In June, AbbVie (NYSE:ABBV) made a bid to purchase Allergan (NYSE:AGN) in a cash and stock transaction valued at $63 billion. AbbVie likely decided to pursue the massive acquisition in part to decrease its reliance on its best-selling drug Humira, sales of which have been declining in Europe due to competition from biosimilars. However, the deal has faced some resistance. In a letter sent to the U.S. Federal Trade Commission (FTC) in September, a coalition of consumer groups and unions expressed their concerns that AbbVie's acquisition of Allergan "will likely harm consumers." The coalition asked the FTC to investigate further, and potentially block the acquisition.
Selling assets to reduce the anticompetitive risks
AbbVie and Allergan have agreed to divest some of their assets to move the acquisition forward, and the pharma giants recently reached an agreement with the FTC on the deal. Allergan agreed to sell Brazikumab -- a drug in its pipeline that is being developed as a treatment for Crohn's disease and ulcerative colitis -- to AstraZeneca (NYSE:AZN). Allergan will also be selling Zenpep -- an enzyme-replacement therapy used by patients with conditions such as cystic fibrosis -- to Nestle (OTC:NSRGY). The acquisition of Allergan was initially supposed to close during the first quarter of 2020. However, AbbVie now says it expects the deal to close in May. Still, the good news is that AbbVie should not encounter any more obstacles now that is has reached a deal with the FTC.