FTC sues to block Amgen's $27.8 billion deal to acquire Horizon Therapeutics

Yahoo Finance healthcare reporter Anjalee Khemlani joins the Live Show to discuss details surrounding the FTC suing biopharmaceutical giant Amgen Inc and its plan to block Amgen's $27.8 billion deal to acquire Horizon Therapeutics.

Video transcript

DIANE KING HALL: The Federal Trade Commission is suing to block Amgen's deal to acquire Horizon Therapeutics, and the stock is sliding on the news. Yahoo Finance's Anjalee Khemlani has the details. Anj, take us through it.

ANJALEE KHEMLANI: That's right, Diane. So we got the FTC suing or at least saying in a statement that it is suing to block this deal. That would be the potentially $28 billion acquisition of Horizon Therapeutics by Amgen, big pharmaceutical giant.

And what it would do is really add two orphan drugs to Amgen's pipeline. That's for rare diseases. The FTC is concerned about competition here, saying that Amgen could leverage its market power with PBMs and, you know, really benefit these two products.

Meanwhile, analysts are basically saying that, you know, they're concerned because it's not based on overlapping products, which is where competition would necessarily come in. In a note from SVB Securities, the analyst said, quote, "There does not seem to be a strong rationale that the FTC can justify that this specific deal would be anticompetitive in nature, in our view." That comment was sort of echoed by other analysts as well.

The FTC did say in a statement today that today's action is the first to challenge a pharmaceutical merger in recent memory, sending a clear signal to the market that the FTC won't hesitate to challenge mergers. And this is something that we have seen the FTC sort of lay a stance on, which is trying to block the competition, trying to block monopolies, and really focus on the pricing pressures that this ends up, you know, being a problem.

In its response, Amgen did say that it is going to fight this, of course, saying, quote, "that the FTC's claims that Amgen might bundle these medications and offer them in a multiproduct discount--" that's through the PBMs for favorable placement and the like-- "at some point in the future is entirely speculative and does not reflect real-world competitive dynamics." And they've committed, as has Horizon, not to bundle.

So already a lot of discourse around this, and we will obviously have to wait and see what happens. The deal is set to close in mid-December, and analysts are saying that this could at least delay it by six months or so if it doesn't get resolved before then. The companies could end up terminating at the end of that time, or they could end up moving forward and going through a trial.

So all depends. All wait and see. This is an interesting one to watch because it has broader implications for the overall pharma industry. We know, of course, Pfizer and Seagen just filed for their deal with the FTC to close. That's $43 billion. So a lot of big deals on the table right now.

DIANE KING HALL: All right, thanks so much for breaking that down, Anjalee Khemlani.