Drug companies agree to divest a product under development by Allergan to treat inflammatory bowel diseases.
Today, the European Commission (EC) announced that it has conditionally approved Allergan plc’s acquisition of AbbVie Inc. The EC’s investigation primarily focused on biologic treatments for ulcerative colitis and Crohn's disease, collectively termed inflammatory bowel diseases (IBD), where the activities of AbbVie and Allergan overlap.
In light of concerns that the deal would have led to a loss of innovation for IBD treatments, as AbbVie would not continue developing Allergan's "IL-23 inhibitor"—called brazikumab—AbbVie agreed to divest the pipeline product, including the development, manufacturing and marketing rights at a worldwide level. The divestiture must be made to a purchaser that will continue the drug’s development. The remedies submitted by the parties satisfied the EC’s competition concerns.
According to the EC, U.S.-based AbbVie also has a pipeline drug that belongs to the IL-23 class of biologics—risankizumab. In addition, the company markets Humira for IBD, which belongs to another class of biologics called "anti-TNFs".
AbbVie disclosed plans to acquire Allergan in a cash and stock transaction for a transaction equity value of approximately $63 billion in June 2019. At that time, the companies said that the combined company would consist of several attractive franchises with leadership positions across immunology, hematologic oncology, medical aesthetics, neuroscience, women's health, eye care, and virology.
FTC review. On the other side of the Atlantic, the FTC is conducting an in-depth review of the deal. In September 2019, Abbvie announced that the agency had issued a Second Request for additional documents. At that point, the companies said that they were cooperating fully with the FTC and continued to expect to close the transaction in early 2020.
Consumer group, union opposition. Consumer groups and unions have expressed their skepticism over the deal. In a September 2019 letter to the FTC, Families USA, Public Citizen, U.S. PIRG Education Fund, Service Employees International Union (SEIU), and American Federation of State, County, & Municipal Employees (AFSCME), among others, requested that, in light of growing market concentration, the FTC "investigate this proposed merger thoroughly and take all necessary action, including blocking the merger, to prevent further harm to consumers."
Companies: AbbVie Inc.; Allergan plc
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