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Horizon (HZNP) Up as FTC Pauses Acquisition by Amgen Lawsuit
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The Federal Trade Commission ("FTC"), through a filing in the Federal Court, temporarily suspended its lawsuit to block Horizon Therapeutics’ $27.8 billion acquisition by Amgen (AMGN - Free Report) until Sep 18, 2023.
The FTC’s decision to pause the lawsuit is to allow the agency to consider whether it should settle the case or enter into negotiations with Amgen and Horizon. Following the news, Horizon’s share price climbed 5.8% during the after-market hours on Aug 25, 2023.
According to a Reuters article, Amgen issued a statement following the FTC’s strategic move, stating that AMGN welcomes the opportunity to prove the absence of any unscrupulous intent behind the impending acquisition agreement to the courts. Per Reuters, the agency and Amgen are due to meet in federal court in September to discuss the issue.
Horizon, however, withheld any statement on the issue, at this time. Year to date, shares of HZNP have lost 6.2% compared with the industry’s 13.2% fall.
Image Source: Zacks Investment Research
We would like to remind the investors that the acquisition agreement was announced in December 2022. This acquisition will add Horizon’s portfolio of rare disease drugs like Tepezza, Krystexxa and Uplizna to Amgen’s broad and diversified portfolio and is expected to be accretive to the bottom line by 2024.
Tepezza is HZNP’s blockbuster drug to treat thyroid eye disease, while Krystexxa is used in adults to help reduce the signs and symptoms of gout that are not controlled by other treatments. Uplizna is a prescription medicine used to treat adults with neuromyelitis optica spectrum disorder who are anti-aquaporin-4 antibody positive.
Year to date, shares of AMGN have lost 2.4% compared with the industry’s 13.2% fall.
Image Source: Zacks Investment Research
However, in May 2023, the FTC filed a lawsuit in Federal Court to halt Amgen’s acquisition of Horizon. Per the FTC, if the acquisition is allowed to go through, a large-cap giant like AMGN could leverage its position with insurance companies and pharmacy benefit managers to entrench the monopoly positions for two of Horizon's key products — Tepezza and Krystexxa. The agency argued that the drugs currently face little to no competition in the market and are sold at very high prices to patients.
In response to the above lawsuit, Amgen stated that it was disappointed by the FTC’s decision and does not believe that the merger poses any competitive issues. Horizon also responded to the unforeseen development, stating that the objective of the acquisition deal is to accelerate the availability of important rare disease medicines, with significant unmet needs, to more patients worldwide. HZNP also stated that it has no plans to bundle any of its rare disease medicines, thereby addressing the FTC’s potential concern.
Both Amgen and Horizon continue to expect the closing of the acquisition agreement by mid-December 2023.
Zacks Rank and Stocks to Consider
Amgen and Horizon currently carry a Zacks Rank #3 (Hold) each.
In the past 30 days, the Zacks Consensus Estimate for J&J’s 2023 earnings per share has increased from $10.73 to $10.75. During the same period, the estimate for JNJ’s 2024 earnings per share has increased from $11.28 to $11.30. Year to date, shares of JNJ have lost 5.9%.
JNJ beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 5.58%.
In the past 30 days, the Zacks Consensus Estimate for Corcept’s 2023 earnings per share has gone up from 62 cents to 78 cents. The estimate for Corcept’s 2024 earnings per share has also improved from 61 cents to 83 cents. Year to date, shares of CORT have climbed 56.2%.
CORT’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 6.99%.
Horizon Therapeutics Public Limited Company Price and Consensus
Image: Bigstock
Horizon (HZNP) Up as FTC Pauses Acquisition by Amgen Lawsuit
The Federal Trade Commission ("FTC"), through a filing in the Federal Court, temporarily suspended its lawsuit to block Horizon Therapeutics’ $27.8 billion acquisition by Amgen (AMGN - Free Report) until Sep 18, 2023.
The FTC’s decision to pause the lawsuit is to allow the agency to consider whether it should settle the case or enter into negotiations with Amgen and Horizon. Following the news, Horizon’s share price climbed 5.8% during the after-market hours on Aug 25, 2023.
According to a Reuters article, Amgen issued a statement following the FTC’s strategic move, stating that AMGN welcomes the opportunity to prove the absence of any unscrupulous intent behind the impending acquisition agreement to the courts. Per Reuters, the agency and Amgen are due to meet in federal court in September to discuss the issue.
Horizon, however, withheld any statement on the issue, at this time. Year to date, shares of HZNP have lost 6.2% compared with the industry’s 13.2% fall.
Image Source: Zacks Investment Research
We would like to remind the investors that the acquisition agreement was announced in December 2022. This acquisition will add Horizon’s portfolio of rare disease drugs like Tepezza, Krystexxa and Uplizna to Amgen’s broad and diversified portfolio and is expected to be accretive to the bottom line by 2024.
Tepezza is HZNP’s blockbuster drug to treat thyroid eye disease, while Krystexxa is used in adults to help reduce the signs and symptoms of gout that are not controlled by other treatments. Uplizna is a prescription medicine used to treat adults with neuromyelitis optica spectrum disorder who are anti-aquaporin-4 antibody positive.
Year to date, shares of AMGN have lost 2.4% compared with the industry’s 13.2% fall.
Image Source: Zacks Investment Research
However, in May 2023, the FTC filed a lawsuit in Federal Court to halt Amgen’s acquisition of Horizon. Per the FTC, if the acquisition is allowed to go through, a large-cap giant like AMGN could leverage its position with insurance companies and pharmacy benefit managers to entrench the monopoly positions for two of Horizon's key products — Tepezza and Krystexxa. The agency argued that the drugs currently face little to no competition in the market and are sold at very high prices to patients.
In response to the above lawsuit, Amgen stated that it was disappointed by the FTC’s decision and does not believe that the merger poses any competitive issues. Horizon also responded to the unforeseen development, stating that the objective of the acquisition deal is to accelerate the availability of important rare disease medicines, with significant unmet needs, to more patients worldwide. HZNP also stated that it has no plans to bundle any of its rare disease medicines, thereby addressing the FTC’s potential concern.
Both Amgen and Horizon continue to expect the closing of the acquisition agreement by mid-December 2023.
Zacks Rank and Stocks to Consider
Amgen and Horizon currently carry a Zacks Rank #3 (Hold) each.
A couple of better-ranked stocks in the pharma/biotech sector are J&J (JNJ - Free Report) and Corcept Therapeutics (CORT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, the Zacks Consensus Estimate for J&J’s 2023 earnings per share has increased from $10.73 to $10.75. During the same period, the estimate for JNJ’s 2024 earnings per share has increased from $11.28 to $11.30. Year to date, shares of JNJ have lost 5.9%.
JNJ beat estimates in each of the trailing four quarters, delivering an average earnings surprise of 5.58%.
In the past 30 days, the Zacks Consensus Estimate for Corcept’s 2023 earnings per share has gone up from 62 cents to 78 cents. The estimate for Corcept’s 2024 earnings per share has also improved from 61 cents to 83 cents. Year to date, shares of CORT have climbed 56.2%.
CORT’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 6.99%.
Horizon Therapeutics Public Limited Company Price and Consensus
Horizon Therapeutics Public Limited Company price-consensus-chart | Horizon Therapeutics Public Limited Company Quote