- Federal Trade Commission attorneys have withdrawn their administrative challenge to Amgen’s $27.8 billion acquisition of Horizon Therapeutics, following a July hearing in which a commission judge urged the two sides to settle the dispute.
- In the filing posted late Friday, FTC lawyers said they believe “that it would be appropriate to take steps to allow for discussion with the commission regarding the proper resolution of this matter.” The request comes weeks before a separate motion by the FTC to block the deal is due to face a court trial in Chicago.
- Suspending the administrative challenge could be a prelude to a legal settlement that would allow the acquisition to move ahead. Horizon shares rose 6% in Monday morning trading.
By objecting to Amgen’s deal for Horizon, the FTC put to the test new ideas about how drugmaker mergers can harm consumers.
Typically, regulators have maintained that overlaps between competing products can give combining companies a more powerful market position, and have sought divestments as a resolution. However, in this case, the FTC argued that Amgen could use rebates and discounts on established drugs like Enbrel to secure favorable insurance coverage for Horizon drugs like Tepezza and Krystexxa.
The FTC claimed Amgen has a history of using such “cross-market bundling” practices.
The Horizon acquisition was one of the first major opportunities for the FTC to apply the new framework for reviewing pharmaceutical mergers, which agency leadership laid out early in the Biden administration. A pre-trial settlement could reveal the evidence regulators have compiled to support their case, and indicate whether they believe they can prevail in court.
In a statement following the FTC’s notice of withdrawal, Amgen said, “we have no reason, ability or intention to bundle Horizon’s Tepezza or Krystexxa with any of our products and will not do so.”
“We would be pleased if our commitment were honored instead of going through a lengthy court process,” the drugmaker added. The company said it expects the deal to close by mid-December.
Wall Street analysts have largely shared Amgen’s expectation, with some doubting the strength of the FTC’s arguments. Stifel analyst Annabel Samimy wrote in an Aug. 8 note that the FTC’s new arguments will not “hold merit” when challenged.
“The suit is based on hypotheticals, and the only reason that Tepezza and Krystexxa do not have direct competition in their respective markets is because no other players have successfully completed clinical development to date,” Samimy wrote.
Seagen, which is waiting to close its $43 billion acquisition by Pfizer, recently disclosed that the FTC had asked for more information about the companies’ deal, which is the largest in the industry since 2019.