Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Lupin’s acquisition of Gavis conditioned on divesture of certain generic drugs, (Feb 19, 2016)
Organizations Mentioned:Gavis Pharmaceuticals LLC | Lupin Ltd.
By Michael Menzhuber, J.D., LL.M.
In order to settle FTC charges that Lupin Ltd.’s proposed $850 million acquisition of Gavis Pharmaceuticals LLC would likely be anticompetitive, Lupin and Gavis will sell the rights and assets for two generic drugs to G&W Laboratories, a New Jersey-based generic pharmaceutical company, the agency announced today.
Without the divesture, the merger would have: (1) combined two of only four companies that currently market generic doxycycline monohydrate capsules (DMC) in two dosages (used to treat bacterial infections) with the result being higher prices; and (2) eliminate one of only a few companies likely to enter the market in the near future for generic mesalamine extended release capsules (used to treat ulcerative colitis) thereby delaying beneficial competition and the prospect of price decreases.
The terms of the proposed order provide that:
Lupin is required to transfer all of Gavis’ rights and assets related to DMC no later than ten days after the acquisition is consummated. The transfer includes Gavis’ manufacturing technology, which Lupin will help G&W set up. In the interim, Lupin will supply G&W with the finished product for two years.
Gavis is required to divest its rights and assets related to generic mesalamine capsule to G&W before the acquisition takes place. Gavis’ CEO will provide consulting services to help G&W complete the required regulatory work and begin manufacturing the product.
Gavis and Lupin are required to transfer all confidential business data related to both divested products, and provide access to knowledgeable employees, so that G&W can obtain all the necessary FDA approvals in a timely manner.
Companies: Lupin Ltd.; Gavis Pharmaceuticals LLC
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