Amgen resolves US regulator’s challenge to $28bn Horizon deal

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Amgen has reached an agreement with the US antitrust regulator that allows the drugmaker to press ahead with its $28bn acquisition of Horizon Therapeutics.

The settlement resolves the Federal Trade Commission’s first challenge to a pharmaceutical deal in more than a decade.

The FTC had contended that Amgen could get buyers such as health insurers or pharmacy benefit managers to favour Horizon’s drugs by bundling them with its own best-selling medicines. Amgen said it had no reason, ability or intention to bundle the drugs.

Under the resolution, which includes no financial settlement, Amgen has promised not to bundle two of Horizon’s drugs.

Henry Liu, director of the FTC’s bureau of competition, said the proposed resolution sent a “clear signal” that the FTC and its state partners would scrutinise pharmaceutical mergers that enabled such practices. 

“Consolidation in the pharmaceutical industry has given companies the power and incentive to engage in exclusionary rebating practices, which can lead to skyrocketing prices on essential medications,” he said. 

The FTC will monitor Amgen’s contracts involving Horizon’s drugs Tepezza, for thyroid eye disease, and Krystexxa, for chronic gout. Amgen will be banned from buying drugs or potential drugs that target the same diseases without receiving permission from the FTC to do so.

“Amgen has consistently stated to the FTC, the courts and the public that it has no reason, ability or intention to bundle Horizon’s Tepezza . . . or Krystexxa . . . with any of its products,” the company said. “This narrow assurance, formalised in the consent order with the FTC, will have no impact on Amgen’s business.”

The California-based pharmaceutical company agreed to the acquisition in December last year, winning a three-way race to add a new pipeline of drugs for rare autoimmune and inflammatory diseases. Horizon had also attracted interest from French drugmaker Sanofi and US pharma group Johnson & Johnson. 

But in May, the FTC sued to block the deal, arguing that “rampant consolidation” in the pharmaceuticals industry is pushing up drug prices. 

The move shook the sector, where large drugmakers rely on buying smaller biotechs to replenish their stocks of innovative medicines as drugs go off patent. 

Amgen said that the deal was now expected to close early in the fourth quarter. Shares in Amgen added 1.4 per cent in pre-market trading, while Horizon rose 2.8 per cent. 

Analysts raised concerns about whether the FTC’s novel approach could affect Pfizer’s $43bn deal for Seagen, which has yet to receive approval. Shares in Pfizer added 0.4 per cent in pre-market trading, while Seagen stock rose by 2.2 per cent.