FTC sues to dam Amgen-Horizon Therapeutics acquisition

The Federal Trade Commission on Tuesday said it has sued to dam Amgen’s $27.8 billion acquisition of Horizon Therapeutics.

Shares of Horizon were down 15% in morning trading. Amgen’s stock was down about 1%.

The FTC argued that the deal would allow Amgen to “leverage its portfolio of blockbuster drugs to entrench the monopoly positions” of two of Horizon’s medications: the thyroid eye disease treatment Tepezza and the gout medicine Krystexxa. 

Neither drug has any competition within the pharmaceutical market, the agency noted.

“Today’s motion – the FTC’s first challenge to a pharmaceutical merger in recent memory – sends a transparent signal to the market: The FTC won’t hesitate to challenge mergers that enable pharmaceutical conglomerates to entrench their monopolies on the expense of consumers and fair competition,” FTC Bureau of Competition Director Holly Vedova said in a press release.

Amgen is ready to defend the acquisition, sources acquainted with the matter told CNBC’s David Faber earlier Tuesday, with one source adding the corporate expects to “win big.”

Representatives for Amgen and for Horizon Therapeutics didn’t immediately reply to a request for comment from CNBC. Bloomberg earlier reported the lawsuit could come on Tuesday.

The 2 drugmakers said in February that the FTC sent them a second request for information concerning the acquisition as a part of the agency’s review of the deal. 

Thousand Oaks, California-based Amgen struck the deal to purchase Horizon Therapeutics in early December and said it expected to finish the sale in the primary half of this yr. 

The move was a bid to strengthen Amgen’s drug portfolio because it prepares to face several patent expirations for key treatments over the following decade.

That features a patent for a medicine that treats psoriasis, an autoimmune condition that causes inflammation of the skin.

Horizon, which is predicated in Ireland, would beef up Amgen’s drug offerings with treatments for rare, autoimmune and severe inflammatory diseases. 

Sen. Elizabeth Warren, D-Mass., in January expressed concern concerning the deal’s potential impact on competition within the drug market. 

The acquisition and the then-proposed merger of Indivior and Opiant could “cause further price increases on lifesaving drugs and forestall reasonably priced alternatives from entering the market,” Warren wrote in a letter to FTC Chair Lina Khan and two commissioners on the agency.

She called on the FTC to “heavily scrutinize” the 2 deals. The Indivior and Opiant deal later closed.

Correction: This story has been updated to correct the spelling of Indivior.