Stock Market News

US FTC sues to block Amgen’s $27.8 billion deal for Horizon Therapeutics

2023.05.16 15:29


© Reuters. FILE PHOTO: An Amgen sign is seen at the company’s office in South San Francisco, California October 21, 2013. REUTERS/Robert Galbraith/File Photo/File Photo

By Diane Bartz

WASHINGTON (Reuters) – The U.S. Federal Trade Commission said on Tuesday it would sue to stop Amgen Inc (NASDAQ:)’s $27.8 billion acquisition of Horizon Therapeutics (NASDAQ:) Plc in a rare move to block a large pharmaceutical deal.

In its complaint, the FTC said Amgen would be able to leverage the powerful position it has with insurance companies and pharmacy benefit managers who want access to its blockbuster drugs to pressure them into favorable terms for Horizon’s two key products – the fast-growing thyroid eye disease treatment Tepezza and gout drug Krystexxa.

“Rampant consolidation in the pharmaceutical industry has given powerful companies a pass to exorbitantly hike prescription drug prices, deny patients access to more affordable generics, and hamstring innovation in life-saving markets,” FTC Bureau of Competition Director Holly Vedova said.

Amgen said in a statement it was disappointed by the FTC decision and that it believed it had “overwhelmingly demonstrated” that the deal had no legitimate competitive issues. The California-based biotech, which had hoped to close the deal in the first half of this year, said it would work with the court to complete the transaction by mid-December.

Horizon shares were down about 15% to $95.52 in New York trading on Tuesday.

Amgen announced plans to buy Horizon in December, saying that its rare disease drugs would offer it some protection from the drug pricing provisions of the Inflation Reduction Act, which are aimed drugs most widely used by the government’s Medicare health plan.

One month later, Democratic Senator Elizabeth Warren wrote to the FTC Chair Lina Khan asking her to scrutinize the deal for antitrust violations and to oppose it if the agency found them.

In the letter, Warren said Tepezza costs nearly $433,000 per course and pointed out both companies’ histories of raising prices on their drugs.

Amgen sees revenue from the Horizon medicines helping to offset increased competition that has eroded sales of its blockbuster rheumatoid arthritis drug Enbrel. Other key drugs in Amgen’s product portfolio, such as psoriasis therapy Otezla, face the loss of patent protections over the next few years.

The FTC, which currently has three Democratic commissioners, voted 3-0 to approve the challenge to the Amgen-Horizon deal.Jefferies analyst Michael Yee said drugmakers may change how they view M&A targets based on this FTC case to emphasize smaller companies or those with products still in clinical trials.

Shares of some companies viewed as potential acquisition targets like Sarepta Therapeutics (NASDAQ:) and BioMarin Pharmaceutical (NASDAQ:), as well as Seagen Inc, were down about 5% each.

Pfizer (NYSE:) in March announced it would acquire Seagen for $43 billion, with the companies on Friday making their submissions to the FTC and Department of Justice.

In recent years, the agency has typically identified therapeutic overlaps in the companies involved in deals and required one of the medicines to be divested.

The last major deal approved by the FTC was AstraZeneca (NASDAQ:)’s $39 billion acquisition of Alexion (NASDAQ:) Pharma in April 2021, about two months before Khan was appointed by the Biden administration.

(This story has been corrected to say the last major deal was approved by the FTC in April, not August, in paragraph 14)

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 75,894.33 0.23%
vested-xor
Vested XOR (VXOR) $ 3,405.08 99,999.99%
ethereum
Ethereum (ETH) $ 2,879.30 5.35%
tether
Tether (USDT) $ 1.00 0.06%
solana
Solana (SOL) $ 195.05 3.95%
bnb
BNB (BNB) $ 597.10 0.62%
usd-coin
USDC (USDC) $ 0.999897 0.04%
xrp
XRP (XRP) $ 0.552971 1.50%
staked-ether
Lido Staked Ether (STETH) $ 2,877.90 5.31%
dogecoin
Dogecoin (DOGE) $ 0.191546 2.72%
cardano
Cardano (ADA) $ 0.396129 8.99%
tron
TRON (TRX) $ 0.160185 1.63%
the-open-network
Toncoin (TON) $ 4.88 1.76%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,412.38 5.72%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 75,814.31 0.41%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 1.57%
avalanche-2
Avalanche (AVAX) $ 27.24 0.26%
weth
WETH (WETH) $ 2,879.40 5.39%
chainlink
Chainlink (LINK) $ 12.51 1.97%
bitcoin-cash
Bitcoin Cash (BCH) $ 377.37 0.56%
sui
Sui (SUI) $ 2.28 1.46%
polkadot
Polkadot (DOT) $ 4.13 0.31%
leo-token
LEO Token (LEO) $ 6.26 0.39%
usds
USDS (USDS) $ 1.00 0.11%
litecoin
Litecoin (LTC) $ 71.36 0.02%
uniswap
Uniswap (UNI) $ 8.86 6.98%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,027.44 5.33%
near
NEAR Protocol (NEAR) $ 4.21 1.28%
aptos
Aptos (APT) $ 9.73 0.37%
pepe
Pepe (PEPE) $ 0.000011 7.61%
bittensor
Bittensor (TAO) $ 506.02 3.75%
internet-computer
Internet Computer (ICP) $ 7.74 2.24%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.40 1.76%
dai
Dai (DAI) $ 0.999806 0.02%
stellar
Stellar (XLM) $ 0.101268 4.17%
ethereum-classic
Ethereum Classic (ETC) $ 20.15 2.47%
monero
Monero (XMR) $ 163.31 0.99%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.19%
kaspa
Kaspa (KAS) $ 0.112998 6.41%
whitebit
WhiteBIT Coin (WBT) $ 19.63 1.51%
aave
Aave (AAVE) $ 181.68 4.16%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.342972 2.10%
blockstack
Stacks (STX) $ 1.67 3.42%
crypto-com-chain
Cronos (CRO) $ 0.091067 5.95%
okb
OKB (OKB) $ 40.44 3.04%
first-digital-usd
First Digital USD (FDUSD) $ 1.00 0.13%
dogwifcoin
dogwifhat (WIF) $ 2.34 3.50%
arbitrum
Arbitrum (ARB) $ 0.577135 4.15%
mantle
Mantle (MNT) $ 0.665767 11.26%
filecoin
Filecoin (FIL) $ 3.75 0.37%