UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Horizon Pharma, Inc.
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Filed under Rule 14a-12
of the Securities Exchange Act of 1934
Filing by: Horizon Pharma, Inc.
Subject Company: Horizon Pharma, Inc.
SEC File No. of Horizon Pharma, Inc.: 001-35238
This Schedule 14A filing consists of a presentation that was used by Horizon Pharma, Inc. (“Horizon”) in investor meetings on May 22, 2014. Certain information contained in the presentation relating to Vidara Therapeutics International Ltd. (“Vidara”) and ACTIMMUNE® has been provided by Vidara.
Forward Looking Statements
The presentation contains forward-looking statements, including, but not limited to, statements related to the anticipated consummation of a business combination transaction between Horizon and Vidara and the timing and benefits thereof, Horizon’s and the combined company’s strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, anticipated product portfolio, development programs and management structure, and other statements that are not historical facts. These forward-looking statements are based on Horizon’s current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to Horizon’s ability to complete the transaction with Vidara on the proposed terms and schedule; risks associated with business combination transactions, such as the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; risks related to future opportunities and plans for Horizon, as well as the combined company, including uncertainty of the expected financial performance and results; disruption from the proposed transaction, making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers; the calculations of, and factors that may impact the calculations of, the acquisition price in connection with the proposed merger and the allocation of such acquisition price to the net assets acquired in accordance with applicable accounting rules and methodologies; and the possibility that if the combined company does not achieve the perceived benefits of the proposed transaction as rapidly or to the extent anticipated by financial analysts or investors, the market price of the combined company’s shares could decline, as well as other risks related to Horizon’s business, including Horizon’s dependence on sales of DUEXIS and VIMOVO and its ability to increase sales of its DUEXIS, VIMOVO and RAYOS/LODOTRA products; competition, including potential generic competition; the ability of Horizon to protect its intellectual property and defend its patents; regulatory obligations and oversight; and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in Horizon’s SEC filings and reports, including in its Annual Report on Form 10-K for the year ended December 31, 2013. Horizon undertakes no duty or obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or changes in its expectations.
Additional Information and Where to Find It
In connection with the proposed transaction with Vidara, Horizon and Vidara will be filing documents with the SEC, including the filing by Horizon of a preliminary and definitive proxy statement/prospectus relating to the proposed transaction and the filing by Vidara of a registration statement on Form S-4 that will include the proxy statement/prospectus relating to the proposed transaction. After the registration statement has been declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to Horizon stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE RELATED PRELIMINARY AND DEFINITIVE PROXY/PROSPECTUS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HORIZON, VIDARA AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents (when they are available) and other related documents filed with the SEC at the SEC’s web site at www.sec.gov, by directing a request to Horizon’s Investor Relations department at Horizon Pharma, Inc., Attention: Investor Relations, 520 Lake Cook Road, Suite 520, Deerfield, IL 60015 or to Horizon’s Investor Relations department at 224-383-3000 or by email to investor-relations@horizonpharma.com. Investors and security holders may obtain free copies of the documents filed with the SEC on Horizon’s website at www.horizonpharma.com under the heading “Investors” and then under the heading “SEC Filings.”
Horizon and its directors and executive officers and Vidara and its directors and executive officers may be deemed participants in the solicitation of proxies from the stockholders of Horizon in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction will be included in the proxy statement/prospectus described above. Additional information regarding the directors and executive officers of Horizon is also included in Horizon’s Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on March 13, 2014. These documents are available free of charge at the SEC’s web site at www.sec.gov and from Investor Relations at Horizon as described above.
This communication does not constitute an offer to sell, or the solicitation of an offer to sell, or the solicitation of an offer to subscribe for or buy, any securities nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Horizon Pharma, Inc.
Filed under Rule 14a-12 of the Securities Exchange Act of 1934 Filing by: Horizon Pharma, Inc.
Subject Company: Horizon Pharma, Inc. SEC File No. of Horizon Pharma, Inc.: 001-35238
The following is a slide presentation relating to the proposed transactions described therein that was made available beginning on May 22, 2014.
May 2014 NASDAQ: HZNP
Forward-Looking Statements
This presentation contains forward-looking statements, including, but not limited to, statements related to the anticipated consummation of a business combination transaction between Horizon Pharma and Vidara Therapeutics and the timing and benefits thereof, Horizon Pharma’s and the combined company’s strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, anticipated product portfolio, development programs and management structure, and other statements that are not historical facts. These forward-looking statements are based on Horizon Pharma’s current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to Horizon Pharma’s ability to complete the transaction with Vidara on the proposed terms and schedule; risks associated with business combination transactions, such as the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the transaction will not occur; risks related to future opportunities and plans for Horizon Pharma, as well as the combined company, including uncertainty of the expected financial performance and results; disruption from the proposed transaction, making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers; the calculations of and factors that may impact the calculations of, the acquisition price in connection with the proposed merger and the allocation of such acquisition price to the net assets acquired in accordance with applicable accounting rules and methodologies; and the possibility that if the combined company does not achieve the perceived benefits of the proposed transaction as rapidly or to the extent anticipated by financial analysts or investors, the market price of the combined company’s shares could decline, as well as other risks related to Horizon Pharma’s business, including Horizon Pharma’s dependence on sales of DUEXIS and VIMOVO and its ability to increase sales of its DUEXIS, VIMOVO and RAYOS/LODOTRA products; competition, including potential generic competition; the ability of Horizon Pharma to protect its intellectual property and defend its patents; regulatory obligations and oversight; and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in Horizon Pharma’s SEC filings and reports, including in its Annual Report on Form 10-K for the year ended December 31, 2013. Horizon Pharma undertakes no duty or obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or changes in its expectations.
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Additional Information
In connection with the proposed transaction, Horizon Pharma and Vidara Therapeutics will be filing documents with the SEC, including the filing by Horizon Pharma of a preliminary and definitive proxy statement/prospectus relating to the proposed transaction and the filing by Vidara Therapeutics of a registration statement on Form S-4 that will include the proxy statement/prospectus relating to the proposed transaction. After the registration statement has been declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to Horizon Pharma stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-
4 AND THE RELATED PRELIMINARY AND DEFINITIVE PROXY/PROSPECTUS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT HORIZON PHARMA, Vidara THERAPEUTICS AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents (when they are available) and other related documents filed with the SEC at the SEC’s web site at www.sec.gov, by directing a request to Horizon Pharma’s Investor Relations department at Horizon Pharma, Inc., Attention: Investor Relations, 520 Lake Cook Road, Suite 520, Deerfield, IL 60015 or to Horizon Pharma’s Investor Relations department at 224-383-3000 or by email to investor-relations@horizonpharma.com. Investors and security holders may obtain free copies of the documents filed with the SEC on Horizon Pharma’s website at www.horizonpharma.com under the heading “Investors” and then under the heading “SEC Filings.”
Horizon Pharma and its directors and executive officers and Vidara Therapeutics and its directors and executive officers may be deemed participants in the solicitation of proxies from the stockholders of Horizon Pharma in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction will be included in the proxy statement/prospectus described above. Additional information regarding the directors and executive officers of Horizon Pharma is also included in Horizon Pharma’s Annual Report on Form
10-K for the year ended December 31, 2013,which was filed with the SEC on March 13, 2014. These documents are available free of charge at the SEC’s web site at www.sec.gov and from Investor Relations at Horizon Pharma as described above.
This communication does not constitute an offer to sell, or the solicitation of an offer to sell, or the solicitation of an offer to subscribe for or buy, any securities nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
For full prescribing information refer to product websites.
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Note Regarding Use of Non-GAAP Financial Measures
Horizon Pharma provides non-GAAP net income (loss) and net income (loss) per share financial measures that include adjustments to GAAP figures. These adjustments to GAAP exclude non-cash items such as stock compensation and depreciation and amortization, non-cash interest expense, and other non-cash charges. Certain one-time or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred. EBITDA, or earnings before interest, taxes, depreciation and amortization, is also used and provided by Horizon Pharma as a non-GAAP financial measure. Horizon Pharma believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Horizon Pharma’s financial performance. The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of operational results and trends. In addition, these non-GAAP financial measures are among the indicators Horizon Pharma’s management uses for planning and forecasting purposes and measuring Horizon Pharma’s performance. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The non-GAAP financial measures used by Horizon Pharma may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies.
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Horizon Pharma Overview
Profitable(1), spec pharma company with differentiated growth prospects
Analytics-driven commercial model with a track record of driving organic growth
Four U.S. marketed products targeting unmet therapeutic needs in arthritis and orphan diseases(2)
VIMOVO® (naproxen/esomeprazole) – FDA approved for treating signs and symptoms of RA, OA, Ankylosing Spondylitis and to decrease the risk of developing upper GI ulcers
DUEXIS® (ibuprofen/famotidine) – FDA approved for treating signs and symptoms of RA and OA and to decrease the risk of developing upper GI ulcers
ACTIMMUNE® (interferon gamma 1b) – FDA approved recombinant biologic for chronic granulomatous disease (CGD) and severe, malignant osteopetrosis (SMO)(2)
RAYOS® (prednisone) delayed-release tablets(3) – FDA approved for RA & multiple additional indications
Efficient corporate platform facilitating an aggressive business development strategy via product/company acquisitions(2)
(1) On a non-GAAP basis
(2) Pending the closing of the acquisition of Vidara Therapeutics International Ltd. Which is expected this summer
(3) RAYOS is known as LODOTRA outside the United States
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Accelerating Financial Performance
$300.0 $275.0
Net Sales Adjusted EBITDA ~497% Year-over-Year
$250.0 Net Sales Growth
$200.0
$150.0
$100.0 $85.0 ($ in millions) $74.0
$51.9 in $50.0
( $
$18.8
$6.9 $8.7 $11.0
$(50.0) $(33.5) $(16.6) $(46.8)
$(100.0) $(73.3)
$(150.0) 2011 2012 2013 2014E(1) Q1:13 Q1:14
(1) Midpoint of 2014 guidance for net sales of $270 - $280 million and EBITDA of $80 - $90 million which includes ACTIMMUNE results for the period of August through December 2014; excludes transaction related expenses
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Differentiated Business Model
Organic Growth
B2B sales force made up of 250 primary care reps and 40 rheumatology reps
Sophisticated, analytics-based commercial model
Optimize value based on understanding of the market and managed care
Do what is best for the patient by minimizing out of pocket costs
Proven execution capabilities based on VIMOVO and DUEXIS commercial success
M&A
Build a leading global specialty pharmaceutical company
Disciplined, yet aggressive M&A strategy
Focus on proprietary products marketed in the U.S. with clinical differentiation and significant upside within our commercial model
Leverage existing sales force or diversify business outside of arthritis and orphan diseases
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Proven Leadership Team
Extensive Commercial, Orphan, and Development Experience
President & CEO,
IDM Pharma Wyeth, Searle, Merck and
(Orphan/Osteosarcoma; Tim Walbert Abbott sold to Takeda) Marketed 12 NSAIDs, including
Chairman, President & CEO
Celebrex, VIOXX, Arthrotec, Board Member Mobic, Daypro, Brufen
Raptor (orphan); XOMA (orphan) VP/GM, Abbott Immunology
Egalet (opioid); BIO Led global development & launch of HUMIRA ($10+B in sales)
Bob De Vaere Jeff Sherman, M.D. Todd Smith
EVP, Chief Financial Officer EVP, Chief Commercial Officer EVP, Chief Medical Officer
IDM Pharma, Nexa Therapeutics, Epimmune,
BMS, Searle, Takeda, IDM Pharma Agouron, Achillion, Abbott, Bayer, Fenwal Vista Medical
Ben Bove Jeff Kent, M.D. Bob Carey
EVP, Chief Business Officer SVP, Marketing & Analytics SVP, Medical Affairs
JMP, Dresdner Kleinwort Wasserstein, Galt & Company, Abbott, Fenwal Searle (Celebrex/Bextra), Abbott (HUMIRA) Vector Securities
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Sales and Marketing Model
1) Differentiated 2) Optimize Value Commercial Model
Rep profile, optimized Optimize value based on targeting, selling model, IC detailed understanding of market and managed care dynamics
Leading-Edge, dge, Value-Based
3) Optimize Paper-to- Analytics 4) Minimize Patient Out Fill Process of Pocket Costs
Use PME and other partners Ensure widespread access to to “close the sale” in the generous co-pay program HCP office (e.g., 96% of patients get DUEXIS for $20 or less)
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DUEXIS Number of Unique Prescribers and Adopters Continues to Accelerate
Unique Prescribers +16% Over Last 3 Months and Unique Adopters (>5 Rx/week) +30% Over Last 3 Months*
0 5,000 10,000 15,000 20,000 25,000
9-Dec 30-Dec 20-Jan 10-Feb 2-Mar 23-Mar 13-Apr 4-May 25-May 15-Jun 2012 6-Jul Number 27-Jul 17-Aug
7-Sep of 28-Sep increase 19-Oct 9-Nov 30-Nov 21-Dec over 11-Jan 1-Feb Unique 22-Feb last 15-Mar 3 5-Apr 26-Apr
17-May
7-Jun 2013 28-Jun
19-Jul months Writers
9-Aug
30-Aug (1)
20-Sep
11-Oct
1-Nov
22-Nov
13-Dec
0 500 1,000 1,500 2,000 2,500
9-Dec
30-Dec
20-Jan
10-Feb
2-Mar
23-Mar
13-Apr
4-May
25-May Number
15-Jun 30%
2012 6-Jul of
27-Jul
17-Aug
7-Sep
28-Sep
19-Oct
9-Nov increase
30-Nov
21-Dec Unique
11-Jan
1-Feb over
22-Feb
15-Mar
5-Apr last
26-Apr 3
17-May
7-Jun
28-Jun Adopters
2013 19-Jul
9-Aug
30-Aug months (5+
20-Sep
11-Oct
1-Nov
22-Nov
13-Dec TRx)
2012 2013 2012 2013
(1)
Added 200+ new writers every week for last 16 months*
(1) Source: Healthcare Analytics (SHA) Prescriber Level Data
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Prescriptions-Made-Easy™ (PME) Specialty Pharmacy Program Driving Prescriptions
~35% of DUEXIS Prescriptions Through PME at end April 2014
0 200 400 600 800 1,000 1,200
1 10 7- -Aug Aug 2 31 4- -Aug Aug
17 4- -Sep Sep 2 21 8- -Sep Sep
15 2- -Oct Oct
2013 1 26 9- -Oct Oct Rx 9 2- -Nov Nov 2 13 6- -Nov Nov
30 7--Nov Dec 1 24 1- -Dec Dec
28 4--Dec Jan Filled 1 11 8- -Jan Jan 21 5--Feb Jan
18 5- -Feb Feb 2014 21 2--Mar Feb
15 8- -Mar Mar 2 29 2- -Mar Mar
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Average 67% Fill National
Rate
(1)
PME 88%
1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 1.80 1.90
1.44 (Q1
Average Refill
2014)
(2) Rate
PME . 1
78
(1) National Average fill rate calculated by subtracting IMS Monthly Claims national average rejections and reversals from total patients that had a claim adjudicated (1 – rejections –reversals) and Pharmacy Pilot fill rate based on total patients contacted by the pharmacy that provide insurance information and fill their prescription (total patients that fill Rx / total patients that are contacted and have insurance information) (2) National Average refill rate based on IMS NPA Monthly
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Port folio of Marketed Products
Primary Care Brands Specialty Brands
(1)
U . S.
.
Ex-U.S.
12 (1) Pending the closing of the acquisition of Vidara Therapeutics International Ltd. Which is expected this summer
VIMOVO & DUEXIS
Addressing an Unmet Medical Need
NSAID-INDUCED POOR PHYSICIAN AND GI TOXICITY PATIENT COMPLIANCE
GI intolerance incidence: up to 50%(1) 76% of MDs do not prescribe concomitant GI therapy(4)
Endoscopic ulcers incidence: 15-46%(2)
Leads to 107k hospitalizations and 16.5k deaths 37% of patients non-compliant; increased to 61% by the 3rd prescription(5) per year(3)
Novel formulations of two of the most prescribed NSAIDs combined with a GI protectant in a single pill
VIMOVO DUEXIS
Naproxen NSAID Ibuprofen
Esomeprazole GI Famotidine magnesium (PPI) Protectant (H2 antagonist) BID Dosing TID
(1) Singh and Rosen Ramey. J Rheumatol. 1998;51(suppl):8–16. (2) Geis et al. J Rheumatol. 1996;18:11–14
(3) M.Wolfe, et.al.; Gastrointestinal Toxicity of Nonsteroidal Anti-inflammatory Drugs; NEJM; vol. 340; no. 24; June 1999. (4) BMC Musculoskeletal Disorders 2006, 7:79
13
(5) Sturkenboom, et.al.; Aliment Pharmacol Ther 2003; 18:1137-1147
COX-2 Fallout Created a Large Market Void
60,000 U.S. TRx – COX-2 Inhibitors
COX-2 CV 50,000 5,066 concerns led to
nds) 10,007 over
12,458 $3 billion thousa 40,000 in lost sales in (in 21,628 the U.S. alone
tions 19,407
Prescrip 30,000 13,566 Total 20,000 ..
. S U
1,713 25,393 10,000 22,859 23,291
Bextra
13,679 13,508 13,215 12,619 Vioxx Celebrex
0
2002 2003 2004 2005 2006 2007 2008
14 Source: IMS Health, National Prescription Audit, Total RXs, 2002 - 2008
Fueling Demand for Traditional NSAIDs
Greater than 55 Million Annual Ibuprofen & Naproxen Prescriptions
38 million
40,000
thousands) 35,000 Ibuprofen 30,000
(in
Meloxicam
Prescriptions 25,000 17 million
20,000
Naproxen NSAID 15,000 Total 10,000 Celebrex
. . S
U 5,000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Wolters Kluwer PHAST Audit, National Level Retail and Institutional, Source Healthcare Analytics is a source of data only and does not endorse the views, opinions and/or findings expressed or otherwise published by Horizon.
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Significant Market Opportunity for both VIMOVO and DUEXIS with Minimal Overlap
Minimal Overlap with
Underlying Market Potential Existing Targets Product Positioning
The market potential for ibuprofen and …leading to limited overlap in existing …VIMOVO and DUEXIS are naproxen underlying NSAID is large, writers of VIMOVO and DUEXIS… highly synergistic and meet different segmented, and largely untapped… patient needs
Weekly New Rx (k) There is only ~30% TRx overlap of VIMOVO as the “Smarter Naproxen” 600 VIMOVO and DUEXIS prescribers(1)
Focus on HCPs that need an NSAID, but are also concerned with
500 protection (gold-standard protection, etc.) 400 Focus on underlying Naproxen prescribers
VIMOVO DUEXIS
300
Prescribers Prescribers DUEXIS as the “Smarter Ibuprofen”
Focus on HCPs that need best-in-
200 class pain relief and protection
(rapid onset, gold standard efficacy, 100 etc.)
0 Focus on underlying Ibuprofen prescribers
Generic DUEXIS Generic VIMOVO Ibuprofen Naproxen
(1) Source: Healthcare Analytics (SHA) Prescriber Level Data from June 2013 – August 2013
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(naproxen/esomeprazole magnesium) Delayed-Release Tablets 375/20 and 500/20 mg
Indicated for the relief of signs and symptoms of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis and to decrease the risk of developing gastric ulcers in patients at risk of developing NSAID-associated gastric ulcers
VIMOVO
Acquired November 18, 2013 from AstraZeneca for $35M one-time payment
Key Transaction Highlights Historical Net Sales
$40.0
Synergistic product acquisition $35.0
$34.0 $30.0
Leverages commercial infrastructure
$25.0 $25.0
Focus on commercial payors ($ in millions)
$20.0 in $20.0 $
Ability to maximize value (via price) to
$15.0
HZNP and patient (lower co-pay) allows for potential rapid acceleration of $10.0 VIMOVO revenues $5.0
$-
(1) (1)
2012 2013 Q1:14
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(1) AstraZeneca Annual Reports
VIMOVO Off to Strong Start in 2014
250 Primary Care Reps + 40 Specialty Reps Selling VIMOVO
HZNP – Full Launch of VIMOVO on February 3, 2014
LARGE MARKET MANAGED COMMERCIAL OPPORTUNITY CARE EXECUTION
Large NSAID market Branded NSAIDs in Tier April 2014 NRx +1% vs. (>100M TRx/year) 3 position March 2014
Naproxen NSAID in VIMOVO priced at April 2014 TRx +1% vs. U.S. with over 16M monthly WAC of $799, March 2014 TRx/year WAC/TRx of ~$820 March 2014 TRx
88% of claims dollars of ~$20.5M
Peak annual
VIMOVO demand of April 2014 TRx dollars ~600k scripts and of ~$20.8M
$0 target co-pay run rate of ~300k scripts at YE13
19 Source: IMS NPA Monthly data; IMS Claims data - Commercial Only
For the relief of signs and symptoms of rheumatoid arthritis and osteoarthritis and to decrease the risk of developing upper gastrointestinal ulcers in patients who are taking ibuprofen for those indications
DUEXIS Overview
250 Sales Reps Promoting to Primary Care and ORS
LARGE MARKET MANAGED COMMERCIAL OPPORTUNITY CARE EXECUTION
Large NSAID market Branded NSAIDs in Tier April 2014 TRx +3.0% (>100M TRx/year) 3 position vs. March 2014
Ibuprofen leading Monthly WAC of $799, April 2014 NRx +1.9% NSAID in U.S. with average WAC/Rx of vs. March 2014 over 33M TRx/year ~$700 March TRx dollars of
84% of claims ~$13.4M approved April TRx dollars of
$0 target co-pay ~$14.0M
Source: IMS NPA Monthly data; IMS Claims data - Commercial Only
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DUEXIS Performance
0 5,000 10,000 15,000 20,000 25,000
Jan 12 Feb 12
Mar 12 Sales Apr 12
May 12 Expansion Force
Jun 12 NRx TRx Jul 12 Aug 12 Sep 12 to Oct 12 $ from
Price Increase
Nov 12 502 $ TRx Dec 12 198
DUEXIS
Jan 13
WAC Increase
Feb 13 WAC
Mar 13 and Apr 13 to
$ from
May 13 Price
$
Jun 13 677
502 NRx
Jul 13
Aug 13 WAC Increase Monthly
Sep 13 WAC Oct 13 to Nov 13 from
$ Price
Dec 13 $ Jan 14 799
677
Feb 14
Mar 14 WAC Increase
Apr 14 WAC
DUEXIS Quarterly Net Sales Growth ($M)
$35 $23.1 $30
(2)
$25 $21.5 $20
$13.9
$15 $9.5
$10 (1) $4.9
$5.7
$5 $2.4
$0.9 $1.4 $0
Q1:12 Q2:12 Q3:12 Q4:12 Q1:13 Q2:13 Q3:13 Q4:13 Q1:14
Source: IMS NPA Monthly
(1) Includes one-time amount of $1.4M due to change in timing of revenue recognition. (2) Includes one time reversal of managed care rebate in the amount of $2.4M
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(Interferon gamma-1b) Injection
For reduction of the frequency and severity of serious infections associated with Chronic Granulomatous Disease and for delaying time to disease progression in patients with severe, malignant osteopetrosis
Vidara Therapeutics Acquisition Overview
Announced on March 19, 2014 the acquisition of Vidara Therapeutics International Ltd. for 31.35 million shares of Horizon stock, $200 million in cash and plan to become Horizon Pharma plc
ACTIMMUNE
Recombinant biologic approved in two ultra orphan indications, CGD and SMO
Realized $58.9 million in net revenues in 2013
Commercial rights in U.S., Canada, Japan and certain LA, Asian and other ROW territories
Two U.S. patents extending to 2022; perpetual Genentech know-how license
Potential for label expansion, including Friedreich’s ataxia and eczema herpeticum
Total headcount of 24, including 6 sales reps with biologic and orphan experience
Corporate structure
Irish headquarters: Dublin
Bermuda headquarters: Hamilton (IP & BLA)
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ACTIMMUNE Market
Primary immune deficiency in which phagocytes fail to produce superoxide, leading to an inability to kill harmful microorganisms such as bacteria and fungi
Vulnerable to severe recurrent bacterial and/or fungal infections often require hospitalization and special treatment CGD
Triple prophylactic therapy is the standard of care: ACTIMMUNE + antibiotic + antifungal
Generally diagnosed before age five with a median life expectancy of 20-25 years
Estimated U.S. prevalence: 900-1,600 patients
Severe autosomal recessive form of osteopetrosis, a congenital disorder of bone resorption by osteoclasts resulting in impaired bone remodeling
Usually presents in the first year of life, often within the first three months SMO Estimated U.S. prevalence: 85-215 patients
ACTIMMUNE delays time to disease progression and benefits patients by increasing red blood cell production and bone resorption
25
(prednisone)
Delayed-Release Tablets
Indicated as an anti-inflammatory or immunosuppressive agent for certain allergic, dermatologic, gastrointestinal, hematologic, ophthalmologic, nervous system, renal, respiratory, rheumatologic, specific infectious diseases or conditions and organ transplantation
Note: RAYOS is known as LODOTRA outside the United States
RAYOS Commercial Overview
Q1 2014 TRx +3.5% vs. Q4 2013
HIGH UNMET NEED IN MANAGED COMMERCIAL RA & PMR CARE OVERVIEW UPDATE
1.8M RA Patients, Majority Tier 3 40 Rheum Specialists majority suffer from position calling on 3,000+ morning symptoms RAYOS priced at $933 rheumatologists WAC per 30-count Q1 2014 TRx +3.5% vs.
1.1M PMR Patients, bottle, WAC per Rx of Q4 2013 majority suffer from $1,610 morning symptoms April 2014 TRx -1% vs.
88% of claims March 2014
~10M annual TRx approved $0 target co pay April 2014 TRx dollars
-
~3M annual of $1.7M, +1% vs. prednisone Rx’s March 2014
Source: IMS NPA Monthly data; IMS Claims data - Commercial Only
Note: RAYOS is known as LODOTRA outside the United States
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Intellectual Property’s invalidity challenge ANDA approved by FDA; Court order mediation is in process (no trial date set)
ACTIMMUNE
Two U.S. patents extending to 2022; perpetual Genentech know-how license
RAYOS
5 issued U.S. patents with protection to at least 2024
Horizon responded to a PIV Patent Certification received from Watson on July 15, 2013 by filing a patent infringement lawsuit against Watson on Aug. 27, 2013 in New Jersey – no trial date set
DUEXIS
6 issued U.S. patents
Settled Par Pharmaceutical PIV litigation by granting a non-exclusive right to market a generic product beginning January 1, 2023, or earlier under certain circumstances
VIMOVO
8 issued U.S. patents with protection to at least 2022
Five generic companies have filed ANDA PIV against VIMOVO
Dr. Reddy
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Business Development Strategy
Leverage Core U.S. products/companies with on-market assets
Leverage 250 person primary care sales force
Commercial Strengths
Leverage specialty (40 person rheum sales force) or orphan capabilities
Important Unmet Need Pursue opportunities with differentiated clinical benefits
Adjacencies to Current Differentiated and/or underappreciated assets with targeted approach Capabilities regardless of therapeutic area
Pursue opportunities with near term accretion
Maximize Shareholder
Attractive financial returns Value Creation Meaningful exclusivity
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Q1 2014 and Full Year 2013 Results
Net Sales by Product
Q1 2014 % Change from Full Year 2013 % Change from Q1 2013 Full Year 2012
DUEXIS $13.9 184% $59.0 473%
(1) (1)
VIMOVO $34.0 NM $1.0 NM
(1)
RAYOS $3.3 1,000% $5.8 NM
(1)
LODOTRA $0.7 (80%) $8.2 NM(1)
Total Net Sales $51.9 497% $74.0 293%
Adjusted Q1:14 non-GAAP net income was $11.0 million, or $0.16 non-GAAP basic earnings per share and $0.13 non-GAAP diluted earnings per share
(1) Not meaningful
30
Financial Highlights
Pro Forma for
(in millions) As of 3/31/14
Vidara Acquisition
Balance Sheet
Cash $103.4 n/a
Debt $150.0(1) $400.0(2)
Capitalization(3)
Basic Shares Outstanding 71.4 102.8
Fully Diluted Shares Outstanding(4) 90.4 121.8
(1) Gross amount of 5% convertible notes outstanding, excluding debt discount
(2) Assumes takedown of $250 million bridge loan commitment funding from Deerfield Management Company, L.P.
(3) Includes all issued and outstanding securities, vested and unissued RSUs and contingent stock options. Pro Forma column includes 31,350,000 shares issued to Vidara shareholders upon closing and assumes no existing warrants, options or RSUs are exercised between 3/31/14 and closing.
(4) Excludes shares issuable upon conversion of $150 million convertible note.
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Appendix
Horizon Pharma History
Founded in Palo
Alto, CA DUEXIS
RAYOS
1 Employee U.S. Launch
U.S. Launch
RAYOS VIMOVO
DUEXIS U.S. HZNP
U.S. Approval Approval U.S. Launch Relocates
4-2011 7-2012 to IL
2005 2008 2010 2011 2012 2013 2014
T. Walbert joins as CEO
$50M IPO (NASDAQ: HZNP)
$86M Equity Raise
Vidara Acquisition & $250M Loan
Acquisition of private, $111M Raised: Acquisition of Switzerland-based $60M in Debt and VIMOVO Nitec Pharma (RAYOS) $51M in Equity $150M Convert
33
VIMOVO: Significant Reduction in Gastric Ulcers
Cumulative observed incidence of Gastric Ulcers
Study 301 Study 302
30
(%) * 24.3*
23.1
25
Ulcers 20 Gastric 15
of 10 7.1
4.1
5
Incidence 0
VIMOVO EC VIMOVO EC Naproxen Naproxen
*P<0.001 Ec Naproxen vs. VIMOVO
Source: VIMOVO Approved Package Insert, October 2012
34
VIMOVO: Gastric Protection with or without Low Dose Aspirin (LDA)
Pooled Cumulative incidence of Gastric Ulcer with or without LDA
LDA Users LDA Non-Users
35
DUEXIS Met Primary Endpoints in Phase 3 Trials
~50 % Reduction in Gastric or Upper GI Ulcers
REDUCE-1, Patients with REDUCE-2, Patients with Endoscopic Gastric Ulcer (%) Endoscopic Upper GI Ulcer (%)
20.0%
17.6%
10.5%
8.7%
N=447 N=216 N=380 N=190
DUEXIS Ibuprofen DUEXIS Ibuprofen TID 800 mg TID TID 800 mg TID p-value = 0.0004 p-value = 0.002
Statistically significant less dyspepsia vs. ibuprofen
5% vs. 8% (p-value = 0.009)
All other treatment-emergent GI adverse events were similar
Source: DUEXIS Approved Package Insert, April 2011
36
RAYOS Synchronizes Pharmaceutical Delivery with Therapeutic Need
STANDARD PREDNISONE LODOTRA
- Current regimen too late - Optimal nocturnal release regimen
- Convenient bedtime dosing
- Morning administration does not mediate nocturnal cytokine peak - Reduces morning stiffness and pain
Inflammatory cytokine levels and pain and stiffness scores
High
10pm release Cytokine
2am
StiffnessPain
&
6am
RELEASE
10am
Inflammatory cytokine levels and pain and stiffness scores
High
10pm Cytokine release DOSING
2am RELEASE
6am
Pain 10am Stiffness&
Notes: Illustrative only
RAYOS is known as LODOTRA outside the United States
37
RAYOS Delivers Superior to Immediate-Release Prednisone in Reducing Morning Stiffness
CAPRA-1 (Pivotal EU Phase 3 Study)
Relative change from baseline in duration of morning stiffness for the safety set of the open phase
20
10 IR PREDNISONE GROUP SWITCHED TO LODOTRA 0
Mean Immediate Release Prednisone Group stiffness -10 -20 p-value = 0.045 Mean LODOTRA Group morning -30 SEM in -40 %) ( change -50 -60
DOUBLE BLIND
-70 OPEN LABEL PHASE
Relative PHASE -80
0 1 2 3 4 5 6 7 8 9 10 11 12 13 Study Month
23% mean relative reduction in morning stiffness after 3 months
Sustained reduction of morning stiffness (~50% reduction)
Reduction in IL-6 levels (~30% after 3 months, ~40% after 12 months)
Source: The Lancet, 2008 (371:205-14)
Note: RAYOS is known as LODOTRA outside the United States
38
RAYOS: Significantly Improved ACR 20/50 Response
CAPRA-2: Pivotal U.S. Phase 3 Study
% of Patients with Improvement
48.5%
Diff.
(1.7X)
28.6%
LODOTRA
22.7% Placebo
Diff.
(2.5X)
Diff.
(2.8X)
9.2%
7.0% 2.5%
ACR 20 ACR 50 ACR 70
p-value = 0.0002 p-value = 0.0027 p-value = 0.0955
Strong, Significant Improvement in ACR 20 and ACR 50
350 Patients Randomized 2:1
DMARD Use (MTX) Included in Trial
Safety Comparable to Placebo
Source: Arthritis Rheum 2010 (62 suppl 10:392)
Note: RAYOS is known as LODOTRA outside the United States
39
Adjusted Financials Reconciliation
($ in thousands) Fiscal Year Ended December 31, Three Months Ended March 31, 2011 2012 2013 2013 2014
GAAP Net Loss $ (113,265) $ (87,794) $ (149,005) $ (22,171) $ (206,250)
Loss on derivative revaluation - - 69,300 - 204,030 Intangible impairment charge 69,621 - - - -Depreciation and intangible amortization expense 4,199 5,538 9,310 1,922 5,403 Interest expense, net 6,284 14,525 39,178 3,603 4,207 Other expense, net - 56 - - 667 Foreign exchange loss (gain) 1,023 (489) (1,206) 905 38 Benefit for income taxes (14,683) (5,171) (1,121) (881) (1,105)
Non-GAAP Adjustments 66,444 14,459 115,461 5,549 213,240
EBITDA $ (46,821) $ (73,335) $ (33,544) $ (16,622) $ 6,990 Adjustments for Vidara acquisition costs - - - - 4,049 Total Non-GAAP Adjustments 66,444 14,459 115,461 5,549 217,289
Adjusted EBITDA $ (46,821) $ (73,335) $ (33,544) $ (16,622) $ 11,039
40
Adjusted Financials Reconciliation (continued)
Three Months Ended
($ in thousands) March 31,
2014
GAAP Net Loss $ (206,250)
Loss on derivative revaluation 204,030 Intangible amortization expense (net of tax effect) 4,680 Stock based compensation 1,927 Amortization of debt discount and deferred financing costs 2,333 Depreciation expense 376 Amortization of deferred revenue (161)
Non-GAAP Adjustments 213,185
Non-GAAP Net Income (Loss) $ 6,935
Adjustments for Vidara acquisition costs 4,049
Total Non-GAAP Adjustments 217,234
Adjusted Non-GAAP Net Income (Loss) $ 10,984
GAAP Net Loss per common share - basic $ (3.07)
Non-GAAP Adjustments 3.23
Adjusted Non-GAAP Basic Earnings (Loss) per Share $ 0.16
Dilutive earnings per share effect of common stock equivalents (0.03)
Adjusted Non-GAAP Net Income (Loss) per Common Share - Diluted $ 0.13
41
Horizon Pharma, Inc.
Filed under Rule 14a-12 of the Securities Exchange Act of 1934 Filing by: Horizon Pharma, Inc.
Subject Company: Horizon Pharma, Inc. SEC File No. of Horizon Pharma, Inc.: 001-35238
The following is a slide presentation relating to the proposed transactions described therein that was made available beginning on May 22, 2014.
May 2014 NASDAQ: HZNP