Question

DOES HORIZON PHARMA HAVE A FORMAL
STRUCTURE?
Headquartered in Dublin, Ireland, Horizon Pharma develops and markets medicines, especially ones for
treating arthritis, pain, and inflammatory diseases. Horizon has been on a buying spree. In September
2014, for a $660 million deal, the company acquired Vidara Therapeutics International; in October 2014,
under a deal worth $45 million, the company acquired the U.S. sales and marketing rights to the osteoarthritis
drug Pennsaid from Nuvo Research; and in May 2015, Hyperion Therapeutics was acquired
by Horizon Pharma for $1.1 billion, increasing their orphan disease drug portfolio and increased their
product range to seven with RAVICTI and BUPHENYL coming onboard. For a price of almost $3 billion,
Horizon Pharma had hoped to acquire DepoMed (DEPO), which would have meant a premium of
42 percent of DEPO’s closing price as of July 2015. However, Horizon had to withdraw their offer after
a court ruling on the company’s improper use of confidential information.
Horizon is focused on identifying, developing, acquiring, and commercializing a range of medical
products that are accessible and will address different medical needs. In 2015, the third quarter saw net sales
of $226.5 million, increasing by more than 200 percent in comparison to the previous year, and 31 percent
up from the second quarter in 2015. The net income in 2015, for the third quarter, was $3.3 million, a 57
percent increase from the same quarter in the previous year.
The profitable growth was mainly due to strong sales growth in the business units— primary care
($56.9 million), orphan ($28.7 million), and specialty ($11.7 million). As part of its strategy for 2015,
Horizon’s orphan and primary care business units were given new medicines in the third quarter. Horizon
received the European Commission’s approval for RAVICTI oral liquid treatment in 2015, and is expecting
to launch this product in 2017. In 2015, the drug RAYOS, under Horizon’s specialty division, saw sales of
$11.7 million, an increase of 106 percent in comparison to the third quarter of the previous year, while the
sales of LODOTRA increased 36 percent. Horizon Pharma’s strategy of growing through acquisition seems
to be the right medicine for the company so far.
Questions
1. Visit Horizon’s website and go through the senior management section. The company lists its top
21 corporate executives and their respective titles. Based on this information, what type of organizational
structure is Horizon using?
2. Based on the information at the website given above, what are three good and three bad aspects
of Horizon’s organizational structure?

Answer 1

Solution 1

The organisation chart for senior management ismore formal and does comprise of many layers as VP, Executive VP and Chairman /CEO form three levels within senior management unlike the informal structure. It is not like we see in startups where there is no clear definition of roles and responsibilities do overlap.

Solution 2

The organisation culture of the company has been known for improving people lives, empathy towards patients and equal inclusion of all employees.

However downsides of organisation culture include its aggressive strategy which causes large scale changes and unstructured management of people. Also the high pressure high target culture coupled with micromanagement are the drawbacks of such culture .