Overview of the issuer Horizon Therapeutics (last year the company changed its corporate name from Horizon Pharma) is a Dublin-based biopharmaceutical company specialized in the development of medicine designed to treat rare diseases. Horizon Therapeutics has a portfolio that consists of 10 commercialized products covering such areas of application as orphan diseases, rheumatology, and the primary care segment.Since the beginning of the year, Horizon Therapeutics shares have strongly outperformed the US market, returning 25% to investors despite an overall market downturn attributable to the coronavirus pandemic. The stock resolutely exceeded the target price we indicated in our previous recommendation (updated at the end of February).We are upbeat about the company’s Q1 financial performance and maintain that the pandemic poses no threat to the investment case of Horizon Therapeutics.In January, the FDA approved the company’s new product, teprotumumab, on which we pinned optimistic investment hopes, while revenue accretion from the new medicine was reflected in the company’s quarterly financial statement. We still regard the stock as an attractive long-term investment. We reiterate our BUY recommendation on Horizon Therapeutics shares. Growth factors and financial performance In recent years, Horizon has made some acquisitions with a view to expanding its portfolio of drugs through products manufactured by smaller companies. Specifically, the company took over Raptor Pharmaceutical for USD 800 mn and Crealta Holdings for USD 510 mn. Horizon’s portfolio currently consists of 10 commercialized drugs in such areas as orphan diseases, rheumatology and the primary case segment. In our view, another positive factor is the acquisition of River Vision with its experimental medicine, teprotumumab, developed to treat a rare disease – the thyroid eye disease (TED) (Graves’ ophthalmopathy, endocrine orbitopathy), for which there was no FDA-approved therapy. Finally, in January 2020 the FDA approved teprotumumab, which encourages us investment outlook as we initially assigned a BUY recommendation to Horizon shares as we thought this product was very likely to gain approval and be launched on the market. Our expectations fully materialized and for the first time in history the medicine developed to treat TED started to be sold as Tepezza. We believe that the revenue and profit growth prospects from Tepezza have yet to be fully factored into the share performance of Horizon Therapeutics and will be priced in over the next 12 months. Horizon’s advantage compared to many sector peers has long been the fact that in 2014 the company managed to relocate its tax jurisdiction from the US to Ireland well before this trend in the pharmaceutical industry caused commotion at the official level. Notably, since 2013 Horizon has switched from being a conventional pharmaceutical company that manufactures standard drugs prescribed by local therapists and becoming a diversified biopharmaceutical company with a focus on orphan diseases. Over the next few years, Horizon will continue to expand its product mix and commercialize drugs developed by acquired firms. We believe this approach will pay off in the long run. The company’s Q1 revenue climbed 26.9% y-o-y to USD 355.9 mn, or above the median forecast of USD 68.02 mn, while net loss totaled USD 13.6 mn, and adjusted EPS reached USD 0.40, or USD 0.19 above the forecast. Drug sales in the orphan and rheumatology segments showed strong growth. In y-o-y terms, revenue increased 78% to USD 93.3 mn from Krystexxa, 23% to USD 61.2 mn from Ravicti, decreased 3% to USD 38.3 mn from Procysbi, and increased 22% to USD 26.5 mn from Actimmune. The new drug Tepezza generated sales of USD 23.5 mn, exceeding market expectations. Notably, the company raised its full-year revenue guidance to USD 1.40–1.45 bn. Horizon’s quarterly report was quite upbeat, reflecting robust sales growth across key drug segments and a strong starting revenue from teprotumumab, a new TED drug approved in January. On our estimates, the new revenue stream from Tepezza will more than offset the negative impact of the pandemic this year. Moreover, we continue to believe that Horizon Therapeutics holds further growth potential in the orphan and rheumatology segments, with Krystexxa sales yet to peak, looking set to rise over the coming quarters. Valuation multiples and peer comparison A comparison of Horizon’s key multiples with the median peer and industry ratios reveals a mixed picture, however, given the company’s impressive growth potential for revenue and profit thanks to an increasingly larger drug product mix, we regard the company as a compelling investment case. Technical analysis In technical terms, the monthly chart shows a long-term upward trend that has not yet been breached. $HZNP, Horizon Therapeutics Public Limited Company / H1 Overall, we continue to view Horizon Therapeutics as an attractive investment case on a 12-month horizon and assign a BUY recommendation to the stock with a target price of USD 51 per share.