP fundamental analysis
Snowflake Score
Valuation3/6
Future Growth4/6
Past Performance3/6
Financial Health6/6
Dividends0/6

HZNP Stock Overview

Horizon Therapeutics Public Limited Company, a biotechnology company, focuses on the discovery, development, and commercialization of medicines that address critical needs for people impacted by rare, autoimmune, and severe inflammatory diseases.

Horizon Therapeutics Public Limited Company Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Horizon Therapeutics
Historical stock prices
Current Share PriceUS$61.21
52 Week HighUS$120.54
52 Week LowUS$60.44
Beta1.11
1 Month Change-27.71%
3 Month Change-32.25%
1 Year Change-40.71%
3 Year Change121.13%
5 Year Change358.50%
Change since IPO568.96%

Recent News & Updates

Aug 19

Horizon Therapeutics: This Core Biotech Company Is On Sale

Shares have lost 40% of their value year to date. Tepezza sales should reaccelerate into the back half of 2022 and 2023 as the drug makes inroads into chronic TED market. Krystexxa continues to experience respectable growth in the uncontrolled gout market and Horizon has multiple shots on goal to address 9M estimated sufferers. Rare disease focused pipeline has $10 billion in potential peak sales and management is likely to acquire additional drugs on the cheap. HZNP is a Buy and I suggest accumulating dips in the back half of the year. Key risks include competition, failure to reinvigorate Tepezza sales and disappointing readouts. Shares of Ireland-based Horizon Therapeutics (HZNP) have risen by 237% since my 2016 recommendation identified the company as an attractive Core Biotech-type selection. However, so far in 2022 shares have lost 40% of their value. I've had this rare disease player on my radar for quite a while as a possible addition to our current Core Biotech portfolio. One would think fair value is considerably higher than the current $14 billion market capitalization, considering growing Tepezza sales in the lucrative TED market ($3B+ peak potential), Krystexxa sales hitting an inflection point to help patients suffering from gout and pipeline contains drug candidates with $10B+ in peak sales potential across a range of diseases and settings. As share price and valuation have hit relative lows, I think it's time I revisit this one to see if it's ready for us to add to the Core Biotech portfolio. Chart FinViz Figure 1: HZNP weekly chart (Source: Finviz) When looking at charts, clarity often comes from taking a look at distinct time frames in order to determine important technical levels and get a feel for what's going on. In the weekly chart above, we can see share price top out at the $120 level twice in late 2021 and again in 2022. From there, they've steadily drifted south after multiple disappointing quarters as pessimism takes over. Current range in the low $60s appears to be establishing a near-term low, but I would not overestimate the ability of short sellers to take this one lower still. My initial opinion is that long term investors would do well to accumulate a pilot position in the near term, adding further exposure spread out across Q3 and Q4 reports in order to encourage patience and possibly attain a better average cost. Overview Management presentation at Goldman Sachs Healthcare Conference is a worthwhile listen to gain better understanding of the present picture: Long term growth is being driven by 3 lead approved rare-disease drugs with combined $5.5 billion in peak sales potential (Tepezza in TED, Krystexxa in gout and Uplizna in MG). Behind these, the company has 20+ clinical programs ongoing with combined peak sales potential of over $10 billion. Corporate Slides Figure 2: Deep pipeline (Source: corporate presentation) Management has a strong track record in savvy business development and knows how to get deals done. They always start with the question of whether the opportunity being examined is strategically aligned with their objectives as a rare disease company. They are currently looking at individual assets to expand the pipeline, looking at growth into late 2020's and beyond. They are scaling geographically as well, with Tepezza being the anchor of these efforts. They do evaluate larger bolt-on deals from time to time as well, IF they meet the derisking criteria such as coming with a commercially approved product plus a pipeline for diversification. Management asks themselves whether they can add value to what they receive, such as Uplizna and the 2021 deal to acquire Viela Bio for $3.05 billion with opportunity inherited to expand to additional indications. They are VERY disciplined from a valuation standpoint. Management notes that the overall XBI may be 60%+ off from its peak, with some smaller cap stocks down 70% to 80% which could be cheap but NOT attractive. Other companies sport more attractive valuations that have not fully reset yet. They are confident in their commercial capabilities in the rare disease business model, providing support and specialty marketing efforts which they do very well. They are thoughtful and intentional in thinking about how to develop products, get a good regulatory outcome and position them for successful launch. Focusing on core asset Tepezza in TED (Thyroid Eye Disease) market, management expects sales to reaccelerate in the back half of 2022. They have expanded the field force to call on a broader range of targets. Simply put, more resources will drive greater conversion and they will provide more support to help patients come onto the funnel and get care. Success in chronic TED could be a catalyst to grow sales as well, demonstrating benefit in patients with low activity scores. 2 years into launch management found out there are not discrete phases of disease such as acute and chronic, as they come across patients with range of symptoms since diagnosis. On the con side, management will not commit to revisiting their long-term guidance so perhaps there's insufficient clarity there. Corporate Slides Figure 3: Key growth drivers for Tepezza and projected peak sales ramp (Source: corporate presentation) As for Krystexxa launch in combination with immunomodulators to expand the market opportunity in uncontrolled out, management notes that this overall gout market consists of over 9 million patients growing at single digits annually. Krystexxa is appropriate for over 100,000 patients and tapping a low % of that currently, so there's lots of upside from here. 4% infusion reaction (patients more comfortable when considering whether to go on treatment) and 71% complete response are encouraging. They are also expanding efforts to address gout via collaboration with Arrowhead Pharmaceuticals (siRNA) and other drug candidates, with the goal being to address the hundreds of thousands of patients for whom current therapies do not work, are contraindicated or have safety concerns with existing products. The goal over time is to bring a portfolio of products forward to address the broader need and create a really powerful gout franchise. Corporate Slides Figure 4: Impressive improvement in CR rate leads to increased use of immunomodulation (Source: corporate presentation) Moving on to Uplizna and the NMO opportunity, they are in the process of relaunch (Q4) and positioning with expanded sales team and reinforced infrastructure around the brand. Goal is to help folks get on treatment faster and help physicians get through reimbursement more efficiently while continuing to generate data through the field support team. They are seeing that the majority of patients are switchers, but they do have a decent amount of treatment naive patients as well. This reinforces management's belief that Uplizna is a next generation B cell depleter and physicians are buying into that as they switch from rituximab. Also, they are able to provide a more constant regiment with 2x/year dosing and more certainty to have disease under control. This is especially important considering that a single attack can cause irreversible blindness or paralysis (no partial recovery such as with multiple sclerosis). The myasthenia gravis landscape also allows them to differentiate from novel FcRns like Argenx (ARGX) where patients are getting weekly infusions four times then waiting 80 days to see if they need further infusions. Data also positions Uplizna to be studied in MuSK patients and they will have the largest data set to show efficacy in this population. Another unique feature they offer is steroid taper, to show many patients weaned off of steroids and thus avoid their long term health consequences. Other Information For the second quarter of 2022, the company reported cash and equivalents of $1.89 billion as compared to $2.6 billion in debt outstanding and positive operating cash flow of $249 million. Shares took a hit when Q2 earnings were released considering that full year guidance was below estimates, with company expecting full year net sales of $3.53B - $3.60B versus prior guidance of $3.9B -$4B. Also, they now expect Tepezza full year net sales percentage growth in the high teens versus prior guidance of mid-30s percentage growth. Key development programs moving forward included: Anti-ITL7 monoclonal antibody daxdilimab in phase 2 study for systemic lupus erythematosus ((SLE)), disease in which the body's immune system attacks its own tissues and organs. Phase 2 trial in alopecia areata, phase 2 study in discoid lupus erythematosus ((DLE)), phase 2 study in lupus nephritis and phase 2 study in dermatomyositis (rare autoimmune disorder characterized by rashes, debilitating muscle weakness and interstitial lung disease). CD40 ligand antagonist dazodalibep in multiple studies in autoimmune diseases, including phase 2 study in Sjögren's syndrome, phase 2 study in rheumatoid arthritis, phase 2 study in kidney transplant rejection and phase 2 study in focal segmental glomerulosclerosis. Oral lysophosphatidic acid receptor 1 antagonist HZN-825 in pivotal phase 2b study in diffuse cutaneous sytsemic sclerosis and phase 2b pivotal study in idiopathic pulmonary fibrosis. Anti-CD19 humanized monoclonal antibody Uplizna in phase 3 study for myasthenia gravis and phase 3 study for IgG4-related disease. Tepezza phase 4 study in chronic/low-CAS TED, phase 3 Japan study in moderate-to-severe active TED, subcutaneous administration phase 1b study and phase 1 study in diffuse cutaneous systemic sclerosis. Krystexxa phase 4 trial evaluating methotrexate combo over shorter infusion duration in uncontrolled gout, monthly dosing phase 4 study and retreatment phase 4 study (patients who were not complete responders to monotherapy). HZN-1116, fully human monoclonal antibody that neutralizes function of FLT3-ligand in phase 1 study in patients with autoimmune diseases. Moving on to the conference call, management highlights 13% growth in orphan disease segment of the business and 30% growth for Krystexxa. For TEPEZZA in TED, market research confirmed estimates of over 100,000 patients in the US appropriate for treatment in the US (segmented based on disease severity and clinical activity score or CAS). They estimate more than 20,000 patients with high CAS and key severity symptoms such as high proptosis and diplopia. This is the market where they have highest penetration rate at 20%. They also estimate more than 80,000 patients in the next segment of TED with low clinical activity score with high proptosis or diplopia (seen low single digit penetration of this segment today). The challenge here will be to address low awareness of the disease with ophthalmologists and endocrinologists. The company expects more meaningful uptake based on data sets generated beginning in 2024. Moving onto Krystexxa, again they saw 30% year-over-year growth driven by growing adoption in both rheumatology and nephrology market segments as well as uptake with immunomodulation (running at 50% of new patients). Expanded label is allowing them to promote the benefits of methotrexate for the first time and management remains confident in attaining peak annual sales of more than $1 billion. Uplizna delivered another strong quarter as well with net sales of $39M, with commercial launch underway in Germany. Management remains confident in global peak annual net sales expectation of over $1 billion across all indications. As for prior financings, March 2019 secondary offering took place at $24.50 (less than half the current share price and a reminder that management has successfully created shareholder value over the past few years). Accumulated deficit (retained earnings) now stands at positive $318 million, which I think is quite impressive considering the company was founded way back in 2005. As for insider holdings, President and CEO Timothy Walbert owns ~435,000 shares or over $26 million worth.

Aug 04
Analyst Forecasts Just Became More Bearish On Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)

Analyst Forecasts Just Became More Bearish On Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)

The latest analyst coverage could presage a bad day for Horizon Therapeutics Public Limited Company ( NASDAQ:HZNP...

Shareholder Returns

HZNPUS BiotechsUS Market
7D-8.8%-2.0%1.4%
1Y-40.7%-22.2%-8.4%

Return vs Industry: HZNP underperformed the US Biotechs industry which returned -23% over the past year.

Return vs Market: HZNP underperformed the US Market which returned -9% over the past year.

Price Volatility

Is HZNP's price volatile compared to industry and market?
HZNP volatility
HZNP Average Weekly Movement7.6%
Biotechs Industry Average Movement12.4%
Market Average Movement7.6%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.1%

Stable Share Price: HZNP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: HZNP's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20052,015Tim Walberthttps://www.horizontherapeutics.com

Horizon Therapeutics Public Limited Company, a biotechnology company, focuses on the discovery, development, and commercialization of medicines that address critical needs for people impacted by rare, autoimmune, and severe inflammatory diseases. The company operates in two segments, Orphan and Inflammation. Its portfolio comprises 12 medicines in the areas of rare diseases, gout, ophthalmology, and inflammation.

Horizon Therapeutics Public Limited Company Fundamentals Summary

How do Horizon Therapeutics's earnings and revenue compare to its market cap?
HZNP fundamental statistics
Market CapUS$14.10b
Earnings (TTM)US$764.96m
Revenue (TTM)US$3.81b

18.4x

P/E Ratio

3.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HZNP income statement (TTM)
RevenueUS$3.81b
Cost of RevenueUS$910.86m
Gross ProfitUS$2.90b
Other ExpensesUS$2.14b
EarningsUS$764.96m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.32
Gross Margin76.11%
Net Profit Margin20.06%
Debt/Equity Ratio51.9%

How did HZNP perform over the long term?

See historical performance and comparison