While the anti-corruption storm in the domestic medical field is entering deep waters, the United States across the ocean is not idle either. Recently, after an investigation by the Federal Trade Commission (FTC), Cooper Companies announced the abandonment of the $875 million acquisition of Cook Medical’s reproductive health business.
Regarding the failure of this acquisition, the FTC stated, “The FTC is committed to protecting patients from higher costs and maintaining the drive for innovation. Terminating the acquisition transaction protects the benign competition in the market and is a win-win for patients.”
In fact, the FTC has more than once blocked MNC’s mergers and acquisitions under the name of “antitrust”. So, what impact will this have on the US pharmaceutical ecosystem? What challenges does it pose to domestic innovative drugs going global?
Multiple failed deals, FTC intensifies antitrust efforts
For a long time, the FTC has focused on direct competition between individual products, but now it has expanded its scope of review. At the workshop held by the FTC in 2022, antitrust enforcement agencies from Canada, the UK, and Europe also joined in to explore “new approaches to enforcing antitrust laws.”
On May 16th of this year, the FTC sued Amgen for its acquisition of Horizon Therapeutics, claiming that the acquisition would hinder market competition for Horizon’s two new drugs, Tepezza and Krystexxa.
Going back to the end of 2022, Amgen announced an agreement to acquire Horizon for $27.8 billion. If the deal is completed, Amgen will gain the blockbuster drug Tepezza, as well as the commercialized Krystexxa (for treating chronic gout), Uplizna (for treating optic nerve and spinal inflammation), and Ravicti (for treating rare genetic disorders related to urea cycle disorders).
Among them, Tepezza was approved by the FDA in 2020 and is a fully human monoclonal antibody and insulin-like growth factor-1 receptor (IGF-1R) targeted therapy for the treatment of thyroid eye disease. It is a severe, progressive, vision-threatening rare autoimmune disease associated with bulging eyes (proptosis), double vision, pain, inflammation, and facial disfigurement. Tepezza has shown significant efficacy in treating thyroid eye disease: 82.9% of patients experienced a reduction in eyeball diameter of more than 2mm, compared to only 9.5% in the control group. After 24 weeks of treatment with Tepezza, the average reduction in eyeball diameter for patients was 3.32mm.
After Tepezza was launched, sales quickly surged, achieving $800 million in sales in its first year on the market. In 2022, Tepezza brought Horizon $1.97 billion in revenue. Analysts predict that Tepezza’s peak sales will reach $4 billion.
Krystexxa, another blockbuster product of Horizon, is used to treat uncontrolled gout in adult patients who do not respond to conventional therapies. Gout, one of the most common types of inflammatory arthritis, affects over 55 million people worldwide and primarily affects the joints of the lower extremities (feet, ankles, and knees). It is caused by hyperuricemia, where urate crystals accumulate in the joints, leading to sudden and severe pain, swelling, and more.
Krystexxa is a recombinant uricase (UO) drug. It was approved by the FDA in September 2010, and its annual sales in the past three years were $406 million, $565 million, and $716 million, showing good growth momentum.
SVB Securities analysts believe that it may be due to the lack of competitors in the market for these two drugs that FTC opposes Amgen’s acquisition of Horizon, as it would give Amgen the ability to monopolize the thyroid-related eye disease market and the market for chronic refractory gout.
However, SVB also believes that the FTC does not have sufficient evidence to prove that this merger violates antitrust laws, as there is no overlap between Horizon’s products and Amgen’s products. So, what is the basis for the FTC’s speculation?
One of the main reasons is that Amgen has a history of controlling drug prices. Previously, Regeneron sued Amgen, alleging that Amge...
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