Covid-19 could throw final hurdle into AbbVie and Allergan’s massive merger
You can add AbbVie and Allergan’s $63 billion merger to the list of plans potentially disrupted by Covid-19.
The Federal Trade Commission said that it may need to offer extensions on certain cases because coronavirus-related disruptions may make it difficult for companies to make documents and witnesses available, Bloomberg reported.
That could mean a sudden roadblock just before the finish line for the giant drugmakers, who have been slow-walking their way to a merger since they announced one last June. Most recently, in early March, the European Union gave the all-clear and — months after the FTC issued a rare “second request” in their review of the buyout — the two companies said they had agreed to a timeline with the US agency to finish by the first days of the 2nd quarter, i.e. early April or May.
The newfound momentum came after Allergan divested brazikumab, an IL-23 inhibitor, back to AstraZeneca. In letters to the FTC, unions, consumer advocacy groups and Democratic senators raised antitrust concerns about the drug’s similarity to AbbVie’s IL-23 inhibitor Skyrizi. Allergan’s endocrine drug Zenpep was also divested to Nestlé for similar reasons.
In a statement released yesterday, AbbVie and Allergan said they had entered into a consent decree with the FTC on the divestments. The companies said they expected to close in May.
Divestitures of this kind are routine in Big Pharma mergers. Last year, Celgene divested Otezla for $13.4 billion as part of its buyout by Bristol Myers. The brazikumab sell-off, though, didn’t satisfy many of the unions and consumer groups opposing the deal, who wrote to the FTC in February that AstraZeneca was ill-positioned to bring the drug forward and that AbbVie’s rebate walls on Skyrizi would limit the rival drug’s market potential.
This deal would make AbbVie the fourth largest pharmaceutical company in the world.
