FTC hold raises hope of Amgen/Horizon deal progress

The Federal Trade Commission (FTC) in the US has paused its legal challenge to Amgen's proposed acquisition of Horizon Therapeutics, setting up settlement talks that may give the two companies an opportunity to get the $28 billion deal across the line.

The suspension of the FTC's in-house proceedings – withdrawing them from adjudication – is effective until 18th September and provides time for the FTC's commissioners to decide whether the agency should look at other ways to resolve the case, such as a settlement, ahead of a court date next month.

Amgen reiterated its position that there is no reason for the takeover not to go through and expects it to be completed before the end of the year. It agreed to acquire Dublin-based Horizon in December 2022, after Sanofi and Johnson & Johnson pulled out of negotiations.

The FTC asked for additional information about the transaction in January and then filed its lawsuit seeking to block the deal in May, claiming that Amgen would be able to "stifle competition" for Horizon's Tepezza (teprotumumab) for thyroid eye disease (TED) and chronic refractory gout treatment Krystexxa (pegloticase).

The agency has claimed that the drugmaker could use rebates on its existing drugs, such as immunology blockbuster Enbrel (etanercept), to pressure insurance companies and pharmacy benefit managers to include the drugs on formularies at the expense of competitors. Tepezza is reported to cost around $433,000 per course at list prices, while Krystexxa has an annual price tag of $650,000

The move has been viewed as somewhat unusual for the financial regulator, which usually focuses on areas where overlap in merging companies' product portfolios could lead to a monopoly.

At the moment, the drugs have no competitors in the market, and Amgen has called the FTC's concerns "entirely speculative", stating it was prepared to make a commitment that it would not undertake the 'bundling' activity highlighted in the FTC's complaint. The two companies filed a countersuit against the FTC in July.

Earlier this year, Senator Elizabeth Warren (D-MA) added a political element to the wrangling when she sent a letter to the FTC, urging it to scrutinise M&A in the pharma sector more closely, singling out the Amgen/Horizon transaction, expressing concerns about "rampant consolidation in the pharmaceutical industry and its impact on drug affordability and access."

She claimed the Amgen/Horizon deal presented "numerous antitrust and price gouging concerns," writing that both companies had "engaged in brazen price increases on drugs that face little or no competition."