Merger of Mylan and Pfizer's Upjohn wins EU nod with product sell-off agreement

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The generics merger between Mylan and Pfizer's Upjohn unit has won European antitrust clearance after product sell-offs. (MPD01605/CC BY-SA 2.0)

The proposed merger between Mylan and Pfizer’s Upjohn, though facing a delay due to the COVID-19 pandemic, has won antitrust clearance from the European Commission—but not without conditions.

EU regulators said Wednesday they allowed the transaction after the pair agreed to sell some Mylan generic drugs across 20 countries in the European Economic Area and the U.K.

In a statement, Mylan said the required divestitures are “substantially in line with” the company’s previously stated expectations.

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The European Commission noted that Mylan and the Pfizer established medicines division have overlaps in several disease areas such as cardiovascular, musculoskeletal, nervous system and urinary tract.

Specifically, officials spotted 36 specific overlaps covering a dozen drugs that raised antitrust concerns. These included Pfizer’s Revatio—a sister drug to its popular erectile dysfunction therapy Viagra—for pulmonary arterial hypertension in countries such as France and the U.K. Mylan has a generic version of the pill.

Investigators also found that Pfizer’s migraine reliever Relpax and Mylan’s copycat hold strong positions in Northern European countries Denmark, Finland, Norway and Sweden, as well as France. Pfizer’s eye drop Xalatan and its sister combo drug Xalacom and their knockoffs by Mylan are dominant players in certain Eastern European territories, they said. And Upjohn's top-selling pain med Lyrica and anxiety solution Xanax also drew attention.

In 2019, Lyrica’s global sales plummeted by a third to $3.32 billion, as it lost U.S. exclusivity in June. Xalatan and Xalacom delivered $281 million to Upjohn’s top line, down from $318 million in 2018. Xanax global sales declined 11% year over year to $198 million. Sales of Revatio also plummeted to $144 million in 2019, from $227 million the previous year, driven by lower U.S. sales and pricing pressures from generic entry.

While neither the EC nor Mylan disclosed which specific drugs will land on the chopping board, the regulatory body did say that the committed sell-offs “remove the entire overlaps between Mylan and Upjohn in the markets raising serious doubts and fully address all of the Commission’s competition concerns.”

RELATED: Pfizer, Mylan say COVID-19 delays will postpone their Viatris merger

Meanwhile, in the U.S., Pfizer previously disclosed (PDF) that both companies had received a “second request” from the Federal Trade Commission for more information on the deal.

These requests—which usually mean lengthened review and increased possibility of legal challenge or divestiture requirements—have become a new normal for big biopharma transactions lately. Roche’s $4.3 billion acquisition of Spark Therapeutics, Bayer’s $7.6 billion bid to offload its animal health franchise to Elanco, and AbbVie’s proposed $63 billion takeover of Allergan have all been hit with the same additional scrutiny.

Mylan agreed to the Upjohn deal partly for the latter’s wide global reach. But that global footprint also created multiple regulatory hurdles for the transaction, as the pair also needs to gain green lights from many other jurisdictions, including China, Japan, India, Russia, among others.

Now, the progress of those antitrust reviews has been further complicated by the COVID-19 pandemic, forcing Pfizer and Mylan to postpone the close of the megamerger from mid-2020 to the second half of the year.

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