Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: FTC requires modifications to pharma acquisition to preserve future competition, (Aug 4, 2014)

By Jeffrey May, J.D.

Pharmaceutical company Akorn, Inc. has received conditional approval from the FTC to acquire VPI Holdings Corp., the parent company of VersaPharm Incorporated. The transaction, valued at $440 million, is contingent on Akorn's agreement to divest assets to resolve the FTC's concerns that the transaction would eliminate significant future competition between Akorn and VersaPharm in the sale of generic rifampin, which is used to treat tuberculosis (In the Matter of Akorn, Inc., FTC Dkt. C-4479, File No. 141 0162).

According to the FTC’s complaint, only VersaPharm and two other firms currently have Food and Drug Administration (FDA) approval to sell generic injectable rifampin used as a first-line treatment to kill or prevent the growth of tuberculosis. The FTC alleged that Akorn would have entered the market for generic injectable rifampin in the near future absent the acquisition. Thus, the acquisition, as originally proposed, would have eliminated significant future competition between Akorn and VersaPharm in the sale of generic rifampin.

Under the terms of a proposed consent order, Akorn would be required to divest its rights related to generic rifampin to Watson Laboratories, Inc. The settlement requires Akorn to divest its Abbreviated New Drug Application for generic injectable rifampin – which is currently pending before the FDA. An interim monitor appointed by the FTC will supervise the process.

Akorn describes itself and VersaPharm as niche pharmaceutical companies. According to Akorn, VersaPharm is a privately-held developer and marketer of multi-source prescription pharmaceuticals, focusing in dermatology, tuberculosis, and hemophilia.

Attorneys: Jasmine Y. Rosner for FTC. Mark L. Kovner (Kirkland & Ellis, LLP) for Akorn, Inc.

Companies: Akorn, Inc., VPI Holdings Corp., VersaPharm Inc., Watson Laboratories, Inc.

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