A US competition regulator has given the go-ahead for US drugmaker AbbVie to buy Allergan, which makes Botox, in a $63bn deal that the American company hopes will replenish its pipeline of new drugs.
The Federal Trade Commission announced on Tuesday it had voted 3-2 to approve the acquisition after the companies agreed to sell some of Allergan’s assets to Nestlé and AstraZeneca.
Those assets relate to the treatment of exocrine pancreatic insufficiency — a condition which means patients are unable to digest food properly — as well as colitis and Crohn’s disease. The commission said it did not see any risk to competition beyond those areas, despite the two Democratic commissioners voting against the takeover.
The FTC said in a statement: "Over the course of their nine-month investigation, commission staff explored a wide range of theories of competitive harm, including harm to innovation. They uncovered no evidence of such harms beyond those remedied by the proposed consent."
In a dissenting opinion, Rohit Chopra, one of the Democratic commissioners, called the FTC’s decision "risky and concerning", saying that he had wanted to block the merger.
He added in a tweet: "Nestlé may be the world’s largest food and beverage company, but it does not make prescription drugs".
"I am unwilling to trust this candy and cat litter conglomerate to restore competition for patients needing medicine for serious pancreatic conditions."
AbbVie’s mega-deal had been called into question by several investors in February as they feared that regulators would block the Botox maker’s takeover. The company is relying on the deal to bolster its list of new drugs before it loses exclusivity on Humira, the anti-inflammation drug used to treat arthritis, in the US in 2023. At that point AbbVie expects seven rivals to enter the market.
As well as Botox, Allergan makes drugs that are used in eyecare, gastroenterology and to treat the central nervous system.
Under pressure to find the next big-money medicine as their blockbuster drugs faced the upcoming loss of patent protection, several big pharmaceutical companies went on a buying spree in 2019, spending billions of dollars to secure new assets.
Other deals included Bristol-Myers-Squibb’s $74bn takeover of biotech group Celgene and Pfizer’s $11.4bn acquisition of Array BioPharma.
Dealmaking in the sector has come to halt following the coronavirus pandemic. However, the regulator’s decision to approve the deal is likely to boost business sentiment.
The European Commission approved the deal earlier this year, leaving the Irish High Court as the only institution whose consent is still needed. Allergan is domiciled in Ireland.
(Published by Financial times, May 6, 2020)
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