Amgen's Horizon Acquisition Faces Challenges as Key Drugs Underperform

Amgen's $27.8 billion acquisition of Horizon Therapeutics in 2023 is facing headwinds as the company's first-quarter earnings report reveals disappointing performance from key rare disease drugs. Despite overall revenue growth, the struggle to build momentum for Horizon's prized possessions – Uplizna, Krystexxa, and Tepezza – has raised questions about the acquisition's value.

Tepezza's Decline Raises Concerns

Tepezza, the lone drug on the market for thyroid eye disease, has experienced a significant setback. The treatment's first-quarter sales of $381 million marked a 17% sequential decline, falling $69 million short of analyst expectations. This represents Tepezza's lowest quarterly performance since Q1 2021, prompting concerns about its growth trajectory.

Murdo Gordon, Amgen's chief commercial officer, attributed the decline to changes in U.S. wholesaler inventory levels, stating, "We do not expect similar deductions in inventory levels for the remainder of the year." However, the 9% decline in volume and 8% decrease in inventory levels have led analysts to question the Horizon acquisition's value.

Expansion Efforts and Future Prospects

Despite the setbacks, Amgen remains optimistic about Tepezza's future. The company recently received a positive opinion from Europe's Committee for Medicinal Products for Human Use and is preparing for a European launch. Additionally, Amgen is developing a subcutaneous version of Tepezza, which could provide a more convenient administration option for patients and potentially boost sales.

Uplizna and Krystexxa Face Similar Challenges

Uplizna and Krystexxa, two other key drugs acquired from Horizon, also fell short of analyst expectations in Q1. Uplizna's sales of $91 million were $20 million below projections, while Krystexxa's $236 million haul missed the mark by $57 million.

However, Uplizna recently received FDA approval for immunoglobulin G4-related disease (IgG4-RD), becoming the first drug approved for this condition affecting 20,000 patients in the U.S. Furthermore, Amgen announced an FDA decision date of December 14 for Uplizna's potential approval in treating generalized myasthenia gravis (gMG).

Amgen Urges Patience as Integration Continues

Amgen executives are calling for patience as they work to integrate and grow the Horizon portfolio. Jay Bradner, Amgen's R&D chief, emphasized the youth of the product lineup, stating, "It's a very young portfolio of products where we're really just beginning to address the severe diseases that these drugs treat. Whether it's Tepezza, Uplizna, Krystexxa or Tavneos, these are going to be key growth-driving products for us over the long haul."

As the pharmaceutical industry watches closely, Amgen faces the challenge of proving the long-term value of its Horizon acquisition while addressing the immediate concerns surrounding the performance of these key rare disease treatments.