December 1, 2014
By Riley McDermid, BioSpace.com Breaking News Editor
Regulators at the European Union antitrust agency have a busy month ahead of them, as they try to decide whether to approve two massive biotech deals that will see Novartis sell its vaccine business to GlaxoSmithKline in exchange for Glaxo’s oncology pipeline.
The European Commission has until Jan. 14 to give the deals the green light or issue a denial, said the agency Monday. The regulatory body can also require the companies to issue certain concessions if it feels the deal size violates European competition rules, or even launch a long, and often costly, investigation if it believes the deal deserves deeper scrutiny.
There is no doubt the scheme is massive and far-reaching. Under the terms of the plan, Novartis will scoop up GSK‘s oncology products for $14.5 billion, with an additional $1.5 billion on the line if an experimental drug meets its endpoints in an ongoing melanoma trial. In exchange, Glaxo will pay up to $1.8 billion and ongoing royalties for Novartis’s vaccines program.
The companies have said they will also launch a joint venture in consumer healthcare.
Glaxo received approval for the deal from the U.S. Federal Trade Commission last week, with American regulators saying they saw no antitrust issues. However, the agency added the caveat that Novartis must also sell its Habitrol nicotine patch. But it could face higher hurdles in Europe, say analysts, because of different regulations across the European Union.
Most recently, the Commission approved Medtronic ‘s $43 billion takeover of Covidien Plc , on the condition Covidien sell its drug-coated balloon catheter business.
