Horizon Therapeutics Public Limited Company (HZNP): Business Model Canvas [10-2024 Updated]

In the dynamic world of biopharmaceuticals, Horizon Therapeutics Public Limited Company (HZNP) stands out with its innovative approach to treating rare and autoimmune diseases. This blog post delves into the Business Model Canvas of Horizon, highlighting its key partnerships, activities, resources, and value propositions. Discover how this company not only addresses unmet medical needs but also fosters strong relationships with healthcare professionals and patients. Join us as we explore the intricate components that drive Horizon's success in the competitive pharmaceutical landscape.

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Key Partnerships

Collaborations with biopharmaceutical companies

Horizon Therapeutics has established strategic collaborations with several biopharmaceutical companies to enhance its product offerings and expand its market reach. A notable partnership is with Arrowhead Pharmaceuticals, Inc., for HZN-457, which includes an upfront payment of $40 million and potential future milestone payments of up to $660 million based on developmental and regulatory achievements .

Partnerships with healthcare providers

Horizon collaborates extensively with healthcare providers to ensure effective distribution and patient access to its medicines. As of June 30, 2023, the company had secured favorable policy changes for over 20% of U.S. covered lives related to its product TEPEZZA. This partnership model is critical for addressing the complexities of treatment accessibility and improving patient outcomes.

Agreements with wholesale distributors

Horizon has significant agreements with wholesale distributors that are essential for its distribution strategy. As of June 30, 2023, the company’s top four customers accounted for approximately 89% of total outstanding accounts receivable . This concentration underscores the importance of maintaining strong relationships with key distributors to facilitate product availability and sales.

Strategic investments in venture capital funds

Horizon Therapeutics is also committed to investing in venture capital as a strategic partner, with investments in four funds: Forbion Growth Opportunities Fund I C.V., Forbion Capital Fund V C.V., Aisling Capital V, L.P., and RiverVest Venture Fund V, L.P. As of June 30, 2023, the total carrying amount of these investments was $31.9 million, with future commitments totaling $35.4 million . This approach not only diversifies its investment portfolio but also aligns with its long-term growth strategy in biotechnology.

Partnership Type	Partner/Organization	Investment/Commitment	Notes
Biopharmaceutical Collaboration	Arrowhead Pharmaceuticals	$40 million upfront + Up to $660 million in milestones	Development of HZN-457
Healthcare Providers	U.S. Healthcare Networks	N/A	Favorable policy changes for TEPEZZA affecting 20% of covered lives
Wholesale Distributors	Top Four Distributors	N/A	89% of total accounts receivable
Venture Capital Funds	Forbion, Aisling, RiverVest	$31.9 million invested + $35.4 million future commitments	Diversification and growth strategy

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Key Activities

Research and development of new medicines

Horizon Therapeutics has significantly increased its investment in research and development (R&D). In the first half of 2023, R&D expenses rose by $77.8 million, or 38%, totaling $284.2 million compared to $206.4 million in the same period in 2022. This increase was primarily driven by a $54.0 million rise in clinical trial and manufacturing development costs and $21.9 million in employee-related expenses.

Commercialization of existing products

Horizon Therapeutics reported net sales of $1.777 billion for the six months ended June 30, 2023, a slight increase of 1% compared to $1.762 billion in the same period in 2022. The sales growth was primarily attributed to a $122.8 million increase in KRYSTEXXA sales and a $52.8 million increase in UPLIZNA sales. However, TEPEZZA sales decreased by $130.4 million.

Product	Net Sales (6 Months Ended June 30, 2023)	Net Sales (6 Months Ended June 30, 2022)	Change ($)	Change (%)
TEPEZZA	$850.8 million	$981.3 million	($130.4 million)	(13%)
KRYSTEXXA	$431.3 million	$308.5 million	$122.8 million	40%
RAVICTI	$178.7 million	$154.0 million	$24.7 million	16%
UPLIZNA	$121.9 million	$69.1 million	$52.8 million	76%
PENNSAID 2%	$16.1 million	$58.9 million	($42.8 million)	(73%)

Regulatory compliance and approvals

Horizon Therapeutics is actively engaged in ensuring compliance with regulatory requirements for its products. The company's ongoing clinical trials and product approvals are critical to its business model. For instance, Horizon received FDA approval for TEPEZZA in April 2023, which included updates to the label for broader patient access. This strategic compliance effort is essential for maintaining and expanding market access for its therapies.

Marketing and sales initiatives

In the first half of 2023, Horizon's selling, general, and administrative expenses increased by $116.5 million, or 15%, totaling $887.5 million compared to $771.0 million in the same period in 2022. This increase was influenced by costs associated with the commercialization of medicines and global expansion initiatives. The company has also focused on expanding its sales force for TEPEZZA, resulting in a 50% year-over-year increase in the number of prescribing ophthalmologists and endocrinologists.

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Key Resources

Experienced research and development team

Horizon Therapeutics has significantly invested in its research and development (R&D) capabilities. For the six months ended June 30, 2023, the company reported R&D expenses of $284.2 million, an increase of 38% from $206.4 million during the same period in 2022. This increase was primarily driven by a $54 million rise in clinical trial and manufacturing development costs and a $21.9 million increase in employee-related expenses, reflecting heightened R&D activities.

Strong portfolio of patented medicines

Horizon Therapeutics boasts a robust portfolio of patented medications, including:

• TEPEZZA: Net sales of $850.8 million for the six months ended June 30, 2023, down 13% from $981.2 million in the same period of 2022.
• KRYSTEXXA: Net sales increased by 40% to $431.3 million during the same period.
• UPLIZNA: Net sales surged by 76% to $121.9 million.
• RAVICTI: Reported net sales of $178.7 million, a 16% increase.

This diverse portfolio underpins the company's market position and revenue generation capabilities.

Financial resources, including $2.5 billion in cash

As of June 30, 2023, Horizon Therapeutics reported cash and cash equivalents amounting to $2.5 billion. This substantial liquidity position enables the company to fund ongoing and future R&D initiatives, expand its commercial capabilities, and manage operational expenses effectively. Additionally, the company had total assets of $9.3 billion, reflecting a sound financial foundation.

Manufacturing facilities and capabilities

Horizon Therapeutics has made significant investments in its manufacturing capabilities. The company completed the purchase of a drug product biologics manufacturing facility for $67.9 million in July 2021. Furthermore, the company plans to incur approximately $15 million in capital expenditures during the second half of 2023 to prepare this facility for commercial manufacturing.

The following table summarizes Horizon Therapeutics' key financial data and investments in manufacturing and R&D:

Key Resource	Amount	Notes
R&D Expenses (2023)	$284.2 million	38% increase from 2022
TEPEZZA Net Sales (2023)	$850.8 million	Down 13% from 2022
KRYSTEXXA Net Sales (2023)	$431.3 million	Up 40% from 2022
UPLIZNA Net Sales (2023)	$121.9 million	Up 76% from 2022
Cash and Cash Equivalents (2023)	$2.5 billion	Strong liquidity position
Manufacturing Facility Investment	$67.9 million	Acquisition cost in 2021
Planned Capital Expenditures (2023)	$15 million	Preparation for commercial production

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Value Propositions

Innovative treatments for rare and autoimmune diseases

Horizon Therapeutics focuses on the development of innovative treatments specifically for rare and autoimmune diseases. As of June 30, 2023, the company reported a total net sales of $1,777 million, reflecting a growth attributed largely to its key products like KRYSTEXXA and UPLIZNA, which have shown substantial sales increases of 40% and 76% respectively during the first half of 2023.

Focus on unmet medical needs

The company is dedicated to addressing unmet medical needs within its target market segments. This commitment is evident in its robust pipeline and strategic focus on rare diseases, which often lack sufficient treatment options. The total research and development expenses for the first six months of 2023 reached $284 million, up 38% from the previous year, indicating Horizon's significant investment in addressing these critical needs.

Proven efficacy of marketed medicines

Horizon Therapeutics has established a solid reputation for the proven efficacy of its marketed medicines. For instance, TEPEZZA, despite a decline in sales, continues to be a market leader in treating thyroid eye disease with net sales of $850 million in the first half of 2023. The company has also expanded the label for TEPEZZA, which is expected to enhance its market reach.

Medicine	Net Sales (6 months ended June 30, 2023)	Net Sales (6 months ended June 30, 2022)	Change ($)	Change (%)
TEPEZZA	$850,845	$981,265	$(130,420)	(13%)
KRYSTEXXA	$431,277	$308,459	$122,818	40%
UPLIZNA	$121,913	$69,075	$52,838	76%
RAVICTI	$178,672	$153,979	$24,693	16%

Commitment to patient access and affordability

Horizon Therapeutics is committed to ensuring patient access and affordability for its medications. As of June 30, 2023, the company has secured favorable policy changes for over 20% of U.S. covered lives, which are expected to enhance patient access to its treatments. This dedication is complemented by a reduction in co-pay and other patient assistance costs, which as a percentage of gross sales decreased from 7.4% to 1.9% year-over-year.

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Customer Relationships

Direct engagement with healthcare professionals

Horizon Therapeutics actively engages with healthcare professionals to facilitate the prescription of its medicines. As of June 30, 2023, the company expanded its TEPEZZA sales force significantly, resulting in a 50% year-over-year increase in the number of ophthalmologists and endocrinologists prescribing TEPEZZA. This strategy is crucial for enhancing relationships with prescribers and improving patient access to treatment.

Patient support programs

The company offers various patient support programs to assist individuals in accessing their medications. For example, the HorizonCares program provides resources and support for patients, including assistance with reimbursement processes and educational materials. In 2023, Horizon saw a reduction in co-pay and patient assistance costs as a percentage of gross sales, decreasing from 8.0% in 2022 to 0.9% in 2023.

Program Name	Services Offered	Impact on Patients
HorizonCares	Reimbursement assistance, educational resources	Improved access to medications
TEPEZZA Support Program	Navigating insurance, co-pay assistance	Increased adherence to treatment

Partnerships with insurance providers for reimbursement

Horizon Therapeutics has established partnerships with various insurance providers to streamline reimbursement processes for its medicines. In 2023, the company obtained favorable policy changes for more than 20% of U.S. covered lives, enhancing patient access to TEPEZZA following updates to its indication language. This collaboration with payers is essential for reducing barriers to treatment access.

Active communication through marketing campaigns

Horizon employs robust marketing campaigns to maintain active communication with both healthcare professionals and patients. The company invested significantly in direct-to-consumer advertising, which has shown positive returns. As of June 2023, the marketing strategy has led to improved trends in patient enrollment and treatment initiation, reflecting the effectiveness of these campaigns in enhancing awareness and access to their products.

Marketing Campaign	Target Audience	Investment (2023)	Expected Outcome
TEPEZZA Awareness Campaign	Patients and healthcare providers	$28.4 million	Increased prescriptions and patient engagement
KRYSTEXXA Educational Outreach	Rheumatologists	$12 million	Higher treatment initiation rates

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Channels

Direct sales force targeting healthcare providers

Horizon Therapeutics employs a dedicated sales force to engage with healthcare providers. In 2023, the company expanded its TEPEZZA sales force significantly, which contributed to a 50% year-over-year increase in the number of prescribing ophthalmologists and endocrinologists. This strategy is aimed at enhancing the education of key stakeholders regarding TEPEZZA and its benefits for patients suffering from Thyroid Eye Disease (TED).

Online platforms for patient education

Horizon utilizes online platforms to educate patients about its therapies. The company has invested in direct-to-consumer advertising, which has shown positive returns. This includes enhancing patient access to information about their treatment options, particularly for TEPEZZA. The focus on digital education is part of a broader strategy to improve patient enrollment and adherence to prescribed therapies.

Partnerships with healthcare institutions

Horizon has established partnerships with various healthcare institutions to facilitate patient access to its products. These collaborations are critical for navigating the often complex reimbursement landscape. As of June 30, 2023, the company reported obtaining favorable policy changes for over 20% of U.S. covered lives, aimed at improving patient access to TEPEZZA.

Wholesale distributors for medicine delivery

Horizon relies heavily on wholesale distributors for the delivery of its medicines across the United States. In the six months ended June 30, 2023, four wholesale distributors accounted for the majority of sales. The financial stability of these distributors is crucial; any difficulties they encounter could significantly affect Horizon's sales and cash flow. The company’s total net sales for the first half of 2023 reached approximately $1.78 billion, reflecting its reliance on these distribution channels.

Channel	Description	Impact on Sales
Direct Sales Force	Targeting healthcare providers to increase prescriptions	50% increase in prescribing ophthalmologists and endocrinologists
Online Platforms	Patient education and direct-to-consumer advertising	Positive returns observed in patient engagement
Partnerships	Collaboration with healthcare institutions for reimbursement	Favorable policy changes for >20% of U.S. covered lives
Wholesale Distributors	Distribution of products across the U.S.	Majority of sales reliant on four distributors

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Customer Segments

Patients with Rare Diseases and Severe Autoimmune Conditions

Horizon Therapeutics focuses on patients suffering from rare diseases and severe autoimmune conditions. As of June 30, 2023, the company reported net sales of $850.8 million for TEPEZZA, primarily targeting Thyroid Eye Disease (TED) patients. The total addressable market for TEPEZZA is estimated to be around 200,000 patients in the U.S. alone. Additionally, the company reported net sales of $431.3 million for KRYSTEXXA, aimed at treating chronic gout in patients.

Healthcare Professionals and Specialists

Healthcare professionals, including endocrinologists and ophthalmologists, are crucial customer segments for Horizon. The company has expanded its sales force, increasing engagement with these specialists by 50% year-over-year. For instance, during the first half of 2023, UPLIZNA generated $121.9 million in net sales, indicating the importance of educating healthcare professionals about its benefits.

Insurance Companies and Payers

Insurance companies and payers are significant stakeholders in Horizon's business model. The company has made efforts to secure favorable policy changes for more than 20% of U.S. covered lives for TEPEZZA. The reimbursement landscape is crucial, as Horizon reported challenges in obtaining coverage for its products, which impacts patient access.

Healthcare Institutions and Clinics

Healthcare institutions and clinics form another vital customer segment. Horizon relies on a network of wholesale distributors for medicine distribution, with four distributors accounting for substantially all sales. The company’s net sales across its medicines totaled $1.777 billion for the six months ended June 30, 2023, highlighting the importance of institutional partnerships for revenue generation.

Customer Segment	Net Sales (6 Months Ending June 30, 2023)	Primary Products	Key Statistics
Patients with Rare Diseases	$850.8 million (TEPEZZA) $431.3 million (KRYSTEXXA)	TEPEZZA, KRYSTEXXA	~200,000 potential patients for TEPEZZA in the U.S.
Healthcare Professionals	$121.9 million (UPLIZNA)	UPLIZNA	50% increase in specialist engagement year-over-year
Insurance Companies	N/A	N/A	20% of U.S. covered lives with favorable policy changes for TEPEZZA
Healthcare Institutions	$1.777 billion (Total Net Sales)	All Products	Four distributors accounted for substantial sales

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Cost Structure

Research and Development Expenditures

Research and development (R&D) expenses for the first half of 2023 totaled $284.2 million, compared to $206.4 million for the same period in 2022, marking an increase of 38%. For the three months ended June 30, 2023, R&D expenses were $150.0 million, up from $103.2 million in the prior year, reflecting a 45% increase. The increase was largely attributed to a $29.7 million rise in clinical trial and manufacturing development costs, alongside $14.9 million in employee-related expenses.

Sales and Marketing Costs

Selling, general, and administrative (SG&A) expenses for the first half of 2023 were $887.5 million, up from $771.0 million in the same period of 2022, indicating a 15% increase. For the three months ended June 30, 2023, SG&A expenses amounted to $434.1 million, which is a 9% increase from $398.2 million in the prior year. This rise was primarily due to increased costs associated with the commercialization of medicines and global expansion initiatives, including a $34.3 million increase in employee-related expenses.

Manufacturing and Operational Expenses

Cost of goods sold (COGS) for the first half of 2023 was $428.5 million, a decrease from $445.3 million in 2022, reflecting a 4% reduction. For the three months ended June 30, 2023, COGS was $219.9 million, down from $230.2 million in the same quarter of 2022. This decline was attributed to a $15.8 million decrease in inventory step-up expense related to acquired units of UPLIZNA.

Regulatory Compliance Costs

Regulatory compliance costs are embedded within the overall operational expenses but are not separately detailed in the financial statements. However, the legal costs associated with compliance and related activities increased by $7.2 million in the second quarter of 2023, primarily due to costs incurred in connection with the transaction with Amgen.

Cost Category	Q2 2023	Q2 2022	Change (%)
Research and Development	$150.0 million	$103.2 million	45%
Selling, General and Administrative	$434.1 million	$398.2 million	9%
Cost of Goods Sold	$219.9 million	$230.2 million	-4%

Horizon Therapeutics Public Limited Company (HZNP) - Business Model: Revenue Streams

Sales of prescription medicines

Horizon Therapeutics generates a significant portion of its revenue through the sale of prescription medicines. For the six months ended June 30, 2023, the company reported net sales of $1,777 million, an increase of $15.4 million, or 1%, compared to the same period in 2022. The following table outlines the net sales by specific medicines:

Medicine	Net Sales (2023)	Net Sales (2022)	Change ($)	Change (%)
TEPEZZA	$850,845	$981,265	$(130,420)	(13%)
KRYSTEXXA	$431,277	$308,459	$122,818	40%
RAVICTI	$178,672	$153,979	$24,693	16%
UPLIZNA	$121,913	$69,075	$52,838	76%
PROCYSBI	$103,608	$97,277	$6,331	7%
ACTIMMUNE	$58,160	$61,424	$(3,264)	(5%)
PENNSAID 2%	$16,107	$58,954	$(42,847)	(73%)
RAYOS	$12,989	$24,637	$(11,648)	(47%)
BUPHENYL	$2,659	$3,548	$(889)	(25%)
QUINSAIR	$641	$631	$10	2%
DUEXIS	$139	$1,193	$(1,054)	(88%)
VIMOVO	$8	$1,214	$(1,206)	(99%)
Total	$1,777,018	$1,761,656	$15,362	1%

Licensing agreements and royalties

Horizon Therapeutics also earns revenue through licensing agreements and royalties from collaborations. For the six months ended June 30, 2023, the company recognized $5.5 million in revenue from changes in estimates of variable consideration related to its licensing agreement with Mitsubishi Tanabe Pharma Corporation for UPLIZNA. This figure reflects the company's ability to adjust revenue based on sales performance, which directly influences royalty income.

Partnerships with other pharmaceutical companies

The company has engaged in partnerships that enhance its revenue streams. For instance, collaborations with other pharmaceutical companies provide upfront payments and milestone payments. As of June 30, 2023, Horizon had accrued $88.1 million in royalties, which illustrates the financial impact of these partnerships on its overall revenue.

Government and third-party reimbursements

Government and third-party reimbursements play a crucial role in Horizon's revenue model. The company reported significant adjustments to gross sales due to government rebates and chargebacks. For the six months ended June 30, 2023, total adjustments included:

Adjustment Type	Amount (in millions)
Government Rebates and Chargebacks	$418.4
Commercial Rebates and Wholesaler Fees	$79.1
Co-Pay and Other Patient Assistance	$44.2
Total Adjustments	$570.7

These adjustments indicate the impact of reimbursement practices on net sales, which totaled $1,777 million during the same period.