Amgen’s (AMGN:NSD) proposed acquisition of Horizon Therapeutics (HZNP:NSD), which was announced in December 2022, is facing a major hurdle as the U.S. Federal Trade Commission (FTC) is expected to block the $27.8 billion deal. This development has had a significant impact on the stock market, with Horizon Therapeutics experiencing a decline in share prices. In this blog post, we will delve into the details of the potential FTC lawsuit and its implications for both companies involved. Additionally, we will explore the current sentiment of Wall Street analysts toward Amgen stock.
FTC’s Concerns and Potential Lawsuit:
According to recent reports, the FTC is preparing to file a lawsuit stating that the acquisition of Horizon Therapeutics by Amgen could potentially impact competition in the field of drug development. Bloomberg has shed light on these concerns, attributing them as the primary reason behind the anticipated blockage of the deal. These regulatory hurdles have been a cause for speculation and have adversely affected Horizon Therapeutics’ stock, which experienced a 16% drop in after-trade and an additional 18% decline at the time of writing.
Initial Criticisms and FTC’s Second Request:
The Amgen-Horizon merger has faced criticism from the outset. In January, the FTC sent a second request to both companies, seeking additional information and documentation related to the transaction. Notably, Senator Elizabeth Warren also expressed her concerns about the merger in a letter to the FTC. These early red flags raised doubts about the smooth progress of the deal and now seem to be materializing with the expected legal intervention by the FTC.
Amgen Stock Analysis:
Amidst these developments, it is essential to consider the implications for Amgen stock and investor sentiment. Wall Street analysts currently maintain a Hold consensus rating on Amgen, based on a blend of five Buy ratings, five Hold ratings, and two Sell ratings. The average price target for Amgen stock stands at $259, reflecting a potential upside of 10.9% from current levels. However, it is worth noting that Amgen stock shares have declined by 10% year-to-date.
Conclusion:
The potential blockage of Amgen’s acquisition of Horizon Therapeutics by the FTC has sent shockwaves through the stock market. The looming lawsuit and concerns regarding competition in drug development have significantly impacted Horizon Therapeutics’ stock price. Investors closely monitoring these developments should pay attention to the FTC’s official announcement and subsequent legal proceedings. As for Amgen shareholders, it remains crucial to consider the current sentiment of Wall Street analysts and the long-term implications of this regulatory setback.
