FTC demands more information on AbbVie’s Allergan buy, as the US antitrust watchdog keeps intense gaze on major pharma deals


First the FTC (Federal Trade Commission) dug in deep on BMS acquisition of Celgene, then it held up and continues to hold up Roche’s acquisition of Spark Therapeutics, now it is putting another major pharma deal under intense scrutiny.

The FTC has issued another demand of information from AbbVie and Allergan on their proposed $63bn merger. This so called ‘second request’ comes after a coalition of unions and consumer groups petitioning the FTC to carefully examine the deal and to block it if necessary. This follows a similar request by the FTC to Roche about its proposed acquisition of Spark Therapeutics, triggering a series of delays and extended tender offers.

Just as the case of the Roche situation, the FTC has offered no rhyme or reason as to why it has sent out this second request. Allergan, seeming anticipating a second request, offered before the FTC had made this announcement to sell of two of its drugs, brazikumab and Zenep which overlap with AbbVie’s Skyrizi and Creon respectively.

However, the unions do not seem to have an issue with product overlap but more what they consider anti-competitive behavior by both companies. Both companies have a history of using price hikes, rebate walls and controversial IP tactics to stifle competitions. Unions worry that a merged company between the two, creating the fourth largest drug maker in the world will give them even more negotiating power against payers.

Wells Fargo analysts say that they “do not believe there is a significant risk of the deal not being finalized given the little overlap between the companies.” However, after the forced divestment in the BMS-Celgene deal and constants delays for Roche/Spark, no one is quite sure what the FTC will demand.

1 comment:

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