FTC pauses litigation, mulls settlement as industry rallies around Amgen's $28B Horizon deal

After filing a closely watched lawsuit to block Amgen's proposed takeover of Horizon Therapeutics, the Federal Trade Commission (FTC) is pausing those efforts to consider whether it should settle the case.

The agency has suspended internal legal proceedings to block the Amgen-Horizon deal, a court filing (PDF) shows. The halt is in place until Sept. 18 for the FTC to consider “the proper resolution of this matter.”

In a separate filing (PDF), the FTC’s lawyers noted that the commission’s administrative law judge had previously encouraged the two sides to discuss a settlement. The motion to pause the challenge was prompted by the court, the filing shows.

The antitrust watchdog is changing course about a month after saying it was no longer in settlement talks with Amgen. It also comes shortly after Amgen rebuffed a request for a preliminary injunction at the U.S. District Court for the Northern District of Illinois.

The FTC’s case rests on the agency’s assumption that Amgen may bundle its existing blockbuster portfolio with two Horizon drugs to gain an advantage against potential competitors during reimbursement discussions with payers. But Amgen has promised to never bundle those drugs.

“We would be pleased if our commitment were honored instead of going through a lengthy court process,” Amgen said in a statement, as quoted by Reuters.

Still, despite the lawsuit, Amgen has said it expects to close the transaction by mid-December.

The Amgen case serves as a guidepost for the biopharma industry because it’s the first pharma M&A deal that the FTC has challenged in court since the agency threatened to increase its antitrust scrutiny around large biopharma mergers.

As such, two large industry groups, the Biotechnology Innovation Organization (BIO) and the Pharmaceutical Research and Manufacturers of America (PhRMA), are filing legal briefs in support of Amgen.

Both organizations argued that blocking the deal would stifle biotech innovation. Drug development and commercial launches require the involvement of established large manufacturers, PhRMA said in its filing.

“[W]ithout the prospect of acquisition to enable those larger manufacturers to complete the development of such medicines—and to permit those who financed early-stage development to recoup their own investments—innovation would be curtailed,” PhRMA said.

Not every merger is necessarily pro-competition, BIO acknowledged in its brief. But in this case, the FTC is questioning two companies that have no business overlaps. The review “now places all M&A activity under a cloud of suspicion.”

“The problem with the commission’s actions is that, by dramatically increasing the number of deals potentially subject to antitrust challenge, it creates an investment-suppressing cloud of regulatory uncertainty,” BIO said.