AbbVie and Allergan Sign Divestiture Consent Decree with FTC, Move Closer to Finalizing Merger

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AbbVie and Allergan Sign Divestiture Consent Decree with FTC, Move Closer to Finalizing Merger

 

AbbVie and Allergan are closer to completing the $63 billion merger of the two companies. On Tuesday, the companies announced they entered into a consent decree agreement with the Federal Trade Commission that commits them to a previously announced divestiture of products ahead of the merger.

Late Tuesday, AbbVie ad Allergan said they signed the agreement with the FTC confirming the sale of products to AstraZeneca and Nestle. In January, AbbVie and Allergan announced they planned to divest brazikumab, an investigational IL-23 inhibitor, to AstraZeneca and Zenpep, a treatment for exocrine pancreatic insufficiency due to cystic fibrosis and other conditions, to Nestle. Additionally, Nestle will also acquire Viokace, another pancreatic enzyme preparation as part of the deal.

Under the terms announced in January, AstraZeneca would regain the global rights to brazikumab. The two companies had a licensing agreement for the IL-23 inhibitor, but in order to meet the demands of regulators over concerns of a monopoly, the companies terminated that licensing agreement, which causes the drug to revert back to AstraZeneca. Brazikumab is in Phase IIb/II development for Crohn’s Disease and in Phase II development for ulcerative colitis. Mene Pangalos, head of BioPharmaceuticals R&D at AstraZeneca, said at the time the deal was announced that the company was pleased to have the asset back in its fold to support its expanding presence in immunology.

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Greg Behar, chief executive officer of Nestlé Health Science, said that the acquisition of Zenpep is a strategic decision that will enhance the company’s growing medical nutrition portfolio.

When the divestiture was announced in January, financial deals were not disclosed, but analysts pegged the value at about $1 billion.

The consent decree, including the proposed purchasers, remains subject to further review and approval by the Commissioners of the FTC. Earlier this month, the European Commission gave the green light to the merger agreement. The EC’s support of the deal was contingent on the divestiture of these assets. The two companies anticipate closing the deal in May 2020.

While the companies are looking toward May to finalize the merger, some consumer groups have been vocal in their criticism of the two companies joining forces. The groups opposed to the merger of the companies have raised concerns over the creation of a monopoly that will stifle competition in the immunology market. The argument centers on brazikumab. The organizations argue that even with the divestiture of brazikumab, AbbVie and its powerhouse asset Humira dominate the immunology market through “a variety of exclusionary tactics to hamper rivals.” Even though the company has divested a potential rival to Humira to AstraZeneca, there is a chance that the drug, which is still in clinical trials, could fail and never make it to market as an alternative treatment.

 

BioSpace source:

https://www.biospace.com/article/abbvie-and-allergan-sign-divestiture-consent-decree-with-ftc-move-closer-to-finalizing-merger