Horizon Therapeutics plc Reports Second-Quarter 2023 Financial Results

Second-Quarter 2023 Results:

-- Net Sales of $945.0 Million, Representing Year-Over-Year Growth of 11% Excluding Inflammation Medicines --

-- GAAP Net Income of $127.1 Million; Adjusted EBITDA of $320.4 Million --

-- TEPEZZA® (teprotumumab-trbw) Net Sales of $445.5 Million --

-- KRYSTEXXA® (pegloticase injection) Net Sales of $244.3 Million --

-- UPLIZNA® (inebilizumab-cdon) Net Sales of $68.1 Million --

-- Cash Position of $2.5 Billion as of June 30, 2023 --

Second-Quarter and Recent Company Highlights:

-- Announced Positive Topline Data from TEPEZZA Phase 4 Clinical Trial in Patients with Chronic/Low Clinical Activity Score (CAS) Thyroid Eye Disease (TED) --

-- Obtained U.S. FDA Approval for Updated TEPEZZA Indication to Specify Treatment of TED Patients Regardless of Disease Activity or Duration --

-- Announced Positive Topline Data from TEPEZZA Phase 3 Clinical Trial (OPTIC-J) in Japanese Patients --

-- Received Approval for TEPEZZA in Brazil for the Treatment of TED; First Country Outside the U.S. to Approve TEPEZZA --

-- Announced Initiation of TEPEZZA Phase 3 Clinical Trial in Chronic/Low CAS TED in Japan and Daxdilimab Phase 2 Clinical Trial in Lupus Nephritis --

-- Presented New Data from Dazodalibep Phase 2 Clinical Trial in Sjögren’s Syndrome and KRYSTEXXA MIRROR Randomized Controlled Trial at EULAR European Congress of Rheumatology --

-- Continue to Expect Amgen Transaction to Close by Mid-December, Assuming the Federal Trade Commission’s Request for a Preliminary Injunction Is Denied --

-- Named One of Fortune’s 100 Best Companies to Work For® and Ranked as Top Biotechnology/Pharmaceutical Company, Both for Third Consecutive Year --

-- Ranked First in Overall Corporate Reputation by U.S. Patient Advocacy Groups --

Horizon Therapeutics plc (Nasdaq: HZNP) today announced second-quarter 2023 financial results.

“We delivered strong growth in the second quarter, with double-digit year-over-year growth in our core business and mid-teens growth sequentially,” said Tim Walbert, chairman, president and chief executive officer, Horizon. “This performance was driven by exceptional 46% year-over-year KRYSTEXXA sales growth as a result of strong commercial execution and the success of our immunomodulation strategy, in addition to positive and consistent trends we are generating for TEPEZZA, which reflects the success of our expansion efforts to further penetrate the TED market and reach new prescribers. We delivered impressive 76% year-over-year UPLIZNA sales growth and see a long runway ahead as we progress our two Phase 3 programs in IgG4-RD and MG. We also announced several important clinical milestones for TEPEZZA, including strong data in low CAS and long-duration TED and data from our Phase 3 clinical trial in Japan, both of which we expect to contribute to the future growth of this medicine.”

Key Growth Drivers

TEPEZZA: TEPEZZA net sales in the second quarter were $446 million, representing a 10% sequential increase compared to the first quarter of 2023 and a 7% year-over-year decline compared to the second quarter of 2022. The TEPEZZA field-force expansion initiated late in 2022 continues to drive consistent and positive momentum in the business, including increases in new prescribers, patient enrollment forms and patient starts. Through the first half of 2023, as a result of the field-force expansion, the Company expanded its reach to new physician targets, which led to a 50% year-over-year increase in the number of ophthalmologists and endocrinologists prescribing TEPEZZA. In line with the Company’s expansion strategy, prescriber growth has largely come from ophthalmologists, with continued strong referral volume from endocrinologists.

In April 2023, the Company announced positive topline results from its TEPEZZA Phase 4 clinical trial in patients with low CAS and long-duration TED and received FDA approval for an update to the indication for TEPEZZA that supports its potential benefit in TED, regardless of disease activity or duration. The Company is executing on its payer strategy to educate key stakeholders and ease the access burden so all eligible patients can benefit from TEPEZZA. As a result of this process, large national and regional payers are beginning the process of updating their access requirements. To date, the Company has obtained favorable policy changes for greater than 20% of U.S. covered lives, which are expected to take effect in the second half of 2023. The Company expects these strategies and initiatives to further develop the TED market and impact net sales in 2024.

In addition, the Company made significant advancements in its global expansion strategy by announcing the positive topline results from its TEPEZZA Phase 3 clinical trial in Japanese patients, as well as the approval of TEPEZZA in Brazil for patients with TED. There are no medicines approved for the treatment of TED in Brazil or Japan, representing a significant unmet need in both markets. These accomplishments, which are expected to impact net sales beginning in 2025, are important milestones in the Company’s global expansion strategy to bring TEPEZZA to more patients worldwide.

KRYSTEXXA: KRYSTEXXA net sales in the second quarter were a record $244 million, representing a 31% sequential increase compared to the first quarter of 2023 and a 46% year-over-year increase compared to the second quarter of 2022. KRYSTEXXA net sales are now annualizing at a nearly one-billion-dollar run rate. The second-quarter results were driven by execution across all phases of the patient journey – demand generation, stakeholder education and adherence to treatment. The Company continued to see significant uptake from both its rheumatology and nephrology market segments in the quarter, with KRYSTEXXA with immunomodulation usage now at more than 70% of new patient starts. The Company’s efforts to educate physicians and key stakeholders continues to lead to strong patient growth from both new and existing prescribers across both market segments.

UPLIZNA: UPLIZNA net sales in the second quarter were a record $68 million, representing a 27% sequential increase compared to the first quarter of 2023 and a 76% year-over-year increase compared to the second quarter of 2022. Net sales in the U.S. were $53 million, an increase of 76% year-over-year, driven by strong commercial execution. The second-quarter results were driven by robust demand generation and new patient starts, increased depth among the Company’s existing prescribers and strong adherence to maintenance treatment. The Company continues to drive uptake among both patients naïve to biologics as well as patients switching from competitive biologic therapies, establishing UPLIZNA as the fastest-growing biologic in neuromyelitis optica spectrum disorder (NMOSD) year-to-date by market share. The Company expects to advance its global expansion strategy, with multiple planned international launches in 2023. The Company also continues to make progress on its two Phase 3 programs in IgG4-related disease (IgG4-RD) and myasthenia gravis (MG).

Conference Call

In light of the announced agreement to be acquired by Amgen Inc. and applicable securities laws, the Company will not be hosting a conference call to discuss its financial results. This earnings press release, investor deck and the related Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 are publicly available in the Investor Relations section of the Company’s website at https://ir.horizontherapeutics.com.

About Horizon

Horizon is a global biotechnology company focused on the discovery, development and commercialization of medicines that address critical needs for people impacted by rare, autoimmune and severe inflammatory diseases. Our pipeline is purposeful: we apply scientific expertise and courage to bring clinically meaningful therapies to patients. We believe science and compassion must work together to transform lives. For more information on how we go to incredible lengths to impact lives, visit www.horizontherapeutics.com and follow us on Twitter, LinkedIn, Instagram and Facebook.

Note Regarding Use of Non-GAAP Financial Measures

Horizon provides certain non-GAAP financial measures, including EBITDA, or earnings before interest, taxes, depreciation and amortization, adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit and gross profit ratio, non-GAAP operating expenses, non-GAAP operating income, non-GAAP tax benefit (expense) and tax rate, non-GAAP operating cash flow and certain other non-GAAP income statement line items, each of which include adjustments to GAAP figures. These non-GAAP measures are intended to provide additional information on Horizon’s performance, operations, expenses, profitability and cash flows. Adjustments to Horizon’s GAAP figures exclude, as applicable, acquisition and/or divestiture-related costs, costs associated with our pending transaction with Amgen Inc., including responding to a second request review of the transaction by the United States Federal Trade Commission (the “FTC”) and subsequent lawsuit seeking to enjoin the transaction, manufacturing facility start-up costs, restructuring and realignment costs and gain on sale of asset, as well as non-cash items such as share-based compensation, inventory step-up expense, depreciation and amortization, non-cash interest expense, goodwill and long-lived assets impairment charges, gain (loss) on equity security investments and other non-cash adjustments. Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred. Horizon maintains an established non-GAAP cost policy that guides the determination of what costs will be excluded in non-GAAP measures. Horizon believes that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of Horizon’s financial and operating performance. The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the Company’s historical and expected financial results and trends and to facilitate comparisons between periods and with respect to projected information. In addition, these non-GAAP financial measures are among the indicators Horizon’s management uses for planning and forecasting purposes and measuring the Company'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 the Company may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies.

Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, statements related to the pending transaction with Amgen Inc., development, manufacturing and commercialization plans; expected timing of clinical trials and commercial launches; expected future milestones, pipeline expansions and regulatory approvals; potential market opportunities for, and benefits of, Horizon’s medicines and medicine candidates; expected impact of commercial strategies, clinical trial results and product label updates; and business 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, whether the pending transaction with Amgen Inc. will be completed in a timely manner or at all, including whether the district court grants or denies the FTC’s request for a preliminary injunction; the parties’ ability to satisfy (or willingness to waive) the conditions to the consummation of the pending transaction with Amgen Inc., including with respect to the absence of orders preventing the consummation of the transaction; the effect of the pending transaction with Amgen Inc. on Horizon’s business relationships, operating results and business generally; risks that Horizon’s actual future financial and operating results may differ from its expectations or goals; Horizon’s ability to grow net sales from existing medicines; impacts of the on-going war between Russia and Ukraine; changes in inflation, interest rates and general economic conditions; the availability of coverage and adequate reimbursement and pricing from government and third-party payers; Horizon’s ability to successfully implement its business strategies, including the risks that its medicine growth and global expansion initiatives and strategies may not be successful and that new challenges to growth may arise in the future; risks inherent in developing novel medicine candidates and existing medicines for new indications; whether additional clinical trial results or data analyses will be consistent with preliminary results, results from other trials or Horizon’s expectations; risks associated with regulatory approvals; risks in the ability to recruit, train and retain qualified personnel; competition, including generic competition; the ability to protect intellectual property and defend patents; regulatory obligations and oversight, including any changes in the legal and regulatory environment in which Horizon operates and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in Horizon’s filings and reports with the SEC. Horizon undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information.