Pfizer and Mylan to Sell Assets, Gain Clearance for Deal

(Bloomberg) -- The U.S. Federal Trade Commission said Pfizer Inc. and Mylan NV agreed to sell some assets to gain approval for a deal combining Pfizer’s off-patent unit with the generic-drug maker.

The agreement helps pave the way for a proposed deal under which Pfizer will spin off its Upjohn business, which would then be merged with Mylan. Upjohn includes Pfizer’s Greenstone generic-drug division, as well as older blockbuster medicines such as cholesterol therapy Lipitor and anxiety treatment Xanax.

The FTC alleged that the deal would harm current and future competition in 10 generic-drug markets. The commission was particularly concerned about the merger’s impact on other suppliers of various hypertension medications. Pfizer’s Upjohn unit holds a portfolio of such treatments, and Mylan makes generic versions of its brands.

The companies have agreed to sell the rights to some medications to address those concerns, according to a statement from the agency, clearing the way for the new entity, known as Viatris Inc. The transaction is now expected to close on Nov. 16., Pfizer and Mylan said in a statement on Friday.

Viatris’s executive team and board were finalized at the outset of the year. Mylan Chairman Robert J. Coury will become executive chairman of the combined company. Pfizer shareholders will own 57% of the new entity, and Mylan shareholders will own the rest.

Pfizer shares declined 0.7% at 2:04 p.m. in New York, while Mylan shares gained 2.5%.

In July 2019, Pfizer announced plans to combine Upjohn with Mylan in a deal that would allow the branded pharmaceutical company to focus on making new medicines with higher sales-growth potential. The merger also gave Mylan a financial lifeline after a rocky stretch due to U.S. pricing headwinds, which took a toll on the company’s already slim margins.

Upjohn will be required to divest products including Caduet, Dilantin and Aldactazide, among others, while Mylan must sell the rights to its eplerenone tablets for high blood pressure.

The transaction had been expected to close earlier in the year, but the companies said they faced delays in the regulatory review process due to the coronavirus pandemic.

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