Allergan and AbbVie Turn Eyes to the FTC for Approval of their $63 Billion Merger

AbbVie and Allergan have cleared a major hurdle in completing the merger of the two companies that began in June of 2019. On Tuesday, the European Commission gave the green light to the merger following the divestiture of an investigational autoimmune treatment.

With the nod from the European Commission, all eyes are now on the U.S. Federal Trade Commission as it continues to review the pending merger. The FTC does not have a set timeline, but AbbVie and Allergan said they have a timing agreement with the agency that could result in a decision early in the second quarter of this year. AbbVie and Allergan said they continue to fully cooperate with the FTC during its review and intend to close the transaction at the earliest possible date. 

The European Commission’s approval of the $63 billion merger was contingent on the divestiture of brazikumab, an investigational IL-23 inhibitor in development for autoimmune diseases, to AstraZeneca. In January, AbbVie and Allergan announced their intentions to divest some assets in order to avoid regulator concerns over a monopoly. In addition to the deal with AstraZeneca for brazikumab, which is currently in Phase IIb/II development for Crohn's Disease and in Phase II development for ulcerative colitis, the companies sold the approved Zenpep (pancrelipase), a treatment for exocrine pancreatic insufficiency due to cystic fibrosis and other conditions, and Viokace, a pancreatic enzyme preparation, to Nestle.

With clearance from the European Commission, share prices for both companies are climbing this morning. AbbVie is up 3.57% to $90.70 per share as of 10:27 a.m. and Allergan is up ¼% to $194.74 per share, as of 10:27 a.m.

While the news is positive for investors, particularly after a tumultuous week in the stock market, some consumer groups have been trying to stop the merger of AbbVie and Allergan. The groups opposed to the merger of the companies have raised concerns over the creation of a monopoly that will stifle competition in the immunology market. The organizations, which includes American Federation of State, County, & Municipal Employees, Public Citizen, Service Employees International Union, Doctors for America and Prescription Justice, argue that even with the divestiture of brazikumab, AbbVie dominates the immunology market through “a variety of exclusionary tactics to hamper rivals.”

In a letter sent to the Federal Trade Commission, the group said even with the divestiture to AstraZeneca, there is a chance that drug will not increase competition in the market since it’s still an investigational medication.  

In January, AbbVie and Allergan announced plans for a new, stand-alone company called Allergan Aesthetics that will include Allergan’s blockbuster aesthetics treatment Botox as a tent pole.