Horizon Therapeutics (NASDAQ:HZNP) stock is sinking 18% this morning. The Federal Trade Commission ( ) is reportedly attempting to block the drug maker’s proposed merger with Amgen (NASDAQ:AMGN). AMGN is one of the world’s largest pharmaceutical companies.
The FTC will file a lawsuit as soon as today to block the proposed deal, Bloomberg and Reuters reported. The agency is reportedly concerned that the merger would stymie the launches of new drugs.
Amgen agreed to acquire Horizon in December. At the time, it predicted that the transaction would go through by the end of the current quarter.
HZNP has developed “treatments for rare, autoimmune and severe inflammatory diseases.” Two of its most popular drugs are “thyroid eye disease treatment Tepezza and the gout medicine Krystexxa.”
Democratic Senator Elizabeth Warren had warned earlier this year in a statement to the FTC that the merger could cause drug prices to climb.
HZNP Stock: What Investors Should Watch
According to a Bloomberg analyst, the merger would “help fill significant revenue losses at Amgen in the coming years as key products lose patent protection.” Additionally, the deal would be positive for Horizon, since Amgen is skilled at “developing, making and marketing biologic drugs,” the analyst stated.
Investors who are interested in buying HZNP stock on weakness should see whether Amgen and Horizon contest the FTC’s lawsuit. If that does occur, investment bank Jefferies believes that acquiring Horizon’s shares would be a worthwhile investment.
Jefferies also kept a “buy” rating on AMGN in the wake of today’s news.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.