AbbVie and Allergan are looking for a quick close for their $63 billion merger after agreeing to sell off three drugs to help clear antitrust hurdles. But with the novel coronavirus slowing operations, that speedy approval could take longer than expected––at least that's what regulators are saying.
AbbVie and Allergan signed a "consent decree" Tuesday with the Federal Trade Commission (FTC) to divest late-stage gastrointestinal candidate brazikumab and two pancreatic replacement enzymes in a move to ease antitrust concerns.
Earlier this month, the pair closed that sale in the EU, where regulators required the divesture of brazikumab alone for the merger's approval. AbbVie said it now expects the merger to close in May after the FTC's final review of the drug sale.
But despite AbbVie's high hopes of closing the merger in two short months, regulators are warning that the continuing novel coronavirus pandemic could knock that plan off the rails.
The FTC said it may consider requesting extensions if companies are not able to produce documents and employees in a timely manner for a review, potentially pushing back legal deadlines for megamergers, a spokesperson said Wednesday.
"FTC staff is fully operational but the Commission will not sacrifice the scope and thoroughness of its investigations due to current limitations and timing concerns," an FTC spokesperson said. "We are looking at each case individually and will seek to adjust timing as needed."
The DOJ is also considering delays to its own reviews and criminal investigations, Bloomberg reported, but the department didn't specify its reasons. A spokesperson for the DOJ could not be reached by press time.
Earlier this month, AbbVie and Allergan cleared their final regulatory hurdle in the EU for the merger after offloading brazikumab in a deal with AstraZeneca.
The merger itself is pending a final close, but AbbVie said the sale approval would "clear the pathway" to wrap up the transaction. The merger is also pending approval by the Irish High Court, AbbVie said. Thanks to a "timing agreement" between the EU and FTC, AbbVie predicted an FTC decision by April.
But the novel coronavirus pandemic and the rising COVID-19 infection counts have potentially put that final review off indefinitely and past the legally allowed time, Bloomberg reported. Companies are given 30 days to approve or challenge an FTC decision on a merger, potentially putting AbbVie and Allergan under the gun as drugmakers worldwide are sending employees to work remotely.
Even without COVID-19, AbbVie and Allergan had a difficult road to approval with extra FTC hurdles and consumer pushback.
In September, the FTC issued a "second request" for information on the deal within weeks of union and consumer groups complaining the merger would give AbbVie a competitive edge.
The deal would likely make AbbVie the fourth-largest drugmaker in the world by bringing on drugs such as blockbuster Botox as well as fast-growing antipsychotic Vraylar to join AbbVie's own prospective blockbusters including Skyrizi and Rinvoq.