By Scott Kanowsky
Investing.com -- Shares in Sanofi SA (EPA:SASY) rose on Monday after the French drugmaker backed out of its plans to bid for biotech company Horizon Therapeutics PLC (NASDAQ:HZNP).
Sanofi announced that it had ceased negotiations and dropped a potential offer for Horizon on Sunday, saying that the expected transaction price does not meet its "value creation criteria."
Analysts at Barclays said in a note that they expect Sanofi's decision will help boost its share price in the short term. The stock had previously slipped after Horizon revealed last month that Sanofi was in the running to acquire Horizon.
Sanofi's announcement, coupled with Johnson & Johnson's (NYSE:JNJ) choice to also scrap sales talks, leaves U.S. biotechnology giant Amgen Inc (NASDAQ:AMGN) in pole position to buy Horizon. In a report citing a source close to the negotiations, Bloomberg News said that Amgen has already agreed to a deal valuing Horizon at about $26 billion, or around $116.5 per Horizon share.
It would be Amgen's largest acquisition to date, and the biggest transaction in the pharmaceutical industry since AstraZeneca's (LON:AZN) $39B purchase of Alexion (NASDAQ:ALXN) in 2021.
Buying the Irish-headquartered Horizon would give Amgen a gateway to a number of lucrative treatments for rare autoimmune and inflammatory diseases, including the thyroid eye disease medicine Tepezza, which saw sales double over the last year. Revenue from this treatment is also expected to eventually top more than $4B once Horizon can secure the right to sell the drug in Europe and Japan.
Although deal activity has slowed in 2022, drugmakers have been harnessing big cash piles and a recent slide in healthcare stocks to renew their medicine pipelines through mergers and acquisitions. This year, Johnson & Johnson has inked a $16.6B deal for heart technology group Abiomed (NASDAQ:ABMD), while Merck & Co (NYSE:MRK) bought blood-cancer treatment developer Imago BioSciences (NASDAQ:IMGO) for $1.35B and Pfizer (NYSE:PFE) snapped up biotech Biohaven Pharmaceuticals for $11.6B.