Bristol-Myers Poised to Close Celgene Deal After U.S. Nod

(Bloomberg) -- Bristol-Myers Squibb Co. won U.S. antitrust approval for its acquisition of Celgene Corp., the last regulatory approval needed for the blockbuster pharmaceutical deal.

The Federal Trade Commission signed off on the tie-up after Bristol-Myers earlier this year agreed to sell one of Celgene’s most lucrative drugs to resolve concerns the deal would otherwise harm competition, the agency said Friday. Bristol-Myers said it expects to close the purchase Nov. 20.

The combination of the two companies represents a move to gain advantage in a crowded market for innovative cancer treatments. Bristol makes an immunotherapy drug called Opdivo that accounts for roughly a quarter of its sales but that has trailed a rival medication from Merck & Co. Celgene has been looking for a follow-up for its blockbuster blood-cancer therapy Revlimid, which is expected to face increased generic competition in coming years.

The $74 billion deal is among a number of pharmaceutical mergers that are facing regulatory scrutiny amid criticism about soaring drug prices. They include AbbVie Inc.’s deal to buy Botox maker Allergan Plc and Roche Holding AG’s proposed acquisition of Spark Therapeutics Inc.

To gain FTC approval, Bristol-Myers agreed in June to sell the psoriasis pill Otezla, a major product for Cegene projected to bring in $1.86 billion this year. Amgen Inc. is paying $13.4 billion for the business, marking the largest divestiture in a merger-enforcement case by the FTC or Justice Department, the agency said.

That wasn’t enough for the two Democrat-appointed commissioners on the Republican-controlled FTC -- Rohit Chopra and Rebecca Kelly Slaugher -- who voted against approval.

The two criticized the FTC’s approach to investigations of pharmaceutical mergers, which are typically resolved by selling competing product lines to other drug companies. That framework is too narrow and may miss other ways massive pharma deals can harm competition, they said.

“The financial crisis and the Great Recession taught our country a tough lesson,” Chopra wrote in his dissent. “When watchdogs wear blindfolds or fail to evolve with the marketplace, millions of American families can suffer the consequences.”

Commissioner Noah Phillips criticized those dissents in a statement, saying they fail to outline a specific theory for how the deal will harm competition.

“The most they offer is speculation about vaguely articulated harms, without reference to any evidence that this merger is likely to exacerbate them,” Phillips said. “At the end of the day, we are left only with the sense that Commissioners Chopra and Slaughter feel the merger will threaten competition and wish to dissociate themselves with it. To me, that is not enough.”

©2019 Bloomberg L.P.

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