Teva hits roadblock in Allergan buy, hindering 'Pfizergan'

Investors' worries over the closing of Teva's ($TEVA) $40.5 billion deal for Allergan's generics unit are being realized, with the Israeli drugmaker Tuesday reporting that a delay is on the way. And looking ahead, that may also spell a delay for Pfizer's ($PFE) pickup of the rest of Allergan ($AGN), too.

Tuesday, the Petah Tikva-based pharma said in an SEC filing that wrapping up the acquisition may not happen until June, well after the end-of-March timeline it had previously outlined. The holdup? The FTC, which still needs to clear the companies.

According to Bernstein analyst Ronny Gal, the agency "is the bottleneck," with the two sides hammering out potential divestitures--"notably of pipeline products," he wrote in a Tuesday note to clients. The FTC is awaiting input from the FDA before it makes any decisions, and that process "is taking some time," he said.

The way he sees it, the likely reason for the slowdown is that the FDA wants "fairly extensive" divestitures from Teva--ones that the company has chosen to negotiate further. And accordingly, "the impact of the divestitures will likely be more material than previously believed," he figures.

Teva has already agreed to give up several assets across the pond, where it scored an EU go-ahead just last week. The company plans to sell off "a majority" of Allergan's current generics business in the U.K. and Ireland, while in Iceland, it'll be discarding its own business while hanging onto the Dublin drugmaker's. On top of that, Teva agreed to jettison molecules in 24 other countries on the continent.

Investors shouldn't worry too much, though, Gal noted. In his view, the selloffs don't put the transaction at risk, with both sides "highly committed" to making the deal happen. But Pfizer may not be too happy with the news, either; the close of its controversial $160 billion Allergan deal--which will help it shift its tax base to advantaged Ireland--is pending while Allergan finishes up with Teva.

"We speculate there (will) be some delays to the Allergan-Pfizer transaction as (a) result, depending (on) when the Teva-Allergan deal will actually close," Gal wrote.