With FTC eyeing biopharma M&A deals, Pfizer refiles paperwork for $43B buyout of Seagen

An FTC lawsuit aimed at blocking Amgen’s $27.8 billion buyout of Horizon Therapeutics has raised concerns that the United States’ antitrust watchdog is tightening the screws on major M&A moves in the biopharma industry. 

A month later, according to an SEC filing, Pfizer has withdrawn its notification for its proposed $43 billion acquisition of cancer drug specialist Seagen and will submit another later in the day.

The form is required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The waiting period under the act now will expire on July 14 of this year, Seagen said in the filing. The company added that it and Pfizer filed the merger with the European Commission on June 1 and they still expect to complete the acquisition by the end of 2023 or in early 2024.

Pfizer and Seagen announced their proposed merger on March 12. Then on May 12, each filed notifications with the FTC and the Department of Justice. Four days later, the FTC filed its suit in federal court to halt the proposed merger between Amgen and Horizon. The move was the first by the FTC in more than a decade against a pharma M&A deal.

While the filing of the suit seemed to raise red flags for the Pfizer-Seagen deal, some analysts suggested that the legal challenge had more to do with Amgen’s history of enhancing the monopoly positions of its drugs through product bundling and rebate schemes. This ability to exploit the market could be enhanced with therapies that Amgen would gain through an acquisition of Horizon, the FTC has argued.

As it applies to the drugs of Pfizer and Seagen, there is little overlap which would allow the companies to conduct such a bundling/rebate strategy, analysts with Berenberg have said. Still, the FTC in 2021 said it would scrutinize biopharma megamergers more closely going forward.

Pfizer’s proposed acquisition of Seagen is the largest M&A deal in biopharma since AbbVie acquired Allergan for $63 billion in June of 2019.

Pfizer had two of the three largest deals in the industry last year. In May of 2022, Pfizer executed an $11.6 billion buyout of migraine pioneer Biohaven. Three months later, Pfizer paid $5.4 billion for sickle cell specialist Global Blood Therapeutics, outbidding Johnson & Johnson.

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