The Federal Trade Commission said Tuesday that it has filed a lawsuit to block the $27.8 billion acquisition of Amgen Horizon treat.
Horizon shares were down 15% in morning trading. Amgen stock is down about 1%.
The FTC argued that the deal would allow Amgen to “solidify monopolistic positions” in two of Horizon’s fast-growing drugs: the thyroid eye disease treatment Tepezza and the gout medicine Krystexxa.
The agency indicated that neither of the two drugs has any competition in the pharmaceutical market.
The FTC said Amgen would specifically be able to offer rebates on its existing drugs to pressure insurers and pharmacy benefit managers to favor Horizon products. The agency alleged that Amgen had a history of leveraging its drug portfolio to gain advantages over potential competitors.
“Today’s action — the FTC’s first challenge to a pharmaceutical merger in recent memory — sends a clear signal to the market: The FTC will not hesitate to challenge mergers that enable pharmaceutical conglomerates to consolidate their monopolies at the expense of consumers and fair competition,” said Holly Vidova, director of the Office of Competition. of the Federal Trade Commission, in a press release.
Sources familiar with the matter told CNBC reporter David Faber earlier Tuesday that Amgen is ready to defend the acquisition, and one source added that the company expects a “big win.”
Representatives for Amgen and Horizon Therapeutics did not immediately respond to a request for comment from CNBC. Bloomberg previously reported that the lawsuit may be filed on Tuesday.
Robert Galbraith | Reuters
Both drug companies said in February that the FTC sent them a second request for information about the acquisition as part of the agency’s review of the deal.
California-based Amgen Thousand Oaks closed a deal to buy Horizon Therapeutics in early December and said it expects to complete the sale in the first half of this year.
The move was an effort to boost Amgen’s drug portfolio as it prepares to face several patent expirations for key therapies over the next decade.
This includes a patent for a drug that treats psoriasis, an autoimmune condition that causes inflammation of the skin.
Horizon, based in Ireland, will enhance Amgen’s drug offerings with treatments for rare, autoimmune and severe inflammatory diseases.
senator. Elizabeth Warren, D-Massachusetts, in January expressed concern about the deal’s potential impact on competition in the drug market.
The then-proposed acquisition and merger of Indivior and Opiant could “cause further increases in the price of life-saving drugs and prevent affordable alternatives from entering the market,” Warren wrote in a letter to FTC Chair Lena Khan and two commissioners at the agency.
The Federal Trade Commission called for “intense scrutiny” of the two deals. The Indivior and Opiant deal subsequently closed.
Correction: This story has been updated to correct an individual’s spelling.