Allergan plans to sell of two of its drugs for AbbVie takeover to be approved. But will this be enough for the $63bn takeover?

Allergan confirmed today that it will sell two of its drugs to bypass U.S antitrust scrutiny so that the FTC can approve the AbbVie takeover. However, with the way that regulatory bodies have been handling M&A buyouts recently (Roche and Spark Therapeutics spring to mind), analysts are left unsure as to whether this action will be enough.

The drugs that are being sold are brazikumab and Zenep, these two products come as no shock to industry experts, given the overlap with existing AbbVie drugs in their respective field. With brazikumab in phase 2/3 for ulcerative colitis, it would end up competing with AbbVie’s blockbuster bowel anti-inflammatory product Humira. Meanwhile Zenep would directly compete with AbbVie’s Creon as pancreatic replacement enzymes and with Creon bringing in sales of $484m in the first half of 2019 compared to Zenep’s $133m, it made sense that Zenep would be swiftly cut.

It is important to note, that this decision by Allergan comes from no pressure from the US Federal Trade Commission and is entirely a voluntary decision. It most likely can be seen as a precautionary move made by Allergan, due to the unpredictable nature of the FTC in recent weeks particularly with the Celgene and BMS deal where Celegene was ordered to divest its psoriasis drug Otezla contrary to industrial analysts belief that Celgene’s Otezla and BMS experimental TKY2 inhibitor would not have dominated any share of the market. A more recent event that occurred which most likely worried Allergan and analysts is the pushback of Roche’s $4.3bn takeover of Spark Therapeutics for unknown reasons. These two outcomes have created a fear in the industry that the FTC has changed its requirements and seems to be acting much harsher in its decisions, potentially putting off future biopharma deal making.


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