FTC demands AbbVie divests Crohn’s treatment in Allergan buyout
The US Federal Trade Commission has approved a final order regarding charges that biopharmaceutical company AbbVie’s $63 billion acquisition of Allergan would violate US federal antitrust law.
The order, issued on September 4, comes after both companies agreed in May to divest assets to settle FTC charges that the merger would adversely affect market competition for drugs that treat exocrine pancreatic insufficiency (EPI), a condition that causes Crohn’s disease and ulcerative colitis.
The FTC had also alleged that the acquisition would eliminate future direct competition between AbbVie and Allergan in the development and sales in the US of IL-23 inhibitor drugs for treatment of moderate-to-severe Crohn’s disease and moderate-to-severe ulcerative colitis.
According to the complaint, only four companies sell pharmaceutical products to treat EPI. Among them, AbbVie and Allergan together control 95% of the market for these drugs.
AbbVie and Allergan have agreed to divest Allergan’s Zenpep and Viokasiokace, other pancreatic enzyme preparations sold to treat EPI, to competitor Nestlé. AbbVie and Allergan are also required to transfer Allergan’s rights and assets related to Brazikumaz, an IL-23 inhibitor that is in development to treat moderate-to-severe Crohn’s disease and ulcerative colitis, to Astrazeneca.
AbbVie’s purchase of Allergan was first announced in the summer of last year.
The FTC carried out its investigation into the proposed merger after trade unions and consumer groups urged it to intervene, arguing it would “substantially harm competition”.
After completing the vetting process of the proposed divestiture buyers, the FTC concluded that Nestlé had the expertise, US sales infrastructure, and resources to maintain the competition that otherwise would have been lost due to the proposed acquisition.
According to the FTC, it explored a wide range of theories of competitive harm potentially posed by the merger during the course of a ten-month investigation before it issued its order in May, including harm to innovation.
It said, however, that it had “uncovered no evidence of such harms beyond those remedied by the proposed consent, after conducting more than 40 interviews, reviewing extensive written submissions from third parties, and reviewing more than 430,000 documents”.
The deal had previously received approval from the EU. Abbvie shareholders will own approximately 83% of the company following the acquisition, with Allergan shareholders owning 17%.
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