Europe Approves $63 Billion AbbVie-Allergan Takeover

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The $63 billion merger of pharmaceutical giant AbbVie (NYSE:ABBV) (Chicago, Illinois) and Ireland's Allergan plc (NYSE:AGN) (Dublin, Ireland) has taken a major step toward completion with the deal getting the "conditional" green light from the European Commission (EC).

The Commission has approved, under European Union merger regulations, the proposed acquisition of Allergan, best known for its Botox treatment, by AbbVie, conditional on the divestment of a product under development by Allergan to treat inflammatory bowel diseases.

Commissioner Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Inflammatory bowel diseases are lifelong conditions with devastating effects on the life of millions of people. Our decision makes sure that the merger between AbbVie and Allergan will not disrupt the development of a promising innovative treatment for these diseases. This will increase the choice of treatments and offer better prices for patients."

The Commission'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. It noted that AbbVie's product portfolio includes several biologic drugs for IBD, notably risankizumab, a pipeline drug that belongs to a class of biologics called "IL-23 inhibitors" and Humira, a marketed drug that belongs to another class of biologics called "anti-TNFs". Allergan is also currently developing an IL-23 inhibitor, called brazikumab which would likely compete closely with AbbVie's risankizumab as it belongs to the same class of drugs.

The Commission's investigation largely confirmed that the transaction would have led to a loss of innovation for IBD treatments, as AbbVie would not continue developing Allergan's IL-23 inhibitor. It stated: "The IL-23 inhibitors are a promising class of biologics for which only two other competing pipeline products, in addition to AbbVie's and Allergan's IL-23 inhibitors, are currently being developed. The transaction would have thus prevented a promising drug from reaching the market, leading to potentially less choice and higher prices for patients and health systems."

To allay the Commission's concerns, AbbVie has offered to divest Allergan's razikumab pipeline product, including the development, manufacturing and marketing rights at worldwide level, to a purchaser that will continue the drug's development.

AbbVie's Humira, is not only world's best-selling treatment for a wide range of inflammatory diseases, from arthritis and colitis to Crohn's disease, it is the top selling drug in the world, with sales of $20 billion in 2018 alone. It has been No. 1 in sales for all pharmaceutical products worldwide for seven consecutive years, but its future success is under threat from a growing number of biosimilars.

Industrial Info reported that Allergan shareholders had overwhelmingly voted to approve the AbbVie takeover in October last year. For additional information, see October 28, 2019, article--Allergan Shareholders Green Light AbbVie Takeover.

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