ABBVIE Stock- AbbVie wins U.S. antitrust approval to buy Allergan
WASHINGTON (Reuters) – Drugmaker AbbVie Inc has won U.S. antitrust approval to buy Botox maker Allergan, a blockbuster $63 billion deal when it was announced last year, the companies said on Tuesday.
AbbVie, which has been under pressure to diversify its portfolio, said in June 2019 that it would acquire Allergan in a deal that gives AbbVie control over the lucrative wrinkle treatment Botox and buys time to seek new growth before its arthritis treatment Humira loses U.S. patent protection in 2023.
A four-week supply of Humira, the world’s best-selling medicine, has a list price of about $5,174 or more than $60,000 for a year. Its sales were $4.70 billion for the most recent quarter despite declines outside the United States, where it has begun facing competition from cheaper biosimilar versions.
The combined AbbVie and Allergan will be based in AbbVie’s home of North Chicago.
Allergan, formerly based in California, itself was part of a tax “inversion” deal, after European generic drugmaker Actavis bought it for $66 billion in 2015 and adopted the company’s name, moving its headquarters to Dublin.
To win approval from the Federal Trade Commission, the companies said they agreed to divest brazikumab, a drug in development to treat autoimmune diseases, to AstraZeneca.
In addition, Swiss food giant Nestle agreed to buy Allergan’s Zenpep, a product for people whose pancreases do not provide enough enzymes to properly digest fats, proteins and sugars, often because of cystic fibrosis. Zenpep had sales of $237 million in 2018. Nestle will also buy Viokace, another pancreatic enzyme preparation.
The deal was approved by the European Union in January on condition that brazikumab be sold.
The five-member FTC split on whether to approve the merger, with the three Republicans in favor and two Democrats against.
In their statement, the Republican Chairman Joseph Simons and Commissioners Noah Phillips and Christine Wilson argued that the two companies’ drug portfolios are strong in different areas and, once the divestitures are done, there was no evidence that the deal would lead to higher prices or lost innovation.
Democratic Commissioner Rohit Chopra called the FTC decision to divest drugs to Nestle, a company that sells no medicines, “risky and concerning,” and Commissioner Rebecca Slaughter agreed.
The two also expressed concern about AstraZeneca actually bringing brazikumab to market since the company will not pay for it and will have less incentive to make its money back.
Reporting by Diane Bartz; Editing by Chris Reese, Peter Cooney and Sonya Hepinstall