Robert Bradway, chief executive of Thousand Oaks pharma giant Amgen Inc., has grown increasingly frustrated at the government’s unwillingness to come to terms with Amgen over its $27.8 billion acquisition deal of Irish pharma company Horizon Therapeutics.
That deal, announced last December, hit a major stumbling block in May when the Federal Trade Commission filed suit to block it, arguing that it could give Amgen monopoly pricing power over two potential blockbuster drugs that Horizon has developed: Tepezza, used to treat thyroid eye disease, and Krystexxa, which is used to treat chronic refractory gout.
The agency also argued that if the deal went through, Amgen would have powerful incentives to require pharmacies, hospitals and others who order these two drugs to accept some of Amgen’s other drugs as well – a process called bundling.
In June, several state attorneys general, including Robert Bonta in California, joined in the lawsuit to block the deal.
Bradway let his frustration come through during Amgen’s earnings conference call with analysts earlier this month. He said repeatedly that in the deal terms and details, Amgen made commitments that it believes addresses the regulators’ concerns.
“In choosing to pursue this case, they’ve ignored the commitments we made to address their stated concerns,” Bradway said.
“Life-changing medicines that Amgen and Horizon offer treat different diseases and different patient populations,” he continued. “Simply put, there are no competitive overlaps and no incentives to bundle our drugs with theirs.”
In his comments, Bradway noted that many regulatory bodies outside the United States have approved the deal. While he did not name specific countries or regions, when the deal was announced it was noted that in addition to the United States, regulatory authorities in Austria and Germany had to also approve it.
Despite his frustration, Bradway expressed confidence that the deal would ultimately close, though that potential closing date has been pushed back to mid-December from October. And even that October date was itself pushed back a few weeks from late summer.
Last December, Amgen beat out rival pharma companies – Brunswick, New Jersey-based Johnson & Johnson and Paris-based Sanofi – with its $27.8 billion bid to buy Dublin, Ireland-based Horizon, which specializes in the development and distribution of drugs to treat rare diseases.
Amgen views the deal as a major entryway into this rare-disease market, claiming that its drug development and distribution networks would allow these critical drugs to reach far more people than could the companies that initially developed the medications.
With only brief discussions between the Federal Trade Commission and Amgen parties to try to resolve the dispute, a court trial is now looking likely. A start date of Sept. 11 has already been set to hear the case in front of federal Judge John Kness of the Northern District of Illinois in Chicago.
The case could prove a major test of the Federal Trade Commission’s novel legal theory about an acquiring company using a market-dominating position to boost sales of products that are unrelated to the products at the center of the acquisition – the bundling theory.
“We look forward to making our case in court in September, and I’m confident … that we will prevail,” Bradway said in the earnings conference call.
“In the meantime,” he continued, “we’re working closely on integration plans with Horizon, so we can hit the ground running by mid-December, which is when we anticipate being able to close the deal.”