Investors File Lawsuit To Prevent Acquisition of Tepezza Manufacturer Horizon Therapeutics
Following an announcement last month that the pharmaceutical giant Amgen plans to buy the biopharmaceutical company Horizon Therapeutics, which sells the blockbuster thyroid eye disease drug Tepezza, a number of investors are filing lawsuits to stop the acquisition from happening.
On December12, Amgen agreed to pay $116.50 per share in cash to buy Horizon Therapeutics, amid mounting concerns over a growing number of Tepezza lawsuits filed by former users left with permanent hearing loss, which threatens the top selling drug, which accounts for about half of Horizon’s total sales.
Amgen officials have indicated they are buying Horizon Therapeutics in order to increase its rare disease drug portfolio, of which Tepezza figures to be the prime target of the acquisition. However, the deal has immediately raised concerns for investors on both sides, as Horizon Therapeutics faces claims that it withheld information from consumers and the medical community about the risk of irreversible hearing loss from Tepezza.
On January 4, a Horizon Therapeutics investor filed a complaint (PDF) against the company and its financial officers in the U.S. District Court for the Southern District of New York, alleging that the proposed deal violates the Securities Exchange Act.
According to the lawsuit, Horizon sent out a proxy statement on December 30, encouraging company stockholders to vote in favor of the deal. However, investor Shiva Stein says the statement and proposed acquisition are based on materially incomplete and misleading representations of the state of the company.
The Horizon lawsuit claims the December 30 proxy statement to shareholders is misleading because the company has provided certain non-public financial forecasts to its board and Morgan Stanley, which conducted an analysis of the company’s financial projections. However, it did not provide that information to shareholders.
“Absent disclosure of the foregoing material information prior to the special stockholder meeting to vote on the Proposed Transaction, Plaintiff will be unable to make a fully-informed decision regarding whether to vote in favor of the Proposed Transaction, and she is thus threatened with irreparable harm, warranting the injunctive relief sought herein,” the lawsuit states.
A similar complaint (PDF) was filed a day later in the same court by Ryan O’Dell, another shareholder. Both lawsuits seek to have the court prevent the sale of Horizon unless the undisclosed financial projections are released to Horizon’s stockholders, or, if the sale is completed, to allow investors to recover damages due to stock value loss because of the deal’s alleged violations of the Securities Exchange Act.
Tepezza Side Effect Concerns
Horizon’s leading drug product is Tepezza, which brought in $1.66 billion in sales in 2021.
Tepezza (teprotumumab-trbw) is a biologic treatment approved by the FDA in January 2020, as the first drug approved to treat thyroid eye disease, which is caused by hyperthyroidism and linked to Graves’ disease, causing inflammation of eye muscles, eyelids, tear glands and fatty tissues behind the eye. Commonly referred to as bulging eye disease, this condition can cause blurred or double vision.
The FDA allowed Horizon to submit Tepezza through a fast-track Orphan Drug approval process, which allowed the drug maker to introduce the injection without extensive testing, since it targeted a condition which has no other treatment available. However, while the drug was initially expected to be a niche treatment, concerns have emerged that the medication was more widely marketed without fully disclosing all potential side effects to users and the medical community.
Over the few years the thyroid eye disease injection has been on the market, reports of potential Tepezza side effects have emerged, which not only threaten the rapid adoption of the treatment, but also exposes Horizon Therapeutics to a risk of massive Tepezza lawsuit payouts that may be owed to former users left with hearing loss.
A number of studies and case reports have been published over the last two years, which identified a link between Tepezza and hearing problems, which critics indicate the manufacturer knew or should have known about before the drug was ever introduced.
While the drug’s warning label does mention hearing loss as a possible side effect of Tepezza, lawsuits allege that the drug maker downplays the problems as temporary, and that many users could have avoided permanent hearing loss of instructions had been provided about the importance of monitoring hearing on Tepezza.
In a study published earlier this year in the American Journal of Ophthalmology, Stanford researchers looked at 27 patients who had received at least four Tepezza injections and followed up with them up to 40 weeks later, finding that more than 80% of patients receiving Tepezza suffered some form of hearing problems.
A review of that study, published in August 2022, found that about one-third of all patients who experienced Tepezza hearing loss still suffered problems months after receiving the injections.
Plaintiffs pursuing these Tepezza lawsuits allege they never would have agreed to receive the drug if information about the hearing risks had been disclosed.
January 2023 Tepezza Lawsuit Update
At least two complaints have been brought by former users who allege they were left with hearing loss following use of the drug, and dozens of additional claims are actively being investigated by lawyers.
The first Tepezza hearing loss lawsuit was filed in August 2022, by Daniel Weibel, who indicates that he was left with permanent damage after receiving intravenous infusions of the drug from June 2020 through September 2020.
That complaint was followed by a second lawsuit filed in November 2022, alleging that Tepezza side effects caused irreversible hearing loss for Donna Walker, after receiving infusions from June 2020 through November 2020, Walker alleges that the drug maker misrepresented the safety of their medication, suggesting that reports of hearing loss were moderate and reversible, which has not been the case for many users.
As more individuals learn that hearing loss problems may be the result of Tepezza side effects, it is expected that hundreds of lawsuits may be filed against the drug maker throughout 2023, and it is likely to be several years before any accurate assessment can be made about the extent of liability Horizon may face or the amount it may pay in Tepezza lawsuit payouts.
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