BY Richard Summerfield
The Federal Trade Commission (FTC) has approved Amgen’s $27.8bn takeover of Horizon Therapeutics, ending months of speculation and uncertainty over the viability of the proposed deal.
In May, the FTC filed a lawsuit to block the deal over concerns that Amgen would leverage its drugs to secure favourable insurance coverage terms for Horizon’s thyroid eye disease treatment Tepezza and gout drug Krystexxa. Tepezza received nearly $2bn in sales in 2022, while Krystexxa brought in $716m.
Under the terms of the deal, Amgen agreed to pay a premium of approximately 47.9 percent on the closing share price of $78.76 per Horizon share on 29 November 2022. The deal had originally been expected to close in the first half of 2023, prior to the FTC’s antitrust lawsuit.
However, a deal has now been reached which will allow the acquisition, Amgen’s largest ever, to close early in the fourth quarter of this year. Last week, the FTC temporarily suspended its suit against Amgen, which allowed it to consider whether to settle the case.
Under the terms of the agreement struck between the FTC and Amgen, there will be restrictions imposed on Amgen to address key concerns the FTC raised in its suit. Specifically, Amgen is prohibited from ‘bundling’ Tepezza and Krystexxa. Amgen will also have to get approval from the FTC to acquire any products that treat the same diseases as Tepezza and Krystexxa do. Amgen is required to seek those signoffs from the agency through 2032. All other requirements will be effective for 15 years after the agreement is finalised, including a requirement that Amgen submit annual compliance reports to the FTC and states. A monitor will be appointed to oversee Amgen’s compliance, and the monitor’s reports will likewise be submitted to the FTC and to the states.
Federal lawsuits to block the merger by six states - California, Illinois, Minnesota, New York, Washington and Wisconsin - have also been dismissed as part of the settlement.
“Consolidation in the pharmaceutical industry has given companies the power and incentive to engage in exclusionary rebating practices, which can lead to sky-rocketing prices on essential medications,” said Henry Liu, director of the FTC’s Bureau of Competition. “Today’s proposed resolution sends a clear signal that the FTC and its state partners will scrutinize pharmaceutical mergers that enable such practices, and defend patients and competition in this vital marketplace.”
Amgen first moved to buy Horizon in December 2022 to gain access to the company’s rare disease assets, beating other potential suitors, including Sanofi and Johnson & Johnson. But the buyout was quick to attract regulatory and political scrutiny for its potential antitrust issues. Senators including Elizabeth Warren were particularly critical of the deal and its potential impact on drug prices.
In a press release issued on Friday, Amgen said it “has consistently stated to the FTC, the courts and the public that it has no reason, ability or intention to bundle” Horizon’s drugs with any of its own medicines. This “narrow assurance, formalized in the consent order with the FTC, will have no impact on Amgen’s business”, the company added.