The FTC’s settlement with Amgen and Horizon has cleared the way for the two companies to complete a $27.8 billion transaction agreed upon last year. Amgen’s purchase of the biotech was 2022’s largest deal announcement in the biopharma space and its settlement with the FTC may bolster confidence that 2023’s largest deal, a proposed Pfizer-Seagen tie-up, will make it through regulatory review unscathed. Pfizer’s prospective acquisition of Seagen would be worth $43 billion.
M&A deal volume among biopharma firms rose strongly in the first half of 2023, with Q2 agreements rising by more than 150% YoY. Goldman Sachs estimates global pharma firms have $700 billion at their disposal for acquisitions and investment into research and development.
Related ETF: VanEck Pharmaceutical ETF (PPH)
Last week, the US Federal Trade Commission (FTC) suspended its legal challenge to Amgen’s proposed acquisition of Horizon Therapeutics, 2022’s largest deal announcement in the biopharma space. The FTC and Amgen-Horizon then agreed to settle on Friday, clearing the way for the $27.8 billion purchase to close sometime in the fourth quarter. The FTC notes that, as part of the settlement, attorneys general from six states – California, Illinois, Minnesota, New York, Washington, and Wisconsin – will also dismiss a related federal court preliminary injunction action.
There was significant doubt cast upon the FTC’s case not long after the commission originally filed its suit in May, given its employment of a novel theory that Amgen could eventually bundle its drugs with those it is acquiring from Horizon in negotiations with insurers – therefore entrenching Horizon products’ premiere placement in the market and choking out potential competitors that might be cheaper or more effective. Horizon currently sells two marketed products, Tepezza (teprotumumab) for thyroid eye disease and Krystexxa (pegloticase), a chronic refractory gout treatment. Since Amgen was quick to agree that they would not bundle their products with Horizon’s, a settlement was the natural conclusion. Further conditions of the agreement between the FTC and the two firms stipulate Amgen will not introduce discount or rebate schemes on their own products that…
To read the complete Intelligence Briefing, current All-Access clients, SIGN IN All-Access clients receive the full-spectrum of MRP’s research, including daily investment insights and unlimited use of our online research archive. For a free trial of MRP’s All-Access membership, or to save 50% on your first year by signing up now, CLICK HERE
