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?