December 1, 2023

Thousand Oaks-based pharma big Amgen Inc. faces a brand new and considerably surprising hurdle in its $27.8 billion deal to purchase Irish drug firm Horizon Therapeutics plc.: final week the Federal Commerce Fee filed swimsuit to dam the deal.

The FTC introduced on Could 16 that it had filed the lawsuit due to considerations the deal may give Amgen monopoly pricing energy over two potential blockbuster medication that Horizon has developed: Tepezza, used to deal with thyroid eye illness, and Krystexxa, which is used to deal with persistent refractory gout.

To ensure that the deal to be blocked – even quickly – a federal decide should approve the injunction that the FTC is looking for.

In response, Amgen stated it was disenchanted within the FTC choice and “stays dedicated to finishing the acquisition.”

Amgen initially introduced the acquisition final December and had hoped to shut the deal by late summer time or early fall. However the FTC lawsuit has thrown a wrench into that timetable.

In its response, Amgen stated it’s nonetheless working to finish the deal by mid-December. However in feedback within the media, a number of analysts stated the deal’s completion might slide into subsequent yr – assuming it doesn’t fall by means of within the meantime.

Traders of their preliminary response directed most of their doubts concerning the deal to Horizon; shares of that firm fell 15% instantly upon official phrase of the FTC lawsuit and closed Could 16 down 14%.

Amgen shares, by comparability, suffered a modest hit on Could 16, falling 2.4% to $227.95. Nonetheless, that was sufficient to assist drive the general Dow Jones Industrial Common down 336 factors, or 1%; Amgen is among the 30 shares comprising the DJIA.

The central challenge within the FTC’s lawsuit is the priority that if the deal had been to undergo, Amgen may have interaction in a follow the company referred to as “cross-market bundling” with regard to the 2 Horizon medication. Particularly, the FTC stated, this follow “includes conditioning rebates (or providing incremental rebates) on merchandise corresponding to Enbrel in trade for giving Amgen medication most well-liked placement on the insurers’ and (pharmacy profit managers’) lists of lined medicines in numerous product markets.”

In such a situation, the FTC stated, it will be rather more troublesome for different smaller pharmaceutical firms to deliver medication to market that compete with Tepezza or Krystexxa.

Amgen in its response disputed this declare.

“The medicines supplied by Amgen and Horizon typically deal with totally different ailments and affected person populations, and there aren’t any overlaps of aggressive concern,” Amgen stated in its assertion. “The FTC’s declare that Amgen may ‘bundle’ these medicines sooner or later sooner or later is fully speculative and doesn’t mirror the real-world aggressive dynamics behind offering rare-disease medicines to sufferers.”

Moreover, Amgen said, “We dedicated that we’d not bundle the Horizon merchandise raised as points.”